[IVY MANAGEMENT, INC. LETTERHEAD]
IVY SHORT-TERM BOND FUND
Via Mizner Financial Plaza
700 South Federal Highway
Boca Raton, Florida 33432
Dear Shareholder:
You are cordially invited to attend a Special Meeting of
Shareholders of Ivy Short-Term Bond Fund ("ISTBF"), a series of
the Ivy Fund, to be held on November 15, 1996 at 10:00 a.m.
Eastern Time at the offices of ISTBF, for the purpose of
considering and voting upon a proposed Agreement and Plan of
Reorganization for ISTBF (the "Plan").
If the Plan is approved by the shareholders of ISTBF, all or
substantially all of the assets and all identified and stated
liabilities of ISTBF will be exchanged for shares of beneficial
interest of The Tocqueville Government Fund ("TGF") having an
aggregate net asset value equal to the value of ISTBF's aggregate
net assets transferred to TGF. In the reorganization, you will
receive Class A shares of TGF having a net asset value equal to
the value of your Class A or Class B shares.
TGF is a separate series of The Tocqueville Trust, an open-
end diversified management investment company located in New
York, New York. Tocqueville Asset Management L.P. ("TAM") serves
as the investment adviser to TGF, the other four series of The
Tocqueville Trust, as well as to private clients and select
institutions. As of June 30, 1996, TAM had total assets under
management of approximately $435 million.
The investment objectives of ISTBF and TGF are similar in
that both seek to provide shareholders with a high level of
current income consistent with the maintenance of principal.
Shareholders should carefully consider, however, both the
similarities and the differences between the investment
objectives, policies and restrictions of the two Funds. These
similarities and differences, as well as other important
information concerning the proposed combination of the Funds, are
described in detail in the Proxy Statement/Prospectus, which you
are encouraged to review carefully.
THE BOARD OF TRUSTEES OF IVY FUND UNANIMOUSLY RECOMMENDS
APPROVAL OF THE PLAN. Approval of the Plan will require the
affirmative vote of the holders of a majority of the outstanding
shares of ISTBF. We urge you to take the time to consider this
important matter and vote now. Whether or not you expect to
attend the meeting, please sign and promptly return the enclosed
proxy in the enclosed postage-prepaid envelope. Your prompt
response will insure that your shares are counted at the meeting.
Sincerely,
Michael G. Landry
President of Ivy Fund
IVY SHORT-TERM BOND FUND
A Separately Managed Series of
IVY FUND
Via Mizner Financial Plaza
700 South Federal Highway
Boca Raton, Florida 33432
___________________________
Notice of Special Meeting of Shareholders
to be held November 15, 1996
___________________________
October 22, 1996
To the Shareholders of Ivy Short-Term Bond Fund:
NOTICE IS HEREBY GIVEN that a special meeting of shareholders of
Ivy Short-Term Bond Fund (the "ISTBF"), a separately managed
series of Ivy Fund, will be held at 10:00 a.m. Eastern Time, on
November 15, 1996 at the offices of ISTBF, Via Mizner Financial
Plaza, 700 South Federal Highway, Boca Raton, Florida 33432. The
purpose of the special meeting is as follows:
1. To consider and vote on a proposed Agreement and Plan
of Reorganization (the "Plan") providing for (a) the
acquisition of substantially all of the assets and the
assumption of all identified and stated liabilities of
ISTBF as of the closing of the reorganization by The
Tocqueville Government Fund ("TGF"), in exchange for
shares of beneficial interest of TGF having an
aggregate net asset value equal to the aggregate value
of the assets acquired (less liabilities assumed) of
ISTBF and (b) the complete liquidation of ISTBF and the
pro rata distribution of TGF shares to shareholders of
ISTBF. Under the Plan, ISTBF's shareholders will
receive Class A shares of TGF having a net asset value
equal as of the effective time of the Plan to the net
asset value of their Class A and Class B shares of
ISTBF.
2. To transact such other business as may properly come
before the meeting or any adjournments or postponements
thereof.
Even if ISTBF's shareholders vote to approve the Plan,
consummation of the Plan is subject to certain other conditions.
See "Information About the Reorganization -- Plan of
Reorganization" in the attached Proxy Statement/Prospectus.
THE BOARD OF TRUSTEES OF IVY FUND UNANIMOUSLY RECOMMENDS
APPROVAL OF THE PLAN.
The close of business on September 27, 1996 has been fixed
as the record date for the determination of shareholders entitled
to notice of and to vote at the meeting and any adjournments or
postponements thereof.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN
AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENCLOSED POSTAGE-
PREPAID ENVELOPE. IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF
FURTHER SOLICITATION, WE RESPECTFULLY ASK FOR YOUR COOPERATION IN
MAILING IN YOUR PROXY PROMPTLY. If you are present at the
meeting, you may then revoke your proxy and vote in person, as
explained in the Proxy Statement/Prospectus in the section
"Voting Information."
By Order of the Board of Trustees,
C. WILLIAM FERRIS, Secretary
PROXY STATEMENT/PROSPECTUS
October 22, 1996
Relating to the acquisition of the assets of
IVY SHORT-TERM BOND FUND
a separate portfolio of
IVY FUND
Via Mizner Financial Plaza
700 South Federal Highway
Boca Raton, Florida 33432
(800) 777-6472
by and in exchange for shares of
THE TOCQUEVILLE GOVERNMENT FUND
a separate portfolio of
THE TOCQUEVILLE TRUST
1675 Broadway
New York, New York 10019
(800) 697-3863
This Proxy Statement/Prospectus is being furnished to the
shareholders of Ivy Short-Term Bond Fund ("ISTBF"), a separate
portfolio of Ivy Fund, in connection with a special meeting of
shareholders of ISTBF to be held at the offices of ISTBF on
November 15, 1996 for the purpose of voting on a proposed
reorganization in which all or substantially all of the assets of
ISTBF would be acquired by The Tocqueville Government Fund
("TGF"), a separate portfolio of The Tocqueville Trust, in
exchange solely for TGF shares and the assumption by TGF of all
identified and stated liabilities of ISTBF as of the closing date
(the "Reorganization"). Following the Reorganization, ISTBF
would be completely liquidated. ISTBF and TGF are sometimes
referred to herein collectively as the "Funds" or individually as
a "Fund."
This Proxy Statement/Prospectus is first being mailed to
shareholders of ISTBF on or about October 22, 1996. Information
concerning the voting rights of each Fund shareholder is set
forth under the caption "Voting Information," below.
Representatives of Ivy Management, Inc. (the investment adviser
and manager of ISTBF) or of its affiliates may, without cost to
ISTBF, solicit proxies for management of ISTBF by means of mail,
telephone or personal calls. In addition, the services of a
third-party proxy solicitation firm may be used, with any such
firm's expenses to be borne by TGF, or in certain circumstances
by Ivy Management Inc.
As a result of the transactions contemplated by the
Reorganization, each shareholder of ISTBF will receive that
number of full and fractional TGF--Class A shares having an
aggregate net asset value equal to the aggregate net asset value
of the shareholder's Class A and Class B shares of ISTBF held as
of immediately after the close of business on the business day
next preceding the closing date of the Reorganization (the
"Closing"). No sales charge will be imposed in connection with
the issuance of TGF--Class A shares to the Class A and Class B
shareholders of ISTBF pursuant to the Reorganization. The
Reorganization is being structured as a tax-free reorganization
so that no income, gain or loss will be recognized by ISTBF or
its shareholders as a result thereof (except that ISTBF
contemplates that it will make a distribution immediately prior
to the Reorganization of all of its current year net tax-exempt
income, ordinary taxable income and net realized capital gains,
if any, not previously distributed, which distribution will be
taxable to ISTBF shareholders subject to taxation).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
This Proxy Statement/Prospectus sets forth concisely certain
information about TGF that a prospective investor should know
before voting on the proposed Reorganization, and should be
retained for future reference. For a detailed discussion of the
investment objectives and restrictions, operations, policies,
investment risks and other information relating to the Funds, see
(i) the prospectus for ISTBF dated April 30, 1996 (available upon
request and without charge by calling ISTBF's transfer agent at
(800) 777-6472), and (ii) the prospectus for TGF dated February
28, 1996, as supplemented on June 20, 1996, and on July 31, 1996
which is included herewith and is incorporated by reference
herein. A Statement of Additional Information dated October 10,
1996 containing additional information about the Reorganization
and the parties thereto (the "SAI") has been filed with the
Securities and Exchange Commission (the "SEC") and is
incorporated by reference into this Proxy Statement/Prospectus.
A copy of the SAI is available upon request and without charge by
writing to TGF at the address provided above or by calling The
Tocqueville Trust at (800) 697-3863. Shareholders may call the
same number for any other information regarding the Funds.
TGF is an open-end, diversified management investment
company whose investment objective is to provide high current
income consistent with the maintenance of principal and liquidity
through investments in obligations issued or guaranteed by the
U.S. Treasury, agencies of the U.S. Government or
instrumentalities that have been established or sponsored by the
U.S. Government. In pursuit of its objective, TGF intends to
invest at least 65% of its assets in short and intermediate-term
securities backed by the full faith and credit of the U.S.
Government. Also, at least 50% of TGF's assets will be invested
in U.S. Treasury bills, notes and bonds. The dollar-weighted
average maturity of TGF is expected to range from 0 to 12 years.
The investment objectives, policies and restrictions of TGF
(and, consequently, the risks of investing in it) are similar to
those of ISTBF, but differ in certain respects. A comparative
discussion of these differences is contained below under the
caption "Investment Objectives, Policies and Restrictions."
TABLE OF CONTENTS
PAGE
SYNOPSIS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RISK CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . 6
COMPARISON OF INVESTMENT OBJECTIVES, POLICIES AND
RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . 8
INFORMATION ABOUT THE REORGANIZATION . . . . . . . . . . . . 13
PERFORMANCE INFORMATION AND CAPITALIZATION . . . . . . . . . 16
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS . . . . . . . . 17
INFORMATION ABOUT THE FUNDS . . . . . . . . . . . . . . . . . 17
VOTING INFORMATION . . . . . . . . . . . . . . . . . . . . . 18
SYNOPSIS
This summary, which contains certain information pertaining
to the Reorganization, is qualified in its entirety by reference
to the additional information contained elsewhere in this Proxy
Statement/Prospectus, the prospectus for TGF, which is attached
hereto as Exhibit B and is incorporated by reference herein, the
prospectus for ISTBF, which is incorporated by reference herein,
and the Agreement and Plan of Reorganization, which is attached
to this Proxy Statement/Prospectus as Exhibit A.
THE PROPOSED REORGANIZATION
The Board of Trustees of Ivy Fund, including the Trustees
who are not "interested persons" of Ivy Fund (the "Independent
Trustees"), as that term is defined in the Investment Company Act
of 1940, as amended (the "1940 Act"), on behalf of ISTBF, has
unanimously approved an Agreement and Plan of Reorganization (the
"Plan") providing for the acquisition of all or substantially all
of the assets of ISTBF by TGF, in exchange solely for TGF--Class
A shares and the assumption by TGF of all identified and stated
liabilities of ISTBF as of the closing. In connection with the
Reorganization, TGF--Class A shares will be distributed to Class
A and Class B shareholders of ISTBF, and ISTBF would be
completely liquidated. Each shareholder of ISTBF would cease to
be a shareholder of ISTBF and would receive that number of full
and fractional TGF--Class A shares having a net asset value equal
to the net asset value of the Class A and Class B shares of ISTBF
owned by the shareholder. The aggregate net asset value of TGF--
Class A shares to be credited to shareholders of ISTBF shall be
equal to the aggregate net asset value of the Class A and Class B
shares of ISTBF as of immediately after the close of business on
the business day next preceding the Closing. No sales charge
would be imposed in connection with the issuance of TGF--Class A
shares to shareholders of ISTBF pursuant to the Reorganization.
For the reasons set forth below under "Information about the
Reorganization," the Trustees of Ivy Fund, including the
Independent Trustees, have unanimously concluded that the
Reorganization is in the best interests of ISTBF and its share-
holders and that the interests of existing shareholders of ISTBF
would not be diluted as a result of the transactions contemplated
by the Reorganization, and therefore has submitted the
Reorganization for approval by shareholders of ISTBF at a Special
Meeting of Shareholders to be held on November 15, 1996 (the
"Meeting")(see "Voting Information," below). THE BOARD OF
TRUSTEES OF IVY FUND, ON BEHALF OF ISTBF, UNANIMOUSLY RECOMMENDS
APPROVAL OF THE PLAN EFFECTING THE REORGANIZATION.
Approval of the Reorganization with respect to ISTBF
requires the affirmative vote of a majority of all of the votes
entitled to be cast at the special meeting of shareholders of
ISTBF. ISTBF will not bear any of the costs and expenses of the
Reorganization.
TAX CONSEQUENCES
As a condition to closing, the Funds will obtain an opinion
from the law firm Dechert Price & Rhoads, based on certain facts,
assumptions and representations it shall have received from the
Funds, to the effect that the Reorganization will qualify as a
tax-free reorganization for Federal income tax purposes. (See
"Federal Income Tax Consequences" under "Information About the
Reorganization.")
DIVIDEND POLICY
In general, both of the Funds automatically reinvest income,
dividends and capital gains distributions in additional shares
unless a shareholder elects to receive dividends and
distributions in cash or by some other payment method. Following
the Reorganization, dividends and distributions paid with respect
to TGF--Class A shares will continue to be reinvested according
to TGF's dividend policy, as follows: TGF declares and pays
dividends monthly, and distributes net capital gains (if any)
annually. Dividends and distributions of TGF--Class A shares may
be reinvested in Class A shares at net asset value without an
additional sales charge, or received in cash.
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
The investment objective of ISTBF is to provide a high level
of current income consistent with a high degree of principal
stability through investing primarily in short-term U.S.
Government securities (i.e., those maturing in 3 years or less),
including bonds, notes and bills issued by the U.S. Treasury, and
securities issued by agencies or instrumentalities of the U.S.
Government. The principal investment objective of TGF is to
provide high current income consistent with the maintenance of
principal and liquidity through investments in obligations issued
or guaranteed by the U.S. Treasury, agencies of the U.S.
Government or instrumentalities that have been established or
sponsored by the U.S. Government. There can be no assurance that
either fund will achieve its investment objective.
The Funds' investment policies and restrictions are compared
under the caption "Comparison of Investment Objectives, Policies
and Restrictions," below. Although the investment objectives,
policies and restrictions of the Funds (and any attendant
investment risks) are similar, there are significant differences
between ISTBF and TGF about which shareholders of ISTBF should be
aware before voting on the proposed Reorganization.
FUND ORGANIZATION AND MANAGEMENT
Both of the Funds are open-end, diversified management
investment companies registered under the 1940 Act. ISTBF
results from a reorganization of Mackenzie Short-Term U.S.
Government Securities Fund, which was approved by shareholders on
December 30, 1994.
Ivy Management, Inc. ("IMI"), Via Mizner Financial Plaza,
700 South Federal Highway, Suite 300, Boca Raton, Florida 33432,
a wholly owned subsidiary of Mackenzie Investment Management Inc.
("MIMI"), provides business management and investment advisory
services to ISTBF. Ivy Mackenzie Distributors, Inc. ("IMDI"),
Via Mizner Financial Plaza, 700 South Federal Highway, Suite 300,
Boca Raton, Florida 33432, also a wholly owned subsidiary of
MIMI, distributes ISTBF's shares. Ivy Mackenzie Services Corp.
