SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No.___)
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
VAN ECK FUNDS
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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[GRAPHIC OMITTED]
February XX, 1999
Dear Shareholder,
A special meeting of the shareholders of the Van Eck International Investors
Gold Fund has been called to approve changes concerning the structure of the
Fund, which we believe to be in your best interests.
These proposals broaden the investment parameters of the Fund in several ways
(please see following pages for further detail on the proposed changes), which
should provide the Fund with additional investment opportunities.
Attached are the Notice and Proxy Statement/Prospectus for a Special Meeting of
Shareholders of the International Investors Gold Fund to be held on Thursday,
April 15, 1999 for the purpose of considering the proposed Agreement. PLEASE
READ THE PROXY STATEMENT/PROSPECTUS CAREFULLY. IT DISCUSSES THE PROPOSALS AS
WELL AS THE REASONS WHY THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR THE
PROPOSALS.
Please take a moment now to sign and return the proxy card in the enclosed
postage-paid envelope. Your prompt attention in this matter benefits all
shareholders. Thank you.
Sincerely,
John C. van Eck
Chairman of the Board
<PAGE>
VAN ECK FUNDS
INTERNATIONAL INVESTORS GOLD FUND
99 PARK AVENUE, NEW YORK, NEW YORK 10016
(212) 687-5200 o TOLL FREE (800) 221-2220
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
APRIL 15, 1999
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A SPECIAL MEETING OF SHAREHOLDERS OF VAN ECK FUNDS (the "Trust"),
including its series, INTERNATIONAL INVESTORS GOLD FUND (the "Fund"), will be
held at the offices of the Trust, 8th Floor, 99 Park Avenue, New York, New York
on Thursday, April 15, 1999 at 3:00 P.M., New York Time, for the following
purposes:
1. To approve a change in the Fund's sub-classification from
diversified to non-diversified and related changes to its
investment restrictions;
2. To approve an expansion of the commodities permitted to be
purchased;
3. To approve a change the short term borrowing limitation;
4. To approve a change that will eliminate the Fund's
restriction on pledging assets.
5. To approve a change that will permit the Fund to loan its
portfolio securities; and
6. To approve a Distribution Plan for the Fund.
Shareholders of record at the close of business on February 25, 1999
are entitled to notice of, and to vote at the Special Meeting.
By order of the Board of Trustees,
THOMAS H. ELWOOD,
Secretary
February 25, 1999
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WHETHER YOU EXPECT TO ATTEND THE SPECIAL MEETING OR NOT,
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD
AND RETURN IT PROMPTLY.
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<PAGE>
VAN ECK FUNDS
99 PARK AVENUE, NEW YORK, NEW YORK 10016
(212) 687-5200 o TOLL FREE (800) 221-2220
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PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
APRIL 15, 1999
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This Proxy Statement is furnished to shareholders of the International
Investors Gold Fund, a series of the Van Eck Funds (the "Trust"), in connection
with the solicitation by the Trust's Board of Trustees of proxies to be used at
a Special Meeting of Shareholders of the Trust (the "Special Meeting") to be
held at the offices of the Trust, 99 Park Avenue, 8th floor, New York, New York
on Thursday, April 15, 1999 at 3:30 P.M., New York Time, for the purposes set
forth in the accompanying Notice of Special Meeting of Shareholders. The
enclosed proxy can be revoked by notice in writing to the Trust at any time
before it is exercised or by voting in person at the Special Meeting. The cost
of soliciting proxies will be borne by the Fund. In addition to solicitation
by mail, some of the officers of the Trust and/or employees of the Adviser,
without extra remuneration, may conduct additional solicitation by telephone,
telegraph and personal interview. This proxy soliciting material is being mailed
to shareholders on or about March 15, 1999.
Only shareholders of record at the close of business on February 25, 1999 are
entitled to notice of, and to vote at, the Special Meeting and at any
adjournment(s) thereof.
Each proxy will be voted in accordance with the shareholder's instruction with
respect to each of the proposals. If a signed proxy is returned with no
instructions indicated, the proxy will be voted FOR all of the proposals. In the
event there are not sufficient votes to approve the proposal at the time of the
Special Meeting, the Special Meeting may be adjourned to permit further
solicitations of proxies by the Trust, and the persons named in the enclosed
proxy card will vote all shares for which they have voting authority in favor of
such adjournment.
