<PAGE>
1933 ACT REGISTRATION NO. 2-97596
1940 ACT REGISTRATION NO. 811-4297
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 51
-AND-
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 52
VAN ECK FUNDS
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
99 PARK AVENUE, NEW YORK, NEW YORK 10016
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
212-687-5200
(REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE)
THOMAS ELWOOD, ESQ. - VAN ECK ASSOCIATES CORPORATION
99 PARK AVENUE, NEW YORK, NEW YORK 10016
(NAME AND ADDRESS OF AGENT FOR SERVICE)
COPY TO: PHILIP NEWMAN, ESQ., GOODWIN PROCTER & HOAR
EXCHANGE PLACE, BOSTON, MASSACHUSETTS 02109
__________________________________________________________________
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX):
[ ] IMMEDIATELY UPON FILING PURSUANT [ ] ON MAY 1, 1998 PURSUANT TO
TO PARAGRAPH (B) PARAGRAPH (B)
[X] 60 DAYS AFTER FILING PURSUANT TO [ ] ON [DATE] PURSUANT TO
PARAGRAPH (A)(1) PARAGRAPH (A)(1)
[ ] 75 DAYS AFTER FILING PURSUANT TO [ ] ON (DATE) PURSUANT TO
PARAGRAPH (A)(2) PARAGRAPH (A)(2) OF RULE
485
IF APPROPRIATE, CHECK THE FOLLOWING BOX:
[ ] THIS POST-EFFECTIVE AMENDMENT DESIGNATES A NEW EFFECTIVE DATE FOR A
PREVIOUSLY FILED POST-EFFECTIVE AMENDMENT
____________________________________________________
Title of securities being registered. Shares of beneficial interest, $.001 par
value, of Asia Dynasty Fund, Emerging Markets Growth Fund, Global Balanced Fund,
Global Hard Assets Fund, Global Real Estate Fund, Gold/Resources Fund,
International Investors Gold Fund and U.S. Government Money Fund.
<PAGE>
VAN ECK FUNDS
CROSS-REFERENCE PAGE
PURSUANT TO RULE 501 (B) OF REGULATION S-K
UNDER THE SECURITIES ACT OF 1933, AS AMENDED
FORM N-1A
PART A
ITEM NO. LOCATION IN PROSPECTUS
- -------- ----------------------
1. Cover Page Cover Page
2. Synopsis The Funds
3. Condensed Financial Information Financial Highlights
4. General Description of Registrant Other Investments, Investment Policies,
Investment Techniques and Risks.
5. Management of the Fund Management of the Funds;
6. Capital Stock and Other Securities Dividends and Capital Gains; Taxes;
7. Purchase of Securities Being
Offered How to buy, sell, exchange or transfer
shares.
8. Redemption or Repurchase How to buy, sell, exchange or transfer
shares.
9. Pending Legal Proceedings N/A
PART B LOCATION IN STATEMENT
ITEM NO. ADDITIONAL INFORMATION
- -------- ----------------------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History N/A
13. Investment Objectives and Policies Investment Objectives and Policies;
Risk Factors; Investment Restrictions;
Portfolio Transactions and Brokerage
14. Management of the Fund Trustees and Officers
15. Control Persons and Principal Trustees and Officers
Holders of Securities
<PAGE>
PART B LOCATION IN STATEMENT
ITEM NO. ADDITIONAL INFORMATION
- -------- ----------------------
16. Investment Advisory and Other Investment Advisory Services;The
Services Distributor; Trustees and Officers;
Additional Information
17. Brokerage Allocation and Other Portfolio Transactions and Brokerage
Practices
18. Capital Stock and Other Securities General Information
19. Purchase, Redemption and Pricing Valuation of Shares; Exchange
of Securities Being Offered Privilege; Tax-Sheltered Retirement
Plans; Investment Programs;
Redemptions in Kind
20. Tax Status Taxes
21. Underwriters The Distributor
22. Calculation of Performance Data Performance
23. Financial Statements Financial Statements
<PAGE>
YOUR INVESTMENT DEALER IS:
For more detailed information, see the Statement of Additional Information
(SAI), which is incorporated by reference into this prospectus.
For free copies of SAIs, annual or semi-annual
reports...
* Call Van Eck at 1-800-826-1115, or visit the Van Eck website at
www.vaneck.com.
* Go to the Public Reference Room of the Securities and Exchange Commission.
* Call the SEC at 1-800-SEC-0330, or write to them at the Public Reference
Room, Washington, D.C. 20549-6009, and ask them to send you a copy. There is
a fee for this service.
* Download documents from the SEC's website at www.sec.gov
* The Funds' annual report (other than U.S. Government Money Fund) includes a
discussion of market conditions and investment strategies that significantly
affected the Funds' last year.
Van Eck Global [LOGO]
Transfer Agent: DST Systems, Inc.
P.O. Box 418407
Kansas City, Missouri 64141
1-800-544-4653
SEC REGISTRATION NUMBER: 811-04297
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Van Eck Global
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PROSPECTUS
May 1, 1999
[GRAPHIC]
VAN ECK FUNDS
Asia Dynasty Fund
Global Hard Assets Fund
Global Leaders Fund
Gold/Resources Fund
International Investors Gold Fund
U.S. Government Money Fund
These securities have not been approved or disapproved either by the Securities
and Exchange Commission (SEC) or by any State Securities Commission. Neither the
SEC nor any State Commission has endorsed the accuracy or adequacy of this
prospectus. Any claim to the contrary is against the law.
- --------------------------------------------------------------------------------
GLOBAL INVESTMENTS SINCE 1955
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<PAGE>
- --------------------------------------------------------------------------------
Table of Contents
- --------------------------------------------------------------------------------
I. THE FUNDS 2
INCLUDES A PROFILE OF EACH FUND, ITS INVESTMENT STYLE AND PRINCIPAL RISKS;
HISTORIC PERFORMANCE; PERFORMANCE MEASURED AGAINST A RELEVANT BENCHMARK;
HIGHEST AND LOWEST PERFORMING QUARTERS; AND EXPENSES.
ASIA DYNASTY FUND 2
GLOBAL HARD ASSETS FUND 5
GLOBAL LEADERS FUND 9
GOLD/RESOURCES FUND 12
INTERNATIONAL INVESTORS GOLD FUND 15
U.S. GOVERNMENT MONEY FUND 18
II. ADDITIONAL INVESTMENT STRATEGIES 24
OTHER INVESTMENTS, INVESTMENT POLICIES, INVESTMENT
TECHNIQUES AND RISKS.
III.SHAREHOLDER INFORMATION 31
HOW TO BUY, SELL, EXCHANGE, OR TRANSFER SHARES; AUTOMATIC SERVICES; MINIMUM
PURCHASE AND ACCOUNT SIZE; HOW TO CHOOSE A CLASS OF SHARES; YOUR PRICE PER
SHARE; SALES CHARGES; RETIREMENT PLANS; DIVIDENDS AND CAPITAL GAINS; TAXES;
AND MANAGEMENT OF THE FUNDS.
IV. FINANCIAL HIGHLIGHTS 46
TABLES THAT SHOW PER SHARE EARNINGS, EXPENSES, AND PERFORMANCE OF EACH
FUND.
<PAGE>
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I. The Funds
- --------------------------------------------------------------------------------
INCLUDES A PROFILE OF EACH FUND, ITS INVESTMENT STYLE AND PRINCIPAL RISKS;
HISTORIC PERFORMANCE; PERFORMANCE MEASURED AGAINST A RELEVANT BENCHMARK; HIGHEST
AND LOWEST PERFORMING QUARTERS; AND EXPENSES.
1. ASIA DYNASTY FUND PROFILE
OBJECTIVE
Asia Dynasty Fund seeks long-term capital appreciation by investing in the
equity securities of companies outside of Japan that stand to benefit from Asian
development.
PRINCIPAL POLICIES
Under normal circumstances, the Fund will invest at least 65% of total assets in
common and preferred stocks and other equity securities of companies in, or
expected to benefit from the growth of: Burma, Cambodia, Hong Kong, India,
Indonesia, Korea, Laos, Malaysia, Pakistan, Peoples Republic of China ("China"),
the Philippines, Singapore, Sri Lanka, Taiwan, Thailand, and Vietnam. The Fund
may invest as much as 25% of total assets in one country. The Fund currently
invests more than 25% of its total assets in Hong Kong.
PRINCIPAL RISKS
By definition, an Asian emerging markets fund involves above-average risk. Many
emerging markets are much less liquid and much more volatile than the U.S.
market. Asian countries, in particular, may have different or ineffective
securities regulation. Their economies and politics can be extremely volatile.
The Fund is designed for long-term investing. An investment in the Fund involves
the risk of losing money.
2 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / ASIA DYNASTY
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Asia Dynasty Fund Performance
- --------------------------------------------------------------------------------
This chart shows the historic annual total return of Class A shares of Asia
Dynasty Fund (before sales charges) since Fund inception on 3/22/93. Sales loads
or account fees are not reflected, if these amounts were reflected, return would
be less than those shown. This chart describes past performance only, and should
not be understood as a prediction for future results.
During the period covered, the Fund's highest performing quarter (ended
12/31/98) was 26.83%. The lowest performing quarter (ended 6/30/98) was-27.61%.
- --------------------------------------------------------------------------------
Asia Dynasty Fund
Class A Shares Annual Total Returns (%)
As of December 31, 1998
-0.26 -32.10 6.53 3.13 -18.72 61.15
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
0%
========================================================================
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
98 97 96 95 94 93*
- ------------------------------------------------------------------------------
* Inception 3/22/93 to 12/31/93
Fund performance is shown with sales charges subtracted. The index's performance
does not reflect sales charges. Past performance does not guarantee or predict
future results.
- --------------------------------------------------------------------------------
Asia Dynasty Fund
1-, 5-Year and Life of Fund Performance
Plus a Comparison to the MSCI Far East Ex-Japan Free Index*
As of December 31, 1998
1 Year 5 Years Life of Fund
Class A Shares -4.99% -10.44% -1.28%
Class B Shares -6.12% -10.50% -4.99%
MSCI Far East
Ex-Japan Free Index -4.82% -11.95%
-0.28% +
- --------------------------------------------------------------------------------
* The Morgan Stanley Capital International (MSCI) Far East Ex-Japan Free Index
is a market capitalization weighted index that captures the largest 60% of
the publicly traded securities in each industry for nine Asian markets
(excluding Japan); the index includes only shares available for purchase by
foreign investors.
+ Life of Class A Shares; calculated from nearest month end (3/31/93).
VAN ECK GLOBAL PROSPECTUS 3
<PAGE>
- --------------------------------------------------------------------------------
Asia Dynasty Fund Expenses
- --------------------------------------------------------------------------------
This table shows certain expenses you will incur as a Fund investor. You pay
sales charges directly. "Annual Fund Operating Expenses" are paid by the Fund.
Sales charges may decline as you buy more shares, or when you take part in
certain investment programs. (See Chapter III, "Shareholder Information.") The
Adviser may sometimes waive fees and/or reimburse certain expenses of the Fund.
- --------------------------------------------------------------------------------
Asia Dynasty Fund
Shareholder Transaction Expenses
CLASS A CLASS B
Sales Charges
Maximum Sales Charge (% of offering price) 4.75% .00%
Maximum Contingent Deferred Sales Charge
(Redemption Charge) 0.0% 5.00%
Annual Fund Operating Expenses (% of net assets)
Management/Administration Fees 1.00% 1.00%
12b-1 Fees (Shareholder Servicing Fees) .50% 1.00%
Other Expenses 1.63% 1.83%
Total Fund Operating Expenses(*) 3.13% 3.83%
- --------------------------------------------------------------------------------
* After custody fee arrangement: Class A-- 2.43%, Class B-- 3.14%
The table above shows the expenses you would pay on a hypothetical $10,000
investment. The example presumes an average annual return of 5% with redemption
at the end of each time period. This illustration is hypothetical. For a real
investment, your actual expenses may be higher or lower than those shown.
- --------------------------------------------------------------------------------
Expense Example
What a $10,000 investment would actually cost
CLASS A CLASS B
- -------------------------------------------------------------------------------
1 year $ 776 $ 885
3 years $ 1,395 $ 1,569
5 years $ 2,037 $ 2,172
10 years $ 3,750 $ 4,062
- --------------------------------------------------------------------------------
4 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / GLOBAL HARD ASSETS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. GLOBAL HARD ASSETS FUND PROFILE
OBJECTIVE
The Global Hard Assets Fund seeks long-term capital appreciation by investing
primarily in "Hard Asset Securities." Income is a secondary consideration.
PRINCIPAL POLICIES
Under normal conditions, the Fund will invest at least 65% of assets in "hard
asset securities." The Fund will invest at least 5% of assets in the first five
"hard asset" sectors listed below. The Fund may concentrate as much as 50% of
its assets in a single "hard asset" sector.
"Hard asset securities" are the stocks, bonds, and other securities of companies
that derive at least 50% of gross revenue or profit from exploration,
development, production or distribution of:
. Commodities
. Natural Resources
. Precious metals
. Real estate
The Fund may invest up to 50% of assets in equity securities of real estate
investment trusts ("REITs"), not directly in real estate.
Under normal circumstances, the Fund will invest in at least three countries
including the United States. However, there is no limit on the amount the Fund
may invest in any one country, developed or underdeveloped.
Hard asset securities can produce long-term capital appreciation and help
protect capital against inflation during cyclical economic expansions. Hard
asset security values may move independently of industrial shares, so a hard
asset portfolio can offset the fluctuations--and perhaps increase the return--of
an industrial equity portfolio.
VAN ECK GLOBAL PROSPECTUS 5
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Global Hard Assets Fund invests in a number of securities, and utilizes a number
of techniques, that are covered in detail in Chapter II "Investment Policies and
Risks." These include "Derivatives," which are discussed in Chapter II. The Fund
may invest up to 5% of assets in 1) premiums for options on equity securities
and equity indexes, and in 2) warrants, including options and warrants traded in
over-the-counter markets.
The Fund may invest in common stocks; preferred stocks (either convertible or
non-convertible); rights; warrants; direct equity interests in trusts;
partnerships, joint ventures and other unincorporated entities or enterprises;
convertible debt instruments; and special classes of shares that are restricted
to nationals or residents of a given country. Direct investments are generally
considered illiquid and will be lumped together with other illiquid investments;
this total will be subject to the Fund's limits on illiquid investing. The Fund
may invest up to 10% of its assets in precious metals, either bullion or coins.
The Fund may invest up to 10% of assets in asset-backed securities such as
collateralized mortgage obligations ("CMOs") and other mortgage and non-mortgage
asset-backed securities. Asset-backed securities backed by hard assets are
excluded from this 10% limitation.
The Fund may invest up to 35% of assets in debt securities not linked to hard
assets. These securities include those either rated in the higher grades, or
believed (by its Adviser) to be equivalent to higher-rated securities, for
example, A or better by Standard & Poor's (S&P). The Fund's investments in
short-term instruments will consist primarily of securities rated in the highest
category, or, if unrated, in comparable quality instruments or instruments
insured by the U.S. or foreign governments, their agencies and
instrumentalities.
PRINCIPAL RISKS
An investment in the Fund may involve greater risk than an investment in other
funds. Hard asset prices may move independently of the trends of industrial
companies. The energy and basic materials sectors are volatile. Inflation can
drive down stock prices, and stock prices can influence hard assets; so
inflation may also make hard asset security prices go down. An investment in the
Fund should be considered part of an overall investing program, not a complete
investment in itself. An investment in the Fund may lose money.
6 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / GLOBAL HARD ASSETS
- --------------------------------------------------------------------------------
Global Hard Assets Fund Performance
- --------------------------------------------------------------------------------
This chart shows the historic annual total return of Class A shares of Global
Hard Assets Fund (before sales charges) since Fund inception on 11/2/94. Sales
loads or account fees are not reflected, if these ammounts were reflected,
return would be less than those shown. This chart describes past performance
only, and should not be understood as a prediction for future results.
During the period covered, the Fund's highest performing quarter (ended
12/31/97) was 13.48%. The lowest performing quarter (ended 9/30/98) was -23.56%.
- --------------------------------------------------------------------------------
Global Hard Assets Fund
Class A Shares Annual Total Returns (%)
As of December 31, 1998
-32.25 14.29 45.61 20.08 -1.10%
---------------------------------------------------------------------
---------------------------------------------------------------------
0%
=====================================================================
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
98 97 96 95 94*
- --------------------------------------------------------------------------------
* Inception 11/2/94 to 12/31/94
Fund performance is shown with sales charges subtracted. The Index's performance
does not reflect sales charges. Past performance does not guarantee or predict
future results.
- --------------------------------------------------------------------------------
Global Hard Assets Fund
1-Year and Life of Fund Performance
Plus a Comparison to the Ibbotson Hard Assets Index*
As of December 31, 1998
1 Year Life of Fund
Class A Shares -35.45% 6.01%
Class B Shares -35.88% -2.96%
Class C Shares -33.20% 7.12%
Ibbotson Hard Assets Index -11.12% -1.07% +
- --------------------------------------------------------------------------------
* The Ibbotson Hard Assets Index is 75% equities of global companies whose
primary business is linked to hard assets, and 25% commodity futures. The
equity component consists of equal weightings of the MSCI Gold Mines, Non-
Ferrous Metals, Energy Sources, and Forest Products and Paper Indexes, and
the National Association of Real Estate Investment Trusts Equity Index. The
commodity component consists of equal weightings of the Goldman Sachs
Energy, Precious Metals and Industrial Metals Indexes, with the exceptions
noted in the following paragraph.
The Index is entirely equity for 1970-72 because there were no commodity
contracts before 1973 with sufficient liquidity to qualify for inclusion in
the Goldman Sachs indexes. The real estate index did not exist and is not
included before 1972. The precious metals commodity sub-index was first
available in 1973, and until 1977 represented the entire commodity
component. The industrial metals sub-index began in 1977, and, until 1983,
when the energy-related commodities index began, these two sub-indexes each
represented 50% of the commodity component.
+ Life of Class A Shares; calculated from nearest month end (10/31/94).
VAN ECK GLOBAL PROSPECTUS 7
<PAGE>
- --------------------------------------------------------------------------------
Global Hard Assets Fund Expenses
- --------------------------------------------------------------------------------
This table shows certain expenses you will incur as a Fund investor, either
directly or indirectly. Sales charges may decline as you buy more shares, or
when you take part in certain investment programs. (See Chapter III,
"Shareholder Information.") The Adviser may sometimes waive fees and/or
reimburse certain expenses of the Fund.
- --------------------------------------------------------------------------------
Global Hard Assets Fund
Shareholder Transaction Expenses
CLASS A CLASS B CLASS C
Sales Charges
Maximum Sales Charge 4.75% 0% 0%
(% of offering price)
Maximum Contingent Deferred Sales Charge
(Redemption Charge) 0.0% 5.0% 1.00%
Annual Fund Operating Expenses (% of net assets)
Management/Administration Fees 1.00% 1.00% 1.00%
12b-1 Fees (Shareholder Servicing Fees) .50% 1.00% 1.00%
Other Expenses .61% .81% 1.00%
Total Fund Operating Expenses* 2.11% 2.81% 3.00%
- --------------------------------------------------------------------------------
* After advisory fee waiver: Class A-- 2%, Class B-- 2.5%, Class C--2.5%
The table above shows the expenses you would pay on a hypothetical $10,000
investment. The example presumes an average annual return of 5% with redemption
at the end of each time period. This illustration is hypothetical. In a real
investment, your actual expenses may be higher or lower than those shown.
- --------------------------------------------------------------------------------
Expense Example
What a $10,000 investment would actually cost
CLASS A CLASS B CLASS C
---------------------------------------------------------------------------
1 year $ 679 $ 784 $ 403
3 years $ 1,104 $ 1,271 $ 927
5 years $ 1,555 $ 1,684 $ 1,577
10 years $ 2,800 $ 3,138 $ 3,318
- --------------------------------------------------------------------------------
8 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / GLOBAL LEADERS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. GLOBAL LEADERS FUND PROFILE
OBJECTIVE
Global Leaders Fund seeks long-term capital appreciation together with current
income.
PRINCIPAL POLICIES
The Fund will allocate its assets among primarily equity securities, and may
also purchase fixed income securities and short-term investments in the United
States and other countries throughout the world. Under normal conditions, the
Fund will invest in at least three countries including the United States. There
is no limit on the amount the Fund may invest in any one asset class or country.
However, the Fund will not invest more than 10% of assets in the securities of
developing countries with emerging economies or securities markets.
PRINCIPAL RISKS
A global equity portfolio can provide higher returns than a domestic stock fund.
However, a global equity fund can be more volatile than a bond fund and provide
lower returns than a domestic stock fund. There can be no assurance that
allocation of assets globally will reduce risks, or that the Fund will achieve
its investment objective. An investment in the Fund involves a risk of losing
money.
VAN ECK GLOBAL PROSPECTUS 9
<PAGE>
- --------------------------------------------------------------------------------
Global Leaders Fund Performance
- --------------------------------------------------------------------------------
This chart shows the historic annual total return of Class A shares of Global
Leaders Fund (before sales charges) since Fund inception on 12/20/93. Sales
loads or account fees are not reflected, if these amounts were reflected, return
would be less than those shown. This chart describes past performance only, and
should not be understood as a prediction for future results.
During the period covered, the Fund's highest performing quarter (ended
12/31/98) was 6.93%. The lowest performing quarter (ended 9/30/98) was -10.98%.
- --------------------------------------------------------------------------------
Global Leaders Fund
Class A Shares Annual Total Returns (%)
As of December 31, 1998
20.65 14.77 12.28 15.30 -3.90
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
0% =============================================================================
-----------------------------------------------------------------------------
98 97 96 95 94
- --------------------------------------------------------------------------------
Fund performance is shown with sales charges subtracted. The index's performance
does not reflect sales charges. Past performance does not guarantee or predict
future results.
- --------------------------------------------------------------------------------
Global Leaders Fund
1-, 5-Year, and Life of Fund Performance
Plus a Comparison to the MSCI World Stock Index*
As of December 31, 1998
1 Year 5 Years Life of Fund
Class A Shares 14.89% 10.40% 10.34%
Class B Shares 15.07% 10.50% 10.56%
MSCI World Stock Index 24.38% 15.67% 15.67% +
- --------------------------------------------------------------------------------
* The MSCI World Stock Index is a market capitalization weighted benchmark
that tracks the performance of 24 world stock markets. The Index is based on
the reinvestment of dividends less any withholding taxes on foreigners who
do not benefit from a double taxation treaty ("net dividends").
The Index aims for 60% of the total market capitalization for each market
that is represented in the Index. The companies included in the Index
replicate the industry composition of each global market. The chosen list of
stock includes a representative sampling of large, medium, and small
capitalization companies and investment funds are not eligible. Companies
with restricted float due to dominant shareholders or cross ownership are
avoided.
+ Life of Class A Shares; calculated from nearest month end (12/31/93).
10 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / GLOBAL LEADERS
- --------------------------------------------------------------------------------
Global Leaders Fund Expenses
- --------------------------------------------------------------------------------
This table shows certain expenses you will incur as a Fund investor, either
directly or indirectly. Sales charges may decline as you buy more shares, or
when you take part in certain investment programs. (See Chapter III,
"Shareholder Information.") The Adviser may sometimes waive fees and/or
reimburse certain expenses of the Fund.
- --------------------------------------------------------------------------------
Global Leaders Fund
Shareholder Transaction Expenses
CLASS A CLASS B
Sales Charges
Maximum Sales Charge (% of offering price) 4.75% .00%
Maximum Contingent Deferred Sales Charge
(Redemption Charge) 0.0% 5.00%
Annual Fund Operating Expenses (% of net assets)
Management/Administration Fees 1.00% 1.00%
12b-1 Fees (Shareholder Servicing Fees) .50% 1.00%
Other Expenses .82% 1.25%
Total Fund Operating Expenses* 2.32% 3.25%
- --------------------------------------------------------------------------------
* After advisory fee waiver: Class A-- 2%, Class B-- 2.5%
The table above shows the expenses you would pay on a hypothetical $10,000
investment. The example presumes an average annual return of 5% with redemption
at the end of each time period. This illustration is hypothetical. In a real
investment, your actual expenses may be higher or lower than those shown.
- --------------------------------------------------------------------------------
Expense Example
What a $10,000 investment would actually cost
CLASS A CLASS B
- --------------------------------------------------------------------------------
1 year $ 699 $ 828
3 years $ 1,165 $1,401
5 years $ 1,656 $1,898
10 years $ 3,005 $3,549
- --------------------------------------------------------------------------------
VAN ECK GLOBAL PROSPECTUS 11
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. GOLD/RESOURCES FUND PROFILE
OBJECTIVE
Gold/Resources Fund seeks long-term capital appreciation by investing in equity
and debt securities of companies that explore, develop, produce or distribute
gold and other strategic or precious metals, minerals, oil, natural gas and
coal. Although current income may result from these investments, income is not
an investment objective.
PRINCIPAL POLICIES
Under normal conditions, the Fund will invest at least 65% of total assets in
securities of gold mining and natural resources companies. Normally, the Fund
expects to invest at least 25% of assets in Canadian and U.S. gold companies.
There is no restriction on the amount the Fund may invest in foreign securities.
The Fund may invest up to 35% of assets in: common stock of companies not in
gold mining or natural resources, high grade corporate debt securities,
obligations issued or guaranteed by U.S. or foreign governments, and repurchase
agreements. In addition, the Fund may invest up to 10% of assets in gold,
silver, platinum and palladium bullion and gold or silver coins.
PRINCIPAL RISKS
An investment in securities of precious metals and other natural resources
companies can protect capital against inflation. There can be no assurance,
however, that this effect will be achieved. An investment in the Fund should be
considered part of an overall investing program, not a complete investment in
itself. An investment in the Fund may lose money.
12 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / GOLD RESOURCES
- --------------------------------------------------------------------------------
Gold/Resources Fund Performance
- --------------------------------------------------------------------------------
This chart shows the historic annual total return of Class A shares of
Gold/Resources Fund (before sales charges) since Fund's inception 2/15/86. Sales
loads or account fees are not reflected, return would be less than those shown.
This chart describes past performance only, and should not be understood as a
prediction of future results.
During the period covered, the Fund's highest performing quarter (ended 6/30/93)
was 28.13%. The lowest performing quarter (ended 12/31/97) was -32.62%.
- --------------------------------------------------------------------------------
Gold/Resources Fund
Class A Share Annual Total Returns (%)
As of December 31, 1998
-12.39 -39.34 2.51 4.30 -15.62 78.09 -4.50 -4.08 -26.36 18.89
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
0%
==============================================================================
------------------------------------------------------------------------------
------------------------------------------------------------------------------
98 97 96 95 94 93 92 91 90 89
- --------------------------------------------------------------------------------
Fund performance is shown with sales charges subtracted. The index's performance
does not reflect sales charges. Past performance does not guarantee or predict
future results.
- --------------------------------------------------------------------------------
Gold/Resources Fund
1-, 5-, and 10-Year Performance
Plus a Comparison to MSCI Gold Mines Index(*)
As of December 31, 1998
1 Year 5 Year 10 Year
Class A Shares -17.39% -14.70% -4.28%
MSCI Gold Mines Index -9.71% -13.04% -1.66%
- --------------------------------------------------------------------------------
* The Morgan Stanley Capital International (MSCI) Gold Mines Index is a market
capitalization weighted index comprised of 15 stocks in the major gold
producing countries (Canada, the United States, Australia, and the United
Kingdom) excluding South Africa.
VAN ECK GLOBAL PROSPECTUS 13
<PAGE>
- --------------------------------------------------------------------------------
Gold/Resources Fund Expenses
- --------------------------------------------------------------------------------
This table shows certain expenses you will incur as a Fund investor, either
directly or indirectly. Sales charges may decline as you buy more shares, or
when you take part in certain investment programs. (See Chapter III,
"Shareholder Information.") The Adviser may sometimes waive fees and/or
reimburse certain expenses of the Fund.
- --------------------------------------------------------------------------------
Gold/Resources Fund
Shareholder Transaction Expenses
CLASS A
Sales Charges
Maximum Sales Charge 5.75%
(% of offering price)
Maximum Contingent Deferred Sales Charge
(Redemption Charge) 0.0%
Annual fund operating expenses (% of net assets)
Management/Administration Fees 1.00%
12b-1 Fees (Shareholder Servicing Fees) .25%
Other Expenses .99%
Total Fund Operating Expenses* 2.24%
- --------------------------------------------------------------------------------
* After a direct brokerage arrangement: 2.21%
The table above shows the expenses you would pay on a hypothetical $10,000
investment. The example presumes an average annual return of 5% with redemption
at the end of each time period. This illustration is hypothetical. For a real
investment, your actual expenses may be higher or lower than those shown.
- --------------------------------------------------------------------------------
Expense Example
What a $10,000 investment would actually cost
CLASS A
1 year $ 789
3 years $ 1,235
5 years $ 1,706
10 years $ 3,002
- --------------------------------------------------------------------------------
14 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / INTERNATIONAL INVESTORS GOLD
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. INTERNATIONAL INVESTORS GOLD FUND PROFILE
OBJECTIVE
The Fund seeks long-term capital appreciation by investing in common stocks of
gold mining companies. The Fund may take current income into consideration in
picking investments.
PRINCIPAL POLICIES
Under normal conditions, the Fund will invest at least 65% of total assets in
the gold mining industry, with at least 25% of assets invested in gold mining
stocks. The Fund may invest up to 100% of its assets, or, for temporary
defensive purposes, less than 25% of its assets in gold stocks.
Kinds of securities in which the Fund invests: The Fund invests primarily in
securities of companies whose properties, products, or services are
international in scope or substantially outside the U.S., plus U.S. Treasury
securities. Under normal conditions, the Fund expects to invest more than 50% of
assets in securities of foreign companies.
The Fund may invest up to 12 1/2% of its assets in gold and silver coins as well
as gold, silver, platinum and palladium bullion. The sole source of return to
the Fund from coins is from gains or losses realized on their sale. The Fund
pays custody costs to store its bullion and coins.
PRINCIPAL RISKS
An investment in gold stocks can offer an opportunity to achieve long-term
capital appreciation and to protect wealth against inflation. The accelerating
growth of monetary reserves and credit in major industrial markets may help gold
and gold mining share prices go up. Gold share values may move independently of
industrial shares, so adding gold to an industrial equity portfolio may offset
that portfolio's fluctuations--and perhaps increase its return. An investment in
the Fund should be considered part of an overall investment program, not a
complete investment in itself. An investment in the Fund may lose money.
VAN ECK GLOBAL PROSPECTUS 15
<PAGE>
- --------------------------------------------------------------------------------
International Investors Gold Fund Performance
- --------------------------------------------------------------------------------
This chart shows the historic annual total return of Class A shares of
International Investors Gold Fund (before sales charges) since the Fund's
inception. Sales loads or account fees are not reflected, if these amounts were
reflected, return would be less than those shown. This chart describes past
performance only, and should not be understood as a prediction for future
results.
During the period covered, the Fund's highest performing quarter (ended 6/30/93)
was 31.04%. The lowest performing quarter (ended 12/31/97) was -29.30%.
- --------------------------------------------------------------------------------
International Investors Gold Fund
Class A Share Annual Total Returns (%)
As of December 31
-11.87 -36.00 -9.37 -8.93 -1.05 113.41 -29.08 2.56 -27.02 51.29
------------------------------------------------------------------------------
------------------------------------------------------------------------------
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0%
==============================================================================
------------------------------------------------------------------------------
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98 97 96 95 94 93 92 91 90 89
- --------------------------------------------------------------------------------
Fund performance is shown with sales charges subtracted. The index's performance
does not reflect sales charges. Past performance does not guarantee or predict
future results.
- --------------------------------------------------------------------------------
International Investors Gold Fund
1-, 5-, and 10-Year Performance
Plus a Comparison to the FT Gold Mines Index*
As of December 31, 1998
1 Year 5 Year 10 Year
Class A Shares -16.93% -15.36% -2.91%
FT Gold Mines Index -11.07% -13.95% -6.21%
- --------------------------------------------------------------------------------
* The Financial Times Gold Mines Index is a market capitalization-weighted
global index of gold mining shares.
16 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / INTERNATIONAL INVESTORS GOLD
- --------------------------------------------------------------------------------
International Investors Gold Fund Expenses
- --------------------------------------------------------------------------------
This table shows certain expenses you will incur as a Fund investor, either
directly or indirectly. Sales charges may decline as you buy more shares, or
when you take part in certain investment programs. (See Chapter III,
"Shareholder Information.") The Adviser may sometimes waive fees and/or
reimburse certain expenses of the Fund.
- --------------------------------------------------------------------------------
International Investors Gold Fund
Shareholder Transaction Expenses
CLASS A
Sales Charges
Maximum Sales Charge 5.75%
(% of offering price)
Maximum Contingent Deferred Sales Charge
(Redemption Charge) 0.0%
Annual Fund Operating Expenses (% of net assets)
Management/Administration Fees 1.00%
12b-1 Fees (Shareholder Servicing Fees) 0.0%
Other Expenses .78%
Total Fund Operating Expenses * 1.78%
- --------------------------------------------------------------------------------
* After a direct brokerage arrangement: 1.76%
The table above shows the expenses you would pay on a hypothetical $10,000
investment. The example presumes an average annual return of 5% with redemption
at the end of each time period. This illustration is hypothetical. In a real
investment, your actual expenses may be higher or lower than those shown.
- --------------------------------------------------------------------------------
Expense Example
What a $10,000 investment would actually cost
CLASS A
- --------------------------------------------------------------------------------
1 year $ 745
3 years $ 1,103
5 years $ 1,484
10 years $ 2,549
- --------------------------------------------------------------------------------
VAN ECK GLOBAL PROSPECTUS 17
<PAGE>
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- --------------------------------------------------------------------------------
6. U.S. GOVERNMENT MONEY FUND PROFILE
OBJECTIVE
U.S. Government Money Fund seeks safety of principal, daily liquidity and
current income by investing in U.S. Treasury bills, notes, bonds and other
obligations guaranteed by the full faith and credit of the U.S. Government.
KINDS OF SECURITIES IN WHICH THE FUND INVESTS
As a matter of fundamental policy, at least 80% of the Fund's total assets will
at all times be maintained in U.S. Government securities and repurchase
agreements collateralized by such securities. The Adviser selects only high
quality low credit risk securities for the Fund.
PRINCIPAL POLICIES
The Fund follows an operating policy, pursuant to a Securities and Exchange
Commission ("SEC") rule, designed to maintain a constant net asset value of
$1.00 per share.
All securities in which the Fund invests have remaining maturities of 397 days
or less at the date of purchase. The Fund maintains an average-weighted
portfolio maturity of 90 days or less.
PRINCIPAL RISKS
An investment in the Fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. There is no guarantee that the Fund can maintain a constant $1.00 per
share price.
18 VAN ECK GLOBAL PROSPECTUS
<PAGE>
I. THE FUNDS / U.S. GOVERNMENT MONEY
- --------------------------------------------------------------------------------
U.S. Government Money Fund Expenses
- --------------------------------------------------------------------------------
This table shows certain expenses you will incur as a Fund investor, either
directly or indirectly. There are no sales charges for U.S. Government Money
Fund. The Adviser may sometimes waive fees and/or reimburse certain expenses of
the Fund.
- --------------------------------------------------------------------------------
U.S. Government Money Fund
Shareholder Transaction Expenses (%)
CLASS A
Sales Charges
Maximum Sales Charge 0.0%
(% of offering price)
Maximum Contingent Deferred Sales Charge
(Redemption Charge) 0.0%
Annual Fund Operating Expenses (% of net assets)
Management/Administration Fees .50%
12b-1 Fees (Shareholder Servicing Fees) .25%
Other Expenses .45%
Total Fund Operating Expenses* 1.20%
- --------------------------------------------------------------------------------
* After expenses are reduced by a custodian fee arrangement: 1.20%
The table above shows the expenses you would pay on a hypothetical $10,000
investment. The example presumes an average annual return of 5% with redemption
at the end of each time period. This illustration is hypothetical. In a real
investment, your actual expenses may be higher or lower than those shown.
- --------------------------------------------------------------------------------
Expense Example
What a $10,000 investment would actually cost
CLASS A
- --------------------------------------------------------------------------------
1 year $ 123
3 years $ 384
5 years $ 665
10 years $1,466
- --------------------------------------------------------------------------------
VAN ECK GLOBAL PROSPECTUS 19
<PAGE>
- --------------------------------------------------------------------------------
II. Additional Investment Strategies
- --------------------------------------------------------------------------------
OTHER INVESTMENTS, INVESTMENT POLICIES, INVESTMENT TECHNIQUES AND RISKS.
MARKET RISK
An investment in any of the Funds involves "market risk"--the risk that
securities prices may go up or down.
OTHER INVESTMENT TECHNIQUES AND RISK
ASSET-BACKED SECURITIES
Funds Global Hard Assets Fund, Global Leaders Fund
Definition Represent pools of consumer loans unrelated to mortgages.
Risk Principal and interest payments depend on payment of the
underlying loans, though issuers may support credit-
worthiness via letters of credit or other instruments.
BORROWING
Funds Asia Dynasty Fund, Global Hard Assets Fund, Global Leaders
Fund, Gold/Resources Fund, International Investors Gold Fund
Definition Borrowing to invest more is called "leverage." The first
four Funds named above may borrow up to 30% of their net
assets to buy more securities. The two Gold Funds may borrow
up to 50% of net assets in emergencies. All the Funds must
maintain assets equal to 300% of borrowings, and must sell
securities to maintain that margin, even if the sale hurts
the Funds' investment positions.
Risk Leverage exaggerates the effect of rises or falls in prices
of securities bought with borrowed money. Borrowing also
costs money, including fees and interest. The Funds expect
to borrow only via negotiated loan agreements with
commercials banks or other institutional lenders.
20 VAN ECK GLOBAL PROSPECTUS
<PAGE>
II. ADDITIONAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS (CMOs)
Funds Asia Dynasty Fund, Global Hard Assets Fund, Global Leaders
Fund
Definition Asset-backed securities backed by pools of mortgages. CMOs
are fixed-income securities, rated by agencies like other
fixed-income securities; the Funds invest in CMOs rated A or
better by S&P and Moody's. CMOs "pass through" payments made
by individual mortgage holders.
Risk Mortgage holders often refinance when interest rates fall;
reinvestment of prepayments at lower rates can reduce the
yield of the CMO. Issuers of CMOs may support interest and
principal payments with insurance or guarantees. The Funds
may buy uninsured or non-guaranteed CMOs equal in
creditworthiness to insured or guaranteed CMOs.
DEFENSIVE INVESTING
Funds All except U.S. Government Money Fund
Definition A deliberate, temporary shift in portfolio strategy which
may be undertaken when markets start behaving in volatile or
unusual ways. A Fund may, for temporary defensive purposes,
invest a substantial part of its assets in bonds of the U.S.
or foreign governments, certificates of deposit, bankers'
acceptances, high grade commercial paper, and repurchase
agreements. At such times, a Fund may have all of its assets
invested in a single country or currency.
Risk "Opportunity cost"-i.e., when a Fund has invested
defensively in low-risk, low-return securities, it may miss
an opportunity for profit in its normal investing areas.
VAN ECK GLOBAL PROSPECTUS 21
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
Fund Policies:
Basic Risk Management Rules
- ---------------------------
Asia Dynasty Fund
Global Hard Assets Fund
Global Leaders Fund
Gold/Resources Fund
U.S. Government
Money Market Fund
1. Gold/Resources Fund and U.S. Government Money Fund will not invest more than
10% and Asia Dynasty Fund, Global Leaders Fund, and Global Hard Assets Fund will
not invest more than 15% of net assets in securities which are not readily
marketable.
================================================================================
DERIVATIVES
Funds All except U.S Government Money Fund
Definition A derivative is a security that derives its current value
from the current value of another security. It can also
derive its value from a commodity, a currency, or a
securities index. The Funds use derivatives, either on their
own, or in combination with other derivatives, to offset
other investments with the aim of reducing risk--that is
called "hedging." The Funds also invest in derivatives for
their investment value.
Kinds of derivatives include, but are not limited to:
forward contracts, futures contracts, options and swaps. The
Funds will not commit more than 5% of assets to initial
margin deposits on futures contracts and premiums on options
for futures contracts (leverage). Hedging, as defined by the
Commodity Exchange Act, is excluded from this 5% limit.
Risks Derivatives bear special risks, by their very nature. First,
the Fund Advisers must correctly predict the price
movements, during the life of a derivative, of the
underlying asset in order to realize the desired results
from the investment. Second, the price swings of an
underlying security tend to be magnified in the price swing
of its derivative. If a Fund invests in a derivative with
"leverage"--by borrowing--an unanticipated price move might
result in the Fund losing more than its original investment.
For a complete discussion of the kinds of derivatives the
Funds use, and of their risks, please see the SAI.
DIRECT INVESTMENTS
Funds Asia Dynasty Fund, Global Hard Assets Fund, Global Leaders
Fund
Definition Investments made directly with an enterprise via a
shareholder or similar agreements--not via publicly traded
shares or interests. Direct investments may involve high
22 VAN ECK GLOBAL PROSPECTUS
<PAGE>
II. ADDITIONAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
risk of substantial loss. Such positions may be hard to
sell because they are not listed on an exchange, and prices
of such positions may be unpredictable.
Risk A direct investment price as stated for valuation may not
be the price the Fund could actually get if it had to sell.
Private issuers do not have to follow all the rules of
public issuers. Tax rates on realized gains from selling
private issue holdings may be higher than taxes on gains
from listed securities. The Board of Trustees considers
direct investments illiquid, and will aggregate direct
investments with other illiquid investments under the
illiquid investing limits of each Fund.
The Funds will not invest more than 10% of assets in direct
investments.
EMERGING MARKETS SECURITIES
Funds All except U.S. Government Money Fund
Definition Securities of companies which are primarily in developing
countries. (See "Foreign Securities," below, for basic
information on foreign investing risks.)
Risk Investments in emerging markets securities are exposed to a
number of risks that may make these investments volatile in
price, or difficult to trade. Political risks may include
unstable governments, nationalization, restrictions on
foreign ownership, laws that prevent investors from getting
their money out of a country, and legal systems that do not
protect property rights as well as the laws of the U.S.
Market risks may include economies that concentrate in only
a few industries, securities issues that are held by only a
few investors, limited trading capacity in local exchanges,
and the possibility that markets or issues may be
manipulated by foreign nationals who have inside
information.
================================================================================
2. Asia Dynasty Fund, Global Leaders Fund, Global Hard Assets Fund,
Gold/Resources Fund and U.S. Government Money Fund will not purchase more than
10% of any class of securities of a company, or more than 10% of a company's
outstanding securities. Asia Dynasty Fund, Global Leaders Fund and Global Hard
Assets Fund may purchase more than 10% of any non-voting class of securities.
Asia Dynasty Fund and Global Leaders Fund will not invest more than 25% of the
value of their total assets in any one industry.
3. The Funds will not invest more than 10% of their total assets in other
investment companies.
4. Gold/Resources Fund and U.S. Government Money Fund may borrow money for
temporary or emergency purposes up to 10% of the value of their assets. If these
Funds ever borrow more than 5% of such assets, they may not buy securities for
investment.
================================================================================
VAN ECK GLOBAL PROSPECTUS 23
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
Fund Policies:
Basic Risk Management Rules
- ---------------------------
International
Investors Gold Fund
1. The Fund will not buy securities of other investment companies except in the
open market where no commissions or broker fees apply to a sponsor or dealer,
and then not in excess of 10% of assets (mergers or acquisitions excepted).
2. The Fund will not invest more than 5% of assets in companies with less than 3
years continuous operation.
================================================================================
FOREIGN SECURITIES
Funds All except U.S. Government Money Fund
Definition Securities issued by foreign companies, traded in foreign
currencies, or issued by companies with most of their
business interests in foreign countries.
Risk Foreign investing involves greater risks than investing in
U.S. securities. These risks include: exchange rate
fluctuations and exchange controls; less publicly available
information; more volatile or less liquid securities
markets; and the possibility of expropriation, confiscatory
taxation, or political, economic or social instability.
Foreign accounting can be different--and less revealing--
than American accounting practice. Foreign regulation of
stock exchanges may be inadequate or irregular.
Some of these risks may be reduced when Funds invest
indirectly in foreign issues via American Depositary
Receipts (ADRs), European Depositary Receipts (EDRs),
American Depositary Shares (ADSs), Global Depositary Shares
(GDSs), and securities of foreign investment funds or
trusts, including passive foreign investment companies.
These vehicles are traded on larger, recognized exchanges
and in stronger, more recognized currencies.
Russia: The Funds invest only in those Russian companies
whose registrars have contracted to allow the Funds' Russian
sub-custodian to inspect share registers and to obtain
extracts of share registers through regular audits. These
procedures may reduce the risk of loss, but there can be no
assurance that they will be effective.
24 VAN ECK GLOBAL PROSPECTUS
<PAGE>
II. ADDITIONAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INDEXED COMMERCIAL PAPER
Funds Global Hard Assets Fund, Global Leaders Fund
Definition These Funds, for hedging purposes only, invest in commercial
paper with the principal amount indexed to the difference,
up or down, in value between two foreign currencies. The
Funds segregate asset accounts with an equivalent amount of
cash, U.S. government securities, or other highly liquid
securities equal in value to this commercial paper.
Risk Principal may be lost, but the potential for gains in
principal and interest may help the Funds cushion against
the potential decline of the U.S. dollar value of foreign-
denominated investments. At the same time, this commercial
paper provides an attractive money market rate of return.
LOANS OF PORTFOLIO SECURITIES
Funds Asia Dynasty Fund, Global Hard Assets Fund, Global Leaders
Fund
Definition The Funds may lend their securities, up to one-third of the
value of their portfolios, to broker-dealers. Broker-dealers
must collateralize (secure) these borrowings in full with
cash, U.S. Government securities, or high-quality letters of
credit.
Risk If a broker-dealer breaches its agreement either to pay for
the loan, to pay for the securities, or to return the
securities, the Fund may lose money.
LOW RATED OR UNRATED DEBT SECURITIES
Funds Global Hard Assets Fund
Definition Debt securities, foreign and domestic, rated "below
investment grade" by ratings services.
Risk These securities are also called "junk bonds." In the
market, they can behave somewhat like stocks, with prices
that can swing widely in response to the health of their
issuers and to changes in interest rates. By definition,
they involve more risk of default than do higher-rated
issues.
VAN ECK GLOBAL PROSPECTUS 25
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NON-DIVERSIFICATION
Funds Global Leaders Fund, Global Hard Assets Fund, International
Investors Gold Fund, Gold/Resources Fund
Definition Under a definition provided by the Investment Company Act of
1940, non-diversified funds may invest in fewer assets, or
in larger proportions of the assets of single companies or
industries.
Risk Greater concentration of investments in non-diversified
funds may make those funds more volatile than diversified
funds.
PARTLY PAID SECURITIES
Funds All
Definition Securities paid for on an installment basis. A partly paid
security trades net of outstanding installment payments --
the buyer "takes over payments," as it were.
Risk The buyer's rights are typically restricted until the
security is fully paid. If the value of a partly-paid
security declines before a Fund finishes paying for it, the
Fund will still owe the payments, but may find it hard to
sell.
PRECIOUS METALS
Funds Global Hard Assets Fund, Gold/Resources Fund,
International Investors Gold Fund
Definition Gold, silver, platinum and palladium in the form of bullion
and coins which have no numismatic (collectable) value.
There is a well-established world market for precious
metals.
Risk Precious metals prices can swing sharply in response to
cyclical economic conditions, political events or the
monetary policies of various countries. Under current U.S.
26 VAN ECK GLOBAL PROSPECTUS
<PAGE>
II. ADDITIONAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
tax law, the Funds may not receive more than 10% of their
yearly income from selling precious metals or any other
physical commodity. That law may require a Fund, for
example, to hold precious metals when it would rather sell,
or to sell other securities when it would rather hold them--
both may cause investment losses or lost opportunities for
profit. The Funds also incur storage costs for bullion and
coins.
REAL ESTATE SECURITIES
Funds Global Hard Assets Fund
Definition The Fund may not invest in real estate directly, but may
invest up to 50% of assets in real estate investment trusts
("REITs") and other real estate industry companies or
companies with substantial real estate investments.
Risk All general risks of real estate investing apply to REITs
(for example, illiquidity and volatile prices), plus special
risks of REITs in particular. See "Real Estate Securities"
in the SAI.
REPURCHASE AGREEMENTS
Funds All
Definition In a repurchase agreement, a Fund acquires a security for a
short time while agreeing to sell it back at a designated
price and time. The agreement creates a fixed rate of return
not subject to market fluctuations. The Funds enter into
these agreements generally with member banks of the Federal
Reserve System or certain non-bank dealers; these
counterparties collateralize the transaction.
Risk There is a risk of a counterparty defaulting on a "repo,"
but it is generally small.
================================================================================
Year 2000
- ---------
The Adviser's computer system or the systems of other service providers could
have difficulties processing and calculating date-related information from and
after January 1, 2000. This is commonly known as the "Year 2000 Problem." The
Adviser is taking steps that it believes are reasonably designed to address the
problem in its own computers and to obtain assurances that comparable steps are
being taken by its service providers. However, there can be no assurance that
these steps will avoid any adverse impact on the Funds.
================================================================================
VAN ECK GLOBAL PROSPECTUS 27
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHORT SALES
Funds Global Hard Assets Fund
Definition In a short sale, the Fund borrows an equity security from a
broker, then sells it. If the value of the security goes
down, the Fund can buy it back and return it to the broker,
making a profit.
Risk If the value of the security goes up, the Fund will have to
buy it back at a loss to make good on the borrowing. The
Fund is required to "cover" its short sales with collateral
by depositing liquid high-quality securities in an account.
(See the SAI for a complete definition of this account's
liability.) This account cannot exceed 50% of the Fund's net
assets.
WHEN-ISSUED DEBT SECURITIES
Funds All
Definition Debt securities issued at a fixed price and interest rate,
but delivered and paid for some time later.
Risk Principal and interest of a when-issued security may vary
during the waiting period so that its value, when the Fund
takes possession of it, may be different than when the Fund
committed to buy it. The Funds maintain reserves of cash or
high quality securities to offset purchases of when-issued
securities.
28 VAN ECK GLOBAL PROSPECTUS
<PAGE>
- --------------------------------------------------------------------------------
III. SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
HOW TO BUY, SELL, EXCHANGE, OR TRANSFER SHARES; AUTOMATIC
SERVICES; MINIMUM PURCHASE AND ACCOUNT SIZE, HOW TO CHOOSE A
CLASS OF SHARES; YOUR PRICE PER SHARE; SALES CHARGES; RETIREMENT
PLANS; DIVIDENDS AND CAPITAL GAINS; TAXES; AND MANAGEMENT OF THE
FUNDS. (SEE THE SAI FOR ADDITIONAL INFORMATION.)
1. HOW TO BUY, SELL, EXCHANGE OR TRANSFER SHARES
Through a broker or agent
We recommend that you use a broker or agent to buy, sell, exchange, or transfer
shares for you. The applicable sales charge will be the same, whether you buy
indirectly through a broker or agent or directly through the transfer agent.
Contact your broker or agent for details.
Through the Transfer Agent,
DST Systems, Inc. (DST)
You may buy (purchase), sell (redeem), exchange, or transfer ownership of shares
directly through DST by mail or telephone, as stated below.
The Funds' mailing address at DST is:
Van Eck Global
P.O. Box 418407
Kansas City, MO 64141
For overnight delivery:
Van Eck Global
210 W. 10th St., 8th Fl.
Kansas City, MO 64105
To telephone the Funds at DST, call Van Eck's Account Assistance at
1-800-544-4653.
PURCHASE BY MAIL
To make an initial purchase, complete the Van Eck Account Application and mail
it with your check made payable to Van Eck Funds. Subsequent purchases can be
made by check with the remittance stub of your account statement. You cannot
make a purchase by telephone. We cannot accept third party checks, checks drawn
on a foreign bank, or checks not in U.S. Dollars. There are separate
applications for Van Eck retirement accounts (see "Retirement Plans" for
details). For further details, see the application or call Account Assistance.
TELEPHONE REDEMPTION - PROCEEDS BY CHECK
1-800-345-8506
If your account has the optional Telephone Redemption Privilege, you can redeem
up to $50,000 per day. The redemption check must be payable to the registered
owner(s) at the address of record (which cannot have been changed within the
past 30 days). You automatically get the Telephone Redemption Privilege (for
eligible accounts) unless you specifically refuse it on your Account
Application, on broker/agent settlement instructions, or by written notice to
DST. All accounts are eligible for the privilege except those registered in
street, nominee, or corporate name and custodial accounts held by a financial
institution, including Van Eck sponsored retirement plans.
VAN ECK GLOBAL PROSPECTUS 29
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXPEDITED REDEMPTION - PROCEEDS BY WIRE
1-800-345-8506
If your account has the optional Expedited Redemption Privilege, you can redeem
a minimum of $1,000 or more per day by telephone or written request with the
proceeds wired to your designated bank account. This privilege must be
established in advance by Application. For further details, see the Application
or call Account Assistance.
WRITTEN REDEMPTIONS
Your written redemption (sale) request must include:
* Fund and account number
* Number of shares or dollar amount to be redeemed, or a request to sell "all
shares"
* Signatures of all registered account holders, exactly as those names appear
on the account registration, including any additional documents concerning
authority and related matters in the case of estates, trusts, guardianships,
custodianships, partnerships and corporations, as requested by DST
* Special instructions, including bank wire information or special payee or
address
A signature guarantee for each account holder will be required if:
* The redemption is for $50,000 or more
* The redemption amount is wired
* The redemption amount is paid to someone other than the registered owner
* The redemption amount is sent to an address other than the address of record
* The address of record has been changed within the past 30 days
Institutions eligible to provide signature guarantees include banks, brokerages,
trust companies, and some credit unions.
CHECK WRITING
If your account has the optional Redemption by Check Privilege, you can write
checks against your account for a minimum of $250 and a maximum of $5 million.
This privilege is only available to Global Leaders Fund-A and U.S. Government
Money Fund shareholders and must be established in advance by Application. For
further details, see the Application or call Account Assistance.
TELEPHONE EXCHANGE 1-800-345-8506
If your account has the optional Telephone Exchange Privilege, you can exchange
between Van Eck Funds and Van Eck/Chubb Funds of the same Class without any
additional sales charge. (Shares originally purchased into the U.S. Government
Money Fund, which paid no sales charge, may pay an initial sales charge the
first time they are exchanged into another Class A fund.)
Exchanges of Class B and C shares are exempt from the redemption sales charge,
which is taken only at the time of redemption and applicable to the Fund
originally purchased. All accounts are eligible except for those registered in
street name and certain custodial retirement accounts held by a financial
institution other than Van Eck. For further details regarding exchanges, please
see the application, "Market Timing Limits" and "Unauthorized Telephone
Requests" below, or call Account Assistance.
30 VAN ECK GLOBAL PROSPECTUS
<PAGE>
III. SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WRITTEN EXCHANGES
Written requests for exchange must include:
* The fund and account number to be exchanged out of
* The fund to be exchanged into
* Directions to exchange "all shares" or a specific number of shares or dollar
amount
* Signatures of all registered account holders, exactly as those names appear
on the account registration, including any additional documents concerning
authority and related matters in the case of estates, trusts, guardianships,
custodianships, partnerships and corporations, as requested by DST
For further details regarding exchanges, please see the applicable information
in "Telephone Exchange" on the preceding page.
TRANSFER OF OWNERSHIP
Requests must be in writing and provide the same information and legal
documentation necessary to redeem and establish an account, including the social
security or tax identification number of the new owner.
LIMITS AND RESTRICTIONS
Market Timing Limits
Van Eck has a policy of discouraging short-term trading, particularly by
market-timers, and may limit or reject purchase orders and exchanges at its
discretion. Shareholders are limited to six exchanges per calendar year.
Currently, limits are being waived for exchanges out of International Investors
Gold Fund and the U.S. Government Money Fund as long as Van Eck believes that
shareholders will not be materially disadvantaged. Although not generally
imposed, each Fund has the ability to redeem its shares "in kind" by making
payment in securities instead of dollars. For further details, contact Account
Assistance.
Unauthorized Telephone Requests
Like most financial organizations, Van Eck, the Funds and DST may only be liable
for losses resulting from unauthorized transactions if reasonable procedures
designed to verify the caller's identity and authority to act on the account are
not followed.
If you do not want to authorize the Telephone Exchange or Redemption privilege
on your eligible account, you must refuse it on the Account Application,
broker/agent settlement instructions, or by written notice to DST. Van Eck, the
Funds, and DST reserve the right to reject a telephone redemption, exchange, or
other request without prior notice either during or after the call. For further
details, contact Account Assistance.
VAN ECK GLOBAL PROSPECTUS 31
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Automatic Services
Automatic Investment Plan
You may authorize DST to periodically withdraw a specified dollar amount from
your bank account and buy shares in your Fund account. For further details and
to request an Application, contact Account Assistance.
Automatic Exchange Plan
You may authorize DST to periodically exchange a specified dollar amount for
your account from one Fund to another Fund. The Plan is available to Class A
shares only. For further details and to request an Application, contact Account
Assistance.
Automatic Withdrawal Plan
You may authorize DST to periodically withdraw (redeem) a specified dollar
amount from your Fund account and mail a check to you for the proceeds. Your
Fund account must be valued at $10,000 or more at current offering price to
establish the Plan. The Plan is available to Class A shares only. For further
details and to request an Application, contact Account Assistance.
Minimum purchase and account size
An initial purchase of $1,000 and subsequent purchases of $100 or more
are required for non-retirement accounts. There are no minimums for any
retirement or pension plan account, for any account using the Automatic
Investment Plan, or for any other periodic purchase program.
If the size of your account falls below 50 shares after the initial purchase,
each Fund reserves the right to redeem your shares after 30 days notice to you.
This does not apply to accounts exempt from purchase minimums as described
above.
How Fund shares are priced
The Funds buy or sell their shares at their net asset value, or NAV, per share.
The Funds calculate NAV every day the New York Stock Exchange (NYSE) is open, as
of the close of the NYSE, which is normally 4:00 p.m. Eastern Time. There are
some exceptions, including these:
* You may enter a buy or sell order when the NYSE is closed for weekends or
holidays. If that happens, your price will be the NAV calculated on the next
available open day of the NYSE.
* Some NAV determinations depend on calculating the value of securities which
may be traded on foreign exchanges or over-the-counter. These securities may
be unavailable for a price quote during NYSE operating hours.
Except for the U.S. Government Money Fund, the Funds value their assets at fair
market value, when price quotes are available. Otherwise, the Funds' Board of
Trustees determines fair market value in good faith. The U.S. Government Money
Fund is valued at the amortized cost of its assets, no matter what the quoted
prices of the Fund's securities may be.
2. HOW TO CHOOSE A SHARE CLASS
Some Funds offer Class A, B, or C Shares. Separate share classes allow you to
choose the type of sales charge and 12b-1 fee schedule that is best for you.
Please note that no money market fund is available for exchange with Class B and
C Shares. Class B and C Shares automatically convert to Class A Shares eight
years after each individual purchase. You, with your broker or agent, should
review "Sales Charges," "Plan of Distribution (12b-1 Plan)," and the Fund's per
share expenses in "Chapter I. The Funds" and "Chapter IV. Financial Highlights"
in this prospectus before choosing a share class.
* Class A Initial sales charge at time of purchase.
* Class B Contingent Deferred Sales Charge (CDSC) at time of redemption. The
CDSC decreases yearly until it becomes zero in the seventh year.
* Class C Contingent Deferred Redemption Charge (CDRC) of 1% is charged on all
redemptions during the first 12 months after purchase.
32 VAN ECK GLOBAL PROSPECTUS
<PAGE>
III. SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. SALES CHARGES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Class A Shares Sales Charges
Gold/Resources Fund and International Investors Gold Fund
Sales Charge as a Percentage of Discount to Brokers or Agents
Dollar Amount of Purchase Offering Price Net Amount Invested as a Percentage of Offering Price*
<S> <C> <C> <C>
Less than $25,000 5.75% 6.1% 4.75%
$25,000 to $49,999 5.00% 5.3% 4.00%
$50,000 to $99,999 4.50% 4.7% 3.60%
$100,000 to $249,999 3.00% 3.1% 2.40%
$250,000 to $499,999 2.50% 2.6% 2.00%
$500,000 to $999,999 2.00% 2.0% 1.60%
$1,000,000 and over None**
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Class A Shares Sales Charges
Asia Dynasty Fund, Global Hard Assets Fund and Global Leaders Fund
Sales Charge as a Percentage of Discount to Brokers or Agents
Dollar Amount of Purchase Offering Price Net Amount Invested as a Percentage of Offering Price*
<S> <C> <C> <C>
Less than $100,000 4.75% 5.0% 4.00%
$100,000 to $249,999 3.75% 3.9% 3.15%
$250,000 to $499,999 2.50% 2.6% 2.00%
$500,000 to $999,999 2.00% 2.0% 1.65%
$1,000,000 and over None**
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
* Brokers or Agents who receive substantially all of the sales charge for
shares they sell may be deemed to be statutory underwriters.
** For any single purchase of $1 Million or more of Class A shares, the
Distributor may pay a finder's fee to eligible brokers and agents. For
details, contact the Distributor.
VAN ECK GLOBAL PROSPECTUS 33
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Class B Shares Sales Charges
Asia Dynasty Fund, Global Hard Assets Fund and Global Leaders Fund
<S> <C>
Shareholders time of redemption Contingent Deferred Sales Charge (CDSC) +
During Year One 5.0% of the lesser of NAV or purchase price
During Year Two 4.0% of the lesser of NAV or purchase price
During Year Three 4.0% of the lesser of NAV or purchase price
During Year Four 3.0% of the lesser of NAV or purchase price
During Year Five 2.0% of the lesser of NAV or purchase price
During Year Six 1.0% of the lesser of NAV or purchase price
Thereafter None
Class B Broker/Agent Compensation: 4% of the amount purchased at time of
investment.
+ Shares purchased before April 30, 1997 remain subject to the contingent
deferred sales charge schedule in effect at the time of purchase.
- ------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------
Class C Shares Sales Charges
Global Hard Assets Fund
<S> <C>
Shareholders time of redemption Contingent Deferred Redemption Charge (CDRC)
During Year One 1.0% of the lesser of NAV or purchase price
Thereafter None
Class C Broker/Agent Compensation: 1% (.75 of 1% distribution fee and .25 of
1% service fee) of the amount purchased at time of investment.
- ------------------------------------------------------------------------------------------
</TABLE>
U.S. Government Money Fund
There is no sales charge on purchases of the U.S. Government Money Fund.
34 VAN ECK GLOBAL PROSPECTUS
<PAGE>
III. SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Reduced or Waived Sales Charges
You may qualify for a reduced or waived sales charge as stated below, or under
other appropriate circumstances. You (or your broker or agent) must notify DST
or Van Eck at the time of each purchase or redemption whenever a reduced or
waived sales charge is applicable. The term "purchase" refers to a single
purchase by an individual (including spouse and children under age 21),
corporation, partnership, trustee, or other fiduciary for a single trust,
estate, or fiduciary account. The value of shares owned by an individual in
Class A, B, and C of each of the Van Eck Funds and Van Eck/Chubb Funds (except
for the U.S. Government Money Fund) or in any of the Van Eck/Chubb Funds may be
combined for a reduced sales charge in Class A shares only.
FOR CLASS A SHARES
RIGHT OF ACCUMULATION When you buy shares, the amount you buy will be combined
with the value, at current offering price, of any existing Fund shares you own.
This total will determine the sales charge level you qualify for.
COMBINED PURCHASES The combined amounts of your multiple purchases in the Funds
on a single day determines the sales charge level you qualify for.
LETTER OF INTENT If you plan to make purchases in the Funds within a 13 month
period that total an amount equal to a reduced sales charge level, you can
establish a Letter of Intent (LOI) for that amount. Under the LOI, your initial
and subsequent purchases during that period receive the sales charge level
applicable to that total amount. For escrow provisions and details, see the
Application.
GROUP PURCHASES If you are a member of a "qualified group," you may purchase
shares of the Funds at the reduced sales charge applicable to the group as a
whole. A qualified group (1) has more than 10 members, (2) has existed over six
months, (3) has a purpose other than acquiring fund shares at a discount, (4)
and has satisfied certain other criteria, including the use of the Automatic
Investment Plan. For details, contact the Distributor.
PERSONS AFFILIATED WITH VAN ECK Trustees, officers, and full-time employees
(and their families) of the Funds, Adviser or Distributor may buy without a
sales charge. Also, employees (and their spouses and children under age 21) of a
brokerage firm or bank that has a selling agreement with Van Eck, and other
affiliates and agents, may buy without a sales charge.
INVESTMENT ADVISERS, FINANCIAL PLANNERS AND BANK TRUST DEPARTMENTS Investment
advisers, financial planners and bank trust departments that meet certain
requirements and are compensated by asset-based fees may buy without a sales
charge on behalf of their clients.
FOREIGN FINANCIAL INSTITUTIONS Certain foreign financial institutions that have
agreements with Van Eck may buy shares with a reduced or waived sales charge for
their omnibus accounts on behalf of foreign investors.
INSTITUTIONAL RETIREMENT PROGRAMS Certain financial institutions who have
agreements with Van Eck may buy shares without a sales charge for their omnibus
accounts on behalf of investors in retirement plans and deferred compensation
plans other than IRAs.
BUY-BACK PRIVILEGE You have the one-time right to reinvest proceeds of a
redemption from a Class A Fund into that Fund or another Class A Fund within 30
days without a sales charge, excluding the U.S. Government Money Fund.
Reinvestment into the same Fund within 30 days is considered a "wash sale" by
the IRS and cannot be declared as a capital loss or gain for tax purposes.
MOVING ASSETS FROM ANOTHER MUTUAL FUND GROUP You may purchase shares without a
sales charge with the proceeds of a redemption made within three months from
another mutual fund group not managed by Van Eck or its affiliates. The shares
redeemed must have paid an initial sales charge in a Class A fund. Also, the
financial representative of record must be the same on the Van Eck Fund account
as for the other mutual fund redeemed.
VAN ECK GLOBAL PROSPECTUS 35
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR CLASS B AND C SHARES
DEATH OR DISABILITY The redemption sales charge may be waived upon (1) death or
(2) disability as defined by the Internal Revenue Code.
CERTAIN RETIREMENT DISTRIBUTIONS The redemption sales charge may be waived for
lump sum or other distributions from IRA, Keogh, and 403(b) accounts following
retirement or at age 70 1/2. It is also waived for distributions from qualified
pension or profit sharing plans after termination of employment after age 55. In
addition, it is waived for shares redeemed as a tax-free return of an excess
contribution.
4. RETIREMENT PLANS
Fund shares may be invested in tax-advantaged retirement plans sponsored by Van
Eck or other financial organizations. Retirement plans sponsored by Van Eck use
Investors Fiduciary Trust Company ("IFTC") as custodian and must receive
investments directly by check or wire using the appropriate Van Eck retirement
plan application. Confirmed trades through a broker or agent cannot be accepted.
To obtain applications and helpful information on Van Eck retirement plans,
contact your broker or agent or Account Assistance.
Retirement Plans Sponsored by Van Eck:
IRA
Roth IRA
Education IRA
SEP IRA
403(b)(7)
Qualified Pension Plan (Keogh)
5. TAXES
TAXATION OF DIVIDEND OR CAPITAL GAIN DISTRIBUTIONS YOU RECEIVE
For tax-reportable accounts, distributions are normally taxable even if they are
reinvested. Distributions of dividends and short-term capital gains are taxed as
ordinary income. Distributions of long-term capital gains are taxed at capital
gain rates.
TAXATION OF SHARES YOU SELL
For tax-reportable accounts, when you redeem your shares you may incur a capital
gain or loss on the proceeds. The amount of gain or loss, if any, is the
difference between the amount you paid for your shares (including reinvested
distributions) and the amount you receive from your redemption. Be sure to keep
your regular statements; they contain the information necessary to calculate the
capital gain or loss. If you redeem shares from an eligible account, you will
receive an Average Cost Statement in February to assist you in your tax
preparations.
An exchange of shares from one Fund to another will be treated as a sale of Fund
shares. It is, therefore, a taxable event.
NON-RESIDENT ALIENS
Distributions of dividends and short-term capital gains, if any, made to
non-resident aliens are subject to a 30% withholding tax (or lower tax treaty
rates for certain countries). The Internal Revenue Service considers these
distributions U.S. source income. Currently, the Funds are not required to
withhold tax from long-term capital gains or redemption proceeds.
36 VAN ECK GLOBAL PROSPECTUS
<PAGE>
III. SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. DIVIDENDS AND CAPITAL GAINS
If declared, dividend and capital gain distributions are generally paid on the
last business day of the month of declaration. See your tax adviser for details.
Short-term capital gains are treated like dividends and follow that schedule.
Occasionally, a distribution may be made outside of the normal schedule.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Dividend and Capital Gain Schedule
Fund Dividends and Short-Term Long-Term
Capital Gains Capital Gains
<S> <C> <C>
Asia Dynasty Fund June/December December
Global Hard Assets Fund June/December December
Global Leaders Fund March/June/September/December December
Gold/Resources Fund June/December December
International Investors Gold Fund March/June/September/December December
U.S. Government Money Fund Daily Accrual, paid monthly December
- ---------------------------------------------------------------------------------------------
</TABLE>
DIVIDEND AND CAPITAL GAIN REINVESTMENT PLAN Dividends and/or capital gains
are automatically reinvested into your account without a sales charge, unless
you elect a cash payment. You may elect cash payment either on your original
Account Application, or by calling Account Assistance at 1-800-544-4653.
DIVMOVE You can have your cash dividends from a Class A Fund automatically
invested in another Class A fund. Dividends are invested on the payable date,
without a sales charge. For details and an Application, call Account Assistance.
VAN ECK GLOBAL PROSPECTUS 37
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. MANAGEMENT OF THE FUNDS
<TABLE>
<S> <C> <C>
------------------------------------------
SUB-ADVISER
Fiduciary International, Inc.,
Two World Trade Center,
New York, NY 10048,
serves as sub-investment
adviser to Global Leaders
Fund. FII is an indirect subsidiary of
Fiduciary Trust Company International,
a New York State chartered bank.
------------------------------------------
|
|
- ------------------------------------ |
INDEPENDENT |
ACCOUNTANTS |
PricewaterhouseCoopers LLP, --------------------------------- -------------------------
1301 Avenue of the Americas, INVESTMENT ADVISER THE TRUST
New York, NY 10019, AND ADMINISTRATOR "The Trust," is a
provides audit services, Van Eck Associates Corporation, Massachusettes
consultation and advice with _____________ 99 Park Avenue _______________ business trust consisting
respect to financial information New York, NY 10016, of the Van Eck Funds
in the Trust's filings with the manages investment listed in this
Securities and Exchange operations of the Funds. prospectus ("Funds").
Commission, consults with the --------------------------------- The Board of Trustees
Trust on accounting and financial | manages the Funds'
reporting matters and prepares the | business and affairs.
Trust's tax returns. | -------------------------
- ------------------------------------ |
____________________________________________|_______________________________________________
| | |
- --------------------------------------------- | --------------------------------------------------
|
DISTRIBUTOR | TRANSFER AGENT
Van Eck Securities Corporation, 99 Park Ave., | DST Systems, Inc., 210 West 10th Street, 8th Flr.,
New York, NY 10016 distributes the Funds | Kansas City, MO 64105
and is wholly owned by the Adviser. | serves as the Funds' transfer agent.
- --------------------------------------------- | --------------------------------------------------
-----------------------------
CUSTODIAN
The Chase Manhattan Bank,
Chase Metrotech Center,
Brooklyn, NY 11245
holds Fund securities and
settles trades.
-----------------------------
</TABLE>
38 VAN ECK GLOBAL PROSPECTUS
<PAGE>
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INFORMATION ABOUT FUND MANAGEMENT
Investment Adviser
VAN ECK ASSOCIATES CORPORATION, 99 Park Avenue, New York, NY 10016 (the
"Adviser") serves as investment adviser to each of the Funds. Van Eck has been
an investment adviser since 1955 and also acts as adviser or sub-adviser to
other mutual funds registered with the SEC as well as managing and advising
other accounts and pension plans.
FEES PAID TO THE ADVISER Asia Dynasty Fund and Global Leaders Fund each pay the
Adviser a monthly fee at the rate of .75% of average daily net assets. Global
Hard Assets Fund pays the Adviser a monthly fee at the rate of 1% of average
daily net assets, which includes accounting and administrative services provided
to the Fund. Gold/Resources and International Investors Gold Funds each pay the
Adviser a monthly fee at the rate of .75 of 1% of the first $500 million of the
average daily net assets of the Fund; .65 of 1% of the next $250 million of the
average daily net assets and .50 of 1% of the average daily net assets in excess
of $750 million. US Government Money Money Market Fund pays the Advisor at the
annual rate of 0.5% of 1% of the 1st 500 million, -4% of the next 250, .375% of
1% thereafter.
The Adviser also performs accounting and administrative services for Asia
Dynasty, Global Leaders, Gold/Resources, and International Investors Gold Funds.
For these services, the Adviser is paid a monthly fee at the rate of .25% per
year of the average daily net assets on the first $500 million in Asia Dynasty
and Global Leaders Fund, or at the rate of .25% per year on the first $750
million in Gold/Resources and International Investors Gold Funds (then .2% per
year of the average daily net assets in excess of $750 million in the two Gold
Funds).
SUB-INVESTMENT ADVISER: Fiduciary International Inc. (FII), Two World Trade
Center, New York, NY 10048, serves as sub-investment adviser to the Global
Leaders Fund and manages its investment operations. FII is a wholly owned
subsidiary of Fiduciary Investment Corporation, which is in turn a wholly owned
subsidiary of Fiduciary Trust Company International. The Adviser pays FII a
monthly fee of .50% per year of the average daily net assets of the Fund.
Portfolio Managers
ASIA DYNASTY FUND: Gary Greenberg, David Semple Mr. Greenberg is Managing
Director and Chief Investment Officer of Van Eck and an officer and/or portfolio
manager of other mutual funds advised by Van Eck. Mr. Greenberg joined Van Eck
in 1998. He has 12 years of experience in investing. Mr. Semple is an Investment
Director of Van Eck. He joined Van Eck in 1998, and has been in the investing
business for 9 years.
GLOBAL LEADERS FUND: Steven J. Miller, Anne Tatlock Mr. Miller and Ms. Tatlock
are employed by FII, which serves as sub-adviser to the Fund. FII is an indirect
subsidiary of Fiduciary Trust Company International ("FTCI"). Mr. Miller, who
manages the Fund's equity portfolio, joined FTCI in 1994. He has 12 years of
experience in investing. Ms. Tatlock joined FTCI in 1984; she is its President.
GLOBAL HARD ASSETS FUND: Derek S. van Eck, Kevin Reid Mr. van Eck is Director of
Global Investments and President of the Adviser. Mr. van Eck serves as a Trustee
and officer of the Trust and a trustee, officer and/or portfolio manager of
other mutual funds advised or sub-advised by the Adviser. He has 13 years of
experience in investing. Mr. Reid serves as Director of Real Estate Research for
the Adviser and is an officer of the Trust. Mr. Reid joined Van Eck in 1995. He
has 12 years of experience in investing.
GOLD/RESOURCES FUND, INTERNATIONAL INVESTORS GOLD FUND are managed by a team of
advisers, analysts and strategists.
U.S. GOVERNMENT MONEY FUND: Gregory Krenzer Mr. Krenzer serves as a research
analyst for the Adviser specializing in global fixed income securities and is
the co-portfolio manager of another Fund advised by Van Eck. He joined Van Eck
in 1994 and has 5 years of experience in the investment business.
VAN ECK GLOBAL PROSPECTUS 39
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Plan of Distribution (12b-1 Plan)
Each of the Funds has adopted a Plan of Distribution pursuant to Rule 12b-1
under the Act. Of the amounts expended under the plan for the fiscal year ended
December 31, 1998 for all Funds, approximately 40.96% was paid to Brokers and
Agents who sold shares or serviced accounts of Fund shareholders. The remaining
59.04% was retained by the Distributor to repay expenses such as printing and
mailing prospectuses and sales material.
For a complete description of the Plan of Distribution, please see "Plan of
Distribution" in the SAI.
- --------------------------------------------------------------------------------
Van Eck Funds Annual 12b-1 Schedule
expressed in basis points (bps)(*)
FEE TO FUND PAYMENT
TO DEALER
Asia Dynasty Fund-A 50 bps 25 bps
Asia Dynasty Fund-B 100 bps 25 bps
Global Hard Assets Fund-A 50 bps 25 bps
Global Hard Assets Fund-B 100 bps 25 bps
Global Hard Assets Fund-C 100 bps 100 bps**
Global Leaders Fund-A 50 bps 25 bps
Global Leaders Fund-B 100 bps 25 bps
Gold/Resources Fund-A 25 bps 25 bps
International Investors
Gold Fund-A 25 bps 25 bps
U.S. Government
Money Fund 25 bps 25 bps
- --------------------------------------------------------------------------------
* A basis point (bp) is a unit of measure in the financial industry. One bp
equals .01 of 1% (1% = 100 bps).
** Class C payment to brokers or agents begins to accrue after the 12th month
following the purchase trade date. Each purchase must age that long or there is
no payment.
THE TRUST For more information on the Trust, the Trustees and the officers of
the Trust, see "The Trust" and "Trustees and Officers" in the SAI.
EXPENSES Each Fund bears all expenses of its operations other than those
incurred by the Adviser or its affiliate under the Advisory Agreement with the
Trust. Many of these expenses are shown in tables in Chapter I, "The Funds," or
in Chapter IV, "Financial Highlights." For a more complete description of Fund
expenses, please see "Expenses" in the SAI.
40 VAN ECK GLOBAL PROSPECTUS
<PAGE>
IV. FINANCIAL HIGHLIGHTS
TABLES THAT SHOW PER-SHARE EARNINGS, EXPENSES,
AND PERFORMANCE OF EACH FUND.
1. ASIA DYNASTY FUND
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Financial Highlights
Class A Shares
1998 1997 1996 1995 1994
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
beginning of period $7.82 $13.21 $12.40 $12.13 $15.28
------ ------- ------- ------- -------
- -----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment Income (Loss) (0.01) (0.28) (0.20) (0.02) -
Net Gains (Loss) on
Investments (both realized and unrealized) (0.01) (3.82) 1.01 0.40 (2.86)
- -----------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (0.02) (4.10) 0.81 0.38 (2.86)
- -----------------------------------------------------------------------------------------------------------------------------
LESS DIVIDENDS AND DISTRIBUTIONS
From Dividends from
Net Investment Income - - - (0.09) (0.07)
From Distributions from
Capital Gains - (1.15) - - (0.22)
From Tax Returns of Capital - (0.14) - (0.02) -
- -----------------------------------------------------------------------------------------------------------------------------
Total Dividend & Distribution - (1.29) - (0.11) (0.29)
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
end of period $7.80 $7.82 $13.21 $12.40 $12.13
====== ======= ======= ======= =======
Total Return (a) (0.26%) (32.10%) 6.53% 3.13% (18.72%)
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) $10,685 $12,873 $44,351 $64,275 $83,787
Ratios of Gross Expenses
to Average Net Assets 3.13% 2.38% 2.42% 2.03% 1.85%
Ratio of Net Expenses
to Average Net Assets 2.43%(b) 2.38% 2.42% 2.03% 1.85%
Ratio of Net Investment Income (Loss)
to Average Net Assets (0.09%) (0.76% (0.73%) (0.08%) -
Portfolio Turnover Rate 121.96% 200.45% 52.99% 57.06% 51.08%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Total return is calculated assuming an initial investment made at net asset
value at the beginning of the year, reinvestment of dividends and distributions
at net asset value during the year and a redemption on the last day of the year.
A sales charge is not reflected in the calculation of total dividends and
return.
(b) After expenses reduced by a custodian fee arrangement.
VAN ECK GLOBAL PROSPECTUS 41
<PAGE>
I The financial highlights table presents the Fund's financial performance for
the past five years. If the table shows fewer years, that means the Fund is
newer than five years. Some of the information shows financial results for a
single Fund share. The "Total Return" line shows the rate that you would have
earned or lost on an investment in the Fund in a year (with dividends and
distributions reinvested). This information has been audited by
PricewaterhouseCoopers LLP, whose report, along with the Fund's financial
statements, is included in the annual report incorporated by reference
(available on request).
<TABLE>
<CAPTION>
1. ASIA DYNASTY FUND
- ----------------------------------------------------------------------------------------------------------------------------
Financial Highlights
Class B Shares
1998 1997 1996 1995 1994
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
beginning of period $7.63 $13.08 $12.33 $12.09 $15.25
------- ------- ------- ------- -------
- ----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment Income (Loss) (0.07) (0.30) (0.24) (0.08) (0.06)
Net Gains (Loss) on
Investments (both realized and unrealized) (0.02) (3.86) 0.99 0.40 (2.86)
- ----------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (0.09) (4.16) 0.75 0.32 (2.92)
- ----------------------------------------------------------------------------------------------------------------------------
LESS DIVIDENDS AND DISTRIBUTIONS
From Dividends from
Net Investment Income - - - (0.06) (0.02)
From Distributions from
Capital Gains - (1.15) - - (0.22)
From Tax Returns of Capital - (0.14) - (0.02) -
- ----------------------------------------------------------------------------------------------------------------------------
Total Dividend & Distribution - (1.29) - (0.08) (0.24)
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
end of period $7.54 $7.63 $13.08 $12.33 $12.09
======= ======= ======= ======= =======
Total Return (a) (1.18%) (32.87%) 6.08% 2.65% (19.15%)
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) $4,942 $6,914 $20,296 $27,234 $35,024
Ratios of Gross Expenses
to Average Net Assets 3.83% 3.00% 2.86% 2.41% 2.38%
Ratio of Net Expenses
to Average Net Assets 3.14%(b) 3.00% 2.86% 2.41% 2.38%
Ratio of Net Investment Income (Loss)
to Average Net Assets 0.79% (1.36%) (1.14%) (0.52%) (0.50%)
Portfolio Turnover Rate 121.96% 200.45% 52.99% 57.06% 51.08%
Average Commission Rate Paid(b) $0.0824 $0.0049
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Total return is calculated assuming an initial investment made at net asset
value at the beginning of the year, reinvestment of dividends and distributions
at net asset value during the year and a redemption on the last day of the year.
A sales charge is not reflected in the calculation of total dividends and
return.
(b) After expenses reduced by a customer fee arrangement.
42 VAN ECK GLOBAL PROSPECTUS
<PAGE>
IV. FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
2. GLOBAL LEADERS FUND
- ----------------------------------------------------------------------------------------------------------------------------
Financial Highlights
Class A Shares
1998 1997 1996 1995 1994
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
beginning of period $10.38 $10.37 $10.31 $9.07 $9.53
------- ------- ------- ------ ------
- ----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment Income (Loss) 0.02 0.10 0.12 0.07(a) 0.19(a)
Net Gains (Loss) on
Investments (both realized and unrealized) 2.07 1.43 1.15 1.31 (0.56)
- ----------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 2.09 1.53 1.27 1.38 (0.37)
- ----------------------------------------------------------------------------------------------------------------------------
LESS DIVIDENDS AND DISTRIBUTIONS
From Dividends from
Net Investment Income (d) 0.00 (0.08) (0.11) (0.14) (0.09)
From Distributions from
Capital Gains (1.61) (1.43) (1.10) - -
From Tax Returns of Capital (0.08) (0.01) - - -
- ----------------------------------------------------------------------------------------------------------------------------
Total Dividend & Distribution (1.69) (1.52) (1.21) (0.14) (0.09)
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
end of period $10.78 $10.38 $10.37 $10.31 $9.07
======= ======= ======= ====== ======
Total Return (b) 20.65% 14.77% 12.28% 15.30% (3.90%)
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) $27,461 $24,630 $29,331 $30,632 $13,986
Ratios of Gross Expenses
to Average Net Assets 2.32% 2.45% 2.54% 2.69% 2.59%
Ratio of Net Expenses
to Average Net Assets 2.00%(c) 2.00%(c) 2.17%(c) 2.69% 1.06%(c)
Ratio of Net Investment Income (Loss)
to Average Net Assets 0.85% 0.85% 1.05% 0.68% 1.99%
Portfolio Turnover Rate 87.79% 78.07% 114.30% 196.69% 174.76%
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Based on average shares outstanding.
(b) Total return is calculated assuming an initial investment made at net asset
value at the beginning of the year, reinvestment of dividends and distributions
at net asset value during the year and a redemption on the last day of the year.
A sales charge is not reflected in the calculation of total dividends and
return.
(c) After expenses reduced by a custodian fee, direct brokerage or all fee
waiver arrangements.
(d) Net of foreign taxes withheld (to be included in income and claimed as a tax
credit or deduction by the shareholder for federal income tax purposes) of $0.01
for 1997.
VAN ECK GLOBAL PROSPECTUS 43
<PAGE>
The financial highlights table presents the Fund's financial performance for the
past five years. If the table shows fewer years, that means the Fund is newer
than five years. Some of the information shows financial results for a single
Fund share. The "Total Return" line shows the rate that you would have earned or
lost on an investment in the Fund in a year (with dividends and distributions
reinvested). This information has been audited by PricewaterhouseCoopers LLP,
whose report, along with the Fund's financial statements, is included in the
annual report incorporated by reference (available on request).
2. GLOBAL LEADERS FUND
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Financial Highlights
Class B Shares
1998 1997 1996 1995 1994
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
beginning of period $10.31 $10.32 $10.28 $9.02 $9.53
------- ------- ------- ------ ------
- ----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment Income (Loss) 0.00 0.04 0.06 0.01 0.11(a)
Net Gains (Loss) on
Investments (both realized and unrealized) 2.02 1.43 1.14 1.28 (0.57)
- ----------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 2.02 1.47 1.20 1.29 (0.46)
- ----------------------------------------------------------------------------------------------------------------------------
LESS DIVIDENDS AND DISTRIBUTIONS
From Dividends from
Net Investment Income (d) 0.00 (0.03) (0.06) (0.03) (0.05)
From Distributions from
Capital Gains (1.61) (1.45) (1.10) - -
From Tax Returns of Capital (.05) - - - -
- ----------------------------------------------------------------------------------------------------------------------------
Total Dividend & Distribution (1.66) (1.48) (1.16) (0.03) (0.05)
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
end of period $10.67 $10.31 $10.32 $10.28 $9.02
======= ======= ======= ====== ======
Total Return (b) 20.07% 14.26% 11.49% 14.54% (4.84%)
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) $6,039 $5,055 $4,932 $6,151 $5,628
Ratio of Gross Expenses
to Average Net Assets 3.25% 2.51% 3.19% 3.20% 3.21%
Ratio of Net Expenses
to Average Net Assets 2.50%(c) 2.50% 2.71% 3.20% 1.88%(c)
Ratio of Net Investment Income (Loss)
to Average Net Assets 0.36% 0.36% 0.51% 0.14% 1.14%
Portfolio Turnover Rate 87.79% 78.07% 114.30% 196.69% 174.76%
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Based on average shares outstanding.
(b) Total return is calculated assuming an initial investment made at net asset
value at the beginning of the year, reinvestment of dividends and distributions
at net asset value during the year and a redemption on the last day of the year.
A sales charge is not reflected in the calculation of total dividends and
return.
(c) After expenses reduced by a custodian fee, direct brokerage or all fee
waiver arrangements.
(d) Net of foreign taxes withheld (to be included in income and claimed as a tax
credit on deduction by the shareholder for federal income tax purposes) of $0.01
for 1997.
44 VAN GLOBAL PROSPECTUS
<PAGE>
IV. FINANCIAL HIGHLIGHTS
3. GLOBAL HARD ASSETS FUND
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Financial Highlights
Class A Shares
For the period
Nov. 2, 1994(a)
1998 1997 1996 1995 Dec. 31, 1994
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
beginning of period $15.50 $14.42 $10.68 $9.41 $ 9.53
------ ------ ------ ------ ------
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment Income (Loss) 0.10 0.05 0.15 0.32 0.010
Net Gains (Loss) on
Investments (both realized and unrealized) (5.09) 2.01 4.70 1.57 (0.115)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (4.99) 2.06 4.85 1.89 (0.105)
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DIVIDENDS AND DISTRIBUTIONS
From Dividends from
Net Investment Income (0.15) (0.02) (0.14) (0.62) (0.015)
From Distributions from
Capital Gains (0.02) (0.96) (0.95) - -
From Tax Returns of Capital - - (0.02) - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total Dividend & Distribution (0.17) (0.98) (1.11) (0.62) (.015)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
end of period $10.34 $15.50 $14.42 $10.68 $9.41(e)
====== ====== ====== ====== ======
Total Return (b) (32.25%) 14.29% 45.61% 20.09% (1.10%)
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) $22,969 $61,341 $27,226 $3,820 $1.419
Ratio of Gross Expenses
to Average Net Assets (c) 2.11% 2.00% 2.63% 4.05% 3.40%(d)
Ratio of Net Expenses
to Average Net Assets 2.00% 1.97% 0.72% 0.00% 0.15%*(d)
Ratio of Net Investment Income (Loss)
to Average Net Assets 0.58% 0.36% 1.45% 3.08% 0.84%*(d)
Portfolio Turnover Rate 167.79% 118.10% 163.91% 179.33% 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Commencement of operations
(b) Total return is calculated by assuming an initial investment made at net
asset value at the beginning of the period, reinvestment of dividends and
distribution at net asset value during the period and a redemption on the last
day of the period. A sales charges is not reflected in the calculation of total
return. Total return periods of less than one year are not annualized.
(c) Had the Adviser not assumed expenses or had expenses not been reduced by
custody fee and directed brokerage arrangement.
(d) Annualized
(e) Based on average shares outstanding
VAN ECK GLOBAL PROSPECTUS 45
<PAGE>
The financial highlights table presents the Fund's financial performance for the
past five years. If the table shows fewer years, that means the Fund is newer
than five years. Some of the information shows financial results for a single
Fund share. The "Total Return" line shows the rate that you would have earned or
lost on an investment in the Fund in a year (with dividends and distributions
reinvested). This information has been audited by PricewaterhouseCoopers LLP,
whose report, along with the Fund's financial statements, is included in the
annual report incorporated by reference (available on request).
3. GLOBAL HARD ASSETS FUND
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
Financial Highlights
Class B Shares
For the period
Apr. 24, 1996(a)
1998 1997 Dec. 31, 1996
----------------------------------------------------
<S> <C> <C> <C>
Net Asset Value,
beginning of period $15.60 $14.50 $12.55
------ ------ ------
- ---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment Income (Loss) 0.01 (0.01) 0.11
Net Gains (Loss) on
Investments (both realized and unrealized) (5.08) 2.00 2.95
- ---------------------------------------------------------------------------------------------------------
Total from Investment Operations (5.07) 1.99 3.06
- ---------------------------------------------------------------------------------------------------------
LESS DIVIDENDS AND DISTRIBUTIONS
From Dividends from
Net Investment Income (0.14) - (0.14)
From Distributions from
Capital Gains (0.02) (0.89) (0.95)
From Tax Returns of Capital - - (0.02)
- ---------------------------------------------------------------------------------------------------------
Total Dividend & Distribution (0.16) (0.89) (1.11)
- ---------------------------------------------------------------------------------------------------------
Net Asset Value,
end of period $10.37 $15.60 $14.50
====== ====== ======
Total Return (b) (32.55%) 13.72% 24.55%
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) $5,580 $10,541 $1,806
Ratio of Gross Expenses
to Average Net Assets (c) 2.81% 2.73% 3.27%
Ratio of Net Expenses
to Average Net Assets 2.50% 2.50% 1.64%(d)
Ratio of Net Investment Income (Loss)
to Average Net Assets 0.12% (0.13%) 0.53%(d)
Portfolio Turnover Rate 167.79% 118.10% 163.91%
- ---------------------------------------------------------------------------------------------------------
</TABLE>
(a) Commencement of operations.
(b) Total return is calculated by assuming an initial investment made at net
asset value at the beginning of the period, reinvestment of dividends and
distribution at net asset value during the period and a redemption on the last
day of the period. A sales charge is not reflected in the calculation of total
return. Total return periods of less than one year are not annualized.
(c) Had the Adviser not assumed expenses or had expenses not been reduced by
custodian fee and directed brokerage arrangements.
(d) Annualized
(e) Based on average shares outstanding.
46 VAN ECK GLOBAL PROSPECTUS
<PAGE>
3. GLOBAL HARD ASSETS FUND
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Global Hard Assets Fund
Financial Highlights-Class C Shares
For the period
Nov. 2, 1994(a)
1998 1997 1996 1995 Dec. 31 1994
--------------------------------------------------------- -----------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
beginning of period $15.64 $14.52 $10.76 $9.41 $9.53
------- -------- -------- ------- -------
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment Income (Loss) 0.01 (0.01) 0.11 0.34 0.01(e)
Net Gains (Loss) on
Investments (both realized and unrealized) (5.09) 2.00 4.73 1.63 (0.12)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (5.08) 1.99 4.84 1.97 (0.11)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DIVIDENDS AND DISTRIBUTIONS
From Dividends from
Net Investment Income (0.14) - (0.11) (0.62) (0.01)
From Distributions from
Capital Gains (0.02) (0.87) (0.95) - -
From Tax Returns of Capital - - (0.02) - -
- -----------------------------------------------------------------------------------------------------------------------------------
Total Dividend & Distribution (0.16) (0.87) (1.08) (0.62) (0.01)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
end of period $10.40 $15.64 $14.52 $10.76 $9.41
======== ======== ======== ======= =======
Total Return (6) (32.53%) 13.71% 45.18% 20.94% (1.20%)
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) $4,011 $8,698 $1,935 $181 $8
Ratio of Gross Expenses
to Average Net Assets 3.00% 2.94% 6.02% 37.88% 39.49%(d)
Ratio of Net Expenses
to Average Net Assets 2.50% 2.50% 1.31% 0.00% 0.56%*(d)
Ratio of Net Investment Income (Loss)
to Average Net Assets 0.11% (0.15%) 0.84% 3.30% 0.53%*(d)
Portfolio Turnover Rate 167.79% 118.10% 163.91% 179.33% 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Commencement of operations.
(b) Total return is calculated by assuming an initial investment made at net
asset value at the beginning of the period, reinvestment of dividends and
distribution at net asset value during the period and a redemption on the last
day of the period. A sales charge is not reflected in the calculation of total
return. Total return periods of less than one year are not annualized.
(c) Had the Adviser not assumed expenses or had expenses not been reduced by
custodian fee and directed brokerage arrangements.
(d) Annualized
(e) Based on average shares outstanding.
VAN ECK GLOBAL PROSPECTUS 47
<PAGE>
4. GOLD/RESOURCES FUND
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Gold/Resources Fund
Financial Highlights-Class A Shares
1998 1997 1996 1995 1994
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
beginning of period $3.47 $5.72 $5.58 $5.35 $6.34
-------- ------- ------- ------ ------
- ----------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment Income (Loss) (0.04) (0.04) (0.06) (0.03) (0.02)
Net Gains (Loss) on
Investments (both realized and unrealized) (0.39) (2.21) 0.20 0.26 (0.97)
- ----------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (0.43) (2.25) 0.14 0.23 (0.99)
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
end of period $3.04 $3.47 $5.72 $5.58 $5.35
======== ======= ======= ====== ======
Total Return (a) (12.39%) (39.34%) 2.51% 4.30% (15.60%)
RATIOS / SUPPLEMENTARY DATA
Net Assets, End of Period (000) $53,397 $66,151 $132,298 $155,974 $186,091
Ratio of Gross Expenses
to Average Net Assets 2.24% 1.87% 1.71% 1.81% 1.52%
Ratio of Net Expenses
to Average Net Assets 2.21%(b) 1.87% 1.71% 1.81% 1.52%
Ratio of Net Investment Income (Loss)
to Average Net Assets (0.98)% (0.57%) (0.75%) (0.44%) (0.30%)
Portfolio Turnover Rate 79.99% 32.46% 12.95% 6.16% 13.75%
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Total return is calculated by assuming an initial investment at net
asset value at the beginning of the period, reinvestment of all dividends and
distributions at net asset value during the year and a redemption on the last
day of the year. A Sales charges is not reflected in the calculation of total
return. Total return for a period of less than a year is not annualized.
(b) After expenses reduced by a custodian fee and directed brokerage
arrangement.
48 ECK GLOBAL PROSPECTUS
<PAGE>
IV. FINANCIAL HIGHLIGHTS
5. INTERNATIONAL INVESTORS GOLD FUND(*)
The financial highlights table presents the Fund's financial performance for the
past five years. If the table shows fewer years, that means the Fund is newer
than five years. Some of the information shows financial results for a single
Fund share. The "Total Return" line shows the rate that you would have earned or
lost on an investment in the Fund in a year (with dividends and distributions
reinvested). This information has been audited by PricewaterhouseCoopers LLP,
whose report, along with the Fund's financial statements, is included in the
annual report incorporated by reference (available on request).
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
International Investors Gold Fund
Financial Highlights-Class A Shares
1998 1997 1996 1995 1994
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
beginning of period $7.54 $11.90 $13.35 $15.21 $16.08
-------- -------- -------- -------- --------
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment Income (Loss) (b) 0.06 0.09 0.05 0.08 0.19
Net Gains (Loss) on
Investments (both realized and unrealized) (0.95) (4.36) (1.29) (1.44) (0.36)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (0.89) (4.27) (1.24) (1.36) (0.17)
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DIVIDENDS AND DISTRIBUTIONS
From Dividends from
Net Investment Income(a) (0.06) (0.09) (0.07) (0.10) (0.18)
From Distributions from
Capital Gains - - (0.14) (0.38) (0.52)
From Tax Returns of Capital - - - (0.02) -
- ---------------------------------------------------------------------------------------------------------------------------------
Total Dividend & Distribution (0.06) (0.09) (0.21) (0.50) (0.70)
- ---------------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
end of period $6.59 $7.54 $11.90 $13.35 $15.21
======== ======== ======== ======== ========
Total Return (b) (11.87%) (36.00%) (9.37%) (8.93%) (1.04%)
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) $238,639 $232,944 $409,331 $519,795 $634,808
Ratio of Gross Expenses
to Average Net Assets 1.78% 1.52% 1.43% 1.42% 1.15%
Ratio of Net Expenses
to Average Net Assets 1.76%(c) 1.47%(c) 1.43% 1.42% 1.15%
Ratio of Net Investment Income (Loss)
to Average Net Assets 0.99% 0.90% 0.36% 0.55% 1.23%
Portfolio Turnover Rate 86.65% 19.99% 12.45% 4.10% 7.08%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Net of foreign taxes withheld (to be included in income and claimed as a tax
credit by the shareholder for federal income tax purposes) of $0 for 1998 and
1997, $0.01 for 1996, $0.03 for 1995, and $0.07 for 1994.
(b) Total return is calculated by assuming an initial investment at net
asset value at the beginning of the period, reinvestment of all dividends and
distributions at net asset value during the year and a redemption on the last
day of the year. A sales charge is not reflected in the calculation of total
return. Total return for a period of less than a year is not annualized.
(c) After expenses reduced by a custodian fee and directed brokerage
arrangement.
VAN ECK GLOBAL PROSPECTUS 49
<PAGE>
6. U.S. GOVERNMENT MONEY MARKET FUND
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
U.S. Government Money Market Fund
Financial Highlights
1998 1997 1996 1995 1994
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- -----
- ---------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.0388 0.0377 0.0385 0.0456 0.0311
- ---------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
From Net Investment Income (0.0388) (0.0377) (0.0385) (0.0456) (0.0311)
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
end of period $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
Total Return (a) 3.88% 3.77% 3.85% 4.56% 3.11%
RATIOS/SUPPLEMENTARY DATA
Net Assets, End of Period (000) $47,222 $76,650 $107,698 $70,130 $47,078
Ratio of Expenses
to Average Net Assets 1.20% 1.28% 1.23% 1.25% 1.12%
Ratio of Net Investment Income
to Average Net Assets 3.89% 3.91% 4.02% 4.45% 3.07%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
50 VAN ECK GLOBAL PROSPECTUS
<PAGE>
VAN ECK FUNDS
99 Park Avenue, New York, N.Y. 10016
Shareholder Services: Toll Free (800) 544-4653
Van Eck Funds (the "Trust") is a mutual fund consisting of six separate
series: Asia Dynasty Fund (Class A and B), Global Leaders Fund (Class A and B),
Global Hard Assets Fund (Class A, B and C), Gold/Resources Fund (Class A),
International Investors Gold Fund (Class A), and U.S. Government Money Fund (the
"Funds").
<TABLE>
<CAPTION>
TABLE OF CONTENTS Page
- -----------------
<S> <C>
GENERAL INFORMATION...................................................... 2
INVESTMENT OBJECTIVES AND POLICIES....................................... 2
RISK FACTORS ......................................................... 6
INVESTING IN FOREIGN SECURITIES................................. 6
EMERGING MARKETS SECURITIES..................................... 9
FOREIGN CURRENCY TRANSACTIONS................................... 9
FUTURES AND OPTIONS TRANSACTIONS................................ 13
INDEXED SECURITIES AND STRUCTURED NOTES......................... 11
MORTGAGE-BACKED SECURITIES...................................... 13
REAL ESTATE SECURITIES.......................................... 14
COMMERCIAL PAPER................................................ 14
DEBT SECURITIES................................................. 15
DERIVATIVES..................................................... 15
CURRENCY SWAPS.................................................. 16
SHORT SALES..................................................... 16
DIRECT INVESTMENTS.............................................. 16
REPURCHASE AGREEMENTS........................................... 17
RULE 144A SECURITIES............................................ 17
INVESTMENT RESTRICTIONS.................................................. 18
INVESTMENT ADVISORY SERVICES............................................. 23
THE DISTRIBUTOR.......................................................... 24
PORTFOLIO TRANSACTIONS AND BROKERAGE..................................... 26
TRUSTEES AND OFFICERS.................................................... 29
VALUATION OF SHARES...................................................... 36
EXCHANGE PRIVILEGE....................................................... 37
TAX-SHELTERED RETIREMENT PLANS........................................... 37
INVESTMENT PROGRAMS...................................................... 40
TAXES.................................................................... 42
REDEMPTIONS IN KIND...................................................... 44
PERFORMANCE.............................................................. 44
ADDITIONAL INFORMATION................................................... 47
FINANCIAL STATEMENTS..................................................... 47
APPENDIX................................................................. 48
MARKET INDEX DESCRIPTIONS................................................ 51
</TABLE>
This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Funds' current Prospectus, dated May 1, 1999 (the
"Prospectus"), which is available at no charge upon written or telephone request
to the Trust at the address or telephone number at the top of this page.
Shareholders are advised to read and retain this Statement of Additional
Information for future reference.
STATEMENT OF ADDITIONAL INFORMATION - May 1, 1999
<PAGE>
GENERAL INFORMATION
-------------------
Van Eck Funds (the "Trust") is an open-end management investment company
organized as a "business trust" under the laws of The Commonwealth of
Massachusetts on April 3, 1985. The Board of Trustees has authority to create
additional series or funds, each of which may issue a separate class of shares.
There are currently six series of Van Eck Funds: Asia Dynasty Fund (Class A and
B), Global Leaders Fund (Class A and B), Gold/Resources Fund (Class A),
International Investors Gold Fund (Class A), Global Hard Assets Fund (Class A, B
and C), and U.S. Government Money Fund, each of which commenced operations as a
series of Van Eck Funds.
International Investors Gold Fund was formerly a mutual fund incorporated
under the laws of the state of Delaware under the name of International
Investors Incorporated. International Investors Incorporated was reorganized as
a series of the Trust on April 30, 1991. International Investors Incorporated
had been in continuous existence since 1955, and had been concentrating in gold
mining shares since 1968.
The Global Leaders Fund, Global Hard Assets Fund, Gold/Resources Fund and
International Investors Gold Fund are classified as non-diversified funds under
the Investment Company Act of 1940 ("1940 Act"). Asia Dynasty Fund is a
diversified fund.
Van Eck Associates Corporation (the "Adviser") serves as investment adviser
to the Funds. Fiduciary International, Inc. ("FII") serves as sub-investment
adviser to the Global Leaders Fund.
INVESTMENT OBJECTIVES AND POLICIES
----------------------------------
Asia Dynasty Fund
- -----------------
Asia Dynasty Fund may invest in equity securities, warrants and equity
options of companies located in, or expected to benefit from the developmental
growth of the economies of countries located in the Asian region ("Asia Growth
Companies"). Asia Growth Companies consist of companies that (a) are located in
or whose securities are principally traded in an "Asian Region" country, as
defined below, (b)(i) have at lease 50% of their assets in one or more countries
located in the Asian Region or (ii) derive at least 50% of their gross sales
revenues or profits from providing goods or services to, from or within one or
more countries located in the Asian Region or (c) have manufacturing or other
operations in China that are significant to such companies. These investments
are typically listed on stock exchanges or traded in the over-the-counter
markets in Asian Region countries, but may be traded on exchanges or in markets
outside the Asian Region. Similarly, the principal offices of these countries
may be located outside these countries. These countries include Burma, Peoples
Republic of China ("China"), Cambodia, Hong Kong, India, Indonesia, Korea, Laos,
Malaysia, Pakistan, the Philippines, Singapore, Sri Lanka, Taiwan, Thailand and
Vietnam and, when the Fund is in a defensive posture, Australia, Japan and New
Zealand. Currently, the Fund does not consider Australia, Japan and New Zealand
to be part of the Asian Region. The countries constituting the Asian Region may
be changed by the Board without shareholder approval. Equity securities for
purposes of the 65% policy, include common and preferred stocks, direct equity
interests in trusts, partnerships, joint ventures and other unincorporated
entities or enterprises, special classes of shares available only to foreign
persons in those markets that restrict ownership of certain classes of equity to
nationals or residents of that country, convertible preferred stocks and
convertible debt instruments. Debt securities issued by Asia Growth Companies
are typically unrated. The Fund may buy and sell financial futures contracts and
options on financial futures contracts, forward currency contracts and put or
call options on securities, securities indices and foreign currencies and
foreign currency swaps. The Fund may also lend its portfolio securities and
borrow money for investment purposes (i.e. leverage its portfolio).
2
<PAGE>
The securities industry in China and laws regarding fiduciary duties of
officers and directors and the protection of shareholders are not well
developed. China and certain of the other Asian Region countries do not have
many securities laws of nationwide applicability. As changes to the Chinese
legal system develop, foreign investors, including the Fund, may be adversely
affected. The uncertainties faced by foreign investors in China are exacerbated
by the fact that many laws, regulations and decrees of China are not publicly
available, but merely circulated internally. Similar risks exist in other Asian
Region countries.
Global Leaders Fund
- -------------------
Global Leaders Fund may invest in equity securities. Equity securities
include common and preferred stocks; equity and equity index swap agreements;
direct equity interests in trusts, partnerships, joint ventures and other
unincorporated entities or enterprises; special classes of shares available only
to foreign persons in such markets that restrict the ownership of certain
classes of equity to nationals or residents of the country; convertible
preferred stocks and convertible debt instruments; financial futures contracts
and options on financial futures contracts; forward currency contracts and put
and call options on securities, securities indices and foreign currencies and
foreign currency swaps.
The Adviser believes that allocation of assets into many countries and
across asset classes can, over the long-term, provide higher returns that
portfolios invested solely in bonds with lower risk or volatility or than
portfolios invested entirely in stocks. Thus, the "risk-adjusted return" of a
diversified portfolio has the potential to be more attractive than some other,
more concentrated portfolios. In addition, the balanced approach reduces the
risk where events in any one country may adversely affect the entire portfolio.
Investors should note, however, that a balanced portfolio will generally be more
volatile than a portfolio consisting solely of bonds and may provide lower
returns than a portfolio consisting solely of stocks. Investors should also be
aware that although the Fund diversifies across more investment types than most
mutual funds, no one mutual fund can provide a complete investment program for
all investors. There can be no assurance that allocation of assets both globally
and across asset classes will reduce these risks or that the Fund will achieve
its investment objective.
The Fund may also invest in fixed-income securities which include
obligations issued or guaranteed by a government or any of its political
subdivisions, agencies, instrumentalities, or by a supranational organization
such as the World Bank or European Economic Community (or other organizations
which are chartered to promote economic development and are supported by various
governments and government entities), adjustable-rate preferred stock, interest
rate swaps, corporate bonds, debentures, notes, commercial paper, certificates
of deposit, time deposits, repurchase agreements, and debt obligations which may
have a call on a common stock or commodity by means of a conversion privilege or
attached warrants. The Fund may invest in debt instruments of the U.S.
government and its agencies having varied maturities. The Fund may invest in
asset-backed securities such as collateralized mortgage obligations and other
mortgage and non-mortgage asset-backed securities. The Fund may also lend its
portfolio securities and borrow money for investment purposes (i.e. leverage its
portfolio).
Global Hard Assets Fund
- -----------------------
Global Hard Assets Fund will, under normal market conditions, invest at
least 65% of its total assets in "Hard Asset Securities." Therefore, it may be
subject to greater risks and market fluctuations than other investment companies
with more diversified portfolios. Some of these risks include: volatility of
energy and basic materials prices; possible instability of the supply of various
Hard Assets; the risks generally associated with extraction of natural
resources; actions and changes in government which could affect the production
and marketing of Hard Assets; and greater price fluctuations that may be
experienced by Hard Asset Securities than the underlying Hard Assets.
3
<PAGE>
The Adviser believes Hard Asset Securities offer an opportunity to achieve
long-term capital appreciation and to protect wealth against eroding monetary
values during periods of cyclical economic expansions. Since the market action
of Hard Asset Securities may move against or independently of the market trend
of industrial shares, the addition of such securities to an overall portfolio
may increase the return and reduce the price fluctuations of such a portfolio.
There can be no assurance that an increased rate of return or a reduction in
price fluctuations of a portfolio will be achieved. Hard Asset Securities are
affected by many factors, including movement in the stork market. Inflation may
cause a decline in the market, including Hard Asset Securities. An investment in
the Fund's shares should be considered part of an overall investment program
rather than a complete investment program. Hard Asset Securities include equity
securities of "Hard Asset Companies" and securities, including structured notes,
whose value is linked to the price of a commodity or a commodity index. The term
"Hard Asset Companies" includes companies that are directly or indirectly
(whether through supplier relationships, servicing agreements or otherwise)
engaged to a significant extent in the exploration, development, production or
distribution of one or more of the following: (i) precious metals, (ii) ferrous
and non-ferrous metals, (iii) gas, petroleum, petrochemicals or other
hydrocarbons, (iv) forest products, (v) real estate and (vi) other basic non-
agricultural commodities which, historically, have been produced and marketed
profitably during periods of significant inflation. Under normal market
conditions, the Fund will invest at least 5% of its assets in each of the first
five sectors listed above. The Fund has a fundamental policy of concentrating in
such industries and up to 50% of the Fund's assets may be invested in any one of
the above sectors. Precious metal and natural resource securities are at times
volatile and there may be sharp fluctuations in prices even during periods of
rising prices.
The Fund may invest in equity securities. Equity securities include common
and preferred stocks; equity and equity index swap agreements; direct equity
interests in trusts, partnerships, joint ventures and other unincorporated
entities or enterprises; special classes of shares available only to foreign
persons in such markets that restrict the ownership of certain classes of equity
to nationals or residents of the country; convertible preferred stocks and
convertible debt instruments. The Fund may also invest in fixed-income
securities which include obligations issued or guaranteed by a government or any
of its political subdivisions, agencies, instrumentalities, or by a
supranational organization such as the World Bank or European Economic Community
(or other organizations which are chartered to promote economic development and
are supported by various governments and government entities), adjustable-rate
preferred stock, interest rate swaps, corporate bonds, debentures, notes,
commercial paper, certificates of deposit, time deposits, repurchase agreements,
and debt obligations which may have a call on a common stock or commodity by
means of a conversion privilege or attached warrants. Warrants received as
dividends on securities held by the Fund and warrants acquired in units or
attached to securities are not included in this restriction. The Fund may invest
in "when-issued" securities, "partly paid" securities (securities paid for over
a period of time) and securities of foreign issuers; and may lend its portfolio
securities and borrow money for investment purposes. The Fund may invest in debt
instruments of the U.S. government and its agencies having varied maturities.
The Fund seeks investment opportunities worldwide. Under normal conditions,
the Fund will invest its assets in at least three countries including the United
States. There is no limitation or restriction on the amount of assets to be
invested in any one country, developed or underdeveloped. Global investing
involves economic and political considerations not typically applicable to the
U.S. markets.
The Fund may purchase securities, including structured notes, whose value
is linked to the price of a commodity or a commodity index. The Fund may
purchase and sell financial and commodity futures contracts and options on
financial futures and commodity futures contracts and may also write, purchase
or sell put or call options on securities, foreign currencies, commodities and
commodity indices. The Fund may invest in asset-backed securities such as
collateralized mortgage obligations and other mortgage and non-mortgage asset-
backed securities. The Fund may also lend its portfolio securities and borrow
money for investment purposes (i.e. leverage its portfolio).
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<PAGE>
The Fund may invest up to 35% of its total assets in debt securities whose
value is not linked to the value of a Hard Asset or a Hard Asset Company and in
other securities of companies which are not Hard Asset Companies. Non-Hard Asset
debt securities include high grade, liquid debt securities of foreign companies,
foreign governments and the U.S. Government and their respective agencies,
instrumentalities, political subdivisions and authorities, as well as in money
market instruments denominated in U.S. dollars or a foreign currency. High grade
debt securities are those that are rated A or betted by S&P or Moody's, Fitch-1
by Fitch or Duff-1 by D&P or if unrated, of comparable quality in the judgment
of the Adviser, subject to the supervision of the Board of Trustees. The assets
of the Fund invested in short-term instruments will consist primarily of
securities rated in the highest category (for example, commercial paper rated
"Prime-1" or "A-1" by Moody's and S&P, respectively) or if unrated, in
instruments that are determined to be of comparable quality in the judgment of
the Adviser, subject to the supervision of the Board of Trustees, or are insured
by foreign or U.S. governments, their agencies or instrumentalities as to
payment of principal and interest.
Gold/Resources Fund
- -------------------
Gold/Resources Fund may invest in debt and equity securities of companies
engaged in the exploration, development and production of gold and other natural
resources. Gold, other precious metals and natural resources securities are at
times volatile and there may be sharp fluctuations in prices even during periods
of rising prices.
The Fund may invest in any type of security including, but not limited to,
common stocks and equivalents (such as convertible debt securities and
warrants), preferred stocks and bonds and debt obligations of domestic and
foreign companies, governments (including their political subdivisions) and
international organizations. The Fund may purchase and sell financial and
commodity futures contracts and options on financial futures and commodity
futures contracts and may also write, purchase or sell put or call options on
securities, foreign currencies, commodities and commodity indices.
International Investors Gold Fund
- ---------------------------------
The Fund's primary objective is long-term capital appreciation, while
retaining freedom to take current income into consideration in selecting
investments. The Fund's fundamental policy is to concentrate its investments in
common stocks of gold mining companies. It may invest in that industry up to
100% of the value of its assets. In some future period or periods, due to
adverse conditions in that industry, the Fund may for temporary defensive
purposes have less than 25% of the value of its assets invested in that
industry, however, under normal circumstances the Fund will have at least 65% of
its total assets invested in that industry.
The Fund's policy is to invest primarily in securities of companies,
wherever organized, whose properties, products or services are international in
scope or substantially in countries outside the United States, of foreign
governments, and in United States Treasury securities.
Certain Policies Applicable to Global Leaders Fund, Global Hard Assets
Fund, Asia Dynasty Fund, International Investors Gold Fund, and Gold/Resources
Fund.
The above Funds may invest in "when issued" securities and "partly paid"
securities. Additionally, Global Leaders Fund, Global Hard Assets Fund, and Asia
Dynasty Fund may invest in collateralized mortgage obligations. The Appendix to
this Statement of Additional Information contains an explanation of the rating
categories of Moody's Investors Service and Standard & Poor's Corporation
relating to the fixed-income securities and preferred stocks in which the Funds
may invest, including a description of the risks associated with each category.
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<PAGE>
U.S. Government Money Fund
- --------------------------
U.S. Government Money Fund seeks safety of principal, daily liquidity and
current income through investments in short-term U.S. Treasury securities and
other securities carrying the "full faith and credit" guarantee of the U.S.
Government. The Fund invests in U.S. Treasury bills, notes, and bonds and other
obligations guaranteed by the full faith and credit of the U.S. Government and
repurchase agreements collateralized by such obligations (at least 80% of its
assets will be so invested). All securities mature within thirteen months from
the date of purchase, although repurchase agreements may be collateralized by
securities maturing in more than one year.
Direct obligations issued by the U.S. Treasury include bills, notes and
bonds which differ from each other only in interest rates, maturities and times
of issuance: Treasury bills have maturities of thirteen months or less, Treasury
notes have maturities of one to ten years and Treasury bonds generally have
maturities of greater than ten years. Securities guaranteed by the U.S.
Government include such obligations as securities issued by the General Services
Administration and the Small Business Administration.
U.S. Government Money Fund may also invest in other short-term instruments
(up to 20% of its assets), in all cases subject to the credit quality
requirements of the 1940 Act, including commercial paper, banker's acceptances,
and certificates of deposit. Commercial paper consists of short-term, unsecured
promissory notes issued principally by banks and corporations to finance short-
term credit needs. The commercial paper purchased by the Fund will consist only
of direct obligations of the issuer. Banker's acceptances are drafts or bills of
exchange that have been guaranteed as to payment by a bank or trust company.
Banker's acceptances are used to effect payment of merchandise sold in import-
export transactions, and are backed by the credit strength of the bank which
assumes the obligation. Time deposits are credit instruments evidencing the
obligation of a bank to repay funds deposited with it for a specified period of
time. Certificates of deposit are certificates evidencing the obligation of a
bank to repay funds deposited with it for a specific period of time.
RISK FACTORS
------------
Investing In Foreign Securities
-------------------------------
Asia Dynasty Fund, Global Leaders Fund, Global Hard Assets Fund,
Gold/Resources Fund and International Investors Gold Fund.
U.S. Government Money Fund, as a fundamental investment policy, may not
invest in securities of South African issuers; Asia Dynasty Fund, Global Leaders
Fund, Global Hard Assets Fund, Gold/Resources Fund and International Investors
Gold Fund, and are not so restricted by their fundamental investment policies.
Global Hard Assets Fund may invest in Russian issuers. Settlement, clearing
and registration of securities in Russia is in an underdeveloped state.
Ownership of shares (except those held through depositories that meet the
requirements of the Act) is defined according to entries in the issuer's share
register and normally evidenced by extracts from that register, which have no
legal enforceability. Furthermore, share registration is carried out either by
the issuer or registrars located throughout Russia, which are not necessarily
subject to effective government supervision. To reasonably ensure that its
ownership interest continues to be appropriately recorded, the Funds will invest
only in those Russian companies whose registrars have entered into a contract
with the Funds' Russian sub-custodian, which gives the sub-custodian the right,
among others, to inspect the share register and to obtain extracts of share
registers through regular audits. While these procedures reduce the risk of
loss, there can be no assurance
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<PAGE>
that they will be effective. This limitation may prevent the Funds from
investing in the securities of certain Russian issuers otherwise deemed suitable
by the Funds' investment adviser.
Investors should recognize that investing in foreign securities involves
certain special considerations which are not typically associated with investing
in United States securities. Since investments in foreign companies will
frequently involve currencies of foreign countries, and since the above Funds
may hold securities and funds in foreign currencies, these Funds may be affected
favorably or unfavorably by changes in currency rates and in exchange control
regulations, if any, and may incur costs in connection with conversions between
various currencies. Most foreign stock markets, while growing in volume of
trading activity, have less volume than the New York Stock Exchange, and
securities of some foreign companies are less liquid and more volatile than
securities of comparable domestic companies. Similarly, volume and liquidity in
most foreign bond markets are less than in the United States, and at times
volatility of price can be greater than in the United States. Fixed commissions
on foreign securities exchanges are generally higher than negotiated commissions
on United States exchanges, although these Funds endeavor to achieve most
favorable net results on their portfolio transactions. There is generally less
government supervision and regulation of securities exchanges, brokers and
listed companies in foreign countries than in the United States. In addition,
with respect to certain foreign countries, there is the possibility of exchange
control restrictions, expropriation or confiscatory taxation, political,
economic or social instability, which could affect investments in those
countries. Foreign securities such as those purchased by these Funds may be
subject to foreign government taxes, higher custodian fees and dividend
collection fees which could reduce the yield on such securities.
Investments may be made from time to time by Global Leaders Fund, Global
Hard Assets Fund, and Asia Dynasty Fund in companies in developing countries as
well as in developed countries. Asia Dynasty Fund, and Global Hard Assets Fund
may have a substantial portion of their assets in developing countries. Although
there is no universally accepted definition, a developing country is generally
considered by the Adviser ( FII) or to be a country which is in the initial
stages of industrialization. Shareholders should be aware that investing in the
equity and fixed income markets of developing countries involves exposure to
unstable governments, economies based on only a few industries, and securities
markets which trade a small number of securities. Securities markets of
developing countries tend to be more volatile than the markets of developed
countries; however, such markets have in the past provided the opportunity for
higher rates of return to investors.
Since the Asia Dynasty Fund will invest at least 65% of its total assets in
Asian region investments, its investment performance will be especially affected
by events affecting Asian region companies. The value and liquidity of Asian
region investments may be affected favorably or unfavorably by political,
economic, fiscal, regulatory or other developments in the Asian region or their
neighboring regions. The extent of economic development, political stability and
market depth of different countries in the Asian region varies widely. Certain
countries in the Asian region, including Cambodia, China, Laos, Indonesia,
Malaysia, the Philippines, Thailand, and Vietnam are either comparatively
underdeveloped or are in the process of becoming developed. Investments
typically involve greater potential for gain or loss than investments in
securities of issuers in developed countries. Given the Fund's investments, the
Fund will likely be particularly sensitive to changes in China's economy as the
result of a reversal of economic liberalization, political unrest or changes in
China's trading status.
The securities markets in the Asian region are substantially smaller,
less liquid and more volatile than the major securities markets in the United
States. A high proportion of the shares of many issuers may be held by a limited
number of persons and financial institutions, which may limit the number of
shares available for investment by the portfolio. Similarly, volume and
liquidity in the bond markets in the Asian region are less than in the United
States and, at times, price volatility can be greater than in the United States.
A limited number of issuers in the Asian region securities markets may represent
a disproportionately large percentage of market capitalization and trading
value. The limited liquidity of
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<PAGE>
securities markets in the Asian region may also affect the Fund's ability to
acquire or dispose of securities at the price and time it wishes to do so.
Accordingly, during periods of rising securities prices in the more illiquid
Asian region securities markets, the Fund's ability to participate fully in such
price increases may be limited by its investment policy of investing not more
than 15% of its net assets in illiquid securities. Conversely, the Fund's
inability to dispose fully and promptly of positions in declining markets will
cause the Fund's net asset value to decline as the value of the unsold positions
is marked to lower prices. In addition, Asian region securities markets are
susceptible to being influenced by large investors trading significant blocks of
securities.
The Chinese, Hong Kong and Taiwanese stock markets are undergoing a
period of growth and change which may result in trading volatility and
difficulties in the settlement and recording of transactions, and in
interpreting and applying the relevant law and regulations. In particular, the
securities industry in China is not well developed. China has few securities
laws of nationwide applicability. The municipal securities regulations adopted
by Shanghai and Shenzhen municipalities are very new, as are their respective
securities exchanges and other self-regulatory organizations. In addition,
Chinese stockbrokers and other intermediaries may not perform as well as their
counterparts in the United States and other more developed securities markets.
The prices at which the Funds may acquire investments may be affected by trading
by persons with material non-public information and by securities transactions
by brokers in anticipation of transactions by the Funds in particular
securities. The securities markets in Cambodia, Laos and Vietnam are currently
non-existent.
Asia Dynasty Fund will invest in Asian region countries with emerging
economies or securities markets. Political and economic structures in many of
such countries may be undergoing significant evolution and rapid development,
and such countries may lack the social, political and economic stability
characteristic of the United States. Certain of such countries have in the past
failed to recognize private property rights and have at times nationalized or
expropriated the assets of private companies. As a result, the risks described
above, including the risks of nationalization or expropriation of assets, may be
heightened. In addition, unanticipated political or social developments may
affect the value of the Funds' investments in those countries and the
availability to the Funds of additional investments in those countries.
Economies in the Asian region may differ favorably or unfavorably from
the United States economy in such respects as rate of growth of gross national
product, rate of inflation, capital reinvestment, resource self-sufficiency and
balance of payments position. As export-driven economies, the economies of the
Asian region is affected by developments in the economies of its principal
trading partners. Revocation by the United States of China's "Most Favored
Nation" trading status, which the United States President and Congress
reconsider annually, would adversely affect the trade and economic development
of China and Hong Kong. Hong Kong, Japan and Taiwan have limited natural
resources, resulting in dependence on foreign sources for certain raw materials
and economic vulnerability to global fluctuations of price and supply.
China governmental actions can have a significant effect on the
economic conditions in the Asian region, which could adversely affect the value
and liquidity of the Fund's investments. Although the Chinese Government has
recently begun to institute economic reform policies, there can be no assurances
that it will continue to pursue such policies or, if it does, that such policies
will succeed.
China and certain of the other Asian region countries do not have
comprehensive systems of laws, although substantial changes have occurred in
China in this regard in recent years. The corporate form of organization has
only recently been permitted in China and national regulations governing
corporations were introduced only in May 1992. Prior to the introduction of such
regulations Shanghai had adopted a set of corporate regulations applicable to
corporations located or listed in Shanghai, and the relationship between the two
sets of regulations is not clear. Consequently, until a firmer legal basis is
provided, even such fundamental corporate law tenets as the limited liability
status of Chinese issuers and their authority to
8
<PAGE>
issue shares remain open to question. Laws regarding fiduciary duties of
officers and directors and the protection of shareholders are not well
developed. China's judiciary is relatively inexperienced in enforcing the laws
that exist, leading to a higher than usual degree of uncertainty as to the
outcome of litigation. Even where adequate law exists in China, it may be
impossible to obtain swift and equitable enforcement of such law, or to obtain
enforcement of the judgment by a court of another jurisdiction. The bankruptcy
laws pertaining to state enterprises have rarely been used and are untried in
regard to an enterprise with foreign shareholders, and there can be no assurance
that such shareholders, including the Funds, would be able to realize the value
of the assets of the enterprise or receive payment in convertible currency. As
the changes to the Chinese legal system develop, the promulgation of new laws,
existing laws and the preemption of local laws by national laws may adversely
affect foreign investors, including the Funds. The uncertainties faced by
foreign investors in China are exacerbated by the fact that many laws,
regulations and decrees of China are not publicly available, but merely
circulated internally. Similar risks exist in other Asian region countries.
Trading in futures contracts traded on foreign commodity exchanges may
be subject to the same or similar risks as trading in foreign securities.
Emerging Markets Securities
---------------------------
Investments of the Funds (except U.S. Government Money Fund) may be
made from time to time in companies in developing countries as well as in
developed countries. Shareholders should be aware that investing in the equity
and fixed income markets of developing countries involves exposure to
potentially unstable governments, the risk of nationalization of businesses,
restrictions on foreign ownership, prohibitions on repatriation of assets and a
system of laws that may offer less protection of property rights. Emerging
market economies may be based on only a few industries, may be highly vulnerable
to changes in local and global trade conditions, and may suffer from extreme and
volatile debt burdens or inflation rates.
Securities markets in these countries may trade a small number of
securities, may have a limited number of issuers and a high proportion of shares
of may issuers may be held by a relatively small number of persons or
institutions. Local securities markets may be unable to respond effectively to
increases in trading volume, potentially making prompt liquidation of
substantial holdings difficult or impossible at times. Securities of issuers
located in developing markets may have limited marketability and may be subject
to more abrupt or erratic price movements. Many of these stock markets are
undergoing a period of growth and change which may result in trading volatility,
and in difficulties in the settlement and recording of transactions and in
interpreting and applying the relevant law and regulations. In addition,
stockbrokers and other intermediaries in emerging markets may not perform in the
way their counterparts in the United States and other more developed securities
markets do. The prices at which a Fund may acquire investments may be affected
by trading by persons with material non-public information and by securities
transactions by brokers in anticipation of transactions by the Fund in
particular securities. Limited liquidity may impair a Fund's ability to
liquidate a position at the time and price it wishes to do so. In addition, a
Fund's ability to participate fully in the smaller, less liquid emerging markets
may be limited by the policy restricting its investments in illiquid securities.
Foreign Currency Transactions
-----------------------------
Asia Dynasty Fund, Global Leaders Fund, Global Hard Assets Fund,
Gold/Resources Fund and International Investors Gold Fund.
Under normal circumstances, consideration of the prospects for currency
exchange rates will be incorporated into the long-term investment decisions made
for the above Funds with regard to overall
9
<PAGE>
diversification strategies. Although the Funds value their assets daily in terms
of U.S. Dollars, they do not intend physically to convert their holdings of
foreign currencies into U.S. dollars on a daily basis. The Funds will do so from
time to time, and investors should be aware of the costs of currency conversion.
Although foreign exchange dealers do not charge a fee for conversion, they do
realize a profit based on the difference (the "spread") between the prices at
which they are buying and selling various currencies. Thus, a dealer may offer
to sell a foreign currency to the Funds at one rate, while offering a lesser
rate of exchange should the Funds desire to resell that currency to the dealer.
The Funds will use forward contracts, along with futures contracts, foreign
exchange swaps (Asia Dynasty Fund, Global Leaders Fund, Global Hard Assets Fund
only) and put and call options (all types of derivatives), to "lock in" the U.S.
Dollar price of a security bought or sold and as part of their overall hedging
strategy. The Funds will conduct their foreign currency exchange transactions,
either on a spot (i.e., cash) basis at the spot rate prevailing in the foreign
currency exchange market, or through purchasing put and call options on, or
entering into futures contracts or forward contracts to purchase or sell foreign
currencies. See "Futures and Options Transactions."
Changes in currency exchange rates may affect the Funds' net asset
value and performance. There can be no assurance that the Funds' investment
adviser (or Sub-Adviser) will be able to anticipate currency fluctuations in
exchange rates accurately. The Funds may invest in a variety of derivatives and
enter into hedging transactions to attempt to moderate the effect of currency
fluctuations. The Funds may purchase and sell put and call options on, or enter
into futures contracts or forward contracts to purchase or sell, foreign
currencies. This may reduce a Fund's losses on a security when a foreign
currency's value changes. Hedging against a change in the value of a foreign
currency does not eliminate fluctuations in the prices of portfolio securities
or prevent losses if the prices of such securities decline. Furthermore, such
hedging transactions reduce or preclude the opportunity for gain if the value of
the hedged currency should change relative to the other currency. Last, when the
Funds use options and futures in anticipation of the purchase of a portfolio
security to hedge against adverse movements in the security's underlying
currency, but the purchase of such security is subsequently deemed undesirable,
the Fund may incur a gain or loss on the option or futures contract.
The Funds will enter into forward contracts to duplicate a cash market
transaction. The Funds will not purchase or sell foreign currency as an
investment, except that Asia Dynasty Fund, Global Leaders Fund and Global Hard
Assets Fund may enter into currency swaps. See also "Foreign Currency
Transactions" and "Futures and Options Transactions".
In those situations where foreign currency options or futures
contracts, or options on futures contracts may not be readily purchased (or
where they may be deemed illiquid) in the primary currency in which the hedge is
desired, the hedge may be obtained by purchasing or selling an option, or
futures contract or forward contract on a secondary currency. The secondary
currency will be selected based upon the investment adviser's (or Sub-Adviser's)
belief that there exists a significant correlation between the exchange rate
movements of the two currencies. However, there can be no assurances that the
exchange rate or the primary and secondary currencies will move as anticipated
or that the relationship between the hedged security and the hedging instrument
will continue. If they do not move as anticipated or the relationship does not
continue, a loss may result to the Funds on their investments in the hedging
positions.
A forward foreign currency contract, like a futures contract, involves
an obligation to purchase or sell a specific amount of currency at a future
date, which may be any fixed number of days from the date of the contract agreed
upon by the parties, at a price set at the time of the contract. Unlike foreign
currency futures contracts which are standardized exchange-traded contracts,
forward currency contracts are usually traded in the interbank market conducted
directly between currency traders (usually large commercial banks) and their
customers. A forward contract generally has no deposit requirement, and no
commissions are charged at any stage for such trades.
10
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The Adviser (or FII) will not commit any Fund to deliver under forward
contracts an amount of foreign currency in excess of the value of the Fund's
portfolio securities or other assets or obligations denominated in that
currency. The Funds' Custodian will place the securities being hedged, cash or
U.S. government securities or debt or equity securities into a segregated
account of the Fund in an amount equal to the value of the Fund's total assets
committed to the consummation of forward foreign currency contracts to ensure
that the Fund is not leveraged beyond applicable limits. If the value of the
securities placed in the segregated account declines, additional cash or
securities will be placed in the account on a daily basis so that the value of
the account will equal the amount of the Funds' commitments with respect to such
contracts. At the maturity of a forward contract, the Funds may either sell the
portfolio security and make delivery of the foreign currency, or they may retain
the security and terminate their contractual obligation to deliver the foreign
currency prior to maturity by purchasing an "offsetting" contract with the same
currency trader obligating it to purchase, on the same maturity date, the same
amount of the foreign currency. There can be no assurance, however, that the
Funds will be able to effect such a closing purchase transaction.
It is impossible to forecast the market value of a particular portfolio
security at the expiration of the contract. Accordingly, if a decision is made
to sell the security and make delivery of the foreign currency it may be
necessary for a Fund to purchase additional foreign currency on the spot market
(and bear the expense of such purchase) if the market value of the security is
less than the amount of foreign currency that a Fund is obligated to deliver.
If a Fund retains the portfolio security and engages in an offsetting
transaction, the Fund will incur a gain or a loss to the extent that there has
been movement in forward contract prices. Additionally, although such contracts
tend to minimize the risk of loss due to a decline in the value of the hedged
currency, at the same time, they tend to limit any potential gain which might
result should the value of such currency increase.
Futures And Options Transactions
--------------------------------
Asia Dynasty Fund, Global Leaders Fund, Global Hard Assets Fund,
and Gold/Resources Fund.
These Funds may invest in options on futures contracts. Compared to the
purchase or sale of futures contracts, the purchase and sale of options on
futures contracts involves less potential risk to the Funds because the maximum
exposure is the amount of the premiums paid for the options. Futures contracts
and options thereon are both types of derivatives.
