File No. 33-8746
ICA No. 811-4840
As filed with the Securities and Exchange Commission on April 15, 1998
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No. 19
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 21
THE TOCQUEVILLE TRUST
(Exact Name of Registrant as Specified in Charter)
1675 Broadway
New York, New York 10019
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 698-0800
Francois D. Sicart
President
The Tocqueville Trust
1675 Broadway
New York, New York 10019
(Name and Address of Agent for Service)
Copies to:
Susan J. Penry-Williams, Esq.
Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, New York 10022
It is proposed that this filing will become effective (check appropriate box)
( ) immediately upon filing pursuant to paragraph (b)
( ) on (date) pursuant to paragraph (b)
( ) 60 days after filing pursuant to paragraph (a)(1)
( ) on (date) pursuant to paragraph (a)(1)
(X) 75 days after filing pursuant to paragraph (a)(2)
( ) on (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
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THE TOCQUEVILLE TRUST
Registration Statement on Form N-1A
CROSS REFERENCE SHEET
Form N-1A
Item Number
Part A Prospectus Caption
1. Cover Page
2. Highlights; Fee Table
3. *
4. Organization and Description of Shares of the Trust;
Investment Objective, Policy and Risks; Additional
Investment Policies and Risk Considerations
5.(a)(b)(c) Investment Advisor and Investment Advisory Agreement(s)
(d) Distribution Plans
(e) Custodian, Transfer Agent and Dividend Paying Agent
(f) Investment Advisor and Investment Advisory Agreement(s)
(g) Brokerage Allocation
5A Performance Calculation
6.(a) Organization and Description of Shares of the Trust
(b) Investment Advisor and Investment Advisory Agreement(s)
(c) Organization and Description of Shares of the Trust
(d) Purchase of Shares; Redemption of Shares
(e) Cover Page
(f)(g) Dividends, Distributions and Tax Matters
7.(a)(b) Purchase of Shares
(c) Purchase of Shares
(d) Purchase of Shares
(e) *
(f) Distribution Plan
8. Redemption of Shares
9. *
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Part B Statement of Additional Information Caption
10. Cover Page
11. Table of Contents
12. *
13. Investment Policies and Risks; Investment
Restrictions
14. Management
15. General Information
16.(a)(b) Investment Advisor and Investment Advisory Agreements
(c) *
(d) *
(e) *
(f) Distribution Plans
(g) *
(h) See Prospectus
(i) *
17.(a) Portfolio Transactions and Brokerage
(b) *
(c) Portfolio Transactions and Brokerage
(d) *
(e) *
18. General Information
19.(a) Purchase and Redemption of Shares
(b) Computation of Net Asset Value
(c) *
20. Tax Matters
21. Distribution Plans
22. Performance Calculation
23. Financial Statements
Part C Information required to be included in Part C is set forth
under the appropriate Item, so numbered, in Part C to this Registration
Statement.
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* Not Applicable
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THE TOCQUEVILLE TRUST
THE TOCQUEVILLE GOLD FUND
The Tocqueville Trust (the "Trust") is a Massachusetts business trust
that consists of separate series. By this Prospectus, the Trust offers shares of
The Tocqueville Gold Fund (the "Fund"), an open-end, diversified management
investment company.
The Fund's investment objective is to provide long-term capital
appreciation through investments in gold and securities of companies located
throughout the world that are engaged in mining or processing gold ("gold
related securities"), and through investments in other precious metals and
securities of companies located throughout the world that are engaged in mining
or processing such other precious metals ("other precious metal securities").
The Fund will invest no less than 65% of its total assets in a portfolio of gold
and gold related securities.
Tocqueville Asset Management L.P. (the "Investment Advisor") provides
the Fund with investment advisory and certain administrative services.
This Prospectus sets forth concisely the information that a prospective
investor should know before investing in shares of the Fund and should be read
and retained for future reference. A Statement of Additional Information, dated
June 29, 1998, containing additional information about the Fund has been filed
with the Securities and Exchange Commission and is hereby incorporated by
reference into this Prospectus. A copy of the Statement of Additional
Information can be obtained without charge by calling 1-800-697-3863 or writing
the Trust c/o Firstar Trust Company, P.O. Box 701, Milwaukee, Wisconsin
53201-0701. Additional information, including this Prospectus and the Statement
of Additional Information, may be obtained by accessing the Internet Web site
maintained by the Securities and Exchange Commission (http://www.sec.gov).
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INVESTMENTS IN THE FUND ARE SUBJECT TO RISK -- INCLUDING POSSIBLE LOSS
OF PRINCIPAL -- AND WILL FLUCTUATE IN VALUE. SHARES OF THE FUND ARE NOT BANK
DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY A BANK AND ARE NOT
INSURED BY, OBLIGATIONS OF OR OTHERWISE SUPPORTED BY THE U.S. GOVERNMENT, THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is June 29, 1998.
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TABLE OF CONTENTS
Highlights....................................................................3
Fee Table.....................................................................4
Investment Objective, Policies and Risks......................................5
Additional Investment Policies and Risk
Considerations..............................................................8
Investment Advisor and Investment
Advisory Agreement..........................................................11
Distribution Plan............................................................11
Administrative Services Agreement............................................11
Brokerage Allocation.........................................................12
Purchase of Shares...........................................................12
Redemption of Shares.........................................................17
Shareholder Privileges.......................................................18
Retirement Plans.............................................................20
Dividends, Distributions and Tax Matters.....................................21
Organization and Description of Shares of
the Trust..................................................................23
Custodian, Transfer Agent and Dividend
Paying Agent................................................................23
Counsel and Independent Accountants..........................................23
Shareholder Inquiries........................................................23
Other Information............................................................24
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HIGHLIGHTS
WHAT IS THE TOCQUEVILLE TRUST?
The Tocqueville Trust is a business trust formed under the laws of the
Commonwealth of Massachusetts. The Tocqueville Gold Fund, a series of the
Tocqueville Trust, is an open-end, diversified management investment company, as
defined by the Investment Company Act of 1940, as amended (the "1940 Act").
Shares of the Fund may be purchased at a price equal to the next determined net
asset value per share plus a charge which may be imposed at the time of
purchase. As an open-end investment company, the Fund has an obligation to
redeem its shares held by an investor at the net asset value of the shares next
determined after receipt of a redemption request in proper form. (See
"Organization and Description of Shares of the Trust.")
WHAT IS THE TOCQUEVILLE GOLD FUND AND HOW IS ITS INVESTMENT OBJECTIVE ACHIEVED?
The Tocqueville Gold Fund is an open-end, diversified management
investment company whose investment objective is to provide long-term capital
appreciation through investments in gold and securities of companies located
throughout the world that are engaged in mining or processing gold ("gold
related securities"), and through investments in other precious metals and
securities of companies located throughout the world that are engaged in mining
or processing such other precious metals ("other precious metal securities").
The Fund will invest no less than 65% of its total assets in a portfolio of gold
and gold related securities. (See "Investment Objective, Policies and Risks.")
WHO MANAGES THE FUND?
Tocqueville Asset Management L.P. (the "Investment Advisor") serves as
the Fund's investment advisor pursuant to an Investment Advisory Agreement.
Under the terms of each Agreement, the Investment Advisor supervises all aspects
of the Fund's operations and provides investment advisory services. As
compensation, the Investment Advisor receives a fee based on the Fund's average
daily net assets. The Investment Advisor also is engaged in the business of
acting as investment advisor to private accounts with combined assets of more
than $600 million. (See "Investment Advisor and Investment Advisory
Agreements.")
DISTRIBUTION PLAN
The Fund has adopted a distribution plan, pursuant to Rule 12b-1 of the
1940 Act, that allows the Fund to incur distribution expenses related to the
sale of its shares of up to .25% per annum of the Fund's average daily net
assets. (See "Distribution Plan").
SPECIAL RISK CONSIDERATIONS
An investor should be aware that there are special risks inherent in
investing in gold and gold related securities, including fluctuations in the
price of gold and concentration of supply in the gold market. There also are
similar special risks inherent in investing in other precious metals and other
precious metal securities. (See "Investment Objective, Policies and Risks" and
"Additional Investment Policies and Risk Considerations.")
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FEE TABLE
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load on Purchases.................... 4.00%
Maximum Sales Load Imposed on
Reinvested Dividends............................... None
Maximum Deferred Sales Load........................ None
Redemption Fee *
Exchange Fee **
ANNUAL FUND OPERATING EXPENSES:
(as a % of average net assets)
Management Fee..................................... 1.00%
12b-1 Fee (1)...................................... .25%
Other Expenses (after fee waivers)................. .73%
Total Operating Expenses (after fee waivers)................ 1.98%(2)
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(1) Under the Fund's Distribution Plan, the Advisor is permitted to carry
forward expenses not reimbursed by the distribution fee to subsequent
fiscal years for submission by the Fund for payment, subject to the
continuation of the Plan. Such amounts are not recognized in the Fund's
financial statements as expenses and liabilities, since the
Distribution Plan can be terminated on an annual basis without further
liability to the Fund. The Rule 12b-1 fee may represent the equivalent
of an annual asset-based sales charge to an investor. As a result of
distribution fees, a long-term shareholder in the Fund may pay more
than the economic equivalent of the maximum front-end sales charge
permitted by the Rules of the National Association of Securities
Dealers, Inc.
(2) Total Operating Expenses reflect the voluntary waiver and/or the
reimbursement of certain expenses. Absent such voluntary waiver and/or
reimbursement. Other Expenses and Total Operating Expenses for the Fund
would be: 3.00% and 4.25%, respectively. The Advisor has voluntarily
undertaken to waive and/or reimburse expenses during the current fiscal
year so that Total Fund Operating Expenses do not exceed those stated
in the Fee Table. Should the Advisor decide during the current fiscal
year that such waiver and/or reimbursement cannot be maintained,
shareholders will receive 30 days notice of the change.
* The Transfer Agent charges a $12 service fee for each payment of
redemption proceeds made by wire.
** The Transfer Agent charges a $5 fee for each telephone exchange.
EXAMPLE: You would pay the following expenses on a $1000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period.
1 Year..................................... $__
3 Years.................................... $__
The purpose of the expense summary provided above is to assist
investors in understanding the various costs and expenses that a shareholder in
the Fund will bear directly or indirectly. The "Annual Fund Operating Expenses"
summary shows the management fee, Rule 12b-1 fee, and other operating expenses
expected to be incurred by the Fund during the current fiscal year. The
"Example" set forth above assumes all dividends and other distributions are
reinvested and that the percentages under "Annual Fund Operating Expenses"
remain the same in the years shown. The example includes the initial sales
charge.
These examples should not be considered a representation of past or
future expenses and actual expenses may be greater or less than those shown.
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PERFORMANCE CALCULATION
The Fund calculates performance on a total return basis for various
periods. The total return basis combines changes in principal and dividends and
distributions for the periods shown, as well as the deduction of all charges and
expenses. The total return basis reflects the deduction of the maximum initial
sales charge at the time of purchase. Principal changes are based on the
difference between the beginning and closing net asset value for the period.
Calculations assume reinvestment of all dividends and distributions paid by the
Fund. Dividends and distributions are comprised of net investment income and net
realized capital gains, respectively. In addition, the Fund may calculate
performance on a total return basis at net asset value.
Performance will vary from time to time and past results are not
necessarily representative of future results. A shareholder should remember that
performance is a function of portfolio management in selecting the type and
quality of portfolio securities and is affected by operating expenses.
Comparative performance information may be used from time to time in
the advertising or marketing of the Fund's shares, including data from Lipper
Analytical Services, Inc. and Morningstar Mutual Funds. Such comparative
performance information will be stated in the same terms in which the
comparative data and indices are stated. All advertisements of the Fund will
disclose the maximum sales charge to which investments in shares of the Fund may
be subject.
INVESTMENT OBJECTIVE, POLICIES AND RISKS
The Fund's investment objective is fundamental and may not be changed
without a vote of the holders of a majority of its outstanding voting securities
(as defined in the Statement of Additional Information). There can be no
assurance that the Fund will achieve its investment objective.
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide long-term capital
appreciation through investments in gold and securities of companies located
throughout the world that are engaged in mining or processing gold ("gold
related securities"), and through investments in other precious metals and
securities of companies located throughout the world that are engaged in mining
or processing such other precious metals ("other precious metal securities"). As
a matter of fundamental policy, the Fund will invest no less than 65% of its
total assets in a portfolio of gold and gold related securities. Other precious
metals include, but are not limited to, platinum, palladium and silver.
Investments directly in gold and other precious metals may be made through
certificates representing ownership in such metals.
The Investment Advisor is of the belief that gold and other precious
metals, as investments, have fallen out of favor and are undervalued in relation
to their historic valuations and inherent worth during times of adverse monetary
and political turmoil. Throughout history, gold and other precious metals have
been used as basic monetary standards. As an investment medium, gold and other
precious metals, over the long term, have protected capital from adverse
monetary and political developments of a national or international nature and,
in the face of what appears to be continuous worldwide inflation, may offer a
better opportunity for capital growth than many other forms of investment. In
addition, investments in gold and other precious metals may provide more of a
hedge against currencies with declining buying power, devaluation, and inflation
than other types of investments. Notwithstanding these inherent qualities, the
selling prices of gold and other precious metals have fallen to historic lows.
For example, as of the date of the commencement of operations of the Fund, gold
bullion per an ounce was selling at its lowest prices since 1985, and if such
price is adjusted for inflation, then gold bullion per an ounce was selling at
its lowest prices since 1972. In recent years, gold has shown a negative
correlation with stocks (relative to the S&P 500), real interest rates, and the
trade-weighted dollar. Accordingly, the Investment Advisor believes that gold,
gold securities, other precious metals and other precious metal securities
possess good value and the potential for long-term capital appreciation. Of
course, there can be no assurance that the Investment Advisor's beliefs are
accurate or that the investment objective will be achieved. If the metals and
stocks in which the Fund invests never attain their perceived potential or the
valuation of such metals and stocks in the
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marketplace do not in fact reflect significant undervaluation, there may be
little or no appreciation or a depreciation in the value of such metals and
stocks.
To achieve its investment objective, the Fund may invest in all types
of securities. Since opportunities for long-term growth are primarily expected
from equity securities, the Fund will normally invest substantially all of its
assets in such securities, including common stock, investment grade debt
convertible into common stock, depository receipts for these securities and
warrants. The Fund may, however, invest in preferred stock and investment grade
debt securities if the Investment Advisor believes that the capital appreciation
available from an investment in such securities will equal or exceed the capital
appreciation available from an investment in equity securities. The Fund is not
subject to any limitations or guidelines concerning location (i.e., U.S. or
non-U.S.) or market capitalization (i.e., small cap, mid cap or large cap) of
the issuer.
With regard to the Fund's direct investments in precious metals, the
Fund may invest up to 10% of its total assets in gold bullion and other precious
metals. In addition, the Fund may invest up to 5% of its net assets in
repurchase agreements which are fully collateralized by obligations of the U.S.
Government or U.S. Government agencies. The Fund may, from time to time, borrow
up to 10% of the value of its total assets from banks at prevailing interest
rates as a temporary measure for extraordinary or emergency purposes. The Fund
may not purchase securities while borrowings exceed 5% of the value of its total
assets.
Special Considerations. The Investment Advisor will manage the Fund's
portfolio to assure that the Fund will not acquire or dispose of gold bullion or
other precious metals if such acquisition or disposition would jeopardize the
Fund's status as a regulated investment company under the Internal Revenue Code
of 1986, as amended (the "Code"). In general, the Fund could fail to qualify as
a regulated investment company if the Fund derived 10% or more of its gross
income from gains from sales or other dispositions of gold bullion or other
precious metals. The Fund may be required to make less than optimal investment
decisions, including foregoing the opportunity to realize gains, if necessary to
permit the Fund to qualify as a regulated investment company. In addition, the
Fund's investments in gold bullion and other precious metals subject the Fund to
the following risks: the price of a metal may be subject to wide fluctuation;
the market for a metal may be relatively limited; the sources of a metal may be
concentrated in countries with potential instability; and currently, the markets
for the metals are unregulated. Investments in gold bullion and other precious
metals will cause the Fund to incur additional costs for insurance, shipping and
storage.
In addition, an investor should be aware that investment in small
capitalization issuers carries more risk than investment in issuers with market
capitalization greater than $1 billion. Generally, small companies rely on
limited product lines, financial resources, and business activities that may
make them more susceptible to setbacks or downturns. In addition, the stock of
such companies may be more thinly traded. Accordingly, the performance of small
capitalization issuers may be more volatile.
ADDITIONAL INVESTMENT POLICIES AND RISK CONSIDERATIONS
The following investment strategies and techniques are not fundamental
policies of the Fund and may be changed without prior shareholder approval. The
Fund will notify shareholders in writing and amend the Prospectus accordingly
should any such modifications in investment strategies or techniques occur.
REPURCHASE AGREEMENTS
The Fund 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
the Fund. The Fund will receive interest from the institution until the time
when the repurchase is to occur.
The Fund 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
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equal to at least 100% of the amount invested by the Fund, and the Fund will
make payment for such securities only upon the physical delivery or evidence of
book entry transfer to the account of its custodian. If the seller institution
defaults, the Fund might incur a loss or delay in the realization of proceeds if
the value of the collateral securing the repurchase agreement declines and the
Fund might incur disposition costs in liquidating the collateral. The Fund
attempts to minimize such risks by specifying the required value of the
underlying collateral.
ILLIQUID SECURITIES
The Fund will not invest more than 10% of its net assets in illiquid
securities, including repurchase agreements with maturities in excess of seven
days.
RESTRICTED SECURITIES
The Fund may invest in securities that are subject to restrictions on
resale because they have not been registered under the Securities Act of 1933
(the "1933 Act"). These securities are sometimes referred to as private
placements. Although securities which may be resold only to "qualified
institutional buyers" in accordance with the provisions of Rule 144A under the
1933 Act are technically considered "restricted securities," the Fund may
purchase Rule 144A securities without regard to the limitation on investments in
illiquid securities described above in the "Illiquid Securities" section,
provided that a determination is made that such securities have a readily
available trading market. The Investment Advisor will determine the liquidity of
Rule 144A securities under the supervision of the Board of Trustees. The
liquidity of Rule 144A securities will be monitored by the Investment Advisor,
and if as a result of changed conditions, it is determined that a Rule 144A
security is no longer liquid, the Fund's holdings of illiquid securities will be
reviewed to determine what, if any, action is required to assure that the Fund
does not exceed its applicable percentage limitation for investments in illiquid
securities.
TEMPORARY INVESTMENTS
The Fund does not intend to engage in short-term trading on an ongoing
basis. Current income is not an objective of the Fund, and any current income
derived from the Fund's portfolio will be incidental. For temporary defensive
purposes, when deemed necessary by the Investment Advisor, the Fund may invest
up to 100% of its assets in U.S. Government obligations or "high-quality" debt
obligations of companies incorporated and having principal business activities
in the United States. When the Fund's assets are so invested, they are not
invested so as to meet the Fund's investment objective. "High-quality"
short-term obligations are those obligations which, at the time of purchase, (1)
possess a rating in one of the two highest ratings categories from at least one
nationally recognized statistical ratings organization ("NRSRO") (for example,
commercial paper rated "A-1" or "A-2" by Standard & Poor's Corporation ("S&P")
or "P-1" or "P-2" by Moody's Investors Service, Inc. ("Moody's")) or (2) are
unrated by an NRSRO but are determined by the Investment Advisor to present
minimal credit risks and to be of comparable quality to rated instruments
eligible for purchase by the Fund under guidelines adopted by the Board of
Trustees (the "Trustees").
PORTFOLIO TURNOVER
It is anticipated that the annual turnover rate for the Fund should
not exceed 150%. A higher rate of portfolio turnover will result in higher
transaction costs, including brokerage commissions. Also, to the extent that
higher portfolio turnover results in a higher rate of net realized capital gains
to the Fund, the portion of the Fund's distributions constituting taxable
capital gains may increase.
INVESTMENTS IN DEBT SECURITIES
With respect to investment by the Fund in debt securities, there is no
requirement that all such securities be rated by a recognized rating agency.
However, it is the policy of the Fund that investments in debt
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securities, whether rated or unrated, will be made only if they are, in the
opinion of the Investment Advisor, of equivalent quality to "investment grade"
securities. "Investment grade" securities are those rated within the four
highest quality grades as determined by Moody's or S&P . Securities rated Aaa by
Moody's and AAA by S&P are judged to be of the best quality and carry the
smallest degree of risk. Securities rated Baa by Moody's and BBB by S&P lack
high quality investment characteristics and, in fact, have speculative
characteristics as well. Debt securities are interest-rate sensitive; therefore
their value will tend to decrease when interest rates rise and increase when
interest rates fall. Such increase or decrease in value of longer-term debt
instruments as a result of interest rate movement will be larger than the
increase or decrease in value of shorter-term debt instruments.
INVESTMENTS IN OTHER INVESTMENT COMPANIES
The Fund may invest in other investment companies. As a shareholder in
an investment company, the Fund would bear its ratable share of that investment
company's expenses, including its advisory and administration fees. The
Investment Advisor has agreed to waive its management fees with respect to the
portion of the Fund's assets invested in shares of other investment companies.
SHORT SALES
The Fund will not make short sales of securities or maintain a short
position unless, at all times when a short position is open, the Fund owns an
equal amount of such securities or securities convertible into or exchangeable,
without payment of any further consideration, for securities of the same issue
as, and equal in amount to, the securities sold short. This is a technique known
as selling short "against the box." Any gain realized by the Fund on such sales
will be recognized at the time the Fund enters into the short sales.
OPTIONS TRANSACTIONS
The Fund may purchase put and call options on securities and on stock
indices to attempt to hedge its portfolio and to increase its total return. The
Fund may purchase call options when, in the opinion of the Investment Advisor,
the market price of the underlying security or index will increase above the
exercise price. The Fund may purchase put options when the Investment Advisor
expects the market price of the underlying security or index to decrease below
the exercise price. When the Fund purchases a call option it will pay a premium
to the party writing the option and a commission to the broker selling the
option. If the option is exercised by the Fund, the amount of the premium and
the commission paid may be greater than the amount of the brokerage commission
that would be charged if the security were to be purchased directly.
The Fund may purchase puts and calls on foreign currencies that are
traded on a securities or commodities exchange or quoted by major recognized
dealers in such options for the purpose of protecting against declines in the
dollar value of foreign securities and against increases in the dollar cost of
foreign securities to be acquired. If a decline in the dollar value of a foreign
currency is anticipated, the decline in value of portfolio securities
denominated in that currency may be partially offset by purchasing puts on that
foreign currency. If a rise is anticipated in the dollar value of a foreign
currency in which securities to be acquired are denominated, the increased cost
of such securities may be partially offset by purchasing calls on that foreign
currency. However, in the event of rate fluctuations adverse to the Fund's
position, it would lose the premium it paid and transactions costs.
The Fund also may purchase puts and calls on gold and other precious
metals that are traded on a securities or commodities exchange or quoted by
major recognized dealers in such options for the purpose of protecting against
declines in the dollar value of gold and other precious metals and against
increases in the dollar cost of gold and other precious metals to be acquired.
The discussion, rational and risks of puts and calls on foreign currencies
described in this section are also applicable to puts and calls on gold and
other precious metals.
This discussion is a general summary. See the Statement of Additional
Information for information concerning the Fund's options transactions and
strategies.
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FUTURES AND OPTIONS ON FUTURES TRANSACTIONS
The Fund may enter into contracts for the future delivery of
securities or foreign currencies and futures contracts based on a specific
security, class of securities, foreign currency or an index, purchase or sell
options on any such futures contracts and engage in related closing
transactions. The Fund also may enter into a futures contract based on gold and
other precious metals, purchase or sell options on any such futures contracts
and engage in related closing transactions. A futures contract on a securities
index is an agreement obligating either party to pay, and entitling the other
party to receive, while the contract is outstanding, cash payments based on the
level of a specified securities index.
Although the Fund is permitted to engage in the purchase and sale of
futures contracts and options thereon solely for hedging purposes, the use of
such instruments does involve certain transaction costs and risks. The Fund's
ability to hedge effectively all or a portion of its portfolio through
transactions in futures, options on futures or options on related indexes
depends on the degree to which movements in the value of the currencies,
securities, index, gold or other precious metals underlying such hedging
instrument correlate with movements in the value of the relevant portion of the
Fund's portfolio. The trading of futures and options on indexes involves the
additional risk of imperfect correlation between movements in the futures or
option price and the value of the underlying index. While the Fund will
establish a future or option position only if there appears to be a liquid
secondary market therefor, there can be no assurance that such a market will
exist for any particular futures or option contract at any specific time. In
such event, it may not be possible to close out a position held by the Fund,
which could require the Fund to purchase or sell the instrument underlying the
position, make or receive a cash settlement, or meet ongoing variation margin
requirements. Investments in futures contracts on fixed income securities and
related indexes involve the risk that if the Investment Advisor's judgment
concerning the general direction of interest rates is incorrect, the Fund's
overall performance may be poorer than if it had not entered into any such
contract.
WRITING COVERED CALL OPTION CONTRACTS
The Fund may write covered call options on securities or stock
indices, but will not write such options if immediately after such sale the
aggregate value of the obligations under the outstanding options would exceed
25% of its net assets. A call option is "covered" if the Fund owns the
underlying security covered by the call.
The Fund will not write covered call option contracts for speculative purposes.
When a covered call option expires unexercised, the writer realizes a
gain in the amount of the premium received. If the covered call option is
exercised, the writer realizes either a gain or loss from the sale or purchase
of the underlying security with the proceeds to the writer being increased by
the amount of the premium. Any gain or loss from such transaction will depend on
whether the amount paid is more or less than the premium received for the option
plus related transaction costs.
Risks associated with writing covered call option contracts are
similar to the risks discussed in the section concerning "Futures and Options on
Futures Transactions," above.
RISKS ASSOCIATED WITH FOREIGN INVESTMENTS
GENERAL. Consistent with their respective investment objectives and
policies, the Fund may invest indirectly in foreign assets through ADRs, which
are certificates issued by U.S. banks representing the right to receive
securities of a foreign issuer deposited with that bank or a correspondent bank,
and the Fund may directly or indirectly invest in securities of foreign issuers.
Direct and indirect investments in securities of foreign issuers may involve
risks that are not present with domestic investments and there can be no
assurance that the Fund's foreign investments will present less risk than a
portfolio of domestic securities. Compared to United States issuers, there is
generally less publicly available information about foreign issuers and there
may be less governmental regulation and supervision of foreign stock exchanges,
brokers and listed companies. Foreign issuers are not generally subject to
uniform accounting, auditing and financial reporting standards,
- 9 -
<PAGE>
practices and requirements comparable to those applicable to domestic issuers.
Securities of some foreign issuers are less liquid and their prices are more
volatile than securities of comparable domestic issuers. Settlement of
transactions in some foreign markets may be delayed or less frequent than in the
United States, which could affect the liquidity of the Fund's portfolio. Fixed
brokerage commissions on foreign securities exchanges are generally higher than
in the United States. Income from foreign securities may be reduced by a
withholding tax at the source or other foreign taxes. In some countries, there
may also be the possibility of expropriation or confiscatory taxation,
limitations on the removal of funds or other assets of the Fund, political or
social instability or revolution, or diplomatic developments which could affect
investments in those countries.
The value of the Fund's investments denominated in foreign currencies
may depend in part on the relative strength of the U.S. dollar, and the Fund may
be affected favorably or unfavorably by exchange control regulations or changes
in the exchange rate between foreign currencies and the U.S. dollar. When the
Fund invests in foreign securities they will usually be denominated in foreign
currency, and the Fund may temporarily hold funds in foreign currencies. Thus,
the Fund's net asset value per share will be affected by changes in currency
exchange rates. Changes in foreign currency exchange rates may also affect the
value of dividends and interest earned, gains and losses realized on the sale of
securities and net investment income and gains, if any, to be distributed to
shareholders by the Fund. The rate of exchange between the U.S. dollar and other
currencies is determined by the forces of supply and demand in the foreign
exchange markets.
YEAR 2000 PROBLEM.
Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the advisor/administrator and other service providers
do not properly process and calculate date-related information and data from and
after January 1, 2000. This is commonly known as the "Year 2000 Problem." The
advisor/administrator is taking steps that it believes are reasonably designed
to address the Year 2000 Problem with respect to computer systems that it uses
and to obtain reasonable assurances that comparable steps are being taken by the
Fund's major service providers.
INVESTMENT ADVISOR AND INVESTMENT ADVISORY AGREEMENT
Tocqueville Asset Management L.P., 1675 Broadway, New York, New York
10019, acts as Investment Advisor to the Fund under an investment advisory
agreement (the "Agreement") which provides that the Investment Advisor identify
and analyze possible investments for the Fund, and determine the amount, timing,
and form of such investments. The Investment Advisor has the responsibility of
monitoring and reviewing the Fund's portfolio, on a regular basis, and
recommending the ultimate disposition of such investments. It is the Investment
Advisor's responsibility to cause the purchase and sale of securities in the
Fund's portfolio, subject at all times to the policies set forth by the Board of
Trustees. The Investment Advisor is an affiliate of Tocqueville Securities L.P.,
the Fund's distributor.
John Hathaway serves as the portfolio manager of the Fund. Mr. Hathaway
was a portfolio manager with Hudson Capital Advisors from 1986 through 1989, and
the President, Chief Investment Officer and portfolio manager with Oak Hall
Advisors from 1989 through 1996. Mr. Hathaway has been a portfolio manager with
the Investment Advisor since 1997. Mr. Hathaway received his MBA from the
University of Virginia and his BA from Harvard University.
Under the terms of the Agreement, the Fund pays the cost of all its
expenses (other than those expenses specifically assumed by the Investment
Advisor or the Fund's distributor), including the pro rata costs incurred in
connection with the Fund's maintenance of its registration under the 1933 Act
and the 1940 Act, printing of prospectuses distributed to shareholders, taxes or
governmental fees, brokerage commissions, custodial, transfer and shareholder
servicing agent costs, expenses of outside counsel and independent accountants,
preparation of shareholder reports, trustees' fees and shareholder meetings.
- 10 -
<PAGE>
The Investment Advisor receives a fee from the Fund, calculated daily
and payable monthly, for the performance of its services at an annual rate of
1.00% on the first $500 million of the average daily net assets of the Fund,
.75% of average daily net assets in excess of $500 million but not exceeding $1
billion, and .65% of the average daily net assets in excess of $1 billion. The
fee is accrued daily for the purposes of determining the offering and redemption
price of the Fund's shares.
DISTRIBUTION PLAN
The Fund has adopted a distribution plan (each a "Plan") pursuant to
Rule 12b-1 of the 1940 Act. Pursuant to the Plan, the Fund may incur
distribution expenses related to the sale of its shares of up to .25% per annum
of the Fund's average daily net assets.
The Plan provides that the Fund may finance activities which are
primarily intended to result in the sale of the Fund's shares, including, but
not limited to, advertising, printing of prospectuses and reports for other than
existing shareholders, preparation and distribution of advertising material and
sales literature and payments to dealers and shareholder servicing agents
including Tocqueville Securities L.P. ("Tocqueville Securities" or the
"Distributor"), the Fund's distributor, who enter into agreements with the Fund
or Tocqueville Securities. The Plan will only make payments for expenses
actually incurred on a first-in, first-out basis. The Plan may carry forward for
an unlimited number of years any unreimbursed expenses. If the Plan is
terminated in accordance with its terms, the obligations of the Fund to make
payments pursuant to the Plan will cease and the Fund will not be required to
make any payments past the date the Plan terminates. (See the Statement of
Additional Information--"Distribution Plan" for further information about the
Plan.)
ADMINISTRATIVE SERVICES AGREEMENT
Under an Administrative Services Agreement, Tocqueville Asset
Management L.P. supervises the administration of all aspects of the Fund's
operations, including the Fund's receipt of services for which the Fund is
obligated to pay, provides the Fund with general office facilities and provides,
at the Fund's expense, the services of persons necessary to perform such
supervisory, administrative and clerical functions as are needed to effectively
operate the Fund. Those persons, as well as certain employees and Trustees of
the Fund, may be directors, officers or employees of (and persons providing
services to the Fund may include) Tocqueville Asset Management L.P. and its
affiliates. For these services and facilities, Tocqueville Asset Management L.P.
receives with respect to the Fund a fee computed and paid monthly at an annual
rate of .15% of the average daily net assets of the Fund. Certain administrative
responsibilities have been delegated to and are being performed by Firstar Trust
Company.
BROKERAGE ALLOCATION
Subject to the supervision of the Board of Trustees, decisions to buy
and sell securities for the Fund are made by the Investment Advisor. The
Investment Advisor, subject to obtaining the best price and execution, may
allocate brokerage transactions in a manner that takes into account the sale of
shares of the Fund. Generally, the primary consideration in placing portfolio
securities transactions with broker-dealers for execution is to obtain, and
maintain the availability of, execution at the best net price available and in
the most effective manner possible. The Fund's brokerage allocation policies may
permit the Fund to pay a broker-dealer which furnishes research services a
higher commission than that which might be charged by another broker-dealer
which does not furnish research services, provided that such commission is
deemed reasonable in relation to the value of the services provided by such
broker-dealer. Subject to the supervision of the Trustees, the Investment
Advisor is authorized to allocate brokerage to affiliated broker-dealers on an
agency basis to effect portfolio transactions. The Trustees have adopted
procedures incorporating the standards of Rule 17e-1 of the 1940 Act, which
require that the commission paid to affiliated broker-dealers must be
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<PAGE>
reasonable and fair compared to the commission, fee or other remuneration
received, or to be received, by other brokers in connection with comparable
transactions involving similar securities during a comparable period of time. It
is expected that brokerage will be allocated to the Distributor, Tocqueville
Securities L.P., an affiliate of the Investment Advisor. For a complete
discussion of portfolio transactions and brokerage allocation, see "Portfolio
Transactions and Brokerage" in the Statement of Additional Information.
PURCHASE OF SHARES
GENERAL INFORMATION Shares 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 minimum initial investment in The Tocqueville Trust is $1,000
which may be allocated among the Fund and other portfolios of the Trust (the
"Funds") so long as at least $250 is invested in each Fund in which you choose
to invest. The minimum initial investment for 401(k), IRA, Keogh and other
pension or profit sharing plan accounts is $250. The minimum subsequent
investment in the Trust is $100. The Distributor may, in its discretion, waive
the minimum investment requirements for purchases including those made via the
Automatic Investment Plan, which is discussed below.