As of February 25, 1999, there were outstanding ______________ shares of
beneficial interest of International Investors Gold Fund - Class A. Each full
share is entitled to one full vote and each fractional share is entitled to a
proportionate share of one vote. As of such date, the following persons were
known to the Trust to own of record or beneficially more than 5% of the
outstanding shares of the Fund:
International Investors Gold Fund - Class A
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A proxy that is properly executed by a client and returned to his or her broker,
which holds Fund shares for the client in its own name, and that is accompanied
by the client's instructions to withhold authority to vote with respect to the
proposals, represents a broker "non-vote" (that is, a proxy from a broker or
nominee indicating that such person has not received instructions from the
beneficial owner or other person entitled to vote shares on the particular
matter with respect to which
<PAGE>
the broker or nominee does not have discretionary power). The shares represented
thereby will be considered not to be present at the Special Meeting for purposes
of determining the existence of a quorum for the transaction of business for
that proposal and will be deemed not cast with respect to such proposal. Also, a
properly executed and returned proxy marked with an abstention will be
considered present at the Meeting for purposes of determining the existence of a
quorum for the transaction of business. However, abstentions and broker
"non-votes" have the effect of a negative vote on matters which require approval
by a requisite percentage of the outstanding shares.
REQUIRED VOTE
Approval of each proposal requires the vote of a majority of the outstanding
shares of the Fund as defined in the Investment Company Act of 1940, as amended
(the "Act"). This means an affirmative vote of the lesser of (1) more than 50%
of the outstanding voting shares or (2) 67% or more of the shares of the Fund
present at the Special Meeting if more than 50% of the outstanding shares of the
Fund are present or represented by proxy.
PROPOSAL NO. 1
APPROVAL TO CHANGE THE FUND'S SUB-CLASSIFICATION FROM
DIVERSIFIED TO NON-DIVERSIFIED AND RELATED CHANGES TO ITS
INVESTMENT RESTRICTIONS.
International Investors Gold Fund is currently classified under the Act as a
diversified management investment company. Diversified management investment
companies have two categories of investment. In the first category, 25% of the
Fund's total assets are free from any investment restriction on percentage of
ownership. In the second category, the remaining 75% of assets, the Fund is
restricted to investing less than 5% of its assets in the securities of any one
company and may not buy more than 10% of the voting shares of any class of
shares of any company. The Fund, when it was originally offered to the public,
had also further limited itself by adopting another fundamental policy which
eliminated its ability to make use of the first category and, therefore,
subjected its Fund's entire portfolios to the 5% limitation in any one issuer
and to not more than 10% of the outstanding voting securities of any issuer.
Management proposes to change the sub-classification of the Fund from
diversified to non-diversified and to eliminate the fundamental policies of the
Fund that currently limit investments in any single issuer.
Management is requesting these changes due to the changes in the structure of
the gold mining industry including: (1) consolidation and concentration in the
gold industry, (15 companies now represent 80% of the capitalization of the gold
mining industry); (2) historically low real gold prices; and (3) the limited
trading volume of gold shares.
The number of senior gold companies (companies representing 80% of the total
capitalization of the gold mining industry) has declined from 30 in 1995 to 15
due to mergers and acquisitions. Several of these 15 companies are deemed
undesirable or considered low-level investments at any given time further
limiting the pool of companies from which to select. Under the current
restrictions, it is difficult to achieve a market weighting in senior gold
producers and in producers which management believes will outperform the market.
It is the Adviser's opinion that only 6 companies currently carry a sufficient
degree of liquidity to allow large trades (>$1 million). Thus, the Adviser
believes that it would be a more prudent investment strategy if the Fund were
permitted to hold positions of 5% to 15% of total assets in certain companies.
The current investment restrictions do not permit the Funds to use this
strategy.
The Fund would still be subject to Sub-Chapter M of the IRS Code which requires
the Fund at the close of each quarter (1) with respect to 50% of its total
assets to have no greater than 5% of its assets in the securities of any one
issuer and to own not more than 10% of the outstanding voting securities of such
issuer; and (2) to have not more than 25% of total assets in the securities of
any one issuer or two or more issuers which the Funds control.
<PAGE>
If the proposed changes are approved, the Fund would be able to invest without
limitation from time to time in the securities of any single issuer. As a result
of investing in fewer issuers, changes in the financial or market conditions of
a particular issuer could have a more substantial impact on the Fund and,
therefore, the price volatility of the Fund can be expected to increase.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THIS PROPOSAL.