The Funds may buy and sell financial futures contracts which may
include security and interest-rate futures, stock and bond index futures
contracts and foreign currency futures contracts. The Funds may engage in these
transactions for hedging purposes and (except for Gold/Resources Fund) for other
purposes. Global Hard Assets Fund may also buy and sell commodity futures
contracts, which may include futures on natural resources and natural resources
indices. A security or interest-rate futures contract is an agreement between
two parties to buy or sell a specified security at a set price on a future date.
An index futures contract is an agreement to take or make delivery of an amount
of cash based on the difference between the value of the index at the beginning
and at the end of the contract period. A foreign currency futures contract is an
agreement to buy or sell a specified amount of a currency for a set price on a
future date. A commodity futures contract is an agreement to take or make
delivery of a specified amount of a commodity, such as gold, at a set price on a
future date.
A Fund will not commit more then 5% of its total assets to initial
margin deposits on futures contracts and premiums on options on futures
contracts, except that margin deposits for futures positions entered into for
bona fide hedging purposes, as that term is defined in the Commodity Exchange
Act, are
11
<PAGE>
excluded from the 5% limitation. As the value of the underlying asset
fluctuates, either party to the contract is required to make additional margin
payments, known as "variation margin," to cover any additional obligation it may
have under the contract. In addition, cash or high quality securities equal in
value to the current value of the underlying securities less the margin
requirement will be segregated, as may be required, with the fund's custodian to
reflect changes in the value of the underlying futures contract.
The use of financial futures contracts and commodity futures contracts,
options on such futures contracts and commodities (Global Hard Assets Fund,
Gold/Resources Fund and International Investors Gold Fund), may reduce a Fund's
exposure to fluctuations in the prices of portfolio securities and may prevent
losses if the prices of such securities decline. Similarly, such investments may
protect a Fund against fluctuation in the value of securities in which a Fund is
about to invest. Because the financial markets in the Asian region countries and
other developing countries are not as developed as in the United States these
financial investments may not be available to the Funds and the Funds may be
unable to hedge certain risks.
The use of financial futures and commodity futures contracts and
options on such futures contracts and commodities (Global Hard Assets Fund,
Gold/Resources Fund and International Investors Gold Fund) as hedging
instruments involves several risks. First, there can be no assurance that the
prices of the futures contracts or options and the hedged security or the cash
market position will move as anticipated. If prices do not move as anticipated,
a Fund may incur a loss on its investment, may not achieve the hedging
protection anticipated and/or incur a loss greater than if it had entered into a
cash market position. Second, investments in options, futures contracts and
options on futures contracts may reduce the gains which would otherwise be
realized from the sale of the underlying securities or assets which are being
hedged. Third, positions in futures contracts and options can be closed out only
on an exchange that provides a market for those instruments. There can be no
assurances that such a market will exist for a particular futures contract or
option. If a Fund cannot close out an exchange traded futures contract or option
which it holds, it would have to perform its contractual obligation or exercise
its option to realize any profit and would incur transaction costs on the sale
of the underlying assets.
For hedging purposes, each Fund, and for other purposes (such as
creating synthetic positions), each Fund except Gold/Resources Fund, may invest
up to 5% of its total assets, taken at market value at the time of investment,
in premiums on call and put options on domestic and foreign securities, foreign
currencies, stock and bond indices, financial futures contracts and commodity
futures contracts. This policy may be changed without shareholder approval.
The Funds may write, purchase or sell covered call or put options. An
options transaction involves the writer of the option, upon receipt of a
premium, giving the right to sell (call option) or buy (put option) an
underlying asset at an agreed-upon exercise price. The holder of the option has
the right to purchase (call option) or sell (put option) the underlying asset at
the exercise price. If the option is not exercised or sold, it becomes worthless
at its expiration date and the premium payment is lost to the option holder. As
the writer of an option, the Fund keeps the premium whether or not the option is
exercised. When a Fund sells a covered call option, which is a call option with
respect to which the Fund owns the underlying assets, the Fund may lost the
opportunity to realize appreciation in the market price of the underlying asset
or may have to hold the underlying asset, which might otherwise have been sold
to protect against depreciation. A covered put option written by the Fund
exposes it during the term of the option to a decline in the price of the
underlying asset. A put option sold by the Fund is covered when, among other
things, cash or short-term liquid securities are placed in a segregated account
to fulfill the obligations undertaken. Covering a put option sold does not
reduce the risk of loss.
The Funds may invest in options which are either listed on a domestic
securities exchange or traded on a recognized foreign exchange. In addition, the
Funds may purchase or sell over-the-counter options for dealers or banks to
hedge securities or currencies as approved by the Board of Trustees. In general,
12
<PAGE>
exchange traded options are third party contracts with standardized prices and
expiration dates. Over-the-counter options are two party contracts with price
and terms negotiated by the buyer and seller, are generally considered illiquid
and will be subject to the limitation on investments in illiquid securities.
It is the policy of each of the Funds to meet the requirements of the
Internal Revenue Code of 1986, as amended (the "Code") to qualify as a regulated
investment company to prevent double taxation of the Funds and their
shareholders. One of the requirements is that at least 90% of a Fund's gross
income be derived from dividends, interest, payment with respect to securities
loans and gains from the sale or other disposition of stocks or other
securities. Gains from commodity futures contracts do not currently qualify as
income for purposes of the 90% test. The extent to which the Funds may engage in
options and futures contract transactions may be materially limited by this
test.
Indexed Securities And Structured Notes
---------------------------------------
Global Hard Assets Fund, International Investors Gold Fund and
Gold/Resources Fund may invest in indexed securities, (structured notes
securities and index options) whose value is linked to one or more currencies,
interest rates, commodities, or financial or commodity indices. An indexed
security enables the investor to purchase a note whose coupons and/or principal
redemption are linked to the performance of an underlying asset. Indexed
securities may be positively or negatively indexed (i.e., their value may
increase or decrease if the underlying instrument appreciates). Indexed
securities may have return characteristics similar to direct investments in the
underlying instrument or to one or more options on the underlying instrument.
Indexed securities may be more volatile than the underlying instrument itself,
and present many of the same risks as investing in futures and options. Indexed
securities are also subject to credit risks associated with the issuer of the
security with respect to both principal and interest. Only securities linked to
one or more non-agriculture commodities or commodity indices will be considered
a Hard Asset Security.
Indexed securities may be publicly traded or may be two-party contracts
(such two-party agreements are referred to here collectively as structured
notes). When a Fund purchases a structured note, it will make a payment of
principal to the counterparty. Some structured notes have a guaranteed repayment
of principal while others place a portion (or all) of the principal at risk. The
Funds will purchase structured notes only from counterparties rated A or better
by S&P, Moody's or another nationally recognized statistical rating
organization. The Adviser will monitor the liquidity of structured notes under
the supervision of the Board of Trustees and notes determined to be illiquid
will be aggregated with other illiquid securities and subject to the Funds'
limitations on illiquid securities.
Mortgage-Backed Securities
--------------------------
The Funds may invest in mortgage-backed securities. A mortgage-backed
security may be an obligation of the issuer backed by a mortgage or pool of
mortgages or a direct interest in an underlying pool of mortgages. The value of
mortgage-backed securities may change due to shifts in the market's perception
of issuers. In addition, regulatory or tax changes may adversely affect the
mortgage securities market as a whole. Stripped mortgage-backed securities are
created when an U.S. governmental agency or a financial institution separates
the interest and principal components of a mortgage-backed security and sells
them as individual securities. The holder of the "principal-only" security
("PO") receives the principal payments made by the underlying mortgage-backed
security, while the holder of the "interest-only" security ("IO") receives
interest payments from the same underlying security. The prices of stripped
mortgage-backed securities may be particularly affected by change in interest
rates. As interest rates fall, prepayment rates tend to increase, which tends to
reduce the price of IOs and increase prices of POs. Rising interest rates can
have the opposite effect. Changes in interest rates may also affect the
liquidity of IOs and POs.
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<PAGE>
Real Estate Securities
----------------------
Gold/Resources Fund and Global Hard Assets Fund cannot invest in real
estate directly. However, each of these Funds may invest a percentage of its
assets in equity securities of REITs and other real estate industry companies or
companies with substantial real estate investments. Global Hard Assets Fund may
invest up to 50% of its assets in such securities. Gold/Resources Fund and
Global Hard Assets Fund are therefore subject to certain risks associated with
direct ownership of real estate and with the real estate industry in general.
These risks include, among others: possible declines in the value of real
estate; possible lack of availability of mortgage funds; extended vacancies of
properties; risks related to general and local economic conditions;
overbuilding; increases in competition, property taxes and operating expenses;
changes in zoning laws; costs resulting from the clean-up of, and liability to
third parties for damages resulting from, environmental problems; casualty or
condemnation losses; uninsured damages from floods, earthquakes or other natural
disasters; limitations on and variations in rents; and changes in interest
rates.
REITs are pooled investment vehicles whose assets consist primarily of
interest in real estate and real estate loans. REITs are generally classified as
equity REITs, mortgage REITs or hybrid REITs. Equity REITs own interest in
property and realize income from the rents and gain or loss from the sale of
real estate interests. Mortgage REITs invest in real estate mortgage loans and
realize income from interest payments on the loans. Hybrid REITs invest in both
equity and debt. Equity REITs may be operating or financing companies. An
operating company provides operational and management expertise to and exercises
control over, many if not most operational aspects of the property.
REITS are not taxed on income distributed to shareholders provided they
comply with several requirements of the Code.
Investing in REITs involves certain unique risks in addition to those
risks associated with investing in the real estate industry in general. Equity
REITs may be affected by changes in the value of the underlying property owned
by the REITs, while mortgage REITs may be affected by the quality of any credit
extended. REITs are dependent upon management skills, are not diversified, and
are subject to the risks of financing projects. REITs are subject to heavy cash
flow dependency, default by borrowers, self-liquidation and the possibilities of
failing to qualify for the exemption from tax for distributed income under the
Code. REITs (especially mortgage REITs) are also subject to interest rate risk
(i.e., as interest rates rise, the value of the REIT may decline).
Commercial Paper
----------------
Global Leaders Fund and Global Hard Assets Fund may invest in
commercial paper which is indexed to certain specific foreign currency exchange
rates. The terms of such commercial paper provide that its principal amount is
adjusted upwards or downwards (but not below zero) at maturity to reflect
changes in the exchange rate between two currencies while the obligation is
outstanding. The Funds will purchase such commercial paper with the currency in
which it is denominated and, at maturity, will receive interest and principal
payments thereon in that currency, but the amount or principal payable by the
issuer at maturity will change in proportion to the change (if any) in the
exchange rate between two specified currencies between the date the instrument
is issued and the date the instrument matures. While such commercial paper
entails the risk of loss of principal, the potential for realizing gains as a
result of changes in foreign currency exchange rate enables the Funds to hedge
or cross-hedge against a decline in the U.S. dollar value of investments
denominated in foreign currencies while providing an attractive money market
rate of return. The Funds will purchase such commercial paper for hedging
purposes only, not for speculation. The staff of the Securities and Exchange
Commission is currently considering whether the purchase of this type of
commercial paper would result in the issuance of a "senior security" within the
meaning of the 1940 Act. The Funds believe that such investments do not involve
the creation of such a senior security, but nevertheless will establish a
segregated account with respect to its investments in this
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<PAGE>
type of commercial paper and to maintain in such account cash not available for
investment or U.S. Government securities or other liquid high quality debt
securities having a value equal to the aggregate principal amount of outstanding
commercial paper of this type.
Debt Securities
---------------
The Funds may invest in debt securities. The market value of debt
securities generally varies in response to changes in interest rates and the
financial condition of each issuer and the value of a Hard Asset if linked to
the value of a Hard Asset. Debt securities with similar maturities may have
different yields, depending upon several factors, including the relative
financial condition of the issuers. A description of debt securities ratings is
contained in the Appendix to the Statement of Additional Information. High grade
means a rating of A or better by Moody's or S&P's, or of comparable quality in
the judgment of the Adviser or (Sub-Adviser) if no rating has been given by
either service. Many securities of foreign issuers are not rated by these
services. Therefore, the selection of such issuers depends to a large extent on
the credit analysis performed by the Adviser or (Sub-Adviser). During periods of
declining interest rates, the value of debt securities generally increases.
Conversely, during periods of rising interest rates, the value of such
securities generally declines. These changes in market value will be reflected
in the Fund's net asset value. Debt securities with similar maturities may have
different yields, depending upon several factors, including the relative
financial condition of the issuers. For example, higher yields are generally
available from securities in the lower rating categories of S&P or Moody's.
However, the values of lower-rated securities generally fluctuate more than
those of high-grade securities. Many securities of foreign issuers are not rated
by these services. Therefore the selection of such issuers depends to a large
extent on the credit analysis performed by the Adviser (or FII).
New issues of certain debt securities are often offered on a when-
issued basis, that is, the payment obligation and the interest rate are fixed at
the time the buyer enters into the commitment, but delivery and payment for the
securities normally take place after the date of the commitment to purchase. The
value of when-issued securities may vary prior to and after delivery depending
on market conditions and changes in interest rate levels. However, the Funds do
not accrue any income on these securities prior to delivery. The Funds will
maintain in a segregated account with their Custodian an amount of cash or high
quality securities equal (on a daily marked-to-market basis) to the amount of
its commitment to purchase the when-issued securities.
Derivatives
-----------
The Funds may also use futures contracts and options, forward contracts
and swaps as part of various investment techniques and strategies, such as
creating non-speculative "synthetic" positions (covered by segregation of liquid
assets) or implementing "cross-hedging" strategies. A "synthetic position" is
the duplication of cash market transaction when deemed advantageous by the
Funds' Adviser (or Sub-Adviser) for cost, liquidity or transactional efficiency
reasons. A cash market transaction is the purchase or sale of the security or
other asset for cash. "Cross-hedging" involves the use of one currency to hedge
against the decline in the value of another currency. The use of such
instruments as described herein involves several risks. First, there can be no
assurance that the prices of such instruments and the hedge security or the cash
market position will move as anticipated. If prices do not move as anticipated,
a Fund may incur a loss on its investment, may not achieve the hedging
protection it anticipated and/or may incur a loss greater than if it had entered
into a cash market position. Second, investments in such instruments may reduce
the gains which would otherwise be realized from the sale of the underlying
securities or assets which are being hedged. Third, positions in such
instruments can be closed out only on an exchange that provides a market for
those instruments. There can be no assurance that such a market will exist for a
particular futures contract or option. If the Fund cannot close out an exchange
traded futures contract or option which it holds, it would have to perform its
contract obligation or exercise its option to realize any profit and would incur
transaction cost on the sale of the underlying assets.
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<PAGE>
When the Funds intend to acquire securities (or gold bullion or coins
as the case may be) for their portfolio, they may use call options or futures
contracts as a means of fixing the price of the security (or gold) they intend
to purchase at the exercise price (in the case of an option) or contract price
(in the case of futures contact). An increase in the acquisition cost would be
offset, in whole or part, by a gain on the option or futures contract. Options
and futures contracts requiring delivery of a security may also be useful to the
Funds in purchasing a large block of securities that would be more difficult to
acquire by direct market purchases. If the Funds hold a call option rather than
the underlying security itself, the Funds are partially protected from any
unexpected decline in the market price of the underlying security and in such
event could allow the call option to expire, incurring a loss only to the extent
of the premium paid for the option. Using a futures contract would not offer
such partial protection against market declines and the Funds wold experience a
loss as if they had owned the underlying security.
Currency Swaps
--------------
Asia Dynasty, Global Leaders Fund, Global Hard Assets Fund may enter
into currency swaps for hedging purposes. Currency swaps involve the exchange of
rights to make or receive payments of the entire principal value in specified
currencies. Since currency swaps are individually negotiated, a Fund may expect
to achieve an acceptable degree of correlation between its portfolio investments
and its currency swap positions. The entire principal value of a currency swap
is subject to the risk that the other party to the swap will default on its
contractual delivery obligations. Global Hard Assets may also enter into other
asset swaps. Asset swaps are similar to swaps in that the performance of one
Hard Asset (e.g., gold) may be "swapped" for another (e.g., energy).
The use of swaps is a highly specialized activity which involves
investment techniques and risks different from those associates with ordinary
portfolio transactions. If the Funds' investment adviser (or Sub-Adviser) is
incorrect in its forecasts of market values and currency exchange rates and/or
Hard Assets values, the investment performance of the fund would be less
favorable than it would have been if this investment technique were not used.
Swaps are generally considered illiquid and will be aggregated with other
illiquid positions for purposes of the limitation on illiquid investments.
Short Sales
-----------
Currently, Global Hard Assets Fund is the only Fund that can engage in
short sales. The Fund will establish an account with respect to its short sales
and maintain in the account cash not available for investment or US Government
securities or other liquid, high-quality securities having a value equal to the
difference between (i) the market value of the securities sold short at the time
they were sold short and (ii) any cash, US Government Securities or other
liquid, high-quality securities required to be deposited as collateral with the
broker in connection with the short sale (not including the proceeds from the
short sale). The account will be marked to market daily, so that (i) the amount
in the account plus the amount deposited with the broker as collateral equals
the current market value of the securities sold short and (ii) in no event will
the amount in the account plus the amount deposited with the broker as
collateral fall below the original value of the securities at the time they were
sold short. The total value of the assets deposited as collateral with the
broker and deposited in the account will not exceed 50% of the Global Hard
Assets Fund's net assets.
Direct Investments
------------------
Global Leaders Fund and Global Hard Assets Fund may invest up to 10% of
their total assets in direct investments. Direct investments include (i) the
private purchase from an enterprise of an equity interest in the enterprise in
the form of shares of common stock or equity interests in trusts, partnerships,
joint ventures or similar enterprises, and (ii) the purchase of such an equity
interest in an enterprise from a
16
<PAGE>
principal investor in the enterprise. In each case the Funds will, at the time
of making the investment, enter into a shareholder or similar agreement with the
enterprise and one or more other holders of equity interests in the enterprise.
The Adviser (or FII) anticipates that these agreements may, in appropriate
circumstances, provide the Funds with the ability to appoint a representative to
the board of directors or similar body of the enterprise and for eventual
disposition of the Funds' investment in the enterprise. Such a representative of
the Funds will be expected to provide the Funds with the ability to monitor its
investment and protect its rights in the investment and will not be appointed
for the purpose of exercising management or control of the enterprise.
Certain of the Funds' direct investments, particularly the Asia Dynasty
Fund's investments in China, will include investments in smaller, less seasoned
companies. These companies may have limited product lines, markets or financial
resources, or they may be dependent on a limited management group. The Funds do
not anticipate making direct investments in start-up operations, although it is
expected that in some cases the Funds' direct investments will fund new
operations for an enterprise which itself is engaged in similar operations or is
affiliated with an organization that is engaged in similar operations. With
respect to the Asia Dynasty Fund, such direct investments may be made in
entities that are reasonably expected in the foreseeable future to become Asia
Growth Companies, either by expanding current operations or establishing
significant operations in the Asian Region.
Direct investments may involve a high degree of business and financial
risk that can result in substantial losses. Because of the absence of any public
trading market for these investments, the Funds may take longer to liquidate
these positions than would be the case for publicly traded securities. Although
these securities may be resold in privately negotiated transactions, the prices
on these sales could be less than those originally paid by the Funds.
Furthermore, issuers whose securities are not publicly traded may not be subject
to public disclosure and other investor protection requirements applicable to
publicly traded securities. If such securities are required to be registered
under the securities laws of one or more jurisdictions before being resold, the
Funds may be required to bear the expense of the registration. In addition, in
the event the Funds sell unlisted foreign securities, any capital gains realized
on such transactions may be subject to higher rates of taxation than taxes
payable on the sale of listed securities. Direct investments are generally
considered illiquid and will be aggregated with other illiquid investments for
purposes of the limitation on illiquid investments
Repurchase Agreements
---------------------
None of the Funds will enter into a repurchase agreement with a
maturity of more than seven business days if, as a result, more than 10% of the
value of a Fund's total assets would then be invested in such repurchase
agreements and other illiquid securities (Asia Dynasty Fund, Global Leaders Fund
and Global Hard Assets Fund may invest no more than 15% of their total assets in
illiquid securities). A Fund will only enter into a repurchase agreement where
(i) the underlying securities are of the type which the Fund's investment
policies would allow it to purchase directly, (ii) the market value of the
underlying security, including accrued interest, will be at all times equal to
or exceed the value of the repurchase agreement, and (iii) payment for the
underlying securities is made only upon physical delivery or evidence of book-
entry transfer to the account of the custodian or a bank acting as agent.
Rule 144A Securities And Section 4(2) Commercial Paper
------------------------------------------------------
The Securities and Exchange Commission adopted Rule 144A which allows a
broader institutional trading market for securities otherwise subject to
restriction on resale to the general public. Rule 144A establishes a "safe
harbor" from the registration requirements of the Securities Act of 1933 of
resales of certain securities to qualified institutional buyers. The Adviser (or
FII) anticipates that the market for certain restricted securities such as
institutional commercial paper will expand further as a result of this new
regulation and the development of an automated system for the trading, clearance
and settlement of
17
<PAGE>
unregistered securities of domestic and foreign issuers, such as the PORTAL
System sponsored by the National Association of Securities Dealers.
The Adviser (or FII) will monitor the liquidity of restricted
securities in the Funds' holdings under the supervision of the Board of
Trustees. In reaching liquidity decisions, the Adviser (or FII) will consider,
among other things, the following factors: (1) the frequency of trades and
quotes for the security; (2) the number of dealers wishing to purchase or sell
the security and the number of other potential purchasers; (3) dealer
undertakings to make a market in the security and (4) the nature of the security
and the nature of the marketplace trades (e.g., the time needed to dispose of
the security, the method of soliciting offers and the mechanisms of the
transfer).
In addition, commercial paper may be issued in reliance on the "private
placement" exemption from registration afforded by Section 4(2) of the
Securities Act of 1933. Such commercial paper is restricted as to disposition
under the federal securities laws and, therefore, any resale of such securities
must be effected in a transaction exempt from registration under the Securities
Act of 1933. Such commercial paper is normally resold to other investors through
or with the assistance of the issuer or investment dealers who make a market in
such securities, thus providing liquidity.
Securities eligible for resale pursuant to Rule 144A under the
Securities Act of 1933 and commercial paper issued in reliance on the Section
4(2) exemption under the 1940 Act may be determined to be liquid in accordance
with guidelines established by the Board of Trustees for purposes of complying
with investment restrictions applicable to investments by the Funds (except the
U.S. Government Money Fund) in illiquid securities.
INVESTMENT RESTRICTIONS
-----------------------
The following investment restrictions are in addition to those
described in the Prospectus. Policies that are identified as fundamental may be
changed with respect to a Fund only with the approval of the holders of a
majority of the Fund's outstanding shares. Such majority is defined as the vote
of the lesser of (i) 67% or more of the outstanding shares present at a meeting,
if the holders of more than 50% of a Fund's outstanding shares are present in
person or by proxy, or (ii) more than 50% of a Fund's outstanding shares. As to
any of the following policies, if a percentage restriction is adhered to at the
time of investment, a later increase or decrease in percentage resulting from a
change in value of portfolio securities or amount of net assets will not be
considered a violation of the policy.
Asia Dynasty Fund, Global Leaders Fund, Global Hard Assets Fund,
Gold/Resources Fund, and U.S. Government Money Fund.
With respect to Gold/Resources Fund and U.S. Government Money Fund, all
of the following restrictions are fundamental policies except restriction 21,
unless otherwise indicated. With respect to Global Leaders Fund, Global Hard
Assets Fund and Asia Dynasty Fund restrictions 1, 4, 6, 7, 10, 12, 13, 17, 18,
19 and 20, are not fundamental, unless otherwise provided for by applicable
federal or state law.
The Asia Dynasty Fund, Global Leaders Fund, Global Hard Assets Fund,
Gold/Resources Fund, and U.S. Government Money Fund may not:
1. Invest in securities which (i) with respect to Gold/Resources
Fund, and U.S. Government Money Fund, are subject to legal or
contractual restrictions on resale ("restricted securities")
or for which there is no readily available market quotation or
engage in a repurchase agreement maturing in more than seven
days with respect to any security if the result is that more
than 10% of a Fund's net assets would be invested in such
securities, and (ii) with respect to Global Leaders Fund,
Global Hard Assets Fund and Asia Dynasty Fund
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<PAGE>
and are "illiquid" securities, including repurchase agreements
maturing in more than 7 days and options traded over-the-
counter if the result is that more than 15% of Global Leaders
Fund's, Global Hard Assets Fund's or Asia Dynasty Fund's, net
assets would be invested in such securities.
2. Purchase or sell real estate, although the Global Leaders
Fund, Global Hard Assets Fund, Asia Dynasty Fund and
Gold/Resources Fund, may purchase securities of companies
which deal in real estate, including securities of real estate
investment trusts, and may purchase securities which are
collateralized by interests in real estate.
3. Purchase or sell commodities (non-Hard Asset commodities with
respect to Global Hard Assets) or commodity futures contracts
(for the purpose of this restriction, forward foreign exchange
contracts are not deemed to be a commodity or commodity
contract) except that Gold/Resources Fund may, for hedging
purposes, buy and sell financial futures contracts which may
include stock and bond index futures contracts and foreign
currency futures contracts and Gold/Resources Fund may, for
hedging purposes only, buy and sell commodity futures
contracts on gold and other natural resources or on an index
thereon. The Funds may not commit more than 5% of their total
assets to initial margin deposits on futures contracts. In
addition, Gold/Resources Fund, International Investors Gold
Fund and Global Hard Assets Fund may invest in gold and silver
bullion, palladium and platinum group metals bullion and
coins.
4. Exclusive of the Global Leaders Fund, Global Hard Assets Fund
and Asia Dynasty Fund, purchase securities of other open-end
investment companies except as part of a merger,
consolidation, reorganization or acquisition of assets; Asia
Dynasty Fund, Global Leaders Fund, Global Hard Assets Fund or
Gold/Resources Fund may not purchase more than 3% of the total
outstanding voting stock of any closed-end investment company
if more than 5% of any of these Funds' total assets would be
invested in securities of any closed-end investment company,
or more than 10% of such value in closed-end investment
companies in general. In addition, Global Leaders Fund, Global
Hard Assets Fund, Asia Dynasty Fund or Gold/Resources Fund may
not invest in the securities of closed-end investment
companies, except by purchase in the open market involving
only customary broker's commissions.
5. Make loans, except by (i) purchase of marketable bonds,
debentures, commercial paper and similar marketable evidences
of indebtedness and (ii) repurchase agreements. Global Leaders
Fund, Global Hard Assets Fund, Gold/Resources Fund and Asia
Dynasty Fund may lend to broker-dealers portfolio securities
with an aggregate market value up to one-third of its total
assets.
6. As to 75% of the total assets of each of the Asia Dynasty
Fund, U.S. Government Money Fund, purchase securities of any
issuer, if immediately thereafter (i) more than 5% of a Fund's
total assets (taken at market value) would be invested in the
securities of such issuer, or (ii) more than 10% of the
outstanding securities of any class of such issuer would be
held by a Fund (provided that these limitations do not apply
to obligations of the United States Government, its agencies
or instrumentalities). This limitation does not apply to the
Global Leaders Fund, Global Hard Assets Fund International
Investors Gold Fund and Gold/Resources Fund.
7. Invest more than 5 percent of the value of its total assets in
securities of companies having, together with their
predecessors, a record of less than three years of continuous
operation.
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<PAGE>
This restriction does not apply to Global Leaders Fund, Global
Hard Assets Fund or Asia Dynasty Fund.
8. Underwrite any issue of securities (except to the extent that
a Fund may be deemed to be an underwriter within the meaning
of the Securities Act of 1933 in the disposition of restricted
securities).
9. The Fund may not borrow money, except that the U.S. Government
Money Fund may borrow up to 10% of its total assets and
Gold/Resources Fund may borrow up to 50% valued at cost for
temporary or emergency purposes. The Fund will not purchase
securities for investment while borrowings equaling 5% or more
of their total assets are outstanding. In addition, Global
Leaders Fund, Global Hard Assets Fund, Asia Dynasty Fund may
borrow up to 30% of the value of their respective net assets
to increase their holdings of portfolio securities. The Funds
will not borrow for the purpose of leveraging its portfolio
but will borrow only for temporary or emergency purposes.
10. Mortgage, pledge or otherwise encumber its assets except to
secure borrowing effected within the limitations set forth in
restriction (9).
11. Issue senior securities except insofar as a Fund may be deemed
to have issued a senior security by reason of (i) borrowing
money in accordance with restrictions described above; (ii)
entering into forward foreign currency contracts (Global
Leaders Fund, Global Hard Assets Fund, Asia Dynasty Fund and
Gold/Resources Fund); (iii) financial futures contracts
purchased on margin (Global Leaders Fund, Global Hard Assets
Fund, Asia Dynasty Fund, and Gold/Resources Fund), (iv)
commodity futures contracts purchased on margin
(Gold/Resources Fund and Global Hard Assets Fund); (v) foreign
currency swaps (Global Leaders Fund, Global Hard Assets Fund
and Asia Dynasty Fund); and (vi) issuing multiple classes of
shares (Global Leaders Fund, Global Hard Assets Fund and Asia
Dynasty Fund).
12. Except for Global Hard Assets Fund make short sales of
securities, except that Global Leaders Fund, Asia Dynasty Fund
and Gold/Resources Fund may engage in the transactions
specified in restrictions (2), (3) and (14).
13. Purchase any security on margin, except that it may obtain
such short-term credits as are necessary for clearance of
securities transactions and, with respect to Global Leaders
Fund, Global Hard Assets Fund, Asia Dynasty Fund,
Gold/Resources Fund and may make initial or maintenance margin
payments in connections with options and futures contracts and
related options and borrowing effected within the limitations
set forth in restriction (9).
14. Write, purchase or sell puts, calls, straddles, spreads or
combinations thereof, except that Global Leaders Fund, Global
Hard Assets Fund, Asia Dynasty Fund and Gold/Resources Fund
may purchase or sell puts and calls on foreign currencies and
on securities described under "Options Transactions" herein
and in the Prospectus and that Global Leaders Fund, Global
Hard Assets Fund, Asia Dynasty Fund and Gold/Resources Fund
may write, purchase or sell put and call options on financial
futures contracts, which include bond and stock index futures
contracts and Gold/Resources Fund may write, purchase, or sell
put and call options on gold or other natural resources or an
index thereon and on commodity futures contracts on gold or
other natural resources or an index thereon.
15. Make investments for the purpose of exercising control or
management.
16. Invest more than 25 percent of the value of a Fund's total
assets in the securities of issuers having their principal
business activities in the same industry, except the
Gold/Resources Fund and Global Hard Assets Fund and as
otherwise stated in any Fund's fundamental
20
<PAGE>
investment objective, and provided that this limitation does
not apply to obligations issued or guaranteed by the United
States Government, its agencies or instrumentalities.
17. Participate on a joint or joint and several basis in any
trading account in securities, although transactions for the
Funds and any other account under common or affiliated
management may be combined or allocated between the Funds and
such account.
18. Purchase participations or other interests (other than equity
stock interests in the case of the Global Leaders Fund, Global
Hard Assets Fund, Asia Dynasty Fund and Gold/Resources Fund)
in oil, gas or other mineral exploration or development
programs.
19. Invest more than 5% of its total assets in warrants, whether
or not the warrants are listed on the New York or American
Stock Exchanges, or more than 2% of the value of the assets of
a Fund (except Global Leaders Fund, Global Hard Assets Fund
and Asia Dynasty Fund) in warrants which are not listed on
those exchanges. Warrants acquired in units or attached to
securities or received as dividends are not included in this
restriction. The U.S. Government Money Fund will not invest in
warrants.
20. Purchase or retain a security of any issuer if any of the
officers, directors or Trustees of a Fund or its investment
adviser owns beneficially more than 1/2 of 1% of the
securities of such issuer, or if such persons taken together
own more than 5% of the securities of such issuer.
21. Invest in real estate limited partnerships or in oil, gas or
other mineral leases.
With respect to restriction 3, forward foreign exchange contracts are
not deemed to be a commodity or commodity contract.
The following are not considered fundamental policies. Asia Dynasty
Fund, Global Leaders Fund and Global Hard Assets Fund may, for hedging purposes,
buy and sell financial futures contracts which may include stock and bond index
futures contracts and foreign currency futures contracts. These Funds may not
commit more than 5% of their total assets to initial margin deposits on futures
contracts not used for hedging purposes.
With respect to restriction 16, companies in different geographical
locations will not be deemed to be in the same industry if the investment risks
associated with the securities of such companies are substantially different.
For example, although generally considered to be "interest rate sensitive,"
investing in banking institutions in different countries is generally dependent
upon substantially different risk factors, such as the condition and prospects
of the economy in a particular country and in particular industries, and
political conditions.
International Investors Gold Fund
- ---------------------------------
Restrictions 1 through 9 are fundamental policies of International
Investors Gold Fund and may not be changed without shareholder approval.
Restrictions 10 through 16 are not fundamental policies and may be changed
without shareholder approval.
21
<PAGE>
International Investors Gold Fund may not:
1. Underwrite securities of other issuers.
2. Invest in real estate, commodity contracts or commodities
(except that, subject to applicable state laws, the Fund may
invest up to 12.5% of the value of its total assets as of the
date of investment in gold and silver coins which are legal
tender in the country of issue and gold and silver bullion,
palladium and platinum group metals bullion).
3. Make loans to other persons, except through repurchase
agreements or the purchase of publicly distributed bonds,
debentures and other debt securities.
4. Purchase securities on margin or make short sales.
5. Purchase or retain a security of any issuer if any of the
officers or directors of the Company or its investment adviser
own beneficially as much as 1/2 of 1%, or if such persons
taken together own over 5%, of the issuer's securities.
6. Lend its funds or assets, except through the purchase of
securities the Fund would otherwise be authorized to purchase,
provided, however, that the Fund may lend to broker-dealers
and other financial institutions portfolio securities.
7. Purchase any restricted securities which may not be sold to
the public without registration under the Securities Act of
1933, if by reason of such purchase the value of the Company's
aggregate holdings in all such securities would exceed 10% of
total assets.
8. Issue senior securities. The Fund may (i) borrow money in
accordance with restrictions described above, (ii) enter into
forward contracts, (iii) purchase futures contracts on margin,
(iv) issue multiple classes of securities, and (v) enter into
swap agreement or purchase or sell structured notes or similar
instruments.
9. Invest in interests (other than equity stock interests) in
oil, gas or other mineral exploration or development programs
or in oil, gas or other mineral leases.
10. Invest in real estate limited partnerships.
11. Make investments in companies for the purpose of exercising
control or management.
12. Invest more than 10% of its assets in repurchase agreements
having maturities of greater than seven days or in a
combination of such agreements together with restricted
securities and securities for which market quotations are not
readily available.
13. Purchase securities for investment while borrowings equal to
30% or more of the Fund's assets are outstanding.
If a percentage restriction is adhered to at the time of investment, a
later increase or decrease in percentage resulting from a change in values of
portfolio securities or amount of net assets will not be considered a violation
of any of the foregoing restrictions.
22
<PAGE>
INVESTMENT ADVISORY SERVICES
----------------------------
The investment adviser and manager of the Funds is Van Eck Associates
Corporation (the "Adviser"), a Delaware corporation, pursuant to an Advisory
Agreement with the Trust dated as of July 30, 1985, as amended. The Adviser
oversees an investment program for the Funds, subject to the overall supervision
and review of the Board of Trustees. The Adviser is currently the oldest and
largest gold manager investing in gold mining shares. The Adviser's team of gold
managers and analysts average over 25 years of experience.
Fiduciary International, Inc. ("FII"), a New York corporation, is sub-
adviser to the Global Leaders Fund pursuant to a Sub-Investment Advisory
Agreement dated October 30, 1993.
The Adviser or FII provides the Funds with office space, facilities and
simple business equipment and provides the services of consultants, executive
and clerical personnel for administering their affairs. The Adviser compensates
all executive and clerical personnel and Trustees of the Trust if such persons
are employees or affiliates of the Adviser, FII, or its affiliates. The advisory
fee is computed daily and paid monthly at the following annual rates:
International Investors Gold Fund, and Gold/Resources Fund pay a fee equal to
.75 of 1% of the first $500 million of average daily net assets, .65 of 1% of
the next $250 million of average daily net assets and .50 of 1% of the average
daily net assets in excess of $750 million. Global Leaders Fund pays the Adviser
a fee of .75 of 1% of average daily net assets. From this fee the Adviser pays
FII a fee of .50 of 1% of average daily net assets. Global Hard Assets Fund pays
the Adviser 1% of average daily net assets. The U.S. Government Money Fund pays
a monthly fee at the annual rate of .50 of 1% for the first $500 million of
average daily net assets, .40 of 1% on the next $250 million of average daily
net assets, and .375 of 1% of the average daily net assets in excess of $750
million.
The Adviser also performs administrative services for Asia Dynasty
Fund, Global Leaders Fund, Gold/Resources Fund and International Investors Gold
Fund pursuant to a written agreement. The Adviser is also responsible for
providing accounting services to these Funds. For these accounting and
administrative services, Asia Dynasty Fund and Global Leaders Fund each pays .25
of 1% of its respective average daily net assets. Gold/Resources Fund and
International Investors Gold Fund pay an annual rate of .25 of 1% of the first
$750 million of their respective average daily net assets and .20 of 1% of their
respective average daily net assets in excess of $750 million.
The net assets of the Funds at December 31, 1998, December 31, 1997,
1996 and 1995 were approximately: International Investors Gold Fund (Class A) -
$238,638,669, $232,944,326, $409,330,944, and $519,795,000, respectively;
Gold/Resources Fund (Class A) - $53,397,003, $66,150,715, $132,298 and 375,
$155,974,000, respectively; U.S. Government Money Fund - $47,222,172,
$76,649,948, $107,697,508 and $70,130,000, respectively; Asia Dynasty Fund
(Class A) - $10,684,887, $12,872,516, $44,351,438 and $64,275,000, respectively;
Asia Dynasty Fund (Class B) - $4,941,920, $6,913,723, $20,296,022 and
$27,234,000, respectively; Global Leaders Fund (Class A) - $27,461,279,
$24,630,386, $24,399,362 and $30,632,000, respectively; Global Leaders Fund
(Class B) - $6,038,877, $5,054,706, $4,931,669 and $6,151,000, respectively;
Global Hard Assets Fund (Class A) - $22,968,552, $61,341,105, $27,226,101 and
$3,820,000, respectively; Global Hard Assets Fund (Class B) - $5,579,734,
$10,541,237, $62,429 and $1,805,589 respectively, and Global Hard Assets Fund
(Class C) - $4,011,385, $8,698,296, $1,934,906 and $181,000, respectively.
In 1998, 1997, 1996 and 1995 the aggregate remuneration received by the
Adviser from International Investors Gold Fund was $1,710,779, $2,619,794,
$4,087,710 and $4,256,866, respectively; from Gold/Resources Fund was $449,221,
$752,214, $1,198,836 and $1,317,580, respectively; from U.S. Government Money
Fund was $373,387, $386,515, $382,786 and $286,736, respectively; from Global
Leaders Fund was $234,574, $219,469, $242,447 and $141,393, respectively; from
Global Hard Assets
23
<PAGE>
Fund was $559,994, $660,306, $121,846 and $29,887, respectively; from Asia
Dynasty Fund was $116,529, $339,096, $621,605 and $818,148, respectively.
The expenses borne by each of the Funds include: all the charges and
expenses of the transfer and dividend disbursing agent, custodian fees and
expenses, legal, auditors' and accountants' fees and expenses, brokerage
commissions for portfolio transactions, taxes, if any, the advisory fee (and
accounting and administrative services fees, if any), extraordinary expenses (as
determined by the Trustees of the Trust), expenses of shareholders' and
Trustees' meetings, and of preparing, printing and mailing proxy statements,
reports and other communications to shareholders, expenses of preparing and
setting in type prospectuses and periodic reports and expenses of mailing them
to current shareholders, legal and accounting expenses and expenses of
registering and qualifying shares for sale (including compensation of the
employees of the Adviser or its affiliates in relation to the time spent on such
matters), expenses relating to the Plan of Distribution (Rule 12b-1 Plan)
exclusive of International Investors Gold Fund, fees of Trustees who are not
"interested persons" of the Adviser (or FII), membership dues of the Investment
Company Institute, fidelity bond and errors and omissions insurance premiums,
cost of maintaining the books and records of each Fund, and any other charges
and fees not specifically enumerated as an obligation of the Distributor or
Adviser or FII.
The Advisory Agreement with respect to Global Hard Assets Fund was
approved at a meeting of the Board of Trustees held on October 18, 1994. The
Advisory Agreement and Sub-Advisory Agreement with respect to Global Leaders
Fund were approved at a meeting of the Board of Trustees held on October 12,
1993. The Advisory Agreement with respect to Gold/Resources Fund and
International Investors Gold Fund was approved at a meeting of the Board of
Trustees held on May 24, 1994. Advisory Agreements for all the Funds were
reapproved by the Board of Trustees of the Trust, including a majority of the
Trustees who are not parties to such Agreements or interested persons of any
such party at a meeting held on April 22, 1998.
The Advisory Agreement was approved by shareholders of the U.S.
Government Money Fund on January 23, 1987; and Gold/Resources Fund and
International Investors Gold Fund on July 25, 1994. The Advisory Agreements and
Sub-Investment Advisory Agreements were approved by shareholders of Global
Leaders Fund on December 17, 1993. The Advisory Agreements and Sub-Advisory
Agreement provide that they shall continue in effect from year to year with
respect to a Fund as long as it is approved at least annually both (i) by a vote
of a majority of the outstanding voting securities of the Fund (as defined in
the Act) or by the Trustees of the Trust, and (ii) in either event by a vote of
a majority of the Trustees who are not parties to the Agreement or "interested
persons" of any party thereto, cast in person at a meeting called for the
purpose of voting on such approval. The Agreements may be terminated on 60 days
written notice by either party and will terminate automatically in the event of
an assignment within the meaning of the Act.
Mr. John C. van Eck is Chairman of the Board of Directors of the
Adviser as well as President and Trustee of the Trust. Mr. van Eck offered the
first global mutual fund to U.S. investors in 1955 and offered the first gold
fund to U.S. investors in 1968. Mr. van Eck, Chairman and President of the Trust
and Van Eck Worldwide Insurance Trust, and members of his immediate, family own
100% of the voting stock of the Adviser.
THE DISTRIBUTOR
---------------
Shares of the Funds are offered on a continuous basis and are
distributed through Van Eck Securities Corporation, 99 Park Avenue, New York,
New York (the "Distributor"), a wholly owned subsidiary of Van Eck Associates
Corporation. The Trustees of the Trusts have approved a Distribution Agreement
appointing the Distributor as distributor of shares of the Funds. The
Distribution Agreement with respect to all Funds was last reapproved by the
action of the Trustees on April 22, 1998.
24
<PAGE>
The Trust has authorized one or more brokers (who are authorized to
designate other intermediaries) to accept purchase and redemption orders on the
Trust's behalf. The Trust will be deemed to have received a purchase or
redemption order when the authorized broker or its designee accepts the order.
Orders will be priced at the net asset value next computed after they are
accepted by the authorized broker or its designee.
The Distribution Agreement provides that the Distributor will pay all
fees and expenses in connection with printing and distributing prospectuses and
reports for use in offering and selling shares of the Funds and preparing,
printing and distributing advertising or promotional materials. The Funds will
pay all fees and expenses in connection with registering and qualifying their
shares under federal and state securities laws.
Van Eck Securities Corporation retained distributing commissions on
sales of shares of the Funds for the following fiscal years ended December 31
(except as noted) after reallowance to dealers as follows:
<TABLE>
<CAPTION>
Van Eck Securities Reallowance to
Corporation Dealers
----------- -------
<S> <C> <C> <C>
International 1998 $ 60,882 $195,989
Investors Gold Fund 1997 122,745 401,483
1996 160,019 917,169
Gold/Resources Fund 1998 $ 24,848 $ 97,646
1997 38,280 156,899
1996 33,278 231,559
Asia Dynasty Fund 1998 $ 787 $ 5,621
1997 2,455 13,752
1996 22,269 109,025
Global Leaders Fund 1998 $ 1,470 $ 5,608
1997 1,726 5,635
1996 2,382 11,231
Global Hard 1998 $ 26,039 $162,148
Assets Fund 1997 151,014 629,428
1996 53,056 273,203
</TABLE>
To compensate the Distributor for the services it provides and for the
expenses it bears under the Distribution Agreement, each of Gold/Resources Fund
(Class A) and U.S. Government Money Fund has adopted a Plan of Distribution
pursuant to Rule 12b-1 (the "Plan") under the Act. Fees paid by the Funds under
the Plan will be used for servicing and/or distribution expenses incurred only
during the applicable year. Additionally, International Investors Gold Fund,
Global Leaders Fund (Class A and B), Asia Dynasty Fund (Class A and B), and
Global Hard Assets Fund (Class A, B and C) have also adopted a Plan which
provides for the compensation of brokers and dealers who sell shares of these
Funds or provide servicing. The Plan for Asia Dynasty Fund (Class A) is a
reimbursement type plan and provides for the payment of carry-over expenses to
the Distributor, incurred in one year but payable in a subsequent year(s), up to
the maximum for the Fund in any given year. Global Leaders Fund (Class A and
Class B), International Investors Gold Fund, Asia Dynasty Fund (Class B), and
Global Hard Assets Fund (Class A, B and C) Plans are compensation type plans
with a carry-forward provision which provides that the Distributor recoup
distribution expenses in the event the Plan is terminated. For the periods prior
to April 30, 1999, the Distributor has agreed with respect to Plans with a
carry-forward provision, notwithstanding anything to the
25
<PAGE>
contrary in the Plan, to waive its right to reimbursement of carry-forward
amounts in the event the Plan is terminated unless the Board of Trustees has
determined that reimbursement of such carry-forward amounts is appropriate.
Pursuant to the Plans, the Distributor provides the Funds at least
quarterly with a written report of the amounts expended under the Plans and the
purpose for which such expenditures were made. The Trustees review such reports
on a quarterly basis.
The Plans were last reapproved for all Funds, by the Trustees of the
Trust, including a majority of the Trustees who are not "interested persons" of
the Funds and who have no direct or indirect financial interest in the operation
of the Plan, cast in person at a meeting called for the purpose of voting on
each such Plan on April 22, 1997. The Plan was approved by shareholders of the
Gold/Resources Fund (Class A) and U.S. Government Money Fund on January 23,
1987; Asia Dynasty Fund (Class B) on August 31, 1993; Global Leaders Fund (Class
A and B) on December 17, 1993; Asia Dynasty Fund (Class A) on July 25, 1994; and
International Investors Gold Fund on April 21, 1999.
A Plan shall continue in effect as to each Fund, provided such
continuance is approved annually by a vote of the Trustees in accordance with
the Act. A Plan may not be amended to increase materially the amount to be spent
for the services described therein without approval of the shareholders of the
Funds, and all material amendments to the Plan must also be approved by the
Trustees in the manner described above. A Plan may be terminated at any time,
without payment of any penalty, by vote of a majority of the Trustees who are
not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of the Plan, or by a vote of a majority of
the outstanding voting securities of the Fund (as defined in the Act) on written
notice to any other party to the Plan. A Plan will automatically terminate in
the event of its assignment (as defined in the 1940 Act). So long as the Plan is
in effect, the election and nomination of Trustees who are not "interested
persons" of the Trust shall be committed to the discretion of the Trustees who
are not "interested persons." The Trustees have determined that, in their
judgment, there is a reasonable likelihood that the Plan will benefit the Funds
and their shareholders. The Funds will preserve copies of the Plan and any
agreement or report made pursuant to Rule 12b-1 under the Act, for a period of
not less than six years from the date of the Plan or such agreement or report,
the first two years in an easily accessible place. For additional information
regarding the Plans, see the Prospectus.
PORTFOLIO TRANSACTION AND BROKERAGE
-----------------------------------
The Adviser or FII is responsible for decisions to buy and sell
securities and other investments for the Funds, the selection of brokers and
dealers to effect the transactions and the negotiation of brokerage commissions,
if any. In transactions on stock and commodity exchanges in the United States,
these commissions are negotiated, whereas on foreign stock and commodity
exchanges these commissions are generally fixed and are generally higher than
brokerage commissions in the United States. In the case of securities traded on
the over-the-counter markets, there is generally no stated commission, but the
price usually includes an undisclosed commission or markup. In underwritten
offerings, the price includes a disclosed fixed commission or discount. Most
obligations in which the U.S. Government Money Fund invests are normally traded
on a "principal" rather than agency basis. This may be done through a dealer
(e.g. securities firm or bank) who buys or sells for its own account rather than
as an agent for another client, or directly with the issuer. A dealer's profit,
if any, is the difference, or spread, between the dealer's purchase and sale
price for the obligation.
In purchasing and selling the Funds' portfolio investments, it is the
Adviser's or FII's policy to obtain quality execution at the most favorable
prices through responsible broker-dealers. In selecting broker-dealers, the
Adviser or the FII will consider various relevant factors, including, but not
limited to, the size and type of the transaction; the nature and character of
the markets for the security or asset to be purchased or sold; the execution
efficiency, settlement capability, and financial condition of the
26
<PAGE>
broker-dealer's firm; the broker-dealer's execution services rendered on a
continuing basis; and the reasonableness of any commissions.
In addition, the Adviser or the FII may allocate brokerage transactions
to broker-dealers who have entered into arrangements with the Adviser or FII
under which the broker-dealer allocates a portion of the commissions paid by a
Fund toward payment of the Fund's expenses such as transfer agency, printing or
other expenses. The services of the broker-dealer must be comparable to those of
other qualified broker-dealers.
The Adviser or FII may cause the Funds to pay a broker-dealer who
furnishes brokerage and/or research services a commission that is in excess of
the commission another broker-dealer would have received for executing the
transaction if it is determined that such commission is reasonable in relation
to the value of the brokerage and/or research services as defined in Section
28(e) of the Securities Exchange Act of 1934 which have been provided. Such
research services may include, among other things, analyses and reports
concerning issuers, industries, securities, economic factors and trends, and
portfolio strategy. Any such research and other information provided by brokers
to the Adviser or FII are considered to be in addition to and not in lieu of
services required to be performed by the Adviser and FII under the relevant
Advisory Agreement or Sub-Advisory Agreement with the Trust. The research
services provided by broker-dealers can be useful to the Adviser and FII in
serving its other clients or clients of the Adviser, FII or their affiliates.
For the fiscal year ended December 31, 1998, the Global Hard Assets
Fund paid $79,574.60, the Gold/Resources Fund paid $8,600.00 and the
International Investors Gold Fund paid $82,317.40 in commissions to broker
dealers providing research and other services to the Adviser or its affiliates
representing 12.4%, 1.8%, and 6.8%, respectively, of the total commissions paid
by such Funds.
The table below shows the commissions paid on purchases and sales of
portfolio securities by each Fund during its respective fiscal year, and the
percentages of such amounts paid to brokers or dealers which furnished daily
quotations to the Funds for the purpose of calculating daily per share net asset
value and to brokers and dealers which sold shares of the Funds. The U.S.
Government Money Fund did not pay brokerage commissions.
<TABLE>
<CAPTION>
Fund (fiscal year end) 1998
Commissions
<S> <C>
International Investors Gold Fund (Class A and C) (12/31) $1,209,362
Gold/Resources Fund (Class A) (12/31) $ 467,628
Asia Dynasty Fund (Class A and B) (12/31) $ 145,182
Global Leaders Fund (Class A and B) (12/31) $ 49,176
Global Hard Assets Fund (Class A, B and C) (12/31) $ 639,995
<CAPTION>
1997
Commissions
<S> <C>
International Investors Gold Fund (Class A and C) (12/31) $611,085
Gold/Resources Fund (Class A) (12/31) $327,261
Asia Dynasty Fund (Class A and B) (12/31) $675,167
Global Leaders Fund (Class A and B) (12/31) $ 63,682
Global Hard Assets Fund (Class A, B and C) (12/31) $505,063
</TABLE>
27
<PAGE>
<TABLE>
<CAPTION>
Fund (fiscal year end) 1996
Commissions
<S> <C>
International Investors Gold Fund (Class A and C) (12/31) $347,781
Gold/Resources Fund (Class A) (12/31) $271,356
Asia Dynasty Fund (Class A and B) (12/31) $643,451
Global Leaders Fund (Class A and B) (12/31) $ 96,428
Global Hard Assets Fund (Class A and C) (12/31) $110,278
</TABLE>
The Trustees periodically review the Adviser's and FII's performance of
its responsibilities in connection with the placement of portfolio transactions
on behalf of the Funds and review the commissions paid by the Funds over
representative periods of time to determine if they are reasonable in relation
to the benefits to the Funds.
Investment decisions for the Funds are made independently from those of
the other investment accounts managed by the Adviser, FII or affiliated
companies. Occasions may arise, however, when the same investment decision is
made for more than one client's account. It is the practice of the Adviser and
FII to allocate such purchases or sales insofar as feasible among its several
clients or the clients of its affiliates in a manner it deems equitable. The
principal factors which the Adviser and FII considers in making such allocations
are the relative investment objectives of the clients, the relative size of the
portfolio holdings of the same or comparable securities and the then
availability in the particular account of funds for investment. Portfolio
securities held by one client of the Adviser or FII may also be held by one or
more of its other clients or by clients of its affiliates. When two or more of
its clients or clients of its affiliates are engaged in the simultaneous sale or
purchase of securities, transactions are allocated as to amount in accordance
with formulae deemed to be equitable as to each client. There may be
circumstances when purchases or sales of portfolio securities for one or more
clients will have an adverse effect on other clients.
Consistent with the Conduct Rules of the National Association of
Securities Dealers, Inc. and subject to seeking the most favorable price and
execution available and such other policies as the Trustees may determine, the
Adviser or FII may consider sales of shares of the Funds as a factor in the
selection of broker-dealers to execute portfolio transactions for the Funds.
While it is the policy of the Funds generally not to engage in trading
for short-term gains, the Funds will effect portfolio transactions without
regard to the holding period if, in the judgment of the Adviser or FII such
transactions are advisable in light of a change in circumstances of a particular
company, within a particular industry or country, or in general market, economic
or political conditions. The Global Hard Assets Fund, Asia Dynasty Fund and
Gold/Resources Fund anticipate that their annual portfolio turnover rates will
not exceed 100%.
The annual portfolio turnover rate of the Global Leaders Fund may
exceed 100%. Due to the high rate of turnover the Fund may pay a greater amount
in brokerage commissions than a similar size fund with a lower turnover rate.
The portfolio turnover rates of all Funds may vary greatly from year to year. In
addition, since the Fund may have a high rate of portfolio turnover, the Fund
may realize capital gains or losses. Capital gains will be distributed annually
to the shareholders. Capital losses cannot be distributed to shareholders but
may be used to offset capital gains at the Fund level. See "Taxes" in the
Prospectus and the Statement of Additional Information.
The Adviser and related persons, may from time to time, buy and sell
for their own accounts securities recommended to clients for purchase or sale.
The Adviser recognizes that this practice may result in conflicts of interest.
However, to minimize or eliminate such conflicts a Code of Ethics has been
adopted by the Adviser which requires that all trading in securities suitable
for purchase by client accounts must be approved in advance by a person familiar
with purchase and sell orders or recommendations. Approval will be granted if
the security has not been purchased or sold or recommended for purchase or sale
on behalf of a
28
<PAGE>
client account within seven days; or if the security has been purchased or sold
or recommended for purchase or sale by a client account, it is determined that
the trading activity will not have a negative or appreciable impact on the price
or market of the security or the activity is of such a nature that it does not
present the dangers or potential for abuses or likely to result in harm or
detriment to a client account. At the end of each calendar quarter, all related
personnel of the Adviser are required to file a report of all transactions
entered into during the quarter. These reports are reviewed by a senior officer
of the Adviser.
TRUSTEES AND OFFICERS
---------------------
The Trustees and Officers of the Van Eck Funds, their address, position
with the Trust and principal occupations during the past five years are set
forth below.
Trustees of Van Eck Funds:
@ * JOHN C. van ECK, C.F.A. (83) - Chairman of the Board and President
- ----------------------------
270 River Road, Briarcliff Manor, New York; Chairman of the Board and
President of another investment company advised by the Adviser;
Chairman, Van Eck Associates Corporation (investment adviser) and Van
Eck Securities Corporation (broker-dealer); Director, Eclipse Financial
Asset Trust (mutual fund); Former President of the Adviser and its
affiliated companies; Former Director (1992-1995), Abex Inc.
(aerospace); Former Director (1983-1986), The Signal Companies, Inc.
(high technology and engineering); Former Director (1982-1984), Pullman
Transportation Co., Inc. (transportation equipment); Former Director
(1986-1992) The Henley Group, Inc. (technology and health).
@ # + JEREMY H. BIGGS (63) - Trustee
- ---------------------
1220 Park Avenue, New York, NY 10128; Trustee of another investment
company advised by the adviser; Vice Chairman, Director and Chief
Investment Officer, Fiduciary Trust Company International (investment
manager), parent company of Fiduciary International, Inc.; Chairman of
Davis Funds Group (mutual fund management company); Treasurer and
Director of the Royal Oak Foundation (the UK National Trust); Director
and former Chairman of the Union Settlement Association (the community
service organization); First Vice President, Trustee and Chairman of
the Financial Committee of St. James School, St. James, Maryland;
Former Director, International Investors Incorporated (1990-1991).
# + RICHARD C. COWELL (71) - Trustee
- ---------------------
240 El Vedado Way, Palm Beach, Florida 33480; Trustee of another
investment company advised by the Adviser; Private Investor; Director,
West Indies & Caribbean Development Ltd. (real estate); Former
Director, Compo Industries, Inc. (machinery manufacturer); Former
Director, International Investors Incorporated (1957-1991); Former
Director (1978-1981), American Eagle Petroleums, Ltd. (oil and gas
exploration); Former President and Director (1968-1976), Minerals and
Industries, Inc. (petroleum products); Former Director (1978-1983)
Duncan Gold Resources, Inc. (oil exploration and gold mining); Former
Director (1981-1984), Crested Butte Silver Mining Co.; Former Chairman
and Member of Executive Committee (1974-1981), Allerton Resources, Inc.
(oil and gas exploration); Former Director (1976-1982), Western World
Insurance Co.
29
<PAGE>
@ PHILIP D. DEFEO (53) - Trustee
- ------------------
99 Park Avenue, New York, NY 10016; Trustee of another investment
company advised by the Adviser; President, Chief Executive Officer and
Director of Van Eck Associates Corporation (investment adviser) and Van
Eck Securities Corporation (broker-dealer) since September 1996; Former
Executive Vice President and Director of Marketing and Customer
Services (June 1994 - August 1996), Cedel International (finance and
settlements); Former Managing Director (July 1992 - April 1994), Lehman
Brothers (investment bank and broker-dealer); Former Senior Vice
President, Fidelity Investments and Former President, Fidelity Services
Company (financial services); (1987-1992).
# + WESLEY G. McCAIN (56) - Trustee
- --------------------
144 East 30th Street, New York, New York 10016; Trustee of other
affiliated investment companies advised or administered by the Adviser;
Chairman and Owner, Towneley Capital Management, Inc., (investment
adviser since 1971); Chairman, Eclipse Funds (mutual fund since 1986);
Chairman and Owner, Eclipse Financial Services, Inc.(since 1986;
General Partner, Pharaoh Partners, L.P. (since 1992); Principal,
Pharaoh Partners (Cayman) LDC (since 1996); President and Owner,
Millbrook Associates, Inc. (economic and marketing consulting, since
1989); Trustee, Libre Group Trust (since 1994) Director, Libre
Investments (Cayman) Ltd.(since 1996); Former Director, International
Investors Incorporated.
# DAVID J. OLDERMAN (63) - Trustee
- -------------------
40 East 52nd Street, New York, New York 10022; Trustee of another
investment company advised by the Adviser; Chairman of the Board, Chief
Executive Officer and Owner, Carret & Company, Inc. (since 1988);
Chairman of the Board, American Copy Equipment Co. (1991-present);
Chairman of the Board, Brighton Partners, Inc. (1993-present);
Principal, Olderman & Raborn, Inc., (investment advisers-1984-1988);
Chairman of the Board, Railoc, Inc., (farm equipment manufacturing-
1979-1984); Head of Corporate Finance, Halsey Stuart (investment
banking-1974-1975); Vice Chairman of the Board, Stone and Webster
Securities Corp. (investment banking, retail sales and investment
advisory divisions-1964 to 1974).
# * RALPH F. PETERS (70) - Trustee
- -------------------
66 Strimples Mill Road, Stockton, New Jersey 08559-1703; Trustee of
another investment company advised by the Adviser; Former Chairman of
the Board, Former Chairman of the Executive Committee and Chief
Executive Officer of Discount Corporation of New York (dealer in U.S.
Treasury and Federal Agency Securities) (1981-1988); Director, Sun Life
Insurance and Annuity Company of New York; Director, U.S. Life Income
Fund, Inc., New York; Former Director, International Investors
Incorporated.
# RICHARD D. STAMBERGER (39) - Trustee
- -----------------------
888 17th Street, N.W., Washington, D.C. 20006; Trustee of two other
investment companies advised or administered by the Adviser; Principal,
National Strategies, Inc., a public policy firm in Washington, D.C.;
Partner and Co-founder, Quest Partners, L.L.C. (management consulting
firm/since 1988); Executive Vice President, Chief Operating Officer,
and a Director of NuCable Resources Corporation (technology firm/since
1988); associated with Anderson Benjamin & Reed, a regulatory
consulting firm based in Washington, D.C. (1985-1986); White House
Fellow-Office of Vice President (1984-1985); Director of Special
Projects, National Cable Television Association (1983-1984).
30
<PAGE>
@**JAN van ECK (35) - Trustee
- --------------
99 Park Avenue, New York, New York 10016; Director of Van Eck
Associates Corporation; President and Director of Van Eck Securities
Corporation and other affiliated companies; President and Director of
Van Eck Capital, Inc.; President and Director of Van Eck Absolute
Return Advisers Corporation; Co-President and Director of Shenyin
Wanguo Van Eck Asset Management (Asia) Limited and President, Chief
Executive Officer and Director of Van Eck Global Asset Management
(Asia) Ltd. (1996-1999).
@**DEREK van ECK (34) - Trustee and Executive Vice President
- ----------------
99 Park Avenue, New York, New York 10016; President of the Global Hard
Assets Fund series of Van Eck Funds and Worldwide Hard Assets Fund
series of Van Eck Worldwide Insurance Trust; Vice President of Global
Leaders Fund series of Van Eck Funds; President and Director of Global
Investments and Director of Van Eck Associates Corporation and
Executive Vice President and Director of Van Eck Securities Corporation
and other affiliated companies.
Officers of the Trust:
BRUCE J. SMITH (44) - Vice President and Treasurer
- --------------
99 Park Avenue, New York, New York 10016; Officer of two other
investment companies advised or administered by the Adviser; Senior
Managing Director, Portfolio Accounting of Van Eck Associates
Corporation and Senior Managing Director of Van Eck Securities
Corporation.
THOMAS H. ELWOOD (51) - Vice President and Secretary
- ----------------
99 Park Avenue, New York, New York 10016; Officer of three other
investment companies advised or administered by the Adviser; Vice
President, Secretary and General Counsel of Van Eck Associates
Corporation, Van Eck Securities Corporation and other affiliated
companies. Former Assistant Counsel of Jefferson Pilot Insurance
company and officer of other investment companies distributed by
Jefferson Pilot and its affiliates. Former Associate Counsel of New
York Life Insurance company
JOSEPH P. DiMAGGIO (42) - Controller
- ------------------
99 Park Avenue, New York, New York 10016; Controller of another
investment company advised by the Adviser; Director of Portfolio
Accounting of Van Eck Associates Corporation (since 1993); Former
Accounting Manager, Alliance Capital Management (1985-1993).
CHARLES CAMERON (39) - Vice President
- ---------------
99 Park Avenue, New York, New York 10016; Vice President of another
investment company advised by the Adviser; Director of Trading of Van
Eck Securities Corporation
SUSAN C. LASHLEY (44) - Vice President
- ----------------
99 Park Avenue, New York, New York 10016; Vice President of another
investment company advised by the Adviser; Managing Director, Mutual
Fund Operations of Van Eck Securities Corporation.
KEVIN REID (36) - Vice President
- ----------
99 Park Avenue, New York, New York 10016; President of the Global Real
Estate Fund series and Vice President of the Global Hard Assets Fund
series of Van Eck Funds and President of the Worldwide Real Estate Fund
and Vice President of the Worldwide Hard Assets Fund series of Van Eck
Worldwide Insurance Trust; Officer of another investment company
advised by the Adviser; Director, Real Estate Research, of Van Eck
Associates Corporation; Former Chief Financial Officer of E.P. Reid,
Inc (construction - 1993 to 1994); Former Chief Financial Officer and
Chief Operating
31
<PAGE>
Officer (1991 - 1993) and Former Vice President and portfolio manager
(1998 - 1991) of Trammell Crow Company (real estate).
GREGORY KRENZER (26) - President of Van Eck U.S. Government Money Fund
- ---------------
99 Park Avenue, New York, New York 10016, Research Analyst and
Portfolio Assistant (Global Fixed Income) of Van Eck Associates
Corporation since 1994.
______
@ An "interested person" as defined in the 1940 Act.
* Member of Executive Committee -exercises general powers of Board of
Trustees between meetings of the Board.
** Son of Mr. John C. van Eck
# Member of the Nominating Committee.
+ Member of the Audit Committee -reviews fees, services, procedures,
conclusions and recommendations of independent auditors.
Compensation Table
<TABLE>
<CAPTION>
Van Eck Funds Van Eck Funds Total Fund Complex
(Current Trustees Fees) (Deferred Compensation) Compensation(a)
--------------------- --------------------- --------------
<S> <C> <C> <C>
John C. van Eck $0 $0 $0
Jeremy H. Biggs $0 $20,467 $39,250
Richard C. Cowell $20,467 $0 $33,500
Philip D. DeFeo $0 $0 $0
Wesley G. McCain $0 $20,467 $39,250
David J. Olderman $0 $16,496 $31,250
Ralph F. Peters $18,940 $0 $31,000
Richard D. Stamberger $9,469 $9,469 $31,000
Jan F. van Eck $0 $0 $0
Derek S. van Eck $0 $0 $0
</TABLE>
(a) The term "fund complex" refers to the Funds of the Trust, the series of
the Van Eck Worldwide Insurance Trust and the Van Eck/Chubb, Funds, Inc., which
are also managed by the Adviser. The Trustees are paid a fee for their services
to the Trust. No other compensation, including pension or other retirement
benefits, is paid to the Trustees by the fund complex.
As of February 16, 1999, all of the Officers and Trustees of the Trust
as a group owned the number of shares indicated of each Fund: 31,637.98 shares
of Asia Dynasty Fund - Class A, equal to approximately 2.2% of the shares
outstanding; 34,159.79 shares of Global Leaders Fund - Class A, equal to
approximately 1.34% of shares outstanding; 1,346,546.25 shares of the U.S.
Government Money Fund, equal to approximately 1.26% of the shares outstanding.
As of February 16, 1999, all of the Officers and Trustees of the Trust as a
group owned less than 1% of shares outstanding of each of the other Funds and
Classes.
As of February 16, 1999, the following persons owned 5% or more of the
shares of the Fund(s) indicated below:
<TABLE>
<CAPTION>
International Investors Gold Fund (Class A shares) Asia Dynasty Fund (Class B shares)
- ------------------------------------------------- ----------------------------------
<S> <C>
Donaldson Lufkin Jenrette 9.82% MLPF&S for the sole benefit 41.43%
Securities Corporation Inc. of its customers
P.O. Box 2052 4800 Deer Lake Drive East
</TABLE>
32
<PAGE>
<TABLE>
<S> <C>
Jersey City, NJ 07303-2052 3rd Floor
Jacksonville, FL 32246-6484
MLPF&S for the sole benefit 5.38%
of its customers First Clearing Corporation 6.09%
4800 Deer Lake Drive East A/C 3955-3795
3rd Floor Harbor Associates
Jacksonville, FL 32246-6484 230 Normandy Circle
Palm Harbor, FL 34683
U.S. Government Money Fund Global Leaders Fund (Class B shares)
- -------------------------- ------------------------------------
Nation Asset Management Ltd. 9.13% MLPF&S for the sole benefit 20.19%
Washington Mall West of its customers
Reid Street FL 4 4800 Deer Lake Drive East
Hamilton JM 11 Bermuda 3rd Floor
Jacksonville, FL 32246-6484
Edward M. Miller & Edward W. 7.20%
101 Montgomery St.
Rodier & Michael Reddington TR M. Club Foundation 6.72%
Meridian Venture Partners II LTD University of Maryland Inc
c/o Meridian Venture Group P.O. Box 273
57 Plandome Rd College Park, MD 20741-0273
Manhasset, NY 11030-2330
LLT Limited 5.60% Global Hard Assets Fund (Class A shares)
----------------------------------------
Washington Mall
4th Floor MLPF&S for the sole benefit 7.94%
Hamilton HM 11 of its customers
Bermuda 3rd Floor
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
Gold/Resources Fund (Class A Shares)
- ------------------------------------
MLPF&S for the sole benefit 7.24% KAS Associate NV 7.36%
of its customers Stitching Vermogensgiro
4800 Deer Lake Drive East Beleggingsrekening
Jacksonville, FL 32246-6484 c/o RAJ Sporri/Internal Code 24893
P.O. Box 178/1000 AD Amsterdam
The Netherlands
Asia Dynasty Fund (Class A shares)
- ----------------------------------
MLPF&S for the sole benefit 12.95% Charles Schwab & Co. Inc. 6.40%
of its customers Special Custody Acct FEBO
4800 Deer Lake Drive East Customers Intl One Source
3rd Floor Attn Mutual Funds
Jacksonville, FL 32246-6484 101 Montgomery Street
San Francisco, CA 94104-4122
Global Hard Assets Fund (Class B shares)
- ---------------------------------------
MLPF&S for the sole benefit 14.06%
of its customers
4800 Deer Lake Drive East
3rd Floor
</TABLE>
33
<PAGE>
Jacksonville, FL 32246-6484
Global Hard Assets Fund (Class C shares)
- ----------------------------------------
MLPF&S for the sole benefit 16.18%
of its customers
4800 Deer Lake Drive East
3rd Floor
Jacksonville, FL 32246-6484
VALUATION OF SHARES
-------------------
The net asset value per share of each of the Funds is computed by
dividing the value of all of a Fund's securities plus cash and other assets,
less liabilities, by the number of shares outstanding. The net asset value per
share is computed as of the close of the New York Stock Exchange, Monday through
Friday, exclusive of national business holidays. The Funds will be closed on the
following national business holidays: New Years Day, Martin Luther King Jr.'s
birthday, President's Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas. The net asset values need not be computed
on a day in which no orders to purchase, sell or redeem shares of the Funds have
been received.
Dividends paid by a Fund with respect to Class A, Class B and Class C
shares will be calculated in the same manner, at the same time and on the same
day and will be in the same amount, except that the higher distribution services
fee and any incremental transfer agency costs relating to Class B or Class C
shares will be borne exclusively by that Class. The Trustees have determined
that currently no conflict of interest exists between the Class A and Class B
shares or Class A and Class C shares. On an ongoing basis, the Board of
Trustees, pursuant to their fiduciary duties under the 1940 Act and state laws,
will seek to ensure that no such conflict arises.
Shares of International Investors Gold Fund-A, Gold/Resources Fund-A,
Global Hard Assets Fund-A, Asia Dynasty Fund-A and Global Leaders Fund-A are
sold at the public offering price which is determined once each day the Funds
are open for business and is the net asset value per share plus a sales charge
in accordance with the schedule set forth in the Prospectus. Shares of the U.S.
Government Money Fund are sold without a sales charge. Shares of Asia Dynasty
Fund-B, Global Leaders Fund-B, and Global Hard Assets Fund-B are sold with a
contingent deferred sales charge. Shares of Global Hard Assets Fund- were sold
with a redemption fee.
Set forth below is an example of the computation of the public offering
price for shares of the International Investors Gold Fund-A, Gold/Resources
Fund-A, Asia Dynasty Fund-A, Global Hard Assets Fund-A and Global Leaders Fund-A
on December 31, 1998 under the then-current maximum sales charge:
<TABLE>
<CAPTION>
Gold/ Global International Asia Global
Resources Hard Investors Dynasty Leaders
Fund-A Assets Gold Fund-A Fund-A Fund-A
<S> <C> <C> <C> <C> <C>
Net asset value and repurchase $3.04 $10.34 $6.59 $7.80 $10.78
price per share on $.001 par
value capital shares
outstanding
Maximum sales charge (as .19 .52 .40 .39 .54
described in the Prospectus)
Maximum offering price
per share $3.23 $10.86 $6.99 $8.19 $11.32
</TABLE>
34
<PAGE>
In determining whether a contingent deferred sales charge is applicable
to a redemption of Class B shares or a redemption charge is applicable to Class
C shares, the calculation will be determined in the manner that results in the
lowest possible rate being charged. Therefore, it will be assumed that the
redemption is first of any Class A shares in the shareholder's Fund account
(unless a specific request is made to redeem a specific class of shares), second
of Class B shares held for over six years, Class C shares held for over one
year, shares attributable to appreciation or shares acquired pursuant to
reinvestment, and third of any Class C shares or Class B held longest during the
applicable period.
To provide two examples, assume an investor purchased 100 Class B
shares of Global Hard Assets Fund at $10 per share (at a cost of $1,000) and in
the second year after purchase, the net asset value per share is $12 and, during
such time, the investor has acquired 10 additional shares upon dividend
reinvestment. If at such time the investor makes his first redemption of 50
shares (proceeds $600), 10 shares or $120 will not be subject to charge because
of dividend reinvestment. With respect to the remaining 40 shares, the charge is
not applied to the $80 attributable to appreciation but is applied only to the
original cost of $10 per share and not to the increase in net asset value of $2
per share. Therefore, $200 of the $600 redemption proceeds will be charged at a
rate of 4% (the applicable rate in the second year after purchase). Instead,
assume an investor purchased 100 Class C shares of Global Hard Assets Fund at
$10 per share (at a cost of $1,000) and six months after purchase, the net asset
value per share is $12 and, during such time, the investor has acquired 10
additional shares upon dividend reinvestment. If at such time the investor makes
his first redemption of 50 shares (proceeds $600), 10 shares or $120 will not be
subject to charge because of dividend reinvestment. With respect to the
remaining 40 shares, the charge is not applied to the $80 attributable to
appreciation but is applied only to the original cost of $10 per share and not
to the increase in net asset value of $2 per share. Therefore, $400 of the $600
redemption proceeds will be charged at a rate of 1%.
The value of a financial futures or commodity futures contract equals
the unrealized gain or loss on the contract that is determined by marking it to
the current settlement price for a like contract acquired on the day on which
the commodity futures contract is being valued. A settlement price may not be
used if the market makes a limit move with respect to a particular commodity.
Securities or futures contracts for which market quotations are readily
available are valued at market value, which is currently determined using the
last reported sale price. If no sales are reported as in the case of most
securities traded over-the-counter, securities are valued at the mean of their
bid and asked prices at the close of trading on the New York Stock Exchange (the
"Exchange"). In cases where securities are traded on more than one exchange, the
securities are valued on the exchange designated by or under the authority of
the Board of Trustees as the primary market. Short-term investments having a
maturity of 60 days or less are valued at amortized cost, which approximates
market. Options are valued at the last sales price unless the last sales price
does not fall within the bid and ask prices at the close of the market, in which
case the mean of the bid and ask prices is used. All other securities are valued
at their fair value as determined in good faith by the Trustees. Foreign
securities or futures contracts quoted in foreign currencies are valued at
appropriately translated foreign market closing prices or as the Board of
Trustees may prescribe.
Generally, trading in foreign securities and futures contracts, as well
as corporate bonds, United States government securities and money market
instruments, is substantially completed each day at various times prior to the
close of the Exchange. The values of such securities used in determining the net
asset value of the shares of the Funds may be computed as of such times. Foreign
currency exchange rates are also generally determined prior to the close of the
Exchange. Occasionally, events affecting the value of such securities and such
exchange rates may occur between such times and the close of the Exchange which
will not be reflected in the computation of the Fund's net asset values. If
events materially affecting the value of such securities occur during such
period, then these securities will be valued at their fair value as determined
in good faith by the Trustees.
35
<PAGE>
U.S. Government Money Fund
- --------------------------
It is the policy of the U.S. Government Money Fund to use its best
efforts to maintain a constant per share price equal to $1.00.
The portfolio instruments of the U.S. Government Money Fund are valued
on the basis of amortized cost. This involves valuing an instrument at its cost
initially and, thereafter, assuming a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuating interest rates on
the market value of the instrument. While this method provides certainty in
valuation, it may result in periods during which the value, as determined by
amortized cost, is higher or lower than the price the Fund would receive if it
sold the instrument.
The valuation of the Fund's portfolio instruments based upon their
amortized cost and simultaneous maintenance of the Fund's per share net asset
value at $1.00 are permitted by a rule adopted by the Securities and Exchange
Commission. Under this rule, the Fund must maintain a dollar-weighted average
portfolio maturity of 90 days or less, purchase only instruments having
remaining maturities of thirteen months or less, and invest only in securities
determined by the Trustees to be of high quality with minimal credit risks. In
accordance with the rule, the Trustees have established procedures designed to
stabilize, to the extent reasonably practicable, the Fund's price per share as
computed for the purpose of sales and redemptions at $1.00. Such procedures
include review of the Fund's portfolio holdings by the Trustees, at such
intervals as they may deem appropriate, to determine whether the net asset value
of the Fund calculated by using available market quotations or market
equivalents deviates from $1.00 per share based on amortized cost. The rule also
provides that the extent of any deviation between the Fund's net asset value
based upon available market quotations or market equivalents and $1.00 per share
net asset value based on amortized cost must be examined by the Trustees. In the
event the Trustees determine that a deviation exists which may result in
material dilution or is otherwise unfair to investors or existing shareholders,
they must cause the Fund to take such corrective action as they regard as
necessary and appropriate, including: selling portfolio instruments prior to
maturity to realize capital gains or losses or to shorten average portfolio
maturity; withholding dividends or paying distributions from capital or capital
gains; redeeming shares in kind; or establishing a net asset value per share by
using available market quotations.
EXCHANGE PRIVILEGE
------------------
Class A, Class B and Class C shareholders of a Fund may exchange their
shares for shares of the same class of other of the funds in the Van Eck Global
Group of Funds. The Exchange Privilege will not be available if the proceeds
from a redemption of shares of a Fund whose shares qualify are paid directly to
the shareholder. The Exchange Privilege is not available for shares which are
not on deposit with DST or Investors Fiduciary Trust Company ("IFTC"), or shares
which are held in escrow pursuant to a Letter of Intent. If certificates
representing shares of a Fund accompany a written exchange request, such shares
will be deposited into an account with the same registration as the certificates
upon receipt by DST.
The Funds each reserve the right to (i) charge a fee of not more than
$5.00 per exchange payable to a Fund or charge a fee reasonably intended to
cover the costs incurred in connection with the exchange; (ii) establish a limit
on the number and amount of exchanges made pursuant to the Exchange Privilege
and (iii) terminate the Exchange Privilege without written notice. In the event
of such termination, shareholders who have acquired their shares pursuant to the
Exchange Privilege will be afforded the opportunity to re-exchange such shares
for shares of the Fund originally purchased without sales charge, for a period
of not less than three (3) months.
By exercising the Exchange Privilege each shareholder whose shares are
subject to the Exchange Privilege will be deemed to have agreed to indemnify and
hold harmless the Trust and each of its series, their investment adviser, sub-
investment adviser (if any), distributor, transfer agent, IFTC and the officers,
36
<PAGE>
directors, employees and agents thereof against any liability, damage, claim or
loss, including reasonable costs and attorneys' fees, resulting from acceptance
of, or acting or failure to act upon, or acceptance of unauthorized instructions
or non-authentic telephone instructions given in connection with, the Exchange
Privilege, so long as reasonable procedures are employed to confirm the
authenticity of such communications. (For more information on the Exchange
Privilege, see the Prospectus).
TAX-SHELTERED RETIREMENT PLANS
------------------------------
The Trust offers several prototype tax-sheltered retirement plans
through which shares of a Fund may be purchased. These plans are more fully
described below. IFTC, P.O. Box 418407, Kansas City, Missouri acts as the
trustee and/or custodian (the "Trustee") under the retirement plans offered by
the Trust. Persons who wish to establish a tax-sheltered retirement plan should
consult their own tax advisors or attorneys regarding their eligibility to do so
and the laws applicable thereto, such as the employee coverage and
nondiscrimination rules, fiduciary responsibility provisions and diversification
requirements and the reporting and disclosure obligations under the Employee
Retirement Income Security Act of 1974 and applicable state tax laws. The Trust
is not responsible for compliance with such laws. Further information regarding
the retirement plans, including applications and fee schedules, may be obtained
upon request to the Trust.
Regular Individual Retirement Account and Spousal Individual Retirement
-----------------------------------------------------------------------
Account. The Regular IRA is available to all individuals under age 70 1/2,
- -------
including self-employed individuals, who receive compensation for services
rendered and wish to purchase shares of a Fund. Spousal Individual Retirement
Accounts ("SPIRA") are available to individuals who are otherwise eligible to
establish a Regular IRA for themselves and whose spouses are treated as having
no compensation of their own.
The amount an individual contributes to a Regular IRA reduces the
amount the individual can contribute to a Roth IRA for the same year.
In general, the maximum deductible contribution to an IRA which may be
made for any one year is $2,000 or 100% of annual compensation includible in
gross income, whichever is less. If an individual establishes a SPIRA, the
maximum aggregate deductible amount that the individual may contribute annually
is the lesser of $4000 or 100%. However, that no more than $2,000 per year for
either the individual or the spouse may be contributed to either the IRA or
SPIRA.
In the case of a taxpayer who is deemed to be an active participant in
an employer-sponsored retirement plan, no deduction is available for
contributions to a Regular IRA or SPIRA if his adjusted gross income exceeds the
annual maximum. For 1998, the annual maximum is $60,000 for married taxpayers
filing jointly, $40,000 for single taxpayers, and $10,000 for married taxpayers
filing separately. For each year after 1998, the annual maximum for married
taxpayers filing jointly and single taxpayers is increased $1,000. In 2006, the
annual maximum filing jointly increases $5,000 and in 2007 increases $15,000.
(Married taxpayers who file joint tax returns will not be deemed to be active
participants solely because their spouse is an active participant under an
employer-sponsored retirement plan. However, when one spouse is an active
participant and the other is not, no deduction is available for contributions to
a Regular IRA by the nonactive participant spouse if the spouses' combined
adjusted gross income exceeds $160,000.) Taxpayers who are active participants
in employer-sponsored retirement plans, will be able to make fully deductible
IRA contributions at the same levels discussed above, if their adjusted gross
income is less than the annual minimum. For 1998, the annual minimum is $50,000
for married taxpayers filing jointly and $30,000 for single taxpayers. For
married taxpayers filing jointly and single taxpayers, the annual minimum is
increased at the same rate as the annual maximum through the year 2005. After
2005, the annual minimum for married taxpayers filing jointly is increased
$5,000 in 2006 and for 2007.
37
<PAGE>
In the case of taxpayers who are active participants in employer-
sponsored retirement plans and who have adjusted gross income between the
applicable annual minimum and maximum, deductible IRA contributions will be
phased out. In general and before 2007, the $2,000 IRA deduction is reduced by
$200 for each $1,000 of adjusted gross income in excess of the applicable
minimum. In general, in the case of a taxpayer who contributes to an IRA and a
SPIRA, the $4000 IRA deduction is reduced by $400 for each $1,000 of adjusted
gross income in excess of the applicable minimum.
Individuals who are ineligible to make fully deductible contributions
may make nondeductible contributions up to an aggregate of $2,000 in the case of
contributions (deductible and nondeductible) to a Regular IRA and up to an
aggregate of $4,000 in the case of contributions (deductible and nondeductible)
to a Regular IRA and SPIRA and the income upon all such contributions will
accumulate tax free until distribution.
In addition, a separate rollover` IRA may be established by a
"rollover" contribution, which may permit the tax-free transfer of assets from
qualified retirement plans under specified circumstances. A "rollover
contribution" from a qualified retirement plan includes a lump sum distribution
received by an individual, because of severance of employment, from a qualified
plan and paid into an individual retirement account within 60 days after receipt
or transferred directly in a trust-to-trust transfer. A rollover IRA can be
established even if the individual is over age 70 1/2.
Dividends and capital gains earned on amounts invested in either an IRA
or SPIRA are automatically reinvested by the Trustee in shares of a Fund and
accumulate tax-free until distribution. Distributions from a Regular IRA, SPIRA
or rollover IRA, to the extent taxable, are taxable as ordinary income.
Distributions from either an IRA or SPIRA prior to age 59-1/2, may result in
adverse tax consequences and penalties. In addition, there may be a penalty on
contributions in excess of the contribution limits and other penalties are
imposed on insufficient payouts after age 70-1/2.
Roth Individual Retirement Account and Spousal Individual Retirement
--------------------------------------------------------------------
Account. The Roth IRA is available to all individuals who wish to purchase Fund
- -------
shares regardless of their age, including self-employed individuals, and whose
adjusted gross income is less than $160,000 for married taxpayers filing
jointly, $10,000 for married taxpayers filing jointly, $10,000 for married
taxpayers filing separately, and $110,000 for single taxpayers. Spousal Roth
IRA's ("SPRIRA") are available to individuals who are otherwise eligible to
establish a Roth IRA for themselves and whose spouses are treated as having no
compensation of their own.
Contributions to a Roth IRA or SPRIRA are not deductible. In general,
the maximum annual contribution to a Roth IRA which may be made for any one year
is $2,000 or 100% of annual compensation includible in gross income, whichever
is less, minus any contributions made for the year to a Regular IRA. If an
individual establishes a SPRIRA, the aggregate maximum amount that the
individual may contribute annually is the lesser of $4,000 or 100% of the
combined compensation of individual and spouse minus any deductible Regular IRA
or Roth IRA contributions made by the individual to his own Regular or Roth IRA
for the taxable year. The amount an individual contributes to a Roth IRA reduces
the amount such individual can contribute to a Regular IRA for the same year.
Taxpayers can make the full annual contribution to a Roth IRA if their
adjusted gross income for the year is less than $150,000 if married filing
jointly, or less than $95,000 if single.
Taxpayers who are eligible to establish a Roth IRA, but whose adjusted
gross incomes exceed the amount for making a full annual contribution, can make
a reduced contribution to the Roth IRA. In general, to determine the reduced
contribution: (i) subtract the base amount ($95,000 for single, $150,000 for
married filing jointly, $0 for married filing separately) from adjusted gross
income; (ii) subtract the amount in (i) above from $15,000 ($10,000 if married
filing jointly or married filing separately); (iii) divide the
38
<PAGE>
amount in (ii) by $15,000 ($10,000 if married filing jointly or married filing
separately); and (iv) multiply the fraction from (iii) by $2,000 ($4,000 for a
SPRIRA).
In addition, if the adjusted gross income of married taxpayers who file
joint returns or a single taxpayer is less than $100,000, they may convert a
non-Roth IRA to a Roth IRA. Married couples filing separate returns cannot make
such a conversion. A taxpayer converts a non Roth IRA into a Roth IRA by
withdrawing the funds from his non Roth IRA and rolling them over into a Roth
IRA within 60 days, or by directing his non Roth IRA trustee or custodian to
convert the existing non Roth IRA with such custodian or trustee. Except for
conversions made during 1998, the amount rolled over from the non Roth IRA to
the Roth IRA is includible in income and subject to income tax in the year of
conversion. For non Roth IRAs converted into Roth Conversion IRAs during 1998,
special rules apply. The amount rolled over is includible in Federal gross
income (and subject to Federal income taxes) over a four year period.
In addition, an individual can rollover a Roth IRA into another Roth
IRA within 60 days after receipt of the funds (or directly in a trustee-to-
trustee transfer).
Dividends and capital gains earned on amounts invested in either a Roth
IRA or SPRIRA are automatically reinvested by the Trustee in shares of a Fund
and accumulate tax free until distribution.
"Qualified distribution" from either a Roth IRA or SPIRA are not
included in federal gross income and not subject to federal income tax. Any non-
qualified distribution is includible in federal gross income and subject to
federal income tax only to the extent it is a distribution of earnings. These
earnings are taxable as ordinary income. To be a "qualified distribution" the
amounts must be withdrawn after the "5-year holding period" and must be
withdrawn when you are age 59 1/2 or older, because of death or permanent
disability, or to pay for qualifying "first-time homebuyer expenses." For Roth
IRAs, SPRIRAs and rollover Roth IRAs, the "5-year holding period" is the five
tax year period beginning with the first tax year for which the taxpayer made a
contribution to his or her Roth IRA. For non Roth IRAs converted into Roth IRAs,
the "5-year holding period" is the five tax year period beginning with the first
tax year in which the non Roth IRA was converted to a Roth IRA.
Withdrawals are deemed to be a made first from contributions to the
Roth IRA and then from earnings. Thus, until the full amount contributed has
been withdrawn, withdrawals are not includible for federal gross income. Special
rules apply to withdrawals from Regular IRAs converted in 1998 to a Roth IRA.
The taxable portion of distributions from either a Roth IRA or SPRIRA
prior to age 59 1/2 may result in adverse tax consequences and penalties. In
addition, they may be a penalty on contributions in excess of the contribution
limits.
Simplified Employee Pension Plan. A SEP may be utilized by employers to
--------------------------------
provide retirement income to employees by making contributions to employee SEP
IRAs. Owners and partners may qualify as employees. The employee is always 100%
vested in contributions made under a SEP. Subject to certain limitations, an
employer may also make contributions to a SEP-IRA under a salary reduction
arrangement by which the employee elects contributions to a SEP-IRA in lieu of
immediate cash compensation. After December 31, 1996, contributions under a
salary reduction arrangement are permitted only into SEP plans in existence on
December 31, 1996. The maximum contribution to a SEP-IRA (an IRA established to
receive SEP contributions) is the lesser of $30,000 or 15% of taxable
compensation from the employer, excluding contributions made pursuant to a
salary reduction arrangement.
Contributions by employers under a SEP arrangement up to the maximum
permissible amounts are deductible by employers for federal income tax purposes.
Contributions up to the maximum permissible amounts are not includible in the
gross income of the employee. Dividends and capital gains on amounts
39
<PAGE>
invested in SEP-IRAs are automatically reinvested by the Trustee in shares of
the mutual fund that paid such amounts and accumulate tax-free until
distribution. Withdrawals of amounts prior to age 59 1/2, may result in adverse
tax consequences. In addition, there may be a penalty on contributions in excess
of the contribution limits and other penalties are imposed on insufficient
payouts after age 70 1/2.
Qualified Pension Plans. International Investors Fund offers forms of
-----------------------
prototype profit sharing and money purchase pension plans (together, the
"Qualified Pension Plans") that can be utilized by self-employed individuals,
partnerships and corporations (for this purpose called "Employers") and their
employees who wish to purchase shares of a Fund under a retirement program.
The maximum combined contribution which may be made to all Qualified
Pension Plans in any one year on behalf of a participant is, depending on the
types of plans and benefit formula selected by the Employer, up to the lesser of
$30,000 or 25 percent of compensation (net earned income in the case of a self-
employed individual). Contributions by Employers to Qualified Pension Plans up
to the maximum permissible amounts are deductible for Federal income tax
purposes. Amounts contributed by employers on behalf of employees are not taxed
to the employees until the time of distribution, except that contributions in
excess of permissible amounts may result in adverse tax consequences and
penalties to the Employer. Dividends and capital gains earned on amounts
invested in Qualified Pension Plans are automatically reinvested by the Trustee
in shares of a Fund and accumulate tax-free until distribution. Amounts
contributed by employers on behalf of employees are not taxed to the employees
until the time of distribution, except that withdrawals of contributions prior
to age 59-1/2, may result in adverse tax consequences and penalties.
403(b)(7) Program. The Tax-Deferred Annuity Program and Custodial
-----------------
Account offered by the Fund (the "403(b)(7) Program") allows employees of
certain tax exempt organizations and schools to have a portion of their
compensation set aside for their retirement years in shares held in an
investment company custodial account.
In general, the maximum limit on annual contributions for each employee
is the lesser of $30,000 per year (as adjusted by the IRS for cost-of-living
increases), 25% of the employee's compensation or the employee's exclusion
allowance specified in Section 403(b) of the Code. However, an employee's salary
reduction contributions to a 403(b)(7) Program may not exceed $9,500 a year (as
adjusted for cost of living expenses). Amounts contributed by employers on
behalf of employees are not taxed to the employees until the time of
distribution, except that contributions in excess of permissible amounts may
result in adverse tax consequences and penalties. Dividends and capital gains on
amounts invested in the 403(b)(7) Program are automatically reinvested in shares
of a Fund. It is intended that dividends and capital gains on amounts invested
in the 403(b)(7) Program will accumulate tax-free until distribution.
Employees will receive distributions from their accounts under the
403(b)(7) Program following termination of employment by retirement or at such
other time as the employer shall designate, but in no case later than an
employee's reaching age 65. Withdrawals of contributions prior to age 59-1/2,
may result in adverse tax consequences and penalties. Employees will also
receive distributions from their accounts under the 403(b)(7) Program in the
event they become disabled.
INVESTMENT PROGRAMS
-------------------
Dividend Reinvestment Plan. Reinvestments of dividends of the Funds,
--------------------------
except for U.S. Government Money Fund, will occur on a date selected by the
Board of Trustees. Reinvestment of U.S. Government Money Fund will occur on the
last day of the month.
Automatic Exchange Plan. Investors may arrange under the Exchange Plan
-----------------------
to have DST collect a specified amount once a month or quarter from the
investor's account in one of the Funds and purchase full
40
<PAGE>
and fractional shares of another Fund at the public offering price next computed
after receipt of the proceeds. Further details of the Automatic Exchange Plan
are given in the application which is available from DST or the Funds. This does
not apply to Class B or Class C shares.
An investor should realize that he is investing his funds in securities
subject to market fluctuations, and accordingly the Automatic Exchange Plan does
not assure a profit or protect against depreciation in declining markets. The
Automatic Exchange Plan contemplates the systematic purchase of securities at
regular intervals regardless of price levels.
The expenses of the Automatic Exchange Plan are general expenses of a
Fund and will not involve any direct charge to the participating shareholder.
The Automatic Exchange Plan is completely voluntary and may be terminated on
fifteen days notice to DST.
Automatic Investment Plan. Investors may arrange under the Automatic
-------------------------
Investment Plan to have DST collect a specified amount once a month or quarter
from the investor's checking account and purchase full and fractional shares of
a Fund at the public offering price next computed after receipt of the proceeds.
Further details of the Automatic Investment Plan are given in the application
which is available from DST or the Funds.
An investor should realize that he is investing his funds in securities
subject to market fluctuations, and accordingly the Automatic Investment Plan
does not assure a profit or protect against depreciation in declining markets.
The Automatic Investment Plan contemplates the systematic purchase of securities
at regular intervals regardless of price levels.
The expenses of the Automatic Investment Plan are general expenses of a
Fund and will not involve any direct charge to the participating shareholder.
The Automatic Investment Plan is completely voluntary. The Automatic Investment
Plan may be terminated on thirty days notice to DST.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan is designed to
-------------------------
provide a convenient method of receiving fixed redemption proceeds at regular
intervals from shares of a Fund deposited by the investor under this Plan. This
Plan is not available to Class B or Class C shareholders. Further details of the
Automatic Withdrawal Plan are given in the application which is available from
DST or the Funds.
In order to open an Automatic Withdrawal Plan, the investor must
complete the Application and deposit, or purchase for deposit, with DST, agent
for the Automatic Withdrawal Plan, shares of a Fund having a total value of not
less than $10,000 based on the offering price on the date the Application is
accepted.
Income dividends and capital gains distributions on shares under an
Automatic Withdrawal Plan will be credited to the investor's Automatic
Withdrawal Plan account in full and fractional shares at the net asset value in
effect on the reinvestment date.
Periodic checks for a specified amount will be sent to the investor, or
any person designated by him, monthly or quarterly (January, April, July and
October). A Fund will bear the cost of administering the Automatic Withdrawal
Plan.
Redemption of shares of a Fund deposited under the Automatic Withdrawal
Plan may deplete or possibly use up the initial investment plus income dividends
and distributions reinvested, particularly in the event of a market decline. In
addition, the amounts received by an investor cannot be considered as an actual
yield or income on his investment since part of such payments may be a return of
his capital. The redemption of shares under the Automatic Withdrawal Plan may
give rise to a taxable event.
41
<PAGE>
The maintenance of an Automatic Withdrawal Plan concurrently with
purchases of additional shares of a Fund would be disadvantageous because of the
sales charge payable with respect to such purchases. An investor may not have an
Automatic Withdrawal Plan in effect and at the same time have in effect an
Automatic Investment Plan or an Automatic Exchange Plan. If an investor has an
Automatic Investment Plan or an Automatic Exchange Plan, such service must be
terminated before an Automatic Withdrawal Plan may take effect.
The Automatic Withdrawal Plan may be terminated at any time (1) on 30
days notice to DST or from DST to the investor, (2) upon receipt by DST of
appropriate evidence of the investor's death or (3) when all shares under the
Automatic Withdrawal Plan have been redeemed. Upon termination, unless otherwise
requested, certificates representing remaining full shares, if any, will be
delivered to the investor or his duly appointed legal representatives.
TAXES
-----
Taxation of the Fund - In General
- ---------------------------------
Each of the Funds intends to continue to continue to qualify and elect
to be treated each taxable year as a "regulated investment company" under
Subchapter M of the Code. To so qualify, each Fund must, among other things, (a)
derive at least 90% of its gross income from dividends, interest, payments with
respect to securities loans, gains from the sale or other disposition of stock,
securities or foreign currencies, or other income (including gains from options,
futures or forward contracts) derived with respect to its business of investing
in such stock, securities or currencies; and (b) satisfy certain diversification
requirements.
As a regulated investment company, a Fund will not be subject to
federal income tax on its net investment income and capital gain net income
(capital gains in excess of its capital losses) that it distributes to
shareholders if at least 90% of its net investment income and short-term capital
gains for the taxable year are distributed. However, if for any taxable year a
Fund does not satisfy the requirements of Subchapter M of the Code, all of its
taxable income will be subject to tax at regular corporate rates without any
deduction for distribution to shareholders, and such distributions will be
taxable to shareholders as ordinary income to the extent of the Fund's current
or accumulated earnings or profits.
Each Fund will be liable for a nondeductible 4% excise tax on amounts
not distributed on a timely basis in accordance with a calendar year
distribution requirement. To avoid the tax, during each calendar year the Fund
must distribute, or be deemed to have distributed, (i) at least 98% of its
ordinary income (not taking into account any capital gains or losses) for the
calendar year, (ii) at least 98% of its capital gains in excess of its capital
losses (adjusted for certain ordinary losses) for the twelve month period ending
on October 31 (or December 31, if the Fund so elects), and (iii) all ordinary
income and capital gains for previous years that were not distributed during
such years. For this purpose, any income or gain retained by the Fund that is
subject to corporate tax will be considered to have been distributed by year-
end. The Funds intend to make sufficient distributions to avoid this 4% excise
tax.
Taxation of the Funds' Investments
- ----------------------------------
Original issue discount. For federal income tax purposes, debt
-----------------------
securities purchased by the Funds may be treated as having an original issue
discount. Original issue discount represents interest for federal income tax
purposes and can generally be defined as the excess of the stated redemption
price at maturity of a debt obligation over the issue price. Original issue
discount is treated for federal income tax purposes as income earned by the
Funds, whether or not any income is actually received, and therefore is subject
to the distribution requirements of the Code. Generally, the amount of original
issue discount included in the income of the Funds each year is determined on
the basis of a constant yield to maturity which takes into account the
compounding of accrued interest.
42
<PAGE>
Debt securities may be purchased by the Funds at a discount which
exceeds the original issue discount remaining on the securities, if any, at the
time the Funds purchased the securities. This additional discount represents
market discount for income tax purposes. In the case of any debt security issued
after July 18, 1984, having a fixed maturity date of more than one year from the
date of issue and having market discount, the gain realized on disposition will
be treated as interest to the extent it does not exceed the accrued market
discount on the security (unless the Funds elect to include such accrued market
discount in income in the tax year to which it is attributable). Generally,
market discount is accrued on a daily basis. The Funds may be required to
capitalize, rather than deduct currently, part or all of any direct interest
expense incurred or continued to purchase or carry any debt security having
market discount, unless the it makes the election to include market discount
currently. Because the Funds must include original issue discount in income, it
will be more difficult for the Funds to make the distributions required for them
to maintain their status as a regulated investment company under Subchapter M of
the Code or to avoid the 4% excise tax described above.
Options and Futures Transactions. Certain of the Funds' investments may
--------------------------------
be subject to provisions of the Code that (i) require inclusion of unrealized
gains or losses in the Funds' income for purposes of the 90% test, the excise
tax and the distribution requirements applicable to regulated investment
companies, (ii) defer recognition of realized losses, and (iii) characterize
both realized and unrealized gain or loss as short-term or long-term gain or
loss. Such provisions generally apply to options and futures contracts. The
extent to which the Funds make such investments may be materially limited by
these provisions of the Code.
Foreign Currency Transactions. Under Section 988 of the Code, special
-----------------------------
rules are provided for certain foreign currency transactions. Foreign currency
gains or losses from foreign currency contracts (whether or not traded in the
interbank market), from futures contracts that are not "regulated futures
contracts," and from unlisted options are treated as ordinary income or loss
under Section 988. The Funds may elect to have foreign currency-related
regulated futures contracts and listed options subject to ordinary income or
loss treatment under Section 988. In addition, in certain circumstances, the
Funds may elect capital gain or loss for foreign currency transactions. The
rules under Section 988 may also affect the timing of income recognized by the
Funds.
Taxation of the Shareholders
- ----------------------------
Distributions of net investment income and the excess of net short-term
capital gain over net long-term capital loss are taxable as ordinary income to
shareholders. Distributions of net capital gain (the excess of net long-term
capital gain over net short-term capital loss) are taxable to shareholders as
long-term capital gain, regardless of the length of time the shares of the Fund
have been held by such shareholders. Any loss realized upon a taxable
disposition of shares within six months from the date of their purchase will be
treated as a long-term capital loss to the extent of any long-term capital gain
distributions received by shareholders during such period.
Distributions of net investment income and capital gain net income will
be taxable as described above whether received in cash or reinvested in
additional shares. When distributions are received in the form of shares issued
by the Funds, the amount of the distribution deemed to have been received by
participating shareholders is the fair market value of the shares received
rather than the amount of cash which would otherwise have been received. In such
case, participating shareholders will have a basis for federal income tax
purposes in each share received from the Funds equal to the fair market value of
such share on the payment date.
Distributions by the Funds result in a reduction in the net asset value
of the Funds' shares. Should a distribution reduce the net asset value below a
shareholder's cost basis, such distribution nevertheless would be taxable to the
shareholder as ordinary income or long-term capital gain as described above,
even though, from an investment standpoint, it may constitute a partial return
of capital. In particular, investors should be
43
<PAGE>
careful to consider the tax implications of buying shares just prior to a
distribution. The price of shares purchased at that time includes the amount of
any forthcoming distribution. Those investors purchasing shares just prior to a
distribution will then receive a return of their investment upon distribution
which will nevertheless be taxable to them.
If a shareholder (i) incurs a sales load in acquiring shares in the
Funds, and (ii) by reason of incurring such charge or making such acquisition
acquires the right to acquire shares of one or more regulated investment
companies without the payment of a load or with the payment of a reduced load
("reinvestment right"), and (iii) disposes of the shares before the 91st day
after the date on which the shares were acquired, and (iv) subsequently acquires
shares in that regulated investment company or in another regulated investment
company and the otherwise applicable load charge is reduced pursuant to the
reinvestment right, then the load charge will not be taken into account for
purposes of determining the shareholder's gain or loss. To the extent such
charge is not taken into account in determining the amount of gain or loss, the
charge will be treated as incurred in connection with the subsequently acquired
shares and will have a corresponding effect on the shareholder's basis in such
shares.
Income received by the Funds may give rise to withholding and other
taxes imposed by foreign countries. If more than 50% of the value of the Funds'
assets at the close of a taxable year consists of securities of foreign
corporations, the Funds may make an election that will permit an investor to
take a credit (or, if more advantageous, a deduction) for foreign income taxes
paid by the Funds, subject to limitations contained in the Code. As an investor,
you would then include in gross income both dividends paid to you and the
foreign taxes paid by the Funds on their foreign investments.
The Funds cannot assure investors that they will be eligible for the
foreign tax credit. The Funds will advise shareholders annually of their share
of any creditable foreign taxes paid by the Funds.
The Funds may be required to withhold federal income tax at a rate of
31% from dividends made to any shareholder who fails to furnish a certified
taxpayer identification number ("TIN") or who fails to certify that he or she is
exempt from such withholding or who the Internal Revenue Service notifies the
Funds as having provided the Funds with an incorrect TIN or failed to properly
report for federal income tax purposes. Any such withheld amount will be fully
creditable on each shareholder's individual federal income tax return.
The foregoing discussion is a general summary of certain of the current
federal income tax laws affecting the Funds and investors in the shares. The
discussion does not purport to deal with all of the federal income tax
consequences applicable to the Funds, or to all categories of investors, some of
which may be subject to special rules. Investors should consult their own
advisors regarding the tax consequences, including state and local tax
consequences, to them of investment in the Funds.
REDEMPTIONS IN KIND
-------------------
Each Fund has elected to have the ability to redeem its shares in kind,
committing itself to pay in cash all requests for redemption by any shareholder
of record limited in amount with respect to each shareholder of record during
any ninety-day period to the lesser of (i) $250,000 or (ii) 1% of the net asset
value of such company at the beginning of such period.
PERFORMANCE
-----------
U.S. Government Money Fund
- --------------------------
The U.S. Government Money Fund may advertise performance in terms of
yield based on a seven-day yield or an effective yield.
44
<PAGE>
Seven-day yield is computed by determining the net change, exclusive of
capital changes, in the value of a hypothetical pre-existing account having a
balance of one share at the beginning of the period, subtracting a hypothetical
charge reflecting deductions from shareholder accounts, and dividing the
difference by the value of the account at the beginning of the base period to
obtain the base period return, and then multiplying the base period return by
(365/7) with the resulting yield figure carried to at least the nearest
hundredth of one percent.
Effective yield quotation is based on the seven days ended on the date
of the calculation and is computed by determining the net change, exclusive of
capital changes, in the value of a hypothetical pre-existing account having a
balance of one share at the beginning of the period, subtracting a hypothetical
charge reflecting deductions from shareholder accounts, and dividing the
difference by the value of the account at the beginning of the base period to
obtain the base period return, and then compounding the base period return by
adding 1, raising the sum to a power equal to 365 divided by 7, and subtracting
1 from the result, according to the following formula: EFFECTIVE YIELD = [(BASE
PERIOD RETURN + 1)365/7]-1 with the resulting yield figure carried to at least
the nearest hundredth of one percent.
In calculating yield or effective yield quotations, the net change in
an account value includes: (a) the value of additional shares purchased with
dividends from the original share and dividends declared on both the original
share and any such additional shares; (b) all fees, other than nonrecurring
account or sales charges, that are charged to all shareholder accounts in
proportion to the length of the base period. The calculation excludes realized
gains and losses from the sale of securities and unrealized appreciation and
depreciation.
The seven day yield and seven day effective yield for the U.S.
Government Money Fund at December 31, 1998 was 2.49% and 2.52%, respectively.
Asia Dynasty Fund, Global Leaders Fund, Global Hard Assets Fund,
Gold/Resources Fund and International Investors Gold Fund
The above Funds may advertise performance in terms of average annual
total return for 1, 5 and 10 year periods, or for such lesser periods as any of
such Funds have been in existence. Average annual total return is computed by
finding the average annual compounded rates of return over the periods that
would equate the initial amount invested to the ending redeemable value,
according to the following formula:
=======================================================================
P(1+T)/to the power of n/ = ERV
Where: P=A hypothetical initial payment of $1,000
T=Average annual total return
n=Number of years
ERV=Ending redeemable value of a hypothetical $1,000
payment made at the beginning of the 1, 5, or 10 year
periods at the end of the year or period;
=======================================================================
The calculation assumes the maximum sales load (or other charges
deducted from payments) is deducted from the initial $1,000 payment and assumes
all dividends and distributions by the Fund are reinvested at the price stated
in the prospectus on the reinvestment dates during the period, and includes all
recurring fees that are charged to all shareholder accounts.
45
<PAGE>
Average Annual Total Return for the Period ended December 31, 1998
(after maximum sales charge).
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years Life
<S> <C> <C> <C> <C>
International Investors
Gold Fund (Class A) (16.94)% (15.36)% (2.91)% 9.10%
Gold/Resources Fund (Class A) (17.39)% (14.70)% (4.28)% (0.44)%
Asia Dynasty Fund (Class A) (4.99)% (10.44)% -- (1.28)%
Asia Dynasty Fund (Class B) (6.12)% (10.50)% -- (4.49)%
Global Leaders Fund (Class A) 14.89 % 10.40% -- 10.34%
Global Leaders Fund (Class B) 15.07 % 10.50% -- 10.56%
Global Hard Assets Fund (Class A) (35.45)% -- -- 6.01%
Global Hard Assets Fund (Class B) (35.88)% -- -- (2.96)%
Global Hard Assets Fund (Class C) (33.20)% -- -- 7.12%
</TABLE>
The Global Leaders Fund, Asia Dynasty Fund, Gold/Resources Fund, Global
Hard Assets Fund, and International Investors Gold Fund may advertise
performance in terms of a 30-day yield quotation. The 30-day yield quotation is
computed by dividing the net investment income per share earned during the
period by the maximum offering price per share on the last day of the period,
according to the following formula:
========================================================================
YIELD = 2[(A-B/CD + 1)/to the power of 6/-1]
Where: A = dividends and interest earned during the
period
B = expenses accrued for the period (net of
reimbursement)
C = the average daily number of shares
outstanding during the period that were
entitled to receive dividends
D = the maximum offering price per share on
the last day of the period after
adjustment for payment of dividends
within 30 days thereafter
========================================================================
The Global Leaders Fund, Global Hard Assets Fund, Asia Dynasty Fund,
Gold/Resources Fund, and International Investors Gold Fund may also advertise
performance in terms of aggregate total return. Aggregate total return for a
specified period of time is determined by ascertaining the percentage change in
the net asset value of shares of the Fund initially acquired assuming
reinvestment of dividends and distributions and without giving effect to the
length of time of the investment according to the following formula:
=======================================================
[(B-A)/A](100)=ATR
Where: A=initial investment
B=value at end of period
ATR=aggregate total return
=======================================================
The calculation assumes the maximum sales charge is deducted from the initial
payment and assumes all distributions by the Funds are reinvested at the price
stated in the Prospectus on the reinvestment dates during the period, and
includes all recurring fees that are charged to all shareholder accounts.
46
<PAGE>
Aggregate Total Return for the period ended December 31, 1998 (after maximum
sales charge).
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years Life
<S> <C> <C> <C> <C>
International Investors
Gold Fund (Class A) (16.94)% (56.57)% (25.58)% 4,125.53%
Gold/Resources Fund (Class A) (17.39)% (54.83)% (35.40)% (5.47)%
Asia Dynasty Fund (Class A) (4.99)% (42.38)% -- (7.16)%
Asia Dynasty Fund (Class B) (6.12)% (42.59)% -- (21.70)%
Global Leaders Fund (Class A) 14.89% 64.01% -- 64.01%
Global Leaders Fund (Class B) 15.07% 64.72% -- 65.72%
Global Hard Assets Fund (Class A) (35.45)% -- -- 27.49%
Global Hard Assets Fund (Class B) (35.88)% -- -- (7.77)%
Global Hard Assets Fund (Class C) (33.20)% -- -- 33.13%
</TABLE>
Advertising Performance
- -----------------------
As discussed in the Funds' Prospectus, the Funds may quote performance
results from recognized publications which monitor the performance of mutual
funds, and the Funds may compare their performance to various published
historical indices. These publications are listed in Part B of the Appendix. In
addition, the Funds may quote and compare their performance to the performance
of various economic and market indices and indicators, such as the S&P 500,
Financial Times Index, Morgan Stanley Capital International Europe, Australia,
Far East Index, Saloman Brothers World Property Index, Morgan Stanley Capital
International World Index, Morgan Stanley Capital International Real Estate
Index, NAREIT Equity Index, Wilshire Real Estate Securities Index, Morgan
Stanley REIT Index, Saloman Brothers World Property Index, Morgan Stanley
Capital International Combined Far East (ex-Japan) Free Index, Salomon Brothers
World Bond Index, Salomon Brothers World Government Bond Index, GNP and GDP
data. Descriptions of these indices are provided in Part B of the Appendix.
ADDITIONAL INFORMATION
----------------------
Custodian. The Chase Manhattan Bank, Chase Metrotech Center, Brooklyn,
---------
New York is the custodian of the Trust's portfolio securities, cash, coins and
bullion. The Custodian is authorized, upon the approval of the Trust, to
establish credits or debits in dollars or foreign currencies with, and to cause
portfolio securities of a Fund to be held by its overseas branches or
subsidiaries, and foreign banks and foreign securities depositories which
qualify as eligible foreign custodians under the rules adopted by the Securities
and Exchange Commission.
Independent Accountants. PricewaterhouseCoopers, 1177 Avenue of the
-----------------------
Americas, New York, New York 10036, serve as the independent accountants for the
Trust.
Counsel. Goodwin, Procter & Hoar, LLP Exchange Place, Boston,
-------
Massachusetts 02109 serves as counsel to the Trust.
FINANCIAL STATEMENTS
--------------------
The financial statements of Asia Dynasty Fund, Global Hard Assets Fund,
Global Leaders Fund, International Investors Gold Fund, Gold/Resources Fund and
U.S. Government Money Fund for the fiscal year ended December 31, 1998, are
hereby incorporated by reference from the Funds' Annual Reports to Shareholders,
which are available at no charge upon written or telephone request to the Trust
at the address or telephone numbers set forth on the first page of this
Statement of Additional Information.
47
<PAGE>
APPENDIX
--------
PART A.
Corporate Bond Ratings
- ----------------------
Description of Moody's Investors Service, Inc. corporate bond ratings:
Aaa--Bonds which are rated Aaa are judged to be the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge". Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater or there may be other elements present which make the
long-term risks appear somewhat larger than in Aaa securities.
A--Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors given
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa--Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Moody's applies the numerical modifiers 1, 2 and 3 to each generic
rating classification from Aa through B. The modifier 1 indicates that the
security ranks in the higher end of its generic rating category; the modifier 2
indicates a mid-range ranking; and the modifier 3 indicates that the issue ranks
in the lower end of its generic rating category.
Description of Standard & Poor's Corporation corporate bond ratings;
AAA --Bonds rated AAA have the highest rating assigned by S&P to a debt
obligations. Capacity to pay interest and repay principal is extremely strong.
AA --Bonds rated AA have a very strong capacity to pay interest and
repay principal and differ from the higher rated issues only in small degree.
A --Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.
BBB --Bonds rated BBB are regarding as having an adequate capacity to
pay interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and repay principal
for bonds in this category than for bonds in higher rated categories.
48
<PAGE>
Preferred Stock Ratings
- -----------------------
Moody's Investors Service, Inc. describes its preferred stock ratings
as:
aaa -An issue which is rated aaa is considered to be a top-quality
preferred stock. This rating indicates good asset protection and the least risk
of dividend impairment within the universe of convertible preferred stocks.
aa -An issue which is rated aa is considered a high-grade preferred
stock. This rating indicates that there is reasonable assurance that earnings
and asset protection will remain relatively well maintained in the foreseeable
future.
a -An issue which is rated a is considered to be an upper-medium grade
preferred stock. While risks are judged to be somewhat greater than in the aaa
and aa classifications, earnings and asset protection are, nevertheless,
expected to be maintained at adequate levels.
baa -An issue which is rated baa is considered to be medium-grade,
neither highly protected nor poorly secured. Earnings and asset protection
appear adequate at present but may be questionable over any great length of
time.
ba -An issue which is rated ba is considered to have speculative
elements, and its future cannot be considered well assured. Earnings and asset
protection may be very moderate and not well safe-guarded during adverse
periods. Uncertainty of position characterizes preferred stocks in this class.
b -An Issue which is rated b generally lacks the characteristics of a
desirable investment. Assurance of dividend payments and maintenance of other
terms of the issue over any long period of time may be small.
caa -An issue which is rated caa is likely to be in arrears on dividend
payments. This rating designation does not purport to indicate the future status
of payment.
ca -An issue which is rated ca is speculative in a high degree and is
likely to be in arrears on dividends with little likelihood of eventual payment.
c -This is the lowest rated class of preferred or preference stock.
Issues so rated can be regarded as having extremely poor prospects of every
attaining any real investment standing.
Standard & Poor's Corporation describes its preferred stock ratings as:
AAA -This is the highest rating that may be assigned by Standard &
Poor's to a preferred stock issue and indicates an extremely strong capacity to
pay the preferred stock obligations.
AA -A preferred stock issue rated AA also qualifies as a high-quality
fixed income security. The capacity to pay preferred stock obligations is very
strong, although not as overwhelming as for issues rated AAA.
A -An issue rated A is backed by a sound capacity to pay the preferred
stock obligations, although it is somewhat more susceptible to the adverse
effect of changes in circumstances and economic conditions.
49
<PAGE>
BBB -An issue rated BBB is regarded as backed by an adequate capacity
to play the preferred stock obligations. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to make payments for a preferred
stock in this category than for issues in the A category.
BB,B,CCC -Preferred stocks rated BB,B, and CCC are regarded, on
balance, as predominantly speculative with respect to the issuer's capacity to
pay preferred stock obligations. BB indicates the lowest degree of speculation
and CCC the highest degree of speculation. While such issues will likely have
some quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
Short-Term Debt Ratings
- -----------------------
Description of Moody's short-term debt ratings:
Prime-1--Issuers rated Prime-1 (or supporting institutions) have a
superior ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by may of the following
characteristics: leading market positions in well-established industries, higher
rates of return of funds employed, conservative capitalization structure with
moderate reliance on debt and ample asset protection, broad margins in earnings
coverage of fixed financial charges and high internal cash generation and well-
established access to a range of financial markets and assured sources of
alternate liquidity.
Prime-2--Issuers rated Prime-2 (or supporting institutions) have a
strong ability for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected be external conditions. Ample alternate liquidity is maintained.
Prime-3--Issuers rated Prime-3 (or supporting institutions) have an
acceptable ability for repayment of senior short-term obligations. The effect of
industry characteristics and market compositions may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt protection measurements and may require relatively high financial leverage.
Adequate alternate liquidity is maintained.
Not Prime--Issuers rated Not Prime do not fall within any of the Prime
rating categories.
Description of Standard & Poor's short-term debt ratings:
A-1--This highest category indicates that the degree of safety
regarding timely payment is strong. Those issues determined to possess extremely
strong safety characteristics are denoted with a plus sign (+) designation.
A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated `A-1'.
A-3--Issues carrying this designation have adequate capacity for timely
payment. They are, however, more vulnerable to the adverse effects of changes in
circumstances than obligations carrying the higher designations.
B--Issues rated B are regarded as having only speculative capacity for
timely payment.
C--This rating is assigned to short-term debt obligations with a
doubtful capacity for payment.
50
<PAGE>
D--Debt rated D is in payment default. The D rating category is used
when interest payments or principal payments are not made on the date due, even
if the applicable grace period has not expired, unless S&P believes that such
payments will be made during such grace period.
PART B
- ------
The publications and services from which the Funds will quote
performance are: Micropal, Ltd. (an international investment fund information
service), Fortune, Changing Times, Money, U.S. News & World Report, Money Fund
Scorecard, Morningstar, Inc., Business Week, Institutional Investor, The Wall
Street Journal, Wall Street Transcripts, New York Post, Investment Company
Institute publications, The New York Times, Barron's, Forbes magazine, Research
magazine, Donaghues Money Fund Report, Donaghue's Money Letter, The Economist,
FACS, FACS of the Week, Financial Planning, Investment Daily, Johnson's Charts,
Mutual Fund Profiles (S&P), Powell Monetary Analysis, Sales & Marketing
Management Magazine, Life magazine, Black Enterprise, Fund Action, Speculators
Magazine, Time, NewsWeek, U.S.A Today, Wiesenberger Investment Service, Mining
Journal Quarterly, Mining Journal Weekly, Northern = 0Miner, Gold Gazette,
George Cross Newsletter, Engineering and Mining Journal, Weekly Stock Charts-
Canadian Resources, Jeweler's Circular Keystone, Financial Times, Journal of
Commerce, Mikuni's Credit Ratings, Money Market Directory of Pension Funds, Oil
and Gas Journal, Pension Funds and Their Advisers, Investment Company Data,
Inc., Mutual Funds Almanac, Callan Associates, Inc., Media General Financial
Services, Financial World, Pensions & Investment Age, Registered Investment
Advisors, Aden Analysis, Baxter Weekly, Congressional Yellow Book, Crain's New
York Business, Survey of Current Business, Treasury Bulletin, U.S. Industrial
Outlook, Value Line Survey, Bank Credit Analyst, S&P Corporation Records,
Euromoney, Moody's, Investment Dealer's Digest, Financial Mail, Financial Post,
Futures, Grant's Interest Rate Observer, Institutional Investor, International
Currency Review, International Bank Credit Analyst, Investor's Daily, German
Business Weekly, GATT Trade Annual Report, and Dimensional Fund Advisers, Inc.
MARKET INDEX DESCRIPTIONS
Morgan Stanley Capital International Europe, Australia, Far East Index
(US$ terms): An arithmetic, market value-weighted average of the performance of
over 1,079 companies listed on the stock exchanges of Europe, Australia, New
Zealand and the Far East. The index is calculated on a total return basis, which
includes reinvestment of gross dividends before deduction of withholding taxes.
Morgan Stanley Capital International Real Estate Index: An arithmetic,
market value-weighted average of the performance of property shares worldwide.
Morgan Stanley REIT Index: A capitalization-/weighted index with
dividends reinvested of most actively traded real estate invest trusts.
NAREIT Equity Index: A capitalization-weighted index comprised of
publicly traded equity real estate investment trusts excluding mortgages REITS.
Morgan Stanley Capital International World Index (US$ terms): An
arithmetic, market value-weighted average of the performance of over 1,515
companies listed on the stock exchanges of the following countries: Australia,
Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland,
Italy, Japan, Malaysia, the Netherlands, New Zealand, Norway, Singapore, Spain,
Sweden, Switzerland, the United Kingdom and the United States. The index is
calculated on a total return basis, which includes reinvestment of gross
dividends before deduction of withholding taxes. The combined
51
<PAGE>
market capitalization of these countries represents approximately 60% of the
aggregate market value of the stock exchanges of the above 22 countries.
Morgan Stanley Capital International Combined Far East ex-Japan Free
Index: An arithmetic, market value-weighted average of the performance of
companies listed on the stock exchanges of the following countries: Hong Kong,
Indonesia, Korea (Korea is included at 20% of its market capitalization in the
Combined Free Index), Malaysia, Philippines Free, Singapore Free and Thailand.
The combined market capitalization of these countries represents approximately
60% of the aggregate market value of the stock exchanges of the above seven
countries.
Salomon Brothers World Bond Index (US$ terms): Measures the total
return performance of high quality securities in major sectors of the
international bond market. The index covers approximately 600 bonds from 10
currencies: Australian Dollars, Canadian Dollars, European Currency Units,
French Francs, Japanese Yen, Netherlands Guilder, Swiss Francs, UK pounds
Sterling, US Dollars and German Deutsche Marks. Only high-quality, straight
issues are included. The index is calculated on both a weighted basis and an
unweighted basis. Generally, index samples for each market are restricted to
bonds with at least five years' remaining life.
Salomon Brothers World Government Bond Index (US$ terms): The WGBI
includes the Government bonds markets of the United States, Japan, Germany,
France, the United Kingdom, Canada, Italy, Australia, Belgium, Denmark, the
Netherlands, Spain, Sweden and Austria. Country eligibility is determined based
on market capitalization and investability criteria. A market's eligible issues
must total at least US$20 billion, Y2.5 trillion and DM30 billion for three
consecutive months for the market to be considered eligible for inclusion. Once
a market satisfies this criteria, it will be added at the end of the following
quarter. Guidelines by which a market may be excluded from the index have also
been established. A market will be excluded if the market capitalization of
eligible issues falls below half of all of the entry levels for six consecutive
months. Once again, the market will be removed at the end of the following
quarter. In addition, market entry barriers are a reason for exclusion despite
meeting the size criteria (for example, if a market discourages foreign investor
participation).
Salomon Brothers World Property Equity Index: A top-down, float
capitalization-weighted index that includes shares of approximately 380
companies in 19 countries.
Wilshire REIT Securities Index: A capitalization-weighted index
comprised of publicly traded equity real estate investment trusts excluding
mortgages REITS.
GPR - Life Global Real Estate Securities Index: A market
capitalization-weighted index of property companies in 33 countries.
Gross Domestic Product: The market value of all final goods and
services produced by labor and property supplied by residents of the United
States in a given period of time, usually one year. Gross Domestic Product
comprises (1) purchases of persons (2) purchases of governments (Federal, State
& Local) (3) gross private domestic investment (includes change in business
inventories) and (4) international trade balance from exports. Nominal GDP is
expressed in 1993 dollars. Real GDP is adjusted for inflation and is currently
expressed in 1987 dollars.
G:ALISON/VEFSAI/VEF50199.SAI
52
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
a.) Financial Statements included in Prospectus (Part A):
Financial Highlights or Selected per Share Data and Ratios of Asia
Dynasty Fund for the fiscal period ended December 31, 1993, and for
the years ended December 31, 1994, 1995 and 1996, for the year ended
December 31, 1997 (audited) for the year ended December 31, 1998
(audited); of Global Balanced Fund for the fiscal period ended
December 31, 1993 and for the years ended December 31, 1994, 1995 and
1996, for the year ended December 31, 1997 (audited) for the year
ended December 31, 1998 (audited); of Global Hard Assets Fund for
the fiscal period ended December 31, 1994 and for the years ended
December 31, 1995 and 1996, for the year ended December 31, 1997
(audited) for the year ended December 31, 1998 (audited); for
Gold/Resources Fund for the years ended December 31, 1987, 1988, 1989
and 1990 (not audited by Coopers & Lybrand LLP, the Fund's current
auditors), and for the years ended December 31, 1991, 1992, 1993,
1994, 1995 and 1996, for the year ended December 31, 1997 for the
year ended December 31, 1998 (audited); for International Investors
Gold Fund for the years ended December 31, 1992 and 1993, for the
fiscal period or year ended December 31, 1994 and for the years ended
December 31, 1995 and 1996, for the year ended December 31, 1997 for
the year ended December 31, 1998 (audited); and for U.S. Government
Money Fund for the years ended December 31, 1992, 1993, 1994, 1995
and 1996, for the year ended December 31, 1997 for the year ended
December 31, 1998 (audited);
The audited financial statements of the Registrant are included in Registrant's
Annual Reports to Shareholders for the fiscal year or period ended December 31,
1998, filed with the Securities and Exchange Commission under Section 30(b)(1)
of the Investment Company Act of 1940, and have been incorporated in Part B
hereof by reference:
Asia Dynasty Fund - Investment Portfolio at December 31, 1998;
Asia Dynasty Fund - Statement of Assets and Liabilities at December 31,
1998;
Asia Dynasty Fund - Statement of Operations for the year ended December 31,
1998;
Asia Dynasty Fund - Statement of Change in Net Assets for the year ended
December 31, 1997 and 1998;
Asia Dynasty Fund - Financial Highlights for the period September 1, 1993 to
December 31, 1993, the year ended December 31, 1994, 1995,
1996, 1997 and 1998;
Asia Dynasty Fund - Notes to Financial Statements Report of Independent
Accountants February 22, 1999.
Global Balanced Fund - Investment Portfolio at December 31, 1998;
Global Balanced Fund - Statement of Assets and Liabilities at December 31,
1998;
Global Balanced Fund - Statement of Operations for the year ended December 31,
1998;
Global Balanced Fund - Statement of Change in Net Assets for the year ended
December 31, 1997 and 1998;
Global Balanced Fund - Financial Highlights for the period December 20, 1993 to
December 31, 1993, the year ended December 31, 1994,
1995, 1996, 1997 and 1998;
Global Balanced Fund - Notes to Financial Statements Report of Independent
Accountants February 22, 1999.
Global Hard Assets Fund - Investment Portfolio at December 31, 1998;
Global Hard Assets Fund - Statement of Assets and Liabilities at December 31,
1998;
Global Hard Assets Fund - Statement of Operations for the year ended December
31, 1998;
Global Hard Assets Fund - Statement of Change in Net Assets for the year ended
December 31, 1997 and 1998;
Global Hard Assets Fund - Financial Highlights for the period from November 2,
1994 to December 31, 1994, for the period from April
24, 1996 to December 31, 1996, the year ended
December 31, 1995, 1996, 1997 and 1998;
Global Hard Assets Fund - Notes to Financial Statements Report of Independent
Accountants February 22, 1999.
Gold/Resources Fund - Investment Portfolio at December 31, 1998;
Gold/Resources Fund - Statement of Assets and Liabilities at December 31,
1998;
Gold/Resources Fund - Statement of Operations for the year ended December 31,
1998;
Gold/Resources Fund - Statement of Change in Net Assets for the year ended
December 31, 1997 and 1998;
Gold/Resources Fund - Financial Highlights for the year ended December 31,
1993, 1994, 1995, 1996, 1997 and 1998;
Gold/Resources Fund - Notes to Financial Statements Report of Independent
Accountants February 22, 1999.
International Investors Gold Fund - Investment Portfolio at December 31,
1998;
International Investors Gold Fund - Statement of Assets and Liabilities at
December 31, 1998;
International Investors Gold Fund - Statement of Operations for year ended
December 31, 1998;
International Investors Gold Fund - Statement of Change in Net Assets for the
year ended December 31, 1997 and 1998;
International Investors Gold Fund - Financial Highlights for the year ended
December 31, 1993, 1994, 1995, 1996, 1997
and 1998;
International Investors Gold Fund - Notes to Financial Statements Report of
Independent Accountants February 22,
1999.
U.S. Government Money Fund - Investment Portfolio at December 31, 1998;
U.S. Government Money Fund - Statement of Assets and Liabilities at December 31,
1998;
U.S. Government Money Fund - Statement of Operations for year ended December 31,
1998;
U.S. Government Money Fund - Statement of Change in Net Assets for the year
ended December 31, 1997 and 1998;
U.S. Government Money Fund - Financial Highlights for the year ended December
31, 1993, 1994, 1995, 1996, 1997 and 1998;
U.S. Government Money Fund - Notes to Financial Statements Report of Independent
Accountants February 22, 1999.
b) Exhibits (An * denotes inclusion in this filing)
(1)(a) Master Trust Agreement (incorporated by reference to Registration
Statement No. 2-97596); Form of First Amendment to Master Trust
Agreement (incorporated by reference to Registration Statement No. 2-
97596). Form of Second Amendment to Master Trust Agreement
(incorporated by reference to Pre-Effective Amendment No. 1). Form of
Third Amendment to Master Trust Agreement (incorporated by reference to
Post-Effective Amendment No. 1). Form of Fourth Amendment to Master
Trust Agreement (incorporated by reference to Post-Effective Amendment
No. 3). Form of Fifth Amendment to the Master Trust Agreement, adding
World Income Fund as a series to the trust (incorporated by reference
to Post-Effective Amendment No. 7). Form of Sixth Amendment to Master
Trust Agreement, adding International Investors Fund as a series of the
Trust and establishing investment limitations therefore, respectively,
(incorporated by reference to Post-Effective Amendment No. 17). Form of
Seventh Amendment to the Master Trust Agreement, adding Short-Term
World Income Fund and International Equities Fund as series of the
Trust (incorporated by reference to Post-Effective Amendment No. 19).
(1)(b) Form of Amended and Restated Master Trust Agreement (incorporated by
reference to Post-Effective Amendment No. 20); Form of Amendment to the
Master Trust Agreement changing the name of Short-Term World Income
Fund to Short-Term World Income Fund-C and changing the name of
International Equities Fund to International Growth Fund (incorporated
by reference to Post-Effective Amendment No. 20); Form of Second
Amendment to the Amended and Restated Master Trust Agreement adding
Asia Dynasty Fund as a series of the Trust (incorporated by reference
to Post-Effective Amendment No. 23); Third Amendment to the Amended and
Restated Master Trust Agreement adding Global Balanced Fund as a series
of the Trust and changing the name of International Investors Fund to
International Investors Gold Fund (incorporated by reference to Post-
Effective Amendment No. 29); Fourth Amendment to the Amended and
Restated Master Trust Agreement adding Global SmallCap Fund and Asia
Infrastructure Fund as series of the Trust (incorporated by reference
to Post-Effective Amendment No. 30); Form of Fifth Amendment to the
Amended and Restated Master Trust Agreement (incorporated by reference
to Post-Effective Amendment No. 35); Form of Sixth Amendment to the
Amended and Restated Master Trust Agreement (incorporated by reference
to Post-Effective Amendment No. 35); Seventh Amendment to Amended and
Restated Master Trust Agreement adding Global Hard Assets Fund as a
series of the Trust (incorporated by reference to Post-Effective
Amendment No. 36); Eighth Amendment to Amended and Restated Master
Trust Agreement adding Gold Opportunity Fund as a series of the Trust
(incorporated by reference to Post-Effective Amendment No. 37); Ninth
Amendment to the Amended and Restated Master Trust Agreement adding
Class B shares to Asia Infrastructure Fund, Global Hard Assets Fund and
Gold Opportunity Fund series of the Trust (incorporated by reference to
Post-Effective Amendment No. 39).
(1)(c) Tenth Amendment to Amended and Restated Master Trust Agreement adding
Emerging Markets Growth Fund (to be filed by Amendment).
(2) By-laws of Registrant (incorporated by reference to Registration
Statement No. 2-97596).
(3) Not Applicable.
(4)(a) Form of certificate of shares of beneficial interest of the World Trend
Fund (incorporated by reference to Pre-Effective Amendment No. 1).
Forms of certificates of shares of beneficial interest of
Gold/Resources Fund and
<PAGE>
U.S. Government Money Fund (incorporated by reference to Post-Effective
Amendment No. 1); Form of certificate of shares of beneficial interest
of the World Income Fund (incorporated by reference to Post-Effective
Amendment No. 6); Forms of certificates of shares of beneficial
interest of the Short-Term World Income Fund-C and International Growth
Fund (incorporated by reference to Post-Effective Amendment No. 23);
Form of certificate of shares of beneficial interest of Asia Dynasty
Fund (incorporated by reference to Post-Effective Amendment No. 23);
Form of certificate of Class B shares of beneficial interest of Asia
Dynasty Fund (incorporated by reference to Post-Effective Amendment No.