Shares of the Fund may be purchased from the following entities: (a)
the Funds' Distributor, Tocqueville Securities; (b) authorized securities
dealers which have entered into sales agreements with Tocqueville Securities
(the "Selling Brokers") on a best efforts basis and brokers who have entered
into agreements with the Trust to provide distribution and shareholder services;
and (c) the Funds' transfer agent, Firstar Trust Company (the "Transfer Agent").
The Fund reserves the right to cease offering shares for sale at any time or to
reject any order for the purchase of shares.
A purchase order becomes effective upon receipt of the order by
Tocqueville Securities, a Selling Broker or other 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.
The net asset value per share is determined by dividing the market
value of the Fund's investments as of the close of trading plus any cash or
other assets (including dividends receivable and accrued interest) less all
liabilities (including accrued expenses) by the number of Fund shares
outstanding. The Fund will determine the net asset value of its shares once
daily as of the close of trading on the New York Stock Exchange (the "Exchange")
on each "Fund business day" which is any day on which the Exchange is open for
business.
Investors who already have a brokerage account with Tocqueville
Securities, a Selling Broker or other broker may purchase the Fund's shares
through such broker. Payment for purchase orders through Tocqueville Securities,
the Selling Broker or other broker must be made to Tocqueville Securities, the
Selling Broker or other broker within three business days of the purchase order.
All dealers are responsible for forwarding orders for the purchase of the Fund's
shares on a timely basis.
The Fund's shares normally will be maintained in book entry form and
share certificates will be issued only on request. The Distributor reserves the
right to refuse to sell shares of the Fund to any person.
INITIAL SALES CHARGES
The initial sales charge, imposed upon a sale of shares, varies
according to the size of the purchase as follows:
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<PAGE>
<TABLE>
<CAPTION>
INITIAL SALES CHARGE CONCESSION
TO DEALERS
% OF % OF NET % OF
OFFERING AMOUNT OFFERING
AMOUNT OF PURCHASE PRICE INVESTED PRICE
------- ---------- ------
<S> <C> <C> <C>
Less than $100,000.......................................................... 4.00 4.16 3.50
$100,000 to $249,999........................................................ 3.50 3.63 3.00
$250,000 to $499,000........................................................ 2.50 2.56 2.00
$500,000 to $999,999........................................................ 1.50 1.52 1.00
$1,000,000 and over......................................................... 1.00 1.01 0.50
</TABLE>
The reduced initial sales charges apply to the aggregate of purchases
of shares of the Fund made at one time by any "person", which term includes an
individual, spouse and children under the age of 21, or a trustee or other
fiduciary of a trust, estate or fiduciary account.
Upon notice to Selling Brokers, Tocqueville Securities may reallow up
to the full applicable initial sales charge and such Selling Broker may
therefore be deemed an "underwriter" under the 1933 Act, as amended, during such
periods. The Distributor may, from time to time, provide promotional incentives
to certain Selling Brokers whose representatives have sold or are expected to
sell significant amounts of one or all of the Funds of the Trust. At various
times the Distributor may implement programs under which a Selling Broker's
sales force may be eligible to win cash or material awards for certain sales
efforts or under which the Distributor will reallow an amount not exceeding the
total applicable initial sales charges generated by the Selling Broker during
such programs to any Selling Broker that sponsors sales contests or recognition
programs conforming to criteria established by the Distributor or participates
in sales programs sponsored by the Distributor. The Distributor may provide
marketing services to Selling Brokers, consisting of written informational
material relating to sales incentive campaigns conducted by such Selling Brokers
for their representatives.
PURCHASES OF SHARES AT NET ASSET VALUE
PURCHASES THROUGH CERTAIN BROKERAGE ACCOUNTS. Shares may be purchased
at net asset value through brokerage accounts with Tocqueville Securities L.P.,
Selling Brokers and other brokers who have entered into agreements with the
Trust to provide distribution and shareholder services.
QUALIFIED PERSONS. There is no initial sales charge for "Qualified
Persons", which are the following (a) active or retired trustees, directors,
officers, partners or employees (their spouses and children under age 21) of (i)
the Investment Advisor and Distributor or any affiliates or subsidiaries thereof
(the directors, officers or employees of which shall also include their parents
and siblings for all purchases of Fund shares), (ii) Selling Brokers or other
brokers who have entered into agreements with the Trust to provide distribution
and shareholder services, or (iii) trade organizations to which the Investment
Advisor belongs and (b) trustees or custodians of any qualified retirement plan
or IRA established for the benefit of a person in (a) above.
PURCHASES THROUGH INVESTMENT ADVISORS. Purchases also may be made with
no initial sales charge through a registered investment adviser who has
registered with the Securities and Exchange Commission or appropriate state
authorities and who (a) clears such Fund share transaction through a
broker/dealer, bank or trust company, (each of whom may impose transaction fees
with respect to such transaction), or (b) purchases shares for its own account,
or an account for which the investment adviser has discretion and is authorized
to make investment decisions.
QUALIFIED AND OTHER RETIREMENT PLANS. In addition, no initial sales
charge will apply to any purchase of shares by an investor through a 401(k) Plan
or 457 (state deferred compensation) Plan.
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<PAGE>
RECENTLY REDEEMED SHARES. Shares of the Fund may be purchased at net
asset value by persons who have, within the previous 30 days, redeemed their
shares of the Fund. The amount which may be purchased at net asset value is
limited to an amount up to, but not exceeding, the net amount of redemption
proceeds. Such purchases may also be handled by a securities dealer, who may
charge the shareholder a fee for this service.
SHAREHOLDERS AS OF JANUARY 1, 1994. Shareholders who held shares of a
Fund of the Tocqueville Trust prior to January 1, 1994, may purchase shares of
the Fund at net asset value for as long as they continue to own shares of any
Fund of the Trust, provided that there is no change in the account registration.
However, once a shareholder has closed an account by redeeming all of their Fund
shares for a period of more than thirty days such shareholder will no longer be
able to purchase shares of the Fund at net asset value.
REDUCED INITIAL SALES CHARGES
CUMULATIVE QUANTITY DISCOUNT. Shares of the Fund may be purchased by
any person at a reduced initial sales charge which is determined by (a)
aggregating the dollar amount of the new purchase and the greater of the
purchaser's total (i) net asset value or (ii) cost of all shares of the Fund and
the other Funds of the Trust, acquired by exchange from such other Fund,
provided such Fund charged an initial sales load at the time of the exchange
then held by such person and (b) applying the initial sales charge applicable to
such aggregate. The privilege of the cumulative quantity discount is subject to
modification or discontinuance at any time with respect to all shares purchased
thereafter.
GROUP PURCHASES. An individual who is a member of a qualified group
(as defined below) may also purchase shares of the Fund at the reduced initial
sales charge applicable to the group taken as a whole. The reduced initial sales
charge is based upon the aggregate dollar value of shares previously purchased
and still owned by the group plus the securities currently being purchased and
is determined as stated above under "Cumulative Quantity Discount". For example,
if members of the group had previously invested and still held $90,000 of shares
and now were investing $15,000, the initial sales charge would be 3.50%. In
order to obtain such discount, the purchaser or investment dealer must provide
the Transfer Agent with sufficient information, including the purchaser's total
cost, at the time of purchase to permit verification that the purchaser
qualifies for a cumulative quantity discount, and confirmation that the order is
subject to such verification. Information concerning the current initial sales
charge applicable to a group may be obtained by contacting the Transfer Agent.
A "qualified group" is one which: (a) has been in existence for more
than six months; (b) has a purpose other than acquiring shares at a discount;
and (c) satisfies uniform criteria which enables the Distributor to realize
economies of scale in its costs of distributing shares. A qualified group must
have more than 10 members, must be available to arrange for group meetings
between representatives of the Fund and the members, must agree to include sales
and other materials related to the Fund in its publications and mailings to
members at reduced or no cost to the Distributor, and must seek to arrange for
payroll deduction or other bulk transmission of investments in the Fund. This
privilege is subject to modification or discontinuance at any time with respect
to all shares purchased thereafter.
LETTER OF INTENT. Investors may also qualify for reduced initial sales
charges by signing a Letter of Intent (the "LOI"). This enables the investor to
aggregate purchases of shares of the Fund with purchases of shares of any other
Fund of the Trust acquired by exchange, during a 13-month period. The initial
sales charge is based on the total amount invested in shares during the 13-month
period. Shares of any Fund of the Trust currently owned by the investor, if any,
will be credited as purchases (at their current offering prices on the date the
LOI is signed) toward completion of the LOI. A 90-day back-dating period can be
used to include earlier purchases at the investor's cost. The 13-month period
would then begin on the date of the first purchase during the 90-day period. No
retroactive adjustment will be made if purchases exceed the amount indicated in
the LOI. A shareholder must notify the Transfer Agent or Distributor whenever a
purchase is being made pursuant to a LOI.
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<PAGE>
The LOI is not a binding obligation on the investor to purchase, or on
a Fund to sell, the full amount indicated; however, on the initial purchase (or
subsequent purchases if necessary), 5% of the dollar amount specified in the LOI
will be held in escrow by the Transfer Agent in shares registered in the
shareholder's name in order to assure payment of the proper initial sales
charge. If total purchases pursuant to the LOI (less any dispositions and
exclusive of any distributions on such shares automatically reinvested) are less
than the amount specified, the investor will be requested to remit to the
Transfer Agent an amount equal to the difference between the initial sales
charge paid and the initial sales charge applicable to the aggregate purchases
actually made. If not remitted within 20 days after written request, an
appropriate number of escrowed shares will be redeemed in order to realize the
difference. This privilege is subject to modification or discontinuance at any
time with respect to all shares purchased thereunder. Shareholders will be paid
distributions, either in additional shares or cash, upon such escrowed shares.
METHODS OF PAYMENT
BY CHECK. Investors who wish to purchase shares directly from the
Transfer Agent may do so by sending a completed purchase application (included
with this Prospectus or obtainable from the Trust) to The Tocqueville Trust, c/o
Firstar Trust Company, P.O. Box 701, Milwaukee, WI 53201-0701, accompanied by a
check payable to The Tocqueville Gold Fund. Purchase applications sent to the
Fund will be forwarded to the Transfer Agent, and will not be effective until
received by the Transfer Agent. The price per share is the next determined per
share net asset value (plus a varying initial sales charge) after receipt of an
application by Firstar Trust Company. Purchase applications should be mailed
directly to: The Tocqueville Trust, The Tocqueville Gold Fund, c/o Firstar Trust
Company, P.O. Box 701, Milwaukee, Wisconsin 53201-0701. The U.S. Postal Service
and other independent delivery services are not agents of the Trust. Therefore,
deposit of purchase applications in the mail or with such services does not
constitute receipt by Firstar Trust Company or the Trust. Please do not mail
letters by overnight courier to the post office box address. To purchase shares
by overnight or express mail, please use the following street address: The
Tocqueville Trust, The Tocqueville Gold Fund, c/o Firstar Trust Company, Mutual
Fund Services, Third Floor, 615 East Michigan Street, Milwaukee, Wisconsin
53202. All applications must be accompanied by payment in the form of a check
drawn on a U.S. bank payable to The Tocqueville Gold Fund or by direct wire
transfer. No cash will be accepted. Firstar Trust Company will charge a $20 fee
against a shareholder's account for any payment check returned to the custodian.
The shareholder will also be responsible for any losses suffered by the Fund as
a result.
BY AUTOMATIC INVESTMENT PLAN. The Fund has an Automatic Investment
Plan which permits an existing shareholder to purchase additional shares of the
Fund (minimum $100 per transaction) at regular intervals. Under the Automatic
Investment Plan, shares are purchased by transferring funds from a shareholder's
checking, bank money market, NOW account, or savings account in an amount of
$100 or more designated by the shareholder. At the shareholder's option, the
account designated will be debited and shares will be purchased on the date
selected by the shareholder. There must be a minimum of seven days between
automatic purchases. If the date selected by the shareholder is not a business
day, funds will be transferred the next business day thereafter. Only an account
maintained at a domestic financial institution which is an Automated Clearing
House member may be so designated. To establish an Automatic Investment Account,
complete and sign Section F of the Purchase Application and send it to the
Transfer Agent. Shareholders may cancel this privilege or change the amount of
purchase at any time by calling 1-800-697-3863 or by mailing written
notification to: The Tocqueville Trust, The Tocqueville Gold Fund, c/o Firstar
Trust Company, P.O. Box 701, Milwaukee, Wisconsin 53201-0701. The change will be
effective five business days following receipt of notification by the Transfer
Agent. The Fund may modify or terminate this privilege at any time or charge a
service fee, although no such fee currently is contemplated. However, a $20 fee
will be imposed by Firstar Trust Company if sufficient funds are not available
in the shareholder's account at the time of the automatic transaction .
While investors may use this option to purchase shares in their IRA or
other retirement plan accounts, neither the Distributor nor the Transfer Agent
will monitor the amount of contributions to ensure that they do
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<PAGE>
not exceed the amount allowable for Federal tax purposes. Firstar Trust Company
will assume that all retirement plan contributions are being made for the tax
year in which they are received.
BY WIRE. Investors who purchase shares directly from the Transfer Agent
may also purchase shares by wire. Funds should be wired to:
................................Firstar Bank Milwaukee, N.A.
................................777 East Wisconsin Avenue
................................Milwaukee, Wisconsin 53202
................................ABA # 075000022
................................Credit: Firstar Trust Company
................................Account # 112952137
................................Further credit: The Tocqueville Trust
- The Tocqueville Gold Fund
...........................................Name of shareholder and
account number (if known)
(Wired funds must be received prior to 4:00 p.m. Eastern time to be
eligible for same day pricing.)
The establishment of a new account or any additional purchases for an
existing account by wire transfer should be preceded by a phone call to Firstar
Trust Company, 1-800-697-3863, to provide information for the account. A
properly signed share purchase application marked "Follow Up" must be sent for
all new accounts opened by wire transfer. Applications are subject to acceptance
by the Fund, and are not binding until so accepted.
REDEMPTION OF SHARES
GENERAL INFORMATION
In order to redeem shares purchased through Tocqueville Securities, a
Selling Broker or other broker, the broker must be notified by telephone or mail
to execute a redemption. A properly completed order to redeem shares received by
the broker's office will be executed at the net asset value next determined
after receipt by the broker of the order. Redemption proceeds will be held in a
shareholder's account with Tocqueville Securities unless the broker is
instructed to remit all proceeds directly to the shareholder.
Shares purchased through the Transfer Agent may be redeemed by the
Transfer Agent at the next determined net asset value upon receipt of a request
in good order. Payment will be made for redeemed shares as soon as practicable,
but in no event later than three business days after receipt of a redemption
notification in good order. If the shares being redeemed were purchased directly
from the Transfer Agent 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 by the Transfer Agent.
"Good order" means that the request complies with the following: (a) where the
shareholder has not elected to permit telephone redemptions, the request must be
in writing, specifying the number of shares or dollar amount to be redeemed and
sent to the Transfer Agent, Attn.: The Tocqueville Gold Fund at P.O. Box 701,
Milwaukee, Wisconsin 53201-0701. The U.S. Postal Service and other independent
delivery services are not agents of the Trust. Therefore, deposit of redemption
requests in the mail or with such services does not constitute receipt by
Firstar Trust Company or the Trust. Please do not mail letters by overnight
courier to the post office box address. Redemption requests sent by overnight or
express mail should be directed to: The Tocqueville Gold Fund, c/o Firstar Trust
Company, Mutual Fund Services, Third Floor, 615 East Michigan Street, Milwaukee,
Wisconsin 53202. Requests for redemption by telegram and requests which are
subject to any special conditions or which specify an effective date other than
as provided herein cannot be honored; (b) where share certificates have been
issued, a shareholder must endorse the certificates and include them in the
redemption request; (c) signatures on the redemption request and on endorsed
certificates submitted for redemption must be guaranteed by a commercial bank
which is a member of the Federal Deposit Insurance Corporation, a trust company
or a
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<PAGE>
member firm (broker-dealer) of a national securities exchange (a notary public
or a savings and loan association is not an acceptable guarantor); and, (d) the
request must include any additional legal documents concerning authority and
related matters in the case of estates, trusts, guardianships, custodianships,
partnerships and corporations. Any written requests sent to a Fund will be
forwarded to the Transfer Agent and the effective date of a redemption request
will be when the request is received by the Transfer Agent. Shareholders who
purchased shares through the Transfer Agent may arrange for the proceeds of
redemption requests to be sent by Federal Fund wire to a designated bank account
by sending wiring instructions to Firstar Trust Company, P.O. Box 701,
Milwaukee, Wisconsin 53201-0701. The Transfer Agent charges a $12 service fee
for each payment of redemption proceeds made by Federal Fund wire. Additional
information regarding redemptions may be obtained by calling 1-800-697-3863.
Shares of the Fund purchased through programs of services offered or
administered by processing intermediaries that have entered into agreements with
the Fund ("Processing Intermediaries") may be required to be redeemed through
such programs. Such Processing Intermediaries may become shareholders of record
and may use procedures and impose restrictions in addition to or different from
those applicable to shareholders who redeem shares directly through the Fund.
The Fund may only accept redemption requests for an account in which the
Processing Intermediary is the shareholder of record from the Processing
Intermediary. The Fund may authorize one or more Processing Intermediaries (and
other Processing Intermediaries properly designated thereby) to accept
redemption requests on the Fund's behalf. In such event, the Fund will be deemed
to have received a redemption request when the Processing Intermediary accepts
the customer request, and the redemption price will be the Fund's net asset
value next computed after the customer redemption request is accepted by the
Processing Intermediary.
Redemption of the Fund's shares or payments therefore may be suspended
at such times (a) when the Exchange is closed, (b) when trading on the Exchange
is restricted, (c) when an emergency exists which makes it impractical for the
Fund to either dispose of securities or make a fair determination of net asset
value, or (d) for such other period as the Securities and Exchange Commission
may permit for the protection of the Fund's shareholders. There is no assurance
that the net asset value received upon redemption will be greater than that paid
by a shareholder upon purchase.
The Fund reserves the right to close an account that has dropped below
$500 in value for a period of three months or longer other than as a result of a
decline in the net asset value per share. Shareholders are notified at least 60
days prior to any proposed redemption and are invited to add to their account if
they wish to continue as shareholders of the Fund.
TELEPHONE REDEMPTION
Shareholders of the Fund will also be permitted to redeem fund shares
by telephone. To redeem shares by telephone, call 1-800-697-3863 with your
account name, account number and amount of redemption. Redemption proceeds will
only be sent to a shareholder's address or a pre-authorized bank account of a
commercial bank located within the United States as shown on the Transfer
Agent's records. (Available only if established on the account application and
if there has been no change of address by telephone within the preceding 15
days.)
The Fund reserves the right to refuse a telephone redemption if they
believe it is advisable to do so. Procedures for redeeming shares by telephone
may be modified or terminated by the Fund at any time upon notice to
shareholders. During periods of substantial economic or market change, telephone
redemptions may be difficult to implement. If a shareholder is unable to contact
the Transfer Agent by telephone, shares may also be redeemed by delivering the
redemption request to the Transfer Agent.
In an effort to prevent unauthorized or fraudulent redemption requests
by telephone, the Fund and the Transfer Agent employ reasonable procedures to
confirm that such instructions are genuine. Among the procedures used to
determine authenticity, investors electing to redeem or exchange by telephone
will be required to provide their account number. All such telephone
transactions will be tape recorded. The Fund
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<PAGE>
may implement other procedures from time to time. If reasonable procedures are
not implemented, the Fund and/or the Transfer Agent may be liable for any loss
due to unauthorized or fraudulent transactions. In all other cases, the
shareholder is liable for any loss for unauthorized transactions.
SHAREHOLDER PRIVILEGES
SYSTEMATIC WITHDRAWAL PLAN. The Fund offers a Systematic Withdrawal
Plan for shareholders who own shares worth at least $10,000 at current net asset
value of the Fund. Under the Systematic Withdrawal Plan, a fixed sum (minimum
$500) will be distributed at regular intervals (on any day, either monthly or
quarterly). In electing to participate in the Systematic Withdrawal Plan,
investors should realize that within any given period the appreciation of their
investment in the Fund may not be as great as the amount withdrawn. A
shareholder may vary the amount of frequency of withdrawal payments or
temporarily discontinue them by notifying Firstar Trust Company at
1-800-697-3863. The Systematic Withdrawal Plan does not apply to shares of the
Fund held in Individual Retirement Accounts or defined contribution retirement
plans. For additional information or to request an application please call
Firstar Trust Company at 1-800-697-3863.
EXCHANGE PRIVILEGE. Subject to certain conditions, shares of the Fund
may be exchanged for the shares of another Fund of The Tocqueville Trust at such
Fund's then current net asset value. No initial sales charge is imposed on the
shares being acquired 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 such exchange. You should note that any such exchange,
which may only be made in states where shares of the Funds of The Tocqueville
Trust are qualified for sale, may create a gain or loss to be recognized for
federal income tax purposes. Exchanges must be made between accounts having
identical registrations and addresses. Exchanges may be authorized by telephone.
In order to protect itself and shareholders from liability for unauthorized or
fraudulent telephone transactions, the Fund will use reasonable procedures in an
attempt to verify the identity of a person making a telephone exchange request.
The Funds reserve the right to refuse a telephone exchange request if they
believe that the person making the request is not the record owner of the shares
being exchanged, or is not authorized by the shareholder to request the
exchange. Shareholders will be promptly notified of any refused request for a
telephone exchange. As long as these normal identification procedures are
followed, neither the Funds nor their agents will be liable for loss, liability
or cost which results from acting upon instructions of a person believed to be a
shareholder with respect to the telephone exchange privilege. You will not
automatically be assigned this privilege unless you check the box on the
Purchase Application which indicates that you wish to have the privilege. The
exchange privilege may be modified or discontinued at any time.
Shareholders may also exchange shares of any or all of an investment
in the Fund for shares of the Firstar Money Market Fund, the Firstar Tax-Exempt
Money Market Fund, or the Firstar U.S. Government Fund (collectively the "Money
Market Funds"). This Exchange Privilege is a convenient way for shareholders to
buy shares in a money market fund in order to respond to changes in their goals
or market conditions. Before exchanging into the Money Market Funds,
shareholders must read the Firstar Money Market Funds' Prospectus. To obtain the
Money Market Funds' Prospectus and the necessary exchange authorization forms,
call the Transfer Agent at 1-800-697-3863. The Transfer Agent charges a $5 fee
for each telephone exchange which will be deducted from the investor's account
from which the funds are being withdrawn prior to effecting the exchange. There
is no charge for exchange transactions that are requested by mail. Use of the
Exchange Privilege is subject to the minimum purchase and redemption amounts set
forth in the Prospectus for the Money Market Funds. All accounts opened in a
Money Market Fund as a result of using the Exchange Privilege must be registered
in the identical name and taxpayer identification number as a shareholder's
existing account with the Funds.
For purposes of the Exchange Privilege, exchanges into and out of the
Money Market Funds will be treated as shares owned in the Fund. For example, if
an investor who owned shares in the Fund moved an investment from the Fund to
one of the Money Market Funds and then decided at a later date to move the
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investment back to the Fund, he or she would be deemed, once again, to own
shares of one of the Fund and may do so without the imposition of any additional
sales charges, so long as the investment has been continuously invested in
shares of the Money Market Fund during the period between withdrawal and
reinvestment.
Remember that each exchange represents the sale of shares of one Fund
and the purchase of shares of another. Therefore, shareholders may realize a
taxable gain or loss on the transaction. Before making an exchange request, an
investor should consult a tax or other financial adviser to determine the tax
consequences of a particular exchange. The Distributor is entitled to receive a
fee from the Money Market Funds for certain support services at the annual rate
of .20 of 1% of the average daily net asset value of the shares for which it is
the holder or dealer of record. Because excessive trading can hurt the Fund's
performance and shareholders, the Fund reserves the right to temporarily or
permanently limit the number of exchanges or to otherwise prohibit or restrict
shareholders from using the Exchange Privilege at any time, without notice to
shareholders. In particular, a pattern of exchanges with a "market timing"
strategy may be disruptive to the Fund and may thus be restricted or refused.
Excessive use of the Exchange Privilege is defined as more than five exchanges
per calendar year. The restriction or termination of the Exchange Privilege does
not affect the rights of shareholders to redeem shares, as discussed in the
Prospectus.
The Money Market Funds are managed by Firstar Investment Research and
Management Company, an affiliate of Firstar Trust Company. The Firstar Funds,
including the Money Market Funds, are unrelated to The Tocqueville Trust.
CHECK REDEMPTION. A shareholder may request on the Purchase
Application or by later written request to establish check redemption privileges
for any of the Money Market Funds. The redemption checks ("Checks") will be
drawn on the Money Market Fund in which the investor has made an investment.
Checks will be sent only to the registered owner(s) and only to the address of
record. Checks may be made payable to the order of any person in the amount of
$250 or more. Dividends are earned until the Check clears the Transfer Agent.
When a Check is presented to the Transfer Agent for payment, the Transfer Agent,
as the investor's agent, will cause the particular Money Market Fund involved to
redeem a sufficient number of the investor's shares to cover the amount of the
Check. Checks will not be returned to shareholders after clearance. The initial
checkbook is free, additional checkbooks are $5. The fee for additional
checkbooks will be deducted from the shareholder's account. There is no charge
to the investor for the use of the Checks; however, the Transfer Agent will
impose a $20 charge for stopping payment of a Check upon the request of the
investor, or if the Transfer Agent cannot honor a Check due to insufficient
funds or other valid reason. Because dividends on each Money Market Fund accrue
daily, Checks may not be used to close an account, as a small balance is likely
to result.
RETIREMENT PLANS
INDIVIDUAL RETIREMENT ACCOUNTS
Individual shareholders may establish their own tax-sheltered
Individual Retirement Accounts ("IRA"). The Fund offers three types of IRA's,
including the Traditional IRA, that can be adopted by executing the appropriate
Internal Revenue Service ("IRS") Form.
Traditional IRA. In a Traditional IRA, amounts contributed to the IRA
may be tax deductible at the time of contribution depending on whether the
shareholder is an "active participant" in an employer-sponsored retirement plan
and the shareholder's income. Distributions from a Traditional IRA will be taxed
at distribution except to the extent that the distribution represents a return
of the shareholder's own contributions for which the shareholder did not claim
(or was not eligible to claim) a deduction. Distribution prior to age 59-1/2 may
be subject to an additional 10% tax applicable to certain premature
distributions. Distributions must commence by April 1 following the calendar
year in which the shareholder attains age 70-1/2. Failure to begin distributions
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by this date (or distributions that do not equal certain minimum thresholds) may
result in adverse tax consequences.
Roth IRA. In a Roth IRA (sometimes known as the American Dream IRA),
amounts contributed to the IRA are taxed at the time of contribution, but
distributions from the IRA are not subject to tax if the shareholder has held
the IRA for certain minimum periods of time (generally, until age 59-1/2).
Shareholders whose incomes exceed certain limits are ineligible to contribute to
a Roth IRA. Distributions that do not satisfy the requirements for tax-free
withdrawals are subject to income taxes (and possibly penalty taxes) to the
extent that the distribution exceeds the shareholder's contributions to the IRA.
The minimum distribution rules applicable to Traditional IRAs do not apply
during the lifetime of the shareholder. Following the death of the shareholder,
certain minimum distribution rules apply.
For Traditional and Roth IRAs, the maximum annual contribution
generally is equal to the lesser of $2,000 or 100% of the shareholder's
compensation (earned income). An individual may also contribute to a Traditional
IRA or Roth IRA on behalf of his or her spouse provided that the individual has
sufficient compensation (earned income). Contributions to a Traditional IRA
reduce the allowable contribution under a Roth IRA, and contributions to a Roth
IRA reduce the allowable contribution to a Traditional IRA.
Education IRA. In an Education IRA, contributions are made to an IRA
maintained on behalf of a beneficiary under age 18. The maximum annual
contribution is $500 per beneficiary. The contributions are not tax deductible
when made. However, if amounts are used for certain educational purposes,
neither the contributor nor the beneficiary of the IRA are taxed upon
distribution. The beneficiary is subject to income (and possible penalty taxes)
on amounts withdrawn from an Education IRA that are not used for qualified
educational purposes. Shareholders whose income exceeds certain limits are
ineligible to contribute to an Education IRA.
Under current IRS regulations, an IRA applicant must be furnished a
disclosure statement containing information specified by the IRS. The applicant
generally has the right to revoke his account within seven days after receiving
the disclosure statement and obtain a full refund of his contributions. The
custodian may, in its discretion, hold the initial contribution uninvested until
the expiration of the seven-day revocation period. The custodian does not
anticipate that it will exercise its discretion but reserves the right to do so.
SIMPLIFIED EMPLOYEE PENSION PLAN
A Traditional IRA may also be used in conjunction with a Simplified
Employee Pension Plan ("SEP- IRA"). A SEP-IRA is established through execution
of Form 5305-SEP together with a Traditional IRA established for each eligible
employee. Generally, a SEP-IRA allows an employer (including a self-employed
individual) to purchase shares with tax deducible contributions not exceeding
annually for any one participant 15% of compensation (disregarding for this
purposes compensation in excess of $160,000 per year). The $160,000 compensation
limit applies for 1998 and is adjusted periodically for cost of living
increases. A number of special rules apply to SEP Plans, including a requirement
that contributions generally be made of all employees of the employer (including
for this purpose a sole proprietorship or partnership) who satisfy certain
minimum participation requirements.
SIMPLE IRA
An IRA may also be used in connection with a SIMPLE Plan established
by the shareholder's employer (or by a self-employed individual). When this is
done, the IRA is known as a SIMPLE IRA, although it is similar to a Traditional
IRA with the exceptions described below. Under a SIMPLE Plan, the shareholder
may elect to have his or her employer make salary reduction contributions of up
to $6,000 per year to the SIMPLE IRA. The $6,000 limit applies for 1998 and is
adjusted periodically for cost of living increases. In addition, the employer
will contribute certain amounts to the shareholder's SIMPLE IRA, either as a
matching contribution to those participants who make salary reduction
contributions or as a non-elective contribution to all
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eligible participants whether or not making salary reduction contribution. A
number of special rules apply to SIMPLE Plans, including (1) a SIMPLE Plan
generally is available only to employers with fewer than 100 employees; (2)
contributions must be made on behalf of all employees of the employer (other
than bargaining unit employees) who satisfy certain minimum participation
requirements; (3) contributions are made to a special SIMPLE IRA that is
separate and apart from the other IRAs of employees; (4) the distribution excise
tax (if otherwise applicable) is increased to 25% on withdrawals during the
first two years of participation in a SIMPLE IRA; and (5) amounts withdrawn
during the first two years of participation may be rolled over tax-free only
into another SIMPLE IRA (and not to a Traditional IRA or to a Roth IRA). A
SIMPLE IRA is established by executing Form 5304-SIMPLE together with an IRA
established for each eligible employee.
DIVIDENDS, DISTRIBUTIONS, AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS. Dividends are paid at least annually by
the Fund. The Fund also distributes net capital gains (if any) at least
annually. Dividends and distributions of shares may be reinvested at net asset
value without an initial sales charge. Shareholders should indicate on the
purchase application whether they wish to receive dividends and distributions in
cash. Otherwise, all income dividends and capital gains distributions are
automatically reinvested in the Fund at the next determined net asset value
unless the Transfer Agent receives written notice from an individual shareholder
prior to the record date, requesting that the distributions and dividends be
distributed to the investor in cash.
TAX MATTERS. The Fund intends to qualify as a regulated investment
company by satisfying the requirements under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), including the requirements with
respect to diversification of assets, distribution of income and sources of
income. It is the Fund's policy to distribute to its shareholders all of its
investment income (net of expenses) and any capital gains (net of capital
losses) in accordance with the timing requirements imposed by the Code so that
the Fund will satisfy the distribution requirement of Subchapter M and not be
subject to federal income tax or the 4% excise tax. If the Fund fails to satisfy
any of the Code requirements for qualification as a regulated investment
company, it will be taxed at regular corporate tax rates on all of its taxable
income (including capital gains) without any deduction for distributions to
shareholders, and distributions to shareholders will be taxable as ordinary
dividends (even if derived from the Fund's net long-term capital gains) to the
extent of the Fund's current and accumulated earnings and profits.
Distributions by the Fund of its net investment income and the excess,
if any, of its net short-term capital gain over its net long-term capital loss
are generally taxable to shareholders as ordinary income. These distributions
are treated as dividends for federal income tax purposes. Distributions by the
Fund of the excess, if any, of its net long-term capital gain over its net
short-term capital loss are designated as capital gain dividends and are taxable
to shareholders as long-term capital gains, without regard to the length of time
the Fund's shares were held.
Portions of the Fund's investment income may be subject to foreign
income taxes withheld at the source. The economic effect of such withholding
taxes on the total return of the Fund cannot be predicted. The Fund may elect to
"pass through" to its shareholders these foreign taxes, in which event each
shareholder will be required to include their pro rata portion thereof in its
gross income, but will be able to deduct or (subject to various limitations)
claim a foreign tax credit for such amount.
Distributions by the Fund to shareholders will be treated in the same
manner for federal income tax purposes whether received in cash or reinvested in
additional shares of the Fund. In general, distributions by the Fund are taken
into account by the shareholders in the year in which they are made. However,
certain distributions made during January will be treated as having been paid by
the Fund and received by the shareholders on December 31 of the preceding year.
A statement setting forth the federal income tax status of all distributions
made or deemed made during the year, including any amount of foreign taxes
"passed through," will be sent to shareholders promptly after the end of each
year. A shareholder who purchases shares of the
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Fund just prior to the record date will be taxed on the entire amount of the
dividend received, even though the net asset value per share on the date of such
purchase may have reflected the amount of such dividend.
A shareholder will recognize gain or loss upon the sale (exchange) or
redemption of shares of the Fund in an amount equal to the difference between
the proceeds of the sale or redemption and the shareholder's adjusted tax basis
in the shares. Any loss recognized upon a taxable disposition of shares within
six months from the date of their purchase will be treated as a long-term
capital loss to the extent of any capital gain dividends received on such
shares. All or a portion of any loss recognized upon a taxable disposition of
shares of the Fund may be disallowed if other shares of the Fund are purchased
within 30 days before or after such disposition.