("IMSC") serves as transfer and dividend-paying agent and
provides various shareholder and shareholder-related services for
ISTBF. MIMI provides certain administrative, fund accounting and
pricing services for ISTBF. MIMI is a subsidiary of Mackenzie
Financial Corporation ("MFC"), Toronto, Ontario, Canada.
Tocqueville Asset Management L.P. ("TAM"), 1675 Broadway,
New York, New York 10019, acts as investment adviser to TGF under
a separate investment advisory agreement (the "Agreement"). The
Agreement provides that TAM identify and analyze possible
investments for TGF, determine the amount and timing of such
investments, and the form of investment. TAM has the
responsibility of monitoring and reviewing TGF's portfolio, and,
on a regular basis, to recommend the ultimate disposition of such
investments. It is TAM's responsibility to cause the purchase
and sale of securities in TGF's portfolio, subject at all times
to the policies set forth by The Tocqueville Trust's Board of
Trustees. In addition, TAM also provides certain administrative
and managerial services to TGF. TAM is an affiliate of
Tocqueville Securities L.P., TGF's distributor. Transfer and
dividend-paying agent functions for TGF have been delegated to
and are being performed by Boston Financial Data Services, Inc.,
an affiliate of State Street Bank and Trust Company.
FEES AND EXPENSES
ISTBF: ISTBF pays IMI a monthly fee for business management
and investment advisory services at the annual rate of 0.60% of
ISTBF's average daily net assets. During the fiscal year ended
December 31, 1995, IMI was paid fees of $42,049 from ISTBF.
During the fiscal years ended June 30, 1993 and June 30, 1994 and
the six-month period ended December 31, 1994, MIMI, as investment
adviser to ISTBF when it was a series of The Mackenzie Funds
Inc., received fees of $191,454, $171,829 and $32,313,
respectively, from ISTBF.
ISTBF has adopted pursuant to Rule 12b-1 under the 1940 Act
separate distribution plans pertaining to its Class A and Class B
shares (each, a "Plan"). Under ISTBF's Class A Plan, ISTBF pays
IMDI a service fee up to an amount equal on an annual basis to
0.25% of the average daily net asset value of ISTBF's outstanding
Class A shares. Under ISTBF's Class B Plan, ISTBF pays IMDI a
service/distribution fee at an annual rate of up to 0.75% of the
average daily net assets attributable to ISTBF's Class B shares,
of which up to 0.25% constitutes a service fee. During the
fiscal year ended December 31, 1995, IMDI was paid $17,428 and
$299, respectively, pursuant to ISTBF's Class A and Class B
Plans.
For transfer agency and shareholder services, ISTBF pays
IMSC an annual fee of $20.75 per open Class A and Class B
account, payable in equal monthly installments. ISTBF also pays
IMSC $4.36 for each account that is closed, and reimburses IMSC
monthly for out-of-pocket expenses. For the fiscal year ended
December 31, 1995, the fees and expenses paid to IMSC totaled
$13,645.
The administrative service fees payable to MIMI during the
fiscal year ended December 31, 1995 totaled $7,008. For fund
accounting and pricing services provided to ISTBF by MIMI during
the fiscal year ended December 31, 1995, ISTBF paid MIMI $22,290.
TGF: TAM receives a fee from TGF, payable monthly, for the
performance of its services at an annual rate of 0.50% of the
first $500 million of TGF's average daily net assets, 0.40% of
the average daily net assets in excess of $500 million but not
exceeding $1 billion, and 0.30% of the average daily net assets
over $1 billion. For the period August 14, 1995 to October 31,
1995, TGF paid advisory fees to TAM of $0, because TAM waived its
advisory fee. If TAM had not waived its fee, TGF would have paid
advisory fees to TAM of $3,453.
TGF has adopted a Rule 12b-1 distribution plan pertaining to
its Class A shares under which TGF may incur distribution
expenses related to the sale of Class A shares of up to 0.25% per
annum of TGF's average daily net assets. TGF did not pay
distribution expenses for Class A shares for the period August
14, 1995 to October 31, 1995.
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET
ASSETS):[1]
A table comparing the annual fund operating expenses for the
Class A and Class B shares of ISTBF with the annual fund
operating expenses for TGF--Class A and the Combined Fund--Class
A, had the Reorganization been consummated, is provided below:
Ivy Ivy Combined
Tocqueville Short-Term Short-Term (pro forma)[5]
Class A Class A Class B Class A
Management
Fees . . .50% .00%[2] .00%[2] .25%[6]
12b-1 Service
Fees . . .25% .25% .75% .25%
Other
Expenses .50%[3] .68% .68% .50%[6]
_________________________________________________________________
Total Fund
Operating
Expenses 1.25%[3] .93%[4] 1.43%[4] 1.00%[6]
[1] The percentages in the table expressing annual fund
operating expenses are based on (i) estimated expenses for
the year ended October 31, 1996, in the case of TGF, and
(ii) amounts incurred during the fiscal year ended December
31, 1995, in the case of ISTBF.
[2] After expense reimbursements. Without expense
reimbursements, management fees for both classes of ISTBF
would have been .60%.
[3] After fee waivers. Other expenses include legal fees,
accounting fees, transfer agent fees, custodial fees and the
administrative services fee. The administrative services
fee is accrued at an annual rate equal to .15% of average
daily net assets which is currently being waived. If the
adviser had not agreed to waive the administrative services
fee, management fees would have been .50%, other expenses
would have been .65% and total fund operating expenses would
have been 1.40%.
[4] After expense reimbursements. The voluntary portion of
ISTBF's expense reimbursement may be revised or terminated
at any time, at which time ISTBF's expenses would increase.
If the adviser had not agreed to the expense reimbursements,
management fees would have been .60%, other expenses would
have been 2.42% and total fund operating expenses for Class
A and Class B of ISTBF (including 12b-1 fees) would have
been 3.27% and 3.77%, respectively.
[5] Both Class A and Class B shares of ISTBF will become Class A
shares of TGF after the Reorganization.
[6] After fee waivers and/or expense reimbursements. Under the
Agreement, TGF's operating expense ratio will be capped at
1.00% for at least the first three years following the
Reorganization. If the Adviser had not agreed to the fee
waivers and/or expense reimbursements, management fees would
be .50%, other expenses would be 1.47% and total fund
operating expenses would be 1.97%.
TGF--Class A shares are charged a maximum front-end sales
load of 4.00%, while Class A shares of ISTBF are charged a
maximum front-end sales load of 3.00%. After the Reorganization,
former shareholders of ISTBF will not pay a front-end or deferred
sales load for new purchases of TGF--Class A shares.
FINANCIAL HIGHLIGHTS FOR TGF
The following is selected financial highlights for Class A
shares and Class B shares of TGF. The following information from
August 14, 1995 (inception of TGF) through October 31, 1995 has
been audited by McGladrey & Pullen, LLP, independent accountants.
The following information for Class A shares and Class B shares
of TGF for the six month period ended April 30, 1996 is
unaudited. The information presented below should be read in
conjunction with the financial statements and notes thereto,
which appear in the 1995 Annual Report to Shareholders and the
April 30, 1996 Semi-Annual Report to Shareholders, each of which
is incorporated by reference in the Statement of Additional
Information to this Proxy/Prospectus.
(UNAUDITED)
CLASS A CLASS B CLASS A CLASS B
-------- -------- -------- --------
FOR THE PERIOD FROM
PER SHARE OPERATING SIX MONTHS AUGUST 14, 1995
PERFORMANCE (FOR ENDED TO
A SHARE OUTSTANDING APRIL 30, 1996 OCTOBER 31, 1995
THROUGHOUT THE PERIOD) --------------- --------------------
Net asset value,
beginning of period $10.05 $10.05 $10.00 $ 9.97
------ ------ ------ ------
Income from investment
operations:
Net investment income
(loss)(a)(b) 0.25(a) 0.23(b) 0.05(e) 0.04
Net realized and
unrealized gain (0.12) (0.12) 0.05 0.08
------ ------ -------- --------
Total from investment
operations 0.13 0.11 0.10 0.12
------ ------ -------- --------
Less distributions
Dividends from net
investment income (0.22) (0.19) (0.05) (0.04)
Distributions from net
realized gains -- -- -- --
------ ------ -------- --------
Total distributions (0.22) (0.19) (0.05) (0.04)
------ ------ -------- --------
Change in net asset
value for the period (0.09) (0.08) 0.05 0.08
------ ------ -------- --------
Net asset value, end
of period $ 9.96 $ 9.97 $10.05 $10.05
------ ------ -------- --------
Total Return (c)(d) 1.25%(a) 1.08%(b) 6.26%* 8.42%*
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000 for Class A) $9,194 $205 $6,506 $201
Ratio of average net
assets of:
Expenses 1.53%*(a) 1.53%*(b) 2.74%*(e) --
Net investment income 4.27%*(a) 4.27%*(b) 3.08%*(e) --
Portfolio turnover rate 141%* -- % 0.00% --
--------
(a) Net of fees waived amounting to 0.90% of average net assets
for the period ended April 30, 1996.
(b) Net of fees waived amounting to 1.40% of average net assets
for the period ended April 30, 1996.
(c) Does not include maximum sales charge of 4% for Class A
shares.
(d) Does not include contingent deferred sales charge for Class
B shares. Not annualized.
(e) Net of fees waived amounting to 0.77% of average net assets
for the period ended October 31, 1995.
* Annualized.
PURCHASE, EXCHANGE AND REDEMPTION PROCEDURES
SALES CHARGES OF THE FUNDS
Class A shares of both Funds are sold to investors at the
net asset value next determined after a purchase order becomes
effective (as described below) plus a varying initial sales
charge (the "public offering price"). The sales charge applied
to a purchase of Class A shares of both Funds decreases as the
purchase amount increases, as described in the table of sales
charges set forth in each Fund's prospectus. The maximum sales
charge on investments in TGF--Class A shares is 4.00% of the
public offering price (4.16% of the net amount invested) on
investments of less than $100,000. The maximum sales charge on
investments in Class A shares of ISTBF is 3.00% of the public
offering price (3.09% of the net amount invested) on investments
of less than $25,000. In addition, both Funds offer reduced
initial sales charges on Class A shares under certain
circumstances, for example, as a result of a cumulative quantity
discount or for shareholders who execute a Letter of Intent to
purchase, within a specified time period, an amount qualifying
for a reduced sales charge. Information about such discounts can
be found in ISTBF's prospectus under "Qualifying for a Reduced
Sales Charge," and in TGF's prospectus under "Reduced Initial
Sales Charges on Class A Shares."
Class B shares of TGF (which currently are not offered to
the public) may be sold without an initial sales charge but will
be subject to higher ongoing expenses than Class A shares and a
contingent deferred sales charge of up to 5% if they are redeemed
within six years of purchase. Class B shares of ISTBF are
offered for sale at net asset value per share, but are subject to
a contingent deferred sales charge of up to 3% if they are
redeemed within six years of purchase. The contingent deferred
sales charge applied to Class B shares of both Funds decreases as
the holding period of the shares increases.
In addition, both Funds offer Class A shareholders a
cumulative quantity discount due to rights of accumulation or for
shareholders who execute a Letter of Intent to purchase, within a
13 month period, an amount qualifying for a reduced sales charge.
SALES CHARGES AFTER THE REORGANIZATION
Notwithstanding the discussion above, no sales charge will
be imposed in connection with ISTBF shareholders' receipt of TGF-
-Class A shares as a result of the Reorganization. Additionally,
following the Reorganization, former shareholders of ISTBF who
wish to make additional purchases of TGF shares may do so without
paying a front-end or deferred sales load. ISTBF shareholders
who wish to purchase any other class of shares of TGF that is, or
may in the future be, offered for sale to the public, subject to
applicable eligibility requirements may do so in accordance with
TGF's then current prospectus.
PURCHASES OF THE FUNDS
Shares of ISTBF may be purchased directly through ISTBF's
transfer agent, IMSC, or through registered securities dealers
who have a sales agreement with IMDI, ISTBF's distributor.
ISTBF requires a minimum initial investment of $1,000, and the
minimum subsequent investment in shares of ISTBF is $100. Shares
of TGF may be purchased from the following entities: (a) TGF's
distributor, Tocqueville Securities; (b) authorized securities
dealers which have entered into sales agreements with Tocqueville
Securities ("Selling Brokers"); and (c) TGF's transfer agent,
State Street Bank and Trust Company. The minimum initial
investment in The Tocqueville Trust is $5,000, except for 401(k),
IRA, Keogh and other pension and profit sharing plan accounts
where the minimum is $2,000. For example, an investor may choose
to make an initial investment in TGF equal to an amount which is
less than $5,000 so long as such investor's total initial
investment in the Funds of The Tocqueville Trust is equal to
$5,000. The minimum subsequent investment in the Trust is
$1,000.
In general, purchases of shares of ISTBF and TGF are made at
the public offering price next determined after the purchase
order is received. In the case of TGF, a purchase order
becomes effective upon receipt of the order by Tocqueville
Securities, a Selling Broker, or the Transfer Agent. Purchase
orders received prior to 4:00 p.m. New York time are priced
according to the net asset value per share next determined on
that day. Purchase orders received after 4:00 p.m. New York time
are priced according to the net asset value per share next
determined on the following day.
EXCHANGE FEATURES OF ISTBF (PRIOR TO THE REORGANIZATION)
Class A shares of ISTBF may be exchanged for Class A shares
of another Ivy or Mackenzie fund upon payment of the difference,
if any, between the sales charge applied to shares of ISTBF and
the applicable sales charge for the Ivy or Mackenzie fund into
which the exchange is being made. The additional sales charge
will be waived for shares that have been invested for a period of
12 months or longer. No initial sales charge is assessed at the
time of an exchange of Class A shares of ISTBF for shares of Ivy
Money Market Fund. Class B shares of ISTBF may be exchanged for
Class B shares of another Ivy or Mackenzie Fund on the basis of
the relative net asset value per Class B share, without the
payment of any contingent deferred sales charge that would
otherwise be due upon the redemption of the outstanding Class B
shares. Class B shareholders of ISTBF may also exchange their
Class B shares for shares of Ivy Money Market Fund. Class B
shareholders exercising the exchange privilege remain subject to
ISTBF's contingent deferred sales charge schedule (or period)
following the exchange if such schedule is higher (or such period
is longer) than the contingent deferred sales charge schedule (or
period) that applies to the Ivy or Mackenzie Fund into which the
exchange is being made. ISTBF's Class B shares convert
automatically into Class A shares of ISTBF after a period of
eight years, based on the relative net asset value of such shares
at the time of conversion. For purposes of both the conversion
feature and computing the contingent deferred sales charge that
may be payable upon the redemption of Class B shares acquired
through an exchange (prior to conversion), the holding period of
the outstanding Class B shares of ISTBF will be "tacked" onto the
holding period of the new Ivy/Mackenzie Class B shares. ISTBF
shares acquired through reinvested dividends will not be assessed
a sales charge if subsequently exchanged into another Ivy or
Mackenzie fund.
EXCHANGE FEATURES OF TGF CLASS A SHARES
Subject to certain conditions, Class A shares of TGF (and
Class B shares, when offered to the public) may be exchanged for
Class A and Class B shares, respectively, of another fund of The
Tocqueville Trust at such fund's then current net asset value.
No initial sales charge is imposed on the Class A shares being
acquired, and no contingent deferred sale charge is imposed on
the Class B share being redeemed, through an exchange. The
dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the fund acquired
through the exchange.