26); Form of certificate of Class A and Class B shares of beneficial
interest of Global Balanced Fund (incorporated by reference to Post-
Effective Amendment No. 26); Form of certificate of Class B shares of
beneficial interest of the World Income Fund (incorporated by reference
to Post-Effective Amendment No. 29); Certificate of Class A shares of
beneficial interest of the World Income Fund; Form of certificate of
Class A and Class B shares of beneficial interest of Global SmallCap
Fund and Asia Infrastructure Fund (incorporated by reference to Post-
Effective Amendment No. 30); Form of certificate of Class A and Class C
shares of beneficial interest of Global Hard Assets Fund (incorporated
by reference to Post-Effective Amendment No. 33); Form of certificate
of Class A and Class C shares of beneficial interest of Gold
Opportunity Fund (incorporated by reference to Post-Effective Amendment
No. 35); Form of certificate of Class B shares of beneficial interest
of Asia Infrastructure Fund, Global Hard Assets Fund and Gold
Opportunity Fund (incorporated by reference to Post-Effective Amendment
No. 39.
(4)(b) Instruments defining rights of security holders (See Exhibits (1) and
(2) above).
(5)(a) Advisory Agreement (incorporated by reference to Post-Effective
Amendment No. 1).
(5)(b) Letter Agreement to add Gold/Resources Fund and U.S. Government Money
Fund (incorporated by reference to Post-Effective Amendment No. 1);
Letter Agreement to add World Income Fund (incorporated by reference to
Post-Effective Amendment No. 6)
(5)(c) Form of Advisory Agreement between Van Eck Associates Corporation and
Van Eck Funds with respect to Asia Dynasty Fund (incorporated by
reference to Post-Effective Amendment No. 23).
(5)(d) Advisory Agreement between Van Eck Associates Corporation and Van Eck
Funds with respect to Global Balanced Fund (incorporated by reference
to Post-Effective Amendment No. 31).
(5)(e) Letter Agreement to add Global SmallCap Fund and Asia Infrastructure
Fund (incorporated by reference to Post-Effective Amendment No. 31);
and. Letter Agreement to add Gold/Resources Fund and International
Investors Gold Fund (incorporated by reference to Post-Effective
Amendment No. 34)
(5)(f) Advisory Agreement between Van Eck Associates Corporation and Global
Hard Assets Fund (incorporated by reference to Post-Effective Amendment
No. 36).
(5)(g) Form of Letter Agreement to add Gold Opportunity Fund (incorporated by
reference to Post-Effective Amendment No. 37).
(5)(h) Sub-Advisory Agreement among Fiduciary International, Inc., Van Eck
Associates Corporation and Van Eck Funds with respect to Global
Balanced Fund (incorporated by reference to Post-Effective Amendment
No. 27).
(5)(i) Form of Advisory Agreement between Van Eck Associates Corporation and
Van Eck Funds with respect to Emerging Markets Growth Fund (originally
called Global Emerging Markets Fund) (incorporated by reference to
Post-Effective Amendment No. 36).
(5)(k) Form of Sub-Advisory Agreement among Peregrine Asset Management (Hong
Kong) Limited, Van Eck Associates Corporation and Van Eck Funds with
respect to Emerging Markets Growth Fund (originally called Global
Emerging Markets Fund) (incorporated by reference to Post-Effective
Amendment No.46).
2
<PAGE>
(6)(a) Distribution Agreement (incorporated by reference to Post-Effective
Amendment No. 1).
(6)(b) Letter Agreement to add Gold/Resources Fund and U.S. Government Money
Fund (incorporated by reference to Post-Effective Amendment No. 1);
Letter Agreement to add World Income Fund (incorporated by reference
to Post-Effective Amendment No. 6); and Letter Agreement to add Asia
Dynasty Fund (incorporated by reference to Post-Effective Amendment
No. 23)
(6)(c) Letter Agreement to add Global SmallCap Fund and Asia Infrastructure
Fund (incorporated by reference to Post-Effective Amendment No. 31);
Letter Agreement to add Gold/Resources Fund-C, International
Investors Gold Fund-C, Global SmallCap Fund-C and Asia Infrastructure
Fund-C (incorporated by reference to Post-Effective Amendment No.
34); Letter Agreement to add Global Hard Assets Fund (incorporated by
reference to Post-Effective Amendment No. 36); Form of Letter
Agreement to add Gold Opportunity Fund (incorporated by reference to
Post-Effective Amendment No. 37); Form of Letter Agreement adding
Asia Select Portfolios (incorporated by reference to Post-Effective
Amendment No. 41); and Form of Letter Agreement adding Core
International Index Fund (incorporated by reference to Post-Effective
Amendment No. 42)
(6)(d) Amendment to Form of Selling Group Agreement (incorporated by
reference to Post-Effective Amendment No. 9).
(6)(e) Selling Group Agreement (incorporated by reference to Post-Effective
Amendment No. 12).
(6)(f) Letter Agreement to add Emerging Markets Growth Fund (to be filed by
amendment).
(7) Form of Deferred Compensation Plan (incorporated by reference to
Post-Effective Amendment No. 40).
(8) Global Custody Agreement, as amended (to be filed by amendment).
(9)(a) Forms of Procedural Agreement, Customer Agreement and Safekeeping
Agreement with Merrill Lynch Futures Inc. utilized by World Income
Fund, and Forms of Procedural Agreement, Customer Agreement and Safe
Keeping Agreement with Morgan Stanley & Co. utilized by World Income
Fund (incorporated by reference to Post-Effective Amendment No. 9).
(9)(b) Commodity Customer's Agreement between World Income Fund and Morgan
Stanley & Co. (incorporated by reference to Post-Effective Amendment
No. 10 ).
(9)(c) Agreement and Plan of Redomicile and Reorganization between the Trust
and International Investors Incorporated respecting the
reorganization of International Investors Incorporated into the Trust
as its fifth series, International Investors. (incorporated by
reference to Post-Effective Amendment No. 17).
(9)(d) Form of Accounting and Administrative Services Agreement with respect
to Asia Dynasty Fund (Incorporated by reference to Post-effective
Amendment No. 23).
(9)(e) Accounting and Administrative Services Agreement with respect to
Global Balanced Fund (incorporated by reference to Post-effective
Amendment No. 31).
(9)(f) Letter Agreement to add Global SmallCap Fund and Asia Infrastructure
Fund (incorporated by reference to Post-effective Amendment No. 31)
and Letter Agreement to add Gold/Resources Fund and International
Investors Gold Fund (incorporated by reference to Post-effective
Amendment No. 34). Letter Agreement to add Global Hard Assets
3
<PAGE>
Fund (incorporated by reference to Post-effective Amendment No. 36).
Letter Agreement to add Gold Opportunity Fund (incorporated by
reference to Post-effective Amendment No. 37).
(9)(g) Form of Accounting and Administrative Services Agreement with respect
to Global Emerging Markets Fund (incorporated by reference to Post-
Effective Amendment No. 36).
(9)(h) Letter Agreement to add Emerging Markets Growth Fund (to be filed by
amendment).
(10) Opinion of Goodwin, Procter & Hoar, including consent, with regard to
World Trends Fund (incorporated by reference to Pre-Effective
Amendment No. 1); Opinion Of Fund (incorporated by reference to Post-
Effective Amendment No. 1); Opinion of Goodwin, Procter & Hoar with
regard to World Income Fund (incorporated by reference to Post-
Effective Amendment No. 7); Opinion of Goodwin, Procter & Hoar and
consent with regard to International Investors (incorporated by
reference to Post-Effective Amendment No. 17); Opinion of Goodwin,
Procter and Hoar with regard to Asia Dynasty Fund (incorporated by
reference to Post-effective Amendment No. 24); Opinion of Goodwin,
Procter & Hoar with respect to the issuance of Class B shares of Asia
Dynasty Fund and with respect to the issuance of Class A and Class B
shares of Global Balanced Fund (incorporated by reference to Post-
effective Amendment No. 27); Opinion of Goodwin, Procter & Hoar with
respect to the issuance of Class A and Class B shares of Asia
Infrastructure Fund and Global SmallCap Fund (incorporated by
reference to Post-effective Amendment No. 31) and Opinion of Goodwin,
Procter & Hoar, including consent, with regard to the issuance of
Class A and Class C shares of Global Hard Assets Fund (incorporated
by reference to Post-effective Amendment No. 36). Opinion of Goodwin,
Procter & Hoar, including consent, with regard to the issuance of
Class A and Class C shares of Gold Opportunity Fund (incorporated by
reference to Post-Effective Amendment No. 37). Opinion of Goodwin,
Proctor & Hoar including consent, with regard to the issuance of
Class B shares of Asia Infrastructure Fund, Gold Opportunity Fund and
Global Hard Assets Fund (incorporated by reference to Post-Effective
Amendment No. 40).
(10)(b) Opinion of Goodwin, Procter & Hoar, with respect to issuance of Class
A, Class B and Class C shares of Emerging Markets Growth Fund (to be
filed by amendment).
(11)* Consent of Independent Accountants
(12) Not Applicable.
(13) Not Applicable.
(14)(a) Forms of prototype "Keogh" and 403(b)(7) Plans utilized by registrant
(incorporated by reference to Post-Effective Amendment No. 10).
(14)(b) Registrant's revised form of IRA Plan (incorporated by reference to
Post-Effective Amendment No. 10).
(14)(c) Registrant's form of Simplified Employee Plan (incorporated by
reference to Post-Effective Amendment No. 10).
(14)(d) Amendments to the Retirement Plan for Self-Employed Individuals,
Partnerships and Corporation using shares of Van Eck Funds and
International Investors Incorporated; Profit Sharing Plan Adoption
Agreement. (incorporated by reference to Post-Effective Amendment No.
14).
(15)(a) Plan of Distribution with respect to International Growth Fund and
Asia Dynasty Fund Incorporated by reference to Post-Effective
Amendment No. 23). Form of Plan of Distribution with respect to Class
B shares of Asia Dynasty Fund (Incorporated by reference to Post-
Effective Amendment No. 25). Form of Plan of Distribution with
respect to Global Balanced Fund (Class A and B) and World Income Fund
(Class B) (incorporated by reference to Post-Effective Amendment No.
26). Letter Agreement to add Global SmallCap Fund (Class A) and Asia
Infrastructure Fund (Class A) (incorporated by reference to
Gold/Resources Fund (Class C), International Investors Gold Fund
(Class C), Global (Class A) (incorporated by reference to Post-
Effective Amendment No. 36). Form of Letter Agreement to add Gold
Opportunity Fund (Class A and Class C) and Letter Agreement to add
Global Hard Assets Fund (Class C) (incorporated by reference to Post-
Effective Amendment No. 37. Form of Plan of Distribution with respect
to Asia Infrastructure Fund (Class B), Global Hard Assets Fund (Class
B) and Gold Opportunity Fund
4
<PAGE>
(Class B) (incorporated by reference to Post-Effective Amendment No.
39).
(15)(b) Letter Agreement to add Emerging Markets Growth Fund (Class A/Class
B/Class C).
(16)* Computation of Performance Quotation.
(17) * Financial Data Schedule.
(18) Powers of Attorney (incorporated by reference from Post-Effective
Amendment No. 5).
(19) Not Applicable.
ITEM 25. Persons controlled by or under common control with Registrant
Not Applicable.
ITEM 26. Number of Holders of Securities
Set forth below are the number of Record Holders as of February 19, 1999 of
each series of the Registrant:
<TABLE>
<CAPTION> FUND
NAME NUMBER OF RECORD HOLDERS
---- ------------------------
CLASS A CLASS B CLASS C
------- ------- -------
<S> <C>
Global Balanced Fund..... 2,392 306
Asia Dynasty Fund........ 1,780 548
International Investors
Gold Fund............... 35,179
Gold/Resources Fund...... 11,845
Global Hard Assets Fund.. 2,602 582 448
U.S. Government Money
Fund.................... 1,842
</TABLE>
ITEM 27. Indemnification
Reference is made to Article VI of the Master Trust Agreement of the
Registrant, as amended, previously filed as Exhibit (1) to the Registration
Statement.
Insofar as indemnification by the Registrant for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers, underwriters
and controlling persons of the Registrant, pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification is against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a trustee,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted against the Registrant by such
trustee, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
ITEM 28. Business and other Connections of Investment Adviser
Reference is made to Form ADV of Van Eck Associates Corporation (File No. 801-
21340), as currently on file with the Securities and Exchange Commission, and
to the caption "Management" in the Registrant's Prospectus and to the captions
"The Distributor", "Investment Advisory Services" and "Trustees and Officers"
in the Registrant's Statement of Additional Information.
5
<PAGE>
ITEM 29. Principal Underwriters
(a) Van Eck Securities Corporation, principal underwriter for the Registrant,
also distributes shares of Van Eck Worldwide Insurance Trust and Van Eck/Chubb
Funds, Inc.
(b) The following table presents certain information with respect to each
director and officer of Van Eck Securities Corporation:
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION AND OFFICES POSITION AND OFFICE
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
- ------------------ -------------------- -------------------
<S> <C> <C>
John C. van Eck Chairman and Director Chairman and President
99 Park Avenue
New York, NY 10016
Jan van Eck President and Director Trustee
99 Park Avenue
New York, NY 10016
Sigrid S. van Eck Vice President and Assistant Treasurer and Director None
270 River Road
Briarcliff Manor,
NY
Fred M. van Eck Director None
99 Park Avenue
New York, NY 10016
Derek van Eck Director Trustee and Executive Vice President
99 Park Avenue
New York, NY 10016
Bruce J. Smith Vice President, Chief Financial Officer, Treasurer and Controller Vice President and Treasurer
99 Park Avenue
New York, NY 10016
Thomas Elwood Vice President, General Counsel and Secretary Vice President and Secretary
99 Park Avenue
New York, NY 10016
Susan C. Lashley Managing Director, Operations Vice President
99 Park Avenue
New York, NY 10016
Keith Fletcher Senior Managing Director None
99 Park Avenue
New York, NY 10016
</TABLE>
(c) Not Applicable
6
<PAGE>
ITEM 30. Location of Accounts and Records
The following table sets forth information as to the location of accounts,
books and other documents required to be maintained pursuant to Section 31(a)
of the Investment Company Act of 1940, as amended, and the Rules promulgated
thereunder.
<TABLE>
<CAPTION>
ACCOUNTS, BOOKS AND DOCUMENTS LISTED BY
REFERENCE TO SPECIFIC SUBSECTION OF
17 CFR 270 31A-1 TO 31A-3 PERSON IN POSSESSION AND ADDRESS
--------------------------------------- --------------------------------
<S> <C>
31a-1(b)(1) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(2)(i) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(2)(ii) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(2)(iii) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(2)(iv) DST Systems, Inc.
21 West Tenth Street
Kansas City, Missouri 64105
31a-1(b)(3) Not Applicable
31a-1(b)(4) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(5) Fiduciary International, Inc.
Two World Trade Center
New York, New York 10048
Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(6) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(7) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(8) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
ACCOUNTS, BOOKS AND DOCUMENTS LISTED BY
REFERENCE TO SPECIFIC SUBSECTION OF
17 CFR 270 31A-1 TO 31A-3 PERSON IN POSSESSION AND ADDRESS
--------------------------------------- --------------------------------
<S> <C>
31a-1(b)(9) Fiduciary International, Inc.
Two World Trade Center
New York, New York 10048
Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(10) Fiduciary International, Inc.
Two World Trade Center
New York, New York 10048
Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(11) Fiduciary International, Inc.
Two World Trade Center
New York, New York 10048
Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(b)(12) Fiduciary International, Inc.
Two World Trade Center
New York, New York 10048
Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(c) Not Applicable
31a-1(d) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-1(e) Not Applicable
31a-1(f) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-2(a)(1) Van Eck Associate's Corporation
99 Park Avenue
New York, NY 10016
DST Systems, Inc.
21 West Tenth Street
Kansas City, MO 64105
Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
Fiduciary International, Inc.
Two World Trade Center
New York, NY 10048
31a-2(b) Not Applicable
31a-2(c) Van Eck Securities Corporation
99 Park Avenue
New York, NY 10016
31a-2(d) Not Applicable
31a-2(e) Van Eck Associates Corporation
99 Park Avenue
New York, NY 10016
31a-3 Not Applicable
All Other Records Van Eck Funds
pursuant to the Rule 99 Park Avenue
New York, NY 10016
</TABLE>
ITEM 31. Management Services
- ----------------------------
None
ITEM 32. Undertakings
------------
Registrant undertakes to file a post-effective amendment using
financial statements which need not be certified within four to six months from
the effective date of Global Real Estate Fund.
8
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Post-Effective Amendment to the
Registration Statement pursuant to Rule 485(a) under the Securities Act of 1933
and has duly caused this Amendment to the Registration Statement on Form N-1A to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York, State of New York, on the 22nd day of February, 1999.
VAN ECK FUNDS
By: /s/ John C. van Eck
----------------------------------
John C. van Eck, President
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in the
capacities and on the date indicated:
Signature Title Date
/s/ John C. van Eck
___________________ Chairman and President 2/22/99
John C. van Eck
/s/ Bruce J. Smith
___________________ Chief Financial Officer 2/22/99
Bruce J. Smith
/s/ Jeremy Biggs
___________________ Trustee 2/22/99
Jeremy Biggs
/s/ Richard Cowell
___________________ Trustee 2/22/99
Richard Cowell
/s/ Philip DeFeo Trustee 2/22/99
- -------------------
Philip DeFeo
/s/ Wesley G. McCain
___________________ Trustee 2/22/99
Wesley G. McCain
/s/ David J. Olderman
___________________ Trustee 2/22/99
David J. Olderman
/s/ Ralph F. Peters
___________________ Trustee 2/22/99
Ralph F. Peters
<PAGE>
/s/ Richard Stamberger
_______________________ Trustee 2/22/99
Richard Stamberger
/s/ Derek S. van Eck
_______________________ Trustee 2/22/99
Derek S. van Eck
/s/ Jan F. van ECK
_______________________ Trustee 2/22/99
Jan F. van Eck
/s/ John C. van Eck
_________________________
<PAGE>
Exhibit Index
-------------
<TABLE>
<CAPTION>
Exhibit No. Item
- ----------- ----
<S> <C>
Exhibit 11 Consent of Independent Accountants.
Exhibit 17 Financial Data Schedule.
</TABLE>
<PAGE>
VAN ECK GLOBAL FUND
MASTER TRUST AGREEMENT
April 3, 1985
1983 Goodwin, Procter & Hoar
All Rights Reserved
<PAGE>
VAN ECK GLOBAL FUND
-------------------
MASTER TRUST AGREEMENT
----------------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I. NAME AND DEFINITIONS 1
- ---------- --------------------
Section 1.1 Name 1
Section 1.2 Definitions 1
(a) "Trust" 1
(b) "Trustees" 1
(c) "Shares" 2
(d) "Sub-Trust" or "Series" 2
(e) "Shareholder" 2
(f) "1940 Act" 2
(g) "Commission" 2
(h) "Declaration of Trust" 2
(i) "By-Laws" 2
(j) "Securities" or "Security" 2
ARTICLE II. PURPOSE OF TRUST 2
- ----------- ----------------
ARTICLE III. THE TRUSTEES 2
- ------------ ------------
Section 3.1 Number, Designation, Election, Term, etc. 2
(a) Initial Trustee(s) 2
(b) Number 2
(c) Election and Term 3
(d) Resignation and Retirement 3
(e) Removal 3
(f) Vacancies 3
(g) Effect of Death, Resignation, etc. 4
(h) No Accounting 4
Section 3.2 Powers of Trustees 4
(a) Investments 5
(b) Disposition of Assets 5
(c) Ownership Powers 5
(d) Subscription 5
(e) Form of Holding 5
(f) Reorganization, etc. 5
(g) Voting Trusts, etc. 6
(h) Compromise 6
(i) Partnerships, etc. 6
(j) Borrowing and Security 6
(k) Guarantees, etc. 6
(l) Insurance 6
(m) Pensions, etc. 7
</TABLE>
(i)
<PAGE>
<TABLE>
<S> <C>
Section 3.3 Certain Contracts 7
(a) Advisory 7
(b) Administration 8
(c) Distribution 8
(d) Custodian and Depository 8
(e) Transfer and Dividend Dis-
bursing Agency 8
(f) Shareholder Servicing 8
(g) Accounting 8
Section 3.4 Payment of Trust Expenses and Compensation of
Trustees 9
Section 3.5 Ownership of Assets of the Trust 10
ARTICLE IV. SHARES 10
- ----------- ------
Section 4.1 Description of Shares 10
Section 4.2 Establishment and Designation of Sub-Trusts 11
(a) Assets Belonging to Sub-Trusts 11
(b) Liabilities Belonging to Sub-Trusts 12
(c) Dividends 12
(d) Liquidation 13
(e) Voting 13
(f) Redemption by Shareholder 13
(g) Redemption by Trust 14
(h) Net Asset Value 14
(i) Transfer 15
(j) Equality 15
(k) Fractions 15
(l) Conversion Rights 15
(m) Termination of Sales 15
Section 4.3 Ownership of Shares 16
Section 4.4 Investments in the Trust 16
Section 4.5 No Pre-emptive Rights 16
Section 4.6 Status of Shares and Limitation of
Personal Liability 16
ARTICLE V. SHAREHOLDERS' VOTING POWERS AND MEETINGS 17
- ---------- ----------------------------------------
Section 5.1 Voting Powers 17
Section 5.2 Meetings 17
Section 5.3 Record Dates 18
</TABLE>
(ii)
<PAGE>
<TABLE>
<S> <C>
Section 5.4 Quorum and Required Vote 18
Section 5.5 Action by Written Consent 18
Section 5.6 Inspection of Records 19
Section 5.7 Additional Provisions 19
Section 5.8 Shareholder Communications 19
ARTICLE VI. LIMITATION OF LIABILITY; INDEMNIFICATION 20
- ----------- ----------------------------------------
Section 6.1 Trustees, Shareholders, etc. Not Personally
Liable; Notice 20
Section 6.2 Trustee's Good Faith Action; Expert
Advice; No Bond or Surety 20
Section 6.3 Indemnification of Shareholders 21
Section 6.4 Indemnification of Trustees, Officers, etc. 21
Section 6.5 Compromise Payment 22
Section 6.6 Indemnification Not Exclusive, etc. 23
Section 6.7 Liability of Third Persons Dealing with
Trustees 23
ARTICLE VII. MISCELLANEOUS 23
- ------------ -------------
Section 7.1 Duration and Termination of Trust 23
Section 7.2 Reorganization 24
Section 7.3 Amendments 24
Section 7.4 Filing of Copies; References; Headings 25
Section 7.5 Applicable Law 26
Section 7.6 Name of Trust 26
</TABLE>
(iii)
<PAGE>
VAN ECK GLOBAL FUND
-------------------
MASTER TRUST AGREEMENT
----------------------
AGREEMENT AND DECLARATION OF TRUST made at Boston, Massachusetts this 3rd
day of April, 1965, by the Trustee hereunder, and by the holder of shares of
beneficial interest to be issued hereunder as hereinafter provided.
WITNESSETH
WHEREAS this Trust has been formed to carry on the business of an
investment company; and
WHEREAS this Trust is authorized to issue its shares of beneficial interest
in separate series, each separate series to be a Sub-Trust hereunder, all in
accordance with the provisions hereinafter set forth; and
WHEREAS the Trustees have agreed to manage all property coming into their
hands as trustees of a Massachusetts business trust in accordance with the
provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same upon the
following terms and conditions for the benefit of the holders from time to time
of shares of beneficial interest in this Trust or Sub-Trusts created hereunder
as hereinafter set forth.
ARTICLE I
---------
NAME AND DEFINITIONS
--------------------
Section 1.1 Name. This Trust shall be known as "VAN ECK GLOBAL FUND" and
----
the Trustees shall conduct the business of the Trust under that name or any
other name or names as they may from time to time determine.
Section 1.2 Definitions. Whenever used herein, unless otherwise required
-----------
by the context or specifically provided:
(a) The "Trust" refers to the Massachusetts business trust established by
this Agreement and Declaration of Trust, as amended from time to time, inclusive
of each and every Sub-Trust established hereunder;
<PAGE>
(b) "Trustees" refers to the Trustees of the Trust and of each Sub-Trust
hereunder named herein or elected in accordance with Article III;
(c) "Shares" refers to the transferable units of interest into which the
beneficial interest in the Trust and each Sub-Trust of the Trust (as the context
may require) shall be divided from time to time;
(d) "Series" refers to Series of Shares established and designated under or
in accordance with the provisions of Article IV, each of which Series shall be a
Sub-Trust of the Trust;
(e) "Shareholder" means a record owner of Shares;
(f) The "1940 Act" refers to the Investment Company Act of 1940 and the
Rules and Regulations thereunder, all as amended from time to time;
(g) The term "Commission" shall have the meaning given it in the 1940 Act;
(h) "Declaration of Trust" shall mean this Agreement and Declaration of
Trust as amended or restated from time to time;
(i) "By-Laws" shall mean the By-Laws of the Trust as amended from time to
time; and
(j) "Securities" or "Security" shall mean and include, but shall not be
limited to, those securities described in Section 2(a)(36) of the 1940 Act.
ARTICLE II
----------
PURPOSE OF TRUST
----------------
The purpose of the Trust is to operate as an investment company and to
offer Shareholders of the Trust and each Sub-Trust of the Trust one or more
investment programs primarily in Securities or other property.
ARTICLE III
-----------
THE TRUSTEES
------------
Section 3.1 Number, Designation, Election, Term, etc.
-----------------------------------------
(a) Initial Trustee(s). Upon his execution of this Declaration of Trust
------------------
or a counterpart hereof or some other writing in which he accepts such
Trusteeship and agrees to the provisions
2
<PAGE>
hereof, H. Frederick Hagemann, Jr. shall become a Trustee hereof and of each
Sub-Trust hereunder.
(b) Number. The Trustee(s) serving as such, whether named above or
------
hereafter becoming a Trustee, may increase or decrease the number of Trustees to
a number other than the number theretofore determined. No decrease in the number
of Trustees shall have the effect of removing any Trustee from office prior to
the expiration of his term, but the number of Trustees may be decreased in
conjunction with the removal of a Trustee pursuant to subsection (e) of this
Section 3.1.
(c) Election and Term. The Trustees shall be elected by the Shareholders
-----------------
of the Trust. Each Trustee, whether named above or hereafter becoming a Trustee,
shall serve as a Trustee of the Trust and of each Sub-Trust hereunder during the
lifetime of this Trust and until its termination as hereinafter provided except
as such Trustee sooner dies, resigns, retires or is removed. Subject to Section
16(a) of the 1940 Act, the Trustees may elect their own successors and may,
pursuant to Section 3.1(f) hereof, appoint Trustees to fill vacancies.
(d) Resignation and Retirement. Any Trustee may resign his trust or
--------------------------
retire as a Trustee, by written instrument signed by him and delivered to the
other Trustees or to any officer of the Trust, and such resignation or
retirement shall take effect upon such delivery or upon such later date as is
specified in such instrument and shall be effective as to the Trust and each
Sub-Trust hereunder.
(e) Removal. Any Trustee may be removed with or without cause at any
-------
time: (i) by written instrument signed by at least two-thirds of the number of
Trustees prior to such removal, specifying the date upon which such removal
shall become effective; or (ii) by vote of Shareholders holding not less than
two-thirds of the Shares then outstanding cast in person or by proxy at any
meeting called for the purpose; or (iii) by a written declaration signed by
Shareholders holding not less than two-thirds of the Shares then outstanding and
filed with the Trust's Custodian. Any such removal shall be effective as to the
Trust and each Sub-Trust hereunder.
(f) Vacancies. Any vacancy or anticipated vacancy resulting from any
---------
reason, including without limitation the death, resignation, retirement, removal
or incapacity of any of the Trustees, or resulting from an increase in the
number of Trustees by the other Trustees may (but need not unless required by
the 1940 Act) be filled by a majority of the remaining Trustees, subject to the
provisions of Section 16(a) of the 1940 Act, through the appointment in writing
of such other person as such remaining Trustees in their discretion shall
determine and such appointment shall be effective-upon the written acceptance of
3
<PAGE>
the person named therein to serve as a Trustee and agreement by such person to
be bound by the provisions of this Declaration of Trust, except that any such
appointment in anticipation of a vacancy to occur by reason of retirement,
resignation, or increase in number of Trustees to be effective at a later date
shall become effective only at or after the effective date of said retirement,
resignation, or increase in number of Trustees. As soon as any Trustee so
appointed shall have accepted such appointment and shall have agreed in writing
to be bound by this Declaration of Trust and the appointment is effective, the
Trust estate shall vest in the new Trustee, together with the continuing
Trustees, without any further act or conveyance.
(g) Effect of Death, Resignation, etc. The death, resignation,
---------------------------------
retirement, removal, or incapacity of the Trustees, or any one of them, shall
not operate to annul or terminate the Trust or any Sub-Trust here-under or to
revoke or terminate any existing agency or contract created or entered into
pursuant to the terms of this Declaration of Trust.
(h) No Accounting. Except to the extent required by the 1940 Act or under
-------------
circumstances which would justify his removal for cause, no person ceasing to be
a Trustee as a result of his death, resignation, retirement, removal or
incapacity (nor the estate of any such person) shall be required to make an
accounting to the Shareholders or remaining Trustees upon such cessation.
Section 3.2 Powers of Trustees. Subject to the provisions of this
------------------
Declaration of Trust, the business of the Trust shall be managed by the
Trustees, and they shall have all powers necessary or convenient to carry out
that responsibility and the purpose of the Trust. Without limiting the
foregoing, the Trustees may adopt By-Laws not inconsistent with this Declaration
of Trust providing for the conduct of the business and affairs of the Trust and
may amend and repeal them to the extent that such By-Laws do not reserve that
right to the Shareholders; they may from time to time in accordance with the
provisions of Section 4.1 hereof establish Sub-Trusts, each such Sub-Trust to
operate as a separate and distinct investment medium and with separately defined
investment objectives, policies and investment purposes; they may as they
consider appropriate elect and remove officers and appoint and terminate agents
and consultants and hire and terminate employees, any one or more of the
foregoing of whom may be a Trustee, and may provide for the compensation of all
of the foregoing; they may appoint from their own number, and terminate, andy
one or more committees consisting of two or more Trustees, including without
implied limitation an executive committee, which may, when the Trustees are not
in session and subject to the 1940 Act, exercise some or all of the power and
authority of the Trustees as the Trustees may determine; in accordance with
Section 3.3 they may employ one or more Advisers, Administrators,
4
<PAGE>
Depositories and Custodians and may authorize any Depository or. Custodian to
employ subcustodians or agents and to deposit all or any part of such assets in
a system or systems for the central handling of securities and debt instruments,
retain transfer, dividend, accounting or Shareholder servicing agents or any of
the foregoing, provide for the distribution of Shares by the Trust through one
or more distributors, principal underwriters or otherwise, set record dates or
times for the determination of Shareholders or various of them with respect to
various matters; they may compensate or provide for the compensation of the
Trustees, officers, advisers, administrators, custodians, other agents,
consultants and employees of the Trust or the Trustees on such terms as they
deem appropriate; and in general they may delegate to any officer of the Trust,
to any committee of the Trustees and to any employee, adviser, administrator,
distributor, depository, custodian, transfer and dividend disbursing agent, or
any other agent or consultant of the Trust such authority, powers, functions and
duties as they consider desirable or appropriate for the conduct of the business
and affairs of the Trust, including without implied limitation the power and
authority to act in the name of the Trust and of the Trustees, to sign documents
and to act as attorney-in-fact for the Trustees.
Without limiting the foregoing and to the extent not inconsistent with the
1940 Act or other applicable law, the Trustees shall have power and authority
for and on behalf of the Trust and each separate Sub-Trust established
hereunder:
(a) Investments. To invest and reinvest cash and other property, and to
-----------
hold cash or other property uninvested without in any event being bound or
limited by any present or future law or custom in regard to investments by
trustees;
(b) Disposition of Assets. To sell, exchange, lend, pledge, mortgage,
---------------------
hypothecate, write options on and lease any or all of the assets of the Trust;
(c) Ownership Powers. To vote or give assent, or exercise any rights of
----------------
ownership, with respect to Securities or other property; and to execute and
deliver proxies or powers of attorney to such person or persons as the Trustees
shall deem proper, granting to such person or persons such power and discretion
with relation to Securities or other property as the Trustees shall deem proper;
(d) Subscription. To exercise powers and rights of subscription or
------------
otherwise which in any manner arise out of ownership of Securities;
(e) Form of Holding. To hold any Securities or other property in a form
---------------
not indicating any trust, whether in bearer, unregistered or other negotiable
form, or in the name of the
5
<PAGE>
Trustees or of the Trust or of any Sub-Trust or in the name of a custodian,
subcustodian or other depositary or a nominee or nominees or otherwise;
(f) Reorganization, etc. To consent to or participate in any plan for the
-------------------
reorganization, consolidation or merger of any corporation or issuer, any
Security of which is or was held in the Trust; to consent to any contract,
lease, mortgage, purchase or sale of property by such corporation or issuer, and
to pay calls or subscriptions with respect to any Security held in the Trust;
(g) Voting Trusts, etc. To join with other holders of any Securities in
------------------
acting through a committee, depositary, voting trustee or otherwise, and in that
connection to deposit any Security with, or transfer any Security to, any such
committee, depositary or trustee, and to delegate to them such power and
authority with relation to any Security (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree to pay, and to nay,
such portion of the expenses and compensation of such committee, depositary or
trustee as the Trustees shall deem proper;
(h) Compromise. To compromise, arbitrate or otherwise adjust claims in
----------
favor of or against the Trust or any Sub-Trust or any matter in controversy,
including but not limited to claims for taxes;
(i) Partnerships, etc. To enter into joint ventures, general or limited
-----------------
partnerships-and any other combinations or associations;
(j) Borrowing and Security. To borrow funds and to mortgage and pledge
----------------------
the assets of the Trust or any Sub-Trust or any part thereof to secure
obligations arising in connection with such borrowing;
(k) Guarantees, etc. To endorse or guarantee the payment of any notes or
---------------
other obligations of any person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof; and to mortgage and pledge the
Trust property (or Sub-Trust property) or any part thereof to secure, any of or
all such obligations;
(l) Insurance. To purchase and pay for entirely out of Trust property
---------
such insurance as they may deem necessary or appropriate for the conduct of the
business, including without limitation, insurance policies insuring the assets
of the Trust and payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, consultants, investment advisers, managers,
administrators, distributors, principal
6
<PAGE>
underwriters, or independent contractors, or any thereof (or any person
connected therewith), of the Trust individually against all claims and
liabilities of every nature arising by reason of holding, being or having held
any such office or position, or by reason of any action alleged to have been
taken or omitted by any such person in any such capacity, including any action
taken or omitted that may be determined to constitute negligence, whether or not
the Trust would have the power to indemnify such person against such liability;
and
(m) Pensions, etc. To pay pensions for faithful service, as deemed
-------------
appropriate by the Trustees, and to adopt, establish and carry out pension,
profit-sharing, share bonus, share purchase, savings, thrift and other
retirement, incentive and benefit plans, trust and provisions, including the
purchasing of life insurance and annuity contracts as a means of providing such
retirement and other benefits, for any or all of the Trustees, officers,
employees and agents of the Trust.
Except as otherwise provided by the 1940 Act or other applicable law, this
Declaration of Trust or the By-Laws, any action to be taken by the Trustees on
behalf of the Trust or any Sub-Trust may be taken by a majority of the Trustees
present at a meeting of Trustees (a quorum, consisting of at least a majority of
the Trustees then in office, being present), within or without Massachusetts,
including any meeting held by means of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time and participation by such means
shall constitute presence in person at a meeting, or by written consents of a
majority of the Trustees then in office (or such larger or different number as
may be required by the 1940 Act or other applicable law).
Section 3.3 Certain Contracts. Subject to compliance with the provisions
-----------------
of the 1940 Act, but notwithstanding any limitations of present and future law
or custom in regard to delegation of powers by trustees generally, the Trustees
may, at any time and from time to time and without limiting the generality of
their powers and authority otherwise set forth herein, enter into one or more
contracts with any one or more corporations, trusts, associations, partnerships,
limited partnerships, other type of organizations, or individuals ("Contracting
Party"), to provide for the performance and assumption of some or all of the
following services, duties and responsibilities to, for or on behalf of the
Trust and/or any Sub-Trust, and/or the Trustees, and to provide for the
performance and assumption of such other services, duties and responsibilities
in addition to those set forth below as the Trustees may determine appropriate:
(a) Advisory. Subject to the general supervision of the Trustees and in
--------
conformity with the stated policy of the Trustees
7
<PAGE>
with respect to the investments of the Trust or of the assets belonging to any
Sub-Trust of the Trust (as that phrase is defined in subsection (a) of Section
4.2), to manage such investments and assets, make investment decisions with
respect thereto, and to place purchase and sale orders for portfolio
transactions relating to such investments and assets;
(b) Administration. Subject to the general supervision of the Trustees
--------------
and in conformity with any policies of the Trustees with respect to the
operations of the Trust and each Sub-Trust, to supervise all or any part of the
operations of the Trust and each Sub-Trust, and to provide all or any part of
the administrative and clerical personnel, office space and office equipment and
services appropriate for the efficient administration and operations of the
Trust and each Sub-Trust;
(c) Distribution. To distribute the Shares of the Trust and each Sub-
------------
Trust, to be principal underwriter of such Shares, and/or to act as agent of the
Trust and each Sub-Trust in the sale of Shares and the acceptance or rejection
of orders for the purchase of Shares;
(d) Custodian and Depository. To act as depository for and to maintain
------------------------
custody of the property of the Trust and each Sub-Trust and accounting records
in connection therewith;
(e) Transfer and Dividend Disbursing Agency. To maintain records of the
---------------------------------------
ownership of outstanding Shares, the issuance and redemption and the transfer
thereof, and to disburse any dividends declared by the Trustees and in
accordance with the policies of the Trustees and/or the instructions of any
particular Shareholder to reinvest any such dividends;
(f) Shareholder Servicing. To provide service with respect to the
---------------------
relationship of the Trust and its Shareholders, records with respect to
Shareholders and their Shares, and similar matters; and
(g) Accounting. To handle all or any part of the accounting
----------
responsibilities, whether with respect to the Trust's properties, Shareholders
or otherwise.
The same person may be the Contracting Party for some or all of the services,
duties and responsibilities to, for and of the Trust and/or the Trustees, and
the contracts with respect thereto may contain such terms interpretive of or in
addition to the delineation of the services, duties and responsibilities
provided for, including provisions that are not inconsistent with the 1940 Act
relating to the standard of duty of and the rights to indemnification of the
Contracting Party and others, as the Trustees may determine. Nothing herein
shall preclude, prevent or limit the Trust or a Contracting Party from entering
into sub-contrac-
8
<PAGE>
tual arrangements relative to any of the matters referred to in Sections 3.3(a)
through (g) hereof.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, manager,
adviser, principal underwriter or distributor or agent of or for any
Contracting Party, or of or for any parent or affiliate of any Contracting
Party or that the Contracting Party or any parent or affiliate thereof is a
Shareholder or has an interest in the Trust or any Sub-Trust, or that
(ii) any Contracting Party may have a contract providing for the
rendering of any similar services to one or more other corporations,
trusts, associations, partnerships, limited partnerships or other
organizations, or have other business or interests,
shall not affect the validity of any contract for the performance and assumption
of services, duties and responsibilities to, for or of the Trust or any Sub-
Trust and/or the Trustees or disqualify any Shareholder, Trustee or officer of
the Trust from voting upon or executing the same or create any liability or
accountability to the Trust, any Sub-Trust or its Shareholders, provided that in
the case of any relationship or interest referred to in the preceding clause (i)
on the part of any Trustee or officer of the Trust either (x) the material facts
as to such relationship or interest have been disclosed to or are known by the
Trustees not having any such relationship or interest and the contract involved
is approved in good faith by a majority of such Trustees not having any such
relation-ship or interest (even though such unrelated or disinterested Trustees
are less than a quorum of all of the Trustees), (y) the material facts as to
such relationship or interest and as to the contract have been disclosed to or
are known by the Shareholders entitled to vote thereon and the contract involved
is specifically approved in good faith by vote of the Shareholders, or (z) the
specific contract involved is fair to the Trust as of the time it is authorized,
approved or ratified by the Trustees or by the Shareholders.
Section 3.4 Payment of Trust Expenses and Compensation of Trustees. The
------------------------------------------------------
Trustees are authorized to pay or to cause to be paid out of the principal or
income of the Trust or any Sub-Trust, or partly out of principal and partly out
of income, and to charge or allocate the same to, between or among such one or
more of the Sub-Trusts that may be established and designated pursuant to
Article IV, as the Trustees deem fair, all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with the Trust or any Sub-Trust,
or in connection with
9
<PAGE>
the management thereof, including, but not limited to, the Trustees'
compensation and such expenses and charges for the services of the Trust's
officers, employees, investment adviser, administrator, distributor, principal
underwriter, auditor, counsel, depository, custodian, transfer agent, dividend
disbursing agent, accounting agent, Shareholder servicing agent, and such other
agents, consultants, and independent contractors and such other expenses and
charges as the Trustees may deem necessary or proper to incur. Without limiting
the generality of any other provision hereof, the Trustees shall be entitled to
reasonable compensation from the Trust for their services as Trustees and may
fix the amount of such compensation.
Section 3.5 Ownership of Assets of the Trust. Title to all of the assets
--------------------------------
of the Trust shall at all times be considered as vested in the Trustees.
ARTICLE IV
----------
SHARES
------
Section 4.1 Description of Shares. The beneficial interest in the Trust
---------------------
shall be divided into Shares, all without par value and of one class, but the
Trustees shall have the authority from time to time to divide the class of
Shares into two or more Series of Shares (each of which Series of Shares shall
be a separate and distinct Sub-Trust of the Trust, including without limitation
those Sub-Trusts specifically established and designated in Section 4.2), as
they deem necessary or desirable. Each Sub-Trust established hereunder shall be
deemed to be a separate trust under Massachusetts General Laws Chapter 182. The
Trustees shall have exclusive power without the requirement of shareholder
approval to establish and designate such separate and distinct Sub-Trusts, and
to fix and determine the relative rights and preferences as between the shares
of the separate Sub-Trusts as to right of redemption and the price, terms and
manner of redemption, special and relative rights as to dividends and other
distributions and on liquidation, sinking or purchase fund provisions,
conversion rights and conditions under which the several Sub-Trusts shall have
separate voting rights or no voting rights.
The number of authorized Shares and the number of Shares of each Sub-Trust
that may be issued is unlimited, and the Trustees may issue Shares of any Sub-
Trust for such consideration and on such terms as they may determine (or for no
consideration if pursuant to Share dividend or split-up), all without action or
approval of the Shareholders. All Shares when so issued on the terms determined
by the Trustees shall be fully paid and non-assessable (but may be subject to
mandatory contribution back to the Trust as provided in subsection (h) of
Section 4.2). The Trustees may classify or reclassify any unissued Shares or any
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<PAGE>
Shares previously issued and reacquired of any Sub-Trust into one or more Sub-
Trusts that may be established and designated from time to time. The Trustees
may hold as treasury Shares, reissue for such consideration and on such terms as
they may determine, or cancel, at their discretion from time to time, any Shares
of any Sub-Trust reacquired by the Trust.
The Trustees may from time to time close the transfer books or establish
record dates and times for the purposes of determining the holders of Shares
entitled to be treated as such, to the extent provided or referred to in Section
5.3.
The establishment and designation of any Sub-Trust in addition to those
established and designated in Section 4.2 shall be effective upon the execution
by a majority of the then Trustees of an instrument setting forth such
establishment and designation and the relative rights and preferences of the
Shares of such Sub-Trust, or as otherwise provided in such instrument. At any
time that there are no Shares outstanding of any particular Sub-Trust previously
established and designated the Trustees may by an instrument executed by a
majority of their number abolish that Sub-Trust and the establishment and
designation thereof. Each instrument referred to in this paragraph shall have
the status of an amendment to this Declaration of Trust.
Any Trustee, officer or other agent of the Trust, and any organization in
which any such person is interested may acquire, own, hold and dispose of Shares
of any Sub-Trust of the Trust to the same extent as if such person were not a
Trustee, officer or other agent of the Trust; and the Trust may issue and sell
or cause to be issued and sold and may purchase Shares of any Sub-trust from any
such person or any such organization subject only to the general limitations,
restrictions or other provisions applicable to the sale or purchase of Shares of
such Sub-Trust generally.
Section 4.2 Establishment and Designation of Sub-Trusts. Without limiting
-------------------------------------------
the authority of the Trustees set forth in Section 4.1 to establish and
designate any further Sub-Trusts, the Trustees hereby establish and designate
one Sub-Trust, Van Eck Global Fund, and any Shares of any further Sub-Trusts
that may from time to time be established and designated by the Trustees shall
(unless the Trustees otherwise determine with respect to some further Sub-Trust
at the time of establishing and designating the same) have the following
relative rights and preferences:
(a) Assets Belonging to Sub-Trusts. All consideration received by the
------------------------------
Trust for the issue or sale of Shares of a particular Sub-Trust, together with
all assets in which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation of such assets, and any
11
<PAGE>
funds or payments derived from any reinvestment of such proceeds in whatever
form the same may be, shall be held by the Trustees in trust for the benefit of
the holders of Shares of that Sub-Trust and shall irrevocably belong to that
Sub-Trust for all purposes, and shall be so recorded upon the books of account
of the Trust. Such consideration, assets, income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds, in whatever form the same may be, together with
any General Items allocated to that Sub-Trust as provided in the following
sentence, are herein referred to as "assets belonging to" that Sub-Trust. In the
event that there are any assets, income, earnings, profits, and proceeds
thereof, funds, or payments which are not readily identifiable as belonging to
any particular Sub-Trust (collectively *"General Items"), the Trustees shall
allocate such General Items to and among any one or more of the Sub-Trusts
established and designated from time to time in such manner and on such basis as
they, in their sole discretion, deem fair and equitable; and any General Items
so allocated to a particular Sub-Trust shall belong to that Sub-Trust. Each
such allocation by the Trustees shall be conclusive and binding upon the Share-
holders of all Sub-Trusts for all purposes.
(b) Liabilities Belonging to Sub-Trusts. The assets belonging to each
-----------------------------------
particular Sub-Trust shall be charged with the liabilities in respect of that
Sub-Trust and all expenses, costs, charges and reserves attributable to that
Sub-Trust, and any general liabilities, expenses, costs, charges or reserves of
the Trust which are not readily identifiable as belonging to any particular Sub-
Trust shall be allocated and charged by the Trustees to and among any one or
more of the Sub-Trusts established and designated from time to time in such
manner and on such basis as the Trustees in their sole discretion deem fair and
equitable. The liabilities expenses, costs, charges and reserves allocated and
so charged to a Sub-Trust are herein referred to as "liabilities belonging to"
that Sub-Trust. Each allocation of liabilities, expenses, costs, charges and
reserves by the Trustees shall be conclusive and binding upon the Shareholders
of all Sub-Trusts for all purposes. Any creditor of any Sub-Trust may look only
to the assets of that Sub-Trust to satisfy such creditor's debt.
The Trustees shall have full discretion, to the extent not inconsistent
with the 1940 Act, to determine which items shall be treated as income and which
items as capital; and each such determination and allocation shall be
conclusive and binding upon the Shareholders.
(c) Dividends. Dividends and distributions on Shares of a particular Sub-
---------
Trust may be paid with such frequency as the Trustees may determine, which may
be daily or otherwise pursuant to a standing resolution or resolutions adopted
only once or with
12
<PAGE>
such frequency as the Trustees may determine, to the holders of Shares of that
Sub-Trust, from such of the income and capital gains, accrued or realized, from
the assets belonging to that Sub-Trust, as the Trustees may determine, after
providing for actual and accrued liabilities belonging to that Sub-Trust. All
dividends and distributions on Shares of a particular Sub-Trust shall be
distributed pro rata to the holders of Shares of that Sub-Trust in proportion to
the number of Shares of that Sub-Trust held by such holders at the date and time
of record established for the payment of such dividends or distributions, except
that in connection with any dividend or distribution program or procedure the
Trustees may determine that no dividend or distribution shall be payable on
Shares as to which the Shareholder's purchase order and/or payment have not been
received by the time or times established by the Trustees under such program or
procedure. Such dividends and distributions may be made in cash or Shares of
that Sub-Trust or a combination thereof as determined by the Trustees or
pursuant to any program that the Trustees may have in effect at the time for the
election by each Shareholder of the mode of the making of such dividend or
distribution to that Shareholder. Any such dividend or distribution paid in
Shares will be paid at the net asset value thereof as. determined in accordance
with subsection (h) of Section 4.2.
(d) Liquidation. In the event of the liquidation or dissolution oil the
-----------
Trust or any Sub-Trust, the Shareholders of each Sub-Trust that has been
established and designated and that has voted to be liquidated or dissolved,
shall be entitled to receive, when and as declared by the Trustees, the excess
of the assets belonging to that Sub-Trust over the liabilities belonging to that
Sub-Trust. The assets so distributable to the Shareholders of any particular
Sub-Trust shall be distributed among such Shareholders in proportion to the
number of Shares of that Sub-Trust held by them and recorded on the books of the
Trust. The liquidation of any particular Sub-Trust may be authorized by vote of
a majority of the Trustees then in office subject to the approval of a majority
of the outstanding voting Shares of that Sub-Trust, as defined in the 1940 Act.
(e) Voting. On each matter submitted to a vote of the Shareholders, each
------
holder of a Share of each Sub-Trust shall be entitled to one vote for each whole
Share and to a proportionate fractional vote for each fractional Share standing
in his name on the books of the Trust and all Shares of each Sub-Trust shall
vote as a separate class except as to voting for Trustees and as other-wise
required by the 1940 Act. As to any matter which does not affect the interest of
a particular Sub-Trust, only the holders of Shares of the one or more affected
Sub-Trusts shall be entitled to vote.
(f) Redemption by Shareholder. Each holder of Shares of a particular Sub-
-------------------------
Trust shall have the right at such times as may be
13
<PAGE>
permitted by the Trust and as otherwise required by the 1940 Act to require the
Trust to redeem all or any part of his Shares of that Sub-Trust at a redemption
price equal to the net asset value per Share of that Sub-Trust next determined
in accordance with subsection (h) of this Section 4.2 after the Shares are
properly tendered for redemption. Payment of the redemption price shall be in
cash; provided, however, that if the Trustees determine, which determination
shall be conclusive, that conditions exist which make payment wholly in cash
unwise or undesirable, the Trust may, subject to the requirements of the 1940
Act, make payment wholly or partly in securities or other assets belonging to
the Sub-Trust of which the Shares being redeemed are part at the value of such
securities or assets used in such determination of net asset value.
Notwithstanding the foregoing, the Trust may postpone payment of the
redemption price and may suspend the right of the holders of Shares of any Sub-
Trust to require the Trust to redeem Shares of that Sub-Trust during any period
or at any time when and to the extent permissible under the 1940 Act.
(g) Redemption by Trust. Each Share of each Sub-Trust that has been
-------------------
established and designated is subject to redemption by the Trust at the
redemption price which would be applicable if such Share was then being redeemed
by the Shareholder pursuant to subsection (f) of this Section 4.2: (a) at any
time, if the Trustees determine in their sole discretion that failure to so
redeem may have materially adverse consequences to the holders of the Shares of
the Trust or any Sub-Trust thereof, or (b) upon such other conditions as may
from time to time be determined by the Trustees and set forth in the then
current Prospectus of the Trust with respect to maintenance of Shareholder
accounts of a minimum amount. Upon such redemption the holders of the Shares so
redeemed shall have no further right with respect thereto other than to receive
payment of such redemption price.
(h) Net Asset Value. The net asset value per Share of any Sub-Trust shall
---------------
be the quotient obtained by dividing the value of the net assets of that Sub-
Trust (being the value of the assets belonging to that Sub-Trust less the
liabilities belonging to that Sub-Trust) by the total number of Shares of that
Sub-Trust out-standing, all determined in accordance with the methods and
procedures, including without limitation those with respect to rounding,
established by the Trustees from time to time.
The Trustees may determine to maintain the net asset value per Share of any
Sub-Trust at a designated constant dollar amount (or other currency unit) and in
connection therewith may adopt procedures not inconsistent with the 1940 Act for
the continuing declarations of income attributable to that Sub-Trust as
dividends payable in additional Shares of that Sub-Trust at the designated
constant dollar amount (or other currency unit) and for the
14
<PAGE>
handling of any losses attributable to that Sub-Trust. Such procedures may
provide that in the event of any loss each Shareholder shall be deemed to have
contributed to the capital of the Trust attributable to that Sub-Trust his pro
rata portion of the total number of Shares required to be cancelled in order to
permit the net asset value per Share of that Sub-Trust to be maintained, after
reflecting such loss, at the designated constant dollar amount (or other
currency unit). Each Share-holder of the Trust shall be deemed to have agreed,
by his investment in any Sub-Trust with respect to which the Trustees shall have
adopted any such procedure, to make the contribution referred to in the
preceding sentence in the event of any such loss.
(i) Transfer. All Shares of each particular Sub-Trust shall be
--------
transferable, but transfers of Shares of a particular Sub-Trust will be
recorded on the Share transfer records of the Trust applicable to that Sub-Trust
only at such times as Shareholders shall have the right to require the Trust to
redeem Shares of that Sub-Trust and at such other times as may be permitted by
the Trustees.
(j) Equality. All Shares of each particular Sub-Trust shall represent an
--------
equal proportionate interest in the assets belonging to that Sub-Trust (subject
to the liabilities belonging to that Sub-Trust), and each Share of any
particular Sub-Trust shall be equal to each other Share of that Sub-Trust; but
the provisions of this sentence shall not restrict any distinctions permissible
under subsection (c) of this Section 4.2 that may exist with respect to
dividends and distributions on Shares of the same Sub-Trust. The Trustees may
from time to time divide or combine the Shares of any particular Sub-Trust into
a greater or lesser number of Shares of that Sub-Trust without thereby changing
the proportionate beneficial interest in the assets belonging to that Sub-Trust
or in any way affecting the rights of Shares of any other Sub-Trust.
(k) Fractions. Any fractional Share of any Sub-Trust, if any such
---------
fractional Share is outstanding shall carry proportionately all the rights and
obligations of a whole Share of that Sub-Trust, including rights and obligations
with respect to voting, receipt of dividends and distributions, redemption of
Shares, and liquidation of the Trust or any Sub-Trust.
(1) Conversion Rights. Subject to compliance with the requirements of the
-----------------
1940 Act, the Trustees shall have the authority to provide that holders of
Shares of any Sub-Trust shall have the right to convert said Shares into Shares
of one or more other Sub-Trust in accordance with such requirements and
procedures as may be established by the Trustees.
(m) Termination of Sales. The Trustees shall have the authority to
--------------------
terminate the sales of Shares of any Sub-Trust at
15
<PAGE>
any time or for such periods as the Trustees may from. time to time decide.
Section 4.3 Ownership of Shares. The ownership of Shares shall be
-------------------
recorded on the books of the Trust or of a transfer or similar agent for the
Trust, which books shall be maintained separately for the Shares of each Sub-
Trust that has been established and designated. No certificates certifying the
ownership of Shares need be issued except as the Trustees may otherwise
determine from time to time. The Trustees may make such rules as they consider
appropriate for the issuance of Share certificates, the use of facsimile
signatures, the transfer of Shares and similar matters. The record books of the
Trust as kept by the Trust or any transfer or similar agent, as the case may be,
shall be conclusive as to who are the Shareholders and as to the number of
Shares of each Sub-Trust held from time to time by each such Shareholder.
Section 4.4 Investments in the Trust. The Trustees may accept investments
------------------------
in the Trust and each Sub-Trust thereof from such persons and on such terms and
for such consideration, not inconsistent with the provisions of the 1940 Act, as
they from time to time authorize. The Trustees may authorize any distributor,
principal underwriter, custodian, transfer agent or other person to accept
orders for the purchase of Shares that conform to such authorized terms and to
reject any purchase orders for Shares whether or not conforming to such
authorized terms.
Section 4.5 No Pre-emptive Rights. Shareholders shall have no pre-emptive
---------------------
or other right to subscribe to any additional Shares or other securities issued
by the Trust.
Section 4.6 Status of Shares and Limitation of Personal Liabilities.
-------------------------------------------------------
Shares shall be deemed to be personal property giving only the rights provided
in this instrument. Every Shareholder by virtue of having become a Shareholder
shall be held to have expressly assented and agreed to the terms hereof and to
have become a party hereto. The death of a Shareholder during the continuance of
the Trust shall not operate to terminate the Trust or any Sub-Trust thereof nor
entitle the representative of any deceased Shareholder to an accounting or to
take any action in court or elsewhere against the Trust or the Trustees, but
only to the rights of said decedent under this Trust. Ownership of Shares shall
not entitle the Shareholder to any title in or to the whole or any part of the
Trust property or right to call for a partition or division of the same or for
an accounting, nor shall the ownership of Shares constitute the Shareholders
partners. Neither the Trust nor the Trustees, nor any officer, employee or agent
of the Trust shall have any power to bind personally any Shareholder, nor except
as specifically provided herein to call upon any Shareholder for the payment of
any sum of
16
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money or assessment whatsoever other than such as the Shareholder may at any
time personally agree to pay.
ARTICLE V
---------
SHAREHOLDERS' VOTING POWERS AND MEETINGS
----------------------------------------
Section 5.1 Voting Powers. The Shareholders shall have power to vote only
-------------
(i) for the election or removal of Trustees as provided in Section 3.1, (ii)
with respect to any contract with a Contracting Party as provided in Section 3.3
as to which Shareholder approval is required by the 1940 Act, (iii) with
respect to any termination or reorganization of the Trust or any Sub-Trust to
the extent and as provided in Sections 7.1 and 7.2, (iv) with respect to any
amendment of this Declaration of Trust to the extent and as provided in Section
7.3, (v) to the same extent as the stockholders of a Massachusetts business
corporation as to whether or not a court action, proceeding or claim should or
should not be brought or maintained derivatively or as a class action on behalf
of the Trust or any Sub-Trust thereof or the Shareholders (provided, however,
that a shareholder of a particular Sub-Trust shall not be entitled to a
derivative or class action on behalf of any other Sub-Trust (or shareholder of
any other Sub-Trust) of the Trust) and (vi) with respect to such additional
matters relating to the Trust as may be required by the 1940 Act, this
Declaration of Trust, the By-Laws or any registration of the Trust with the
Commission (or any successor agency) or any state, or as the Trustees may
consider necessary or desirable. There shall be no cumulative voting in the
election of Trustees. Shares may be voted in person or by proxy. A proxy with
respect to Shares held in the name of two or more persons shall be valid if
executed by any one of them unless at or prior to exercise of the proxy the
Trust receives a specific written notice to the contrary from any one of them. A
proxy purporting to be executed by or on behalf of a Shareholder shall be
deemed valid unless challenged at or prior to its exercise and the burden of
proving invalidity shall rest on the challenger. Until Shares are issued, the
Trustees may exercise all rights of Shareholders and may take any action
required by law, this Declaration of Trust or the By-Laws to be taken by
Shareholders.
Section 5.2 Meetings. No annual or regular meeting of Shareholders is
--------
required. Special meetings of Shareholders may be called by the Trustees from
time to time for the purpose of taking action upon any matter requiring the vote
or authority of the Shareholders as herein provided or upon any other matter
deemed by the Trustees to be necessary or desirable. Written notice of any
meeting of Shareholders shall be given or caused to be given by the Trustees by
mailing or transmitting such notice at least seven days before such meeting,
postage prepaid, stating the time, place and purpose of the meeting, to each
Shareholder
17
<PAGE>
at the Shareholder's address as it appears on the records of the Trust. The
Trustees shall promptly call and give notice of a meeting of Shareholders for
the purpose of voting upon removal of any Trustee of the Trust when requested to
do so in writing by Shareholders holding not less than 10% of the Shares then
outstanding. If the Trustees shall fail to call or give notice of any meeting
of Shareholders for a period of 30 days after written application by
Shareholders holding at least 10% of the Shares then outstanding requesting a
meeting be called for any other purpose requiring action by the Shareholders as
provided herein or in the By-Laws, then Shareholders holding at least 10% of the
Shares then outstanding may call and give notice of such meeting, and thereupon
the meeting shall be held in the manner provided for herein in case of call
thereof by the Trustees.
Section 5.3 Record Dates. For the purpose of determining the Shareholders
------------
who are entitled to vote or act at any meeting or any adjournment thereof, or
who are entitled to participate in any dividend or distribution, or for the
purpose of any other action, the Trustees may from time to time close the
transfer books for such period, not exceeding 30 days (except at or in
connection with the termination of the Trust), as the Trustees may determine; or
without closing the transfer books the Trustees may fix a date and time not more
than 60 days prior to the date of any meeting of Shareholders or other action as
the date and time of record for the determination of Shareholders entitled to
vote at such meeting or any adjournment thereof or to be treated as
Shareholders of record for purposes of such other action, and any Shareholder
who was a Shareholder at the date and time so fixed shall be entitled to vote at
such meeting or any adjournment thereof or to be treated as a Shareholder of
record for purposes of such other action, even though he has since that date and
time disposed of his Shares, and no Shareholder becoming such after that date
and time shall be so entitled to vote at such meeting or any adjournment
thereof or to be treated as a Shareholder of record for purposes of such other
action.
Section 5.4 Quorum and Required Vote. A majority of the Shares entitled
------------------------
to vote shall be a quorum for the transaction of business at a Shareholders'
meeting, but any lesser number shall be sufficient for adjournments. Any
adjourned session or sessions may be held, within a reasonable time after the
date set for the original meeting without the necessity of further notice. A
majority of the Shares voted, at a meeting of which a quorum is present shall
decide any questions and a plurality shall elect a Trustee, except when a
different vote is required or permitted by any provision of the 1940 Act or
other applicable law or by this Declaration of Trust or the By-Laws.
Section 5.5 Action by Written Consent. Subject to the provisions of the
-------------------------
1940 Act and other applicable law, any action taken by Shareholders may be taken
without a meeting if a major-
18
<PAGE>
ity of Shareholders entitled to vote on the matter (or such larger proportion
thereof as shall be required by the 1940 Act or by any express provision of this
Declaration of Trust or the By-Laws) consent to the action in writing and such
written consents are filed with the records of the meetings of Shareholders.
Such consent shall be treated for all purposes as a vote taken at a meeting of
Shareholders.
Section 5.6 Inspection of Records. The records of the
---------------------
Trust shall be open to inspection by Shareholders to the same
extent as is permitted stockholders of a Massachusetts business corporation
under the Massachusetts Business Corporation Law.
Section 5.7 Additional Provisions. The By-Laws may include further
---------------------
provisions for Shareholders' votes and meetings and related matters not
inconsistent with the provisions hereof.
Section 5.8 Shareholder Communications. Whenever ten or more Shareholders
--------------------------
of record who have been such for at least six months preceding the date of
application, and who hold in the aggregate either Shares having a net asset
value of at least $25,000 or at least 1% of the outstanding Shares, whichever is
less, shall apply to the Trustees in writing, stating that they wish to
communicate with other Shareholders with a view to obtaining signatures to a
request for a Share-holder meeting and accompanied by a form of communication
and request which they wish to transmit, the Trustees shall within five business
days after receipt of such application either (1) afford to such applicants
access to a list of the names and addresses of all Shareholders as recorded on
the books of the Trust or Sub-Trust, as applicable; or (2) inform such
applicants as to the approximate number of Shareholders of record, and the
approximate cost of mailing to them the proposed communication and form of
request.
If the Trustees elect to follow the course specified in clause (2) above,
the Trustees, upon the written request of such applicants, accompanied by a
tender of the material to be mailed and of the reasonable expenses of mailing,
shall, with reasonable promptness, mail such material to all Shareholders of
record at their addresses as recorded on the books, unless within five business
days after such tender the Trustees shall mail to such applicants and file with
the Commission, together with a copy of the material to be mailed, a written
statement signed by at least a majority of the Trustees to the effect that in
their opinion either such material contains untrue statements of fact or omits
to state facts necessary to make the statements contained therein not
misleading, or would be in violation of applicable law, and specifying the basis
of such opinion. The Trustees shall thereafter comply with any order entered by
the Commission and the requirements of the 1940 Act and the Securities Exchange
Act of 1934.
19
<PAGE>
ARTICLE VI
----------
LIMITATION OF LIABILITY; INDEMNIFICATION
----------------------------------------
Section 6.1 Trustees, Shareholders, etc. Not Personally Liable; Notice.
----------------------------------------------------------
All persons extending credit to, contracting with or having any claim against
the Trust shall look only to the assets of the Sub-Trust with which such person
dealt for payment under such credit, contract or claim; and neither the
Shareholders of any Sub-Trust nor the Trustees, nor any of the Trust's officers,
employees or agents, whether past, present or future, nor any other Sub-Trust
shall be personally liable therefor. Every note, bond, contract, instrument,
certificate or undertaking and every other act or thing whatsoever executed or
done by or on behalf of the Trust, any Sub-Trust or the Trustees or any of them
in connection with the Trust shall be conclusively deemed to have been executed
or done only by or for the Trust (or the Sub-Trust) or the Trustees and not
personally. Nothing in this Declaration of Trust shall protect any Trustee or
officer against any liability to the Trust or the Shareholders to which such
Trustee or officer would otherwise be subject by reason of wilful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee or of such officer.
Every note, bond, contract, instrument, certificate or undertaking made or
issued by the Trustees or by any officers or officer shall give notice that this
Declaration of Trust is on file with the Secretary of The Commonwealth of
Massachusetts and shall recite to the effect that the same was executed or made
by or on behalf of the Trust or by them as Trustees or Trustee or as officers or
officer and not individually and that the obligations of such instrument are not
binding upon any of them or the Shareholders individually but are binding only
upon, the assets and property of the Trust, or the particular Sub-Trust in
question, as the case may be, but the omission thereof shall not operate to bind
any Trustees or Trustee or officers or officer or Shareholders or Shareholder
individually.
Section 6.2 Trustee's Good Faith Action; Expert Advice; NoBond or Surety.
------------------------------------------------------------
The exercise by the Trustees of their powers and discretions hereunder shall be
binding upon everyone interested. A Trustee shall be liable for his own wilful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee, and for nothing else, and
shall not be liable for errors of judgment or mistakes of fact or law. Subject
to the foregoing, (a) the Trustees shall not be responsible or liable in any
event for any neglect or wrongdoing of any officer, agent, employee, consultant,
adviser, administrator, distributor or principal underwriter, custodian or
transfer, dividend disbursing, Shareholder servicing or accounting agent of the
Trust, nor shall any Trustee by responsible for
20
<PAGE>
the act or omission of any other Trustee; (b) the Trustees may take advice of
counsel or other experts with respect to the meaning and operation of this
Declaration of Trust and their duties as Trustees, and shall be under no
liability for any act or omission in accordance with such advice or for failing
to follow such advice; and (c) in discharging their duties, the Trustees, when
acting in good faith, shall be entitled to rely upon the books of account of the
Trust and upon written reports made to the Trustees by any officer appointed by
them, any independent public accountant, and (with respect to the subject matter
of the contract involved) any officer, partner or responsible employee of a
Contracting Party appointed by the Trustees pursuant to Section 3.3. The
Trustees as such shall not be required to give any bond or surety or any other
security for the performance of their duties.
Section 6.3 Indemnification of Shareholders. In case any Shareholder (or
-------------------------------
former Shareholder) of any Sub-Trust of the Trust shall be charged or held to be
personally liable for any obligation or liability of the Trust solely by reason
of being or having been a Shareholder and not because of such Shareholder's acts
or omissions or for some other reason, said Sub-Trust (upon proper and timely
request by the Shareholder) shall assume the defense against such charge and
satisfy any judgment thereon, and the Shareholder or former Shareholder (or his
heirs, executors, administrators or other legal representatives or in the case
of a corporation or other entity, its corporate or other general successor)
shall be entitled out of the assets of said Sub-Trust estate to be held harmless
from and indemnified against all loss and expense arising from. such liability.
Section 6.4 Indemnification of Trustees, Officers, etc. The Trust shall
------------------------------------------
indemnify (from the assets of the Sub-Trust or Sub-Trusts in question) each of
its Trustees and officers (including persons who serve at the Trust's request as
directors, officers or trustees of another organization in which the Trust has
any interest as a shareholder, creditor or otherwise [hereinafter referred to as
a "Covered Person"]) against all liabilities, including but not limited to
amounts paid in satisfaction of judgments, in compromise or as-fines and
penalties, and expenses, including reasonable accountants' and counsel fees,
incurred by any Covered Person in connection with the defense or disposition of
any action, suit or other proceeding, whether civil or criminal, before any
court or administrative or legislative body, in which such Covered Person may be
or may have been involved as a party or otherwise or with which such person may
be or may have been threatened, while in office or thereafter, by reason of
being or having been such a Trustee or officer, director or trustee, except with
respect to any matter as to which it has been determined that such Covered
Person (i) did not act in good faith in the reasonable belief that such Covered
Person's action was in or not opposed to the best interests of the Trust
21
<PAGE>
or (ii) had acted with wilful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such Covered
Person's office (either and both of the conduct described in (i) and (ii) being
referred to hereafter as "Disabling Conduct"). A determination that the Covered
Person is entitled to indemnification may be made by (i) a final decision on the
merits by a court or other body before whom the proceeding was brought that the
person to be indemnified was not liable by reason of Disabling Conduct, (ii)
dismissal of a court action or an administrative proceeding against a Covered
Person for insufficiency of evidence of Disabling Conduct, or (iii) a reasonable
determination, based upon a review of the facts, that the Covered Person was not
liable by reason of Disabling Conduct by (a) a vote of a majority of a quorum of
Trustees who are neither "interested persons" of the Trust as defined in section
2(a)(19) of the 1940 Act nor parties to the proceeding, or (b) an independent
legal counsel in a written opinion. Expenses, including accountants' and counsel
fees so incurred by any such Covered Person (but excluding amounts paid in
satisfaction of judgments, in compromise or as fines or penalties), may be paid
from time to time by the Sub-Trust in question in advance of the final
disposition of any such action, suit or proceeding, provided that the Covered
Person shall have undertaken to repay the amounts so paid to the Sub-Trust in
question if it is ultimately determined that indemnification of such expenses is
not authorized under this Article VI and (i) the Covered Person shall have
provided security for such undertaking, (ii) the Trust shall be insured against
losses arising by reason of any lawful advances, or (iii) a majority of a quorum
of the disinterested Trustees who are not a party to the proceeding, or an
independent legal counsel in a written opinion, shall have determined, based on
a review of readily available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the Covered Person ultimately will be found
entitled to indemnification.
Section 6.5 Compromise Payment. As to any matter disposed of by a
------------------
compromise payment by any such Covered Person referred to in Section 6.4,
pursuant to a consent decree or otherwise, no such indemnification either for
said payment or for any other expenses shall be provided unless such
indemnification shall be approved (a) by a majority of the disinterested
Trustees who are not a party to the proceeding or (b) by an independent legal
counsel in a written opinion. Approval by the Trustees pursuant to clause (a)
or by independent legal counsel pursuant to clause (b) shall not prevent the
recovery from any Covered Person of any amount paid to such Covered Person in
accordance with any of such clauses as indemnification if such Covered Person
is subsequently adjudicated by a court of competent jurisdiction not to have
acted in good faith in the reasonable belief that such Covered Person's action
was in or not opposed to the best interests of the Trust or to have been liable
to the Trust or its Share-holders by reason of wilful misfeasance, bad faith,
gross negligence or
22
<PAGE>
reckless disregard of the duties involved in the conduct of such Covered
Person's office.
Section 6.6 Indemnification Not Exclusive, etc. The right of
----------------------------------
indemnification provided by this Article VI shall not be exclusive of or affect
any other rights to which any such Covered Person may be entitled. As used in
this Article VI, "Covered Person" shall include such person's heirs, executors
and administrators, an "interested Covered Person" is one against whom the
action, suit or other proceeding in question or another action, suit or other
proceeding on the same or similar grounds is then or has been pending or
threatened, and a "disinterested" person is a person against whom none of such
actions, suits or other proceedings or another action, suit or other proceeding
on the same or similar grounds is then or has been pending or threatened.
Nothing contained in this article shall affect any rights to indemnification to
which personnel of the Trust, other than Trustees and officers, and other
persons may be entitled by contract or otherwise under law, nor the power of the
Trust to purchase and maintain liability insurance on behalf of any such person.
Section 6.7 Liability of Third Persons Dealing with Trustees. No person
------------------------------------------------
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.
ARTICLE VII
-----------
MISCELLANEOUS
-------------
Section 7.1 Duration and Termination of Trust. Unless terminated as
---------------------------------
provided herein, the Trust shall continue without limitation of time and,
without limiting the generality of the foregoing, no change, alteration or
modification with respect to any Sub-Trust shall operate to terminate the Trust.
The Trust may be terminated at any time by a majority of the Trustees then in
office subject to a favorable vote of a majority of the outstanding voting
securities, as defined in the 1940 Act, Shares of each Sub-Trust voting
separately by Sub-Trust.
Upon termination, after paying or otherwise providing for all charges,
taxes, expenses and liabilities, whether due or accrued or anticipated as may be
determined by the Trustees, the Trust shall in accordance with such procedures
as the Trustees consider appropriate reduce the remaining assets to
distributable form in cash, securities or other property, or any combination
thereof, and distribute the proceeds to the Shareholders, in conformity with the
provisions of subsection (d) of Section 4.2.
23
<PAGE>
Section 7.2 Reorganization. The Trustees may sell, convey, merge and
--------------
transfer the assets of the Trust, or the assets belonging to any one or more
Sub-Trusts, to another trust, partnership, association or corporation organized
under the laws of any state of the United States, or to the Trust to be held as
assets belonging to another Sub-Trust of the Trust, in exchange for cash, shares
or other securities (including, in the case of a transfer to another Sub-Trust
of the Trust, Shares of such other Sub-Trust) with such transfer either (1)
being made subject to, or with the assumption by the transferee of, the
liabilities belonging to each Sub-Trust the assets of which are so transferred,
or (2) not being made subject to, or not with the assumption of, such
liabilities; provided, however, that no assets belonging to any particular Sub-
Trust shall be so transferred unless the terms of such transfer shall have first
been approved at a meeting called for the purpose by the affirmative vote of the
holders of a majority of the outstanding voting Shares, as defined in the 1940
Act, of that Sub-Trust. Following such transfer, the Trustees shall distribute
such cash, shares or other securities (giving due effect to the assets and
liabilities belonging to and any other differences among the various Sub-Trusts
the assets belonging to which have so been transferred) among the Shareholders
of the Sub-Trust the assets belonging to which have been so transferred; and if
all of the assets of the Trust have been so transferred, the Trust shall be
terminated.
The Trust, or any one or more Sub-Trusts, may, either as the successor,
survivor, or non-survivor, (1) consolidate with one or more other trusts,
partnerships, associations or corporations organized under the laws of the
Commonwealth of Massachusetts or any other state of the United States, to form a
new consolidated trust, partnership, association or corporation under the laws
of which any one of the constituent entities is organized, or (2) merge into one
or more other trusts, partnerships, associations or corporations organized under
the laws of the Commonwealth of Massachusetts or any other state of the United
States, or have one or more such trusts, partnerships, associations or
corporations merged into it, any such consolidation or merger to be upon such
terms and conditions as are specified in an agreement and plan of reorganization
entered into by the Trust, or one or more Sub-Trusts as the case may be, in
connection therewith. The terms "merge" or "merger" as used herein shall also
include the purchase or acquisition of any assets of any other trust,
partnership, association or corporation which is an investment company organized
under the laws of the Commonwealth of Massachusetts or any other state of the
United States. Any such consolidation or merger shall require the affirmative
vote of the holders of a majority of the outstanding voting Shares, as defined
in the 1940 Act, of each Sub-Trust affected thereby.
Section 7.3 Amendments. All rights granted to the Shareholders under this
----------
Declaration of Trust are granted subject to
24
<PAGE>
the reservation of the right to amend this Declaration of Trust as herein
provided, except that no amendment shall repeal the limitations on personal
liability of any Shareholder or Trustee or repeal the prohibition of assessment
upon the Shareholders without the express consent of each Shareholder or Trustee
involved. Subject to the foregoing, the provisions of this Declaration of Trust
(whether or not related to the rights of Shareholders) may be amended at any
time, so long as such amendment does not adversely affect the rights of any
Shareholder with respect to which such amendment is or purports to be applicable
and so long as such amendment is not in contravention of applicable law,
including the 1940 Act, by an instrument in writing signed by a majority of the
then Trustees (or by an officer of the Trust pursuant to the vote of a majority
of such Trustees). Any amendment to this Declaration of Trust that adversely
affects the rights of Shareholders may be adopted at any time by an instrument
in writing signed by a majority of the then Trustees (or by an officer of the
Trust pursuant to a vote of a majority of such Trustees) when authorized to do
so by the vote in accordance with subsection (e) of Section 4.2 of Shareholders
holding a majority of the Shares entitled to vote. Subject to the foregoing, any
such amendment shall be effective as provided in the instrument containing the
terms of such amendment or, if there is no provision therein with respect to
effectiveness, upon the execution of such instrument and of a certificate (which
may be a part of such instrument) executed by a Trustee or officer, of the Trust
to the effect that such amendment has been duly adopted.
Section 7.4 Filing of Copies; References; Headings. The original or a
--------------------------------------
copy of this instrument and of each amendment hereto shall be kept at the office
of the Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each amendment hereto shall be filed by the Trust With the
Secretary of The Commonwealth of Massachusetts and with the Boston City Clerk,
as well as any other governmental office where such filing may from time to time
be required, but the failure to make any such filing shall not impair the
effectiveness of this instrument or any such amendment. Anyone dealing with the
Trust may rely on a certificate by an officer of the Trust as to whether or not
any such amendments have been made, as to the identities of the Trustees and
officers, and as to any matters in connection with the Trust hereunder; and,
with the same effect as if it were the original, may rely on a copy certified by
an officer of the Trust to be a copy of this instrument or of any such
amendments. In this instrument and in any such amendment, references to this
instrument, and all expressions like "herein". "hereof" and "hereunder" shall
be deemed to refer to this instrument as a whole as the same may be amended or
affected by any such amendments. The masculine gender shall include the feminine
and neuter genders. Headings are placed herein for convenience of reference only
and shall not be taken as a part hereof or
25
<PAGE>
control or affect the meaning, construction or effect of this instrument. This
instrument may be executed in any number of counterparts each of which shall be
deemed an original.
Section 7.5 Applicable Law. This Declaration of Trust is made in The
--------------
Commonwealth of Massachusetts, and it is created under and is to be governed by
and construed and administered according to the laws of said Commonwealth,
including the Massachusetts Business Corporation Law as the same may be amended
from time to time, to which reference is made with the intention that matters
not specifically covered herein or as to which an ambiguity may exist shall be
resolved as if the Trust were a business corporation organized in
Massachusetts, but the reference to said Business Corporation Law is not
intended to give the Trust, the Trustees, the Shareholders or any other person
any right, power, authority or responsibility available only to or in connection
with an entity organized in corporate form. The Trust shall be of the type
referred to in Section 1 of Chapter 182 of the Massachusetts General Laws and of
the type commonly called a Massachusetts business trust, and without limiting
the provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a trust.
Section 7.6 Name of Trust. It is understood that the name "Van Eck", and
-------------
any logo associated with that name, is the valuable property of Van Eck
Management Corporation and that the Trust or any Sub-Trust has the right to
include "Van Eck" as a part of its name only through permission of Van Eck
Management Corporation. If Van Eck Management Corporation withdraws the right to
the use of its name, the Trust (and any Sub-Trust) shall forthwith cease to use
the Van Eck name and logo and shall take such action as may be necessary to
change its name (or the name of any Sub-Trust) to eliminate all use of or
reference to the word "Van Eck". The Trust hereby stipulates that companies or
trusts other than the Trust may be formed with the word "Van Eck" in their
titles.
26
<PAGE>
IN WITNESS WHEREOF, the undersigned hereunto sets his hand and seal in the
City of Boston, Massachusetts for himself and his assigns, as of the day and
year first above written.
/s/ H. Frederick Hagemann, Jr.
H. Frederick Hagemann, Jr.
THE COMMONWEALTH OF MASSACHUSETTS.
Suffolk, ss.
Then personally appeared the above-named H. Frederick Hagemann, Jr. who
acknowledged the foregoing instrument to be his free act and deed, before me,
this 3rd day of April, 1985.
/s/ Maurine A. McDermott
Notary Public
My commission expires: 2/2/90
27
<PAGE>
VAN ECK GLOBAL FUND
AMENDMENT NO. 1 TO MASTER TRUST AGREEMENT
Amendment No. 1 to the Master Trust Agreement dated April 3, 1985, made at
New York, New York, this 24th day of April, 1985.
W I T N E S S E T H:
- - - - - - - - - --
WHEREAS, Section 7.3 of the Master Trust Agreement dated April 3, 1985, as
amended (the "Agreement"), of Van Eck Global Fund (the "Trust") provides that
the Agreement may be amended at any time, so long as such amendment does not
adversely affect the rights of any shareholder and so long as such amendment is
not in contravention of applicable law, including the Investment Company Act of
1940, by an instrument in writing, signed by an officer of the Trust pursuant to
a vote of the majority of the Trustees of the Trust; and
WHEREAS, a majority of the Trustees of the Trust have duly adopted the
amendment to the Agreement shown below and authorized the same to be filed with
the Secretary of State of the Commonwealth of Massachusetts.
NOW, THEREFORE, the undersigned John C. van Eck, the duly elected and
serving President of the Trust, pursuant to the authorization described above,
hereby amends the Agreement in-the following respects:
<PAGE>
Section 1.1 of the Agreement and all other appropriate
references in the Agreement are amended to change the name
of the Trust from Van Eck Global Fund to Van Eck Funds.
WITNESS my hand and seal this 24th day of April, 1985.
/s/ John C. van Eck
John C. van Eck, President
STATE OF NEW YORK )
)SS.
COUNTY OF NEW YORK )
Then personally appeared the above-named John C. van Eck, and acknowledged
this instrument to be his free act and deed this 24th day of April, 1985.
/s/ Henry G. Neger
Notary Public
My Commission expires: March 30, 1987
2
<PAGE>
VAN ECK FUNDS
AMENDMENT NO. 2 TO MASTER TRUST AGREEMENT
Amendment No. 2 to the Master Trust Agreement dated April 3, 1985, made at
New York, New York, this 9th day of July, 1985.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Section 7.3 of the Master Trust Agreement dated April 3, 1985, as
amended (the "Agreement"), of Van Eck Funds (the "Trust") provides that the
Agreement may be amended at any time, so long as such amendment does not
adversely affect the rights of any shareholder and so long as such amendment is
not in contravention of applicable law, including the Investment Company Act of
1940, by an instrument in writing, signed by an officer of the Trust pursuant to
a vote of the majority of the Trustees of the Trust; and
WHEREAS, a majority of the Trustees of the Trust have duly adopted the
amendment to the Agreement shown below and authorized the same to be filed with
the Secretary of State of the Commonwealth of Massachusetts.
NOW, THEREFORE, the undersigned John C. van Eck, the duly elected and
serving President of the Trust, pursuant to the authorization described above,
hereby amends the Agreement in the following respects:
<PAGE>
Section 4.2 of the Agreement is amended to change the name of the
sole existing Sub-Trust of the Trust from Van Eck Global Fund to
World Trends Fund.
WITNESS my hand and seal this 9th day July, 1985.
/s/ John C. van Eck
John C. van Eck, President
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
Then personally appeared the above-named John C. van Eck, and acknowledged
this instrument to be his free act and deed this 9th day of July, 1985.
/s/ Henry G. Neger
Notary Public
My Commission expires: March 30, 1987
2
<PAGE>
VAN ECK FUNDS
AMENDMENT NO. 3 TO THE MASTER TRUST AGREEMENT
Amendment No. 3 to the Master Trust Agreement dated April 3, 1985, made at
New York, New York, this 12th day of November, 1985.
W I T N E S S E T H:
--------------------
WHEREAS, SECTION 7.3 of the Master Trust Agreement dated April 3, 1985, as
amended (the "Agreement"), of the Van Eck Funds (the "Trust") provides that the
Agreement may be amended at any time, so long as such amendment does not
adversely affect the rights of any shareholder and so long as such amendment is
not in contravention of applicable law, including the Investment Company Act of
1940, by an instrument in writing, signed by an officer of the Trust pursuant to
a vote of majority of the Trustees of the Trust; and
WHEREAS, a majority of Trustee of the Trust have duly adopted the amendment
to the Agreement shown below and authorized the same to be filed with the
Secretary of State of the Commonwealth of Massachusetts.
NOW, THEREFORE, the undersigned John C. van Eck, the duly elected and
serving President of the Trust, pursuant to the authorization described above,
hereby amends the Agreement in the following respects:
<PAGE>
Section 4.2 of the Agreement and all other appropriate references in the
Agreement are amended to designate and establish two new series of shares (in
addition to the "World Trends Fund" series heretofore established and
designated) to be known as the Gold/Resources Fund and U.S. Government Money
Fund, effective as of this date, such new series to have the relative rights and
preferences set forth in Subsections (a) through (l) of Section 4.2 of the
Agreement.
WITNESS my hand and seal this 12th day of November 1985.
/s/ John C. van Eck
John C. van Eck, President
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
Then personally appeared the above-named John C. van Eck, and acknowledged
this instrument to be his free act and deed this 12th day of November, 1985.
/s/ Henry G. Neger
Notary Public
My commission expires: March 30, 1987
<PAGE>
VAN ECK FUNDS
AMENDMENT NO. 4 TO MASTER TRUST AGREEMENT
Amendment No. 4 to the Master Trust Agreement dated April 3, 1985, made at
New York, New York, this 6th day of February, 1986.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, SECTION 7.3 of the Master Trust Agreement dated April 3, 1985, as
amended (the "Agreement"), of the Van Eck Funds (the "Trust") provides that the
Agreement may be amended at any time, so long as such amendment does not
adversely affect the rights of any shareholder and so long as such amendment is
not in contravention of applicable law, including the Investment Company Act of
1940, by an instrument in writing, signed by an officer of the Trust pursuant to
a vote of majority of the Trustees of the Trust; and
WHEREAS, a majority of Trustees of the Trust have duly adopted the
amendment to the Agreement shown below and authorized the same to be filed with
the Secretary of State of the Commonwealth of Massachusetts.
NOW, THEREFORE, the undersigned John C. van Eck, the duly elected and
serving President of the Trust, pursuant to the authorization described above,
hereby amends the Agreement in the following respects:
<PAGE>
The first paragraph of Section 4.1 of the Agreement is amended to read as
follows:
"Section 4.1 Description of Shares. The beneficial interest in the
---------------------
Trust shall be divided into Shares, all with $.001 par value and of one
class, but the Trustees shall have the authority from time to time to
divide the class of Shares into two or more Series of Shares (each of which
Series of Shares shall be a separate and distinct Sub-Trust of the Trust,
including without limitation those Sub-Trusts specifically established and
designated in Section 4.2), as they deem necessary or desirable. Each Sub-
Trust established hereunder shall be deemed to be a separate trust under
Massachusetts General Laws Chapter 182. The Trustees shall have exclusive
power without the requirement of shareholder approval to establish and
designate such separate and distinct Sub-Trusts, and to fix and determine
the relative rights and preferences as between the shares of the separate
Sub-Trusts as to right of redemption and the price, terms and manner of
redemption, special and relative rights as to dividends and other
distributions and on liquidation, sinking or purchase fund provisions,
conversion rights, and conditions under which the several Sub-Trusts shall
have separate voting rights or no voting rights."
WITNESS my hands and seal this 6th day of February, 1986.
/s/ John C. van Eck
John C. van Eck, President
STATE OF NEW YORK )
COUNTY OF NEW YORK)
Then personally appeared the above-named John C. van Eck, and acknowledged
this instrument to be his free act and deed this 6th day of February, 1986.
/s/ Henry G. Neger
Notary Public
My commission expires: March 30, 1987
2
<PAGE>
VAN ECK FUNDS
AMENDMENT NO. 5 TO MASTER TRUST AGREEMENT
Amendment No. 5 to the Master Trust Agreement dated April 3, 1985, made at
New York, New York, this 28th day of April, 1987.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, SECTION 7.3 of the Master Trust Agreement dated April 3, 1985, as
amended (the "Agreement"), of the Van Eck Funds (the "Trust") provides that the
Agreement may be amended at any time, so long as such amendment does not
adversely affect the rights of any shareholder and so long as such amendment is
not in contravention of applicable law, including the Investment Company Act of
1940, by an instrument in writing, signed by an officer of the Trust pursuant to
a vote of majority of the Trustees of the Trust; and
WHEREAS, a majority of Trustee of the Trust have duly adopted the amendment
to the Agreement shown below and authorized the same to be filed with the
Secretary of State of the Commonwealth of Massachusetts.
NOW, THEREFORE, the undersigned John C. Van Eck, the duly elected and
serving President of the Trust, pursuant to the authorization described above,
hereby amends the Agreement in the following respects:
<PAGE>
Section 4.2 of the Agreement and all other appropriate references in the
Agreement are amended to designate and establish a new series of shares (in
addition to the "World Trends Fund, Gold/Resources Fund and U.S. Government
Money Fund" series heretofore established and designated) to be known as the
World Income Fund, effective as of this date, such new series to have the
relative rights and preferences set forth in Subsections (a) through (1) of
Section 4.2 of the Agreement.
WITNESS my hand and seal this 28th day of April, 1987.
/s/ John C. van Eck
John C. van Eck, President
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
Then personally appeared the above-named John C. van Eck, and acknowledged
this instrument to be his free act and deed this 28th day of April, 1987.
/s/ Linda S. Cole
Notary Public
My commission expires: Jan. 31, 1989
<PAGE>
VAN ECK FUNDS
AMENDMENT NO. 6 TO MASTER TRUST AGREEMENT
Amendment No. 6 to the Master Trust Agreement dated April 3, 1985, as
amended, made at New York, New York, this 27th day of February, 1991.
W I T N E S S E T H:
- - - - - - - - - -
HEREAS, SECTION 7.3 of the Master Trust Agreement dated April 3, 1985, as
amended (the "Agreement"), of the Van Eck Funds (the "Trust") provides that the
Agreement may be amended at any time, as long as such amendment does not
adversely affect the rights of any shareholder and so long as such amendment is
not in contravention of applicable law, including the Investment Company Act of
1940, by an instrument in writing, signed by an officer of the Trust pursuant to
a vote of a majority of the Trustees of the Trust; and
WHEREAS, Section 4.1 of the Agreement provides that the Trustees of the
Trust may establish and designate additional series of Shares of the Trust; and
WHEREAS, a majority of Trustees of the Trust have duly approved this
amendment to the Agreement and authorized the same to be filed with the
Secretary of State of the Commonwealth of Massachusetts.
NOW, THEREFORE, the undersigned Michael G. Doorley, the duly elected and
serving vice-President of the Trust, pursuant to the authorization described
above, hereby declares (i) that
<PAGE>
Section 4.2 of the Agreement and all other appropriate references in the
Agreement are amended to establish and designate a new series of Shares (in
addition to the World Trends Fund, Gold/Resources Fund, U.S. Government Money
Fund and World Income Fund) to be known as "International Investors", such new
series to have the relative rights and preferences set forth in Subsections (a)
through (m) of Section 4.2 of the Agreement; (ii) that Article III of the
Agreement is amended to add Section 3.6 thereof setting forth certain investment
restrictions with respect to the International Investors series of the Trust, as
set forth herein below; and (iii) that Section 7.3 of the Agreement is amended
to include certain provisions for the amendment by shareholders of International
Investors of the investment restrictions set forth in Section 3.6, as set forth
herein below.
1. The initial paragraph of Section 4.2 of the Master Trust Agreement is
amended to read as follows:
"Section 4.2 Establishment and Designation of Sub-Trusts.
---------------------------------------------
Without limiting the authority of the Trustees set forth in Section
4.1 to establish and designate any further Sub-Trusts, the Trustees
hereby establish and designate five Sub-Trusts: World Trends Fund,
Gold/Resources Fund, U.S. Government Money Fund, World Income Fund and
International Investors. The World Trends Fund, Gold/Resources Fund,
U.S. Government Money Fund, World Income Fund, International Investors
and any Shares of any further Sub-Trusts that may from time to time be
established and designated by the Trustees shall (unless the Trustees
otherwise determine with respect to some further Sub-Trust at the time
of establishing and designating the same) have the following relative
rights and preferences:"
2
<PAGE>
2. Article III of the Master Trust Agreement is amended to add Section
3.6 thereof to read as follows:
"Section 3.6 Investment Restrictions with Respect to
---------------------------------------
International Investors. Notwithstanding anything to the contrary in
-----------------------
Section 3.2 hereof, the Trustees may not, with respect to
International Investors ("II"), (i) purchase securities on margin,
except as is necessary for the clearance of its transactions; (ii)
sell short unless II may readily acquire the security sold short by
virtue of its holding a right to purchase a quantity of such shorted
security sufficient to cover the short; (iii) lend its funds or
assets, except through the purchase of securities II would otherwise
be authorized to purchase; (iv) borrow unless for emergency or
extraordinary reasons, and provided such borrowings are limited to 10%
of total assets, taken at cost; (v) mortgage, pledge or hypothecate
more than 15% of II's total assets, taken at cost; (vi) purchase the
securities of any issuer with less than three (3) years' continuous
operation if 5% of II's total assets, taken at cost, are invested in
such issuer; (vii) purchase securities (exclusive of U.S. government
issues) if upon such purchase more than 5% of II's total assets (taken
at market value) would consist of the securities of such issuer;
(viii) purchase securities of any issuer if such purchase would cause
II to own at the time of purchase more than 10% of the outstanding
securities of such issuer; (ix) purchase securities issued by any
other investment company or investment trust, except by purchase in
the open market where no commission or profit to a sponsor or dealer
results from such purchase other than the customary brokerage
commission or except when such purchase, though not made in the open
market, is part of a plan of merger or consolidation; (x) purchase or
retain securities of an issuer having an officer, director or security
holder who is an officer or director of the Trust or who furnishes
management or supervising services to the Trust, if at the time of
such purchase or at any time thereafter any one or more of such
persons owns beneficially more than 1/2 of 1% of the securities of
such issuer or such persons or persons together own more than 5% of
such securities (all taken at market value); and (xi) underwrite
securities of other issuers or invest in futures contracts, commodity
futures contracts or commodities (excluding gold or silver bullion) or
options thereon."
3
<PAGE>
3. Section 7.3 is amended by adding the following clause at the end of
the third sentence thereof:
"; provided, however, that any amendment to Section 3.6 may be adopted
at any time by an instrument in writing signed by a majority of the
then Trustees (or by an officer of the Trust pursuant to a vote of a
majority of such Trustees) only when authorized to do so by the vote
of a "majority of the outstanding voting securities" of International
Investors, as such term is defined in the 1940 Act."
WITNESS my hand and seal this 27th day of February, 1991.
/s/ Michael G. Doorley
MICHAEL G. DOORLEY
VICE PRESIDENT
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
Then personally appeared the above-named Bruce J. Smith and acknowledged this
instrument to be his free act and deed this 27th day of February, 1991.
/s/ Thaddeus Leszczynski
Notary Public
My Commission Expires: 3/30/92
4
<PAGE>
VAN ECK FUNDS
AMENDMENT NO. 7 TO MASTER TRUST AGREEMENT
Amendment No. 7 to the Master Trust Agreement dated April 3, 1985, as
amended, made at New York, New York, this 27th of December, 1991.
W I T N E S S E T H:
--------------------
WHEREAS, Section 7.3 of the Master Trust Agreement dated April 3. 1985, as
amended (the "Agreement"), of the Van Eck Funds (the "Trust") provides that the
Agreement may be amended at any time, as long as such amendment does not
adversely affect the rights of any shareholder and so long as such amendment is
not in contravention of applicable law, including the Investment Company Act of
1940, by an instrument in writing, signed by an officer of the Trust pursuant to
a vote of a majority of the Trustees of the Trust; and
WHEREAS, Section 4.1 of the Agreement provides that the Trustees of the
Trust may establish and designate additional series of Shares of the Trust; and
WHEREAS, a majority of Trustees of the Trust have duly approved this
amendment to the Agreement and authorized the same to be filed with the
Secretary of State of the Commonwealth of Massachusetts.
NOW, THEREFORE, the undersigned David McClean, the duly elected and serving
Assistant Secretary of the Trust, pursuant to the authorization described above,
hereby declares that
<PAGE>
Section 4.2 of the Agreement and all other appropriate references in the
Agreement are amended to establish and designate two new series of Shares (in
addition to the World Trends Fund, Gold/Resources Fund, U.S. Government Money
Fund, World Income Fund and International Investors) to be known as the "Short-
Term World Income Fund" and "International Equities Fund," each such new series
to have the relative rights and preferences set forth in Subsections (a) through
(m) of Section 4.2 of the Agreement.
The initial paragraph of Section 4.2 of the Master Trust Agreement is
amended to read as follows:
"Section 4.2 Establishment and Designation of Sub-Trusts. Without
--------------------------------------------
limiting the authority of the Trustees not forth in Section 4.1 to
establish and designate any further Sub-Trusts, the Trustees hereby
,establish and designate seven Sub-trusts: World Trends Fund,
Gold/Resources Fund, U.S. Government Money Fund, World Income Fund,
International Investors, Short-Term World Income Fund and
International Equities Fund. The World Trends Fund, Gold/Resources
Fund, U.S. Government Money Fund, World Income Fund, International
Investors, Short-Term World Income Fund and International Equities
Fund and any Shares of any further Sub-Trusts that may from time to
time be established and designated by the Trustees shall (unless the
Trustees otherwise determine with respect to some further Sub-Trust at
the time of establishing and designating the same) have the following
relative rights and preferences:"
WITNESS my hand and seal this 27th day of December, 1991.
/s/ David McClean
David McClean, Assistant Secretary
2
<PAGE>
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
Then personally appeared the above-named David McClean and acknowledged this
instrument to be his free act and deed this 27th day of December, 1991.
/s/ Henry G. Neger
Notary Public
My Commission Expires: 12/31/93
3
<PAGE>
VAN ECK FUNDS
AMENDED AND RESTATED
MASTER TRUST AGREEMENT
February 6, 1992
(C)1992 Goodwin, Procter & Hoar
All Rights Reserved
<PAGE>
VAN ECK FUNDS
AMENDED AND RESTATED
MASTER TRUST AGREEMENT
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I. NAME AND DEFINITIONS 1
- --------- --------------------
Section 1.1 Name 1
Section 1.2 Definitions 1
(a) "Trust" 2
(b) "Trustees" 2
(c) "class" 2
(d) "Shares" 2
(e) "Sub-Trust" or "Series" 2
(f) "Shareholder" 2
(g) "1940 Act" 2
(h) "Commission" 2
(i) "Declaration of Trust" 2
(j) "By-Laws" 2
(k) "Securities" or "Security" 2
ARTICLE II. PURPOSE OF TRUST 2
- ---------- ----------------
ARTICLE III. THE TRUSTEES 3
- ----------- ------------
Section 3.1 Number, Designation, Election, Term, etc. 3
(a) Initial Trustee(s) 3
(b) Number 3
(c) Election and Term 3
(d) Resignation and Retirement 3
(e) Removal 3
(f) Vacancies 4
(g) Effect of Death, Resignation, etc. 4
(h) No Accounting 4
Section 3.2 Powers of Trustees 4
(a) Investments 5
(b) Disposition of Assets 6
(0) ownership Powers 6
(d) Subscription 6
(e) Form of Holding 6
(f) Reorganization, etc. 6
(g) Voting Trusts, etc. 6
(h) Compromise 6
(i) Partnerships, etc. 6
(j) Borrowing and Security 7
(k) Guarantees, etc. 7
(1) Insurance 7
(m) Pensions, etc. 7
(i)
<PAGE>
Section 3.3 Certain Contracts 8
(a) Advisory 8
(b) Administration 8
(c) Distribution 8
(d) Custodian and Depository 8
(e) Transfer and Dividend Dis-
bursing Agency 8
(f) Shareholder Servicing 9
(g) Accounting 9
Section 3.4 Payment of Trust Expenses and
Compensation of Trustees 10
Section 3.5 Ownership of Assets of the Trust 10
Section 3.6 Investment Restrictions with Respect
to International Investors 10
ARTICLE IV. SHARES 11
- --------- ------
Section 4.1 Description of Shares 11
Section 4.2 Establishment and Designation of
Sub-Trusts 13
(a) Assets Belonging to Sub-Trusts 13
(b) Liabilities Belonging to Sub-Trusts 14
(c) Dividends 15
(d) Liquidation 15
(e) Voting 16
(f) Redemption by Shareholder 16
(g) Redemption by Trust 17
(h) Net Asset Value 17
(i) Transfer 18
(j) Equality 18
(k) Fractions 18
(l) Conversion Rights 18
Section 4.3 Ownership of Shares 19
Section 4.4 Investments in the Trust 19
Section 4.5 No Pre-emptive Rights 19
Section 4.6 Status of Shares and Limitation of
Personal Liability 19
ARTICLE V. SHAREHOLDER' VOTING POWERS AND MEETINGS 20
- --------- ---------------------------------------
Section 5.1 Voting Powers 20
Section 5.2 Meetings 20
</TABLE>
(ii)
<PAGE>
<TABLE>
<S> <C>
Section 5.3 Record Dates 21
Section 5.4 Quorum and Required Vote 21
Section 5.5 Action by Written Consent 22
Section 5.6 Inspection of Records 22
Section 5.7 Additional Provisions 22
Section 5.8 Shareholder Communications 22
ARTICLE VI. LIMITATION OF LIABILITY; INDEMNIFICATION 23
- ---------- ----------------------------------------
Section 6.1 Trustees, Shareholders, etc. Not
Personally Liable; Notice 23
Section 6.2 Trustee's Good Faith Action; Expert
Advice; No Bond or Surety 24
Section 6.3 Indemnification of Shareholders 24
Section 6.4 Indemnification of Trustees, Officers,
etc. 24
Section 6.5 Compromise Payment 26
Section 6.6 Indemnification Not Exclusive, etc. 26
Section 6.7 Liability of Third Persons Dealing with
Trustees 26
ARTICLE VII. MISCELLANEOUS 27
- ----------- -------------
Section 7.1 Duration and Termination of Trust 27
Section 7.2 Reorganization 27
Section 7.3 Amendments 28
Section 7.4 Filing of Copies; References; Headings 29
Section 7.5 Applicable Law 29
Section 7.6 Name of Trust 30
</TABLE>
(iii)
<PAGE>
VAN ECK FUNDS
AMENDED AND RESTATED
MASTER TRUST AGREEMENT
AGREEMENT AND DECLARATION OF TRUST made at Boston, Massachusetts the 3rd day
of April, 1985 (the "Original Master Trust Agreement"), by the Trustee
hereunder, and by the holder of shares of beneficial interest to be issued
hereunder as hereinafter provided is amended and restated in its entirety this
6th day of February, 1992 in the City of New York in the State of New York, as
follows:
WITNESSETH
WHEREAS this Trust has been formed to carry on the business of an investment
company; and
WHEREAS this Trust is authorized to issue its shares of beneficial interest
in separate series, each separate series to be a Sub-Trust hereunder, and to
issue classes of Shares of any Sub-Trust or divide Share of any Sub-Trust into
two or more classes, all in accordance with the provisions hereinafter set
forth; and
WHEREAS the Trustees have agreed to manage all property coming into their
hands as trustees of a Massachusetts business trust in accordance with the
provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same upon the
following terms and conditions for the benefit of the holders from time to time
of shares of beneficial interest in this Trust or Sub-Trusts created hereunder
as hereinafter set forth.
ARTICLE I
---------
NAME AND DEFINITIONS
--------------------
Section 1.1 Name. This Trust shall be known as "VAN ECK FUNDS" and the
----
Trustees shall conduct the business of the Trust under that name or any other
name or names as they may from time to time determine.
Section 1.2 Definitions. Whenever used herein, unless otherwise required
-----------
by the context or specifically provided:
<PAGE>
(a) The "Trust" refers to the Massachusetts business trust established by
this Agreement and Declaration of Trust, as amended from time to time, inclusive
of each and every Sub-Trust established hereunder;
(b) "Trustees" refers to the Trustees of the Trust and of each Sub-Trust
hereunder named herein or elected in accordance with Article III;
(c) "class" refers to any class of Shares of any Series or Sub-Trust
established and designated under or in accordance with the provisions of Article
IV;
(d) "Shares" refers to the transferable units of interest into which the
beneficial interest in the Trust and each Sub-Trust of the Trust and/or Shares
of any Sub-Trust (as the context may require) shall be divided from time to
time;
(e) "Series" or "Sub-Trust" refers to series of Shares established and
designated under or in accordance with the provisions of Article-IV, each of
which Series shall be a Sub-Trust of the Trust;
(f) "Shareholder" means a record owner of Shares;
(g) The "1940 Act" refers to the Investment Company Act of 1940 and the
Rules and Regulations thereunder, all as amended from time to time;
(h) The term "Commission" shall have the meaning given it in the 1940 Act;
(i) "Declaration of Trust" shall mean this Agreement and Declaration of
Trust as amended or restated from time to time;
(j) "By-Laws" shall mean the By-Laws of the Trust as amended from time to
time; and
(k) "Securities" or "Security" shall mean and include, but shall not be
limited to, those securities described in Section 2(a)(36) of the 1940 Act.
ARTICLE II
----------
PURPOSE OF TRUST
----------------
The purpose of the Trust is to operate as an investment company and to offer
Shareholders of the Trust and each Sub-Trust of the Trust one or more investment
programs primarily in Securities or other property.
2
<PAGE>
ARTICLE III
-----------
THE TRUSTEES
------------
Section 3.1 Number, Designation, Election, Term, etc.
-----------------------------------------
(a) Trustees. The Trustees hereof and of each Sub-Trust shall be John C.
--------
van. Eck, Jeremy H. Biggs, Richard D. Cowell, James C. Dudley, Wesley G. McCain,
Harvey E. Mole, Ralph F. Peters, Fred M. van Eck and Alling Woodruff.
(b) Number. The Trustees serving as such, whether named above or hereafter
------
becoming Trustees, may increase or decrease the number of Trustees to a number
other than the number theretofore determined. No decrease in the number of
Trustees shall have the effect of removing any Trustee from office prior to the
expiration of his term, but the number of Trustees may be decreased in
conjunction with the removal of a Trustee pursuant to subsection (e) of this
Section 3.1.
(c) Election and Term. The Trustees shall be elected by the Shareholders
-----------------
of the Trust. Each Trustee, whether named above or hereafter becoming a Trustee,
shall serve as a Trustee of the Trust and of each Sub-Trust hereunder during the
lifetime-of this Trust and until its termination as hereinafter provided except
as such Trustee sooner dies, resigns, retires or is removed. Subject to Section
16(a) of the 1940 Act, the Trustees may elect their own successors and may,
pursuant to Section 3.1(f) hereof, appoint Trustees to fill vacancies.
(d) Resignation and Retirement. Any Trustee may resign his trust or retire
--------------------------
as a Trustee, by written instrument signed by him and delivered to the other
Trustees or to any officer of the, Trust, and such resignation or retirement
shall take effect upon such delivery or upon such later date as is specified in
such instrument and shall be effective as to the Trust and each Sub-Trust
hereunder.
(e) Removal. Any Trustee may be removed with or without cause at any time:
-------
(i) by written instrument, signed by at least two-thirds of the number of
Trustees in office immediately prior to such removal, specifying the date upon
which such removal shall become effective; or (ii) by vote of Shareholders
holding not less than two-thirds of the Shares then outstanding, cast in person
or by proxy at any meeting called for the purpose; or (iii) by a written
declaration signed by Shareholders holding not less than two-thirds of the
Shares then outstanding and filed with the Trust's Custodian. Any such removal
shall be effective as to the Trust and each Sub-Trust hereunder.
3
<PAGE>
(f) Vacancies. Any vacancy or anticipated vacancy resulting from any
---------
reason, including without limitation the death, resignation, retirement, removal
or incapacity of any of the Trustees, or resulting from an increase in the
number of Trustees by the other Trustees may (but need not unless required by
the 1940 Act) be filled by a majority of the remaining Trustees, subject to the
provisions of Section 16(a) of the 1940 Act, through the appointment in writing
of such other person as such remaining Trustees in their discretion shall
determine and such appointment shall be effective upon the written acceptance of
the person named therein to serve as a Trustee and agreement by such person to
be bound by the provisions of this Declaration of Trust, except that any such
appointment in anticipation of a vacancy to occur by reason of retirement,
resignation, or increase in number of Trustees to be effective at a later date
shall become effective only at or after the effective date of said retirement,
resignation, or increase in number of Trustees. As soon as any Trustee so
appointed shall have accepted such appointment and shall have agreed in writing
to be bound by this Declaration of Trust and the appointment is effective, the
Trust estate shall vest in the new Trustee, together with the continuing
Trustees, without any further act or conveyance.
(g) Effect of Death, Resignation, etc. The death, resignation, retirement,
---------------------------------
removal, or incapacity of the Trustees, or any one of them, shall not operate to
annul or terminate the Trust or any Sub-Trust hereunder or to revoke or
terminate any existing agency or contract created or entered into pursuant to
the terms of this Declaration of Trust.
(h) No Accounting. Except to the extent required by the 1940 Act or under
-------------
circumstances which would justify his removal for cause, no person ceasing to be
a Trustee as a result of his death, resignation, retirement, removal or
incapacity (nor the estate of any such person) shall be required to make an
accounting to the Shareholders or remaining Trustees upon such cessation.
Section 3.2 Powers of Trustees. Subject to the provisions of this
------------------
Declaration-of Trust, the business of the Trust shall be managed by the
Trustees, and they shall have all powers necessary or convenient to carry out
that responsibility and the purpose of the Trust. Without limiting the
foregoing, the Trustees may adopt By-Laws not inconsistent with this Declaration
of Trust providing for the conduct of the business and affairs of the Trust and
may amend and repeal them to the extent that such By-Laws do not reserve that
right to the Shareholders; they may from time to time in accordance with the
provisions of Section 4.1 hereof establish Sub-Irusts, each such Sub-Trust to
operate as a separate and distinct investment
4
<PAGE>
medium and with separately defined investment objectives, policies and
investment purposes; they may from time to time in accordance with the
provisions of Section 4.1 hereof establish classes of Shares of any Series or
Sub-Trust or divide the Shares of any series or Sub-Trust into two or more
classes; they may as they consider appropriate elect and remove officers and
appoint and terminate agents and consultants and hire and terminate employees,
any one or more of the foregoing of whom may be a Trustee, and may provide for
the compensation of all of the foregoing; they may appoint from their own
number, and terminate, any one or more committees consisting of two or more
Trustees, including without implied limitation an executive committee, which
may, when the Trustees are not in session and subject to the 1940 Act, exercise
some or all of the power and authority of the Trustees as the Trustees may
determine; in accordance with Section 3.3 they may employ one or more Advisers,
Administrators, Depositories and Custodians and may authorize any Depository or
Custodian to employ subcustodians or agents and to deposit all or any part of
such assets in a system or systems for the central handling of securities and
debt instruments, retain transfer, dividend, accounting or Shareholder servicing
agents or any of the foregoing, provide for the distribution of Shares by the
Trust through one or more distributors, principal underwriters or otherwise, and
set record dates or times for the determination of Shareholders or various of
them with respect to various matters; they may compensate or provide for the
compensation of the Trustees, officers, advisers, administrators, custodians,
other agents, consultants and employees of the Trust or the Trustees on such
terms as they deem appropriate; and in general they may delegate to any officer
of the Trust, to any committee of the Trustees and to any employee, adviser,
administrator, distributor, depository, custodian, transfer and dividend
disbursing agent, or any other agent or consultant of the Trust such authority,
powers, functions and duties as they consider desirable or appropriate for the
conduct of the business and affairs of the Trust, including without implied
limitation the power and authority to act in the-name of the Trust and any Sub-
Trust and of the Trustees, to sign documents and to act as attorney-in-fact for
the Trustees.
Without limiting the foregoing and to the extent not inconsistent with the
1940 Act or other applicable law, the Trustees shall have power and authority
for and on behalf of the Trust and each separate Sub-Trust established
hereunder:
(a) Investments. To invest and reinvest cash and other property, and to
-----------
hold cash or other property uninvested without in any event being bound or
limited by any present or future law or custom in regard to investments by
trustees;
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(b) Disposition of Assets. To sell, exchange, lend, pledge, mortgage,
---------------------
hypothecate, write options on and lease any or all of the assets of the Trust;
(c) Ownership Powers. To vote or give assent, or exercise any rights Of
----------------
ownership, with respect to Securities or other property; and to execute and
deliver proxies or powers of attorney to such person or persons as the Trustees
shall deem proper, granting to such person or persons such power and discretion
with relation to Securities or other property as the Trustees shall deem proper;
(d) Subscription. To exercise powers and rights of subscription or
------------
otherwise which in any manner arise out of ownership of Securities;
(e) Form of-Holding. To hold any Securities or other property in a form
---------------
not indicating any trust, whether in bearer, unregistered or other negotiable
form, or in the name of the Trustees or of the Trust or of any Sub-Trust or in
the name of a custodian, subcustodian or other depositary or a nominee or
nominees or otherwise;
(f) Reorganization, etc. To consent to or participate in any plan for the
-------------------
reorganization, consolidation or merger of any corporation or issuer, any
Security of which is or was held in the Trust; to consent to any contract,
lease, mortgage, purchase or sale of property by such corporation or issuer, and
to pay calls or subscriptions with respect to
any Security held in the Trust;
(g) Voting Trusts, etc. To join with other holders of any Securities in
------------------
acting through a committee, depositary, voting trustee or otherwise, and in that
connection to deposit any Security with, or transfer any Security to, any such
committee, depositary or trustee, and to delegate to them such power and
authority with relation to any Security (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree to pay, and to pay,
such portion of the expenses and compensation of such committee, depositary or
trustee as the Trustees shall deem proper;
(h) Compromise. To compromise, arbitrate or otherwise adjust claims in
----------
favor of or against the Trust or any Sub-Trust or any matter in controversy,
including but not limited to claims for taxes;
(i) Partnerships, etc. To enter into joint ventures, general or limited
------------------
partnerships and any other combinations or associations;
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(j) Borrowing and Security. To borrow funds and to mortgage and pledge the
----------------------
assets of the Trust or any Sub-Trust or any part thereof to secure obligations
arising in connection with such borrowing;
(k) Guarantees, etc. To endorse or guarantee the payment of any notes or
---------------
other obligations of any person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof; and to mortgage and pledge the
Trust property (or Sub-Trust property) or any part thereof to secure any of or
all such obligations;
(l) Insurance. To purchase and pay for entirely out of Trust property such
---------
insurance as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the assets
of the Trust and payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, consultants, investment advisers, managers,
administrators, distributors, principal underwriters, or independent
contractors, or any thereof (or any person connected therewith), of the Trust
individually against all claims and liabilities of every nature arising by
reason of holding, being or having held any such office or position, or by
reason of any action alleged to have been taken or omitted by any such person in
any such capacity, including any action taken or omitted that may be determined
to constitute negligence, whether or not the Trust would have the power to
indemnify such person against such liability; and
(m) Pensions, etc. To pay pensions for faithful service, as deemed
-------------
appropriate by the Trustees, and to adopt, establish and carry out pension,
profit-sharing, share bonus, share purchase, savings, thrift and other
retirement, incentive and benefit plans, trust and provisions, including the
purchasing of life insurance and annuity contracts as a means of providing such
retirement and other benefits, for any or all of the Trustees, officers,
employees and agents of the Trust.
Except as otherwise provided by the 1940 Act or other applicable law, this
Declaration of Trust or the By-Laws, any action to be taken by the Trustees on
behalf of the Trust or any Sub-trust or class thereof may be taken by a majority
of the Trustees present at a meeting of Trustees (a quorum, consisting of At
least a majority of the Trustees then in office, being present), within or
without Massachusetts, including any meeting held by means of a conference
telephone or other communications equipment by means of which all persons
participating in the meeting can hear each other at the same time and
participation by such means shall constitute presence in person at a meeting, or
by written consents of a majority of
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the Trustees then in office (or such larger or different number as may be
required by the 1940 Act or other applicable law).
Section 3.3 Certain Contracts. Subject to compliance with the provisions
-----------------
of the 1940 Act, but notwithstanding limitations of present and future law or
custom in regard to delegation of powers by trustees generally, the Trustees
may, at any time and from time to time and without limiting the generality of
their powers and authority otherwise set forth herein, enter into one or more
contracts with any one or more corporations, trusts, associations, partnerships,
limited partnerships, other type of organizations, or individuals ("Contracting
Party"), to provide for the performance and assumption of some or all of the
following services, duties and responsibilities to, for or on behalf of the
Trust and/or any Sub-Trust, and/or the Trustees, and to provide for the
performance and assumption of such other services, duties and responsibilities
in addition to those set forth below as the Trustees may determine appropriate:
(a) Advisor. Subject to the general supervision of the Trustees and in
-------
conformity with the stated policy of the Trustees with respect to the
investments of the Trust or of the assets belonging to any Sub-Trust of the
Trust (as that phrase is defined in subsection (a) of Section 4.2), to manage
such investments and assets, make investment decisions with respect thereto, and
to place purchase and sale orders for portfolio transactions relating to such
investments and assets;
(b) Administration. Subject to the general supervision of the Trustees and
--------------
in conformity with any policies of the Trustees with respect to the operations
of the Trust and each Sub-Trust, to supervise all or any part of the operations
of the Trust and each Sub-Trust (including each class thereof), and to provide
all or any part of the administrative and clerical personnel, office space and
office equipment and services appropriate for the efficient administration and
operations of the Trust and each Sub-Trust;
(c) Distribution. To distribute the Shares of the Trust and each Sub-
------------
Trust, to be principal underwriter of such Shares, and/or to act at agent of the
Trust and each Sub-Trust in the sale of Shares and the acceptance or rejection
of orders for the purchase of Shares;
(d) Custodian and Depository. To act as depository for and to maintain
------------------------
custody of the property of the Trust and each Sub-Trust and accounting records
in connection therewith;
(e) Transfer and Dividend Disbursing Agency. To maintain records of the
---------------------------------------
ownership of outstanding Shares, the issuance and redemption and the transfer
thereof, and to disburse any
8
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dividends declared by the Trustees and in accordance with the policies of the
Trustees and/or the instructions of any particular Shareholder to reinvest any
such dividends;
(f) Shareholder Servicing. To provide service with respect to the
---------------------
relationship of the Trust and its Shareholders, records with respect to
Shareholders and their Shares, and similar matters; and
(g) Accounting. To handle all or any part of the accounting
----------
responsibilities, whether with respect to the Trust's properties, Shareholders
or otherwise.
The same person may be the Contracting Party for some or all of the
services, duties and responsibilities to, for and of the Trust and/or the
Trustees, and the contracts with respect thereto may contain such terms
interpretive of or in addition to the delineation of the services, duties and
responsibilities provided for, including provisions that are not inconsistent
with the 1940 Act relating to the standard of duty of and the rights to
indemnification of the Contracting Party and others, as the Trustees may
determine. Nothing herein shall preclude, prevent or limit the Trust or a
Contracting Party from entering into sub-contractual arrangements relative to
any of the matters referred to in Sections 3.3(a) through (g) hereof.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, manager,
adviser, principal underwriter or distributor or agent of or for any
Contracting Party, or of or for any parent or affiliate of any Contracting
Party or that the Contracting Party or any parent or affiliate thereof is a
Shareholder or has an interest in the Trust or any Sub-Trust, or that
(ii) any Contracting Party may have a contract providing for the
rendering of any similar services to one or more other corporations, trusts,
associations, partnerships, limited partnerships or other organizations, or
have other business or interests,
shall not affect the validity of any contract for the performance and assumption
of services, duties and responsibilities to, for or of the Trust or any Sub-
Trust and/or the Trustees or disqualify any Shareholder, Trustee or officer of
the Trust from voting upon or executing the same or create any liability or
accountability to the Trust, any Sub-Trust or its Shareholders, provided that in
the case of any relationship or interest referred to in the preceding clause (i)
on the part of any Trustee or officer of the Trust either
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(x) the material facts as to such relationship or interest have been disclosed
to or are known by the Trustees not having any such relationship or interest and
the contract involved is approved in good faith by a majority of such Trustees
not having any such relationship or interest (even though such unrelated or
disinterested Trustees are less than a quorum of all of the Trustees), (y) the
material facts as to such relationship or interest and as to the contract have
been disclosed to or are known by the Shareholders entitled to vote thereon and
the contract involved is specifically approved in good faith by vote of the
Shareholders, or (z) the specific contract involved is fair to the Trust as of
the time it is authorized, approved or ratified by the Trustees or by the
Shareholders.
Section 3.4 Payment of Trust Expenses and Compensation of Trustees. The
------------------------------------------------------
Trustees are authorized to pay or to cause to be paid out of the principal or
income of the Trust or any Sub-Trust, or partly out of principal and partly out
of income, and to charge or allocate the same to, between or among such one or
more of the Sub-Trusts and/or one or more classes of Shares thereof that may be
established and designated pursuant to Article IV, as the Trustees deem fair,
all expenses, fees, charges, taxes and liabilities incurred or arising in
connection with the Trust or any Sub-Trust and/or any class of Shares thereof,
or in connection with the management thereof, including, but not limited to, the
Trustees' compensation and such expenses and charges for the services of the
Trust's officers, employees, investment adviser, administrator, distributor,
principal underwriter, auditor, counsel, depository, custodian, transfer agent,
dividend disbursing agent, accounting agent, Shareholder servicing agent, and
such other agents, consultants, and independent contractors and such other
expenses and charges as the Trustees may deem necessary or proper to incur.
Without limiting the generality of any other provision hereof, the Trustees
shall be entitled to reasonable compensation from the Trust for their services
as Trustees and may fix the amount of such compensation.
Section 3.5 Ownership of Assets of the Trust. Title to all of the assets;
--------------------------------
the Trust and of each Sub-Trust shall at all times be considered as vested in
the Trustees.
Section 3.6 Investment Restrictions with Respect to International
-----------------------------------------------------
Investors. Notwithstanding anything to the contrary in Section 3.2 hereof, the
- ---------
Trustees may not, with respect to International Investors ("II"), (i) purchase
securities on margin, except as is necessary for the clearance of its
transactions; (iii) sell short unless II may readily acquire the security sold
short by virtue of its holding a right to purchase a quantity of such shorted
security
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sufficient to cover the short; (iii) lend its funds or assets, except through
the purchase of securities II would otherwise be authorized to purchase; (iv)
borrow unless for emergency or extraordinary reasons, and provided such
borrowings are limited to 10% of total assets, taken at cost; (v) mortgage,
pledge or hypothecate more than 15% of II's total assets, taken at cost; (vi)
purchase the securities of any issuer with less than three (3) years' continuous
operation if 5% of II's total assets, taken at cost, are invested in such
issuer; (vii) purchase securities (exclusive of U.S. government issues) if upon
such purchase more than 5% of II's total assets (taken at market value) would
consist of the securities of such issuer; (viii) purchase securities of any
issuer if such purchase would cause II to own at the time of purchase more than
10% of the outstanding securities of such issuer; (ix) purchase securities
issued by any other investment company or investment trust, except by purchase
in the open market where no commission or profit to a sponsor or dealer results
from such purchase other than the customary brokerage commission or except when
such purchase, though not made in the open market, is part of a plan of merger
or consolidation; (x) purchase or retain securities of an issuer having an
officer, director or security holder who is an officer or director of the Trust
or who furnishes management or supervising services to the Trust, if at the time
of such purchase or at any time thereafter any one or more of such persons owns
beneficially more than 1/2 of 1% of the securities of such issuer or such
persons or persons together own more than 5% of such securities (all taken at
market value); and (xi) underwrite securities of other issuers or invest in
futures contracts, commodity futures contracts or commodities (excluding gold or
silver bullion) or options thereon.
ARTICLE IV
----------
SHARES
------
Section 4.1 Description of Shares. The beneficial interest in the Trust
---------------------
shall be divided into Shares, all with $.001 par value, but the Trustees shall
have the authority from time to time to divide of Shares into two or more Series
of Shares (each of which Series shall represent the beneficial interest in a
separate and distinct Sub-Trust of the Trust, including without limitation each
Sub-Trust specifically established and designated in Section 4.2), as they deem
necessary or desirable. Each Sub-Trust established hereunder shall be deemed to
be a separate trust under Massachusetts General Laws Chapter 182. The Trustees
shall have exclusive power without the requirement of shareholder approval to
establish and designate such separate and distinct Sub-Trusts, and to fix and
determine the relative rights and preferences as
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between the shares of the separate Sub-Trusts as to right of redemption and the
price, terms and manner of redemption, special and relative rights as to
dividends and other distributions and on liquidation, sinking or purchase fund
provisions, conversion rights, and conditions under which the several Sub-Trusts
shall have separate voting rights or no voting rights.
In addition, the Trustees shall have the authority from time to time to
issue classes of Shares of any Sub-Trust and to divide the Shares of any Sub-
Trust into classes, each class having such different dividend, liquidation,
voting and other rights as the Trustees may determine, and the Trustees shall
have the authority to establish and designate the specific classes of Shares of
each Sub-Trust. The fact that a Sub-Trust shall have initially been established
and designated without any specific establishment or designation of classes
(i.e., that all Shares of such Sub-Trust are initially of a single class), or
that a Sub-Trust shall have more than one established and designated class,
shall not limit the authority of the Trustees to establish and designate
separate classes, or one or more further classes, of said Sub-Trust without
approval of the holders of the initial class thereof, or previously established
and designated class or classes thereof, provided that the establishment and
designation of such further separate classes would not adversely affect the
rights of the holders of the initial or previously established and designated
class or classes (within the meaning of section 77 of the Massachusetts General
Laws Chapter 156B).
The number of authorized Shares and the number of Shares of each Sub-Trust
or class thereof that may be issued is unlimited, and the Trustees may issue
Shares of any Sub-Trust or class thereof for such consideration and on such
terms as they may determine (or for no consideration if pursuant to a Share
dividend or split-up), all without action or approval of the Shareholders. All
Shares when so issued on the terms determined by the Trustees shall be fully
paid and non-assessable (but may be subject to mandatory contribution back to
the Trust as provided in subsection (h) of Section 4.2). The Trustees may
classify or reclassify any unissued Shares or any Shares previously issued and
reacquired of any Sub-Trust or class thereof into one or more Sub-Trusts or
classes thereof that may be established and designated from time to time. The
Trustees may hold as treasury Shares, reissue for such consideration and on such
terms as they may determine, or cancel, at their discretion from time to time,
any Shares of any Sub-Trust or class thereof or class thereof reacquired by the
Trust.
The Trustees may from time to time close the transfer books or establish
record dates and times for the purposes of
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determining the holders of Shares entitled to be treated as such, to the extent
provided or referred to in Section 5.3.
The establishment and designation of any Sub-Trust or of any class of Shares
of any Sub-Trust in addition to those established and designated in Section 4.2
shall be effective (i) upon the execution by a majority of the then Trustees of
an instrument setting forth such establishment and designation and the relative
rights and preferences of the Shares of such Sub-Trust or class, (ii) upon the
execution of an instrument in writing by an officer of the Trust pursuant to the
vote of a majority of the Trustees, or (iii) as otherwise provided in either
such instrument. At any time that there are no Shares outstanding of any
particular Sub-Trust or class previously established and designated the Trustees
may by an instrument executed by a majority of their number abolish that Sub-
Trust or class and the establishment and designation thereof. Each instrument
referred to in this paragraph shall have the status of an amendment to this
Declaration of Trust.
Any Trustee, officer or other agent of the Trust, and any organization in
which any such person is interested may acquire, own, hold and dispose of Shares
of any Sub-Trust (including any class thereof) of the Trust to the same extent
at if such person were not a Trustee, officer or other agent of the Trust; and
the Trust may issue and sell or cause to be issued and sold and may purchase
Shares of any Sub-Trust (including any class thereof) from any such person or
any such organization subject only to the general limitations, restrictions or
other provisions applicable to the sale or purchase of Shares of such Sub-Trust
(including any class thereof) generally.
Section 4.2 Establishment and Designation of Sub-Trusts. Without limiting
-------------------------------------------
the authority of the Trustees set forth in Section 4.1 to establish and
designate any further Sub-Trusts, the Trustees hereby establish and designate
the following seven Sub-Trusts: World Trends Fund, Gold/Resources Fund, U.S.
Government Money Fund, World Income Fund, International Investors, Short-Term
World-Income Fund and International Equities Fund. Shares of such Sub-Trusts
and any Shares of any further Sub-Trusts that may from time to time be
established and designated by the Trustees shall (unless the Trustees otherwise
determine with respect to some further Sub-Trust at the time of establishing and
designating the same) have the following relative rights and preferences:
(a) Assets Belonging to Sub-Trusts. All consideration received by the
------------------------------
Trust for the issue or sale of Shares of a particular Sub-Trust or any class
thereof, together with all assets in which such consideration is invested or
reinvested,
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all income, earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation of such assets, and any funds-or
payments derived from any reinvestment of such proceeds in whatever form the
same may be, shall be held by the Trustees in trust for the benefit of the
holders of Shares of that Sub-Trust or any class thereof and shall irrevocably
belong to that Sub-Trust and allocable to any classes thereof for all purposes,
and shall be so recorded upon the books of account of the Trust. Such
consideration, assets, income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any reinvestment of such
proceeds, in whatever form the same may be, together with any General Items (as
hereinafter defined) allocated to that Sub-trust as provided in the following
sentence, are herein referred to as "assets belonging to" that Sub-Trust (and be
allocable to any classes thereof). In the event that there are any assets,
income, earning, profits, and proceeds thereof, funds, or payments which are not
readily identifiable as belonging to any particular Sub-Trust (collectively
"General items"), the Trustees shall allocate such General Items to and among
any one or more of the Sub-Trusts established and designated from time to time
in such manner and on such basis as they, in their sole discretion, deem fair
and equitable; and any General Items so allocated to a particular Sub-Trust
shall belong to that Sub-Trust (and be allocable to any classes thereof). Each
such allocation by the Trustees shall be conclusive and binding upon the
Shareholders of all Sub-Trusts (including any classes thereof) for all purposes.
(b) Liabilities Belonging to Sub-Trusts. The assets belonging to each
-----------------------------------
particular Sub-Trust shall be charged with the liabilities in respect of that
Sub-Trust and all expenses, costs, charges and reserves attributable to that
Sub-Trust, and any general liabilities, expenses, costs, charges or reserves of
the Trust which are not readily identifiable as belonging to any particular Sub-
Trust shall be allocated and charged by the Trustees to and among any one or
more of the Sub-Trusts established and designated from time to time in such
manner and on such basis as the Trustees in their sole discretion deem fair and
equitable. In addition, the liabilities applicable to a particular class of
Shares of a particular Sub-Trust and all expenses, costs, charges and reserves
belonging to that class, and any general liabilities, expenses, costs or
reserves of that particular Sub-Trust that are not readily identifiable as
belonging to any particular class of Shares of that Sub-Trust shall be allocated
and charged by the Trustees to and among any one or more of the classes of that
Sub-Trust established and designated from time to time as the Trustees in their
sole discretion deem fair and equitable. The liabilities, expenses, costs,
charges and reserves allocated and so charged to a
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Sub-Trust or class thereof are herein referred to as "liabilities belonging to"
that Sub-Trust or class thereof. Each allocation of liabilities, expenses,
costs, charges and reserves by the Trustees shall be conclusive and binding upon
the Shareholders of all Sub-Trusts (including any classes thereof) for all
purposes. Any creditor of any Sub-Trust may look only to the assets of that Sub-
Trust to satisfy such creditor's debt.
The Trustees shall have full discretion, to the extent not inconsistent with
the 1940 Act, to determine which items shall be treated as income and which
items as capital; and each such determination and allocation shall be conclusive
and binding upon the Shareholders.
(c) Dividends. Dividends and distributions on Shares of a particular Sub-
---------
Trust or any class thereof may be paid with such frequency as the Trustees may
determine, which may be daily or otherwise pursuant to a standing resolution or
resolutions adopted only once or with such frequency as the Trustees may
determine, to the holders of Shares of that Sub-Trust or class, from such of the
income and capital gains, accrued or realized, from the assets belonging to that
Sub-Trust or in the case of a class belonging to that Sub-Trust and allocable to
that class, as the Trustees may determine, after providing for actual and
accrued liabilities belonging to that Sub-Trust or class. All dividends and
distributions on Shares of a particular Sub-Trust or class thereof shall be
distributed pro rata to the holders of Shares of that Sub-Trust or class in
proportion to the number of Shares of that Sub-Trust or class held by such
holders at the date and time of record established for the payment of such
dividends or distributions, except that in connection with any dividend or
distribution program or procedure the Trustees may determine that no dividend or
distribution shall be payable on Shares as to which the Shareholder's purchase
order and/or payment have not been received by the time or times established by
the Trustees under such program or procedure. Such dividends and distributions
may be made in cash or Shares of that Sub-Trust or class or a combination
thereof as determined by the Trustees or pursuant to any program that the
Trustees may have in effect at the time for the election by each Shareholder of
the mode of the making of such dividend or distribution to that Shareholder. Any
such dividend or distribution paid in Shares will be paid at the net asset value
thereof as determined in accordance with subsection (h) of Section 4.2.
(d) Liquidation. In the event of the liquidation or dissolution of the
-----------
Trust, the holders of Shares of each Sub-Trust or any class thereof that has
been established and designated and that has voted to be liquidated or
dissolved,
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shall be entitled to receive, when and as declared by the Trustees, the excess
of the assets belonging to that Sub Trust or in the case of a class, belonging
to that Sub-Trust and allocable to that class, over the liabilities belonging to
that Sub-Trust or class. The assets so distributable to the holders of Shares of
any particular Sub-Trust or any class thereof shall be distributed among such
holders in proportion to the number of Shares of that Sub-Trust or class held by
them and recorded on the books of the Trust. The liquidation of any particular
Sub-Trust may be authorized at any time by vote of a majority of the Trustees
then in office subject to the approval of a majority of the outstanding voting
Shares of that Sub-Trust, as defined in the 1940 Act.
(e) Voting. On each matter submitted to a vote of the Shareholders, each
------
holder of a Share shall be entitled to one vote for each whole Share and to a
proportionate fractional vote for each fractional Share standing in his name on
the books of the Trust and all Shares of each Sub-Trust shall vote as a separate
class except as to voting for Trustees and as otherwise required by the 1940 Act
and except as set forth in the instrument establishing and designating any class
of any Sub-Trust and, further, except that as to any matter which does not
affect the interest of a particular Sub-Trust or class thereof, only the holders
of Shares of the one or more affected Sub-Trusts or classes shall be entitled to
vote.