Ordinary income dividends paid to non-resident alien or foreign entity
shareholders generally will be subject to United States withholding tax at a
rate of 30% (or lower rate under an applicable treaty). Foreign shareholders are
urged to consult their own tax advisers concerning the applicability of United
States withholding taxes.
Under the backup withholding rules of the Code, certain shareholders
may be subject to 31% backup withholding tax on ordinary income dividends,
capital gain dividends and redemption payments made by the Fund. In order to
avoid this backup withholding, a shareholder must provide the Fund with a
correct taxpayer identification number (which for an individual is usually his
Social Security number) or certify that the shareholder is a corporation or
otherwise exempt from or not subject to backup withholding.
The foregoing discussion of federal income tax consequences is based
on tax laws and regulations in effect on the date of this Prospectus, and is
subject to change by legislative or administrative action. As the foregoing
discussion is for general information only, a prospective shareholder should
also review the more detailed discussion of federal income tax considerations
relevant to the Fund that is contained in the Statement of Additional
Information. In addition, each prospective shareholder should consult with his
own tax adviser as to the tax consequences of investments in the Fund, including
the application of state and local taxes which may differ from the federal
income tax consequences described above.
ORGANIZATION AND DESCRIPTION OF SHARES OF THE TRUST
The Trust was organized as a Massachusetts business trust under the
laws of the Commonwealth of Massachusetts. The Trust's Declaration of Trust
filed September 17, 1986, permits the Trustees to issue an unlimited number of
shares of beneficial interest with a par value of $0.01 per share in an
unlimited number of series of shares. On August 19, 1991, the Declaration of
Trust was amended to change the name of the Trust to "The Tocqueville Trust,"
and on August 4, 1995, the Declaration of Trust was amended to permit the
division of a series into classes of shares. Each share of beneficial interest
has one vote and shares equally in dividends and distributions when and if
declared by a Fund and in a Fund's net assets upon liquidation. All shares, when
issued, are fully paid and nonassessable. There are no preemptive or conversion
rights. Fund shares do not have cumulative voting rights and, therefore, holders
of at least 50% of the shares voting for trustees can elect all trustees and the
remaining shareholders would not be able to elect any trustees. The Board of
Trustees may classify or reclassify any unissued shares of the Trust into shares
of any series by setting or changing in any one or more respects, from time to
time, prior to the issuance of such shares, the preference, conversion or other
rights, voting powers, restrictions, limitations as to dividends, or
qualifications of such shares. Any such classification or reclassification will
comply with the provisions of the 1940 Act.
There will not normally be annual shareholder meetings. Shareholders
may remove Trustees from office by votes cast at a meeting of shareholders or by
written consent.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND PAYING AGENT
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Firstar Trust Company and The Chase Manhattan Bank serve as custodian
for the portfolio securities and cash of the Fund. Firstar Trust Company serves
as the Fund's Transfer and Dividend Paying Agent, and in those capacities
maintains certain financial and accounting books and records pursuant to
agreements with the Trust. Its mailing address is 615 East Michigan Street,
Milwaukee, WI 53202.
COUNSEL AND INDEPENDENT ACCOUNTANTS
Kramer, Levin, Naftalis & Frankel, 919 Third Avenue, New York, N.Y.
10022, is counsel for the Trust. McGladrey & Pullen, LLP, 555 Fifth Avenue, New
York, N.Y. 10017-2416, has been appointed independent accountants for the Trust.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to The Tocqueville Trust c/o
Firstar Trust Company, 615 East Michigan Street, Milwaukee, Wisconsin 53202,
Attention: The Tocqueville Gold Fund, or may be made by calling 1- 800-697-3863.
OTHER INFORMATION
This Prospectus omits certain information contained in the
registration statement filed with the Securities and Exchange Commission. Copies
of the registration statement, including items omitted herein, may be obtained
from the Commission by paying the charges prescribed under its rules and
regulations. The Statement of Additional Information included in such
registration statement may be obtained without charge from the Trust.
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and information
or representations not herein contained, if given or made, must not be relied
upon as having been authorized by the Trust. This Prospectus does not constitute
an offer or solicitation in any jurisdiction in which such offering may not
lawfully be made.
The Code of Ethics of the Investment Advisor and the Funds prohibits
all affiliated personnel from engaging in personal investment activities which
compete with or attempt to take advantage of a Fund's planned portfolio
transactions. Both organizations maintain careful monitoring of compliance with
the Code of Ethics.
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<PAGE>
PROSPECTUS
June 29, 1998
THE TOCQUEVILLE TRUST
THE TOCQUEVILLE GOLD FUND
INVESTMENT ADVISOR
Tocqueville Asset Management L.P.
1675 Broadway
New York, New York 10019
Telephone: (212) 698-0800
DISTRIBUTOR
Tocqueville Securities L.P.
1675 Broadway
New York, New York 10019
Telephone: (800) 697-3863
SHAREHOLDERS' SERVICING,
CUSTODIAN AND TRANSFER AGENT
Firstar Trust Company
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
Telephone: (800) 697-3863
BOARD OF TRUSTEES
Francois Sicart -- Chairman
Lucille G. Bono
Bernard F. Combemale
James B. Flaherty
Inge Heckel
Robert W. Kleinschmidt
Francois Letaconnoux
Larry M. Senderhauf
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<PAGE>
STATEMENT OF ADDITIONAL INFORMATION - June 29, 1998
THE TOCQUEVILLE TRUST
THE TOCQUEVILLE GOLD FUND
This Statement of Additional Information is not a prospectus. This
Statement of Additional Information is incorporated by reference in its entirety
into the Prospectus and should be read in conjunction with the Fund's current
Prospectus, copies of which may be obtained by writing The Tocqueville Trust,
c/o Firstar Trust Company, 615 East Michigan Street, Milwaukee, Wisconsin 53202
or calling (800) 697-3863.
This Statement of Additional Information relates to the Fund's
Prospectus which is dated June 29, 1998.
TABLE OF CONTENTS
Page
Investment Policies and Risks............................................... 2
Investment Restrictions..................................................... 5
Management.................................................................. 7
Investment Advisor and Investment Advisory Agreement....................... 9
Distribution Plan........................................................... 10
Administrative Services Agreement.......................................... 10
Portfolio Transactions and Brokerage........................................ 10
Allocation of Investments................................................... 11
Computation of Net Asset Value.............................................. 11
Purchase and Redemption of Shares........................................... 12
Tax Matters................................................................. 12
Performance Calculation..................................................... 18
General Information......................................................... 19
Reports ................................................................... 20
<PAGE>
The Tocqueville Trust (the "Trust") is a Massachusetts business trust
currently consisting of separate funds. This Statement of Additional Information
relates to The Tocqueville Gold Fund (the "Fund"), an open-end, diversified
management investment company. The Fund's investment objective is to provide
long-term capital appreciation through investments in gold and securities of
companies located throughout the world that are engaged in mining or processing
gold ("gold related securities"), and through investments in other precious
metals and securities of companies located throughout the world that are engaged
in mining or processing such other precious metals ("other precious metal
securities"). Much of the information contained in this Statement of Additional
Information expands on subjects discussed in the Prospectus. Capitalized terms
not defined herein are used as defined in the Prospectus. No investment in
shares of the Fund should be made without first reading the Fund's Prospectus.
INVESTMENT POLICIES AND RISKS
The following descriptions supplement the investment policies of Fund set forth
in the Prospectus. The Fund's investments in the following securities and other
financial instruments are subject to the investment policies and limitations
described in the Prospectus and this Statement of Additional Information.
1. Writing Covered Call Options on Securities and Stock Indices
The Fund may write covered call options on optionable securities or
stock indices from time to time as the Investment Advisor determines is
appropriate in seeking to attain the Fund's objective. A call option written by
the Fund gives the holder the right to buy the underlying securities or index
from the Fund at a stated exercise price. Options on stock indices are settled
in cash.
The Fund may write only covered call options, which means that, so
long as the Fund is obligated as the writer of a call option, it will own the
underlying securities subject to the option (or comparable securities or cash
satisfying the cover requirements of securities exchanges).
The Fund will receive a premium for writing a covered call option,
which increases the return of the Fund in the event the option expires
unexercised or is closed out at a profit. The amount of the premium will
reflect, among other things, the relationship of the market price of the
underlying security or index to the exercise price of the option, the term of
the option and the volatility of the market price of the underlying security or
index. By writing a covered call option, the Fund limits its opportunity to
profit from any increase in the market value of the underlying security or index
above the exercise price of the option.
The Fund may terminate an option that it has written prior to the
option's expiration by entering into a closing purchase transaction in which an
option is purchased having the same terms as the option written. The Fund will
realize a profit or loss from such transaction if the cost of such transaction
is less or more than the premium received from the writing of the option.
Because increases in the market price of a call option will generally reflect
increases in the market price of the underlying security or index, any loss
resulting from the repurchase of a call option is likely to be offset in whole
or in part by unrealized appreciation of the underlying security (or securities)
owned by the Fund.
2. Purchasing Put and Call Options on Securities and Stock Indices
The Fund may purchase put options to protect its portfolio holdings
in an underlying stock index or security against a decline in market value. Such
hedge protection is provided during the life of the put option since the Fund,
as holder of the put option, is able to sell the underlying security or index at
the put exercise price regardless of any decline in the underlying market price
of the security or index. In order for a put option to be profitable, the market
price of the underlying security or index must decline sufficiently below the
exercise
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<PAGE>
price to cover the premium and transaction costs. By using put options in this
manner, the Fund will reduce any profit it might otherwise have realized in its
underlying security or index by the premium paid for the put option and by
transaction costs, but it will retain the ability to benefit from future
increases in market value.
The Fund may also purchase call options to hedge against an increase
in prices of stock indices or securities that it ultimately wants to buy. Such
hedge protection is provided during the life of the call option since the Fund,
as holder of the call option, is able to buy the underlying security or index at
the exercise price regardless of any increase in the underlying market price of
the security or index. In order for a call option to be profitable, the market
price of the underlying security or index must rise sufficiently above the
exercise price to cover the premium and transaction costs. By using call options
in this manner, the Fund will reduce any profit it might have realized had it
bought the underlying security or index at the time it purchased the call option
by the premium paid for the call option and by transaction costs, but it limits
the loss it will suffer if the security or index declines in value to such
premium and transaction costs.
3. Borrowing
The Fund may, from time to time, borrow up to 10% of the value of its
total assets from banks at prevailing interest rates as a temporary measure for
extraordinary or emergency purposes. The Fund may not purchase securities while
borrowings exceed 5% of the value of its total assets.
4. Repurchase Agreements
The Fund 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
the Fund. The Fund will receive interest from the institution until the time
when the repurchase is to occur.
The Fund will always receive as collateral U.S. Government or
short-term money market securities whose market value is equal to at least 100%
of the amount invested by the Fund, and the Fund will make payment for such
securities only upon the physical delivery or evidence by book entry transfer to
the account of its custodian. If the seller institution defaults, the Fund might
incur a loss or delay in the realization of proceeds if the value of the
collateral securing the repurchase agreement declines and it might incur
disposition costs in liquidating the collateral. The Fund will attempt to
minimize such risks by entering into such transactions only with
well-capitalized financial institutions and specifying the required value of the
underlying collateral.
5. Futures Contracts
The Fund may enter into futures contracts, options on futures
contracts and stock index futures contracts and options thereon for the purposes
of remaining fully invested and reducing transaction costs. The Fund also may
enter into futures contracts based on gold and other precious metals, options on
such futures contracts and options thereon for the purposes of remaining fully
invested and reducing transaction costs. Futures contracts provide for the
future sale by one party and purchase by another party of a specified amount of
a specific security, class of securities, currency, index, gold or other
precious metal at a specified future time and at a specified price. A stock
index futures contract is a bilateral agreement pursuant to which two parties
agree to take or make delivery of an amount of cash equal to a specified dollar
amount times the difference between the stock index value at the close of
trading of the contracts and the price at which the futures contract is
originally struck. Futures contracts which are standardized as to maturity date
and underlying financial instrument are traded on national futures exchanges.
Futures exchanges and trading are regulated under the Commodity Exchange Act by
the Commodity Futures Trading Commission (the "CFTC"), a U.S. Government agency.
Although futures contracts by their terms call for actual delivery
and acceptance of the underlying securities, in most cases the contracts are
closed out before the settlement date without the making or taking of
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<PAGE>
delivery. Closing out an open futures position is done by taking an opposite
position (buying a contract which has previously been "sold," or "selling" a
contract previously purchased) in an identical contract to terminate the
position. A futures contract on a securities index is an agreement obligating
either party to pay, and entitling the other party to receive, while the
contract is outstanding, cash payments based on the level of a specified
securities index. The acquisition of put and call options on futures contracts
will, respectively, give the Fund the right (but not the obligation), for a
specified price, to sell or to purchase the underlying futures contract, upon
exercise of the option, at any time during the option period. Brokerage
commissions are incurred when a futures contract is bought or sold.
Futures traders are required to make a good faith margin deposit in
cash or government securities with a broker or custodian to initiate and
maintain open positions in futures contracts. A margin deposit is intended to
assure completion of the contract (delivery or acceptance of the underlying
security) if it is not terminated prior to the specified delivery date. Minimal
initial margin requirements are established by the futures exchange and may be
changed. Brokers may establish deposit requirements which are higher than the
exchange minimums. Initial margin deposits on futures contracts are customarily
set at levels much lower than the prices at which the underlying securities are
purchased and sold, typically ranging upward from less than 5% of the value of
the contract being traded.
After a futures contract position is opened, the value of the
contract is marked-to-market daily. If the futures contract price changes to the
extent that the margin on deposit does not satisfy margin requirements, payment
of additional "variation" margin will be required. Conversely, change in the
contract value may reduce the required margin, resulting in a repayment of
excess margin to the contract holder. Variation margin payments are made to and
from the futures broker for as long as the contract remains open. The Fund
expects to earn interest income on its margin deposits.
In addition to the margin restrictions discussed above, transactions
in futures contracts may involve the segregation of funds pursuant to
requirements imposed by the CFTC. Under those requirements, where the Fund has a
long position in a futures contract, it may be required to establish a
segregated account (not with a futures commission merchant or broker, except as
may be permitted under CFTC rules) containing cash or certain liquid assets
equal to the purchase price of the contract (less any margin on deposit). For a
short position in futures or forward contracts held by the Fund, those
requirements may mandate the establishment of a segregated account (not with a
futures commission merchant or broker, except as may be permitted under CFTC
rules) with cash or certain liquid assets that, when added to the amounts
deposited as margin, equal the market value of the instruments underlying the
futures contracts (but are not less than the price at which the short positions
were established). However, segregation of assets is not required if the Fund
"covers" a long position. For example, instead of segregating assets, the Fund,
when holding a long position in a futures contract, could purchase a put option
on the same futures contract with a strike price as high or higher than the
price of the contract held by the Fund. In addition, where the Fund takes short
positions, or engages in sales of call options, it need not segregate assets if
it "covers" these positions. For example, where the Fund holds a short position
in a futures contract, it may cover by owning the instruments underlying the
contract. The Fund may also cover such a position by holding a call option
permitting it to purchase the same futures contract at a price no higher than
the price at which the short position was established. Where the Fund sells a
call option on a futures contract, it may cover either by entering into a long
position in the same contract at a price no higher than the strike price of the
call option or by owning the instruments underlying the futures contract. The
Fund could also cover this position by holding a separate call option permitting
it to purchase the same futures contract at a price no higher than the strike
price of the call option sold by the Fund.
When interest rates are expected to rise or market values of
portfolio securities are expected to fall, the Fund can seek through the sale of
futures contracts to offset a decline in the value of its portfolio securities.
When interest rates are expected to fall or market values are expected to rise,
the Fund, through the purchase of such contracts, can attempt to secure better
rates or prices for the Fund than might later be available in the market when it
effects anticipated purchases.
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<PAGE>
The Fund will only sell futures contracts to protect securities and
currencies it owns against price declines or purchase contracts to protect
against an increase in the price of securities it intends to purchase. The Fund
also will only sell futures contracts or purchase futures contracts based on
gold or other precious metals for protection against decreases or increases in
the price of gold or other precious metals, as applicable.
The Fund's ability to effectively utilize futures trading depends on
several factors. First, it is possible that there will not be a perfect price
correlation between the futures contracts and their underlying stock index.
Second, it is possible that a lack of liquidity for futures contracts could
exist in the secondary market, resulting in an inability to close a futures
position prior to its maturity date. Third, the purchase of a futures contract
involves the risk that the Fund could lose more than the original margin deposit
required to initiate a futures transaction.
Risk Factors in Futures Transactions
Positions in futures contracts may be closed out only on an exchange
which provides a secondary market for such futures. However, there can be no
assurance that a liquid secondary market will exist for any particular futures
contract at any specific time. Thus, it may not be possible to close a futures
position. In the event of adverse price movements, the Fund would continue to be
required to make daily cash payments to maintain the required margin. In such
situations, if the Fund has insufficient cash, it may have to sell portfolio
securities to meet daily margin requirements at a time when it may be
disadvantageous to do so. In addition, the Fund may be required to make delivery
of the instruments underlying futures contracts it holds. The inability to close
options and futures positions also could have an adverse impact on the ability
to effectively hedge them. The Fund will minimize the risk that it will be
unable to close out a futures contract by only entering into futures contracts
which are traded on national futures exchanges and for which there appears to be
a liquid secondary market.
The risk of loss in trading futures contracts in some strategies can
be substantial, due both to the low margin deposits required, and the extremely
high degree of leverage involved in futures pricing. Because the deposit
requirements in the futures markets are less onerous than margin requirements in
the securities market, there may be increased participation by speculators in
the futures market which may also cause temporary price distortions. A
relatively small price movement in a futures contract may result in immediate
and substantial loss (as well as gain) to the investor. For example, if at the
time of purchase, 10% of the value of the futures contract is deposited as
margin, a subsequent 10% decrease in the value of the futures contract would
result in a total loss of the margin deposit, before any deduction for the
transaction costs, if the account were then closed out. A 15% decrease would
result in a loss equal to 150% of the original margin deposit if the contract
were closed out. Thus, a purchase or sale of a futures contract may result in
losses in excess of the amount invested in the contract. However, because the
futures strategies engaged in by the Fund are only for hedging purposes, the
Investment Advisor does not believe that the Fund is subject to the risks of
loss frequently associated with futures transactions. The Fund would presumably
have sustained comparable losses if, instead of the futures contract, it had
invested in the underlying financial instrument and sold it after the decline.
Utilization of futures transactions by the Fund does involve the risk
of imperfect or no correlation where the securities underlying the futures
contract have different maturities than the portfolio securities being hedged.
It is also possible that the Fund could both lose money on futures contracts and
also experience a decline in value of its portfolio securities. There is also
the risk of loss by the Fund of margin deposits in the event of bankruptcy of a
broker with whom the Fund has an open position in a futures contract or related
option.
Conclusion
Unlike the fundamental investment objective of the Fund set forth
above and the investment restrictions set forth below which may not be changed
without shareholder approval, the Fund has the right to modify the investment
policies described above without shareholder approval.
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<PAGE>
INVESTMENT RESTRICTIONS
The following fundamental policies and investment restrictions have
been adopted by the Fund and except as noted, such policies and restrictions
cannot be changed without approval by the vote of a majority of the outstanding
voting shares of the Fund which, as defined by the Investment Company Act of
1940, as amended (the "1940 Act"), means the affirmative vote of the lesser of
(a) 67% or more of the shares of the Fund present at a meeting at which the
holders of more than 50% of the outstanding shares of the Fund are represented
in person or by proxy, or (b) more than 50% of the outstanding shares of the
Fund.
The Fund may not:
(1) issue senior securities;
(2) invest more than 25% of its assets in the securities of
issuers in any one industry, with the exception of gold, gold related
securities, other precious metals, and other precious metal
securities;
(3) with respect to 75% of the value of the Fund's 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, or more than 10% of the outstanding voting securities of any
one issuer would be owned by the Fund;
(4) 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;
(5) borrow money in excess of 10% of the value of the Fund's
total assets from banks. The Fund may not purchase securities while
borrowings exceed 5% of the value of its total assets;
(6) buy or sell real estate, commodities, or commodity
contracts, except the Fund may purchase or sell futures or options on
futures;
(7) underwrite securities;
(8) invest in precious metals other than in accordance with the
Fund's investment objective and policy, if as a result the Fund would
then have more than 10% of its total assets (taken at current value)
invested in such precious metals; and
(9) participate in a joint investment account.
The following restrictions are non-fundamental and may be changed by
the Fund's Board of Trustees. Pursuant to such restrictions, the Fund will not:
(1) make short sales of securities, other than short sales
"against the box," or purchase securities on margin except for
short-term credits necessary for clearance of portfolio transactions,
provided that this restriction will not be applied to limit the use
of options, futures contracts and related options, in the manner
otherwise permitted by the investment restrictions, policies and
investment program of the Fund;
(2) purchase the securities of any other investment company, if
the Fund, immediately after such purchase or acquisition, owns in the
aggregate, (i) more than 3% of the total outstanding voting
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<PAGE>
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; and
(3) invest more than 10% of its total net assets in illiquid
securities. Illiquid securities are securities that are not readily
marketable or cannot be disposed of promptly within seven days and in
the usual course of business without taking a materially reduced
price. Such securities include, but are not limited to, time deposits
and repurchase agreements with maturities longer than seven days.
Securities that may be resold under Rule 144A or securities offered
pursuant to Section 4(2) of the Securities Act of 1933, as amended,
shall not be deemed illiquid solely by reason of being unregistered.
The Investment Advisor shall determine whether a particular security
is deemed to be liquid based on the trading markets for the specific
security and other factors.
MANAGEMENT
The overall management of the business and affairs of the Fund is
vested with the Board of Trustees. The Board of Trustees approves all
significant agreements between the Trust or the Fund and persons or companies
furnishing services to the Fund, including the Fund's agreement with an
investment advisor, custodian and transfer agent. The day-to-day operations of
the Fund are delegated to the Fund's officers subject always to the investment
objectives and policies of the Fund and to general supervision by the Trust's
Board of Trustees.
The Trustees and officers and their principal occupations are noted
below. Unless otherwise indicated the address of each Trustee and executive
officer is 1675 Broadway, New York, New York 10019.
FRANCOIS DANIEL SICART,* CHAIRMAN, PRINCIPAL EXECUTIVE OFFICER AND TRUSTEE.
Chairman and Chief Executive Officer, Tocqueville Management Corporation, the
General Partner of Tocqueville Asset Management L.P. and Tocqueville Securities
L.P. from January, 1990 to present; Chairman and Chief Executive Officer,
Tocqueville Asset Management Corp. from December, 1985 to January, 1990; Vice
Chairman of Tucker Anthony Management Corporation, from 1981 to October 1986;
Vice President (formerly general partner) and other positions with Tucker
Anthony, Inc. from 1969 to January, 1990.
LUCILLE G. BONO, TRUSTEE. Financial services consultant, 1997 to present;
Operations and administrative manager, Tocqueville Asset Management L.P. and
Tocqueville Securities L.P. from January 1990 to November 1997; similar
responsibilities, Tocqueville Asset Management Corp., December 1985 to January
1990; operations and administration staff, Tucker Anthony Inc. (and
predecessors), April 1954 to January 1990.
BERNARD F. COMBEMALE, TRUSTEE. Investment Management Consultant, 1981 to
present; Chairman and Chief Executive Officer, Trusthouse Forte Inc., 1984 to
1988; Chairman of the Executive Committee & Director, Western World Insurance
Company, 1981 to present; Director, Westco Holding Corporation, 1981 to present;
Director, The French-American Foundation, 1980 to present; Trustee, The Princess
Grace Foundation - U.S.A., 1980 to present.
JAMES B. FLAHERTY, TRUSTEE. President and Partner, Troutbeck Conference Center
and Country Inn from October, 1979 to present; Vice President, Leedsville Realty
and Construction Corp. from 1980 to present; Associate Creative Director, Young
and Rubicam Advertising, and Dentsu, Young and Rubicam from March, 1983 to
February, 1985; Creative Director and Senior Vice President, Tinker Campbell
Ewald from October,
- --------------
* Interested person of the Fund as defined in the 1940 Act.
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<PAGE>
1977 to November, 1980; Partner/owner of Freshfields Restaurant, W. Cornell, CT;
President/Creative Director of JBF Ltd., an advertising company.
INGE HECKEL, TRUSTEE. Management Consultant, 1988 to present; Executive
Director, Princess Grace Foundation U.S.A. from June, 1986 to September, 1988;
Vice President and Assistant Secretary, The Asia Society from September, 1984 to
June, 1986; Executive Director, Metropolitan Boston Zoos from September, 1982 to
July, 1984; President, Bradford College, Bradford, Massachusetts from September,
1979 to June, 1982; Trustee of Bradford College; Former Director and Chairman,
Public Relations Committee, International Counsel of Museums (UNESCO); Former
Director, BayBank/Merrimack Valley; Member, Art Advisory Board, Mount Holyoke
College Art Museum.
ROBERT KLEINSCHMIDT,* PRESIDENT, PRINCIPAL OPERATING OFFICER AND TRUSTEE.
President, Tocqueville Asset Management L.P. from January, 1994 to present and
Managing Director from July, 1991 to January, 1994. Partner, David J. Greene &
Co., May, 1978 to July, 1991. Assistant Vice President, Irving Trust Co., July,
1976 to May, 1978.
FRANCOIS LETACONNOUX, TRUSTEE. President, Lepercq de Neuflize & Co. from July,
1993 to present; Director, Lepercq 99 First Management Inc. from 1988 to
present; Director, Lepercq de Neuflize & Co., Inc. (investment bank) from 1988
to present; Managing Director, Lepercq Capital Partners (real estate investment
firm), from 1974 to present.
LARRY M. SENDERHAUF, TRUSTEE. President, LMS 33 Corp., 1983 to present; Vice
President, NCCI Corp. 1985 to present; President, Cash Unlimited, 1980-1986;
President, Financial Exchange Corp., 1981-1986; President, LMS Development
Corp., 1986-1995; Vice President, Pacific Ring Enterprises, 1982-1995.
JOSEPH COOPER, SECRETARY AND TREASURER. Vice President and Treasurer,
Tocqueville Management Corporation, the General Partner of Tocqueville Asset
Management L.P. and Tocqueville Securities L.P. from January, 1990 to present.
Vice President, Treasurer and Chief Financial Officer, Tocqueville Asset
Management Corporation from December, 1985 to February, 1990. Self-employed as a
public accountant.
KIERAN LYONS, VICE PRESIDENT AND PRINCIPAL FINANCIAL OFFICER. Chief Financial
Officer, Tocqueville Management Corporation, the General Partner of Tocqueville
Asset Management L.P. and Tocqueville Securities L.P. from January, 1992 to
present. Certified Public Accountant, Pegg & Pegg, February, 1985 to January,
1992.
Under the terms of the Massachusetts General Corporation Law, the
Fund may indemnify any person who was or is a Trustee, officer or employee of
the Fund to the maximum extent permitted by the Massachusetts General
Corporation Law; provided, however, that any such indemnification (unless
ordered by a court) shall be made by the Fund only as authorized in the specific
case upon a determination that indemnification of such persons is proper in the
circumstances. Such determination shall be made (i) by the Board of Trustees, by
a majority vote of a quorum which consists of Trustees who are neither
"interested persons" of the Trust, as defined in Section 2(a)(19) of the 1940
Act, nor parties to the proceeding, or (ii) if the required quorum is not
obtained or if a quorum of such Trustees so directs, by independent legal
counsel in a written opinion. No indemnification will be provided by the Fund to
any Trustee or officer of the Fund for any liability to the Fund or it
shareholders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of duty.
The Fund does not pay direct remuneration to any officer of the Fund.
As of January 31, 1998, the Trustees and officers as a group owned beneficially
3.99% of The Tocqueville Fund's outstanding shares,
2.26% of The Tocqueville International Fund's outstanding shares, 5.49% of The
Tocqueville Small Cap Fund's outstanding shares, and 18.96% of the The
Tocqueville Government Fund's outstanding shares, all of which were acquired for
investment purposes. Certain of the Trustees and officers may have investment
discretion for institutional and private accounts which own shares of the Funds,
however the Trustees and
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<PAGE>
officers do not have the power to vote such shares and have disclaimed
beneficial ownership of such shares. For the fiscal year ended October 31, 1997,
the Trust paid the "disinterested" Trustees an aggregate of $18,000; each
disinterested Trustee received $750 per meeting. "Interested" Trustees do not
receive Trustees' fees. The Trust did not reimburse Trustee expenses.
The table below illustrates the compensation paid to each Trustee for
the Trust's most recently completed fiscal year:
<TABLE>
<CAPTION>
Pension or Total
Retirement Compensation
Aggregate Benefits Accrued Estimated Annual from Fund and
Name of Person, Compensation as Part of Fund Benefits Upon Fund Complex
Position from Fund Expenses Retirement Paid to Trustees
- --------------- ------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Francois Sicart $0 $0 $0 $0
Bernard F. Combemale $4,500 $0 $0 $4,500
James B. Flaherty $4,500 $0 $0 $4,500
Inge Heckel $4,500 $0 $0 $4,500
Robert Kleinschmidt $0 $0 $0 $0
Francois Letaconnoux $4,500 $0 $0 $4,500
Lucille Bono $0 $0 $0 $0
Larry Senderhauf $0 $0 $0 $0
</TABLE>
INVESTMENT ADVISOR AND INVESTMENT ADVISORY AGREEMENTS
Tocqueville Asset Management L.P. (the "Investment Advisor"), 1675
Broadway, New York, New York 10019, acts as the Investment Advisor to the Fund
under a separate investment advisory agreement (the "Agreement" or
"Agreements"). The Agreement provides that the Investment Advisor identify and
analyze possible investments for the Fund, determine the amount and timing of
such investments, and the form of investment. The Investment Advisor has the
responsibility of monitoring and reviewing the Fund's portfolio, and, on a
regular basis, to recommend the ultimate disposition of such investments. It is
the Investment Advisor's responsibility to cause the purchase and sale of
securities in the Fund's portfolio, subject at all times to the policies set
forth by the Trust's Board of Trustees. In addition, the Investment Advisor also
provides certain administrative and managerial services to the Fund.
The Investment Advisor receives a fee from the Fund, calculated daily
and payable monthly, for the performance of its services at an annual rate of
1.00% on the first $500 million of the average daily net assets of the Fund,
.75% of average daily net assets in excess of $500 million but not exceeding $1
billion, and .65% of the average daily net assets in excess of $1 billion. The
fee is accrued daily for the purposes of determining the offering and redemption
price of the Fund's shares. The advisory fee is higher than that paid by most
investment companies but the Board of Trustees believes them to be reasonable in
light of the services the Fund receives thereunder.
Under the terms of the Agreement, the Fund pays all of its expenses
(other than those expenses specifically assumed by the Investment Advisor and
the Fund's distributor) including the costs incurred in connection with the
maintenance of its registration under the Securities Act of 1933, as amended,
and the 1940 Act, printing of prospectuses distributed to shareholders, taxes or
governmental fees, brokerage commissions,
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<PAGE>
custodial, transfer and shareholder servicing agents, expenses of outside
counsel and independent accountants, preparation of shareholder reports, and
expenses of Trustee and shareholder meetings.
The Agreement may be terminated without penalty on 60 days' written
notice by a vote of the majority of the Trust's Board of Trustees or by the
Investment Advisor, or by holders of a majority of the Fund's outstanding
shares. The Fund's Agreement will continue for two years from its effective date
and from year-to-year thereafter provided it is approved, at least annually, in
the manner stipulated in the 1940 Act. This requires that the Agreement and any
renewal thereof be approved by a vote of the majority of the Fund's Trustees who
are not parties thereto or interested persons of any such party, cast in person
at a meeting specifically called for the purpose of voting on such approval.
DISTRIBUTION PLAN
The Fund has adopted a distribution plan pursuant to Rule 12b-1 of
the 1940 Act (the "Plan"). The Plan provides that the Fund may incur
distribution expenses related to the sale of shares of up to .25% per annum of
the Fund's average daily net assets.
The Plan provides that the Fund may finance activities which are
primarily intended to result in the sale of the Fund's shares, including, but
not limited to, advertising, printing of prospectuses and reports for other than
existing shareholders, preparation and distribution of advertising material and
sales literature and payments to dealers and shareholder servicing agents
including Tocqueville Securities L.P. ("Tocqueville Securities") who enter into
agreements with the Fund or its distributor.
In approving the Plan in accordance with the requirements of Rule
12b-1 under the 1940 Act, the Trustees (including the "disinterested" Trustees,
as defined in the 1940 Act) considered various factors and determined that there
is a reasonable likelihood that the Plan will benefit the Fund and its
shareholders. The Plan will continue in effect from year to year if specifically
approved annually (a) by the majority of the Fund's outstanding voting shares or
by the Board of Trustees and (b) by the vote of a majority of the disinterested
Trustees. While the Plan remains in effect, the Fund's Principal Financial
Officer shall prepare and furnish to the Board of Trustees a written report
setting forth the amounts spent by the Fund under the Plan and the purposes for
which such expenditures were made. The Plan may not be amended to increase
materially the amount to be spent for distribution without shareholder approval
and all material amendments to the Plan must be approved by the Board of
Trustees and by the disinterested Trustees cast in person at a meeting called
specifically for that purpose. While the Plan is in effect, the selection and
nomination of the disinterested Trustees shall be made by those disinterested
Trustees then in office.
ADMINISTRATIVE SERVICES AGREEMENT
Tocqueville Asset Management L.P., supervises administration of the
Fund pursuant to an Administrative Services Agreement with the Fund. Under the
Administrative Services Agreement, Tocqueville Asset Management L.P. supervises
the administration of all aspects of the Fund's operations, including the Fund's
receipt of services for which the Fund is obligated to pay, provides the Fund
with general office facilities and provides, at the Fund's expense, the services
of persons necessary to perform such supervisory, administrative and clerical
functions as are needed to effectively operate the Fund. Those persons, as well
as certain employees and Trustees of the Fund, may be directors, officers or
employees of (and persons providing services to the Fund may include)
Tocqueville Asset Management L.P. and its affiliates. For these services and
facilities, Tocqueville Asset Management L.P. receives with respect to the Fund
a fee computed and paid monthly at an annual rate of 0.15% of the average daily
net assets of the Fund.