REDEMPTIONS OF THE FUNDS
Shares of both Funds may be redeemed in accordance with the
procedures described in each Fund's prospectus. If the shares
being redeemed were purchased by check, payment may be delayed
for the minimum time needed to verify that the purchase check has
been honored. This is not normally more than 15 days from the
time of receipt of the check.
RISK CONSIDERATIONS
Because of similarities in the Funds' investment objectives
and restrictions, the risks of investing in ISTBF are similar to
the risks of investing in TGF. There are significant differences
between the Funds, however, and the risks of investing in either
Fund vary to the degree that their investment objectives,
policies and restrictions vary.
OPTIONS, FUTURES AND FOREIGN CURRENCY TRANSACTIONS. Subject
to the limitations in their prospectuses, both of the Funds may
write covered call options and for hedging may purchase and sell
futures contracts and options thereon. TGF may enter into
futures contracts which provide for the future acquisition or
delivery of fixed income securities or which are based on indexes
of fixed income securities. This investment technique is
designed only to hedge against anticipated future changes in
interest rates which otherwise might either adversely affect the
value of the TGF's portfolio securities or adversely affect the
prices of long-term bonds which are intended to be purchased at a
later date. TGF may also purchase options on futures contracts
for hedging purposes.
Investors should be aware that the risks associated with the
use of options and futures are considerable. Options and futures
transactions generally involve a small investment of cash
relative to the magnitude of the risk assumed, and therefore
could result in a significant loss. For example, a liquid
secondary market for any futures or options contract may not be
available when a futures or options position is sought to be
closed and the fund would remain obligated to meet margin
requirements until the position is closed. In addition, there
may be an imperfect correlation between price movements in the
securities on which the futures or options contract is based and
in the fund's portfolio securities being hedged. Successful use
of futures or options contracts is further dependent on the
ability of the Fund's manager to predict correctly price
movements in the securities being hedged, and no assurance can be
given that its judgment will be correct. For further information
regarding the Funds' options and/or futures transactions and
their attendant risks, see each Fund's prospectus and statement
of additional information.
FOREIGN SECURITIES. Both Funds may invest in the securities
of foreign issuers. However, TGF may not invest in securities of
foreign issuers other than in accordance with its investment
objective and policies, if as a result TGF would then have more
than 25% of its total assets (taken at current value) invested in
such foreign securities. In any event, TGF does not currently
intend to invest in the securities of foreign issuers.
Investing in the securities of foreign issuers involves
special risks and considerations not typically associated with
investing in U.S. companies. In many foreign countries there is
less regulation of business and industry practices, stock
exchanges, brokers and listed companies than in the United
States. For example, foreign companies are not generally subject
to uniform accounting and financial reporting standards, and
foreign securities transactions may be subject to higher
brokerage costs. There also tends to be less publicly available
information about issuers in foreign countries, and foreign
securities markets of many of the countries in which the Funds
may invest may be smaller, less liquid and subject to greater
price volatility than those in the United States. Securities
issued in emerging market countries, such as Latin America and
certain eastern European countries, may be even less liquid and
more volatile than securities of issuers operating in more
developed economies (e.g., countries in other parts of Europe).
Generally, price fluctuations in a Fund's foreign security
holdings are likely to be high relative to those of securities
issued in the United States. Other risks include the possibility
of expropriation, nationalization or confiscatory taxes, foreign
exchange controls (which may include suspension of the ability to
transfer currency from a given country), default in foreign
government securities, difficulties in enforcing foreign
judgments, political or social instability, or other developments
that could adversely affect the Funds' foreign investments.
Investors should also be aware that many emerging markets
countries have experienced and continue to experience high rates
of inflation, which can create a negative interest rate
environment and erode the value of outstanding financial assets
in those countries.
DEBT SECURITIES. ISTBF may invest in investment-grade debt
securities as well as in corporate debt securities considered
medium or lower grade (commonly referred to as "high yield" or
"junk" bonds). "Investment grade" debt securities are those
rated Aaa, Aa, A or Baa by Moody's Investors Services, Inc.
("Moody's") or AAA, AA, A or BBB by Standard & Poor's Corporation
("S&P") at the time of purchase). TGF may not invest in corporate
debt securities.
Bonds rated Aaa by Moody's and AAA by S&P are judged to be
of the best quality (i.e., capacity to pay interest and repay
principal is extremely strong). Bonds rated Aa/AA are considered
to be of high quality (i.e., capacity to pay interest and repay
interest is very strong and differs from the highest rated issues
only to a small degree). Bonds rated A are viewed as having many
favorable investment attributes, but elements may be present that
suggest a susceptibility to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated
categories. Bonds rated Baa/BBB (considered by Moody's to be
"medium grade" obligations) are considered to have an adequate
capacity to pay interest and repay principal, but certain
protective elements may be lacking (i.e., such bonds lack
outstanding investment characteristics and have some speculative
characteristics).
Securities rated lower than Baa by Moody's or BBB by S&P,
and comparable unrated securities, are considered to have
predominately speculative characteristics with respect to the
issuer's capacity to pay interest and repay principal. While
high yield debt securities are likely to have some quality and
protective characteristics, these qualities are largely
outweighed by the risk of exposure to adverse conditions and
other uncertainties. Accordingly, investments in such
securities, while generally providing for greater income and
potential opportunity for gain than investments in higher-rated
securities, also entail greater risk (including the possibility
of default or bankruptcy of the issuer of such securities) and
generally involve greater price volatility than securities in
higher rating categories. IMI seeks to reduce risk through
diversification (including investments in foreign securities),
credit analysis and attention to current developments and trends
in both the economy and financial markets. Should the rating of
a portfolio security be downgraded, IMI determines whether it is
in ISTBF's best interest to retain or dispose of the security
(unless the security is downgraded below the rating of C, in
which case IMI ordinarily disposes of the security based on then
existing market conditions).
MORTGAGE-BACKED SECURITIES. Both of the Funds may invest in
mortgage-backed securities in accordance with their stated
investment objectives and policies. Mortgage-backed securities
are securities representing part ownership of a pool of mortgage
loans. Although the mortgage loans in the pool will have
maturities of up to 30 years, the actual average life of the
loans typically will be substantially less because the mortgages
will be subject to principal amortization and may be prepaid
prior to maturity. In periods of falling interest rates, the rate
of prepayment tends to increase, thereby shortening the actual
average life of the security (generally referred to as
"prepayment risk"). Conversely, rising interest rates tend to
decrease the rate of prepayment, thereby lengthening the
security's actual average life (generally referred to as
"extension risk"). Since it is not possible to predict
accurately the average life of a particular pool, and because
prepayments are reinvested at current rates, the market value of
mortgage-backed securities may decline during periods of
declining interest rates.
For a further discussion of the investment techniques and
risk factors that apply to the Funds, see "Comparison of
Investment Objectives, Policies and Restrictions," below, and the
discussion under the captions "Investment Objective, Policies and
Risks" and "Additional Investment Policies and Risk
Considerations" in the Funds' prospectuses.
COMPARISON OF INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
INVESTMENT OBJECTIVES:
ISTBF, an open-end, diversified management investment
company, seeks a high level of current income consistent with a
high degree of principal stability. TGF, also an open-end,
diversified management investment company, seeks to provide high
current income consistent with the maintenance of principal and
liquidity through investments in obligations issued or guaranteed
by the U.S. Treasury, agencies of the U.S. Government or
instrumentalities that have been established or sponsored by the
U.S. Government.
PRIMARY INVESTMENTS:
U.S. GOVERNMENT SECURITIES: ISTBF normally invests at least
65% of total assets in short-term U.S. Government securities,
including (1) direct obligations of the U.S. Treasury (such as
Treasury bills, notes, and bonds) and (2) Federal agency
obligations guaranteed as to principal and interest by the U.S.
Treasury (such as GNMA certificates, which are mortgage-backed
securities representing part ownership of a pool of mortgage
loans). Under normal circumstances, GNMA certificates are
expected to provide higher yields than U.S. Treasury securities
of comparable maturity. Although stated maturities on GNMA
certificates generally range from 25 to 30 years, effective
maturities are usually shorter due to the prepayment of the
underlying mortgages by homeowners. On average, GNMA
certificates are repaid within 12 years and so are classified as
intermediate-term securities. Although ISTBF may purchase
individual securities with a greater maturity, the
dollar-weighted average maturity of ISTBF's portfolio may not
exceed three years. Whenever in IMI's judgment abnormal market
or economic conditions warrant, ISTBF may, for temporary
defensive purposes, invest without limit in short-term U.S.
Government Securities (maturing in 13 months or less).
In pursuit of its objective, TGF intends to invest at least
65% of its assets in short and intermediate-term securities
backed by the full faith and credit of the U.S. Government.
Also, at least 50% of TGF's assets will be invested in U.S.
Treasury bills, notes and bonds. The dollar-weighted average
maturity of TGF is expected to range from 0 to 12 years. The
balance of TGF's assets may be invested in obligations issued or
guaranteed by the U.S. Treasury, agencies of the U.S. Government
or instrumentalities that have been established or sponsored by
the U.S. Government, as well as in repurchase agreements
collateralized by such securities. TGF may also invest in bond
(interest rate) futures and options to a limited extent.
MORTGAGE-BACKED SECURITIES: ISTBF may invest in mortgage
pass-through securities (such as adjustable rate mortgage
securities, or "ARMs"). ISTBF may also invest in collateralized
mortgage obligations ("CMOs"), which are securities that are
collateralized by the original mortgage loan (or mortgage pass-
through security) and that redirect the cash flow of such loan
(or pass-through security) to the individual bond holder(s). TGF
may invest up to 35% of its assets in GNMA pass-through
certificates. TGF may also invest up to 35% of its assets in (i)
fixed rate or adjustable rate mortgage-backed securities issued
or guaranteed by the Federal National Mortgage Association
("FNMA") and the Federal Home Loan Mortgage Corporation
("FHLMC"), and (ii) CMOs. TGF will limit investments in CMOs to
10% of its portfolio, and may only invest in CMOs that are backed
by the full faith and credit of the U.S. Government, FNMA or
FHLMC and are determined not to be "high-risk" under guidelines
issued by the Federal Financial Institutions Examination Council
("FFIEC").
DEBT SECURITIES: ISTBF may invest up to 35% of its assets
in "investment-grade" debt securities (i.e., those rated Aaa, Aa,
A or Baa by Moody's Investors Services, Inc. ("Moody's") or AAA,
AA, A or BBB by Standard & Poor's Corporation ("S&P") at the time
of purchase). ISTBF may invest less than 35% of its net assets in
corporate debt securities considered medium or lower grade
(commonly referred to as "high yield" or "junk" bonds). ISTBF
will not invest in corporate debt securities that, at the time of
investment, are rated less than C by either Moody's or S&P. TGF
may not invest in corporate debt securities.
FOREIGN SECURITIES: ISTBF may invest up to 20% of its net
assets in debt securities of foreign issuers meeting the credit
quality standards described above with respect to ISTBF's
investments in U.S. Government Securities, including non-U.S.
dollar-denominated debt securities, American Depository Receipts
("ADRs"), Eurodollar securities, and debt securities issued,
assumed or guaranteed by foreign governments or political
subdivisions or instrumentalities thereof. TGF may not invest in
securities of foreign issuers other than in accordance with its
investment objective and policies, if as a result TGF would then
have more than 25% of its total assets (taken at current value)
invested in such foreign securities. In any event, TGF does not
currently intend to invest in the securities of foreign issuers.
RESTRICTED AND ILLIQUID SECURITIES: ISTBF may invest up to
10% of its net assets in illiquid securities (including
repurchase agreements of more than seven days' duration and other
securities that are not readily marketable or which have a
limited trading market), up to 50% of which (or 5% of ISTBF's net
assets) may be securities that are subject to restrictions on
resale because they have not been registered under the Securities
Act of 1933 ("Restricted Securities"). TGF will not invest more
than 10% of its net assets in illiquid securities, including
repurchase agreements with maturities in excess of seven days.
TGF may purchase Restricted Securities without regard to the
limitation on investments in illiquid securities, provided that a
determination is made that such securities have a readily
available trading market.
OPTIONS TRANSACTIONS AND FUTURES CONTRACTS: ISTBF can use
various techniques to increase or decrease its exposure to
changing security prices, interest rates, currency exchange
rates, commodity prices, or other factors that affect security
values. These techniques may involve derivative transactions such
as selling call options and purchasing put and call options on
U.S. government securities, interest rate futures, foreign
currency futures and foreign currencies that are traded on an
exchange or board of trade. IMI can use these practices to
adjust the risk and return characteristics of ISTBF's portfolio
of investments. ISTBF may only engage in transactions in
interest rate futures, currency rate futures and options on
interest rate futures and currency futures contracts for hedging
purposes. TGF may write covered call options on optionable
securities or stock indices of the types in which it is permitted
to invest from time to time as TAM determines is appropriate in
seeking to attain TGF's objective. TGF may write (sell) covered
call options in order to hedge against changes in the market
value of the TGF's securities caused by fluctuating interest
rates. TGF will not write covered call options for speculative
purposes. TGF will receive a premium for writing a covered call
option, which increases TGF's return in the event the option
expires unexercised or is closed out at a profit. TGF may enter
into futures contracts which provide for the future acquisition
or delivery of fixed income securities or which are based on
indexes of fixed income securities. This investment technique is
designed only to hedge against anticipated future changes in
interest rates which otherwise might either adversely affect the
value of the TGF's portfolio securities or adversely affect the
prices of long-term bonds which are intended to be purchased at a
later date. TGF may also purchase options on futures contracts
for hedging purposes.
REPURCHASE AGREEMENTS: ISTBF may enter into repurchase
agreements, but will not enter into repurchase agreements with
more than seven days to maturity if, as a result, more than 10%
of ISTBF's net assets would be invested in illiquid securities
that include such repurchase agreements. TGF may enter into
repurchase agreements subject to resale to a bank or dealer at an
agreed upon price which reflects a net interest gain for TGF.
TGF will receive interest from the institution until the time
when the repurchase is to occur. TGF will always receive
collateral (i.e., U.S. Government obligations or obligations of
its agencies or instrumentalities, or short-term money market
securities) acceptable to it whose market value is equal to at
least 100% of the amount invested by the TGF, and TGF will make
payment for such securities only upon the physical delivery or
evidence of book entry transfer to the account of its custodian.
TGF will not invest in repurchase agreements with maturities in
excess of seven days.
COMMON STOCKS: ISTBF may invest up to 5% of its net assets
in dividend paying common stocks (including adjustable rate
preferred stocks). TGF may, but currently does not intend to
make such investments.
ZERO COUPON BONDS AND "WHEN-ISSUED" SECURITIES: ISTBF may
invest in zero coupon bonds in accordance with ISTBF's credit
quality standards and securities sold on a"when-issued" or
firm-commitment basis. TGF may, but currently does not intend to
make such investments.
LENDING OF PORTFOLIO SECURITIES: ISTBF may lend its
portfolio securities to increase current income. TGF may not
make loans of money or securities other than (a) through the
purchase of publicly distributed bonds, debentures or other
corporate or governmental obligations, (b) by investing in
repurchase agreements, and (c) by lending its portfolio
securities, provided the value of such loaned securities does not
exceed 33-1/3% of its total assets.
BORROWING: Neither Fund may borrow money in excess of 10%
of the value of its total assets from banks. TGF may not
purchase securities while borrowings exceed 5% of the value of
its total assets.