(f) Redemption by Shareholder. Each holder of Shares of a particular Sub-
-------------------------
Trust or any class thereof shall have the right at such times as may be
permitted by the Trust and as otherwise required by the 1040 Act to require the
Trust to redeem all or any part of his Shares of that Sub-Trust or class thereof
at a redemption price equal to the net asset value per Share of that Sub-Trust
or class thereof next determined in accordance with subsection (h) of this
Section 4.2 after the Shares are properly tendered for redemption, subject to
any contingent deferred sales charge in effect at the time of redemption.
Payment of the redemption price shall be in cash; provided, however, that if the
Trustees determine, which determination shall be conclusive, that conditions
exist which make payment wholly in cash unwise or undesirable, the Trust may,
subject to the requirements of the 1940 Act, make payment wholly or partly in
securities or other assets belonging to the Sub-Trust of which the Shares being
redeemed are part at the value of such securities or assets used in such
determination of net asset value.
Notwithstanding the foregoing, the Trust may postpone payment of the
redemption price and may suspend the right of the holders of Shares of any Sub-
Trust or class thereof to require the Trust to redeem Shares of that Sub-Trust
or class
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thereof during any period or at any time when and to the extent permissible
under the 1940 Act.
(g) Redemption by Trust. Each Share of each Sub-Trust or class thereof
-------------------
that has been established and designated is subject to redemption by the Trust
at the redemption price which would be applicable if such Share was then being
redeemed by the Shareholder pursuant to subsection (f) of this Section 4.2: (a)
at any time, if the Trustees determine in their sole discretion that failure to
so redeem may have materially adverse consequences to the holders of the Shares
of the Trust or any Sub-Trust or class thereof, or (b) upon such other
conditions as may from time to time be determined by the Trustees and set forth
in the then current Prospectus of the Trust with respect to maintenance of
Shareholder accounts of a minimum amount. Upon such redemption the holders of
the Shares so redeemed shall have no further right with respect thereto other
than to receive payment of such redemption price.
(h) Net Asset Value. The net asset value per Share of any Sub-Trust shall
---------------
be (i) in the case of a Sub-Trust whose Shares are not divided into classes, the
quotient obtained by dividing the value of the net assets of that Sub-Trust
(being the value of the assets belonging to that Sub-Trust less the liabilities
belonging to that Sub-Trust) by the total number of Shares of that Sub-Trust
outstanding, and (ii) in the case of a class of a Sub-Trust the Shares of which
are divided into classes, the quotient obtained by dividing the value of the net
assets of the Sub-Trust allocable to such class) being the value of the assets
belonging to that Sub-Trust allocable to such class less the liabilities
belonging to such class by the total number of Shares of such class outstanding;
all determined in accordance with the methods and procedures, including without
limitation those with respect to rounding, established by the Trustees from time
to time.
The Trustees may determine to maintain the net asset value per Share of any
Sub-Trust at a designated constant dollar amount(or other currency unit) and in
connection therewith may adopt procedures not inconsistent with the 1940 Act for
the continuing declarations of income attributable to that Sub-Trust as
dividends payable in additional Shares of that Sub-Trust at the designated
constant dollar amount (or other currency unit) and for the handling of any
losses attributable to that Sub-Trust. Such procedures may provide that in the
event of any loss each Shareholder shall be deemed to have contributed to the
capital of the Trust attributable to that Sub-Trust his pro rata portion of the
total number of Shares required to be cancelled in order to permit the net asset
value per Share of that Sub-Trust to be maintained, after reflecting such loss,
at the designated constant dollar amount (or other
17
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currency unit). Each Shareholder of the Trust shall be deemed to have agreed, by
his investment in any Sub-Trust with respect to which the Trustees shall have
adopted any such procedure, to make the contribution referred to in the
preceding sentence in the event of any such loss.
(i) Transfer. All Shares of each particular Sub-Trust or class thereof
--------
shall be transferable, but transfers of Shares of a particular Sub-Trust or
class thereof will be recorded on the Share transfer records of the Trust
applicable to that Sub-Trust or class thereof only at such times as Shareholders
shall have the right to require the Trust to redeem Shares of that Sub-Trust or
class thereof and at such other times as may be permitted by-the Trustees.
(j) Equality. Except as provided herein or in the instrument establishing
--------
and designating any class of any Sub-Trust, all Shares of each particular Sub-
Trust or class thereof shall represent an equal proportionate interest in the
assets belonging to that Sub-Trust, or in the case of a class, belonging to that
Sub-Trust and allocable to that class subject to the liabilities belonging to
that Sub-Trust or class, and each Share of any particular Sub-Trust shall be
equal to each other Share of that Sub-Trust or class; but the provisions of this
sentence shall not restrict any distinctions permissible under subsection (c) of
this Section 4.2 that may exist with respect to dividends and distributions on
Shares of the same Sub-Trust or class. The Trustees may from time to time divide
or combine the Shares of any particular Sub-Trust or class into a greater or
lesser number of Shares of that Sub-Trust or class without thereby changing the
proportionate beneficial interest in the assets belonging to that Sub-Trust or
class or in any way affecting the rights of Shares of any other Sub-Trust or
class.
(k) Fractions. Any fractional Share of any Sub-Trust or class, if any such
---------
fractional Share is outstanding shall carry proportionately all the rights and
obligations of a whole Share of that Sub-Trust or class, including rights and
obligations with respect to voting, receipt of dividends and distributions,
redemption of Shares, and liquidation of the Trust or any Sub-Trust (including
classes thereof).
(l) Conversion Rights. Subject to compliance with the requirements of the
-----------------
1940 Act, the Trustees shall have the authority to provide that holders of
Shares of any Sub-Trust or classes thereof shall have the right to convert said
Shares into Shares of one or more other Sub-Trust or class thereof in accordance
with such requirements and procedures as may be established by the Trustees.
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Section 4.3 Ownership of Shares. The ownership of Shares shall be recorded
-------------------
on the books of the Trust or of a transfer or similar agent for the Trust, which
books shall be maintained separately for the Shares of each Sub-Trust and each
class thereof that has been established and designated. No certificates
certifying the ownership of Shares need be issued except as the Trustees may
otherwise determine from time to time. The Trustees may make such rules as they
consider appropriate for the issuance of Share certificates, the use of
facsimile signatures, the transfer of Shares and similar matters. The record
books of the Trust as kept by the Trust or any transfer or similar agent, as the
case may be, shall be conclusive as to who are the Shareholders and as to the
number of Shares of each Sub-Trust and class thereof held from time to time by
each such Shareholder.
Section 4.4 Investments in the Trust. The Trustees may accept investments
------------------------
in the Trust and each Sub-Trust from such persons and on such terms and for such
consideration, not inconsistent with the provisions of the 1940 Act, as they
from time to time authorize. The Trustees may authorize any distributor,
principal underwriter, custodian, transfer agent or other person to accept
orders for the purchase of Shares that conform to such authorized terms and to
reject any purchase orders for Shares whether or not conforming to such
authorized terms.
Section 4.5 No Pre-emptive Rights. Shareholders shall have no pre-emptive
---------------------
or other right to subscribe to any additional Shares or other securities issued
by the Trust.
Section 4.6 Status of Shares and Limitation of Personal Liability. Shares
-----------------------------------------------------
shall be deemed to be personal property giving only the rights provided in this
instrument. Every Shareholder by virtue of having become a Shareholder shall be
held to have expressly assented and agreed to the terms hereof and to have
become a party hereto. The death of a Shareholder during the continuance of the
Trust shall not operate to terminate the Trust or any Sub-Trust thereof nor
entitle the representative of any deceased Shareholder to an accounting or to
take any action in court or elsewhere against the Trust or the Trustees, but
only to the rights of said decedent under this Trust. Ownership of Shares shall
not entitle the Shareholder to any title in or to the whole or any part of the
Trust property or right to call for a partition or division of the same or for
an accounting, not shall the ownership of Shares constitute the Shareholders
partners. Neither the Trust nor the Trustees, nor any officer, employee or
agent of the Trust shall have any power to bind personally any Shareholder, nor
except as specifically provided herein to call upon any Shareholder for the
payment of any sum of money or assessment
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whatsoever other than such as the Shareholder may at any time personally agree
to pay.
ARTICLE V
---------
SHAREHOLDERS' VOTING POWERS AND MEETINGS
----------------------------------------
Section 5.1 Voting Powers. The Shareholders shall have power to vote only
-------------
(i) for the election or removal of Trustees as provided in Section 3.1, (ii)
with respect to any contract with a Contracting Party as provided in Section
3.3 as to which Shareholder approval is required by the 1940 Act, (iii) with
respect to any termination or reorganization of the Trust or any Sub-Trust
(including any class thereof) to the extent and as provided in Sections 7.1 and
7.2, (iv) with respect to any amendment of this Declaration of Trust to the
extent and as provided in Section 7.3, (v) to the same extent as the
stockholders of a Massachusetts business corporation as to whether or not a
court action, proceeding or claim should or should not be brought or maintained
derivatively or as a class action on behalf of the Trust or any Sub-Trust
(including any classes thereof, thereof or the Shareholders (provided, however,
that a shareholder of a particular Sub-Trust or of a particular class of a
particular Sub-Trust shall not be entitled to a derivative or class-action on
behalf of any other Sub-Trust (or shareholder of any other Sub-Trust or of a
particular class of a particular Sub-Trust) of the Trust) and (vi) with respect
to such additional matters relating to the Trust as may be required by the 1940
Act, this Declaration of Trust, the By-Laws or any registration of the Trust
with the Commission (or any successor agency) or any state, or as the Trustees
may consider necessary or desirable. There shall be no cumulative voting in the
election of Trustees. Shares may be voted in person or by proxy. A proxy with
respect to Shares held in the name of two or more persons shall be valid if
executed by any one of them unless at or prior to exercise of the proxy the
Trust receives a specific written notice to the contrary from any one of them. A
proxy purporting to be executed by or on behalf of a Shareholder shall be deemed
valid unless challenged at or prior to its exercise and the burden of proving
invalidity shall rest on the challenger. Until Shares are issued, the Trustees
may exercise all rights of Shareholders and may take any action required by law,
this Declaration of Trust or the By-Laws to be taken by Shareholders.
Section 5.2 Meetings. No annual or regular meeting of Shareholders is
--------
required. Special meetings of Shareholders may be called by the Trustees from
time to time for the purpose of taking action upon any matter requiring the vote
or authority of the Shareholders as herein provided or upon any other matter
20
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deemed by the Trustees to be necessary or desirable. Written notice of any
meeting of Shareholders shall be given or caused to be given by the Trustees by
mailing or transmitting such notice at least seven days before such meeting,
postage prepaid, stating the time, place and purpose of the meeting, to each
Shareholder at the Shareholder's address as it appears on the records of the
Trust. The Trustees shall promptly call and give notice of a meeting of
Shareholders for the purpose of voting upon removal of any Trustee of the Trust
when requested to do so in writing by Shareholders holding not less than 10% of
the Shares then outstanding. If the Trustees shall fail to call or give notice
of any meeting of Shareholders for a period of 30 days after written Application
by Shareholders holding at least 10% of the Shares then outstanding requesting a
meeting be called for any other purpose requiring action by the Shareholders as
provided herein or in the By-Laws, then Shareholders holding at least 10% of the
Shares then outstanding may call and give notice of such meeting, and thereupon
the meeting shall be held in the manner provided for herein in case of call
thereof by the Trustees.
Section 5.3 Record Dates. For the purpose of determining the Shareholders
------------
who are entitled to vote or act at any meeting or any adjournment thereof, or
who are entitled to participate in any dividend or distribution, or for the
purpose of any other action, the Trustees may from time to time close the
transfer books for such period, not exceeding 30 days (except at or in
connection with the termination of the Trust), as the Trustees may determine; or
without closing the transfer books the Trustees may fix a date and time not more
than 60 days prior to the date of any meeting of Shareholders or other action as
the date and time of record for the determination of Shareholders entitled to
vote at such meeting or any adjournment thereof or to be treated as Shareholders
of record for purposes of such other action, and any Shareholder who was a
Shareholder at the date and time so fixed shall be entitled to vote at such
meeting or any adjournment thereof or to be treated as a Shareholder of record
for purposes of such other action, even though he has since that date and time
disposed of his Shares, and no Shareholder becoming such after that date and
time shall be so entitled to vote at such meeting or any adjournment thereof or
to be treated as a Shareholder of record for purposes of such other action.
Section 5.4 Quorum and Required Vote. A majority of the Shares entitled to
------------------------
vote shall be a quorum for the transaction of business at a Shareholders'
meeting, but any lesser number shall be sufficient for adjournments. Any
adjourned session or sessions may be held, within a reasonable time after the
date set for the original meeting without the necessity of further notice. A
majority of the Shares voted, at a meeting of which
21
<PAGE>
a quorum is present shall decide any questions and a plurality shall elect a
Trustee, except when a different vote is required or permitted by any provision
of the 1940 Act or other applicable law or by this Declaration of Trust or the
By-Laws.
Section 5.5 Action by Written Consent. Subject to the provisions of the
-------------------------
1940 Act and other applicable law, any action taken by Shareholders may be taken
without a meeting if a majority of Shareholders entitled to vote on the matter
(or such larger proportion thereof as shall be required by the 1940 Act or by
any express provision of this Declaration of Trust or the By-Laws) consent to
the action in writing and such written consents are filed with the records of
the meetings of Shareholders. Such consent shall be treated for all purposes as
a vote taken at a meeting of Shareholders.
Section 5.6 Inspection of Records. The records of the Trust shall be open
---------------------
to inspection by Shareholders to the same extent as it permitted stockholders of
a Massachusetts business corporation under the Massachusetts Business
Corporation Law.
Section 5.7 Additional Provisions. The By-Laws may include further
---------------------
provisions for Shareholders' votes and meetings and related matters not
inconsistent with the provisions hereof.
Section 5.8 Shareholder Communications. Whenever ten or more Shareholders
--------------------------
of record who have been Such for at least six months preceding the date of
application, and who hold in the aggregate either Shares having a net asset
value of at least $25,000 or at least 1% of the outstanding Shares, whichever is
less, shall apply to the Trustees in writing, stating that they wish to
communicate with other Shareholders with a view to obtaining signatures to a
request for a Shareholder meeting and accompanied by a form of communication and
request which they wish to transmit, the Trustees shall within five business
days after receipt of such application either (1) afford to such applicants
access to a list of the names and addresses of all Shareholders as recorded on
the books of the Trust or Sub-Trust, as applicable; or (2) inform such
applicants as to the approximate number of Shareholders of record, and the
approximate cost of mailing to them the proposed communication and form of
request.
If the Trustees elect to follow the course specified in clause (2) above,
the Trustees, upon the written request of such applicants, accompanied by a
tender of the material to be mailed and the reasonable expenses of mailing,
shall, with reasonable promptness, mail such material to all Shareholders of
record at their addresses as recorded on the books, unless within five business
days after such tender the Trustees shall mail to such applicants and file with
the Commission, together
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<PAGE>
with a copy of the material to be mailed, a written statement signed by at least
a majority of the Trustees to the effect that in their opinion either such
material contains untrue statements of fact or omits to state facts necessary to
make the statements contained therein not misleading, or would be in violation
of applicable law, and specifying the basis of such opinion. The Trustees shall
thereafter comply with any order entered by the Commission and the requirements
of the 1940 Act and the Securities Exchange Act of 1934.
ARTICLE VI
----------
LIMITATION OF LIABILITY; INDEMNIFICATION
----------------------------------------
Section 6.1 Trustees, Shareholders, etc. Not Personally Liable; Notice.
----------------------------------------------------------
All persons extending credit to, contracting with or having any claim against
the Trust shall look only to the assets of the Sub-Trust with which such person
dealt for payment under such credit, contract or claim; and neither the
Shareholders of any Sub-Trust nor the Trustees, nor any of the Trust's officers,
employees or agents, whether past, present or future, nor any other Sub-Trust
shall be personally liable therefor. Every note, bond, contract, instrument,
certificate or undertaking and every other actor thing whatsoever executed or
done by or on behalf of the Trust, any Sub-Trust or the Trustees or any of them
in connection with the Trust shall be conclusively deemed to have been executed
or done only by or for the Trust (or the Sub-Trust) or the Trustees and not
personally. Nothing in this Declaration of Trust shall protect any Trustee or
officer against any liability to the Trust or the Shareholders to which such
Trustee or officer would otherwise be subject by reason of wilful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee or of such officer.
Every note, bond, contract, instrument, certificate or undertaking made or
issued by the Trustees or by any officers or officer shall give notice that this
Declaration of Trust is on file with the Secretary of The Commonwealth of
Massachusetts and shall recite to the effect that the same was executed or made
by or on behalf of the Trust or by them as Trustees or Trustee or as officers or
officer and not individually and that the obligations of such instrument are not
binding upon any of them or the Shareholders individually but are binding only
upon the assets and property of the Trust, or the particular Sub-Trust in
question, as the case may be, but the omission thereof shall not operate to bind
any Trustees or Trustee or officers or officer or Shareholders or Shareholder
individually.
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Section 6.2 Trustee's Good Faith Action; Expert Advice; No Bond or Surety.
-------------------------------------------------------------
The exercise by the Trustees of their powers and discretions hereunder shall be
binding upon everyone interested. A Trustee shall be liable for his own wilful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee, and for nothing else, and
shall not be liable for errors of judgment or mistakes of fact or law. Subject
to the foregoing, (a) the Trustees shall not be responsible or liable in any
event for any neglect or wrongdoing of any officer, agent, employee, consultant,
adviser, administrator, distributor or principal underwriter, custodian or
transfer, dividend disbursing, Shareholder servicing or accounting agent of the
Trust, nor shall any Trustee be responsible for the act or omission of any other
Trustee; (b) the Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Declaration of Trust and their
duties as Trustees, and shall be under no liability for any act or omission in
accordance with such advice or for failing to follow such advice; and (c) in
discharging their duties, the Trustees, when acting in good faith, shall be
entitled to rely upon the books of account of the Trust and upon written reports
made to the Trustees by any officer appointed by them, any independent public
accountant, and (with respect to the subject matter of the contract involved)
any officer, partner or responsible employee of a Contracting Party appointed by
the Trustees pursuant to Section 3.3. The Trustees as such shall not be required
to give any bond or surety or any other security for the performance of their
duties.
Section 6.3 Indemnification of Shareholders. In case any Shareholder (or
-------------------------------
former Shareholder) of any Sub-Trust of the Trust shall be charged or held to be
personally liable for any obligation or liability of the Trust solely by reason
of being or having been a Shareholder and not because of such Shareholder's acts
or omissions or for some other reason, said Sub-Trust (upon proper and timely
request by the Shareholder) shall assume the defense against such charge and
satisfy any judgment, thereon, and the Shareholder or former Shareholder (or his
heirs, executors, administrators or other legal representatives or in the case
of a corporation or other entity, its corporate or other general successor)
shall be entitled out of the assets of said Sub-Trust estate to be held harmless
from and indemnified against all loss and expense arising from such liability.
Section 6.4 Indemnification of Trustees, Officers, etc. The Trust shall
------------------------------------------
indemnify (from the assets of the Sub-Trust or Sub-Trusts in question) each of
its Trustees and officers (including persons who serve at the Trust's request as
director's, officers or trustees of another organization in
24
<PAGE>
which the Trust has any interest as a shareholder, creditor or otherwise
[hereinafter referred to as a "Covered Person"]) against all liabilities,
including but not limited to amounts paid in satisfaction of judgments, in
compromise or as fines and penalties, and expenses, including reasonable
accountants' and counsel fees, incurred by any Covered Person in connection with
the defense or disposition of any action, suit or other proceeding, whether
civil or criminal, before any court or administrative or legislative body, in
which such Covered Person may be or may have been involved as a party or
otherwise or with which such person may be or may have been threatened, while in
office or thereafter, by reason of being or having been such a Trustee or
officer, director or trustee, except with respect to any matter as to which it
has been determined that such Covered Person (i) did not act in good faith in
the reasonable belief that such Covered Person's action was in or not opposed to
the best interests of the Trust or (ii) had acted with wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office (either and both of the conduct
described in (i) and (ii) being referred to hereafter as "Disabling Conduct"). A
determination that the Covered Person is entitled to indemnification may be made
by (i) a final decision on the merits by a court or other body before whom the
proceeding was brought that the person to be indemnified was not liable by
reason of Disabling Conduct, (ii) dismissal of a court action or an
administrative proceeding against a Covered Person for insufficiency of evidence
of Disabling Conduct, or (iii) a reasonable determination, based upon a review
of the facts, that the Covered Person was not liable by reason of Disabling
Conduct by (a) a vote of a majority of a quorum of Trustees who are neither
"interested persons" of the Trust as defined in section 2(a)(19) of the 1940 Act
nor parties to the proceeding, or (b) an independent legal counsel in a written
opinion. Expenses, including accountants' and counsel fees so incurred by any
such Covered Person (but excluding amounts paid in satisfaction of judgments, in
compromise or as fines or penalties), may be paid from time to time by the Sub-
Trust in question in advance of the final disposition of any such action, suit
or proceeding, provided that the Covered Person shall have undertaken to repay
the amounts so paid to the Sub-Trust in question if it is ultimately determined
that indemnification of-such expenses is not authorized under this Article VI
and (i) the Covered Person shall have provided security for such undertaking,
(ii) the Trust shall be insured against losses arising by reason of any lawful
advances, or (iii) a majority of a quorum of the disinterested Trustees who are
not a party to the proceeding, or an independent legal counsel in a written
opinion, shall have determined, based on a review of readily-available facts (as
opposed to a full trial-type inquiry), that there is reason to believe that the
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Covered Person ultimately will be found entitled to indemnification.
Section 6.5 Compromise Payment. As to any matter disposed of by a
------------------
compromise payment by any such Covered Person referred to in Section 6.4,
pursuant to a consent decree or otherwise, no such indemnification either for
said payment or for any other expenses shall be provided unless such
indemnification shall be approved (a) by a majority of the disinterested
Trustees who are not a party to the proceeding or (b) by an independent legal
counsel in a written opinion. Approval by the Trustees pursuant to clause (a) or
by independent legal counsel pursuant to clause (b) shall not prevent the
recovery from any Covered Person of any amount paid to such Covered Person in
accordance with any of such clauses as indemnification if such Covered Person is
subsequently adjudicated by a court of competent jurisdiction not to have acted
in good faith in the reasonable belief that such Covered Person's action was in
or not opposed to the best interests of the Trust or to have been liable to the
Trust or its Shareholders by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of such
Covered Person's office.
Section 6.6 Indemnification Not Exclusive, etc. The right of
----------------------------------
indemnification provided by this Article VI shall not be exclusive of or affect
any other rights to which any such Covered Person may be entitled. As used in
this Article VI, "Covered Person" shall include such person's heirs, executors
and administrators, an "interested Covered Person" is one against whom the
action, suit or other proceeding in question or another action, suit or other
proceeding on the same or similar grounds is then or has been pending or
threatened, and a "disinterested" person is a person against whom none of such
actions, suits or other proceedings or another action, suit or other proceeding
on the same or similar grounds is then or has been pending or threatened.
Nothing contained in this article shall affect any rights to indemnification to
which personnel of the Trust, other than Trustees and officers, and other
persons may be entitled by contract or otherwise under law, nor the power of the
Trust to purchase and maintain liability insurance on behalf of any such person.
Section 6.7 Liability of Third Persons Dealing with Trustees. No person
------------------------------------------------
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.
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ARTICLE VII
-----------
MISCELLANEOUS
-------------
Section 7.1 Duration and Termination of Trust. Unless terminated as
---------------------------------
provided herein, the Trust shall continue without limitation of time and,
without limiting the generality of the foregoing, no change, alteration or
modification with respect to any Sub-Trust or any class thereof shall operate to
terminate the Trust. The Trust may be terminated at any time by a majority of
the Trustees then in office subject to a favorable vote of a majority of the
outstanding voting securities, as defined in the 1940 Act, Shares of each Sub-
Trust voting separately by Sub-Trust.
Upon termination, after paying or otherwise providing for all charges,
taxes, expenses and liabilities, whether due or accrued or anticipated as may be
determined by the Trustees, the Trust shall in accordance with such procedures
as the Trustees consider appropriate reduce the remaining assets to
distributable form in cash, securities or other property, or any combination
thereof, and distribute the proceeds to the Shareholders, in conformity with the
provisions of subsection (d) of Section 4.2.
Section 7.2 Reorganization. The Trustees may sell, convey, merge and
--------------
transfer the assets of the Trust, or the assets belonging to any one or more
Sub-Trusts, to another trust, partnership, association or corporation organized
under the laws of any state of the United States, or to the Trust to be held as
assets belonging to another Sub-Trust of the Trust, in exchange for cash, shares
or other securities (including, in the case of a transfer to another Sub-Trust
of the Trust, Shares of such other Sub-Trust or any class thereof) with such
transfer either (1) being made subject to, or with the assumption by the
transferee of, the liabilities belonging to each Sub-Trust the assets of which
are so transferred, or (2) not being made subject to, or not with the assumption
of, such liabilities; provided, however, that no assets belonging to any
particular Sub-Trust shall be so transferred unless the terms of such transfer
shall have first been approved at a meeting called for the purpose by the
affirmative vote of the holders of a majority of the outstanding voting Shares,
as defined in the 1940 Act, of that Sub-Trust. Following such transfer, the
Trustees shall distribute such cash, shares or other securities (giving due
effect to the assets and liabilities belonging to and any other differences
among the various Sub-Trusts or classes thereof the assets belonging to which
have so been transferred) among the Shareholders of the Sub-Trust (taking into
account the differences among the classes of Shares thereof if any) the assets
belonging to which have been so
27
<PAGE>
transferred; and if all of the assets of the Trust have been so transferred, the
Trust shall be terminated.
The Trust, or any one or more Sub-Trusts, may, either as the successor,
survivor, or non-survivor, (1) consolidate with one or more other trusts,
partnerships, associations or corporations organized under the laws of the
Commonwealth of Massachusetts or any other state of the United States, to form a
new consolidated trust, partnership, association or corporation under the laws
of which any one of the constituent entities is organized, or (2) merge into
one or more other trusts, partnerships, associations or corporations organized
under the laws of the Commonwealth of Massachusetts or any other state of the
United States, or have one or more such trusts, partnerships, associations or
corporations merged into it, any such consolidation or merger to be upon such
terms and conditions as are specified in an agreement and plan of reorganization
entered into by the Trust, or one or more Sub-Trusts as the case may be, in
connection therewith. The terms "merge" or "merger" as used herein shall also
include purchase or acquisition of any assets of any other trust, partnership,
association or corporation which is an investment company organized under the
laws of the Commonwealth of Massachusetts or any other state of the United
States. Any such consolidation or merger shall require the affirmative vote of
the holders of a majority of the outstanding voting Shares, as defined in the
1940 Act, of each Sub-Trust affected thereby.
Section 7.3 Amendments. All rights granted to the Shareholders under this
----------
Declaration of Trust are granted subject to the reservation of the right to
amend this Declaration of Trust as herein provided, except that no amendment
shall repeal the limitations on personal liability of any Shareholder or Trustee
or repeal the prohibition of assessment upon the Shareholders without the
express consent of each Shareholder or Trustee involved. Subject to the
foregoing, the provisions of this Declaration of Trust (whether or not related
to the rights of Shareholders) may be amended at any time, so long as such
amendment does not adversely affect the rights of any Shareholder with respect
to which such amendment is or purports to be applicable and so long as such
amendment is not in contravention of applicable law, including the 1940 Act, by
an instrument in writing signed by a majority of the then Trustees (or by an
officer of the Trust pursuant to the vote of a majority of such Trustees). Any
amendment to this Declaration of Trust that adversely affects the rights of
Shareholders may be adopted at any time by an instrument in writing signed by a
majority of the then Trustees (or by an officer of the Trust pursuant to a vote
of a majority of such Trustees) when authorized to do so by the vote in
accordance with subsection (e) of Section 4.2 of Shareholders holding a
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majority of the Shares entitled to vote; provided, however, that any amendment
to Section 3.6 may be adopted at any time by an instrument in writing signed by
a majority of the then Trustees (or by an officer of the Trust pursuant to a
vote of a majority of such Trustees) only when authorized to do so by the vote
of a "majority of the outstanding voting securities" of International Investors,
as such term is defined in the 1940 Act. Subject to the foregoing, any such
amendment shall be effective as provided in the instrument containing the terms
of such amendment or, if there is no provision therein with respect to
effectiveness, upon the execution of such instrument and of a certificate (which
may be a part of such instrument) executed by a Trustee or officer of the Trust
to the effect that such amendment has been duly adopted.
Section 7.4 Filing of Copies; References; Headings. The original or a copy
--------------------------------------
of this instrument and of each amendment hereto shall be kept at the office of
the Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each amendment hereto shall be filed by the Trust with the
Secretary of The Commonwealth of Massachusetts and with the Boston City Clerk,
as well as any other governmental office where such filing may from time to time
be required, but the failure to make any such filing shall not impair the
effectiveness of this instrument or any such amendment. Anyone dealing with the
Trust may rely on a certificate by an officer of the Trust as to whether or not
any such amendments have been made, as to the identities of the Trustees and
officers, and as to any matters in connection with the Trust hereunder; and,
with the same effect as if it were the original, may rely on a copy certified by
an officer of the Trust to be a copy of this instrument or of any such
amendments. In this instrument and in any such amendment, references to this
instrument, and all expressions like "herein", "hereof" and "hereunder" shall be
deemed to refer to this instrument as a whole as the same may be amended or
affected by any such amendments. The masculine gender shall include the
feminine and neuter genders. Headings are placed herein for convenience of
reference only and shall not be taken as a part hereof or control or affect the
meaning, construction or effect of this instrument. This instrument may be
executed in any number of counterparts each of which shall be deemed an
original.
Section 7.5 Applicable Law. This Declaration of Trust is made in The
--------------
Commonwealth of Massachusetts, and it is created under and is to be governed by
and construed and administered according to the laws of said Commonwealth,
including the Massachusetts Business Corporation Law as the same may be amended
from time to time, to which reference is made with the intention that matters
not specifically covered herein or as to which an ambiguity may exist shall be
resolved as if the Trust
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were a business corporation organized in Massachusetts, but the reference to
said Business Corporation Law is not intended to give the Trust, the Trustees,
the Shareholders or any other person any right, power, authority or
responsibility available only to or in connection with an entity organized in
corporate form. The Trust shall be of the type referred to in Section I of
Chapter 182 of the Massachusetts General Laws and of the type commonly called a
Massachusetts business trust, and without limiting the provisions hereof, the
Trust may exercise all powers which are ordinarily exercised by such a trust.
Section 7.6 Name of Trust. It is understood that the name "Van Eck", and
-------------
any logo associated with that name, is the valuable property of Van Eck
Management Corporation and that the Trust or any Sub-Trust has the right to
include "Van Eck" as a part of its name only through permission of Van Eck
Management Corporation. If Van Eck Management Corporation withdraws the right
to the use of its name, the Trust (and any Sub-Trust) shall forthwith cease to
use the Van Eck name and logo and shall take such action as may be necessary to
change its name (or the name of any Sub-Trust) to eliminate all use of or
reference to the word "Van Eck". The Trust hereby stipulates that companies or
trusts other than the Trust may be formed with the word "Van Eck" in their
titles.
IN WITNESS WHEREOF, the undersigned hereunto set their hands and seal in
the City of New York in the State of New York for themselves and them assigns,
as of the day and year first above written.
/s/ John C. van Eck /s/ Jeremy H. Biggs
John C. van Eck Jeremy H. Biggs
/s/ Richard Cowell /s/ James C. Dudley
Richard C. Cowell James C. Dudley
/s/ Wesley G. McCain /s/ Harvey E. Mole
Wesley G. McCain Harvey E. Mole
/s/ Ralph Peters /s/ Fred M. van Eck
Ralph F. Peters Fred M. van Eck
/s/ Alling Woodruff
Alling Woodruff
30
<PAGE>
THE STATE OF NEW YORK
County of New York
State of New York
Then personally appeared the above-named John C. van Eck, Jeremy H. Biggs,
Richard C. Cowell, James C. Dudley, Wesley G. McCain, Harvey Mole, Ralph F.
Peters, Fred M. van Eck and Alling Woodruff who each acknowledged the foregoing
instrument to be his free act and deed, before me, this 6th day of February,
1992.
/s/ Henry G. Neger
Notary Public
My commission expires: 12/31/93
<PAGE>
VAN ECK FUNDS
AMENDMENT NO. 1 TO
AMENDED AND RESTATED MASTER TRUST AGREEMENT
Amendment No. 1 to the Amended and Restated Master Trust Agreement dated
February 6, 1992 (amending the Master Trust Agreement dated April 3, 1985) of
Van Eck Funds, made at New York, New York, this 28th day of February, 1992.
W I T N E S S E T H:
--------------------
WHEREAS, Section 7.3 of the Amended and Restated Master Trust Agreement
dated February 6, 1992 (the "Agreement") of the Van Eck Funds (the "Trust")
provides that the Agreement may be amended at any time, as long as such
amendment does not adversely affect the rights of any shareholder and so long as
such amendment is not in contravention of applicable law, including the
Investment Company Act of 1940, by an instrument in writing, signed by an
officer of the Trust pursuant to a vote of a majority of the Trustees of the
Trust; and
WHEREAS, Section 4.1 of the Agreement provides that the Trustees of the
Trust may establish and designate series of Shares of the Trust; and
WHEREAS, a majority of Trustees of the Trust have duly approved this
amendment to the Agreement and authorized the same to be filed with the
Secretary of State of the Commonwealth of Massachusetts.
<PAGE>
NOW, THEREFORE, the undersigned David McClean, the duly elected and serving
Assistant Secretary of the Trust, pursuant to the authorization described above,
hereby declares that Section 4.2 of the Agreement and all other appropriate
references in the Agreement are amended to redesignate two series of Shares,
Short-Term World Income Fund and International Equities Fund, as the "Short-Term
World Income Fund-C" and "International Growth Fund," respectively.
The initial paragraph of Section 4.2 of the Master Trust Agreement is
amended to read as follows:
"Section 4.2 Establishment and Designation of Sub-Trusts.
-------------------------------------------
Without limiting the authority of the Trustees set forth in Section
4.1 to establish and designate any further Sub-Trusts, the Trustees
hereby establish and designate the following seven Sub-Trusts: World
Trends Fund, Gold/Resources Fund, U.S. Government Money Fund, World
Income Fund, International Investors, Short-Term World Income Fund-C
and International Growth Fund. Shares of such Sub-Trusts and any
Shares of any further Sub-Trusts that may from time to time be
established and designated by the Trustees shall (unless the Trustees
otherwise determine with respect to some further Sub-Trust at the time
of establishing and designating the same) have the following relative
rights and preferences:"
WITNESS my hand and seal this 28th day of February, 1992.
/s/ David McClean
David McClean, Assistant Secretary
2
<PAGE>
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
Then personally appeared the above-named David McClean and acknowledged
this instrument to be his free act and deed this 28th day of February, 1992.
/s/ Henry G Neger
Notary Public
My Commission Expires: 12/31/93
<PAGE>
VAN ECK FUNDS
AMENDMENT NO. 2
TO AMENDED AND RESTATED MASTER TRUST AGREEMENT
Amendment No. 2 to the Amended and Restated Master Trust Agreement dated
February 6, 1992 (amending the Master Trust Agreement dated April 3, 1985) (the
"Agreement"), of Van Eck Funds (the "Trust"), made at New York, New York this
17th day of March, 1993.
W I T N E S S E T H:
--------------------
WHEREAS, Section 7.3 of the Agreement provides that the Agreement may be
amended at any time, as long as such amendment does not adversely affect the
rights of any shareholder and so long as such amendment is not in contravention
of applicable law, including the Investment Company Act of 1940, by an
instrument in writing, signed by an officer of the Trust pursuant to a vote of a
majority of the Trustees of the Trust; and
WHEREAS, Section 4.1 of the Agreement provides that the Trustees of the
Trust may establish and designate series of Shares of the Trust; and
WHEREAS, a majority of Trustees have duly approved this amendment to the
Agreement and authorized the same to be filed with the Secretary of State of the
Commonwealth of Massachusetts.
NOW, THEREFORE, the undersigned Michael G. Doorley the duly elected and
serving Vice President of the Trust, pursuant to the authorization described
above, hereby declares that the initial, paragraph of Section 4.2 of the
Agreement is amendment to add additional Sub-Trusts and to read as follows:
"Section 4.2 Establishment and Description of Sub-Trusts. Without
-------------------------------------------
limiting the authority of the Trustees set forth in Section 4.1 to
establish and designate any further Sub-Trusts, the Trustees hereby
establish and designate nineteen Sub-Trusts: World Trends Fund,
Gold/Resources Fund, U. S. Government Money Fund, World Income Fund,
International Growth Fund, International Investors,
<PAGE>
Short-Term World Income Fund-C, Asia Dynasty Fund, World High Income
Trust, World Income Plus Fund, Strategic World Income Fund, Global 500
Trust, Global 500 Income Trust, American Trust, American Growth Trust,
Balanced Growth Trust, Flexible Income Trust, U.S./Global Short-Term
Trust, International Asset Allocation Trust, and Foreign Currency
Trust. The World Trends Fund, Gold/Resources Fund, U.S. Government
Money Fund, World Income Fund, International Growth Fund,
International Investors, Short-Term World Income Fund-C, World High
Income Trust, World Income Plus Fund, Strategic World Income Fund,
Global 500 Trust, Global 500 Income Trust, American Trust, American
Growth Trust, Balanced Growth Trust, Flexible Income Trust,
U.S./Global Short-Term Trust, International Asset Allocation Trust,
and Foreign Currency Trust and any Shares of any further Sub-Trusts
that may from time to time be established and designated by the
Trustees shall (unless the Trustees otherwise determine with respect
to sane further Sub-Trust at the time of establishing and designating
the same) have the following relative riots and preferences:"
WITNESS my hand and seal this 17th day of March 1993.
/s/ Michael G. Doorley
Michael G. Doorley, Vice President
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
Then personally appeared the above-named Michael G. Doorley and
acknowledged this instrument to be his free act and deed this 17th day of March
1993.
/s/ Thaddeus Leszczynksi
My Commission Expires: March 30, 1994
<PAGE>
VAN ECK FUNDS
AMENDMENT NO. 3
TO AMENDED AND RESTATED MASTER TRUST AGREEMENT
Amendment No. 3 to the Amended and Restated Master Trust Agreement dated
February 6, 1992 (amending the Master Trust Agreement dated April 3, 1985) (the
"Agreement"), of Van Eck Funds (the "Trust"), made at New York, New York this
16th day of December, 1993.
W I T N E S S E T H:
--------------------
WHEREAS, Section 7.3 of the Agreement provides that the Agreement may be
amended from time to time, as long as such amendment does not adversely affect
the rights of any shareholder and so long as such amendment is not in
contravention of applicable law, including the Investment Company Act of 1940,
by an instrument in writing, signed by an officer of the Trust pursuant to a
vote of a majority of the Trustees of the Trust; and
WHEREAS, Section 4.1 of the Agreement provides that the Trustees of the
Trust may establish and designate series of Shares of the Trust and classes
thereof; and
WHEREAS, a majority of the Trustees of the Trust have voted to establish
two classes of shares of the Asia Dynasty Fund, which classes are designated as
Class A and Class B; and
WHEREAS, a majority of the Trustees of the Trust have voted to establish a
new series of the Trust, which series is designated as the Global Balanced Fund,
and to establish two classes of shares thereof, which classes are designated as
Class A and Class B; and
WHEREAS, a majority of Trustees have duly approved this amendment to the
Agreement and authorized the same to be filed with the Secretary of State of the
Commonwealth of Massachusetts.
NOW, THEREFORE, the undersigned Michael G. Doorley the duly elected and
serving Vice President of the Trust, pursuant to the authorization described
above, hereby declares that the initial paragraph of Section 4.2 of the
Agreement is amendment to add additional Sub-Trusts and to read as follows:
"Section 4.2 Establishment and Description of Sub-Trusts. Without
-------------------------------------------
limiting the authority of the Trustees set forth in Section 4.1 to
establish and designate any further Sub-Trusts, the Trustees hereby
establish and designate twenty-one Sub-Trusts: World Trends Fund,
Gold/Resources Fund, U.S. Government Money Fund, World Income Fund,
International Growth Fund, International Investors Gold Fund, Asia
Dynasty Fund (Class A and Class B), Global Balanced Fund (Class A and
Class B), World High Income Trust, World Income Plus Fund, Strategic
World Income Fund, Global 500 Trust, Global 500 Income Trust, American
Trust, American Growth Trust, Balanced Growth Trust, Flexible Income
Trust, U.S./Global Short-Term Trust, International Asset Allocation
Trust, and Foreign Currency Trust. The World Trends Fund,
Gold/Resources Fund, U.S. Government Money Fund, World Income Fund,
International Growth Fund, International Investors Gold Fund, Asia
Dynasty Fund (Class A and Class B), Global Balanced Fund (Class A and
Class B), World High Income Trust, World Income Plus Fund, Strategic
World Income Fund, Global 500 Trust, Global 500 Income Trust, American
Trust, American Growth Trust, Balanced Growth Trust, Flexible Income
Trust, U.S./Global Short-Term Trust, International Asset Allocation
<PAGE>
Trust, and Foreign Currency Trust and any Shares of any further Sub-
Trusts that may from time to time be established and designated by the
Trustees shall (unless the Trustees otherwise determine with respect
to some further Sub-Trust at the time of establishing and designating
the same) have the following relative rights and preferences:"
WITNESS my hand and seal this 16th day of December, 1993.
/s/ Thaddeus Leszczynski
Thaddeus Leszczynski, Vice President
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
Then personally appeared the above-named Thaddeus Leszczynski and
acknowledged this instrument to be his free act and deed this 15th day of
December, 1993.
/s/ Henry G. Neger
Notary Public
My Commission Expires: 12/31/93
<PAGE>
VAN ECK FUNDS
AMENDMENT NO. 4
TO AMENDED AND RESTATED MASTER TRUST AGREEMENT
Amendment No. 4 to the Amended and Restated Master Trust Agreement dated
February 6, 1992 (amending the Master Trust Agreement dated April 3, 1985) (the
"Agreement"), of Van Eck Funds (the "Trust"), made at New York, New York this
10th day of May, 1994.
W I T N E S S E T H:
--------------------
WHEREAS, Section 7.3 of the Agreement provides that the Agreement may be
amended from time to time, as long as such amendment does not adversely affect
the rights of any shareholder and so long as such amendment is not in
contravention of applicable law, including the Investment Company Act of 1940,
by an instrument in writing, signed by an officer of the Trust pursuant to a
vote of a majority of the Trustees of the Trust; and
WHEREAS, Section 4.1 of the Agreement provides that the Trustees of the
Trust may establish and designate series of Shares of the Trust and classes
thereof-, and
WHEREAS, a majority of the Trustees of the Trust have voted to establish a
second class of Shares for the World Income Fund which shall be designated as
Class B Shares and hereby redesignate all existing shares of World Income Fund
and any similar shares issued in the future as Class A Shares; and
WHEREAS, a majority of the Trustees have voted to establish two new series
of the Trust, which are designated as Asia Infrastructure Fund and Global
SmallCap Fund, and to establish two classes of Shares of each series thereof,
which are designated as Class A and Class B; and
WHEREAS, a majority of the Trustees have voted to change section 7.2 of the
Agreement with respect to all Sub-Trusts other than World Trends Fund,
Gold/Resources Fund, U.S. Government Money Fund, World Income Fund,
International Growth Fund, International Investors Gold Fund, Asia Dynasty Fund
and Global Balanced Fund; and
<PAGE>
WHEREAS, a majority of Trustees have duly approved this amendment to the
Agreement and authorized the same to be filed with the Secretary of State of the
Commonwealth of Massachusetts.
NOW, THEREFORE, the undersigned Thaddeus Leszczynski, the duly elected and
serving Vice President of the Trust, pursuant to the authorization described
above, hereby declares that the initial paragraph of Section 4.2 of the
Agreement is amended to add additional Sub-Trusts and to read as follows:
"Section 4.2 Establishment and Description of Sub-Trusts. Without
-------------------------------------------
limiting the authority of the Trustees set forth in Section 4.1 to
establish and designate any further Sub-Trusts, the Trustees hereby
establish and designate ten Sub-Trusts: World Trends Fund,
Gold/Resources Fund, U.S. Government Money Fund, World Income Fund
(Class A and Class B), International Growth Fund, International
Investors Gold Fund, Asia Dynasty Fund (Class A and Class B), Asia
Infrastructure Fund (Class A and Class B), Global Balanced Fund (Class
A and Class B) and Global SmallCap Fund (Class A and Class B). The
World Trends Fund, Gold/Resources Fund, U.S. Government Money Fund,
World Income Fund (Class A and Class B), International Growth Fund,
International Investors Gold Fund, Asia Dynasty Fund (Class A and
Class B), Asia Infrastructure Fund (Class A and Class B), Global
Balanced Fund (Class A and Class B) and Global SmallCap Fund (Class A
and Class B) and any Shares of any further Sub-Trusts that may from
time to time be established and designated by the Trustees shall
(unless the Trustees otherwise determine With respect to some further
Sub-Trust at the time of establishing and designating the same) have
the following relative rights and preferences:"
and hereby declares that the second paragraph of Section 7.2 of the Agreement is
amended to read as follows:
The Trust or any one or more Sub-Trusts may, either as the successor,
or survivor, or non-survivor, (1) consolidate with one or more other
trusts, partnerships, associations or corporations organized under the
laws of the Commonwealth of Massachusetts or any other state of the
United States, to form a new consolidated trust, partnership,
association or corporation under the laws of which any one of the
constituent entities is organized, or (2) merge into one or more other
trusts, partnerships, associations or corporations organized under the
laws of the Commonwealth of Massachusetts or any other state of the
United States, or have one or more such trusts, partnerships,
associations or corporations merged into it, any such consolidation or
merger to be upon such terms and conditions as are specified in an
agreement and plan of reorganization entered into by the Trust, or one
or more such Sub-Trusts as the case may be, in connection therewith.
The terms "merge" or "merger" as used herein shall also include the
purchase or acquisition of any assets of any other trust, partnership,
association
<PAGE>
or corporation which is an investment company organized under the laws
of the Commonwealth of Massachusetts or any other state of the United
States. With respect to the World Trends Fund, Gold/Resources Fund,
U.S. Government Money Fund, World Income Fund, International Growth
Fund, International Investors Gold Fund, Asia Dynasty Fund and Global
Balanced Fund only, any such consolidation or merger shall require the
affirmative vote of the holders of a majority of the outstanding
voting Shares, as defined in the 1940 Act, of the Sub-Trust so
affected thereby; and with respect to all other Sub-Trusts, such
affirmative vote shall only be required if the Sub-Trust is not the
successor or survivor of such consolidation or merger.
WITNESS my hand and seal this 10th day of May, 1994.
/s/ Thaddeus Leszczynksi
Thaddeus Leszczynski, Vice President
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
Then personally appeared the above-named Thaddeus Leszczynski and
acknowledged this instrument to be his free act and deed this 10th day of May,
1994.
/s/ Henry G. Neger
Notary Public
My commission expires: 12/31/95
<PAGE>
VAN ECK FUNDS
AMENDMENT NO. 5
TO AMENDED AND RESTATED MASTER TRUST AGREEMENT
Amendment No. 5 to the Amended and Restated Master Trust Agreement dated
February 6, 1992 (amending the Master Trust Agreement dated April 3, 1985) (the
"Agreement"), of Van Eck Funds (the "Trust'), made at New York, New York this
26th day of July, 1994.
W I T N E S S E T H:
--------------------
WHEREAS, Article VII, Section 7.3 of the Agreement provides that any
amendment to the Agreement that adversely affects the rights of shareholders may
be adopted at any time by an instrument in writing signed by a majority of the
Trustees (or by an officer of the Trust pursuant to a vote of a majority of such
Trustees) when authorized to do so by the vote in accordance with subsection (e)
of Section 4.2 of shareholders holding a majority of the shares entitled to
vote; and
WHEREAS, a majority of the Trustees have voted to amend Article III,
Section 3.6 of the Agreement with respect to International Investors Gold Fund;
and
WHEREAS, a majority of the outstanding shares of International Investors
Gold Fund have voted to amend Article III, Section 3.6 of the Agreement; and
WHEREAS, a majority of the Trustees have voted to amend Article IV, Section
4.2(e) of the Agreement with respect to all Sub-Trusts; and
WHEREAS, a majority of the outstanding shares of each Sub-Trust, except
Gold/Resources Fund, Global Balanced Fund and Asia Dynasty Fund, have voted to
amend Article IV, Section 4.2(e) of the Agreement with respect to all Sub-
Trusts; and
WHEREAS, a majority of the Trustees have voted to amend Article VII,
Section 7.2 of the Agreement with respect to all Sub-Trusts; and
<PAGE>
WHEREAS, a majority of the outstanding shares of each Sub-Trust, except
Gold/Resources Fund, Global Balanced Fund and Asia Dynasty Fund, have voted to
amend Article VII, Section 7.2 of the Agreement; and
WHEREAS, a majority of the Trustees have voted to amend Article VII,
Section 7.3 of the Agreement with respect to all Sub-Trusts; and
WHEREAS, a majority of the outstanding shares of each Sub-Trust, except
Gold/Resources Fund, Global Balanced Fund and Asia Dynasty Fund, have voted to
amend Article VII, Section 7.3 of the Agreement; and
WHEREAS, a majority of Trustees have duly approved this amendment to the
Agreement and authorized the same to be filed with the Secretary of State of the
Commonwealth of Massachusetts.
NOW, THEREFORE, the undersigned Thaddeus Leszczynski, a duly elected and
serving Secretary of the Trust, pursuant to the authorization described above,
hereby declares that Article III, Section 3.6 of the Agreement is amended to
read as follows:
Section 3.6 Investment Restrictions with Respect to International
-----------------------------------------------------
Investors. Notwithstanding anything to the contrary in Section 3.2
---------
hereof, the Trustees may not, with respect to International Investors
("II"), (i) purchase securities on margin, except as is necessary for
the clearance of its transactions; (ii) sell short unless II may
readily acquire the security sold short by virtue of its holding a
right to purchase a quantity of such shorted security sufficient to
cover the short; (iii) lend its funds or assets, except through the
purchase of securities II would otherwise be authorized to purchase;
(iv) borrow unless for emergency or extraordinary reasons, and
provided such borrowings are limited to 10% of total assets, taken at
cost; (v) mortgage, pledge or hypothecate more than 15% of II's total
assets, taken at cost; (vi) purchase the securities of any issuer with
less than three (3) years' continuous operation if 5% of II's total
assets, taken at cost, are invested in such issuer, (vii) purchase
securities (exclusive of U.S. government issues) if upon such purchase
more than 5% of II's total assets (taken at market value) would
consist of the securities of such issuer; (viii) purchase securities
of any issuer if such purchase would cause II to own at the time of
purchase more than 10% of the outstanding securities of such issuer;
(ix) purchase securities issued by any other investment company or
investment trust, except by purchase in the open market where no
commission or profit to a sponsor or dealer results from such purchase
other than the customary brokerage commission or except when such
purchase, though not made in the open market, is part of a plan of
merger or
<PAGE>
consolidation; (x) purchase or retain securities of an issuer having
an officer, director or security holder who is an officer or director
of the Trust or who furnishes management or supervising services to
the Trust, if at the time of such purchase or at any time thereafter
any one or more of such persons owns beneficially more than 1/2 of 1%
of the securities of such issuer or such persons or persons together
own more than 5% of such securities (all taken at market value); and
(xi) underwrite securities of other issuers.
and hereby declares that Article IV, Section 4.2(e) of the Agreement is amended
to read as follows:
"Section 4.2(e) Voting. On each matter submitted to a vote of the
------
shareholders, each holder of the Share shall be entitled to one vote
for each whole share and to a proportionate fractional vote for each
fractional Share standing in his name on the books of the Trust
irrespective of the Sub-Trusts thereof or class thereof and all Shares
of all Sub-Trusts, except Gold/Resources Fund, Global Balanced Fund
and Asia Dynasty Fund, and classes thereof shall vote together as a
single class; provided, however, that as to any matter (i) with
respect to which a separate vote by such Sub-Trust or class thereof is
required by the 1940 Act or the provisions of the writing or vote
establishing and designating the Sub-Trust or class, such requirements
as to a separate vote by such Sub-Trust or class thereof shall apply
in lieu of all Shares of all Sub-trusts and classes thereof voting
together, and (ii) as to any matter which affects the interests of one
or more affected Sub-Trusts or classes shall be entitled to vote, and
each such Sub-Trust or class shall vote as a separate class."
and hereby declares that the second paragraph of Article VII, Section 7.2 of the
Agreement is amended to read as follows:
"Section 7.2 Reorganization. The Trust or any one or more Sub-Trusts,
----------------
except Gold/Resources Fund, Global Balanced Fund and Asia Dynasty Fund
may, either as the successor, or survivor, or non-survivor, (1)
consolidate with one or more other trusts, partnerships, associations
or corporations organized under the laws of the Commonwealth of
Massachusetts or any other state of the United States, to form a new
consolidated trust, partnership, association or corporation under the
laws of which any one of the constituent entities is organized, or (2)
merge into one or more other trusts, partnerships, associations or
corporations organized under the laws of the Commonwealth of
Massachusetts or any other state of the United States, or have one or
more such trusts, partnerships, associations or corporations merged
into it, any such consolidation or merger to be upon such terms and
conditions as are specified in an agreement and plan of reorganization
entered into by the Trust, or one or more such Sub-Trusts as the case
may be, in connection therewith. The terms "merge" or "merger" as used
herein shall also include the purchase or acquisition of any assets of
any other trust, partnership, association or corporation which is an
investment company organized under the laws of the Commonwealth of
Massachusetts or any other state of the United States. Any such
consolidation or merger shall require the affirmative vote of the
holders of a majority of the outstanding voting securities, as defined
in the 1940
<PAGE>
Act, of the Sub-Trust so affected thereby if the Sub-Trust is not the
successor or survivor of such consolidation or merger."
and hereby declares that Article VII, Section 7.3 of the Agreement is amended to
read as follows:
"Section 7.3 Amendments. All rights granted to the Shareholders under
this Declaration of Trust are granted subject to the reservation of
the right to amend this Declaration of Trust as herein provided,
except that no amendment shall repeal the limitations on personal
liability of any Shareholder or Trustee or repeal the prohibition of
assessment upon the Shareholders without the express consent of each
Shareholder or Trustee involved. Subject to the foregoing, the
provisions of the Declaration of Trust (whether or not related to the
rights of Shareholders) may be amended at any time, so long as such
amendment does not adversely affect the rights of any Shareholder with
respect to which such amendment is or purports to be applicable and so
long as such amendment is not in contravention of applicable law,
including the 1940 Act, by an instrument in writing signed by a
majority of such trustees. Any amendment to this Declaration of Trust
that adversely affects the rights of Shareholders may be adopted at
any time by an instrument In writing signed by a majority of the then
Trustees (or by an officer of the Trust pursuant to a vote of a
majority of such trustees) when authorized to do so by the vote in
accordance with subsection (e) of Section 4.2 of Shareholders holding
a majority of the outstanding voting securities entitled to vote (as
defined in the 1940 Act) and with respect to Gold/Resources Fund,
Global Balanced Fund and Asia Dynasty Fund of Shareholders holding a
majority of the outstanding voting securities entitled to vote;
provided, however, that any amendment to Section 3.6 may be adopted at
any time by an instrument in writing signed by a majority of the then
Trustees (or by an officer of the Trust pursuant to a vote of a
majority of such trustees) only when authorized to do so by the vote
of a "majority of the outstanding voting securities" of International
Investors, as such term is defined in the 1940 Act. Subject to the
foregoing, any such amendment shall be effective as provided in the
instrument containing the terms of such amendment or, if there is no
provision therein with respect to effectiveness, upon the execution of
such instrument and of a certificate (which may be a part of such
instrument) executed by a Trustee or officer of the Trust to the
effect that such amendment has been duly adopted.
<PAGE>
WITNESS my hand and seal this 26th day of July, 1994.
/s/ Thaddeus Leszczynski
Thaddeus Leszczynski, Secretary
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
Then personally appeared the above-named Thaddeus Leszczynski and
acknowledged this instrument to be his free act and deed this 26th day of July,
1994.
/s/ Henry G. Neger
Notary Public
My commission expires: 12/31/95
<PAGE>
VAN ECK FUNDS
AMENDMENT NO. 6
TO AMENDED AND RESTATED MASTER TRUST AGREEMENT
Amendment No. 6 to the Amended and Restated Master Trust Agreement dated
February 6, 1992 (amending the Master Trust Agreement dated April 3, 1985) (the
"Agreement"), of Van Eck Funds (the "Trust"), made at New York, New York this
8th day of August, 1994.
W I T N E S S E T H:
--------------------
WHEREAS, Article VII, Section 7.3 of the Agreement provides that any
amendment to the Agreement that adversely affects the rights of shareholders may
be adopted at any time by an instrument in writing signed by a majority of the
Trustees (or by an officer of the Trust pursuant to a vote of a majority of such
Trustees) when authorized to do so by the vote in accordance with subsection (e)
of Section 4.2 of shareholders holding a majority of the shares entitled to
vote; and
WHEREAS, Section 4.1 of the Agreement provides that the Trustees of the
Trust may establish and designate series of Shares of the Trust and classes
thereof; and
WHEREAS, a majority of the outstanding shares of each Sub-Trust, except
Asia Dynasty Fund, have voted to amend Article IV, Section 4.2(e) of the
Agreement with respect to all Sub-Trusts; and
WHEREAS, a majority of the outstanding shares of each Sub-Trust, except
Asia Dynasty Fund, have voted to amend Article VII, Section 7.2 of the
Agreement; and
WHEREAS, a majority of the outstanding shares of each Sub-Trust, except
Asia Dynasty Fund, have voted to amend Article VII, Section 7.3 of the
Agreement; and
WHEREAS, a majority of the Trustees of the Trust have voted to establish a
second class of Shares of International Investors Gold Fund and Gold/Resources
Fund which shall be designated as Class C Shares and hereby redesignate all
existing shares of International Investors Gold Fund and Gold/Resources Fund and
any similar shares issued in the future as
<PAGE>
Class A Shares; and
WHEREAS, a majority of the Trustees of the Trust have voted to rename the
World Income Fund (Class A and Class B) as Global Income Fund (Class A and Class
B); and
WHEREAS, a majority of the Trustees of the Trust have voted to rename the
Asia Infrastructure Fund (Class A and Class B) as Asia Infrastructure Fund
(Class A and Class C); and
WHEREAS, a majority of the Trustees of the Trust have voted to rename the
Global SmallCap Fund (Class A and Class B) as Global SmallCap Fund (Class A and
Class C); and
WHEREAS, a majority of Trustees have duly approved this amendment to the
Agreement and authorized the same to be filed with the Secretary of State of the
Commonwealth of Massachusetts.
NOW, THEREFORE, the undersigned Thaddeus Leszczynski, a duly elected and
serving Secretary of the Trust, pursuant to the authorization described above,
hereby declares that the initial paragraph of Article IV, Section 4.2 of the
Agreement is amended to read as follows:
"Section 4.2 Establishment and Description of Sub-Trusts. Without
-------------------------------------------
limiting the authority of the Trustees set forth in Section 4.1 to
establish and designate any further Sub-Trusts, the Trustees hereby
establish and designate ten Sub-Trusts: World Trends Fund,
Gold/Resources Fund (Class A and Class C), U.S. Government Money Fund,
Global Income Fund (Class A and Class B), International Growth Fund,
International Investors Gold Fund (Class A and Class C), Asia Dynasty
Fund (Class A and Class B), Asia Infrastructure Fund (Class A and
Class C), Global Balanced Fund (Class A and Class B) and Global
SmallCap Fund (Class A and Class C). The World Trends Fund,
Gold/Resources Fund (Class A and Class C), U.S. Government Money Fund,
Global Income Fund (Class A and Class B), International Growth Fund,
International Investors Gold Fund (Class A and Class C), Asia Dynasty
Fund (Class A and Class B), Asia Infrastructure Fund (Class A and
Class C), Global Balanced Fund (Class A and Class B) and Global
SmallCap Fund (Class A and Class C) and any Shares of any further Sub-
Trusts that may from time to time be established and designated by the
Trustees shall (unless the Trustees otherwise determine with respect
to some further Sub-Trust at the time of establishing and designating
the same) have the following relative rights and preferences:"
and hereby declares that Article IV, Section 4.2(e) of the Agreement is amended
to read as follows:
<PAGE>
"Section 4.2(e) Voting. On each matter submitted to a vote of the
------
shareholders, each holder of the Share shall be entitled to one vote
for each whole share and to a proportionate fractional vote for each
fractional Share standing in his name on the books of the Trust
irrespective of the Sub-Trusts thereof or class thereof and all Shares
of all Sub-Trusts, except Asia Dynasty Fund, and classes thereof shall
vote together as a single class; provided, however, that as to any
matter (i) with respect to which a separate vote by such Sub-Trust or
class thereof is required by the 1940 Act or the provisions of the
writing or vote establishing and designating the Sub-Trust or class,
such requirements as to a separate vote by such Sub-Trust or class
thereof shall apply in lieu of all Shares of all Sub-trusts and
classes thereof voting together, and (ii) as to any matter which
affects the interests of one or more affected Sub-Trusts or classes
shall be entitled to vote, and each such Sub-Trust or class shall vote
as a separate class."
and hereby declares that the second paragraph of Article VII, Section 7.2 of the
Agreement is amended to read as follows:
"Section 7.2 Reorganization. The Trust or any one or more Sub-Trusts,
--------------
except Asia Dynasty Fund may, either as the successor, or survivor, or
non-survivor, (1) consolidate with one or more other trusts,
partnerships, associations or corporations organized under the laws of
the Commonwealth of Massachusetts or any other state of the United
States, to form a new consolidated trust, partnership, association or
corporation under the laws of which any one of the constituent
entities is organized, or (2) merge into one or more other trusts,
partnerships, associations or corporations organized under the laws of
the Commonwealth of Massachusetts or any other state of the United
States, or have one or more such trusts, partnerships, associations or
corporations merged into it, any such consolidation or merger to be
upon such terms and conditions as are specified in an agreement and
plan of reorganization entered into by the Trust, or one or more such
Sub-Trusts as the case may be, in connection therewith. The terms
"merge" or "merger" as used herein shall also include the purchase or
acquisition of any assets of any other trust, partnership, association
or corporation which is an investment company organized under the laws
of the Commonwealth of Massachusetts or any other state of the United
States. Any such consolidation or merger shall require the affirmative
vote of the holders of a majority of the outstanding voting
securities, as defined in the 1940 Act, of the Sub-Trust so affected
thereby if the Sub-Trust is not the successor or survivor of such
consolidation or merger."
and hereby declares that Article VI I, Section 7.3 of the Agreement is amended
to read as follows:
"Section 7.3 Amendments. All rights granted to the Shareholders under
----------
this Declaration of Trust are granted subject to the reservation of
the right to amend this Declaration of Trust as herein provided,
except that no amendment shall repeal the limitations on personal
liability of any Shareholder or Trustee or repeal the prohibition of
assessment upon the Shareholders without the express consent of each
Shareholder or Trustee involved. Subject to the foregoing, the
provisions of the Declaration of Trust (whether or not related to the
rights of Shareholders) may be amended at any time, so long as such
amendment does not adversely
<PAGE>
affect the rights of any Shareholder with respect to which such
amendment is or purports to be applicable and so long as such
amendment is not in contravention of applicable law, including the
1940 Act, by an instrument in writing signed by a majority of such
trustees). Any amendment to this Declaration of Trust that adversely
affects the rights of Shareholders may be adopted at any time by an
instrument in writing signed by a majority of the then Trustees (or by
an officer of the Trust pursuant to a vote of a majority of such
trustees) when authorized to do so by the vote in accordance with
subsection (e) of Section 4.2 of Shareholders holding a majority of
the outstanding voting securities entitled to vote (as defined in the
1940 Act) and with respect to Gold/Resources Fund, Global Balanced
Fund and Asia Dynasty Fund of Shareholders holding a majority of the
outstanding voting securities entitled to vote; provided, however,
that any amendment to Section 3.6 may be adopted at any time by an
instrument in writing signed by a majority of the then Trustees (or by
an officer of the Trust pursuant to a vote of a majority of such
trustees) only when authorized to do so by the vote of a "majority of
the outstanding voting securities" of International Investors, as such
term is defined in the 1940 Act. Subject to the foregoing, any such
amendment shall be effective as provided in the instrument containing
the terms of such amendment or, if there is no provision therein with
respect to effectiveness, upon the execution of such instrument and of
a certificate (which may be a part of such instrument) executed by a
Trustee or officer of the Trust to the effect that such amendment has
been duly adopted."
<PAGE>
WITNESS my hand and seal this 8th day of August, 1994.
/s/ Thaddeus Leszczynski
Thaddeus Leszczynski, Secretary
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
Then personally appeared the above-named Thaddeus Leszczynski and
acknowledged this instrument to be his free act and deed this 8th day of ___,
1994.
/s/ Henry G. Neger
Notary Public
My commission expires: 12/31/95
<PAGE>
VAN ECK FUNDS
AMENDMENT NO. 7
TO AMENDED AND RESTATED MASTER TRUST AGREEMENT
Amendment No. 7 to the Amended and Restated Master Trust Agreement dated
February 6, 1992 (amending the Master Trust Agreement dated April 3, 1985) (the
"Agreement"), of Van Eck Funds (the "Trust"), made at New York, New York this
26th day of October, 1994.
W I T N E S S E T H:
--------------------
WHEREAS, Article VII, Section 7.3 of the Agreement provides that any
amendment to the Agreement that adversely affects the rights of shareholders may
be adopted at any time by an instrument in writing signed by a majority of the
Trustees (or by an officer of the Trust pursuant to a vote of a majority of such
Trustees) when authorized to do so by the vote in accordance with subsection (e)
of Section 4.2 of shareholders holding a majority of the shares entitled to
vote; and
WHEREAS, Section 4.1 of the Agreement provides that the Trustees of the
Trust may establish and designate series of Shares of the Trust and classes
thereof; and
WHEREAS, a majority of the Trustees have voted to establish a new series of
the Trust, which is designated as Global Hard Assets Fund and to establish two
classes of Shares thereof, which are designated as Class A and Class C; and
WHEREAS, a majority of Trustees have duly approved this amendment to the
Agreement and authorized the same to be filed with the Secretary of State of the
Commonwealth of Massachusetts.
NOW, THEREFORE, the undersigned Thaddeus Leszczynski, a duly elected and
serving Secretary of the Trust, pursuant to the authorization described above,
hereby declares that the initial paragraph of Article IV, Section 4.2 of the
Agreement is amended to read as follows:
<PAGE>
"Section 4.2 Establishment and Description of Sub-Trusts. Without
-------------------------------------------
limiting the authority of the Trustees set forth in Section 4.1 to
establish and designate any further Sub-Trusts, the Trustees hereby
establish and designate eleven SubTrusts: World Trends Fund,
Gold/Resources Fund (Class A and Class C), U.S. Government Money Fund,
Global Income Fund (Class A and Class B), International Growth Fund,
International Investors Gold Fund (Class A and Class C), Asia Dynasty
Fund (Class A and Class B), Asia Infrastructure Fund (Class A and
Class C), Global Balanced Fund (Class A and Class B), Global SmallCap
Fund (Class A and Class C) and Global Hard Assets Fund (Class A and
Class C). The World Trends Fund, Gold/Resources Fund (Class A and
Class C), U.S. Government Money Fund, Global Income Fund (Class A and
Class B), International Growth Fund, International Investors Gold Fund
(Class A and Class C), Asia Dynasty Fund (Class A and Class B), Asia
Infrastructure Fund (Class A and Class C), Global Balanced Fund (Class
A and Class B), Global SmallCap Fund (Class A and Class C) and Global
Hard Assets Fund (Class A and Class C) and any Shares of any further
Sub-Trusts that may from time to time be established and designated by
the Trustees shall (unless the Trustees otherwise determine with
respect to some further Sub-Trust at the time of establishing and
designating the same) have the following relative rights and
preferences:"
WITNESS my hand and seal this 26th day of October, 1994.
/s/ Thaddeus Leszczynski
Thaddeus Leszczynski, Secretary
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
Then personally appeared the above-named Thaddeus Leszczynski and
acknowledged this instrument to be his free act and deed this 26th day of
October, 1994.
/s/ Henry G. Neger
Notary Public
My Commission Expires: 12/31/94
<PAGE>
VAN ECK FUNDS
AMENDMENT NO. 8
TO AMENDED AND RESTATED MASTER TRUST AGREEMENT
Amendment No. 8 to the Amended and Restated Master Trust Agreement dated
February 6, 1992 (amending the Master Trust Agreement dated April 3, 1985) (the
"Agreement"), of Van Eck Funds (the "Trust"), made at New York, New York this
21st day of December, 1994.
W I T N E S S E T H:
- --------------------
WHEREAS, Article VII, Section 7.3 of the Agreement provides that any
amendment to the Agreement that adversely affects the rights of shareholders may
be adopted at any time by an instrument in writing signed by a majority of the
Trustees (or by an officer of the Trust pursuant to a vote of a majority of such
Trustees) when authorized to do so by the vote in accordance with subsection (e)
of Section 4.2 of shareholders holding a majority of the shares entitled to
vote; and
WHEREAS, Section 4.1 of the Agreement provides that the Trustees of the
Trust may establish and designate series of Shares of the Trust and classes
thereof; and
WHEREAS, a majority of the outstanding shares of each Sub-Trust have voted
to amend Article IV, Section 4.2(e) of the Agreement with respect to all Sub-
Trusts; and
WHEREAS, a majority of the outstanding shares of each Sub-Trust have voted
to amend Article VII, Section 7.2 of the Agreement; and
WHEREAS, a majority of the outstanding shares of each Sub-Trust have voted
to amend Article VII, Section 7.3 of the Agreement; and
WHEREAS, a majority of the Trustees have voted to establish a new series of
the Trust, which is designated as Gold Opportunity Fund and to establish two
classes of Shares thereof, which are designated as Class A and Class C;
and
<PAGE>
WHEREAS, a majority of Trustees have duly approved this amendment to the
Agreement and authorized the same to be filed with the Secretary of State of the
Commonwealth of Massachusetts.
NOW, THEREFORE, the undersigned Thaddeus Leszczynski, a duly elected and
serving Secretary of the Trust, pursuant to the authorization described above,
hereby declares that the initial paragraph of Article IV, Section 4.2 of the
Agreement is amended to read as follows:
"Section 4.2 Establishment and Description of Sub-Trusts. Without
-------------------------------------------
limiting the authority of the Trustees set forth in Section 4.1 to
establish and designate any further Sub-Trusts, the Trustees hereby
establish and designate eleven Sub-Trusts: World Trends Fund,
Gold/Resources Fund (Class A and Class C), U.S., Government Money
Fund, Global Income Fund (Class A and Class B), International
Investors Gold Fund (Class A and Class C), Asia Dynasty Fund (Class A
and Class B), Asia Infrastructure Fund (Class A and Class C), Global
Balanced Fund (Class A and Class B), Global SmallCap Fund (Class A and
Class C), Global Hard Assets Fund (Class A and Class C) and Gold
Opportunity Fund (Class A and Class C). The World Trends Fund,
Gold/Resources Fund (Class A and Class C), U.S. Government Money Fund,
Global Income Fund (Class A and Class B), International Investors Gold
Fund (Class A and Class C), Asia Dynasty Fund (Class A and Class B),
Asia Infrastructure Fund (Class A and Class C), Global Balanced Fund
(Class A and Class B), Global SmallCap Fund (Class A and Class C),
Global Hard Assets Fund (Class A and Class C) and Gold Opportunity
Fund (Class A and Class C) and any Shares of any further Sub-Trusts
that may from time to time be established and designated by the
Trustees shall (unless the Trustees otherwise determine with respect
to some further Sub-Trust at the time of establishing and designating
the same) have the following relative rights and preferences:"
and hereby declares that Article IV, Section 4.2(e) of the Agreement is amended
to read as follows:
"Section 4.2(e) Voting. On each matter submitted to a vote of the
------
shareholders, each holder of the Share shall be entitled to one vote
for each whole share and to a proportionate fractional vote for each
fractional Share standing in his name on the books of the Trust
irrespective of the Sub-Trusts thereof or class thereof and all Shares
of all Sub-Trusts and classes thereof shall vote together as a single
class; provided, however, that as to any matter (i) with respect to
which a separate vote by such Sub-Trust or class thereof is required
by the 1940 Act or the provisions of the writing or vote establishing
and designating the Sub-Trust or class, such requirements as to a
separate vote by such Sub-Trust or class thereof shall apply in lieu
of all Shares of all Sub-trusts and classes thereof voting together,
and (ii) as to any matter which affects the interests of one or more
affected Sub-Trusts or classes shall be entitled to vote, and each
such Sub-Trust or class shall vote as a separate class."
<PAGE>
hereby declares that the second paragraph of Article VII, Section 7.2 of the
Agreement is amended to read as follows:
"Section 7.2 Reorganization. The Trust or any one or more Sub-Trusts
----------------
may, either as the successor, or survivor, or non-survivor, (1)
consolidate with one or more other trusts, partnerships, associations
or corporations organized under the laws of the Commonwealth of
Massachusetts or any other state of the United States, to form a new
consolidated trust, partnership, association or corporation under the
laws of which any one of the constituent entities is organized, or (2)
merge into one or more other trusts, partnerships, associations or
corporations organized under the laws of the Commonwealth of
Massachusetts or any other state of the United States, or have one or
more such trusts, partnerships, associations or corporations merged
into it, any such consolidation or merger to be upon such terms and
conditions as are specified in an agreement and plan of reorganization
entered into by the Trust, or one or more such Sub-Trusts as the case
may be, in connection therewith. The terms "merge" or "merger" as used
herein shall also include the purchase or acquisition of any assets of
any other trust, partnership, association or corporation which is an
investment company organized under the laws of the Commonwealth of
Massachusetts or any other state of the United States. Any such
consolidation or merger shall require the affirmative vote of the
holders of a majority of the outstanding voting securities, as defined
in the 1940 Act, of the Sub-Trust so affected thereby if the Sub-Trust
is not the successor or survivor of such consolidation or merger."
and hereby declares that Article VII, Section 7.3 of the Agreement is amended to
read as follows:
"Section 7.3 Amendments. All rights granted to the Shareholders under
this Declaration of Trust are granted subject to the reservation of
the right to amend this Declaration of Trust as herein provided,
except that no amendment shall repeal the limitations on personal
liability of any Shareholder or Trustee or repeal the prohibition of
assessment upon the Shareholders without the express consent of each
Shareholder or Trustee involved. Subject to the foregoing, the
provisions of the Declaration of Trust (whether or not related to the
rights of Shareholders) may be amended at any time, so long as such
amendment does not adversely affect the rights of any Shareholder with
respect to which such amendment is or purports to be applicable and so
long as such amendment is not in contravention of applicable law,
including the 1940 Act, by an instrument in writing signed by a
majority of such trustees). Any amendment to this Declaration of Trust
that adversely affects the rights of Shareholders may be adopted at
any time by an instrument in writing signed by a majority of the then
Trustees (or by an officer of the Trust pursuant to a vote of a
majority of such trustees) when authorized to do so by the vote in
accordance with subsection (e) of Section 4.2 of Shareholders holding
a majority of the outstanding voting securities entitled to vote (as
defined in the 1940 Act); provided, however, that any amendment to
Section 3.6 may be adopted at any time by an instrument in writing
signed by a majority of the then Trustees (or by an officer of the
Trust pursuant to a vote of a majority of such trustees) only when
authorized to do so by the vote of a "majority of the outstanding
voting securities" of International Investors, as such term is defined
in the 1940 Act. Subject to the foregoing, any such amendment shall be
effective as
<PAGE>
provided in the instrument containing the terms of such amendment or,
if there is no provision therein with respect to effectiveness, upon
the execution of such instrument and of a certificate (which may be a
part of such instrument) executed by a Trustee or officer of the Trust
to the effect that such amendment has been duly adopted."
WITNESS my hand and seal this 21st day of December, 1994.
/s/ Thaddeus Leszczynski
Thaddeus Leszczynski, Secretary
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
Then personally appeared the above-named Thaddeus Leszczynski and
acknowledged this instrument to be his free act and deed this 21st day of
December, 1994.
/s/ Henry G. Neger
Notary Public
My commission expires: 12/31/95
<PAGE>
VAN ECK FUNDS
AMENDMENT NO. 9
TO AMENDED AND RESTATED MASTER TRUST AGREEMENT
Amendment No. 9 to the Amended and Restated Master Trust Agreement dated
February 6, 1992 (amending the Master Trust Agreement dated April 3, 1985) (the
"Agreement"), of Van Eck Funds (the "Trust"), made at New York, New York this
21st day of December, 1994.
W I T N E S S E T H:
--------------------
WHEREAS, Article VII, Section 7.3 of the Agreement provides that any
amendment to the Agreement that adversely affects the rights of shareholders may
be adopted at any time by an instrument in writing signed by a majority of the
Trustees (or by an officer of the Trust pursuant to a vote of a majority of such
Trustees) when authorized to do so by the vote in accordance with subsection (e)
of Section 4.2 of shareholders holding a majority of the shares entitled to
vote; and
WHEREAS, Section 4.1 of the Agreement provides that the Trustees of the
Trust may establish and designate series of Shares of the Trust and classes
thereof; and
WHEREAS, a majority of the Trustees have voted to establish a second class
of Shares of Asia Infrastructure Fund and a third class of Shares of Global Hard
Assets Fund and Gold Opportunity Fund, which are designated as Class B Shares;
and
WHEREAS, a majority of the Trustees have voted to eliminate the World
Trends Fund and the Global SmallCap Fund series of the Trust.
WHEREAS, a majority of the Trustees have voted to eliminate the Class B
Shares of the Global Income Fund series of the Trust.
WHEREAS, a majority of the Trustees have voted to eliminate the Class C
Shares of the Gold/Resources Fund and the Asia Infrastructure Fund series of the
Trust.
WHEREAS, a majority of Trustees have duly approved this amendment to the
Agreement and authorized the same to be filed with the Secretary of State of the
Commonwealth of Massachusetts.
NOW, THEREFORE, the undersigned Thaddeus Leszczynski, a duly elected and
serving Secretary of the Trust, pursuant to the authorization described above,
hereby declares that the initial paragraph of Article IV, Section 4.2 of the
Agreement is amended to read as follows:
"Section 4.2 Establishment and Description of Sub-Trusts. Without
--------------------------------------------
limiting the authority of the Trustees set forth in Section 4.1 to
establish and designate any further Sub-Trusts, the Trustees hereby
establish and designate nine Sub-Trusts: Gold/Resources Fund (Class
A), U.S. Government
<PAGE>
Money Fund, Global Income Fund (Class A), International Investors Gold
Fund (Class A and Class C), Asia Dynasty Fund (Class A and Class B),
Asia Infrastructure Fund (Class A and Class B), Global Balanced Fund
(Class A and Class B), Global Hard Assets Fund (Class A, Class B and
Class C) and Gold Opportunity Fund (Class A, Class B and Class C). The
Gold/Resources Fund (Class A), U.S. Government Money Fund, Global
Income Fund (Class A), International Investors Gold Fund (Class A and
Class C), Asia Dynasty Fund (Class A and Class B), Asia Infrastructure
Fund (Class A and Class B), Global Balanced Fund (Class A and Class
B), Global Hard Assets Fund (Class A, Class B and Class C) and Gold
Opportunity Fund (Class A, Class B and Class C) and any Shares of any
further Sub-Trusts that may from time to time be established and
designated by the Trustees shall (unless the Trustees otherwise
determine with respect to some further Sub-Trust at the time of
establishing and designating the same) have the following relative
rights and preferences:"
WITNESS my hand and seal this 23rd day of April, 1996.
/s/ Thaddeus Leszczynski
Thaddeus Leszczynski, Secretary
STATE OF NEW YORK
COUNTY OF NEW YORK
Then personally appeared the above-named Thaddeus Leszczynski and acknowledged
this instrument to be his free act and deed this 23rd day of April, 1996.
/s/ Peter J. Carbone
Notary Public
My commission expires: February 8, 1997
<PAGE>
BY-LAWS
OF
VAN ECK FUNDS
ARTICLE 1
---------
Agreement and Declaration
-------------------------
of Trust and Principal Office
-----------------------------
1.1 Agreement and Declaration of Trust. These By-Laws shall be subject to
----------------------------------
the Declaration of Trust, as from time to time in effect (the "Declaration of
Trust"), of Van Eck Funds, the Massachusetts business trust established by the
Declaration of Trust (the "Trust").
1.2 Principal Office of the Trust. The principal office of the Trust
-----------------------------
shall be located in New York, New York.
ARTICLE 2
---------
Meetings of Trustees
--------------------
2.1 Regular Meetings. Regular meetings of the Trustees may be held
----------------
without call or notice at such places and at such times as the Trustees may from
time to time determine, provided that notice of the first regular meeting
following any such determination shall be given to absent Trustees.
2.2 Special Meetings. Special meetings of the Trustees may be held at any
----------------
time and at any place designated in the call of the meeting when called by the
Chairman of the Trustees, the President or the Treasurer or by two or more
Trustees, sufficient notice thereof being given to each Trustee by the Secretary
or an Assistant Secretary or by the officer of the Trustees calling the meeting.
2.3 Notice. It shall be sufficient notice to a Trustee of a special
------
meeting to send notice by mail at least forty-eight hours or by telegram at
least twenty-four hours before the meeting addressed to the Trustee at his or
her usual or last known business or residence address or to give notice to him
or her in person or by telephone at least twenty-four hours before the meeting.
Notice of a meeting need not be given to any Trustee if a written waiver of
notice, executed by him or her before or after the meeting, is filed with the
records of the meeting, or to any Trustee who attends the meeting without
protesting prior thereto or at its commencement the lack of notice
<PAGE>
to him or her. Neither notice of a meeting nor a waiver of a notice need specify
the purposes of the meeting.
2.4 Quorum. At any meeting of the Trustees a majority of the Trustees
------
then in office shall constitute a quorum. Any meeting may be adjourned from
time to time by a majority of the votes cast upon the question, whether or not a
quorum is present, and the meeting may be held as adjourned without further
notice.
2.5 Participation by Telephone. One or more of the Trustees or of any
--------------------------
committee of the Trustees may participate in a meeting thereof by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at a meeting.
ARTICLE 3
---------
Officers
--------
3.1 Enumeration; Qualification. The officers of the Trust shall be a
--------------------------
Chairman or the Trustees, a President, a Treasurer, a Secretary and such other
officers, including Vice Presidents, if any, as the Trustees from time to time
may in their discretion elect. The Trust may also have such agents as the
Trustees from time to time may in their discretion appoint. The Chairman of the
Trustees shall be a Trustee and may but need not be a shareholder; and any other
officer may be but none need be a Trustee or shareholder. Any two or more
offices may be held by the same person.
3.2 Election. The Chairman of the Trustees, the President, the Treasurer,
--------
and the Secretary shall be elected annually by the Trustees at a meeting held
within the first four months of the Trust's fiscal year. The meeting at which
the officers are elected shall be known as the annual meeting of Trustees.
Other officers, if any, may be elected or appointed by the Trustees at said
meeting or at any other time. Vacancies in any office may be filled at any
time.
3.3 Tenure. The Chairman of the Trustees, the President, the Treasurer,
------
and the Secretary shall hold office until the next annual meeting of the
Trustees and until their respective successors are chosen and qualified, or in
each case until he or she sooner dies, resigns, is removed or becomes
disqualified. Each other officer shall hold office and each agent shall retain
authority at the pleasure of the Trustees.
3.4 Powers. Subject to the other provisions of these By-Laws, each
------
officer shall have, in addition to the duties and powers herein and in the
Declaration of Trust set forth, such
2
<PAGE>
duties and powers as are commonly incident to the office occupied by him or her
as if the Trust were organized as a Massachusetts business corporation and such
other duties and powers as the Trustees may from time to time designate.
3.5 Chairman; President. Unless the Trustees otherwise provide, the
-------------------
Chairman of the Trustees, or, if there is none, or in the absence of the
Chairman, the President shall preside at all meetings of the shareholders and of
the Trustees. The President shall be the chief executive officer.
3.6 Vice President. The Vice President, or if there be more than one Vice
--------------
President, the Vice Presidents in the order determined by the Trustees (or if
there be no such determination, then in the order of their election) shall in
the absence of the President or in the event of his inability or refusal to act,
perform the duties of the President, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the President. The Vice
Presidents shall perform such other duties and have such other powers as the
Board of Trustees may from time to time prescribe.
3.7 Treasurer. The Treasurer shall be the chief financial and accounting
---------
officer of the Trust, and shall, subject to the provisions of the Declaration of
Trust and to any arrangement made by the Trustees with a custodian, investment
adviser or manager, or transfer, shareholder servicing or similar agent, be in
charge of the valuable papers, books of account and accounting records of the
Trust, and shall have such other duties and powers as may be designated from
time to time by the Trustees or by the President.
3.8 Assistant Treasurer. The Assistant Treasurer, or if there shall be
-------------------
more than one, the Assistant Treasurers in the order determined by the Trustees
(or if there be no such determination, then in the order of their election),
shall, in the absence of the Treasurer or in the event of his inability or
refusal to act, perform the duties and exercise the powers of the Treasurer and
shall perform such other duties and have such other powers as the Board of
Trustees may from time to time prescribe.
3.9 Secretary. The Secretary shall record all proceedings of the
---------
shareholders and the Trustees in books to be kept therefor, which books or a
copy thereof shall be kept at the principal office of the Trust. In the absence
of the Secretary from any meeting of the share-holders or Trustees, an assistant
secretary, or if there be none or if he or she is absent, a temporary secretary
chosen at such meeting shall record the proceedings thereof in the aforesaid
books.
3.10 Assistant Secretary. The Assistant Secretary, or if there be more
-------------------
than one, the Assistant Secretaries in the order
3
<PAGE>
determined by the Trustees (or if there be no determination, then in the order
of their election), shall, in the absence of the Secretary or in the event of
his inability or refusal to act, perform the duties and exercise the powers of
the Secretary and shall perform such other duties and have such other powers as
the Board of Trustees may from time to time prescribe.
3.11 Resignations and Removals. Any Trustee or officer may resign at any
-------------------------
time by written instrument signed by him or her and delivered to the Chairman,
the President or the Secretary or to a meeting of the Trustees. Such
resignation shall be effective upon receipt unless specified to be effective at
some other time. The Trustees may remove any officer elected by them with or
without cause. Except to the extent expressly provided in a written agreement
with the Trust, no Trustee or officer resigning and no officer removed shall
have any right to any compensation for any period following his or her
resignation or removal, or any right to damages on account of such removal.
ARTICLE 4
---------
Committees
----------
4.1 General. The Trustees, by vote of a majority of the Trustees then in
-------
office, may elect from their number an Executive Committee or other committees
and may delegate thereto some or all of their powers except those which by law,
by the Declaration of Trust, or by these By-Laws may not be delegated. Except
as the Trustees may otherwise determine, any such committee may make rules for
the conduct of its business, but unless otherwise provided by the Trustees or in
such rules, its business shall be conducted so far as possible in the same
manner as is provided by these By-Laws for the Trustees themselves. All members
of such committees shall hold such offices at the pleasure of the Trustees. The
Trustees may abolish any such committee at any time. Any committee to which the
Trustees delegate any of their powers or duties shall keep records of its
meetings and shall report its action to the Trustees. The Trustees shall have
power to rescind any action of any committee, but no such rescission shall have
retroactive effect.
ARTICLE 5
---------
Reports
-------
5.1 General. The Trustees and officers shall render reports at the time
-------
and in the manner required by the Declaration of Trust or any applicable law.
Officers and Committees shall render such additional reports as they may deem
desirable or as may from time to time be required by the Trustees.
4
<PAGE>
ARTICLE 6
---------
Fiscal Year
-----------
6.1 General. The fiscal year of the Trust shall be fixed by resolution of
-------
the Trustees.
ARTICLE 7
---------
Seal
----
7.1 General. The seal of the Trust shall consist of a flat-faced die with
-------
the word "Massachusetts", together with the name of the Trust and the year of
its organization cut or engraved thereon, but, unless otherwise required by the
Trustees, the seal shall not be necessary to be placed on, and its absence shall
not impair the validity of, any document, instrument or other paper executed and
delivered by or on behalf of the Trust.
ARTICLE 8
---------
Execution of Papers
-------------------
8.1 General. Except as the Trustees may generally or in particular cases
-------
authorize the execution thereof in some other manner, all deeds, leases,
contracts, notes and other obligations made by the Trustees shall be signed by
the President, any Vice President, or by the Treasurer and need not bear the
seal of the Trust.
ARTICLE 9
---------
Issuance of Share Certificates
------------------------------
9.1 Share Certificates. In lieu of issuing certificates for shares, the
------------------
Trustees or the transfer agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such shares, who
shall in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accented such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
The Trustees may at any time authorize the issuance of share certificates
either in limited cases or to all shareholders. In that event, a shareholder may
receive a certificate stating the number of shares owned by him, in such form as
shall be prescribed from time to time by the Trustees. Such certificate shall be
signed by the president or a vice president and by the trea-
5
<PAGE>
surer or assistant treasurer. Such signatures may be facsimiles if the
certificate is signed by a transfer agent, or by a registrar, other than a
Trustee, officer or employee of the Trust. In case any officer who has signed or
whose facsimile signature has been placed on such certificate shall cease to be
such officer before such certificate is issued, it may be issued by the Trust
with the same effect as if he were such officer at the time of its issue.
9.2 Loss of Certificates. In case of the alleged loss or destruction or
--------------------
the mutilation of a share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees shall prescribe.
9.3 Issuance of New Certificate to Pledgee. A pledgee of shares
--------------------------------------
transferred as collateral security shall be entitled to a new certificate if the
instrument of transfer substantially describes the debt or duty that is intended
to be secured thereby. Such new certificate shall express on its face that it
is held as collateral security, and the name of the pledgor shall be stated
thereon, who alone shall be liable as a shareholder, and entitled to vote
thereon.
9.4 Discontinuance of Issuance of Certificates. The Trustees may at any
------------------------------------------
time discontinue the issuance of share certificates and may, by written notice
to each shareholder, require the surrender of shares certificates to the Trust
for cancellation. Such surrender and cancellation shall not affect the
ownership of shares in the Trust.
ARTICLE 10
----------
Dealings with Trustees and Officers
-----------------------------------
10.1 General. Any Trustee, officer or other agent of the Trust may acquire,
-------
own and dispose of shares of the Trust to the same extent as if he were not a
Trustee, officer or agent; and the Trustees may accept subscriptions to shares
or repurchase shares from any firm or company in which any Trustee, officer or
other agent of the Trust may have an interest.
ARTICLE 11
----------
Amendments to the By-Laws
-------------------------
12.1 General. These By-Laws may be amended or repealed, in whole or in
-------
part, by a majority of the Trustees then in office at any meeting of the
Trustees, or by one or more writings signed by such a majority.
6
<PAGE>
The foregoing By-Laws were adopted by the Board of Trustees on April 16, 1985.
__________________________________
<PAGE>
ADVISORY AGREEMENT
AGREEMENT made as of the 30th day of July, 1985 between VAN ECK ASSOCIATES
CORPORATION, a corporation organized under the laws of the State of Delaware and
having its principal place of business in New York, New York (the "Advisor"),
and VAN ECK FUNDS, a Massachusetts business trust having its principal place of
business in New York, New York (the "Trust").
WHEREAS, the Trust is engaged in business as an open-end management
investment company and is so registered under the Investment Company Act of 1940
(the "1940 Act"); and
WHEREAS, the Advisor is engaged principally in the business of rendering
investment management services and is so registered under the Investment
Advisers Act of 1940; and
WHEREAS, the Trust is authorized to issue shares of beneficial interest in
separate series with each such series representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Trust intends to initially offer shares in one series, the
World Trends Fund [such series (being referred to herein as the "Initial Fund")
together with all other series subsequently established by the Trust with
respect to which the Trust desires to retain the Advisor to render investment
advisory services hereunder and with respect to which the Advisor is willing so
to do, being herein collectively referred to as the "Funds"];
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF ADVISOR.
(a) Initial Fund. The Trust hereby appoints the Advisor to act as
manager and investment adviser to the Initial Fund for the period
and on the terms herein set forth. The Advisor accepts such
appointment and agrees to render the services herein set forth,
for the compensation herein provided.
(b) Additional Funds. In the event that the Trust establishes one or
more series of shares other than the Initial Fund with respect to
which it desires to retain the Advisor to render management and
investment advisory services hereunder, it shall so notify the
Advisor in writing, indicating the advisory fee which will be
payable with respect to
<PAGE>
the additional series of shares. If the Advisor is willing to
render such services, it shall so notify the Trust in writing,
whereupon such series of shares shall become a Fund hereunder.
2. DUTIES OF ADVISOR.
The Advisor, at its own expense, shall furnish the following services and
facilities to the Trust:
(a) Investment Program. The Advisor will (i) furnish continuously an
investment program for each Fund, (ii) determine (subject to the
overall supervision and review of the Board of Trustees of the
Trust) what investments shall be purchased, held, sold or
exchanged by each Fund and what portion, if any, of the assets of
each Fund shall be held uninvested, and (iii) make changes on
behalf of the Trust in the investments of each Fund. The Advisor
will also manage, supervise and conduct such other affairs and
business of the Trust and each Fund thereof and matters
incidental thereto, as the Advisor and the Trust agree, subject
always to the control of the Board of Trustees of the Trust and
to the provisions of the Declaration of Trust and By-laws and the
1940 Act.
(b) Office Space and Facilities. The Advisor will arrange to furnish
the Trust office space in the offices of the Advisor, or in such
other place or places as may be agreed upon from time to time,
and all necessary office facilities, simple business equipment,
supplies, utilities, and telephone service for managing the
affairs and investments of the Trust. These services are
exclusive of the necessary services and records of any dividend
disbursing agent, transfer agent, registrar or custodian, and
accounting and bookkeeping services which may be provided by the
custodian.
(c) Personnel. The Advisor shall provide executive and clerical
personnel for administering the affairs of the Trust, and shall
compensate officers and Trustees of the Trust if such persons are
also employees of the Advisor or its affiliates, except as
provided in Paragraphs 3(f), 3(j) and 3(m) hereof.
(d) Portfolio Transactions. The Advisor shall place all orders for
the purchase and sale of portfolio securities for the account of
each Fund with brokers or dealers selected by the Advisor,
2
<PAGE>
although the Trust will pay the actual brokerage commissions on
portfolio transactions in accordance with Paragraph 3(c). In
executing portfolio transactions and selecting brokers or
dealers, the Advisor will use its best efforts to seek on behalf
of the Trust or any Fund thereof the best overall terms
available. In assessing the best overall terms available for any
transaction, the Advisor shall consider all factors it deems
relevant, including, without limitation, the breadth of the
market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer, and
the reasonableness of the commission, if any (for the specific
transaction and on a continuing basis). In evaluating the best
overall terms available, and in selecting the broker or dealer to
execute a particular transaction, the Advisor may also consider
the brokerage and research services (as those terms are defined
in Section 28(e) of the Securities Exchange Act of 1934) provided
to any Fund and/or other accounts over which the Advisor or an
affiliate of the Advisor exercises investment discretion. The
Advisor is authorized to pay to a broker or dealer who provides
such brokerage and research services a commission for executing a
portfolio transaction for any Fund which is in excess of the
amount of commission another broker or dealer would have charged
for effecting that transaction if the Advisor determines in good
faith that such commission was reasonable in relation to the
value of the brokerage and research services provided by such
broker or dealer, viewed in terms of that particular transaction
or in terms of all of the accounts over which investment
discretion is so exercised by the Advisor or its affiliates.
Nothing in this Agreement shall preclude the combining of orders
for the sale or purchase of securities or other investments with
other accounts managed by the Advisor or its affiliates provided
that the Advisor does not favor any account over any other
account and provided that any purchase or sale orders executed
contemporaneously shall be allocated in a manner the Advisor
deems equitable among the accounts involved. Consistent with the
Rules of Fair Practice of the National Association of Securities
Dealers, Inc. and subject to seeking the most favorable price and
execution available and such other policies as the Board of
Trustees of the Trust may determine, the Advisor may consider
sales of shares of a Fund as a factor in the
3
<PAGE>
selection of broker-dealers to execute portfolio transactions for
a Fund.
3. ALLOCATION OF EXPENSES.
Except for the services and facilities to be provided by the Advisor as set
forth in Paragraph 2 above, the Trust assumes and shall pay all expenses
for all other Trust operations and activities and shall reimburse the
Advisor for any such expenses incurred by the Advisor. The expenses to be
borne by the Trust shall include, without limitation:
(a) The charges and expenses of any registrar, stock transfer or
dividend disbursing agent, custodian, depository or other agent
appointed by the Trust for the safekeeping of its cash, portfolio
securities and other property;
(b) the charges and expenses of auditors and outside accountants;
(c) brokerage commissions for transactions in the portfolio
securities of the Trust;
(d) all taxes, including issuance and transfer taxes, and corporate
fees payable by the Trust to Federal, state or other U.S. or
foreign governmental agencies;
(e) the cost of stock certificates representing shares of the Trust;
(f) expenses involved in registering and maintaining registrations of
the Trust and of its shares with the Securities and Exchange
Commission and various states and other jurisdictions, including
reimbursement of actual expenses incurred by the Advisor in
performing such functions for the Trust, and including
compensation of persons who are Advisor employees in proportion
to the relative time spent on such matters;
(g) all expenses of shareholders' and Trustees' meetings, including
meetings of committees, and of preparing, setting in type,
printing and mailing proxy statements, quarterly reports, semi-
annual reports, annual reports and other communications to
shareholders;
(h) all expenses of preparing and setting in type prospectuses, and
expenses of printing and mailing the same to shareholders (but
not expenses of
4
<PAGE>
printing and mailing of prospectuses and literature used for
promotional purposes);
(i) compensation and travel expenses of Trustees who are not
"interested persons" of the Advisor within the meaning of the
1940 Act;
(j) the expense of furnishing, or causing to be furnished, to each
shareholder statements of his account, including the expense of
mailing, and any charges and expenses for services performed by
the Advisor or by Van Eck Securities Corporation in connection
with servicing shareholder accounts, including accounting and
bookkeeping services not otherwise provided by a custodian or
dividend and transfer agent;
(k) charges and expenses of legal counsel in connection with matters
relating to the Trust, including, without limitation, legal
services rendered in connection with the Trust's corporate and
financial structure, day to day legal affairs of the Trust and
relations with its shareholders, issuance of Trust shares, and
registration and qualification of securities under Federal, state
and other laws;
(l) the expenses of attendance at professional meetings of
organizations such as the Investment Company Institute by
officers and Trustees of the Trust, and the membership or
association dues of such organizations;
(m) upon the net assets of a Fund exceeding $10 million, the cost and
expense of maintaining the books and records of the Trust,
including general ledger and daily net asset value accounting,
including compensation of persons who are Advisor employees in
proportion to the relative time spent on such matters;
(n) the expense of obtaining and maintaining a fidelity bond as
required by Section 17(g) of the 1940 Act and the expense of
obtaining and maintaining an errors and omissions policy;
(o) interest payable on Trust borrowings;
(p) postage; and
(q) any other costs and expenses incurred by the Advisor for Trust
operations and activities,
5
<PAGE>
including but not limited to the organizational costs of a Fund
which will initially be paid by the Advisor and reimbursed by the
Trust to the Advisor.
4. ADVISORY FEE.
(a) For the services and facilities to be provided to each of the
Funds by the Advisor as provided in Paragraph 2 hereof, the Trust
shall pay the Advisor a fee payable monthly with respect to each
of the Funds, which fee shall be paid at the annual rate set
forth in the advisory fee schedule below as amended from time to
time to reflect changes with respect to the establishment of new
Funds. The Fee is based upon the daily average net assets of a
Fund, determined in accordance with procedures established from
time to time by.or under the direction of the Board of Trustees
of the Trust:
ADVISORY FEE SCHEDULE
Daily Average Annual
Net Assets Fee Rate
---------- --------
World Trends Fund
-----------------
Up to and including $500
million .75%
Over $500 million up to
and including $750 million .65%
Over $750 million .50%
5. EXPENSE LIMITATION.
The Advisor agrees that for any fiscal year of the Trust during which the
total of all expenses of the Trust (including investment advisory fees
under this agreement, but excluding interest, portfolio brokerage
commissions and expenses, taxes and extraordinary items) exceeds the lowest
expense limitation imposed in any state in which the Trust is then making
sales of its shares or in which its shares are then qualified for sale, the
Advisor will reimburse the Trust for such expenses not otherwise excluded
from reimbursement by this Paragraph 5 to the extent that they exceed such
expense limitation.
6
<PAGE>
6. TRUST TRANSACTIONS.
The Advisor agrees that neither it nor any of its officers, directors,
employees or agents will take any long or short term position in the shares
of the Trust; provided, however, that such prohibition shall not prevent
the purchase of shares of the Trust by any of the persons above described
for their account and for investment at the price (net asset value) at
which such shares are available to the public at the time of purchase or as
part of the initial capital of the Funds.
7. RELATIONS WITH TRUST.
Subject to and in accordance with the Declaration of Trust and By-laws of
the Trust and the Articles of Incorporation and By-laws of the Advisor,
respectively, it is understood (i) that Trustees, officers, agents and
shareholders of the Trust are or may be interested in the Advisor (or any
successor thereof) as directors, officers, or otherwise; (ii) that
directors, officers, agents and shareholders of the Advisor are or may be
interested in the Trust as Trustees, officers, shareholders, or otherwise;
and (iii) that the Advisor (or any such successor) is or may be interested
in the Trust as a shareholder or otherwise and that the effect of any such
adverse interests shall be governed by said Declaration of Trust, Articles
of Incorporation and By-laws.
8. LIABILITY OF ADVISOR AND OFFICERS AND TRUSTEES OF THE TRUST.
Neither the Advisor nor its officers, directors, employees, agents or
controlling persons or assigns shall be liable for any error of judgment or
of law, or for any loss suffered by the Trust or its shareholders in
connection with the matters to which this Agreement relates, except that no
provision of this Agreement shall be deemed to protect the Advisor or such
persons against any liability to the Trust or its shareholders to which the
Advisor might otherwise be subject by reason of any willful misfeasance,
bad faith or gross negligence in the performance of its duties or the
reckless disregard of its obligations and duties under this Agreement.
9. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. This Agreement shall become effective with respect to
the Initial Fund on the date hereof and, with respect to any
additional Fund, on the date of receipt by the Trust of notice
from the Advisor in accordance with Paragraph 1(b) hereof that
the Advisor is willing to serve as
7
<PAGE>
Advisor with respect to such Fund. Unless terminated as herein
provided, this Agreement shall remain in full force and effect
until April 30, 1987 with respect to the Initial Fund and shall
continue in full force and effect for periods of one year
thereafter with respect to each Fund so long as such continuance
with respect to any such Fund is approved at least annually (i)
by either the Trustees of the Trust or by vote of a majority of
the outstanding voting shares (as defined in the 1940 Act) of
such Fund, and (ii) in either event by the vote of a majority of
the Trustees of the Trust who are not parties to this Agreement
or "interested persons" (as defined in the 1940 Act) of any such
party, cast in person at a meeting called for the purpose of
voting on such approval. However, the continuance of this
Agreement with respect to any Fund other than the Initial Fund is
subject to the approval of this Agreement by a majority of the
outstanding voting shares of such Fund within twelve (12) months
following the date on which such Fund becomes a Fund hereunder.
Any approval of this Agreement by the holders of a majority of
the outstanding shares (as defined in the 1940 Act) of any Fund
shall be effective to continue this Agreement with respect to any
such Fund notwithstanding (i) that this Agreement has not been
approved by the holders of a majority of the outstanding shares
of any other Fund affected thereby, and (ii) that this Agreement
has not been approved by the vote of a majority of the
outstanding shares of the Trust, unless such approval shall be
required by any other applicable law or otherwise.
(b) Termination. This Agreement may be terminated at any time,
without payment of any penalty, by vote of the Trustees of the
Trust or by vote of a majority of the outstanding shares (as
defined in the 1940 Act), or by the Advisor on sixty (60) days'
written notice to the other party.
(c) Automatic Termination. This Agreement shall automatically and
immediately terminate in the event of its assignment.
10. NAME OF TRUST.
It is understood that the name "Van Eck" is the valuable property of Van
Eck Associates corporation, and that the Trust has the right to include
"Van Eck" as a part of its
8
<PAGE>
name only so long as this Agreement shall continue. Upon termination of
this Agreement the Trust shall forthwith cease to use the "Van Eck" name
and shall submit to its shareholders an amendment to its Declaration of
Trust to change the Trust's name.
11. PRIOR AGREEMENT SUPERSEDED.
This Agreement supersedes any prior agreement relating to the subject
matter hereof between the parties.
12. SERVICES NOT EXCLUSIVE.
The services of the Advisor to the Trust hereunder are not to be deemed
exclusive, and the Advisor shall be free to render similar services to
others so long as its services hereunder are not impaired thereby.
13. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
(b) If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
14. LIMITATION OF LIABILITY.
The term "Van Eck Funds" means and refers to the Trustees from time to time
serving under the Declaration of Trust of the Trust dated April 3, 1985, as
the same may subsequently thereto have been, or subsequently hereto be
amended. It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents or employees of the Trust, personally, but bind only the
assets and property of the Trust, as provided in the Declaration of Trust
of the Trust. The execution and delivery of this Agreement have been
authorized by the Trustees and shareholders of the Trust and signed by an
authorized officer of the Trust, acting as such, and neither such
authorization by such Trustees and shareholders nor such execution and
delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but
shall bind only the assets and property of the Trust as provided in its
Declaration of Trust.
9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first set forth above.
VAN ECK FUNDS VAN ECK ASSOCIATES CORPORATION
By______________________________ By____________________________
President President
Attest: Attest:
_______________________________ _______________________________
Secretary Secretary
10
<PAGE>
VAN ECK FUNDS
122 East 42nd Street
New York, New York 10168
November 18, 1985
Van Eck Associates Corporation
122 East 42nd Street
New York, New York 10168
Gentlemen:
The Board of Trustees of Van Eck Funds, at a meeting held on October 8,
1985, approved the establishment of two additional series of the Trust, namely
the Gold/Resources Fund and U.S. Government Money Fund (the "New Funds"). The
Gold/Resources Fund will be a non South African precious metals growth fund.
The U.S. Government Money Fund will be a fund investing only in obligations of
the U.S. Government.
Pursuant to Sections 1(b), 4 and 9(a) of the Advisory Agreement (the
"Agreement"), dated July 30, 1985, between Van Eck Associates Corporation and
Van Eck Funds, we wish to retain Van Eck Associates Corporation to render the
services contemplated by the Agreement with respect to the New Funds in exchange
for the fees set forth in Exhibit A of this notice.
Please confirm below your willingness to render such services and your
agreement to amend the advisory fee schedule in Section 4 of the Agreement to
include the information set forth in Exhibit A of this notice.
VAN ECK FUNDS
ATTEST:___________________________ BY:________________________________
Secretary President
Confirmed, Agreed to and Accepted this ____ day of November 1995:
VAN ECK ASSOCIATES CORP.
ATTEST:___________________________ BY:________________________________
Secretary President
<PAGE>
EXHIBIT A
---------
ADVISORY FEE SCHEDULE
Gold/Resources Fund
-------------------
Daily Average Annual Fee
Net Assets Rate
- -------------- ------------
Up to and including $500 million .75%
Over $500 million up to and
including $750 million .65%
Over $750 million .50%
U.S. Government Money Fund
--------------------------
Daily Average Annual Fee
Net Assets Rate
- -------------- ------------
Up to and including $500 million .50%
Over $500 million up to and
including $750 million .40%
Over $750 million .375%
<PAGE>
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the day of , 1993 between VAN ECK ASSOCIATES
CORPORATION, a corporation organized under the laws of the State of Delaware and
having its principal place of business in New York, New York (the "Advisor"),
and VAN ECK FUNDS a Massachusetts Business trust having its principal place of
business in New York, New York (the "Trust").
WHEREAS, the Trust is engaged in business as an open-end investment company and
is so registered under the Investment Company Act of 1940 (the "1940 Act"); and
WHEREAS, the Advisor is engaged principally in the business of rendering
investment management services and is registered under the Investment Advisers
Act of 1940; and
WHEREAS, the Trust is authorized to issue shares of beneficial interest with
each series; and in separate series representing interests in a separate
portfolio of securities and other assets:
WHEREAS, the Trust intends to offer its shares in one such series, namely, Asia
Growth Fund (the "Fund") and invest the proceeds in securities, the Trust
desires to retain the Advisor to render investment advisory services hereunder
and with respect to which the Advisor is willing so to do;
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties hereto
as follows:
1 . APPOINTMENT OF ADVISOR.
The Trust hereby appoints the Advisor to act as investment advisor to the
Fund for the period and on the terms herein set forth. The Advisor accepts
such appointment and agrees to render the services herein set forth, for
the compensation herein provided.
2. DUTIES OF ADVISOR.
The Advisor, at its own expense, shall furnish the following services and
facilities to the Trust:
(a) Investment Program. The Advisor will (i) furnish continuously an
------------------
investment program for the Fund (ii) determine (subject to the overall
supervision and review of the Board of Trustees of the Trust) what
investments shall be purchased, held, sold or exchanged and what portion,
if any, of the assets of the Trust shall be held uninvested, and (iii) make
changes on behalf of the Trust in the investments. The Advisor also will
manage, supervise and conduct such other affairs and business of the
<PAGE>
Trust and matters incidental thereto, as the Advisor and the Trust agree,
subject always to the control of the Board of Trustees of the Trust and to
the provisions of the Master Trust Agreement of the Trust, the Trust's By-
laws and the 1940 Act.
(b) Office Space and Facilities. The Advisor will arrange to furnish the
---------------------------
Trust office space in the offices of the Advisor, or in such other place or
places as may be agreed upon from time to time, and all necessary office
facilities, simple business equipment, supplies, utilities, and telephone
service required for managing the investments of the Trust.
(c) Personnel. The Advisor shall provide executive and clerical personnel
---------
for managing the investments of the Trust, and shall compensate officers
and Trustees of the Trust if such persons are also employees of the Advisor
or its affiliates, except as otherwise provided herein.
(d) Portfolio Transactions. The Advisor shall place all orders for the
----------------------
purchase and sale of portfolio securities for the account of the Trust with
brokers or dealers selected by the Advisor, although the Trust will pay the
actual brokerage commissions on portfolio transactions in accordance with
Paragraph 3(d). In executing portfolio transactions and selecting brokers
or dealers, the Advisor will use its best efforts to seek on behalf of the
Trust the best overall terms available. In assessing the best overall terms
available for any transaction, the Advisor shall consider all factors it
deems relevant, including, without limitation, the breadth of the market in
the security, the price of the security, the financial condition and
execution capability of the broker or dealer, and the reasonableness of the
commission, if any (for the specific transaction and on a continuing
basis). In evaluating the best overall terms available, and in selecting
the broker or dealer to execute a particular transaction, the Advisor may
also consider the brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934) provided
to the Trust and/or the other accounts over which the Advisor or an
affiliate of the Advisor exercises investment discretion. The Advisor is
authorized to pay to a broker or dealer who provides such brokerage and
research services a commission for executing a portfolio transaction which
is in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction if the Advisor determines in
good faith that such commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer,
viewed in terms of that particular transaction or in terms of all of the
accounts over which investment discretion is so exercised by the Advisor or
its affiliates. Nothing in this Agreement shall preclude the combining of
orders for the sale or purchase of securities or other investments with
other accounts managed by the Advisor or its affiliates provided that the
Advisor does not favor any account over any other account and provided that
any purchase or sale orders executed contemporaneously shall be allocated
in a manner the Advisor deems equitable among the accounts involved.
<PAGE>
3. EXPENSES OF THE TRUST
The Advisor shall not bear the responsibility for or expenses associated with
operational, accounting or administrative services on behalf of the Trust not
directly related to providing an investment program for the Trust. The expenses
to be borne by the Trust include, without limitation:
(a) charges and expenses of any registrar, stock, transfer or
dividend disbursing agent, custodian, depository or other agent
appointed by the Trust for the safekeeping of its cash, portfolio
securities and other property;
(b) general operational, administrative and accounting costs, such as
the costs of calculating the Trust's net asset value, the
preparation of the Trust's tax filings with relevant authorities
and of compliance with any and all regulatory authorities;
(c) charges and expenses of auditors and outside accountants;
(d) brokerage commissions for transactions in the portfolio
securities of the Trust;
(e) all taxes, including issuance and transfer taxes, and corporate
fees payable by the Trust to Federal, state or other U.S. or
foreign governmental agencies;
(f) the cost of stock certificates representing shares of the Trust;
(g) expenses involved in registering and maintaining registrations of
the Trust and of its shares with the Securities and Exchange
Commission and various states and other jurisdictions, if
applicable;
(h) all expenses of shareholders' and Trustees' meetings, including
meetings of committees, and of preparing, setting in type,
printing and mailing proxy statements, quarterly reports, semi-
annual reports, annual reports and other communications to
shareholders;
(i) all expenses of preparing and setting in type offering documents,
and expenses of printing and mailing the same to shareholders
(but not expenses of printing and mailing of offering documents
and literature used for any promotional purposes);
(j) compensation and travel expenses of Trustees who are not
<PAGE>
"interested persons" of the Advisor within the meaning of the
1940 Act;
(k) the expense of furnishing, or causing to be furnished, to each
shareholder statements of account;
(l) charges and expenses of legal counsel in connection with matters
relating to the Trust, including, without limitation, legal
services rendered in connection with the Trust's corporate and
financial structure, day to day legal affairs of the Trust and
relations with its shareholders, issuance of Trust shares, and
registration and qualification or securities under Federal, state
and other laws;
(m) the expenses of attendance at professional meetings of
organizations such as the Investment Company Institute by
officers and Trustees of the Trust, and the membership or
association dues of such organizations;
(n) the cost and expense of maintaining the books and records of the
Trust;
(o) the expense of obtaining and maintaining a fidelity bond as
required by Section 17(g) of the 1940 Act and the expense of
obtaining and maintaining an errors and omissions policy;
(p) interest payable on Trust borrowing;
(q) postage; and
(r) any other costs and expenses incurred by the Advisor for Trust
operations and activities, including but not limited to the
organizational costs of the Trust if initially paid by the
Advisor.
4. ADVISORY FEE.
For the services and facilities to be provided to the Trust by the Advisor as
provided in Paragraph 2 hereof, the Trust shall pay the Advisor a fee, payable
monthly, at the annual rate of 1% of the Trust's average daily net assets, as
determined by the Trust or its third party administrator in accordance with
procedures established from time to time by or under the direction of the Board
of Trustees of the Trust.
5. SUB - INVESTMENT ADVISORS.
(a) Appointment of Sub-investment Advisors. Subject to the terms of the
--------------------------------------
Agreement, the Master Trust Agreement and the 1940 Act, the Advisor, at its
<PAGE>
expense, may select and contract with investment advisors ("Sub Investment
Advisors") to provide all or a portion of the investment advisory services
to be furnished by the Advisor hereunder. Any contract with a Sub-
Investment Advisor shall be subject to the written approval of the Trust.
(b) Responsibility of Advisor So long as the Sub-Investment Advisor serves
--------------------------
as Investment advisor to all or a portion of the Fund's assets, the
obligation of the Advisor under this Agreement shall be, subject in any
event to the control of the Board of Trustees of the Trust, to determine
and review with the Sub-Investment Advisor investment policies of the Fund
with respect to the assets managed by the Sub-Investment Advisor and the
Sub-Investment Advisor shall have the obligation of furnishing continuously
an investment program and making investment decisions for the Fund,
adhering to applicable policies and restrictions and of placing all orders
for the purchase and sale of portfolio securities for the Fund with respect
to such assets. The Advisor shall compensate any Sub-investment Advisor to
the Fund for its services to the Fund.
(c) Termination of Sub-investment Advisory Agreement.
------------------------------------------------
The Trust or the Advisor may terminate the services of the Sub-investment
Advisor at any time in its sole discretion, and at such time the Advisor
shall assume the responsibilities of the Sub-investment Advisor unless and
until a successor Sub - Investment Advisor is selected.
6. TRUST TRANSACTIONS.
The Advisor agrees that neither it nor any of its officers, directors,
employees or agents will take any long- or short-term position in the
shares of the Trust; provided, however, that such prohibition shall not
prevent the purchase of shares of the Trust by any of the persons above
described for their account and for investment at the price (net asset
value) at which such shares are available to the public at the time of
purchase or as part of the initial capital of the Trust.
7. RELATIONS WITH TRUST.
Subject to and in accordance with the Master Trust Agreement and By-Laws of
the Trust and the Articles of Incorporation and By-Laws of the Advisor,
respectively, it is understood (i) that Trustees, officers, agents and
shareholders of the Trust are or may be interested in the Advisor (or any
successor thereof) as directors, officers, or otherwise; (ii) that
directors, officers, agents and shareholders of the Advisor are or may be
interested in the Trust as Trustees, officers, shareholders or otherwise;
and (iii) that the Advisor (or any such successor) is or may be interested
in the Trust as a shareholder or otherwise and that the effect of any such
adverse interests shall be governed by said Master Trust Agreement and
By-laws.
<PAGE>
8. LIABILITY OF ADVISOR AND OFFICERS AND TRUSTEES OF THE TRUST.
Neither the Advisor nor its officers, directors, employees, agents or
controlling persons or assigns shall be liable for any error of judgment or law,
or for any loss suffered by the Trust or its shareholders in connection with the
matters to which this Agreement relates, except that no provision of this
Agreement shall be deemed to protect the Advisor or such persons against any
liability to the Trust or its shareholders to which the Advisor might otherwise
be subject by reason of any willful misfeasance, bad faith or gross negligence
in the performance of its duties or the reckless disregard of its obligations
and duties under this Agreement.
9. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. This Agreement shall become effective on the date hereof.
--------
Unless terminated as herein provided, this Agreement shall remain in
full force and effect until February 28, 1995 and shall continue in
full force and effect for periods of one year thereafter so long as
such continuance is approved at least annually (i) by either the
Trustees of the Trust or by vote of a majority of the outstanding
voting shares (as defined in the 1940 Act) of the Trust, and (ii) in
either event by the vote of a majority of the Trustees of the Trust
who are not parties to this Agreement or "interested persons" (as
defined in the 1940 Act) of any such party, cast in person at a
meeting called for the purpose of voting on such approval.
(b) Termination. This Agreement may be terminated at any time, without
-----------
payment of any penalty, by vote of the Trustees of the Trust or by
vote of a majority of the outstanding shares (as defined in the 1940
Act), or by the Advisor, on sixty (60) days written notice to the
other party.
(c) Automatic Termination. This Agreement shall automatically and
---------------------
immediately terminate in the event of its assignment.
10. PRIOR AGREEMENT SUPERSEDED.
This Agreement supersedes any prior agreement relating to the subject matter
hereof between the parties.
11. SERVICES NOT EXCLUSIVE.
The services of the Advisor to the Trust hereunder are not to be deemed
<PAGE>
exclusive, and the Advisor shall be free to render similar services to others
and to engage in other activities.
12 MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
(b) If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
13. LIMITATION OF LIABILITY.
The Term Van Eck Funds means and refers to the Trustees from time to time
serving under the Master Trust Agreement of the Trust dated April 3, 1985 as the
same may subsequently thereto have been, or subsequently hereto be amended. It
is expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any Trustees, shareholders, nominees, officers, agents or employees
of the Trust, personally, but bind only the assets and property of the Trust, as
provided in the Master Trust Agreement of the Trust. The execution and delivery
of this Agreement have been authorized by the Trustees and the Trust, acting as
such, and neither such authorization by such officer shall be deemed to have
been made by any of them personally, but shall bind only the assets and property
of the Trust as provided in its Master Trust Agreement.
In WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
Van Eck Funds
VAN ECK TRUST
By__________________________
Attest: President
VAN ECK ASSOCIATES CORPORATION
By_______________________________
Attest: President
<PAGE>
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 20th day of April, 1994 between VAN ECK ASSOCIATES
CORPORATION, a corporation organized under the laws of the State of
Delaware and having its principal place of business in New York, New York
(the "Advisor'), and VAN ECK FUNDS a Massachusetts Business trust having
its principal place of business in New York, New York (the "Trust").
WHEREAS, the Trust is engaged in business as an open-end investment company
and is so registered under the Investment Company Act of 1940 (the "1940
Act"); and
WHEREAS, the Advisor is engaged principally in the business of rendering
investment management services and is registered under the Investment
Advisers Act of 1940; and
WHEREAS, the Trust is authorized to issue shares of beneficial interest
with each series; and in separate series representing interests in a
separate portfolio of securities and other assets:
WHEREAS, the Trust intends to initially offer its shares in one such
series, namely, Global Balanced Fund (the "Fund" or "Initial Series") and
invest the proceeds in securities, the Trust desires to retain the Advisor
to render investment advisory services hereunder and with respect to which
the Advisor is willing so to do;
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF ADVISOR.
The Trust hereby appoints the Advisor to act as investment advisor to the
Fund for the period and on the terms herein set forth. The Advisor accepts
such appointment and agrees to render the services herein set forth, for
the compensation herein provided.
2. DUTIES OF ADVISOR.
The Advisor, at its own expense, shall furnish the following services and
facilities to the Trust:
(a) Investment Program.
------------------
The Advisor will (i) furnish continuously an investment program for the
Fund (ii) determine (subject to the overall supervision and review of the
Board of Trustees of the Trust) what investments shall be purchased, held,
sold or exchanged and what portion, if any, of the assets of the Trust
shall be held uninvested, and (iii) make changes on behalf of the Trust in
the investments. The Advisor also will manage,
<PAGE>
supervise and conduct such other affairs and busines of the Trust and
matters incidental thereto, as the Advisor and the Trust agree, subject
always to the control of the Board of Trustees of the Trust and to the
provisions of the Master Trust Agreement of the Trust, the Trust's By-laws
and the 1940 Act.
(b) Office Space and Facilities.
---------------------------
The Advisor will arrange to furnish the Trust office space in the offices
of the Advisor, or in such other place or places as may be agreed upon from
time to time, and all necessary office facilities, simple business
equipment, supplies, utilities, and telephone service required for managing
the investments of the Trust
(c) Personnel.
---------
The Advisor shall provide executive and clerical personnel for managing the
investments of the Trust, and shall compensate officers and Trustees of the
Trust if such persons are also employees of the Advisor or its affiliates,
except as otherwise provided herein.
(d) Portfolio Transactions.
----------------------
The Advisor shall place all orders for the purchase and sale of portfolio
securities for the account of the Trust with brokers or dealers selected by
the Advisor, although the Trust will pay the actual brokerage commissions
on portfolio transactions in accordance with Paragraph 3(d). In executing
portfolio transactions and selecting brokers or dealers, the Advisor will
use its best efforts to seek on behalf of the Trust the best overall terms
available. In assessing the best overall terms available for any
transaction, the Advisor shall consider all factors it deems relevant,
including, without limitation, the breadth of the market in the security,
the price of the security, the financial condition and execution capability
of the broker or dealer, and the reasonableness of the commission, if any
(for the specific transaction and on a continuing basis). In evaluating the
best overall terms available, and in selecting the broker or dealer to
execute a particular transaction, the Advisor may also consider the
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) provided to the Trust and/or
the other accounts over which the Advisor or an affiliate of the Advisor
exercises investment discretion. The Advisor is authorized to pay to a
broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction which is in excess of the
amount of commission another broker or dealer would have charged for
effecting that transaction if the Advisor determines in good faith that
such commission was reasonable in relation to the value of the brokerage
and research services provided by such broker or dealer, viewed in terms of
that particular transaction or in terms of all of the accounts over which
investment discretion is so exercised by the Advisor or its affiliates.
Nothing in this Agreement shall preclude the combining of orders for the
sale or purchase of securities or other investments with other accounts
managed by the Advisor or its affiliates provided that the Advisor does not
favor any account over any other account and provided that any purchase or
sale orders executed contemporaneously shall be allocated
2
<PAGE>
in a manner the Advisor deems equitable among the accounts involved.
3. EXPENSES OF THE TRUST
The Advisor shall not bear the responsibility for or expenses associated
with operational, accounting or administrative services on behalf of the
Trust not directly related to providing an investment program for the
Trust. The expenses to be borne by the Trust include, without limitation:
(a) charges and expenses of any registrar, stock, transfer or
dividend disbursing agent, custodian, depository or other agent
appointed by the Trust for the safekeeping of its cash, portfolio
securities and other property;
(b) general operational, administrative and accounting costs, such as
the costs of calculating the Trust's net asset value, the
preparation of the Trust's tax filings with relevant authorities
and of compliance with any and all regulatory authorities;
(c) charges and expenses of auditors and outside accountants;
(d) brokerage commissions for transactions in the portfolio
securities of the Trust;
(e) all taxes, including issuance and transfer taxes, and corporate
fees payable by the Trust to Federal, state or other U.S. or
foreign governmental agencies;
(f) the cost of stock certificates representing shares of the Trust;
(g) expenses involved in registering and maintaining registrations of
the Trust and of its shares with the Securities and
ExchangeCommission and various states and other jurisdictions, if
applicable;
(h) all expenses of shareholders' and Trustees' meetings, including
meetings of committees, and of preparing, setting in type,
printing and mailing proxy statements, quarterly reports, semi-
annual reports, annual reports and other communications to
shareholders;
(i) all expenses of preparing and setting in type offering documents,
and expenses of printing and mailing the same to shareholders
(but not expenses of printing and mailing of offering documents
and literature used for any promotional purposes);
(j) compensation and travel expenses of Trustees who are not
"interested persons" of the Advisor within the meaning of the
1940 Act;
3
<PAGE>
(k) the expense of furnishing, or causing to be furnished, to each
shareholder statements of account;
(l) charges and expenses of legal counsel in connection with matters
relating to the Trust, including, without limitation, legal
services rendered in connection with the Trust's corporate and
financial structure, day to day legal affairs of the Trust and
relations with its shareholders, issuance of Trust shares, and
registration and qualification or securities under Federal, state
and other laws;
(m) the expenses of attendance at professional meetings of
organizations such as the investment Company Institute by
officers and Trustees of the Trust, and the membership or
association dues of such organizations;
(n) the cost and expense of maintaining the books and records of the
Trust;
(o) the expense of obtaining and maintaining a fidelity bond as
required by Section 17(g) of the 1940 Act and the expense of
obtaining and maintaining an errors and omissions policy;
(p) interest payable on Trust borrowing;
(q) postage; and
(r) any other costs and expenses incurred by the Advisor for Trust
operations and activities, including but not limited to the
organizational costs of the Trust if initially paid by the
Advisor.
4. ADVISORY FEE.
For the services and facilities to be provided to the Trust by the Advisor
as provided in Paragraph 2 hereof, the Trust shall pay the Advisor a fee at
the annual rate set forth in Exhibit A ("Annual Fee"). The Trust shall pay
such amounts monthly, based on the Fund's average daily net assets, as
determined by the Trust or its third party administrator in accordance with
procedures established from time to time by or under the direction of the
Board of Trustees of the Trust.
5. SUB-INVESTMENT ADVISORS.
(a) Appointment of Sub-investment Advisors.
--------------------------------------
Subject to the terms of the Agreement, the Master Trust Agreement and the
1940 Act, the Advisor, at its expense, may select and contract with
investment advisors ("Sub -Investment Advisors") to provide all or a
portion of the investment advisory
4
<PAGE>
services to be furnished by the Advisor hereunder. Any contract with a Sub-
Investment Advisor shall be subject to the written approval of the Trust.
(b) Responsibility of Advisor.
-------------------------
So long as the Sub-Investment Advisor serves as Investment advisor to all
or a portion of the Funds assets, the obligation of the Advisor under this
Agreement shall be, subject in any event to the control of the Board of
Trustees of the Trust, to determine and review with the Sub-investment
Advisor investment policies of the Fund with respect to the assets managed
by the Sub-investment Advisor and the Sub-Investment Advisor shall have the
obligation of furnishing continuously an investment program and making
investment decisions for the Fund, adhering to applicable policies and
restrictions and of placing all orders for the purchase and sale of
portfolio securities for the Fund with respect to such assets. The Advisor
shall compensate any Sub-Investment Advisor to the Fund for its services to
the Fund.
(c) Termination of Sub-Investment Advisory Agreement.
------------------------------------------------
The Trust or the Advisor may terminate the services of the Sub-investment
Advisor at any time in its sole discretion, and at such time the Advisor
shall assume the responsibilities of the Sub-Investment Advisor unless and
until a successor Sub-Investment Advisor is selected.
6. TRUST TRANSACTIONS.
The Advisor agrees that neither it nor any of its officers, directors,
employees or agents will take any long- or short-term position in the
shares of the Trust; provided, however, that such prohibition shall not
prevent the purchase of shares of the Trust by any of the persons above
described for their account and for investment at the price (net asset
value) at which such shares are available to the public at the time of
purchase or as part of the initial capital of the Trust.
7. RELATIONS WITH TRUST.
Subject to and in accordance with the Amended and Restated Master Trust
Agreement and By-Laws of the Trust and the Articles of Incorporation and
By-Laws of the Advisor, respectively, it is understood (i) that Trustees,
officers, agents and shareholders of the Trust are or may be interested in
the Advisor (or any successor thereof) as directors, officers, or
otherwise; (ii) that directors, officers, agents and shareholders of the
Advisor are or may be interested in the Trust as Trustees, officers,
shareholders or otherwise; and (iii) that the Advisor (or any such
successor) is or may be interested in the Trust as a shareholder or
otherwise and that the effect of any such adverse interests shall be
governed by said Master Trust Agreement and By-laws.
5
<PAGE>
8. LIABILITY OF ADVISOR AND OFFICERS AND TRUSTEES OF THE TRUST.
Neither the Advisor nor its officers, directors, employees, agents or
controlling persons or assigns shall be liable for any error of judgment or
law, or for any loss suffered by the Trust or its shareholders in
connection with the matters to which this Agreement relates, except that no
provision of this Agreement shall be deemed to protect the Advisor or such
persons against any liability to the Trust or its shareholders to which the
Advisor might otherwise be subject by reason of any willful misfeasance,
bad faith or gross negligence in the performance of its duties or the
reckless disregard of its obligations and duties under this Agreement.
9. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration.
--------
This Agreement shall become effective on the date hereof for the Initial
Series. Unless terminated as herein provided, this Agreement shall remain
in full force and effect until May 1, 1995 and shall continue in full force
and effect for periods of one year thereafter so long as such continuance
is approved at least annually (i) by either the Trustees of the Trust or by
vote of a majority of the outstanding voting shares (as defined in the 1940
Act) of the Trust, and (ii) in either event by the vote of a majority of
the Trustees of the Trust who are not parties to this Agreement or
"interested persons" (as defined in the 1940 Act) of any such party, cast
in person at a meeting called for the purpose of voting on such approval.
(b) Additional Series.
-----------------
As additional series, other than the Initial Series, are established, the
Agreement shall become effective with respect to each such series listed in
Exhibit A at the Annual Fee set forth in such Exhibit upon the initial
public offering of such new series, provided that the Agreement has
previously been approved for continuation as provided in subsection (a)
above.
(c) Termination.
-----------
This Agreement may be terminated at any time, without payment of any
penalty, by vote of the Trustees of the Trust or by vote of a majority of
the outstanding shares (as defined in the 1940 Act), or by the Advisor, on
sixty (60) days written notice to the other party.
(d) Automatic Termination.
---------------------
This Agreement shall automatically and immediately terminate in the event
of its assignment.
6
<PAGE>
10. PRIOR AGREEMENT SUPERSEDED.
This Agreement supersedes any prior agreement relating to the subject
matter hereof between the parties.
11. SERVICES NOT EXCLUSIVE.
The services of the Advisor to the Trust hereunder are not to be deemed
exclusive, and the Advisor shall be free to render similar services to
others and to engage in other activities.
12 MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
(b) If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
13. LIMITATION OF LIABILITY.
The Term Van Eck Funds means and refers to the Trustees from time to time
serving under the Amended and Restated Master Trust Agreement of the Trust
dated February 6, 1992, as the same may subsequently thereto have been, or
subsequently hereto be amended. It is expressly agreed that the obligations
of the Trust hereunder shall not be binding upon any Trustees,
shareholders, nominees, officers, agents or employees of the Trust,
personally, but bind only the assets and property of the Trust, as provided
in the Amended and Restated Master Trust Agreement of the Trust. The
execution and delivery of this Agreement have been authorized by the
Trustees and the Trust, acting as such, and neither such authorization by
such officer shall be deemed to have been made by any of them personally,
but shall bind only the assets and property of the Trust as provided in its
Amended and Restated Master Trust Agreement.
7
<PAGE>
In WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first set forth above.
[SEAL] VAN ECK FUNDS
Attest: /s/ Gabrielle Gallo By /s/ John C. van Eck
[SEAL] VAN ECK ASSOCIATES CORPORATION
Attest: /s/ Gabrielle Gallo By /s/ John C. van Eck
8
<PAGE>
EXHIBIT A
Annual Advisory Fee
Name of Series (as a % of average daily net assets)
- -------------- ------------------------------------
Global Balanced Fund .75 of 1%
<PAGE>
VAN ECK FUNDS
122 East 42nd Street
New York, New York 10168
August 15, 1994
Van Eck Securities Corporation
122 East 42nd Street
New York, New York 10168
Ladies/Gentlemen:
Pursuant to Section 1 of the Distribution Agreement, dated July 30,1985
(the "Agreement"), between Van Eck Funds (the "Trust") and Van Eck Securities
Corporation (the "Distributor"), please be advised that the Trust has
established an additional class of shares, namely, Class C shares, for four
series of the Trust, namely, Gold/Resources Fund, International Investors Gold
Fund, Asia infrastructure Fund and Global SmallCap Fund (the "Fund"). The
Trustees of the Trust have adopted the Agreement to retain the Distributor to
render services contemplated by the Agreement for the Fund. Class C Shares will
be sold at "net asset value per share" of each Fund plus a redemption charge for
shares redeemed within twelve months of the date of purchase in accordance with
the then current prospectus of the Trust, as from time to time amended.
Please confirm below your willingness to render such services.