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<PAGE>
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to the supervision of the Board of Trustees, decisions to buy
and sell securities for the Fund are made by the Investment Advisor. The
Investment Advisor is authorized to allocate the orders placed by it on behalf
of the Fund to such unaffiliated brokers who also provide research or
statistical material, or other services to the Fund or the Investment Advisor
for the Fund's use. Such allocation shall be in such amounts and proportions as
the Investment Advisor shall determine and the Investment Advisor will report on
said allocations regularly to the Board of Trustees indicating the unaffiliated
brokers to whom such allocations have been made and the basis therefor. In
addition, the Investment Advisor may consider sales of shares of the Fund and of
any other funds advised or managed by the Investment Advisor as a factor in the
selection of unaffiliated brokers to execute portfolio transactions for the
Fund, subject to the requirements of best execution. The Trustees have
authorized the allocation of brokerage to affiliated broker-dealers on an agency
basis to effect portfolio transactions. The Trustees have adopted procedures
incorporating the standards of Rule 17e-1 of the 1940 Act, which require that
the commission paid to affiliated broker-dealers must be "reasonable and fair
compared to the commission, fee or other remuneration received, or to be
received, by other brokers in connection with comparable transactions involving
similar securities during a comparable period of time." At times, the Fund may
also purchase portfolio securities directly from dealers acting as principals,
underwriters or market makers. As these transactions are usually conducted on a
net basis, no brokerage commissions are paid by the Fund.
In selecting a broker to execute each particular transaction, the
Investment Advisor will take the following into consideration: the best net
price available; the reliability, integrity and financial condition of the
broker; the size and difficulty in executing the order; and, the value of the
expected contribution of the broker to the investment performance of the Fund on
a continuing basis. Accordingly, the cost of the brokerage commissions to the
Fund in any transaction may be greater than that available from other brokers if
the difference is reasonably justified by other aspects of the portfolio
execution services offered. Subject to such policies and procedures as the Board
of Trustees may determine, the Investment Advisor shall not be deemed to have
acted unlawfully or to have breached any duty solely by reason of its having
caused the Fund to pay an unaffiliated broker that provides research services to
the Investment Advisor for the Fund's use an amount of commission for effecting
a portfolio investment transaction in excess of the amount of commission another
broker would have charged for effecting the transaction, if the Investment
Advisor determines in good faith that such amount of commission was reasonable
in relation to the value of the research service provided by such broker viewed
in terms of either that particular transaction of the Investment Advisor's
ongoing responsibilities with respect to the Fund.
ALLOCATION OF INVESTMENTS
The Investment Advisor has other advisory clients which include
individuals, trusts, pension and profit sharing funds, some of which have
similar investment objectives to the Fund. As such, there will be times when the
Investment Advisor may recommend purchases and/or sales of the same portfolio
securities for the Fund and its other clients. In such circumstances, it will be
the policy of the Investment Advisor to allocate purchases and sales among the
Fund and its other clients in a manner which the Investment Advisor deems
equitable, taking into consideration such factors as size of account,
concentration of holdings, investment objectives, tax status, cash availability,
purchase cost, holding period and other pertinent factors relative to each
account. Simultaneous transactions may have an adverse effect upon the price or
volume of a security purchased by the Fund.
COMPUTATION OF NET ASSET VALUE
The Fund will determine the net asset value of its shares once daily
as of the close of trading on the New York Stock Exchange (the "Exchange") on
each day that the Exchange is open for business. It is expected
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<PAGE>
that the Exchange will be closed on Saturdays and Sundays and on New Year's Day,
Martin Luther King Day, President's Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day. The Fund may make or cause
to be made a more frequent determination of the net asset value and offering
price, which determination shall reasonably reflect any material changes in the
value of securities and other assets held by the Fund from the immediately
preceding determination of net asset value. The net asset value is determined by
dividing the market value of the Fund's investments as of the close of trading
plus any cash or other assets (including dividends receivable and accrued
interest) less all liabilities (including accrued expenses) by the number of the
Fund's shares outstanding. Securities traded on the New York Stock Exchange or
the American Stock Exchange will be valued at the last sale price, or if no
sale, at the mean between the latest bid and asked price. Securities traded in
any other U.S. or foreign market shall be valued in a manner as similar as
possible to the above, or if not so traded, on the basis of the latest available
price. Securities sold short "against the box" will be valued at market as
determined above; however, in instances where the Fund has sold securities short
against a long position in the issuer's convertible securities, for the purpose
of valuation, the securities in the short position will be valued at the "asked"
price rather than the mean of the last "bid" and "asked" prices. Investments in
gold bullion will be valued at their respective fair market values determined on
the basis of the mean between the last current bid and asked prices based on
dealer or exchanges quotations. Where there are no readily available quotations
for securities they will be valued at a fair value as determined by the Board of
Trustees acting in good faith.
PURCHASE AND REDEMPTION OF SHARES
A complete description of the manner by a which the Fund's shares may
be purchased and redeemed, including discussions concerning the front-end sales
load appears in the Prospectus under the headings "Purchase of Shares" and
"Redemption of Shares" respectively.
TAX MATTERS
The following is only a summary of certain additional federal income
tax considerations generally affecting the Fund and its shareholders that are
not described in the Prospectus. No attempt is made to present a detailed
explanation of the tax treatment of the Fund or its shareholders, and the
discussions here and in the Prospectus are not intended as substitutes for
careful tax planning.
Qualification as a Regulated Investment Company
The Fund has elected to be taxed as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). As a regulated investment company, the Fund is not subject to federal
income tax on the portion of its net investment income (i.e., taxable interest,
dividends and other taxable ordinary income, net of expenses) and capital gain
net income (i.e., the excess of capital gains over capital losses) that it
distributes to shareholders, provided that it distributes at least 90% of its
investment company taxable income (i.e., net investment income and the excess of
net short-term capital gain over net long-term capital loss) for the taxable
year (the "Distribution Requirement"), and satisfies certain other requirements
of the Code that are described below. Distributions by the Fund made during the
taxable year or, under specified circumstances, within twelve months after the
close of the taxable year, will be considered distributions of income and gains
of the taxable year and will, therefore, count towards the satisfaction of the
Distribution Requirement.
In addition to satisfying the Distribution Requirement, a regulated
investment company must derive at least 90% of its gross income from dividends,
interest, certain payments with respect to securities loans, gains from the sale
or other disposition of stock or securities or foreign currencies (to the extent
such currency gains are directly related to the regulated investment company's
principal business of investing in stock or securities)
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and other income (including, but not limited to, gains from options, futures or
forward contracts) derived with respect to its business of investing in such
stock, securities or currencies (the "Income Requirement").
In general, gain or loss recognized by the Fund on the disposition of
an asset will be a capital gain or loss. In addition, gain will be recognized as
a result of certain constructive sales, including short sales "against the box".
However, gain recognized on the disposition of a debt obligation purchased by
the Fund at a market discount (generally, at a price less than its principal
amount) will be treated as ordinary income to the extent of the portion of the
market discount which accrued during the period of time the Fund held the debt
obligation. In addition, under the rules of Code section 988, gain or loss
recognized on the disposition of a debt obligation denominated in a foreign
currency or an option with respect thereto (but only to the extent attributable
to changes in foreign currency exchange rates), and gain or loss recognized on
the disposition of a foreign currency forward contract, futures contract, option
or similar financial instrument, or of foreign currency itself, except for
regulated futures contracts or non-equity options subject to Code section 1256
(unless the Fund elects otherwise), will generally be treated as ordinary income
or loss.
Further, the Code also treats as ordinary income a portion of the
capital gain attributable to a transaction where substantially all of the return
realized is attributable to the time value of the Fund's net investment in the
transaction and: (1) the transaction consists of the acquisition of property by
the Fund and a contemporaneous contract to sell substantially identical property
in the future; (2) the transaction is a straddle within the meaning of section
1092 of the Code; (3) the transaction is one that was marketed or sold to the
Fund on the basis that it would have the economic characteristics of a loan but
the interest-like return would be taxed as capital gain; or (4) the transaction
is described as a conversion transaction in the Treasury Regulations. The amount
of the gain recharacterized generally will not exceed the amount of the interest
that would have accrued on the net investment for the relevant period at a yield
equal to 120% of the federal long-term, mid-term, or short-term rate, depending
upon the type of instrument at issue, reduced by an amount equal to: (1) prior
inclusions of ordinary income items from the conversion transaction and (2) the
capital interest on acquisition indebtedness under Code section 263(g). Built-in
losses will be preserved where the Fund has a built-in loss with respect to
property that becomes a part of a conversion transaction. No authority exists
that indicates that the converted character of the income will not be passed
through to the Fund's shareholders.
In general, for purposes of determining whether capital gain or loss
recognized by the Fund on the disposition of an asset is long-term or
short-term, the holding period of the asset may be affected if (1) the asset is
used to close a "short sale" (which includes for certain purposes the
acquisition of a put option) or is substantially identical to another asset so
used, (2) the asset is otherwise held by the Fund as part of a "straddle" (which
term generally excludes a situation where the asset is stock and the Fund grants
a qualified covered call option (which, among other things, must not be
deep-in-the-money) with respect thereto) or (3) the asset is stock and the Fund
grants an in-the-money qualified covered call option with respect thereto. In
addition, the Fund may be required to defer the recognition of a loss on the
disposition of an asset held as part of a straddle to the extent of any
unrecognized gain on the offsetting position.
Any gain recognized by the Fund on the lapse of, or any gain or loss
recognized by the Fund from a closing transaction with respect to, an option
written by the Fund will be treated as a short-term capital gain or loss.
Certain transactions that may be engaged in by the Fund (such as
regulated futures contracts, certain foreign currency contracts, and options on
stock indexes and futures contracts) will be subject to special tax treatment as
"Section 1256 contracts." Section 1256 contracts are treated as if they are sold
for their fair market value on the last business day of the taxable year, even
though a taxpayer's obligations (or rights) under such contracts have not
terminated (by delivery, exercise, entering into a closing transaction or
otherwise) as of such date. Any gain or loss recognized as a consequence of the
year-end deemed disposition of Section 1256 contracts is taken into account for
the taxable year together with any other gain or loss that was previously
recognized upon the termination of Section 1256 contracts during that taxable
year. Any capital gain or loss for the taxable year with respect to Section 1256
contracts (including any capital gain or loss arising as a consequence of the
year-end deemed sale of such contracts) is generally treated as 60% long-term
capital gain or loss and 40% short-term capital gain or loss. The Fund, however,
may elect not to have this special tax
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treatment apply to Section 1256 contracts that are part of a "mixed straddle"
with other investments of the Fund that are not Section 1256 contracts.
The Fund may purchase securities of certain foreign investment funds
or trusts which constitute passive foreign investment companies ("PFICs") for
federal income tax purposes. If the Fund invests in a PFIC, it has three
separate options. First, it may elect to treat the PFIC as a qualifying electing
fund (a "QEF"), in which case it will each year have ordinary income equal to
its pro rata share of the PFIC's ordinary earnings for the year and long-term
capital gain equal to its pro rata share of the PFIC's net capital gain for the
year, regardless of whether the Fund receives distributions of any such ordinary
earnings or capital gains from the PFIC. Second, for tax years beginning after
December 31, 1997, the Fund may make a mark-to-market election with respect to
its PFIC stock. Pursuant to such an election, the Fund will include as ordinary
income any excess of the fair market value of such stock at the close of any
taxable year over its adjusted tax basis in the stock. If the adjusted tax basis
of the PFIC stock exceeds the fair market value of such stock at the end of a
given taxable year, such excess will be deductible as ordinary loss in the
amount equal to the lesser of the amount of such excess or the net
mark-to-market gains on the stock that the Fund included in income in previous
years. The Fund's holding period with respect to its PFIC stock subject to the
election will commence on the first day of the following taxable year. If the
Fund makes the mark-to-market election in the first taxable year it holds PFIC
stock, it will not incur the tax described below under the third option.
Finally, if the Fund does not elect to treat the PFIC as a QEF and
does not make a mark-to-market election, then, in general, (1) any gain
recognized by the Fund upon a sale or other disposition of its interest in the
PFIC or any "excess distribution" (as defined) received by the Fund from the
PFIC will be allocated ratably over the Fund's holding period in the PFIC stock,
(2) the portion of such gain or excess distribution so allocated to the year in
which the gain is recognized or the excess distribution is received shall be
included in the Fund's gross income for such year as ordinary income (and the
distribution of such portion by the Fund to shareholders will be taxable as an
ordinary income dividend, but such portion will not be subject to tax at the
Fund level), (3) the Fund shall be liable for tax on the portions of such gain
or excess distribution so allocated to prior years in an amount equal to, for
each such prior year, (i) the amount of gain or excess distribution allocated to
such prior year multiplied by the highest tax rate (individual or corporate, as
the case may be) in effect for such prior year, plus (ii) interest on the amount
determined under clause (i) for the period from the due date for filing a return
for such prior year until the date for filing a return for the year in which the
gain is recognized or the excess distribution is received, at the rates and
methods applicable to underpayments of tax for such period, and (4) the
distribution by the Fund to shareholders of the portions of such gain or excess
distribution so allocated to prior years (net of the tax payable by the Fund
thereon) will again be taxable to the shareholders as an ordinary income
dividend.
Treasury Regulations permit a regulated investment company, in
determining its investment company taxable income and net capital gain (i.e.,
the excess of net long-term capital gain over net short-term capital loss) for
any taxable year, to elect (unless it has made a taxable year election for
excise tax purposes as discussed below) to treat all or any part of any net
capital loss, any net long-term capital loss or any net foreign currency loss
(including, to the extent provided in Treasury Regulations, losses recognized
pursuant to the PFIC mark-to-market election) incurred after October 31 as if it
had been incurred in the succeeding year.
In addition to satisfying the requirements described above, the Fund
must satisfy an asset diversification test in order to qualify as a regulated
investment company. Under this test, at the close of each quarter of the Fund's
taxable year, at least 50% of the value of the Fund's assets must consist of
cash and cash items, U.S. Government securities, securities of other regulated
investment companies, and securities of other issuers (as to which the Fund has
not invested more than 5% of the value of the Fund's total assets in securities
of such issuer and does not hold more than 10% of the outstanding voting
securities of such issuer), and no more than 25% of the value of its total
assets may be invested in the securities of any one issuer (other than U.S.
Government securities and securities of other regulated investment companies),
or in two or more issuers which the Fund controls and which are engaged in the
same or similar trades or businesses. Generally, an
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option (call or put) with respect to a security is treated as issued by the
issuer of the security not the issuer of the option.
If for any taxable year the Fund does not qualify as a regulated
investment company, all of its taxable income (including its net capital gain)
will be subject to tax at regular corporate rates without any deduction for
distributions to shareholders, and such distributions will be taxable to the
shareholders as ordinary dividends to the extent of the Fund's current and
accumulated earnings and profits. Such distributions generally will be eligible
for the dividends-received deduction in the case of corporate shareholders.
Excise Tax on Regulated Investment Companies
A 4% non-deductible excise tax is imposed on a regulated investment
company that fails to distribute in each calendar year an amount equal to 98% of
its ordinary income for such calendar year and 98% of capital gain net income
for the one-year period ended on October 31 of such calendar year (or, at the
election of a regulated investment company having a taxable year ending November
30 or December 31, for its taxable year (a "taxable year election")). The
balance of such income must be distributed during the next calendar year. For
the foregoing purposes, a regulated investment company is treated as having
distributed any amount on which it is subject to income tax for any taxable year
ending in such calendar year.
For purposes of the excise tax, a regulated investment company shall:
(1) reduce its capital gain net income (but not below its net capital gain) by
the amount of any net ordinary loss for the calendar year; and (2) exclude
foreign currency gains and losses and ordinary gains or losses arising as a
result of a PFIC mark-to-market election (or upon an actual disposition of the
PFIC stock subject to such election) incurred after October 31 of any year (or
after the end of its taxable year if it has made a taxable year election) in
determining the amount of ordinary taxable income for the current calendar year
(and, instead, include such gains and losses in determining ordinary taxable
income for the succeeding calendar year).
The Fund intends to make sufficient distributions or deemed
distributions of its ordinary taxable income and capital gain net income prior
to the end of each calendar year to avoid liability for the excise tax. However,
investors should note that the Fund may in certain circumstances be required to
liquidate portfolio investments to make sufficient distributions to avoid excise
tax liability.
Fund Distributions
The Fund anticipates distributing substantially all of its investment
company taxable income for each taxable year. Such distributions will be taxable
to shareholders as ordinary income and treated as dividends for federal income
tax purposes. Such dividends paid by the Fund will qualify for the 70%
dividends-received deduction for corporate shareholders only to the extent
discussed below.
The Fund may either retain or distribute to shareholders its net
capital gain for each taxable year. The Fund currently intends to distribute any
such amounts. Net capital gain that is distributed and designated as a capital
gain dividend will be taxable to shareholders as long-term capital gain,
regardless of the length of time the shareholder has held his shares or whether
such gain was recognized by the Fund prior to the date on which the shareholder
acquired his shares. The Code provides, however, that under certain conditions
only 50% (58% for alternative minimum tax purposes) of the capital gain
recognized upon the Fund's disposition of domestic "small business" stock will
be subject to tax.
Conversely, if the Fund elects to retain its net capital gain, the
Fund will be taxed thereon (except to the extent of any available capital loss
carryovers) at the 35% corporate tax rate. If the Fund elects to retain its net
capital gain, it is expected that the Fund also will elect to have shareholders
of record on the last day of its taxable year treated as if each received a
distribution of his pro rata share of such gain, with the result that each
shareholder will be required to report his pro rata share of such gain on his
tax return as long-term capital gain, will receive a refundable tax credit for
his pro rata share of tax paid by the Fund on the gain, and will increase the
tax basis for his shares by an amount equal to the deemed distribution less the
tax credit.
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Ordinary income dividends paid by the Fund with respect to a taxable
year will qualify for the 70% dividends-received deduction generally available
to corporations (other than corporations, such as S corporations, which are not
eligible for the deduction because of their special characteristics and other
than for purposes of special taxes such as the accumulated earnings tax and the
personal holding company tax) to the extent of the amount of qualifying
dividends received by the Fund from domestic corporations for the taxable year.
Generally, a dividend received by the Fund will not be treated as a qualifying
dividend (1) if it has been received with respect to any share of stock that the
Fund has held for less than 46 days (91 days in the case of certain preferred
stock), excluding for this purpose under the rules of Code section 246(c)(3) and
(4) any period during which the Fund has an option to sell, is under a
contractual obligation to sell, has made and not closed a short sale of, is the
grantor of a deep-in-the-money or otherwise nonqualified option to buy, or has
otherwise diminished its risk of loss by holding other positions with respect
to, such (or substantially identical) stock; (2) to the extent that the Fund is
under an obligation (pursuant to a short sale or otherwise) to make related
payments with respect to positions in substantially similar or related property;
or (3) to the extent that the stock on which the dividend is paid is treated as
debt-financed under the rules of Code Section 246A. The 46-day holding period
must be satisfied during the 90-day period beginning 45 days prior to each
applicable ex-dividend date; the 91-day holding period must be satisfied during
the 180-day period beginning 90 days before each applicable ex-dividend date.
Moreover, the dividends-received deduction for a corporate shareholder may be
disallowed or reduced (1) if the corporate shareholder fails to satisfy the
foregoing requirements with respect to its shares of the Fund or (2) by
application of Code section 246(b) which in general limits the
dividends-received deduction to 70% of the shareholder's taxable income
(determined without regard to the dividends-received deduction and certain other
items). Since a large portion of the Fund may be invested in stock of non- U.S.
corporations, the ordinary dividends distributed by the Fund generally may not
qualify for the dividends-received deduction for corporate shareholders.
Alternative minimum tax ("AMT") is imposed in addition to, but only
to the extent it exceeds, the regular tax and is computed at a maximum marginal
rate of 28% for noncorporate taxpayers and 20% for corporate taxpayers on the
excess of the taxpayer's alternative minimum taxable income ("AMTI") over an
exemption amount. For purposes of the corporate AMT, the corporate
dividends-received deduction is not itself an item of tax preference that must
be added back to taxable income or is otherwise disallowed in determining a
corporation's AMTI. However, a corporate shareholder will generally be required
to take the full amount of any dividend received from the Fund into account
(without a dividends-received deduction) in determining its adjusted current
earnings, which are used in computing an additional corporate preference item
(i.e., 75% of the excess of a corporate taxpayer's adjusted current earnings
over its AMTI (determined without regard to this item and the AMT net operating
loss deduction)) includable in AMTI.
Investment income that may be received by the Fund from sources
within foreign countries may be subject to foreign taxes withheld at the source.
The United States has entered into tax treaties with many foreign countries
which entitle the Fund to a reduced rate of, or exemption from, taxes on such
income. It is impossible to determine the effective rate of foreign tax in
advance since the amount of the Fund's assets to be invested in various
countries is not known. If more than 50% of the value of the Fund's total assets
at the close of its taxable year consist of the stock or securities of foreign
corporations, the Fund may elect to "pass through" to the Fund's shareholders
the amount of foreign taxes paid by the Fund. If the Fund so elects, each
shareholder would be required to include in gross income, even though not
actually received, his pro rata share of the foreign taxes paid by the Fund, but
would be treated as having paid his pro rata share of such foreign taxes and
would therefore be allowed to either deduct such amount in computing taxable
income or use such amount (subject to various Code limitations) as a foreign tax
credit against federal income tax (but not both). For purposes of the foreign
tax credit limitation rules of the Code, each shareholder would treat as foreign
source income his pro rata share of such foreign taxes plus the portion of
dividends received from the Fund representing income derived from foreign
sources. No deduction for foreign taxes could be claimed by an individual
shareholder who does not itemize deductions. Each shareholder should consult his
own tax adviser regarding the potential application of foreign tax credits.
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<PAGE>
Distributions by the Fund that do not constitute ordinary income
dividends or capital gain dividends will be treated as a return of capital to
the extent of (and in reduction of) the shareholder's tax basis in his shares;
any excess will be treated as gain from the sale of his shares, as discussed
below.
Distributions by the Fund will be treated in the manner described
above regardless of whether such distributions are paid in cash or reinvested in
additional shares of the Fund (or of another fund). Shareholders receiving a
distribution in the form of additional shares will be treated as receiving a
distribution in an amount equal to the fair market value of the shares received,
determined as of the reinvestment date. In addition, if the net asset value at
the time a shareholder purchases shares of the Fund reflects undistributed net
investment income or recognized capital gain net income, or unrealized
appreciation in the value of the assets of the Fund, distributions of such
amounts will be taxable to the shareholder in the manner described above,
although such distributions economically constitute a return of capital to the
shareholder.
Ordinarily, shareholders are required to take distributions by the
Fund into account in the year in which the distributions are made. However,
dividends declared in October, November or December of any year and payable to
shareholders of record on a specified date in such a month will be deemed to
have been received by the shareholders (and made by the Fund) on December 31 of
such calendar year if such dividends are actually paid in January of the
following year. Shareholders will be advised annually as to the U.S. federal
income tax consequences of distributions made (or deemed made) during the year.
The Fund will be required in certain cases to withhold and remit to
the U.S. Treasury 31% of ordinary income dividends and capital gain dividends,
and the proceeds of redemption of shares, paid to any shareholder (1) who has
failed to provide a correct taxpayer identification number, (2) who is subject
to backup withholding for failure to properly report the receipt of interest or
dividend income, or (3) who has failed to certify to the Fund that it is not
subject to backup withholding or that it is a corporation or other "exempt
recipient."
Sale or Redemption of Shares
A shareholder will recognize gain or loss on the sale or redemption
of shares of the Fund in an amount equal to the difference between the proceeds
of the sale or redemption and the shareholder's adjusted tax basis in the
shares. All or a portion of any loss so recognized may be disallowed if the
shareholder purchases other shares of the Fund within 30 days before or after
the sale or redemption. In general, any gain or loss arising from (or treated as
arising from) the sale or redemption of shares of the Fund will be considered
capital gain or loss and will be long-term capital gain or loss if the shares
were held for longer than one year. Long- term capital gain recognized by an
individual shareholder will be taxed at the lowest rate applicable to capital
gains if the holder has held such shares for more than 18 months at the time of
the sale. However, any capital loss arising from the sale or redemption of
shares held for six months or less will be treated as a long-term capital loss
to the extent of the amount of capital gain dividends received on such shares.
For this purpose, the special holding period rules of Code Section 246(c)(3) and
(4) (discussed above in connection with the dividends-received deduction for
corporations) generally will apply in determining the holding period of shares.
Long-term capital gains of noncorporate taxpayers are currently taxed at a
maximum rate at least 11.6% lower than the maximum rate applicable to ordinary
income. Capital losses in any year are deductible only to the extent of capital
gains plus, in the case of a noncorporate taxpayer, $3,000 of ordinary income.
If a shareholder (1) incurs a sales load in acquiring shares of the
Fund, (2) disposes of such shares less than 91 days after they are acquired and
(3) subsequently acquires shares of the Fund or another fund at a reduced sales
load pursuant to a right to reinvest at such reduced sales load acquired in
connection with the acquisition of the shares disposed of, then the sales load
on the shares disposed of (to the extent of the reduction in the sales load on
the shares subsequently acquired) shall not be taken into account in determining
gain or loss on the shares disposed of but shall be treated as incurred on the
acquisition of the shares subsequently acquired.
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Foreign Shareholders
Taxation of a shareholder who, as to the United States, is a
nonresident alien individual, foreign trust or estate, foreign corporation, or
foreign partnership ("foreign shareholder"), depends on whether the income from
the Fund is "effectively connected" with a U.S. trade or business carried on by
such shareholder.
If the income from the Fund is not effectively connected with a U.S.
trade or business carried on by a foreign shareholder, ordinary income dividends
paid to a foreign shareholder will be subject to U.S. withholding tax at the
rate of 30% (or lower applicable treaty rate) upon the gross amount of the
dividend. Furthermore, such foreign shareholder may be subject to U.S.
withholding tax at the rate of 30% (or lower applicable treaty rate) on the
gross income resulting from the Fund's election to treat any foreign taxes paid
by it as paid by its shareholders, but may not be allowed a deduction against
this gross income or a credit against this U.S. withholding tax for the foreign
shareholder's pro rata share of such foreign taxes which it is treated as having
paid. Such a foreign shareholder would generally be exempt from U.S. federal
income tax on gains realized on the sale of shares of the Fund, capital gain
dividends and amounts retained by the Fund that are designated as undistributed
capital gains.
If the income from the Fund is effectively connected with a U.S.
trade or business carried on by a foreign shareholder, then ordinary income
dividends, capital gain dividends, and any gains realized upon the sale of
shares of the Fund will be subject to U.S. federal income tax at the rates
applicable to U.S. citizens or domestic corporations.
In the case of a foreign shareholder other than a corporation, the
Fund may be required to withhold U.S. federal income tax at a rate of 31% on
distributions that are otherwise exempt from withholding tax (or taxable at a
reduced treaty rate) unless such shareholder furnishes the Fund with proper
notification of his foreign status.
The tax consequences to a foreign shareholder entitled to claim the
benefits of an applicable tax treaty may be different from those described
herein. Foreign shareholders are urged to consult their own tax advisers with
respect to the particular tax consequences to them of an investment in the Fund,
including the applicability of foreign taxes.
Effect of Future Legislation; State and Local Tax Considerations
The foregoing general discussion of U.S. federal income tax
consequences is based on the Code and the Treasury Regulations issued thereunder
as in effect on the date of this Statement of Additional Information. Future
legislative or administrative changes or court decisions may significantly
change the conclusions expressed herein, and any such changes or decisions may
have a retroactive effect.
Rules of state and local taxation of ordinary income dividends and
capital gain dividends from regulated investment companies often differ from the
rules for U.S. federal income taxation described above. Shareholders are urged
to consult their tax advisers as to the consequences of these and other state
and local tax rules affecting investment in the Fund.
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PERFORMANCE CALCULATION
For purposes of quoting and comparing the performance of the Fund to
that of other mutual funds and to other relevant market indices in
advertisements or in reports to shareholders, performance may be stated in terms
of total return. Under rules promulgated by the Securities and Exchange
Commission ("SEC"), a fund's advertising performance must include total return
quotations calculated according to the following formula:
P(1 + T)^n = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years (1, 5 or 10)
ERV = ending redeemable value of a hypothetical
$1,000 payment, made at the beginning of the
1,5 or 10 year period, at the end of such
period (or fractional portion thereof.)
Under the foregoing formula, the time periods used in advertising
will be based on rolling calendar quarters, updated to the last day of the most
recent quarter prior to submission of the advertising for publication, and will
cover 1, 5 and 10 year periods of the Fund's existence or such shorter period
dating from the effectiveness of the Fund's Registration Statement. In
calculating the ending redeemable value, all dividends and distributions by the
Fund are assumed to have been reinvested at net asset value as described in the
Prospectus on the reinvestment dates during the period. Total return, or "T" in
the formula above, is computed by finding the average annual compounded rates of
return over the 1, 5 and 10 year periods (or fractional portion thereof) that
would equate the initial amount invested to the ending redeemable value. Any
recurring account charges that might in the future be imposed by the Fund would
be included at that time.
All advertisements containing performance data of any kind will
include a legend disclosing that such performance data represents past
performance and that the investment return and principal value of an investment
will fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
GENERAL INFORMATION
Organization And Description Of Shares Of the Trust
The Trust was organized as a Massachusetts business trust under the
laws of The Commonwealth of Massachusetts. The Trust's Declaration of Trust
filed September 17, 1986, permits the Trustees to issue an unlimited number of
shares of beneficial interest with a par value of $0.01 per share in the Trust
in an unlimited number of series of shares. The Trust consists of 10 series, The
Tocqueville Fund, The Tocqueville Small Cap Value Fund, The Tocqueville
Asia-Pacific Fund, The Tocqueville International Value Fund, The Tocqueville
Government Fund, The Tocqueville California Muni Fund, The Tocqueville
High-Yield Municipal Bond Fund, The Tocqueville New York Muni Fund, The
Tocqueville Tax-Free Money Market Fund, The Tocqueville U.S. Government
Strategic Income Fund and The Tocqueville Gold Fund. On August 19, 1991, the
Declaration of Trust was amended to change the name of the Trust to "The
Tocqueville Trust," and on August 4, 1995, the Declaration of Trust was amended
to permit the division of a series into classes of shares. Each share of
beneficial interest has one vote and shares equally in dividends and
distributions when and if declared by the Fund and in the Fund's net assets upon
liquidation. All shares, when issued, are fully paid and nonassessable. There
are no preemptive, conversion or exchange rights. Fund shares do not have
cumulative voting rights and, as such, holders of at least 50% of the shares
voting for Trustees can elect all Trustees and the remaining shareholders would
not be able to elect any Trustees. The Board of Trustees may classify or
reclassify any unissued shares of the Trust into shares of any series by setting
or changing in any one or more respects, from time to time, prior to the
issuance of such shares, the preference, conversion or other rights, voting
powers, restrictions, limitations as to dividends, or qualifications of such
shares. Any such classification or
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reclassification will comply with the provisions of the 1940 Act. Shareholders
of each series as created will vote as a series to change, among other things, a
fundamental policy of each Fund and to approve the Investment Advisory Agreement
and Distribution Plan.
The Trust is not required to hold annual meetings of shareholders but
will hold special meetings of shareholders when, in the judgment of the
Trustees, it is necessary or desirable to submit matters for a shareholder vote.
Shareholders have, under certain circumstances, the right to communicate with
other shareholders in connection with requesting a meeting of shareholders for
the purpose of removing one or more Trustees. Shareholders also have, in certain
circumstances, the right to remove one or more Trustees without a meeting. No
material amendment may be made to the Trust's Declaration of Trust without the
affirmative vote of the holders of a majority of the outstanding shares of each
series affected by the amendment.
Under Massachusetts law, shareholders of a Massachusetts business
trust may, under certain circumstances, be held personally liable as partners
for its obligations. However, the Trust's Declaration of Trust contains an
express disclaimer of shareholder liability for acts or obligations of the Trust
and provides for indemnification and reimbursement of expenses out of the Trust
property for any shareholder held personally liable for the obligations of the
Trust. The Trust's Declaration of Trust further provides that obligations of the
Trust are not binding upon the Trustees individually but only upon the property
of the Trust and that the Trustees will not be liable for any action or failure
to act, errors of judgment or mistakes of fact or law, but nothing in the
Declaration of Trust protects a Trustee against any liability to which he would
otherwise be subject by reason of wilful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of his
office.
REPORTS
Shareholders with receive reports at least semi-annually showing the
Fund's holdings and other information. In addition, shareholders receive
financial statements examined by the Trust's independent accountants.
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PART C. OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
(a) Financial statements.
In Part A: None.
In Part B: None.
In Part C: None.
(b) Exhibits
EX-99.B1(a) Agreement and Declaration of Trust of
Registrant.(1)
(b) Amendment to the Agreement and Declaration of
Trust of Registrant dated August 4, 1995.(5)
EX-99.B2 By-laws of Registrant.(1)
EX-99.B3 None.
EX-99.B4 Specimen certificate for shares of beneficial
interest of Registrant.(2)
EX-99.B5(a) Investment Advisory Agreement between
Registrant on behalf of The Tocqueville Fund
and Tocqueville Asset Management L.P.(3)
(b) Investment Advisory Agreement between
Registrant on behalf of The Tocqueville
Asia-Pacific Fund and Tocqueville Asset
Management L.P.(5)
(c) Investment Advisory Agreement between
Registrant on behalf of The Tocqueville Europe
Fund and The Tocqueville Asset Management
L.P.(5)
(d) Investment Advisory Agreement between
Registrant on behalf of The Tocqueville Small
Cap Value Fund and Tocqueville Asset Management
L.P.(5)
(e) Investment Advisory Agreement Between
Registrant on behalf of The Tocqueville
Government Fund and Tocqueville Asset
Management L.P. (5)
(f) Form of Investment Advisory Agreement Between
Registrant on behalf of The Tocqueville Gold
Fund and Tocqueville Asset Management L.P. (7)
EX-99.B6(a) Distribution Agreement between Registrant and
Tocqueville Securities L.P.(5)
EX-99.B6(b) Form of Distribution Agreement between
Registrant on behalf of The Tocqueville Gold
Fund and Tocqueville Securities L.P. (7)
EX-99.B7 None.