CERTIFICATES OF DEPOSIT, BANKERS' ACCEPTANCES AND COMMERCIAL
PAPER: ISTBF may invest in certificates of deposit, banker's
acceptances and commercial paper rated Prime-A by Moody's or A-1
by S&P, or, if not rated by Moody's or S&P, issued by companies
having an outstanding debt issue currently rated Aa or better by
Moody's or AA or better by S&P. TGF does not currently intend to
make such investments.
INVESTMENT RESTRICTIONS:
FUNDAMENTAL INVESTMENT RESTRICTIONS. The following
fundamental policies and investment restrictions have been
adopted by the Funds and except as noted, such policies and
restrictions cannot be changed without approval by the vote of a
majority of the outstanding voting securities of a Funds, as
defined by the Investment Company Act of 1940, as amended ("the
1940 Act"):
- DIVERSIFICATION: Neither Fund may, with respect to 75%
of its total assets, purchase any securities (other
than obligations issued or guaranteed by the U.S.
Government or its agencies or instrumentalities) if,
immediately after such purchase, more than 5% of the
value of the Fund's total assets would be invested in
securities of any one issuer;
- REAL ESTATE, COMMODITIES, AND COMMODITY CONTRACTS.
Neither Fund may buy or sell real estate, commodities,
or commodity contracts, except either Fund may purchase
or sell futures or options on futures, and ISTBF may
purchase and sell (a) securities that are secured by
real estate and (b) securities of issuers that invest
or deal in real estate. ISTBF may not invest in real
estate mortgage loans.
- OIL, GAS AND MINERALS. ISTBF may not invest in
interests in oil, gas and/or mineral exploration or
development programs. TGF may not invest in precious
metals other than in accordance with its investment
objective and policy, if as a result it would have more
than 10% of its total assets invested in such precious
metals. (TGF's policies regarding oil and gas are
listed as non-fundamental investment restrictions.)
- EXERCISING CONTROL. ISTBF may not invest in securities
for the purpose of exercising control over or
management of the issuer. TGF has a similar "non-
fundamental" policy.
- JOINT INVESTMENT ACCOUNTS. ISTBF may not participate
on a joint or a joint and several basis in any trading
account in securities. TGF may not participate in a
joint investment account.
- OWNERSHIP OF VOTING SECURITIES. ISTBF may not purchase
the securities of any one issuer if, immediately after
such purchase, ISTBF would own more than 10% of the
issuer's outstanding voting securities. TGF may not,
with respect to 75% of the value of its assets,
purchase any securities (other than obligations issued
or guaranteed by the U.S. Government or its agencies or
instrumentalities) if, immediately after such purchase,
more than 10% of the outstanding voting securities of
any one issuer would be owned by TGF.
- PURCHASING SECURITIES ON MARGIN. ISTBF may not
purchase securities on margin, except such short-term
credits as are necessary for the clearance of
transactions. TGF has a similar "non-fundamental"
policy.
- LOANS. Neither Fund may make loans of money or
securities other than (a) through the purchase of
publicly distributed bonds, debentures or other
corporate or governmental obligations, (b) by investing
in repurchase agreements, or (c) by lending its
portfolio securities, provided the value of such loaned
securities does not exceed 33-1/3% of its total assets.
- BORROWING. Neither Fund may borrow money in excess of
10% of the value of a their total assets from banks.
ISTBF must repay all outstanding borrowings before any
additional investments are made. TGF may not purchase
securities while borrowings exceed 5% of the value of
its total assets.
- INDUSTRY CONCENTRATION. Neither Fund may concentrate
its investments in particular industries. No more than
25% of the value of either Fund's assets will be
invested in any one industry.
- UNDERWRITING SECURITIES. Neither Fund may underwrite
securities, except to the extent that, in connection
with the sale of securities, it may be deemed to be an
underwriter under applicable securities laws.
- SENIOR SECURITIES. Neither Fund may issue senior
securities.
NON-FUNDAMENTAL INVESTMENT RESTRICTIONS: The following
restrictions are non-fundamental and may be changed by each
Fund's Board of Trustees, to the extent permitted by applicable
law, regulation or regulatory policy.
- SHORT SALES. Neither Fund will make short sales of
securities, other than short sales "against the box,"
except to the extent provided otherwise in its
prospectus or statement of additional information.
- UNSEASONED ISSUERS. ISTBF will not purchase a security
if, as a result, it would have more than 5% of its
total assets (taken at current value) invested in
securities of companies (including predecessors) less
than three years old. TGF will not invest more than
10% of its total assets in the securities of any
company which, including its predecessors, has not been
in the business for at least three years.
- OFFICER AND TRUSTEE OWNERSHIP INTERESTS. Neither Fund
will purchase or retain securities of an issuer when
one or more officers and Trustees of the Fund or of the
Fund's Investment Advisor (or, in the case of TGF, a
person owning more than 10% of the shares of either)
own beneficially more than 1/2 of 1% of the securities
of such issuer and such persons owning more than 1/2 of
1% of such securities together own beneficially more
than 5% of the securities of such issuer.
- ILLIQUID SECURITIES. Neither Fund will invest more
than 10% if its total net assets in illiquid
securities.
- OTHER INVESTMENT COMPANIES. Neither Fund will purchase
the securities of any other investment company, if the
purchasing Fund, immediately after such purchase or
acquisition, owns in the aggregate, (i) more than 3% of
the total outstanding voting stock of such investment
company, (ii) securities issued by such investment
company having an aggregate value in excess of 5% of
the value of the total assets of the Fund, or (iii)
securities issued by such investment company and all
other investment companies having an aggregate value in
excess of 10% of the value of the total assets of the
Fund.
- OIL, GAS AND MINERALS. ISTBF will not purchase or sell
interests in oil, gas or mineral leases (other than
securities of companies that invest in or sponsor such
programs). TGF will not purchase interests in oil, gas
or other mineral exploration programs; however, this
limitation will not prohibit the acquisition of
securities of companies engaged in the production or
transmission of oil, gas, or other minerals.
- PURCHASING SECURITIES ON MARGIN. TGF will not purchase
securities on margin except for short-term credits
necessary for clearance of portfolio transactions, and
except to the extent provided otherwise in its
prospectus or statement of additional information.
- EXERCISING CONTROL. TGF will not invest for purposes
of exercising control or management.
- FOREIGN SECURITIES. TGF will not invest in securities
of foreign issuers other than in accordance with its
investment objective and policy, if as a result TGF
would then have more than 25% of its total assets
(taken at current value) invested in such foreign
securities.
- WARRANTS. TGF will not invest in warrants if, at the
time of acquisition, the investment in warrants, valued
at the lower of cost or market value, would exceed 5%
of TGF's net assets.
- REAL ESTATE LIMITED PARTNERSHIP INTERESTS. ISTBF may
not purchase or sell real estate limited partnership
interests. TGF's policies with respect to Real Estate
Limited Partnership Interests are described in the
paragraph below.
In addition to the foregoing restrictions, each Fund has
adopted certain operating policies in order to comply with
federal and state statutes and/or regulatory policies.
Specifically, ISTBF treats securities eligible for resale under
Rule 144A of the Securities Act of 1933 as subject to ISTBF's
restriction on investing in Restricted Securities (see
"Restricted and Illiquid Securities" under "Primary Investments,"
above), unless ISTBF's Board determines that such securities are
liquid. In addition, as a matter of operating policy, TGF will
not (i) invest in oil, gas and other mineral leases; (ii)
purchase or sell real property, including limited partnership
interests; and (iii) invest more than 2% of its net assets in
warrants which are not listed on the New York or American Stock
Exchange nor more than 5% of its net assets in warrants.
Although these policies are not fundamental and may be changed by
The Tocqueville Trust's Board of Trustees without shareholder
approval, these policies will remain in effect until the federal
government or a state either amends or appeals applicable statues
and regulatory policies.
Whenever an investment policy or investment restriction set
forth in either Fund's prospectus or statement of additional
information states a maximum percentage of assets that may be
invested in any security or other asset or describes a policy
regarding quality standards, such percentage limitation or
standard shall, unless otherwise indicated, apply to the Fund
only at the time a transaction is entered into. Accordingly, if
a percentage limitation is adhered to at the time of investment,
a later increase or decrease in the percentage that results from
a relative change in values or from a change in the Fund's net
assets or other circumstances is not considered a violation.
INFORMATION ABOUT THE REORGANIZATION
REASONS AND PURPOSES
The Reorganization has been recommended by the Board of
Trustees of ISTBF as a means of combining similar investment
companies with similar investment objectives and policies to
attempt to achieve enhanced investment performance and
distribution capability, as well as certain economies of scale
and attendant savings in costs to the Funds and their
shareholders. Achievement of these goals cannot, of course, be
assured. For the reasons set forth below, IMI has recommended to
the Board of Trustees of Ivy Fund that the assets of ISTBF be
combined with those of TGF. The Board of Trustees of ISTBF has
unanimously approved the Reorganization and recommends that
shareholders of ISTBF vote in favor of it.
In determining whether to recommend that the shareholders of
ISTBF vote to approve the Reorganization, the Board of Trustees,
with the assistance and advice of legal counsel, inquired into a
number of matters and considered, among other factors: (a) the
fees and expense ratios of both ISTBF and TGF; (b) the terms and
conditions of the Reorganization and whether the Reorganization
would result in the dilution of shareholder interests; (c) the
compatibility of the Funds' investment objectives, policies,
restrictions and portfolios; (d) the service features available
to shareholders in each Fund; (e) the costs that would be
incurred by the Funds as a result of the Reorganization; and (f)
the tax consequences of the Reorganization.
The Board of Trustees has determined that the Reorganization
may permit the shareholders of ISTBF to pursue substantially the
same investment goals in a somewhat larger fund. At its current
size, Management does not believe the ISTBF offers shareholders
the most efficient vehicle for pursuing their investment goals.
Managing a fund with a larger asset base could give the
investment adviser greater investment flexibility and the ability
to select a larger number of portfolio securities with the
attendant benefits of increased diversification.
Additionally, Management has determined that if the
Reorganization is not consummated, and ISTBF continues as an Ivy
Fund, ISTBF expenses will probably increase in part because
Management intends to eliminate the current voluntary expense
reimbursement arrangement.
AGREEMENT AND PLAN OF REORGANIZATION
The following summary of the proposed Agreement and Plan of
Reorganization (the "Plan") is qualified in its entirety by
reference to the Plan attached to this Proxy Statement/Prospectus
as Exhibit A. The Plan provides that TGF will acquire all or
substantially all of the assets of ISTBF in exchange solely for
TGF--Class A shares and the assumption by TGF of certain
identified liabilities of ISTBF on the closing date (the "Closing
Date"), or such later date as provided in the Plan. The Closing
Date is expected to be on or about November 22, 1996.
The Board of Trustees of Ivy Fund, on behalf of ISTBF, and
the Board of Trustees of The Tocqueville Trust, on behalf of TGF,
have each determined that the interests of existing shareholders
of their respective Funds will not be diluted as a result of the
transactions contemplated by the Reorganization, and that
participation in the Reorganization is in the best interests of
shareholders of ISTBF and TGF, respectively.
The number of full and fractional TGF--Class A shares to be
issued to shareholders of ISTBF will be determined on the basis
of the relative net asset values per share and aggregate net
assets of TGF--Class A shares and the Class A and Class B shares
of ISTBF computed as of the close of regular trading on the New
York Stock Exchange (normally 4:00 p.m., Eastern time) and after
the declaration of any dividends on the business day next
preceding the Closing Date (the "Valuation Date"). The net asset
value per share with respect to TGF--Class A shares and Class A
and Class B shares of ISTBF will be determined in each case by
dividing each such Class's assets, less liabilities, by the total
number of its outstanding shares. Portfolio securities of both
TGF and ISTBF will be valued in accordance with the valuation
policies and procedures of TGF as described under "Computation of
Net Asset Value" in TGF's then current statement of additional
information.
ISTBF will endeavor to discharge all of its known
liabilities and obligations prior to the Valuation Date. The
liabilities assumed are expected to relate generally to expenses
incurred in the ordinary course of ISTBF's operations, such as
accounts payable and accrued expenses relating to custodian and
transfer agency fees, legal and accounting fees, and expenses of
state securities registration of ISTBF's shares. TGF will assume
all liabilities, expenses, costs, charges and reserves reflected
on an unaudited statement of assets and liabilities of ISTBF
prepared on ISTBF's behalf by MIMI, as ISTBF's administrator, as
of the close of regular trading on the New York Stock Exchange on
the Valuation Date and in accordance with generally accepted
accounting principles consistently applied from the prior audited
period. TGF will assume only those liabilities of ISTBF
reflected in that unaudited statement of assets and liabilities
as of the Closing Date and will not assume any other liabilities.
On or before the Closing Date, ISTBF intends to declare and
pay a dividend or dividends intended to have the effect of
distributing to ISTBF's shareholders all of ISTBF's net income
and gain that has not been distributed previously.
Immediately after the Closing Date, ISTBF will distribute to
its shareholders of record, with respect to each class of its
shares, determined as of immediately after the close of business
on the Valuation Date, on a pro rata basis within that class, the
full and fractional TGF--Class A shares received by ISTBF, and
ISTBF will then be completely liquidated. This distribution and
liquidation will be accomplished by establishing accounts in the
name of ISTBF's shareholders on the share records of TGF, such
accounts representing the respective pro rata number of full and
fractional TGF--Class A shares attributed to those shareholders.
After the Closing Date, any issued and outstanding certificates
representing Class A shares and Class B shares of ISTBF will
represent Class A shares of TGF [distributed to the record
holders of ISTBF]. Certificates representing Class A shares and
Class B shares of ISTBF will, upon presentation to the transfer
agent of TGF, be exchanged for Class A shares of TGF. TGF will
issue certificates representing its Class A shares only upon
request.
The consummation of the Plan is subject to the fulfillment
of certain conditions set forth therein, including, among other
things, approval of the Reorganization by the requisite vote of
ISTBF's shareholders. (See Sections 6, 7 and 8 of the Plan
attached hereto as Exhibit A.) The Plan may be terminated and
the Reorganization abandoned at any time prior to the Closing
Date by either party by resolution of the Board of Trustees of
Ivy Fund, on behalf of ISTBF, or the Board of Trustees of The
Tocqueville Trust, on behalf of TGF, as the case may be, if
circumstances should develop that, in the opinion of the Board so
resolving, make proceeding with the Plan inadvisable.
TGF or TAM adviser shall have paid or agreed to pay the
first $25,000 of costs incurred by The Tocqueville Trust and Ivy
Fund in connection with the Reorganization, including the fees
and expenses associated with the preparation and filing of this
Proxy Statement/Prospectus, any other state or federal
qualification and registration fees, and the expenses of printing
and mailing this Proxy Statement/Prospectus, soliciting proxies
and holding the special meeting of ISTBF shareholders required to
approve the Reorganization and all counsel fees in connection
therewith, which expenses shall be solely and directly related to
the Reorganization within the meaning of Revenue Ruling 73-54,
1973 1 C.B. 187 (all of such costs, fees and expenses referred to
as the "Reorganization Expenses"). All of the Reorganization
Expenses, without considering fees and expenses of the TGF's and
TAM's investment adviser's counsel and accountants, in excess of
$25,000, shall be paid by the ISTBF's investment adviser.