VAN ECK FUNDS
ATTEST: /s/ Thaddeus Leszczynski BY: John C. van Eck
President
Confirmed, Agreed to and Accepted this August 15, 1994
VAN ECK ASSOCIATES CORPORATION
ATTEST: /s/ Thaddeus Leszczynski BY: John C. van Eck
President
<PAGE>
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 20th day of October, 1994 between VAN ECK ASSOCIATES
CORPORATION, a corporation organized under the laws of the State of Delaware and
having its principal place of business in New York, New York (the "Advisor"),
and VAN ECK FUNDS, a Massachusetts Business trust having its principal place of
business in New York, New York (the "Trust").
WHEREAS, the Trust is engaged in business as an open-end investment company and
is so registered under the Investment Company Act of 1940 (the "1940 Act"); and
WHEREAS, the Advisor is engaged principally in the business of rendering
investment management services and is registered under the Investment Advisers
Act of 1940; and
WHEREAS, the Trust is authorized to issue shares of beneficial interest with
each series; and in separate series representing interests in a separate
portfolio of securities and other assets:
WHEREAS, the Trust intends to initially offer its shares in one such series,
namely, Global Hard Assets Fund (the "Fund" or "Initial Series") and invest the
proceeds in securities, the Trust desires to retain the Advisor to render
investment advisory and accounting and administrative services hereunder and
with respect to which the Advisor is willing so to do;
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties hereto
as follows:
1. APPOINTMENT OF ADVISOR.
The Trust hereby appoints the Advisor to act as investment advisor and
administrator to the Fund for the period and on the terms herein set forth. The
Advisor accepts such appointment and agrees to render the services herein set
forth, for the compensation herein provided.
2. DUTIES OF ADVISOR.
The Advisor, at its own expense, shall furnish the following services and
facilities to the Trust:
(a) Investment Program.
------------------
The Advisor will (i) furnish continuously an investment program for the Fund
(ii) determine (subject to the overall supervision and review of the Board of
Trustees of the Trust) what investments shall be purchased, held, sold or
exchanged and what portion, if any, of the assets of the Trust shall be held
uninvested, and (iii) make
<PAGE>
changes on behalf of the Trust in the investments. The Advisor also will manage,
supervise and conduct such other affairs and business of the Trust and matters
incidental thereto, as the Advisor and the Trust agree, subject always to the
control of the Board of Trustees of the Trust and to the provisions of the
Master Trust Agreement of the Trust, the Trust's By-laws and the 1940 Act.
(b) Accounting and Administrative Services
--------------------------------------
(i) The Advisor, at its own expense, will perform the following accounting
functions on an ongoing basis:
(1) Journalize the Initial Series' investment, capital share and income
and expense activities;
(2) Verify investment buy/sell trade tickets when received from the
Initial Series and transmit trades to the Trust's custodian for proper
settlement;
(3) Maintain individual ledgers for investment securities;
(4) Reconcile cash and investment balances of the Initial Series with the
Trust's custodian, and provide the Initial Series with the beginning
cash balance available for investment purposes;
(5) Update the cash availability throughout the day as required by the
Initial Series;
(6) Post to and prepare the Trust's Statement of Assets and Liabilities
and the Statement of Operations;
(7) Calculate various contractual expenses (e.g., transfer agency fees);
(8) Control all disbursements from the Initial Series and authorize such
disbursements upon written instructions from authorized Initial Series
officers and agents;
(9) Calculate capital gains and losses;
(10) Determine the Initial Series' net income;
(11) Obtain security market quotes, at the Initial Series' expense, from
services approved by the Trust, or if such quotes are unavailable,
obtain such prices from the Initial Series investment advisor, and in
either case calculate the market value of the Trust's investments;
(12) Deliver a copy of the daily portfolio valuation to the Initial Series;
(13) Compute the net asset value of the Initial Series:
2
<PAGE>
(14) Compute the Initial Series' yields, total return, expense ratios,
portfolio turnover rate;
(15) Monitor the expense accruals and notify the Initial Series of any
proposed adjustments; and
(16) Prepare periodic unaudited financial statements.
(ii) In addition to the accounting services described in the foregoing Paragraph
2(b)(i), the Advisor will provide or arrange for the following services:
(1) Prepare periodic audited financial statements;
(2) Supply various statistical data as requested by the Board of Trustees
of the Trust on an ongoing basis;
(3) Prepare for execution and file the Initial Series' Federal and state
tax returns;
(4) Prepare and file the Initial Series' Semi-Annual Reports with the SEC
on Form N-SAR;
(5) Prepare and file with the Securities and Exchange Commission the
Trust's annual, semi-annual, and quarterly shareholder reports;
(6) File registration statements on form N-1 A and other filings relating
to the registration of Shares;
(7) Monitor the Initial Series' status as a regulated investment company
under Sub-Chapter M of the Internal Revenue Code of 1986, as amended;
(8) Maintain the Initial Series' fidelity bond as required by the 1940
Act;
(9) Prepare materials for and record the proceedings of, in conjunction
with the officers of the Trust, the meetings of the Trust's Board of
Trustees; and
(10) Prepare any other regulatory reports to and for any federal, local or
state agency as may be required.
In carrying out its duties hereunder, as well as any other activities undertaken
on behalf of the Initial Series pursuant to this Agreement, the Advisor shall at
all times be subject to the control and direction of the Board of Trustees of
the Trust.
(c) Office Space and Facilities.
---------------------------
The Advisor will arrange to furnish the Trust office space in the offices of the
Advisor, or in such other place or places as may be agreed upon from time to
time, and all necessary office facilities, simple business equipment, supplies,
utilities, and
3
<PAGE>
telephone service required for managing the investments of the Trust.
(d) Personnel.
---------
The Advisor shall provide executive and clerical personnel for managing the
investments of the Trust, and shall compensate officers and Trustees of the
Trust if such persons are also employees of the Advisor or its affiliates,
except as otherwise provided herein.
(e) Portfolio Transactions.
----------------------
The Advisor shall place all orders for the purchase and sale of portfolio
securities for the account of the Trust with brokers or dealers selected by the
Advisor, although the Trust will pay the actual brokerage commissions on
portfolio transactions in accordance with Paragraph 3(d). In executing portfolio
transactions and selecting brokers or dealers, the Advisor will use its best
efforts to seek on behalf of the Trust the best overall terms available. In
assessing the best overall terms available for any transaction, the Advisor
shall consider all factors it deems relevant, including, without limitation, the
breadth of the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any (for the specific transaction and on a
continuing basis). In evaluating the best overall terms available, and in
selecting the broker or dealer to execute a particular transaction, the Advisor
may also consider the brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934) provided to the
Trust and/or the other accounts over which the Advisor or an affiliate of the
Advisor exercises investment discretion. The Advisor is authorized to pay to a
broker or dealer who provides such brokerage and research services a commission
for executing a portfolio transaction which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Advisor determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of that particular
transaction or in terms of all of the accounts over which investment discretion
is so exercised by the Advisor or its affiliates. Nothing in this Agreement
shall preclude the combining of orders for the sale or purchase of securities or
other investments with other accounts managed by the Advisor or its affiliates
provided that the Advisor does not favor any account over any other account and
provided that any purchase or sale orders executed contemporaneously shall be
allocated in a manner the Advisor deems equitable among the accounts involved.
(f) Right to Receive Advice.
-----------------------
(i) Advice of Initial Series. If the Advisor shall be in doubt as to any
------------------------
action to be taken or omitted by it, it may request, and shall receive,
from the Initial Series directions or advice.
(ii) Advice of Counsel. If the Advisor or the Initial Series shall be in doubt
-----------------
as to any question of law involved in any action to be taken or omitted by
the
4
<PAGE>
Advisor, it may request advice at the Initial Series' cost from counsel
of its own choosing (who may be counsel for the Advisor or the Initial
Series, at the option of the Advisor).
(iii) Protection of the Advisor. The Advisor shall be protected in any action
-------------------------
or inaction which it takes in reliance on any directions or advice
received pursuant to subsections (i) or (ii) of this paragraph which the
Advisor, after receipt of any such directions or advice in good faith
believes to be consistent with such directions or advice as the case may
be. However, nothing in this paragraph shall be construed as imposing
upon the Advisor any obligation (i) to seek such directions, or advice or
(ii) to act in accordance with such directions or advice when received.
Nothing in this subsection shall excuse the Advisor when an action or
omission on the part of the Advisor constitutes willful misfeasance, bad
faith, gross negligence or reckless disregard by the Advisor of its
duties under this Agreement.
3. EXPENSES OF THE TRUST
The Advisor shall not bear the responsibility for or expenses associated with
operational, accounting or administrative services on behalf of the Trust not
expressly assumed by the Advisor hereunder. The expenses to be borne by the
Trust include, without limitation:
(a) charges and expenses of any registrar, stock, transfer or dividend
disbursing agent, custodian, depository or other agent appointed by
the Trust for the safekeeping of its cash, portfolio securities and
other property;
(b) general operational, administrative and accounting costs, such as
the costs of calculating the Trust's net asset value, the
preparation of the Trust's tax filings with relevant authorities and
of compliance with any and all regulatory authorities;
(c) charges and expenses of auditors and outside accountants;
(d) brokerage commissions for transactions in the portfolio securities
of the Trust;
(e) all taxes, including issuance and transfer taxes, and corporate fees
payable by the Trust to Federal, state or other U.S. or foreign
governmental agencies;
(f) the cost of stock certificates representing shares of the Trust;
(g) expenses involved in registering and maintaining registrations of
the Trust and of its shares with the Securities and Exchange
Commission and various states and other jurisdictions, if
applicable;
5
<PAGE>
(h) all expenses of shareholders' and Trustees' meetings, including
meetings of committees, and of preparing, setting in type, printing
and mailing proxy statements, quarterly reports, semi-annual reports,
annual reports and other communications to shareholders;
(i) all expenses of preparing and setting in type offering documents, and
expenses of printing and mailing the same to shareholders (but not
expenses of printing and mailing of offering documents and literature
used for any promotional purposes);
(j) compensation and travel expenses of Trustees who are not "interested
persons" of the Advisor within the meaning of the 1940 Act;
(k) the expense of furnishing, or causing to be furnished, to each
shareholder statements of account;
(l) charges and expenses of legal counsel in connection with matters
relating to the Trust, including, without limitation, legal services
rendered in connection with the Trust's corporate and financial
structure, day to day legal affairs of the Trust and relations with
its shareholders, issuance of Trust shares, and registration and
qualification or securities under Federal, state and other laws;
(m) the expenses of attendance at professional meetings of organizations
such as the Investment Company Institute by officers and Trustees of
the Trust, and the membership or association dues of such
organizations;
(n) the cost and expense of maintaining the books and records of the
Trust;
(o) the expense of obtaining and maintaining a fidelity bond as required
by Section 17(g) of the 1940 Act and the expense of obtaining and
maintaining an errors and omissions policy;
(p) interest payable on Trust borrowing;
(q) postage; and
(r) any other costs and expenses incurred by the Advisor for Trust
operations and activities, including but not limited to the
organizational costs of the Trust if initially paid by the Advisor.
4. COMPENSATION
For the, services and facilities to be provided to the Trust by the Advisor as
provided in Paragraph 2 hereof, the Trust shall pay the Advisor a fee at the
annual rate set
6
<PAGE>
forth in Exhibit A ("Annual Fee"). The Trust shall pay such amounts monthly,
based on the Fund's average daily net assets, as reflected in the books and
records of the Trust in accordance with procedures established from time to time
by or under the direction of the Board of Trustees of the Trust.
5. SUB-INVESTMENT ADVISORS.
(a) Appointment of Sub-Investment Advisors.
--------------------------------------
Subject to the terms of the Agreement, the Master Trust Agreement and the 1940
Act, the Advisor, at its expense, may select and contract with investment
advisors ("Sub -Investment Advisors") to provide all or a portion of the
investment advisory services to be furnished by the Advisor hereunder. Any
contract with a Sub-Investment Advisor shall be subject to the written approval
of the Trust.
(b) Responsibility of Advisor.
-------------------------
So long as the Sub-Investment Advisor serves as investment advisor to all or a
portion of the Fund's assets, the obligation of the Advisor under this Agreement
shall be, subject in any event to the control of the Board of Trustees of the
Trust, to determine and review with the Sub-investment Advisor investment
policies of the Fund with respect to the assets managed by the Sub-Investment
Advisor and the Sub-Investment Advisor shall have the obligation of furnishing
continuously an investment program and making investment decisions for the Fund,
adhering to applicable policies and restrictions and of placing all orders for
the purchase and sale of portfolio securities for the Fund with respect to such
assets. The Advisor shall compensate any Sub-investment Advisor to the Fund for
its services to the Fund.
(c) Termination of Sub-Investment Advisory Agreement.
------------------------------------------------
The Trust or the Advisor may terminate the services of the Sub-investment
Advisor at any time in its sole discretion, and at such time the Advisor shall
assume the responsibilities of the Sub-investment Advisor unless and until a
successor Sub-Investment Advisor is selected.
6. TRUST TRANSACTIONS.
The Advisor agrees that neither it nor any of its officers, directors, employees
or agents will take any long- or short-term position in the shares of the Trust;
provided, however, that such prohibition shall not prevent the purchase of
shares of the Trust by any of the persons above described for their account and
for investment at the price (net asset value) at which such shares are available
to the public at the time of purchase or as part of the initial capital of the
Trust.
7
<PAGE>
7. RELATIONS WITH TRUST.
Subject to and in accordance with the Amended and Restated Master Trust
Agreement and By-Laws of the Trust and the Articles of Incorporation and By-Laws
of the Advisor, respectively, it is understood (i) that Trustees, officers,
agents and shareholders of the Trust are or may be interested in the Advisor (or
any successor thereof) as directors, officers, or otherwise; (ii) that
directors, officers, agents and shareholders of the Advisor are or may be
interested in the Trust as Trustees, officers, shareholders or otherwise; and
(iii) that the Advisor (or any such successor) is or may be interested in the
Trust as a shareholder or otherwise and that the effect of any such adverse
interests shall be governed by said Master Trust Agreement and By-laws.
8. LIABILITY OF ADVISOR AND OFFICERS AND TRUSTEES OF THE TRUST.
Neither the Advisor nor its officers, directors, employees, agents or
controlling persons or assigns shall be liable for any error of judgment or law,
or for any loss suffered by the Trust or its shareholders in connection with the
matters to which this Agreement relates, except that no provision of this
Agreement shall be deemed to protect the Advisor or such persons against any
liability to the Trust or its shareholders to which the Advisor might otherwise
be subject by reason of any willful misfeasance, bad faith or gross negligence
in the performance of its duties or the reckless disregard of its obligations
and duties under this Agreement.
9. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration.
--------
This Agreement shall become effective on the date hereof for the Initial Series.
Unless terminated as herein provided, this Agreement shall remain in full force
and effect until May 1, 1996 and shall continue in full force and effect for
periods of one year thereafter so long as such continuance is approved at least
annually (i) by either the Trustees of the Trust or by vote of a majority of the
outstanding voting shares (as defined in the 1940 Act) of the Trust, and (ii) in
either event by the vote of a majority of the Trustees of the Trust who are not
parties to this Agreement or "interested persons" (as defined in the 1940 Act)
of any such party, cast in person at a meeting called for the purpose of voting
on such approval.
(b) Additional Series.
-----------------
As additional series, other than the Initial Series, are established, the
Agreement shall become effective with respect to each such series listed in
Exhibit A at the Annual Fee set forth in such Exhibit upon the initial public
offering of such new series, provided that the Agreement has previously been
approved for continuation as provided in subsection (a) above.
8
<PAGE>
(c) Termination.
-----------
This Agreement may be terminated at any time, without payment of any penalty, by
vote of the Trustees of the Trust or by vote of a majority of the outstanding
shares (as defined in the 1940 Act), or by the Advisor, on sixty (60) days
written notice to the other party.
(d) Automatic Termination.
---------------------
This Agreement shall automatically and immediately terminate in the event of its
assignment.
10. PRIOR AGREEMENT SUPERSEDED.
This Agreement supersedes any prior agreement relating to the subject matter
hereof between the parties.
11. SERVICES NOT EXCLUSIVE.
The services of the Advisor to the Trust hereunder are not to be deemed
exclusive, and the Advisor shall be free to render similar services to others
and to engage in other activities.
12. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
(b) If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
13. LIMITATION OF LIABILITY.
The Term Van Eck Funds means and refers to the Trustees from time to time
serving under the Amended and Restated Master Trust Agreement of the Trust dated
February 6, 1992, as the same may subsequently thereto have been, or
subsequently hereto be amended. It is expressly agreed that the obligations of
the Trust hereunder shall not be binding upon any Trustees, shareholders,
nominees, officers, agents or employees of the Trust, personally, but bind only
the assets and property of the Trust, as provided in the Amended and Restated
Master Trust Agreement of the Trust. The execution and delivery of this
Agreement have been authorized by the Trustees and the Trust, acting as such,
and neither such authorization by such officer shall be deemed to have been made
by any of them
9
<PAGE>
personally, but shall bind only the assets and property of the Trust as
provided in its Amended and Restated Master Trust Agreement.
In WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
[SEAL] VAN ECK FUNDS
By /s/ John C. van Eck
Attest: /s/ Thaddeus Leszczynski President
[SEAL] VAN ECK ASSOCIATES CORPORATION
By /s/ Rodger Lawson
Attest: /s/ Thaddeus Leszczynski President
<PAGE>
EXHIBIT A
Annual Advisory Fee
Name of Series (as a % of average daily net assets)
- -------------- ------------------------------------
Global Hard Assets Fund 1.00%
<PAGE>
SUB-INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 30th day of October, 1993 by and among FIDUCIARY
INTERNATIONAL, INC., a Corporation organized under the laws of the State of New
York and having its principal place of business in New York, New York (the
"Sub-Adviser") and VAN ECK ASSOCIATES CORPORATION, a corporation organized under
the laws of the State of Delaware and having its principal place of business in
New York, New York (the "Adviser" and VAN ECK FUNDS, a Massachusetts business
trust, having its principal place of business in New York, New York (the
"Trust"),
WHEREAS, the Trust is engaged in business as an open-end investment company and
is so registered under the Investment Company Act of 1940 ("1940 Act"); and
WHEREAS, the Sub-Adviser is engaged principally in the business of rendering
investment management services and is registered under the Investment Advisers
Act of 1940 ("Advisers Act"), and
WHEREAS, the Trust is authorized to issue shares of beneficial interest in
separate series with each such series representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Trust intends to offer shares in one of such series, namely, Global
Balanced Fund (the "Fund") and invest the proceeds in securities and other
assets, the Trust has retained the Adviser to render management and advisory
services; and
WHEREAS, the Adviser desires to retain the Sub-Adviser to render investment
advisory and other services hereunder to the Fund and the Sub-Adviser is willing
to do so.
NOW, THEREFORE, WITNESSETH:
That it is hereby agreed among the parties hereto as follows:
1. APPOINTMENT OF SUB-ADVISER
The Adviser hereby appoints the Sub-Adviser to act as investment advisor to the
Fund for the period and on the terms herein set forth. The Sub-Adviser accepts
such appointment and agrees to render the services herein set forth, for the
compensation herein provided. So long as the Sub-Adviser serves as investment
advisor to the Fund pursuant to this Agreement the obligation of the Adviser
under this Agreement with respect to the Fund shall be, subject in any event to
the control of the Trustees of the Trust, to determine and review with Sub-
Adviser investment policies of the Fund and the Sub-Adviser shall have the
obligation of furnishing continuously an investment program and making
investment decisions for the Fund, adhering to applicable investment objectives,
policies and restrictions and placing all orders for the purchase and sale of
portfolio securities for the Fund and such other services set forth in Section 2
hereof. The Adviser will compensate the Sub-Adviser of the Fund for its services
to the Fund. The Adviser or the Fund, subject to the terms of this Agreement,
may terminate the services of the Sub-Adviser at any time in their sole
discretion, and the Adviser shall at such time assume the responsibilities of
the Sub-Adviser unless and until a successor investment advisor is selected.
2. DUTIES OF SUB-ADVISER.
The Sub-Adviser, at its own expense, shall furnish the following services and
facilities to the Trust:
<PAGE>
(a) Investment Program. The Sub-Adviser will (i) furnish continuously an
------------------
investment program for the Fund, (ii) determine (subject to the overall
supervision and review of the Board of Trustees of the Trust and the
Adviser) what investments shall be purchased, held, sold or exchanged and
what portion, if any, of the assets of the Fund shall be held uninvested,
and (iii) make changes on behalf of the Fund in the investments. The Sub-
Adviser will provide the services hereunder in accordance with the Fund's
investment objectives, policies and restrictions as stated in the then
current prospectus and statement of additional information which is part of
the Trust's Registration Statement filed with the Securities and Exchange
Commission, as amended from time to time, copies of which shall be sent to
the Sub-Adviser by the Adviser. The Sub-Adviser also will manage, supervise
and conduct such other affairs and business of the Trust and matters
incidental thereto as the Sub-Adviser and the Trust agree, subject always to
the control of the Board of Trustees of the Trust and to the provisions of
the Master Trust Agreement of the Trust, the Trust's By-laws and the 1940
Act. The Sub-Adviser will manage the Fund so that it will qualify as a
regulated investment company under sub-chapter M of the Internal Revenue
Code of 1986, as it may be amended from time to time; and, with respect to
the services provided by the Sub-Adviser under this Agreement, it shall be
responsible for compliance with all applicable laws, rules and regulations.
Sub-Adviser will adopt procedures reasonably designed to ensure compliance.
(b) Office Space and Facilities. The Sub-Adviser will arrange to furnish office
---------------------------
space, all necessary office facilities, simple business equipment, supplies,
utilities, and telephone service required for managing the investments of
the Fund.
(c) Personnel. The Sub-Adviser shall provide executive and clerical personnel
---------
for managing the investments of the Fund, and shall compensate officers and
Trustees of the Fund for services provided to the Fund (but not any other
series of the Trust) if such persons are also employees of the Sub-Adviser
or its affiliates, except as otherwise provided herein.
(d) Portfolio Transactions. The Sub-Adviser shall place all orders for the
----------------------
purchase and sale of portfolio securities for the account of the Fund with
brokers or dealers selected by the Sub-Adviser, although the Fund will pay
the actual transaction costs, including without limitation brokerage
commissions on portfolio transactions in accordance with this Paragraph
3(d). In executing portfolio transactions and selecting brokers or dealers,
the Sub-Adviser will use its best efforts to seek on behalf of the Fund the
best overall terms available. In assessing the best overall terms available
for any transaction, the Sub-Adviser shall consider all factors it deems
relevant, including, without limitation, the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the
commission, if any (for the specific transaction and on a continuing basis).
In evaluating the best overall terms available, and in selecting the broker
or dealer to execute a particular transaction, the Sub-Adviser may also
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) provided to Sub-
Adviser or an affiliate of the Sub-Adviser in respect of accounts over which
it exercises investment discretion. The Sub-Adviser is authorized to pay to
a broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction which is in excess of the
amount of commission another broker or dealer would have charged for
effecting that transaction if the Adviser determines in good faith that such
commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of that
particular transaction or in terms of all of the accounts over which
investment discretion is so exercised by the Sub-Adviser or its affiliates.
Nothing in this Agreement shall preclude the combining of orders for the
sale or purchase of securities or other investments with other accounts
managed by the Sub-Adviser or its affiliates provided that the
<PAGE>
Sub-Adviser does not favor any account over any other account and provided
that any purchase or sale orders executed contemporaneously shall be
allocated in an equitable manner among the accounts involved in accordance
with procedures adopted by the Sub-Adviser.
(e) In connection with the purchase and sale of securities for the Fund, the
Sub-Adviser will arrange for the transmission to the custodian and
recordkeeping agent for the Trust on a daily basis, such confirmation, trade
tickets, and other documents and information, including, but not limited to,
Cusip, Sedol, or other numbers that identify securities to be purchased or
sold on behalf of the Fund, as may be reasonably necessary to enable the
custodian and recordkeeping agent to perform its administrative and
recordkeeping responsibilities with respect to the Fund. With respect to
portfolio securities to be purchased or sold through the Depository Trust
Company, the Sub-Adviser will arrange for the automatic transmission of the
confirmation of such trades to the Fund's custodian and recordkeeping agent,
(f) The Sub-Adviser will monitor on a daily basis the determination by the
custodian and recordkeeping agent for the Fund of the valuation of portfolio
securities and other investments of the Fund. The Sub-Adviser will assist
the custodian and recordkeeping agent for the Fund in determining or
confirming, consistent with the procedures and policies stated in the
Registration Statement for the Trust, the value of any portfolio securities
or other assets of the Fund for which the custodian and recordkeeping agent
seeks assistance from, or identifies for review by, the Sub-Adviser. The
Sub-Adviser shall assist the Board in determining fair value of such
securities or assets for which market quotations are not readily available.
(g) The Sub-Adviser will provide the Trust or the Adviser with copies of all of
the Fund's investment records and ledgers maintained by the Sub-Adviser
(which shall not include the records and ledgers maintained by the custodian
and recordkeeping agent for the Trust) as are necessary to assist the Trust
and the Adviser to comply with requirements of the 1940 Act and the Advisers
Act as well as other applicable laws. The Sub-Adviser will furnish to
regulatory authorities having the requisite authority any information,
reports or investment records and ledgers maintained by the Sub-Adviser in
connection with such services which may be requested in order to ascertain
whether the operations of the Trust are being conducted in a manner
consistent with applicable laws and regulations.
(h) The Sub-Adviser will provide reports to the Trust's Board of Trustees for
consideration at meetings of the Board on the investment program for the
Fund and the issues and securities represented in the Fund's portfolio, and
will furnish the Trust's Board of Trustees with respect to the Fund such
periodic and special reports as the Trustees or the Adviser may reasonably
request.
3. EXPENSES OF THE TRUST
Except as provided in sections 2(d) above, the Sub-Adviser shall assume and
pay all of its own costs and expenses related to providing an investment
program for the Fund.
4. SUB-ADVISORY FEE.
For the services and facilities to be provided to the Fund by the Adviser as
provided in Paragraph 2 hereof, the Adviser shall pay the Sub-Adviser a fee,
payable monthly, at the annual rate of .50 of 1% of the Fund's average daily
net assets from the Advisory fee it receives from the fund, as determined by
the Trust or its third party administrator in accordance with procedures
established, from time to time, by or under the direction of the Board of
Trustees of the Trust. The Trust shall not be liable for the obligation
<PAGE>
of the Adviser to make payment to the Sub-Adviser.
5. REPRESENTATIONS AND COVENANTS
(a) The Adviser hereby represents and warrants as follows:
(1) That it is registered in good standing with the Securities and Exchange
Commission as an investment adviser under the Advisers Act, and such
registration is current, complete and in full compliance with all
applicable provisions of the Advisers Act and the rules and regulations
thereunder;
(2) That it has all the requisite authority to enter into, execute, deliver and
perform its obligations under this Agreement; and
(3) Its performance of its obligations under this Agreement does not conflict
with any law, regulation or order to which it is subject.
(b) The Adviser hereby covenants and agrees that, so long as this Agreement
shall remain in effect:
(1) It shall maintain its registration in good standing as an investment
adviser under the Advisers Act, and such registration shall at all times
remain current, complete and in full compliance with all applicable
provisions of the Advisers Act and the rules and regulations thereunder;
(2) Its performance of its obligations under this Agreement does not conflict
with any law, regulation or order to which it is subject; and
(3) It shall at all times fully comply with the Advisers Act, the 1940 Act, all
applicable rules and regulations under such Acts and all other applicable
law; and
(4) It shall promptly notify the Sub-Adviser upon occurrence of any event that
might disqualify or prevent it from performing its duties under this
Agreement.
(c) The Sub-Adviser hereby represents and warrants as follows:
(1) That it is registered in good standing with the Securities and Exchange
Commission as an investment adviser under the Advisers Act, and such
registration is current, complete and in full compliance with all
applicable provisions of the Advisers Act and the rules and regulations
thereunder;
(2) That it has all the requisite authority to enter into, execute, deliver and
perform its obligations under this Agreement; and
(3) Its performance of its obligations under this Agreement does not conflict
with any law, regulation or order to which it is subject.
(d) The Sub-Adviser hereby covenants and agrees that, so long as this Agreement
shall remain in effect:
(1) It shall maintain its registration in good standing as an investment
adviser under the Advisers Act, and such registration shall at all times
remain current, complete and in full compliance with all
<PAGE>
applicable provisions of the Advisers Act and the rules and regulations
thereunder;
(2) Its performance of its obligations under this Agreement does not conflict
with any law, regulation or order to which it is subject;
(3) It shall at all times fully comply with the Advisers Act, the 1940 Act, all
applicable rules and regulations under such Acts and all other applicable
law; and
(4) It shall promptly notify the Adviser upon occurrence of any event that
might disqualify or prevent it from performing its duties under this
Agreement.
6. TRUST TRANSACTIONS.
The Adviser and Sub-Adviser each agrees that neither it nor any of its officers,
directors, employees or agents will take any long- or short-term position in the
shares of the Trust; provided, however, that such prohibition shall not prevent
the purchase of shares of the Trust by any of the persons above described for
their account and for investment at the price (net asset value) at which such
shares are available at the time of purchase or as part of the initial capital
of the Trust.
7. RELATIONS WITH TRUST.
Subject to and in accordance with the Declaration of Trust and By-Laws of the
Trust and the Articles of Incorporation and By-Laws of the Adviser and Sub-
Adviser it is understood (i) that Trustees, officers, agents and shareholders of
the Trust are or may be interested in the Sub-Adviser (or any successor
thereof) as directors, officers, or otherwise; (ii) that directors, officers,
agents and shareholders of the Sub-Advisor are or may be interested in the Trust
as Trustees, officers, shareholders or otherwise; and (111) that the Sub-Advisor
(or any such successor) is or may be interested in the Trust as a shareholder or
otherwise and that the effect of any such adverse interests shall be governed by
said Declaration of Trust and By-laws.
8. LIABILITY OF ADVISER, SUB-ADVISER AND OFFICERS AND TRUSTEES OF THE TRUST.
Neither the Adviser, Sub-Adviser nor any of their officers, directors,
employees, agents or controlling persons or assigns or Trustees or officers of
the Trust shall be liable for any error of judgment or law, or for any loss
suffered by the Trust or its shareholders in connection with the matters to
which this Agreement relates, except that no provision of this Agreement shall
be deemed to protect the Adviser, Sub-Adviser or such persons against any
liability to the Trust or its shareholders to which the Adviser or Sub-Adviser
might otherwise be subject by reason of any wilful misconduct, gross negligence
or actions taken in bad faith in the discharge of its respective obligations and
performance of its respective duties under this Agreement.
9. INDEMNIFICATION
(a) Notwithstanding Section 8 of the Agreement, the Adviser agrees to Indemnify
and hold harmless the Sub-Adviser, any affiliated person of the Sub-Adviser
(except the Trust), and each person, if any, who, within the meaning of
Section 15 of the Securities Act of 1933 ("Act") controls ("controlling
person") the Sub-Adviser (all of such persons being referred to as "Sub-
Adviser Indemnified Persons") against any and all losses, claims, damages,
liabilities (excluding salary
<PAGE>
charges of employees, officers or partners of the Sub-Adviser), or
litigation (including legal and other) expenses to which a Sub-Adviser
Indemnified Person may become subject under the 1933 Act, the 1940 Act, the
Advisers Act, any other statute, common law or otherwise, arising out of the
Adviser's responsibilities to the Trust which (1) may be based upon any
untrue statement or alleged untrue statement of a material fact supplied by,
or which is the responsibility of, the Adviser and contained in the
Registration Statement or prospectus or statement of additional information
covering shares of the Fund or any other series, or any amendment thereof or
any supplement thereto, or the omission or alleged omission or failure to
state therein a material fact known or which should have been known to the
Adviser and was required to be stated therein or necessary to make the
statements therein not misleading, unless such statement or omission was
made in reliance upon information furnished to the Adviser or the Trust or
to any affiliated person of the Adviser by a Sub-Adviser Indemnified Person
in writing for inclusion in the Registration Statement or prospectus or
statement of additional information; or (2) may be based upon a failure by
the Adviser to comply with, or a breach of, any provision of this Agreement
or any other agreement with the Fund; or (3) may be based upon misfeasance
or negligence by the Adviser in the discharge of its duties and performance
of its obligations under this Agreement or any other agreement with the
Fund, provided however, that in no case shall the indemnity in favor of the
Sub-Adviser Indemnified Person be deemed to protect such person against any
liability to which any such person would otherwise be subject by reason of
any misfeasance or negligence in the discharge of its obligations and the
performance of its duties under this Agreement.
(b) Notwithstanding Section 8 of this Agreement, the Sub-Adviser agrees to
indemnify and hold harmless the Adviser, any affiliated person of the
Adviser (except the Trust), and each person, if any, who, within the meaning
of Section 15 of the 1933 Act, controls ("controlling person") the Adviser
(all of such persons being referred to as "Adviser Indemnified Persons")
against any and all losses, claims, damages, liabilities (excluding salary
charges of employees, officers or partners of the Adviser), or litigation
(including legal and other) expenses to which an Adviser Indemnified Person
may become subject under the 1933 Act, the 1940 Act, the Advisers Act, any
other statute, common law or otherwise, arising out of the Sub-Adviser's
responsibilities as sub-investment adviser to the Fund which (1) may be
based upon any untrue statement or alleged untrue statement of a material
fact supplied by the Sub-Adviser for inclusion in the Registration Statement
or prospectus or statement of additional information covering shares of the
Fund, or any amendment thereof or any supplement thereto, or, with respect
to a material fact supplied by the Sub-Adviser for inclusion in the
Registration Statement or prospectus or statement of additional information,
the omission or alleged omission or failure to state therein a material
fact known or which should have been known to the Sub-Adviser and was
required to be stated therein or necessary to make the statements therein
not misleading, unless such statement or omission was made in reliance upon
information furnished to the Sub-Adviser, the Trust, or any affiliated
person of the Sub-Adviser or Trust by an Adviser Indemnified Person; or (2)
may be based upon a failure by the Sub-Adviser to comply with, or a breach
of, any provision of this Agreement or any other agreement with the Fund or
(3) may be based upon misfeasance or negligence by the Sub-Adviser in the
discharge of its duties and performance of its obligations under this
Agreement or any other agreement with the Fund provided however, that in no
case shall the indemnity in favor of an Adviser Indemnified Person be deemed
to protect such person against any liability to which any such person would
otherwise be subject by reason of misfeasance or negligence in the discharge
of its obligations and the performance of its duties under this Agreement.
(c) Neither the Adviser nor the Sub-Adviser shall be liable under this Section
with respect to any claim made against an Indemnified Person unless such
Indemnified Person shall have notified the indemnifying party in writing
within a reasonable time after the summons or other first legal
<PAGE>
process giving information of the nature of the claim shall have been served
upon such Indemnified Person (or such Indemnified Person shall have received
notice of such service on any designated agent), but failure to notify the
indemnifying party of any such claim shall not relieve the indemnifying
party from any liability which it may have to the Indemnified Person against
whom such action is brought otherwise than on account of this Section. In
case any such action is brought against the Indemnified Person, the
indemnifying party will be entitled to participate, at its own expense, in
the defense thereof or, after notice to the Indemnified Person, to assume
the defense thereof, with counsel satisfactory to the Indemnified Person. If
the indemnifying party assumes the defense and the selection of counsel by
the indemnifying party to represent both the Indemnified Person and the
indemnifying party would result in a conflict of interests and would not, in
the reasonable judgment of the Indemnified Person, adequately represent the
interests of the Indemnified Person, the indemnifying party will at its own
expense, assume the defense with counsel to the indemnifying party and, also
at its own expense, with separate counsel to the Indemnified Person which
counsel shall be satisfactory to the indemnifying party and the Indemnified
Person. The Indemnified Person will bear the fees and expenses of any
additional counsel retained by it, and the indemnifying party shall not be
liable to the Indemnified Person under this Agreement for any legal or other
expenses subsequently incurred by the Indemnified Person independently in
connection with the defense thereof other than reasonable costs of
investigation. The indemnifying party shall not have the right to compromise
or settle the litigation without the prior written consent of the
Indemnified Person if the compromise or settlement results, or may result,
in a finding of wrongdoing on the part of the Indemnified Person.
10. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) Duration. This Agreement shall become effective on the date hereof Unless
--------
terminated as herein provided, this Agreement shall remain in full force and
effect until May 1, 1995 and shall continue in full force and effect for
periods of one year thereafter so long as such continuance is approved at
least annually (i) by either the Trustees of the Trust or by vote of a
majority of the outstanding voting shares (as defined in the 1940 Act) of
the Trust, and (ii) in either event by the vote of a majority of the
Trustees of the Trust who are not parties to this Agreement or "Interested
persons" (as defined in the 1940 Act) of any such party, cast in person at a
meeting called for the purpose of voting on such approval.
(b) Termination. This Agreement may be terminated at any time, without payment
-----------
of any penalty, by vote of the Trustees of the Trust or by vote of a
majority of the outstanding shares (as defined in the 1940 Act), or by the
Adviser or Sub-Adviser, on sixty (60) days written notice to the other
parties.
(c) Automatic Termination. This Agreement shall automatically and immediately
---------------------
terminate in the event of its assignment.
11. PRIOR AGREEMENT SUPERSEDED.
This Agreement supersedes any prior agreement relating to the subject matter
hereof between the parties
12. SERVICES EXCLUSIVE.
The services of the Sub-Adviser and its affiliates shall be exclusive with
regards to the Trust as provided in this Section 12, and Sub-Adviser and its
affiliates shall be prohibited from serving
<PAGE>
as investment adviser to any open-end investment company having similar
investment objectives and policies (i.e., to provide growth and income by
investing its assets globally in equity, fixed-income securities and short-term
money market instruments) offered for sale in the United States through the
broker-dealer community (which includes NASD members, financial planners and
advisers and other investor agents) so long as this Agreement (and any
continuation) is in effect.
The services of the Sub-Adviser which, taken collectively, are exclusive under
this Section 12 are asset allocations with respect to fixed-income and equity
securities and cash reserves in the Fund; allocation decisions between domestic
and international fixed-income securities and domestic and international equity
securities; country, sector, maturity, issue and currency commitments for fixed-
income securities, country, sector, industry, stock and currency commitments for
equity securities; and hedging and foreign exchange decisions. The 'balanced'
approach assumes that, except for temporary defensive purposes, there is always
some significant allocation to both equity and fixed-income securities; and
"global" means all world equity and fixed-income markets, including the United
States.
The services of the Sub-Adviser (and its affiliates) to the Trust hereunder are
not to be deemed exclusive if this Agreement is terminated by the Fund or
Adviser; nor are the services of the Sub-Adviser exclusive with respect to
mutual funds that do not have similar investment objectives and policies, such
as domestic, international or global equity funds, domestic, international or
global bond funds, country funds and other similar funds, which as a matter of
investment policy do not allocate their assets globally between equity and
fixed-income securities, although it is understood that such equity funds may,
for temporary defensive purposes, invest substantially all of their assets in
fixed-income securities. The services provided by the Sub-Adviser as of the date
of this Agreement to funds within the Federated Group and the Blanchard Group of
Funds are excluded from this Section 12.
13. EXPENSE LIMITATION.
The Adviser and Sub-Adviser agree that for any fiscal year of the Fund during
which the total of all expenses of the Fund (including investment advisory fees
under the investment advisory agreement, but excluding interest, portfolio
brokerage commissions and expenses, taxes and extraordinary items) exceeds the
lowest expense limitation imposed in any state in which the Fund is then making
sales of its shares or in which its shares are then qualified for sale, the
Adviser and Sub-Adviser will each reimburse the Trust for one-half of such
expenses not otherwise excluded from reimbursement by this Paragraph 13 to the
extent that they exceed such expense limitation but in no event shall such
reimbursement exceed the advisory, sub-advisory and administrative fees
retained.
14. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
(b) If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
15. USE OF NAME
(a) It is understood that the name "Van Eck" or any derivative thereof or
logo associated with that name is the valuable property of the Adviser
and its affiliates, and that the Trust and Sub-Adviser have the right to
use such name (or derivative or logo) only with the approval of the
Adviser and only so long as the Adviser is Adviser to the Fund. Upon
<PAGE>
termination of the Investment Advisory and Management Agreement between
the Trust and the Adviser, the Trust and the Sub-Adviser shall
forthwith cease to use such name (or derivative or logo).
(b) It is understood that the name Fiduciary International, Inc. any
derivative thereof or logo associated with that name is the valuable
property of the Sub-Adviser and its affiliates and that the Trust
and/or the Fund have the night to use such name (or derivative or logo)
in offering materials of the Trust only with the approval of the Sub-
Adviser and only for so long as the Sub-Adviser is investment advisor
to the Fund. Upon termination of this Agreement, the Trust and Adviser
shall forthwith cease to use such name (or derivative or logo).
16. LIMITATION OF LIABILITY.
The Term "Van Eck Funds" means and refers to the Trustees from time to time
serving under the Amended and Restated Master Trust Agreement of the Trust dated
February 6, 1992 as the same may subsequently thereto have been, or subsequently
hereto be amended. It is expressly agreed that the obligations of the Trust
hereunder shall not be binding upon any Trustees, shareholders, nominees,
officers, agents or employees of the Trust, personally, but bind only the assets
and property of the Trust, as provided in the Amended and Restated Master Trust
Agreement of the Trust. The execution and delivery of this Agreement have been
authorized by the Trustees and the Trust, acting as such, and neither such
authorization by such officer shall be deemed to have been made by any of them
personally, but shall bind only the assets and property of the Trust as provided
in its Amended and Restated Master Trust Agreement.
In WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first set forth above.
Attest: VAN ECK FUNDS
/s/ Thaddeus Leszczynski By /s/ John C. van Eck
President
Attest: VAN ECK ASSOCIATES CORPORATION
/s/ Thaddeus Leszczysnki By /s/ John C. van Eck
President
Attest: FIDUCIARY INTERNATIONAL, INC.
- -------------------------- By ---------------------------------
President
<PAGE>
DISTRIBUTION AGREEMENT
----------------------
THIS AGREEMENT made as of the 30th day of July, 1985 by and between VAN ECK
FUNDS (the "Trust"), a business trust established and existing under the laws of
the Commonwealth of Massachusetts and VAN ECK SECURITIES CORPORATION (the
"Distributor"), a corporation organized and existing under the laws of the State
of Delaware.
WHEREAS, the Trust proposes to offer shares of beneficial interest in the
World Trends Fund series of the Trust and from time to time hereafter establish
additional different series representing interests in different portfolios of
assets (each series being referred to herein as a "Fund" or collectively as the
"Funds").
NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained,
the parties hereto agree as follows:
Section 1. Appointment of the Distributor. The Trust hereby appoints the
------------------------------
Distributor as its exclusive agent to sell and distribute shares of each Fund of
the Trust then in existence (the "Shares") for the account and risk of the Trust
during the continuous offering of such Shares, on the terms and for the period
set forth in this Agreement, and the Distributor hereby accepts such appointment
and agrees to act hereunder. It is understood that purchases of Shares of any
Fund may be made through other broker-dealers who are members in good standing
of the National Association of Securities Dealers, Inc. in connection with the
offering and sale of the Shares, in which case the Distributor shall enter into
Selling Group Agreements ("Selling Group Agreements") in substantially the form
attached hereto or amend existing Selling Group Agreements with such broker-
dealers to conform therewith and directly through the Trust's Transfer Agent in
the manner set forth in a Fund's Prospectus.
Section 2. Services and Duties of the Distributor.
--------------------------------------
(a) The Distributor agrees to arrange to sell, as exclusive agent for
the Trust, from time to time during the term of this Agreement, Shares of any
Fund upon the terms described in a Fund's Prospectus. As used in this Agreement,
the term "Prospectus" shall mean a prospectus and the term "Statement of
Additional Information" shall mean the statement of additional information
included in the Trust's Registration Statement and the term "Registration
Statement" shall mean the Registration Statement, including exhibits and
financial statements, most recently filed by the Trust with the Securities and
Exchange Commission and effective under the Securities Act of 1933, as
<PAGE>
amended (the "1933 Act") and the Investment Company Act of 1940, as amended (the
"1940 Act"), as such Registration Statement is amended by any amendments thereto
at the time in effect.
(b) Upon commencement of the continuous public offering of Shares of
any Fund of the Trust, the Distributor will hold itself available to receive
orders, satisfactory to the Distributor, for the purchase of Shares of that Fund
and will accept such orders on behalf of the Trust as of the time of receipt of
such orders and will transmit such orders as are so accepted to the Trust's
Transfer Agent as promptly as practicable. Purchase orders shall be deemed
effective at the time and in the manner set forth in a Fund's Prospectus.
(c) The Distributor, as agent for the Trust and in its discretion,
may enter into Selling Group Agreements (or amend existing Selling Group
Agreements to conform therewith) with such registered and qualified retail
broker-dealers as it may select pursuant to which such broker-dealers may also
arrange for the sale or sell Shares of any Fund.
(d) The offering price of the Shares of a Fund shall be the net asset
value (as described in the Master Trust Agreement of the Trust, as amended from
time to time and determined as set forth in the Prospectus of such Fund and the
Statement of Additional Information) per Share for that Fund next determined
following receipt of an order plus the maximum sales charge, if any, calculated
in the manner set forth in the Fund's Prospectus. The Distributor shall receive
the entire amount of the sales charge, if any, as compensation for its services
under this Agreement; however, the Distributor may reallow all or any portion of
such sales charge to broker-dealers entering into Selling Group Agreements (or
amending existing Selling Group Agreements) with the Distributor to sell Shares
of such Fund. Shares of a Fund may be sold at prices that reflect scheduled
variations in, or elimination of, the sales charge to particular classes of
investors or transactions in accordance with a Fund's Prospectus and the
Statement of Additional Information. The Trust shall furnish the Distributor,
with all possible promptness, advice of each computation of the net asset value
of a Fund. The Distributor shall also be entitled, subject to the terms and
conditions of the Trust's Plan of Distribution pursuant to Rule 12b-1 under the
Investment Company Act of 1940 to amounts payable by a Fund thereunder.
(e) The Distributor shall use its best efforts and shall not be
obligated to arrange for sales of any certain number of Shares of a Fund and the
services of the Distributor to the Trust hereunder shall not be deemed to be
exclusive, and the Distributor shall be free to (i) render similar services to,
and act as underwriter or distributor in connection with the distribution of
shares of other investment companies, and (ii) engage in any other businesses
and activities from time to time.
2
<PAGE>
(f) The Distributor is authorized on behalf of the Trust to
repurchase Shares of a Fund presented to it by dealers at the price determined
in accordance with, and in the manner set forth in, the Prospectus of such Fund.
Section 3. Duties of the Trust.
-------------------
(a) The Trust agrees to sell Shares of its Funds so long as it has
Shares available for sale and to cause its Transfer Agent to issue, if requested
by the purchaser, certificates for Shares of its Funds, registered in such names
and amounts as promptly as practicable after receipt by the Trust of the net
asset value thereof.
(b) The Trust shall keep the Distributor fully informed with regard
to its affairs and shall furnish to the Distributor copies of all information,
financial statements and other papers which the Distributor may reasonably
request for use in connection with the distribution of Shares of the Funds. This
shall include, without limitation, one certified copy of all financial
statements of the Funds prepared by independent accountants and such reasonable
number of copies of a Fund's most current Prospectus, the Statement of
Additional Information and annual and interim reports as the Distributor may
request. The Trust shall cooperate fully in the efforts of the Distributor to
arrange for the sale of Shares of the Funds and in the performance of the
Distributor under this Agreement.
(c) The Trust shall take, from time to time, all necessary action to
register the Shares of the Funds under the 1933 Act, including payments of the
related filing fees, so that there will be available for sale such number of
Shares of the Funds as the Distributor may be expected to sell. The Trust agrees
to file from time to time such amendments, reports and other documents as may be
necessary in order that there may be no untrue statement of a material fact in
the Registration Statement or Prospectus of a Fund, or necessary in order that
there may be no omission to state a material fact in the Registration Statement
or Prospectus of a Fund which omission would make the statements therein, in
light of the circumstances under which they were made, misleading.
(d) The Trust shall use its best efforts to qualify and maintain the
registration and qualification of an appropriate number of Shares of the Funds
and the Trust for sale under the securities laws of such states as the
Distributor shall designate, and, if necessary or appropriate in connection
therewith, to qualify and maintain the qualification of the Trust as a broker-
dealer in such states. The Distributor shall furnish such information and other
material relating to its affairs and activities as may be requested by the Trust
in connection with such qualifications.
3
<PAGE>
Section 4. Expenses.
--------
(a) The Trust shall bear all costs and expenses of the continuous
offering of Shares of the Funds in connection with: (i) fees and disbursements
of its counsel and auditors, (ii) the preparation, filing and printing of any
registration statements and/or Prospectuses and Statements of Additional
Information required by and under federal and state securities laws, (iii) the
preparation and mailing of annual and interim reports and proxy materials, if
any, to shareholders and (iv) the qualification of the Shares of the Funds for
sale and of the Trust as a broker-dealer under the securities laws of such
states or other jurisdictions as shall be selected by the Distributor pursuant
to Section 3(d) hereof and the cost and expenses payable to each such state for
continuing qualification therein.
(b) The Distributor shall bear (i) the costs and expenses of
preparing, printing and distributing any materials not prepared by the Trust and
other materials used by the Distributor in connection with its offering of
Shares of the Funds for sale to the public (including the additional cost of
printing copies of the Prospectus and of annual and interim reports) to
shareholders other than copies thereof required for distribution to existing
shareholders or for filing with any federal and state securities authorities,
(ii) any expenses of advertising incurred by the Distributor in connection with
such offering and (iii) the expenses of registration or qualification of the
Distributor as a broker-dealer under federal or state laws, if necessary, and
the expenses of continuing such registration or qualification. It is understood
and agreed that so long as the Trust's Plan of Distribution as to a Fund
pursuant to Rule 12b-1 under the Investment Company Act of 1940 continues in
effect, any expenses incurred by the Distributor hereunder may be paid from
amounts received by it from a Fund under such Plan.
Section 5. Indemnification. The Trust agrees to indemnify, defend and hold
---------------
the Distributor, its officers, directors, employees and agents and any person
who controls the Distributor within the meaning of Section 15 of the 1933 Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "1934 Act"),
free and harmless from and against any and all losses, claims, damages,
liabilities and expenses (including the cost of investigating or defending such
claims, damages or liabilities and any counsel fees incurred in connection
therewith) which the Distributor, its officers, directors, employees and agents
or any such controlling person may incur under the 1933 Act, the 1934 Act, or
under common law or otherwise, arising out of or based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, a Prospectus, or the Statement of Additional Information or arising
out of or based upon the omission or any alleged omission to state a
4
<PAGE>
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such claims, damages, liabilities or
expenses arise out of or are based upon any such untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with information furnished in writing by the Distributor to the Trust for use in
the Registration Statement, a Prospectus or the Statement of Additional
Information. The Distributor agrees to promptly notify the Trust of any event
giving rise to rights of indemnification hereunder, including any action brought
against the Distributor, its officers, directors, employees and agents or any
such controlling person, such notification to be given by letter or telegram
addressed to the Trust at its principal business office, but the Distributor's
failure so to notify the Trust shall not relieve the Trust from any obligation
it may have to indemnify the Distributor hereunder or otherwise.
The Distributor agrees to indemnify, defend and hold the Trust, its
Trustees and officers and any person who controls the Trust, if any, within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, free and
harmless from and against any and all losses, claims, damages, liabilities and
expenses (including the cost of investigating or defending such claims, damages
or liabilities and any counsel fees incurred in connection therewith) which the
Trust, its Trustees or officers or any such controlling person may incur under
the 1933 Act, the 1934 Act, or under common law or otherwise, but only to the
extent that such liability or expense incurred by the Trust, its Trustees or
officers or such controlling person arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in
information furnished in writing by the Distributor to the Trust for use in the
Registration Statement, a Prospectus or the Statement of Additional Information.
The Trust agrees to promptly notify the Distributor of any event giving rise to
rights of indemnification hereunder, including any action brought against the
Trust, its Trustees or officers or any such controlling person, such
notification being given to the Distributor at its principal business office,
but the Trust's failure so to notify the Distributor shall not relieve the
Distributor from any obligation it may have to indemnify the Trust hereunder or
otherwise.
Section 6. Contribution. In order to provide for just and equitable
------------
contribution in circumstances in which the indemnification provided for in the
first paragraph of Section 5 is for any reason held to be unavailable from the
Trust, the Trust and the Distributor shall contribute to the aggregate losses,
claims, damages, liabilities or expenses (including the reasonable costs of
investigating or defending such claims, damages or liabilities but after
deducting any contribution received by the Trust from persons other than
Distributor who may also be liable for contribution, such as persons who control
the Trust within the meaning
5
<PAGE>
of the 1933 Act, officers of the Trust who signed the Registration Statement and
Trustees) to which the Trust and the Distributor may be subject in such
proportion so that the Distributor is responsible for that portion represented
by the percentage that the Sales Charge appearing in the Prospectus of the Fund
bears to the public offering price appearing therein and the Trust is
responsible for the balance; provided, however, that (i) in no case shall the
Distributor be responsible for any amount in excess of the portion of the Sales
Charge received and retained by it in respect of the Shares of a Fund purchased
through it hereunder and (ii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 6, each person, if any, who
controls the Distributor within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Distributor. Each party who may seek contribution under this Section 6 shall,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section 6, give written
notice of the commencement of such action, suit or proceeding to the party or
parties from whom such contribution may be sought, but the omission so to notify
such contributing party or parties shall not relieve the party or parties from
whom contribution may be sought from any other obligation it or they may have
otherwise than on account of this Section 6.
Section 7. Compliance with Securities Laws. The Trust represents that it
-------------------------------
is registered as a diversified, open-end management investment company under the
1940 Act, and agrees that it will comply with all of the provisions of the 1940
Act and of the rules and regulations thereunder. The Trust and the Distributor
each agree to comply with all of the applicable terms and provisions of the 1940
Act, the 1933 Act and, subject to the provisions of Section 3(d), all applicable
state "Blue Sky" laws. The Distributor agrees to comply with all of the
applicable terms and provisions of the 1934 Act.
Section 8. Term of Contract. This Agreement shall go into effect on the
----------------
date hereof and shall continue in effect until July 30, 1986, and thereafter for
successive periods of one year each if such continuance is approved at least
annually thereafter (i) either by an affirmative vote of a majority of the
outstanding shares of the Trust or by the Board of Trustees of the Trust, and
(ii) in either case by a majority of the Trustees of the Trust who are not
interested persons of the Distributor or (otherwise than as Trustees) of the
Trust, cast in person at a meeting called for the purpose of voting on such
approval. This Agreement may be terminated at any time by one party hereto to
the other on sixty (60) days' written notice to the other party.
6
<PAGE>
Section 9. Assignment. This Agreement may not be assigned by the
----------
Distributor and shall automatically terminate in the event of an attempted
assignment by the Distributor; provided, however, that the Distributor may
employ or enter into agreements with such other person, persons, corporation, or
corporations, as it shall determine in order to assist it in carrying out this
Agreement.
Section 10. Amendment. This Agreement may be amended at any time by
---------
mutual agreement in writing of the parties hereto, provided that any such
amendment is approved by a majority of the Trustees of the Trust who are not
interested persons of the Distributor or by the holders of a majority of the
outstanding shares of the Trust.
Section 11. Governing Law. This Agreement shall be governed and construed
-------------
in accordance with the laws of the State of New York.
Section 12. Non-Liability of Shareholders, Trustees, Officers, Employees,
-------------------------------------------------------------
Representatives and Agents. Copies of the Master Trust Agreement, as amended,
- --------------------------
establishing the Trust are on file with the Secretary of the Commonwealth of
Massachusetts, and notice is hereby given that this Agreement is executed on
behalf of the Trust by officers of the Trust as officers and not individually
and that the obligations of or arising out of this Agreement are not binding
upon any of the Trustees, officers, shareholders, employees or agents of the
Trust individually but are binding only upon the assets and property of the
Trust.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
VAN ECK FUNDS
By_________________________________
VAN ECK SECURITIES CORPORATION
By_________________________________
7
<PAGE>
VAN ECK FUNDS
122 East 42nd Street
New York, New York 10168
November 18, 1985
Van Eck Associates Corporation
122 East 42nd Street
New York, New York 10168
Gentlemen:
The Board of Trustees of Van Eck Funds, at a meeting held on October 8,
1985, approved the establishment of two additional series of the Trust, namely
the Gold/Resources Fund and U.S. Government Money Fund (the "New Funds"). The
Gold/Resources Fund will be a non South African precious metals growth fund.
The U.S. Government Money Fund will be a fund investing only in obligations of
the U.S. Government.
Pursuant to Sections 1(b), 4 and 9(a) of the Advisory Agreement (the
"Agreement"), dated July 30, 1985, between Van Eck Associates Corporation and
Van Eck Funds, we wish to retain Van Eck Associates Corporation to render the
services contemplated by the Agreement with respect to the New Funds in exchange
for the fees set forth in Exhibit A of this notice.
Please confirm below your willingness to render such services and your
agreement to amend the advisory fee schedule in Section 4 of the Agreement to
include the information set forth in Exhibit A of this notice.
VAN ECK FUNDS
ATTEST:___________________________ BY:________________________________
Secretary President
Confirmed, Agreed to and Accepted this ____ day of November 1998:
VAN ECK ASSOCIATES CORP.
ATTEST:___________________________ BY:________________________________
Secretary President
<PAGE>
EXHIBIT A
---------
ADVISORY FEE SCHEDULE
Gold/Resources Fund
-------------------
Daily Average Annual Fee
Net Assets Rate
- -------------- ------------
Up to and including $500 million .75%
Over $500 million up to and
including $750 million .65%
Over $750 million .50%
U.S. Government Money Fund
--------------------------
Daily Average Annual Fee
Net Assets Rate
- -------------- ------------
Up to and including $500 million .50%
Over $500 million up to and
including $750 million .40%
Over $750 million .375%
<PAGE>
FORM OF
VAN ECK FUNDS
99 Park Avenue
New York, New York 10016
February 20, 1993
Van Eck Securities Corporation
99 Park Avenue
New York, New York 10016
Ladies/Gentlemen:
Pursuant to Section 1 of the Distribution Agreement, dated July 30, 1985
(the "Agreement"), between Van Eck Funds (the "Trust") and Van Eck Securities
Corporation (the "Distributor"), please be advised an additional series of the
Trust, namely, Asia Dynasty Fund (the "Fund") has adopted the Agreement and
retained the Distributor to render services contemplated by the Agreement for
the Fund. The Fund will issue one class of shares, namely, Class A shares. Class
A Shares will be sold at "net asset value per share" plus a front-end sales
charge in accordance with the then current prospectus of the Trust, as from time
to time amended.
Please confirm below your willingness to render such services.
VAN ECK FUNDS
ATTEST: ___________________________ BY: _______________________________
President
Confirmed, Agreed to and Accepted this February 20, 1993
VAN ECK SECURITIES CORPORATION
ATTEST: ___________________________ BY: _______________________________
President
<PAGE>
VAN ECK FUNDS
122 East 42nd Street
New York, New York 10168
August 15, 1994
Van Eck Securities Corporation
122 East 42nd Street
New York, New York 10168
Ladies/Gentlemen:
Pursuant to Section 1 of the Distribution Agreement, dated July 30,1985
(the "Agreement"), between Van Eck Funds (the "Trust") and Van Eck Securities
Corporation (the "Distributor"), please be advised that the Trust has
established an additional class of shares, namely, Class C shares, for four
series of the Trust, namely, Gold/Resources Fund, International Investors Gold
Fund, Asia infrastructure Fund and Global SmallCap Fund (the "Fund"). The
Trustees of the Trust have adopted the Agreement to retain the Distributor to
render services contemplated by the Agreement for the Fund. Class C Shares will
be sold at "net asset value per share" of each Fund plus a redemption charge for
shares redeemed within twelve months of the date of purchase in accordance with
the then current prospectus of the Trust, as from time to time amended.
Please confirm below your willingness to render such services.
VAN ECK FUNDS
ATTEST: /s/ Thaddeus Leszczynski BY: /s/ John C. van Eck
President
Confirmed, Agreed to and Accepted this August 15, 1994
VAN ECK ASSOCIATES CORPORATION
ATTEST: /s/ Thaddeus Leszczynski BY: /s/ John C. van Eck
President
<PAGE>
VAN ECK FUNDS
122 East 42nd Street
New York, New York 10168
October 20, 1994
Van Eck Securities Corporation
122 East 42nd Street
New York, New York, 10168
Ladies/Gentlemen:
Pursuant to Section I of the Distribution Agreement, dated July 30, 1985
(the "Agreement"), between Van Eck Funds (the"Trust") and Van Eck Securities
Corporation (the "Distributor"), please be advised an additional series of the
Trust, namely, Global Hard Assets Fund (the "Fund") has adopted the Agreement
and retained the Distributor to render services contemplated by the Agreement
for the Fund. The Fund will issue two classes of shares, namely, Class A and
Class C shares. Class A Shares will be sold at "net asset value per share" plus
a front-end sales charge and the Class C shares will be sold at "net asset value
per share" plus a redemption charge for shares redeemed within twelve months of
the date of purchase in accordance with the then current prospectus of the
Trust, as from time to time amended.
Please confirm below your willingness to render such services.
VAN ECK FUNDS
ATTEST: /s/ Thaddeus Leszczynski BY: /s/ John C. van Eck
President
Confirmed, Agreed to and Accepted this October 20, 1994
VAN ECK SECURITIES CORPORATION
ATTEST: /s/ Thaddeus Leszczynski BY: /s/ Rodger Lawson
President
<PAGE>
VAN ECK SECURITIES CORPORATION
122 East 42nd Street, New York, New York 10168
(212) 687-5200 * Toll free (800) 221-2220
SELLING GROUP AGREEMENT FOR THE SALE OF SHARES OF
INTERNATIONAL INVESTORS INCORPORATED
AND VAN ECK FUNDS
Dear Sirs:
As national and international distributor of shares for, and as agent of,
International Investors Incorporated and each of the series currently or
hereafter established under the Van Eck Funds Master Trust Agreement
(collectively, the "Funds"), we enclose a copy of the current prospectuses of
the Funds and invite you to become a member of the Funds' Selling Group to offer
shares in the Funds (the "Shares") upon the following terms:
1. In all sales of Shares through us we shall act as the Funds' agent. In all
sales of Shares by you to your customers you shall act as dealer for your own
account, and in no transaction shall you have any authority to act as agent of
the Funds or as our agent.
2. The public offering price at which you may offer the Shares is the net
asset value thereof, as computed from time to time, plus a selling commission,
if any, as described in the prospectus currently in effect with respect to each
of the Shares at the time of your offer. As compensation for each sale of Shares
made by you, you will be allowed the discount, if any, on such Shares as
described in the then current prospectus of the Fund whose Shares are sold. The
current public offering prices of the Shares, commissions and discounts are set
forth in Exhibit A hereto which exhibit may be amended from time to time by us
upon notice to you.
To the extent you provide distribution and marketing services in the promotion
of Shares of the Gold/Resources Fund, U.S. Government Money Fund, World Trends
Fund or World Income Fund of Van Eck Funds and each additional series of the Van
Eck Funds hereafter established with a Plan of Distribution pursuant to Rule
12b-1 of the Investment Company Act of 1940 (the "Van Eck Funds"), we shall pay
you an annual fee of 0.25% of the net asset value of Shares of each of such Van
Eck Funds owned by those customers of your firm whose records, as maintained by
Van Eck Funds or its agent, designate your firm as the customer's dealer of
record. The 12b-1 compensation will be calculated by taking the average daily
balance in each shareholder account during the year, for which your firm is
designated as the dealer of record and multiplying it by the compensation factor
of 25 basis points (0.25%). Distribution and marketing services include but are
not limited to furnishing services and assistance to your customers who invest
in and own Shares of such Van Eck Funds, answering routine inquiries, assisting
in changing distribution options, account designations and addresses. No such
fee will be paid to you with respect to Shares of such Van Eck Funds purchased
by you and redeemed or repurchased by Van Eck Funds or by us as agent within
seven (7) business days after the date of our confirmation of such purchase. No
such fee will be paid to you if the total amount of such fees based upon the
value of your customer's Shares will be less than $50.00. You shall furnish us
and Van Eck Funds with such information as shall be reasonably requested by the
Trustees of Van Eck Funds with respect to the fees paid to you. The provisions
of this Paragraph may be terminated as to any of the Van Eck Funds by the vote
of a majority of the Trustees of Van Eck Funds who are non-interested
<PAGE>
Trustees or by a vote of a majority of the outstanding shares of a Fund on sixty
(60) days' written notice, without payment of any penalty. These provisions will
also be terminated by any act which terminates either the Distribution Agreement
between Van Eck Funds and Van Eck Securities Corporation or this Selling Group
Agreement.
The public offering prices, commissions and discounts may be revised by us at
any time, but any change will not affect selling commissions and discounts on
sales for which orders have been accepted by us.
The Initial Offering of Shares of a Fund as defined in the prospectus for the
Shares shall be on such terms as described in the then current prospectus of the
Fund whose shares are being sold.
In addition to the discounts, if any, allowed pursuant to the foregoing
provisions of this Section 2, we may from time to time provide additional
concessions to dealers which employ registered representatives who sell, during
a specific period, a minimum dollar amount of the Shares of a Fund. Such
additional concessions may take the form of merchandise or payment for travel
expenses incurred in connection with trips taken by dealer designated persons.
If non-cash concessions are provided, each dealer earning such a concession may
elect to receive a cash amount equivalent to the cost of providing such
concessions. Notice of availability of concessions will be given to you by us
and if any concessions are earned by you, the value thereof is includable in
your income for NASD assessment purposes.
3. You agree to purchase the Shares only through us or from your customers.
In the case of purchases of Shares through us you agree that all such purchases
shall be made only to cover purchase orders already received by you from your
customers or for your own bona fide investment. In the case of purchases from
customers you agree to pay not less than the repurchase price currently being
quoted by the Funds.
4. You agree to sell Shares of a Fund only to customers and to us as agent of
such Fund. In the case of sales to customers you agree to sell only at the
public offering price then in effect with respect to such Shares and all such
sales shall be in accordance with the then current prospectus for such Shares;
to transmit promptly upon receipt any and all orders received by you (such
orders must be received by us no later than 5:00 p.m. New York time); not to
withhold placing customers' orders with us in order thereby to make a profit for
yourself; and to take up and pay for Shares confirmed to you. In the case of
sales to us you may act either as principal for your own account or as agent for
your customer. If you act as principal for your own account in purchasing Shares
for resale to us, you agree to pay your customer not less than you receive from
us. If you act as agent for your customer in selling Shares to us, you agree not
to charge your customer more than a fair commission for handling the
transaction. Orders received for Shares of a Fund from you will be accepted by
us for such Fund only at the public offering price applicable to each order, as
established in accordance with the provisions of such Fund's then current
prospectus. The procedure stated herein relating to the pricing and handling of
orders shall be subject to instructions which we may forward from time to time
to all members of the Selling Group.
5. If any Shares of a Fund confirmed to you under this agreement are
repurchased by us as agent of a Fund, or are tendered for redemption, within
seven business days after confirmation by us of the original purchase order or
the Closing Date, as defined in a prospectus for a Fund, you shall forthwith
refund to us for the account of such Fund the full discount allowed to you on
the sale. We are obligated to pay to such Fund our share of the selling
commission on such Shares and upon receipt by us of your discount to pay the
same to such Fund. We shall notify you of such repurchase within ten days after
the date on which each certificate or appropriate redemption or repurchase
request is delivered to us or to such Fund.
6. You shall make all sales subject to our confirmation. All orders so placed
shall be firm orders. All orders are subject to acceptance or rejection by us in
our sole discretion, and by the Funds in their sole discretion. Please telephone
"wire-orders" to Van Eck Securities Corporation (800) 221-2220, or in New York
(212) 687-5200. "Direct-mail" orders should be sent to ATTN: "NAME OF FUND," DST
Systems, Inc., 21 West Tenth Street, Kansas City, MO 64105.
7. Payment of the public offering price, less your dealer's discount, if any,
for Shares ordered from us during a Continuous Offering of Shares of a Fund
shall be made by check payable to International Investors Incorporated, or Van
Eck Funds: "NAME OF FUND" in New York clearing house funds, which check should
be sent to ATTN: "NAME OF FUND," DST Systems, Inc., 21 West Tenth Street, Kansas
City, MO 64105, within five days after our
<PAGE>
acceptance of your order or such lesser period as then may be permitted by law
or regulation. If such payment is not received within said time period, interest
at the prime rate in effect at Citibank N.A., may be added to the amount due us
and we reserve the right without notice to cancel the sale or at our option to
return the Shares to the issuer for redemption or repurchase. In the latter case
we shall have the right to hold you responsible for any loss, including loss of
profit, resulting to us. Should payment be made by check on your local bank,
delivery of certificates may be delayed pending clearance of your check. Upon
receipt of payment in conformity with the above, Shares so ordered will be
issued in or transferred into such names as you may designate and forwarded as
promptly as possible in accordance with your instructions.
Payment for Shares purchased by you during an Initial Offering of Shares of a
Fund shall be made on such date and in accordance with such terms as described
in the then current prospectus of the Fund whose Shares are sold or as we may
advise.
8. All sales through us shall be subject to the issuance of Shares to us by
the Funds. We and the Funds reserve the right to suspend sales without notice,
or to withdraw the offering of Shares entirely.
9. The Funds have authorized us as their agent and subject to their direction
to repurchase Shares at the repurchase price currently being quoted by the
Funds. This authority is supplementary to the obligation of the Funds to redeem
Shares tendered them for redemption as described in the Funds' current
prospectuses. No commissions are payable to us or by us in respect of any such
repurchase by us as such agent. Please telephone "wire-order" liquidation
requests to Van Eck Securities Corporation (800) 221-2220, or in New York (212)
687-5200 (such orders must be received by us no later than 5:00 p.m. New York
time to obtain the redemption price for such day). "Direct-mail" liquidation
requests should be sent to ATTN: "NAME OF FUND," DST Systems, Inc., 21 West
Tenth Street, Kansas City, MO 64105.
10. We will notify you of each series, including the applicable discounts and
commissions, established hereafter under the Van Eck Funds Master Trust
Agreement which series shall thereupon be deemed one of the Funds and supply to
you in reasonable quantities additional copies of any current prospectuses and
such sales literature for the Funds as may from time to time be issued. You are
not authorized to give any information other than that, or to make any
representations other than those contained in the then currently effective
registration statements or prospectuses or supplemental information thereto or
in any sales literature then currently issued or approved by the Funds.
11. We represent that we are members of the National Association of
Securities Dealers, Inc. Your acceptance of this agreement constitutes a
representation to us that you are a properly registered or licensed broker or
dealer under federal and state securities laws and regulations, and that you are
a member of the National Association of Securities Dealers, Inc. and agree to be
bound by the rules of such Association or if a foreign dealer, that if
registered under the Securities Exchange Act of 1934, you will conform to the
Rules of Fair Practice of said Association in making sales of Shares in the
United States or, if not so registered, you will not sell or deliver Shares in
the United States or to persons who you have reason to believe are citizens or
residents of the United States.
12. You are not employed or retained for any purpose as broker, agent or
employee by us or by the Funds, and you are not authorized in any manner to act
for, or to make any representations on behalf of, us or the Funds. Nothing
herein shall constitute you, other persons signing this agreement or the
undersigned as partners; however, you agree to bear your proportionate share, if
any, of any claim, demand or liability for transfer taxes asserted against you,
such other persons or us based on the theory that you, such other persons and we
or any two or more of us, constitute an association, unincorporated business or
other entity, and your proportionate share of any expenses defending any such
claim, demand or liability.
13. From time to time or upon application we will inform you as to the states
in which the Funds' Shares have been qualified for sale.
14. Your first order placed with us for the purchase of Shares will represent
your acceptance of this agreement.
15. All communications should be sent to us at the above address. Any notice
to you shall be duly given if mailed or telegraphed to you at the address
specified by you below.
<PAGE>
16. This agreement may be terminated by either of us at any time by written
notice to the other and shall terminate automatically if either of us ceases to
be a member of the National Association of Securities Dealers, Inc.
17. This agreement shall be governed by and interpreted in accordance with
the laws of the state of New York.
Very truly yours,
VAN ECK SECURITIES CORPORATION
Date:__________________ By:______________________________________________
We accept and agree to the terms and conditions set forth in this agreement
and acknowledge receipt of the prospectuses enclosed herewith.
Firm:____________________________________________
Date:__________________ By:______________________________________________
Address:_________________________________________
_________________________________________________
EXHIBIT A
INTERNATIONAL INVESTORS INCORPORATED
<TABLE>
<CAPTION>
DISCOUNT TO
SALES CHARGE AS A BROKER-DEALERS
PERCENTAGE OF AS A PERCENTAGE
--------------------
OFFERING NET AMOUNT OF THE PUBLIC
DOLLAR AMOUNT OF PURCHASE PRICE INVESTED OFFERING PRICE
------------------------- -------- ---------- --------------
<S> <C> <C> <C>
Less than $10,000...................................... 8.5% 9.3% 7.0%
$10,000 to less than $25,000........................... 7.5% 8.1% 6.25%
$25,000 to less than $50,000........................... 6.25% 6.7% 5.0%
$50,000 to less than $100,000.......................... 5.0% 5.3% 4.0%
$100,000 to less than $250,000 ....................... 3.5% 3.6% 2.8%
$250,000 to less than $500,000 ....................... 2.5% 2.6% 2.0%
$500,000 to less than $1,000,000 ..................... 2.0% 2.0% 1.6%
$1,000,000 to less than $3,000,000..................... 1.0% 1.0% 0.8%
$3,000,000 and......................................... 0.5% 0.5% 0.4%
</TABLE>
VAN ECK FUNDS
WORLD TRENDS FUND, GOLD/RESOURCES AND WORLD INCOME FUND
<TABLE>
<CAPTION>
DISCOUNT TO*
SALES CHARGE AS A BROKER-DEALERS
PERCENTAGE OF AS A PERCENTAGE
------------------------
OFFERING NET AMOUNT OF THE PUBLIC
DOLLAR AMOUNT OF PURCHASE PRICE INVESTED OFFERING PRICE
------------------------- ------- ---------- -----------------
<S> <C> <C> <C>
Less than $10,000 .......................................... 7.5% 8.1% 6.0%
$10,000 to less than $25,000 ............................... 6.25% 6.7% 5.0%
$25,000 to less than $50,000 ............................... 5.0% 5.3% 4.0%
$50,000 to less than $100,000 .............................. 4.0% 4.2% 3.2%
$100,000 to less than $250,000 ............................. 3.0% 3.1% 2.4%
$250,000 to less than $500,000 ............................. 2.5% 2.6% 2.0%
$500,000 to less than $1,000,000 ........................... 2.0% 2.0% 1.6%
$1,000.000 to less than $3,000,000 ......................... 1.0% 1.0% 0.8%
$3,000,000 to less than $4,000,000 ......................... 0.5% 0.5% 0.4%
$4,000,000 and over ........................................ -0- -0- -0-
------------
</TABLE>
* With respect to purchases of World Income Fund shares and for the period
beginning August 10, 1987 through October 30, 1987 all of the sales charge
imposed will be reallowed to the applicable broker dealer.
U.S. GOVERNMENT MONEY FUND
No Sales Charge
<PAGE>
VAN ECK SECURITIES CORPORATION
122 East 42nd Street
(212) 687-5200 - Toll free (800) 221-2220
SELLING AGENCY AGREEMENT FOR THE SALE OF SHARES OF
INTERNATIONAL INVESTORS INCORPORATED
AND VAN ECK FUNDS
February 7, 1989
Dear Sirs:
As national and international distributor of shares for, and as agent of,
International Investors Incorporated and each of the series currently or
hereafter established under the Van Eck Funds Master Trust Agreement
(collectively, the "Funds"), we enclose a copy of the current prospectuses of
the Funds and invite you to make available to your customers shares in the Funds
(the "Shares") upon the following terms:
1. In all sales of Shares through us we shall act as the Funds' agent. In
all sales of Shares by you to your customers you shall act as agent for your
customers and in no transaction shall you have any authority to act or hold
yourself out as agent of the Funds or as our agent. That is, you shall act as
broker for your customers and your customers' transactions will be executed only
upon your authorization, and on all such transactions you shall be acting solely
as agent, upon the order and at the request of your customers and such
transactions shall be for the account of your customers and not for your own
account. You guarantee the legal capacity of your customers and any co-owners
transacting in Shares.
2. The public offering price at which the Shares may be sold is the net
asset value thereof, as computed from time to time, plus a selling commission,
if any, as described in the prospectus currently in effect with respect to each
of the Shares at the time the purchase order is effective. As compensation for
each sale of Shares to your customers hereunder, you will be allowed the
discount, if any, on such Shares as described in the then current prospectus of
the Fund whose Shares are sold. The current public offering prices of the
Shares, commissions and discounts are set forth in Exhibit A hereto which
exhibit may be amended from time to time by us upon notice to you.
<PAGE>
For shareholder support services you provide to your customers in respect
of Shares of the Gold/Resources Fund, U.S. Government Money Fund, World Trends
Fund or World Income Fund of Van Eck Funds and each additional series of the Van
Eck Funds hereafter established with a Plan of Distribution pursuant to Rule
12b-1 of the Investment Company Act of 1940 (the "Van Eck Funds"), we shall pay
you a fee at an annual rate of 0.25% of the net asset value of Shares of each of
such Van Eck Funds owned by those customers of your firm whose records, as
maintained by Van Eck Funds or its agent, designate your firm as the customer's
broker of record. The l2b-1 compensation will be calculated by taking the
average daily balance in each shareholder account during the year, for which
your firm is designated as the broker of record and multiplying it by the
compensation factor of 25 basis points (0.25%). Shareholder support services
include but are not limited to furnishing services and assistance to your
customers who invest in and own Shares of such Van Eck Funds, answering routine
inquiries, assisting in changing distribution options, account designations and
addresses. No such fee will be paid to you with respect to Shares of such Van
Eck Funds purchased by any of your customers and redeemed or repurchased by Van
Eck Funds or by us as agent within (7) seven business days after the date of our
confirmation of such purchase. No such fee will be paid to you if the total
amount of such fees based upon the value of your customers' Shares of the Van
Eck Funds will be less than $50.00. You shall furnish us and Van Eck Funds with
such information as shall be reasonably requested by the Trustees of Van Eck
Funds with respect to the fees paid to you. The provisions of this Paragraph may
be terminated as to any of the Van Eck Funds by the vote of a majority of the
Trustees of Van Eck Funds who are non-interested Trustees or by a vote of a
majority of the outstanding shares of a Fund on sixty (60) days written notice,
without payment of any penalty. These provisions will also be terminated by any
act which terminates either the Distribution Agreement between Van Eck Funds and
Van Eck Securities Corporation or this Selling Agency Agreement.
The public offering prices, commissions and discounts may be revised by us
at any time, but any change will not affect selling commissions and discounts on
sales for which orders have been accepted by us.
The Initial Offering of Shares of a Fund as defined in the prospectus for
the Shares shall be on such terms as described in the then current prospectus of
the Fund whose Shares are being sold.
In addition to the discounts, if any, allowed pursuant to the foregoing
provisions of this Section 2, we may from time to time provide additional
concessions to brokers and others whose representatives sell, during a specific
period, a minimum dollar amount of the Shares of a Fund. Such additional
concessions may take the form of merchandise or payment for travel expenses
incurred in connection with trips taken by person designated by the broker or
other person. If non-cash concessions are provided, each broker or other person
earning such a concession may elect to receive a cash amount equivalent to our
cost of providing such
<PAGE>
concessions. Notice of availability of concessions will be given to you by us
and if any concessions are earned by you, the value thereof is includable in
your income, if you are an NASD member, for NASD assessment purposes.
3. You agree to purchase Shares through us only for the purpose of
covering purchase orders already received by you from your customers or from
your own bona fide investment.
4. In acting as agent for your customers you agree that shares will be
sold only at the public offering price then in effect with respect to such
Shares and all such sales shall be in accordance with the then current
prospectus for such Shares; to transmit promptly upon receipt any and all orders
received by you (such orders must be received by us no later than 5:00 pm New
York time); not to withhold placing customers' orders with us in order thereby
to make a profit for yourself; you will take up and pay for Shares confirmed to
you. In acting as agent for your customer in selling Shares to us, you agree not
to charge your customer more than a fair commission for handling the
transaction. orders received for Shares of a Fund from you on behalf of your
customers will be accepted by us for such Fund only at the public offering price
applicable to each order, as established in accordance with the provisions of
such Fund's then current prospectus. The procedure stated herein relating to the
pricing and handling of orders shall be subject to instructions which we may
forward from time to time to all brokers and others with which we have entered
into an agreement.
5. If any shares of a Fund confirmed to you under this agreement are
repurchased by us as agent of a Fund, or are tendered for redemption, within
seven business days after confirmation by us of the original purchase order or
the Closing Date, as defined in a prospectus for a Fund, you shall forthwith
refund to us for the account of such Fund the full discount allowed to you on
the sale. We are obligated to pay to such Fund our share of the selling
commission on such Shares and upon receipt by us of your discount to pay the
same to such Fund. We shall notify you of such repurchase within ten days after
the date on which each certificate or appropriate redemption or repurchase
request is delivered to us or to such Fund.
6. All sales shall be subject to our confirmation. All orders so placed
shall be firm orders. All orders are subject to acceptance or rejection by us in
our sole discretion, and by the Funds in their sole discretion. Please telephone
"wire-orders" to Van Eck Securities Corporation (800) 221-2220, or in New York
(212) -687-5200. "Direct-mail" orders should be sent to ATTN: "NAME OF FUND,"
DST Systems, Inc., 21 West Tenth Street, Kansas City, MO 64105.
7. Payment of the public offering price, less your discount, if any, for
Shares ordered from us on behalf of your customers during a Continuous offering
of Shares of a Fund shall be made by
<PAGE>
check payable to International Investors Incorporated or Van Eck Funds: "NAME OF
FUND" in New York clearing house funds, which check should be sent to ATTN:
"NAME OF FUND," DST Systems, Inc., 21 West Tenth Street, Kansas City, MO 64105,
within five business days after our acceptance of your order or such lesser
period as then may be permitted by law or regulation. If such payment is not
received within said time period, interest at the prime rate in effect at
Citibank N.A., may be added to the amount due us and we reserve the right
without notice to cancel the sale or at our option to return the Shares to the
issuer for redemption or repurchase. In the latter case we shall have the right
to hold you responsible for any loss, including loss of profit, resulting to us.
Should payment be made by check, delivery of certificates may be delayed pending
clearance of your check. Upon receipt of payment in conformity with the above,
Shares so ordered will be issued in or transferred into such names as you may
designate and forwarded as promptly as possible in accordance with your
instructions.
Payment for Shares purchased during an Initial Offering of Shares of a Fund
shall be made on such date and in accordance with such terms as described in the
then current prospectus of the Fund whose Shares are sold or as we may advise.
8. All sales through us shall be subject to the issuance of Shares to us
by the Funds. We and the Funds reserve the right to suspend sales without
notice, or to withdraw the offering of Shares entirely.
9. The Funds have authorized us as their agent and subject to their
direction to repurchase Shares at the repurchase price currently being quoted by
the Funds. This authority is supplementary to the obligation of the Funds to
redeem Shares tendered them for redemption as described in the Funds' current
prospectuses. No commissions are payable to us or by us in respect of any such
repurchase by us as such agent. Please telephone "wire-order" liquidation
requests to Van Eck Securities Corporation (800) 221-2220, or in New York (212)
687-5200 (such orders must be received by us no later than 5:00 pm New York time
to obtain the redemption price for such day). "Direct-mail" liquidation requests
should be sent to ATTN: "NAME OF FUND," DST Systems, Inc., 21 West Tenth Street,
Kansas City, MO 64105.
10. We will notify you of each series, including the applicable discounts
and commissions, established hereafter under the Van Eck Funds Master Trust
Agreement which series shall thereupon be deemed one of the Funds and supply to
you in reasonable quantities additional copies of any current prospectuses and
such sales literature for the Funds as may from time to time be issued. You are
not authorized to give any information other than that, or to make any
representations other than those contained in the then currently effective
registration statements or prospectuses or supplemental information thereto or
in any sales literature then currently issued or approved by the Funds.
<PAGE>
11. We represent that we are members of the National Association of
Securities Dealers, Inc. Your acceptance of this agreement constitutes a
representation to us that you are either (i) a properly registered or licensed
broker or dealer under federal and state securities laws and regulations and a
member of the National Association of Securities Dealers, Inc. and agree to be
bound by the rules of such Association or (ii) a bank as defined in Section 3
(a) (6) of the Securities Exchange Act of 1934, as amended, and are duly
authorized to enter into the transactions subject to this agreement.
12. You are not employed or retained for any purpose as broker, agent or
employee by us or by the Funds, and you are not authorized in any manner to act
for, or to make any representations on behalf of, us or the funds. Nothing
herein shall constitute you, other persons signing this agreement or the
undersigned as partners; however, you agree to bear your proportionate share, if
any, of any claim, demand or liability for transfer taxes asserted against you,
such other persons or us based on the theory that you, such other persons and we
or any two or more of us, constitute an association, unincorporated business or
other entity, and your proportionate share of any expenses defending any such
claim, demand or liability.
13. From time to time or upon application we will inform you as to the
states in which the Funds' Shares have been qualified for sale.
14. Your first order placed with us for the purchase of Shares will
represent your acceptance of this agreement.
15. All communications should be sent to us at the above address. Any
notice to you shall be duly given if mailed or telegraphed to you at the address
specified by you below.
16. This agreement may be terminated by either of us at any time by
written notice to the other and shall terminate automatically if, as the case
may be, either of us ceases to be a member of the National Association of
Securities Dealers, Inc. or if you cease to be a bank as defined above.
17. This agreement shall be governed by and interpreted in accordance with
the laws of the state of New York.
Very Truly Yours,
VAN ECK SECURITIES CORPORATION
Date: ____________________________ By:__________________________________
<PAGE>
We accept and agree to the terms and conditions set forth in this agreement
and acknowledge receipt of the prospectuses enclosed herewith.
Firm: _______________________________________
Date: __________________ By: _______________________________________
Address: _______________________________________
_______________________________________
<PAGE>
EXHIBIT A
INTERNATIONAL INVESTORS INCORPORATED
<TABLE>
<CAPTION>
Discount to
Sales Charge as a Broker-Dealers
Percentage of as a Percentage
----------------
Offering Net Amount of the Public
Price Invested Offering Price
--------- ---------- ---------------
<S> <C> <C> <C>
Dollar Amount of Purchase
- -------------------------
Less than $10,000 8.5% 9.3% 7.0%
$10,000 to less than $25,000 7.5% 8.1% 6.25%
$25,000 to less than $50,000 6.25% 6.7% 5.0%
$50,000 to less than $100,000 5.0% 5.3% 4.0%
$100,000 to less than $250,000 3.5% 3.6% 2.8%
$250,000 to less than $500,000 2.5% 2.6% 2.0%
$500,000 to less than $1,000,000 2.0% 2.0% 1.6%
$1,000,000 to less than $3,000,000 1.0% 1.0% 0.8%
$3,000,000 and over 0.5% 0.5% 0.4%
</TABLE>
VAN ECK FUNDS
WORLD TRENDS FUND, GOLD/RESOURCES AND WORLD INCOME FUND
<TABLE>
<CAPTION>
Discount to
Sales Charge as a Broker-Dealers
Percentage of as a Percentage
----------------
Offering Net Amount of the Public
Price Invested Offering Price
--------- ---------- ---------------
<S> <C> <C> <C>
Dollar Amount of Purchase
- -------------------------
Less than $10,000 7.5% 8.1% 6.0%
$10,000 to less than $25,000 6.25% 6.7% 5.0%
$25,000 to less than $50,000 5.0% 5.3% 4.0%
$50,000 to less than $100,000 4.0% 4.2% 3.2%
$100,000 to less than $250,000 3.0% 3.1% 2.4%
$250,000 to less than $500,000 2.5% 2.6% 2.0%
$500,000 to less than $1,000,000 2.0% 2.0% 1.6%
$1,000,000 to less than $3,000,000 1.0% 1.0% 0.8%
$3,000,000 to less than $4,000,000 0.5% 0.5% 0.4%
$4,000,000 and over -0- -0- -0-
</TABLE>
U.S. GOVERNMENT MONEY FUND
No Sales Charge
12/15/88
<PAGE>
DEFERRED FEE AGREEMENT
----------------------
THIS AGREEMENT, dated January 1, 1996 by and between Van Eck Funds (the
"Trust"), a
management investment company organized as a Massachusetts business Trust, with
offices at 99 Park Avenue, New York, New York 10016, and _____________, 1220
Park Avenue, New York, New York 10128 ("Trustee").
WITNESSETH:
WHEREAS, Trustee currently serves as a trustee of the Trust and receives
remuneration ("Trustee's Fees") from the Trust in that capacity; and
WHEREAS, Trustee desires that an arrangement be established with the Trust
under which Trustee may defer receipt of Trustee's Fees that may otherwise
become payable to Trustee and that relate to services performed after the date
hereof, and
WHEREAS, the Trust is agreeable to such an arrangement;
NOW, THEREFORE, it is agreed as follows:
1. Trustee irrevocably elects to defer receipt, subject to the provisions
of this Agreement, of the portion of Trustee's Fees designated on Schedule A
which may otherwise become payable to Trustee for the calendar year 1996, and
which relate to services performed after the date hereof. Such election shall
continue in effect with respect to such Trustee's Fees which may otherwise
become payable to Trustee for any calendar year subsequent to 1996 (which,
together with the calendar year 1996, are referred to herein as "Deferred Years"
and individually as a "Deferred Year"), unless prior to January I of such year,
Trustee shall have delivered to the President of the Trust a written revocation
or modification of such election with respect to all or any portion of such
Trustee's Fees which may otherwise become payable to him for such year.
Trustee's Fees with respect to which Trustee shall have elected to defer receipt
(and shall not have revoked such election) as provided above are hereinafter
referred to as "Deferred Trustee's Fees."
2. During any Deferred Year, the Trust shall credit the amount of
Deferred Trustee's Fees to a book reserve account (the "Deferred Fee Account")
based on the rate(s) of such Trustee's Fees in effect from time to time during
such year.
3. The "Underlying Securities" designated for the Deferred Fee Account
shall be shares of the Van Eck Funds as set forth on Schedule A as it may be
amended from time to time; provided, however, that management of the Trust and
Trustee may from time to time designate in writing shares of one or more of the
Investment Funds listed on Schedule A hereto which may be amended from time to
time by the Trust (or any successor to the Trust) as the Underlying Securities.
Notwithstanding the foregoing, if in the reasonable judgment of management of
the Trust the acquisition of designated Underlying Securities would be
reasonably likely to result in a violation by the Trust, any series thereof or
the issuer of any Underlying Securities of Sections 12(d)(1), 17(a), 17(d) or
18(f) under the Investment Company Act of 1940, as amended, or of the investment
objectives and policies of the Trust or any series thereof, management may
designate new Underlying Securities, upon written notice to the Trustee, which
designation shall be effective until such time as a new designation is made in
writing by management of the Trust and the Trustee. Until such time as the
Securities and Exchange Commission ("SEC") shall by order permit the Investment
Funds listed on Schedule A to be acquired for the benefit of the Deferred Fee
Account, the Underlying Securities shall be U.S. Treasury bills, the rate for
each quarter shall be the rate as reported in the Wall Street Journal or
Barron's as of the prior quarter-end or as close to that date as is possible.
The date on which the SEC order becomes effective the Underlying Securities
shall be those listed on Schedule A as designated by Trustee.
<PAGE>
4. The value of the Deferred Fee Account as of any date shall be equal to
the value such account would have had as of such date if the amounts credited
thereto had been invested and reinvested in the Underlying Securities from and
after the date such Underlying Securities were designated. In addition, the
Deferred Fee Account shall be credited or debited, as the case may be, with all
gains, losses, interest, dividends and earnings that would have been realized
had the Deferred Fee Account been invested in such Underlying Securities from
and after the date such Underlying Securities were designated.
5. The Trust's obligation to make payments of the Deferred Fee Account
shall be a general obligation of the Trust, and such payments shall be made from
the Trust's general assets and property. Trustee's relationship to the Trust
under this Agreement shall be only that of a general unsecured creditor, and
neither this Agreement nor any action taken pursuant hereto shall create or be
construed to create a trust or fiduciary relationship of any kind between the
Trust and Trustee, Trustee's designated beneficiary or any other person, or a
security interest of any kind in any property of the Trust in favor of Trustee
or any other person. The Trust shall not be required to purchase, hold or
dispose of any investments pursuant to this Agreement; provided, however, that
if in order to cover its obligations hereunder the Trust elects to purchase any
investments (including without limitation investments in tile Underlying
Securities), the same shall continue for all purposes to be a part of the
general assets and property of the Trust, subject to the claims of its general
creditors and no person other than the Trust shall by virtue of tile provisions
of this Agreement have any interest in such assets other than an interest as a
general creditor. The Trust shall provide an annual statement to Trustee showing
such information as is appropriate, including the aggregate amount in the
Deferred Fee Account, as of a reasonably current date, which amount may increase
or decrease from time to time as a result of gains, losses, interest, dividends
and earnings, in accordance with paragraph 4 above.
6. Trustee hereby elects to have payments made, upon termination of
Trustee's service as a trustee, out of Trustee's Deferred Fee Account as set
forth in Schedule A. Otherwise, payment shall be made to Trustee in such number
of annual installments as shall be determined by the Trust in its sole
discretion. The Trust may consult with Trustee prior to such determination. Each
annual installment payment shall be made as of January 31, beginning with the
January 31st following the termination of Trustee's service as a trustee. Until
complete payment of amounts credited to the Deferred Fee Account, the unpaid
balance shall be credited or debited, as the case may be, with all gains,
losses, interest, dividends and earnings in accordance with paragraph 4 above.
The Trust in its sole discretion reserves tile right to accelerate payment of
amounts in Trustee's Deferred Fee Account at any time after termination of
Trustee's service as a trustee. Notwithstanding tile foregoing, in tile event of
the liquidation, dissolution or winding up of tile Trust or the distribution of
all or substantially all of the Trust's assets and property relating to one or
more series of its shares, if any, to shareholders of such series (for this
purpose a sale, conveyance or transfer of the Trust's assets to a trust,
partnership, association or another corporation in exchange for cash, shares or
other securities with the transfer being made subject to, or with the assumption
by the transferee of, the liabilities of the Trust shall not be deemed a
termination of the Trust or such a distribution), all unpaid amounts in the
Deferred Fee Account as to such series as of the effective date thereof shall be
paid in a lump sum oil such effective date.
7. Payment of amounts credited to the Deferred Fee Account shall be made
in the form of a check. Such payment shall be made to Trustee except that:
(a) in the event that Trustee shall be determined by a court of
competent jurisdiction to be incapable of managing Trustee's financial affairs,
and if the Trust has actual notice of such determination, payment shall be made
to Trustee's personal representative(s); and
(b) in the event of Trustee's death, payment shall be made to the last
beneficiary designated by Trustee for purposes of receiving such payment in such
event in a written notice delivered to the President of the Trust; provided that
if such beneficiary has not survived Trustee, payment shall
<PAGE>
instead be made to Trustee's estate. (Trustee hereby designates as the initial
beneficiary for purposes of receiving such payment in such event the person set
forth in Schedule A.)
The Trust may deduct from the payment of amounts in the Deferred Fee
Account any amounts required for purposes of withholding for federal and/or
state income and employment tax or any similar tax or levy.
8. Amounts in the Deferred Fee Account shall not in any way be subject to
the debts or other obligations of Trustee and may not be voluntarily sold,
transferred, pledged or assigned by him except as provided in paragraph 7(b).
9. This Agreement shall not be construed to confer any right on the part
of Trustee to be or remain a trustee of the Trust or to receive any, or any
particular rate of, Trustee's Fees.
10. Interpretations of, and determinations related to, this Agreement made
by the Trust, including any determinations of the amounts in the Deferred Fee
Account, shall be made by the Board of Trustees of tile Trust and, if made in
good faith, shall be conclusive and binding upon all parties; and the Trust
shall not incur any liability to Trustee for any such interpretation or
determination so made or for any other action taken by it in connection with
this Agreement in good faith.
11. This Agreement contains the entire understanding and agreement between
the parties with respect to the subject matter hereof, and may not be amended,
modified or supplemented in any respect except by subsequent written agreement
entered into by both parties.
12. This Agreement shall be binding upon, and shall inure to the benefit
of, the Trust and its successors and assigns and Trustee and Trustee's heirs,
executors, administrators and personal representatives.
13. This Agreement is being entered into in, and shall be construed in
accordance with tile internal laws of, the Commonwealth of Massachusetts,
without regard to conflicts of law provisions thereof
14. Copies of the Master Trust Agreement, as amended, establishing Van Eck
Funds are on file with the Secretary of the Commonwealth of Massachusetts, and
notice is hereby given that this Agreement is executed on behalf of the Trust by
an officer of the Trust as an officer and not individually and that the
obligations of or arising out of this Agreement are not binding upon any of the
Trustees, officers, shareholders, employees or agents of tile Trust individually
but are binding only upon the assets and property of the Trust.
IN WITNESS WHEREOF, the Trust has caused this Agreement to be executed on
its behalf by its duly authorized officer, and Trustee has executed this
Agreement, on the date first written above.
VAN ECK FUNDS
By_____________________________________________
John C. van Eck
Chairman
_______________________________________________
Trustee
<PAGE>
[LOGO APPEARS HERE]
GLOBAL CUSTODY AGREEMENT
This AGREEMENT is effective August , 1996, and is between THE CHASE
MANHATTAN BANK (the "Bank") and VAN ECK WORLDWIDE INSURANCE TRUST (the
"Customer").
1. CUSTOMER ACCOUNTS.
The Bank agrees to establish and maintain the following accounts
("Accounts"):
(a) A custody account in the name of the Customer ("Custody Account") for
any and all stocks, shares, bonds, debentures, notes, mortgages or other
obligations for the payment of money, bullion, coin and any certificates,
receipts, warrants or other instruments representing rights to receive, purchase
or subscribe for the same or evidencing or representing any other rights or
interests therein and other similar property whether certificated or
uncertificated as may be received by the Bank or its Subcustodian (as defined in
Section 3) for the account of the Customer ("Securities"); and
(b) A deposit account in the name of the Customer ("Deposit Account") for
any and all cash in any currency received by the Bank or its Subcustodian for
the account of the Customer, which cash shall not be subject to withdrawal by
draft or check.
The Customer warrants its authority to: 1) deposit the cash and Securities
("Assets") received in the Accounts and 2) give Instructions (as defined in
Section 11) concerning the Accounts. The Bank may deliver securities of the
same class in place of those deposited in the Custody Account.
Upon written agreement between the Bank and the Customer, additional
Accounts may be established and separately accounted for as additional Accounts
under the terms of this Agreement.
2. MAINTENANCE OF SECURITIES AND CASH AT BANK AND SUBCUSTODIAN LOCATIONS.
Unless Instructions specifically require another location acceptable to the
Bank:
(a) Securities will be held in the country or other jurisdiction in which
the principal trading market for such Securities is located, where such
Securities are to be presented for payment or where such Securities are
acquired; and
(b) Cash will be credited to an account in a country or other jurisdiction
in which such cash may be legally deposited or is the legal currency for the
payment of public or private debts.
Cash may be held pursuant to Instructions in either interest or non-
interest bearing accounts as may be available for the particular currency. To
the extent Instructions are issued and the Bank can comply with such
Instructions, the Bank is authorized to maintain cash balances on deposit for
<PAGE>
the Customer with itself or one of its affiliates at such reasonable rates of
interest as may from time to time be paid on such accounts, or in non-interest
bearing accounts as the Customer may direct, if acceptable to the Bank.
If the Customer wishes to have any of its Assets held in the custody of an
institution other than the established Subcustodians as defined in Section 3 (or
their securities depositories), such arrangement must be authorized by a written
agreement, signed by the Bank and the Customer.
3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES.
The Bank may act under this Agreement through the subcustodians listed in
Schedule A of this Agreement with which the Bank has entered into subcustodial
agreements ("Subcustodians"). The Customer authorizes the Bank to hold Assets
in the Accounts in accounts which the Bank has established with one or more of
its branches or Subcustodians. The Bank and Subcustodians are authorized to
hold any of the Securities in their account with any securities depository in
which they participate.
The Bank reserves the right to add new, replace or remove Subcustodians.
The Customer will be given reasonable notice by the Bank of any amendment to
Schedule A. Upon request by the Customer, the Bank will identify the name,
address and principal place of business of any Subcustodian of the Customer's
Assets and the name and address of the governmental agency or other regulatory
authority that supervises or regulates such Subcustodian.
4. USE OF SUBCUSTODIAN.
(a) The Bank will identify the Assets on its books as belonging to the
Customer.
(b) Where permissible under local law and regulation, a Subcustodian will
hold such Assets together with assets belonging to other customers of the Bank
in accounts identified on such Subcustodian's books as special custody accounts
for the exclusive benefit of customers of the Bank. Where the foregoing method
of holding is not so permissible, then a Subcustodian will hold such Assets in a
manner consistent with local law and regulation and consistent with beneficial
title to such Assets not being held by the Subcustodian.
(c) Any Assets in the Accounts held by a Subcustodian will be subject only
to the instructions of the Bank or its agent. Any Securities held in a
securities depository for the account of a Subcustodian will be subject only to
the instructions of such Subcustodian.
(d) Any agreement the Bank enters into with a Subcustodian for holding its
customer's assets shall provide that such assets will not be subject to any
right, charge, security interest, lien or claim of any kind in favor of such
Subcustodian except for safe custody or administration, and that the beneficial
ownership of such assets will be freely transferable without the payment of
money or value other than for safe custody or administration. The foregoing
shall not apply to the extent of any special agreement or arrangement made by
the Customer with any particular Subcustodian.
5. DEPOSIT ACCOUNT TRANSACTIONS.
(a) The Bank or its Subcustodians will make payments from the Deposit
Account upon receipt of Instructions which include all information required by
the Bank.
(b) In the event that any payment to be made under this Section 5 exceeds
the funds available in the Deposit Account, the Bank, in its discretion, may
advance the Customer such excess amount which shall be deemed a loan payable on
demand, bearing interest at the rate customarily charged by the Bank on similar
loans.
2
<PAGE>
(c) If the Bank credits the Deposit Account on a payable date, or at any
time prior to actual collection and reconciliation to the Deposit Account, with
interest, dividends, redemptions or any other amount due ("AutoCredit"), the
Customer will promptly return any such amount upon oral or written notification:
(i) that such amount has not been received in the ordinary course of business or
(ii) that such amount was incorrectly credited. If the Customer does not
promptly return any amount upon such notification, the Bank shall be entitled,
upon oral or written notification to the Customer, to reverse such credit by
debiting the Deposit Account for the amount previously credited. The Bank or
its Subcustodian shall have no duty or obligation to institute legal
proceedings, file a claim or a proof of claim in any insolvency proceeding or
take any other action with respect to the collection of such amount, but may act
for the Customer upon Instructions after consultation with the Customer.
6. CUSTODY ACCOUNT TRANSACTIONS.
(a) Securities will be transferred, exchanged or delivered by the Bank or
its Subcustodian upon receipt by the Bank of Instructions which include all
information required by the Bank. Settlement and payment for Securities
received for, and delivery of Securities out of, the Custody Account shall,
where feasible, be made in such manner as set forth in Instructions form the
Customer it being understood, however, that settlement and payment shall be made
in accordance with the customary or established securities trading or securities
processing practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivery of Securities to a
purchaser, dealer or their agents against a receipt with the expectation of
receiving later payment and free delivery. In connection with the foregoing,
where Customer specifies delivery versus payment in a settlement Instruction for
a given trade, the Bank shall promptly advise Customer in the event that such
method is unavailable and then shall settle such trade either in accordance with
local market practice or, if the Customer has made particular arrangements for
delivery versus payment of which the Customer shall advise the Bank and which
are acceptable to the Bank, in accordance with such arrangements. Delivery of
Securities out of the Custody Account may also be made in any manner
specifically required by Instructions acceptable to the Bank.
(b) The Bank, in its discretion, may credit or debit the Accounts on a
contractual settlement date with cash or Securities with respect to any sale,
exchange or purchase of Securities. Otherwise, such transactions will be
credited or debited to the Accounts on the date cash or Securities are actually
received by the Bank and reconciled to the Account.
(i) The Bank may reverse credits or debits made to the Accounts in its
discretion if the related transaction fails to settle within a reasonable
period, determined by the Bank in its discretion, after the contractual
settlement date for the related transaction.
(ii) If any Securities delivered pursuant to this Section 6 are returned by
the recipient thereof, the Bank may reverse the credits and debits of the
particular transaction at any time.
7. ACTIONS OF THE BANK.
The Bank shall follow Instructions received regarding assets held in the
Accounts. However, until it receives Instructions to the contrary, the Bank
will:
(a) Present for payment any Securities which are called, redeemed or
retired or otherwise become payable and all coupons and other income items which
call for payment upon presentation, to the extent that the Bank or Subcustodian
is actually aware of such opportunities.
3
<PAGE>
(b) Execute in the name of the Customer such ownership and other
certificates as may be required to obtain payments in respect of Securities.
(c) Exchange interim receipts or temporary Securities for definitive
Securities.
(d) Appoint brokers and agents for any transaction involving the
Securities, including, without limitation, affiliates of the Bank or any
Subcustodian.
(e) Issue statements to the Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.
The Bank will send the Customer an advice or notification of any transfers
of Assets to or from the Accounts. Such statements, advices or notifications
shall indicate the identity of the entity having custody of the Assets. Unless
the Customer sends the Bank a written exception or objection to any Bank
statement within the lesser of 60 days after its next semiannual audit covering
any period included in the statement or 180 days of receipt, the Customer shall
be deemed to have approved such statement. In such event, or where the Customer
has otherwise approved any such statement, the Bank shall, to the extent
permitted by law, be released, relieved and discharged with respect to all
matters set forth in such statement or reasonably implied therefrom as though it
had been settled by the decree of a court of competent jurisdiction in an action
where the Customer and all persons having or claiming an interest in the
Customer or the Customer's Accounts were parties.
All collections of funds or other property paid or distributed in respect
of Securities in the Custody Account shall be made at the risk of the Customer.
The Bank shall have no liability for any loss occasioned by delay in the actual
receipt of notice by the Bank or by its Subcustodians of any payment, redemption
or other transaction regarding Securities in the Custody Account in respect of
which the Bank has agreed to take any action under this Agreement. With respect
to income on Securities which is not subject to AutoCredit, the Bank shall
advise the Customer of a failure to receive such income in the ordinary course
of business, but a failure to provide such notice shall not render the Bank
liable for any such amount except to the extent such failure directly results in
Customer's inability to recover such income.
8. CORPORATE ACTIONS; PROXIES; TAX RECLAIMS.
(a) Corporate Actions. Whenever the Bank receives information concerning
-----------------
the Securities which requires discretionary action by the beneficial owner of
the Securities (other than a proxy), such as subscription rights, bonus issues,
stock repurchase plans and rights offerings, or legal notices or other material
intended to be transmitted to securities holders ("Corporate Actions"), the Bank
will give the Customer notice of such Corporate Actions to the extent that the
Bank's central corporate actions department has actual knowledge of a Corporate
Action in time to notify its customers.
When a rights entitlement or a fractional interest resulting from a rights
issue, stock dividend, stock split or similar Corporate Action is received which
bears an expiration date, the Bank will endeavor to obtain Instructions from the
Customer or its Authorized Person, but if Instructions are not received in time
for the Bank to take timely action, or actual notice of such Corporate Action
was received too late to seek Instructions, the Bank is authorized to sell such
rights entitlement or fractional interest and to credit the Deposit Account with
the proceeds or take any other action it deems, in good faith, to be appropriate
in which case it shall be held harmless for any such action.
(b) Proxy Voting. The Bank shall provide proxy voting services, if elected
------------
by the Customer, in accordance with the terms of the proxy voting services rider
hereto. Proxy voting services may be provided by the Bank or, in whole or in
part, by one or more third parties appointed by the Bank (which may be
affiliates of the Bank).
4
<PAGE>
(c) Tax Reclaims.
------------
(i) Subject to the provisions hereof, the Bank will apply for a reduction
of withholding tax and any refund of any tax paid or tax credits which apply in
each applicable market in respect of income payments on Securities for the
benefit of the Customer which the Bank believes may be available to such
Customer.
(ii) The provision of tax reclaim services by the Bank is conditional upon
the Bank receiving from the beneficial owner of Securities (A) a declaration of
its identity and place of residence and (B) certain other documentation
reasonably requested by Bank (pro forma copies of which are available from the
--- -----
Bank). The Customer acknowledges that, if the Bank does not receive such
declarations, documentation and information, additional United Kingdom taxation
will be deducted from all income received in respect of Securities issued
outside the United Kingdom and that U.S. non-resident alien tax or U.S. backup
withholding tax will be deducted from U.S. source income. The Customer shall
provide to the Bank such documentation and information as it may require in
connection with taxation, and warrants that, when given, this information shall
be true and correct in every respect, not misleading in any way, and contain all
material information. The Customer undertakes to notify the Bank immediately if
any such information requires updating or amendment.
(iii) The Bank shall not be liable to the Customer or any third party for
any tax, fines or penalties payable by the Bank or the Customer, and shall be
indemnified accordingly, whether these result from the inaccurate completion of
documents by the Customer or any third party, or as a result of the provision to
the Bank or any third party of inaccurate or misleading information or the
withholding of material information by the Customer or any other third party, or
as a result of any delay of any revenue authority or any other matter beyond the
control of the Bank.
(iv) The Customer confirms that the Bank is authorized to deduct from any
cash received or credited to the deposit account any taxes or levies required by
any revenue or governmental authority for whatever reason in respect of the
Securities or Cash Accounts.
(v) The Bank shall perform tax reclaim services only with respect to
taxation levied by the revenue authorities of the countries notified to the
Customer from time to time and the Bank may, by notification in writing, at its
absolute discretion, supplement or amend the markets in which the tax reclaim
services are offered. Other than as expressly provided in this sub-clause, the
Bank shall have no responsibility with regard to the Customer's tax position or
status in any jurisdiction.
(vi) The Customer confirms that the Bank is authorized to disclose any
information requested by any revenue authority or any governmental body in
relation to the Customer or the Securities and/or Cash held for the Customer.
(vii) Tax reclaim services may be provided by the Bank or, in whole or in
part, by one or more third parties appointed by the Bank (which may be
affiliates of the Bank); provided that the Bank shall be liable for the
performance of any such third party to the same extent as the Bank would have
been if it performed such services itself.
9. NOMINEES.
5
<PAGE>
Securities which are ordinarily held in registered form may be registered
in a nominee name of the Bank, Subcustodian or securities depository, as the
case may be. The Bank may without notice to the Customer cause any such
Securities to cease to be registered in the name of any such nominee and to be
registered in the name of the Customer. In the event that any Securities
registered in a nominee name are called for partial redemption by the issuer,
the Bank may allot the called portion to the respective beneficial holders of
such class of security in any manner the Bank deems to be fair and equitable.
The Customer agrees to hold the Bank, Subcustodians, and their respective
nominees harmless from any liability arising directly or indirectly from their
status as a mere record holder of Securities in the Custody Account.
10. AUTHORIZED PERSONS.
As used in this Agreement, the term "Authorized Person" means employees or
agents including investment managers as have been designated by written notice
from the Customer or its designated agent to act on behalf of the Customer under
this Agreement. Such persons shall continue to be Authorized Persons until such
time as the Bank receives Instructions from the Customer or its designated agent
that any such employee or agent is no longer an Authorized Person.
11. INSTRUCTIONS.
The term "Instructions" means instructions of any Authorized Person
received by the Bank, via telephone, telex, TWX, facsimile transmission, bank
wire or other teleprocess or electronic instruction or trade information system
acceptable to the Bank which the Bank reasonably believes in good faith to have
been given by Authorized Persons or which are transmitted with proper testing or
authentication pursuant to terms and conditions which the Bank may specify.
Unless otherwise expressly provided, all Instructions shall continue in full
force and effect until canceled or superseded.
Any Instructions delivered to the Bank by telephone shall promptly
thereafter be confirmed in writing by an Authorized Person (which confirmation
may bear the facsimile signature of such Person), but the Customer will hold the
Bank harmless for the failure of an Authorized Person to send such confirmation
in writing, the failure of such confirmation to conform to the telephone
instructions received or the Bank's failure to produce such confirmation at any
subsequent time. The Bank may electronically record any Instructions given by
telephone, and any other telephone discussions with respect to the Custody
Account. The Customer shall be responsible for safeguarding any testkeys,
identification codes or other security devices which the Bank shall make
available to the Customer or its Authorized Persons.
12. STANDARD OF CARE; LIABILITIES.
(a) The Bank shall be responsible for the performance of only such duties
as are set forth in this Agreement or expressly contained in Instructions which
are consistent with the provisions of this Agreement as follows:
(i) The Bank will use reasonable care with respect to its obligations under
this Agreement and the safekeeping of Assets. The Bank shall be liable to
the Customer for any loss which shall occur as the result of the failure of
a Subcustodian to exercise reasonable care with respect to the safekeeping
of such Assets to the same extent that the Bank would be liable to the
Customer if the Bank were holding such Assets in New York. In the event of
any loss to the Customer by reason of the failure of the Bank or its
Subcustodian to utilize reasonable care, the Bank shall be liable to the
Customer only to the extent of the Customer's direct damages, to be
determined based on the market value of the property which is the subject
of the loss at the date of notification of such loss to Customer and
without reference to any special
6
<PAGE>
conditions or circumstances. Alternatively, the Customer may, at its
election and its sole expense, be subrogated to the rights of the Bank in
respect of any Subcustodian in connection with such a loss. In no event
shall the Bank be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including, but not limited to, lost
profits), even if the Bank has been advised of the likelihood of such loss
or damage and regardless of the form of action. Bank shall not be
responsible for the insolvency of any Subcustodian which is not a branch or
"Affiliate" of Bank, with the term "Affiliate" meaning any entity
controlling, controlled by, or under common control with, Bank.
(ii)
The Bank shall be indemnified by, and without liability to the Customer for
any action taken or omitted by the Bank whether pursuant to Instructions or
otherwise within the scope of this Agreement if such act or omission was in
good faith, without negligence and in compliance herewith. In performing
its obligations under this Agreement, the Bank may rely on the genuineness
of any document which it believes in good faith to have been validly
executed.
(iii) The Customer agrees to pay for and hold the Bank harmless from any
liability or loss resulting from the imposition or assessment of any taxes
or other governmental charges, and any related expenses with respect to
income from or Assets in the Accounts.
(iv) The Bank shall be entitled to rely, and may act, upon the advice of
counsel (who may be counsel for the Customer) on all matters and shall be
without liability for any action reasonably taken or omitted pursuant to
such advice.
(v) The Bank need not maintain any insurance for the benefit of the
Customer.
(vi) Without limiting the foregoing, the Bank shall not be liable for any
loss which results from: 1) the general risk of investing, or 2) investing
or holding Assets in a particular country including, but not limited to,
losses resulting from nationalization, expropriation or other governmental
actions; regulation of the banking or securities industry; currency
restrictions, devaluations or fluctuations; and market conditions which
prevent the orderly execution of securities transactions or affect the
value of Assets.
(vii) Neither party shall be liable to the other for any loss due to forces
beyond their control including, but not limited to strikes or work
stoppages, acts of war or terrorism, insurrection, revolution, nuclear
fusion, fission or radiation, or acts of God; provided that. in the event
of the occurrence of any of the foregoing events, the Bank shall take such
steps as are reasonable to restore services within a reasonable time, but
shall not be obligated thereby to settle any strike or resolve any work
stoppage.
(b) Consistent with and without limiting the first paragraph of this
Section 12, it is specifically acknowledged that the Bank shall have no duty or
responsibility to:
(i) question Instructions or make any suggestions to the Customer or an
Authorized Person regarding such Instructions;
(ii) supervise or make recommendations with respect to investments or the
retention of Securities;
7
<PAGE>
(iii) advise the Customer or an Authorized Person regarding any default in
the payment of principal or income of any security other than as provided
in Section 5(c) and the last paragraph of (S)7 of this Agreement;
(iv) evaluate or report to the Customer or an Authorized Person regarding
the financial condition of any broker, agent or other party selected by
Customer (other than any subcustodian) to which Securities are delivered or
payments are made pursuant to this Agreement, provided, however, that the
Bank shall exercise reasonable care when appointing any broker, agent or
other party in its discretion.
(v) review or reconcile trade confirmations received from brokers. The
Customer or its Authorized Persons (as defined in Section 10) issuing
Instructions shall bear any responsibility to review such confirmations
against Instructions issued to and statements issued by the Bank.
(c) The Customer authorizes the Bank to act under this Agreement
notwithstanding that the Bank or any of its divisions or affiliates may have a
material interest in a transaction, or circumstances are such that the Bank may
have a potential conflict of duty or interest including the fact that the Bank
or any of its affiliates may provide brokerage services to other customers, act
as financial advisor to the issuer of Securities, act as a lender to the issuer
of Securities, act in the same transaction as agent for more than one customer,
have a material interest in the issue of Securities, or earn profits from any of
the activities listed herein.
13. FEES AND EXPENSES.
The Customer agrees to pay the Bank for its services under this Agreement
such amount as may be agreed upon in writing, together with the Bank's
reasonable out-of-pocket or incidental expenses, including, but not limited to,
legal fees. The Bank shall have a lien on and is authorized to charge any
Accounts of the Customer for any amount owing to the Bank under any provision of
this Agreement; provided that the Bank's security interest in a particular
Security will terminate at the time the Customer pays the Bank the settlement
amount for such Security in immediately available funds. The Bank shall give
the Customer prompt subsequent notice of any charge against Cash made hereunder
and not less than two days' prior notice of the liquidation or other disposition
of any Security subject to lien in connection with the satisfaction of any
amount owing to the Bank.
14. MISCELLANEOUS.
(a) Foreign Exchange Transactions. To facilitate the administration of
-----------------------------
the Customer's trading and investment activity, the Bank is authorized except as
instructed to the contrary, to enter into spot or forward foreign exchange
contracts with the Customer or an Authorized Person for the Customer and may
also provide foreign exchange through its subsidiaries, affiliates or
Subcustodians. Instructions, including standing instructions, may be issued with
respect to such contracts but the Bank may establish rules or limitations
concerning any foreign exchange facility made available. In all cases where the
Bank, its subsidiaries, affiliates or Subcustodians enter into a foreign
exchange contract related to Accounts, the terms and conditions of the then
current foreign exchange contract of the Bank, its subsidiary, affiliate or
Subcustodian and, to the extent not inconsistent, this Agreement shall apply to
such transaction.
(b) Certification of Residency, etc. The Customer certifies that it is a
--------------------------------
resident of the United States and agrees to notify the Bank of any changes in
residency. The Bank may rely upon this certification or the certification of
such other facts as may be required to administer the Bank's
8
<PAGE>
obligations under this Agreement. The Customer will indemnify the Bank against
all losses, liability, claims or demands arising directly or indirectly from any
such certifications.
(c) Access to Records. The Bank shall allow the Customer's independent
------------------
public accountant reasonable access to the records of the Bank relating to the
Assets as is required in connection with their examination of books and records
pertaining to the Customer's affairs. Subject to restrictions under applicable
law, the Bank shall also obtain an undertaking to permit the Customer's
independent public accountants reasonable access to the records of any
Subcustodian which has physical possession of any Assets as may be required in
connection with the examination of the Customer's books and records.
(d) Governing Law; Successors and Assigns. This Agreement shall be
--------------------------------------
governed by the laws of the State of New York and shall not be assignable by
either party, but shall bind the successors in interest of the Customer and the
Bank.
(e) Entire Agreement; Applicable Riders. Customer represents that the
------------------------------------
Assets deposited in the Accounts are (Check one):
____ Employee Benefit Plan or other assets subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA");
x Mutual Fund assets subject to certain Securities and Exchange
-----
Commission ("SEC") rules and regulations;
____ Neither of the above.
This Agreement consists exclusively of this document together with
Schedule A, Exhibits I - _______ and the following Rider(s) [Check
applicable rider(s)]:
____ ERISA
x MUTUAL FUND
-----
x PROXY VOTING
-----
____ SPECIAL TERMS AND CONDITIONS
There are no other provisions of this Agreement and this Agreement
supersedes any other agreements, whether written or oral, between the parties.
Any amendment to this Agreement must be in writing, executed by both parties.
(f) Severability. In the event that one or more provisions of this
-------------
Agreement are held invalid, illegal or enforceable in any respect on the basis
of any particular circumstances or in any jurisdiction, the validity, legality
and enforceability of such provision or provisions under other circumstances or
in other jurisdictions and of the remaining provisions will not in any way be
affected or impaired.
(g) Waiver. Except as otherwise provided in this Agreement, no failure or
-------
delay on the part of either party in exercising any power or right under this
Agreement operates as a waiver, nor does any single or partial exercise of any
power or right preclude any other or further exercise, or the exercise of any
other power or right. No waiver by a party of any provision of this Agreement,
or
9
<PAGE>
waiver of any breach or default, is effective unless in writing and signed by
the party against whom the waiver is to be enforced.
(h) Notices. All notices under this Agreement shall be effective when
--------
actually received. Any notices or other communications which may be required
under this Agreement are to be sent to the parties at the following addresses or
such other addresses as may subsequently be given to the other party in writing:
Bank: The Chase Manhattan Bank
4 Chase MetroTech Center
Brooklyn, NY 11245
Attention: Global Custody Division
or telex: _____________________________
Customer: VAN ECK WORLDWIDE INSURANCE TRUST
_______________________________________
_______________________________________
or telex: _____________________________
(i) Termination. This Agreement may be terminated by the Customer or the
------------
Bank by giving sixty (60) days written notice to the other, provided that such
notice to the Bank shall specify the names of the persons to whom the Bank shall
deliver the Assets in the Accounts. If notice of termination is given by the
Bank, the Customer shall, within sixty (60) days (or such other amount of days
as is contemplated by the Extension Notice) following receipt of the notice,
deliver to the Bank Instructions specifying the names of the persons to whom the
Bank shall deliver the Assets. In either case the Bank will deliver the Assets
to the persons so specified, after deducting any amounts which the Bank
determines in good faith to be owed to it under Section 13. If within sixty
(60) days following receipt of a notice of termination by the Bank, the Bank
does not receive Instructions from the Customer specifying the names of the
persons to whom the Bank shall deliver the Assets, the Bank, at its election,
may deliver the Assets to a bank or trust company doing business in the State of
New York to be held and disposed of pursuant to the provisions of this
Agreement, or to Authorized Persons, or may continue to hold the Assets until
Instructions are provided to the Bank; provided that, where the Bank is the
terminating party and the Bank had not notified the Customer that termination
was for breach of this Agreement by the Customer, such sixty (60) day period
shall be extended for an additional period as requested by Customer of up to one
hundred and twenty (120) days.
(j) Nonrecourse Obligations. A copy of the Master Trust Agreement, as
-----------------------
amended from time to time, of the Customer is on file with Secretary of State of
Massachusetts, and notice is hereby given that this Agreement is not executed on
behalf of the Trustees of the Customer as individuals, and the obligations of
this Agreement are not binding upon any of the Trustees, officers, or
shareholders of the Customer individually, but are binding only upon the assets
and property of the Customer. The Bank agrees that no shareholder, Trustee or
officer of the Customer may be held personally liable or responsible for any
obligations of the Customer arising hereunder.
(k) Several Obligations of the Portfolios. The Customer is series company
-------------------------------------
with multiple portfolios and has entered into this Agreement on behalf of those
portfolios identified in Exhibit __
10
<PAGE>
hereto, as amended from time to time on notice to the Bank (each a "Portfolio").
With respect to any obligation of the Customer on behalf of any Portfolio
arising hereunder, the Bank shall look for payment or satisfaction of such
obligation solely to the assets and property of the Portfolio to which such
obligation relates as though the Customer had separately contracted with the
Bank by separate written instrument with respect to each Portfolio. In addition
this Agreement may be terminated with respect to one or more Portfolios in
accordance with the terms of paragraph (i) hereof.
VAN ECK WORLDWIDE INSURANCE TRUST
By:____________________________________________
Title:
Date:
THE CHASE MANHATTAN BANK
By:____________________________________________
Title:
Date:
11
<PAGE>
STATE OF )
: ss.
COUNTY OF )
On this day of , 1996, before me personally came
, to me known, who being by me duly sworn, did depose and say that
he/she resides in at
that he/she is of
, the entity described in and which executed the foregoing instrument; that
he/she knows the seal of said entity, that the seal affixed to said instrument
is such seal, that it was so affixed by order of said entity, and that he/she
signed his/her name thereto by like order.
__________________________
Sworn to before me this ______________
day of ______________, 1996.
______________________
Notary
<PAGE>
STATE OF NEW YORK )
: ss.
COUNTY OF NEW YORK )
On this day of, 1996, before me personally
came ,to me known, who being by me duly sworn, did depose and
say that he/she resides in at
; that he/she is a Vice President of THE CHASE MANHATTAN BANK, the
corporation described in and which executed the foregoing instrument; that
he/she knows the seal of said corporation, that the seal affixed to said
instrument is such corporate seal, that it was so affixed by order of the Board
of Directors of said corporation, and that he/she signed his/her name thereto by
like order.
___________________________
Sworn to before me this ___________________
day of ________________, 1996
_____________________
Notary
<PAGE>
Mutual Fund Rider to Global Custody Agreement
Between The Chase Manhattan Bank and
VAN ECK WORLDWIDE INSURANCE TRUST
effective August , 1996
Customer represents that the Assets being placed in the Bank's custody are
subject to the Investment Company Act of 1940 (the Act), as the same may be
amended from time to time.
Except to the extent that the Bank has specifically agreed to comply with a
condition of a rule, regulation, interpretation promulgated by or under the
authority of the SEC or the Exemptive Order applicable to accounts of this
nature issued to the Bank (Investment Company Act of 1940, Release No. 12053,
November 20, 1981), as amended, or unless the Bank has otherwise specifically
agreed, the Customer shall be solely responsible to assure that the maintenance
of Assets under this Agreement complies with such rules, regulations,
interpretations or exemptive order promulgated by or under the authority of the
Securities Exchange Commission.
The following modifications are made to the Agreement:
Section 3. Subcustodians and Securities Depositories.
------------------------------------------
Add the following language to the end of Section 3:
The terms Subcustodian and securities depositories as used in this
Agreement shall mean a branch of a qualified U.S. bank, an eligible foreign
custodian or an eligible foreign securities depository, which are further
defined as follows:
(a) "qualified U.S. Bank" shall mean a qualified U.S. bank as defined in
Rule 17f-5 under the Investment Company Act of 1940;
(b) "eligible foreign custodian" shall mean (i) a banking institution or
trust company incorporated or organized under the laws of a country other
than the United States that is regulated as such by that country's
government or an agency thereof and that has shareholders' equity in excess
of $200 million in U.S. currency (or a foreign currency equivalent
thereof), (ii) a majority owned direct or indirect subsidiary of a
qualified U.S. bank or bank holding company that is incorporated or
organized under the laws of a country other than the United States and that
has shareholders' equity in excess of $100 million in U.S. currency (or a
foreign currency equivalent thereof) (iii) a banking institution or trust
company incorporated or organized under the laws of a country other than
the United States or a majority owned direct or indirect subsidiary of a
qualified U.S. bank or bank holding company that is incorporated or
organized under the laws of a country other than the United States which
has such other qualifications as shall be specified in Instructions and
approved by the Bank; or (iv) any other entity that shall have been so
qualified by exemptive order, rule or other appropriate action of the SEC;
and
(c) "eligible foreign securities depository" shall mean a securities
depository or clearing agency, incorporated or organized under the laws of
a country other than the United States, which operates (i) the central
system for handling securities or equivalent book-entries in that country,
or (ii) a transnational system for the central handling of securities or
equivalent book-entries.
<PAGE>
The Customer represents that its Board of Directors has approved each of
the Subcustodians listed in Schedule A to this Agreement and the terms of the
subcustody agreements between the Bank and each Subcustodian, which are attached
as Exhibits I through _____ of Schedule A, and further represents that its Board
has determined that the use of each Subcustodian and the terms of each
subcustody agreement are consistent with the best interests of the Fund(s) and
its (their) shareholders. The Bank will supply the Customer with any amendment
to Schedule A for approval. The Customer has supplied or will supply the Bank
with certified copies of its Board of Directors resolution(s) with respect to
the foregoing prior to placing Assets with any Subcustodian so approved.
Section 11. Instructions.
-------------
Add the following language to the end of Section 11:
Deposit Account Payments and Custody Account Transactions made pursuant to
Section 5 and 6 of this Agreement may be made only for the purposes listed
below. Instructions must specify the purpose for which any transaction is
to be made and Customer shall be solely responsible to assure that
Instructions are in accord with any limitations or restrictions applicable
to the Customer by law or as may be set forth in its prospectus.
(a) In connection with the purchase or sale of Securities at prices as
confirmed by Instructions;
(b) When Securities are called, redeemed or retired, or otherwise become
payable;
(c) In exchange for or upon conversion into other securities alone or
other securities and cash pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment;
(d) Upon conversion of Securities pursuant to their terms into other
securities;
(e) Upon exercise of subscription, purchase or other similar rights
represented by Securities;
(f) For the payment of interest, taxes, management or supervisory fees,
distributions or operating expenses;
(g) In connection with any borrowings by the Customer requiring a pledge
of Securities, but only against receipt of amounts borrowed;
(h) In connection with any loans, but only against receipt of adequate
collateral as specified in Instructions which shall reflect any
restrictions applicable to the Customer;
(i) For the purpose of redeeming shares of the capital stock of the
Customer and the delivery to, or the crediting to the account of, the Bank,
its Subcustodian or the Customer's transfer agent, such shares to be
purchased or redeemed;
(j) For the purpose of redeeming in kind shares of the Customer against
delivery to the Bank, its Subcustodian or the Customer's transfer agent of
such shares to be so redeemed;
(k) For delivery in accordance with the provisions of any agreement among
the Customer, the Bank and a broker-dealer registered under the Securities
Exchange Act of 1934 (the "Exchange Act") and a member of The National
Association of Securities Dealers, Inc. ("NASD"), relating to compliance
with the rules of The Options Clearing Corporation and of any registered
national securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in connection with
transactions by the Customer;
2
<PAGE>
(l) For release of Securities to designated brokers under covered call
options, provided, however, that such Securities shall be released only
upon payment to the Bank of monies for the premium due and a receipt for
the Securities which are to be held in escrow. Upon exercise of the
option, or at expiration, the Bank will receive from brokers the Securities
previously deposited. The Bank will act strictly in accordance with
Instructions in the delivery of Securities to be held in escrow and will
have no responsibility or liability for any such Securities which are not
returned promptly when due other than to make proper request for such
return;
(m) For spot or forward foreign exchange transactions to facilitate
security trading, receipt of income from Securities or related
transactions;
(n) For other proper purposes as may be specified in Instructions issued
by an officer of the Customer which shall include a statement of the
purpose for which the delivery or payment is to be made, the amount of the
payment or specific Securities to be delivered, the name of the person or
persons to whom delivery or payment is to be made, and a certification that
the purpose is a proper purpose under the instruments governing the
Customer; and
(o) Upon the termination of this Agreement as set forth in Section 14(i).
Section 12. Standard of Care; Liabilities.
------------------------------
Add the following subsection (c) to Section 12:
(c) The Bank hereby warrants to the Customer that in its opinion, after
due inquiry, the established procedures to be followed by each of its
branches, each branch of a qualified U.S. bank, each eligible foreign
custodian and each eligible foreign securities depository holding the
Customer's Securities pursuant to this Agreement afford protection for such
Securities at least equal to that afforded by the Bank's established
procedures with respect to similar securities held by the Bank and its
securities depositories in New York.
Section 14. Access to Records.
------------------
Add the following language to the end of Section 14(c):
-------------------------------------------------------
Upon reasonable request from the Customer, the Bank shall furnish the
Customer such reports (or portions thereof) of the Bank's system of
internal accounting controls applicable to the Bank's duties under this
Agreement. The Bank shall endeavor to obtain and furnish the Customer with
such similar reports as it may reasonably request with respect to each
Subcustodian and securities depository holding the Customer's assets.
3
<PAGE>
GLOBAL PROXY SERVICE RIDER
To Global Custody Agreement
Between
THE CHASE MANHATTAN BANK
AND
VAN ECK WORLDWIDE INSURANCE TRUST (the "Customer")
dated August , 1996.
1. Global Proxy Services (the "Services") shall be provided for the countries
listed in the procedures and guidelines ("Procedures") furnished to
Customer, as the same may be amended by the Bank from time to time on prior
notice to Customer. The Procedures are incorporated by reference herein
and form a part of this Rider.
2. The Service shall consist of those elements as set forth in the Procedures,
and shall include (a) notifications ("Notifications") by the Bank to
Customer of the dates of pending shareholder meetings, resolutions to be
voted upon and the return dates as may be received by the Bank or provided
to the Bank by its Subcustodians or third parties, and (b) voting by the
Bank of proxies based on Customer Directions. Original proxy materials or
copies thereof shall not be provided. Notifications shall generally be in
English and, where necessary, shall be summarized and translated from such
non-English materials as have been made available to the Bank or its
subcustodian. In this respect the Bank's only obligation is to provide
information from sources it believes to be reliable and/or to provide
materials summarized and/or translated in good faith. the Bank reserves
the right to provide Notifications, or parts thereof, in the language
received. Upon reasonable advance request by Customer, backup information
relative to Notifications, such as annual reports, explanatory material
concerning resolutions, management recommendations or other material
relevant to the exercise of proxy voting rights shall be provided as
available, but without translation.
3. While the Bank shall attempt to provide accurate and complete
Notifications, whether or not translated, the Bank shall not be liable for
any losses or other consequences that may result from reliance by Customer
upon Notifications where the Bank prepared the same in good faith.
4 Notwithstanding the fact that the Bank may act in a fiduciary capacity with
respect to Customer under other agreements or otherwise under the
Agreement, in performing Services the Bank shall be acting solely as the
agent of Customer, and shall not exercise any discretion with regard to
such Services.
5. Proxy voting may be precluded or restricted in a variety of circumstances,
including, without limitation, where the relevant Financial Assets are: (i)
on loan; (ii) at registrar for registration or reregistration; (iii) the
subject of a conversion or other corporate action; (iv) not held in a name
subject to the control of the Bank or its subcustodian or are otherwise
held in a manner which precludes voting; (v) not capable of being voted on
account of local market regulations or practices or restrictions by the
issuer; or (vi) held in a margin or collateral account.
6 Customer acknowledges that in certain countries the Bank may be unable to
vote individual proxies but shall only be able to vote proxies on a net
basis (e.g., a net yes or no vote given the voting instructions received
---
from all customers).