- 4 -
<PAGE>
EX-99.B8(a) Custodian Agreement between Registrant and
Firstar Trust Company.(6)
EX-99.B8(b) Global Custody Tri-Party Agreement between The
Chase Manhattan Bank, Firstar Trust and the
Registrant on behalf of The Tocqueville
Asia-Pacific Fund.(6)
EX-99.B8(c) Global Custody Tri-Party Agreement between The
Chase Manhattan Bank, Firstar Trust and the
Registrant on behalf of The Tocqueville
International Value Fund.(6)
EX-99.B8(d) Form of Global Custody Tri-Party Agreement
between The Chase Manhattan Bank, Firstar Trust
and the Registrant on behalf of The Tocqueville
Gold Fund.(7)
EX-99.B8(e) Form of Custodian Agreement between Registrant
on behalf of The Tocqueville Gold Fund and
Firstar Trust Company.(7)
EX-99.B9(a) Administration Agreement between Registrant and
Tocqueville Asset Management L.P.(5)
EX-99.B9(b) Transfer Agent Agreement between the Registrant
and Firstar Trust Company.(6)
EX-99.B9(c) Fund Accounting Servicing Agreement between the
Registrant and Firstar Trust Company.(6)
EX-99.B9(d) Form of Administration Agreement between
Registrant and Tocqueville Asset Management
L.P.(7)
EX-99.B9(e) Form of Transfer Agent Agreement between the
Registrant and Firstar Trust Company.(7)
EX-99.B9(f) Form of Fund Accounting Servicing Agreement
between the Registrant and Firstar Trust
Company.(7)
EX-99.B10 None.
EX-99.B11(a) Consent of Kramer, Levin, Naftalis & Frankel,
counsel to the Registrant.(7)
EX-99.B11(b) Consent of McGladrey & Pullen, LLP, independent
accountants for the Registrant.(7)
EX-99.B12 None.
EX-99.B13 Certificate re: initial $100,000 capital.(2)
EX-99.B14 None.
EX-99.B15(a) Rule 12b-1 Plan for the Class A shares of The
Tocqueville Fund, as amended.(5)
(b) Rule 12b-1 Plan for the Class B shares of The
Tocqueville Fund.(5)
- 5 -
<PAGE>
(c) Rule 12b-1 Plan for the Class A shares of The
Tocqueville Europe Fund (now The Tocqueville
International Value Fund's Rule 12b-1 Plan).(5)
(d) Rule 12b-1 Plan for the Class B shares of The
Tocqueville Europe Fund (now The Tocqueville
International Value Fund's Rule 12b-1 Plan).(5)
(e) Rule 12b-1 Plan for the Class A shares of The
Tocqueville Small Cap Value Fund.(5)
(f) Rule 12b-1 Plan for the Class B shares of The
Tocqueville Small Cap Value Fund.(5)
(g) Rule 12b-1 Plan for the Class A Shares of The
Tocqueville Government Fund.(5)
(h) Rule 12b-1 Plan for the Class B shares of The
Tocqueville Government Fund.(5)
(i) Form of Rule 12b-1 Plan for The Tocqueville
Gold Fund.(7)
EX-99.B16 Schedule for computation of performance
quotation.(4)
EX-99.B17 See EX-27.
EX-99.B18 Rule 18f-3 Plan for The Tocqueville Trust.(4)
EX-27 None.
- ------------
(1)Previously filed in the Fund's Registration Statement on September 15, 1986.
(2)Previously filed in Pre-Effective Amendment No. 1 on December 2, 1986.
(3)Previously filed in Post-Effective Amendment No. 4 on December 29, 1989.
(4)Previously filed in Post-Effective Amendment No. 13 on July 19, 1995.
(5)Previously filed in Post-Effective Amendment No. 14 on February 28, 1996,
accession number 0000922423-96-000107.
(6)Previously filed in Post-Effective Amendment No. 16 on February 28, 1997,
accession number 0000922423-97-000170.
(7)Filed herewith.
ITEM 25. Persons Controlled By or Under Common Control with Registrant
None
- 6 -
<PAGE>
ITEM 26. Number of Holders of Securities
Number of Record Holders
Title of Class ($.01 par value) as of January 30, 1998
- ---------------------------------- ------------------------
Shares of beneficial interest:
The Tocqueville Fund 1,059
The Tocqueville International Value Fund 281
The Tocqueville Small Cap Value Fund 351
The Tocqueville Government Fund 235
The Tocqueville California Muni Fund 0
The Tocqueville High-Yield Municipal Bond Fund 0
The Tocqueville New York Muni Fund 0
The Tocqueville Tax-Free Money Market Fund 0
The Tocqueville U.S. Government Strategic Income Fund 0
The Tocqueville Gold Fund 0
ITEM 27. Indemnification
Article VIII of the Registrant's Declaration of Trust provides as
follows:
The Trust shall indemnify each of its Trustees, officers (including
persons who serve at its request as directors, officers or trustees of another
organization in which it has any interest, as a shareholder, creditor or
otherwise) against all liabilities and expenses (including amounts paid in
satisfaction of judgments, in compromise, as fines and penalties, and as counsel
fees) reasonably incurred by him in connection with the defense or disposition
of any action, suit or other proceeding, whether civil or criminal, in which he
may be involved or with which he may be threatened, while in office or
thereafter, by reason of his being or having been such a trustee, officer,
employee or agent, except with respect to any matter to which he shall have been
adjudicated to have acted in bad faith, willful misfeasance, gross negligence or
reckless disregard of his duties; provided, however, that as to any matter
disposed of by a compromise payment by such person, pursuant to a consent decree
or otherwise, no indemnification either for said payment or for any other
expenses shall be provided unless the Trust shall have received a written
opinion from independent legal counsel approved by the Trustees to the effect
that if the matter of willful misfeasance, gross negligence or reckless
disregard of duty, or the matter of good faith and reasonable belief as to the
best interests of the Trust, had been adjudicated, it would have been
adjudicated in favor of such person. The rights accruing to any Person under
these provisions shall not exclude any other right to which he may be lawfully
entitled; provided that no Person may satisfy any right of indemnity or
reimbursement granted herein or in Section 5.1 or to which he may be otherwise
entitled except out of the property of the Trust, and no Shareholder shall be
personally liable to any Person with respect to any claim for indemnity or
reimbursement or otherwise. The Trustees may make advance payments in connection
with indemnification under this Section 5.3, provided that the indemnified
person shall have given a written undertaking to reimburse the Trust in the
event it is subsequently determined that he is not entitled to such
indemnification.
Insofar as the conditional advancing of indemnification monies for
actions based upon the Investment Company Act of 1940 may be concerned, such
payments will be made only on the following conditions: (1) the advances must be
limited to amounts used, or to be used, for the preparation or presentation of a
defense to the action, including costs connected with the preparation of a
settlement; (ii) advances may be made only upon receipt of a written promise by,
or on behalf of, the recipient to repay that amount of the advance which exceeds
that amount to which it is ultimately determined that he is entitled to receive
from the Registrant by reason of indemnification; and (iii) (a) such promise
must be secured by a surety bond, other suitable insurance or an equivalent form
of security which assures that any repayments may be obtained by the Registrant
without delay or litigation, which bond, insurance or other form of security
must be provided by the recipient of the advance, or (b) a majority of a quorum
of the Registrant's disinterested, non-party Trustees, or an independent legal
counsel in a written opinion, shall determine, based upon a review of readily
available facts, that the recipient of the advance ultimately will be found
entitled to indemnification.
- 7 -
<PAGE>
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to Trustees, officers and controlling persons of
the Registrant pursuant to the foregoing provisions or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a Trustee, officer or controlling person of the Registrant in
connection with the successful defense of any action, suit or proceeding) is
asserted by such Trustee, officer or controlling person in connection with
shares being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
ITEM 28. Business and Other Connections of Investment Adviser
None.
ITEM 29. Principal Underwriters
(a) None.
(b) The following information is furnished with respect to the
officers and Partners of Tocqueville Securities L.P., the Registrant's principal
underwriter. The business address for all persons listed below is 1675 Broadway,
New York, New York 10019.
Positions and
Name and Principal Offices with Positions and Offices
Business Address Principal Underwriters with Registrant
- -------------------------------- ---------------------- ---------------------
Tocqueville Management Corp. General Partner None
1675 Broadway
New York, New York 10019
Tocqueville Asset Management L.P. Limited Partner Investment Adviser
1675 Broadway
New York, New York 10019
(c) Not Applicable. The Registrant's principal underwriter is an
affiliated person of the Registrant.
ITEM 30. Location of Accounts and Records
As required by Section 31(a) of the Investment Company Act of
1940, the accounts, books or other documents relating to each of The Tocqueville
Fund's, The Tocqueville International Value Fund's, The Tocqueville Small Cap
Value Fund's, The Tocqueville Government Fund's, The Tocqueville California Muni
Fund's, The Tocqueville High-Yield Municipal Bond Fund's, The Tocqueville New
York Muni Fund's, The Tocqueville Tax-Free Money Market Fund's, The Tocqueville
U.S. Government Strategic Income Fund's, and The Tocqueville Gold Fund's budget
and accruals will be kept by Firstar Trust Company, 615 East Michigan Street,
Milwaukee, WI 53202. The accounts, books or other documents of each Fund
relating to shareholder accounts and records and dividend disbursements also
will be kept by Firstar Trust Company at the same address.
- 8 -
<PAGE>
ITEM 31. Management Services
There are no management-related service contracts not discussed
in Parts A and B.
ITEM 32. Undertakings
(1) Registrant undertakes to call a meeting of shareholders for the
purpose of voting upon the question of removal of a trustee or
trustees if requested to do so by the holders of at least 10% of
the Registrant's outstanding voting securities, and to assist in
communications with other shareholders as required by Section
16(c) of the Investment Company Act of 1940, as amended.
(2) Registrant undertakes to file, on behalf of The Tocqueville Gold
Fund, a post-effective amendment, using financial statements
which need not be certified, within four to six months from the
effective date of Registrant's 1933 Act Registration Statement.
(3) Registrant undertakes to furnish each person to whom a prospectus
is delivered a copy of a Fund's latest annual report to
shareholders which will include the information required by Item
5A, upon request and without charge.
- 9 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment to the Registration Statement on Form N-1A to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of New
York, and State of New York on the 15th day of April, 1998.
THE TOCQUEVILLE TRUST
By: /s/Francois D. Sicart
------------------------------------
Francois D. Sicart
Principal Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed by the
following persons in the capacities indicated on the 15th day of
April, 1998.
Signatures Title
- ---------------------------- ------------------------------
/s/Francois D. Sicart Principal Executive Officer
- ---------------------------- and Trustee
Francois D. Sicart
- ---------------------------- Trustee
Bernard F. Combemale
/s/ James B. Flaherty
- ---------------------------- Trustee
James B. Flaherty
/s/Inge Heckel Trustee
- ----------------------------
Inge Heckel
/s/Robert Kleinschmidt President, Principal Operating
- ---------------------------- Officer and Trustee
Robert Kleinschmidt
/s/Francois Letaconnoux Trustee
- ----------------------------
Francois Letaconnoux
/s/Kieran Lyons Vice President and
- ---------------------------- Principal Financial Officer
Kieran Lyons
/s/Lucille G. Bono Trustee
- ----------------------------
Lucille G. Bono
/s/Larry M. Senderhauf Trustee
- ----------------------------
Larry M. Senderhauf
- 10 -
<PAGE>
INDEX TO EXHIBITS
Exhibit Caption
- ------------ -------------------------------------------------------------
EX-99.B5(f) Form of Investment Advisory Agreement Between Registrant on
behalf of The Tocqueville Gold Fund and Tocqueville Asset
Management L.P.
EX-99.B6(b) Form of Distribution Agreement between Registrant on behalf
of The Tocqueville Gold Fund and Tocqueville Securities L.P.
EX-99.B8(d) Form of Global Custody Tri-Party Agreement between The Chase
Manhattan Bank, Firstar Trust and the Registrant on behalf of
The Tocqueville Gold Fund.
EX-99.B8(e) Form of Custodian Agreement between the Registrant on behalf
of The Tocqueville Gold Fund and Firstar Trust Company.
EX-99.B9(d) Form of Administration Agreement between Registrant and
Tocqueville Asset Management L.P.
EX-99.B9(e) Form of Transfer Agent Agreement between the Registrant on
behalf of The Tocqueville Gold Fund and Firstar Trust
Company.
EX-99.B9(f) Form of Fund Accounting Servicing Agreement between the
Registrant on behalf of The Tocqueville Gold Fund and Firstar
Trust Company.
EX-99.B11(a) Consent of Kramer, Levin, Naftalis & Frankel, counsel for
Registrant.
EX-99.B11(b) Consent of McGladrey & Pullen, independent accountants for
the Registrant .
EX-99.15(i) Form of Rule 12b-1 Plan for The Tocqueville Gold Fund.
FORM OF INVESTMENT ADVISORY CONTRACT
FOR THE TOCQUEVILLE GOLD FUND
<PAGE>
FORM OF
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made ____ day of ______, 199_ by and between
THE TOCQUEVILLE TRUST, a Massachusetts business trust (the "Trust"), on behalf
of its series THE TOCQUEVILLE GOLD FUND (the "Fund") and TOCQUEVILLE ASSET
MANAGEMENT L.P., a limited partnership (the "Investment Adviser");
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end, diversified
management investment company under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), and the rules and regulations
promulgated thereunder; and
WHEREAS, the Investment Adviser is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended (the "Investment
Advisers Act"), and engages in the business of acting as an investment adviser;
and
WHEREAS, the Trust and the Investment Adviser desire to enter
into an agreement to provide for the management of the assets of the Fund on the
terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants
herein contained and other good and valuable consideration, the
<PAGE>
receipt whereof is hereby acknowledged, the parties hereto agree as follows:
1. Management. The Investment Adviser shall act as investment
adviser for the Trust and shall, in such capacity, supervise the investment and
reinvestment of the cash, securities or other properties comprising the Trust's
assets, subject at all times to the policies and control of the Trust's Board of
Trustees. The Investment Adviser shall give the Trust the benefit of its best
judgment, efforts and facilities in rendering its services as investment
adviser. The Investment Adviser shall, for all purposes herein, be deemed an
independent contractor and shall have, unless otherwise expressly provided or
authorized, no authority to act for or represent the Trust in any way or
otherwise be deemed an agent of the Trust.
2. Duties of Investment Advisor. In carrying out its
obligation under paragraph 1 hereof, the Investment Adviser
shall:
(a) supervise and manage all aspects of the Fund's
operations;
(b) provide the Fund or obtain for it, and thereafter
supervise, such executive, administrative, clerical and shareholder servicing
services as are deemed advisable by the Trust's Board of Trustees;
(c) arrange, but not pay for, the periodic updating
of prospectuses and supplements thereto, proxy material,
-2-
<PAGE>
tax returns, reports to the Fund's shareholders and reports to and filings with
the Securities and Exchange Commission, state Blue Sky authorities;
(d) provide the Fund with, or obtain for it, adequate
office space and all necessary office equipment and services, including
telephone service, heat, utilities, stationery supplies and similar items for
the Fund's principal office;
(e) provide the Board of Trustees of the Trust on a
regular basis with financial reports and analyses on the Fund's operations and
the operations of comparable investment companies;
(f) obtain and evaluate pertinent information about
significant developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally or the Fund, and
whether concerning the individual issuers whose securities are included in the
Fund or the activities in which they engage, or with respect to securities which
the Investment Adviser considers desirable for inclusion in the Fund;
(g) determine what issuers and securities shall be
represented in the Fund's portfolio and regularly report them to the Board of
Trustees of the Trust;
(h) formulate and implement continuing programs for
the purchases and sales of the securities of such issuers and regularly report
thereon to the Board of Trustees of the Trust; and
-3-
<PAGE>
(i) take, on behalf of the Fund, all actions which
appear to the Fund necessary to carry into effect such purchase and sale
programs and supervisory functions as aforesaid, including the placing of orders
for the purchase and sale of portfolio securities.
3. Broker-Dealer Relationships. The Investment Adviser is
responsible for decisions to buy and sell securities for the Fund, broker-dealer
selection, and negotiation of brokerage commission rates. The Investment
Adviser's primary consideration in effecting a security transaction will be
execution at a price that is reasonable and fair compared to the commission, fee
or other remuneration received or to be received by other brokers in connection
with comparable transactions, including similar securities being purchased or
sold on a securities exchange during a comparable period of time.
In selecting a broker-dealer to execute each particular
transaction, the Investment Adviser will take the following into consideration:
the best net price available; the reliability, integrity and financial condition
of the broker-dealer; the size of and difficulty in executing the order; and the
value of the expected contribution of the broker-dealer to the investment
performance of the Fund on a continuing basis. Accordingly, the price to the
Fund in any transaction may be less favorable than that available from another
broker-dealer if the difference is reasonably justified by other aspects of the
portfolio execution
-4-
<PAGE>
services offered. Subject to such policies and procedures as the Board of
Trustees may determine, the Investment Adviser shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement or otherwise
solely by reason of its having caused the Fund to pay a broker or dealer that
provides brokerage and research services to the Investment Adviser for the
Fund's use an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Investment Adviser
determines in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Investment Adviser's overall responsibilities with respect to the Fund. The
Investment Adviser is further authorized to allocate the orders placed by it on
behalf of the Fund to such brokers and dealers who also provide research or
statistical material, or other services to the Fund or the Investment Adviser
for the Fund's use. Such allocation shall be in such amounts and proportions as
the Investment Adviser shall determine and the Investment Adviser will report on
said allocations regularly to the Board of Trustees of the Trust indicating the
brokers to whom such allocations have been made and the basis therefor.
-5-
<PAGE>
4. Control by Board of Trustees. Any investment program
undertaken by the Investment Adviser pursuant to this Agreement, as well as any
other activities undertaken by the Investment Adviser on behalf of the Fund
pursuant thereto, shall at all times be subject to any directives of the Board
of Trustees of the Trust.
5. Compliance with Applicable Requirements. In
carrying out its obligations under this Agreement, the Investment
Adviser shall at all times conform to:
(a) all applicable provisions of the Investment
Company Act and the Investment Advisers Act and any rules and regulations
adopted thereunder as amended; and
(b) the provisions of the Registration Statements of
the Fund under the Securities Act of 1933, as amended, and the Investment
Company Act; and
(c) the provisions of the Declaration of Trust of the
Trust, as amended; and
(d) the provisions of the By-laws of the Trust, as
amended; and
(e) any other applicable provisions of state and
federal law.
-6-
<PAGE>
6. Expenses. The expenses connected with the Fund shall be
allocable between the Fund and the Investment Adviser as follows:
(a) The Investment Adviser shall furnish, at its
expense and without cost to the Trust, the services of a President, Secretary
and one or more Vice Presidents of the Fund, to the extent that such additional
officers may be required by the Fund for the proper conduct of its affairs.
(b) The Investment Adviser shall further maintain, at
its expense and without cost to the Fund, a trading function in order to carry
out its obligations under subparagraph (i) of paragraph 2 hereof to place orders
for the purchase and sale of portfolio securities for the Fund.
(c) Nothing in subparagraph (a) hereof shall be
construed to require the Investment Adviser to bear:
(i) any of the costs (including applicable office
space, facilities and equipment) of the services of a
principal financial officer of the Fund whose normal duties
consist of maintaining the financial accounts and books and
records of the Fund; including the reviewing of calculations
of net asset value and preparing tax returns; or
(ii) any of the costs (including applicable office
space, facilities and equipment) of the services of any of the
personnel operating under the direction of such principal
financial officer. Notwithstanding the
-7-
<PAGE>
obligation of the Fund to bear the expense of the functions
referred to in clauses (i) and (ii) of this subparagraph (c),
the Investment Adviser may pay the salaries, including any
applicable employment or payroll taxes and other salary costs,
of the principal financial officer and other personnel
carrying out such functions and the Fund shall reimburse the
Investment Adviser therefor upon proper accounting.
(d) All of the ordinary business expenses
incurred in the operations of the Fund and the offering of its shares shall be
borne by the Fund unless specifically provided otherwise in this paragraph 6.
These expenses include but are not limited to brokerage commissions, legal,
auditing, taxes or governmental fees, the cost of preparing share certificates,
custodian, depository, transfer and shareholder service agent costs, expenses of
issue, sale, redemption and repurchase of shares, expenses of registering and
qualifying shares for sale, insurance premiums on property or personnel
(including officers and trustees if available) of the Fund which inure to its
benefit, expenses relating to trustee and shareholder meetings, the cost of
preparing and distributing reports and notices to shareholders, the fees and
other expenses incurred by the Fund in connection with membership in investment
company organizations and the cost of printing copies of prospectuses and
statements of additional information distributed to shareholders.
-8-
<PAGE>
7. Delegation of Responsibilities. The Investment Adviser may
delegate the performance of certain investment advisory services to Tocqueville
Finance S.A., a company registered as an investment adviser in France, including
the responsibility to provide certain information and research to the Investment
Adviser regarding the foreign securities in which the Fund may invest.
Tocqueville Finance may place portfolio trades in foreign securities for the
Fund which, in accordance with the general securities practices in France, will
result in Tocqueville Finance receiving a portion of the brokerage commissions
paid to certain securities brokers for the foreign securities bought and sold
for the Fund.
The authorization for the Investment Adviser to use the
services of Tocqueville Finance is subject to the Fund receiving best price and
execution for the foreign securities transactions placed with foreign securities
brokers by Tocqueville Finance. Tocqueville Finance is an affiliate of the
Investment Adviser by virtue of the Investment Adviser's ownership of
approximately 25% of the common stock of such corporation. No compensation may
be paid the Fund or the Investment Adviser for the information and research
provided by Tocqueville Finance; however, Tocqueville Finance will, as stated
above, retain the portion of brokerage commissions received from certain
securities brokers for transactions executed in foreign markets.
-9-
<PAGE>
8. Compensation. The Fund shall pay the Investment Adviser in
full compensation for services rendered hereunder an annual investment advisory
fee, payable monthly, of 1.00% of the Fund's average daily net assets on the
first $500 million, .75% of the Fund's average daily net assets in excess of
$500 million but not exceeding $1 billion, and .65% of the Fund's average daily
net assets in excess of $1 billion. The average daily net asset value of the
Fund shall be determined in the manner set forth in the Declaration of Trust and
Prospectus of the Fund.
9. Expense Limitation. If, for any fiscal year, the total of
all ordinary business expenses of the Fund, including all investment advisory
fees but excluding brokerage commissions and fees, taxes, interest and
extraordinary expenses such as litigation, would exceed the most restrictive
expense limits imposed by any statute or regulatory authority of any
jurisdiction in which shares of the Fund are offered for sale, the investment
advisory fee shall be reduced by the amount of such excess. The amount of any
such reduction to be borne by the Investment Adviser shall be deducted from the
monthly investment advisory fee otherwise payable to the Investment Adviser
during such fiscal year; and if such amount should exceed such monthly fee, the
Investment Adviser agrees to pay to the Fund such excess expenses no later than
the last day of the first month of the next succeeding fiscal year. For the
purposes of this paragraph, the term "fiscal year" shall exclude the portion of
the current
-10-
<PAGE>
fiscal year which shall have elapsed prior to the date hereof and shall include
the portion of the then-current fiscal year which shall have elapsed at the date
of termination of this Agreement.
10. Non-Exclusivity. The services of the Investment Adviser to
the Fund are not to be deemed to be exclusive, and the Investment Adviser shall
be free to render investment advisory and corporate administrative or other
services to others (including other investment companies) and to engage in other
activities. It is understood and agreed that officers or Partners of the
Investment Adviser may serve as officers or trustees of the Trust, and that
officers or trustees of the Trust may serve as officers or partners of the
Investment Adviser to the extent permitted by law; and that the officers and
partners of the Investment Adviser are not prohibited from engaging in any other
business activity or from rendering services to any other person, or from
serving as partners, officers or partners of any other firm or corporation,
including other investment companies.
11. Term and Approval. This Agreement shall become effective
at the close of business on the date hereof and shall remain in force and effect
for two years and thereafter from year to year, provided that such continuance
is specifically approved at least annually:
(a) (i) by the Trust's Board of Trustees or (ii) by
the vote of a majority of the Fund's outstanding voting
-11-
<PAGE>
securities (as defined in Section 2(a)(42) of the Investment Company Act); and
(b) by the affirmative vote of a majority of the
Trustees who are not parties to this Agreement or interested persons of a party
to this Agreement (other than as Trust trustees), by votes cast in person at a
meeting specifically called for such purpose.
12. Termination. This Agreement may be terminated at any time,
without the payment of any penalty, by vote of the Trust's Board of Trustees or
by vote of a majority of the Fund's outstanding voting securities, or by the
Investment Adviser, on sixty (60) days' written notice to the other party. The
notice provided for herein may be waived by either party. This Agreement shall
automatically terminate in the event of its assignment, the term "assignment"
for the purpose having the meaning defined in Section 2(a)(4) of the Investment
Company Act.
13. Liability of Investment Adviser and Indemnification. In
the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Investment
Adviser or any of its officers, trustees or employees, it shall not be subject
to liability to the Trust or to any shareholder of the Trust for any omission in
the course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security.
-12-
<PAGE>
14. Liability of Trustees and Shareholders. A copy of the
Agreement and Declaration of Trust of the Trust is on file with the Secretary of
The Commonwealth of Massachusetts, and notice is hereby given that this
instrument is executed on behalf of the trustees of the Trust as trustees and
not individually and that the obligations of this instrument are not binding
upon any of the trustees or shareholders individually but are binding only upon
the assets and property of the Fund.
15. Notices. Any notices under this Agreement shall be in
writing, addressed and delivered or mailed postage paid to the other party at
such address as such other party may designate for the receipt of such notice.
Until further notice to the other party, it is agreed that the address of the
Trust and that of the Investment Adviser shall be 1675 Broadway, New York, New
York 10019.
16. Questions of Interpretation. Any question of
interpretation of any term or provision of this Agreement having a counterpart
in or otherwise derived from a term or provision of the Investment Company Act
shall be resolved by reference to such term or provision of the Act and to
interpretations thereof, if any, by the United States Courts or in the absence
of any controlling decision of any such court, by rules, regulations or orders
of the Securities and Exchange Commission issued pursuant to said Act. In
addition, where the effect of a requirement of the Investment Company Act
reflected in any provision of this
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<PAGE>
Agreement is released by rules, regulation or order of the Securities and
Exchange Commission, such provision shall be deemed to incorporate the effect of
such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in duplicate by their respective officers on the day
and year first above written.
THE TOCQUEVILLE TRUST, on
behalf of The Tocqueville
Gold Fund
Attest: By:
-------------------
- ----------------- TOCQUEVILLE ASSET MANAGEMENT
L.P.
Attest:
By:
-------------------
- -----------------
-14-
FORM OF
DISTRIBUTION AGREEMENT FOR REGISTRANT
<PAGE>
FORM OF
DISTRIBUTION AGREEMENT
BETWEEN
THE TOCQUEVILLE TRUST
AND
TOCQUEVILLE SECURITIES L.P.
THIS AGREEMENT made this ___ day of ______, 199_, by and
between THE TOCQUEVILLE FUND, a Massachusetts business trust (hereinafter
referred to as the "Fund"), on behalf of its series listed on Exhibit A, and
TOCQUEVILLE SECURITIES L.P. (hereinafter referred to as the "Distributor").
W I T N E S S E T H:
In consideration of the mutual covenants herein contained and
other good and valuable consideration, the receipt whereof is hereby
acknowledged, the parties hereto agree as follows:
FIRST: The Fund hereby appoints the Distributor as its
underwriter to promote the sale and to arrange for the sale of shares of
beneficial interest of the Fund to the public through its sales representatives
and to investment dealers in the states set forth in Exhibit B. In addition, the
Distributor may receive payment for certain distribution expenses pursuant to a
Rule 12b- 1 distribution plan.
The Fund agrees to sell and deliver its shares, upon the terms
hereinafter set forth, as long as it has unissued and/or treasury shares
available for sale.
<PAGE>
SECOND: The Fund hereby authorizes the Distributor, subject to
law and the Declaration of Trust of the Fund, to accept, for the account of the
Fund, orders for the purchase of its shares, satisfactory to the Distributor, as
of the time of receipt of such orders by the dealer or as otherwise described in
the then current Prospectus of the Fund.
THIRD: The Fund will determine the net asset value of its
shares once daily as of the close of trading on The New York Stock Exchange on
each day that the Exchange is open for business. It is expected that the
Exchange will be closed on Saturdays and Sundays and on New Year's Day, Martin
Luther King Day, President's Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day. The net asset value is determined
by dividing the market value of the Fund's investments as of the close of
trading plus any cash or other assets (including dividends receivable and
accrued interest) less all liabilities (including accrued expenses) by the
number of Fund shares outstanding. Securities traded on the New York Stock
Exchange or the American Stock Exchange will be valued at the last sale price
or, if no sale, at the mean between the latest bid and asked price. Securities
traded in any other U.S. or foreign market shall be valued in a manner as
similar as possible to the above or, if not so traded, on the basis of the
latest available price. Securities sold short against the box will be valued at
market as determined above; however, in instances where the Fund has sold
securities short against a long position in the issuer's convertible securities,
for the purpose of valuation, the securities in
-2-
<PAGE>
the short position will be valued at the "asked" price rather than the mean of
the last "bid" and "asked" prices. Gold bullion investments will be valued at
their respective fair market values determined on the basis of the mean between
the last current bid and asked prices based on dealer or exchange quotations.
Where there are no readily available quotations for securities they will be
valued at fair market value as determined by the Board of Trustees of the Fund
acting in good faith.
FOURTH: The Distributor agrees to devote reasonable time and
effort to enlist investment dealers and otherwise promote the sale and
distribution and act as Distributor for the sale and distribution of the shares
of the Fund as such arrangements may profitably be made; but so long as it does
so, nothing herein contained shall prevent the Distributor from entering into
similar arrangements with other funds and to engage in other activities. The
Fund reserves the right to issue shares in connection with any merger or
consolidation of the Fund with any other investment company or any personal
holding company or in connection with offers of exchange exempted from Section
22(a) of the Investment Company Act of 1940.
FIFTH: Upon receipt by the Fund at its principal place of
business of a written order from the Distributor, together with delivery
instructions, the Fund shall, as promptly as practicable, cause certificates for
the shares called for in such order to be delivered or credited in such amounts
and in such names as shall be specified by the Distributor, against payment
therefor in such manner as may be acceptable to the Fund.
-3-
<PAGE>
SIXTH: All sales literature and advertisements used by the
Distributor in connection with sales of the shares of the Fund shall be subject
to the approval of the Fund. The Fund authorizes the Distributor in connection
with the sale or arranging for the sale of its shares to give only such
information and to make only such statement or representations as are contained
in the current Prospectus and Statement of Additional Information or in sales
literature or advertisements approved by the Fund or in such financial
statements and reports as are furnished to the Distributor pursuant to this
Agreement. The Fund shall not be responsible in any way for any information,
statements or representations given or made by the Distributor or its
representatives or agents other than such information, statements and
representations contained in the then current Prospectus and Statement of
Additional Information.
SEVENTH: The Distributor as agent of the Fund is authorized,
subject to the direction of the Fund, to accept shares for redemption at their
net asset value, determined as prescribed in the then current prospectus of the
Fund.
EIGHTH: The Fund shall bear:
(A) the expenses of qualification of the shares for sale in
connection with such public offerings in such states as shall be selected by the
Distributor and of continuing the qualification therein until the Distributor
notifies the Fund that it does not wish such qualification continued; and
-4-
<PAGE>
(B) all legal expenses in connection with the foregoing.
NINTH: The Distributor shall bear:
(A) the expenses of printing and distributing prospectuses and
statements of additional information (other than those prospectuses and
statements of additional information required by applicable laws and regulations
to be distributed to the shareholders by the Fund and pursuant to any Rule 12b-1
distribution plan), and any other promotional or sales literature which are used
by the Distributor or furnished by the Distributor to purchasers or dealers in
connection with the Distributor's activities pursuant to this Agreement;
(B) expenses of any advertising used by the Distribu-
tor in connection with such public offering; and
TENTH: The Distributor will accept orders for shares of the
Fund only to the extent of purchase orders actually received and not in excess
of such orders, and it will not avail itself of any opportunity of making a
profit by expediting or withholding orders.
ELEVENTH: The Fund shall keep the Distributor fully informed
with regard to its affairs, shall furnish the Distributor with a certified copy
of all financial statements, and a signed copy of each report, prepared by
independent public accountants, and with such reasonable number of printed
copies of each quarterly, semi-annual and annual report of the Fund as the
Distributor may request, and shall cooperate fully in the efforts
-5-
<PAGE>
of the Distributor to sell and arrange for the sale of its shares and in the
performance by the Distributor of all its duties under this Agreement.
TWELFTH: The Fund agrees to register, from time to time as
necessary, additional shares with the Securities and Exchange Commission, state
and other regulatory bodies and to pay the related filing fees therefor and to
file such amendments, reports and other documents as may be necessary in order
that there may be no untrue statement of a material fact in the Registration
Statement, Prospectus or necessary in order that there may be no omission to
state a material fact therein necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading. As
used in this Agreement, the term "Registration Statement" shall mean from time
to time the Registration Statement most recently filed by the Fund with the
Securities and Exchange Commission and effective under the Securities Act of
1933, as amended, as such Registration Statement is amended at such time, and
the term "Prospectus" shall mean for the purposes of this Agreement from time to
time the form of prospectus and statement of additional information authorized
by the Trust for use by the Underwriter and by dealers.
THIRTEENTH:
(A) The Fund and the Distributor shall each comply with all
applicable provisions of the Investment Company Act of 1940, the Securities Act
of 1933, and of all other Federal and
-6-
<PAGE>
state laws, rules and regulations governing the issuance and sale of shares of
the Fund.