PROPOSAL NO. 2
TO APPROVE AN EXPANSION OF THE COMMMODITIES
PERMITTED TO BE PURCHASED
Investment restrictions of the Fund prohibit investment in platinum and
palladium. Management believes that the inclusion of a wider array of metals
will provide greater options and diversification to the Fund.
Set forth below is the relevant investment restriction that will change if this
proposal is approved, additions are underscored.
2. The two may not invest in real estate, commodity contracts or commodities
(except that subject to the 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.)
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THIS PROPOSAL.
PROPOSAL NO. 3
TO APPROVE A CHANGE
Under the Act, open-end funds may borrow up to 33 1/3% of their total assets
(50% of assets, including the amount borrowed) from a bank. The International
Investors Gold Fund is currently limited to a maximum short term borrowing
limitation of 10% of total assets valued at cost. Management has found this
limitation to be a problem in managing the portfolio in a volatile marketplace.
The Fund is unable to be fully invested due to the need to maintain cash balance
for large redemptions. Management would like the flexibility to make such
borrowings up to 50% of total assets. Although large-scale redemptions rarely
occur (none in 1998) the ability to fund redemptions in short-term borrowings
would greatly improve the ability of management to be fully invested when it
chose to do so. In addition, it would provide greater flexibility to dispose of
underlying securities to meet redemptions. During period which the Fund borrows,
borrowing may increase volatility of the Fund and at time when the Fund engages
in borrowing, its portfolio may increase or decrease more than would otherwise
be the case. In addition, it would provide greater flexibility to dispose of
underlying securities to meet redemptions. During period which the Fund borrows,
borrowing may increase volatility of the Fund and at time when the Fund engages
in borrowing, its portfolio may increase or decrease more than would otherwise
be the case.
PROPOSAL NO. 4
TO APPROVE A CHANGE THAT ELIMINATES THE FUND'S
RESTRICTION ON PLEDGING ASSETS
Currently, the Fund is subject to a fundamental investment restriction that
prohibits the Fund from mortgaging, pledging or hypothecating more than 15% of
the Fund's total assets. This restriction, which is not required by the Act, may
impair the ability of the Fund to enter into advantageous borrowing
arrangements. For this reason, management believes that it would be in the best
interests of the Fund and its shareholders to eliminate the restriction.
As noted in Proposal 3 above, from time to time it may be desirable for the Fund
to borrow money for temporary or emergency purposes. Such borrowings are often
made available to by banks on either a secured or unsecured basis. In certain
cases, the terms of such borrowing arrangements, including the interest rates
and commitment fees charged by the lender, may be more advantageous to the Fund
if the Fund agrees to pledge assets to secure the borrowing. As a practical
matter, however, it may not be possible for the Fund to borrow on a secured
basis unless the Fund is able to pledge all of its assets. For this reason,
management believes that it would be in the best interests of the Fund to
eliminate the Fund's restriction on pledging assets.
PROPOSAL NO. 5
TO APPROVE A CHANGE THAT WILL PERMIT THE FUND TO
LOAN ITS PORTFOLIO SECURITIES
The investment restrictions of the Fund prohibits loans of portfolio securities.
Management believes that the opportunity to lend up to 50% of its portfolio
securities is an advantage to the Fund and gives the Fund a low risk opportunity
to enhance portfolio income.
In a securities loan transaction, the Fund would loan securities to a broker or
other financial institution and would receive cash or high quality debt
securities as collateral for the loan equal at all times to not less than the
value of the loaned securities. The value of the loaned securities and the
collateral would be marked to market daily and the borrower would be required to
deliver additional collateral, if necessary, to maintain the required collateral
coverage. During the term of the loan, the borrower would be required to make
payments to the Fund equal to the amount of all dividends paid on the underlying
loaned securities.
In cases where the cash is received as collateral, the cash would be invested in
high quality money market instruments. The yield on these investment (not a
specified amount to be paid back to the borrower) would be retained by the Fund
and its lending agent as income on the transaction. The Fund would bear the risk
of any losses incurred on the investment of such cash collateral.
In addition to the cash collateral investment risk, securities lending
transactions involve the risk of a borrower default in returning a security on
loan. In such an event, the Fund ( or its lending agent) would sell the
collateral and use the proceeds to purchase the loaned securities in the open
market. However, changes in the value of the loaned securities and/or the
collateral could result in a loss to the Fund.