Approval of the Plan requires the affirmative vote of a
majority of all of the votes entitled to be cast at the special
meeting of shareholders of ISTBF. If the Reorganization is not
approved by ISTBF's shareholders, the Board of Trustees of Ivy
Fund, on behalf of ISTBF, will consider other possible courses of
action, including continuing to operate ISTBF as it presently
operates, terminating future sales of Fund shares, or seeking
shareholder approval to liquidate ISTBF.
THE BOARD OF TRUSTEES OF IVY FUND, ON BEHALF OF ISTBF,
UNANIMOUSLY RECOMMENDS APPROVAL OF THE PLAN.
DESCRIPTION OF SHARES OF TGF
Each TGF share issued to shareholders of ISTBF under the
Plan would be fully paid and non-assessable when issued, and
transferable without restriction. There would be no preemptive
or conversion rights. See "Comparative Information on
Shareholder Rights" and TGF's prospectus for additional
information with respect to TGF.
FEDERAL INCOME TAX CONSEQUENCES
The Reorganization is intended to qualify for Federal income
tax purposes as a tax-free reorganization under Section 368(a)(1)
of the Internal Revenue Code of 1986, as amended, (the "Code").
Accordingly, pursuant to this treatment, shareholders of ISTBF
would not recognize gain or loss upon the receipt of TGF--Class A
shares in exchange for their Class A and Class B shares of ISTBF.
The tax basis of TGF--Class A shares received would be the same
as the basis of ISTBF shares surrendered. As a condition to the
Closing of the Reorganization, ISTBF and TGF will receive an
opinion from the law firm of Dechert Price & Rhoads to the effect
that the Reorganization will qualify as a tax-free reorganization
for Federal income tax purposes. That opinion will be based in
part upon certain assumptions and representations made by ISTBF
and TGF.
Shareholders of ISTBF should consult their tax advisers
regarding the effect, if any, of the proposed Reorganization in
light of their individual circumstances. BECAUSE THE FOREGOING
DISCUSSION RELATES ONLY TO THE FEDERAL INCOME TAX CONSEQUENCES OF
THE REORGANIZATION, SHAREHOLDERS OF ISTBF SHOULD ALSO CONSULT
THEIR TAX ADVISERS AS TO STATE, LOCAL AND OTHER TAX CONSEQUENCES,
IF ANY, OF THE REORGANIZATION.
APPRAISAL RIGHTS
There are no appraisal rights under Massachusetts law for a
shareholder of an open-end investment company registered under
the 1940 Act if the value placed on the shareholder's stock that
is the subject of the transaction is its net asset value. In any
event, the staff of the SEC has taken the position that any
rights to appraisal arising under state law are superseded by the
provisions of Rule 22c-1 under the 1940 Act, which generally
requires that shares of a registered open-end investment company
be valued at their next determined net asset value. A
shareholder of ISTBF may redeem his or her shares at net asset
value prior to the date of the Reorganization.
BASED UPON THE BOARD OF TRUSTEES' REVIEW, THE BOARD OF TRUSTEES
CONCLUDED THAT THE PARTICIPATION OF ISTBF IN THE PROPOSED
REORGANIZATION WOULD BE IN THE BEST INTERESTS OF ISTBF AND ITS
SHAREHOLDERS AND THAT THE REORGANIZATION WOULD NOT RESULT IN THE
DILUTION OF EXISTING SHAREHOLDERS' INTERESTS. THE BOARD OF
TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES, UNANIMOUSLY
RECOMMENDS APPROVAL OF THE REORGANIZATION.
PERFORMANCE INFORMATION AND CAPITALIZATION
PERFORMANCE INFORMATION
The following table compares the performance history of TGF
and ISTBF with the Lipper Index since August 31, 1995 (TGF
commenced operations August 14, 1995):
Lipper
TGF ISTBF ISTBF Intermediate
U.S. Government
Class A Class A Class B Index
Total Return 3.05% 4.76% 4.18% 3.41%
(As of 6/30/96)
____________________
CAPITALIZATION
The following table shows the capitalization (unaudited) of
the Funds as of June 30, 1996, as well as the pro forma combined
capitalization of both Funds assuming the Reorganization
transpired as of that date:
TOCQUEVILLE
GOVERNMENT IVY SHORT TERM PRO FORMA
FUND BOND FUND COMBINED
CLASS A
Net Assets 9,811,124 5,765,549 15,661,060
Shares outstanding 986,268 592,727 1,574,201
Net asset value per share $9.95 $9.73 $9.95
CLASS B
Net Assets 206 84,387 206
Shares outstanding 21 8,689 21
Net asset value per share $9.95 $9.71 $9.95
The Reorganization is being accounted for by TGF by the
method used for a tax-free reorganization of an investment
company. Under this method (sometimes referred to as a "pooling
without restatement"), the aggregate net asset value of TGF--
Class A shares issued in the Reorganization will equal the
combined aggregate net asset value of ISTBF Class A and Class B
shares.
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS
As a Massachusetts business trust, Ivy Fund is governed by
its Agreement and Declaration of Trust dated December 21, 1983,
as amended and restated December 10, 1992, and amendments thereto
( "Ivy's Declaration of Trust"), its By-Laws, and applicable
Massachusetts law. The Tocqueville Trust is governed by its
Declaration of Trust dated September 15, 1986 (the "Trust's
Declaration of Trust") as amended on August 1, 1991 and August 4,
1995, its By-Laws, and applicable Massachusetts law. The
business and affairs of each of Ivy Fund and The Tocqueville
Trust are managed under the direction of its Board of Trustees.
There are no material differences between the rights of
shareholders of each Fund.
INFORMATION ABOUT THE FUNDS
ISTBF:
Information concerning the operation and management of ISTBF
is incorporated herein by reference from its current prospectus
dated April 30, 1996. A copy of the prospectus is available upon
request and without charge by calling (800) 777-6472. Additional
information is included in ISTBF's statement of additional
information dated April 30, 1996, which has been filed with the
SEC. A copy of that statement of additional information is
available upon request and without charge by calling (800) 777-
6472. Reports and other information filed by Ivy Fund, including
charter documents and shareholder reports, can be inspected and
copied at the Public Reference Facilities maintained by the SEC,
located at 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the Atlanta Regional Office of the Securities and Exchange
Commission, 1375 Peachtree Street, N.E., Suite 788, Atlanta,
Georgia 30367. Copies of such material can also be obtained
from the Public Reference Branch, Office of Consumer Affairs and
Information Services, Securities and Exchange Commission,
Washington, D.C. 20549 at prescribed rates.
TGF:
Information concerning the operation and management of TGF
is included in the current prospectus dated February 28, 1996,
which is included herewith and incorporated by reference herein.
Additional information is included in TGF's statement of
additional information dated February 28, 1996, which has been
filed with the SEC and is available upon request and without
charge by calling TGF at (800) 697-3863. TGF is subject to the
informational requirements of the Securities Exchange Act of 1934
and in accordance therewith files proxy material, reports and
other information, including charter documents, with the SEC.
These reports can be inspected and copied at the Public Reference
Facilities maintained by the SEC, located at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Atlanta Regional Office
of the Securities and Exchange Commission, 1375 Peachtree Street,
N.E., Suite 788, Atlanta, Georgia 30367. Copies of such
material can also be obtained from the Public Reference Branch,
Office of Consumer Affairs and Information Services, Securities
and Exchange Commission, Washington, D.C. 20549 at prescribed
rates.
CERTAIN AFFILIATIONS:
ISTBF: IMI serves as ISTBF's investment adviser and
administrator. IMDI serves as the principal distributor of
ISTBF's shares. IMSC provides transfer and dividend-paying agent
services for ISTBF, as well as shareholder and shareholder-
related services. IMI, IMSC and IMDI are all located in Boca
Raton, Florida and are wholly owned subsidiaries of MIMI. MIMI
is a wholly owned subsidiary of MFC, which is located in Toronto,
Ontario, Canada.
TGF: TAM serves as investment adviser to TGF. Tocqueville
Securities L.P. is TGF's distributor, and is an affiliate of TAM.
SHAREHOLDER PROPOSALS FOR SUBSEQUENT MEETINGS:
ISTBF does not, as a general matter, hold regular annual or
other meetings of shareholders. Any shareholder who wishes to
submit proposals to be considered at a subsequent meeting of
shareholders should send such proposals to the principal
executive offices of Ivy Fund, located at Via Mizner Financial
Plaza, 700 South Federal Highway, Boca Raton, Florida 33432. It
is suggested that proposals be submitted by certified mail,
return receipt requested.
OTHER BUSINESS:
The Trustees of Ivy Fund know of no other business to be
brought before the Meeting. However, if any other matters
properly come before the Meeting, proxies will be voted in
accordance with the judgment of persons named as proxies.
If you cannot attend the Meeting in person, please complete
and sign the enclosed proxy and return it in the envelope
provided so that the Meeting may be held and action taken on the
matters described herein with the greatest possible number of
shares participating.
THE TRUSTEES OF IVY FUND, INCLUDING THE INDEPENDENT
TRUSTEES, UNANIMOUSLY RECOMMEND APPROVAL OF THE PLAN OF
REORGANIZATION, AND ANY UNMARKED PROXIES WILL BE SO VOTED.
VOTING INFORMATION
Proxies from the shareholders of ISTBF are being solicited
by the Board of Trustees of Ivy Fund, on behalf of ISTBF, for the
Special Meeting of Shareholders to be held at 10:00 a.m. Eastern
time on November 15, 1996, at the Trust's offices at Via Mizner
Financial Plaza, 700 South Federal Highway, Boca Raton, Florida
33432, or at such later time made necessary by adjournment. A
proxy may be revoked at any time at or before the Meeting by oral
or written notice to the Secretary of ISTBF or by voting in
person at the Meeting. Unless revoked, all properly executed
proxies received in time for the Meeting will be voted in
accordance with the specifications thereon or, in the absence of
such specifications, for approval of the Plan and the
Reorganization.
Proxies are to be solicited by mail. Additional
solicitations may be made by telephone, telegraph or personal
contact by officers, employees or agents of IMI and its
affiliates. Shareholder Communications Corp. has been retained
to assist in the solicitation of proxies in connection with the
Reorganization. For its services, Shareholder Communications
Corp. will be paid a fee expected to equal approximately $1,500
and will be reimbursed for its related expenses.
Shareholders of ISTBF of record at the close of business on
September 27, 1996 (the "Record Date") will be entitled to vote
at the Meeting or any adjournment thereof. The holders of a
majority of the shares of ISTBF outstanding at the close of
business on the Record Date and entitled to vote at the Meeting,
present in person or represented by proxy, will constitute a
quorum for the Meeting. Shareholders are entitled to one vote
for each share held and fractional votes for fractional shares
held.
As of September 27, 1996, as shown on the books of ISTBF,
there were issued and outstanding 609,076.783 Class A shares of
common stock of ISTBF and 7,001.439 Class B shares of common
stock of ISTBF. As of September 27, 1996, as shown on the books
of TGF, there were issued and outstanding 959,620.821 shares of
beneficial interest of TGF.
For purposes of determining the presence of a quorum for
transacting business at the Meeting, abstentions and broker "non-
votes" will be treated as shares that are present, but which have
not been voted. Broker "non-votes" are proxies received by ISTBF
from brokers or nominees when the broker or nominee neither has
received instructions from the beneficial owner(s) or other
person(s) entitled to vote nor has discretionary power to vote on
a particular matter. Abstentions and broker "non-votes" will
have the effect of a vote AGAINST the proposed Plan and
Reorganization, which proposal requires the affirmative vote of a
majority of all of the votes entitled to be cast at the Meeting.
In the event that a quorum is not present at the Meeting or
a quorum is present but sufficient votes to approve the Plan are
not received, the persons named as proxies may propose one or
more adjournments of the Meeting to permit further solicitation
of proxies. Any such adjournment will require the affirmative
vote of a majority of those shares represented at the meeting in
person or by proxy. If a quorum is present, the persons named as
proxies will vote those proxies that they are entitled to vote
FOR the Plan in favor of such an adjournment and will vote those
proxies that they are required to vote AGAINST the Plan against
any such adjournment.
The votes of the shareholders of TGF are not being
solicited, because their approval or consent is not necessary for
the Reorganization to take place.
As of September 30, 1996, the officers and Trustees of Ivy
Fund as a group owned beneficially less than 1% of the
outstanding shares of TGF, and to the best knowledge of Ivy Fund,
as of June 30, 1996, no person owned of record or beneficially 5%
or more of TGF's outstanding Class A shares.
As of September 30, 1996, the Officers and Trustees of Ivy
Fund as a group owned none of the outstanding Class A or Class B
shares of ISTBF. To the knowledge of Ivy Fund, as of September
30, 1996, no shareholder owned beneficially or of record 5% or
more of ISTBF's total outstanding shares, except that Prestige
Bank FSB, 710 Old Clairton Road, Pittsburg, PA 15236, owned of
record 134,178.601 shares (21.91%), and First National Bank of
Assumption, Carl C. Corzine, President, 141 N. Chestnut St., P.O.
Box 197, Assumption, IL 62510, owned of record 60,273.000 shares
(9.84%) and Colchester Financial Ltd., P.O. Box 699, Blanco, TX
78606, owned of record 40,559.440 shares (6.62%).
In addition, to the knowledge of the Ivy Fund, as of
September 30, 1996, no shareholder owned beneficially or of
record 5% or more of ISTBF's outstanding shares in each class,
except that of the outstanding Class A shares of ISTBF, Prestige
Bank FSB, 710 Old Clairton Road, Pittsburgh, PA 15236, owned of
record 134,178.601 shares (21.91%), First National Bank of
Assumption, Carl C. Corzine, President, 141 N. Chestnut Street,
P.O. Box 197, Assumption, IL 62510, owned of record 60,273.000
shares (9.95%), and Colchester Financial Ltd., P.O. Box 699,
Blanco, TX 78606, owned of record 40,559.440 shares (6.62%), and
except that of the outstanding Class B shares of ISTBF, Marjorie
S. Fraser, 184 Euclid Avenue, Hamburg, NY 14075, owned of record
2,161.011 shares (30.77%), Kenneth H. and Carmen M. Luk, trustee
of the Luk Revocable Trust, U/A/D 12-18-92, 7151 N. 3rd Street,
Phoenix, AZ 85020, owned of record 1,182.938 shares (16.84%),
Carole Jane Champagne, 236 Davis Avenue, Greenwich, CT 06830,
owned of record 734.605 shares (10.46%), First Trust Corp. Cust.
IRA FBO: Ralph V. Gerrard U/A/D 10-11-94, P.O. Box 173301,
Denver, CO 80217-3301, owned of record 634.320 shares (9.03%),
First Trust Corp. Cust. IRA FBO: Marilyn H. Roeters U/A/D 5-14-
92, P.O. Box 173301, Denver, CO 80217-3301 owned of record
580.632 shares (8.26%), Rita N. Dillon, trustee of the Rita N.
Dillon Trust, U/A/D 02/18/92, P.O. Box 1025, Ponte Verde, FL
32004, owned of record 497.066 shares (7.07%), and First Trust
Corp. Cust. IRA FBO: Linda L. Stempel U/A/D 10-4-94, P.O. Box
173301, Denver, CO 80217-3301, owned of record 458.039 shares
(6.52%).
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement")
is made as of this ____ day __________, 1996, by and between The
Tocqueville Trust ("Tocqueville Trust"), a business trust
organized under the laws of the Commonwealth of Massachusetts, on
behalf of The Tocqueville Government Fund (the "Acquiring Fund"),
a series of Tocqueville Trust, and Ivy Fund, a business trust
organized under the laws of the Commonwealth of Massachusetts, on
behalf of Ivy Short-Term Bond Fund (the "Acquired Fund"), a
series of Ivy Fund.