(B) In absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Distributor, the Fund agrees to indemnify the Distributor against any and
all claims, demands, liabilities and expenses which the Distributor may incur
under the Securities Act of 1933, or common law or otherwise, arising out of or
based upon any alleged untrue statement of a material fact contained in any
registration statement, statement of additional information or prospectus of the
Fund, or any omission to state a material fact therein, the omission of which
makes any statement contained therein misleading, unless such statement or
omission was made in reliance upon, and in conformity with information furnished
to the Fund in connection therewith by or on behalf of the Distributor. The
Distributor agrees to indemnify the Fund against any and all claims, demands,
liabilities and expenses which the Fund may incur arising out of or based upon
any act or deed of sales representatives of the Distributor which is outside the
scope of their authority.
(C) The Distributor agrees to indemnify the Fund against any
and all claims, demands, liabilities and expenses which the Fund may incur under
the Securities Act of 1933, or common law or otherwise, arising out of or based
upon any alleged untrue statement of a material fact contained in any
registration statement, or Prospectus of the Fund, or any omission to state a
material fact therein if such statement or omission was made in reliance upon,
and in conformity with, information furnished to
-7-
<PAGE>
the Fund in connection therewith by or on behalf of the Distributor.
FOURTEENTH: Nothing herein contained shall require the Fund to
take any action contrary to any provision of its trust agreement or to any
applicable statute or regulation.
FIFTEENTH: This Agreement has been approved by the Trustees of
the Fund and shall become effective at the close of business on the date hereof,
and shall remain in effect for two years from the date hereof and shall continue
in force and effect for successive annual periods thereafter, provided that such
continuance is specifically approved at least annually (a)(i) by the Board of
Trustees of the Fund, or (ii) by vote of a majority of the Fund's outstanding
voting securities (as defined in Section 2(a)(42) of the Investment Company
Act), and (b) by vote of a majority of the Fund's Trustees who are not
interested persons (as defined in Section 2(a)(19) of the Investment Company
Act) of the Distributor by votes cast in person at a meeting called for such
purpose.
SIXTEENTH: A copy of the Agreement and Declaration of Trust of
the Trust is on file with the Secretary of The Commonwealth of Massachusetts,
and notice is hereby given that this instrument is executed on behalf of the
Trustees of the Fund as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
-8-
<PAGE>
SEVENTEENTH:
(A) This Agreement may be terminated at any time, without the
payment of any penalty, by vote of the Board of Trustees of the Fund or by vote
of a majority of the outstanding voting securities of the Fund, or by the
Distributor, on sixty (60) days written notice to the other party.
(B) This Agreement shall automatically terminate in the event
of its assignment, the term "assignment" for this purpose having the meaning
defined in Section 2(a)(4) of the Investment Company Act.
EIGHTEENTH: Any notice under this Agreement shall be in
writing, addressed and delivered, or mailed, postage paid, to the other party at
such address as such other party may designate for the receipt of such notices.
Until further notice to the other party, it is agreed that the address of the
Fund shall be 1675 Broadway, New York, New York 10019 and the address of the
Distributor shall be 1675 Broadway, New York, New York 10019.
-9-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed in duplicate on the day and year first above written.
ATTEST: THE TOCQUEVILLE TRUST, on behalf of the
series listed in Exhibit A
By:
- ---------------- ------------------
ATTEST: TOCQUEVILLE SECURITIES L.P.
By:
- ---------------- ------------------
-10-
<PAGE>
EXHIBIT A
The Tocqueville Gold Fund (as of June 29, 1998)
<PAGE>
EXHIBIT B
THE TOCQUEVILLE TRUST
The Tocqueville Gold Fund
FORM OF GLOBAL CUSTODY TRI-PARTY AGREEMENT
This AGREEMENT is effective ________ _, 199_, and is between THE CHASE
MANHATTAN BANK, N.A. (the "Bank") and Firstar Trust (the "Customer") and
The Tocqueville Gold Fund (the "Fund").
1. CUSTOMER ACCOUNTS.
The Bank agrees to establish and maintain the following accounts
("Accounts"):
(a) A custody account in the name of the Customer ("Custody Account")
for any and all stocks, shares, bonds, debentures, notes, mortgages or other
obligations for the payment of money, bullion, coin and any certificates,
receipts, warrants or other instruments representing rights to receive, purchase
or subscribe for the same or evidencing or representing any other rights or
interests therein and other similar property whether certificated or
uncertificated as may be received by the Bank or its Subcustodian (as defined in
Section 3) for the account of the Customer ("Securities"); and
(b) A deposit account in the name of the Customer ("Deposit Account")
for any and all cash in any currency received by the Bank or its Subcustodian
for the account of the Customer, which cash shall not be subject to withdrawal
by draft or check.
The Customer warrants its authority to: 1) deposit the cash and
Securities ("Assets") received in the Accounts and 2) give Instructions (as
defined in Section 11) concerning the Accounts. The Bank may deliver securities
of the same class in place of those deposited in the Custody Account.
Upon written agreement between the Bank and the Customer, additional
Accounts may be established and separately accounted for as additional Accounts
under the terms of this Agreement.
2. MAINTENANCE OF SECURITIES AND CASH AT BANK AND SUBCUSTODIAN LOCATIONS.
Unless Instructions specifically require another location acceptable to
the Bank:
(a) Securities will be held in the country or other jurisdiction in
which the principal trading market for such Securities is located, where such
Securities are to be presented for payment or where such Securities are
acquired; and
(b) Cash will be credited to an account in a country or other
jurisdiction in which such cash may be legally deposited or is the legal
currency for the payment of public or private debts.
Cash may be held pursuant to Instructions in either interest or
non-interest bearing accounts as may be available for the particular currency.
To the extent Instructions are issued and the Bank can comply with such
Instructions, the Bank is authorized to maintain cash balances on deposit for
the Customer with itself or one of its affiliates at such reasonable rates of
interest as may from time to time be paid on such accounts, or in non-interest
bearing accounts as the Customer may direct, if acceptable to the Bank.
If the Customer wishes to have any of its Assets held in the custody of
an institution other than the established Subcustodians as defined in Section 3
(or their securities depositories), such arrangement must be authorized by a
written agreement, signed by the Bank and the Customer.
<PAGE>
3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES.
The Bank may act under this Agreement through the subcustodians listed
in Schedule A of this Agreement with which the Bank has entered into
subcustodial agreements ("Subcustodians"). The Customer authorizes the Bank to
hold Assets in the Accounts in accounts which the Bank has established with one
or more of its branches or Subcustodians. The Bank and Subcustodians are
authorized to hold any of the Securities in their account with any securities
depository in which they participate.
The Bank reserves the right to add new, replace or remove
Subcustodians. The Customer will be given reasonable notice by the Bank of any
amendment to Schedule A. Upon request by the Customer, the Bank will identify
the name, address and principal place of business of any Subcustodian of the
Customer's Assets and the name and address of the governmental agency or other
regulatory authority that supervises or regulates such Subcustodian.
4. USE OF SUBCUSTODIAN.
(a) The Bank will identify such Assets on its books as belonging to
the Customer.
(b) A Subcustodian will hold such Assets together with assets belonging
to other customers of the Bank in accounts identified on such Subcustodian's
books as special custody accounts for the exclusive benefit of customers of the
Bank.
(c) Any Assets in the Accounts held by a Subcustodian will be subject
only to the instructions of the Bank or its agent. Any Securities held in a
securities depository for the account of a Subcustodian will be subject only to
the instructions of such Subcustodian.
(d) Any agreement the Bank enters into with a Subcustodian for holding
its customer's assets shall provide that such assets will not be subject to any
right, charge, security interest, lien or claim of any kind in favor of such
Subcustodian except for safe custody or administration, and that the beneficial
ownership of such assets will be freely transferable without the payment of
money or value other than for safe custody or administration. The foregoing
shall not apply to the extent of any special agreement or arrangement made by
the Customer with any particular Subcustodian.
5. DEPOSIT ACCOUNT TRANSACTIONS.
(a) The Bank or its Subcustodians will make payments from the Deposit
Account upon receipt of Instructions which include all information required by
the Bank.
(b) In the event that any payment to be made under this Section 5
exceeds the funds available in the Deposit Account, the Bank, in its discretion,
may advance the Customer such excess amount which shall be deemed a loan payable
on demand, bearing interest at the rate customarily charged by the Bank on
similar loans.
(c) If the Bank credits the Deposit Account on a payable date, or at
any time prior to actual collection and reconciliation to the Deposit Account,
with interest, dividends, redemptions or any other amount due, the Customer will
promptly return any such amount upon oral or written notification: (i) that such
amount has not been received in the ordinary course of business or (ii) that
such amount was incorrectly credited. If the Customer does not promptly return
any amount upon such notification, the Bank shall be entitled, upon oral or
written notification to the
2
<PAGE>
Customer, to reverse such credit by debiting the Deposit Account for the amount
previously credited. The Bank or its Subcustodian shall have no duty or
obligation to institute legal proceedings, file a claim or a proof of claim in
any insolvency proceeding or take any other action with respect to the
collection of such amount, but may act for the Customer upon Instructions after
consultation with the Customer.
6. CUSTODY ACCOUNT TRANSACTIONS.
(a) Securities will be transferred, exchanged or delivered by the Bank
or its Subcustodian upon receipt by the Bank of Instructions which include all
information required by the Bank. Settlement and payment for Securities received
for, and delivery of Securities out of, the Custody Account may be made in
accordance with the customary or established securities trading or securities
processing practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivery of Securities to a
purchaser, dealer or their agents against a receipt with the expectation of
receiving later payment and free delivery. Delivery of Securities out of the
Custody Account may also be made in any manner specifically required by
Instructions acceptable to the Bank.
(b) The Bank, in its discretion, may credit or debit the Accounts on a
contractual settlement date with cash or Securities with respect to any sale,
exchange or purchase of Securities. Otherwise, such transactions will be
credited or debited to the Accounts on the date cash or Securities are actually
received by the Bank and reconciled to the Account.
(i) The Bank may reverse credits or debits made to the Accounts in its
discretion if the related transaction fails to settle within a
reasonable period, determined by the Bank in its discretion, after the
contractual settlement date for the related transaction.
(ii) If any Securities delivered pursuant to this Section 6 are
returned by the recipient thereof, the Bank may reverse the credits and
debits of the particular transaction at any time.
7. ACTIONS OF THE BANK.
The Bank shall follow Instructions received regarding assets held in
the Accounts. However, until it receives Instructions to the contrary, the Bank
will:
(a) Present for payment any Securities which are called, redeemed or
retired or otherwise become payable and all coupons and other income items which
call for payment upon presentation, to the extent that the Bank or Subcustodian
is actually aware of such opportunities.
(b) Execute in the name of the Customer such ownership and other
certificates as may be required to obtain payments in respect of Securities.
(c) Exchange interim receipts or temporary Securities for definitive
Securities.
(d) Appoint brokers and agents for any transaction involving the
Securities, including, without limitation, affiliates of the Bank or any
Subcustodian.
(e) Issue statements to the Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.
3
<PAGE>
The Bank will send the Customer an advice or notification of any
transfers of Assets to or from the Accounts. Such statements, advices or
notifications shall indicate the identity of the entity having custody of the
Assets. Unless the Customer sends the Bank a written exception or objection to
any Bank statement within sixty (60) days of receipt, the Customer shall be
deemed to have approved such statement. In such event, or where the Customer has
otherwise approved any such statement, the Bank shall, to the extent permitted
by law, be released, relieved and discharged with respect to all matters set
forth in such statement or reasonably implied therefrom as though it had been
settled by the decree of a court of competent jurisdiction in an action where
the Customer and all persons having or claiming an interest in the Customer or
the Customer's Accounts were parties.
All collections of funds or other property paid or distributed in
respect of Securities in the Custody Account shall be made at the risk of the
Customer. The Bank shall have no liability for any loss occasioned by delay in
the actual receipt of notice by the Bank or by its Subcustodians of any payment,
redemption or other transaction regarding Securities in the Custody Account in
respect of which the Bank has agreed to take any action under this Agreement.
8. CORPORATE ACTIONS; PROXIES.
Whenever the Bank receives information concerning the Securities which
requires discretionary action by the beneficial owner of the Securities (other
than a proxy), such as subscription rights, bonus issues, stock repurchase plans
and rights offerings, or legal notices or other material intended to be
transmitted to securities holders ("Corporate Actions"), the Bank will give the
Customer notice of such Corporate Actions to the extent that the Bank's central
corporate actions department has actual knowledge of a Corporate Action in time
to notify its customers.
When a rights entitlement or a fractional interest resulting from a
rights issue, stock dividend, stock split or similar Corporate Action is
received which bears an expiration date, the Bank will endeavor to obtain
Instructions from the Customer or its Authorized Person, but if Instructions are
not received in time for the Bank to take timely action, or actual notice of
such Corporate Action was received too late to seek Instructions, the Bank is
authorized to sell such rights entitlement or fractional interest and to credit
the Deposit Account with the proceeds or take any other action it deems, in good
faith, to be appropriate in which case it shall be held harmless for any such
action.
The Bank will deliver proxies to the Customer or its designated agent
pursuant to special arrangements which may have been agreed to in writing. Such
proxies shall be executed in the appropriate nominee name relating to Securities
in the Custody Account registered in the name of such nominee but without
indicating the manner in which such proxies are to be voted; and where bearer
Securities are involved, proxies will be delivered in accordance with
Instructions.
9. NOMINEES.
Securities which are ordinarily held in registered form may be
registered in a nominee name of the Bank, Subcustodian or securities depository,
as the case may be. The Bank may without notice to the Customer cause any such
Securities to cease to be registered in the name of any such nominee and to be
registered in the name of the Customer. In the event that any Securities
registered in a nominee name are called for partial redemption by the issuer,
the Bank may allot the called portion to the respective beneficial holders of
such class of security in any manner the Bank deems to be fair and equitable.
The Customer agrees to hold the Bank, Subcustodians, and their respective
nominees harmless from any liability arising directly or indirectly from their
status as a mere record holder of Securities in the Custody Account.
4
<PAGE>
10. AUTHORIZED PERSONS.
As used in this Agreement, the term "Authorized Person" means employees
or agents including investment managers as have been designated by written
notice from the Customer or its designated agent to act on behalf of the
Customer under this Agreement. Such persons shall continue to be Authorized
Persons until such time as the Bank receives Instructions from the Customer or
its designated agent that any such employee or agent is no longer an Authorized
Person.
11. INSTRUCTIONS.
The term "Instructions" means instructions of any Authorized Person
received by the Bank, via telephone, telex, TWX, facsimile transmission, bank
wire or other teleprocess or electronic instruction or trade information system
acceptable to the Bank which the Bank believes in good faith to have been given
by Authorized Persons or which are transmitted with proper testing or
authentication pursuant to terms and conditions which the Bank may specify.
Unless otherwise expressly provided, all Instructions shall continue in full
force and effect until canceled or superseded.
Any Instructions delivered to the Bank by telephone shall promptly
thereafter be confirmed in writing by an Authorized Person (which confirmation
may bear the facsimile signature of such Person), but the Customer will hold the
Bank harmless for the failure of an Authorized Person to send such confirmation
in writing, the failure of such confirmation to conform to the telephone
instructions received or the Bank's failure to produce such confirmation at any
subsequent time. The Bank may electronically record any Instructions given by
telephone, and any other telephone discussions with respect to the Custody
Account. The Customer shall be responsible for safeguarding any testkeys,
identification codes or other security devices which the Bank shall make
available to the Customer or its Authorized Persons.
12. STANDARD OF CARE; LIABILITIES.
(a) The Bank shall be responsible for the performance of only such
duties as are set forth in this Agreement or expressly contained in Instructions
which are consistent with the provisions of this Agreement as follows:
(i) The Bank will use reasonable care with respect to its obligations
under this Agreement and the safekeeping of Assets. The Bank shall be
liable to the Customer for any loss which shall occur as the result of
the failure of a Subcustodian to exercise reasonable care with respect
to the safekeeping of such Assets to the same extent that the Bank
would be liable to the Customer if the Bank were holding such Assets in
New York. In the event of any loss to the Customer by reason of the
failure of the Bank or its Subcustodian to utilize reasonable care, the
Bank shall be liable to the Customer only to the extent of the
Customer's direct damages, to be determined based on the market value
of the property which is the subject of the loss at the date of
discovery of such loss and without reference to any special conditions
or circumstances.
(ii) The Bank will not be responsible for any act, omission, default or
for the solvency of any broker or agent which it or a Subcustodian
appoints unless such appointment was made negligently or in bad faith.
5
<PAGE>
(iii) The Bank shall be indemnified by, and without liability to the
Customer for any action taken or omitted by the Bank whether pursuant
to Instructions or otherwise within the scope of this Agreement if such
act or omission was in good faith, without negligence. In performing
its obligations under this Agreement, the Bank may rely on the
genuineness of any document which it believes in good faith to have
been validly executed.
(iv) The Customer agrees to pay for and hold the Bank harmless from any
liability or loss resulting from the imposition or assessment of any
taxes or other governmental charges, and any related expenses with
respect to income from or Assets in the Accounts.
(v) The Bank shall be entitled to rely, and may act, upon the advice of
counsel (who may be counsel for the Customer) on all matters and shall
be without liability for any action reasonably taken or omitted
pursuant to such advice.
(vi) The Bank need not maintain any insurance for the benefit of the
Customer.
(vii) Without limiting the foregoing, the Bank shall not be liable for
any loss which results from: 1) the general risk of investing, or 2)
investing or holding Assets in a particular country including, but not
limited to, losses resulting from nationalization, expropriation or
other governmental actions; regulation of the banking or securities
industry; currency restrictions, devaluations or fluctuations; and
market conditions which prevent the orderly execution of securities
transactions or affect the value of Assets.
(viii) Neither party shall be liable to the other for any loss due to
forces beyond their control including, but not limited to strikes or
work stoppages, acts of war or terrorism, insurrection, revolution,
nuclear fusion, fission or radiation, or acts of God.
(b) Consistent with and without limiting the first paragraph of this
Section 12, it is specifically acknowledged that the Bank shall have no duty or
responsibility to:
(i) question Instructions or make any suggestions to the Customer
or an Authorized Person regarding such Instructions;
(ii) supervise or make recommendations with respect to investments
or the retention of Securities;
(iii) advise the Customer or an Authorized Person regarding any default
in the payment of principal or income of any security other than as
provided in Section 5(c) of this Agreement;
(iv) evaluate or report to the Customer or an Authorized Person
regarding the financial condition of any broker, agent or other party
to which Securities are delivered or payments are made pursuant to this
Agreement;
(v) review or reconcile trade confirmations received from brokers. The
Customer or its Authorized Persons (as defined in Section 10) issuing
Instructions shall bear any responsibility to review such confirmations
against Instructions issued to and statements issued by the Bank.
(c) The Customer authorizes the Bank to act under this Agreement
notwithstanding that the Bank or any of its divisions or affiliates may have a
6
<PAGE>
material interest in a transaction, or circumstances are such that the Bank may
have a potential conflict of duty or interest including the fact that the Bank
or any of its affiliates may provide brokerage services to other customers, act
as financial advisor to the issuer of Securities, act as a lender to the issuer
of Securities, act in the same transaction as agent for more than one customer,
have a material interest in the issue of Securities, or earn profits from any of
the activities listed herein.
13. FEES AND EXPENSES.
The Customer agrees to pay the Bank for its services under this
Agreement such amount as may be agreed upon in writing, together with the Bank's
reasonable out-of-pocket or incidental expenses, including, but not limited to,
legal fees. The Bank shall have a lien on and is authorized to charge any
Accounts of the Customer for any amount owing to the Bank under any provision of
this Agreement.
14. MISCELLANEOUS.
(a) Foreign Exchange Transactions. To facilitate the administration of
the Customer's trading and investment activity, the Bank is authorized to enter
into spot or forward foreign exchange contracts with the Customer or an
Authorized Person for the Customer and may also provide foreign exchange through
its subsidiaries, affiliates or Subcustodians. Instructions, including standing
instructions, may be issued with respect to such contracts but the Bank may
establish rules or limitations concerning any foreign exchange facility made
available. In all cases where the Bank, its subsidiaries, affiliates or
Subcustodians enter into a foreign exchange contract related to Accounts, the
terms and conditions of the then current foreign exchange contract of the Bank,
its subsidiary, affiliate or Subcustodian and, to the extent not inconsistent,
this Agreement shall apply to such transaction.
(b) Certification of Residency, etc. The Customer certifies that it is
a resident of the United States and agrees to notify the Bank of any changes in
residency. The Bank may rely upon this certification or the certification of
such other facts as may be required to administer the Bank's obligations under
this Agreement. The Customer will indemnify the Bank against all losses,
liability, claims or demands arising directly or indirectly from any such
certifications.
(c) Access to Records. The Bank shall allow the Customer's independent
public accountant reasonable access to the records of the Bank relating to the
Assets as is required in connection with their examination of books and records
pertaining to the Customer's affairs. Subject to restrictions under applicable
law, the Bank shall also obtain an undertaking to permit the Customer's
independent public accountants reasonable access to the records of any
Subcustodian which has physical possession of any Assets as may be required in
connection with the examination of the Customer's books and records.
(d) Governing Law; Successors and Assigns. This Agreement shall be
governed by the laws of the State of New York and shall not be assignable by
either party, but shall bind the successors in interest of the Customer and the
Bank.
(e) Entire Agreement; Applicable Riders. Customer represents that the
Assets deposited in the Accounts are (Check one):
[ ] Employee Benefit Plan or other assets subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA");
7
<PAGE>
[X] Mutual Fund assets subject to certain Securities and Exchange
Commission ("SEC") rules and regulations;
[ ] Neither of the above.
This Agreement consists exclusively of this document together with
Schedule A, Exhibits I - _______ and the following Rider(s) [Check
applicable rider(s)]:
[ ] ERISA
[X] MUTUAL FUND
[ ] SPECIAL TERMS AND CONDITIONS
There are no other provisions of this Agreement and this Agreement
supersedes any other agreements, whether written or oral, between the parties.
Any amendment to this Agreement must be in writing, executed by both parties.
(f) Severability. In the event that one or more provisions of this
Agreement are held invalid, illegal or enforceable in any respect on the basis
of any particular circumstances or in any jurisdiction, the validity, legality
and enforceability of such provision or provisions under other circumstances or
in other jurisdictions and of the remaining provisions will not in any way be
affected or impaired.
(g) Waiver. Except as otherwise provided in this Agreement, no failure
or delay on the part of either party in exercising any power or right under this
Agreement operates as a waiver, nor does any single or partial exercise of any
power or right preclude any other or further exercise, or the exercise of any
other power or right. No waiver by a party of any provision of this Agreement,
or waiver of any breach or default, is effective unless in writing and signed by
the party against whom the waiver is to be enforced.
(h) Notices. All notices under this Agreement shall be effective when
actually received. Any notices or other communications which may be required
under this Agreement are to be sent to the parties at the following addresses or
such other addresses as may subsequently be given to the other party in writing:
Bank: The Chase Manhattan Bank, N.A.
Chase MetroTech Center
Brooklyn, NY 11245
Attention: Global Custody Division
or telex:___________________________
8
<PAGE>
Customer: _________________________________
_________________________________
_________________________________
Fund: _________________________________
_________________________________
_________________________________
(i) Termination. This Agreement may be terminated by the Customer or
the Bank by giving sixty (60) days written notice to the other, provided that
such notice to the Bank shall specify the names of the persons to whom the Bank
shall deliver the Assets in the Accounts. If notice of termination is given by
the Bank, the Customer shall, within sixty (60) days following receipt of the
notice, deliver to the Bank Instructions specifying the names of the persons to
whom the Bank shall deliver the Assets. In either case the Bank will deliver the
Assets to the persons so specified, after deducting any amounts which the Bank
determines in good faith to be owed to it under Section 13. If within sixty (60)
days following receipt of a notice of termination by the Bank, the Bank does not
receive Instructions from the Customer specifying the names of the persons to
whom the Bank shall deliver the Assets, the Bank, at its election, may deliver
the Assets to a bank or trust company doing business in the State of New York to
be held and disposed of pursuant to the provisions of this Agreement, or to
Authorized Persons, or may continue to hold the Assets until Instructions are
provided to the Bank.
CUSTOMER
By:
--------------------------------------------
THE CHASE MANHATTAN BANK
By:
--------------------------------------------
FUND
By:
--------------------------------------------
9
<PAGE>
STATE OF )
: ss.
COUNTY OF )
On this day of , 19 , before me personally
came , to me known, who being by me duly sworn, did depose
and say that he/she resides in at ;
that he/she is of , the entity described in
and which executed the foregoing instrument; that he/she knows the seal of said
entity, that the seal affixed to said instrument is such seal, that it was so
affixed by order of said entity, and that he/she signed his/her name thereto by
like order.
__________________________
Sworn to before me this ________
day of __________, 19__.
_________________
Notary
10
<PAGE>
STATE OF )
: ss.
COUNTY OF )
On this day of , 19 , before me personally
came , to me known, who being by me duly sworn, did depose
and say that he/she resides in at ;
that he/she is of , the entity described in
and which executed the foregoing instrument; that he/she knows the seal of said
entity, that the seal affixed to said instrument is such seal, that it was so
affixed by order of said entity, and that he/she signed his/her name thereto by
like order.
__________________________
Sworn to before me this ________
day of __________, 19__.
_________________
Notary
11
<PAGE>
STATE OF )
: ss.
COUNTY OF )
On this day of , 19 , before me personally
came , to me known, who being by me duly sworn, did depose
and say that he resides in at ;
that he is Vice President of THE CHASE MANHATTAN BANK, the corporation described
in and which executed the foregoing instrument; that he/she knows the seal of
said corporation, that the seal affixed to said instrument is such seal, that it
was so affixed by order of said entity, and that he/she signed his/her name
thereto by like order.
__________________________
Sworn to before me this ________
day of __________, 19__.
_________________
Notary
12
<PAGE>
Mutual Fund Rider to Global Custody Tri-Party Agreement
Between The Chase Manhattan Bank and
Firstar Trust and
The Tocqueville Gold Fund, effective ________ _, 199_
Customer represents that the Assets being placed in the Bank's custody
are subject to the Investment Company Act of 1940 (the Act), as the same may be
amended from time to time.
Except to the extent that the Bank has specifically agreed to comply
with a condition of a rule, regulation, interpretation promulgated by or under
the authority of the SEC or the Exemptive Order applicable to accounts of this
nature issued to the Bank (Investment Company Act of 1940, Release No. 12053,
November 20, 1981), as amended, or unless the Bank has otherwise specifically
agreed, the Customer shall be solely responsible to assure that the maintenance
of Assets under this Agreement complies with such rules, regulations,
interpretations or exemptive order promulgated by or under the authority of the
Securities Exchange Commission.
The following modifications are made to the Agreement:
Section 3. Subcustodians and Securities Depositories.
Add the following language to the end of Section 3:
The terms Subcustodian and securities depositories as used in this
Agreement shall mean a branch of a qualified U.S. bank, an eligible
foreign custodian or an eligible foreign securities depository, which
are further defined as follows:
(a) "qualified U.S. Bank" shall mean a qualified U.S. bank as defined
in Rule 17f-5 under the Investment Company Act of 1940;
(b) "eligible foreign custodian" shall mean (i) a banking institution
or trust company incorporated or organized under the laws of a country
other than the United States that is regulated as such by that
country's
13
<PAGE>
government or an agency thereof and that has shareholders' equity in
excess of $200 million in U.S. currency (or a foreign currency
equivalent thereof), (ii) a majority owned direct or indirect
subsidiary of a qualified U.S. bank or bank holding company that is
incorporated or organized under the laws of a country other than the
United States and that has shareholders' equity in excess of $100
million in U.S. currency (or a foreign currency equivalent
thereof)(iii) a banking institution or trust company incorporated or
organized under the laws of a country other than the United States or a
majority owned direct or indirect subsidiary of a qualified U.S. bank
or bank holding company that is incorporated or organized under the
laws of a country other than the United States which has such other
qualifications as shall be specified in Instructions and approved by
the Bank; or (iv) any other entity that shall have been so qualified by
exemptive order, rule or other appropriate action of the SEC; and
(c) "eligible foreign securities depository" shall mean a securities
depository or clearing agency, incorporated or organized under the laws
of a country other than the United States, which operates (i) the
central system for handling securities or equivalent book-entries in
that country, or (ii) a transnational system for the central handling
of securities or equivalent book-entries.
The Customer represents that its Board of Directors has approved each
of the Subcustodians listed in Schedule A to this Agreement and the terms of the
subcustody agreements between the Bank and each Subcustodian, which are attached
as Exhibits I through of Schedule A, and further represents that its Board has
determined that the use of each Subcustodian and the terms of each subcustody
agreement are consistent with the best interests of the Fund(s) and its (their)
shareholders. The Bank will supply the Customer with any amendment to Schedule A
for approval. The Customer has supplied or will supply the Bank with certified
copies of its Board of Directors resolution(s) with respect to the foregoing
prior to placing Assets with any Subcustodian so approved.
Section 11. Instructions.
Add the following language to the end of Section 11:
Deposit Account Payments and Custody Account Transactions made pursuant
to Section 5 and 6 of this Agreement may be made only for the purposes
listed below. Instructions must specify the purpose for which any
transaction is to be made and Customer shall be solely responsible to
assure that Instructions are in accord with any limitations or
restrictions applicable to the Customer by law or as may be set forth
in its prospectus.
14
<PAGE>
(a) In connection with the purchase or sale of Securities at prices as
confirmed by Instructions;
(b) When Securities are called, redeemed or retired, or otherwise
become payable;
(c) In exchange for or upon conversion into other securities alone or
other securities and cash pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment;
(d) Upon conversion of Securities pursuant to their terms into other
securities;
(e) Upon exercise of subscription, purchase or other similar rights
represented by Securities;
(f) For the payment of interest, taxes, management or supervisory fees,
distributions or operating expenses;
(g) In connection with any borrowings by the Customer requiring a
pledge of Securities, but only against receipt of amounts borrowed;
(h) In connection with any loans, but only against receipt of adequate
collateral as specified in Instructions which shall reflect any restrictions
applicable to the Customer;
(i) For the purpose of redeeming shares of the capital stock of the
Customer and the delivery to, or the crediting to the account of, the Bank, its
Subcustodian or the Customer's transfer agent, such shares to be purchased or
redeemed;
(j) For the purpose of redeeming in kind shares of the Customer against
delivery to the Bank, its Subcustodian or the Customer's transfer agent of such
shares to be so redeemed;
(k) For delivery in accordance with the provisions of any agreement
among the Customer, the Bank and a broker-dealer registered under the Securities
Exchange Act of 1934 (the "Exchange Act") and a member of The National
Association of Securities Dealers, Inc. ("NASD"), relating to compliance with
the rules of The Options Clearing Corporation and of any registered national
securities exchange, or of any similar organization or organizations, regarding
escrow or other arrangements in connection with transactions by the Customer;
15
<PAGE>
(l) For release of Securities to designated brokers under covered call
options, provided, however, that such Securities shall be released only upon
payment to the Bank of monies for the premium due and a receipt for the
Securities which are to be held in escrow. Upon exercise of the option, or at
expiration, the Bank will receive from brokers the Securities previously
deposited. The Bank will act strictly in accordance with Instructions in the
delivery of Securities to be held in escrow and will have no responsibility or
liability for any such Securities which are not returned promptly when due other
than to make proper request for such return;
(m) For spot or forward foreign exchange transactions to facilitate
security trading, receipt of income from Securities or related transactions;
(n) For other proper purposes as may be specified in Instructions
issued by an officer of the Customer which shall include a statement of the
purpose for which the delivery or payment is to be made, the amount of the
payment or specific Securities to be delivered, the name of the person or
persons to whom delivery or payment is to be made, and a certification that the
purpose is a proper purpose under the instruments governing the Customer; and
(o) Upon the termination of this Agreement as set forth in Section
14(i).
Section 12. Standard of Care; Liabilities.
Add the following subsection (c) to Section 12:
(c) The Bank hereby warrants to the Customer that in its opinion, after
due inquiry, the established procedures to be followed by each of its branches,
each branch of a qualified U.S. bank, each eligible foreign custodian and each
eligible foreign securities depository holding the Customer's Securities
pursuant to this Agreement afford protection for such Securities at least equal
to that afforded by the Bank's established procedures with respect to similar
securities held by the Bank and its securities depositories in New York.
Section 14. Access to Records.
Add the following language to the end of Section 14(c):
Upon reasonable request from the Customer, the Bank shall furnish the
Customer such reports (or portions thereof) of the Bank's system of
internal accounting controls applicable to the Bank's duties under this
Agreement. The Bank shall endeavor to obtain and furnish the Customer
with such similar reports as it may reasonably request with respect to
each Subcustodian and securities depository holding the Customer's
assets.
<PAGE>
SCHEDULE A
SUB-CUSTODIANS EMPLOYED BY
THE CHASE MANHATTAN BANK, GLOBAL CUSTODY
COUNTRY SUB-CUSTODIAN CORRESPONDENT BANK
- ------- ------------- ------------------
ARGENTINA The Chase Manhattan Bank The Chase Manhattan Bank
Arenales 707, 5th Floor Buenos Aires
De Mayo 130/140
1061 Buenos Aires
ARGENTINA
AUSTRALIA The Chase Manhattan Bank The Chase Manhattan Bank
36th Floor Sydney
World Trade Centre
Jamison Street
Sydney
New South Wales 2000
AUSTRALIA
AUSTRIA Creditanstalt - Bankverein Credit Lyonnais Bank
Schottengasse 6 Vienna
A - 1011, Vienna
AUSTRIA
BANGLADESH Standard Chartered Bank Standard Chartered Bank
18-20 Motijheel C.A. Dhaka
Box 536,
Dhaka-1000
BANGLADESH
BELGIUM Generale Bank Credit Lyonnais Bank
3 Montagne Du Parc Brussels
1000 Bruxelles
BELGIUM
BOTSWANA Barclays Bank of Botswana Barclays Bank of Botswana
Limited Gaborone
Barclays House
Khama Crescent
Gaborone
BOTSWANA
<PAGE>
BRAZIL Banco Chase Manhattan, S.A. Banco Chase Manhattan S.A.