<PAGE>
7. Customer shall not make any use of the information provided hereunder,
except in connection with the funds or plans covered by this Agreement, and
shall in no event sell, license, give or otherwise make the information
provided hereunder available, to any third party, and shall not directly or
indirectly compete with the Bank or diminish the market for the Services by
provision of such information, in whole or in part, for compensation or
otherwise, to any third party.
8. The names of Authorized Persons for Services shall be furnished to the Bank
in accordance with (S)10 of the Agreement. Fees for the Services shall be
agreed as set forth in (S)13 of the Agreement.
2
<PAGE>
DOMESTIC AND GLOBAL
SPECIAL TERMS AND CONDITIONS RIDER
----------------------------------
Domestic Corporate Actions and Proxies
- --------------------------------------
With respect to domestic U.S. and Canadian Securities (the latter if held in
DTC), the following provisions will apply rather than the pertinent provisions
of Section 8 of the Agreement and the Global Proxy Service rider:
Bank shall send to Customer or the Authorized Person for a Securities
Account, such proxies (signed in blank, if issued in the name of Bank's nominee
or the nominee of a central depository) and communications with respect to
Financial Assets in the Securities Account as call for voting or relate to legal
proceedings within a reasonable time after sufficient copies are received by
Bank for forwarding to its customers. In addition, Bank shall follow coupon
payments, redemptions, exchanges or similar matters with respect to Financial
Assets in the Securities Account and advise Customer or the Authorized Person
for such Account of rights issued, tender offers or any other discretionary
rights with respect to such Financial Assets, in each case, of which Bank has
received notice from the issuer of the Financial Assets, or as to which notice
is published in publications routinely utilized by Bank for this purpose.
<PAGE>
AMENDMENT, dated ________, 1996 to the ___________1996 custody agreement
("Agreement"), between VAN ECK WORLDWIDE INSURANCE TRUST ("Customer"), having a
place of business at ________________, and The Chase Manhattan Bank ("Bank"),
having a place of business at 270 Park Ave., New York, N.Y. 10017
It is hereby agreed as follows:
Section 1. Except as modified hereby, the Agreement is confirmed in all
respects. Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Agreement.
Section 2. The Agreement is amended as follows by adding the following as
new (S)15:
"(a) "CMBI" shall mean Chase Manhattan Bank International, an
indirect wholly-owned subsidiary of Bank, located in Moscow, Russia, and any
nominee companies appointed by it.
"(b) "International Financial Institution" shall mean any bank in the
top 1,000 (together with their affiliated companies) as measured by "Tier 1"
capital or any broker/dealer in the top 100 as measured by capital.
"(c) "Negligence" shall mean the failure to exercise "Reasonable
Care".
"(d) "No-Action Letter" shall mean the response of the Securities and
Exchange Commission's Office of Chief Counsel of Investment Management, dated
April 18, 1995, in respect of the Templeton Russia Fund, Inc. (SEC Ref. No. 95-
151-CC, File No. 811-8788) providing "no-action" relief under (S)17(f) of The
Investment Company Act of 1940, as amended, and SEC Rule 17f-5 thereunder, in
connection with custody of such Templeton Russia Fund, Inc.'s investments in
Russian Securities.
"(e) "Reasonable Care" shall mean the use of reasonable custodial
practices under the applicable circumstances as measured by the custodial
practices then prevailing in Russia of International Financial Institutions
acting as custodians for their institutional investor clients in Russia.
"(f) "Registrar Company" shall mean any entity providing share
registration services to an issuer of Russian Securities.
"(g) "Registrar Contract" shall mean a contract between CMBI and a
Registrar Company (and as the same may be amended from time to time) containing,
inter alia, the contractual provisions described at paragraphs (a)-(e) on pps.
- ----- ----
5-6 of the No-Action Letter.
"(h) "Russian Security" shall mean a Security issued by a Russian
issuer.
"(i) "Share Extract" shall mean: (i) an extract of its share
registration books issued by a Registrar Company indicating an investor's
ownership of a security; and (ii) a form prepared by CMBI or its agent in those
cases where a Registrar Company is unwilling to issue a Share Extract.
Section 3. Section 6(a) of the Agreement is amended by adding the
following at the end thereof: "With respect to Russia, payment for Russian
Securities shall not be made prior to the issuance and receipt of the Share
Extract relating to such Russian Security. Delivery of Russian Securities may
be made in accordance with the customary or established securities trading or
securities processing practices and procedures in Russia. Delivery of Russian
Securities may also be made in any manner specifically required by Instructions
acceptable to the Bank. Customer shall promptly supply such transaction and
settlement information as may be requested by Bank or CMBI in connection with
particular transactions."
<PAGE>
Section 4. Section 8 of the Agreement is amended by adding a new paragraph
to the end thereof as follows: "It is understood and agreed that Bank need only
use its reasonable efforts with respect to performing the functions described in
this (S)8 with respect to Russian Securities, it being understood that proxy
voting services are not available."
Section 5. Section 12(a)(i) of the Agreement is amended with respect to
Russian custody by deleting the phrase "reasonable care" wherever it appears and
substituting, in lieu thereof, the phrase "Reasonable Care".
Section 6. Section 12(a)(i) of the Agreement is further amended with
respect to Russian custody by inserting the following at the end of the first
sentence thereof: "; provided that, with respect to Russian Securities, Bank's
responsibilities shall be limited to safekeeping of relevant Share Extracts."
Section 7. Section 12(a)(i) of the Agreement is further amended with
respect to Russian custody by inserting the following after the second sentence
thereof: "Delegation by Bank to CMBI shall not relieve Bank of any
responsibility to Customer for any loss due to such delegation, and Bank shall
be liable for any loss or claim arising out of or in connection with the
performance by CMBI of such delegated duties to the same extent as if Bank had
itself provided the custody services hereunder. In connection with the
foregoing, neither Bank nor CMBI shall assume responsibility for, and neither
shall be liable for, any action or inaction of any Registrar Company and no
Registrar Company shall be, or shall be deemed to be, Bank, CMBI, a
Subcustodian, a securities depository or the employee, agent or personnel of any
of the foregoing. To the extent that CMBI employs agents to perform any of the
functions to be performed by Bank or CMBI with respect to Russian Securities,
neither Bank nor CMBI shall be responsible for any act, omission, default or for
the solvency of any such agent unless the appointment of such agent was made
with Negligence or in bad faith, except that where Bank or CMBI uses (i) an
affiliated nominee or (ii) an agent to perform the share registration or share
confirmation functions described in paragraphs (a)-(e) on pps. 5-6 of the No-
Action Letter, and, to the extent applicable to CMBI, the share registration
functions described on pps. 2-3 of the No-Action Letter, Bank and CMBI shall be
liable to Customer as if CMBI were responsible for performing such services
itself."
Section 8. Section 12(a)(ii) is amended with respect to Russian custody by
deleting the word "negligently" and substituting, in lieu thereof, the word
"Negligently".
Section 9. Section 12(a)(iii) is amended with respect to Russian custody
by deleting the word "negligence" and substituting, in lieu thereof, the word
"Negligence".
Section 10. Add a new Section 16 to the Agreement as follows:
"(a) Bank will advise Customer (and will update such advice from time
to time as changes occur) of those Registrar Companies with which CMBI has
entered into a Registrar Contract. Bank shall cause CMBI both to monitor each
Registrar Company and to promptly advise Customer and its investment advisor
when CMBI has actual knowledge of the occurrence of any one or more of the
events described in paragraphs (i)-(v) on pps. 8-9 of the No-Action Letter with
respect to a Registrar Company that serves in that capacity for any issuer the
shares of which are held by Customer.
"(b) Where Customer is considering investing in the Russian
Securities of an issuer as to which CMBI does not have a Registrar Contract with
the issuer's Registrar Company, Customer may request that Bank ask that CMBI
both consider whether it would be willing to attempt to enter into such a
Registrar Contract and to advise Customer of its willingness to do so. Where
CMBI has agreed to make such an attempt, Bank will advise Customer of the
occurrence of any one or more of the events described in paragraphs (i)-(iv) on
pps. 8-9 of the No-Action Letter of which CMBI has actual knowledge.
(c) Where Customer is considering investing in the Russian Securities
of an issuer as to which CMBI has a Registrar Contract with the issuer's
Registrar Company, Customer may advise Bank of its interest in investing in such
issuer and, in such event, Bank will advise Customer of the occurrence of any
one or more of
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<PAGE>
the events described in paragraphs (i)-(v) on pps. 8-9 of the No-Action Letter
of which CMBI has actual knowledge."
Section 11. Add a new Section 17 to the Agreement as follows: "Customer
shall pay for and hold Bank and CMBI harmless from any liability or loss
resulting from the imposition or assessment of any taxes (including, but not
limited to, state, stamp and other duties) or other governmental charges, and
any related expenses incurred by Bank, CMBI or their respective agents with
respect to income on Customer's Russian Securities.
Section 12. Add a new Section 18 to the Agreement as follows: "Customer
acknowledges and agrees that CMBI may not be able, in given cases and despite
its reasonable efforts, to obtain a Share Extract from a Registrar Company and
CMBI shall not be liable in any such event including with respect to any losses
resulting from such failure."
Section 13. Add a new Section 19 to the Agreement as follows: "Customer
acknowledges that it has received, reviewed and understands Bank's market report
for Russia, including, but not limited to, the risks described therein."
Section 14. Add a new Section 20 to the Agreement as follows: "Subject to
the cooperation of a Registrar Company, for at least the first two years
following CMBI's first use of a Registrar Company, Bank shall cause CMBI to
conduct share confirmations on at least a quarterly basis, although thereafter
confirmations may be conducted on a less frequent basis if Customer's Board of
Directors, in consultation with CMBI, determines it to be appropriate."
Section 15. Add a new Section 21 to the Agreement as follows: "Bank shall
cause CMBI to prepare for distribution to Customer's Board of Directors a
quarterly report identifying: (i) any concerns it has regarding the Russian
share registration system that should be brought to the attention of the Board
of Directors; and (ii) the steps CMBI has taken during the reporting period to
ensure that Customer's interests continue to be appropriately recorded."
Section 16. Add a new Section 22 to the Agreement as follows: "Except as
provided in new (S)16(b), the services to be provided by Bank hereunder will be
provided only in relation to Russian Securities for which CMBI has entered into
a Registrar Contract with the relevant Registrar Company."
*********************
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
VAN ECK WORLDWIDE INSURANCE TRUST THE CHASE MANHATTAN BANK
By: ______________________ By: ________________________
Name: Name:
Title: Title:
Date: Date:
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[LETTERHEAD OF CHASE APPEARS HERE]
GLOBAL CUSTODY AGREEMENT
This AGREEMENT is effective August , 1996, and is between THE CHASE
MANHATTAN BANK (the "Bank") and VAN ECK FUNDS (the "Customer").
1. CUSTOMER ACCOUNTS.
The Bank agrees to establish and maintain the following accounts
("Accounts"):
(a) A custody account in the name of the Customer ("Custody Account") for
any and all stocks, shares, bonds, debentures, notes, mortgages or other
obligations for the payment of money, bullion, coin and any certificates,
receipts, warrants or other instruments representing rights to receive, purchase
or subscribe for the same or evidencing or representing any other rights or
interests therein and other similar property whether certificated or
uncertificated as may be received by the Bank or its Subcustodian (as defined in
Section 3) for the account of the Customer ("Securities"); and
(b) A deposit account in the name of the Customer ("Deposit Account") for
any and all cash in any currency received by the Bank or its Subcustodian for
the account of the Customer, which cash shall not be subject to withdrawal by
draft or check.
The Customer warrants its authority to: 1) deposit the cash and Securities
("Assets") received in the Accounts and 2) give Instructions (as defined in
Section 11) concerning the Accounts. The Bank may deliver securities of the
same class in place of those deposited in the Custody Account.
Upon written agreement between the Bank and the Customer, additional
Accounts may be established and separately accounted for as additional Accounts
under the terms of this Agreement.
2. MAINTENANCE OF SECURITIES AND CASH AT BANK AND SUBCUSTODIAN LOCATIONS.
Unless Instructions specifically require another location acceptable to the
Bank:
(a) Securities will be held in the country or other jurisdiction in which
the principal trading market for such Securities is located, where such
Securities are to be presented for payment or where such Securities are
acquired; and
(b) Cash will be credited to an account in a country or other jurisdiction
in which such cash may be legally deposited or is the legal currency for the
payment of public or private debts.
Cash may be held pursuant to Instructions in either interest or non-
interest bearing accounts as may be available for the particular currency. To
the extent Instructions are issued and the Bank can comply with such
Instructions, the Bank is authorized to maintain cash balances on deposit for
<PAGE>
the Customer with itself or one of its affiliates at such reasonable rates of
interest as may from time to time be paid on such accounts, or in non-interest
bearing accounts as the Customer may direct, if acceptable to the Bank.
If the Customer wishes to have any of its Assets held in the custody of an
institution other than the established Subcustodians as defined in Section 3 (or
their securities depositories), such arrangement must be authorized by a written
agreement, signed by the Bank and the Customer.
3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES.
The Bank may act under this Agreement through the subcustodians listed in
Schedule A of this Agreement with which the Bank has entered into subcustodial
agreements ("Subcustodians"). The Customer authorizes the Bank to hold Assets
in the Accounts in accounts which the Bank has established with one or more of
its branches or Subcustodians. The Bank and Subcustodians are authorized to
hold any of the Securities in their account with any securities depository in
which they participate.
The Bank reserves the right to add new, replace or remove Subcustodians.
The Customer will be given reasonable notice by the Bank of any amendment to
Schedule A. Upon request by the Customer, the Bank will identify the name,
address and principal place of business of any Subcustodian of the Customer's
Assets and the name and address of the governmental agency or other regulatory
authority that supervises or regulates such Subcustodian.
4. USE OF SUBCUSTODIAN.
(a) The Bank will identify the Assets on its books as belonging to the
Customer.
(b) Where permissible under local law and regulation, a Subcustodian will
hold such Assets together with assets belonging to other customers of the Bank
in accounts identified on such Subcustodian's books as special custody accounts
for the exclusive benefit of customers of the Bank. Where the foregoing method
of holding is not so permissible, then a Subcustodian will hold such Assets in a
manner consistent with local law and regulation and consistent with beneficial
title to such Assets not being held by the Subcustodian.
(c) Any Assets in the Accounts held by a Subcustodian will be subject only
to the instructions of the Bank or its agent. Any Securities held in a
securities depository for the account of a Subcustodian will be subject only to
the instructions of such Subcustodian.
(d) Any agreement the Bank enters into with a Subcustodian for holding its
customer's assets shall provide that such assets will not be subject to any
right, charge, security interest, lien or claim of any kind in favor of such
Subcustodian except for safe custody or administration, and that the beneficial
ownership of such assets will be freely transferable without the payment of
money or value other than for safe custody or administration. The foregoing
shall not apply to the extent of any special agreement or arrangement made by
the Customer with any particular Subcustodian.
5. DEPOSIT ACCOUNT TRANSACTIONS.
(a) The Bank or its Subcustodians will make payments from the Deposit
Account upon receipt of Instructions which include all information required by
the Bank.
(b) In the event that any payment to be made under this Section 5 exceeds
the funds available in the Deposit Account, the Bank, in its discretion, may
advance the Customer such excess amount which shall be deemed a loan payable on
demand, bearing interest at the rate customarily charged by the Bank on similar
loans.
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<PAGE>
(c) If the Bank credits the Deposit Account on a payable date, or at any
time prior to actual collection and reconciliation to the Deposit Account, with
interest, dividends, redemptions or any other amount due ("AutoCredit"), the
Customer will promptly return any such amount upon oral or written notification:
(i) that such amount has not been received in the ordinary course of business or
(ii) that such amount was incorrectly credited. If the Customer does not
promptly return any amount upon such notification, the Bank shall be entitled,
upon oral or written notification to the Customer, to reverse such credit by
debiting the Deposit Account for the amount previously credited. The Bank or its
Subcustodian shall have no duty or obligation to institute legal proceedings,
file a claim or a proof of claim in any insolvency proceeding or take any other
action with respect to the collection of such amount, but may act for the
Customer upon Instructions after consultation with the Customer.
6. CUSTODY ACCOUNT TRANSACTIONS.
(a) Securities will be transferred, exchanged or delivered by the Bank or
its Subcustodian upon receipt by the Bank of Instructions which include all
information required by the Bank. Settlement and payment for Securities received
for, and delivery of Securities out of, the Custody Account shall, where
feasible, be made in such manner as set forth in Instructions form the Customer
it being understood, however, that settlement and payment shall be made in
accordance with the customary or established securities trading or securities
processing practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivery of Securities to a
purchaser, dealer or their agents against a receipt with the expectation of
receiving later payment and free delivery. In connection with the foregoing,
where Customer specifies delivery versus payment in a settlement Instruction for
a given trade, the Bank shall promptly advise Customer in the event that such
method is unavailable and then shall settle such trade either in accordance with
local market practice or, if the Customer has made particular arrangements for
delivery versus payment of which the Customer shall advise the Bank and which
are acceptable to the Bank, in accordance with such arrangements. Delivery of
Securities out of the Custody Account may also be made in any manner
specifically required by Instructions acceptable to the Bank.
(b) The Bank, in its discretion, may credit or debit the Accounts on a
contractual settlement date with cash or Securities with respect to any sale,
exchange or purchase of Securities. Otherwise, such transactions will be
credited or debited to the Accounts on the date cash or Securities are actually
received by the Bank and reconciled to the Account.
(i) The Bank may reverse credits or debits made to the Accounts in its
discretion if the related transaction fails to settle within a reasonable
period, determined by the Bank in its discretion, after the contractual
settlement date for the related transaction.
(ii) If any Securities delivered pursuant to this Section 6 are returned
by the recipient thereof, the Bank may reverse the credits and debits of the
particular transaction at any time.
7. ACTIONS OF THE BANK.
The Bank shall follow Instructions received regarding assets held in the
Accounts. However, until it receives Instructions to the contrary, the Bank
will:
(a) Present for payment any Securities which are called, redeemed or
retired or otherwise become payable and all coupons and other income items which
call for payment upon presentation, to the extent that the Bank or Subcustodian
is actually aware of such opportunities.
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<PAGE>
(b) Execute in the name of the Customer such ownership and other
certificates as may be required to obtain payments in respect of Securities.
(c) Exchange interim receipts or temporary Securities for definitive
Securities.
(d) Appoint brokers and agents for any transaction involving the
Securities, including, without limitation, affiliates of the Bank or any
Subcustodian.
(e) Issue statements to the Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.
The Bank will send the Customer an advice or notification of any transfers
of Assets to or from the Accounts. Such statements, advices or notifications
shall indicate the identity of the entity having custody of the Assets. Unless
the Customer sends the Bank a written exception or objection to any Bank
statement within the lesser of 60 days after its next semiannual audit covering
any period included in the statement or 180 days of receipt, the Customer shall
be deemed to have approved such statement. In such event, or where the Customer
has otherwise approved any such statement, the Bank shall, to the extent
permitted by law, be released, relieved and discharged with respect to all
matters set forth in such statement or reasonably implied therefrom as though it
had been settled by the decree of a court of competent jurisdiction in an action
where the Customer and all persons having or claiming an interest in the
Customer or the Customer's Accounts were parties.
All collections of funds or other property paid or distributed in respect
of Securities in the Custody Account shall be made at the risk of the Customer.
The Bank shall have no liability for any loss occasioned by delay in the actual
receipt of notice by the Bank or by its Subcustodians of any payment, redemption
or other transaction regarding Securities in the Custody Account in respect of
which the Bank has agreed to take any action under this Agreement. With respect
to income on Securities which is not subject to AutoCredit, the Bank shall
advise the Customer of a failure to receive such income in the ordinary course
of business, but a failure to provide such notice shall not render the Bank
liable for any such amount except to the extent such failure directly results in
Customer's inability to recover such income.
8. CORPORATE ACTIONS; PROXIES; TAX RECLAIMS.
(a) Corporate Actions. Whenever the Bank receives information concerning
-----------------
the Securities which requires discretionary action by the beneficial owner of
the Securities (other than a proxy), such as subscription rights, bonus issues,
stock repurchase plans and rights offerings, or legal notices or other material
intended to be transmitted to securities holders ("Corporate Actions"), the Bank
will give the Customer notice of such Corporate Actions to the extent that the
Bank's central corporate actions department has actual knowledge of a Corporate
Action in time to notify its customers.
When a rights entitlement or a fractional interest resulting from a rights
issue, stock dividend, stock split or similar Corporate Action is received which
bears an expiration date, the Bank will endeavor to obtain Instructions from the
Customer or its Authorized Person, but if Instructions are not received in time
for the Bank to take timely action, or actual notice of such Corporate Action
was received too late to seek Instructions, the Bank is authorized to sell such
rights entitlement or fractional interest and to credit the Deposit Account with
the proceeds or take any other action it deems, in good faith, to be appropriate
in which case it shall be held harmless for any such action.
(b) Proxy Voting. The Bank shall provide proxy voting services, if elected
------------
by the Customer, in accordance with the terms of the proxy voting services rider
hereto. Proxy voting services may be provided by the Bank or, in whole or in
part, by one or more third parties appointed by the Bank (which may be
affiliates of the Bank).
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(c) Tax Reclaims.
------------
(i) Subject to the provisions hereof, the Bank will apply for a reduction
of withholding tax and any refund of any tax paid or tax credits which apply in
each applicable market in respect of income payments on Securities for the
benefit of the Customer which the Bank believes may be available to such
Customer.
(ii) The provision of tax reclaim services by the Bank is conditional
upon the Bank receiving from the beneficial owner of Securities (A) a
declaration of its identity and place of residence and (B) certain other
documentation reasonably requested by Bank (pro forma copies of which are
--- -----
available from the Bank). The Customer acknowledges that, if the Bank does not
receive such declarations, documentation and information, additional United
Kingdom taxation will be deducted from all income received in respect of
Securities issued outside the United Kingdom and that U.S. non-resident alien
tax or U.S. backup withholding tax will be deducted from U.S. source income. The
Customer shall provide to the Bank such documentation and information as it may
require in connection with taxation, and warrants that, when given, this
information shall be true and correct in every respect, not misleading in any
way, and contain all material information. The Customer undertakes to notify the
Bank immediately if any such information requires updating or amendment.
(iii) The Bank shall not be liable to the Customer or any third party for
any tax, fines or penalties payable by the Bank or the Customer, and shall be
indemnified accordingly, whether these result from the inaccurate completion of
documents by the Customer or any third party, or as a result of the provision to
the Bank or any third party of inaccurate or misleading information or the
withholding of material information by the Customer or any other third party, or
as a result of any delay of any revenue authority or any other matter beyond the
control of the Bank.
(iv) The Customer confirms that the Bank is authorized to deduct from any
cash received or credited to the deposit account any taxes or levies required by
any revenue or governmental authority for whatever reason in respect of the
Securities or Cash Accounts.
(v) The Bank shall perform tax reclaim services only with respect to
taxation levied by the revenue authorities of the countries notified to the
Customer from time to time and the Bank may, by notification in writing, at its
absolute discretion, supplement or amend the markets in which the tax reclaim
services are offered. Other than as expressly provided in this sub-clause, the
Bank shall have no responsibility with regard to the Customer's tax position or
status in any jurisdiction.
(vi) The Customer confirms that the Bank is authorized to disclose any
information requested by any revenue authority or any governmental body in
relation to the Customer or the Securities and/or Cash held for the Customer.
(vii) Tax reclaim services may be provided by the Bank or, in whole or in
part, by one or more third parties appointed by the Bank (which may be
affiliates of the Bank); provided that the Bank shall be liable for the
performance of any such third party to the same extent as the Bank would have
been if it performed such services itself.
9. NOMINEES.
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<PAGE>
Securities which are ordinarily held in registered form may be registered
in a nominee name of the Bank, Subcustodian or securities depository, as the
case may be. The Bank may without notice to the Customer cause any such
Securities to cease to be registered in the name of any such nominee and to be
registered in the name of the Customer. In the event that any Securities
registered in a nominee name are called for partial redemption by the issuer,
the Bank may allot the called portion to the respective beneficial holders of
such class of security in any manner the Bank deems to be fair and equitable.
The Customer agrees to hold the Bank, Subcustodians, and their respective
nominees harmless from any liability arising directly or indirectly from their
status as a mere record holder of Securities in the Custody Account.
10. AUTHORIZED PERSONS.
As used in this Agreement, the term "Authorized Person" means employees or
agents including investment managers as have been designated by written notice
from the Customer or its designated agent to act on behalf of the Customer under
this Agreement. Such persons shall continue to be Authorized Persons until such
time as the Bank receives Instructions from the Customer or its designated agent
that any such employee or agent is no longer an Authorized Person.
11. INSTRUCTIONS.
The term "Instructions" means instructions of any Authorized Person
received by the Bank, via telephone, telex, TWX, facsimile transmission, bank
wire or other teleprocess or electronic instruction or trade information system
acceptable to the Bank which the Bank reasonably believes in good faith to have
been given by Authorized Persons or which are transmitted with proper testing or
authentication pursuant to terms and conditions which the Bank may specify.
Unless otherwise expressly provided, all Instructions shall continue in full
force and effect until canceled or superseded.
Any Instructions delivered to the Bank by telephone shall promptly
thereafter be confirmed in writing by an Authorized Person (which confirmation
may bear the facsimile signature of such Person), but the Customer will hold the
Bank harmless for the failure of an Authorized Person to send such confirmation
in writing, the failure of such confirmation to conform to the telephone
instructions received or the Bank's failure to produce such confirmation at any
subsequent time. The Bank may electronically record any Instructions given by
telephone, and any other telephone discussions with respect to the Custody
Account. The Customer shall be responsible for safeguarding any testkeys,
identification codes or other security devices which the Bank shall make
available to the Customer or its Authorized Persons.
12. STANDARD OF CARE; LIABILITIES.
(a) The Bank shall be responsible for the performance of only such duties
as are set forth in this Agreement or expressly contained in Instructions which
are consistent with the provisions of this Agreement as follows:
(i) The Bank will use reasonable care with respect to its obligations
under this Agreement and the safekeeping of Assets. The Bank shall be
liable to the Customer for any loss which shall occur as the result of the
failure of a Subcustodian to exercise reasonable care with respect to the
safekeeping of such Assets to the same extent that the Bank would be liable
to the Customer if the Bank were holding such Assets in New York. In the
event of any loss to the Customer by reason of the failure of the Bank or
its Subcustodian to utilize reasonable care, the Bank shall be liable to
the Customer only to the extent of the Customer's direct damages, to be
determined based on the market value of the property which is the subject
of the loss at the date of notification of such loss to Customer and
without reference to any special
6
<PAGE>
conditions or circumstances. Alternatively, the Customer may, at its
election and its sole expense, be subrogated to the rights of the Bank in
respect of any Subcustodian in connection with such a loss. In no event
shall the Bank be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including, but not limited to, lost
profits), even if the Bank has been advised of the likelihood of such loss
or damage and regardless of the form of action. Bank shall not be
responsible for the insolvency of any Subcustodian which is not a branch or
"Affiliate" of Bank, with the term "Affiliate" meaning any entity
controlling, controlled by, or under common control with, Bank.
(ii)
The Bank shall be indemnified by, and without liability to the Customer for
any action taken or omitted by the Bank whether pursuant to Instructions or
otherwise within the scope of this Agreement if such act or omission was in
good faith, without negligence and in compliance herewith. In performing
its obligations under this Agreement, the Bank may rely on the genuineness
of any document which it believes in good faith to have been validly
executed.
(iii) The Customer agrees to pay for and hold the Bank harmless from any
liability or loss resulting from the imposition or assessment of any taxes
or other governmental charges, and any related expenses with respect to
income from or Assets in the Accounts.
(iv) The Bank shall be entitled to rely, and may act, upon the advice of
counsel (who may be counsel for the Customer) on all matters and shall be
without liability for any action reasonably taken or omitted pursuant to
such advice.
(v) The Bank need not maintain any insurance for the benefit of the
Customer.
(vi) Without limiting the foregoing, the Bank shall not be liable for any
loss which results from: 1) the general risk of investing, or 2) investing
or holding Assets in a particular country including, but not limited to,
losses resulting from nationalization, expropriation or other governmental
actions; regulation of the banking or securities industry; currency
restrictions, devaluations or fluctuations; and market conditions which
prevent the orderly execution of securities transactions or affect the
value of Assets.
(vii) Neither party shall be liable to the other for any loss due to forces
beyond their control including, but not limited to strikes or work
stoppages, acts of war or terrorism, insurrection, revolution, nuclear
fusion, fission or radiation, or acts of God; provided that. in the event
of the occurrence of any of the foregoing events, the Bank shall take such
steps as are reasonable to restore services within a reasonable time, but
shall not be obligated thereby to settle any strike or resolve any work
stoppage.
(b) Consistent with and without limiting the first paragraph of this
Section 12, it is specifically acknowledged that the Bank shall have no
duty or responsibility to:
(i) question Instructions or make any suggestions to the Customer or an
Authorized Person regarding such Instructions;
(ii) supervise or make recommendations with respect to investments or the
retention of Securities;
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<PAGE>
(iii) advise the Customer or an Authorized Person regarding any default in
the payment of principal or income of any security other than as provided
in Section 5(c) and the last paragraph of (S)7 of this Agreement;
(iv) evaluate or report to the Customer or an Authorized Person regarding
the financial condition of any broker, agent or other party selected by
Customer (other than any subcustodian) to which Securities are delivered or
payments are made pursuant to this Agreement, provided, however, that the
Bank shall exercise reasonable care when appointing any broker, agent or
other party in its discretion.
(v) review or reconcile trade confirmations received from brokers. The
Customer or its Authorized Persons (as defined in Section 10) issuing
Instructions shall bear any responsibility to review such confirmations
against Instructions issued to and statements issued by the Bank.
(c) The Customer authorizes the Bank to act under this Agreement
notwithstanding that the Bank or any of its divisions or affiliates may have a
material interest in a transaction, or circumstances are such that the Bank may
have a potential conflict of duty or interest including the fact that the Bank
or any of its affiliates may provide brokerage services to other customers, act
as financial advisor to the issuer of Securities, act as a lender to the issuer
of Securities, act in the same transaction as agent for more than one customer,
have a material interest in the issue of Securities, or earn profits from any of
the activities listed herein.
13. FEES AND EXPENSES.
The Customer agrees to pay the Bank for its services under this Agreement
such amount as may be agreed upon in writing, together with the Bank's
reasonable out-of-pocket or incidental expenses, including, but not limited to,
legal fees. The Bank shall have a lien on and is authorized to charge any
Accounts of the Customer for any amount owing to the Bank under any provision of
this Agreement; provided that the Bank's security interest in a particular
Security will terminate at the time the Customer pays the Bank the settlement
amount for such Security in immediately available funds. The Bank shall give the
Customer prompt subsequent notice of any charge against Cash made hereunder and
not less than two days' prior notice of the liquidation or other disposition of
any Security subject to lien in connection with the satisfaction of any amount
owing to the Bank.
14. MISCELLANEOUS.
(a) Foreign Exchange Transactions. To facilitate the administration of
-----------------------------
the Customer's trading and investment activity, the Bank is authorized except as
instructed to the contrary, to enter into spot or forward foreign exchange
contracts with the Customer or an Authorized Person for the Customer and may
also provide foreign exchange through its subsidiaries, affiliates or
Subcustodians. Instructions, including standing instructions, may be issued with
respect to such contracts but the Bank may establish rules or limitations
concerning any foreign exchange facility made available. In all cases where the
Bank, its subsidiaries, affiliates or Subcustodians enter into a foreign
exchange contract related to Accounts, the terms and conditions of the then
current foreign exchange contract of the Bank, its subsidiary, affiliate or
Subcustodian and, to the extent not inconsistent, this Agreement shall apply to
such transaction.
(b) Certification of Residency, etc. The Customer certifies that it is a
--------------------------------
resident of the United States and agrees to notify the Bank of any changes in
residency. The Bank may rely upon this certification or the certification of
such other facts as may be required to administer the Bank's
8
<PAGE>
obligations under this Agreement. The Customer will indemnify the Bank against
all losses, liability, claims or demands arising directly or indirectly from any
such certifications.
(c) Access to Records. The Bank shall allow the Customer's independent
------------------
public accountant reasonable access to the records of the Bank relating to the
Assets as is required in connection with their examination of books and records
pertaining to the Customer's affairs. Subject to restrictions under applicable
law, the Bank shall also obtain an undertaking to permit the Customer's
independent public accountants reasonable access to the records of any
Subcustodian which has physical possession of any Assets as may be required in
connection with the examination of the Customer's books and records.
(d) Governing Law; Successors and Assigns. This Agreement shall be
--------------------------------------
governed by the laws of the State of New York and shall not be assignable by
either party, but shall bind the successors in interest of the Customer and the
Bank.
(e) Entire Agreement; Applicable Riders. Customer represents that the
------------------------------------
Assets deposited in the Accounts are (Check one):
____ Employee Benefit Plan or other assets subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA");
x Mutual Fund assets subject to certain Securities and Exchange
-----
Commission ("SEC") rules
and regulations;
____ Neither of the above.
This Agreement consists exclusively of this document together with Schedule
A, Exhibits I - _______ and the following Rider(s) [Check applicable
rider(s)]:
____ ERISA
x MUTUAL FUND
----
x PROXY VOTING
----
____ SPECIAL TERMS AND CONDITIONS
There are no other provisions of this Agreement and this Agreement
supersedes any other agreements, whether written or oral, between the parties.
Any amendment to this Agreement must be in writing, executed by both parties.
(f) Severability. In the event that one or more provisions of this
-------------
Agreement are held invalid, illegal or enforceable in any respect on the basis
of any particular circumstances or in any jurisdiction, the validity, legality
and enforceability of such provision or provisions under other circumstances or
in other jurisdictions and of the remaining provisions will not in any way be
affected or impaired.
(g) Waiver. Except as otherwise provided in this Agreement, no failure or
-------
delay on the part of either party in exercising any power or right under this
Agreement operates as a waiver, nor does any single or partial exercise of any
power or right preclude any other or further exercise, or the exercise of any
other power or right. No waiver by a party of any provision of this Agreement,
or
9
<PAGE>
waiver of any breach or default, is effective unless in writing and signed by
the party against whom the waiver is to be enforced.
(h) Notices. All notices under this Agreement shall be effective when
--------
actually received. Any notices or other communications which may be required
under this Agreement are to be sent to the parties at the following addresses or
such other addresses as may subsequently be given to the other party in writing:
Bank: The Chase Manhattan Bank
4 Chase MetroTech Center
Brooklyn, NY 11245
Attention: Global Custody Division
or telex: __________________________________
Customer: VAN ECK FUNDS
or telex: __________________________________
(i) Termination. This Agreement may be terminated by the Customer or the
------------
Bank by giving sixty (60) days written notice to the other, provided that such
notice to the Bank shall specify the names of the persons to whom the Bank shall
deliver the Assets in the Accounts. If notice of termination is given by the
Bank, the Customer shall, within sixty (60) days (or such other amount of days
as is contemplated by the Extension Notice) following receipt of the notice,
deliver to the Bank Instructions specifying the names of the persons to whom the
Bank shall deliver the Assets. In either case the Bank will deliver the Assets
to the persons so specified, after deducting any amounts which the Bank
determines in good faith to be owed to it under Section 13. If within sixty (60)
days following receipt of a notice of termination by the Bank, the Bank does not
receive Instructions from the Customer specifying the names of the persons to
whom the Bank shall deliver the Assets, the Bank, at its election, may deliver
the Assets to a bank or trust company doing business in the State of New York to
be held and disposed of pursuant to the provisions of this Agreement, or to
Authorized Persons, or may continue to hold the Assets until Instructions are
provided to the Bank; provided that, where the Bank is the terminating party and
the Bank had not notified the Customer that termination was for breach of this
Agreement by the Customer, such sixty (60) day period shall be extended for an
additional period as requested by Customer of up to one hundred and twenty (120)
days.
(j) Nonrecourse Obligations. A copy of the Master Trust Agreement, as
-----------------------
amended from time to time, of the Customer is on file with Secretary of State of
Massachusetts, and notice is hereby given that this Agreement is not executed on
behalf of the Trustees of the Customer as individuals, and the obligations of
this Agreement are not binding upon any of the Trustees, officers, or
shareholders of the Customer individually, but are binding only upon the assets
and property of the Customer. The Bank agrees that no shareholder, Trustee or
officer of the Customer may be held personally liable or responsible for any
obligations of the Customer arising hereunder.
(k) Several Obligations of the Portfolios. The Customer is series company
-------------------------------------
with multiple portfolios and has entered into this Agreement on behalf of those
portfolios identified in Exhibit __
10
<PAGE>
hereto, as amended from time to time on notice to the Bank (each a "Portfolio").
With respect to any obligation of the Customer on behalf of any Portfolio
arising hereunder, the Bank shall look for payment or satisfaction of such
obligation solely to the assets and property of the Portfolio to which such
obligation relates as though the Customer had separately contracted with the
Bank by separate written instrument with respect to each Portfolio. In addition
this Agreement may be terminated with respect to one or more Portfolios in
accordance with the terms of paragraph (i) hereof.
VAN ECK FUNDS
By:____________________________________________
Title:
Date:
THE CHASE MANHATTAN BANK
By:____________________________________________
Title:
Date:
11
<PAGE>
STATE OF )
: ss.
COUNTY OF )
On this day of , 1996, before me personally came
, to me known, who being by me duly sworn, did depose and say that
he/she resides in at, that
he/she is of, the entity
described in and which executed the foregoing instrument; that he/she knows the
seal of said entity, that the seal affixed to said instrument is such seal, that
it was so affixed by order of said entity, and that he/she signed his/her name
thereto by like order.
Sworn to before me this ______________
day of ______________, 1996.
Notary
<PAGE>
STATE OF NEW YORK )
: ss.
COUNTY OF NEW YORK )
On this day of , 1996, before me personally came
,to me known, who being by me duly sworn,
did depose and say that he/she resides in
at; that he/she is a Vice President of THE CHASE MANHATTAN BANK, the
corporation described in and which executed the foregoing instrument; that
he/she knows the seal of said corporation, that the seal affixed to said
instrument is such corporate seal, that it was so affixed by order of the Board
of Directors of said corporation, and that he/she signed his/her name thereto by
like order.
Sworn to before me this ___________________
day of ________________, 1996
Notary
<PAGE>
Mutual Fund Rider to Global Custody Agreement
Between The Chase Manhattan Bank and
VAN ECK FUNDS
effective August , 1996
Customer represents that the Assets being placed in the Bank's custody are
subject to the Investment Company Act of 1940 (the Act), as the same may be
amended from time to time.
Except to the extent that the Bank has specifically agreed to comply with a
condition of a rule, regulation, interpretation promulgated by or under the
authority of the SEC or the Exemptive Order applicable to accounts of this
nature issued to the Bank (Investment Company Act of 1940, Release No. 12053,
November 20, 1981), as amended, or unless the Bank has otherwise specifically
agreed, the Customer shall be solely responsible to assure that the maintenance
of Assets under this Agreement complies with such rules, regulations,
interpretations or exemptive order promulgated by or under the authority of the
Securities Exchange Commission.
The following modifications are made to the Agreement:
Section 3. Subcustodians and Securities Depositories.
------------------------------------------
Add the following language to the end of Section 3:
The terms Subcustodian and securities depositories as used in this
Agreement shall mean a branch of a qualified U.S. bank, an eligible foreign
custodian or an eligible foreign securities depository, which are further
defined as follows:
(a) "qualified U.S. Bank" shall mean a qualified U.S. bank as defined in
Rule 17f-5 under the Investment Company Act of 1940;
(b) "eligible foreign custodian" shall mean (i) a banking institution or
trust company incorporated or organized under the laws of a country other
than the United States that is regulated as such by that country's
government or an agency thereof and that has shareholders' equity in excess
of $200 million in U.S. currency (or a foreign currency equivalent
thereof), (ii) a majority owned direct or indirect subsidiary of a
qualified U.S. bank or bank holding company that is incorporated or
organized under the laws of a country other than the United States and that
has shareholders' equity in excess of $100 million in U.S. currency (or a
foreign currency equivalent thereof) (iii) a banking institution or trust
company incorporated or organized under the laws of a country other than
the United States or a majority owned direct or indirect subsidiary of a
qualified U.S. bank or bank holding company that is incorporated or
organized under the laws of a country other than the United States which
has such other qualifications as shall be specified in Instructions and
approved by the Bank; or (iv) any other entity that shall have been so
qualified by exemptive order, rule or other appropriate action of the SEC;
and
(c) "eligible foreign securities depository" shall mean a securities
depository or clearing agency, incorporated or organized under the laws of
a country other than the United States, which operates (i) the central
system for handling securities or equivalent book-entries in that country,
or (ii) a transnational system for the central handling of securities or
equivalent book-entries.
<PAGE>
The Customer represents that its Board of Directors has approved each of
the Subcustodians listed in Schedule A to this Agreement and the terms of the
subcustody agreements between the Bank and each Subcustodian, which are attached
as Exhibits I through _____ of Schedule A, and further represents that its Board
has determined that the use of each Subcustodian and the terms of each
subcustody agreement are consistent with the best interests of the Fund(s) and
its (their) shareholders. The Bank will supply the Customer with any amendment
to Schedule A for approval. The Customer has supplied or will supply the Bank
with certified copies of its Board of Directors resolution(s) with respect to
the foregoing prior to placing Assets with any Subcustodian so approved.
Section 11. Instructions.
-------------
Add the following language to the end of Section 11:
Deposit Account Payments and Custody Account Transactions made pursuant to
Section 5 and 6 of this Agreement may be made only for the purposes listed
below. Instructions must specify the purpose for which any transaction is
to be made and Customer shall be solely responsible to assure that
Instructions are in accord with any limitations or restrictions applicable
to the Customer by law or as may be set forth in its prospectus.
(a) In connection with the purchase or sale of Securities at prices as
confirmed by Instructions;
(b) When Securities are called, redeemed or retired, or otherwise become
payable;
(c) In exchange for or upon conversion into other securities alone or
other securities and cash pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment;
(d) Upon conversion of Securities pursuant to their terms into other
securities;
(e) Upon exercise of subscription, purchase or other similar rights
represented by Securities;
(f) For the payment of interest, taxes, management or supervisory fees,
distributions or operating expenses;
(g) In connection with any borrowings by the Customer requiring a pledge
of Securities, but only against receipt of amounts borrowed;
(h) In connection with any loans, but only against receipt of adequate
collateral as specified in Instructions which shall reflect any
restrictions applicable to the Customer;
(i) For the purpose of redeeming shares of the capital stock of the
Customer and the delivery to, or the crediting to the account of, the Bank,
its Subcustodian or the Customer's transfer agent, such shares to be
purchased or redeemed;
(j) For the purpose of redeeming in kind shares of the Customer against
delivery to the Bank, its Subcustodian or the Customer's transfer agent of
such shares to be so redeemed;
(k) For delivery in accordance with the provisions of any agreement among
the Customer, the Bank and a broker-dealer registered under the Securities
Exchange Act of 1934 (the "Exchange Act") and a member of The National
Association of Securities Dealers, Inc. ("NASD"), relating to compliance
with the rules of The Options Clearing Corporation and of any registered
national securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in connection with
transactions by the Customer;
2
<PAGE>
(l) For release of Securities to designated brokers under covered call
options, provided, however, that such Securities shall be released only
upon payment to the Bank of monies for the premium due and a receipt for
the Securities which are to be held in escrow. Upon exercise of the option,
or at expiration, the Bank will receive from brokers the Securities
previously deposited. The Bank will act strictly in accordance with
Instructions in the delivery of Securities to be held in escrow and will
have no responsibility or liability for any such Securities which are not
returned promptly when due other than to make proper request for such
return;
(m) For spot or forward foreign exchange transactions to facilitate
security trading, receipt of income from Securities or related
transactions;
(n) For other proper purposes as may be specified in Instructions issued
by an officer of the Customer which shall include a statement of the
purpose for which the delivery or payment is to be made, the amount of the
payment or specific Securities to be delivered, the name of the person or
persons to whom delivery or payment is to be made, and a certification that
the purpose is a proper purpose under the instruments governing the
Customer; and
(o) Upon the termination of this Agreement as set forth in Section 14(i).
Section 12. Standard of Care; Liabilities.
------------------------------
Add the following subsection (c) to Section 12:
(c) The Bank hereby warrants to the Customer that in its opinion, after
due inquiry, the established procedures to be followed by each of its
branches, each branch of a qualified U.S. bank, each eligible foreign
custodian and each eligible foreign securities depository holding the
Customer's Securities pursuant to this Agreement afford protection for such
Securities at least equal to that afforded by the Bank's established
procedures with respect to similar securities held by the Bank and its
securities depositories in New York.
Section 14. Access to Records.
------------------
Add the following language to the end of Section 14(c):
-------------------------------------------------------
Upon reasonable request from the Customer, the Bank shall furnish the
Customer such reports (or portions thereof) of the Bank's system of
internal accounting controls applicable to the Bank's duties under this
Agreement. The Bank shall endeavor to obtain and furnish the Customer with
such similar reports as it may reasonably request with respect to each
Subcustodian and securities depository holding the Customer's assets.
3
<PAGE>
GLOBAL PROXY SERVICE RIDER
To Global Custody Agreement
Between
THE CHASE MANHATTAN BANK
AND
VAN ECK FUNDS (the "Customer")
dated August , 1996.
1. Global Proxy Services (the "Services") shall be provided for the countries
listed in the procedures and guidelines ("Procedures") furnished to
Customer, as the same may be amended by the Bank from time to time on prior
notice to Customer. The Procedures are incorporated by reference herein and
form a part of this Rider.
2. The Service shall consist of those elements as set forth in the Procedures,
and shall include (a) notifications ("Notifications") by the Bank to
Customer of the dates of pending shareholder meetings, resolutions to be
voted upon and the return dates as may be received by the Bank or provided
to the Bank by its Subcustodians or third parties, and (b) voting by the
Bank of proxies based on Customer Directions. Original proxy materials or
copies thereof shall not be provided. Notifications shall generally be in
English and, where necessary, shall be summarized and translated from such
non-English materials as have been made available to the Bank or its
subcustodian. In this respect the Bank's only obligation is to provide
information from sources it believes to be reliable and/or to provide
materials summarized and/or translated in good faith. the Bank reserves the
right to provide Notifications, or parts thereof, in the language received.
Upon reasonable advance request by Customer, backup information relative to
Notifications, such as annual reports, explanatory material concerning
resolutions, management recommendations or other material relevant to the
exercise of proxy voting rights shall be provided as available, but without
translation.
3. While the Bank shall attempt to provide accurate and complete
Notifications, whether or not translated, the Bank shall not be liable for
any losses or other consequences that may result from reliance by Customer
upon Notifications where the Bank prepared the same in good faith.
4 Notwithstanding the fact that the Bank may act in a fiduciary capacity with
respect to Customer under other agreements or otherwise under the
Agreement, in performing Services the Bank shall be acting solely as the
agent of Customer, and shall not exercise any discretion with regard to
such Services.
5. Proxy voting may be precluded or restricted in a variety of circumstances,
including, without limitation, where the relevant Financial Assets are: (i)
on loan; (ii) at registrar for registration or reregistration; (iii) the
subject of a conversion or other corporate action; (iv) not held in a name
subject to the control of the Bank or its subcustodian or are otherwise
held in a manner which precludes voting; (v) not capable of being voted on
account of local market regulations or practices or restrictions by the
issuer; or (vi) held in a margin or collateral account.
6 Customer acknowledges that in certain countries the Bank may be unable to
vote individual proxies but shall only be able to vote proxies on a net
basis (e.g., a net yes or no vote given the voting instructions received
---
from all customers).
<PAGE>
7. Customer shall not make any use of the information provided hereunder,
except in connection with the funds or plans covered by this Agreement, and
shall in no event sell, license, give or otherwise make the information
provided hereunder available, to any third party, and shall not directly or
indirectly compete with the Bank or diminish the market for the Services by
provision of such information, in whole or in part, for compensation or
otherwise, to any third party.
8. The names of Authorized Persons for Services shall be furnished to the Bank
in accordance with (S)10 of the Agreement. Fees for the Services shall be
agreed as set forth in (S)13 of the Agreement.
2
<PAGE>
DOMESTIC AND GLOBAL
SPECIAL TERMS AND CONDITIONS RIDER
----------------------------------
Domestic Corporate Actions and Proxies
- --------------------------------------
With respect to domestic U.S. and Canadian Securities (the latter if held in
DTC), the following provisions will apply rather than the pertinent provisions
of Section 8 of the Agreement and the Global Proxy Service rider:
Bank shall send to Customer or the Authorized Person for a Securities
Account, such proxies (signed in blank, if issued in the name of Bank's nominee
or the nominee of a central depository) and communications with respect to
Financial Assets in the Securities Account as call for voting or relate to legal
proceedings within a reasonable time after sufficient copies are received by
Bank for forwarding to its customers. In addition, Bank shall follow coupon
payments, redemptions, exchanges or similar matters with respect to Financial
Assets in the Securities Account and advise Customer or the Authorized Person
for such Account of rights issued, tender offers or any other discretionary
rights with respect to such Financial Assets, in each case, of which Bank has
received notice from the issuer of the Financial Assets, or as to which notice
is published in publications routinely utilized by Bank for this purpose.
<PAGE>
AMENDMENT, dated ________, 1996 to the ___________1996 custody agreement
("Agreement"), between VAN ECK FUNDS ("Customer"), having a place of business at
________________, and The Chase Manhattan Bank ("Bank"), having a place of
business at 270 Park Ave., New York, N.Y. 10017
It is hereby agreed as follows:
Section 1. Except as modified hereby, the Agreement is confirmed in all
respects. Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Agreement.
Section 2. The Agreement is amended as follows by adding the following as
new (S)15:
"(a) "CMBI" shall mean Chase Manhattan Bank International, an
indirect wholly-owned subsidiary of Bank, located in Moscow, Russia, and any
nominee companies appointed by it.
"(b) "International Financial Institution" shall mean any bank in the
top 1,000 (together with their affiliated companies) as measured by "Tier 1"
capital or any broker/dealer in the top 100 as measured by capital.
"(c) "Negligence" shall mean the failure to exercise "Reasonable
Care".
"(d) "No-Action Letter" shall mean the response of the Securities and
Exchange Commission's Office of Chief Counsel of Investment Management, dated
April 18, 1995, in respect of the Templeton Russia Fund, Inc. (SEC Ref. No. 95-
151-CC, File No. 811-8788) providing "no-action" relief under (S)17(f) of The
Investment Company Act of 1940, as amended, and SEC Rule 17f-5 thereunder, in
connection with custody of such Templeton Russia Fund, Inc.'s investments in
Russian Securities.
"(e) "Reasonable Care" shall mean the use of reasonable custodial
practices under the applicable circumstances as measured by the custodial
practices then prevailing in Russia of International Financial Institutions
acting as custodians for their institutional investor clients in Russia.
"(f) "Registrar Company" shall mean any entity providing share
registration services to an issuer of Russian Securities.
"(g) "Registrar Contract" shall mean a contract between CMBI and a
Registrar Company (and as the same may be amended from time to time) containing,
inter alia, the contractual provisions described at paragraphs (a)-(e) on pps.
- ----- ----
5-6 of the No-Action Letter.
"(h) "Russian Security" shall mean a Security issued by a Russian
issuer.
"(i) "Share Extract" shall mean: (i) an extract of its share
registration books issued by a Registrar Company indicating an investor's
ownership of a security; and (ii) a form prepared by CMBI or its agent in those
cases where a Registrar Company is unwilling to issue a Share Extract.
Section 3. Section 6(a) of the Agreement is amended by adding the
following at the end thereof: "With respect to Russia, payment for Russian
Securities shall not be made prior to the issuance and receipt of the Share
Extract relating to such Russian Security. Delivery of Russian Securities may be
made in accordance with the customary or established securities trading or
securities processing practices and procedures in Russia. Delivery of Russian
Securities may also be made in any manner specifically required by Instructions
acceptable to the Bank. Customer shall promptly supply such transaction and
settlement information as may be requested by Bank or CMBI in connection with
particular transactions."
Section 4. Section 8 of the Agreement is amended by adding a new paragraph
to the end thereof as follows: "It is understood and agreed that Bank need only
use its reasonable efforts with respect to
<PAGE>
performing the functions described in this (S)8 with respect to Russian
Securities, it being understood that proxy voting services are not available."
Section 5. Section 12(a)(i) of the Agreement is amended with respect to
Russian custody by deleting the phrase "reasonable care" wherever it appears and
substituting, in lieu thereof, the phrase "Reasonable Care".
Section 6. Section 12(a)(i) of the Agreement is further amended with
respect to Russian custody by inserting the following at the end of the first
sentence thereof: "; provided that, with respect to Russian Securities, Bank's
responsibilities shall be limited to safekeeping of relevant Share Extracts."
Section 7. Section 12(a)(i) of the Agreement is further amended with
respect to Russian custody by inserting the following after the second sentence
thereof: "Delegation by Bank to CMBI shall not relieve Bank of any
responsibility to Customer for any loss due to such delegation, and Bank shall
be liable for any loss or claim arising out of or in connection with the
performance by CMBI of such delegated duties to the same extent as if Bank had
itself provided the custody services hereunder. In connection with the
foregoing, neither Bank nor CMBI shall assume responsibility for, and neither
shall be liable for, any action or inaction of any Registrar Company and no
Registrar Company shall be, or shall be deemed to be, Bank, CMBI, a
Subcustodian, a securities depository or the employee, agent or personnel of any
of the foregoing. To the extent that CMBI employs agents to perform any of the
functions to be performed by Bank or CMBI with respect to Russian Securities,
neither Bank nor CMBI shall be responsible for any act, omission, default or for
the solvency of any such agent unless the appointment of such agent was made
with Negligence or in bad faith, except that where Bank or CMBI uses (i) an
affiliated nominee or (ii) an agent to perform the share registration or share
confirmation functions described in paragraphs (a)-(e) on pps. 5-6 of the No-
Action Letter, and, to the extent applicable to CMBI, the share registration
functions described on pps. 2-3 of the No-Action Letter, Bank and CMBI shall be
liable to Customer as if CMBI were responsible for performing such services
itself."
Section 8. Section 12(a)(ii) is amended with respect to Russian custody by
deleting the word "negligently" and substituting, in lieu thereof, the word
"Negligently".
Section 9. Section 12(a)(iii) is amended with respect to Russian custody
by deleting the word "negligence" and substituting, in lieu thereof, the word
"Negligence".
Section 10. Add a new Section 16 to the Agreement as follows:
"(a) Bank will advise Customer (and will update such advice from time
to time as changes occur) of those Registrar Companies with which CMBI has
entered into a Registrar Contract. Bank shall cause CMBI both to monitor each
Registrar Company and to promptly advise Customer and its investment advisor
when CMBI has actual knowledge of the occurrence of any one or more of the
events described in paragraphs (i)-(v) on pps. 8-9 of the No-Action Letter with
respect to a Registrar Company that serves in that capacity for any issuer the
shares of which are held by Customer.
"(b) Where Customer is considering investing in the Russian
Securities of an issuer as to which CMBI does not have a Registrar Contract with
the issuer's Registrar Company, Customer may request that Bank ask that CMBI
both consider whether it would be willing to attempt to enter into such a
Registrar Contract and to advise Customer of its willingness to do so. Where
CMBI has agreed to make such an attempt, Bank will advise Customer of the
occurrence of any one or more of the events described in paragraphs (i)-(iv) on
pps. 8-9 of the No-Action Letter of which CMBI has actual knowledge.
(c) Where Customer is considering investing in the Russian Securities
of an issuer as to which CMBI has a Registrar Contract with the issuer's
Registrar Company, Customer may advise Bank of its interest in investing in such
issuer and, in such event, Bank will advise Customer of the occurrence of any
one or more of the events described in paragraphs (i)-(v) on pps. 8-9 of the No-
Action Letter of which CMBI has actual knowledge."
2
<PAGE>
Section 11. Add a new Section 17 to the Agreement as follows: "Customer
shall pay for and hold Bank and CMBI harmless from any liability or loss
resulting from the imposition or assessment of any taxes (including, but not
limited to, state, stamp and other duties) or other governmental charges, and
any related expenses incurred by Bank, CMBI or their respective agents with
respect to income on Customer's Russian Securities.
Section 12. Add a new Section 18 to the Agreement as follows: "Customer
acknowledges and agrees that CMBI may not be able, in given cases and despite
its reasonable efforts, to obtain a Share Extract from a Registrar Company and
CMBI shall not be liable in any such event including with respect to any losses
resulting from such failure."
Section 13. Add a new Section 19 to the Agreement as follows: "Customer
acknowledges that it has received, reviewed and understands Bank's market report
for Russia, including, but not limited to, the risks described therein."
Section 14. Add a new Section 20 to the Agreement as follows: "Subject to
the cooperation of a Registrar Company, for at least the first two years
following CMBI's first use of a Registrar Company, Bank shall cause CMBI to
conduct share confirmations on at least a quarterly basis, although thereafter
confirmations may be conducted on a less frequent basis if Customer's Board of
Directors, in consultation with CMBI, determines it to be appropriate."
Section 15. Add a new Section 21 to the Agreement as follows: "Bank shall
cause CMBI to prepare for distribution to Customer's Board of Directors a
quarterly report identifying: (i) any concerns it has regarding the Russian
share registration system that should be brought to the attention of the Board
of Directors; and (ii) the steps CMBI has taken during the reporting period to
ensure that Customer's interests continue to be appropriately recorded."
Section 16. Add a new Section 22 to the Agreement as follows: "Except as
provided in new (S)16(b), the services to be provided by Bank hereunder will be
provided only in relation to Russian Securities for which CMBI has entered into
a Registrar Contract with the relevant Registrar Company."
*********************
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
VAN ECK FUNDS THE CHASE MANHATTAN BANK
By: ___________________ By: _________________
Name: Name:
Title: Title:
Date: Date:
3
<PAGE>
PROCEDURAL AGREEMENT
AMONG MERRILL LYNCH FUTURES INC.
World Income Fund Series of Van Eck Funds
and Citibank
WHEREAS the undersigned World Income Fund Series of Van Eck Funds
("Customer") has opened a trading account with the undersigned Merrill Lynch
Futures Inc. ("Merrill"), a registered futures commission merchant, for the
purpose of trading futures contracts traded on duly registered boards of trade,
Including options on such futures contracts ("Contracts") through said firm; and
WHEREAS, in connection with the opening of the trading account, Customer
and Merrill have entered into a Customer Agreement which requires Customer to
deposit as collateral the initial margin (including any additional original
margin requirements for Customer's short option positions) ("Initial Margin")
with respect to each Contract as required by the rules and regulations of the
Chicago Mercantile Exchange, the Chicago Board of Trade, the Commodity Exchange,
and such other exchanges on which Merrill may effect or cause to be effected
transactions as broker for Customer; and
WHEREAS Customer, Merrill, and the undersigned Citibank ("Custodian") have
entered into a Safekeeping Agreement establishing an account entitled "Merrill
Lynch Futures Inc. Customer Funds for the benefit of World Income Fund Series of
Van Eck Funds (Customer Segregated Account)" pursuant to which Custodian agrees
to maintain a Safekeeping Account (which for its general conditions is governed
by the Custodian Agreement between the Custodian and Customer) for the custody
of the Initial Margin which Customer is required to deposit and maintain, and
<PAGE>
WHEREAS the Customer Agreement and the Safekeeping Agreement both provide
that the rights and duties of the parties thereto are subject to the provisions
of this Agreement.
NOW, THEREFORE, IT IS AGREED THAT:
1. Customer shall deposit and maintain as collateral in the Safekeeping
Account such Initial Margin as shall be required from time to time by the
exchange on which transactions are effected or caused to be effected by Merrill
as broker for Customer. Customer may deposit amounts in excess of such
requirements. The designation "Customer Funds" in the account title is intended
to indicate the status of the account under the Commodity Exchange Act and
Commodity Futures Trading Commission regulations; however, the provisions of
this agreement shall be controlling as to the rights of the parties in the
collateral deposited in the account.
2. The Initial Margin deposited and maintained in the Safekeeping
Account, created pursuant to the Safekeeping Agreement, shall be in the form, as
Customer elects, of cash or of eligible securities of the U.S. Government
(valued at the current market value less 10% of the principal value thereof) or
of a combination thereof. Customer may substitute U.S. Government securities of
equal or greater value upon prior approval by Merrill, which approval shall not
be unreasonably withheld. Upon receipt of such substitute securities, Merrill
agrees to give Instructions to Custodian to release from the Safekeeping Account
cash or eligible U.S. Government securities of an equal value, or such lesser
amount as may be directed by Customer. Any separate interest payments thereon
shall be automatically credited by Custodian in Federal funds to such demand
deposit accounts designated in instructions from
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<PAGE>
Customer on the date that such interest becomes due and payable unless notice
has been provided to Custodian pursuant to Paragraph 5 (a) below, and such
interest is required to meet additional Variation Margin requirements in
accordance with the procedure provided in Paragraphs 5 (a), (b) and (c). Amounts
due on securities which mature or are redeemed will be credited to the
Safekeeping Account in Federal funds on the date such amounts are received.
Amounts due to Customer as a result of the variation in value of Customer's
short option positions shall be credited to Customer by reducing the amount of
the collateral required to be maintained in the Safekeeping Account.
3. With respect to the deposit of Initial Margin, Custodian shall be
directed by Customer's custodian order to segregate specified assets in the
Safekeeping Account, and Custodian shall promptly provide Merrill and Customer
with a written confirmation of each transfer into or out of the Safekeeping
Account.
4. Withdrawals of Initial Margin from the Safekeeping Account shall be
effected upon receipt by the Custodian of Customer's custodian order and
Merrill's prior written verification of such withdrawal. Merrill shall, upon
request of the Customer, inform Customer of the amount of any excess Initial
Margin in the Safekeeping Account.
5. Merrill shall have access to the collateral only in accordance with
the following, and only at such times as conditions set forth hereafter are
complied with:
(a) If notice by Merrill is given to Customer that additional margin
is required by Merrill as broker for the Customer due to variation in the
value of one or more futures contracts held in the trading account or
otherwise pursuant to the Customer Agreement
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<PAGE>
("Variation Margin"), and such notice is given prior to 9:00 A.M. New York
time on a day on which the Customer is open for business, which Variation
Margin shall first have been satisfied from any amounts currently credited
to the Customer's trading account with Merrill in connection with which the
Variation Margin is required, the Customer shall transfer to Merrill such
Variation Margin not later than 3:00 P.M. on the same day. If Notice by
Merrill to the Customer is given of the need for Variation Margin
subsequent to 9:00 A.M. but prior to 4:00 P.M. New York time on a day on
which the Customer is open for business, the Customer shall provide such
Variation Margin to Merrill not later than 10:30 A.M. New York time on the
next succeeding day on which the Customer is open for business. Notice by
Merrill to the Customer of the receipt of Variation Margin shall be given
promptly.
(b) If Merrill has not received the requested Variation Margin within
the time period as provided in Paragraph 5(a), Notice by Merrill to
Customer of the failure to receive the Variation Margin shall be given
immediately.
(c) If Merrill does not receive the Variation Margin in accordance
with Paragraph 5(a), Merrill may give (i) Notice to Custodian of the
Customer's failure to provide Variation Margin and the amount of Variation
Margin required; and (ii) Notice to the Customer that such Notice has been
given to Custodian. Promptly upon receipt by Custodian of such Notice but
without prejudice to any rights of Merrill hereunder, Custodian shall give
Notice to the Customer of its receipt of such Notice.
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<PAGE>
(d) In the event Customer has failed to transfer the required
Variation Margin to Merrill during the time period as provided in Paragraph
5 (a), Merrill may give Notice to Custodian of the Customer's failure to
provide Variation Margin and that all conditions precedent to Merrill's
right to direct disposition hereunder have been satisfied, and may give
instructions to Custodian (i) to transfer eligible U.S. Government
securities to Merrill, (i) to sell at the prevailing market price such of
the collateral in the Safekeeping Account relating to the trading account
in which the Variation Margin is required, in each case as necessary to
provide for payment to Merrill of the amount of Variation Margin that
Merrill shall have specified in the Notice, or (iii) with respect to
collateral in the form of cash, Merrill may give instructions to Custodian
to immediately transfer cash in the amount of the Variation Margin that
Merrill shall have specified in the Notice from such Safekeeping Account to
the account of Merrill. Custodian shall promptly give Notice to Customer of
its receipt of such instructions from Merrill and, upon taking any action
pursuant to such instructions, shall immediately give Notice to Customer of
such action. Subject to the notice provisions of Paragraph 5 set forth
above, which include Merrill giving Custodian a statement that all
conditions precedent to Merrill's right to direct disposition hereunder
have been satisfied, Custodian shall take instructions solely from Merrill
with respect to the sale of securities and/or the transfer of cash to
Merrill. In the event such statement is not given in writing, Merrill will
confirm the statement thereafter in writing to Custodian by the most
expeditious means which may be
-5-
<PAGE>
by telecopy. In the event that Merrill receives eligible U.S. Government
securities pursuant to this Paragraph 5(d), it shall have the right to sell
or otherwise dispose of such securities and shall remit to Customer any
proceeds of such sale or disposition in excess of the amount of Variation
Margin specified in instructions from Merrill to Custodian.
(e) Custodian shall retain in the Safekeeping Account any collateral
in excess of the amount of Variation Margin specified in instructions from
Merrill to Custodian including any proceeds from the sale of securities in
excess of such amount. Custodian shall give consideration to any timely
request by Customer with respect to particular securities to be sold and
shall sell any securities in the principal market for such securities or,
in the event such principal market is closed, sell them in a manner
commercially reasonable for such securities.
6. Merrill shall promptly credit to the trading account of Customer any
Variation Margin resulting from the variation in value of one or more Contracts
purchased or sold by Customer in accordance with the rules of any contract
market, exchange or board of trade on which Contract transactions are effected
by Merrill for Customer. At Customer's direction, Merrill shall transfer trading
account balances to Customer in Federal funds to the Custodian or such bank
account in Customer's name as Customer shall otherwise direct. Customer may give
such directions to Merrill by telephone, confirmed thereafter in writing.
7. Custodian shall act only upon receipt of instructions from Merrill
regarding release of collateral. Custodian shall indemnify Customer from any
loss incurred by reasons of Custodian's negligence or
-6-
<PAGE>
willful misconduct in acting on those instructions; provided that the
instructions are given in a timely fashion and comply in all other respects with
the provisions of this Agreement.
8. Unless otherwise provided, all notices or other communications called
for by this Agreement shall be given by the most expeditious means possible and
may be given by telephone. If a notice Is not given in writing, a written
confirmation shall be provided to appropriate parties within a reasonable time
after the notice is given.
9. Any and all expenses of. establishing, maintaining, or terminating the
Safekeeping Account, including without limitation any and all expenses incurred
by Custodian in connection with the Safekeeping Account, shall be borne by
Customer.
10. This Agreement and the Safekeeping Account, except as provided in the
Safekeeping Agreement, shall terminate only upon written consent of Customer and
Merrill, neither of which shall unreasonably withhold their consent, at which
time Custodian shall transfer to Customer, or to a substitute custodian
designated by Customer, all property held in the Safekeeping Account.
11. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of the State of
New York.
12. Except as specifically provided herein, this Agreement does not in any
way affect any other agreements entered into among the parties hereto and any
actions taken or omitted by any party hereunder shall not affect any rights of
any other party hereunder.
13. No amendment of this Agreement shall be effective unless in writing
and signed by persons thereunto duly authorized.
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<PAGE>
14. Written communications hereunder shall be, except as otherwise
required hereunder, hand-delivered or mailed first class postage prepaid, except
that written notice of termination shall be sent by certified mail addressed:
(a) if to Custodian, to:
Citibank
One CitiCorp Center
New York, New York 10043
Attention: Deia Capella
-8-
<PAGE>
(b) (1) if to Customer, to:
World Income Fund Series of Van Eck Funds
122 East 42nd Street, 42nd Floor
New York, New York 10168
Attention: Shirley L. Osborne;
(2) with copies to:
World Income Fund Series of Van Eck Funds
122 East 42nd Street, 42nd Floor,
New York, New York 10168
Attention: Michael Doorley
(c) if to Merrill, to:
New York Futures Sales Office
One Liberty Plaza, 21st Floor
New York, New York 10080
Attention: Mr. John Emptage;
15. This Agreement is executed on behalf of the Trustees of the Fund as
Trustees and not individually,. and the obligations of this Agreement are not
binding upon any of the Trustees but are binding only upon the assets and
property of the Customer.
World Income Fund Series of Van Eck Funds
By: /s/ Michael Doorley
Authorized Signature
Date: 8/5/87 Title: Vice President
Merrill Lynch Futures Inc.
By: /s/ John Emptage
Authorized Signature
Date: 8/12/87 Title: Vice President
Citibank
By: /s/ Mark C. Aprahamian
Authorized Signature
Date: 8/5/87 Title: Vice President
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<PAGE>
CUSTOMER AGREEMENT BETWEEN
MERRILL LYNCH FUTURES INC. AND
World Income Fund Series of Van Eck Funds
In consideration of acceptance by Merrill Lynch Futures Inc. ("Merrill") of
an account for World Income Fund Series of Van Eck Funds ("Customer") introduced
by Merrill Lynch, Pierce, Fenner & Smith Inc., Merrill and Customer agree as
follows:
1. Customer authorizes Merrill to purchase and sell futures contracts and
option contracts thereon ("Contracts") traded on duly registered boards of trade
for Customer's account in accordance with Customer's oral or written
instructions from persons designated by Customer by resolution of Customer's
Board of Directors, Managing Partner, Board of Trustees, or person(s)
responsible for the management of Customer's account, duly certified and
delivered to Merrill. Customer hereby waives any defense that any such
instruction was not in writing as may be required by the Statute of Frauds or
any other law, rule or regulation.
2. Customer shall in connection with Contract transactions pay Merrill
(1) brokerage and commission charges as agreed upon by Merrill and Customer from
time to time, (2) any charges imposed on any transaction undertaken for Customer
by the contract market, exchange or clearinghouse through which it is executed
and any tax or fee imposed on such transactions by any competent authority or
self-regulatory organization, (3) any margin required by Merrill for Customer
due to the variation in value of one or more outstanding Contracts purchased or
sold by Customer ("Variation Margin") in accordance with Paragraph 7 hereof, or
as required by Merrill due to an increase in margin requirements for new or
existing positions, and (4)
<PAGE>
interest and service charges on any Customer deficit balances at the rates
customarily charged by Merrill, together with Merrill's costs and attorney's
fees incurred in collecting such deficit. Such payments shall be made in Federal
funds to Merrill at such address as Merrill may designate.
3. A detailed statement of all transactions for or on the Customer's
behalf shall be furnished to Customer on a daily and a monthly basis. Such
statements shall be conclusive and binding on the Customer unless the Customer
notifies Merrill of any objection within five business days from the day the
Customer receives such statement; provided however that with respect to monthly
statements only the Customer may make such objection within ten business days.
4. Customer shall timely deposit and maintain in the Safekeeping Account
at all times Initial Margin (including any additional original margin
requirements for Customer's short option positions) ("Initial Margin") for
Customer's account in accordance with the Procedural Agreement. Customer shall
timely pay to Merrill the amount of any additional or Variation Margin with
respect to Customer's open positions on Contracts in accordance with the
Procedural Agreement. If, upon notice given by Merrill as set forth in the
Procedural Agreement, Customer fails to provide additional or Variation Margin
or if Customer fails to deposit or maintain in the Safekeeping Account required
Initial Margin, Merrill may without further notice to Customer take any action
set forth in Paragraphs 12 and 14 hereof.
5. Customer shall make timely delivery of or payment for financial
instruments in compliance with the terms of the Contracts purchased or sold by
Customer through Merrill unless such Contracts have been
-2-
<PAGE>
terminated by an offsetting purchase or sale prior to the delivery date.
Customer shall advise Merrill of its intentions with respect to the delivery of
or payment for such financial instruments, and Merrill shall be entitled to
receive appropriate assurances with respect thereto.
6. Customer acknowledges that (a) any trading recommendations and market
or other information communicated to Customer by Merrill are incidental to the
conduct of Merrill's business as a futures commission merchant and do not
constitute an offer to sell or the solicitation of an offer to buy any Contracts
or instrument that is the subject of any Contract; (b) such recommendation and
information, although based upon information obtained from sources believed by
Merrill to be reliable, may be incomplete, may not be verified, and may be
changed without notice to Customer; and (c) Merrill makes no representation,
warranty or guarantee as to the accuracy or completeness of any market or other
information or trading recommendation furnished to Customer. Customer
understands that officers, employees, or affiliates of Merrill may have a
position in, may intend to, and may, buy or sell, Contracts or instruments that
are the subject of Contracts, including Contracts which are the Subject of
information or recommendations furnished to Customer, and that the position or
transactions of any such officer, employee, or affiliate may or may not be
consistent with the recommendations furnished by Merrill to Customer.
7. All transactions by Merrill on Customer's behalf shall be subject to
the applicable constitution, by-laws, rules, regulations, customs, usages,
rulings, and interpretations of the contract market and its clearinghouse on
which such transactions are executed or cleared by Merrill or its agents for
Customer's account, and to all applicable
-3-
<PAGE>
governmental acts and statutes (such as the Commodity Exchange Act) and to rules
and regulations made thereunder; Merrill shall not be liable to Customer as a
result of any action taken by Merrill or its agents to comply with any such
constitution, by-law, rule, regulation, custom, usage, ruling, interpretation,
act, or statute.
8. Merrill shall have no responsibility for delays in the transmission of
orders due to (a) breakdown or failure of transmission or communication
facilities, or (b) any other cause beyond Merrill's control.
9 Merrill shall have no responsibility for compliance by Customer with
any law or regulation governing Customer's conduct as a fiduciary.
10. Merrill shall have no responsibility for compliance by any investment
adviser or commodity trading advisor of Customer with any law or regulation
governing the conduct of such investment adviser or commodity trading advisor as
a fiduciary to Customer.
11. Customer represents that (a) Customer is duly registered under the
Investment Company Act of 1940, as amended, and is validly existing and
empowered to enter into this agreement and to effectuate transactions in
financial futures contracts, and options on futures or cash contracts as
contemplated hereby; (b) Customer has reviewed the registration requirements
pertinent to commodity pool operators and commodity trading advisors of the
Commodity Futures Trading Commission and the National Futures Association in
accordance with the requirements of the Commodity Exchange Act and the
regulations of the Commodity Futures Trading Commission and has determined that
Customer and any investment adviser or commodity trading advisor of Customer are
in compliance with such requirements to the extent applicable.
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<PAGE>
12. In the event that (a) Customer shall be dissolved, become insolvent or
in any other way terminate; (b) fail to deposit or maintain Initial Margin or
make payment of additional or Variation Margin, as set forth in Paragraph 4
hereof; or (c) in the event Merrill reasonably feels that it is necessary for
its protection, after having made reasonable attempts to notify Customer,
Merrill may close out Customer's open Contracts in whole or in part, sell any or
all of Customer's property held by Merrill, buy any securities or other property
for Customer's account, and cancel any outstanding orders and commitments made
by Merrill on behalf of Customer. Subject to Merrill's obligation to use best
efforts to obtain a fair and reasonable price, any such sale, purchase, or
cancellation may be made at Merrill's discretion on the contract or other market
or through the clearinghouse where such business is then transacted without
advertising the same and without notice to Customer, and without prior tender,
demand or call upon Customer. Customer shall remain liable for and shall pay to
Merrill the amount of any deficiency resulting from any transaction described
above.
13. As used herein, the term insolvent means that (a) an order, judgment
or decree has been entered under the bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment or debt, dissolution of liquidation or
similar law (herein called the "Bankruptcy Law") or any jurisdiction
adjudicating the Customer insolvent; or (b) the Customer has petitioned or
applied to any tribunal for, or consented to, the appointment of, or taking
possession by, a trustee, receiver, liquidator or similar official, of the
Customer, or commenced a voluntary case Linder the Bankruptcy Law of the United
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<PAGE>
States or any proceedings related to the Customer under the Bankruptcy Law of
any other jurisdiction, whether now or hereafter in effect; or (c) any such
petition or application has been filed, or any such proceedings commenced,
against the Customer and the Customer by any act has indicated its approval
thereof, consent thereto or acquiescence therein, or an order for relief has
been entered in an involuntary case against Customer under the Bankruptcy Law of
the United States, as now or hereafter constituted, or an order, judgment or
decree has been entered therein appointing any such trustee, receiver,
liquidator or similar official, or approving the petition in any such
proceedings, and such order, judgment or decree remains unstayed and in effect
for more than 30 days.
14. If at any time Customer fails to deliver to Merrill any property
previously sold by Merrill on Customer's behalf or fails to deliver financial
instruments in compliance with Contracts, Customer authorizes Merrill in its
discretion to borrow or to buy any property necessary to make delivery thereof,
and Customer shall pay Merrill for any cost, loss and damage which Merrill may
sustain from its inability to borrow or buy any such property.
15. All communications to Customer shall be to: World Income Fund Series
of Van Eck Funds, 122 East 42nd Street, 42nd Floor, New York, New York 10168,
Attention: Shirley L. Osborne; with copies to World Income Fund Series of Van
Eck Funds, 122 East 42nd Street, 42nd Floor, New York, New York 10168,
Attention: Michael Doorley; or to such other addresses as Customer may hereafter
direct Merrill in writing to use. All communications to Merrill shall be to the
offices at Merrill Lynch, Pierce, Fenner & Smith Inc., New York Futures Sales
Office,
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<PAGE>
One Liberty Plaza, 21st Floor, New York, New York 10080, Attention: Mr. John
Emptage; or at such other addresses as the parties may designate.
16. This Agreement, the Procedural Agreement, and the Safekeeping
Agreement referred to in the Procedural Agreement contain the entire agreement
between the parties and supersede any prior agreements between the parties as to
the subject matter of this Agreement. Subject to Paragraph 7 hereof, no
provision of this Agreement shall in any respect be waived, altered, modified,
or amended unless such waiver, alteration, modification, or amendment be
committed to in writing and signed by Customer and a duly authorized officer of
Merrill.
17. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of the State of
New York.
18. This Agreement shall inure to the benefit of Merrill and Customer and
their respective successors and assigns.
19. If any term or provision hereof, or the application thereof to any
person or circumstances, shall to any extent be contrary to any contract market,
exchange or government regulation or otherwise invalid or unenforceable, the
remainder of this Agreement or the application of such term or provision to
persons or circumstances other than those as to which it is contrary, invalid,
or unenforceable, shall not be affected thereby, and it shall be enforced to the
fullest extent permitted by regulation and law.
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<PAGE>
20. The rights and remedies conferred upon the parties hereto shall be
cumulative, and the exercise or waiver of any thereof shall not preclude or
inhibit the exercise of additional rights and remedies.
21. This Agreement is executed on behalf of the Trustees of the Customer
as Trustees and not individually and the obligations of this Agreement are not
binding upon any of the Trustees but are binding only upon the assets and
property of the Customer.
22. Customer represents that (a) Customer will promptly notify Merrill in
writing if any of the above representations shall materially change or cease to
be true and correct; (b) Customer has read and understands the Commodity Futures
Trading Commission Risk Disclosure Statement, the Options on Futures Risk
Disclosure Statement (under separate cover) and the Margin Disclosure Statement;
and (c) no person or entity has any interest in or control of the account to
which this Agreement pertains other than Customer and the persons designated by
Customer as set forth in Paragraph 1 hereof.
23. Customer and Merrill agree to promptly furnish appropriate financial
statements to each other to show any material changes in their financial
positions and to furnish such other information concerning each other as each
may reasonably request.
24. Where the context hereof requires, the singular shall import the
plural and the masculine shall import the feminine and neuter.
25. Merrill shall be entitled to rely on any instruction received from
any person identified in writing to Merrill by Customer and such instruction
shall bind Customer. Customer agrees to hold Merrill harmless against any action
taken by Merrill in reliance upon this provision.
-8-
<PAGE>
This Agreement is executed on behalf of the Trustees of the Fund as
Trustees and not individually, and-the obligations of this Agreement are not
binding upon any of the Trustees but are binding only upon the assets and
property of the Customer.
26. This Agreement shall become a binding contract between Customer and
Merrill when signed by both parties.
World Income Fund Series of Van Eck Funds
By: /s/ Michael Doorley
Title: Vice President
The undersigned Secretary of, or person serving in a similar capacity with
respect to World Income Fund Series of Van Eck Funds the Customer which is party
to this Agreement, the Procedural Agreement and the Safekeeping Agreement,
hereby certifies that the individual whose name appears above as the signatory
of this Agreement, the Procedural Agreement and the Safekeeping Agreement on
behalf of the Customer holds the position with the Customer as identified above
and is authorized to execute this Agreement on behalf of the Customer.
World Income fund Series of Van Eck Funds
By: /s/ Carolyn T. Vallarta
Name: Carolyn T. Vallarta
Secretary
APPROVED:
MERRILL LYNCH FUTURES INC.
By: /s/ John Emptage
Title: Vice President
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<PAGE>
TO: World Income Fund Series of Van Eck Funds
Account No. _______________
FROM: MERRILL LYNCH FUTURES INC.
RISK DISCLOSURE STATEMENT
This statement is furnished to you because Regulation 1.55 of the Commodity
Futures Trading Commission requires it.
The risk of loss in trading commodity futures contracts can be substantial. You
should therefore carefully consider whether such trading is suitable for you in
light of your financial condition. In considering whether to trade, you should
be aware of the following:
(1) You may sustain a total loss of the Initial Margin funds and any additional
funds that you deposit with your broker to establish or maintain a position
in the commodity futures market. If the market moves against your position
you may be called upon by your broker to deposit a substantial amount of
additional margin funds, on short notice, in order to maintain your
position. If you do not provide the required funds within the prescribed
time, your position may be liquidated at a loss, and you will be liable for
any resulting deficit in your account.
(2) Under certain market conditions, you may find it difficult or impossible to
liquidate a position. This can occur, for example, when the market makes a
"limit move".
(3) Placing contingent orders, such as a "stop-loss" or "stop-limit" order,
will not necessarily limit your losses to the intended amounts since market
conditions may make it impossible to execute such orders.
(4) A "spread" position may not be less risky than a simple "long" or "short"
position.
(5) The high degree of leverage that is often obtainable in futures trading
because of the small margin requirements can work against you as well as
for you. The use of leverage can lead to large losses as well as gains.
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<PAGE>
This brief statement cannot, of course, disclose all the risks and other
significant aspects of the commodity markets. You should therefore carefully
study futures trading before you trade.
World Income Fund Series of Van Eck Funds HAS RECEIVED AND THAT IT UNDERSTANDS
THE RISK DISCLOSURE DOCUMENT PROVIDED TO IT IN COMPLIANCE WITH REGULATION 1.55
OF THE COMMODITY FUTURES TRADING COMMISSION.
Dated: 8/5/87 By: /s/ Michael Doorley
Title: Vice President
PLEASE SIGN AND RETURN ONE COPY TO MERRILL LYNCH FUTURES INC.
RETAIN THE DUPLICATE COPY FOR YOUR RECORDS.
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<PAGE>
TO: World Income Fund Series of Van Eck Funds
Account No. ____________________
FROM: MERRILL LYNCH FUTURES INC.
COMMODITY OPTIONS RISK DISCLOSURE STATEMENT
World Income Fund Series of Van Eck Funds ACKNOWLEDGES THAT IT HAS RECEIVED
(DELIVERED UNDER SEPARATE COVER) AND THAT IT UNDERSTANDS THE OPTIONS RISK
DISCLOSURE STATEMENT IN COMPLIANCE WITH REGULATION 33.7 OF THE COMMODITY FUTURES
TRADING COMMISSION.
World Income Fund Series of Van Eck Funds
BY: /s/ Michael Doorley DATED: 8/5/87
ITS: Vice President
PLEASE SIGN AND RETURN ONE COPY TO MERRILL LYNCH FUTURES INC. RETAIN THE
DUPLICATE COPY FOR YOUR RECORDS.
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<PAGE>
TO: World Income Fund Series of Van Eck Funds
Account No. ___________________
FROM: MERRILL LYNCH FUTURES INC.
MARGIN DISCLOSURE STATEMENT
This statement is furnished to you because Regulation 190.10(c) of the Commodity
Futures Trading Commission requires it for reasons of fair notice unrelated to
Merrill Lynch's current financial condition.
1. You should know that in the unlikely event of Merrill Lynch's bankruptcy,
property, including property specifically traceable to you, will be
returned, transferred or distributed to you, or on your behalf, only to the
extent of your pro rata share of all property available for distribution to
customers.
2. Notice concerning the terms for the return of specifically identifiable
property will be by publication in a newspaper of general circulation.
3. The Commission's regulations concerning bankruptcies of commodity brokers
can be found at 17 Code of Federal Regulations Part 190.
World Income Fund Series of Van Eck Funds HAS RECEIVED THE MARGIN DISCLOSURE
STATEMENT IN ACCORDANCE WITH REGULATION 190.10(c) OF THE COMMODITY FUTURES
TRADING COMMISSION.
Dated: 8/5/87 By: /s/ Michael Doorley
Title: /s/ Vice President
PLEASE SIGN AND RETURN ONE COPY TO MERRILL LYNCH FUTURES INC. RETAIN THE
DUPLICATE COPY FOR YOUR RECORDS.
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<PAGE>
TO: World Income Fund Series of Van Eck Funds
Account No. ___________________
FROM: MERRILL LYNCH FUTURES INC.
HEDGE AGREEMENT
(To be signed by hedge customers only)
The undersigned represents that all transactions in this account are for hedging
purposes only and shall be entered into solely for the purpose of protecting
against losses which may be incurred in a cash position in a specific commodity,
or with respect to interest rate futures or stock index futures to protect
against losses that may be incurred in an existing securities portfolio.
These transactions are not for speculation. In the event that the undersigned
intends to enter into any transactions in this account for speculative purposes,
we shall notify Merrill Lynch in writing prior to the entry of such
transactions.
The undersigned is familiar with all laws, rules and regulations concerning
hedging in such contracts.
World Income Funds Series of Van Eck Funds
By: /s/ Michael Doorley
Title: Vice President
Dated: 8/5/97
CFTC Regulation 190.06 requires that in the unlikely event of Merrill Lynch's
bankruptcy, you be given the opportunity to give instructions to the bankruptcy
trustee regarding the disposition of your open futures positions. Unless you
indicate a contrary preference in the space provided below, the trustee would be
authorized to liquidate your open positions, without seeking further
instructions from you.
[ ] World Income Fund Series of Van Eck Funds would prefer to be contacted
by the bankruptcy trustee for instructions regarding the disposition of its open
futures positions.
PLEASE SIGN AND RETURN ONE COPY TO MERRILL LYNCH FUTURES INC. RETAIN THE
DUPLICATE COPY FOR YOUR RECORDS.
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<PAGE>
SAFEKEEPING AGREEMENT
World Income Fund Series of Van Eck Funds ("Depositor") and Merrill Lynch
Futures Inc. ("Merrill") have interests in the subject Safekeeping Account
pursuant to a certain Procedural Agreement among Merrill, Depositor, and
Citibank ("Custodian") which Procedural Agreement governs over any inconsistent
provisions in this Safekeeping Agreement.
- --------------------------------------------------------------------------------
Citibank
One CitiCorp Center
New York, New York 10043
Attention: Deia Capella
Gentlemen:
The Depositor hereby requests the Custodian to open and maintain a
Safekeeping Account, which shall be a subaccount under the Custodian Agreement
dated as of August 30, 1985 between Depositor and Custodian, and in the name of
"Merrill Lynch Futures Inc. Customer Funds for the benefit of World Income Fund
Series of Van Eck Funds (Customer Segregated Account)" for all monies and
securities now or hereafter deposited with and accepted by you for the initial
margin in futures and option contracts thereon including any additional original
margin requirements for Customer's short option positions.
In such custodial capacity you are limited to holding the securities in
safekeeping for the Depositor and dealing with them as herein expressed unless
otherwise mutually agreed in writing.
You shall make purchases, sales, and deliveries of securities only as the
Depositor may direct, and you are authorized and directed to:
1. Collect income and principal on bearer securities in the account:
2. Dispose of the monies received from income collections,
<PAGE>
3. Send a daily confirmation of receipts and disbursements to the
Depositor and to Merrill;
4. Provide a monthly list of securities to the Depositor and to Merrill;
5. On request, confirm to Merrill and Depositor all account charges and
positions.
The general conditions of the Safekeeping Agreement shall be those of the
Custodian Agreement between Depositor and Custodian.
The compensation of the Custodian for its services hereunder shall be
payable monthly and shall be as the parties shall agree. No change in
compensation shall be applicable to this account except upon written notice to
Depositor.
The Custodian will acknowledge for Merrill by letter, Attachment A hereto,
that Custodian was informed that the monies and securities on deposit belong to
Depositor and are being held by Custodian, in the name of Merrill Lynch Futures
Inc., in accordance with the Commodity Exchange Act and the regulations
thereunder.
All communications from the Custodian shall be sent to the Depositor
pursuant to the Custodian Agreement, and to Merrill at the address shown below,
or at such other address as the Depositor or Merrill shall from time to time
direct.
The Depositor is not a foreign citizen; if this citizenship status changes,
the Depositor will promptly notify the Custodian in writing.
This Agreement is executed on behalf of the Trustees of the Depositor as
Trustees and not individually and the obligations of this Agreement are not
binding upon any of the Trustees but are binding only upon the assets and
property of the Depositor.
-2-
<PAGE>
This Agreement is executed on behalf of the Trustees of the Fund as
Trustees and not individually, and the obligations of this Agreement are not
binding upon any of the Trustees but are binding only upon the assets and
property of the Customer.
Either the Depositor or the Custodian, subject to the Procedural Agreement,
may close this account at any time upon 60 days prior notice.
Accepted: Very truly yours,
Citibank World Income Fund Series of Van Eck Funds
By: /s/ Mark C. Aprahamian By: Michael Doorley
Acknowledged and Approved:
on behalf of
Merrill Lynch Futures Inc.
By: /s/ John Emptage
Merrill Lynch, Pierce,
Fenner & Smith, Inc.
New York Futures Sales Office
One Liberty Plaza, 21/st/ Floor
New York, New York 10080
Attention: Mr. John Emptage;
Dated 8/12/87
-3-
<PAGE>
Attachment A
------------
Date: August 4, 1987
Citibank
One CitiCorp Center
New York, New York 10043
Attention: Deia Capella
Gentlemen:
We refer to the account with your bank designated as "Merrill Lynch Futures
Inc. Customer Funds for the benefit of World Income Fund Series of Van Eck
Funds (Customer Segregated Account)" account number __________ (the "Account"),
opened pursuant to a Safekeeping Agreement among World Income Fund Series of Van
Eck Funds ("Depositor"), Merrill Lynch Futures Inc. ("Merrill") and your bank,
as custodian, dated __________.
The Account is being maintained by us in compliance with the provisions of
the Commodity Exchange Act and as a subaccount under the custodian agreement
between Depositor and you. Depositor will from time to time deposit with you in
such Account monies or obligations of the United States, general obligations of
any state or of any political subdivision thereof, or obligations fully
guaranteed as to principal and interest by the United States (collectively
referred to as "securities"). All such securities and monies will be treated
either as investments of our commodity and commodity option customer's funds or
as obligations belonging to such customer. Under the provisions of the Commodity
Exchange Act and regulations promulgated thereunder, these deposits are required
to be segregated and treated as belonging to the customer. By signing and
returning to us the enclosed copy of this letter, you acknowledge that you
understand the nature of the securities and monies deposited in the account.
You further acknowledge that the funds and securities held in the above
Account are those of a commodity or commodity option customer and are being held
by the bank subject to the requirements of the Commodity Exchange Act and
regulations promulgated thereunder. Such funds and securities will not be
treated by the bank as the funds or securities of any person other than such
depositor customer of Merrill, and will not be used by the bank in connection
with the obligations of any person other than Depositor, except as provided in
the Safekeeping Agreement and the Procedural Agreement.
You also acknowledge that the above Account is a special deposit, and you agree
that, in providing services to us or to any of our affiliates, including but not
limited to extending credit or granting accommodations or services relating to
uncollected, target, compensating or other balances to us or to any of our
affiliates, the bank
<PAGE>
World Income Fund Series of Van Eck Funds
Dated August 4, 1987
Page Two
Acknowledges that is has no claim, and will seek no lien, right of set off or
any other claim or interest in the funds or securities held in said Account, and
that it will not use the funds and securities in the above-described Account to
margin, collateralize, secure or to extend credit to Depositor, to any of its
affiliates, to us, to any of our affiliates or to any persons for such
activities or otherwise. You hereby agree that the obligations and records
accounting for the monies and securities held in the Account may be examined by
an authorized employee of the Commodity Futures Trading Commission.
Sincerely yours,
Merrill Lynch Futures Inc.
/s/ Frank P. Leonardo
Frank P. Leonardo
Chief Financial Officer
/s/ Steven J. Gogolin
Steven J. Gogolin
Assistant Treasurer
Citibank /s/ Mark Aprahamian
AGREED AND ACKNOWLEDGED:
Title: Vice President
Dated: August 5, 1987
<PAGE>
PROCEDURAL AGREEMENT
AMONG Morgan Stanley & Co., Inc.
World Income Fund of Van Eck Funds
and Citibank
WHEREAS the undersigned World Income Fund Series of Van Eck Funds
("Customer") has opened a trading account with the undersigned Morgan Stanley &
Co., Inc. ("MS & Co"), a registered futures commission merchant, for the purpose
of trading futures contracts traded on duly registered boards of trade,
including options on such futures contracts ("Contracts") through said firm; and
WHEREAS, in connection with the opening of the trading account, Customer
and MS & Co have entered into a Customer Agreement which required Customer to
deposit as collateral the initial margin (including any additional original
margin requirements for Customer's short option positions) ("Initial Margin")
with respect to each Contract as required by MS & Co or by the rules and
regulations of the Chicago Mercantile Exchange, the Chicago Board of Trade, the
Commodity Exchange, and such other exchanges on which MS & Co may effect or
cause to be effected transactions as broker for Customer; and
WHEREAS Customer, MS & Co, and the undersigned Citibank ("Custodian") have
entered into a Safekeeping Agreement establishing an account entitled "Morgan
Stanley & Co., Inc. Customer Funds for the benefit of World Income Fund Series
of Van Eck Funds (Customer Segregated Account)" pursuant to which Custodian
agrees to maintain a Safekeeping Account(which for its general conditions is
governed by the
<PAGE>
Custodian Agreement between the Custodian and Customer, except in the event of a
conflict between the Custodian Agreement and this Procedural Agreement, in which
case this Procedural Agreement shall govern) for the custody of the Initial
Margin which Customer is required to deposit and maintain, and
WHEREAS the Customer Agreement and the Safekeeping Agreement both provide
that the rights and duties of the parties thereto are subject to the provisions
of this Agreement.
NOW, THEREFORE IT IS AGREED THAT:
1. Customer shall deposit and maintain as collateral in the Safekeeping
Account such Initial Margin as shall be required from time to time by MS & Co or
by the exchange on which transactions are effected or caused to be effected by
MS & Co as broker for Customer. Customer may deposit amounts in excess of such
requirements. The designation "Customer Funds" in the account title is intended
to indicate the status of the account under the Commodity Exchange Act and
Commodity Futures Trading Commission regulations; however, the provisions of
this agreement to the extent not in conflict with the CEA and CFTC regulations
shall be controlling as to the rights of the parties in the collateral deposited
in the account.
2. The Initial Margin deposited and maintained in the Safekeeping
Account, created pursuant to the Safekeeping Agreement, shall be in the form, as
Customer elects, of cash
<PAGE>
or of eligible securities of the U.S. Government (Treasury Bills shall be valued
at 90% of face value and Treasury Bonds and Notes shall be valued at 70% of face
value) or a combination thereof. Customer may substitute U.S. Government
securities of equal or greater value upon prior approval by MS & Co which
approval shall not be unreasonably withheld. Upon receipt of such substitute
securities, MS & Co agrees to give instructions to Custodian to release from the
Safekeeping Account cash or eligible U.S. Government securities of an equal
value, or such lesser amount as may be directed by Customer. Any separate
interest payments thereon shall be automatically credited by Custodian in
Federal funds to such demand deposit accounts designated in instructions from
Customer on the date that such interest becomes due and payable unless notice
has been provided to Custodian pursuant to Paragraph 5 (a) below, and such
interest is required to meet additional Variation Margin requirements in
accordance with the procedure provided in Paragraphs 5 (a), (b) and (c). Amounts
due on securities which mature or are redeemed will be credited to the
Safekeeping Account in Federal funds on the date such amounts are received.
Amounts due to Customer as a result of the variation in value of Customer's
short positions shall be credited to Customer by reducing the amount of the
collateral required to be maintained in the Safekeeping Account with prior
notice to MS & Co.
3. With respect to the deposit of Initial Margin,
<PAGE>
Custodian shall be directed by Customer's custodian order to segregate specified
assets in the Safekeeping Account, and Custodian shall promptly provide MS & Co
and Customer with a written confirmation of each transfer into or out of the
Safekeeping Account.
4. Withdrawals of Initial Margin from the Safekeeping Account shall be
effected upon receipt by the Custodian of Customer's custodian order and MS &
Co's prior written verification of such withdrawal. MS & Co shall, upon request
of the Customer, inform Customer of the amount of any excess Initial Margin in
the Safekeeping Account.
5. MS & Co shall have access to the collateral only in accordance with
the following, and only at such times as conditions set forth hereafter are
complied with:
(a) If notice by MS & Co is given to Customer that additional margin
is required by MS & Co as broker for the Customer due to variation in the value
of one or more contracts held in the trading account or otherwise pursuant to
the Customer Agreement ("Variation Margin"), and such notice is given prior to
10:00 A.M. New York time on a day on which the Customer is open for business,
which Variation Margin shall first have been satisfied from any amounts
currently credited to the Customer's trading account with MS & Co in connection
with which the Variation Margin is required, the Customer shall transfer to MS &
Co such Variation Margin not later than 3:30 P.M. on the same day. If Notice by
MS & Co to the Customer is given of the need
<PAGE>
for Variation Margin subsequent to 10:00 A.M. but prior to 4:00 P.M. New York
time on a day on which the Customer is open for business, the Customer shall
provide such Variation Margin to MS & Co not later than 10:30 A.M. New York time
on the next succeeding day on which the Customer is open for business. Notice by
MS & Co to the Customer of the receipt of Variation Margin shall be given
promptly.
(b) If MS & Co has not received the requested Variation Margin within
the-time period as provided in Paragraph 5(a), Notice by MS & Co to Customer of
the failure to receive the Variation Margin shall be given immediately.
(c) If MS & Co does not receive the Variation Margin in accordance
with Paragraph 5(a), MS & Co may give (i) Notice to Custodian of the Customer's
failure to provide Variation Margin and the amount of Variation Margin required;
and (ii) Notice to the Customer that such Notice has been given to Custodian.
Promptly upon receipt by Custodian of such Notice but without prejudice to any
rights of MS & Co hereunder, Custodian shall give Notice to the Customer of its
receipt of such Notice.
(d) In the event Customer has failed to transfer the required
Variation Margin to MS & Co during the time period as provided in Paragraph
5(a), MS & Co may give Notice to Custodian of the Customer's failure to provide
Variation Margin which Notice shall be the same Notice as in Paragraph 5(c) and
that all conditions precedent to MS & Co's right to direct disposition hereunder
have been
<PAGE>
satisfied, and may give instructions to Custodian (i) to transfer eligible U.S.
Government securities to MS & CO (ii) to sell at the prevailing market price
such of the collateral in the Safekeeping Account relating to the trading
account in which the Variation Margin is required, in each case as necessary to
provide for payment to MS & Co of the amount of Variation Margin that MS & Co
shall have specified in the Notice, or (iii) with respect to collateral in the
form of cash, MS & Co may give instructions to Custodian to immediately transfer
cash in the amount of the Variation Margin that MS & Co shall have specified in
the Notice from such Safekeeping Account to the account of MS & Co. Custodian
shall promptly give Notice to Customer of its receipt of such instructions from
MS & Co and, upon taking any action pursuant to such instructions, shall
immediately give Notice to Customer of such action. Subject to the notice
provisions of Paragraph 5 set forth above, which include MS & Co giving
Custodian a statement that all conditions precedent to MS & Co's right to direct
disposition hereunder have been satisfied, Custodian shall take instructions
solely from MS & Co with respect to the sale of securities and/or the transfer
of cash to MS & Co. In the event such statement is not given in writing, MS & Co
will confirm the statement thereafter in writing to Custodian by the most
expeditions means which may be by telecopy. In the event that MS & Co receives
eligible U.S. Government securities pursuant to this Paragraph 5(d), it
<PAGE>
shall have the right to sell or otherwise dispose of such securities and shall
remit to Customer any proceeds of such sale or disposition in excess of the
amount of Variation Margin specified in instructions from MS & Co to Custodian.
(e) Custodian shall retain in the Safekeeping Account any collateral
in excess of the amount of Variation Margin specified in instructions from MS &
Co to Custodian including any proceeds form the sale of securities in excess of
such amount. Custodian shall give consideration to any timely request by
Customer with respect to particular securities to be sold and shall sell any
securities in the principal market for such securities or, in the event such
principal amount is closed, sell them in manner commercially reasonable for such
securities.
6. MS & Co shall promptly credit to the trading account of Customer any
Variation Margin resulting from the variation in value of one or more Contracts
purchased or sold by Customer in accordance with the rules of any contract
market, exchange or board of trade on which Contract transactions are effected
by MS & Co for Customer. At Customer's direction, MS & Co shall transfer trading
account balances to Customer in Federal funds to the Custodian or such bank
account in Customer's name as customer shall otherwise direct. Customer may give
such directions to MS & Co by telephone, confirmed thereafter in writing.
7. Custodian shall act only upon receipt of
<PAGE>
instructions from MS & Co regarding release of collateral. Custodian shall
indemnify Customer from any loss incurred by reasons of Custodian's negligence
or willful misconduct in acting on those instructions; provided that the
instructions are given in a timely fashion and comply in all other respects with
the provisions of this Agreement.
8. Unless otherwise provided, all notice or other communications called
for by this Agreement shall be given by the most expeditious means possible and
may be given by telephone. If a notice is not given in writing, a written
confirmation shall be provided to appropriate parties within a reasonable time
after the notice is given.
9. Any and all expenses of establishing, maintaining, or terminating the
Safekeeping Account, including without limitation any and all expenses incurred
by Custodian in connection with the Safekeeping Account, shall be borne by
Customer.
10. This Agreement and the Safekeeping Account, except as provided in the
Safekeeping Agreement, shall terminate only upon written consent of Customer and
MS & Co, neither of which shall unreasonably withhold their consent, at which
time Custodian shall transfer to Customer, or to a substitute custodian
designated by Customer, all property held in the Safekeeping Account.
11. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of the State of
New York.
<PAGE>
12. Except as specifically provided herein, this Agreement does not in any
way affect other agreements entered into among the parties hereto and any
actions taken or omitted by any party hereunder shall not affect any rights of
any other party hereunder.
13. No amendment of this Agreement shall be effective unless in writing
and signed by persons thereunto duly
authorized.
14. Written communications hereunder shall be, except as otherwise
required hereunder, hand-delivered or mailed first class postage prepaid, except
that written notice of termination shall be sent by certified mail addressed:
(a) if to Custodian, to:
Citibank
One Citicorp Center
New York, New York 10043
Attention: Dela Capella
(b) (1) if to Customer, to:
World Income fund Series of Van Eck Funds
122 East 42nd Street, 42nd Floor
New York, New York 10168
Attention: Shirley L. Osborne;
(2) with copies to:
World Income Fund Series of Van Eck funds
122 East 42nd Street, 42nd Floor
New York, New York 10168
Attention: Michael Doorley
(c) Morgan Stanley & Co., Inc.
55 Water Street
New York, New York 10041
Attention: Commodity Operations Manager
<PAGE>
15. This Agreement is executed on behalf of the Trustees of the Fund as
Trustees and not individually, and the obligations of this Agreement are not
binding upon any of the Trustees but are binding only upon the assets and
property of the Customer.
World Income Fund Series of Van Eck Funds
By:_______________________
Authorized Signature
Date:____________ Title:____________________
Morgan Stanley & Co., Inc.
By:_______________________
Authorized Signature
Date:____________ Title:____________________
Citibank
By:_______________________
Authorized Signature
Date:___________ Title:____________________
<PAGE>
CUSTOMER AGREEMENT BETWEEN
Morgan Stanley & Co., Inc. AND
World Income Fund Series of Van Eck Funds
In consideration of acceptance by Morgan Stanley & Co., Inc. ("MS & Co") of
an account for World Income Fund Series of Van Eck Funds ("Customer")
MS & Co and Customer agree as follows:
1. Customer authorizes MS & Co to purchase and sell futures contracts and
option contracts thereon ("Contracts") traded on duly registered boards of trade
for Customer's account in accordance with Customer's oral or written
instructions from persons designated by Customer by resolution of Customer's
Board of Directors, Managing Partner, Board of Trustees, or person(s)
responsible for the management of Customer's account, duly certified and
delivered to MS & Co. Customer hereby waives any defense that any such
instruction was not in writing as may be required by the Statue of Frauds or any
other law, rule or regulation.
2. Customer shall in connection with Contract transactions pay MS & Co
(1) brokerage and commission charges as agreed upon by MS & Co and Customer from
time to time, (2) any charges imposed on any transaction undertaken for Customer
by the contract market, exchange or clearinghouse through which it is executed
and any tax or fee imposed on such transactions by any competent authority or
self-regulatory organization, (3) any margin required by MS & Co for Customer
due to the variation in value of one or
<PAGE>
more outstanding Contracts purchased or sold by Customer ("Variation Margin") in
accordance with Paragraph 7 hereof, or as required by MS & Co due to an increase
in margin requirements for new or existing positions, and (4) interest and
service charges on any Customer deficit balances at the rates customarily
charged by MS & Co together with MS & Co's costs and attorney's fees incurred in
collecting such deficit. Such payments shall be made in Federal funds to MS & Co
at such addresses as MS & Co may designate.
3. A detailed statement of all transactions for or on the Customer's
behalf shall be furnished to Customer on a daily and a monthly basis. Such
statements shall be conclusive and binding on the Customer unless the Customer
notifies MS & Co of any objection within five business days from the day the
Customer receives such statement; provided however that with respect to monthly
statements only the Customer may make such objection within ten business days.
4. Customer shall timely deposit and maintain in the Safekeeping Account
at all times Initial Margin (including any additional original margin
requirements for Customer's short option positions) ("Initial Margin") for
Customer's account in accordance with the Procedural Agreement. Customer shall
timely pay to MS & Co the amount of any additional or Variation Margin with
respect to Customer's open positions on Contracts in accordance with the
Procedural Agreement. If, upon notice given by MS & Co as set forth in the
Procedural Agreement, Customer fails to
<PAGE>
provide additional or Variation Margin or if Customer fails to deposit or
maintain in the Safekeeping Account required Initial Margin, MS & Co may without
further notice to Customer take any action set forth in Paragraphs 12 and 14
hereof.
5. Customer shall make timely delivery of or payment for financial
instruments in compliance with the terms of the Contracts purchased or sold by
Customer through MS & Co unless such Contracts have been terminated by an
offsetting purchase or sale prior to the delivery date. Customer shall advise MS
& Co of its intentions with respect to the delivery of or payment for such
financial instruments, and MS & Co shall be entitled to receive appropriate
assurances with respect thereto.
6. Customer acknowledges that (a) any trading recommendations and market
or other information communicated to Customer by MS & Co are incidental to the
conduct of MS & Co's business as a futures commission merchant and do not
constitute an offer to sell or the solicitation of an offer to buy any Contracts
or instrument that is the subject of any Contract; (b) such recommendation and
information, although based upon information obtained from sources believed by
MS & Co to be reliable, may be incomplete, may not be verified, and may be
changed without notice to Customer; and (c) MS & Co makes no representation,
warranty or guarantee as to the accuracy or completeness of any market or other
information or trading recommendation
<PAGE>
furnished to Customer. Customer understands that officers, employees, or
affiliates of MS & Co may have a position in, may intend to, and may, buy or
sell, Contracts or instruments that are the subject of Contracts, including
Contracts which are the subject of information or recommendations furnished to
Customer, and that the position or transactions of any such-officer, employee,
or affiliate may or may not be consistent with the recommendations furnished by
MS & Co to Customer.
7. All transactions by MS & Co on Customer's behalf shall be subject to
the applicable constitution, by-laws, rules, regulations, customs, usages,
rulings, and interpretations of the contract market and its clearinghouse on
which such transactions are executed or cleared by MS & Co or its agents for
Customer's account, and to all applicable governmental acts and statutes (such
as the Commodity Exchange Act) and to rules and regulations made thereunder; MS
& Co shall not be liable to Customer as a result of any action taken by MS & Co
or its agents to comply with any such constitution, by-law, rule, regulation,
custom, usage, ruling, interpretation, act, or statute.
8. MS & Co shall have no responsibility for delays in the transmission of
orders due to (a) breakdown or failure of transmission or communication
facilities, or (b) any other cause beyond MS & Co's control.
9. MS & Co shall have no responsibility for compliance by Customer with
any law or regulation governing
<PAGE>
Customer's conduct as a fiduciary.
10. MS & Co shall have no responsibility for compliance by any investment
adviser or commodity trading advisor of Customer with any law or regulation
governing the conduct of such investment adviser or commodity trading advisor as
a fiduciary to Customer.
11. Customer represents that (a) Customer is duly registered under the
Investment Company Act of 1940, as amended, and is validly existing and
empowered to enter into this Agreement and to effectuate transactions in futures
contracts which may include stock index, foreign currency and debt instrument
futures, and options on such futures or cash contracts as contemplated hereby;
(b) Customer has reviewed the registration requirements pertinent to commodity
pool operators and commodity trading advisors of the Commodity Futures Trading
Commission and the National Futures Association in accordance with the
requirements of the Commodity Exchange Act and the regulations of the Commodity
Futures Trading Commission and has determined that Customer and any investment
adviser or commodity trading advisor of Customer are in compliance with such
requirements to the extent applicable.
12. In the event that (a) Customer shall be dissolved, become insolvent or
in any other way terminate; (b) fail to deposit or maintain Initial Margin or
make payment of additional or Variation Margin, as set forth in Paragraph 4
hereof; or (c) in the event MS & Co reasonably feels that it
<PAGE>
is necessary for its protection, after having made reasonable attempts to notify
Customer, MS & Co may close out Customer's open Contracts in whole or in part,
sell any or all of Customer's property held by MS & Co buy any securities or
other property for Customer's account, and cancel any outstanding orders and
commitments made by MS & Co on behalf of Customer. Subject to MS & Co's
obligation to use best efforts to obtain a fair and reasonable price, any such
sale, purchase, or cancellation may be made at MS & Co's discretion on the
contract or other market or through the clearinghouse where such business is
then transacted without advertising the same and without notice to Customer, and
without prior tender, demand or call upon Customer. Customer shall remain liable
for and shall pay to MS & Co the amount of any deficiency resulting from any
transaction described above.
13. As used herein, the term insolvent means that (a) an order, judgement
or decree has been entered under the bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution of liquidation or
similar law (herein called the "Bankruptcy Law") of any jurisdiction
adjudicating the Customer insolvent; or (b) the Customer has petitioned or
applied to any tribunal for, or consented to, the appointment of, or taking
possession by, a trustee, receiver, liquidator or similar official, of the
Customer, or commenced a voluntary case under the Bankruptcy Law of the United
States or any proceedings related to the
<PAGE>
Customer under the Bankruptcy Law of any other jurisdiction, whether now or
hereafter in effect; or (c) any such petition or application has been filed, or
any such proceedings commenced, against the Customer and the Customer by any act
has indicated its approval thereof, consent thereto or acquiescence therein, or
an order for relief has been entered in an involuntary case against Customer
under the Bankruptcy Law of the United States, as now or hereafter constituted,
or an order, judgement or decree has been entered therein appointing any such
trustee, receiver, liquidator or similar official, or approving the petition in
any such proceedings, and such order, judgement or decree remains unstayed and
in effect for more than 30 days.
14. If at any time Customer fails to deliver to MS & Co any property
previously sold by MS & Co on Customer's behalf or fails to deliver financial
instruments in compliance with Contracts, Customer authorizes MS & Co in its
discretion to borrow or to buy any property necessary to make delivery thereof,
and Customer shall pay MS & Co for any cost, loss and damage which MS & Co may
sustain from its inability to borrow or buy any such property.
15. All communications to Customer shall be to: world Income Fund Series
of Van Eck Funds, 122 East 42nd Street, 42nd Floor, New York, New York 10168,
Attention: Shirley L. Osborne; with copies to World Income Fund Series of Van
Eck Funds, 122 East 42nd Street, 42nd Floor, New York, New York 10168,
Attention: Michael Doorley; or to such other
<PAGE>
addresses as Customer may hereafter direct MS & Co in writing to use. All
communications to MS & Co shall be to the offices at Morgan Stanley & Co., Inc.,
55 Water Street, New York, New York, 10041, Attn: Commodities Operations
Manager; or at such other addresses as the parties may designate.
16. This Agreement, the Procedural Agreement, and the Safekeeping
Agreement referred to in the Procedural Agreement contain the entire agreement
between the parties and supersede any prior agreements between the parties as to
the subject matter of this Agreement. Subject to Paragraph 7 hereof, no
provision of this Agreement shall in any respect be waived, altered, modified,
or amended unless such waiver, alteration, modification, or amendment be
committed to in writing and signed by Customer and a duly authorized officer of
MS & Co.
17. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of the State of
New York.
18. This Agreement shall inure to the benefit of MS & Co and Customer and
their respective successors and assigns, only upon prior written consent other
than assignment by MS & Co to an affiliate.
19. If any term or provision hereof, or the application thereof to any
person or circumstances, shall to any extent be contrary to any contract market,
exchange or government regulation or otherwise invalid or unenforceable,
<PAGE>
the remainder of this Agreement or the application of such term or provision to
persons or circumstances other than those as to which it is contrary, invalid,
or unenforceable, shall not be affected thereby, and it shall be enforced to the
fullest extent permitted by regulation and law.
20. The rights and remedies conferred upon the parties hereto shall be
cumulative, and the exercise or waiver of any thereof shall not preclude or
inhibit the exercise of additional rights and remedies.
21. This Agreement is executed on behalf of the Trustees of the Customer
as Trustees and not individually and the obligations of this Agreement are not
binding upon any of the Trustees but are binding only upon the assets and
property of the Customer.
22. Customer represents that (a) Customer will promptly notify MS & Co in
writing if any of the above representations shall materially change or cease to
be true and correct; (b) Customer has read and understands the Commodity Futures
Trading Commission Risk Disclosure Statement, the Options on Futures Risk
Disclosure Statement (under separate cover) and the Margin Disclosure Statement;
and (c) no person or entity has any interest in or control of the account to
which this Agreement pertains other than Customer and the persons designated by
Customer as set forth in Paragraph 1 hereof.
23. Customer and MS & Co agree to promptly furnish appropriate financial
statements to each other to show any
<PAGE>
material changes in their financial positions and to furnish such other
information concerning each other as each may reasonably request.
24. Where the context hereof requires, the singular shall import the plural
and the masculine shall import the feminine and neuter.
25. MS & Co shall be entitled to rely on any instruction received from any
person identified in writing to MS & Co by Customer and such instruction shall
bind Customer. Customer agrees to hold MS & Co harmless against any action taken
by MS & Co in reliance upon this provision.
<PAGE>
26. This Agreement shall become a binding contract between Customer and MS
& Co when signed by both parties.
World Income Fund Series of
Van Eck Funds
By:_______________________
Title:____________________
The undersigned Secretary of, or person serving in a similar capacity with
respect to World Income Fund Series of Van Eck Funds the Customer which is party
to this Agreement, the Procedural Agreement and the Safekeeping Agreement,
hereby certifies that the individual whose name appears above as the signatory
of this Agreement, the Procedural Agreement and the Safekeeping Agreement on
behalf of the Customer holds the position with the Customer as identified above
and is authorized to execute this Agreement on behalf of the Customer.
World Income Fund Series of
Van Eck Funds
By:_______________________
Name:_____________________
Secretary
Approved:
Morgan Stanley Co., Inc.
By:____________________
Title:_________________
<PAGE>
SAFEKEEPING AGREEMENT
World Income Fund Series of Van Eck Funds ("Depositor") and Morgan Stanley &
Co., Inc. ("MS & Co") have interests in the subject Safekeeping Account pursuant
to a certain Procedural Agreement among MS & Co, Depositor, and Citibank
("Custodian") which Procedural Agreement governs over any inconsistent
provisions in this Safekeeping Agreement.
Citibank
One Citicorp Center
New York, New York 10043
Attention: Dela Capella
Gentlemen:
The Depositor hereby requests the Custodian to open and maintain a
Safekeeping Account, which shall be a subaccount under the Custodian Agreement
dated as of August 30, 1985, between Depositor and Custodian, and in the name of
"Morgan Stanley & Co., Inc. Customer Funds for the benefit of World Income Fund
Series of Van Eck Funds (Customer Segregated Account)" for all monies and
securities now or hereafter deposited with and accepted by you for the initial
margin in futures and option contracts thereon including any additional original
margin requirements for Customer's short option positions.
In such custodial capacity you are limited to holding the securities in
safekeeping for the Depositor and dealing with them as herein expressed unless
otherwise mutually agreed in writing.
You shall make purchases, sales, and deliveries of securities only as the
Depositor may direct, and you are authorized and directed to:
1. Collect income and principal on bearer securities
<PAGE>
in the account;
2. Dispose of the monies received from income collections, maturity,
redemption, sale or other disposition of the securities pursuant to said
Procedural Agreement;
3. Send a daily confirmation of receipts and disbursements to the
Depositor and to MS & Co;
4. Provide a monthly list of securities to the Depositor and to MS & Co;
5. on request, confirm to MS & Co and Depositor all account charges and
positions.
The general conditions of the Safekeeping Agreement shall be those of the
Custodian Agreement between Depositor and Custodian, except in the event of a
conflict between the Custodian Agreement and this Safekeeping Agreement, in
which case this Safekeeping Agreement shall govern.
The compensation of the Custodian for its services hereunder shall be
payable monthly and shall be as the parties shall agree. No change in
compensation shall be applicable to this account except upon written notice to
Depositor.
The Custodian will acknowledge for MS & Co by letter, Attachment A hereto,
that Custodian was informed that the monies and securities on deposit belong to
Depositor and are being held by Custodian, in the name of Morgan Stanley & Co.,
Inc., in accordance with the Commodity Exchange Act and the regulations
thereunder.
All communications from the Custodian shall be sent to
<PAGE>
the Depositor pursuant to the Custodian Agreement, and to MS & Co at the address
shown below, or at such other address as the Depositor or MS & Co shall from
time to time direct.
The Depositor is not a foreign citizen; if this citizenship status changes,
the Depositor will promptly notify the Custodian in writing.
This Agreement is executed on behalf of the Trustees of the Depositor as
Trustees and not individually and the obligations of this Agreement are not
binding upon any of the Trustees but are binding only upon the assets and
property of the Depositor.
Either the Depositor or the Custodian, subject to the Procedural Agreement,
may close this account at any time upon 60 days prior notice.
Accepted: Very truly yours,
Citibank World Income Fund Series of
Van Eck Funds
By:_____________________ By:_______________________
Acknowledged and Approved:
on behalf of
Morgan Stanley & Co., Inc.
By:____________________
Dated:_________________
<PAGE>
Attachment A
Date: November , 1987
Citibank
One Citicorp Center
New York, New York 10043
Attention: Dela Capella
Gentlemen:
We refer to the account with your bank designated as a "Morgan Stanley &
Co., Inc. Customer Funds for the benefit of World Income Fund Series of Van Eck
Funds (Customer Segregated Account)" account number _________(the "Account"),
opened pursuant to a Safekeeping Agreement among World Income Fund Series of Van
Eck Funds ("Depositor"), Morgan Stanley & Co., Inc. ("MS & Co") and your bank,
as custodian, dated ____________.
The Account is being maintained by us in compliance with the provisions of
the Commodity Exchange Act and as a subaccount under the custodian agreement
between Depositor and you. Depositor will form time to time deposit with you in
such Account monies or obligations of the United States, or obligations fully
guaranteed as to principal and interest by the United States (collectively
referred to as "securities"). All such securities and monies will be treated
either as investments of our commodity and commodity option customer's funds or
as obligations belonging to such customer. Under the provisions of the Commodity
Exchange Act and regulations promulgated thereunder, these deposits are required
to be segregated and treated as belonging to the customer. By signing and
returning to us the enclosed copy of this letter, you acknowledge that you
understand the nature of the securities and monies deposited in the account.
You further acknowledge that the funds and securities held in the above
Account are those of a commodity or commodity option customer and are being held
by the bank subject to the requirements of the Commodity Exchange Act and
regulations promulgated thereunder. Such funds and securities will not be
treated by the bank as the funds or securities of any person other than such
depositor customer of MS & Co and will not be used by the bank in connection
with the obligations of any person other than Depositor, except as provided in
the Safekeeping Agreement and Procedural Agreement.
You also acknowledge that the above Account is a
<PAGE>
World Income Fund Series of Van Eck Funds
Dated November , 1987
Page Two
special deposit, and you agree that, in providing services to us or to any of
our affiliates, including but not limited to the extending credit or granting
accommodations or services relating to uncollected, target, compensating or
other balances to us or to any of our affiliates, the bank acknowledges that it
has no claim, and will seek no lien, right of set off or any other claim or
interest in the funds or securities held in said Account, and that it will not
use the funds and securities in the above-described Account to margin,
collateralize, secure or to extend credit to Depositor, to any of its
affiliates, to us, to any of our affiliates or to any persons for such
activities or otherwise. You hereby agree that the obligations and records
accounting for the monies and securities held in the Account may be examined by
an authorized employee of the Commodity Futures Trading Commission.
Sincerely yours,
Morgan Stanley & Co., Inc.
__________________________
Citibank
AGREED AND ACKNOWLEDGED
_______________________
(title)
Dated ___________, 19__
<PAGE>
MORGAN STANLEY
COMMODITY CUSTOMER'S AGREEMENT
Gentlemen:
In consideration of the acceptance by Morgan Stanley & Co. Incorporated ("Morgan
Stanley") of one or more accounts of the undersigned (the "Customer"), whether
designated by name, number or otherwise, for the purchase or sale of
commodities, commodity futures, option or forward contracts or any other
commodity-related instrument, the Customer agrees as follows:
A. REPRESENTATIONS OF THE CUSTOMER.
1. RISKS OF COMMODITY TRADING. In entering into this Agreement with Morgan
Stanley, the Customer understands that commodity trading is a ighly
speculative activity; that prices arc subject to sharp upward and downward
movements; that price fluctuations may result in losses which may
substantially exceed the capital in the Customer's account; and that on
trading days on which a commodity reaches its permissible exchange price
limit, trading may cease, which could lock the Customer into positions
resulting in substantial losses. The Customer further understands that in
commodity transactions executed on an exchange on which foreign currency is
used, any profit or loss resulting from such transactions may be affected by
fluctuations in the exchange rate for such currency, and that any profit or
loss arising as a result of fluctuations in the exchange rate for such
currency will be entirely for the account and risk of the Customer. The
Customer is willing and able, financially and otherwise, to assume the risks
of commodity trading. The Customer recognizes that guarantees of profit or
freedom from loss are impossible of performance in commodity trading,
acknowledges that he has received no such guarantees from Morgan Stanley or
from any of its representatives, and has not entered into this Agreement and
will place to orders hereunder in consideration of or in reliance upon any
such guarantees or similar representations. The Customer shall not hold
Morgan Stanley responsible for any losses sustained by the Customer as a
result of any prediction, recommendation or advice made or given by a
representative of Morgan Stanley, whether or not made or given at the request
of the Customer. The Customer understands that Morgan Stanley may, without
notice to the Customer, exercise various remedies, including liquidation of
positions in the Customer's accounts, pursuant to Section D of this Agreement
upon the Customer's failure to maintain adequate margin or upon the
occurrence of any other Event of Default as described in paragraph 4 of
Section D of this Agreement.
2. AUTHORITY OF CUSTOMER. Except as disclosed in writing to Morgan Stanley prior
to delivery hereof, the Customer is not: (a) a general partner, officer,
director, owner of more than ten percent of the equity interest, associated
person or employee of a futures commission merchant or an introducing broker,
or a relative or spouse of any of the foregoing persons, or any relative of
such spouse, who shares the same home as any of the foregoing persons; nor
(b) a member of any exchange or an employee of any exchange or clearing
house, company in which an exchange owns a majority of the capital stock,
bank- trust company, insurance company, or any person, Firm or entity engaged
in the business of dealing, either as broker or principal, in commodity
futures, physicals, forward or option contracts, documents of title relating
to commodities, securities, bills of exchange, acceptances or other forms of
commercial paper, or the spouse of such a member or employee, nor is the
Customer individually so engaged. In the event that the Customer (or the
Customer's spouse) becomes so employed or engaged the Customer will promptly
notify Morgan Stanley in writing of such employment or engagement. If the
Customer is a corporation or a partnership, it is duly organized and in good
standing under the laws of the jurisdiction in which it was formed. If the
Customer is a corporation, partnership or other entity, the Customer
represents and warrants that it has full power and authority to enter into
this Agreement and to engage in the transactions contemplated hereby, and
that such transactions do not and will not violate any rules or regulations
of any regulatory body to which the Customer is subject. The address at the
foot of this Agreement is the actual address of the Customer and the Customer
will promptly notify Morgan Stanley by registered mail of any change in that
address.
3. CUSTOMER IS PRINCIPAL. Except as disclosed in writing to Morgan Stanley prior
to or accompanying delivery hereof, the Customer is acting as principal and
not as agent for any parry, and no person, firm or entity other than the
Customer has any interest in the commodity accounts of the Customer with
Morgan Stanley. The Customer will give written notice to Morgan Stanley
before granting to any person. firm or entity any interest in any commodity
account of the Customer with Morgan Stanley or undertaking to act as agent
for any other parry with respect to such accounts.
4. DELIVERY OF ACTUAL COMMODITY INTENDED. All orders for the purchase or sale of
any commodity for immediate or deterred delivery are given and executed with
the understanding that the Customer intends, in the case of purchases. to
receive delivery of and pay for the physical commodity and, in the case of
sales, to deliver and receive payment for the physical commodity.
<PAGE>
B. DEFINITIONS.
1. AFFILIATE. "Affiliate" includes any corporation, partnership or venture
which, directly or indirectly, controls, is controlled by, or is under
common control with Morgan Stanley or any of the foregoing corporations.
partnerships or ventures.
2. COLLATERAL. "Collateral" means ail funds, commodities, securities and any
other property of the Customer at any time held in any account or otherwise
by or for Morgan Stanley or any Affiliate and all proceeds thereof. Any
property in transit to or set apart for Morgan Stanley or any Affiliate is
deemed held by Morgan Stanley or such Affiliate for the purposes hereof.
3. LIABILITY. "Liability" includes all now existing or hereafter arising
obligations of any kind whatsoever of the Customer or any entity for the
obligations of which the Customer is liable, to Morgan Stanley or any
Affiliate or to others to the extent of the interest of Morgan Stanley or
any Affiliate therein, whether absolute, contingent, joint and/or several,
secured or unsecured, due or not due, contractual or tortious, arising by
operation of law or otherwise-, liquidated, unliquidated, direct or
indirect.
C. TERMS OF TRANSACTIONS.
1. APPLICABLE RULES AND TERMS. Transactions with or on behalf of a Customer
are subject to:
(a) the terms hereof, the terms and conditions of Morgan Stanley's
confirmation thereof and any other terms and conditions agreed to in
writing by the Customer and Morgan Stanley;
(b) any applicable laws. rules, regulations or orders of any authority of
the United States government, any political subdivision thereof, and
any other governmental authority having jurisdiction over a
transaction, except to the extent that die provisions thereof have
been waived by (a);
(c) the rules, orders, resolutions, regulations and interpretations of any
organized commodity exchange on which a transaction is executed (and
of its clearing house, if any), in respect of such transaction, except
to the extent that the provisions thereof have been waived by (a) or
are inconsistent with (b);
(d) the rules, orders, resolutions and regulations of any registered
futures association having jurisdiction over a transaction, in respect
of such transaction, except to the extent that the provisions thereof
have been waived by (a) or are inconsistent with (b) or (c); and
(e) customary practice in the trade, except to the extent inconsistent
with (a), (b), (c) or (d).
Morgan Stanley, its officers, directors, employees and agents shall not be
liable to the Customer as a result of any action taken by Morgan Stanley, its
officers, directors, employees and agents which is necessary to comply with any
such law, rule, regulation, order, resolution or customary practice.
2. MARGIN. The Customer shall provide to and maintain with Morgan Stanley
margin in such amounts and form as Morgan Stanley, in its sole discretion,
may from time to time require. Margin requirements may be changed from time
to time for open as well as for new positions. The margin required of the
Customer by Morgan Stanley in respect of a particular position may exceed
the margin required of Morgan Stanley by the commodity exchange on which
that position is to be or has been established or by such exchange's
clearing house, if any. If Morgan Stanley determines that additional margin
is required, the Customer agrees to transfer such additional margin,
immediately upon demand, to such bank account as Morgan Stanley may
designate; provided, however, that Morgan Stanley shall have no obligation
to notify the Customer of any insufficiency of margin in any of the
Customer's accounts prior to exercising the rights provided to Morgan
Stanley under Section D of this Agreement. Morgan Stanley shall have the
right but not the obligation to lend funds to the Customer (and credit such
funds to the Customer's account) in an amount sufficient to satisfy margin
requirements without prior notice to the Customer.
3. FEES AND COMMISSIONS. The Customer shall pay such fees and commissions for
Morgan Stanley's services as Morgan Stanley may from time to time charge.
Morgan Stanley may share fees or commissions received by it with persons
that introduce or refer the Customer to Morgan Stanley.
4. INTEREST ON ADVANCES. Morgan Stanley may charge the Customer interest on
amounts which have been advanced hereunder to the Customer by Morgan
Stanley, but which are not yet due, at the rate determined by Morgan
Stanley. Interest rates may be changed from time to time in respect of
amounts theretofore advanced as well as in respect of amounts newly
advanced.
-2-
<PAGE>
5. NO STANDARD REQUIREMENT. Morgan Stanley shall have no obligation to publish
fee and commission schedules, nor to impose margin requirements or charge
fees. commissions or interest rates of uniform applicability among its
customers. nor to justify to the Customer the considerations or the basis
on which margin requirements, fees, commissions and interest rates arc
determined by it.
6. CONFIRMATIONS AND STATEMENTS. The Customer shall be conclusively bound by
confirmations of the execution of orders and statements of the accounts of
the Customer if not objected to in writing by the Customer before the
earlier of ten days following transmission to, or one day following actual
receipt by the Customer. Morgan Stanley shall not be bound by prices or
transactions reported in error.
7. CAPACITY OF MORGAN STANLEY; FLOOR BROKERS. Morgan Stanley shall execute
commodity futures and exchange-traded commodity option transactions for the
Customer solely in the capacity of agent. Other commodities transactions
may be executed by Morgan Stanley, in its sole discretion and without prior
or subsequent notice to the Customer, in the capacity of principal, agent
for the Customer and/or agent for any third party. In executing
transactions on an organized commodity exchange, Morgan Stanley shall have
sole discretion to select floor brokers and clearing brokers (who may
include employees or other agents of Morgan Stanley or its Affiliates) to
execute or carry the Customer's transactions and shall not be responsible
to the Customer for any losses caused by any error, failure to execute
orders, negligence or misconduct of any floor broker or clearing broker
selected by it if, -at the time such floor broker or clearing broker was
selected, Morgan Stanley had a reasonable basis to believe that such Poor
broke, or clearing broker was duly registered and authorized to act as such
under the then prevailing rules of such exchange and/or any regulatory
agency having jurisdiction over such floor broker or clearing broker. The
Customer agrees that Morgan Stanley shall not be responsible to the
Customer in the event of any error, failure, negligence or misconduct on
the part of any futures commission merchant, introducing broker or other
person introducing the Customer to Morgan Stanley or on the part of any
commodity trading advisor or other person handling the Customer's accounts,
and that Morgan Stanley shall have no duty to supervise the activities of
any such futures commission merchant, introducing broker, commodity trading
advisor. or other person. The Customer will indemnify Morgan Stanley and
hold Morgan Stanley harmless from and against any and all liabilities,
losses, costs, damages and expenses, including legal expenses, incurred by
Morgan Stanley as a result of any error failure, negligence or misconduct
on the part of any such futures commission merchant, introducing broker,
commodity trading advisor or other person.
8. TRANSACTION LIMITS. The Customer acknowledges Morgan Stanley's right to
limit retroactively or prospectively the number of futures, physicals,
forward or options positions maintained or acquired through Morgan Stanley
at any time. The Customer agrees not to make any trade through Morgan
Stanley which would have the effect of exceeding the position limits
imposed on the Customer by Morgan Stanley, the exchange on which the trade
is to be made or any regulatory agency having jurisdiction over the trade
and agrees to liquidate promptly any positions carried by Morgan Stanley
for the Customer which exceed any such position limits.
9. FAILURE OF DELIVERY BY CUSTOMER. In the case of the sale of any commodity
by Morgan Stanley at the direction of the Customer, including any sale
pursuant to a futures, physicals, forward or options contract, and Morgan
Stanley's inability to make delivery on such sale, by reason of the
Customer's failure to supply Morgan Stanley with such commodity, then
Morgan Stanley may borrow or purchase from any parry (including any
Affiliate), any commodity necessary to make the delivery, and the Customer
shall be responsible for all losses and expenses, including legal expenses,
that Morgan Stanley sustains as a result of the Customer's failure to
deliver. The Customer acknowledges that Morgan Stanley has no duty to
borrow or purchase any such commodity or to attempt to do so.
10. REMEDY FOR NON-CONFORMING PURCHASES. If any commodity purchased from the
Customer by Morgan Stanley hereunder shall fail to meet customary and usual
standards for merchantability, Morgan Stanley, without prior notice to the
Customer, may sell such commodity back to the Customer at the higher of the
market price of the commodity prevailing at the time of resale or the
original sale price, and the amount of such price shall be paid forthwith
by the Customer to Morgan Stanley. The Customer shall be liable for all
costs and expenses, including legal expenses, that Morgan Stanley sustains
as a result of the Customer's failure to deliver the conforming commodity.