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation pursuant to Section 368(a) of the
United States Internal Revenue Code of 1986, as amended (the
"Code"). The reorganization (the "Reorganization") will consist
of the transfer of all or substantially all of the assets of the
Acquired Fund to the Acquiring Fund and the assumption by the
Acquiring Fund of all of the identified and stated liabilities as
of the Effective Time (defined below) of the Acquired Fund in
exchange solely for full and fractional voting shares of
beneficial interest, par value $.01 per share, of the Acquiring
Fund (the "Acquiring Fund Shares"), having an aggregate net asset
value equal to the aggregate value of the assets acquired (less
liabilities assumed) of the Acquired Fund, and the distribution
of the Acquiring Fund Shares to the shareholders of the Acquired
Fund in liquidation of the Acquired Fund as provided herein, all
upon the terms and conditions hereinafter set forth.
WITNESSETH:
WHEREAS, each of Tocqueville Trust and Ivy Fund is a
registered, open-end management investment company, with Ivy Fund
offering its shares of beneficial interest in multiple series
(each of which series represents a separate and distinct
portfolio of assets and liabilities) and Tocqueville Trust
offering its shares of beneficial interest in a single series at
the current time;
WHEREAS, the Acquired Fund offers Class A, Class B, and
Class I shares and the Acquiring Fund offers Class A and Class B
shares;
WHEREAS, the Acquiring Fund has ceased offering Class B
shares, and is converting the existing outstanding Class B shares
into Class A shares;
WHEREAS, there are no Class I shares of the Acquired Fund
outstanding and the Acquired Fund has ceased offering Class I
shares;
WHEREAS, the Acquired Fund owns securities which generally
are assets of the character in which the Acquiring Fund is
permitted to invest; and
WHEREAS, Tocqueville Asset Management L.P., the Acquiring
Fund's investment adviser, wishes to effect the Reorganization;
WHEREAS, the Board of Trustees of each of the Acquired Fund
and the Acquiring Fund has determined that the exchange of all or
substantially all of the assets of the Acquired Fund for
Acquiring Fund Shares and the assumption of all of the identified
and stated liabilities of the Acquired Fund as of the Effective
Time by the Acquiring Fund is in the best interests of the
shareholders of the Acquired Fund and the Acquiring Fund,
respectively; and
WHEREAS, the purpose of the Reorganization is to combine the
assets of the Acquiring Fund with those of the Acquired Fund in
an attempt to achieve greater operating economies and increased
portfolio diversification and synergies.
NOW, THEREFORE, in consideration of the promises and of the
representations, warranties, covenants and agreements hereinafter
set forth, the parties hereto covenant and agree as follows:
1. TRANSFER OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE
ACQUIRED FUND TO THE ACQUIRING FUND SOLELY IN EXCHANGE FOR
ACQUIRING FUND SHARES, THE ASSUMPTION OF ALL IDENTIFIED AND
STATED LIABILITIES OF THE ACQUIRED FUND AS OF THE EFFECTIVE
TIME, AND THE LIQUIDATION OF THE ACQUIRED FUND
1.1 Subject to the requisite approval by Acquired Fund
shareholders and to the other terms and conditions set forth
herein and on the basis of the representations and warranties
contained herein, the Acquired Fund agrees to transfer all or
substantially all of the Acquired Fund's assets as set forth in
Section 1.2 to the Acquiring Fund, and the Acquiring Fund agrees
in exchange therefor (a) to deliver to the Acquired Fund that
number of full and fractional Acquiring Fund Shares determined in
accordance with Article 2, and (b) to assume all of the
identified and stated liabilities of the Acquired Fund, as set
forth in Section 1.3. Such transactions shall take place as of
the effective time provided for in Section 3.1 (the "Effective
Time").
1.2 (a) The assets of the Acquired Fund to be acquired by
the Acquiring Fund shall consist of all or substantially all of
the Acquired Fund's property, including, but not limited to, all
cash, securities, commodities, futures, and interest and
dividends receivable which are owned by the Acquired Fund as of
the Effective Time. All of such assets shall be set forth in
detail in an unaudited statement of assets and liabilities of the
Acquired Fund as of the Effective Time (the "Effective Time
Statement"). The Effective Time Statement shall, with respect to
the listing of the Acquired Fund's portfolio securities, detail
the adjusted tax basis of such securities by lot, the respective
holding periods of such securities and the current and
accumulated earnings and profits of the Acquired Fund. The
Effective Time Statement shall be prepared in accordance with
generally accepted accounting principals (except for footnotes)
consistently applied from the prior audited period and shall be
certified by the Acquired Fund's treasurer.
(b) The Acquired Fund has provided the Acquiring Fund
with a list of all of the Acquired Fund's assets as of the date
of execution of this Agreement. The Acquired Fund reserves the
right to sell any of these securities in the ordinary course of
its business and, subject to Section 5.1, to acquire additional
securities in the ordinary course of its business.
1.3 The Acquiring Fund shall assume all of the identified
and stated liabilities, expenses, costs, charges and reserves
(including, but not limited to, expenses incurred in the ordinary
course of the Acquired Fund's operations, such as accounts
payable relating to custodian fees, investment management and
administrative fees, legal and audit fees, and expenses of state
securities registration of the Acquired Fund's shares) reflected
in the Effective Time Statement. The Acquiring Fund shall assume
only those liabilities of the Acquired Fund in the amounts
reflected on the Effective Time Statement and shall not assume
any other liabilities, whether absolute or contingent, known or
unknown, accrued or unaccrued.
1.4 Immediately after the transfer of assets provided for
in Section 1.1 and the assumption of liabilities provided for in
Section 1.3, and pursuant to the plan of reorganization adopted
herein, the Acquired Fund will distribute pro rata (as provided
in Article 2) to the Acquired Fund's shareholders of record,
determined as of the Effective Time (the "Acquired Fund
Shareholders"), the Acquiring Fund shares received by the
Acquired Fund pursuant to Section 1.1, and all other assets of
the Acquired Fund, if any. Thereafter, no additional shares
representing interests in the Acquired Fund shall be issued.
Such distribution will be accomplished by the transfer of the
Acquiring Fund Shares then credited to the account of the
Acquired Fund on the books of the Acquiring Fund to open accounts
on the share records of the Acquiring Fund in the names of the
Acquired Fund shareholders representing the numbers and classes
of Acquiring Fund Shares due each such shareholder. All issued
and outstanding shares of the Acquired Fund will simultaneously
be canceled on the books of the Acquired Fund, although share
certificates representing interests in the Acquired Fund will
represent those numbers and classes of Acquiring Fund Shares
after the Effective Time as determined in accordance with Article
2. Unless requested by Acquired Fund shareholders, the Acquiring
Fund will not issue certificates representing the Acquiring Fund
Shares issued in connection with such exchange.
1.5 Ownership of Acquiring Fund Shares will be shown on the
books of the Acquiring Fund. Acquiring Fund Shares will be
issued in the manner described in the Acquiring Fund's Prospectus
and Statement of Additional Information as in effect as of the
Effective Time, except that no front-end sales charges will be
incurred by Acquired Fund Shareholders in connection with their
acquisition of Acquiring Fund Shares pursuant to this Agreement,
and, after the Reorganization, no front-end sales charges or
deferred sales charges will be incurred by former holders of
Acquired Fund Shares when purchasing additional Acquiring Fund
Shares for their existing account with the Acquiring Fund. In
addition, the Acquiring Fund's operating expense ratio will be
capped at 1.0% for its Class A shares for at least the first
three years following the reorganization.
1.6 Any reporting responsibility of the Acquired Fund,
including, but not limited to, the responsibility for filing of
regulatory reports, tax returns, or other documents with the
Securities and Exchange Commission (the "Commission"), any state
securities commissions, and any federal, state or local tax
authorities or any other relevant regulatory authority, is and
shall remain the responsibility of the Acquired Fund.
2. VALUATION; ISSUANCE OF ACQUIRING FUND SHARES
The Acquiring Fund shall issue Class A shares in exchange
for the assets and liabilities of the Acquired Fund which are
allocable to its Class A and Class B shares in accordance with
the following procedure:
2.1 The net asset value per share of the Acquired Fund's
and the Acquiring Fund's Class A shares shall be computed as of
the Effective Time and after the declaration of any dividends or
distributions on that date using the valuation procedures set
forth in their respective declarations of trust and bylaws, their
then-current Prospectuses and Statements of Additional
Information, and as may be required by the Investment Company Act
of 1940, as amended (the "1940 Act").
2.2 (a) The total number of Class A Acquiring Fund shares
to be issued (including fractional shares, if any) in exchange
for the assets and liabilities of the Acquired Fund which are
allocable to the Acquired Fund's Class A shares shall be
determined as of the Effective Time by multiplying the number of
Class A Acquired Fund shares outstanding immediately prior to the
Effective Time times a fraction, the numerator of which is the
net asset value per share of the Acquired Fund's Class A shares
immediately prior to the Effective Time, and the denominator of
which is the net asset value per share of the Acquiring Fund's
Class A shares immediately prior to the Effective Time, each as
determined pursuant to Section 2.1.
(b) The total number of Class A Acquiring Fund shares
to be issued (including fractional shares, if any) in exchange
for the assets and liabilities of the Acquired Fund which are
allocable to the Acquired Fund's Class B shares shall be
determined as of the Effective Time by multiplying the number of
Class B Acquired Fund shares outstanding immediately prior to the
Effective Time times a fraction, the numerator of which is the
net asset value per share of the Acquired Fund's Class B shares
immediately prior to the Effective Time, and the denominator of
which is the net asset value per share of the Acquiring Fund's
Class A shares immediately prior to the Effective Time, each as
determined pursuant to Section 2.1.
2.3 Immediately after the Effective Time, the Acquired Fund
shall distribute to the Acquired Fund Shareholders of the
respective classes in liquidation of the Acquired Fund pro rata
within classes (based upon the ratio that the number of Acquired
Fund shares of the respective classes owned by each Acquired Fund
Shareholder immediately prior to the Effective Time bears to the
total number of issued and outstanding Acquired Fund shares of
such classes immediately prior to the Effective Time) the full
and fractional Class A Acquiring Fund Shares received by the
Acquired Fund pursuant to Section 2.2. Accordingly, each Class A
Acquired Fund Shareholder shall receive, immediately after the
Effective Time, Class A Acquiring Fund Shares with an aggregate
net asset value equal to the aggregate net asset value of the
Class A Acquired Fund shares owned by such Acquired Fund
Shareholder immediately prior to the Effective Time; and each
Class B Acquired Fund Shareholder shall receive, immediately
after the Effective Time, Class A Acquiring Fund Shares with an
aggregate net asset value equal to the aggregate net asset value
of the Class B Acquired Fund shares owned by such Acquired Fund
Shareholder immediately prior to the Effective Time.
3. EFFECTIVE TIME; CLOSING
3.1 The closing of the transactions contemplated by this
Agreement (the "Closing") shall occur as of the close of normal
trading on the New York Stock Exchange (the "Exchange")
(currently, 4:00 p.m. Eastern time), and after the declaration of
any dividends or distributions on such date, on the fourth
business day following the date on which this Agreement and the
transactions contemplated herein have been approved by the
requisite vote of the holders of the outstanding shares of the
Acquired Fund, or at such time on such later date as provided
herein or as the parties otherwise may agree in writing (such
time and date being referred to herein as the "Effective Time").
All acts taking place at the Closing shall be deemed to take
place simultaneously as of the Effective Time unless otherwise
agreed to by the parties. The Closing shall be held at the
offices of Dechert Price & Rhoads, Ten Post Office Square,
Boston, Massachusetts 02109, or at such other place as the
parties may agree.
3.2 The Acquired Fund shall deliver at the Closing its
written instruction to the custodian for the Acquired Fund,
acknowledged and agreed to in writing by such custodian,
irrevocably instructing such custodian to transfer to the
Acquiring Fund all of the Acquired Fund's portfolio securities,
cash, and any other assets to be acquired by the Acquiring Fund
pursuant to this Agreement.
3.3 In the event that the Effective Time occurs on a day on
which (a) the Exchange or another primary trading market for
portfolio securities of the Acquiring Fund or the Acquired Fund
shall be closed to trading or trading thereon shall be
restricted, or (b) trading or the reporting of trading on the
Exchange or elsewhere shall be disrupted so that accurate
appraisal of the value of the net assets of the Acquiring Fund or
the Acquired Fund is impracticable, the Effective Time shall be
postponed until the close of normal trading on the Exchange on
the first business day when trading shall have ben fully resumed
and reporting shall have been restored.
3.4 The Acquired Fund shall deliver at the Closing a
certificate of its transfer agent stating that the records
maintained by the transfer agent (which shall be made available
to the Acquiring Fund) contain the names and addresses of the
Acquired Fund shareholders and the numbers and classes of
outstanding Acquired Fund shares owned by each such shareholder
as of the Effective Time. The Acquiring Fund shall certify at
the Closing that the Acquiring Fund Shares required to be issued
by it pursuant to this Agreement have been issued and delivered
as required herein.