Chase Manhattan Center Sao Paulo
Rua Verbo Divino, 1400
Sao Paulo, SP 04719-002
BRAZIL
CANADA The Royal Bank of Canada Royal Bank of Canada
Royal Bank Plaza Toronto
Toronto Ontario M5J 2J5
CANADA
Canada Trust Royal Bank of Canada
Canada Trust Tower Toronto
BCE Place
161 Bay at Front
Toronto
Ontario M5J 2T2
CANADA
CHILE The Chase Manhattan Bank, The Chase Manhattan Bank
Agustinas 1235 Santiago
Casilla 9192
CHILE
COLOMBIA Cititrust Colombia S.A. Cititrust Colombia S.A.
Sociedad Fiduciaria Sociedad Fiduciaria
Carrera 9a No 99-02 Santafe de Bogota
Santafe de Bogota, DC
COLOMBIA
CZECH REPUBLIC Ceskoslovenska Obchodni Komercni Banka, A.S.,
Banka, A.S. Praha
Na Prikope 14
115 20 Praha 1
CZECH REPUBLIC
DENMARK Den Danske Bank Den Danske Bank
2 Holmes Kanala DK 1091 Copenhagen
Copenhagen
DENMARK
ECUADOR Citibank, N.A. Citibank N.A.
Juan Leon Mera Quito
130 y Patria
Quito
ECUADOR
<PAGE>
EGYPT National Bank of Egypt National Bank of Egypt
24 Sherif Street Cairo
Cairo
EGYPT
ESTONIA HansBank Tallinna Bank
Liivalaia 8 Tallinn
EE0100 Tallinn
ESTONIA
EUROBONDS Cedel Bank S.A. A/c The Chase Manhattan
67 Boulevard Grande Bank, N.A.
Duchesse Charlotte London
LUXEMBOURG A/c No. 17817
ECU: Lloyds Bank PLC
International Banking
Division
London
For all other currencies:
see relevant country
EURO CDS First Chicago Clearing Centre ECU: Lloyds Bank PLC
27 Leadenhall Street Banking Division London
London EC3A 1AA For all other currencies:
UNITED KINGDOM see relevant country
FINLAND Merita Bank KOP Merita Bank KOP
Aleksis Kiven 3-5 Helsinki
00500 Helsinki
FINLAND
FRANCE Banque Paribas Societe Generale
Ref 256 Paris
BP 141
3, Rue D'Antin
75078 Paris
Cedex 02
FRANCE
GERMANY Chase Bank A.G. Chase Bank A.G.
Alexanderstrasse 59 Frankfurt
Postrach 90 01 09
60441 Frankfurt/Main
GERMANY
<PAGE>
GHANA Barclays Bank of Ghana Ltd Barclays Bank
Barclays House Accra
High Street
Accra
GHANA
GREECE Barclays Bank Plc National Bank of Greece S.A.
1 Kolokotroni Street Athens
10562 Athens A/c Chase Manhattan Bank,
GREECE London
A/c No 040/7/921578-68
HONG KONG The Chase Manhattan Bank The Chase Manhattan Bank,
40/F One Exchange Square Hong Kong
8, Connaught Place
Central, Hong Kong
HONG KONG
HUNGARY Citibank Budapest, Rt. Citibank Budapest Rt.
Vaci Utca 19-21 Budapest
1052 Budapest V
HUNGARY
INDIA The Hongkong and Shanghai The Hongkong and Shanghai
Banking Corporation Limited Banking Corporation Limited
52/60 Mahatma Gandhi Road Bombay
Bombay 400 001
INDIA
Deutsche Bank AG Deutsche Bank
Securities & Custody Services Bombay
Kodak House
222 D.N. Road, Fort
Bombay 400 001
INDIA
INDONESIA The Hongkong and Shanghai The Chase Manhattan Bank
Banking Corporation Limited Jakarta
World Trade Center
J1. Jend Sudirman Kav. 29-31
Jakarta 10023
INDONESIA
<PAGE>
IRELAND Bank of Ireland Allied Irish Bank
International Financial Dublin
Services Centre
1 Harbourmaster Place
Dublin 1
IRELAND
ISRAEL Bank Leumi Le-Israel B.M Bank Leumi Le-Israel B.M.
19 Herzl Street Tel Aviv
61000 Tel Aviv
ISRAEL
ITALY The Chase Manhattan Bank, The Chase Manhattan Bank,
Piazza Meda 1 Milan
20121 Milan
ITALY
JAPAN The Fuji Bank Ltd. The Chase Manhattan Bank
6-7 Nihonbashi-Kabutocho Tokyo
Chuo-Ku
Tokyo
JAPAN
JORDAN Arab Bank Limited Arab Bank Limited
P O Box 950544-5 Amman
Amman
Shmeisani
JORDAN
KENYA Barclays Bank of Kenya Barclays Bank of Kenya
Third Floor Nairobi
Queensway House
Nairobi
Kenya
LUXEMBOURG Banque Generale du Banque Generale du
Luxembourg S.A. Luxembourg S.A.
50 Avenue J.F. Kennedy Luxembourg
L-2951 LUXEMBOURG
MALAYSIA The Chase Manhattan Bank, The Chase Manhattan Bank,
Pernas International Kuala Lumpur
Jalan Sultan Ismail
50250, Kuala Lumpur
MALAYSIA
<PAGE>
MAURITIUS Hongkong and Shanghai Hongkong and Shanghai
Banking Corporation Ltd. Banking Corporation Ltd.
Curepipe Road Curepipe
Curepipe
MAURITTUS
MEXICO The Chase Manhattan Bank, No correspondent Bank
(Equities) S.A.
Prolongacion Paseo de la
Reforma no. 600,
PB Colonia Santa Fe Pena
Blanca
01210 Mexico D.F.
(Government Bonds) Banco Nacional de Mexico, No correspondent Bank
Avenida Juarex No. 104-11
Piso
06040 Mexico D.F.
MEXICO
MOROCCO Banque Commerciale du Banque Commerciale du
Maroc Maroc
2 Boulevard Moulay Youssef Casablanca
Casablanca 2000
MOROCCO
NAMIBIA Standard Bank Namibia Ltd. Standard Bank of South
Mutual Platz - 3rd Floor Africa Ltd.
P.O. Box 3327 Johannesburg
Windhock
NAMIBIA
NETHERLANDS ABN AMRO N.V. Generale Bank
Securities Centre Nederland N.V.
P O Box 3200 Rotterdam
4800 De Breda
NETHERLANDS
NEW ZEALAND National Nominees Limited National Bank of New
Level 2 BNZ Tower Zealand
125 Queen Street Wellington
Auckland
NEW ZEALAND
<PAGE>
NORWAY Den Norsek Bank Den Norske Bank
Kirkegaten 21 Oslo
Oslo 1
NORWAY
PAKISTAN Citibank N.A. Citibank N.A.
I.I. Chundrigar Road Karachi
AWT Plaza
Karachi
PAKISTAN
Deutsche Bank A.G. Deutsche Bank A.G. Karachi
Unitowers
I.I. Chundrigar Road
Karachi
PAKISTAN
PERU Citibank, N.A. Citibank N.A.
Camino Real 457 Lima
CC Torre Real - 5th Floor
San Isidro, Lima 27
PERU
PHILIPPINES The Hongkong and Shanghai The Hongkong and Shanghai
Banking Corporation Limited Banking Corporation Limited
Hong Kong Bank Centre 3/F Manila
San Miguel Avenue
Ortigas Commercial Centre
Pasig Metro Manila
PHILIPPINES
POLAND Bank Polska Kasa Opieki S.A. Bank Polska Kasa Opieki
Curtis Plaza S.A.
Woloska 18 Warsaw
02-675 Warsaw
POLAND
For Mutual Funds: Bank Polska Kasa Opieki
Bank Handlowy W. S.A.
Warszawic S.A. Warsaw
Custody Dept.
Capital Markets Center
UI, Nowy Swiat 6/12
00-920 Warsaw
POLAND
<PAGE>
PORTUGAL Banco Espirito Santo c Banco Nacional Ultra Marino
Comercial de Lisboa Lisbon
Servico de Gestaode Titulos
R. Mouzinho da Silveira, 36
r/c
1200 Lisbon
PORTUGAL
SHANGHAI (CHINA) The Hongkong and Shanghai Citibank
Banking Corporation Limited New York
Corporate Banking Centre
Unit 504, 5/F Shanghai
Centre
1376 Nanjing Xi Lu
Shanghai
THE PEOPLE'S REPUBLIC
OF CHINA
SHENZHEN (CHINA) The Hongkong and Shanghai The Chase Manhattan Bank
Banking Corporation Limited Hong Kong
1st Floor
Central Plaza Hotel
No. 1 Chun Feng Lu
Shenzhen
THE PEOPLE'S REPUBLIC
OF CHINA
SINGAPORE The Chase Manhattan Bank, The Chase Manhattan Bank,
Shell Tower Singapore
50 Raffles Place
Singapore 0104
SINGAPORE
SLOVAK REPUBLIC Ceskoslovenska Obchodni Ceskoslovenska Obchodni
Banka, A.S. Banka
Michalska 18 Slovak Republic
815 63 Bratislava
SLOVAK REPUBLIC
SOUTH AFRICA Standard Bank of South Africa Standard Bank of South
Standard Bank Chambers Africa
46 Marshall Street South Africa
Johannesburg 2001
SOUTH AFRICA
<PAGE>
SOUTH KOREA The Hongkong & Shanghai The Hongkong & Shanghai
Banking Corporation Limited Banking Corporation Limited
6/F Kyobo Building Seoul
#1 Chongro, 1-ka Chongro-Ku,
Seoul
SOUTH KOREA
SPAIN The Chase Manhattan Bank Chase Manhattan Bank,
Paseo de la Castellana, 51 Madrid
28046 Madrid
SPAIN
SRI LANKA The Hongkong & Shanghai The Hongkong & Shanghai
Banking Corporation Limited Banking Corporation Limited
Unit #02-02 West Block, Colombo
World Trade Center
Colombo 1,
SRI LANKA
SWEDEN Skandinaviska Enskilda Banken Svenska Handelsbanken
Kungstradgardsgatan 8 Stockholm
Stockhold S-106 40
SWEDEN
SWITZERLAND Union Bank of Switzerland Union Bank of Switzerland
45 Bahnhofstrasse Zurich
8021 Zurich
SWITZERLAND
TAIWAN The Chase Manhattan Bank, Republic of China
115 Min Sheng East Road - No correspondent Bank
Sec 3,
9th Floor
Taipei
TAIWAN
THAILAND The Chase Manhattan Bank, The Chase Manhattan Bank,
Bubhajit Building Bangkok
20 North Sathorn Road
Silom, Bangrak
Bangkok 10500
THAILAND
<PAGE>
TUNISIA Banque Internationale Arabe de Banque International Arabe
Tunisie de Tunisie, Tunisia
70-72 Avenue Habib
Bourguiba
P.O. Box 520
1080 Tunis Cedex
TUNISIA
TURKEY The Chase Manhattan Bank, The Chase Manhattan Bank,
Emirhan Cad No. 145 Istanbul
Atakule, A Blok Kat 11
80700-Dikilitas/Bestktas
Istanbul
TURKEY
U.K. The Chase Manhattan Bank, The Chase Manhattan Bank,
Woolgate House London
Coleman Street
London EC2P 2HD
UNITED KINGDOM
URUGUAY The First National Bank of The First National Bank of
Boston Boston
Zabala 1463 Montevidco
Montevidco
URUGUAY
U.S.A. The Chase Manhattan Bank, The Chase Manhattan Bank,
1 Chase Manhattan Plaza New York
New York
NY 10081
U.S.A.
VENEZUELA Citibank N.A. Citibank N.A.
Carmelitas a Altagracia Caracas
Edificio Citibank
Caracas 1010
VENEZUELA
ZAMBIA Barclays Bank of Zambia Barclays Bank of Zambia
Kafue House Lusaka
Cairo Road
P.O. Box 31936
Lusaka
ZAMBIA
<PAGE>
ZIMBABWE Barclays Bank of Zimbabwe Barclays Bank of Zimbabwe
Ground Floor Harare
Tanganyika House
Corner of 3rd Street & Union
Avenue
Harare
ZIMBABWE
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Mutual Fund Services
CHASE GLOBAL SECURITIES SERVICES FEE AGREEMENT
BETWEEN THE CHASE MANHATTAN BANK, N.A. AND
FIRSTAR TRUST COMPANY
I. Portfolio Basis Point Fee
Market Value Basis Points
------------ ------------
$0 to $150MM 14.0
$151MM to $200MM 12.0
Over $200MM 10.0
II. Global Standard Price By Country Banks (see attached)
Asset Holdings Fee Per Transaction Fee
--------------------------------------
Bank "A" -0- Basis Points $30.00
Bank "B" -0- Basis Points $40.00
Bank "C" -0- Basis Points $60.00
Bank "D" -0- Basis Points $90.00
Bank "E" -0- Basis Points 100.00
Bank "F" -0- Basis Points 120.00
Bank "G" 20.0 Basis Points 135.00
Bank "H" 25.0 Basis Points 140.00
III. Out-of-Pocket Expenses
Billed as incurred (e.g., scrip fees, transporting securities out of the
local market)
IV. Global Securities Lending
60%/40% split in clients' for (50%/50% with indemnification)
V. Infostation
$2,500/installation fee plus expenses
VI. Annual VIP Accounting Fees
Monthly - $15,000 per portfolio
VII. Proxy Service Fees
Notification - CDS $25 per meeting
Fax/Telex - $50 per account
Voting - $75/account
<PAGE>
Mutual Fund Services
CHASE GLOBAL SECURITIES SERVICES
GLOBAL CUSTODY
GLOBAL BANDS
Band "A" Band "D" Band "F"
Japan Austria Argentina
CEDEL Finland Brazil
United States Hong Kong Chile
EUROCLEAR Italy Greece
Luxembourg Indonesia
Band "B" Malaysia Jordan
Germany Singapore Pakistan
Netherlands Turkey Philippines
Canada Portugal
Switzerland Band "E" Taiwan
Mexico Spain
Band "C" Thailand
Australia
Belgium
Denmark
France
Ireland
New Zealand
Norway
Sweden
United Kingdom
Emerging Markets Bands
Band "G" Band "H"
Columbia Peru
Hungary
India
Korea
Poland
Shenzen
Sri Lanka
Venezuela
FORM OF CUSTODIAN AGREEMENT
THIS AGREEMENT made on this _____ day of ________, 199_, between The
Tocqueville Trust, a Massachusetts business trust, on behalf of the Torqueville
Gold Fund (hereinafter called the "Fund"), and FIRSTAR TRUST COMPANY, a
corporation organized under the laws of the State of Wisconsin (hereinafter
called "Custodian"),
WHEREAS, the Fund desires that its securities and cash shall be
hereafter held and administered by Custodian pursuant to the terms of this
Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Fund and Custodian agree as follows:
1. Definitions
The word "securities" as used herein includes stocks, shares, bonds,
debentures, notes, mortgages or other obligations, and any certificates,
receipts, warrants or other instruments representing rights to receive, purchase
or subscribe for the same, or evidencing or representing any other rights or
interests therein, or in any property or assets.
The words "officers' certificate" shall mean a request or direction or
certification in writing signed in the name of the Fund by any two of the
President, a Vice President, the Secretary and the Treasurer of the Fund, or
any other persons duly authorized to sign by the Board of Trustees.
The word "Board" shall mean Board of Trustees of The Tocqueville Trust.
2. Names, Titles, and Signatures of the Fund's Officers
An officer of the Fund will certify to Custodian the names and
signatures of those persons authorized to sign the officers' certificates
described in Section 1 hereof, and the names of the members of the Board of
Trustees, together with any changes which may occur from time to time.
Additional Series. The Tocqueville Trust is authorized to issue
separate Series of shares of beneficial interest representing interests in
separate investment portfolios. The parties intend that each portfolio
established by the trust, now or in the future, be covered by the terms and
conditions of this agreement.
<PAGE>
3 . Receipt and Disbursement of Money
A. Custodian shall open and maintain a separate account or accounts in
the name of the Fund, subject only to draft or order by Custodian acting
pursuant to the terms of this Agreement. Custodian shall hold in such account or
accounts, subject to the provisions hereof, all cash received by it from or for
the account of the Fund. Custodian shall make payments of cash to, or for the
account of, the Fund from such cash only:
(a) for the purchase of securities for the portfolio of the Fund
upon the delivery of such securities to Custodian, registered in
the name of the Fund or of the nominee of Custodian referred to
in Section 7 or in proper form for transfer;
(b) for the purchase or redemption of shares of the common stock of
the Fund upon delivery thereof to Custodian, or upon proper
instructions from the The Tocqueville Trust;
(c) for the payment of interest, dividends, taxes, investment
adviser's fees or operating expenses (including, without
limitation thereto, fees for legal, accounting, auditing and
custodian services and expenses for printing and postage);
(d) for payments in connection with the conversion, exchange or
surrender of securities owned or subscribed to by the Fund held
by or to be delivered to Custodian; or
(e) for other proper corporate purposes certified by resolution of
the Board of Trustees of the Fund.
Before making any such payment, Custodian shall receive (and may rely
upon) an officers' certificate requesting such payment and stating that it is
for a purpose permitted under the terms of items (a), (b), (c), or (d) of this
Subsection A, and also, in respect of item (e), upon receipt of an officers'
certificate specifying the amount of such payment, setting forth the purpose for
which such payment is to be made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom such payment is to
be made, provided, however, that an officers' certificate need not precede the
disbursement of cash for the purpose of purchasing a money market instrument, or
any other security with same or next-day settlement, if the President, a Vice
President, the Secretary or the Treasurer of the Fund issues appropriate oral
or facsimile instructions to Custodian and an appropriate officers' certificate
is received by Custodian within two business days thereafter.
B. Custodian is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received by Custodian for the
account of the Fund.
C. Custodian shall, upon receipt of proper instructions, make federal
funds available to the Fund as of specified times agreed upon from time to time
by the Fund and the custodian
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<PAGE>
in the amount of checks received in payment for shares of the Fund which are
deposited into the Fund's account.
4. Segregated Accounts
Upon receipt of proper instructions, the Custodian shall establish and
maintain a segregated account(s) for and on behalf of the portfolio, into which
account(s) may be transferred cash and/or securities.
5. Transfer, Exchange, Redelivery, etc. of Securities
Custodian shall have sole power to release or deliver any securities of
the Fund held by it pursuant to this Agreement. Custodian agrees to transfer,
exchange or deliver securities held by it hereunder only:
(a) for sales of such securities for the account of the Fund upon
receipt by Custodian of payment therefore;
(b) when such securities are called, redeemed or retired or otherwise
become payable;
(c) for examination by any broker selling any such securities in
accordance with "street delivery" custom;
(d) in exchange for, or upon conversion into, other securities alone
or other securities and cash whether pursuant to any plan of
merger, consolidation, reorganization, recapitalization or
readjustment, or otherwise;
(e) upon conversion of such securities pursuant to their terms into
other securities;
(f) upon exercise of subscription, purchase or other similar rights
represented by such securities;
(g) for the purpose of exchanging interim receipts or temporary
securities for definitive securities;
(h) for the purpose of redeeming in kind shares of common stock of
the Fund upon delivery thereof to Custodian; or
(i) for other proper corporate purposes.
As to any deliveries made by Custodian pursuant to items (a), (b), (d),
(e), (f), and (g), securities or cash receivable in exchange therefore shall be
deliverable to Custodian.
3
<PAGE>
Before making any such transfer, exchange or delivery, Custodian shall
receive (and may rely upon) an officers' certificate requesting such transfer,
exchange or delivery, and stating that it is for a purpose permitted under the
terms of items (a), (b), (c), (d), (e), (f), (g), or (h) of this Section 5 and
also, in respect of item (i), upon receipt of an officers' certificate
specifying the securities to be delivered, setting forth the purpose for which
such delivery is to be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of such securities
shall be made, provided, however, that an officers' certificate need not precede
any such transfer, exchange or delivery of a money market instrument, or any
other security with same or next-day settlement, if the President, a Vice
President, the Secretary or the Treasurer of the Fund issues appropriate oral
or facsimile instructions to Custodian and an appropriate officers' certificate
is received by Custodian within two business days thereafter.
6. Custodian's Acts Without Instructions
Unless and until Custodian receives an officers' certificate to the
contrary, Custodian shall: (a) present for payment all coupons and other income
items held by it for the account of the Fund, which call for payment upon
presentation and hold the cash received by it upon such payment for the account
of the Fund; (b) collect interest and cash dividends received, with notice to
the Fund, for the account of the Fund; (c) hold for the account of the Fund
hereunder all stock dividends, rights and similar securities issued with respect
to any securities held by it hereunder; and (d) execute, as agent on behalf of
the Fund, all necessary ownership certificates required by the Internal Revenue
Code or the Income Tax Regulations of the United States Treasury Department or
under the laws of any state now or hereafter in effect, inserting the Fund's
name on such certificates as the owner of the securities covered thereby, to the
extent it may lawfully do so.
7. Registration of Securities
Except as otherwise directed by an officers' certificate, Custodian
shall register all securities, except such as are in bearer form, in the name of
a registered nominee of Custodian as defined in the Internal Revenue Code and
any Regulations of the Treasury Department issued hereunder or in any provision
of any subsequent federal tax law exempting such transaction from liability for
stock transfer taxes, and shall execute and deliver all such certificates in
connection therewith as may be required by such laws or regulations or under the
laws of any state. Custodian shall use its best efforts to the end that the
specific securities held by it hereunder shall be at all times identifiable in
its records.
The Fund shall from time to time furnish to Custodian appropriate
instruments to enable Custodian to hold or deliver in proper form for transfer,
or to register in the name of its registered nominee, any securities which it
may hold for the account of the Fund and which may from time to time be
registered in the name of the Fund.
4
<PAGE>
8. Voting and Other Action
Neither Custodian nor any nominee of Custodian shall vote any of the
securities held hereunder by or for the account of the Fund, except in
accordance with the instructions contained in an officers' certificate.
Custodian shall deliver, or cause to be executed and delivered, to the
Corporation all notices, proxies and proxy soliciting materials with relation to
such securities, such proxies to be executed by the registered holder of such
securities (if registered otherwise than in the name of the Fund), but without
indicating the manner in which such proxies are to be voted.
9. Transfer Tax and Other Disbursements
The Fund shall pay or reimburse Custodian from time to time for any
transfer taxes payable upon transfers of securities made hereunder, and for all
other necessary and proper disbursements and expenses made or incurred by
Custodian in the performance of this Agreement.
Custodian shall execute and deliver such certificates in connection
with securities delivered to it or by it under this Agreement as may be required
under the provisions of the Internal Revenue Code and any Regulations of the
Treasury Department issued thereunder, or under the laws of any state, to exempt
from taxation any exemptable transfers and/or deliveries of any such securities.
10. Concerning Custodian
Custodian shall be paid as compensation for its services pursuant to
this Agreement such compensation as may from time to time be agreed upon in
writing between the two parties. Until modified in writing, such compensation
shall be as set forth in Exhibit A attached hereto.
Custodian shall not be liable for any action taken in good faith upon
any certificate herein described or certified copy of any resolution of the
Board, and may rely on the genuineness of any such document which it may in good
faith believe to have been validly executed.
The Fund agrees to indemnify and hold harmless Custodian and its
nominee from all taxes, charges, expenses, assessments, claims and liabilities
(including counsel fees) incurred or assessed against it or by its nominee in
connection with the performance of this Agreement, except such as may arise from
its or its nominee's own negligent action, negligent failure to act or willful
misconduct. Custodian is authorized to charge any account of the Fund for such
items.
In the event of any advance of cash for any purpose made by Custodian resulting
from orders or instructions of the Fund, or in the event that Custodian or its
nominee shall incur or be assessed any taxes, charges, expenses, assessments,
claims or liabilities in connection with the performance of this Agreement,
except such as may arise from its or its nominee's own negligent action,
negligent failure to act or willful misconduct, any property at any time held
for the account of the Fund shall be security therefore.
5
<PAGE>
Custodian agrees to indemnify and hold harmless Fund from all charges,
expenses, assessments, and claims/liabilities (including counsel fees) incurred
or assessed against it in connection with the performance of this agreement,
except such as may arise from the Fund's own negligent action, negligent failure
to act, or willful misconduct.
11. Subcustodians
Custodian is hereby authorized to engage another bank or trust company
as a Subcustodian for all or any part of the Fund's assets, so long as any such
bank or trust company is a bank or trust company organized under the laws of any
state of the United States, having an aggregate capital, surplus and undivided
profit, as shown by its last published report, of not less than Two Million
Dollars ($2,000,000) and provided further that, if the Custodian utilizes the
services of a Subcustodian, the Custodian shall remain fully liable and
responsible for any losses caused to the Fund by the Subcustodian as fully as
if the Custodian was directly responsible for any such losses under the terms of
the Custodian Agreement.
Notwithstanding anything contained herein, if the Fund requires the
Custodian to engage specific Subcustodians for the safekeeping and/or clearing
of assets, the Fund agrees to indemnify and hold harmless Custodian from all
claims, expenses and liabilities incurred or assessed against it in connection
with the use of such Subcustodian in regard to the Fund's assets, except as may
arise from its own negligent action, negligent failure to act or willful
misconduct.
12. Reports by Custodian
Custodian shall furnish the Fund periodically as agreed upon with a
statement summarizing all transactions and entries for the account of Fund.
Custodian shall furnish to the Fund, at the end of every month, a list of the
portfolio securities showing the aggregate cost of each issue. The books and
records of Custodian pertaining to its actions under this Agreement shall be
open to inspection and audit at reasonable times by officers of, and of auditors
employed by, the Fund.
13. Termination or Assignment
This Agreement may be terminated by the Fund, or by Custodian, on
ninety (90) days notice, given in writing and sent by registered mail to
Custodian at P.O. Box 2054, Milwaukee, Wisconsin 53201, or to the Fund at The
Tocqueville Trust located at 1675 Broadway, New York, N.Y. 10019, as the case
may be. Upon any termination of this Agreement, pending appointment of a
successor to Custodian or a vote of the shareholders of the Fund to dissolve or
to function without a custodian of its cash, securities and other property,
Custodian shall not deliver cash, securities or other property of the Fund to
the Fund, but may deliver them to a bank or trust company of its own selection,
having an aggregate capital, surplus and undivided profits, as shown by its last
published report of not less than Two Million Dollars ($2,000,000) as a
Custodian for the Fund to be held under terms similar to those of this
Agreement, provided, however, that Custodian shall not be required to make any
such delivery or payment until full payment shall have been made by the Fund of
all liabilities constituting a
6
<PAGE>
charge on or against the properties then held by Custodian or on or against
Custodian, and until full payment shall have been made to Custodian of all its
fees, compensation, costs and expenses, subject to the provisions of Section 10
of this Agreement.
This Agreement may not be assigned by Custodian without the consent of
the Fund, authorized or approved by a resolution of its Board of Trustees.
14. Deposits of Securities in Securities Depositories
No provision of this Agreement shall be deemed to prevent the use by
Custodian of a central securities clearing agency or securities depository,
provided, however, that Custodian and the central securities clearing agency or
securities depository meet all applicable federal and state laws and
regulations, and the Board of Trustees of the Fund approves by resolution the
use of such central securities clearing agency or securities depository.
15. Records
To the extent that Custodian in any capacity prepares or maintains any
records required to be maintained and preserved by the Fund pursuant to the
provisions of the Investment Company Act of 1940, as amended, or the rules and
regulations promulgated thereunder, Custodian agrees to make any such records
available to the Fund upon request and to preserve such records for the periods
prescribed in Rule 31a-2 under the Investment Company Act of 1940, as amended.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and their respective corporate seals to be affixed hereto as of the
date first above-written by their respective officers thereunto duly authorized.
Executed in several counterparts, each of which is an original.
Attest: FIRSTAR TRUST COMPANY
By
- -------------------------- ---------------------
Attest: THE TOCQUEVILLE TRUST
By
- -------------------- -------------------
<PAGE>
EXHIBIT A MUTUAL FUND SERVICES
MUTUAL FUND CUSTODIAL AGENT SERVICE
DOMESTIC PORTFOLIOS
ANNUAL FEE SCHEDULE
o Fund groups less than $500 million
o Annual fee based on market value assets:
o $0.20 per $1,000 (2.0 basis points)
o Minimum annual fee per fund: $3,000
o Investment transactions: (purchase, sale, exchange, tender, redemption,
maturity, receipt delivery)
o $12.00 per book entry security (depository or Federal Reserve system)
o $25.00 per definitive security (physical)
o $75.00 per Euroclear
o $78.00 per principal reduction on pass-through certificates
o $35.00 per option/future contracts
* 15% discount applies to the above fees for the first 3 years, not
including out-of-pocket expenses.
o Variable Amount Notes: Used as a short-term investment, variable amount
notes offer safety and prevailing high interest rates. Our charge, which is
1/4 of 1%, is deducted from the variable amount note income at the time is
credited to your account.
o Extraordinary expenses: Based on time and complexity involved
o Out-of-pocket expenses: Charged to the account, including but not limited
to:
o $10.00 per variation margin transaction
o $10.00 per Fed wire deposit or withdrawal
o Fees are billed monthly, based on market value at the beginning of the
month
FORM OF
ADMINISTRATION AGREEMENT FOR REGISTRANT
<PAGE>
FORM OF
ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of the ______ day of _______, 199_ by and
between The Tocqueville Trust, a Massachusetts business trust (the "Company"),
on behalf of its series listed in Exhibit 1 (the "Funds"), and Tocqueville Asset
Management L.P., a limited partnership (the "Administrator");
WITNESSETH:
WHEREAS, the Company is an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Company wishes to retain the Administrator to provide
certain administrative services in connection with the management of the Funds'
operations and the Administrator is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Company hereby appoints the Administrator to
provide certain administrative services, hereinafter enumerated, in connection
with the management of the Funds' operations for the period and on the terms set
forth in this Agreement. The Administrator accepts such appointment and agrees
to comply with all relevant provisions of the 1940 Act, applicable rules and
regulations thereunder, and other applicable law.
2. Services on a Continuing Basis. Subject to the overall supervision
of the Board of Trustees of the Company, the Administrator will perform the
following services on a regular basis which would be daily, weekly or as
otherwise appropriate:
A) perform the services in Exhibit 2 attached; and
B) such additional services as may be agreed upon by the Funds and the
Administrator.
3. Responsibility of the Administrator. The Administrator shall be
under no duty to take any action on behalf of the Funds except as set forth
herein or as may be agreed to by the Administrator in writing. In the
performance of its duties hereunder, the Administrator shall be obligated to
exercise reasonable care and diligence and to act in good faith and to use its
best efforts. Without limiting the generality of the foregoing or any other
provision of this Agreement, the Administrator shall not be liable for delays or
errors or loss of data occurring by reason of circumstances beyond the
Administrator's control.
<PAGE>
4. Reliance Upon Instructions. The Company agrees that the
Administrator shall be entitled to rely upon any instructions, oral or written,
actually received by the Administrator from the Board of Trustees of the Company
and shall incur no liability to the Company in acting upon such oral or written
instructions, provided such instructions reasonably appear to have been received
from a person duly authorized by the Board of Trustees of the Company to give
oral or written instructions on behalf of the Funds.
5. Confidentiality. The Administrator agrees on behalf of itself and
its employees to treat confidentially all records and other information relative
to the Funds and all prior, present or potential shareholders of the Funds,
except after prior notification to, and approval of release of information in
writing by, the Funds, which approval shall not be unreasonably withheld where
the Administrator may be exposed to civil or criminal contempt proceedings for
failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Funds.
6. Equipment Failures. In the event of equipment failures or the
occurrence of events beyond the Administrator's control which render the
performance of the Administrator's functions under this Agreement impossible,
the Administrator shall take reasonable steps to minimize service interruptions
and is authorized to engage the services of third parties (at the
Administrator's expense) to prevent or remedy such service interruptions.
7. Compensation. As compensation for services rendered by the
Administrator during the term of this agreement, each Fund will pay to the
Administrator an annual fee equal to .15% of its average daily net assets,
payable monthly by the fifth day of the next month.
8. Indemnification. Each Fund agrees to indemnify and hold harmless the
Administrator from all taxes, filing fees, charges, expenses, assessments,
claims and liabilities (including without limitation, liabilities arising under
the Securities Act of 1933, the Securities Exchange Act of 1934, the 1940 Act,
and any state and foreign securities laws, all as amended from time to time) and
expenses, including (without limitation) reasonable attorneys' fees and
disbursements, arising directly or indirectly from any action or thing which the
Administrator takes or does or omits to take or do at the request of or in
reliance upon the advice of the Board of Trustees of the Company, provided, that
the Administrator will not be indemnified against any liability to a Fund or to
shareholders of such Fund (or any expenses incident to such liability) arising
out of the Administrator's own willful misfeasance, bad faith, gross negligence
or reckless disregard of its duties and obligations under this Agreement. The
Administrator agrees to indemnify and hold harmless each of the Funds, the
Company, and each of its Trustees from all claims and liabilities (including,
without limitation, liabilities arising under the Securities Act of 1933, the
Securities Exchange Act of 1934, the 1940 Act, and any state and foreign
securities laws, all as amended from time to time) and expenses, including
(without limitation) reasonable attorneys' fees and disbursements, arising
directly or indirectly from any action or thing which the Administrator takes or
does or omits to take or do which is in violation of this Agreement or not in
accordance with instructions properly given to the Administrator,
-2-
<PAGE>
or arising out of the Administrator's own willful misfeasance, bad faith, gross
negligence or reckless disregard of its duties and obligations under this
Agreement. No Fund or other series of the Company shall be liable for any claim
against, or expense of, any other Fund or series of the Company.
9. Duration and Termination. This Agreement shall continue as to a Fund
until termination by the Fund (through the Board of Trustees of the Company) or
the Administrator on 30 days' written notice to the other. All notices and other
communications hereunder shall be in writing. This Agreement cannot be assigned
without the prior written consent of the other party hereto.
10. Amendments. This Agreement or any part hereof may be changed or
waived only by instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
11. Miscellaneous. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the services to be
performed hereunder, and supersedes all prior agreements and understandings,
relating to the subject matter hereof. The captions in this Agreement are
included for convenience of reference only and in no way define or limit any of
the provisions hereof or otherwise affect their construction or effect. This
Agreement shall be deemed to be a contract made in New York and governed by New
York law. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement will
not be affected thereby. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below on the day and year first written
above.