11. DELIVERY AND STORAGE OF COMMODITY. If Morgan Stanley agrees, Morgan
Stanley, on behalf of the Customer and for a reasonable charge, will make
arrangements for packaging, shipping, storing or insuring any commodity
sold hereunder. Morgan Stanley's only liability in respect of such
arrangements will be in the event of its gross negligence or willful
misconduct.
12. REIMBURSEMENT FOR TAXES, ETC. The Customer shall reimburse Morgan Stanley
for all taxes, levies, imposts, duties, charges and fees incurred in
connection with the purchase, sale, delivery or storage of any commodity
hereunder.
13. PAYMENT. Unless otherwise agreed by Morgan Stanley, any payment by the
Customer to Morgan Stanley shall be in immediately available funds to
Morgan Stanley's account at the bank designated by Morgan Stanley.
14. LIQUIDATING INSTRUCTIONS. At least five business days prior to the first
notice day in the case of long positions in open futures contracts, and at
least five business days prior to the last trading day in the case of short
positions in open futures contracts and long or short
-3-
<PAGE>
positions in open commodity option contracts, the Customer will either give
Morgan Stanley instructions to liquidate such contracts, or will deliver to
Morgan Stanley sufficient funds and/or any documents necessary to make or
take delivery. If such instructions, Or such funds and/or documents, are
not received by Morgan Stanley by the time specified above, Morgan Stanley
may, in its discretion and without notice to the Customer, either liquidate
the positions of the Customer or make or receive delivery on behalf of the
Customer, upon such terms and by such methods as Morgan Stanley may
determine in its sole and absolute discretion.
15. CURRENCY EXCHANGE RATES. In the event that any transaction is effected in a
foreign currency, any profit or loss arising as a result of a fluctuation
in the exchange rate for such currency will be entirely for the account and
risk of the Customer Initial and subsequent deposits for margin purposes
shall be made by the Customer in United States currency. When any such
position is liquidated Morgan Stanley shall debit or credit the account of
the Customer in United States currency at the rate of exchange determined
by Morgan Stanley in its sole and absolute discretion on the basis of the
then prevailing money market exchange rates for such foreign currency.
D. SECURITY AGREEMENT CONCERNING THE CUSTOMER'S OBLIGATIONS TO MORGAN STANLEY.
1. SECURITY INTEREST. The Customer grants to Morgan Stanley, for itself and as
agent for its Affiliates, the senior security the Collateral, as security
for the payment of any and all Liabilities.
2. MORGAN STANLEY'S RIGHTS RESPECTING COLLATERAL. Morgan Stanley may, in its
sole discretion, transfer to or register in the name of itself, its
Affiliates or the nominee of any of them, any of the Collateral, and take
any action required by die laws of any jurisdiction to perfect its and/or
its Affiliates' security interest in the Collateral, without notice or
liability to the Customer except to account for property actually received
by it. The Customer agrees to do all such acts and things and to execute
and deliver all such documents and instruments as Morgan Stanley may
request from time to time in order to perfect and preserve such security
interest. The Customer appoints Morgan Stanley as its agent and
attorney-in-fact, with power of substitution, for doing all such acts and
things and executing and delivering all such documents and instruments on
its behalf. Morgan Stanley has no obligation to return to the Customer the
identical item of Collateral, but only to replace such item with property
of like kind and substantially similar quantity, subject to adjustments for
quantity and quality variations at then prevailing market prices. As at the
date hereof there exists no, and without the prior written consent of
Morgan Stanley, Customer will not create, grant or permit to exist any,
security interest in any of the Collateral. The Customer hereby grants
Morgan Stanley and its Affiliates the right to borrow, pledge, repledge,
hypothecate, rehypothecate, loan or invest any of the Collateral without
notice to the Customer, or to account to the Customer for, any interest,
income or benefit that may be derived therefrom. The rights of Morgan
Stanley and its Affiliates set forth above shall be qualified, by any
applicable requirements for segregation of customers' property under the
Commodity Exchange Act, as amended, and the rules and regulations
promulgated thereunder.
3. ACTIONS OR SETTLEMENTS RESPECTING COLLATERAL. Morgan Stanley in its sole
discretion may, in its name, the name of any Affiliate, or in the name of
the Customer or otherwise, demand, sue for, collect or receive any money or
property at any time payable or receivable on account of or in exchange
for, or make any compromise or settlement deemed desirable with respect to,
any of the Collateral, but shall be under no obligation to do so. Morgan
Stanley may extend the time of payment or otherwise modify the terms of, or
release any of the Collateral, without thereby incurring responsibility to,
or discharging or otherwise affecting any Liability of the Customer. Morgan
Stanley shall not be required to Like steps necessary to preserve any
rights against prior parties to any of the Collateral.
4. EVENTS OF DEFAULT. An Event of Default hereunder shall occur (i) if the
Customer repudiates or defaults in the performance of any obligation
hereunder or under any other agreement with Morgan Stanley or any
Affiliate, including but not limited to, the failure of the Customer to pay
any of the Liabilities when due; or (ii) if Morgan Stanley or any Affiliate
determines that it has reasonable grounds for insecurity with respect to
performance by the Customer of any obligation and, within twenty-four hours
after demand, the Customer fails to provide adequate assurance of
performance thereof, or (iii) if any proceedings are commenced by or
against the Customer under any laws relating to bankruptcy, insolvency or
the relief of debtors; or (iv) if the Customer makes an assignment for the
benefit of creditors, or (v) if a receiver, trustee, conservator,
liquidator or similar officer is appointed for the Customer or any or all
of its property; or (vi) if the Customer (if a corporation) takes any
corporate action in respect of (iii), (iv), or (v); or (vii) if any of the
representations of the Customer contained in, made pursuant to, or made in
connection with the opening or trading of an account under this Agreement
shall have been false or misleading when made; or (viii) if the Customer
dies; or (ix) if the Customer or any partnership of which the Customer is a
member suspends the transaction of his or its usual business, or any
proceeding or remedy in enforcement is resorted to or commenced with
respect to any of the property of the Customer or any such partnership; or
(x) if the Customer, if a corporation, shall be or be a party to any merger
or consolidation without prior written notice to, and consent of, Morgan
Stanley; or (xi) if the Customer, if a partnership terminates its existence
by reason of the death of a partner or dissolution.
5. MORGAN STANLEY'S REMEDIES UPON DEFAULT. (a) Upon or at anytime after the
occurrence of an Event of Default Morgan Stanley may exercise any or all of
the following remedies, without prejudice to any other remedies:
(i) terminate any or all of Morgan Stanley's obligations for future
performance to the Customer;
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<PAGE>
(ii) treat any and all of the Customer's Liabilities as immediately due
and payable;
(iii) consolidate any of the Customer's accounts with Morgan Stanley;
(iv) offset sums owing by Morgan Stanley to the Customer (including any
sums arising from the operation of this Section 5) against the
Customer's Liabilities;
(v) offset cash Collateral against the Customer's Liabilities;
(vi) sell any or all of the non-cash Collateral in such marine, as Morgan
Stanley determines to be commercially reasonable, including the sale
of such Collateral at such prices as Morgan Stanley sees fit, with
only such notice as is required by applicable law and cannot be
waived, and the sale of Rich Collateral to Morgan Stanley or any of
its Affiliates, who shall thereafter hold such collateral free from
any claim or right of any kind, including any equity of redemption
of die Customer, any such right and equity being hereby expressly
waived and released;
(vii) close out any contract with the Customer in whole or in part from
time to time, as Morgan Stanley elect, by matching contracts with
the Customer for amounts of material equal to the amounts closed
Oct, at market prices therefor as determined by Morgan Stanley. If
the contract closed-out is a contract to sell to the Customer, a
matching contract is a contract to buy from the Customer, or, if the
contract closed-out is a contract to buy from the Customer, a
matching contract is a contract to sell to the Customer, for
delivery and payment at the time or times provided in the contract
closed-out. Upon any close-out Morgan Stanley or the Customer as the
case may be, shall forthwith pay to the other the net amount due
under the contract closed-out and the matching contract discounted
from the time for payment to present value;
(viii) execute offsetting transactions (which need not be for the same
delivery month or on the same market) on commodity exchanges or in
the cash markets as to each open position in the Customer's
accounts, such transactions to be for the Customer's account and
risk. Morgan Stanley shall not be-responsible for any losses or lost
profits resulting from the timing of such transactions in relation
to market conditions at the time of the execution thereof or at any
earlier or later time.
(b) Notwithstanding the foregoing, upon the occurrences of any of the Events of
Default set forth in Section D.4 (iii) through (vi) inclusive, immediately
and without further action by Morgan Stanley, to the extent the same may be
lawful:
(i) all of Morgan Stanley's obligations for future performance to the
Customer shall terminate;
(ii) all of the Customer's Liabilities shall (iii)be immediately due and
payable;
(iii) the Customer's accounts with Morgan Stanley shall be consolidated;
(iv) all sums owing by Morgan Stanley to the Customer (including any sums
arising from the operation of this Section 5) shall be offset
against the Customer's Liabilities; and
(v) all cash Collateral shall be offset against the Customer's
Liabilities.
(c) The Customer shall pay Morgan Stanley for all losses and expenses including
legal expenses incurred by Morgan Stanley in connection with (A) the
exercise of any remedy, (B) the care of the Collateral and defining or
asserting the rights and claims of Morgan Stanley in respect thereof,
including insurance, and (C) meeting any of Morgan Stanley's obligations
which would otherwise be defaulted, unless and except to the extent Morgan
Stanley waives any or all of the foregoing in whole or in part. Morgan
Stanley shall be entitled to void all or any part of such waiver at any
time so long as the Event of Default continues.
6. TRANSFER OF COLLATERAL. Morgan Stanley may assign or transfer any of the
Liabilities. Morgan Stanley may assign to any transferee of any of the
Liabilities all or any part of the Collateral and thereafter shall be fully
discharged from all responsibility with respect to the Collateral so
assigned.
7. DEFICIENCY INTEREST. In the event of any failure by the Customer timely to
pay any sum due hereunder, Morgan Stanley, prior to its exercise of any
remedies under this Section D, may charge the Customer interest on the
unpaid sum, while outstanding, at a rate per annum equal to the lesser of
the maximum rate permitted by law or 115 percent of the brokers' call money
rate as determined by Morgan Stanley.
-5-
<PAGE>
Upon and following any such exercise of remedy the Customer shall pay
interest to Morgan Stanley on any unpaid sum, including any deficiency
amount in an account of the Customer, at a rate per annum equal to [he
lesser of the maximum rate permitted by law or 115 percent of the brokers'
call money rate as determined by Morgan Stanley.
E. MISCELLANEOUS PROVISIONS.
1. GOVERNING LAW AND SUBMISSION TO JURISDICTION. This Agreement shall be
governed by the substantive laws of the State of New York. The Customer
submits to the jurisdiction of the courts of New York and of the Federal
Courts in the Southern District of New York with respect to any litigation
with Morgan Stanley relating to this Agreement, and consents to the service
or process by the mailing to the Customer of copies thereof by certified
mail to the address of the Customer as it appears on the books and records
of Morgan Stanley such service to be effective two days after mailing. The
Customer hereby waives irrevocably any immunity to which it might otherwise
be entitled in any arbitration, action at law, suit in equity other or any
other proceedings arising out of or based on this Agreement or any
transaction in connection herewith.
2. INDEMNIFICATION. If any representation of the Customer made in, or pursuant
to, this Agreement shall be false or misleading, the Customer snail
indemnify and hold Morgan Stanley harmless from and against all claims,
losses, damages and expenses, including legal expenses, resulting
therefrom.
3. FORCE MAJEURE; WARRANTY AND DISCLAIMER OF WARRANTIES. Morgan Stanley shall
not be liable for any delay in performance, for non-performance of any of
its obligations hereunder or in any transaction between Morgan Stanley and
the Customer or for any losses caused by the occurrence of any contingency
beyond the reasonable control of Morgan Stanley including, but not limited
to, breakdown or failure of transmission of communications facilities, the
suspension or termination of trading or delivery an any commodity exchange
or market, the imposition of a cash settlement by an exchange, clearing
organization, government agency or other entity in lieu of delivery on a
commodity contract or for any other reason, the bankruptcy, insolvency or
liquidation of a clearing organization, clearing broker or bank, war
(whether an actual declaration thereof is made or not), sabotage,
insurrection, riot or other act of civil disobedience, act of a public
enemy, failure or delay in transportation, act of any government or any
agency or subdivision thereof, judicial action, labor dispute, accident,
fire, explosion, flood, storm or other natural cause, a shortage of labor,
fuel, raw material or machinery, or technical failure. Morgan Stanley may,
in its sole discretion and without liability to the Customer, cancel this
Agreement or the particular transaction involved if its performance is
delayed or rendered impossible due to the occurrence of any such
contingency. Morgan Stanley's sole warranty is that any commodity delivered
by it hereunder will conform to the description thereof on any confirmation
delivered by Morgan Stanley with respect thereto. MORGAN STANLEY HEREBY
EXPRESSLY DISCLAIMS ALI OTHER WARRANTIES EXPRESS OR IMPLIED, INCLUDING ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND ANY
WARRANTY AS TO THE COMPLIANCE WITH THE LAWS OF ANY GOVERNMENTAL AUTHORITY
IN RESPECT OF THE OWNERSHIP, POSSESSION STORAGE, FINANCING OR
TRANSPORTATION OF ANY COMMODITY WHICH IS THE SUBJECT MATTER OF ANY
TRANSACTION PURSUANT TO THIS AGREEMENT.
4. NON-WAIVER; NON-ASSIGNMENT; TIME OF THE ESSENCE. A waiver or modification
of any provision hereof, or any attempted assignment by the Customer of any
right or interest herein, shall not bind Morgan Stanley unless in writing
and signed by a duly authorized officer of Morgan Stanley, and shall riot
entitle the Customer to any further assignment or to that waiver or
modification on any subsequent occasion. No waiver or modification of this
Agreement may be implied from any course of dealing between the parties or
from any failure of Morgan Stanley to exercise any right or remedy under
this Agreement on any occasion or series of occasions. Time is of the
essence in the performance of the Customer's obligations hereunder.
5. BINDING EFFECT. This Agreement shall cover all commodities accounts,
commodity futures, options and forward contract accounts and all other
commodity-related accounts of the Customer with Morgan Stanley shall be
binding upon the Customer, and the estate, legal representatives,
successors and assigns of the Customer and shall inure to the benefit of
Morgan Stanley, its successors and assigns. The Customer hereby ratifies
all prior transactions effected with or through Morgan Stanley of the sort
provided for by this Agreement and agrees that such transactions and all
transactions effected hereafter with Morgan Stanley in commodity futures,
commodity options, any other commodity-related instruments, or in
commodities for immediate or deferred delivery shall be governed by the
terms hereof.
6. COMMUNICATIONS. Communications may be sent to the Customer by mail, telex,
telegraph. messenger or other reasonable means, to the address shown on the
books and records of Morgan Stanley, and shall be deemed given to the
Customer personally upon, receipt or twenty-four hours after transmission,
whichever first occurs. Morgan Stanley may from time to time, but shall not
be obligated to, monitor and record communications between its employees
and customers. The Customer hereby waives any and ail rights to object to
the admission to evidence of such recordings in any legal proceeding
between the Customer and Morgan Stanley. Morgan Stanley may take any action
pursuant to this Agreement on the basis of unconfirmed telephone
instructions which it in good faith believes originated from the Customer
or the Customer's duly authorized agent and the Customer will indemnify
Morgan Stanley and hold it harmless from and against all liabilities,
losses, Costs and expense, including legal expenses, incurred by Morgan
Stanley as a result of acting upon such instructions.
-6-
<PAGE>
7. NON-EXECUTION. Any failure by the Customer to duly execute this Agreement
shall not constitute a waiver by Morgan Stanley of any rights it may
otherwise possess against the Customer.
8. MORGAN STANLEY HAS NO RESPONSIBILITY FOR RECOMMENDATIONS. The Customer
acknowledges that (A) any trading recommendation or market information
communicated by Morgan Stanley to the Customer or the Customer's duly
authorized agent does not constitute an offer to sell or the solicitation
of any offer to buy any commodity; (B) such recommendations and information
although based upon information obtained from sources believed by Morgan
Stanley to be reliable, may be incomplete and unverified; and (C) Morgan
Stanley makes no representation, warranty. or guaranty as to, and shall not
be responsible for, the accuracy or completeness of any market information
or trading recommendation furnished to the Customer. The Customer
represents that the Customer will not hold Morgan Stanley responsible for
losses sustained by the Customer as a result of any prediction or
recommendation made by any representative of Morgan Stanley, whether or not
made or given at the request of the Customer. The Customer understands that
Morgan Stanley and/ or its officers, directors, Affiliates, stockholders,
or representatives may have a position in and may intend to buy or sell
commodities which are the subject of trading recommendations furnished to
the Customer and that the market position or intention to buy or sell of
Morgan Stanley or any such officer, director, Affiliate, stockholder, or
representative may or may not be consistent with the recommendations
furnished to the Customer by Morgan Stanley.
9. LIMITATION UPON REMEDIES. In the event any commodity delivered by Morgan
Stanley while acting as principal is not in conformity with the description
thereof on any confirmation delivered by Morgan Stanley with respect
thereto, the sole remedy of the Customer and all others claiming with or
trough die Customer is that the Customer may, at the Customer's expense,
return such material to Morgan Stanley, and Morgan Stanley shall, at Morgan
Stanley's expense, replace the material so returned. In no event shall
Morgan Stanley be liable for any special or consequential damages or
otherwise than as stated in the preceding sentence Morgan Stanley shall
have no liability hereunder unless written notice specifying any alleged
defect is received by Morgan Stanley within twenty days after delivery of
the commodity sold pursuant hereto. Failure so to notify Morgan Stanley
shall constitute a waiver of any and all claims with respect to such
commodity.
10. TERMINATION. This Agreement shall continue in effect until terminated and
may be terminated by the Customer at any time when the Customer has no
Liabilities and no oven positions which could give rise to subsequent
Liabilities to Morgan Stanley or any Affiliate upon the actual receipt by
Morgan Stanley of written notice of termination, or at any time whatsoever
by Morgan Stanley upon the mailing or delivery of written notice of
termination to the Customer provided, however, that any such termination
shall not affect any transactions theretofore entered into and shall not
relieve either party of any obligations in connection with any debit
balance or credit balance or other Liability or obligation incurred prior
to such termination.
11. MULTIPLE PARTIES. If more than one Customer shall execute this Agreement:
(a) the word "Customer" wherever it appears in this Agreement, other than
in this paragraph, shall be deemed to refer to each such Customer, and
to ail such Customers, unless the following provisions of this
paragraph otherwise require;
(b) each Customer shall be jointly and severally liable for the full and
timely performance of all of the obligations of the Customers under or
in connection with this Agreement and any account established and any
transaction effected under this Agreement;
(c) in connection with any account established under this Agreement,
Morgan Stanley may act upon any order, request or instruction from any
one Customer without the necessity of confirmation from any other
Customer;
(d) the delivery of any report, statement, notice or other communication
to my one Customer shall be deemed to have been to all of the
Customers;
(e) Morgan Stanley may deliver any Collateral of any of the Customers held
by it to any one or more of the Customers, and make payments from any
account established pursuant to this Agreement to or upon the order or
direction of any one of :he Customers, even if such delivery and/or
payment shall be made to one or more of the Customers personally, and
Morgan Stanley shall be under no obligation to inquire into the
purpose of any request for the delivery of any such Collateral or the
making of any such payment, or to see to the disposition or
application thereof; and
(f) unless Morgan Stanley is advised other-wise in writing by completing
Morgan Stanley's form of Declaration of Tenancy in Common, the
interest of the Customers in any account or accounts established under
this Agreement shall be deemed to be a joint tenancy with rights of
survivorship and not a tenancy in common.
12. SEVERABILITY. If any provision of this Agreement, or the application of
such provision to any person or circumstances, shall be held invalid, the
remainder of this Agreement, and the application of such provision to
persons or circumstances ocher than chose as to which it is held invalid,
shall not be affected thereby.
-7-
<PAGE>
13. CAPTIONS. Section and paragraph captions are used for convenience of
reference and neither form an integral part of this Agreement, nor limit
the applicability or affect the meaning of any of its provisions.
13. CROSS TRADE CONSENT. The Customer hereby confirms that the Customer has no
objection to Morgan Stanley or any Affiliate, or officers or directors of
Morgan Stanley or any Affiliate, acting as buyers with respect to orders
given by the Customer to Morgan Stanley to sell for the account of the
Customer, or acting as sellers with respect to orders given by the Customer
to Morgan Stanley to buy for the account of the Customer on any commodity
futures exchange. The Customer hereby further confirms that the Customer
has no objection to floor brokers on any commodity futures exchange acting
as buyers with respect to orders giver by the Customer to Morgan Stanley
and by Morgan Stanley to such floor brokers to sell for the account of the
Customer, or acting as sellers with respect to orders given by the Customer
to Morgan Stanley and by Morgan Stanley to such floor brokers to buy for
the account of the Customer. Morgan Stanley is further authorized, on
behalf of the Customer, to give consent to such actions to floor brokers.
The consents; and authorization form herein are subject to any applicable
provisions of the Commodity Exchange Act, as amended, the regulations
thereunder and the by-laws and rules of the exchanges on which such
transactions occur, and may be revoked at any time on written notice to
Morgan Stanley. By placing its initials in the space set forth at the foot
of this paragraph, the Customer accepts and agrees to the provisions of
this paragraph.
ACCEPTED AND AGREED:
MMI 22 October 1987
(Customer's Initials) (Date)
VAN ECK FUNDS/WORLD INCOME FUND
(Name of Customer - Please Print)
22-Oct-87 /s/ Klaus Buescher Klaus Buescher - Portfolio Manager
(Date) (Signature) (Name & Title - Please Print)
122 East 42/nd/ Street
(Address)
New York, NY 10168
22-Oct-87 /s/ Mansoor Ijaz Mansoor Ijaz - Futures/Options Strategist
122 East 42/nd/ Street
(Address)
New York, NY 10168
-8-
<PAGE>
AGREEMENT AND PLAN OF REDOMICILE AND REORGANIZATION
AGREEMENT AND PLAN OF REDOMICILE AND REORGANIZATION, dated as of , 1991
(the "Agreement"), between International Investors Incorporated, a Delaware
corporation (the "Company"), and Van Eck Funds, a Massachusetts business trust
(the "Trust").
WHEREAS the Company is a diversified, open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"Act");
WHEREAS the Company has authorized capital stock consisting of 500,000,000
shares at $1 par value, which capital stock comprises the only class of stock of
the Company issued and outstanding;
WHEREAS the Trust was organized pursuant to a Master Trust Agreement, dated
April 3, 1985, and is presently authorized to issue five series of shares of
beneficial interest, without par value, including shares of International
Investors ("II");
WHEREAS the Company desires to reorganize itself into the Trust, pursuant
to Section 271 of the Delaware General Corporation Law, and to provide for the
exchange of the Company's assets and liabilities for shares of beneficial
interest of 11 and the pro-rata distribution to shareholders of the Company, on
a one-for-one basis, of shares of beneficial interest of II in exchange for the
issued and outstanding capital stock of the Company;
Now THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. PLAN OF REDOMICILE AND REORGANIZATION.
At the "Effective Time" of the reorganization of the Company, the Company
shall transfer all of its business and assets to II, and II shall assume all
liabilities of the Company, in exchange for delivery to the Company by the Trust
of a number of shares of 11 (both full and fractional) equal to the number of
shares of the Company outstanding immediately prior to the time of such transfer
and assumption (the "Effective Time"). All debts, liabilities, obligations and
duties of the Company, to the extent that they exist at or after the Effective
Time, shall after the Effective Time attach to 11 and may be enforced against II
to the same extent as if the same had been incurred by II.
At the Effective Time, the shares of II (both full and fractional) received
by the Company will be distributed to the shareholders of the Company in
exchange for their shares of the Company, each shareholder to receive a number
of shares of II equal to the number of shares of the Company held by him. The
pro-rata issuance and distribution will be accompanied by the establishment of
an open account on the share records of the Trust in the name of each
shareholder of the Company and representing the respective pro rata number of
shares of II due such shareholder. Certificates for shares of the Company issued
prior to the Effective Time shall represent outstanding shares of II after the
Effective Time. As soon as practicable after the Effective Time, the Company
shall file a Certificate of Dissolution for recording with the Delaware
Secretary of State, and shall take in accordance with Delaware General
Corporation Law all other steps as shall be necessary and proper to effect
complete dissolution of the Company. Subsequent to the Effective Time, the
Company will liquidate and dissolve, and will cease to exist as a separate
business entity.
<PAGE>
2. ISSUED SHARE.
Prior to the Effective Time and after the Company has taken the actions
authorized by stockholders of the Company pursuant to Section 3(g) hereof, the
single share of II heretofore held by the Company shall be redeemed and
cancelled by the Trust.
3. CONDITIONS PRECEDENT.
The obligations of the Company and the Trust to effectuate the plan of
redomicile and reorganization hereunder shall be subject to the satisfaction of
each of the following conditions:
(a) Such authority, including "no-action" letters, and orders from the
Securities and Exchange Commission (the "Commission") and state securities
commissions as may be necessary to permit the parties to carry out the
transactions contemplated by this Agreement shall have been received.
(b) One or more post-effective amendments to the registration
statement of the Trust on Form N-1A under the Securities Act of 1933 and
the Act, as may be required, containing such amendments to such
registration statement as are determined by the Board of Trustees of the
Trust to be necessary and appropriate as a result of the plan of redomicile
and reorganization shall have been filed with the Commission and shall have
become effective, and no stop-order suspending the effectiveness of the
registration statement shall have been issued, and no proceeding for that
purpose shall have been initiated or threatened by the Commission (and not
withdrawn or terminated).
(c) Confirmation shall have been received from the Commission or its
staff that II shall, effective upon or before the Effective Time, be duly
registered as a diversified, open-end management investment company under
the Act.
(d) Each party shall have received an opinion of counsel that the
Trust, and II, are duly formed and validly existing under the laws of the
Commonwealth of Massachusetts and that the shares of the Trust to be issued
pursuant to the terms of this Agreement have been duly authorized, and,
when issued and delivered as provided in this Agreement, will have been
validly issued, fully paid and nonassessable.
(e) Each party shall have received an opinion of counsel to the effect
that the reorganization contemplated by this Agreement qualifies as a
"reorganization" under Section 368(a)(1) of the Internal Revenue Code of
1986, as amended (the "Code"), and each party shall have received an
opinion of counsel or a private letter ruling from the Internal Revenue
Service to the effect that II will be treated as a separate association
taxable as a corporation for federal income tax purposes.
(f) The shares of II shall have been duly qualified for offering to
the public in all states of the United States, the Commonwealth of Puerto
Rico and the District of Columbia (except where applications are not
required) so as to permit the transfers contemplated by this Agreement to
be consummated.
(g) A vote approving this Agreement and the reorganization
contemplated hereby shall have been adopted by at least a majority of the
outstanding shares of capital stock of the Company entitled to vote at an
annual or special meeting and the shareholders of the Company shall have
voted at such meeting to direct the Company to vote, and the Company shall
have voted, as the sole shareholder of II to approve an investment advisory
agreement (the "Advisory Agreement") between the Trust and Van Eck
Associates Corporation.
<PAGE>
(h) The Board of Trustees of the Trust shall have taken the following
actions at a meeting duly called for such purposes:
(1) approved the Advisory Agreement between the Trust and Van Eck
Associates Corporation;
(2) selected Deloitte & Touche as the Trust's independent
auditors for the fiscal year ending December 31, 1991;
(3) authorized the issuance by the Trust, prior to the Effective
Time, of one share of 11 to the Company in consideration for the
payment of $10, for the purpose of enabling the Company to vote on the
matters referred to in paragraph (g) in this Section 3 as the sole
shareholder of 11;
(4) submitted the advisory agreement referred to in paragraph (g)
of this Section 3 to the Company as sole shareholder of II; and
(5) authorized the issuance by the Trust of shares of II at the
Effective Time in exchange for the assets and liabilities of the
Company pursuant to the terms and provisions of this Agreement.
At any time prior to the Effective Time, any of the foregoing conditions
may be waived by the Board of Directors of the Company if, in the judgment of
the Board, such waiver will not have a material adverse effect on the benefits
intended under this Agreement to the stockholders of the Company.
4. EFFECTIVE TIME.
The exchange of the Company's business, assets and liabilities for shares
of II shall be effective as of 5:30 P.M. New York Time, on April 30, 1991 or at
such other time and date as fixed by the mutual consent of the parties.
5. TERMINATION.
This Agreement and the transactions contemplated hereby may be terminated
and abandoned by resolution of the Board of Directors of the Company, at any
time prior to the Effective Time, if circumstances should develop that, in the
opinion of the Board, make proceeding with the Agreement inadvisable.
6. GOVERNING LAW.
This Agreement shall be governed and construed in accordance with the laws
of the Commonwealth of Massachusetts.
7. FURTHER ASSURANCES.
The Company and the Trust shall take such further actions as may be
necessary or desirable and proper to consummate the transactions contemplated
hereby.
<PAGE>
8. LIMITATIONS OF LIABILITY.
It is expressly agreed that the obligations of the Trust hereunder shall
not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust, personally, but bind only the assets and
property of the Trust, as provided in the Master Trust Agreement of the Trust.
INTERNATIONAL INVESTORS Attest:
INCORPORATED
___________________________________ ______________________________________
President Secretary
VAN ECK FUNDS (SEAL)
___________________________________ ______________________________________
President Secretary
(SEAL)
<PAGE>
ACCOUNTING AND ADMINISTRATIVE SERVICES AGREEMENT
THIS AGREEMENT is made as of the ____ day of _____, 199x, by and between
VAN ECK FUNDS, a Massachusetts business trust (the "Trust") and VAN ECK
ASSOCIATES CORPORATION (the Administrator"), a New York corporation.
W I T N E S S E T H:
WHEREAS, the Trust Is registered as an open-end, diversified management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Trust wishes to retain the Administrator to provide certain
accounting and administrative services to a series thereof, namely - ("Series"),
and the Administrator is willing to furnish such services;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Trust hereby appoints the Administrator to provide certain
-----------
accounting and administrative services to the Series for the period and on the
terms set forth In this Agreement. The Administrator accepts such appointment
and agrees to furnish the services herein set forth. The Administrator agrees to
comply with all relevant provisions of the 1940 Act and applicable rules and
regulations thereunder. The Trust may from time to time issue separate series or
classes or classify and reclassify shares of such series or class. The
Administrator shall identify to each such series or class of shares property
belonging to such series or class and shall prepare such reports, confirmations
and notices to the Trust called for under this Agreement and shall identify the
series or class of shares to which such report, confirmation or notice pertains
in the event it is engaged by the Trust to perform the services herein contained
respecting such series or class of shares.
2. Delivery of Documents. The Trust will furnish the Administrator with
---------------------
properly certified or authenticated copies of such documents, resolutions and
agreements and any amendments or supplement thereto, as the Administrator may,
from time to time request.
3. Services on a Continuing Basis.
------------------------------
(a) The Administrator, at Its own expense, will perform the following
accounting functions on an ongoing basis:
(1) Journalize the Series' Investment, capital share and income and
expense activities;
(2) Verify investment buy/sell trade tickets when received from the Series
and transmit trades to the Trusts custodian for proper settlement;
(3) Maintain individual ledgers for investment securities;
(4) Reconcile cash and investment balances of the Series with the Trust's
custodian, and
<PAGE>
provide the Series with the beginning cash balance available for
Investment purposes;
(5) Update the cash availability throughout the day as required by the
Series;
(6) Post to and prepare the Trust's Statement of Assets and Liabilities
and the Statement of Operations;
(7) Calculate various contractual expenses (e.g,, transfer agency fees);
(8) Control all disbursements from the Series and authorize such
disbursements upon written instructions from authorized Series
officers and agents;
(9) Calculate capital gains and losses;
(10) Determine the Series' net income;
(11) Obtain security market quotes, at the Fund's expense, from services
approved by the Trust, or if such quotes are unavailable, obtain such
prices from the Series investment advisor, and in either case
calculate the market value of the Trusts investments;
(12) Deliver a copy of the daily portfolio valuation to the Series;
(13) Compute the net asset value of the Series:
(14) Compute the Series' yields, total return, expense ratios, portfolio
turnover rate;
(15) Monitor the expense accruals and notify the Series of any proposed
adjustments; and
(16) Prepare periodic unaudited financial statements.
(b) In addition to the accounting services described in the foregoing
Paragraph 3(a), the Administrator will provide or arrange for the
following services:
(1) Prepare periodic audited financial statements;
(2) Supply various statistical data as requested by the Board of Trustees
of the Trust on an ongoing basis;
(3) Prepare for execution and file the Series' Federal and state tax
returns;
(4) Prepare and file the Series' Semi-Annual Reports with the SEC on Form
N-SAR;
(5) Prepare and file with the Securities and Commission Charge the Trust's
annual, semi-annual, and quarterly shareholder reports;
(6) File registration statements on form N1-A and other filings relating
to the registration of Shares;
(7) Monitor the Series' status as a regulated Investment company under
Sub-Chapter M of the Internal Revenue Code of 1986, as amended;
(8) Maintain the Series' fidelity bond as required by the 1940 Act;
(9) Prepare materials for and record the proceedings of, in conjunction
with the officers of the
<PAGE>
Trust, the meetings of the Trusts Board of Trustees; and
(10) Prepare any other regulatory reports to and for any federal, local or
state agency as may be required.
In carrying out Its duties hereunder, as well as any other activities undertaken
on behalf of the Series pursuant to this Agreement, the Administrator shall at
all times be subject to the control and direction of the Board of Trustees of
the Trust.
4. EXPENSES OF THE ADMINISTRATOR AND THE TRUST
(a) Expenses of the Administrator.
-----------------------------
(1) The Administrator, to the extent not provided by the investment advisers to
the Fund, will arrange to furnish the Trust office space In the offices of
the Administrator, or in such other place or places as may be agreed upon
from time to time, and all necessary office facilities, simple business
equipment, supplies, utilities, and telephone service for administering the
affairs and investments of the Trust. These services are exclusive of the
necessary services and records of any dividend disbursing agent, transfer
agent, registrar or custodian, and accounting and bookkeeping services
which may be provided by the custodian.
(2) The Administrator shall provide executive and clerical personnel for
administering the affairs of the Trust, and shall compensate officers and
Trustees of the Trust if such persons are also employees of the
Administrator or its affiliates, except as provided in Paragraph 3(a).
(b) Expenses of the Trust. Although the Administrator shall be responsible for
---------------------
providing or arranging for a third party to provide the services set forth
herein, the Administrator shall not bear the responsibility for or expenses
associated with operational, accounting or administrative services on behalf of
the Trust not directly related to providing an investment program for the Trust.
The expenses to be borne by the Trust include, without limitation:
(1) the charges and expenses of any registrar, stock, transfer or dividend
disbursing agent, custodian, depository or other agent appointed by the
Trust for the safekeeping of its cash, portfolio securities and other
property;
(2) except as provided in Section 4(a) hereof, general operational,
administrative and accounting costs, such as the costs of calculating the
Trusts net asset value, the preparation of the Trust's tax flings with
relevant authorities and of compliance with any and all regulatory
authorities:
(3) the charges and expenses of auditors and outside accountants;
(4) brokerage commissions for transactions in the portfolio securities of the
Trust;
(5) all taxes, including issuance and transfer taxes, and corporate fees
payable by the Trust to Federal, state or other U.S. or foreign
governmental agencies;
(6) the cost of stock certificates representing shares of the Trust;
(7) expenses involved in registering and maintaining registrations of the Trust
and of its shares with the Securities and Exchange Commission and various
states and other jurisdictions, if applicable;
(8) all expenses of shareholders' and Trustees' meetings, Including meetings of
committees, and of preparing, setting in type, printing and mailing proxy
statements, quarterly reports, semi-annual
<PAGE>
reports, annual reports and other communications to shareholders;
(9) all expenses of preparing and setting in type offering documents, and
expenses of printing and mailing the same to shareholders (but not expenses
of printing and mailing of offering document and literature used for any
promotional purposes);
(10) compensation and travel expenses of Trustees who are not "interested
persons" of the Administrator within the meaning of the 1940 Act;
(11) the expense of furnishing, or causing to be furnished, to each shareholder
statements of account;
(12) charges and expenses of legal counsel in connection with matters relating
to the Trust, including, without limitation, legal services rendered in
connection with the Trust's corporate and financial structure, day to day
legal affairs of the Trust and relations with its shareholders, issuance of
Trust shares, and registration and qualification or securities under
Federal, state and other laws;
(13) the expenses of attendance at professional meetings of organizations such
as the Investment Company Institute by officers and Trustees of the Trust,
and the membership or association dues of such organizations;
(14) the cost and expense of maintaining the books and records of the Trust;
(15) the expense of obtaining and maintaining a fidelity bond as required by
Section 17(g) of the 1940 Act and the expense of obtaining and maintaining
an errors and omissions policy;
(16) interest payable on Trust borrowing;
(17) postage; and
(18) any other cost and expenses Incurred by the Administrator for Trust
operations and activities.
5. Records.
-------
The books and records pertaining to the Series which are in the possession of
the Administrator shall be the property of the Trust. Such books and records
shall be prepared and maintained as required by the 1940 Act and other
applicable securities laws and rules and regulations. The Trust, or the Trust's
authorized representatives, shall have access to such books and records at all
times during the Administrator's normal business hours. Upon the reasonable
request of the Trust, copies of any such books and records shall be provided by
the Administrator to the Trust or its authorized representative at the Trust's
expense.
6. Liaison With Accountants. The Administrator shall act as liaison with the
------------------------
Trust's independent public accountants and shall provide account analyses,
fiscal year summaries, and other audit related schedules. The Administrator
shall take all reasonable action in the performance of its obligations under
this Agreement to assure that the necessary information is made available to
such accountants for the expression of their opinion, as such may be required by
the Trust from time to time.
7. Right to Receive Advice.
-----------------------
(a) Advice of Series. If the Administrator shall be in doubt as to any action
----------------
to be taken or omitted by it, it may request, and shall receive, from the
Series directions or advice.
(b) Advice of Counsel. If the Administrator or the Series shall be in doubt as
-----------------
to any question of law
<PAGE>
involved in any action to be taken or omitted by the Administrator, it may
request advice at the Series' cost from counsel of its own choosing (who
may be counsel for the Administrator or the Series, at the option of the
Administrator).
(c) Protection of the Administrator. The Administrator shall be protected in
-------------------------------
any action or inaction which it takes in reliance on any directions or advice
received pursuant to subsections (a) or (b) of this paragraph which the
Administrator, after receipt of any such directions or advice in good faith
believes to be consistent with such directions or advice as the case may be.
However, nothing in this paragraph shall be construed as imposing upon the
Administrator any obligation (i) to seek such directions, or advice or (ii) to
act in accordance with such directions or advice when received. Nothing in this
subsection shall excuse the Administrator when an action or omission on the part
of the Administrator constitutes willful misfeasance, bad faith, gross
negligence or reckless disregard by the Administrator of its duties under this
Agreement.
8. Compliance with Governmental Rules and Regulations. The Series assumes
--------------------------------------------------
full responsibility for insuring that it complies with all applicable
requirements of the Securities Act of 1933 (the "1933 Act"), the Securities
Exchange Act of 1934 ("the 1934 Act"), the 1940 Act, and any laws, rules and
regulations of governmental authorities having Jurisdiction.
9. Compensation. As compensation for the services rendered by the
------------
Administrator during the term of this Agreement, the Series will pay to the
Administrator an annual fee calculated and payable monthly, at the annual rate
of - 1% of the average daily net assets of the Series.
10. Indemnification. The Trust agrees to indemnify and hold harmless the
---------------
Administrator and its nominees from all taxes, charges, expenses, assessments,
claims and liabilities, (including, without limitation, liabilities arising
under the 1933 Act, the 1934 Act, the 1940 Act, and any state and foreign
securities and blue sky laws, all as or to be amended from time to time) and
expenses, including (without limitation) attorneys' fees and disbursements,
arising directly or Indirectly from any action or thing which the Administrator
takes or does or omits to take or do (i) at the request or on the direction of
or in reliance on the advice of the Series or the Trust or (ii) upon oral or
written instruction, provided, that neither the Administrator nor any of its
nominees shall be indemnified against any liability to the Series or to its
shareholders (or any expenses incident to such liability) arising out of the
Administrator's own willful misfeasance, bad faith, gross negligence or reckless
disregard of its duties and obligations under this Agreement.
11. Responsibility of the Administrator. The Administrator shall be under no
-----------------------------------
duty to take any action on behalf of the Series except as specifically set forth
herein or as may be specifically agreed to by the Administrator in writing. In
the performance of its duties hereunder, the Administrator shall be obligated to
exercise care and diligence and to act in good faith and to use its best efforts
within reasonable limits in performing services provided for under this
Agreement, but the Administrator shall not be liable for any act or omission
which does not constitute willful misfeasance, bad faith or gross negligence on
the part of the Administrator or reckless disregard by the Administrator of its
duties under this Agreement. Without limiting the generality of the foregoing or
of any other provision of this Agreement, the Administrator in connection with
its duties under this Agreement shall not be under any duty or obligation to
inquire into and shall not be liable for or in respect of (a) the validity or
invalidity or authority or lack thereof of any oral or written instruction,
notice or other instrument which conforms to the applicable requirements of this
Agreement, and which the Administrator reasonably believes to be genuine; (b)
delays or errors or loss of data occurring by reason of circumstances beyond the
Administrator's control, including acts of civil or military authority, national
emergencies, labor difficulties, fire, mechanical breakdown, flood or
catastrophe, acts of God, insurrection, war, riots or failure of the mails,
transportation, communication or power supply. In the event of equipment
failures beyond the Administrator's control, the Administrator shall, at no
additional expense to the Series or the Trust, take reasonable steps to minimize
service interruptions but shall have no liability with respect thereto.
<PAGE>
12. Duration and Termination. This Agreement shall continue until termination
------------------------
by either party on 60 days written notice to the other.
13. Further Action. Each party agrees to perform such further acts and execute
--------------
such further documents as are necessary to effectuate the purposes hereof.
14. Amendments. This Agreement or any part hereof may be changed or waived
----------
only by an instrument in writing signed by the party against which enforcement
of such change or waiver is sought.
15. Miscellaneous. This Agreement embodies the entire agreement and
-------------
understanding between the parties thereto, and supersedes all prior agreements
and understandings, relating to the subject matter hereof, provided that the
parties hereto may embody in one or more separate documents their agreement, if
any, with respect to delegation and/or oral instructions. The captions in this
agreement are included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their construction or
effect. This Agreement shall be deemed to be a contract made in New York and
governed by New York law. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby. This Agreement shall be binding
and shall inure to the benefit of the parties hereto and their respective
successors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below on the day and year first above
written.
[SEAL] VAN ECK FUNDS
Attest: ___________________ By:__________________
[SEAL] VAN ECK ASSOCIATES CORPORATION
Attest:___________________ By:__________________
<PAGE>
ACCOUNTING AND ADMINISTRATIVE SERVICES AGREEMENT
------------------------------------------------
THIS AGREEMENT is made as of the 20th day of April, 1994 by and between VAN
ECK FUNDS, a Massachusetts business trust (the "Trust*) and VAN ECK ASSOCIATES
CORPORATION ("the Administrator"), a Delaware corporation.
W I T N E S S E T H:
WHEREAS, the Trust is registered as an open-end, diversified management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Trust initially wishes to retain the Administrator to provide
certain accounting and administrative services to a series thereof, namely
Global Balanced Fund ("Initial Series'), and the Administrator is willing to
furnish such services;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment.
-----------
The Trust hereby appoints the Administrator to provide certain accounting and
administrative services to the Initial Series for the period and on the terms
set forth in this Agreement. The Administrator accepts such appointment and
agrees to furnish the services herein set forth. The Administrator agrees to
comply with all relevant provisions of the 1940 Act and applicable rules and
regulations thereunder. The Trust may from time to time issue separate series or
classes or classify and reclassify shares of such series or class. The
Administrator shall identify to each such series or class of shares property
belonging to such series or class and shall prepare such reports, confirmations
and notices to the Trust called for under this Agreement and shall identify the
series or class of shares to which such report, confirmation or notice pertains
in the event it is engaged by the Trust to perform the services herein contained
respecting such series or class of shares.
2. Delivery of Documents.
---------------------
The Trust will furnish the Administrator with property certified or
authenticated copies of such documents, resolutions and agreements and any
amendments or supplement thereto, as the Administrator may, from time to time
request.
3. Services on a Continuing Basis.
------------------------------
(a) The Administrator, at its own expense, will perform the following
accounting functions on an ongoing basis:
(1) Journalize the Initial Series' investment, capital share and income
and expense activities;
(2) Verify investment buy/sell trade tickets when received from the
Initial Series and transmit trades to the Trust's custodian for proper
settlement;
<PAGE>
(3) Maintain individual ledgers for investment securities;
(4) Reconcile cash and investment balances of the Initial Series with the
Trust's custodian, and provide the Initial Series with the beginning
cash balance available for investment purposes;
(5) Update the cash availability throughout the day as required by the
Initial Series;
(6) Post to and prepare the Trust's Statement of Assets and Liabilities
and the Statement of Operations;
(7) Calculate various contractual expenses (e.g., transfer agency fees);
(8) Control all disbursements from the Initial Series and authorize such
disbursements upon written instructions from authorized Initial Series
officers and agents;
(9) Calculate capital gains and losses;
(10) Determine the Initial Series' net income;
(11) Obtain security market quotes, at the Initial Series' expense, from
services approved by the Trust, or if such quotes are unavailable,
obtain such prices from the Initial Series investment advisor, and in
either case calculate the market value of the Trust's investments;
(12) Deliver a copy of the daily portfolio valuation to the Initial Series;
(13) Compute the net asset value of the Initial Series:
(14) Compute the Initial Series' yields, total return, expense ratios,
portfolio turnover rate;
(15) Monitor the expense accruals and notify the Initial Series of any
proposed adjustments; and
(16) Prepare periodic unaudited financial statements.
(b) In addition to the accounting services described in the foregoing Paragraph
3(a), the Administrator will provide or arrange for the following services:
(1) Prepare periodic audited financial statements;
(2) Supply various statistical data as requested by the Board of Trustees
of the Trust on an ongoing basis;
(3) Prepare for execution and file the Initial Series' Federal and
state tax returns;
(4) Prepare and file the Initial Series' Semi-Annual Reports with the SEC
on Form N-SAR;
2
<PAGE>
(5) Prepare and file with the Securities and Exchange Commission the
Trust's annual, semi-annual, and quarterly shareholder reports;
(6) File registration statements on form N-1A and other filings relating
to the registration of Shares;
(7) Monitor the Initial Series' status as a regulated investment company
under Sub-Chapter M of the Internal Revenue Code of 1986, as amended;
(8) Maintain the Initial Series' fidelity bond as required by the 1940
Act;
(9) Prepare materials for and record the proceedings of, in conjunction
with the officers of the Trust, the meetings of the Trust's Board of
Trustees; and
(10) Prepare any other regulatory reports to and for any federal, local or
state agency as may be required.
In carrying out its duties hereunder, as well as any other activities undertaken
on behalf of the Initial Series pursuant to this Agreement, the Administrator
shall at all times be subject to the control and direction of the Board of
Trustees of the Trust.
4. Expenses of the Administrator and the Trust.
-------------------------------------------
(a) Expenses of the Administrator.
-----------------------------
(1) The Administrator, to the extent not provided by the investment
advisor to the Fund, will arrange to furnish the Trust office space in
the offices of the Administrator, or in such other place or places as
may be agreed upon from time to time, and all necessary office
facilities, simple business equipment, supplies, utilities, and
telephone service for administering the affairs and investments of the
Trust. These services are exclusive of the necessary services and
records of any dividend disbursing agent, transfer agent, registrar or
custodian, and accounting and bookkeeping services which may be
provided by the custodian.
(2) The Administrator shall provide executive and clerical personnel for
administering the affairs of the Trust, and shall compensate officers
and Trustees of the Trust if such persons are also employees of the
Administrator or its affiliates, except as provided in Paragraph 3(a).
(b) Expenses of the Trust.
---------------------
Although the Administrator shall be responsible for providing or arranging for a
third party to provide the services set forth herein, the Administrator shall
not bear the responsibility for or expenses associated with operational,
accounting or administrative services on behalf of the Trust not directly
related to providing an investment program for the Trust. The expenses to be
borne by the Trust include, without limitation:
3
<PAGE>
(1) the charges and expenses of any registrar, stock, transfer or dividend
disbursing agent, custodian, depository or other agent appointed by
the Trust for the safekeeping of its cash, portfolio securities and
other property;
(2) except as provided in Section 4(a) hereof, general operational,
administrative and accounting costs, such as the costs of calculating
the Trust's net asset value, the preparation of the Trust's tax
firings with relevant authorities and of compliance with any and all
regulatory authorities,
(3) the charges and expenses of auditors and outside accountants;
(4) brokerage commissions for transactions in the portfolio securities of
the Trust;
(5) all taxes, including issuance and transfer taxes, and corporate fees
payable by the Trust to Federal, state or other U.S. or foreign
governmental agencies;
(6) the cost of stock certificates representing shares of the Trust;
(7) expenses involved in registering and maintaining registrations of the
Trust and of its shares with the Securities and Exchange Commission
and various states and other jurisdictions, if applicable;
(8) all expenses of shareholders' and Trustees' meetings, including
meetings of committees, and of preparing, setting in type, printing
and mailing proxy statements, quarterly reports, semi-annual reports,
annual reports and other communications to shareholders;
(9) all expenses of preparing and setting in type offering documents, and
expenses of printing and mailing the same to shareholders (but not
expenses of printing and mailing of offering documents and literature
used for any promotional purposes);
(10) compensation and travel expenses of Trustees who are not "interested
persons" of the Administrator within the meaning of the 1940 Act;
(11) the expense of furnishing, or causing to be furnished, to each
shareholder, statements of account;
(12) charges and expenses of legal counsel in connection with matters
relating to the Trust, including, without limitation, legal services
rendered in connection with the Trust's corporate and financial
structure, day to day legal affairs of the Trust and relations with
its shareholders, issuance of Trust shares, and registration and
qualification of securities under Federal, state and other laws;
(13) the expenses of attendance at professional meetings of organizations
such as the Investment Company Institute by officers and Trustees of
the Trust, and the membership or association dues of such
organizations;
(14) the cost and expense of maintaining the books and records of the
Trust;
4
<PAGE>
(15) the expense of obtaining and maintaining a fidelity bond as required
by Section 17(g) of the 1940 Act and the expense of obtaining and
maintaining an errors and omissions policy;
(16) interest payable on Trust borrowing;
(17) postage; and
(18) any other cost and expenses incurred by the Administrator for Trust
operations and activities.
5. Records.
-------
The books and records pertaining to the Initial Series which are in the
possession of the Administrator shall be the property of the Trust. Such books
and records shall be prepared and maintained as required by the 1940 Act and
other applicable securities laws and rules and regulations. The Trust, or the
Trust's authorized representatives, shall have access to such books and records
at all times during the Administrator's normal business hours. Upon the
reasonable request of the Trust, copies of any such books and records shall be
provided by the Administrator to the Trust or its authorized representative at
the Trusts expense.
6. Liaison With Accountants.
------------------------
The Administrator shall act as liaison with the Trust's independent public
accountants and shall provide account analyses, fiscal year summaries, and other
audit related schedules. The Administrator shall take all reasonable action in
the performance of its obligations under this Agreement to assure that the
necessary information is made available to such accountants for the expression
of their opinion, as such may be required by the Trust from time to time.
7. Right to Receive Advice.
-----------------------
(a) Advice of Initial Series. If the Administrator shall be in doubt as to any
------------------------
action to be taken or omitted by it, it may request, and shall receive,
from the Initial Series directions or advice.
(b) Advice of Counsel. If the Administrator or the Initial Series shall be in
-----------------
doubt as to any question of law involved in any action to be taken or
omitted by the Administrator, it may request advice at the Initial Series'
cost from counsel of its own choosing (who may be counsel for the
Administrator or the Initial Series, at the option of the Administrator).
(c) Protection of the Administrator. The Administrator shall be protected in
-------------------------------
any action or inaction which it takes in reliance on any directions or
advice received pursuant to subsections (a) or (b) of this paragraph which
the Administrator, after receipt of any such directions or advice in good
faith believes to be consistent with such directions or advice as the case
may be. However, nothing in this paragraph shall be construed as imposing
upon the Administrator any obligation (i) to seek such directions, or
advice or (ii) to act in accordance with such directions or advice when
received. Nothing in this subsection shall excuse the Administrator when an
action or omission on the part of the Administrator
5
<PAGE>
constitutes willful misfeasance, bad faith, gross negligence or reckless
disregard by the Administrator of its duties under this Agreement.
8. Compliance with Governmental Rules and Regulations.
--------------------------------------------------
The Initial Series assumes full responsibility for insuring that it complies
with all applicable requirements of the Securities Act of 1933 (the "1933 Act"),
the Securities Exchange Act of 1934 (the "1934 Act'), the 1940 Act, and any
laws, rules and regulations of governmental authorities having jurisdiction.
9. Compensation.
------------
As compensation for the services rendered by the Administrator during the term
of this Agreement, the Initial Series will pay to the Administrator a fee at the
annual rate set forth in Exhibit A ("Annual Fee"). The Initial Series shall pay
such amounts monthly, at the annual rate of .25 of 1% of the average daily net
assets of the Initial Series.
10. Indemnification.
---------------
The Trust agrees to indemnify and hold harmless the Administrator and its
nominees from all taxes, charges, expenses, assessments, claims and liabilities,
(including, without limitation, liabilities arising under the 1933 Act, the 1934
Act, the 1940 Act, and any state and foreign securities and blue sky laws, all
as or to be amended from time to time) and expenses, including (without
limitation) attorneys' fees and disbursements, arising directly or indirectly
from any action or thing which the Administrator takes or does or omits to take
or do (i) at the request or on the direction of or in reliance on the advice of
the Initial Series or the Trust or (ii) upon oral or written instruction,
provided, that neither the Administrator nor any of its nominees shall be
indemnified against any liability to the Initial Series or to its shareholders
(or any expenses incident to such liability) arising out of the Administrator's
own willful misfeasance, bad faith, gross negligence or reckless disregard of
its duties and obligations under this Agreement.
11. Responsibility of the Administrator.
-----------------------------------
The Administrator shall be under no duty to take any action on behalf of the
Initial Series except as specifically set forth herein or as may be specifically
agreed to by the Administrator in writing. In the performance of its duties
hereunder, the Administrator shall be obligated to exercise care and diligence
and to act in good faith and to use its best efforts within reasonable limits in
performing services provided for under this Agreement, but the Administrator
shall not be liable for any act or omission which does not constitute willful
misfeasance, bad faith or gross negligence on the part of the Administrator or
reckless disregard by the Administrator of its duties under this Agreement.
Without limiting the generality of the foregoing or of any other provision of
this Agreement, the Administrator in connection with its duties under this
Agreement shall not be under any duty or obligation to inquire into and shall
not be liable for or in respect of (a) the validity or invalidity or authority
or lack thereof of any oral or written instruction, notice or other instrument
which conforms to the applicable requirements of this Agreement, and which the
Administrator reasonably believes to be genuine; (b) delays or errors or loss of
data occurring by reason of circumstances beyond the Administrator's control,
including acts of civil or military authority, national emergencies, labor
difficulties, fire, mechanical breakdown, flood or catastrophe, acts of God,
insurrection, war, riots
6
<PAGE>
or failure of the mails, transportation, communication or power supply. In the
event of equipment failures beyond the Administrator's control, the
Administrator shall, at no additional expense to the Initial Series or the
Trust, take reasonable steps to minimize service interruptions but shall have no
liability with respect thereto.
12. Duration and Termination.
------------------------
This Agreement shall continue until termination by either party on 60 days
written notice to the other. As additional series, other than the Initial
Series, are established, the Agreement shall become effective with respect to
such series listed in Exhibit A at the Annual Fee set forth in such Exhibit upon
the initial public offering of such new series.
13. Further Action.
--------------
Each party agrees to perform such further acts and execute such further
documents as are necessary to effectuate the purposes hereof.
14. Amendments.
----------
This Agreement or any part hereof may be changed or waived only by an instrument
in writing signed by the party against which enforcement of such change or
waiver is sought
15. Miscellaneous.
-------------
This Agreement embodies the entire agreement and understanding between the
parties thereto, and supersedes all prior agreements and understandings,
relating to the subject matter hereof, provided that the parties hereto may
embody in one or more separate documents their agreement, if any, with respect
to delegation and/or oral instructions. The captions in this agreement are
included for convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect. This
Agreement shall be deemed to be a contract made in New York and governed by New
York law. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement shall be binding and shall inure
to the benefit of the parties hereto and their respective successors.
16. Limitation of Liability.
-----------------------
The term "Van Eck Funds" means and refers to the Trustees from time to time
serving under the Amended and Restated Master Trust Agreement dated February 6,
1992, as the same may subsequently thereto have been, or subsequently hereto be,
amended. It is expressly agreed that the obligations of the Trust hereunder
shall not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust, personally, but bind only the assets and
property of the Trust, as provided in the Amended and Restated Master Trust
Agreement of the Trust. The execution and delivery of the Plan have been
authorized by the Trustees and shareholders of the Trust and signed by an
authorized officer of the Trust, acting as such, and neither such authorization
by such Trustees and shareholders nor such execution and delivery by such
officer shall be deemed to have been made by any of them individually or to
impose any
7
<PAGE>
liability on any of them personally, but shall bind only the assets and property
of the Trust as provided in its Amended and Restated Master Trust Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below on the day and year first above
written.
[SEAL] VAN ECK FUNDS
Attest: /s/ Gabrielle Gallo By: /s/ John C. van Eck
[SEAL] VAN ECK ASSOCIATES CORPORATION
Attest: /s/ Gabrielle Gallo By: /s/ John C. van Eck
8
<PAGE>
EXHIBIT A
Annual Administrative Fee
Name of Series (as a % of average daily net assets)
- -------------- ------------------------------------
Global Balanced Fund .25 of 1%
<PAGE>
VAN ECK FUNDS
122 East 42nd Street
New York, New York 10168
July 26, 1994
Van Eck Associates Corporation
122 East 42nd Street
New York, New York 10168
Ladies/Gentlemen:
Pursuant to Section 12 of the Accounting and Administrative Services
Agreement, dated April 20, 1994 (the "Agreement"), between Van Eck Funds (the
"Trust") and Van Eck Associates Corporation (the "Adviser), please be advised
that two additional series of the Trust, namely, Gold/Resources Fund and
International Investors Gold Fund (the "Funds") have adopted the Agreement and
retained the Administrator to render services contemplated by the Agreement for
the Funds. A certification by the Secretary of the Trust of the resolution
adopted by the Board of Trustees and an amended Exhibit A reflecting the
addition of the Funds to the Agreement are attached.
Please confirm below your willingness to render such services.
VAN ECK FUNDS
ATTEST: /s/ Thaddeus Leszczynski BY: /s/ John C. van Eck
President
Confirmed, Agreed to and Accepted this July 26, 1994:
VAN ECK ASSOCIATES CORPORATION
ATTEST: /s/ Thaddeus Leszczynski BY: /s/ John C. van Eck
President
<PAGE>
RESOLUTION OF VAN ECK FUNDS
Separately by the "non-interested" Trustees and by the full Board:
VOTED: That, after having reviewed all relevant information, the Board of
Trustees, with the "non-interested" Trustees also voting separately,
has determined that for each of International Investors Gold Fund and
Gold/Resources Fund, the terms of the Accounting and Administrative
Services Agreement ("Administrative Agreement") between the Trust and
Van Eck Associates Corporation, in substantially the form presented to
this meeting, as revised to reflect the change in the fee schedule
discussed at the meeting, are fair and reasonable and the Board of
Trustees hereby approves the Administrative Agreement with respect to
each Fund.
CERTIFICATE
The undersigned certifies that he is the Secretary of VAN ECK FUNDS, a
business trust organized and existing under the laws of the State of
Massachusetts; that the foregoing is a true and correct copy of a resolution
duly adopted at a meeting of the Board of Trustees of said business trust held
on the 24th day of May, 1994, at which meeting a quorum was at all time present
and acting; that the passage of said resolution was in all respects legal; and
that said resolution is in full force and effect.
Dated this 26th day of July, 1994.
/s/ Thaddeus Leszczynski
Thaddeus Leszczynski, Secretary
(Seal of Trust)
<PAGE>
EXHIBIT A
Annual Administrative Fee
Name of Series (as a % of average daily net assets)
- -------------- ------------------------------------
Global Balanced Fund .25 of 1%
Asia Infrastructure Fund .25 of 1%
Global SmallCap Fund .25 of 1%
International Investors Gold Fund .25 of 1% of the first $750 million and
.20 of 1% on assets in excess of $750
million
Gold/Resources Fund .25 of 1% of the first $750 million and
.20 of 1% on assets in excess of $750
million
<PAGE>
VAN ECK FUNDS
122 East 42nd Street
New York, New York 10168
October 20, 1994
Van Eck Securities Corporation
122 East 42nd Street
New York, New York, 10168
Ladies/Gentlemen:
Pursuant to Section I of the Distribution Agreement, dated July 30, 1985 (the
"Agreement"), between Van Eck Funds (the"Trust") and Van Eck Securities
Corporation (the "Distributor"), please be advised an additional series of the
Trust, namely, Global Hard Assets Fund (the "Fund") has adopted the Agreement
and retained the Distributor to render services contemplated by the Agreement
for the Fund. The Fund will issue two classes of shares, namely, Class A and
Class C shares. Class A Shares will be sold at "net asset value per share" plus
a front-end sales charge and the Class C shares will be sold at "net asset value
per share" plus a redemption charge for shares redeemed within twelve months of
the date of purchase in accordance with the then current prospectus of the
Trust, as from time to time amended.
Please confirm below your willingness to render such services.
VAN ECK FUNDS
ATTEST: /s/ Thaddeus Leszczynski BY: /s/ John C. van Eck
President
Confirmed, Agreed to and Accepted this October 20, 1994
VAN ECK SECURITIES CORPORATION
ATTEST: /s/ Thaddeus Leszczynski BY: /s/ Rodger Lawson
President
<PAGE>
GOODWIN, PROCTER & HOAR
(A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS)
COUNSELLORS AT LAW
28 STATE STREET
BOSTON, MASSACHUSETTS 02109
TELEPHONE (617) 523-5700
TELECOPIER (617) 523-1231
TELEX 94-0640
CABLE.GOODPROCT, BOSTON
December 16, 1985
Van Eck Funds
122 East 42nd Street
New York, New York 10168
Gentlemen:
Reference is made to the Post-Effective Amendment No. 1 to the Registration
Statement on Form N-lA (Registration No. 2-97596) to be filed with the
Securities and Exchange Commission with respect to the proposed sale of an
indefinite number of shares of beneficial interest, no par value, of the
Gold/Resources Fund and U.S. Government Money Fund (the "Shares"), of Van Eck
Funds (the "Trust"). We wish to advise you that we have examined the proceedings
taken to form the Trust, including its Declaration of Trust dated April 3, 1985,
as amended, its By-Laws, and the record of proceedings of its Trustees and
shareholders from the date of formation until the present time. We have also
examined the applicable provisions of the laws of the Commonwealth of
Massachusetts under which the Trust was formed and such other documents and
questions of law as we have deemed necessary to this opinion.
Based upon the foregoing, we are of the opinion that:
1. The Trust is a duly formed and existing business trust under the laws
of the Commonwealth of Massachusetts, with authority to issue the Shares; and
2. The Shares, when issued pursuant to the terms, provisions and
conditions set forth in the Declaration of Trust and in the above-referenced
Registration Statement relating to the Shares, will be validly issued, fully
paid and non-assessable.
We hereby consent to the filing of this opinion as Exhibit 10 to said
Registration Statement.
Respectfully submitted,
/s/ Goodwin, Proctor & Hoar
GOODWIN, PROCTOR & HOAR
<PAGE>
GOODWIN, PROCTER & HOAR LLP
COUNSELLORS AT LAW
EXCHANGE PLACE
BOSTON, MASSACHUSETTS 02109-2881
TELEPHONE (617) 570-1000
TELECOPIER (617) 523-1231
February 28, 1991
Van Eck Funds
122 East 42nd Street
New York, NY 10168
Gentlemen:
As counsel to Van Eck Funds (the "Trust"), a Massachusetts business trust,
we have been asked to render our opinion with respect to the issuance of an
indefinite number of shares of beneficial interest, $.001 par value, of the
Trust (the "Shares") representing interests in International Investors, as more
fully described in the Prospectus and Statement of Additional Information
contained in Post-Effective Amendment No. 16 (the "Amendment") to the Trust's
Registration Statement (the "Registration Statement") on Form N-1A (Registration
No. 2-97596) filed with the Securities and Exchange Commission.
We have examined the Master Trust Agreement of the Trust dated April 3,
1985, as amended, the By-laws of the Trust, as amended, the records of certain
meetings and written consents of the Trustees and shareholders of the Trust, the
Prospectus and Statement of Additional Information contained in the Amendment,
and such other documents, records and certificates as we have deemed necessary
for the purposes of this opinion.
Based upon the foregoing, we are of the opinion that the Trust has been duly
organized and is validly existing pursuant to the laws of The Commonwealth of
Massachusetts, and that the Shares, when sold in accordance with the terms of
the Prospectus and Statement of Additional Information in effect at the time of
sale, will be legally issued, fully paid and non-assessable by the Trust.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Goodwin, Procter & Hoar
GOODWIN, PROCTER & HOAR
<PAGE>
GOODWIN, PROCTER & HOAR
A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
COUNSELLORS AT LAW
EXCHANGE PLACE
BOSTON, MASSACHUSETTS 02109-2881
TELEPHONE (617) 570-1000
TELECOPIER (617) 523-1231
TELEX 94-0640
CABLE-GOODPROCT, BOSTON
March 19, 1993
Van Eck Funds
122 East 42nd Street
New York, NY 10168
Ladies and Gentlemen:
As counsel to Van Eck Funds (the "Trust"), a Massachusetts business trust,
we have been asked to render our opinion with respect to the issuance of an
indefinite number of shares of beneficial interest, $.001 par value, of the
Trust (the "Shares") representing interests in the Asia Dynasty Fund, as more
fully described in the Prospectus and Statement of Additional Information
contained in Post-Effective Amendment No. 24 (the "Amendment") to the Trust's
Registration Statement (the "Registration Statement") on Form N-lA (Registration
No. 2-97596) filed with the Securities and Exchange Commission.
We have examined the Amended and Restated Master Trust Agreement of the
Trust dated February 6, 1992, as amended by Amendment No. 1 dated February 28,
1992 and Amendment No. 2 dated March 17, 1993, the By-laws of the Trust, as
amended, the records of certain meetings and written consents of the Trustees,
the Prospectus and Statement of Additional Information contained in the
Amendment, and such other documents, records and certificates as we have deemed
necessary for the purposes of this opinion.
Based upon the foregoing, we are of the opinion that the Shares, when
issued and sold in accordance with the terms of the Prospectus and Statement of
Additional Information in effect at the time of sale, will be legally issued,
fully paid and non-assessable by the Trust.
We hereby consent to the filing of this opinion as an exhibit to the
Amendment and to the reference to this firm as legal counsel for the trust in
the Prospectus and Statement of Additional Information contained in the
Amendment.
Very truly yours,
/s/ Goodwin, Proctor & Hoar
GOODWIN, PROCTOR & HOAR
<PAGE>
GOODWIN, PROCTER & HOAR
A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
COUNSELLORS AT LAW
EXCHANGE PLACE
BOSTON, MASSACHUSETTS 02109-2881
TELEPHONE (617) 570-1000
TELECOPIER (617) 523-1231
TELEX 94-0640
CABLE-GOODPROCT, BOSTON
December 17, 1993
Van Eck Funds
122 East 42nd Street
New York, NY 10168
Ladies and Gentlemen:
As counsel to Van Eck Funds (the "Trust"), a Massachusetts business trust,
we have been asked to render our opinion with respect to the issuance of an
indefinite number of (i) Class B shares of beneficial interest, $.001 par value
per share, of the Trust representing interests in the Asia Dynasty Fund, and
(ii) Class A and Class B sham of beneficial interest, $.001 par value per share,
of the Trust representing interests in the Global Balanced Fund (collectively,
the "Shares"), as more fully described in the Prospectus and Statement of
Additional Information contained in Post-Effective Amendment No. 27 (the
"Amendment") to the Trust's Registration Statement (the "Registration
Statement") on Form N-1A (Registration No. 2-97596) filed with the Securities
and Exchange Commission.
We have examined the Amended and Restated Master Trust Agreement of the
Trust dated February 6, 1992, as amended, the By-laws of the Trust, as amended,
the records of certain. meetings and written consents of the Trustees, the
Prospectus and Statement of Additional Information contained in the Amendment,
and such other documents, records and certificates as we have deemed necessary
for the purposes of this opinion.
Based upon the foregoing, we are of the opinion that the Shares, when
issued and sold in accordance with the terms of the Prospectus and Statement of
Additional Information in effect at the time of sale, will be legally issued,
fully paid and non-assessable by the Trust.
We hereby consent to the filing of this opinion as an exhibit to the
Amendment and to the reference to this firm as legal counsel for the Trust in
the Prospectus and Statement of Additional Information contained in the
Amendment.
Very truly yours,
/s/ Goodwin, Proctor & Hoar
GOODWIN, PROCTOR & HOAR
<PAGE>
GOODWIN, PROCTER & HOAR
A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
COUNSELLORS AT LAW
EXCHANGE PLACE
BOSTON, MASSACHUSETTS 02109-2881
TELEPHONE (617) 570-000
TELECOPIER (617) 523-1231
TELEX 94-0640
CABLE-GOODPROCT, BOSTON
October 28, 1994
Van Eck Funds
122 East 42nd Street
New York, NY 10168
Gentlemen:
As counsel to Van Eck Funds (the "Trust"), a Massachusetts business trust,
we have been asked to render our opinion with respect to the issuance of Class A
and Class C shares of beneficial interest, par value $.001 per share, of the
Trust (the "Shares") representing interests in the Van Eck Global Hard Assets
Fund series of the Trust, as more fully described in the prospectus and
statement of additional information contained in Post-Effective Amendment No. 33
(the "Amendment") to the Registration Statement on Form N-lA (Registration No.
2-97596) of the Trust to be filed with the Securities and Exchange Commission.
We have examined the Amended and Restated Master Trust Agreement of the
Trust dated February 6, 1992, as amended, the By-laws of the Trust, the records
of certain meetings of the Trustees of the Trust, the prospectus and statement
of additional information contained in the Amendment, and such other documents,
records and certificates as we have deemed necessary for the purposes of this
opinion.
Based upon the foregoing, we are of the opinion that the Shares, when
issued and sold in accordance with the terms of the prospectus and statement of
additional information in effect at the time of sale, will be legally issued,
fully paid and non-assessable by the Trust.
We hereby consent to the filing of this opinion as an exhibit to the
Amendment and further consent to the reference to our name therein.
Very truly yours,
/s/ Goodwin, Proctor & Hoar
GOODWIN, PROCTOR & HOAR
<PAGE>
GOODWIN, PROCTER & HOAR LLP
COUNSELLORS AT LAW
EXCHANGE PLACE
BOSTON, MASSACHUSETTS 02109-2881
TELEPHONE (617) 570-1000
TELECOPIER (617) 523-1231
April 18, 1996
Van Eck Funds
99 Park Avenue
New York, New York 10016
Gentlemen:
As counsel to Van Eck Funds (the "Trust"), we have been asked to render our
opinion in connection with the proposed issuance by the Trust of an indefinite
number of Class B shares of beneficial interest, $.001 par value, of the Trust
(the "Shares") representing interests in the Global Hard Assets Fund, Asia
Infrastructure Fund and Gold opportunity Fund series of the Trust which have
been established and designated in Section 4.2 of Article IV of the Trust's
Amended and Restated Master Trust Agreement dated February 6, 1992, as amended,
all as more fully described in the Prospectuses (the "Prospectuses") and
Statement of Additional Information ("Statement of Additional Information")
contained in Post-Effective Amendment No. 40 (the "Amendment") to Registration
Statement No. 2-97596 to be filed by the Trust.
We have examined the Amended and Restated Master Trust Agreement of the
Trust, as amended, the By-Laws of the Trust, the minutes of meetings and written
consents of the Board of Trustees of the Trust, the Prospectuses, Statement of
Additional Information and such other documents, records and certificates as we
deemed necessary for the purposes of this opinion.
Based upon the foregoing, we are of the opinion that the Shares, when sold
in accordance with the terms of the applicable Prospectus and Statement of
Additional Information in effect at the time of sale, will be legally issued,
fully paid and non-assessable by the Trust.
We consent to being named in the Prospectuses and Statement of Additional
Information and to the filing of this opinion as an exhibit to the Amendment.
Very truly yours,
/s/ Goodwin, Procter & Hoar LLP
GOODWIN, PROCTER & HOAR LLP
<PAGE>
EXHIBIT 99.11
[LETTERHEAD OF PRICEWATERHOUSECOOPERS]
CONSENT OF INDEPENDENT ACCOUNTANTS
_______________________________________________________________
We consent to the incorporation by reference in Post-Effective Amendment No. 51
to the Registration Statement of Van Eck Funds on Form N-1A of our reports dated
February 19, 1999 on our audits of financial statements and financial highlights
of Van Eck Funds (comprising the Asia Dynasty Fund, Global Hard Assets Fund,
Global Balanced Fund, Gold/Resources Fund, International Investors Gold Fund and
U.S. Government Money Fund, which report is included in the Annual Report to
Shareholders for the year ended December 31, 1998 which is incorporated by
reference in the Statement of Additional Information.
We also consent to the reference in the Statement of Additional Information
under the caption "Counsel and Auditors".
/s/ PricewaterhouseCoopers
PRICEWATERHOUSECOOPERS
New York, New York
February 26, 1999
<PAGE>
INFORMATION CONCERNING SIMPLIFIED EMPLOYEE PLANS
What is a SEP?
- --------------
A Simplified Employee Plan (the "SEP") is an arrangement designed to
provide an employer with a simplified means of making contributions towards your
retirement income. Under the SEP, your employer may contribute on your behalf to
an Individual Retirement Account ("IRA") investing in shares of International
Investors Incorporated or Van Eck Funds, or to some other IRA established by
you.
The IRA to which your employer contributes is referred to as a SEP-IRA. You
own and control your SEP-IRA, and SEP contributions become your property as soon
as they deposited. Contributions (plus earnings) made by your employer are
generally not includible in your gross income until payments are made to you
from your SEP-IRA.
What is a Salary Reduction SEP?
-------------------
Under the SEP, your employer may give you the option of having up to $7,000
of your annual compensation contributed to your SEP-IRA. If you elect to reduce
your salary and have such amount contributed to your SEP-IRA, the amounts
contributed (plus any earnings) will not be taxable until you withdraw them from
the IRA. Your employer is not permitted to offer you this salary reduction
option if more than 25 employees were employed by your employer at any time
during
<PAGE>
the year preceding the year for which the option is offered. In addition, at
least one-half of all employees must elect to have contributions made to their
SEP-IRAs.
The information provided here with respect, to SEPs generally applies to
SEPs which contain a salary reduction feature unless otherwise indicated.
Participation in the SEP
- ------------------------
If your employer maintains a SEP, the law states that you must be eligible
to receive a contribution for the year if you are at least 21 years of age, have
performed service for the employer for any period of time (however short) during
three of any of the immediately preceding five years, and have received at least
$300 in total compensation from the employer during the year. Your employer's
SEP may contain less restrictive requirements.
If your employer's SEP contains a salary reduction arrangement, you will be
eligible to elect to have your employer contribute up to $7,000 of your annual
compensation to your SEP-IRA.
Employer Contributions
- ----------------------
The amounts your employer contributes and the amounts, if any, you elect to
defer pursuant to a Salary Reduction Arrangement (if available) are not included
in your
<PAGE>
gross income and are not subject to income tax until withdrawn from your SEP-
IRA.
Your employer will determine the amount of the employer contribution to be
made to your SEP-IRA based on a percentage of your total compensation, up to a
maximum compensation level of $200,000. Under the SEP there is no requirement
that an employer maintain a particular level of contributions and it is possible
that for a given year no employer contributions will be made on an employee's
behalf. If your employer does make a contribution, however, the same percentage
of compensation will be contributed for all eligible employees. Your employer
cannot contribute an amount which is more than 15 percent of your compensation
to your SEP-IRA in any year, and can never contribute more than $30,000 a year
to your SEP-IRA.
If your employer permits, contributions can be made pursuant to a Salary
Reduction Arrangement. Contributions under a Salary Reduction Arrangement cannot
exceed $7,000 for any one year. All contributions, whether made by your employer
or made pursuant to a salary reduction arrangement, are subject to the maximum
limitations (15% of compensation or $30,000, whichever is less) discussed above.
The law requires that an employer contribute on behalf of all employees who
have satisfied the eligibility requirements, even if they terminated employment
for any reason (including death) during the year. To comply with this provision
<PAGE>
and to avoid adverse tax consequences, your employer will require you to
establish an IRA. If you do not establish an IRA, your employer may establish
one for you.
If for any year your employer determines that the SEP is "Top Heavy",
meaning that contributions on behalf of "key employees" (as defined in the
Internal Revenue Code), exceed 60 percent of the total contributions for all
other employees, your employer must make a contribution to your SEP-IRA in an
amount equal to at least 3% of your compensation, notwithstanding any
contributions already made on your behalf through a Salary Reduction
Arrangement.
How Contributions are Allocated
- -------------------------------
Assume that the employer elects to make a SEP contribution for a year equal
to 15% of each participant's compensation. The law contains a $30,000 ceiling on
SEP contributions which also must be recognized. The contributions would be
allocated as follows:
<TABLE>
<CAPTION>
Compensation SEP Contribution
<S> <C> <C>
Participant A $ 10,000 $ 1,500
B 30,000 4,500
C 50,000 7,500
D 100,000 15,000
E 150,000 22,500
F* 200,000 30,000
G* 400,000 30,000
</TABLE>
*[Remember that the maximum contribution to a SEP-IRA for the year is $30,000
and that only a maximum of $200,000 in compensation can be used in calculating
the contribution for any year.]
<PAGE>
May I Make Additional Contributions to my SEP-IRA?
- --------------------------------------------------
Even if you employer contributes to your SEP-IRA in any year, you may still
contribute up to $2,000 or 100% of your compensation, whichever is less, either
to your SEP-IRA or another IRA. These contributions may be tax-deductible to
some extent if your income is below certain levels. The limitations on tax
deductions for non-SEP contributions to your SEP-IRA are contained in the
disclosure statement which accompanies your III/VEF IRA.
Excess Contributions and Excess Salary Deferrals
- ------------------------------------------------
Contributions made by your employer (including contributions under a Salary
Reduction Arrangement) to your SEP-IRA which exceed the permissible limits set
forth in Employer Contributions on P. __ (known as "excess contributions") are
----------------------
includible for federal income tax purposes in your gross income in the year
contributed. You should withdraw such excess contributions, plus any earnings,
by the due date (including extensions) for filing your income tax return in
order to avoid the imposition of a 6% penalty tax on the excess amount and its
earnings for each year these amounts remain in your SEP-IRA. Amounts withdrawn
cannot be transferred or rolled over to another IRA.
In addition, Salary Reduction Contributions which exceed $7,000 (known as
"excess deferrals") are includible for federal income tax purposes in your gross
income in the
<PAGE>
year contributed. You should withdraw such excess deferrals, plus any earnings,
by April 15 of the year following the year for which the deferral was made in
order to avoid the imposition of a 6% penalty tax on the excess amount and its
earnings for each year these amounts remain in your SEP-IRA. Excess deferrals
which are withdrawn from your SEP-IRA cannot be transferred or rolled over to
another IRA.
The $7,000 limit applies to all Salary Reduction Arrangements you may have
with any employer or employers. If this limit is exceeded due to contributions
made on your behalf to another retirement plan or arrangement under a different
salary reduction arrangement, you may choose whether to receive a distribution
of the excess from this SEP-IRA or from any other plan or arrangement to which
Salary Reduction contributions have been made.
If you have both excess contributions and excess deferrals, the amount of
excess deferrals you withdraw by April 15 will reduce your excess contributions.
Withdrawals from a SEP-IRA
- --------------------------
It is possible for you to withdraw funds from your SEP-IRA and within 60
days place such funds in another SEP-IRA or IRA without becoming obligated to
pay taxes. This is called a "rollover" and may not be done without penalty more
frequently than once a year. However, there are no restrictions on the number of
times you may make "transfers" if you
<PAGE>
arrange to have such funds transferred between the custodians or trustees, so
that you never have possession. You should be aware that IRAs other than the IRA
into which your employer contributes may provide different rates of return and
may have different terms, including restrictions an transfers or withdrawal of
funds..
If you do not want to leave SEP contributions in any IRA, you may withdraw
them at any time, subject to the provisions of the SEP-IRA document, but any
amounts withdrawn will be included in your income and subject to income tax.
Also, if withdrawals occur before attainment of age 59-1/2, and are not made on
account of death or disability, you may be subject to the imposition of an extra
10% penalty tax.
What if I am Covered under another Plan?
- ----------------------------------------
The maximum contribution (including amounts representing salary reductions)
which may be made on your behalf under all SEPs under which you are covered in
any year is equal to the lesser of 15% of your total compensation or $30,000.
Any contribution made by you or your employer(s) that is more than this yearly
deduction limitation may be withdrawn without penalty by the due date (including
extensions) for filing your income tax return (normally April 15th), and is
includible in your gross income. Any excess amounts (plus earnings) that remain
in your SEP-IRA after
<PAGE>
this time are subject to a 6% penalty tax for each year these amounts remain in
your SEP-IRA.
If you are covered under this SEP and one or more qualified defined
contribution or defined benefit pension plans, special rules may limit the
amount which may be contributed on your behalf in that year. You should consult
your employer if you think you may be affected by these rules.
Tax Treatment of SEP-IRA Distributions
- --------------------------------------
SEP-IRA distributions are not eligible for capital gains treatment or for
the special 5-year averaging treatment which may be available for lump sum
distributions from other qualified pension benefit plans.
Distributions from a SEP-IRA are subject to Federal income tax withholding
unless the employee elects not to have withholding apply.
If distributions from all IRAs and employer sponsored retirement plans
exceed $150,000 in any year, the employee may be subject to a special 15% tax on
the excess.
Additional Information
- ----------------------
In addition to the information contained in this document, your employer
must provide you with the following information:
(1) At the time you become eligible to participate in the SEP, the
employer or plan administrator
<PAGE>
must inform you in writing that a SEP agreement has been adopted and
state which employees may participate, how employer contributions are
allocated and who can provide you with additional information.
(2) The employer or plan administrator must notify you in writing of all
employer contributions to your SEP-IRA (this information must he
supplied by January 31 of the year following the year the contribution
is made or 30 days after the contribution is made, whichever is
later).
(3) If the SEP your employer maintains permits Salary Reduction
Arrangements, your employer must inform you as to how you may make,
change or terminate any amounts you elect to have contributed to your
SEP-IRA pursuant to this arrangement.
(4) If your employer amends the SEP, or replaces it with another SEP, your
employer or plan administrator must furnish a copy of the amended or
new SEP (with a clear written explanation of its effect) to you within
30 days of the date the new SEP or the amendment becomes effective.
(5) If the employer selects, recommends or substantially influences the
IRAs into which your
<PAGE>
SEP contribution will be deposited, the employer or plan administrator
must furnish a clear written explanation of the terms of those IRAs at
the time you become eligible to participate (such information may also
be provided by the financial institution which maintains the IRA). The
explanation must include information about the terms of those IRAs
such as restrictions on a participant's ability to rollover, transfer,
or withdraw funds from the IRAs (including restrictions that allow
rollovers or withdrawals but reduce the earnings of the IRAs or impose
other penalties).
(6) If the employer selects, recommends, or substantially influences the
employee to choose a specific IRA and the IRA prohibits the withdrawal
of funds, the employer or plan administrator may be required to
provide the employee with additional information. Regulations
promulgated by the Department of Labor under Title 1 of the Employee
Retirement Income Security Act of 1974, as amended, should be
consulted in this regard.
<PAGE>
Additional Information Provided by the Financial Institution
- ------------------------------------------------------------
III/VEF or any other financial institution which sponsors your SEP-IRA will
provide you with a disclosure statement which contains the following items of
information in plain, nontechnical language:
(1) the statutory requirements which relate to your SEP-IRA;
(2) the tax consequences which follow the exercise of various options and
what those options are;
(3) Participation eligibility rules, and rules on the deductibility and
nondeductibility of retirement savings;
(4) the circumstances and procedures under which you may revoke your SEP-
IRA, including the name, address, and telephone number of the person
designated to receive notice of revocation;
(5) explanations of when penalties may be assessed against you because of
specified prohibited or penalized activities concerning your SEP-IRA;
and
(6) financial disclosure information which:
(a) either projects value growth rates of your SEP-IRA under various
contribution and retirement schedules, or describes the method of
computing and allocating
<PAGE>
annual earnings and charges which may be assessed;
(b) describes whether, and for what period, the growth projections
for the SEP-IRA are guaranteed, or a statement of the earnings
rate and terms on which the projection is based;
(c) states the sales commission to be charged in each year expressed
as a percentage of $1,000; and
(d) states the proportional amount of any nondeductible life
insurance which may be a feature of your SEP-IRA.
In addition to this disclosure statement, the financial institution is
required to provide you with a financial statement of your SEP-IRA account each
year. It may be necessary to retain and refer to statements for more than one
year in order to evaluate the investment performance of your SEP-IRA.
See IRS Publication 590, available at most IRS offices, for a more complete
explanation of the disclosure requirements.
<PAGE>
INTERNATIONAL INVESTORS INCORPORATED/VAN ECK FUNDS
SIMPLIFIED EMPLOYEE PLAN
------------------------
Article I. Purpose
-------
1.1 This Simplified Employee Plan (the "SEP") is intended to provide
simplified employee pensions to eligible Employees of the Employer in accordance
with the requirements of Section 408(k) of the Internal Revenue Code of 1986, as
amended from time to time. The Employer may contribute towards the retirement
income of its Employees as follows: (1) by an arrangement which permits
Employees to defer a portion of their annual compensation and receive a
corresponding contribution to individual retirement accounts established on
their behalf, (2) by Employer contributions to such individual retirement
accounts based on a uniform percentage of each Employee's Compensation or (3) by
both of the foregoing methods.
The provisions of the SEP, as set forth herein, shall apply only to
eligible Employees who are actively employed by the Employer on or after the
Effective Date.
<PAGE>
Article II. Definitions
-----------
As used in the SEP, the following terms shall have the following meanings,
unless the context clearly indicates to the contrary:
"Adoption Agreement" means the document by which the provisions of the SEP
are adopted by the Employer. The Adoption Agreement is an integral part of the
SEP.
"Code" means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended. All citations to Sections of the Code are to such Sections as
they may from time to time be amended or renumbered.
"Compensation" means wages, salaries, professional fees or other amounts
derived from or received for personal service actually rendered (including but
not limited to, commissions, tips and bonuses) and earned income, as defined in
Section 401(c)(2) of the Code for self-employed individuals within the meaning
of Section 401(c)(1) of the Code, but does not include contributions by the
Employer to the SEP or to any other qualified pension benefit plan or any other
amounts not includible in gross income. Compensation for any Plan Year shall not
include amounts in excess of $200,000.
"Effective Date* means the date upon which the Employer executes the
Adoption Agreement or the date specified by the Employer in the Adoption
Agreement.
<PAGE>
"Employee" means any individual in the employ of the Employer, including
any common-law employee and any self-employed partner or proprietor. Employee
shall also include all employees of any employer required to be aggregated with
the Employer under Section 414(b)(c) or (m) of the Code and leased employees as
defined in Section 414(n) of the Code, excluding any (i) nonresident alien
employee who has received no earned income from sources within the United States
and (ii) any employee included in a unit of employees covered by a negotiated
collective bargaining agreement which does not provide for his participation in
the SEP.
"Employer" means the corporation, partnership or proprietorship set forth
in the Adoption Agreement.
"Nonelective Contributions" means all contributions other than Salary
Reduction Contributions.
"Participant" means each eligible Employee who participates in the SEP in
accordance with Section 3.1 and the Adoption Agreement.
"Plan Year" means the calendar year unless otherwise specified in the
Adoption Agreement.
"Salary Reduction Arrangement" means an arrangement by which the Employee
agrees to a reduction in salary in exchange for Employer contributions to his
SEP-IRA.
"Salary Reduction Contributions" means contributions to a Participant's
SEP-IRA under a Salary Reduction Arrangement.
<PAGE>
"SEP" means this Simplified Employee Plan, as the same may be amended from
time to time.
"Simplified Employee Plan Individual Retirement Account" or "SEP-IRA" means
the International Investors Incorporated/Van Eck Funds Individual Retirement
Account or any other individual retirement established under Section 408(a) of
the Code or individual retirement annuity established under Section 408(b) of
the Code and approved by International Investors Incorporated or Van Eck Funds.
"Service" means any work performed by an Employee for the Employer,
including work performed as a self-employed individual, for any period of time
during the Plan Year. For purposes of determining whether an Employee satisfies
the Service requirement for participation in the SEP as set forth in Section
3.1, employment with any member of a controlled group of corporations with the
Employer (within the meaning of Section 414(b) of the Code), any trade or
business which is under common control with the Employer (within the meaning of
Section 414(c) of the Code) and any member of an affiliate with the Employer
(within the meaning of Section 414(m) of the Code) shall be treated as Service
with the Employer
<PAGE>
Article III. Participation
-------------
3.1 Each Employee who:
(1) has attained age 21;
(2) has performed Service for the Employer during at least three of
the immediately preceding five calendar years; and
(3) received at least $300 in compensation, from the Employer for the
Plan Year shall be enrolled as a Participant in the SEP.
The Adoption Agreement may provide for less restrictive participation
requirements.
3.2 An Employer may make contributions pursuant to Salary Reduction
Arrangements only if:
(1) the Employer maintaining the arrangement had no more than 25
Employees in its employ at any time during the preceding year;
(2) all eligible Employees have the right to participate in this
arrangement; and
(3) at least 50 percent of the Employees of the Employer elect to
defer amounts pursuant to the Salary Reduction Arrangement.
<PAGE>
Article IV. Contributions: Allocations
--------------------------
4.1 Each Plan Year the Employer shall determine whether or not it will
make contributions under the SEP for that Plan Year. The amount of such
contribution shall be determined in the sole discretion of the Employer and set
forth in writing.
4.2(a) Nonelective Contributions to each Participant's SEP-IRA shall be
limited for any Plan Year to the lesser of (i) 15 percent of Compensation or
(ii) $30,000. Such contributions shall be allocated to each and every
Participant's SEP-IRA on the basis of the same percentage of Compensation for
each Participant. Amounts contributed may not discriminate in favor of any
highly compensated Employee (as defined in Section 414(q) of the Code).
(b) Salary Reduction Contributions shall be limited to the lesser of (i)
15 percent of Compensation or (ii) $7,000. Amounts contributed will not be
treated as discriminating in favor of any highly compensated employee (as
defined in Section 414(q) of the Code), if the percentage of total compensation
elected to be deferred by each eligible highly compensated employee does not
exceed the average of the deferral percentages of all other eligible Employees
multiplied by 1.25.
(c) In no event may the total Nonelective and Salary Reduction
Contributions made to a Participant's SEP
<PAGE>
IRA for the Plan Year exceed the lesser of (i) $30,000 or(ii) 15 percent of
Compensation.
(d) If, for any Plan Year, the Employer determines that the SEP is "Top
Heavy," the Employer shall make a Nonelective Contribution to the SEP-IRA off
each individual Participant who is not a "Key Employee" (as defined in Section
416(i) of the Code), in an amount equal to at least 3 percent of each such
Participant's Compensation. A SEP will be Top Heavy for the Plan Year if
contributions (including Salary Reduction Contributions) on behalf of Key
Employees exceed 60 percent of the total contributions for all other Employees.
4.3(a) Contributions for the Plan Year shall be paid into the SEP-IRA of
each Participant no later than the date upon which such Employer's tax return
(including any extensions thereof) is required to be filed. The Employer must
notify each Participant in writing of all contributions made to such
Participant's SEP-IRA by the later of (i) January 31 following the end of the
Plan Year for which a contribution is made or (ii) 30 days after a contribution
is made.
(b) If the Participant has not selected and opened a SEP-IRA by the date
referred to in paragraph 4.3(a), the Employer shall select and open a SEP-IRA in
the name of, and on behalf of the Participant, and shall deposit any
contributions for such Plan Year in such SEP-IRA no later than such date.
<PAGE>
Article V. Benefits
--------
5.1 All contributions made under the SEP by the Employer on behalf of each
Participant shall be fully vested and nonforfeitable at all times.
5.2 The rights of a Participant relating to amounts contributed to the
Participant's SEP-IRA by the Employer shall be subject to any terms and
conditions contained in such SEP-IRA, and shall not be determined by this SEP or
by the Employer.
5.3 In the event of a Participant's death, the distribution of the
Participant's interest in the SEP-IRA shall be governed by the terms and
conditions of the SEP-IRA.
Article VI. Administration
--------------
6.1 The Employer shall have the authority to control and manage the
operation and administration of the SEP and shall be responsible for its
operation in accordance with its terms. The Employer shall, in its sole
discretion, determine all questions arising out of the administration and
interpretation of the SEP.
6.2 The Employer shall make all determinations as to the eligibility of
any individual to become a Participant hereunder and as to the amount of any
contributions made to a Participant's SEP-IRA for any Plan Year.
<PAGE>
6.3 The Employer shall be the "Named Fiduciary" for operation and
administration of the SEP and the "Plan Administrator". The Employer is hereby
designated as agent for service of legal process.
Article VII. Amendment and Termination
-------------------------
7.1 By adopting this SEP, the Employer delegates to International
Investors Incorporated or Van Eck Funds the power to amend the SEP, including
the Adoption Agreement, and the Employer shall be deemed to have consented to
such amendment. Each Employer shall be furnished with a copy of any such
amendment.
7.2. The Employer may at any time amend any elective provision of the SEP
as contained in the Adoption Agreement by executing a revised Adoption
Agreement.
7.3 Neither the Employer, International Investors Incorporated or Van Eck
Funds shall have the power to amend the SEP, including the Adoption Agreement,
in any manner which would cause or permit any part of the Employer contributions
to be used for, or diverted to, any purposes other than for the exclusive
benefit of Participants or their beneficiaries, unless such amendment is
necessary to conform this SEP to any law, regulation or ruling or to meet the
requirements of the Code or any amendment thereof.
<PAGE>
7.4 The Employer may at any time terminate this SEP by a written
instrument properly authorized and executed on behalf of the Employer or by
establishing a new SEP.
7.5 In the event of the dissolution, liquidation, merger, consolidation or
reorganization of the Employer, the SEP shall automatically terminate unless the
successor to the Employer elects to continue this SEP by written instrument
properly authorized and executed on behalf of such successor. In such event, the
successor to the Employer shall be substituted for the Employer under the SEP
for all purposes.
<PAGE>
SIMPLIFIED EMPLOYEE PLAN OF ___________________________
SALARY REDUCTION ARRANGEMENT
Subject to the provisions of the Simplified Employee Plan, I hereby
authorize and request that the following amount be withheld from each of my
payroll checks, commencing with the check for the next payroll period:
-----------------------------------------------------------------
(1) an amount equal to __% of my salary
for each payroll period
or
(2) the stated amount of $________ for
each payroll period.*
-----------------------------------------------------------------
*Not more than 15% of compensation or $7,000 total per year.
______________________________ _____________________________________
Date Signature
<PAGE>
RIDER 2-A
Investors Fiduciary Trust Company is authorized to honor telephone instructions
to exchange shares of any Participating Fund for shares of any other
Participatinq Fund in accordance with the terms of the Exchange Privilege.
Instructions will be honored only if they include the social security or tax
identification number and the shareholder account number of the Owner and are
received prior to the close of business of the New York Stock Exchange.
<PAGE>
RIDER 2-B
If any beneficiary fails to survive, the remaining beneficiary or
beneficiaries will receive all amounts payable from the IRA as a result of the
individual's death in the same proportion as the Percentage of Distributions of
the surviving beneficiaries bear to each other. In the absence of designation,
or failure of all beneficiaries to survive, all amounts shall be paid to the
estate of the individual.
<PAGE>
RIDER 2-C
If none of the designated primary beneficiaries survive the individual, the
following contingent beneficiary or beneficiaries will receive all amounts
payable from the IRA:
<PAGE>
RIDER 2-D
To establish a Simplified Employee Plan Individual Retirement Account,
please complete and sign the Application. Please provide your Social Security
Number. Please mail the Application along with two checks payable to Investors
Fiduciary Trust Company, as Trustee, one in the amount of your initial
contribution and the second in the amount of $10.00, representing the
fiduciary's fee to:
Investors Fiduciary Trust Company
P.O. Box 407
Kansas City, Missouri 64141
Acceptance of the appointment of the Trustee and the establishment of the
Account shall be effective upon receipt by the Trustee of your check.
<PAGE>
RIDER 2-E
2. By Employer on behalf of Employee:
I hereby (i) establish an IRA on behalf of the employee named above (the
"employee") in accordance with the terms of the Trust Agreement; (ii) appoint
Investors Fiduciary Trust Company, or its successor, as Trustee of the IRA;
(iii) agree that current annual service fees of the Trustee may be deducted from
account assets before the end of the calendar year, which fees may be changed
upon notice to the Owner of the account; (iv) acknowledge that I have delivered,
to the employee, in person or by depositing in the U.S. mails, addressed to his
or her last known address as set forth above, a copy of the SEP Booklet,
including the Trust Agreement and the "Individual Retirement Account Disclosure
Statement," together with a copy of the current prospectus(es) and statements of
additional information of the mutual fund(s) in which this contributions is to
be invested; (v) agree, on behalf of myself and my successors and assigns, and
on behalf of the employee, his executors, administrators, heirs, beneficiaries
and assigns, that payment in accordance with the beneficiary designation made by
the employee or with the provisions of the Individual Retirement Account Trust
Agreement shall constitute a release of the Trustee, International Investors
Incorporated, Van Eck Funds, Van Eck Management Corporation, Van Eck Associates
Corporation and any director, trustee, officer, employee or agent thereof from
any further claim or obligation, on account of any amounts payable under the
Trust Agreement.
Name of Employer: ____________________________________________
Signature of Authorized Agent: _______________________________
Date: ____________________
<PAGE>
SIMPLIFIED EMPLOYEE PLAN
ALLOCATION FORMULA NOTICE
TO: All Eligible Employees
RE: Allocation Formula Under The Simplified Employee Plan of
________________________________.
Contributions pursuant to the Simplified Employee Plan will be made
for (check one) [_] calendar year 19__ or [_] employer's taxable year ending
_________________, 19__ to employees who will attain at least ___ (not over 21)
years of age during such year and who have performed service for the employer
during no less than ___(not to exceed three) years of the immediately preceding
five years, at the rate of ___% (not to exceed the lesser of 15% of total
compensation or $30,000) of total compensation of each such employee (excluding
compensation in excess of $200,000 and the amount of the contribution
hereunder).
Date:_____________________ ______________________________
Employer
By:___________________________
<PAGE>
INSTRUMENT OF AMENDMENT TO THE
RETIREMENT PLAN FOR SELF-EMPLOYED
INDIVIDUALS, PARTNERSHIPS AND CORPORATIONS
USING SHARES OF INTERNATIONAL
INVESTORS INCORPORATED OR THE VAN ECK FUNDS
-------------------------------------------
WHEREAS, Section 9.2 of the Retirement Plan for Self-Employed
Individuals, Partnerships and Corporations Using Shares of International
Investors Incorporated or the Van Eck Funds (the "Retirement Plan") delegates to
International Investors Incorporated the right to modify or amend the Retirement
Plan; and
WHEREAS, International Investors Incorporated desires to effect
certain amendments to conform the Retirement Plan (including its related
Adoption Agreements) to the requirements of the Tax Reform Act of 1986, the
Omnibus Budget Reconciliation Act of 1987, the Technical and Miscellaneous
Revenue Act of 1988 and other applicable law;
NOW THEREFORE, effective as of the dates set forth below,
International Investors Incorporated amends the Retirement Plan as follows:
1. The Retirement Plan shall be amended as set forth in that
"compared" draft of the Retirement Plan attached as Exhibit A hereto, so that
the Retirement Plan shall be amended and restated as set forth in Exhibit B
attached hereto. Such amendments and restatement shall,
<PAGE>
except as set forth on the following schedule, be effective as of the first day
of the first Plan Year beginning after December 31, 1988:
Effective Dates for Amendments to Sections of the
Retirement Plan Which are Other Than the First
Plan Year Beginning After December 31, 1988
-----------------------------------------------
<TABLE>
<CAPTION>
Section Effective Date
- ------- --------------
<S> <C>
5-1(c) January 1, 1985
2.11, 2.16,
4.2(c), 7, 8.2 January 1, 1987
2.24, 5.1(a) Plan Years beginning after December 31,
1987 for Participants with 1 or more Hours
of Service in such Plan Years
Name of plan, 2.12 November 1, 1989
</TABLE>
2. Effective as of the first Plan Year beginning after December 31,
1988, the Profit Sharing Plan Adoption Agreement and the Money Purchase Plan
Adoption Agreement shall be amended and restated as set forth in Exhibit C
hereto.
3. The officers of International Investors Incorporated are
authorized to execute such documents, including amendments to the Retirement
Plan and trust thereunder, and to take any and all actions as any of such
officers may deem necessary and advisable to carry out the purpose of this and
the foregoing amendments.
<PAGE>
IN WITNESS WHEREOF, International Investors Incorporated has duly
executed this Instrument as of the ______ day of ___________, 1990.
INTERNATIONAL INVESTORS INCORPORATED
By:___________________________________
John C. Van Eck, President
<PAGE>
CONSENT
-------
Pursuant to Section 9 of the Retirement Plan, Investors Fiduciary
Trust Company hereby consents to the amendments set forth in the foregoing
Instrument of Amendment as of the ____ day of __________, 1990.
INVESTORS FIDUCIARY TRUST COMPANY
By: ____________________________
<PAGE>
EXHIBIT B
Plan Document of the Retirement Plan for Self-Employed
Individuals, Partnerships and Corporations Using Shares of
INTERNATIONAL INVESTORS INCORPORATED OR THE VAN ECK FUNDS
SECTION 1. Purpose.
1.1 By executing the related Profit Sharing Plan or Money Purchase
Plan Adoption Agreement (the "Adoption Agreement"). The Employer has established
a retirement plan (the "Plan") under the Internal Revenue Code of 1986, as now
in effect or as hereafter amended, consisting of the Adoption Agreement, as
amended from time to time, and the following provisions of this Plan Document
and the Trust Agreement, in order to create a trust fund from which benefits
will be paid to eligible individuals or their beneficiaries. The corpus or
income of the Trust Fund may not be used for, or diverted to, purposes other
than for the exclusive benefit of Participants, Surviving Spouses or their
Beneficiaries.
SECTION 2. Definitions.
-----------
As used in the Plan and in the Trust Agreement adopted as a part
hereof, the following terms shall have the following meanings.
2.1 "Act" means the Employee Retirement Income Security Act of 1974,
as now in effect or as hereafter amended. All citations to sections of the Act
are to such sections as they may from time to time be amended or renumbered.
<PAGE>
2.2 "Affiliate" means any entity affiliated with the Employer within
the meaning of Sections 414(b), 414(c) or 414(m) of the Code or the Regulations
under Section 414(o) of the code, except that for purposes of applying the
provisions of Sections 7 and 8 with respect to Top Heavy Plans and the
limitation on contributions, Section 415(h) of the Code shall also apply.
2.3 "Beneficiary" means the person designated by a Participant
pursuant to Section 5.5.
2.4 "Break in Service" means a twelve-month period during which the
Employee has failed to complete more than 500 Hours of Service. The Break in
Service computation period shall be identical to the Year of Service computation
period. Effective with respect to absences commencing on or after January 1,
1985, solely for purposes of determining whether a Break in Service has
occurred, an individual shall be credited with the Hours of Service which such
individual would have completed but for a maternity or paternity absence, or in
the case in which such Hours cannot be determined, 8 Hours of Service per day of
such absence, as determined by the Employer in accordance with the Code and
Regulations; provided, however, that the total Hours of Service so credited
shall not exceed 501 hours and that the individual timely provide the Employer
with such information as it shall require. Hours of Service credited for a
maternity or paternity absence shall be credited entirely (i) in the Plan
<PAGE>
Year in which the absence began if such Hours of Service are necessary to
prevent a Break in Service in such year, or (ii) in the following Plan Year. For
purposes of this Section 2.4, maternity or paternity absence shall mean an
absence from work by reason of the individual's pregnancy, the birth of the
individual's child or the placement of a child with the individual in connection
with adoption of the child by such individual, or for purposes of caring for a
child for the period immediately following such birth or placement.
2.5 "Code" means the Internal Revenue Code of 1986, as now in effect
of an hereafter amended. All citations to sections of the Code are to such
sections as they may from time to time be amended or renumbered.
2.6 "Compensation" means, for a Plan Year, the first $200,000
(adjusted for cost-of-living and otherwise limited in accordance with Section
401(a)(17) of the Code) of compensation, as that term is defined in Section
415(c)(3) of the Code, received by an Employee (other than an Owner-Employee or
Partner-Employee) from the Employer for any during which he is a Participant,
and all wages subject to Social Security tax under Section 3101(a) of the Code
(without the limitation of Section 3121(a) of the Code) including basic salary
or wages, commissions, bonuses, and other extraordinary remuneration but not
including deferred compensation, amounts realized from the exercise of incentive
or nonqualified stock options or when restricted stock or
<PAGE>
property either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture, or Employer contributions under the Plan or any
other benefit plan, other than contributions through a salary reduction
agreement to a cash or deferred plan under Section 401(k) of the Code, to a
cafeteria plan under Section 125 of the Code or to a tax deferred annuity under
Section 403(b) of the Code.
2.7 "Contract" means an annuity contract or a life insurance or retirement
income policy described in Section 6.3 which is issued pursuant to the Plan.
2.8 "Earned Income" means the annual net earnings of an Owner-Employee or
Partner-Employee from self-employment; provided, however, that such net earnings
shall be determined only with respect to a trade, business or profession in
which the personal services of such Owner-Employee or Partner-Employee are a
material income-producing factor. Net earnings will be determined without regard
to items not included in gross income and deductions allocable to such items. In
computing such net earnings, both deductions for contributions under the Plan
made on behalf of an Owner-Employee or Partner-Employee and deductions for
contributions made on behalf of other Participants shall be taken into account.
Beginning January 1, 1990, net earnings shall be reduced by one-half of an
Owner-Employee's or Partner-Employee's deductible self-employment taxes as
determined in accordance with Section 401(c)(2) of the Code
<PAGE>
2.9 "Effective Date" means the first day of the Plan Year in which
the Plan is adopted, except that it shall be the date the Plan is adopted if the
Employer and the Trustee then agree in writing.
2.10 "Employee" means a person employed in the Business including an
Owner-Employee and a Partner-Employee, including all employees of the Employer
or of any Affiliate, but excluding (i) any nonresident alien who receives no
remuneration from the company which constitutes income from sources within the
United States (within the meaning of Section 861(a)(3) of the Code) and, (ii)
any employee who is included in a unit of employees covered by an agreement
which the Secretary of Labor finds to be a collective bargaining agreement
between employee representatives and one or more employers, including the
Employer, if there is evidence that retirement benefits were the subject of good
faith bargaining between such employee representatives and the Employer or such
employers, and which agreement does not provide for his membership in the Plan.
For this purpose, the term "employee representatives" does not include any
organization more than half of whose members are Employees who are owners,
officers or executives of the Employer.
For purposes of the preceding paragraph, any Leased Employee shall be
treated as an employee of the recipient employer, however, contributions
provided by the leasing organization which are attributable to services
performed for
<PAGE>
the recipient employer shall be treated as provided by the recipient employer.
The preceding sentence shall not apply to any Leased Employee if Leased
Employees do not constitute more than 20 percent of the recipient employer's
non-highly compensated work force (as determined pursuant to Section 414(n)(5)
of the Code) and such employee is covered by a money purchase pension plan
maintained by the leasing organization providing: (1) a non-integrated employer
contribution rate of at least 10 percent of compensation, (2) immediate
participation, and (3) full and immediate vesting. For purposes of this
paragraph, the term "Leased Employee" means any person (other than an employee
of the recipient employer) who pursuant to an agreement between the recipient
and any other person ("leasing organization") has performed services for the
recipient (or for the employer and related persons determined in accordance with
Section 414(n)(6) of the Code) on a substantially full time basis for a period
of at least one year and such services are of a type historically performed by
employees in the business field of the recipient employer.
2.11 "Employer" means the sole proprietorship, partnership or
corporation executing the Adoption Agreement as engaged in the trade, business
or profession (the "Business") set forth in the Adoption Agreement and any
successor to the Business who or which elects to continue the Plan with the
written approval of the Trustee.
<PAGE>
2.12 "Exchange Application" means the Exchange Privilege Application
pursuant to which an Employee may exercise the Exchange Privilege.
2.13 "Exchange Privilege" means the privilege pursuant to which an
Employee may, subject to the limitations, terms and conditions set forth in the
Exchange Application and the current prospectuses of International Investors
Incorporated and the Van Eck Funds, exchange I.I.I. Shares or V.E.F. Shares
purchased with contributions to the Plan made by the Employee and the Employer
on behalf of the Employee and any I.I.I. Shares or V.E.F. Shares acquired as a
result of dividends and capital gains distributions thereon for shares of the
Participating Funds and re-exchange such shares for shares of the other
Participating Funds.
2.14 "Fund Shares" means I.I.I. Shares and V.E.F. Shares held in a
Participant's account.
2.15 "Highly Compensated Employees" means, to the extent required by
Section 414(g) of the Code and the Regulations thereunder, all "highly
compensated active employees" and "highly compensated former employees" and
shall be otherwise defined as follows.
A "highly compensated active employee" includes any Employee who
performs service for the Employer or an Affiliate during the "determination
year" and who, during the "look-back year": (1) received compensation from the
Employer or an Affiliate in excess of $75,000 (as adjusted
<PAGE>
pursuant to Section 415(d) of the Code); (2) received compensation from the
Employer or an Affiliate in excess of $50,000 (as adjusted pursuant to Section
415(d) of the Code) and was a member of the top-paid group for such year; or (3)
was an officer of the Employer or an Affiliate and received compensation during
such year that is greater than 50 percent of the dollar limitation in effect
under Section 415(b)(1)(A) of the Code. The term Highly Compensated Employee
also includes (1) Employees who are both described in the preceding sentence if
the term "determination year" is substituted for the term "look-back year" and
the Employee is one of the 100 Employees who received the most compensation from
the Employer or an Affiliate during the "determination year;" and (2) Employees
who are 5 percent owners at any time during the "look-back year" or
"determination year." If no officer has satisfied the compensation requirement
of the preceding clause (3) during either a "determination year" or "look-back
year," the highest paid officer for such year shall be treated as a Highly
Compensated Employee.
For this purpose, the "determination year" shall be the Plan Year. The
"look-back year" shall be the twelve-month period immediately preceding the
determination year. A "highly compensated former employee" includes any Employee
who separated from service (or was deemed to have separated) prior to the
determination year, performs no service for the Employer or Affiliate during the
determination year, and
<PAGE>
was a highly compensated active employee for either the separation year or any
determination year ending on or after the employee's 55th birthday. If an
Employee is, during a determination year or look-back year, a "family member" of
either a 5 percent owner who is an active or former Employee or a Highly
Compensated Employee who is one of the 10 most highly compensated employees
ranked on the basis of compensation paid by the Employer or an Affiliate during
such year, then the "family member" and the 5 percent owner or top-ten highly
compensated employee shall be aggregated. In such case, the "family member" and
5 percent owner or top-ten highly compensated employee shall be treated as a
single Employee receiving compensation and Plan contributions equal to the sum
of such compensation and contributions of the family member and 5 percent owner
or top-ten highly compensated employee. For purposes of this Section 2.16,
"family member" includes the spouse, lineal ascendants and descendants of the
Employee or former Employee and the spouses of such lineal ascendants and
descendants.
The determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of Employees in the top-paid
group, the top 100 Employees, the number of Employees treated as officers and
the compensation that is considered, will be made in accordance with Section
414(g) of the Code and the Regulations thereunder.
<PAGE>
2.16 "Hour of Service* means:
(a) Each hour for which an Employee is directly or indirectly paid or
entitled to payment by the Employer or an Affiliate for the performance of
duties. These hours shall be credited to the Employee for the period or periods
in which the duties are performed; and
(b) Each hour for which an Employee is directly or indirectly paid or
entitled to payment by the Employer or an Affiliate for reasons (such as
vacation, sickness or disability) other than for the performance of duties
(irrespective of whether the employment relationship has terminated). No more
than 501 Hours of Service will be credited under this paragraph for any single
continuous period. These hours shall be credited to the Employee for the period
or periods in which payment is made or amounts payable to the Employee become
due; and
(c) Each hour for which back pay, irrespective of mitigation of
damages, has been either awarded or agreed to by the Employer or an Affiliate
for the period or periods to which the award or agreement pertains rather than
the period in which the award, agreement, or payment was made.
Hours of Service shall be computed and credited pursuant to Labor
Department Regulation Section 2530.200b-2 and on the basis selected in Item 11
of the Adoption Agreement. Hours of Service shall also be credited for an
individual considered an Employee under Section 414(n) of the Code.
<PAGE>
The same Hours of Service shall not be credited both under Section 2.17(a) or
2.17(b), whichever is applicable, and Section 2.17(c).
2.17 "Insurance Company" means a life insurance company which has
issued a Contract.
2.18 "IRS" means the United States Internal Revenue Service.
2.19 "I.I.I. Shares" means the shares of any regulated investment
company, the investment advisor of which is Van Eck Management Corporation.
2.20 "Joint and Survivor Annuity" means an annuity for the life of a
Participant with a survivor annuity for the life of such Participant's Surviving
Spouse in an amount the Participant shall elect which is not less than one-half
of, nor greater than, the amount of the annuity payable during the joint lives
of such Participant and his Surviving Spouse and shall be the amount of benefit
which may be purchased with the balance of such Participant's account under the
Plan. If no election has been made, the percentage will be as specified in Item
12 of the Adoption Agreement.
2.21 "Labor Department" means the United States Department of Labor.
2.22 "Master or Prototype Plan" means a plan, the form of which is the
subject of a favorable opinion letter from the IRS.
<PAGE>
2.23 "Normal Retirement Age" means the 65th birthday of a Participant.
2.24 "Owner-Employee" means the sole proprietor, if the Employer is a
sole proprietorship, or a partner owning more than ten percent of either the
capital or the profits interest in the Employer, if the Employer is a
partnership.
2.25 "Participant" means each Employee who is made a participant in
the Plan in accordance with Section 3.
2.26 "Participating Funds" means International Investors Incorporated
and any series of the Van Eck Funds which is established pursuant to the Master
Trust Agreement of the Van Eck Funds, as amended from time to time.
2.27 "Partner-Employee" means a person who has
Earned Income as a partner (but not an Owner-Employee) in the Employer if the
Employer is a partnership.
2.28 "Plan Year" means the twelve-month period corresponding to the
Employer's fiscal year for Federal income tax purpose.
2.29 "Regulations" means the applicable regulations issued under the
Code, the Act or other applicable law by the IRS, the Labor Department or any
other governmental authority and any temporary rules promulgated by such
authorities pending the issuance of such regulations.
2.30 "Service" means employment (whether or not as an Employee) with
the Employer or an Affiliate. Service shall also include (under rules determined
by the Employer
<PAGE>
uniformly applicable to all Employees similarly situated and in accordance with
the Regulations) (i) periods of vacation, layoff and absence authorized by the
Employer for sickness, temporary disability or personal reasons, (ii) service in
the Armed Forces of the United States, if and to the extent required by the
Military Selective Service Act, as now in effect or an hereafter amended, or any
other Federal law, and (iii) service with a predecessor employer, if the
Employer maintains the plan of a predecessor employer.
2.31 "Surviving Spouse" means a person to whom a Participant has been
married (i) for the entire one-year period ending on the date of the
Participant's death, and (ii) in the event of a Participant's retirement, on the
date benefit payments commence.
2.32 "Trust Agreement" means the trust agreement entered into pursuant
to Section 6 as a part of the Plan.
2.33 "Trustee" means the trustee under the Trust Fund or any successor
thereto.
2.34 "Trust Fund" means the trust fund established under the Trust
Agreement.
2.35 "V.E.F. Shares" means shares of beneficial interest in any series
of the Van Eck Funds which is established pursuant to the Master Trust Agreement
of the Van Eck Funds as amended from time to time.
<PAGE>
2.36 "Year of Service" means a twelve-consecutive month period,
beginning on the date an Employee first performs an Hour of Service for the
Employer or an Affiliate (or first performs an Hour of Service for the Employer
or an Affiliate following a Break in Service), during which the Employee has
completed at least 1,000 Hours of Service. Thereafter, Year of Service means a
Plan Year (which includes the first anniversary of the date on which the
Employee first performed an Hour of Service) during which the Employee has
completed at least 1,000 Hours of Service. The Employee shall be credited with
two Years of Service for purposes of eligibility to participate in the Plan, if
he has completed at least 1,000 Hours of Service in both his initial and second
Year of Service.
SECTION 3. Participation
-------------
3.1 Each Owner-Employee, each Partner-Employee and each other
Employee who as of the Effective Date has completed at least two Years of
Service as an Employee, Owner-Employee, Partner-Employee, or any combination of
the foregoing shall become a Participant on such date. Each Owner-Employee,
Partner-Employee and other Employee who thereafter completes at least two Years
of such Service shall become a Participant on the first day of the month
coincident with or preceding such completion of Service. If an individual
becomes an eligible Employee after completing two Years of
<PAGE>
Service, he shall participate in the Plan as of the first day of the month
coincident with or preceding the date on which he becomes an eligible Employee.
If the Employer has as of the Effective Date been engaged in the Business for
less than two years then such lesser number shall be substituted for two in the
preceding sentences. By completing or amending Item 10 on the Adoption
Agreement, the Employer may reduce the number of years prescribed in the
preceding sentences of this Section 3.1, but the Employer cannot increase the
number. If the Plan provides contributions or benefits for an Owner-Employee who
"controls," either alone or in combination with other owner-employees, one or
more other trades, businesses or professions other than the Business covered by
the Plan, then (i) the employees and self-employed individuals of each such
other trade, business or profession shall be covered by a qualified plan which
provides contributions and benefits for such individuals which shall not be less
favorable than the contributions and benefits provided for such Owner-Employee
under the Plan, and (ii) if such Owner-Employee controls the Business covered by
the Plan, then the Plan and any other qualified plan which covers such other
trades, businesses or professions, when looked at as a single plan, shall
satisfy Sections 401(a) and (d) of the Code with respect to the employees of the
Business and all such other trades, businesses or professions. If an Employee
participates as an Owner-Employee under the qualified plans
<PAGE>
of two or more trades, businesses or professions which are not controlled by
such Employee and such Employee does control a trade, business or professions,
the contributions or benefits of the employees under the qualified plans of the
trades, businesses or professions which are controlled must be as favorable as
those provided for such Employee under the most favorable qualified plan of the
trade, businesses or professions which is not controlled. For purposes of the
preceding sentences (i) an Owner-Employee, or two or more Owner-Employees shall
be treated as owning any interest in a partnership which is owned, directly or
indirectly by a partnership which such Owner-Employee, or such two or more
Owner-Employees are considered to control and (ii) "control" means either the
entire interest in an unincorporated trade, business or profession or, in the
case of a partnership, ownership of more than 50 percent of either the capital
or profits interest.
Except as provided in Section 7, all employees of all Affiliates of
the Employer will be treated as being employed by the Employer.
3.2 The participation of a Participant shall cease upon his
termination of Service (i) on his retirement date, (ii) by reason of death or
total and permanent disability, or (iii) accompanied by any Break in Service.
The participation of a Participant who, without any Break in Service, ceases to
<PAGE>
be an eligible Employee for any reason, including his termination of Service
other than on his retirement date or by reason of his death or total and
permanent disability, shall not cease on account thereof. Notwithstanding any
other provision of the Plan, no contributions shall be made for the benefit of,
and no contributions under the Plan shall be allocated, added or otherwise
credited to the account of, a Participant on or after the date on which he
ceases to be an Employee and before the first day of the Plan Year coincident
with or preceding the date, if any, on which he again becomes an Employee;
provided, however, that a Participant who ceases to be an eligible Employee
after completing 1,000 Hours of Service during a Plan Year shall be entitled to
receive an Employer contribution for such year.
3.3 Any Employee who has a Break in Service and who does not have a
vested interest in the Plan prior to such Break in Service, shall be treated as
a new Employee in the event that he returns to Service. Any Employee who has a
Break in Service and who has a vested interest in the Plan prior to such Break
in Service shall become a Participant upon the completion of one Hour of Service
in the event that he returns to Service.
SECTION 4. Contributions.
-------------
4.1 By the Employer. For each Plan Year, the Employer shall
---------------
contribute, in accordance with the terms set
<PAGE>
forth in Item 9 of the Adoption Agreement, an amount in cash on behalf of each
Participant. The Employer may make payment of its contribution for any Plan Year
on any date or dates it elects, provided that the total amount of its
contribution for any Plan Year shall be paid in full on or before such date as
the Federal income tax laws applicable to such payment require the payment to be
made in order to permit deduction of such payment for such Plan Year.
4.2 By Participants. Contributions may be made by Participants as
---------------
follows:
(a) Subject to Section 4.2(c), each Participant may contribute on
behalf of himself an amount up to !0 percent of such Participant's Compensation
or Earned income derived from the Business for such Plan Year: provided,
however, that if the amount which would otherwise be contributed by the Employer
on behalf of such Participant for any such Plan Year must be reduced by reason
of Section 7.2, the Participant shall not be permitted to make any voluntary
contributions under the Plan during the succeeding Plan Year. The contributions
of Participants shall be made in cash by payroll deductions or by lump-sum
contributions or by such other means as the Employer may determine.
(b) Subject to Section 4.2(c), a Participant in Service may,
notwithstanding the foregoing provisions of this Section 4.2 but subject to the
provisions of Section 7.2, make a lump-sum additional contribution under the
Plan in any
<PAGE>
amount which does not exceed 10 percent of his aggregate Compensation or Earned
Income during the period he was a Participant under the Plan and all other
qualified Plans of the Employer.
(c) (1) Notwithstanding any other provision of this Section 4.2(c),
the average contribution percentage for the Plan Year for Highly Compensated
Employees shall not exceed the greater of the following average contribution
percentage tests: (i) the average contribution percentage for such Plan Year of
those Employees who are not Highly Compensated Employees multiplied by 1.25; or
(ii) the average contribution percentage for the Plan Year of those Employees
who are not Highly Compensated Employees multiplied by 2.0 provided that the
average contribution percentage for Highly Compensated Employees does not exceed
the average contribution percentage for such other Employees by more than 2
percentage points. For purposes of this Section 4.2(c), the "average
contribution percentage" for a Plan Year means, for each specified group of
employees, the average of the ratios (calculated separately for each Employee in
such group) of (x) the sum of the Employee's voluntary contributions for the
Plan Year, to (y) the amount of the Employee's compensation (as defined in
Section 414(s) of the Code) for the Plan Year. An Employee's average
contribution percentage shall be zero, if no voluntary contributions are made on
his or her behalf for such Plan Year. If the Plan and one or more other plans
<PAGE>
of the Company or an Affiliate to which any matching contributions or employee
contributions within the meaning of Section 401(m) are made are treated an one
plan for purposes of Sections 401(a)(4) and 410(b) of the Code, all such
matching contributions or employee contributions to such plans shall be treated
as being made under a single plan for purposes of this Section 4.2(c). The
average contribution percentage taken into account under this Section 4.2(c) for
any Highly Compensated Employee who is eligible for such matching or employee
contributions under two or more plans described in Section 401(a) of the Code or
arrangements described in Section 401(m) of the Code that are maintained by the
Employer shall be determined as if all such contributions were made under a
single plan. The determination and treatment of the average contribution
percentage of any Participant shall satisfy such other requirements as may be
required by the Regulations. For purposes of determining the average
contribution percentage of a Participant who is a Highly Compensated Employee
subject to the family aggregations rules of Section 414(q)(6) because such
employee is either a five-percent owner or one of the ten most Highly
Compensated Employees as described in Section 414(q)(6), the matching and
employee contributions and compensation (as defined in Section 414(s) of the
Code) of such Participant shall include the matching and employee contributions
and compensation (as defined in Section 414(s) of the Code) of "family members,"
<PAGE>
within the meaning of Section 414(q)(6) of the Code, and such "family members"
shall not be considered as separate Employees in determining average
contribution percentages.
(2) The Employer shall determine as of the end of the Plan Year, and
at such time or times in its discretion, whether one of the average contribution
percentage tests specified in Section 4.2(c)(1) is satisfied for such Plan Year.
In the event that neither of the average contribution percentage tests is
satisfied, the Employer shall refund or forfeit the excess contributions in the
manner described in Section 4.2(c)(3). For purposes of this Section 4.2(c),
"excess aggregate contributions" means, with respect to any Plan Year and with
respect to any Participant, the excess of the aggregate amount of voluntary
contributions (and any earnings and losses allocable thereto accruing to the
date of distribution) made by the Highly Compensated Employee for such Plan
Year, over the maximum amount of such voluntary contributions that could be made
by such Employee without violating the requirements of Section 4.2(c)(l). The
amount of each Highly Compensated Employee's excess contributions shall be
determined by reducing the average contribution percentage of each Highly
Compensated Employee whose average compensation percentage is in excess of the
percentage otherwise permitted under Section 4.2(c)(1) to the maximum amount
permitted by that Section.
<PAGE>
(3) If the Employer is required to refund excess contributions for any
Highly Compensated Employee for a Plan Year in order to satisfy the requirements
of Section 6.7(a), then the refund of such excess aggregate contributions shall
be made with respect to such Highly Compensated Employees to the extent
practicable before the 15th day of the third month immediately following the
Plan Year for which such excess aggregate contributions were made, but in no
event later than the end of the Plan Year. All such distributions shall be made
to Highly Compensated Employees on the basis of the respective portions of such
amounts attributable to each such Highly Compensated Employee.
4.3 Vesting. All contributions made by or on behalf of each Participant
-------
under the Plan (except those used to pay premiums on Contracts), and all
investments made with, such contributions and the earnings thereon, shall be
credited to a Participant's separate account under the Trust Fund. A
Participant's interest in all contributions and other amounts credited to his
account and in Contracts held for his benefit shall immediately become and at
all times remain fully vested and non-forfeitable.
4.4 Further Limitation on Contributions. Contributions made under
-----------------------------------
Section 4.2 shall be remitted by contributing Participants to the Trustee. The
Employer may commingle contributions made under Sections 4.1 and 4.2 but shall
<PAGE>
instruct the Trustee to credit the amount of each Section 4.2 contribution to
the Trust Fund to the contributing Participant's account. The Employer shall
keep records of the amounts of each Section 4.1 and each Section 4.2
contribution, respectively, to be credited to each Participant's account and the
dates they are remitted to the Trustee.
SECTION 5. Payment of Benefits.
-------------------
5.1 Time for Distribution.
---------------------
(a) The amount credited to the account of any Participant shall be
distributed to him following the termination of his employment, or the
termination of his Service as a Partner-Employee, and shall commence no later
than the later of a Participant's termination of Service as described in Section
3.2 or attainment of Normal Retirement Age. Notwithstanding the preceding
sentence and any other provision of the Plan (other than Sections 5.2 and 5.6),
any benefit payable to a Participant shall commence no later than the April 1st
of the calendar year following calendar year in which the Participant attains
age 70 1/2, provided, however, that if a Participant attained age 70 1/2 prior
to January 1, 1988, then, except as otherwise provided in Section 5.2(e), any
benefit payable to such Participant shall commence no later than the April 1st
of the calendar year following the later of:
<PAGE>
(1) the calendar year in which such Participant retires; or
(2) the calendar year in which such Participant attains age 70 1/2;
and shall be paid, in accordance with the Regulations, over the life of such
Participant or over the joint lives of such Participant and his Beneficiary, or
over a period not extending beyond the life expectancy of such Participant or
the joint life expectancy of such Participant and his Beneficiary.
(b) If distribution of a Participant's benefit has commenced prior to the
Participant's death, and such Participant dies before his entire benefit is
distributed to him, distribution of the remaining portion of the Participant's
benefit to the Participant's Beneficiary shall be made at least as rapidly as
under the method of distribution in effect on the date of the Participant's
death.
(c) If a Participant dies before distribution of his benefit has commenced,
distributions to any Beneficiary shall be made on or before the December 31st of
the calendar year which contains the fifth anniversary of the date of such
Participant's death; provided, however, at the Beneficiary's irrevocable
election, duly filed with the Committee before the applicable commencement date
set forth in the following sentence, any distribution to a Beneficiary
designated under Section 5.5 may be made over the life of such Beneficiary or
<PAGE>
a period not extending beyond the life expectancy of such Beneficiary. Such
distribution shall not commence later than the December 31st of the calendar
year immediately following the calendar year in which the Participant died or,
in the event such Beneficiary is the Participant's Surviving Spouse, on or
before the December 31st of the calendar year in which such
<PAGE>
Participant would have attained age 70 1/2, if later (or in either case, on any
later date prescribed by Regulations). If such Participant's Surviving Spouse
dies after such Participant's death but before distributions to such Surviving
Spouse commence, this Section 5.1(c) shall be applied to require payment of any
further benefits as if such Surviving Spouse were the Participant.
(d) Pursuant to the Regulations, any benefit paid to a child of the
Participant shall be treated as if paid to a Participant's Surviving Spouse if
such amount will become payable to such Surviving Spouse on the child's
attaining majority, or other designated event permitted by Regulations.
(e) If a participant who is a 5% owner attained age 70 1/2 before January
1, 1998, any benefit payable to such Participant must commence no later than the
April 1st of the calendar year following the later of (i) the calendar year in
which such Participant attains age 70 1/2, or (ii) the earlier of (A) the
calendar year within which ends the Plan Year in which the Participant became a
5% owner (B) the calendar year in which the Participant retires. For purposes of
this
<PAGE>
Section 5.1(e), a 5% owner shall mean a 5% owner of such Participant's Employer
as defined in Section 416(i) of the Code at any time during the Plan Year ending
with or within the calendar year in which such owner attains age 66 1/2 or any
such subsequent Plan Year. Distributions must continue to such Participant even
if such Participant ceases to own more than 5% of the Employer in a subsequent
year.
5.2 Disability.
----------
If a Participant should become disabled, the amount credited to his account
shall be distributed to him within six months after the date of determination of
such disability. A Participant shall be considered to be disabled if he is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or to be of long, continued and indefinite duration.
5.3 Method of Payment.
-----------------
(a) Subject to Section 5.3(b) and Section 5.3(c), any benefit payable
under the Plan shall be paid in one of the following methods of distribution, as
the Participant may elect in accordance with Section 5.3(e).
(1) The purchase therewith and delivery to the Participant by the
Employer of a single premium immediate or deferred annuity (fixed or variable),
containing such provisions as the Employer shall designate; provided, however,
<PAGE>
that any annuity contract distributed herefrom must be nontransferable;
(2) In ratable monthly installment payments from the Trust Fund over
any period not exceeding the remaining life expectancy of the Participant or the
joint life expectancies of the Participant and his Beneficiary as determined by
the Employer in accordance with the Code and Regulations; or
(3) One lump-sum payment thereof from the Trust Fund.
Any distribution, other than a lump-sum payment, shall be made in equal or
substantially equal amounts, and any distribution may be made in Fund Shares or
in cash. If the Participant's entire interest is to be distributed in other than
a lump-sum, then the amount to be distributed each year must be at least an
amount equal to the quotient obtained by dividing the Participant's entire
interest by the life expectancy of the Participant or joint and last survivor
expectancy of the Participant and Beneficiary. For purposes of Sections 5.1 and
5.3, life expectancy and joint and last survivor expectancy are computed by the
use of the return multiples contained in Section 1.72-9 of the Income Tax
Regulations. For purposes of this computation, life expectancy shall be
recalculated annually in accordance with the Regulations, provided, however,
that a Participant may elect to have such life expectancy not so recalculated
and the life
<PAGE>
expectancy of a non-spouse Beneficiary may not be recalculated. Any method of
distribution elected must satisfy the minimum distribution incidental benefit
requirements of Section 401(a)(9) of the Code and the Regulations thereunder. If
a Participant does not elect one of the methods of distribution above,
distribution will be made in the form of one lump-sum payment.
(b) Notwithstanding Section 5.3(a) and unless the Participant has elected
otherwise in accordance with Section 5.3(c), the provisions of this Section
5.3(b) shall apply to any Participant who completes an Hour of Service after
August 22, 1984. A Participant who has a Surviving Spouse shall receive his
retirement benefit under the Plan in the form of a Joint and Survivor Annuity
and a Participant who has no Surviving Spouse shall receive his retirement
benefit under the Plan in the form of a life annuity.
(c) Unless the Participant elects otherwise in accordance with Section
5.3(e), the provisions of this Section 5.3(c) shall apply to any Participant who
completes an Hour of Service after August 22, 1984. A Preretirement Survivor
Annuity shall be paid to the Surviving Spouse of a Participant or former
Participant who dies before the commencement of payment of his retirement
benefit. The term "Preretirement Survivor Annuity" means a benefit providing for
payment of a survivor annuity to his Surviving Spouse, if any, for the life of
such Surviving Spouse equal to the full
<PAGE>
account balance at the date of death. Unless the Surviving Spouse elects to have
such Annuity distributed immediately, payment of the Preretirement Survivor
Annuity shall commence on the last day of the month following the later of (i)
the first month in which the Participant could have retired, or (ii) the month
in which the Participant dies.
(d) At the request of a terminated Participant, a Surviving Spouse, a
Beneficiary or a Participant's estate in accordance with procedures of the
Employer, the Trustee may make one or more advances from the Trust Fund to such
terminated Participant, Surviving Spouse, Beneficiary or Participant's estate
prior to the date upon which a final distribution would otherwise be made from
the Trust Fund in accordance with the Plan. Such advances shall be based upon
the benefit amount which would be payable, and shall reduce the amount which
becomes payable, as of the date of final distribution. In any case where
installment payments are to be paid or are being paid to a Beneficiary, any
balance of unpaid installments upon or after said Beneficiary's death shall be
payable to the estate of such Beneficiary. Only Contracts which conform to the
terms of the Plan shall be issued under this Section.