Finally, securities lending transactions involve operational risks associated
with the timing of loan recalls and the settlement of underlying trades
involving loaned securities. Management believes that securities lending
transactions can be structured to minimize their risks and that the income
derived from such transactions will benefit the Fund and its shareholders. For
example, the Fund will only lend to borrowers that the Adviser has determined
present minimal credit risk. In addition, the Fund (or its agent) will limit
investment of cash collateral to high quality instruments. The Fund will also
employ the services of an experienced lending agent to approve the lending
activities. Finally, consistent with current regulatory restrictions, the Fund
will not lend more than 50% of its assets at any time.
Set forth below is the relevant investment restriction that will change if this
proposal is approved. Additions are underscored.
6. The Fund may not 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 PORTFOLIO SECURITIES TO BROKER-DEALERS
AND OTHER FINANCIAL INSTITUTIONS
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THIS PROPOSAL.
PROPOSAL NO. 6
TO APPROVE A DISTRIBUTION PLAN FOR THE FUND
Each of the Van Eck Global Funds (other than the Fund and the U.S. Government
Money Fund) is currently subject to a plan of distribution adopted under Rule
12b-1 of the Act (each a "Plan"). Each Plan permits a fund to make payments to
finance distribution and shareholder servicing activities of the fund. Among
other things, each fund uses its Plan to make payments of up to .25 of 1% per
year i.e., 25 basis points) of the fund's assets to compensate brokers and other
financial intermediaries for providing services to shareholders. These services
include responding to shareholder inquiries about the fund, distributing reports
and other materials about the fund to shareholders, placing orders for purchases
and redemptions, and performing similar services.
Management believes that shareholders of the Fund benefit when the Fund
maintains a stable or increasing asset base. For example, a stable asset base or
net inflow of cash permits the Fund to meet redemption requests without
disrupting the portfolio. A net inflow of cash permits the Fund to dispose of
its assets, when necessary, in an orderly fashion at the most advantageous
prices possible. This is particularly beneficial with respect to thinly traded
securities or volatile markets. In addition, a growing asset base may cause the
Fund's fixed expenses, on a per share basis, to decrease, thereby increasing the
Fund's overall returns to shareholders.
Management believes that providing investors with shareholder services is
necessary if the Fund is to attract and retain investors in the Fund and that
such services are best performed by financial intermediaries that have ongoing
relationships with shareholders. In addition, management believes that
intermediaries require compensation as an incentive to proving these necessary
services and that such compensation (in the amount of 25 basis points) is
customary in the mutual fund industry. Accordingly, management believes that
approval of the Plan, which is necessary under the Act if the Fund is to make
these payments, is in the long-term best interests of shareholders.
In recommending that shareholders approve the Plan, management also considered
the impact that the Plan would have on the total expense ratio of the Fund. In
this regard, it was noted that, if the Plan had been in effect during 1997, the
total operating expenses of the Fund would have increased from 147 basis points
to 172 basis points of average net assets.
It was also noted that, after giving effect to this increase, the Fund's expense
ratio of 172 basis points would have been below the median of all gold funds
for such period, which was 188 basis points.
As required by the Act, the Plan may not become effective without prior
shareholder approval. In addition, the Trustees (including a majority of the
independent Trustees) must reapprove the Plan annually if the Plan is to
continue in effect after the initial year. The Plan limits the maximum amount of
any payments to 25 basis points and provides that the Trustees may not amend the
plan to increase payments without shareholder approval. A copy of the Plan is
attached to this proxy statement as Exhibit A.
<PAGE>
Imposition of this fee would have increased the Total Fund Operating Expenses
from 1.47% of assets to 1.72% in 1997. This would have placed the Fund in the
second quartile of the non-proprietary gold fund universe, and below the median
expense level for all gold funds in 1997 of 1.88%. A copy of the plan is
attached as Exhibit A.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THIS PROPOSAL.
OTHER MATTERS TO COME BEFORE THE MEETING
The Trustees do not intend to present any other business at the Special Meeting,
nor are they aware that any shareholder intends to do so. If, however, any other
matters are properly brought before the Special Meeting, the persons named in
the accompanying form of proxy will vote thereon in accordance with their
judgment.