3.5 At the Closing, each party to this Agreement shall
deliver to the other such bills of sale, liability assumption
agreements, checks, assignments, share certificates, if any,
receipts or other similar documents as such other party or its
counsel may reasonable request.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Acquired Fund represents and warrants to the
Acquiring Fund as follows:
(a) Ivy Fund is a business trust duly organized and validly
existing under the laws of the Commonwealth of Massachusetts with
power under its declaration of trust to own all of its properties
and assets and to carry on its business as it is now conducted;
(b) Ivy Fund is a registered investment company classified
as a management company of the open-end type, and its
registration with the Commission as an investment company under
the 1940 Act, and of each series of shares offered by Ivy Fund
(including the Acquired Fund shares) under the Securities Act of
1933, as amended (the "1933 Act"), is in full force and effect;
(c) Shares of the Acquired Fund are registered in all
jurisdictions in which they are required to be registered under
state securities laws and any other applicable laws, said
registrations, including any periodic reports or supplemental
filings, are complete and current in all material respects; all
fees required to be paid in connection with such registrations
have been paid; and the Acquired Fund is not subject to any stop
orders, and is fully qualified to sell its shares in any state in
which its shares have been registered;
(d) The Prospectus and Statement of Additional Information
of the Acquired Fund, as of the date hereof and up to and
including the Effective Time, conform and will conform in all
material respects to the applicable requirements of the 1933 Act
and the 1940 Act and the rules and regulations of the Commission
thereunder and do not and will not include any untrue statement
of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
materially misleading;
(e) The Acquired Fund is not, and the execution, delivery
and performance of this Agreement will not result, in a violation
of Ivy Fund's declaration of trust or bylaws or of any material
agreement, indenture, instrument, contract, lease or other
undertaking to which the Acquired Fund is a party or by which it
is bound, except as previously disclosed to the Acquiring Fund in
writing;
(f) Except as previously disclosed to the Acquiring Fund in
writing, no material litigation or administrative proceeding or
investigation of or before any court or governmental body is
presently pending or, to the best of the Acquired Fund's
knowledge, threatened against the Acquired Fund or any of its
properties or assets. The Acquired Fund is not a party to or
subject to the provisions of any order, decree or judgment of any
court or governmental body which materially and adversely affects
its business or its ability to consummate the transactions herein
contemplated;
(g) The Statement of Assets and Liabilities of the Acquired
Fund as of the end of its most recently concluded fiscal year has
been audited by Coopers & Lybrand L.L.P., independent
accountants, and is in accordance with generally accepted
accounting principles ("GAAP") consistently applied, and such
statement (a copy of which as been furnished to the Acquiring
Fund) presents fairly, in all material respects, the financial
position of the Acquired Fund as of such date in accordance with
GAAP, and there are no known material contingent liabilities of
the Acquired Fund required to be reflected on a balance sheet
(including notes thereto) in accordance with GAAP as of such date
not disclosed therein;
(h) Since the end of the Acquired Fund's most recently
concluded fiscal year, there has not been any material adverse
change in the Acquired Fund's financial condition, assets,
liabilities or business other than changes occurring in the
ordinary course of business, except as otherwise disclosed to the
Acquiring Fund. For the purposes of this paragraph (h), a
decline in net asset value per share of the Acquired Fund, the
discharge or incurrence of Acquired Fund liabilities in the
ordinary course of business, or the redemption of Acquired Fund
shares by Acquired Fund shareholders, shall not constitute such a
material adverse change;
(i) All material federal and other tax returns and reports
of the Acquired Fund required by law to have been filed prior to
the Effective Time shall have been filed and shall be correct in
all material respects, and all federal and other taxes shown as
due or required to be shown as due on said returns and reports
shall have been paid or provision shall have been made for the
payment thereof, and, to the best of the Acquired Fund's
knowledge, no such return is currently under audit and no
assessment shall have been asserted with respect to such returns;
(j) For each taxable year of its operation (including the
taxable year ending on the Closing Date), the Acquired Fund has
met the requirements of Subchapter M of the Code for
qualification and treatment as a regulated investment company and
has elected to be treated as such, has been eligible to and has
computed its federal income tax under Section 852 of the Code,
and will have distributed all of its investment company taxable
income and net capital gain (as defined in the Code) that has
accrued through the Closing Date;
(k) All issued and outstanding shares of the Acquired Fund
are, and at the Effective Time will be, duly and validly issued
and outstanding, fully paid and non-assessable (recognizing that,
under Massachusetts law, Acquired Fund Shareholders could, under
certain circumstances, be held personally liable for obligations
of Ivy Fund). All of the issued and outstanding shares of the
Acquired Fund will, at the Effective Time, be held by the persons
and in the amounts set forth in the records of the Acquired Fund,
as provided in Section 3.4. The Acquired Fund does not have
outstanding any options, warrants or other rights to subscribe
for or purchase any Acquired Fund shares, and there is not
outstanding any security convertible into any Acquired Fund
shares (other than Class B shares which automatically convert to
Class A shares after a specified period);
(l) At the Effective Time, the Acquired Fund will have good
and marketable title to the Acquired Fund's assets to be
transferred to the Acquiring Fund pursuant to Section 1.2 and
full right, power, and authority to sell, assign, transfer and
deliver such assets hereunder, and upon delivery of and payment
for such assets, the Acquiring Fund will acquire good and
marketable title thereto, subject to no restrictions on the full
transfer thereof, including such restrictions as might arise
under the 1933 Act other than as disclosed to the Acquiring Fund
in the Effective Time Statement;
(m) The execution, delivery and performance of this
Agreement will have been duly authorized prior to the Effective
Time by all necessary action on the part of the Acquired Fund's
Board of Trustees, and, subject to the approval of the Acquired
Fund shareholders, this Agreement will constitute a valid and
binding obligation of the Acquired Fund, enforceable in
accordance with its terms, subject, as to enforcement to
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other laws relating to or affecting creditors'
rights and to the application of equitable principles in any
proceeding, whether at law or in equity;
(n) The information to be furnished by and on behalf of the
Acquired Fund for use in registration statements, proxy materials
and other documents which may be necessary in connection with the
transactions contemplated hereby shall be accurate and complete
in all material respects;
(o) All information pertaining to the Acquired Fund, Ivy
Fund, and their agents and affiliates and included in the
Registration Statement referred to in Section 5.5 (or supplied by
the Acquired Fund, Ivy Fund or their agents or affiliates for
inclusion in said Registration Statement), on the effective date
of said Registration Statement and up to and including the
Effective Time, will not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make statements therein, in light
of the circumstance under which such statements are made, not
materially misleading (other than as may timely be remedied by
further appropriate disclosure);
(p) Since the end of the Acquired Fund's most recently
concluded fiscal year, there have been no material changes by the
Acquired Fund in accounting methods, principles or practices,
including those required by generally accepted accounting
principles, except as disclosed in writing to the Acquiring Fund;
and
(q) The Effective Time Statement will be prepared in
accordance with generally accepted accounting principles (except
for footnotes) consistently applied and will present accurately
in all material respects the assets and liabilities of the
Acquired Fund as of the Effective Time, and the values of the
Acquired Fund's assets and liabilities to be set forth in the
Effective Time Statement will be computed as of the Effective
Time using the valuation procedures set forth in the Acquired
Fund's declaration of trust and bylaws, its then-current
Prospectus and Statement of Additional Information, and as may be
required by the 1940 Act. At the Effective Time, the Acquired
Fund will have no liabilities, whether absolute or contingent,
accrued and unaccrued, which are not reflected in the Effective
Time Statement.
4.2 The Acquiring Fund represents and warrants to the
Acquired Fund as follows:
(a) Tocqueville Trust is a business trust duly organized
and validly existing under the laws of the Commonwealth of
Massachusetts with power under its declaration of trust to own
all of its properties and assets and to carry on its business as
it is now conducted;
(b) Tocqueville Trust is a registered investment company
classified as a management company of the open-end type, and its
registration with the Commission as an investment company under
the 1940 Act, and of each series of shares offered by Tocqueville
Trust (including the Acquiring Fund Shares) under the 1933 Act,
is in full force and effect;
(c) Shares of the Acquiring Fund are registered in all
jurisdictions in which they are required to be registered under
state securities laws and any other applicable laws; said
registration, including any periodic reports or supplemental
filings, are complete and current; all fees required to be paid
in connection with such registrations have been paid; and the
Acquiring Fund is in good standing, is not subject to any stop
orders, and is fully qualified to sell its shares in any state in
which its shares have been registered;
(d) The Prospectus and Statement of Additional Information
of the Acquiring Fund, as of the date hereof and up to and
including the Effective Time, conform and will conform in all
material respects to the applicable requirements of the 1933 Act
and the 1940 Act and the rules and regulations of the commission
thereunder and do not and will not include any untrue statement
of a material fact or omit to state any material fact necessary
to make the statements therein, in light of the circumstances
under which they were made, not materially misleading;
(e) The Acquiring Fund is not, and the execution, delivery
and performance of the Agreement will not result, in a violation
of its declaration of trust or bylaws or of any material
agreement, indenture, instrument, contract, lease or other
undertaking to which the Acquiring Fund is a party or by which it
is bound;
(f) No material litigation or administrative proceeding or
investigation of or before any court or governmental body is
presently pending or, to the best of the Acquiring Fund's
knowledge, threatened against the Acquiring Fund or any of its
properties or assets. The Acquiring Fund is not a party to or
subject to the provisions of any order, decree or judgment of any
court or governmental body which materially and adversely affects
its business or its ability to consummate the transactions herein
contemplated;
(g) The Statement of Assets and Liabilities of the
Acquiring Fund as of the end of its most recently concluded
fiscal year has been audited by McGladrey & Pullen, LLP,
independent accountants, and is in accordance with GAAP
consistently applied, and such statement (a copy of which has
been furnished to the Acquired Fund) presents fairly, in all
material respects, the financial position of the Acquiring Fund
as of such date in accordance with GAAP, and there are no known
material contingent liabilities of the Acquiring Fund required to
be reflected on a balance sheet (including notes thereto) in
accordance with GAAP as of such date not disclosed therein;
(h) Since the end of the Acquiring Fund's most recently
concluded fiscal year, there has not been any material adverse
change in the Acquiring Fund's financial condition, assets,
liabilities or business other than changes occurring in the
ordinary course of business, except as otherwise disclosed to the
Acquired Fund. For the purposes of this paragraph (h), a decline
in net asset value per share of the Acquiring Fund, the discharge
or incurrence of Acquiring Fund liabilities in the ordinary
course of business, or the redemption of Acquiring Fund shares by
Acquiring Fund shareholders, shall not constitute such a material
adverse change;
(i) All material federal and other tax returns and reports
of the Acquiring Fund required by law to have been filed prior to
the Effective Time shall have been filed and shall be correct in
all material respects, and all federal and other taxes shown as
due or required to be shown as due on said returns and reports
shall have been paid or provision shall have been made for the
payment thereof, and, to the best of the Acquiring Fund's
knowledge, no such return is currently under audit and no
assessment shall have been asserted with respect to such returns;
(j) For each taxable year of its operation, the Acquiring
Fund as met the requirements of Subchapter M of the Code for
qualification and treatment as a regulated investment company and
has elected to be treated as such, has been eligible to and has
computed its federal income tax under Section 852 of the Code,
and will do so for the taxable year including the Closing Date;
(k) All issued and outstanding shares of the Acquiring Fund
are, and at the Effective Time will be, duly and validly issued
and outstanding, fully paid and non-assessable (recognizing that,
under Massachusetts law, Acquiring Fund shareholders could, under
certain circumstances, be held personally liable for obligations
of Tocqueville Trust). The Acquiring Fund Shares to be issued
and delivered to the Acquired Fund for the account of the
Acquired Fund Shareholders, pursuant to the terms of this
Agreement, at the Effective Time will have been duly authorized
and, when so issued and delivered, will be duly and validly
issued and outstanding, fully paid and non-assessable
(recognizing that, under Massachusetts law, Acquiring Fund
Shareholders could, under certain circumstances, be held
personally liable for obligations of Tocqueville Trust). The
Acquiring Fund does not have outstanding any options, warrants or
other rights to subscribe for or purchase any Acquiring Fund
shares, and there is not outstanding any security convertible
into any Acquiring Fund shares (other than Class B shares which
automatically convert to Class A shares after a specified
period);
(l) The execution, delivery and performance of this
Agreement will have been duly authorized prior to the Effective
Time by all necessary action on the part of Tocqueville Trust's
Board of Trustees, and at the Effective Time this Agreement will
constitute a valid and binding obligation of the Acquiring Fund,
enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other laws related to or
affecting creditors' rights and to the application of equitable
principles in any proceeding, whether at law or in equity.
Consummation of the transactions contemplated by the Agreement
does not require the approval of the Acquiring Fund's
shareholders;
(m) The information to be furnished by and on behalf of the
Acquiring Fund for use in registration statements, proxy
materials and other documents which may be necessary in
connection with the transactions contemplated hereby shall be
accurate and complete in all material respects;
(n) Since the end of the Acquiring Fund's most recently
concluded fiscal year, there have been not material changes by
the Acquiring Fund in accounting methods, principles or
practices, including those required by generally accepted
accounting principles, except as disclosed in writing to the
Acquired Fund; and
(o) The Registration Statement referred to in Section 5.5,
on its effective date and up to and including the Effective Time,
will (i) conform in all material respects to the applicable
requirements of the 1933 Act, the Securities Exchange Act of
1934, as amended (the "1934 Act"), and the 1940 Act and the rules
and regulations of the Commission thereunder, and (ii) not
contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under
which such statements were made, not materially misleading (other
than as may timely be remedied by further appropriate
disclosure); provided, however, that the representations and
warranties in clause (ii) of this paragraph shall not apply to
statements in (or omissions from) the Registration Statement
concerning the Acquired Fund, Ivy Fund, and their agents and
affiliates (or supplied by the Acquired Fund, Ivy Fund, or their
agents or affiliates for inclusion in said Registration
Statement).
5. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND
5.1 Each of the Acquired Fund and the Acquiring Fund will
operate its business in the ordinary course between the date
hereof and the Effective Time, it being understood that such
ordinary course of business will include the declaration and
payment of customary dividends and distributions, and any other
distributions that may be advisable (which may include
distributions prior to the Effective time of net income and/or
net realized capital gains not previously distributed).
5.2 The Acquired Fund will call a meeting of its
shareholders to consider and act upon this Agreement and to take
all other action reasonable necessary to obtain approval of the
transactions contemplated herein.
5.3 The Acquired Fund will assist the Acquiring Fund in
obtaining such information as the Acquiring Fund reasonable
requests concerning the beneficial ownership of the Acquired Fund
shares.
5.4 Subject to the provision of this Agreement, the
Acquiring Fund and the Acquired Fund will each take, or cause to
be taken, all actions, and do or cause to be done, all things
reasonable necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement.
5.5 The parties will provide to each other information
reasonably necessary for the preparation of the Registration
Statement on form N-14 of the Acquiring Fund (the "Registration
Statement"), in compliance with the 1933 Act and the 1940 Act.
5.6 The Acquiring Fund agrees to use all reasonable efforts
to obtain the approvals and authorizations required by the 1933
Act, the 1940 Act and such state blue sky or securities laws as
may be necessary in order to conduct its operations after the
Effective Time.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to consummate the
transactions provided for herein shall be subject, at its
election, to the performance by the Acquiring Fund of all the
obligations to be performed by it hereunder at or before the
Effective Time, and, in addition thereto, the following further
conditions (any of which may be waived by the Acquired Fund, in
its sole and absolute discretion):
6.1 All representations and warranties of the Acquiring
Fund contained in this Agreement shall be true and correct as of
the date hereof and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Effective
Time with the same force and effect as if made at such time;
6.2 The Acquiring Fund shall have delivered to the Acquired
Fund a certificate executed in its name by its President or a
Vice President, in a form reasonably satisfactory to the Acquired
Fund and dated as of the date of the Closing, to the effect that
the representations and warranties of the Acquiring Fund made in
this Agreement are true and correct at the Effective Time, except
as they may be affected by the transactions contemplated by this
Agreement;
6.3 The Acquiring Fund shall have delivered to the Acquired
Fund the certificate as to the issuance of Acquiring Fund shares
contemplated by the second sentence of Section 3.4;
6.4 The Acquiring Fund or the Acquiring Fund's investment
adviser shall have paid or agreed to pay the first $25,000 of
costs incurred by the Tocqueville Trust and Ivy Fund in
connection with the Reorganization, including the fees and
expenses associated with the preparation and filing of the
Registration Statement referred to in Section 5.5 above, any
other state or federal qualification and registration fees, and
the expenses of printing and mailing the prospectus/proxy
statement, soliciting proxies and holding the Acquired Fund
shareholder meeting required to approve the transactions
contemplated by this Agreement and all counsel fees in connection
therewith, which expenses shall be solely and directly related to
the Reorganization within the meaning of Revenue Ruling 73-54,
1973 1 C.B. 187 (all of such costs, fees and expenses referred to
as the "Reorganization Expenses"). All of the Reorganization
Expenses, without considering fees and expenses of counsel and
accountants to the Acquiring Fund and the Acquiring Fund's
investment adviser, in excess of $25,000, shall be paid by the
Acquired Fund's investment adviser.