(e) The Employer shall furnish or cause to be furnished to each married
Participant explanations of the Joint and Survivor Annuity and the Preretirement
Survivor Annuity. With respect to a Joint and Survivor Annuity, the Employer
<PAGE>
shall provide each Participant, no less than 30 days and no more than 90 days
prior to the commencement of benefits, a written explanation of: (i) the terms
and conditions of the Joint and Survivor Annuity; (ii) the Participant's right
to make and the effect of an election to waive the Joint and Survivor Annuity;
(iii) the rights of the Participant's Surviving Spouse; and (iv) the right to
make, and the effect of, a revocation of a previous election to waive the Joint
and Survivor Annuity. With respect to a Preretirement Survivor Annuity, the
Employer shall provide each Participant within the period beginning on the first
day of the Plan Year in which the Participant attains age 32 and ending with the
close of the Plan Year in which the Participant attains age 35, a written
explanation the Preretirement Survivor Annuity in such terms and in such manner
as would be comparable to the explanation applicable to a Joint and Survivor
Annuity. If a Participant enters the Plan after the first day of the Plan Year
in which the Participant attained age 32, the Employer shall provide notice no
later than the close of the third Plan Year succeeding the entry of the
Participant in the Plan.
A Participant may, with the written consent of his spouse (unless the
Employer makes a written determination in accordance with the Code and the
Regulations that no such consent is required), elect in writing (i) to receive
his benefit in one of the forms described in Section 5.3(a) in
<PAGE>
lieu of a Joint and Survivor Annuity within the 90-day period ending on the date
payment of his benefit commences, or (ii) to waive the Preretirement Survivor
Annuity within the period beginning on the first day of the Plan Year in which
the Participant attains age 35 and ending on the date of his death. The
Surviving Spouse's consent to a waiver must acknowledge the effect of the
election, be witnessed by the Employer or a notary public and must be limited to
a distribution for a specific Beneficiary. If the Participant separates from
Service prior to the first day of the Plan Year in which he attains age 35, the
election period in (ii) above with respect to the Participant's account balance
at the date of separation shall commence on the date of separation. Any consent
necessary under this provision will not be valid with respect to any other
spouse. Any such election may be revoked by a Participant, without spousal
consent, at any time within which such election could have been made. Any new
waiver or change of Beneficiary shall require a new spousal consent.
(f) Notwithstanding the preceding provisions of this Section 5.3 or of
Section 5.4, the account of a Participant with a balance of not more than $3,500
may, without the consent of the Participant or his spouse, if any, be
distributed in the form of a lump-sum. (However, no distribution shall be made
pursuant to the preceding sentence after the first day of the first period for
which an amount is received as an annuity unless the Participant and his spouse,
<PAGE>
if any, consent in writing to such distribution.) If the value of a
Participant's account balance derived from Employer and Employee contributions
exceeds $3,500, the Participant and his spouse, if any, must consent to any
distribution from such account.
5.4 Distribution on Death.
---------------------
If a Participant has elected in accordance with Section 5.3(e) to receive
benefits in a form other than a Joint and Survivor Annuity or to waive the
Preretirement Survivor Annuity, as applicable, and dies before the distribution
of his benefits from his account under the Trust has commenced pursuant to
Section 5.1 or 5.2, or before such distribution has been completed, then the
entire amount or remaining amount credited to his account shall be distributed
to his Beneficiary. Such distribution shall at the Beneficiary's written
election, be made in one lump cash sum, as described in Section 5.3(a)(3), or in
ratable monthly installments; provided, however, that such distribution shall be
made in accordance with Section 5.1(b) and (c). Any method of distribution
elected must satisfy the minimum distribution incidental benefit requirements of
Section 401(a)(9) of the Code and the Regulations thereunder. For purposes of
this Section 5.4, payments will be calculated by use of the return multiples
specified in Section 1.72-9 of the Regulations. Life-expectancy will be
calculated at the
<PAGE>
time distribution first commences and payments for any 12-consecutive month
period will be based on such life expectancy less the number of whole years
passed since the distribution first commenced.
5.5 Designation of Beneficiary.
--------------------------
In the case of an unmarried Participant or a married Participant whose
spouse consents in accordance with Section 5.3(e), such Participant shall have
the right, by written notice to the Employer, to designate or to change a
Beneficiary to receive any benefit payable under the Plan with respect to such
Participant in the event of his death. If benefits are payable in a form other
than a Joint and Survivor Annuity and if no such designation is in effect on a
Participant's death or if the designated Beneficiary has predeceased the
Participant, his Beneficiary shall be his Surviving Spouse, if any, or if the
Participant has no Surviving Spouse, his estate.
5.6 Withdrawal of Contributions.
---------------------------
Any Participant who has made or is considered as having made contributions
on behalf of himself pursuant to Section 4.2 above may, with his spouse's
consent, if any, upon 30 days, written notice filed with the Trustee by the
Employer, have paid to him all or any portion of the lesser of the amounts
specified in clauses (a) and (b) below:
(a) the fair market value of the Fund Shares purchased with the aggregate
amount of such
<PAGE>
contributions (but exclusive of any earnings thereon); or
(b) the aggregate amount of such contributions (but exclusive of any
earnings thereon and any portion thereof used to purchase current insurance
protection for a Participant).
Before making payment to a Participant under this Section 5.6, the Trustee
must be supplied with a written statement signed by the Employer or the
Participant certifying the amounts of any such portions.
5.7 Payments Due under Contracts. Upon the death of a Participant, any
----------------------------
payments which are due or which may become due under a Contract shall be paid in
accordance with the terms of the Contract.
SECTION 6. Trust.
-----
6.1 Custody of Fund Shares.
----------------------
All contributions under the Plan except that portion, if any, allocated to
premiums on Contracts purchased by the Employer shall be paid over to the
Trustee to be held by the Trustee in trust and in accordance with the Trust
Agreement.
6.2 Trust Agreement.
---------------
The Trust Agreement shall provide:
(1) That all the contributions, including rollover contributions, to the
Trust Fund (including all earnings
<PAGE>
thereon) shall be applied to the purchase of full and fractional I.I.I. Shares
or V.E.F. Shares, as directed in writing by the Employer with respect to
Employer contributions or as directed in writing by the Participant with respect
to his voluntary contributions,
(2) That all earnings received on I.I.I. Shares shall be reinvented in
I.I.I. Shares and all earnings on V.E.F. Shares shall be reinvested in V.E.F.
Shares of the same mutual fund that paid such earnings,
(3) That the shareholder of record of all Fund Shares shall be the Trustee
or its nominee or nominees. Each Participant shall be the beneficial owner of
all Fund Shares held in and credited to his account under the Trust Fund, and
(4) That a Participant shall be eligible to exercise the Exchange
Privilege, subject to the limitations, terms and conditions set forth in the
Exchange Application and the current prospectuses of International Investors
Incorporated or the Van Eck Funds.
6.3 Purchase of Contracts.
---------------------
Subject to Section 6.4, a portion of the contributions otherwise payable by
the Employer for a Participant pursuant to Section 4.1 may, if elected by the
Employer, be used to pay premiums on non-transferable fixed or variable annuity
contracts, retirement income policies or term, ordinary or endowment life
insurance policies purchased and held by the Employer for the benefit of the
Participant who shall
<PAGE>
be the named insured. The Employer shall substitute a bank as trustee or
custodian of the Contracts if the Employer is notified by the IRS that such
substitution is required because the holder of the Contracts is not keeping such
records or making such returns or rendering such statements as are required by
law.
Neither the Trustee nor INTERNATIONAL INVESTORS INCORPORATED nor VAN ECK
FUNDS shall be deemed to have endorsed any Insurance Company as a suitable
issuer of any such Contract under the Plan.
No Participant may borrow against the cash surrender value of a Contract,
and any dividends on a Contract shall be used for the purchase of additional
benefits under the Contract or held by the Insurance Company at interest for the
benefit of the Participant under the terms of the Contract or the rules of the
Insurance Company. A Contract may include waiver of premium for disability or
accidental death benefits (double indemnity) riders.
The Contracts must provide that proceeds will be payable to the Trustee;
however, the Trustee shall be required to pay over all proceeds of the Contracts
to the Participant's Benefit in accordance with the distribution provisions of
the Plan. A Participant's Surviving Spouse will be the beneficiary of the
proceeds in all circumstances unless an election has been made in accordance
with Section 5.3(e) of the Plan.
<PAGE>
In the event of any conflict between the terms of the Plan and the terms of
any Contract, the Plan provisions shall control.
6.4 Payment of Premiums on Contracts.
--------------------------------
Premium payments for Contracts shall be remitted by the Employer directly
to the Insurance Company. To the maximum extent permitted by law, the Trustee,
INTERNATIONAL INVESTORS INCORPORATED and VAN ECK FUNDS shall not be liable for
any amounts payable under a Contract or for any error by the Employer in
remitting premiums.
The maximum aggregate amount which may be used pay the premiums for term
insurance under any Contract or Contracts shall be less than 25 percent of the
aggregate contributions paid by the Employer for the insured Participant and the
maximum aggregate premiums paid for ordinary or whole life insurance shall be
less than 50 percent of the aggregate contributions so paid. If both ordinary
life and term insurance are purchased on the life of any Participant, the sum of
the term insurance premium plus one-half of the ordinary life premium may not
exceed 25 percent of the Employer's contribution made on behalf of such
Participant. If retirement income (or endowment) Contracts are purchased on
behalf of Any Participant, the death benefit under the Contract shall not be
greater than 100 times the anticipated monthly annuity provided under such
Contract. If, on the ground that a Participant is a substandard risk, an
Insurance Company
<PAGE>
refuses to issue a policy on his life at standard rates but will issue one at
higher rates, a Contract may be purchased under the Plan in a reduced face
amount if necessary so that the foregoing limits on total premiums are observed.
It shall be the duty of the Employer to compare (i) the total premiums paid
or about to be paid on any Contracts for a Participant with (ii) the total
Employer contributions for the Participant including the estimated Employer
contributions to be made on his account for the remainder of the year, and with
the cooperation of the Participant to effect such modification of the Contracts
for the Participant as is necessary to the end that the Employer contributions
used to pay premiums do not exceed the foregoing limits on total premiums. If
such modification cannot be effected with the cooperation of the Participant,
the Employer shall not use any further portion of its contributions to pay
premiums with respect to the Participant until payment would be within the
foregoing limits. Subject to the Joint and Survivor Annuity requirements of
Section 5.3, any Contract purchased pursuant to Section 6.3 providing insurance
on a Participant's life will be converted to cash or an annuity or distributed
to the Participant upon commencement of benefits.
Notwithstanding the foregoing provisions of this Section 6.4, the entire or
remaining premium for an annuity contract purchased for distribution pursuant to
Section 5.3(a) may be paid in one lump-sum. For purposes of this
<PAGE>
Section 6.4, ordinary life insurance contracts are Contracts with both
nondecreasing death benefits and nonincreasing premiums.
SECTION 7. Maximum Amount of Allocation.
----------------------------
7.1 If the Participant does not participate in, and has never participated
in, any other qualified plan or a welfare benefit fund, as defined in Section
419(e) of the Code, maintained by the Employer, the amount of Annual Addition
which may be allocated under this Plan on a Participant's behalf for a
Limitation Year shall not exceed the lesser of the Maximum Permissible Amount or
any other limitation contained in this Plan.
7.2 If, in addition to this Plan, the Participant is covered under any
other qualified defined contribution plan or plans (all of which are qualified
Master or Prototype Plans), or a welfare benefit fund, as defined in Section
419(e) of the Code, maintained by the Employer, the amount of Annual Addition
which may be allocated under this Plan on a Participant's behalf for a
Limitation Year shall not exceed the lesser of:
(a) The Maximum Permissible Amount, reduced by the sum of any Annual
Additions allocated to the Participant's accounts for the same Limitation Year
under such other defined contribution plans and welfare benefit funds, or
<PAGE>
(b) Any other limitation contained in this Plan.
7.3 Prior to the determination of the Participant's actual Compensation
for a Limitation Year, the Maximum Permissible Amount may be determined on the
basis of the Participant's estimated annual Compensation for such Limitation
Year. Such estimated annual Compensation shall be determined on a reasonable
basis and shall be uniformly determined for all Participants similarly situated.
Any Employer contributions based on estimated annual Compensation shall be
reduced by any Excess Amounts carried over from prior Limitation Years.
7.4 As soon as is administratively feasible after the end of a Limitation
Year, the Maximum Permissible Amount for such Limitation Year shall be
determined on the basis of the Participant's actual Compensation for such
Limitation Year.
7.5 If a Participant's Annual Additions under this Plan and all such other
plans result in an Excess Amount, such Excess Amount shall be deemed to consist
of the amounts most recently allocated except that Annual Additions attributable
to a welfare benefit fund will be deemed to have been allocated first regardless
of the actual allocation date.
7.6 If an Excess Amount was allocated to a Participant on an Allocation
Date of this Plan which coincides with an Allocation Date of another plan, the
Excess Amount attributed to this Plan will be the product of:
<PAGE>
(a) The total Excess Amount allocated as of such date (including any
amount which would have been allocated except for the limitations of Section 415
of the Code) times
(b) The ratio that (i) the amount allocated to the Participants an of such
date under this Plan bears to (ii) the total amount allocated as of such date
under all qualified defined contribution plans (determined without regard to the
limitations of Section 415 of the Code).
7.7 If, pursuant to the foregoing provisions, there is an Excess Amount
with respect to a Participant for Limitation Year attributable to this Plan,
such Excess Amount shall be disposed of as follows:
(a) First, any voluntary Participant contributions, to the extent that the
return would reduce the Excess Amount, shall at the written election of the
Participant as communicated to the Trustee in accordance with procedures
established by the Employer, be returned to him. Any nondeductible Employer
contributions on behalf of a self-employed individual will, at the direction of
the Employer, be returned to the Employer within one year after the deduction is
disallowed.
(b) In the event that the Participant is in the Service of the Employer at
the end of the Limitation Year, then any portion of such Excess Amount which
constitutes
<PAGE>
Employer contributions must not be distributed to the Participant, but shall be
reapplied to reduce future Employer contributions under the Plan for the next
Limitation Year (and for each succeeding Limitation Year, as necessary) for such
Participant, so that in each such Limitation Year, the sum of actual Employer
contributions plus the reapplied amount shall equal the amount of Employer
contributions which would otherwise be allocated to such Participant's account.
(c) In the event that the Participant is not in the Service of the
Employer at the end of the Limitation Year or in the event that the Participant
is not entitled to have an Employer contribution allocated to his account for
the next Limitation Year, then such Excess Amount must not be distributed to the
Participant, but shall be reapplied to reduce future Employer contributions for
all remaining Participants.
If an Excess Amount exists at any time during a Limitation Year, it shall
receive allocations of investment earnings or losses.
7.8 If the Employer also maintains another plan which is a qualified
defined contribution plan other than a Master or Prototype Plan, Annual
Additions allocated under this Plan on behalf of any Participant shall be
limited in accordance with the provisions of Sections 7.2, 7.5 and 7.6, as
though the other plan were a Master or Prototype Plan,
<PAGE>
unless the Employer provides other limitations pursuant to Item 13(a) of the
Adoption Agreement.
7.9 If the Employer maintains, or at any time maintained, a qualified
defined benefit plan covering any Participant in this Plan, the sum of the
Participant's Defined Benefit Fraction and Defined Contribution Fraction will
not exceed 1.0 in any Limitation Year. The Annual Additions which may be
credited to the Participant's account under this Plan for any Limitation Year
will be limited in accordance with Item 13(b) of the Adoption Agreement.
7.10 For purposes of Section 7 of the Plan, the following terms shall have
the following meanings:
(a) "Annual Addition" means the sum of the following amounts which,
without regard to this Section 7, would have been allocated or credited to a
Participant's account for a Limitation Year:
(i) all Employer contributions made on his behalf,
(ii) all forfeitures, and
(iii) all voluntary Participant contributions.
For purposes of this Section, (i) amounts reapplied to reduce the Employer
contributions under Sections 7.7(b) and 7.7(c) shall be treated as Employer
contributions, (ii) effective April 1, 1984, amounts allocated to an individual
medical account, as defined in Section 415(l)(2) of the Code, which is part of a
defined benefit plan maintained by the Employer
<PAGE>
and (iii) effective January 1, 1986, amounts derived from contributions paid or
accrued in taxable years ending on or after such date, which are attributable to
post-retirement medical benefits allocated to the account of a Key Employee, as
defined in Section 419A(d)(3), under a welfare benefit fund, as defined in
Section 419(e), maintained by the Employer, shall be treated as Annual Additions
to a defined contribution plan.
Nothwithstanding the foregoing provisions of this Section 7.10(a), in
determining the maximum Annual Addition for any Plan Year beginning before
January 1, 1987, the Annual Addition shall not be recomputed to treat all
voluntary contributions as an Annual Addition.
(b) "Maximum Permissible Amount" means, with respect to any Participant for
a Limitation Year, the lesser of (i) $30,000, or, if greater, one-fourth ( 1/4)
of the defined benefit dollar limitation set forth in Section 415(b)(1)(A) of
the Code as in effect for such Limitation Year or (ii) 25 percent of the
Participant's Compensation for the Limitation Year. If a short Limitation Year
is created because of an amendment changing the Limitation Year to a different
twelve-consecutive month period, the Maximum Permissible Amount for the short
Limitation Year shall be the lessor of (i) $30,000, or, if greater, one-fourth
(1/4) of the defined benefit dollar limitation set forth in Section 415(b)(1)(A)
of the Code as in effect for such Limitation Year, multiplied by a fraction,
<PAGE>
the numerator of which is the number of months in the short Limitation Year and
the denominator of which is 12, or (ii) 25 percent of the Participant's
Compensation for the short Limitation Year.
(c) "Excess Amount" means the excess of the Participant's Annual Addition
for a Limitation Year over the Participant's Maximum Permissible Amount (or, if
applicable, such amount as reduced as required by Section 7.2(a)), less any
administrative charges allocable to such excess.
(d) "Limitation Year" means a calendar year (or, if different, the Plan
Year). The Limitation Year for all qualified plans of the Employer shall be
identical. If the Limitation Year is amended to a different 12-consecutive month
period, the new Limitation Year must begin on a date within the Limitation Year
in which the amendment is made.
(e) "Allocation Date" means the date as of which all or any portion of an
Annual Addition is allocated or credited to a Participant's account under this
Plan for a Limitation Year. An Annual Addition made in a subsequent Limitation
Year is deemed allocated or credited as of the last day of the preceding
Limitation Year if it is made (i) for such preceding Limitation Year and (ii)
not later than the time prescribed by law (including any extensions) for filing
the Employer's Federal income tax return for the Employer's fiscal year
coincident with which such Limitation Year ends.
<PAGE>
(f) "Employer" means the Employer under this Plan and any Affiliate of such
Employer.
(g) "Defined Benefit Fraction" means a fraction, the numerator of which is
the sum of the Participant's projected annual benefits under all the defined
benefit plans, as defined in Section 414(j) and 415(k) of the Code (whether or
not terminated) maintained by the Employer, and the denominator of which is the
lesser of (i) 125 percent of the dollar limitation in effect for the Limitation
Year under Section 415(b)(1)(A) of the Code or (ii) 140 percent of the
Participant's average compensation for his high three consecutive years within
the meaning of Section 415(b)(3) of the Code for such Limitation Year. For
purposes of this Section 7.10(g), projected annual benefit means the benefit
(adjusted to an actuarially equivalent straight life annuity or qualified joint
and survivor annuity in accordance with the Regulations) to which the
Participant would be entitled under the terms of a defined benefit plan assuming
(i) the Participant will continue in employment until the later of his current
age or such plan's normal retirement age and (ii) the Participant's Compensation
for the current Limitation Year and all other relevant factors used to determine
benefits under such plan will remain constant for all future Limitation Years.
Notwithstanding the above paragraph, if the Participant was a participant
in one or more defined benefit plans maintained by the Employer which were in
existence on July 1,
<PAGE>
1982, the denominator of this fraction will not be less than 125 percent of the
sum of the annual benefits under such plans which the Participant had accrued as
of the later of September 30, 1983, or the end of the last Limitation Year
beginning before January 1, 1983. The preceding sentence applies only if the
defined benefit plans individually and in the aggregate satisfied the
requirements of Section 415 of the Code as in effect at the end of the 1982
Limitation Year. For purposes of this paragraph, a Master or Prototype Plan with
an opinion letter issued before January 1, 1983, which was adopted by the
Employer on or before September 30, 1983, is treated as a plan in existence on
July 1, 1982.
(h) "Defined Contribution Fraction" means a fraction, the numerator of
which is the sum of the Annual Additions to the Participant's account under all
the defined contribution plans (whether or not terminated) maintained by the
Employer for the current and all prior Limitation Years (including the Annual
Additions attributable to the Participant's nondeductible employee contributions
to all defined benefit plans, whether or not terminated, maintained by the
Employer and the Annual Additions attributable to all welfare benefit funds, as
defined in Section 419(e) of the Code, maintained by the Employer), and the
denominator of which is the sum of the maximum aggregate amounts for the current
and all prior Limitation Years with the Employer (regardless of whether a
defined contribution plan was maintained by the
<PAGE>
Employer). The maximum aggregate amount in any Limitation Year is the lesser of
125 percent of the dollar limitation in effect under Section 415(c)(1)(A) of the
Code or 140 percent of the amount which may be taken into account under Section
415(c)(1)(B) of the Code with respect to the Participant for such year. If the
Employee was a Participant in one or more defined contribution plans maintained
by the Employer which were in existence on July 1, 1982, the numerator of this
fraction will be adjusted if the sum of this fraction and the Defined Benefit
Fraction would otherwise exceed 1.0 under the terms of this Plan. Under the
adjustment, an amount equal to the product of (1) the excess of the sum of the
fractions over 1.0 times (2) the denominator of this fraction, will be
permanently subtracted from the numerator of this fraction. The adjustment is
calculated using the fractions as they would be computed as of the later of
September 30, 1983, or the end of the last Limitation Year beginning before
January 1, 1983. This adjustment also will be made if at the end of the last
Limitation Year beginning before January 1, 1984, the sum of the fractions
exceeds 1.0 because of accruals or additions that were made before the
limitations of this article became effective to any plans of the Employer in
existence on July 1, 1982. For purposes of this paragraph, a Master or Prototype
Plan with an opinion letter issued before January 1, 1983, which is adopted by
the Employer on or
<PAGE>
before September 30, 1983, is treated as a plan in existence on July 1, 1982.
SECTION 8. Top-Heavy Provisions.
--------------------
8.1 The Plan will be considered a Top-Heavy Plan for any Plan Year if it
is determined to be a Top-Heavy Plan as of the last day of the preceding Plan
Year (or, with respect to the first Plan Year, the last day of such Plan Year).
Notwithstanding any other provisions in the Plan, the provisions of this Section
8 shall apply and supersede all other provisions in the Plan during each Plan
Year with respect to which the Plan is determined to be a Top-Heavy Plan.
8.2 For purposes of this Section 8 the following terms shall have the
meanings set forth below:
(a) "Aggregation Group" shall mean the group composed of each qualified
retirement plan of the Employer or an Affiliate in which a Key Employee is a
participant or participated at any time during the determination period
(regardless of whether the qualified retirement plan has terminated) and each
other qualified retirement plan of the Employer or an Affiliate which enables a
plan of the Employer or an Affiliate in which a Key Employee is a participant to
satisfy Section 401(a)(4) or 410 of the Code. In addition, the Employer may
choose to treat any other qualified retirement plan in which a Key Employee is a
Participant as a member of
<PAGE>
the Aggregation Group if such Aggregation Group will continue to satisfy
Sections 401(a)(4) or 410 of the Code with such plan being taken into account.
(b) "Key Employee" shall mean a "Key Employee as defined in Section
416(i)(1) and (5) of the Code and the Regulations promulgated thereunder.
(c) "Non-Key Employee" shall mean a "Non-Key Employee" as defined in
Section 416(i)(2) of the Code and the Regulations promulgated thereunder.
(d) "Top-Heavy Plan" shall mean for any Plan Year beginning after December
31, 1983, the Plan if any of the following conditions exists:
(1) If the Top-Heavy Plan Ratio for the Plan exceeds 60 percent and the
Plan is not part of any Aggregation Group.
(2) If the Plan is a part of an Aggregation Group and the Top-Heavy Ratio
for the group of plans exceeds 60 percent.
(e) "Top-Heavy Ratio" shall mean, if the Employer maintains one or more
defined contribution plans (including any Simplified Employee Pension Plan) and
the Employer has not maintained any defined benefit plan which during the five
year period ending on the determination date(s) has or has had accrued benefits,
for the Plan alone or for the Aggregation Group, a fraction, the numerator of
which is the sum of
<PAGE>
the account balances of all Key Employees as of the determination date(s)
(including any part of any account balance distributed in the five year period
ending on the determination date(s)), and the denominator of which is the sum of
all account balances (including any part of any account balances distributed in
the five year period ending on the determination date(s)), both computed in
accordance with Section 416 of the Code and the Regulations promulgated
thereunder. Both the numerator and denominator of the Top-Heavy Ratio are
adjusted to reflect any contribution not actually made as of the determination
date, but which is required to be taken into account on that date under Section
416 of the Code and the Regulations promulgated thereunder. If the Employer
maintains one or more defined contribution plans (including any Simplified
Employee Pension Plan) and the Employer maintains or has maintained one or more
defined benefit plans which during the five year period ending on the
determination date(s) has or has had any accrued benefits, the Top-Heavy Ratio
for any Aggregation Group as appropriate is a fraction, the numerator of which
is the sum of account balances under the aggregated defined contribution plan or
plans for all Key Employees, and the present value of accrued benefits under the
aggregated defined benefit plan or plans for all Key Employees as of the
determination date(s) and the denominator of which is the sum of the account
balances under the aggregated defined contribution plan or plans for all
<PAGE>
Participants, and the present value of accrued benefits under the defined
benefit plan or plans for all Participants as of the determination date(s), all
determined in accordance with Section 416 of the Code and the Regulations
promulgated thereunder. The accrued benefits under a defined benefit plan in
both the numerator and denominator of the Top-Heavy Ratio are adjusted for any
distribution of an accrued benefit made in the five year period ending on the
determination date. For purposes of this Section, the value of account balances
and the present value of accrued benefits will be determined as of the most
recent valuation date that falls within or ends with the 12-month period ending
on the determination date, except as provided in Section 416 of the Code and the
Regulations promulgated thereunder for the first and plan years of a defined
benefit plan. The account balances and accrued benefits of an individual who has
not performed services for an Employer maintaining the Plan at any time during
the five year period ending on the determination date will be disregarded. The
accrued benefit of any Employee shall be determined under the method which is
used for accrual purposes for all plans of the Employer, or if there is no such
method, then as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under Section 411(b)(1)(C) of the
Code. The calculation of the Top-Heavy Ratio, and the extent to which
distributions, rollovers, and transfers are taken into account will be made in
<PAGE>
accordance with Section 416 of the Code and the Regulations promulgated
thereunder. Deductible employee contributions will not be taken into account for
purposes of computing the Top-Heavy Ratio. When aggregating plans the value of
account balances and accrued benefits will be calculated with reference to the
determination dates that fall within the same calendar year. For purposes of
this Section 8.2, present value shall be based only on the interest and
mortality rates specified in the defined benefit plan, if any, maintained by the
Employer.
(f) "Valuation Date" shall mean the date elected by the Employer as of
which account balances are valued for purposes of calculating the Top-Heavy
Ratio.
8.3 Subject to the provisions of Section 8.4, for each Plan Year that the
Plan is a Top-Heavy Plan, the Employer contribution (including forfeitures and
contributions attributable to salary reduction or similar arrangements)
allocable to the account of each Participant who is in Service at the end of the
Plan Year and who is not a Key Employee shall not be less than the lesser of (1)
3% of such Participant's Compensation, or (ii) in the case where the Employer
has no defined benefit plan which designates this Plan to satisfy Section 401 of
the Code, the largest percentage of Employer contributions and forfeitures, as a
percentage of the Key Employee's Compensation, allocated on behalf of any Key
Employee for the Plan Year. For each Plan Year in
<PAGE>
which the paired plans are Top-Heavy Plans, the Employer will provide a minimum
contribution equal to 3% of total Compensation for each non-Key Employee who is
entitled to a minimum contribution under both paired defined contribution plan
=001 and defined contribution plan =002. For purposes of the Plan, the phrase
"paired plans" shall refer to the Profit Sharing and the Money Purchase Plans
provided for under the Plan which also are referred to as defined contribution
plan =001 and defined contribution plan =002, respectively.
8.4 (a) For each Plan Year that the Plan is a Top-Heavy Plan, 1.0 shall be
substituted for 1.25 as the multiplicand of the dollar limitation in determining
the denominator of the Defined Benefit Fraction and of the Defined Contribution
Fraction for purposes of Section 7 of the Plan.
(b) If, after substituting 90% for 60% wherever the latter appears in
Section 416(g) of the Code, the Plan is not determined to be a Top-Heavy Plan,
the provisions of Section 8.4(a) shall not be applicable if the minimum Employer
contribution (including forfeitures) allocable to the account of any Participant
who is not a Key Employee as specified in Section 8.3 is determined by
substituting "4" for "3".
8.5 If, with respect to a Non-Key Employee who benefits in a Plan Year
under both a defined contribution and defined benefit plan which are Top Heavy
Plans maintained by the Employer, a top heavy minimum benefit is not provided
for such Plan Year under both plans, then such determination for
<PAGE>
such Plan Year shall be made in conformity with the comparability analysis
described in Q&A M-12 of Section 1.416-1 of the Regulations. Such analysis shall
be modified, where a factor of 1.25 is utilized for such Plan Year in connection
with the satisfaction of the limitations set forth in Section 415(e) of the
Code, in accordance with the last sentence of Q&A M-14 of Section 1.416-1 of the
Regulations.
8.6 The Employer shall, to the extent permitted by the Code and in
accordance with the Regulations, apply the applicable provisions of this Plan,
including any alternative provided under Item 13(c) of the Adoption Agreement,
to take into account the benefits payable and the contributions made under any
other plans maintained by the Employer or any Affiliates which are qualified
under Section 401(a) of the Code to prevent inappropriate omissions or required
duplication of minimum benefits or contributions.
SECTION 9. Amendment and Termination.
-------------------------
9.1 By Employer. The Employer may at any time and from time to time
-----------
modify, amend or terminate the Plan in whole or in part (including retroactive
amendments) by delivering to the Trustee and each Insurance Company a written
copy of such modification, amendment or termination signed by the Employer;
provided, however (a) the Employer shall have no power to amend or terminate the
Plan in such manner as would cause or permit any part of the Trust Fund
<PAGE>
(other than such part as may be required for the payment of taxes or expenses
incurred in the administration of the Plan or as may be required to satisfy any
proper charge of the Trustee pursuant to the Trust Agreement) to be diverted to
purposes other than for the exclusive benefit of Participants, their Surviving
Spouses or their Beneficiaries, or as would cause or permit any portion of such
assets to revert to or become the property of the Employer, (b) the Employer
shall not have the right to eliminate an optional form of distribution or modify
or amend the Plan retroactively in such a manner as to deprive any Participant,
Surviving Spouse or Beneficiary of any benefit to which he was entitled under
the Plan by reason of contributions made by the Employer, or of any payment
option thereof, prior to the modification or amendment unless such modification
or amendment is necessary to conform the Plan to, or satisfy the conditions of,
any law, governmental regulation or ruling, or to permit the Plan and Trust Fund
to meet the qualification requirements of the Code, and (c) any such retroactive
modification, amendment or termination either must be accompanied by an opinion
of counsel that it is necessary or advisable to conform the Plan to, or satisfy
the conditions of, any such law, regulation or ruling or to permit the Plan and
Trust Fund to meet the requirements for qualification under the Code, or must be
consented to by the Trustee. However, if the Employer amends any provision of
this Plan other than pursuant to an election
<PAGE>
permitted in the Adoption Agreement or pursuant to an amendment initiated by
INTERNATIONAL INVESTORS INCORPORATED pursuant to Section 9.2 below, such
Employer shall no longer participate in this Master or Prototype Plan, and the
Employer's Plan will be considered to be an individually designed program. If
the Employer's Plan fails to attain or retain qualification, such Plan will no
longer participate in this Master or Prototype Plan and will be considered to be
an individually designed program. If at any time upon failure of the Employer to
correspond with the Trustee or for other reasonable cause the Trustee determines
in good faith that the Employer has abandoned the Plan, it may treat the Plan as
terminated by the Employer.
If the Plan is amended to provide for other than full and immediate
vesting, or the Plan is amended in any way that directly or indirectly affects
the computation of a Participant's non-forfeitable percentage, each Participant
with at least 3 Years of Service with the Employer may elect, within a
reasonable period after the adoption of the amendment, to have his non-
forfeitable percentage computed under the Plan without regard to such amendment.
The period during which the election may be made shall commence with the date
the amendment is adopted and shall end on the latest of:
(i) 60 days after the amendment is adopted;
(ii) 60 days after the amendment become effective; or
<PAGE>
(iii) 60 days after the Participant is issued written notice of the
amendment by the Employer.
9.2 Delegation of Right to Amend.
----------------------------
The Employer by its adoption of the Plan delegates to INTERNATIONAL
INVESTORS INCORPORATED the Employer's right to modify or amend the Plan subject
to the limitations set forth in Section 9.1 above, and the Employer shall be
deemed to have consented to any modification or amendment so made. The Employer
shall be furnished notice of any amendment so made and, upon the Employer's
written request, a copy of the amendment.
9.3 Automatic Termination. The Plan shall terminate upon the death of the
---------------------
proprietor, if the Employer is a sole proprietorship, or upon the termination of
the partnership, if the Employer is a partnership, unless upon such death or
termination a successor to the Business elects to continue the same and such
continuation is approved by the Trustee.
9.4 Procedure upon Termination. Upon termination of the Plan any and all
--------------------------
assets remaining in the Trust Fund for the benefit of Participants shall be
distributed by the Trustee to such Participants in accordance with amounts
credited to their accounts as of the date of such termination (together with any
earnings subsequently accrued thereon). Such distributions shall be in Fund
Shares or in cash or
<PAGE>
other property in one or more of the ways permitted in Section 5.3, as directed
by the Participant (or, in the absence of such direction by the Participant, as
determined by the Trustee). In addition, upon the termination of the Plan all
Contracts held by the Employer pursuant to the Plan shall be delivered to the
respective Participants, provided that such a Contract delivered to a
Participant who is, or has been, a Key Employee, as defined in Section 8.2(b),
at any time the Plan is, or has been, considered a Top-Heavy Plan, as, defined
in Section 8.2(d), shall provide that the Participant shall not in any way
receive cash thereunder or therefor in excess of his own contributions before he
attains age 59 1/2, except in the event of his prior disability.
SECTION 10. Miscellaneous.
-------------
10.1 Status of Participants.
----------------------
(a) Neither the establishment of the Plan and Trust Fund nor any
modification thereof, nor the creation of any account thereunder, nor the
payment of any benefits, shall be construed as giving to any Participant or any
other person any legal or equitable right against the Employer, or the Trustee
or any Insurance Company, except as herein provided, and, in no event, shall the
terms of employment of any Employee or Participant be modified or in any way
affected by the adoption of the Plan.
<PAGE>
(b) All disputed claims for benefits under the Plan shall be submitted to,
and within a reasonable period of time decided by, one person designated in
writing by the Employer. Written notice of the decision on each such claim shall
be furnished reasonably promptly to the claimant. If the claim is wholly or
partially denied, such written notice shall set forth an explanation of the
specific findings and conclusions on which such denial is based. A claimant may
review all pertinent documents and may request a review by the Employer of such
a decision denying the claim. Such a request shall be made in writing and filed
with the Employer within a reasonable period of time, as specified by the
Employer in writing from time to time, after delivery to said claimant of
written notice of said decision. Such written request for review shall contain
all additional information which the claimant wishes the Employer to consider.
The Employer may hold any hearing or conduct any independent investigation which
it deems necessary to render its decision, and the decision on review shall be
made as soon as possible after the Employer's receipt of the request for review.
Written notice of the decision on review shall be promptly furnished to the
claimant and shall include specific reasons for such decision. For all purposes
under the Plan, such decisions on claims (where no review is requested) and
decisions on review (where review is requested) shall be final, binding and
conclusive on all interested persons as to
<PAGE>
participation and benefit eligibility, the Employee's amount of Compensation or
Earned Income and as to any other matter of fact or interpretation relating to
the Plan.
10.2 Administration and Enforcement.
------------------------------
The Plan shall be administered by the Employer, who shall be the named
fiduciary and the plan administrator and who shall have the sole authority to
enforce the Plan and the Trust Agreement on behalf of any and all persons having
or claiming any interest under the Plan or Trust Agreement and shall be
responsible for the operation of the Plan in accordance with its terms;
provided, however, that the Employer's administrative powers and duties may be
delegated to a committee established for that purpose by the Employer, in which
case the committee shall be the named fiduciary and plan administrator. The
Employer shall establish a funding policy for the Plan, shall determine the time
and manner of payment of benefits pursuant to Section 5 and shall determine all
questions arising out of the administration, interpretation and application of
the Plan, which determinations, subject to Section 10.1, shall be conclusive and
binding on all persons. The Employer shall so administer the Plan as to maintain
the Plan as a qualified plan within the meaning of Section 401 of the Code.
<PAGE>
10.3 Transfers to or from Other Qualified Plans.
------------------------------------------
(a) With the consent of the Trustee, the Employer may cause to be
transferred (directly or indirectly, including by rollover from a conduit
individual retirement account in accordance with Section 408(d) of the Code and
the Regulations thereunder) to the Trust Fund all or any of the assets held
(whether by a trustee, custodian or otherwise) under any other plan maintained
for the benefit of any of the Participants which plan is represented by the
Employer to the Trustee as satisfying the applicable requirements of Section
401(a) of the Code. Any such assets so transferred shall be In the form of cash
and accompanied by written instructions from the Employer which shall be
conclusive upon the Trustee, naming the Participants for whose benefit such
assets have been transferred and showing separately the respective contributions
by the Employer and by the Participants and the current value of the assets
attributable thereto. Appropriate adjustment will be made to the amount of
contributions otherwise required or permitted under Section 4 for the Plan Year
in which such transfer occurs, on account of contributions for such Plan Year
under such other plan.
(b) The Employer, subject to the provisions of the Trust Agreement, may
request in writing that the Trustee transfer assets held in the Trust Fund for
the account of a Participant or Participants to another custodian or trustee of
any other plan maintained by the Employer for the benefit
<PAGE>
of such Participant or Participants, provided that any such Participant who was
an Owner-Employee under the Plan is treated as an owner-employee under such
other plan, and provided that the requirements of Section 401(a) of the Code or
successor provisions of law are satisfied by such other plan. The assets so
transferred shall be accompanied by written instructions from the Employer
naming the persons for whose benefit such assets have been transferred and
showing separately the respective contributions by the Employer and by the
Participants and the current value of the assets attributable thereto. Upon such
transfer the provisions of the qualified plan to which such transfer is made
shall govern and the provisions of this Plan shall have no further effect. Any
transfer from the Plan to another plan pursuant to this paragraph may, subject
to such restrictions, include a transfer of Contracts from the Employer.
(c) In the event of any merger or consolidation of the Plan with, or
transfer in whole or in part of the assets and liabilities of the Trust Fund to
another trust fund held under any other plan of deferred compensation maintained
or to be established for the benefit of all or some of the Participants of this
Plan, the assets of the Trust Fund applicable to such Participants shall be
transferred to the other trust fund only if each Participant would (if either
this Plan or the other plan then terminated) receive a benefit immediately after
the merger, consolidation or transfer which
<PAGE>
is equal to or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation or transfer if this Plan had then
terminated.
10.4 Limitation on Liability.
-----------------------
To the maximum extent permitted by law, neither the Trustee nor
INTERNATIONAL INVESTORS INCORPORATED nor the VAN ECK FUNDS shall have any
liability with respect to money transferred by the Employer to an Insurance
Company pursuant to the Plan, and neither the Trustee nor INTERNATIONAL
INVESTORS INCORPORATED nor the VAN ECK FUNDS shall be responsible for the
validity of any Contract.
The Trustee shall have no responsibility to verify the accuracy of any
information supplied by an Insurance Company, and, to the maximum extent
permitted by law, the Trustee shall not incur any liability for its distribution
of any inaccurate information supplied by any Insurance Company.
10.5 Allocation of Charges.
---------------------
Any income taxes or other taxes of any kind whatsoever that may be levied
or assessed upon or in respect of the assets of the Plan, or the income arising
therefrom, any transfer taxes incurred in connection with the investment and
reinvestment of the Trust Fund and all other administrative expenses incurred by
the Trustee in the performance of its duties, including fees for legal services
rendered to the Trustee, and the Trustee's compensation shall be paid and
charged as provided in the Trust Agreement.
<PAGE>
10.6 Condition of Plan and Trust.
---------------------------
It is a condition of the Plan and the Trust Fund, and each Employee by
participating herein expressly agrees, that he shall look solely to the assets
of the Trust Fund and any Contracts purchased for him pursuant to the Plan for
the payment of any benefit to which he is entitled under the Plan.
10.7 Necessity of Qualification.
--------------------------
The Plan in established with the intent that it shall qualify under Section
401 of the Code. Notwithstanding any other provision contained herein, if it is
determined by the IRS upon the application for initial qualification that the
Plan does not so qualify, all contributions made hereunder prior to such
determination, or the Fund Shares or Contracts purchased therewith, and any
income earned thereon, shall be returned within one year after the date such
initial qualification is denied proportionately to the persons contributing the
same; and the Plan shall be considered to be rescinded and of no force and
effect unless such determination can be cured by a retroactive amendment
pursuant to Section 401(b) of the Code.
10.8 Inalienability of Benefits.
---------------------------
Except as pursuant to the terms of a Qualified Domestic Relations Order, no
amount payable at any time under the Plan and the Trust shall be subject in any
manner to
<PAGE>
alienation by anticipation, sale, transfer, assignment, bankruptcy, pledge,
attachment, charge or encumbrance of any kind nor in any manner be subject to
the debts or liabilities of any person and any attempt to so alienate or subject
any such amount, whether presently or thereafter payable, shall be void. For
purpose of this Section 10.8, "Qualified Domestic Relations Order" means any
judgment, decree or order (including approval of a property settlement
agreement) which has been determined by the Employer in accordance with
procedures established under the Plan, to constitute a qualified domestic
relations order within the meaning of Section 414(p)(1) of the Code.
10.9 Benefits Provided by Contract.
-----------------------------
If the payment of any benefit under the Plan is provided for by a Contract
the payment of such benefit shall be subject to all the provisions of such
Contract and this Plan.
10.10 Payments to Minor or Incompetent.
--------------------------------
If the Employer shall find that any person to whom any amount is payable
under the Plan is unable to care for his affairs because of disability, or is a
minor, or has died, then any payment due him or his estate (unless a prior claim
therefor has been made by a duly appointed legal representative) may be paid to
his spouse, a child, a relative, an institutions maintaining or having custody
of such person or
<PAGE>
any other person deemed by the Employer to be a proper recipient on behalf of
such person otherwise entitled to payment. Any such payment shall be a complete
discharge of the liability therefor of the Plan and the Trust Fund.
10.11 Segregation.
------------
If the Employer's Plan become disqualified, the Trustee shall segregate the
trust assets attributable to such Employer from the other assets of the Trust
Fund.
10.12 Status of International Investors Incorporated and Van Eck Funds.
-----------------------------------------------------------------
Neither INTERNATIONAL INVESTORS INCORPORATED nor VAN ECK FUNDS shall be
considered a party to the Plan and both of them and the Trustee shall be fully
protected in relying upon all information concerning the Plan and the
Participants which is shown on the Adoption Agreement or in subsequent notices
by the Employer. Neither INTERNATIONAL INVESTORS INCORPORATED nor VAN ECK FUNDS
shall have any duty or obligation to see to the application of funds paid by the
Employer to the Trustee or to an Insurance Company nor shall they be fiduciaries
with respect to the Plan.
10.13 Headings.
--------
The headings of Sections are included solely for convenience of reference,
and if there is any conflict between such headings and the text of the Plan, the
text shall control.
<PAGE>
10.14 Adoption Agreement Part of Plan.
-------------------------------
The information set forth in the Adoption Agreement shall be part of the
Plan as if set forth fully herein.
10.15 Governing Law.
-------------
Except as preempted by the Act, the Plan shall be governed by and
construed, administered and enforced according to the laws of the State of
Missouri.
<PAGE>
[To be typed on the stationery of
III and Van Eck Funds]
[Date]
Dear Employer:
As you know, certain changes have been made to the Retirement Plan for
Self-Employed Individuals, Partnerships and Corporations Using Shares of
International investors Incorporated or the Van Eck Funds (previously referred
to as the "Keogh Plan" but now referred to as the "Retirement Plan") by
operation of the Tax Reform Act of 1986, the Omnibus Budget Reconciliation Act
of 1987, the Technical and Miscellaneous Revenue Act of 1988 and other changes
in the law. The Retirement Plan has recently been amended to reflect these
required changes. A copy of the plan document for the Retirement Plan as amended
is available upon request.
Briefly, the more important amendments to the Retirement Plan are as
follows:
(1) For plan years beginning after December 31, 1988, compensation in
excess of $200,000 (as adjusted for the cost of living) may not be taken into
account.
<PAGE>
(2) Effective for services provided after December 31, 1986, the
exception for leased employees from participation in the Retirement Plan is
narrowed to add the requirements that leased employees not exceed 20% of an
employer's non-highly compensated workforce and that the leased employee be
covered under a money purchase pension plan with a non-integrated contribution
rate of 10% of compensation (not 7%, as formerly required).
(3) For plan years beginning after December 31, 1987, a qualified plan
generally may not exclude employees from participation on account of age.
(4) For plan years beginning after December 31, 1988, the requisite
number of years of service to participate may not exceed two.
(5) For plan years beginning after December 31, 1986, average after-
tax voluntary contributions made by certain highly compensated employees may not
exceed a proportion of the average of such contributions made by nonhighly
compensated employees.
(6) With certain exceptions, distributions to a participant must
generally begin no later than April 1 of the calendar year after the year the
participant attains age 70 1/2, regardless of when the participant retires.
(7) For plan years beginning December 31, 1986, all of a participant's
voluntary contributions are counted as annual additions for purposes of the
maximum limitations on contributions under Code Section 415.
<PAGE>
(8) Beginning January 1, 1990, net earnings of self-employed
individuals for purposes of plan contributions based on such earnings, must
generally be reduced by 1/2 of such individuals, self-employment taxes.
The above brief overview of the amendments to the Retirement Plan is
not intended to be a complete explanation of the changes, which may vary
according to an employer's particular circumstances. Some additional
clarifications have been made which do not significantly change the Retirement
Plan. Each employer is solely responsible for the procedural, nondiscrimination
and other qualification requirements applicable to the Retirement Plan under the
Internal Revenue Code, the Employee Retirement Income Security Act of 1974 and
other applicable law.
It is not necessary to execute a new application. Unless a written
objection is received by Investors Fiduciary Trust Company, P.O. Box 407, Kansas
City, Missouri 64141 from you within thirty (30) days from the date of this
letter, you shall be deemed to have consented to the Retirement Plan amendments.
Should you have any questions on these amendments please call Toll
Free at (800) 221-2220 or in New York collect at (212) 687-5200.
International Investors Incorporated and Van Eck
Funds
By: ____________________________________________
John C. Van Eck, President
<PAGE>
EXHIBIT C
INTERNATIONAL INVESTORS INCORPORATED
VAN ECK FUNDS
Profit Sharing Plan Adoption Agreement
INSTRUCTIONS
- ------------
To establish a Profit Sharing Plan, please complete and sign the following
Adoption Agreement and mail it, together with the initial contribution (checks
should be made payable to Investors Fiduciary Trust Company), to:
Investors Fiduciary Trust Company
P.O. Box 407
Kansas City, Missouri 64141
The Employer named below hereby establishes a PROFIT SHARING PLAN (the "Plan")
pursuant to the Internal Revenue Code of 1986, as amended, and the Employee
Retirement Income Security Act of 1974, as amended, in accordance with the terms
of the PLAN DOCUMENT OF THE RETIREMENT PLAN FOR SELF-EMPLOYED INDIVIDUALS,
PARTNERSHIPS AND CORPORATIONS USING SHARES OF INTERNATIONAL INVESTORS
INCORPORATED OR THE VAN ECK FUNDS, on pages 11 to 23 of this booklet, as amended
from time to time (the *Plan Document"), and the related TRUST AGREEMENT, on
pages 24 to 27 of this booklet, as amended from time to time, which the Employer
has carefully reviewed. The Employer acknowledges receipt of a copy of the cur
rent prospectus(es) and statements of additional information of the mutual
fund(s) in which contributions to the Plan are to be invested. The Employer
certifies as correct the following information which is part of the Plan
Document as if it were set forth fully therein, and the Plan Document shall be
supplemented and modified by the terms and conditions contained in this Adoption
Agreement. All defined terms used herein have the meanings ascribed to them in
the Plan.
1. Retirement Plan of _______________________________________________________
(Name of Employer)
2. Employer's Business Address ______________________________________________
(City, State and Zip Code)
3. Nature of Employer's Business ____________________________________________
4. [ ] Sole Proprietorship [ ] Partnership [ ]Corporation
5. Employer's Federal Tax Identification No. ________________________________
6. Effective Date of Adoption or Amendment __________________________________
<PAGE>
7. Fiscal year for Federal income tax purposes ("Plan Year"):
[_] Calendar year [_] Other (Specify below)
From ______________________________ to _______________________________
(First month) (Last month)
8. [The following need not be completed unless the Plan Year is other than a
calendar year (see Section 7.10(d) of the Plan Document).] Employer's
Limitation Year ends _______________________________________________
(Month and Day)
9. (a) The Employer will make contributions:
[_] without regard to Net Profit.
[_] with regard to Net Profit, as described below:
For each Plan Year in which the Employer has Net Profit (defined as
the current or accumulated earnings of the Employer before Federal and
State taxes and contributions to this or any other qualified pension,
profit sharing or stock bonus plan, determined under generally
accepted accounting principles) derived from the Business that exceeds
$15,000 (or such other limit as is specified below), the Employer will
contribute out of its Net Profit on behalf of each Participant the
amount specified in (b) below.
[The following need not be completed unless the Employer wishes to
specify a level of Net Profit above which contributions to the Plan
will be required other than $15,000.]
$_________is substituted in place of $15,000 in the above sentence.
(b) [The following need not be completed unless the Employer wishes to
specify, for Plan Years in which it makes a contribution pursuant to
(a) above, a rate of contribution on behalf of each Participant which
is less than 15 percent of Earned Income or Compensation.]
For each Plan Year in which the Employer is required to make a
contribution pursuant to (a) above, the Employer shall contribute in
cash to the Plan:
(i) on behalf of each Owner-Employee who is a Participant, an amount
equal to 15 percent (or such other percentage as is specified
below) of his Earned Income derived from the Business: and
(ii) On behalf of each other Participant, the lesser of (A) the
applicable percentage under subparagraph (i) of his Compensation
(or Earned Income derived from the Business) for the Plan Year,
or (B) that percentage of his Compensation (or Earned Income
derived from the Business) which will equal the highest
percentage of Earned Income derived from the Business contributed
on behalf of any Owner-Employee.
<PAGE>
___% is substituted in place of 15 percent in subparagraph (i) above
[This subsection (b) is subject to the maximum limitation of Annual
Additions described in Section 7 of the Plan Document.]
10. [If the following is not completed, the period of Service required for
participation in the Plan is 2 Years of Service or such lesser number of
years that the Employer has been in the Business. The period of Service
required for participation may only be reduced , not increased.]
___ Years of Service is substituted as the period of Service prescribed in
Section 3.1 of the Plan Document. If the Years of Service selected is or
includes a fractional year, an Employee will not be required to complete
any specified number of Hours of Service to receive credit for such
fract1onal year.
11. [If the following is not completed, Hours of Service will be credited on
the basis of each hour actually worked. If the Employer wishes to specify a
different method of crediting Hours of Service, one of the following
methods may be selected, which method shall be applied to all Employees
covered by the Plan.]
Hours of Service will be credited on the basis of:
[_] days worked: if an Employee would be credited with at least one Hour
of Service during a day, the Employee will be credited with 10 Hours
of Service for that day.
[_] weeks worked: if an Employee would be credited with at least one Hour
of Service during a week, the Employee will be credited with 45 Hours
of Service for that week.
[_] months worked: if an Employee would be credited with a least one Hour
of Service during a month, the Employee will be credited with 190
Hours of Service for that month.
12. [If the following is not completed, the survivor portion of the Joint and
Survivor Annuity payable to the spouse of a Participant to whom it applies
and who fails to elect otherwise will be 5OZ of that payable to the
Participant while alive.)
The survivor portion of the Joint and Survivor Annuity shall be ___% [not
less than 50 nor greater than 100] of the amount of the annuity payable
during the joint lives of the Participant and the spouse unless the
Participant elects a different percentage.
13. [THE FOLLOWING MUST BE COMPLETED IF THE EMPLOYER MAINTAINS ANY OTHER
QUALIFIED PENSION, PROFIT SHARING OR STOCK BONUS PLANS.]
<PAGE>
(a) If the Employer maintains other qualified defined contribution plans
which are not Master or Prototype Plans, the Annual Addition which may
be credited to any Participant's account under this Plan for any
Limitation Year will be limited as follows:
[_] In accordance with Sections 7.2, 7.3, 7.4, 7.5, 7.6 and 7.7 of the
Plan Document.
[_] The attached provisions will apply and will limit total Annual
Additions to the Maximum Permissible Amount in a manner that precludes
Employer discretion. [Attach applicable language on a separate sheet.]
(b) If the Employer maintains. or at any time maintained. one or more
qualified defined benefit pension plans, the sum of the Defined
Contribution Fraction and the Defined Benefit Fraction (as defined in
Sections 7.10(g) of the Plan Document) with respect to any Participant
for a Limitation Year may not exceed 1.0. If the Employer maintains or
maintained such plans, the 1.0 limitation will be met as fo11ows:
[_] By limiting the Annual Additions to this Plan for the Limitation
Year so that the sum of the Defined Contribution Fraction and the
Defined Benefit Fraction does not exceed 1.0.
[_] The attached provisions will apply and will specify the 1.0
limitation in a manner that precludes Employer discretion.
(Attach applicable language on a separate sheet.)
(c) If the Employer maintains other qualified pension. profit sharing or
stock bonus plans required to be aggregated with this Plan for
purposes of Section 416 of the Internal Revenue Code (the top-heavy
rules), the minimum required contribution under this Plan for years in
which it is top-heavy will be calculated in accordance with Section
8.4 of the Plan Document, unless the Employer wishes to designate
another method which prevents inappropriate omissions or required
duplication of minimum contributions or benefits. [Attach applicable
language on a separate sheet if desired.]
14. For purposes of computing the Top-Heavy Ratio, the Valuation Date shall be
________ [designate date] of each year.
15. The Employer (i) hereby appoints Investors Fiduciary Trust Company, or its
successor. as Trustee of the Plan; and (ii) agrees that the annual service
fees of the Trustee, currently $10.00 per Participant per calendar year,
may be deducted from the assets in the account of each Participant before
the end of the calendar year, which fees may be changed upon notice to the
Employer.
Enclosed is a check payable to Investors Fiduciary Trust Company, as Trustee, as
the initial payment of contributions to the Trust Fund under the Plan, as
amended
<PAGE>
from time to time, to be invested and credited to the accounts of Participants
in accordance with the attached Profit Sharing Contribution Schedule.
The Employer will promptly notify the Trustee in writing of any changes in the
attached schedule of Participants.
Additional series of the Van Eck Funds may be established. Subsequent Employer
contributions will be invested as directed in writing by the Employer and
subsequent voluntary contributions will be invested as directed in writing by
the Employee or the Employer on behalf of the Employee.
An Employer who has ever maintained or who later adopts any plan (including,
after December 31, 1985. a welfare benefit fund. as defined in Section 419(e) of
the Internal Revenue Code, which provides post-retirement medical benefits
allocated to separate accounts for key employees, as defined in Section
419A(d)(3) of the Internal Revenue Code) in addition to this Plan (other than
the paired Money Purchase Plan (#002) available under the Plan Document (#01))
may not rely on the opinion letter when issued by the National Office of the
Internal Revenue Service as evidence that this Plan is qualified under Section
401 of the Internal Revenue Code. If an Employer who adopts or maintains
multiple plans wishes to obtain confirmation that its plan(s) are qualified,
application for a determination letter should be made to the appropriate Key
District Director of Internal Revenue.
This Profit Sharing Plan Adoption Agreement may be used only in conjunction with
the Plan Document. Failure to properly fill out this Adoption Agreement may
result in your Plan not being qualified for tax purposes. You will be informed
of any amendments to or discontinuance or abandonment of the Plan. If you have
any questions, you can contact the Plan sponsor. International Investors
Incorporated, at 122 East 42nd Street, New York, New York 10168, (212)687-5200,
outside of New York (800)221-2220.
Date: _______ Name of Employer: _______________________________________________
(please print)
By: ____________________________________________________________________________
(Signature of Sole Proprietor, General Partner or Authorized Corporate Officer)
Acceptance of the appointment of Investors Fiduciary Trust Company as Trustee
and the establishment of the Trust Fund shall be effective upon receipt by the
Trustee of the Employer's check.
________________________________________________________________________________
INVESTMENT DEALER INFORMATION
[Dealer completes. This is not a part of the Plan or Trust. Print or type.]
Name of Dealer Firm: Name and Number of Dealer's Representative:
_______________________ _________________________________________________
Branch office Address of Dealer's Representative:
_________________________________________________
<PAGE>
PROFIT SHARING CONTRIBUTION SCHEDULE
------------------------------------
Initial Contributions
---------------------
Total
Social Proprietor Owner- Initial
PARTICIPANT'S NAME Security or Partner Emp1oyee Employer/ Type of Contri-
---------- --------
Please Print Number Yes No Yes No Voluntary* Fund** bution
- -------------------------------------------------------------------------------
/ /
______________________________________________________________________________
/ /
______________________________________________________________________________
/ /
______________________________________________________________________________
/ /
______________________________________________________________________________
/ /
______________________________________________________________________________
/ /
______________________________________________________________________________
/ /
______________________________________________________________________________
/ /
______________________________________________________________________________
/ /
______________________________________________________________________________
/ /
______________________________________________________________________________
Total initial contributions to be invested in shares of International
Investors Incorporated or the Van Eck Funds: $________
[If additional space is needed. please attach additional sheets.]
________________________
* Designate as E (Employer Contribution) or V (Voluntary Contribution)
** Use the following abbreviations to designate the Fund in which the
contribution should be invested. If a participant's contribution is to
more than one Fund, use a separate line for each portion of the
contribution:
International Investors Incorporated - III
World Trends Fund - WTF
Gold Resources Fund - GRF
U.S. Government Money Fund - USF
World Income Fund - WIF
<PAGE>
INTERNATIONAL INVESTORS INCORPORATED
VAN ECK FUNDS
Money Purchase Plan Adoption Agreement
INSTRUCTIONS
- ------------
To establish a Money Purchase plan, please complete and sign the following
Adoption Agreement and mail it, together with the initial contribution (checks
should be made payable to Investors Fiduciary Trust Company), to:
Investors Fiduciary Trust Company
P.O. Box 407
Kansas City, Missouri 64141
The Employer named below hereby establishes a MONEY PURCHASE PLAN (the "Plan")
pursuant to the Internal Revenue Code of 1986, as amended, and the Employee
Retirement Income Security Act of 1974, as amended, in accordance with the terms
of the PLAN DOCUMENT OF THE RETIREMENT PLAN FOR SELF-EMPLOYED INDIVIDUALS.
PARTNERSHIPS AND CORPORATIONS USING SHARES OF INTERNATIONAL INVESTORS
INCORPORATED OR THE VAN ECK FUNDS, on pages 11 to 23 of this booklet, as amended
from time to time (the "Plan Document"), and the related TRUST AGREEMENT, on
pages 24 to 27 of this booklet, as amended from time to time, which the Employer
has carefully reviewed. The Employer acknowledges receipt of a copy of the
current prospectus(es) and statements of additional information of the mutual
fund(s) in which contributions to the Plan are to be invested. The Employer
certifies as correct the following information which is part of the Plan
Document as if it were set forth fully therein, and the Plan Document shall be
supplemented and modified by the terms and conditions contained in this Adoption
Agreement. All defined terms used herein have the meaning ascribed to them in
the Plan.
1. Retirement Plan of _______________________________________________________
Name of Employer)
2. Employer's Business Address ______________________________________________
(City, State and Zip Code)
3. Nature of Employer's Business ____________________________________________
4. [ ] Sole Proprietorship [ ] Partnership [ ] Corporation
5. Employer's Federal Tax Identification No. ________________________________
1 Effective Date of Adoption or Amendment __________________________________
7. Fiscal year for Federal income tax purposes ("Plan Year"):
<PAGE>
[_] Calendar Year [_] Other (Specify below)
From ______________________________to ____________________________________
(First month) (Last month)
8. [The follow1ng need not be completed unless the Plan is other than a
calendar year (see Section 7.10(d) of the Plan Document).] Employer's
Limitation Year ends _____________________________________________________
(Month and Day)
9. [The following need not be completed unless the Employer wishes to specify
a rate of contribution on behalf of each Participant which is other than
percent of Earned Income or Compensation. The Employer may specify a rate
of contribution which is lesser or greater than 15 percent, but no less
than 3 percent nor more than 25 percent, of Earned Income or Compensation.]
For each Plan Year the Employer shall contribute in cash an amount equal to
15 percent (or such other percentage as is specified below) of each
Participant's Earned Income or Compensation derived from the Business.
____% (not less than 3% nor more than 25%) is substituted in place of 15
percent in the above sentence.
[This subsection (b) is subject to the maximum limitation on Annual
Additions described in Section 7 of the Plan Document.]
10. [If the following is not completed, the period of Service required for
participation in the Plan is 2 Years of Service or such lesser number of
years that the Employer has been in the Business. The period of Service
required for participation may only be reduced, not increased.]
______ Years of Service is substituted as the period of Service prescribed
in Section 3.1 of the Plan Document. If the Years of Service selected is or
includes a fractional year, an Employee will not be required to complete
any specified number of Hours of Service to receive credit for such
fractional year.
11. [If the following is not completed, Hours of Service will be credited on
the basis of each hour actually worked. If the Employer wishes to specify a
different method of crediting Hours of Service, one of the following
methods may be selected, which method shall be applied to all Employees
covered by the Plan.]
Hours of Service will be credited on the basis of:
[_] days worked: if an Employee would be credited with at least one Hour
of Service during a day, the Employee will be credited with 10 Hours
of Service for that day.
[_] weeks worked: if an Employee would be credited with at least one Hour
of Service during a week, the Employee will be credited with 45 Hours
of Service for that week.
<PAGE>
[_] months worked: if an would be credited with at least one Hour of
Service during a month, the Employee will be credited with 190 Hours
of Service for that month
12. [If the following is not completed, the survivor portion of the joint and
Survivor Annuity payable to the spouse of a Participant to whom it applies
and who fails to elect otherwise will be 50% of that payable to the
Participant while alive.]
The survivor portion of the Joint and Survivor Annuity shall be ___% (not
less than 50 nor greater than 100) of the amount of the annuity payable
during the joint lives of the Participant and the spouse unless the
Participant elects a different percentage.
13. [THE FOLLOWING MUST BE COMPLETED IF THE EMPLOYER MAINTAINS ANY OTHER
QUALIFIED PENSION, PROFIT SHARING OR STOCK BONUS PLANS.)
(a) If the Employer maintains other qualified defined contribution plans
which are not Master of Prototype Plans, the Annual Addition which may
be credited to any Participant's account under the Plan for any
Limitation Year will be limited as follows:
[_] In accordance with Sections 7.2, 7.3, 7.4, 7.5, 7.6 and 7.7 of
the Plan Document.
[_] The attached provisions will apply and will limit total Annual
Additions to the Maximum Permissible Amount in a manner that
precludes Employer discretion. [Attach applicable language on a
separate sheet.]
(b) If the Employer maintains, or at any time maintained, one or more
qualified defined benefit pension plans, the sum of the Defined
Contribution Fraction and the Defined Benefit Fraction (as defined in
Sections 7.10(h) and (i) of the Plan Document) with respect to any
Participant for a Limitation Year may not exceed 1.0. If the Employer
maintains or maintained such plans, the 1.0 limitation will be met as
follows:
[_] By limiting the Annual Additions to this Plan for the Limitation
Year so that the sum of the Defined Contribution Fraction and the
Defined Benefit Fraction does not exceed 1.0.
[_] The attached provisions will apply and will specify the 1.0
limitation in a manner that precludes Employer discretion.
(Attach applicable language on a separate sheet.]
(c) If the Employer maintains other qualified pension, profit-sharing or
stock bonus plans required to be aggregated with this Plan for
purposes of Section 416 of the Internal Revenue Code (the top-heavy
rules), the minimum required contribution under this Plan for years in
which it is top-heavy will be calculated in accordance with Section
8.4 of the Plan Document, unless the Employer wishes to designate
another method which prevents inappropriate omissions or required
duplication of minimum
<PAGE>
contributions or benefits. [Attach applicable language in a separate
sheet if desired.]
14. For purposes of computing the Top-Heavy Ratio, the Valuation Date shall be
__________ [designate date] of each year.
15. [The following need not be completed unless the Employer intends to apply
for a waiver of the minimum funding requirements under Section 412(d)
Internal Revenue Code.]
The following language satisfies the requirements of Revenue Ruling 78-223
in the case of a waiver of the minimum funding requirements: ___________
[Attach separate sheet if necessary.]
16. The Employer (i) hereby appoints Investors Fiduciary Trust Company, or its
successor, as Trustee of the Plan; and (ii) agrees that the annual service
fees of the Trustee, currently $10.00 per Participant per calendar year,
may be deducted from the assets in the account of each Participant before
the end of the calendar year, which fees may be changed upon notice to the
Employer.
Enclosed is a check payable to Investors Fiduciary Trust Company, as Trustee, as
the initial payment of contributions to the Trust Fund under the Plan, as
amended from time to time, to be invested and credited to the accounts of
Participants in accordance with the attached Money Purchase Contribution
Schedule.
The Employer will promptly notify the Trustee in writing of any changes in the
attached schedule of Participants.
Additional series of the Van Eck Funds may be established. Subsequent Employer
contributions will be invested as directed in writing by the Employer and
subsequent voluntary contributions will be invested as directed in writing by
the Employee or the Employer on behalf of the Employee.
An Employer who has ever maintained or who later adopts any plan (including,
after December 31, 1985, a welfare benefit fund, as defined in Section 419(e) of
the Internal Revenue Code, which provides post-retirement medical benefits
allocated to separate accounts for key employees, as defined in Section
419A(d)(3) of the Internal Revenue Code) in addition to this Plan (other than
the paired Profit Sharing Plan (#001) available under the Plan Document (#01))
may not rely on the opinion letter issued by the National Office of the Internal
Revenue Service as evidence that this Plan is qualified under Section 401 of the
Internal Revenue Code. If an Employer who adopts or maintains multiple plans
wishes to obtain confirmation that its plan(s) are qualified, application for a
determination letter should be made to the appropriate Key District Director of
Internal Revenue.
<PAGE>
This Monthly Purchase Plan Adoption Agreement may be used only in conjunction
with the Plan Document. Failure to properly fill out this Adoption Agreement may
result in your Plan not being qualified fur tax purposes. You will be informed
of any amendments to or discontinuance or abandonment of the Plan. If you have
any questions, you can contact the Plan sponsor, International Investors
Incorporated, at 122 East 42nd Street, New York, New York 10168, (212)687-5200,
outside of New York (800)221-2220.
Date: _________ Name of Employer: ____________________________________________
(please print)
By: ___________________________________________________________________________
(Signature of Sole Proprietor, General Partner or Authorized Corporate Officer)
Acceptance of the appointment of Investors Fiduciary Trust Company as Trustee
and the establishment of the Trust Fund shall be effective upon receipt by the
Trustee of the Employer's check.
________________________________________________________________________________
INVESTMENT DEALER INFORMATION
[Dealer completes. This is not a part of the Plan or Trust. Print or type.]
Name of Dealer Firm: Name and Number of Dealer's Representative:
______________________ _________________________________________________
Branch Office Address of Dealer's Representative:
_________________________________________________
<PAGE>
MONEY PURCHASE CONTRIBUTION SCHEDULE
Initial Contributions
---------------------
Total
Social Proprietor Owner- Initial
PARTICIPANT'S NAME Security or Partner Emp1oyee Employer/ Type of Contri-
---------- --------
Please Print Number Yes No Yes No Voluntary* Fund** bution
- -------------------------------------------------------------------------------
/ /
______________________________________________________________________________
/ /
______________________________________________________________________________
/ /
______________________________________________________________________________
/ /
______________________________________________________________________________
/ /
______________________________________________________________________________
/ /
______________________________________________________________________________
/ /
______________________________________________________________________________
/ /
______________________________________________________________________________
/ /
______________________________________________________________________________
/ /
______________________________________________________________________________
Total initial contributions to be invested in shares of International
Investors Incorporated or the Van Eck Funds: $________
[If additional space is needed. please attach additional sheets.]
________________________
* Designate as E (Employer Contribution) or V (Voluntary Contribution)
** Use the following abbreviations to designate the Fund in which the
contribution should be invested. If a participant's contribution is to
more than one Fund, use a separate line for each portion of the
contribution:
International Investors Incorporated - III
World Trends Fund - WTF
Gold Resources Fund - GRF
U.S. Government Money Fund - USF
World Income Fund - WIF
<PAGE>
FORM OF
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
(Class B Shares)
WHEREAS, VAN ECK FUNDS, an unincorporated business trust organized under
the laws of the Commonwealth of Massachusetts (hereinafter called the "Trust"),
is engaged in business as an open-end management investment company and is
registered as such under the Investment Company Act of 1940, as amended (the
"Act");
WHEREAS, the Trust is authorized to issue shares of beneficial interest, in
separate series, with each such series representing the interests in a separate
portfolio of securities and other assets;
WHEREAS, shares of beneficial interest of certain series of the Trust may
be divided into two or more classes (any series, currently existing or hereafter
established by the Trust offering two or more classes of its shares being
referred hereafter, individually or collectively as the context may require, as
"Series");
WHEREAS, the class of shares of a Series offered to the public at the
public offering price per share and subject to a contingent deferred sales
charge ("CDSC") on the terms and conditions set forth in the Trust's then-
current prospectus shall be designated as Class B shares (the Class B Shares
hereinafter "Shares");
WHEREAS, Van Eck Securities Corporation (the "Underwriter") serves as
principal underwriter of Shares of each Series pursuant to a written agreement;
WHEREAS, the Trust hereby intends to act as a distributor of Shares in
accordance with Rule 12b-1 under the Act, as it may from time to time be amended
("Rule 12b-1"), and desires to adopt a Plan of Distribution pursuant to such
Rule on the terms and conditions as hereinafter set forth, in respect of Shares
(the "Plan");
WHEREAS, initially, the Asia Dynasty Fund ("Initial Series") shall issue
Shares;
WHEREAS, the Trustees as a whole, and the Trustees who are not "interested
persons" of the Trust (as defined in the Act) and who have no direct or indirect
financial interest in the operation of the Plan and any agreements relating to
it (the "Qualified Trustees"), having determined, in the exercise of their
reasonable business judgement and in light of their fiduciary duties under state
law and under Sections 36(a) and (b) of the Act, that there is a reasonable
likelihood that the Plan will benefit the Initial Series and the holders of the
Shares of such Series, have approved the Plan by vote cast in person at a
meeting called for the purpose of voting on the Plan and agreements related
thereto; and
WHEREAS, Van Eck Associates Corporation, as the sole shareholder of the
Shares of the Initial Series, has approved the Plan.
NOW, THEREFORE, the Trust hereby adopts the Plan in accordance with Rule
12b-1:
Section 1. Distribution Activities
-----------------------
<PAGE>
Subject to the supervision of the Trustees, the Trust or the Underwriter on
behalf of the Trust for the compensation set forth herein may, directly or
indirectly, engage in any activities primarily intended to result in the sale of
Shares, which activities may include, but are not limited to, one or more of the
following: (1) advancing commissions to securities dealers in respect of sales
of Shares ("Advanced Commissions"); (2) making payments to securities dealers
and others engaged in the sale of Shares, including making payments of fees to
the broker of record for servicing shareholder accounts ("Maintenance Fees");
(3) paying compensation to and expenses of personnel (including personnel of the
Underwriter and organizations with which the Trust or the Underwriter has
entered into agreements pursuant to this Plan) who engage in or support
distribution of Shares or who render shareholder support services, including but
not limited, to office space and equipment, telephone facilities and expenses,
answering routine inquiries regarding the Trust, processing shareholder
transactions and providing such other shareholder services as the Trust may
reasonably request; (4) formulating and implementing marketing and promotional
activities, including but not limited to direct mail promotions and television,
radio, newspaper, magazine and other mass media advertising; (5) preparing,
printing and distributing sales literature; (6) preparing, printing and
distributing prospectuses of the Trust and reports for recipients other than
existing shareholders of the Trust; (7) obtaining such information, analyses and
reports with respect to marketing and promotional activities as the Trust may,
from time to time, deem advisable and; (8) paying, or reimbursing the
Underwriter for, interest on unrecouped Carry Forward Commissions (as hereafter
defined) at a rate paid by the Underwriter, or, if such amounts are funded by
the Underwriter or an affiliate, at the Broker Call Loan Rate as reported in the
Wall Street Journal, as such rates may vary from day to day. The Underwriter on
behalf of the Trust is authorized to engage in the activities listed above, and
in any other activities primarily intended to result in the sale of Shares,
either directly or through other persons with which the Trust or the Underwriter
has entered into agreements pursuant to the Plan (all such activities hereafter
"Distribution Activities"). The Underwriter is not obligated to perform all of
the Distribution Activities enumerated above or maintain any level of service or
expenditures, but shall in its sole discretion, determine which Distribution
Activities to engage in and the resources to be committed to such activities.
Section 2. Fees, Maximum Expenditures
--------------------------
(a) Payment for Distribution Activities - The Trust is authorized to pay
-----------------------------------
the Underwriter for the Distribution Activities performed under the Plan a fee
at the annual rate set forth in Exhibit A ("Annual Fee"). Such Series shall
calculate daily amounts payable by it in respect of Shares hereunder and shall
pay such amounts monthly or at such other intervals as the Trustees may
determine. In the event the Plan is terminated, the Underwriter shall be
entitled to recoup amounts expended on Distribution Activities on behalf of the
Series in excess of the Annual Fees, CDSC and any other compensation received in
connection with the distribution of the Shares ("Unrecouped Amounts"). The
Payment of Unrecouped Amounts in the case of a Series shall not exceed, on an
annual basis, the Annual Fee ("Annual Limitation"). Unrecouped Amounts payable
under the Plan that are not paid because they exceed the Annual Fee ("Carry
Forward Amounts") shall be carried forward by a Series and shall be paid within
the Annual Limitation in accordance with this Plan. Carry Forward Amounts
attributable to commissions advanced by, or on behalf of, the Underwriter in
respect of Shares pursuant to Section 1(1) hereof are "Carry Forward
Commissions."
(b) Application of Proceeds - The excess of amounts received by the
-----------------------
Underwriter under Section 2(a) hereof over amounts paid by it as Maintenance
Fees to third parties which are not "affiliated persons" (as defined in the Act)
of the Trust and the proceeds received by the Underwriter from CDSC payments
shall be applied first toward interest on unreimbursed Carry
<PAGE>
Forward Commissions, then to reduce any unreimbursed Carry Forward Commissions
and then to reduce the costs incurred by the Underwriter in performing
Distribution Activities.
(c) Any unreimbursed Carry Forward Amounts under Section 2(a) attributable
to a fiscal year of a Series shall be paid by the Trust in respect of Shares in
a subsequent year within the limitations set forth herein. Expenditures made by
one class under the Plan may not be used to subsidize the sale of shares of
another class of a Series.
<PAGE>
Section 3. Term and Termination
--------------------
(a) Initial Series. The Plan shall become effective on ____________ with
--------------
respect to the Initial Series.
(b) Additional Series. As additional Series other than the Initial Series
-----------------
are established, the Plan shall become effective with respect to each such
Series listed in Exhibit A at the Annual Fee set forth in such Exhibit upon the
initial public offering of such new Series, provided that the Plan has
previously been approved for continuation, together with any related agreements,
by votes of a majority of both (a) the Trustees of the Trust and (b) the
Qualified Trustees, cast in person at a meeting held before the initial public
offering of such new Series and called for the purpose of voting on such
approval.
(c) Continuation of the Plan. The Plan and any related agreements shall
------------------------
continue in effect with respect to a Series for so long as such continuance is
specifically approved at least annually by votes of a majority of both (a) the
Trustees of the Trust and (b) the Qualified Trustees, cast in person at a
meeting called for the purpose of voting on this Plan and such related
agreements.
(d) Termination of the Plan. The Plan may be terminated at any time with
-----------------------
respect to any Series by vote of a majority of the Qualified Trustees, or by
vote of a majority of the outstanding Shares. The Underwriter shall not be
entitled to reimbursement in respect of costs incurred in performing
Distribution Activities which occur after termination of the Plan. However, the
Underwriter shall be entitled to reimbursement of all Carry Forward Amounts and
other costs properly incurred in respect of Shares prior to termination, and the
Trust shall continue to make any required payments to the Underwriter pursuant
to Section 2 subject to the Annual Limitation until such time as all such
amounts have been reimbursed. The Underwriter shall also be entitled to receive
all CDSC's paid or payable with respect to Shares purchased before the
termination of the Plan that are redeemed or repurchased by the Trust subsequent
to termination of the Plan. The Plan may remain in effect with respect to a
Series even if it has been terminated in accordance with this Section 3(d) with
respect to one or more other Series.
Section 4. Amendments
----------
The Plan may not be amended to increase materially the amount of
distribution expenditures provided for in Section 2 hereof unless such amendment
is approved by a vote of the majority of the outstanding voting securities of
each of the affected classes of a Series and no material amendment to the Plan
shall be made unless approved in the manner provided for annual renewal in
Section 3(c) hereof.
Section 5. Independent Trustees
--------------------
While the Plan is in effect, the selection and nomination of Trustees who
are not interested persons (as defined in the Act) of the Trust shall be
committed to the discretion of the Trustees who are not interested persons.
Section 6. Quarterly Reports
-----------------
The Treasurer of the Trust shall provide to the Trustees and the Trustees
shall review, at least quarterly, a written report of the amounts expended for
Distribution Activities and the purpose for which such expenditures were made.
The Treasurer shall review, at least annually the revenues received and expenses
incurred by the Underwriter pursuant to the Plan.
<PAGE>
Section 7. Recordkeeping
-------------
The Trust shall preserve copies of the Plan and any related agreements and
all reports made pursuant to Section 6 hereof, for a period of not less than six
years from the date of the Plan, or the agreements and such report, as the case
may be, the first two years in an easily accessible place.
Section 8. Limitation of Liability
-----------------------
The term "Van Eck Funds" means and refers to the Trustees from time to time
serving under the Master Trust Agreement dated April __, 19__, as the same may
subsequently thereto have been, or subsequently hereto be, amended. It is
expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the Trustees, shareholders, nominees, officers, agents or
employees of the Trust, personally, but bind only the assets and property of the
Trust, as provided in the Master Trust Agreement of the Trust. The execution and
delivery of the Plan have been authorized by the Trustees and shareholders of
the Trust and signed by an authorized officer of the Trust, acting as such, and
neither such authorization by such Trustees and shareholders nor such execution
and delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the assets and property of the Trust as provided in its Master Trust
Agreement.
IN WITNESS WHEREOF, the Trust has executed this Plan of Distribution on the
day and year set forth below in New York, New York.
Date:
VAN ECK FUNDS
....................
Vice President
ATTEST:
...............
Secretary
<PAGE>
VAN ECK FUNDS
EXHIBIT A
Name of Series Maximum 12b-1 Fees/Annual Limitation
(Annually as a % of average daily net assets)
Asia Dynasty Fund-B 1.00%
<PAGE>
July 14, 1993
Board of Trustees
Van Eck Funds
122 East 42nd Street
New York, NY 10168
RE: Rule 12b-1 Plan of Distribution ("12b-1 Plan")
Gentlemen:
The 12b-1 Plan in effect for the Class B shares of the Asia Dynasty Fund Series
of the Van Eck Funds is a "compensation" type plan with a
carryover/reimbursement provision. Under this provision, the Distributor shall
be entitled to reimbursement of distribution expenses incurred on behalf of the
Fund which have not been recouped from payment made under the Plan in the event
the Plan is terminated. Such unrecouped distribution expenses incurred by the
Distributor are to be paid by the Fund, subject to the annual limitation on such
expenses under the terminated Plan, after termination. We understand that the
Securities and Exchange Commission and the American Institute of Certified
Public Accountants are reviewing the proper treatment of carryover amounts. We
believe that accrual of carryover amounts as a liability, with a corresponding
reduction in the net asset value per share, is not in the best interests of
shareholders and defeats the purpose of such plans. This is particularly true in
the case of funds with a contingent deferred sales charge where accrual
essentially defeats the "pay as you go" alternative to a front-end sales charge.
Further, we are of the opinion that recoupment by the Distributor of commissions
advanced by the Distributor on behalf of investors and other costs pursuant to
the Plan incurred for the benefit of the Fund is not unfair to the Fund and its
shareholders.
In view of the foregoing, and notwithstanding anything to the contrary in the
Plan, Van Eck Securities Corporation ("Distributor") agrees that, in the event a
Plan is terminated and Distributor no longer serves as distributor or principal
underwriter of the shares of the Fund terminating the Plan, it will waive its
right to reimbursement of Carryover Amounts (as defined in the Plans)
attributable to fiscal year of the Funds ending on December 31, 1993. If the
Distributor continues to serve as distributor or principal underwriter of the
Funds shares or the Board of Trustees determines that reimbursement of Carryover
Amounts after Plan termination is appropriate, then the Distributor shall be
entitled to reimbursement of all Carryover Amounts.
Sincerely,
John C. van Eck
cc: Philip Newman, Goodwin, Procter & Hoar
Kelly Brennan, Coopers & Lybrand
<PAGE>
FORM OF
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
(Class B Shares)
WHEREAS, VAN ECK FUNDS, an unincorporated business trust organized under
the laws of the Commonwealth of Massachusetts (hereinafter called the "Trust"),
is engaged in business as an open-end management investment company and is
registered as such under the Investment Company Act of 1940, as amended (the
"Act");
WHEREAS, the Trust is authorized to issue shares of beneficial interest, in
separate series, with each such series representing the interests in a separate
portfolio of securities and other assets;
WHEREAS, shares of beneficial interest of certain series of the Trust may
be divided into two or more classes (any series, currently existing or hereafter
established by the Trust offering two or more classes of its shares being
referred hereafter, individually or collectively as the context may require, as
"Series");
WHEREAS, the class of shares of a Series offered to the public at the
public offering price per share and subject to a contingent deferred sales
charge ("CDSC") on the terms and conditions set forth in the Trust's then-
current prospectus shall be designated as Class B shares (the Class B Shares
hereinafter "Shares");
WHEREAS, Van Eck Securities Corporation (the "Underwriter") serves as
principal underwriter of Shares of each Series pursuant to a written agreement;
WHEREAS, the Trust hereby intends to act as a distributor of Shares in
accordance with Rule 12b-1 under the Act, as it may from time to time be amended
("Rule 12b-1"), and desires to adopt a Plan of Distribution pursuant to such
Rule on the terms and conditions as hereinafter set forth, in respect of Shares
(the "Plan");
WHEREAS, initially, the Asia Dynasty Fund ("Initial Series") shall issue
Shares;
WHEREAS, the Trustees as a whole, and the Trustees who are not "interested
persons" of the Trust (as defined in the Act) and who have no direct or indirect
financial interest in the operation of the Plan and any agreements relating to
it (the "Qualified Trustees"), having determined, in the exercise of their
reasonable business judgement and in light of their fiduciary duties under state
law and under Sections 36(a) and (b) of the Act, that there is a reasonable
likelihood that the Plan will benefit the Initial Series and the holders of the
Shares of such Series, have approved the Plan by vote cast in person at a
meeting called for the purpose of voting on the Plan and agreements related
thereto; and
WHEREAS, Van Eck Associates Corporation, as the sole shareholder of the
Shares of the Initial Series, has approved the Plan.
NOW, THEREFORE, the Trust hereby adopts the Plan in accordance with Rule
12b-1:
Section 1. Distribution Activities
-----------------------
Subject to the supervision of the Trustees, the Trust or the Underwriter
on behalf of the Trust for the compensation set forth herein may, directly or
indirectly, engage in any activities primarily intended to result in the sale of
Shares, which activities may include, but are not limited to, one or more of the
following: (1) advancing commissions to securities dealers in respect of sales
of Shares ("Advanced
<PAGE>
Commissions"); (2) making payments to securities dealers and others engaged in
the sale of Shares, including making payments of fees to the broker of record
for servicing shareholder accounts ("Maintenance Fees"); (3) paying compensation
to and expenses of personnel (including personnel of the Underwriter and
organizations with which the Trust or the Underwriter has entered into
agreements pursuant to this Plan) who engage in or support distribution of
Shares or who render shareholder support services, including but not limited, to
office space and equipment, telephone facilities and expenses, answering routine
inquiries regarding the Trust, processing shareholder transactions and providing
such other shareholder services as the Trust may reasonably request; (4)
formulating and implementing marketing and promotional activities, including but
not limited to direct mail promotions and television, radio, newspaper, magazine
and other mass media advertising; (5) preparing, printing and distributing sales
literature; (6) preparing, printing and distributing prospectuses of the Trust
and reports for recipients other than existing shareholders of the Trust; (7)
obtaining such information, analyses and reports with respect to marketing and
promotional activities as the Trust may, from time to time, deem advisable and;
(8) paying, or reimbursing the Underwriter for, interest on unrecouped Carry
Forward Commissions (as hereafter defined) at a rate paid by the Underwriter,
or, if such amounts are funded by the Underwriter or an affiliate, at the Broker
Call Loan Rate as reported in the Wall Street Journal, as such rates may vary
from day to day. The Underwriter on behalf of the Trust is authorized to engage
in the activities listed above, and in any other activities primarily intended
to result in the sale of Shares, either directly or through other persons with
which the Trust or the Underwriter has entered into agreements pursuant to the
Plan (all such activities hereafter "Distribution Activities"). The Underwriter
is not obligated to perform all of the Distribution Activities enumerated above
or maintain any level of service or expenditures, but shall in its sole
discretion, determine which Distribution Activities to engage in and the
resources to be committed to such activities.
Section 2. Fees, Maximum Expenditures
--------------------------
(a) Payment for Distribution Activities - The Trust is authorized to pay
-----------------------------------
the Underwriter for the Distribution Activities performed under the Plan a fee
at the annual rate set forth in Exhibit A ("Annual Fee"). Such Series shall
calculate daily amounts payable by it in respect of Shares hereunder and shall
pay such amounts monthly or at such other intervals as the Trustees may
determine. In the event the Plan is terminated, the Underwriter shall be
entitled to recoup amounts expended on Distribution Activities on behalf of the
Series in excess of the Annual Fees, CDSC and any other compensation received in
connection with the distribution of the Shares ("Unrecouped Amounts"). The
Payment of Unrecouped Amounts in the case of a Series shall not exceed, on an
annual basis, the Annual Fee ("Annual Limitation"). Unrecouped Amounts payable
under the Plan that are not paid because they exceed the Annual Fee ("Carry
Forward Amounts") shall be carried forward by a Series and shall be paid within
the Annual Limitation in accordance with this Plan. Carry Forward Amounts
attributable to commissions advanced by, or on behalf of, the Underwriter in
respect of Shares pursuant to Section 1(1) hereof are "Carry Forward
Commissions."
(b) Application of Proceeds - The excess of amounts received by the
-----------------------
Underwriter under Section 2(a) hereof over amounts paid by it as Maintenance
Fees to third parties which are not "affiliated persons" (as defined in the Act)
of the Trust and the proceeds received by the Underwriter from CDSC payments
shall be applied first toward interest on unreimbursed Carry Forward
Commissions, then to reduce any unreimbursed Carry Forward Commissions and then
to reduce the costs incurred by the Underwriter in performing Distribution
Activities.
(c) Any unreimbursed Carry Forward Amounts under Section 2(a) attributable
to a fiscal year of a Series shall be paid by the Trust in respect of Shares in
a subsequent year within the limitations set forth herein. Expenditures made by
one class under the Plan may not be used to subsidize the sale of shares of
another class of a Series.
<PAGE>
Section 3. Term and Termination
--------------------
(a) Initial Series. The Plan shall become effective on ____________ with
--------------
respect to the Initial Series.
(b) Additional Series. As additional Series other than the Initial Series
-----------------
are established, the Plan shall become effective with respect to each such
Series listed in Exhibit A at the Annual Fee set forth in such Exhibit upon the
initial public offering of such new Series, provided that the Plan has
previously been approved for continuation, together with any related agreements,
by votes of a majority of both (a) the Trustees of the Trust and (b) the
Qualified Trustees, cast in person at a meeting held before the initial public
offering of such new Series and called for the purpose of voting on such
approval.
(c) Continuation of the Plan. The Plan and any related agreements shall
------------------------
continue in effect with respect to a Series for so long as such continuance is
specifically approved at least annually by votes of a majority of both (a) the
Trustees of the Trust and (b) the Qualified Trustees, cast in person at a
meeting called for the purpose of voting on this Plan and such related
agreements.
(d) Termination of the Plan. The Plan may be terminated at any time with
-----------------------
respect to any Series by vote of a majority of the Qualified Trustees, or by
vote of a majority of the outstanding Shares. The Underwriter shall not be
entitled to reimbursement in respect of costs incurred in performing
Distribution Activities which occur after termination of the Plan. However, the
Underwriter shall be entitled to reimbursement of all Carry Forward Amounts and
other costs properly incurred in respect of Shares prior to termination, and the
Trust shall continue to make any required payments to the Underwriter pursuant
to Section 2 subject to the Annual Limitation until such time as all such
amounts have been reimbursed. The Underwriter shall also be entitled to receive
all CDSC's paid or payable with respect to Shares purchased before the
termination of the Plan that are redeemed or repurchased by the Trust subsequent
to termination of the Plan. The Plan may remain in effect with respect to a
Series even if it has been terminated in accordance with this Section 3(d) with
respect to one or more other Series.
Section 4. Amendments
----------
The Plan may not be amended to increase materially the amount of
distribution expenditures provided for in Section 2 hereof unless such amendment
is approved by a vote of the majority of the outstanding voting securities of
each of the affected classes of a Series and no material amendment to the Plan
shall be made unless approved in the manner provided for annual renewal in
Section 3(c) hereof.
Section 5. Independent Trustees
--------------------
While the Plan is in effect, the selection and nomination of Trustees who
are not interested persons (as defined in the Act) of the Trust shall be
committed to the discretion of the Trustees who are not interested persons.
Section 6. Quarterly Reports
-----------------
The Treasurer of the Trust shall provide to the Trustees and the Trustees
shall review, at least quarterly, a written report of the amounts expended for
Distribution Activities and the purpose for which such expenditures were made.
The Treasurer shall review, at least annually the revenues received and expenses
incurred by the Underwriter pursuant to the Plan.
<PAGE>
Section 7. Recordkeeping
-------------
The Trust shall preserve copies of the Plan and any related agreements and
all reports made pursuant to Section 6 hereof, for a period of not less than six
years from the date of the Plan, or the agreements and such report, as the case
may be, the first two years in an easily accessible place.
Section 8. Limitation of Liability
-----------------------
The term "Van Eck Funds" means and refers to the Trustees from time to time
serving under the Master Trust Agreement dated February 6, 1992, as the same may
subsequently thereto have been, or subsequently hereto be, amended. It is
expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the Trustees, shareholders, nominees, officers, agents or
employees of the Trust, personally, but bind only the assets and property of the
Trust, as provided in the Master Trust Agreement of the Trust. The execution
and delivery of the Plan have been authorized by the Trustees and shareholders
of the Trust and signed by an authorized officer of the Trust, acting as such,
and neither such authorization by such Trustees and shareholders nor such
execution and delivery by such officer shall be deemed to have been made by any
of them individually or to impose any liability on any of them personally, but
shall bind only the assets and property of the Trust as provided in its Master
Trust Agreement.
IN WITNESS WHEREOF, the Trust has executed this Plan of Distribution on the
day and year set forth below in New York, New York.
Date:
VAN ECK FUNDS
....................
Vice President
ATTEST:
.....................
Secretary
<PAGE>
VAN ECK FUNDS
EXHIBIT A
Name of Series Maximum 12b-1 Fees/Annual Limitation
(Annually as a % of average daily net assets)
Asia Dynasty Fund-B 1.00%
Global Balanced Fund 1.00%
<PAGE>
September 30, 1993
Board of Trustees
Van Eck Funds
122 East 42nd Street
New York, NY 10168
RE: Rule 12b-1 Plan of Distribution ("12b-1 Plan")
Gentlemen:
The 12b-1 Plan in effect for the Class B shares of the Global Balanced Fund
Series of the Van Eck Funds is a "compensation" type plan with a
carryover/reimbursement provision. Under this provision, Van Eck Securities
Corporation ("the Distributor") shall be entitled to reimbursement of
distribution expenses incurred on behalf of the Fund which have not been
recouped from payment made under the Plan in the event the Plan is terminated.
Such unrecouped distribution expenses incurred by the Distributor are to be paid
by the Fund, subject to the annual limitation on such expenses under the
terminated Plan, after termination. We understand that the Securities and
Exchange Commission and the American Institute of Certified Public Accountants
are reviewing the proper treatment of carryover amounts. We believe that
accrual of carryover amounts as a liability, with a corresponding reduction in
the net asset value per share, is not in the best interests of shareholders and
defeats the purpose of such plans. This is particularly true in the case of
funds with a contingent deferred sales charge where accrual essentially defeats
the "pay as you go" alternative to a front-end sales charge. Further, we are of
the opinion that recoupment by the Distributor of commissions advanced by the
Distributor on behalf of investors and other costs pursuant to the Plan incurred
for the benefit of the Fund is not unfair to the Fund and its shareholders.
In view of the foregoing, and notwithstanding anything to the contrary in the
Plan, the Distributor agrees that, in the event a Plan is terminated and
Distributor no longer serves as distributor or principal underwriter of the
shares of the Fund terminating the Plan, it will waive its right to
reimbursement of Unrecouped Amounts (as defined in the Plans) attributable to
fiscal year of the Funds ending on December 31, 1993. If the Distributor
continues to serve as distributor or principal underwriter of the Funds shares
or the Board of Trustees determines that reimbursement of Unrecouped Amounts
after Plan termination is appropriate, then the Distributor shall be entitled to
reimbursement of all Carryover Amounts.
Sincerely,
John C. van Eck
cc: Philip Newman, Goodwin, Procter & Hoar
Kelly Brennan, Coopers & Lybrand
<PAGE>
FORM OF
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
(Class A Shares)
WHEREAS, VAN ECK FUNDS, an unincorporated business trust organized under
the laws of the Commonwealth of Massachusetts (hereinafter called the "Trust"),
is engaged in business as an open-end management investment company and is
registered as such under the Investment Company Act of 1940, as amended (the
"Act");
WHEREAS, the Trust is authorized to issue shares of beneficial interest, in
separate series, with each such series representing the interests in a separate
portfolio of securities and other assets;
WHEREAS, shares of beneficial interest of certain series of the Trust may
be divided into two or more classes (any series, currently existing or hereafter
established by the Trust offering two or more classes of its shares being
referred hereafter, individually or collectively as the context may require, as
"Series");
WHEREAS, the class of shares of a Series offered to the public at net asset
value plus a sales charge equal to a specified percentage of the public offering
price on the terms and conditions set forth in the Trust's then-current
prospectus shall be designated as Class A shares (the Class A shares hereinafter
"Shares");
WHEREAS, Van Eck Securities Corporation (the "Underwriter") serves as
principal underwriter of the Shares in each Series pursuant to a written
agreement;
WHEREAS, the Trust hereby intends to act as a distributor of the Shares in
accordance with Rule 12b-1 under the Act, as it may from time to time be amended
("Rule 12b-1"), and desires to adopt a Plan of Distribution pursuant to such
Rule on the terms and conditions as hereinafter set forth in respect of Shares
(the "Plan");
WHEREAS, initially, the Global Balanced Fund ("Initial Series") shall issue
Shares;
WHEREAS, the Trustees as a whole, and the Trustees who are not "interested
persons" of the Trust (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan and any agreements relating to
it (the "Qualified Trustees"), having determined, in the exercise of their
reasonable business judgement and in light of their fiduciary duties under state
law and under Sections 36(a) and (b) of the Act, that there is a reasonable
likelihood that this Plan will benefit the Initial Series and the holders of the
Shares of such Series, have approved the Plan by votes cast in person at a
meeting called for the purpose of voting on this Plan and agreements related
thereto; and
WHEREAS, Van Eck Associates Corporation, as the sole shareholder of the
Shares of the Initial Series, has approved the Plan.
NOW, THEREFORE, the Trust hereby adopts the Plan in accordance with Rule
12b-1:
SECTION 1. Distribution Activities
-----------------------
Subject to the supervision of the Trustees, the Trust or the Underwriter on
behalf of the Trust for the compensation set forth herein may, directly or
indirectly, engage in any activities primarily intended to result in the sale of
Shares, which activities may include, but are not limited to, the following: (1)
making payments to securities dealers and others engaged in the sale of Shares,
including making payment of fees to
<PAGE>
the broker of record for servicing shareholder accounts ("Maintenance Fees");
(2) paying compensation to and expenses of personnel (including personnel of the
Underwriter and organizations with which the Trust or Underwriter has entered
into agreements pursuant to this Plan) who engage in or support distribution of
Shares or who render shareholder support services, including but not limited to,
office space and equipment, telephone facilities and expenses, answering routine
inquiries regarding the Trust, processing shareholder transactions and providing
such other shareholder services as the Trust may reasonably request; (3)
formulating and implementing marketing and promotional activities, including but
not limited to direct mail promotions and television, radio, newspaper, magazine
and other mass media advertising; (4) preparing, printing and distributing sales
literature; (5) preparing, printing and distributing prospectuses of the Trust
and reports for recipients other than existing shareholders of the Trust; and
(6) obtaining such information, analyses and reports with respect to marketing
and promotional activities as the Trust may, from time to time, deem advisable.
The Underwriter on behalf of the Trust is authorized to engage in the activities
listed above, and in any other activities primarily intended to result in the
sale of Shares, either directly or through other persons with which the Trust or
the Underwriter has entered into agreements pursuant to the Plan (all such
activities hereafter "Distribution Activities"). The Underwriter is not
obligated to perform all of the Distribution Activities enumerated above or
maintain any level of services or expenditures, but shall in its sole
discretion, determine which Distribution Activities to engage in and the
resources to be committed to such activities.
Section 2. Fees, Maximum Expenditures
----------------------------
(a) Payment for Distribution Activities - The Trust is authorized to pay
-----------------------------------
the Underwriter for the Distribution Activities performed under the Plan a fee
at the annual rate set forth in Exhibit A ("Annual Fee"). Such Series shall
calculate daily amounts payable by it in respect of Shares hereunder and shall
pay such amounts monthly or at such other intervals as the Trustees may
determine. In the event the Plan is terminated, the Underwriter shall be
entitled to recoup amounts expended on Distribution Activities on behalf of the
Series in excess of the Annual Fees, and any other compensation received in
connection with the distribution of the Shares ("Unrecouped Amounts"). The
Payment of Unrecouped Amounts in the case of a Series shall not exceed, on an
annual basis, the Annual Fee ("Annual Limitation"). Unrecouped Amounts payable
under the Plan that are not paid because they exceed the Annual Fee ("Carry
Forward Amounts") shall be carried forward by a Series and shall be paid within
the Annual Limitation in accordance with this Plan.
(b) Application of Proceeds - The excess of amounts received by the
-----------------------
Underwriter under Section 2(a) hereof over amounts paid by it as Maintenance
Fees to third parties which are not "affiliated persons" (as defined in the Act)
of the Trust shall be applied toward reducing the Unrecouped Amounts.
(c) Any Unrecouped Carry Forward Amounts under Section 2(a) attributable
to a fiscal year of a Series shall be paid by the Trust in respect of Shares in
a subsequent year within the limitations set forth herein. Expenditures made by
one class under the Plan may not be used to subsidize the sale of shares of
another class of a Series.
Section 3. Term and Termination
--------------------
(a) Initial Series. The Plan shall become effective on _____________ with
--------------
respect to the Initial Series.
(b) Additional Series. As additional Series other than the Initial Series
-----------------
are established, this Plan shall become effective with respect to each such
Series listed in Exhibit A at the Annual Fee set forth in such Exhibit upon the
initial public offering of such new Series, provided that the Plan has
previously been
<PAGE>
approved for continuation, together with any related agreements, by votes of a
majority of both (a) the Trustees of the Trust and (b) the Qualified Trustees,
cast in person at a meeting held before the initial public offering of such new
Series and called for the purpose of voting on such approval.
(c) Continuation of the Plan. The Plan and any related agreements shall
------------------------
continue in effect with respect to a class for so long as such continuance is
specifically approved at least annually by votes of a majority of both (a) the
Trustees of the Trust and (b) the Qualified Trustees, cast in person at a
meeting called for the purpose of voting on this Plan and such related
agreements.
(d) Termination of the Plan. The Plan may be terminated at any time with
-----------------------
respect any Series or any class by vote of a majority of the Qualified Trustees,
or by vote of a majority of the outstanding Shares. The Underwriter shall not
be entitled to reimbursement in respect of costs incurred in performing
Distribution Activities which occur after termination of the Plan. However, the
Underwriter shall be entitled to reimbursement of all Unrecouped Amounts and
other costs properly incurred in respect of Shares prior to termination, and the
Trust shall continue to make payments to the Underwriter pursuant to Section 2
subject to the Annual Limitation until such time as all such amounts have been
reimbursed. The Plan may remain in effect with respect to a Series even if it
has been terminated in accordance with this Section 3(d) with respect to one or
more other Series.
Section 4. Amendments
----------
The Plan may not be amended to increase materially the amount of
distribution expenditures provided for in Section 2 hereof unless such amendment
is approved by a vote of the majority of the outstanding voting securities of
each of the affected classes of a Series and no material amendment to the Plan
shall be made unless approved in the manner provided for annual renewal in
Section 3(c) hereof.
Section 5. Independent Trustees
--------------------
While the Plan is in effect, the selection and nomination of Trustees who
are not interested persons (as defined in the Act) of the Trust shall be
committed to the discretion of the Trustees who are not interested persons.
Section 6. Quarterly Reports
-----------------
The Treasurer of the Trust shall provide to the Trustees and the Trustees
shall review, at least quarterly, a written report of the amounts expended for
Distribution Activities and the purpose for which such expenditures were made.
Section 7. Recordkeeping
-------------
The Trust shall preserve copies of the Plan and any related agreements and
all reports made pursuant to Section 6 hereof, for a period of not less than six
years from the date of this Plan, or the agreements and such report, as the case
may be, the first two years in an easily accessible place.
Section 8. Limitation of Liability
-----------------------
The term "Van Eck Funds" means and refers to the Trustees from time to time
serving under the Master Trust Agreement dated February 6, 1992, as the same may
subsequently thereto have been, or subsequently hereto be, amended. It is
expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the Trustees, shareholders, nominees, officers, agents or
employees of the Trust, personally, but bind only the assets and property of the
Trust,
<PAGE>
as provided in the Master Trust Agreement of the Trust. The execution and
delivery of this Plan have been authorized by the Trustees and shareholders of
the Trust and signed by an authorized officer of the Trust, acting as such, and
neither such authorization by such Trustees and shareholders nor such execution
and delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the assets and property of the Trust as provided in its Master Trust
Agreement.
IN WITNESS WHEREOF, the Trust has executed this Plan of Distribution on the
day and year set forth below in New York, New York.
Date:
VAN ECK FUNDS
.....................
Vice President
ATTEST:
.....................
Secretary
<PAGE>
VAN ECK FUNDS
EXHIBIT A
Names of Series Maximum 12b-1 Fees/Annual Limitation
(Annually as a % of average daily net assets)
Global Balanced Fund (Class A) .50%
<PAGE>
September 30, 1993
Board of Trustees
Van Eck Funds
122 East 42nd Street
New York, NY 10168
RE: Rule 12b-1 Plan of Distribution ("12b-1 Plan")
Gentlemen:
The 12b-1 Plan in effect for the Class A shares of the Global Balanced Fund
Series of the Van Eck Funds is a "compensation" type plan with a
carryover/reimbursement provision. Under this provision, Van Eck Securities
Corporation ("the Distributor") shall be entitled to reimbursement of
distribution expenses incurred on behalf of the Fund which have not been
recouped from payment made under the Plan in the event the Plan is terminated.
Such unrecouped distribution expenses incurred by the Distributor are to be paid
by the Fund, subject to the annual limitation on such expenses under the
terminated Plan, after termination. We understand that the Securities and
Exchange Commission and the American Institute of Certified Public Accountants
are reviewing the proper treatment of carryover amounts. We believe that
accrual of carryover amounts as a liability, with a corresponding reduction in
the net asset value per share, is not in the best interests of shareholders and
defeats the purpose of such plans.
In view of the foregoing, and notwithstanding anything to the contrary in the
Plan, the Distributor agrees that, in the event a Plan is terminated and
Distributor no longer serves as distributor or principal underwriter of the
shares of the Fund terminating the Plan, it will waive its right to
reimbursement of Unrecouped Amounts (as defined in the Plans) attributable to
fiscal year of the Funds ending on December 31, 1993. If the Distributor
continues to serve as distributor or principal underwriter of the Funds shares
or the Board of Trustees determines that reimbursement of Unrecouped Amounts
after Plan termination is appropriate, then the Distributor shall be entitled to
reimbursement of all Carryover Amounts.
Sincerely,
John C. van Eck
cc: Philip Newman, Goodwin, Procter & Hoar
Kelly Brennan, Coopers & Lybrand
<PAGE>
FORM OF
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
(Class C Shares)
WHEREAS, VAN ECK FUNDS, an unincorporated business trust organized under
the laws of the Commonwealth of Massachusetts (hereinafter called the "Trust"),
is engaged in business as an open-end management investment company and is
registered as such under the Investment Company Act of 1940, as amended (the
"Act");
WHEREAS, the Trust is authorized to issue shares of beneficial interest, in
separate series, with each such series representing the interests in a separate
portfolio of securities and other assets;
WHEREAS, shares of beneficial interest of certain series of the Trust may
be divided into two or more classes (any series, currently existing or hereafter
established by the Trust offering two or more classes of its shares being
referred hereafter, individually or collectively as the context may require, as
"Series");
WHEREAS, the class of shares of a Series offered to the public which may be
subject to a redemption fee ("Redemption Fee") on the terms and conditions set
forth in the Trust's then-current prospectus and statement of additional
information shall be designated as Class C shares (the Class C Shares
hereinafter "Shares");
WHEREAS, Van Eck Securities Corporation (the "Underwriter") serves as
principal underwriter of Shares of each Series pursuant to a written agreement;
WHEREAS, the Trust hereby intends to act as a distributor of Shares in
accordance with Rule 12b-1 under the Act, as it may from time to time be amended
("Rule 12b-1"), and desires to adopt a Plan of Distribution pursuant to such
Rule on the terms and conditions as hereinafter set forth, in respect of Shares
(the "Plan");
WHEREAS, initially, the International Investors Gold Fund ("Initial
Series") shall issue Shares;
WHEREAS, the Trustees as a whole, and the Trustees who are not "interested
persons" of the Trust (as defined in the Act) and who have no direct or indirect
financial interest in the operation of the Plan and any agreements relating to
it (the "Qualified Trustees"), having determined, in the exercise of their
reasonable business judgement and in light of their fiduciary duties under state
law and under Sections 36(a) and (b) of the Act, that there is a reasonable
likelihood that the Plan will benefit the Initial Series and the holders of the
Shares of such Series, have approved the Plan by vote cast in person at a
meeting called for the purpose of voting on the Plan and agreements related
thereto; and
WHEREAS, Van Eck Associates Corporation, as the sole shareholder of the
Shares of the Initial Series, has approved the Plan.
NOW, THEREFORE, the Trust hereby adopts the Plan in accordance with Rule
12b-1:
Section 1. Distribution Activities
-----------------------
Subject to the supervision of the Trustees, the Trust or the Underwriter on
behalf of the Trust for the compensation set forth herein may, directly or
indirectly, engage in any activities primarily intended to result in the sale of
Shares, which activities may include, but are not limited to, one or more of the
following: (1) advancing commissions to securities dealers in respect of sales
of Shares ("Advanced
<PAGE>
Commissions"); (2) making payments to securities dealers and others engaged in
the sale of Shares, including making payments of fees to the broker of record
for servicing shareholder accounts ("Maintenance Fees"); (3) paying compensation
to and expenses of personnel (including personnel of the Underwriter and
organizations with which the Trust or the Underwriter has entered into
agreements pursuant to this Plan) who engage in or support distribution of
Shares or who render shareholder support services, including but not limited, to
office space and equipment, telephone facilities and expenses, answering routine
inquiries regarding the Trust, processing shareholder transactions and providing
such other shareholder services, other than those provided by the transfer agent
and other agents of the Trust as the Trust may reasonably request; (4)
formulating and implementing marketing and promotional activities, including but
not limited to direct mail promotions and television, radio, newspaper, magazine
and other mass media advertising; (5) preparing, printing and distributing sales
literature; (6) preparing, printing and distributing prospectuses of the Trust
and reports for recipients other than existing shareholders of the Trust; (7)
obtaining such information, analyses and reports with respect to marketing and
promotional activities as the Trust may, from time to time, deem advisable and;
(8) paying, or reimbursing the Underwriter for, interest on unrecouped Carry
Forward Commissions (as hereafter defined) at a rate paid by the Underwriter,
or, if such amounts are funded by the Underwriter or an affiliate, at the Broker
Call Loan Rate as reported in the Wall Street Journal, as such rates may vary
from day to day. The Underwriter on behalf of the Trust is authorized to engage
in the activities listed above, and in any other activities primarily intended
to result in the sale of Shares, either directly or through other persons with
which the Trust or the Underwriter has entered into agreements pursuant to the
Plan (all such activities hereafter "Distribution Activities"). The Underwriter
is not obligated to perform all of the Distribution Activities enumerated above
or maintain any level of service or expenditures, but shall in its sole
discretion, determine which Distribution Activities to engage in and the
resources to be committed to such activities.
Section 2. Fees, Maximum Expenditures
--------------------------
(a) Payment for Distribution Activities - The Trust is authorized to make
-----------------------------------
payments for the Distribution Activities performed under the Plan, either
directly or to the Underwriter, a fee at the annual rate set forth in Exhibit A
("Annual Fee"). Such Series shall calculate daily amounts payable by it in
respect of Shares hereunder and shall pay such amounts monthly or at such other
intervals as the Trustees may determine and as set forth in the Series' then-
current prospectus and statement of additional information. In the event the
Plan is terminated, the Underwriter shall be entitled to recoup amounts expended
on Distribution Activities on behalf of the Series in excess of the Annual Fees,
Redemption Fees, if any, and any other compensation received in connection with
the distribution of the Shares ("Unrecouped Amounts"). The payment of post-
termination Unrecouped Amounts and any payments made under any successor plan in
the case of a Series shall not exceed, on an annual basis, the Annual Fee
("Annual Limitation"). Unrecouped Amounts payable under the Plan that are not
paid because they exceed the Annual Fee ("Carry Forward Amounts") shall be
carried forward by a Series and shall be paid within the Annual Limitation in
accordance with this Plan. Carry Forward Amounts attributable to commissions
advanced by, or on behalf of, the Underwriter in respect of Shares pursuant to
Section 1(1) hereof are "Carry Forward Commissions."
(b) Application of Proceeds - The excess of amounts received by the
-----------------------
Underwriter under Section 2(a) hereof over amounts paid by it as Maintenance
Fees to third parties which are not "affiliated persons" (as defined in the Act)
of the Trust and the proceeds received by the Underwriter from Redemption Fee
payments, if any, shall be applied first toward interest on unreimbursed Carry
Forward Commissions, then to reduce any unreimbursed Carry Forward Commissions
and then to reduce the costs incurred by the Underwriter in performing
Distribution Activities.
(c) Any unreimbursed Carry Forward Amounts under Section 2(a) attributable
to a fiscal year of a Series shall be paid by the Trust in respect of Shares in
a subsequent year within the limitations set forth
<PAGE>
herein. Expenditures made by one class under the Plan may not be used to
subsidize the sale of shares of another class of a Series.
(d) Payments in Excess of Annual Limitation. - In the event a Series makes
---------------------------------------
advances payments directly for Distribution Activities which, at the time of
payment, are at the Annual Fee, but which payments, less any Redemption Fee
payments, subsequently exceed, on an annualized basis, the Annual Fee rates,
then the Underwriter shall reimburse the Series for any such excess at no less
frequent intervals than the Series is obligated to make periodic payments under
the Plan. If the Underwriter reimbursed a Series for excess payments during one
period because payments exceeded, on an annual basis, the Annual Fee, and
payments in any subsequent period are less, on an annual basis, than the Annual
Fee, then the Underwriter shall be entitled to recoup previously reimbursed
amounts up to, on an annual basis, the Annual Fee.
Section 3. Term and Termination
--------------------
(a) Initial Series. The Plan shall become effective on October 19, 1994
--------------
with respect to the Initial Series.
(b) Additional Series. As additional Series other than the Initial Series
-----------------
are established, the Plan shall become effective with respect to each such
Series listed in Exhibit A at the Annual Fee set forth in such Exhibit upon the
initial public offering of such new Series, provided that the Plan has
previously been approved for continuation, together with any related agreements,
by votes of a majority of both (a) the Trustees of the Trust and (b) the
Qualified Trustees, cast in person at a meeting held before the initial public
offering of such new Series and called for the purpose of voting on such
approval.
(c) Continuation of the Plan. The Plan and any related agreements shall
------------------------
continue in effect with respect to a Series for so long as such continuance is
specifically approved at least annually by votes of a majority of both (a) the
Trustees of the Trust and (b) the Qualified Trustees, cast in person at a
meeting called for the purpose of voting on this Plan and such related
agreements.
(d) Termination of the Plan. The Plan may be terminated at any time with
-----------------------
respect to any Series by vote of a majority of the Qualified Trustees, or by
vote of a majority of the outstanding Shares. The Underwriter shall not be
entitled to reimbursement in respect of costs incurred in performing
Distribution Activities which occur after termination of the Plan. However, the
Underwriter shall be entitled to reimbursement of all Carry Forward Amounts and
other costs properly incurred in respect of Shares prior to termination, and the
Trust shall continue to make any required payments to the Underwriter pursuant
to Section 2 subject to the Annual Limitation until such time as all such
amounts have been reimbursed. The Redemption Fees, if any, paid or payable with
respect to Shares purchased before the termination of the Plan that are redeemed
or repurchased by the Trust subsequent to termination of the Plan shall be used
to reduce Carry Forward Amounts. The Plan may remain in effect with respect to
a Series even if it has been terminated in accordance with this Section 3(d)
with respect to one or more other Series.
Section 4. Amendments
----------
The Plan may not be amended to increase materially the amount of
distribution expenditures provided for in Section 2 hereof unless such amendment
is approved by a vote of the majority of the outstanding voting securities of
each of the affected classes of a Series and no material amendment to the Plan
shall be made unless approved in the manner provided for annual renewal in
Section 3(c) hereof.
<PAGE>
Section 5. Independent Trustees
--------------------
While the Plan is in effect, the selection and nomination of Trustees who
are not interested persons (as defined in the Act) of the Trust shall be
committed to the discretion of the Trustees who are not interested persons.
Section 6. Quarterly Reports
-----------------
The Treasurer of the Trust shall provide to the Trustees and the Trustees
shall review, at least quarterly, a written report of the amounts expended for
Distribution Activities and the purpose for which such expenditures were made.
The Treasurer shall review, at least annually the revenues received and expenses
incurred by the Underwriter pursuant to the Plan.
Section 7. Recordkeeping
-------------
The Trust shall preserve copies of the Plan and any related agreements and
all reports made pursuant to Section 6 hereof, for a period of not less than six
years from the date of the Plan, or the agreements and such report, as the case
may be, the first two years in an easily accessible place.
Section 8. Limitation of Liability
-----------------------
The term "Van Eck Funds" means and refers to the Trustees from time to time
serving under the Master Trust Agreement dated February 6, 1992, as the same may
subsequently thereto have been, or subsequently hereto be, amended. It is
expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the Trustees, shareholders, nominees, officers, agents or
employees of the Trust, personally, but bind only the assets and property of the
Trust, as provided in the Master Trust Agreement of the Trust. The execution
and delivery of the Plan have been authorized by the Trustees and shareholders
of the Trust and signed by an authorized officer of the Trust, acting as such,
and neither such authorization by such Trustees and shareholders nor such
execution and delivery by such officer shall be deemed to have been made by any
of them individually or to impose any liability on any of them personally, but
shall bind only the assets and property of the Trust as provided in its Master
Trust Agreement.
IN WITNESS WHEREOF, the Trust has executed this Plan of Distribution on the
day and year set forth below in New York, New York.
Date: October __. 1994
VAN ECK FUNDS
...............................
Vice President
ATTEST:
..........................
Secretary
<PAGE>
VAN ECK FUNDS
EXHIBIT A
<TABLE>
<CAPTION>
Name of Series Maximum 12b-1 Fees/Annual Limitation
(Annually as a % of average daily net assets)
<S> <C>
International Investors Gold Fund-C 1.00%
Gold/Resources Fund-C 1.00%
Asia Infrastructure Fund-C 1.00%
Global SmallCap Fund-C 1.00%
Global Hard Assets Fund-C 1.00%
</TABLE>
<PAGE>
VAN ECK FUNDS
122 East 42nd Street
New York, New York 10168
October 20, 1994
Van Eck Securities Corporation
122 East 42nd Street
New York, New York 10168
Ladies/Gentlemen:
Pursuant to Section 3(b) of the Plan of Distribution Pursuant to Rule 12b-
1, dated October 29, 1993 (the "Plan"), please be advised that an additional
series of the Trust, namely, Global Hard Assets Fund (the "Fund"), which will
issue Class A Shares have adopted the Plan for the Fund. A certification by the
Secretary of the Trust of the resolution adopted by the Board of Trustees and an
amended Exhibit A reflecting the addition of the Fund to the Plan are attached.
VAN ECK FUNDS
ATTEST: /s/ Thaddeus Leszczynski BY: /s/ John C. van Eck
President
<PAGE>
VAN ECK FUNDS
EXHIBIT A
Name of Series Maximum 12b-1 Fees/Annual Limitation
(Annually as a % of average daily net assets)
Global Balanced Fund-A 0.50%
Asia Infrastructure Fund-A 0.50%
Global SmallCap Fund-A 0.50%
Global Hard Assets Fund-A 0.50%
<PAGE>
RESOLUTION OF VAN ECK FUNDS
Separately by the "non-interested" Trustees and by the full Board:
VOTED: That the Plan of Distribution with respect to the Class A shares
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as
amended, for the Global Hard Assets Fund in the form presented to the
meeting, is hereby adopted by the Board of Trustees for the period
ending May 1, 1995, with the "non-interested" Trustees also voting
separately, after consideration of all factors deemed relevant,
including, but not limited to, the purposes for which the Fund was
organized, the degree to which the Plan is expected to address the
circumstances that led to the organization of the Fund, the level of
payments provided for under the Plan, and the benefits afforded by the
Plan to the Fund and its shareholders.
CERTIFICATE
The undersigned certifies that he is the Secretary of VAN ECK FUNDS, a
business trust organized and existing under the laws of the Commonwealth of
Massachusetts; that the foregoing is a true and correct copy of a resolution
duly adopted at a meeting of the Board of Trustees of said business trust held
on the 18th day of October, 1994, at which meeting a quorum was at all time
present and acting; that the passage of said resolution was in all respects
legal; and that said resolution is in full force and effect.
Dated this 20th day of October, 1994.
/s/ Thaddeus Leszczynski
Thaddeus Leszczynski, Secretary
(Seal of Trust)
<PAGE>
FORM OF
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
(Class B Shares)
WHEREAS, VAN ECK FUNDS, an unincorporated business trust organized under
the laws of the Commonwealth of Massachusetts (hereinafter called the "Trust"),
is engaged in business as an open-end management investment company and is
registered as such under the Investment Company Act of 1940, as amended (the
"Act");
WHEREAS, the Trust is authorized to issue shares of beneficial interest, in
separate series, with each such series representing the interests in a separate
portfolio of securities and other assets;
WHEREAS, shares of beneficial interest of certain series of the Trust may
be divided into two or more classes (any series, currently existing or hereafter
established by the Trust offering two or more classes of its shares being
referred hereafter, individually or collectively as the context may require, as
"Series");
WHEREAS, the class of shares of a Series offered to the public at the
public offering price per share and subject to a contingent deferred sales
charge ("CDSC") on the terms and conditions set forth in the Trust's then-
current prospectus shall be designated as Class B shares (the Class B Shares
hereinafter "Shares");
WHEREAS, Van Eck Securities Corporation (the "Underwriter") serves as
principal underwriter of Shares of each Series pursuant to a written agreement;
WHEREAS, the Trust hereby intends to act as a distributor of Shares in
accordance with Rule 12b-1 under the Act, as it may from time to time be amended
("Rule 12b-1"), and desires to adopt a Plan of Distribution pursuant to such
Rule on the terms and conditions as hereinafter set forth, in respect of Shares
(the "Plan");
WHEREAS, initially, the Asia Dynasty Fund ("Initial Series") shall issue
Shares;
WHEREAS, the Trustees as a whole, and the Trustees who are not "interested
persons" of the Trust (as defined in the Act) and who have no direct or indirect
financial interest in the operation of the Plan and any agreements relating to
it (the "Qualified Trustees"), having determined, in the exercise of their
reasonable business judgement and in light of their fiduciary duties under state
law and under Sections 36(a) and (b) of the Act, that there is a reasonable
likelihood that the Plan will benefit the Initial Series and the holders of the
Shares of such Series, have approved the Plan by vote cast in person at a
meeting called for the purpose of voting on the Plan and agreements related
thereto; and
WHEREAS, Van Eck Associates Corporation, as the sole shareholder of the
Shares of the Initial Series, has approved the Plan.
NOW, THEREFORE, the Trust hereby adopts the Plan in accordance with Rule
12b-1:
Section 1. Distribution Activities
-----------------------
Subject to the supervision of the Trustees, the Trust or the Underwriter
on behalf of the Trust for the compensation set forth herein may, directly or
indirectly, engage in any activities primarily intended to result in the sale of
Shares, which activities may include, but are not limited to, one or more of the
following: (1) advancing commissions to securities dealers in respect of sales
of Shares ("Advanced
<PAGE>
Commissions"); (2) making payments to securities dealers and others engaged in
the sale of Shares, including making payments of fees to the broker of record
for servicing shareholder accounts ("Maintenance Fees"); (3) paying compensation
to and expenses of personnel (including personnel of the Underwriter and
organizations with which the Trust or the Underwriter has entered into
agreements pursuant to this Plan) who engage in or support distribution of
Shares or who render shareholder support services, including but not limited, to
office space and equipment, telephone facilities and expenses, answering routine
inquiries regarding the Trust, processing shareholder transactions and providing
such other shareholder services, other than those provided by the transfer agent
and other agents of the Trust, as the Trust may reasonably request; (4)
formulating and implementing marketing and promotional activities, including but
not limited to direct mail promotions and television, radio, newspaper, magazine
and other mass media advertising; (5) preparing, printing and distributing sales
literature; (6) preparing, printing and distributing prospectuses of the Trust
and reports for recipients other than existing shareholders of the Trust; (7)
obtaining such information, analyses and reports with respect to marketing and
promotional activities as the Trust may, from time to time, deem advisable and;
(8) paying, or reimbursing the Underwriter for, interest on unrecouped Carry
Forward Commissions (as hereafter defined) at a rate paid by the Underwriter,
or, if such amounts are funded by the Underwriter or an affiliate, at the Broker
Call Loan Rate as reported in the Wall Street Journal, as such rates may vary
from day to day. The Underwriter on behalf of the Trust is authorized to engage
in the activities listed above, and in any other activities primarily intended
to result in the sale of Shares, either directly or through other persons with
which the Trust or the Underwriter has entered into agreements pursuant to the
Plan (all such activities hereafter "Distribution Activities"). The Underwriter
is not obligated to perform all of the Distribution Activities enumerated above
or maintain any level of service or expenditures, but shall in its sole
discretion, determine which Distribution Activities to engage in and the
resources to be committed to such activities.
Section 2. Fees, Maximum Expenditures
--------------------------
(a) Payment for Distribution Activities - The Trust is authorized to pay
-----------------------------------
the Underwriter for the Distribution Activities performed under the Plan a fee
at the annual rate set forth in Exhibit A ("Annual Fee"). Such Series shall
calculate daily amounts payable by it in respect of Shares hereunder and shall
pay such amounts monthly or at such other intervals as the Trustees may
determine. In the event the Plan is terminated, the Underwriter shall be
entitled to recoup amounts expended on Distribution Activities on behalf of the
Series in excess of the Annual Fees, CDSC and any other compensation received in
connection with the distribution of the Shares ("Unrecouped Amounts"). The
Payment of Unrecouped Amounts in the case of a Series shall not exceed, on an
annual basis, the Annual Fee ("Annual Limitation"). Unrecouped Amounts payable
under the Plan that are not paid because they exceed the Annual Fee ("Carry
Forward Amounts") shall be carried forward by a Series and shall be paid within
the Annual Limitation in accordance with this Plan. Carry Forward Amounts
attributable to commissions advanced by, or on behalf of, the Underwriter in
respect of Shares pursuant to Section 1(1) hereof are "Carry Forward
Commissions."
(b) Application of Proceeds - The excess of amounts received by the
-----------------------
Underwriter under Section 2(a) hereof over amounts paid by it as Maintenance
Fees to third parties which are not "affiliated persons" (as defined in the Act)
of the Trust and the proceeds received by the Underwriter from CDSC payments
shall be applied first toward interest on unreimbursed Carry Forward
Commissions, then to reduce any unreimbursed Carry Forward Commissions and then
to reduce the costs incurred by the Underwriter in performing Distribution
Activities.
(c) Any unreimbursed Carry Forward Amounts under Section 2(a) attributable
to a fiscal year of a Series shall be paid by the Trust in respect of Shares in
a subsequent year within the limitations set forth herein. Expenditures made by
one class under the Plan may not be used to subsidize the sale of shares of
another class of a Series.
<PAGE>
Section 3. Term and Termination
--------------------
(a) Initial Series. The Plan shall become effective on ____________ with
--------------
respect to the Initial Series.
(b) Additional Series. As additional Series other than the Initial Series
-----------------
are established, the Plan shall become effective with respect to each such
Series listed in Exhibit A at the Annual Fee set forth in such Exhibit upon the
initial public offering of such new Series, provided that the Plan has
previously been approved for continuation, together with any related agreements,
by votes of a majority of both (a) the Trustees of the Trust and (b) the
Qualified Trustees, cast in person at a meeting held before the initial public
offering of such new Series and called for the purpose of voting on such
approval.
(c) Continuation of the Plan. The Plan and any related agreements shall
------------------------
continue in effect with respect to a Series for so long as such continuance is
specifically approved at least annually by votes of a majority of both (a) the
Trustees of the Trust and (b) the Qualified Trustees, cast in person at a
meeting called for the purpose of voting on this Plan and such related
agreements.
(d) Termination of the Plan. The Plan may be terminated at any time with
-----------------------
respect to any Series by vote of a majority of the Qualified Trustees, or by
vote of a majority of the outstanding Shares. The Underwriter shall not be
entitled to reimbursement in respect of costs incurred in performing
Distribution Activities which occur after termination of the Plan. However, the
Underwriter shall be entitled to reimbursement of all Carry Forward Amounts and
other costs properly incurred in respect of Shares prior to termination, and the
Trust shall continue to make any required payments to the Underwriter pursuant
to Section 2 subject to the Annual Limitation until such time as all such
amounts have been reimbursed. The Underwriter shall also be entitled to receive
all CDSC's paid or payable with respect to Shares purchased before the
termination of the Plan that are redeemed or repurchased by the Trust subsequent
to termination of the Plan. The Plan may remain in effect with respect to a
Series even if it has been terminated in accordance with this Section 3(d) with
respect to one or more other Series.
Section 4. Amendments
----------
The Plan may not be amended to increase materially the amount of
distribution expenditures provided for in Section 2 hereof unless such amendment
is approved by a vote of the majority of the outstanding voting securities of
each of the affected classes of a Series and no material amendment to the Plan
shall be made unless approved in the manner provided for annual renewal in
Section 3(c) hereof.
Section 5. Independent Trustees
--------------------
While the Plan is in effect, the selection and nomination of Trustees who
are not interested persons (as defined in the Act) of the Trust shall be
committed to the discretion of the Trustees who are not interested persons.
Section 6. Quarterly Reports
-----------------
The Treasurer of the Trust shall provide to the Trustees and the Trustees
shall review, at least quarterly, a written report of the amounts expended for
Distribution Activities and the purpose for which such expenditures were made.
The Treasurer shall review, at least annually the revenues received and expenses
incurred by the Underwriter pursuant to the Plan.
<PAGE>
Section 7. Recordkeeping
-------------
The Trust shall preserve copies of the Plan and any related agreements and
all reports made pursuant to Section 6 hereof, for a period of not less than six
years from the date of the Plan, or the agreements and such report, as the case
may be, the first two years in an easily accessible place.
Section 8. Limitation of Liability
-----------------------
The term "Van Eck Funds" means and refers to the Trustees from time to time
serving under the Master Trust Agreement dated February 6, 1992, as the same may
subsequently thereto have been, or subsequently hereto be, amended. It is
expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the Trustees, shareholders, nominees, officers, agents or
employees of the Trust, personally, but bind only the assets and property of the
Trust, as provided in the Master Trust Agreement of the Trust. The execution
and delivery of the Plan have been authorized by the Trustees and shareholders
of the Trust and signed by an authorized officer of the Trust, acting as such,
and neither such authorization by such Trustees and shareholders nor such
execution and delivery by such officer shall be deemed to have been made by any
of them individually or to impose any liability on any of them personally, but
shall bind only the assets and property of the Trust as provided in its Master
Trust Agreement.
IN WITNESS WHEREOF, the Trust has executed this Plan of Distribution on the
day and year set forth below in New York, New York.
Date:
VAN ECK FUNDS
.............
Vice President
ATTEST:
................................
Secretary
<PAGE>
VAN ECK FUNDS
EXHIBIT A
Name of Series Maximum 12b-1 Fees/Annual Limitation
(Annually as a % of average daily net assets)
Asia Infrastructure Fund-B 1.00%
Global Hard Assets Fund-B 1.00%
Gold Opportunity Fund-B 1.00%
<PAGE>
POWER OF ATTORNEY
-----------------
We, the undersigned officers and trustees of Van Eck Funds (the "Trust"),
do hereby severally constitute and appoint John C. van Eck and Michael G.
Doorley, and each of them acting singly, as our true and lawful attorneys, with
full powers to them and each of them to sign for us, in our names in the
capacities indicated below, any and all amendments to the Registration Statement
of the Trust on Form N-1A filed with the Securities and Exchange Commission to
enable the Trust to comply with the provisions of the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended, and all
requirements and regulations of the Securities and Exchange Commission, hereby
ratifying and confirming our signatures as they may be signed by our said
attorneys to any and all amendments to the Registration Statement.
IN WITNESS WHEREOF, we have hereunto set our hands on the date indicated
below.
Signature Title Date
- --------- ----- ----
/s/ John C. van Eck President, Trustee and December 10, 1986
John C. van Eck Principal Executive
Officer
/s/ Bruce J. Smith Controller and Principal December 10, 1986
Bruce J. Smith Accounting Officer
/s/ Phillip L. Carret Trustee December 10, 1986
Phillip L. Carret
/s/ Richard C. Cowell Trustee December 10, 1986
Richard C. Cowell
/s/ James C. Dudley Trustee December 10, 1986
James C. Dudley
/s/ Harvey E. Mole Trustee December 10, 1986
Harvey E. Mole
/s/ Fred M. van Eck Trustee December 10, 1986
Fred M. van Eck
/s/ Alling Woodruff Trustee December 10, 1986
Alling Woodruff
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<PAGE>
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<NAME> VAN ECK FUNDS
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<INVESTMENTS-AT-VALUE> 117,204,479
<RECEIVABLES> 4,140,154
<ASSETS-OTHER> 338,604
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 121,683,237
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<SENIOR-LONG-TERM-DEBT> 171,289
<OTHER-ITEMS-LIABILITIES> 2,073,058
<TOTAL-LIABILITIES> 2,244,34
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<SHARES-COMMON-STOCK> 10,337,032
<SHARES-COMMON-PRIOR> 9,917,008
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<NET-ASSETS> 119,438,890
<DIVIDEND-INCOME> 1,264,995
<INTEREST-INCOME> 362,959
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<EXPENSES-NET> 815,624
<NET-INVESTMENT-INCOME> 812,330
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<NAME> GOLD RESOURCE FUND
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<EXPENSES-NET> 720,229
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<NET-CHANGE-FROM-OPS> (4,482,101)
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<NAME> VAN ECK FUNDS
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<DIVIDEND-INCOME> 740,402
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<OTHER-INCOME> (17,541)
<EXPENSES-NET> 751,936
<NET-INVESTMENT-INCOME> 77,652
<REALIZED-GAINS-CURRENT> (73,447)
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<NET-CHANGE-FROM-OPS> (11,423,620)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 89,101
<DISTRIBUTIONS-OF-GAINS> 89,130
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 847,233
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<SHARES-REINVESTED> 10,951
<NET-CHANGE-IN-ASSETS> 22,141,509
<ACCUMULATED-NII-PRIOR> 170,654
<ACCUMULATED-GAINS-PRIOR> 4,458,604
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 354,057
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 769,902
<AVERAGE-NET-ASSETS> 71,398,263
<PER-SHARE-NAV-BEGIN> 15.50
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> (2.39)
<PER-SHARE-DIVIDEND> 0.02
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<PER-SHARE-NAV-END> 13.10
<EXPENSE-RATIO> 2.00
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> WORLDWIDE INSURANCE TRUST
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 89,527,444
<INVESTMENTS-AT-VALUE> 89,527,444
<RECEIVABLES> 14,380,672
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 103,908,116
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 7
<NAME> VAN ECK FUNDS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
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</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 8
<NAME> VAN ECK FUNDS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
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</TABLE>