WHETHER OR NOT YOU PLAN TO ATTEND, IT WOULD BE APPRECIATED IF YOU WOULD FILL IN,
DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE. NO POSTAGE IS NECESSARY IF IT IS MAILED IN THE CONTINENTAL UNITED
STATES.
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PROXY CARD PROXY CARD
VAN ECK FUNDS
INTERNATIONAL INVESTORS GOLD FUND
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 15, 1999
The undersigned shareholder of INTERNATIONAL INVESTORS GOLD FUND (the "Fund"), a
series of VAN ECK FUNDS (the "Trust"), having received Notice of the Special
Meeting of Shareholders of the Trust to be held on Thursday, April 15, 1999 and
the Proxy Statement accompanying such Notice, hereby constitutes and appoints
Jan van Eck and Derek van Eck and each of them, true and lawful attorneys or
attorney for the undersigned, with several powers of substitution, for and in
the name, place and stead of the undersigned, to attend and vote all shares of
the Trust which the undersigned would be entitled to vote at the Meeting to be
held at 99 Park Avenue, 8th Floor, New York, on Thursday, April 15, 1999, at
3:00 P.M., New York Time, and at any and all adjournments thereof, with all
powers the undersigned would possess if personally present.
Dated: _____________________, 1999
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Signature of Shareholder
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Signature of Co-Owner
For joint accounts, all co-owners must
sign. Executors, administrators, trustees,
etc. should so indicate when signing.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSAL.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED BELOW
OR FOR THE PROPOSAL IF NO CHOICE IS INDICATED.
PROPOSALS
1. To approve a change in the Fund sub-classification from diversified to
non-diversified and related changes to their investment restrictions.
FOR _________ AGAINST _________ ABSTAIN _________
2. To approve an expansion of the commodities permitted to be purchased.
FOR _________ AGAINST _________ ABSTAIN _________
3. To approve a change to the short term borrowing limitation.
FOR _________ AGAINST _________ ABSTAIN _________
4. To approve a change that will eliminate the Fund's restriction on
pledging assets.
FOR _________ AGAINST _________ ABSTAIN _________
5. To approve a change that will permit the Fund to loan its portfolio
securities; and
FOR _________ AGAINST _________ ABSTAIN _________
5. To approve a Distribution Plan for the Fund.
FOR _________ AGAINST _________ ABSTAIN _________
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PROXY CARD
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PLEASE MARK YOUR PROXY, DATE AND SIGN IT AND RETURN IT PROMPTLY IN THE
ACCOMPANYING ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
EXHIBIT A
PLAN OF DISTRIBUTION PURSUANT TO RULE 12b-1
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 (any series, currently
existing or hereafter established by the Trust offering two or more classes of
its shares adopting this plan, as set forth in Exhibit A hereto as it may be
amended from time to time, being referred to hereafter, individually or
collectively as the context may require, as "Series");
WHEREAS, shares of beneficial interest of Series of the Trust may be
divided into two or more classes;
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 "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 the
Shares (the "Plan");
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 judgment 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 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, the shareholder of the Shares of the Series, has approved the
Plan.
NOW, THEREFORE, International Investors Gold Fund 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) 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"); (2) 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
<PAGE>
provided by the transfer agent and other agents of the Trust, 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.
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) SERIES. The Plan shall become effective on May 1, 1999 with respect
to the Series listed in Schedule A hereto.
(b) ADDITIONAL SERIES. As additional 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 of the Trust,
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
<PAGE>
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 any 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 of
the Trust, or by vote of a majority of the outstanding Shares of that Series.
The Underwriter shall not be entitled to payments or 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 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 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 continuation 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; ANNUAL 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 Amended and Restated Master Trust Agreement dated
February 6, 1992, as the same may subsequently thereto have been, or
subsequently hereto may 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 of the Trust and signed by an
authorized officer of the Trust, acting as such, and neither such authorization
by such Trustees 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,
<PAGE>
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 Trust has executed this Plan of Distribution on
the day and year set forth below in New York, New York.
Date: May 1, 1999
VAN ECK FUNDS
-----------------------------
President
ATTEST:
- ----------------------------
Secretary
<PAGE>
VAN ECK FUNDS
PLAN OF DISTRIBUTION PURSUANT TO RULE
12b-1 (CLASS A)
EXHIBIT A
Name of Series Maximum 12b-1 Fees/Annual Limitation
(Annually as a % of average daily net assets)
International Investors Gold Fund-Class A .25%