6.5 The Acquired Fund shall have received an opinion from
Kramer, Levin, Naftalis, Nessen, Kamen & Frankel, counsel to the
Acquiring Fund, dated as of the Closing Date, to the effect that:
(a) Tocqueville Trust has been duly organized and is
validly existing as a business trust under the laws of the
Commonwealth of Massachusetts with requisite power and authority
to own its properties and, to the knowledge of such counsel, to
carry on its business as presently conducted;
(b) Under federal laws and the laws of the Commonwealth of
Massachusetts, this Agreement has been duly authorized, executed
and delivered by the Acquiring Fund and, assuming due
authorization, execution and delivery of the Agreement by the
Acquired Fund, constitutes a valid and legally binding obligation
of the Acquiring Fund enforceable against the Acquiring Fund in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors'
rights and to general equitable principles;
(c) The execution and delivery of this Agreement did not
and the exchange of the Acquired Fund's assets for shares of the
Acquiring Fund do not violate (i) the Acquiring Fund's
declaration of trust or bylaws or (ii) any federal law of the
United States or the laws of the commonwealth of Massachusetts
applicable to the Acquiring Fund, provided, however, that such
counsel may state that it expresses no opinion with respect to
federal or state securities laws, other anti-fraud laws and
fraudulent transfer laws; and provided further that insofar as
performance by the Acquiring Fund of its obligations under this
Agreement is concerned such counsel may state that it expresses
no opinion as to bankruptcy, insolvency, reorganization,
moratorium or similar laws of general applicability relating to
or affecting creditors' rights;
(d) All regulatory consents, authorizations, approvals and
filings required to be obtained or made by the Acquiring Fund
under the federal laws of the United states and the laws of the
Commonwealth of Massachusetts for the consummation of the
transactions contemplated by this Agreement have been obtained or
made.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to consummate the
transactions provided for herein shall be subject, at its
election, to the performance by the Acquired Fund of all of the
obligations to be performed by it hereunder at or before the
Effective Time and, in addition thereto, the following conditions
(any of which may be waived by the Acquiring Fund, in its sole
and absolute discretion):
7.1 All representations and warranties of the Acquired Fund
contained in this Agreement shall be true and correct as of the
date hereof and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Effective
Time with the same force and effect as if made at such time.
7.2 The Acquired Fund shall have delivered to the Acquiring
Fund the Effective Time Statement.
7.3 The Acquired Fund shall have delivered to the
Acquiring Fund a certificate executed in its name by its
President or a Vice President, in a form reasonably satisfactory
to the Acquiring Fund and dated as of the date of the Closing, to
the effect that the representations and warranties of the
Acquired Fund made in this Agreement are true and correct at the
Effective Time, except as they may be affected by the
transactions contemplated by this Agreement.
7.4 The Acquired Fund shall have delivered to the Acquiring
Fund the written instructions to the custodian for the Acquired
Fund contemplated by Section 3.2.
7.5 The Acquired Fund shall have delivered to the Acquiring
Fund the certificate as to its shareholder records contemplated
by the first sentence of Section 3.4.
7.6 The Acquiring Fund shall have received an opinion from
Dechert Price & Rhoads, counsel to the Acquired Fund, dated as of
the Closing Date, to the effect that:
(a) Ivy Fund has been duly organized and is validly
existing as a business trust under the laws of the Commonwealth
of Massachusetts with requisite power and authority to own its
properties and, to the knowledge of such counsel, to carry on its
business as presently conducted;
(b) Under federal laws and the laws of the Commonwealth of
Massachusetts, this Agreement has been duly authorized, executed
and delivered by the Acquired Fund and, assuming due
authorization, execution and delivery of the Agreement by the
Acquiring Fund, constitutes a valid and legally binding
obligation of the Acquired Fund enforceable against the Acquired
Fund in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and to general equitable principles;
(c) The execution and delivery of this Agreement did not
and the exchange of the Acquired Fund's assets for shares of the
Acquiring Fund do not violate (i) the Acquired Fund's declaration
of trust or bylaws or (ii) any federal law of the United States
or the laws of the commonwealth of Massachusetts applicable to
the Acquired Fund, provided, however, that such counsel may state
that it expresses no opinion with respect to federal or state
securities laws, other anti-fraud laws and fraudulent transfer
laws; and provided further that insofar as performance by the
Acquired Fund of its obligations under this Agreement is
concerned such counsel may state that it expresses no opinion as
to bankruptcy, insolvency, reorganization, moratorium or similar
laws of general applicability relating to or affecting creditors'
rights;
(d) All regulatory consents, authorizations, approvals and
filings required to be obtained or made by the Acquired Fund
under the federal laws of the United states and the laws of the
Commonwealth of Massachusetts for the consummation of the
transactions contemplated by this Agreement have been obtained or
made.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING
FUND AND THE ACQUIRED FUND
The following shall constitute further conditions precedent
to the consummation of the Reorganization:
8.1 This Agreement and the transactions contemplated herein
shall have been approved by the requisite votes of (a) the Board
of Trustees of each of the Acquiring Fund and the Acquired Fund,
and (b) the holders of the outstanding shares of the Acquired
Fund in accordance with the provisions of the Acquired Fund's
Amended and Restated Declaration of Trust, as amended, and By-
Laws and applicable law, and each Fund shall have delivered
certified copies of the resolutions evidencing such approvals to
the other Fund. Notwithstanding anything herein to the contrary,
neither the Acquiring fund nor the Acquired Fund may waive the
conditions set forth in this Section 8.1.
8.2 As of the Effective Time, no action, suit or other
proceeding shall be, to the knowledge of either party to this
Agreement, threatened or pending before any court or governmental
agency in which it is sought to restrain or prohibit, or obtain
damages or other relief in connection with, this Agreement or the
transactions contemplated herein.
8.3 All consents of other parties and all other consents,
orders and permits of federal, state and local regulatory
authorities deemed necessary by the Acquiring Fund or the
Acquired Fund to permit consummation, in all material respects,
of the transactions contemplated hereby shall have been obtained,
except where failure to obtain any such consent, order or permit
would not involve a risk of a material adverse effect on the
assets or properties of the Acquiring Fund or the Acquired Fund,
provided that either party hereto may for itself waive any of
such conditions.
8.4 The Registration Statement shall have become effective
under the 1933 Act, and no stop order suspending the
effectiveness thereof shall have been issued and, to the best
knowledge of the parties hereto, no investigation or proceeding
for that purpose shall have been instituted or be pending,
threatened or contemplated under the 1933 Act.
8.5 The parties shall have received the opinion of Dechert
Price & Rhoads addressed to the Acquired Fund and the Acquiring
Fund, dated as of the date of the closing, and based in part on
certain representations to be furnished by the Acquired Fund and
the Acquiring Fund, substantially to the effect that, based upon
certain facts, assumptions and representations, the transaction
contemplated by this Agreement constitutes a tax-free
reorganization for federal income tax purposes. The delivery of
such opinion is conditioned upon receipt by Dechert Price &
Rhoads of representations it shall request of Tocqueville Trust
and Ivy Fund. Notwithstanding anything herein to the contrary,
neither the Acquiring Fund nor the Acquired Fund may waive the
condition set forth in this paragraph 8.5.
9. INDEMNIFICATION
9.1 The Acquiring Fund agrees to indemnify and hold
harmless the Acquired Fund and each of the Acquired Fund's
trustees and officers from and against any and all losses,
claims, damages, liabilities or expenses (including, without
limitation, the payment of reasonable legal fees and reasonable
costs of investigation) to which, jointly or severally, the
Acquired Fund or any of its directors or officers may become
subject, insofar as any such loss, claim, damage, liability or
expense (or actions with respect thereto) arises out of or is
based on any breach by the Acquiring Fund of any of its
representations, warranties, covenants or agreements set forth in
this Agreement.
9.2 The Acquired Fund agrees to indemnify and hold harmless
the Acquiring Fund and each of the Acquiring Fund's directors and
officers from and against any and all losses, claims, damages,
liabilities or expenses (including, without limitation, the
payment of reasonable legal fees and reasonable costs of
investigation) to which, jointly or severally, the Acquiring Fund
or any of its directors or officers may become subject, insofar
as nay such loss, claim, damage, liability or expense (or actions
with respect thereto) arises out of or is based on any breach by
the Acquired Fund of any of its representations, warranties,
covenants or agreements set forth in this Agreement.
10. ENTIRE AGREEMENT; SURVIVAL OF REPRESENTATIONS AND WARRANTIES
10.1 The Acquiring Fund and the Acquired Fund agree that
neither party has made any representation, warranty, covenant or
agreement not set forth herein and that this Agreement
constitutes the entire agreement between the parties.
10.2 The representations and warranties contained in this
Agreement or in any document delivered pursuant hereto or in
connection herewith shall survive the consummation of the
transactions contemplated hereby.
11. TERMINATION
This Agreement and the transactions contemplated hereby may
be terminated and abandoned at any time prior to the Closing:
(a) by either party by resolution of the party's board of
trustees at any time prior to the Effective Time, if
circumstances should develop that, in the good faith opinion of
such board, make proceeding with this Agreement and such
transactions not in the best interest of the applicable party's
shareholders;
(b) by either party by notice to the other, without
liability to the terminating party on account of such termination
(providing the terminating party is not otherwise in material
default or breach of this Agreement) if the Closing shall not
have occurred on or before December 31, 1996.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in
such manner as may be mutually agreed upon in writing by the
authorized officers of the Acquired Fund and the Acquiring Fund;
provided, however, that following the meeting of the Acquired
Fund shareholders called by the Acquired Fund pursuant to Section
5.2 of this Agreement, no such amendment may have the effect of
changing the provisions for determining the number of Acquiring
Fund Shares to be issued to Acquired Fund shareholders under this
Agreement to the detriment of such shareholders without their
further approval.
13. NOTICES
Any notice, report, statement or demand required or
permitted by any provisions of this Agreement shall be in writing
and shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, addressed to the Acquiring Fund
at 1675 Broadway, New York, NY 10018, Attention: President, and
to the Acquired Fund at Via Mizner Financial Plaza, 700 South
Federal Highway, Boca Raton, Florida 33432, Attention: President.
14. HEADINGS; COUNTERPARTS; ASSIGNMENTS; MISCELLANEOUS
14.1 The Article and Section headings contained in this
Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.
14.2 All agreements, covenants, representations and
warranties made herein by the Acquired Fund, and all obligations,
duties, responsibilities, rights and privileges created hereunder
in the name of the Acquired Fund, and all actions that are to be
taken by the Acquired Fund, shall be treated as if made, created
or to be taken by Ivy Fund on behalf of the Acquired Fund. The
name "Ivy Fund" is the designation of the Trustees for the time
being under the Amended and Restated Declaration of Trust dated
December 10, 1992, as amended. The Acquired Fund's obligations
hereunder shall not be binding upon any of the Trust's trustees,
shareholders, nominees, officers, agents, or employees
personally, but shall bind only the trust property of Ivy Fund.
Any persons dealing with Ivy Fund must look solely to trust
property for the enforcement of any claims against Ivy Fund. No
series of Ivy Fund other than the Acquired Fund is responsible
for the Acquired Fund's obligations.
14.3 This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all
of which together shall constitute one and the same agreement.
14.4 This Agreement shall bind and inure to the benefit of
the parties hereto and their respective successors and assigns,
but no assignment or transfer hereof or of any rights or
obligations hereunder shall be made by either party without the
prior written consent of the other party. Nothing herein
expressed or implied is intended or shall be construed to confer
upon or give any person, firm or corporation, other than the
parties hereto and their respective successors and assigns, any
rights or remedies under or by reason of this Agreement.
14.5 The validity, interpretation and effect of this
Agreement shall be governed exclusively by the laws of the
Commonwealth of Massachusetts, without giving effect to the
principles of conflict of laws thereof.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be executed by its President or Vice President.
THE TOCQUEVILLE TRUST
on behalf of
THE TOCQUEVILLE GOVERNMENT FUND
By ___________________________________
Its __________________________________
IVY FUND
on behalf of
IVY SHORT-TERM BOND FUND
By ___________________________________
Its __________________________________
FORM OF PROXY
IVY SHORT-TERM BOND FUND
a Series of Ivy Fund
________________
PROXY SOLICITED BY THE TRUSTEES
The undersigned, having received Notice of the November 15,
1996 Special Meeting of Shareholders of Ivy Short-Term Bond Fund
("ISTBF"), a series of shares of Ivy Fund, and the related Proxy
Statement, hereby appoints Michael G. Landry and C. William
Ferris, and each of them as proxies, with full power of
substitution and revocation, to represent the undersigned and to
vote all shares of ISTBF which the undersigned is entitled to
vote at the special meeting of shareholders of ISTBF to be held
at 10:00 a.m., Eastern Time, at the offices of ISTBF, Via Mizner
Financial Plaza, 700 South Federal Highway, Suite 300, Boca
Raton, Florida 33432 and any adjournments thereof:
UNLESS OTHERWISE SPECIFIED IN THE SPACES PROVIDED, THE
UNDERSIGNED'S VOTE WILL BE CAST FOR EACH NUMBERED ITEM LISTED
BELOW.
1. Approval of an Agreement and Plan of Reorganization (the
"Plan") providing for (a) the acquisition of substantially
all of the assets and the assumption of all identified and
stated liabilities of ISTBF as of the closing of the
reorganization by The Tocqueville Government Fund ("TGF"),
in exchange for shares of beneficial interest of TGF having
an aggregate net asset value equal to the aggregate value of
the assets acquired (less liabilities assumed) of ISTBF and
(b) the complete liquidation of ISTBF and the pro rata
distribution of TGF shares to shareholders of ISTBF. Under
the Plan, ISTBF's shareholders will receive Class A shares
of TGF having a net asset value equal as of the effective
time of the Plan to the net asset value of their Class A and
Class B shares of ISTBF as described in the accompanying
Proxy Statement/Prospectus.
FOR AGAINST ABSTAIN
2. In the discretion of the proxies, on any other matters that
may properly come before the meeting and any adjournment or
adjournments thereof.
YOUR PROMPT ATTENTION WILL BE APPRECIATED. PLEASE DATE, SIGN
AND RETURN IN THE ENVELOPE PROVIDED. NO POSTAGE REQUIRED WHEN
MAILED IN THE UNITED STATES. IF YOU PREFER TO USE OUR
TELEPHONE VOTING SERVICE TO RECORD YOUR VOTE IMMEDIATELY,
SIMPLY CALL 1-800-733-8481 Ext. 408 AND FOLLOW INSTRUCTIONS.
(Name of Record holder)
By: _________________________________ DATED:
____________________, 1996
By: _________________________________ DATED:
____________________, 1996
(If held jointly)
Please sign this proxy exactly as your name appears on the books
of the fund. Joint owners should each sign personally. Trustees
and other fiduciaries should indicate the capacity in which they
sign, and where more than one name appears, a majority must sign.
If a corporation, the signature should be that of an authorized
officer who should state his or her title.
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be
of assistance to you and may help avoid the time and expense
involved in validating your vote if you fail to sign your proxy
card properly.
1. INDIVIDUAL ACCOUNTS: Sign your name exactly as it appears in
the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the
party signing should conform exactly to a name shown in the
registration.
3. ALL OTHER ACCOUNTS: The capacity of the individual signing
the proxy card should be indicated unless it is reflected in
the form of registration. For example:
REGISTRATION VALID SIGNATURE
Corporate Accounts:
(1) ABC Corp. John Doe, Treasurer
(2) ABC Corp., c/o John Doe John Doe, Treasurer
(3) ABC Corp. Profit Sharing Plan John Doe,
Trustee
Trust Accounts:
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee u/t/d 12/28/78 Jane B.
Doe,
Trustee
Custodial or Estate Accounts:
(1) John B. Smith, Cust. f/b/o
John B. Smith, Jr., UGMA John B. Smith
(2) John B. Smith John B. Smith, Jr.,
Executor