THE TOCQUEVILLE TRUST,
on behalf of it series listed in Exhibit 1
By: Attest:
----------------------- ----------------
Title:
------------------
TOCQUEVILLE ASSET MANAGEMENT L.P.
By: Attest:
----------------------- ----------------
Title:
--------------------------------
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<PAGE>
EXHIBIT 1
SERIES OF THE TOCQUEVILLE TRUST
The Tocqueville Gold Fund (as of June 29, 1998)
<PAGE>
EXHIBIT 2
TOCQUEVILLE ASSET MANAGEMENT L.P. ("TAM")
ADMINISTRATIVE SERVICES
Pursuant to Section 2 of the Administration Agreement between TAM and The
Tocqueville Trust, TAM will perform the following services on a regular basis
which shall be daily, weekly or as otherwise appropriate:
1) prepare and coordinate reports and other materials to be supplied to
the Board of Trustees of the Funds;
2) prepare and/or supervise the preparation and filing with the
applicable regulatory authority of all securities filings (i.e., N-SARs, 24f-2
notices, etc.), periodic financial reports, prospectuses, statements of
additional information, marketing materials, tax returns, shareholder reports
and other regulatory reports and filings required of the Funds;
3) supervise and monitor the preparation of all required filings
necessary to maintain the Funds' qualification and/or registration to sell
shares in all states where the Funds currently do, or intend to do business;
4) coordinate the preparation, printing and mailing of all materials
(e.g., Annual Reports) required to be sent to shareholders;
5) coordinate the preparation and payment of Fund-related expenses;
6) monitor and oversee the activities of the Funds' servicing agents
(i.e., transfer agent, custodian, fund accountants, etc.);
7) review and adjust as necessary the Funds' daily expense accruals;
8) monitor daily, monthly and periodic compliance with respect to
Federal and State Securities Laws, Securities and Exchange Commission and NASD
Rules and prospectus guidelines and restrictions;
9) send periodic information (i.e., performance figures) to service
organizations that track investment company information; and
10) perform such additional services as may be agreed upon by the
Company and TAM.
FORM OF TRANSFER AGENT AGREEMENT
THIS AGREEMENT is made and entered into on this _______ day of _______,
199_, by and between The Tocqueville Trust a Massachusetts business trust, on
behalf of the Torqueville Gold Fund (hereinafter referred to as the "Fund") and
Firstar Trust Company, a corporation organized under the laws of the State of
Wisconsin (hereinafter referred to as the "Agent").
WHEREAS, the Fund is an open-ended management investment company which are
registered under the Investment Company Act of 1940; and
WHEREAS, the Agent is a trust company and, among other things, is in the
business of administering transfer and dividend disbursing agent functions for
the benefit of its customers;
NOW, THEREFORE, the Fund and the Agent do mutually promise and agree as
follows:
1. Terms of Appointment; Duties of the Agent
Subject to the terms and conditions set forth in this Agreement, the Fund
hereby employs the Agent to act as transfer agent and dividend disbursing agent.
The Agent shall perform all of the customary services of a transfer agent
and dividend disbursing agent, and as relevant, agent in connection with
accumulation, open account or similar plans (including without limitation any
periodic investment plan or periodic withdrawal program), including but not
limited to:
A. Receive orders for the purchase of shares;
B. Process purchase orders and issue the appropriate number of
certificated or uncertificated shares with such uncertificated shares
being held in the appropriate shareholder account;
C. Process redemption requests received in good order;
D. Pay monies;
E. Process transfers of shares in accordance with the shareowner's
instructions;
F. Process exchanges between funds within the same family of funds;
G. Issue and/or cancel certificates as instructed; replace lost, stolen
or destroyed certificates upon receipt of satisfactory indemnification
or surety bond;
H. Prepare and transmit payments for dividends and distributions declared
by the Fund;
<PAGE>
I. Make changes to shareholder records, including, but not limited to,
address changes in plans (i.e., systematic withdrawal, automatic
investment, dividend reinvestment, etc.);
J. Record the issuance of shares of the Fund and maintain, pursuant to
Securities Exchange Act of 1934 Rule 17ad-10(e), a record of the total
number of shares of the Fund which are authorized, issued and
outstanding;
K. Prepare shareholder meeting lists and, if applicable, mail, receive
and tabulate proxies;
L. Mail shareholder reports and prospectuses to current shareholders;
M. Prepare and file U.S. Treasury Department forms 1099 and other
appropriate information returns required with respect to dividends and
distributions for all shareholders;
N. Provide shareholder account information upon request and prepare and
mail confirmations and statements of account to shareholders for all
purchases, redemptions and other confirmable transactions as agreed
upon with the Fund; and
O. Provide a Blue Sky System which will enable the Fund to monitor the
total number of shares sold in each state. In addition, the Fund
shall identify to the Agent in writing those transactions and assets
to be treated as exempt from the Blue Sky reporting to the Fund for
each state. The responsibility of the Agent for the Fund's Blue Sky
state registration status is solely limited to the initial compliance
by the Fund and the reporting of such transactions to the Fund.
2. Compensation
The Fund agrees to pay the Agent for performance of the duties listed in
this Agreement; the fees and out-of-pocket expenses include, but are not limited
to the following: printing, postage, forms, stationery, record retention,
mailing, insertion, programming, labels, shareholder lists and proxy expenses.
These fees and reimbursable expenses may be changed from time to time
subject to mutual written agreement between the Fund and the Agent.
The Fund agrees to pay all fees and reimbursable expenses within ten (10)
business days following the mailing of the billing notice.
3. Representations of Agent
The Agent represents and warrants to the Fund that:
A. It is a trust company duly organized, existing and in good standing
under the laws of Wisconsin;
B. It is a registered transfer agent under the Securities Exchange Act of
1934 as amended.
C. It is duly qualified to carry on its business in the state of
Wisconsin;
2
<PAGE>
D. It is empowered under applicable laws and by its charter and bylaws to
enter into and perform this Agreement;
E. All requisite corporate proceedings have been taken to authorize it to
enter and perform this Agreement;
F. It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement; and
G. It will comply with all applicable requirements of the Securities Act
of 1933 and the Securities Exchange Act of 1934, as amended, the
Investment Company Act of 1940, as amended, and any laws, rules, and
regulations of governmental authorities having jurisdiction.
4. Representations of the Fund
The Fund represents and warrants to the Agent that:
A. The Fund is an open-ended diversified investment company under the
Investment Company Act of 1940;
B. The Fund is a corporation or business trust organized, existing, and
in good standing under the laws of Massachusetts;
C. The Fund is empowered under applicable laws and by its Declaration of
Trust and bylaws to enter into and perform this Agreement;
D. All necessary proceedings required by the Declaration of Trust have
been taken to authorize them to enter into and perform this Agreement;
E. The Fund will comply with all applicable requirements of the
Securities Act of 1933, as amended, Securities Exchange Act of 1934,
as amended, the Investment Company Act of 1940, as amended, and any
laws, rules and regulations of governmental authorities having
jurisdiction; and
F. A registration statement under the Securities Act of 1933 is currently
effective and will remain effective, and appropriate state securities
law filings have been made and will continue to be made, with respect
to all shares of the Fund being offered for sale.
5. Covenants of the Fund and Agent
The Fund shall furnish the Agent a certified copy of the resolution of the
Board of Trustees of the Fund authorizing the appointment of the Agent and the
execution of this Agreement. The Fund shall provide to the Agent a copy of the
Declaration of Trust, bylaws of the Fund, and all amendments.
3
<PAGE>
The Agent shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the Investment Company Act of 1940, as amended, and
the rules thereunder, the Agent agrees that all such records prepared or
maintained by the Agent relating to the services to be performed by the Agent
hereunder are the property of the Fund and will be preserved, maintained and
made available in accordance with such section and rules and will be surrendered
to the Fund on and in accordance with their request.
6. Indemnification; Remedies Upon Breach
The Agent shall exercise reasonable care in the performance of its duties
under this Agreement. The Agent shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in connection with matters
to which this Agreement relates, including losses resulting from mechanical
breakdowns or the failure of communication or power supplies beyond the Agent's
control, except a loss resulting from the Agent's refusal or failure to comply
with the terms of this Agreement or from bad faith, negligence, or willful
misconduct on its part in the performance of its duties under this Agreement.
Notwithstanding any other provision of this Agreement, the Fund shall indemnify
and hold harmless the Agent from and against any and all claims, demands,
losses, expenses, and liabilities (whether with or without basis in fact or law)
of any and every nature (including reasonable attorneys' fees) which the Agent
may sustain or incur or which may be asserted against the Agent by any person
arising out of any action taken or omitted to be taken by it in performing the
services hereunder (i) in accordance with the foregoing standards, or (ii) in
reliance upon any written or oral instruction provided to the Agent by any duly
authorized officer of the Fund, such duly authorized officer to be included in
a list of authorized officers furnished to the Agent and as amended from time to
time in writing by resolution of the Board of Trustees of the Fund.
Further, the Fund will indemnify and hold the Agent harmless against any
and all losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from any claim, demand, action, or suit as
a result of the negligence of the Fund or the principal underwriter (unless
contributed to by the Agent's breach of this Agreement or other Agreements
between the Fund and the Agent, or the Agent's own negligence or bad faith); or
as a result of the Agent acting upon telephone instructions relating to the
exchange or redemption of shares received by the Agent and reasonably believed
by the Agent under a standard of care customarily used in the industry to have
originated from the record owner of the subject shares; or as a result of acting
in reliance upon any genuine instrument or stock certificate signed,
countersigned, or executed by any person or persons authorized to sign,
countersign, or execute the same.
In the event of a mechanical breakdown or failure of communication or power
supplies beyond its control, the Agent shall take all reasonable steps to
minimize service interruptions for any period that such interruption continues
beyond the Agent's control. The Agent will make every reasonable effort to
restore any lost or damaged data and correct any errors resulting from such a
breakdown at the expense of the Agent. The Agent agrees that it shall, at all
times, have reasonable contingency plans with appropriate parties, making
reasonable provision for emergency use of electrical data processing equipment
to the extent appropriate equipment is available. Representatives of the Fund
shall be entitled to inspect the Agent's premises and operating capabilities at
any time during regular business hours of the Agent, upon reasonable notice to
the Agent.
Regardless of the above, the Agent reserves the right to reprocess and
correct administrative errors at its own expense.
4
<PAGE>
In order that the indemnification provisions contained in this section
shall apply, it is understood that if in any case the Fund may be asked to
indemnify or hold the Agent harmless, the Fund shall be fully and promptly
advised of all pertinent facts concerning the situation in question, and it is
further understood that the Agent will use all reasonable care to notify the
Fund promptly concerning any situation which presents or appears likely to
present the probability of such a claim for indemnification against the Fund.
The Fund shall have the option to defend the Agent against any claim which may
be the subject of this indemnification. In the event that the Fund so elect, it
will so notify the Agent and thereupon the Fund shall take over complete
defense of the claim, and the Agent shall in such situation initiate no further
legal or other expenses for which it shall seek indemnification under this
section. The Agent shall in no case confess any claim or make any compromise in
any case in which the Fund will be asked to indemnify the Agent except with the
Fund's prior written consent.
The Agent shall indemnify and hold the Fund harmless from and against any
and all claims, demands, losses, expenses, and liabilities (whether with or
without basis in fact or law) of any and every nature (including reasonable
attorneys' fees) which may be asserted against the Fund by any person arising
out of any action taken or omitted to be taken by the Agent as a result of the
Agent's refusal or failure to comply with the terms of this Agreement, its bad
faith, negligence, or willful misconduct.
7. Confidentiality
The Agent agrees on behalf of itself and its employees to treat
confidentially all records and other information relative to the Fund and their
shareholders and shall not be disclosed to any other party, except after prior
notification to and approval in writing by the Fund, which approval shall not
be unreasonably withheld and may not be withheld where the Agent may be exposed
to civil or criminal contempt proceedings for failure to comply after being
requested to divulge such information by duly constituted authorities.
Additional Series. The Tocqueville Trust is authorized to issue separate
Series of shares of beneficial interest by representing interests in separate
investment portfolios. The parties intend that each portfolio established by the
Trust, now or in the future, be covered by the terms and conditions of this
agreement.
8. Records
The Agent shall keep records relating to the services to be performed
hereunder, in the form and manner, and for such period as it may deem advisable
and is agreeable to the Fund but not inconsistent with the rules and
regulations of appropriate government authorities, in particular, Section 31 of
The Investment Company Act of 1940 as amended (the "Investment Company Act"),
and the rules thereunder. The Agent agrees that all such records prepared or
maintained by The Agent relating to the services to be performed by The Agent
hereunder are the property of the Fund and will be preserved, maintained, and
made available with such section and rules of the Investment Company Act and
will be promptly surrendered to the Fund on and in accordance with its request.
9. Wisconsin Law to Apply
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the state of Wisconsin.
5
<PAGE>
10. Amendment, Assignment, Termination and Notice
A. This Agreement may be amended by the mutual written consent of the
parties.
B. This Agreement may be terminated upon ninety (90) day's written notice
given by one party to the other.
C. This Agreement and any right or obligation hereunder may not be
assigned by either party without the signed, written consent of the
other party.
D. Any notice required to be given by the parties to each other under the
terms of this Agreement shall be in writing, addressed and delivered,
or mailed to the principal place of business of the other party. If to
the agent, such notice should to be sent to Firstar Trust
Company/Mutual Fund Services located at 615 East Michigan Street,
Milwaukee, Wisconisn 53202. If to the Fund, such notice should be
sent to The Tocqueville Trust located at 1675 Broadway, New York, N.Y.
10019.
E. In the event that the Fund give to the Agent their written intention
to terminate and appoint a successor transfer agent, the Agent agrees
to cooperate in the transfer of its duties and responsibilities to the
successor, including any and all relevant books, records and other
data established or maintained by the Agent under this Agreement.
F. Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be
paid by the Fund.
The Tocqueville Trust Firstar Trust Company
By: By:
----------------- ----------------------
Print: Print:
Title: Title:
Date: Date:
Attest: Attest:
----------------- ---------------------
<PAGE>
Mutual Fund Services
SHAREHOLDER ACCOUNTING SERVICES
LOAD FUNDS
ANNUAL FEE SCHEDULE
o $16.00 per shareholder account
o Minimum annual fee of $24,000 for the first fund and $10,000 for each
additional fund.
* 15% discount applies to the above fees for the first 3 years, not
including out-of-pocket expenses.
o Plus out-of-pocket expenses, including but not limited to:
o Telephone - toll-free lines
o Postage
o Programming
o Stationery/envelopes
o Mailing
o Insurance
o Proxies
o Retention of records
o Microfilm/fiche of records
o Special reports
o All other out-of-pocket expenses
o ACH fees
o Fees are billed monthly
<PAGE>
Mutual Fund Services
SHAREHOLDER ACCOUNTING SERVICES
NO-LOAD FUNDS
ANNUAL FEE SCHEDULE
o $14.00 per shareholder account
o Minimum annual fee of $21,000 for the first fund and $10,000 for each
additional fund.
* 15% discount applies to the above fees for the first 3 years, not
including out-of-pocket expenses.
o Plus out-of-pocket expenses, including but not limited to:
o Telephone - toll-free lines
o Postage
o Programming
o Stationery/envelopes
o Mailing
o Insurance
o Proxies
o Retention of records
o Microfilm/fiche of records
o Special reports
o All other out-of-pocket expenses
o ACH fees
o Fees are billed monthly
<PAGE>
Mutual Fund Services
SHAREHOLDER FEES
(CHARGED TO INVESTORS)
DEFINED
CONTRIBUTION
403(B)(7), 401(K)
IRA ACCOUNTS PLAN ACCOUNTS
------------ ----------------
I. Qualified Plan Fees
Annual maintenance fee per account $ 12.50 $ 12.50
Transfer to successor trustee 15.00 15.00
Distribution to a participant (exclusive
of systematic withdrawal plans 15.00 15.00
Refund of excess contribution 15.00 15.00
II. Additional Shareholder Fees
AMOUNT
--------------------
Any outgoing wire $7.50/wire
Telephone exchange 5.00/telephone exchange
Return check fee 15.00/return check
Stop payment fee (liquidation,
dividend, draft check) 15.00/stop payment
Research fee 5.00/research item
(For requested items of the second
calendar year [or previous]
to the request)
These fees are subject to change upon notification by
Firstar Trust Company to the Mutual Fund Client
<PAGE>
Mutual Fund Services
SHAREHOLDER ACCOUNTING SERVICES
AUTOMATIC INVESTMENT PLAN PROCESSING
ACH SERVICE
o Automatic Investment Plan
o Telephone Purchase, Liquidation
o EFT Payments of Dividends, Capital Gains, SWP's
o $125.00 per month
o $0.50 per account set-up and/or change
o $0.35 per item
o $3.50 per correction, reversal, or return item
o Fees are billed monthly.
FORM OF FUND ACCOUNTING SERVICING AGREEMENT
This contract between The Tocqueville Trust, a Massachusetts Business Trust, on
behalf of The Torqueville Gold Fund, hereinafter called the "Fund," and Firstar
Trust Company, a Wisconsin corporation, hereinafter called "FTC," is entered
into on this ______ day of _______, 199_.
WHEREAS, The Tocqueville Trust, is an open-ended management investment
company registered under the Investment Company Act of 1940; and
WHEREAS, Firstar Trust Company ("FTC") is in the business of providing,
among other things, mutual fund accounting services to investment companies;
NOW, THEREFORE, the parties do mutually promise and agree as follows:
1. Services. FTC agrees to provide the following mutual fund accounting
services to the Fund:
A. Portfolio Accounting Services:
(1) Maintain portfolio records on a trade date +1 basis using
security trade information communicated from the investment manager on
a timely basis.
(2) For each valuation date, obtain prices from a pricing source
approved by the Board of Trustees and apply those prices to the
portfolio positions. For those securities where market quotations are
not readily available, the Board of Trustees shall approve, in good
faith, the method for determining the fair value for such securities.
(3) Identify interest and dividend accrual balances as of each
valuation date and calculate gross earnings on investments for the
accounting period.
(4) Determine gain/loss on security sales and identify them as to
short-short, short- or long-term status; account for periodic
distributions of gains or losses to shareholders and maintain
undistributed gain or loss balances as of each valuation date.
B. Expense Accrual and Payment Services:
(1) For each valuation date, calculate the expense accrual
amounts as directed by the Fund as to methodology, rate or dollar
amount.
<PAGE>
(2) Record payments for Fund expenses upon receipt of written
authorization from the Fund.
(3) Account for fund expenditures and maintain expense accrual
balances at the level of accounting detail, as agreed upon by FTC and
the Fund.
(4) Provide expense accrual and payment reporting.
C. Fund Valuation and Financial Reporting Services:
(1) Account for fund share purchases, sales, exchanges,
transfers, dividend reinvestments, and other fund share activity as
reported by the transfer agent on a timely basis.
(2) Apply equalization accounting as directed by the Fund.
(3) Determine net investment income (earnings) for the Fund as
of each valuation date. Account for periodic distributions of earnings
to shareholders and maintain undistributed net investment income
balances as of each valuation date.
(4) Maintain a general ledger for the Fund in the form as agreed
upon.
(5) For each day the Fund is open as defined in the prospectus,
determine the net asset value of the according to the accounting
policies and procedures set forth in the prospectus.
(6) Calculate per share net asset value, per share net earnings,
and other per share amounts reflective of fund operation at such time
as required by the nature and characteristics of the Fund.
(7) Communicate, at an agreed upon time, the per share price for
each valuation date to parties as agreed upon from time to time.
(8) Prepare monthly reports which document the adequacy of
accounting detail to support month-end ledger balances.
D. Tax Accounting Services:
(1) Maintain accounting records for the investment portfolios of
the Fund to support the tax reporting required for IRS-defined
regulated investment companies.
(2) Maintain tax lot detail for the investment portfolio.
(3) Calculate taxable gain/loss on security sales using the tax
lot relief method designated by the Fund.
<PAGE>
(4) Provide the necessary financial information to support the
taxable components of income and capital gains distributions to the
transfer agent to support tax reporting to the shareholders.
E. Compliance Control Services:
(1) Support reporting to regulatory bodies and support financial
statement preparation by making the fund accounting records available
to The Tocqueville Trust, the Securities and Exchange Commission, and
the outside auditors.
(2) Maintain accounting records according to the Investment
Company Act of 1940 and regulations provided thereunder.
2. Pricing of Securities. For each valuation date, obtain prices from a
pricing source selected by FTC but approved by the Fund's Board and apply those
prices to the portfolio positions. For those securities where market quotations
are not readily available, the Fund's Board shall approve, in good faith, the
method for determining the fair value for such securities.
If the Fund desires to provide a price which varies from the pricing
source, the Fund shall promptly notify and supply FTC with the valuation of any
such security on each valuation date. All pricing changes made by the Fund will
be in writing and must specifically identify the securities to be changed by
CUSIP, name of security, new price or rate to be applied, and, if applicable,
the time period for which the new prices are effective.
3. Changes in Accounting Procedures. Any resolution passed by the Board of
Trustees that affects accounting practices and procedures under this agreement
shall be effective upon written receipt and acceptance by the FTC.
4. Changes in Equipment, Systems, Service, Etc. FTC reserves the right to
make changes from time to time, as it deems advisable, relating to its services,
systems, programs, rules, operating schedules and equipment, so long as such
changes do not adversely affect the service provided to the Fund under this
Agreement.
5. Compensation. FTC shall be compensated for providing the services set
forth in this Agreement in accordance with the Fee Schedule attached hereto as
Exhibit A and as mutually agreed upon and amended from time to time.
6. Performance of Service.
A. FTC shall exercise reasonable care in the performance of its
duties under this Agreement. FTC shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund in
connection with matters to which this Agreement relates, including
losses resulting from mechanical breakdowns or the failure of
communication or power supplies beyond FTC's control, except a loss
3
<PAGE>
resulting from FTC's refusal or failure to comply with the terms of
this Agreement or from bad faith, negligence, or willful misconduct on
its part in the performance of its duties under this Agreement.
Notwithstanding any other provision of this Agreement, the Fund shall
indemnify and hold harmless FTC from and against any and all claims,
demands, losses, expenses, and liabilities (whether with or without
basis in fact or law) of any and every nature (including reasonable
attorneys' fees) which FTC may sustain or incur or which may be
asserted against FTC by any person arising out of any action taken or
omitted to be taken by it in performing the services hereunder (i) in
accordance with the foregoing standards, or (ii) in reliance upon any
written or oral instruction provided to FTC by any duly authorized
officer of the Fund, such duly authorized officer to be included in a
list of authorized officers furnished to FTC and as amended from time
to time in writing by resolution of the Board of Trustees of the
Fund.
In the event of a mechanical breakdown or failure of
communication or power supplies beyond its control, FTC shall take all
reasonable steps to minimize service interruptions for any period that
such interruption continues beyond FTC's control. FTC will make every
reasonable effort to restore any lost or damaged data and correct any
errors resulting from such a breakdown at the expense of FTC. FTC
agrees that it shall, at all times, have reasonable contingency plans
with appropriate parties, making reasonable provision for emergency
use of electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Fund shall be entitled
to inspect FTC's premises and operating capabilities at any time
during regular business hours of FTC, upon reasonable notice to FTC.
Regardless of the above, FTC reserves the right to reprocess and
correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this
section shall apply, it is understood that if in any case the Fund
may be asked to indemnify or hold FTC harmless, the Fund shall be
fully and promptly advised of all pertinent facts concerning the
situation in question, and it is further understood that FTC will use
all reasonable care to notify the Fund promptly concerning any
situation which presents or appears likely to present the probability
of such a claim for indemnification against the Fund. The Fund shall
have the option to defend FTC against any claim which may be the
subject of this indemnification. In the event that the Fund so
elects, it will so notify FTC and thereupon the Fund shall take over
complete defense of the claim, and FTC shall in such situation
initiate no further legal or other expenses for which it shall seek
indemnification under this section. FTC shall in no case confess any
claim or make any compromise in any case in which the Fund will be
asked to indemnify FTC except with the Fund's prior written consent.
C. FTC shall indemnify and hold the Fund harmless from and
against any and all claims, demands, losses, expenses, and liabilities
(whether with or without basis in fact or law) of any and every nature
(including reasonable attorneys' fees)
4
<PAGE>
which may be asserted against the Fund by any person arising out of
any action taken or omitted to be taken by FTC as a result of FTC's
refusal or failure to comply with the terms of this Agreement, its bad
faith, negligence, or willful misconduct.
7. Records. FTC shall keep records relating to the services to be performed
hereunder, in the form and manner, and for such period as it may deem advisable
and is agreeable to the Fund but not inconsistent with the rules and
regulations of appropriate government authorities, in particular, Section 31 of
The Investment Company Act of 1940 as amended (the "Investment Company Act"),
and the rules thereunder. FTC agrees that all such records prepared or
maintained by FTC relating to the services to be performed by FTC hereunder are
the property of the Fund and will be preserved, maintained, and made available
with such section and rules of the Investment Company Act and will be promptly
surrendered to the Fund on and in accordance with its request.
8. Confidentiality. FTC shall handle in confidence all information relating
to the Fund's business, which is received by FTC during the course of rendering
any service hereunder.
9. Data Necessary to Perform Services. The Fund or its agent, which may be
FTC, shall furnish to FTC the data necessary to perform the services described
herein at times and in such form as mutually agreed upon.
10. Notification of Error. The Fund will notify FTC of any balancing or
control error caused by FTC within three (3) business days after receipt of any
reports rendered by FTC to the Fund, or within three (3) business days after
discovery of any error or omission not covered in the balancing or control
procedure, or within three (3) business days of receiving notice from any
shareholder.
11. Additional Series. In the event that the The Tocqueville Trust
establishes one or more series of shares with respect to which it desires to
have FTC render accounting services, under the terms hereof, it shall so notify
FTC in writing, and if FTC agrees in writing to provide such services, such
series will be subject to the terms and conditions of this Agreement, and shall
be maintained and accounted for by FTC on a discrete basis. The portfolio
currently covered by this Agreement is: The Tocqueville Gold Fund.
12. Term of Agreement. This Agreement may be terminated by either party
upon giving ninety (90) days prior written notice to the other party or such
shorter period as is mutually agreed upon by the parties. However, this
Agreement may be replaced or modified by a subsequent agreement between the
parties.
13. Duties in the Event of Termination. In the event that in connection
with termination a Successor to any of FTC's duties or responsibilities
hereunder is designated by The Tocqueville Trust by written notice to FTC, FTC
will promptly, upon such termination and at the expense of The Tocqueville
Trust, transfer to such Successor all relevant books, records, correspondence
and other data established or maintained by FTC under this Agreement in a form
5
<PAGE>
reasonably acceptable to The Tocqueville Trust (if such form differs from the
form in which FTC has maintained the same, The Tocqueville Trust shall pay any
expenses associated with transferring the same to such form), and will cooperate
in the transfer of such duties and responsibilities, including provision for
assistance from FTC's personnel in the establishment of books, records and other
data by such successor.
14. Notices. Notices of any kind to be given by either party to the other
party shall be in writing and shall be duly given if mailed or delivered as
follows: Notice to FTC shall be sent to Mutual Fund Services located at 615 East
Michigan Street, Milwaukee, Wisconsin 53202 and notice to the Fund shall be
sent to The Tocqueville Trust located at 1675 Broadway, New York, N.Y. 10019.
15. Choice of Law. This Agreement shall be construed in accordance with the
laws of the State of Wisconsin.
IN WITNESS WHEREOF, the due execution hereof on the date first above
written.
ATTEST: Firstar Trust Company
/s/ By
- ----------------------- -------------------
ATTEST: The Tocqueville Trust
/s/ By
- -------------------- -------------------
<PAGE>
Exhibit A Mutual Fund Services
FUND VALUATION AND ACCOUNTING
DOMESTIC PORTFOLIOS
ANNUAL FEE SCHEDULE
Fixed Income Funds
o Annual fee per fund based on market value of assets:
o $25,000 for the first $40,000,000
o 2/100 of 1% (2 basis points) on the next $200,000,000
o 1/100 or 1% (1 basis point) on the balance
o Out-of-pocket expenses, including daily pricing service
Equity/Balance Funds
o Annual fee per fund based on market value of assets:
o $22,000 for the first $40,000,000
o 1/100 of 1% (1 basis point) on the next $200,000,000
o 5/1000 of 1% (1/2 basis point) on the balance
o Out-of-pocket expenses, including daily pricing service
Money Market Funds
o Annual fee per fund based on market value of assets:
o $25,000 for the first $40,000,000
o 1/100 of 1% (1 basis point) on the next $200,000,000
o 5/1000 of 1% (1/2 basis point) on the balance
o Out-of-pocket expenses, including daily pricing service
* 15% discount applies to the above fees for the first 3 years,
not including out-of-pocket expenses and daily pricing
services.
All fees and out-of-pocket expenses are billed monthly.
<PAGE>
Exhibit A Mutual Fund Services
FUND VALUATION AND ACCOUNTING
ASSET PRICING COST
ASSET TYPE CHARGE PER ITEM PER VALUATION
(DAILY, WEEKLY, ETC.)
Domestic and Canadian Equities $0.15
Options $0.15
Corporate/Government/Agency Bonds $0.50
CMOs $0.80
International Equities and Bonds $0.50
Municipal Bonds $0.80
Money Market Instruments $0.80
Pricing costs are billed monthly.
<PAGE>
Exhibit A Mutual Fund Services
FUND VALUATION AND ACCOUNTING
INTERNATIONAL PORTFOLIOS
ANNUAL FEE SCHEDULE
International Equity Funds
o Annual fee per fund based on market value of assets:
o $25,000 for the first $40,000,000
o 2/100 of 1% (2 basis points) on the next $200,000,000
o 1/100 or 1% (1 basis point) on the balance
o Out-of-pocket expenses, including daily pricing service
International Income Funds
o Annual fee per fund based on market value of assets:
o $27,500 for the first $40,000,000
o 2/100 of 1% (2 basis point) on the next $200,000,000
o 1/100 of 1% (1 basis point) on the balance
o Out-of-pocket expenses, including daily pricing service
* 15% discount applies to the above fee schedule for the first
3 years, not including out-of-pocket expenses and daily
pricing services.
All fees and out-of-pocket expenses are billed monthly.
Kramer, Levin, Naftalis & Frankel
919 THIRD AVENUE
NEW YORK, N.Y. 10022 - 3852
(212) 715 - 9100
Arthur H. Aufses III Monica C. Lord Sherwin Kamin
Thomas D. Balliett Richard Marlin Arthur B. Kramer
Jay G. Baris Thomas Moers Mayer Maurice N. Nessen
Philip Bentley Thomas E. Molner Founding Partners
Saul E. Burian Thomas H. Moreland Counsel
Barry Michael Cass Ellen R. Nadler _____
Thomas E. Constance Gary P. Naftalis
Michael J. Dell Michael J. Nassau Martin Balsam
Kenneth H. Eckstein Michael S. Nelson Joshua M. Berman
Charlotte M. Fischman Jay A. Neveloff Jules Buchwald
David S. Frankel Michael S. Oberman Rudolph de Winter
Marvin E. Frankel Paul S. Pearlman Meyer Eisenberg
Alan R. Friedman Susan J. Penry-Williams Arthur D. Emil
Carl Frischling Bruce Rabb Maria T. Jones
Mark J. Headley Allan E. Reznick Maxwell M. Rabb
Robert M. Heller Scott S. Rosenblum James Schreiber
Philip S. Kaufman Michele D. Ross Counsel
Peter S. Kolevzon Howard J. Rothman _____
Kenneth P. Kopelman Max J. Schwartz
Michael Paul Korotkin Mark B. Segall M. Frances Buchinsky
Shari K. Krouner Judith Singer Abbe L. Dienstag
Kevin B. Leblang Howard A. Sobel Ronald S. Greenberg
David P. Levin Jeffrey S. Trachtman Debora K. Grobman
Ezra G. Levin Jonathan M. Wagner Christian S. Herzeca
Randy Lipsitz Harold P. Weinberger Jane Lee
Larry M. Loeb E. Lisk Wyckoff, Jr. Pinchas Mendelson
Lynn R. Saidenberg
Special Counsel
-----
FAX
(212) 715-8000
---
WRITER'S DIRECT NUMBER
(212)715-9100
-------------
April 15, 1998
The Tocqueville Trust
1675 Broadway
New York, New York 10019
Re: The Tocqueville Trust
File No. 33-8746
Post-Effective Amendment
to Registration Statement on Form N-1A
Gentlemen/Ladies:
We hereby consent to the reference of our firm as Counsel in this amendment
to the Registration Statement on Form N-1A.
Very truly yours,
/s/Kramer, Levin, Naftalis & Frankel
[LETTERHEAD OF McGLADREY & PULLEN, LLP]
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the reference to our firm in the
Prospectus under the caption "Counsel and Independent Accountants".
/s/McGladrey & Pullen, LLP
New York, New York
April 15, 1998
FORM OF
RULE 12B-1 PLAN FOR THE CLASS A
SHARES OF THE TOCQUEVILLE GOLD FUND
<PAGE>
FORM OF
PLAN FOR PAYMENT OF CERTAIN EXPENSES FOR
DISTRIBUTION OR SHAREHOLDER SERVICING ASSISTANCE
OF CLASS A SHARES
A Plan (the "Plan") pertaining to the Class A shares of THE
TOCQUEVILLE GOLD FUND (the "Fund"), a series of The Tocqueville Trust, a
Massachusetts business trust (the "Trust") and an open-end, diversified
management investment company registered under the Investment Company Act of
1940, as amended (the "Act"), adopted pursuant to Section 12(b) of the Act and
Rule 12b-1 promulgated thereunder ("Rule 12b-1").
1. Principal Underwriter. TOCQUEVILLE SECURITIES L.P. ("the
Distributor"), acts as the principal underwriter of the Fund's Class A shares
pursuant to a Distribution Agreement with the Trust. Tocqueville Asset
Management L.P. (the "Investment Advisor"), acts as the Fund's investment
adviser pursuant to an Investment Advisory Agreement with the Trust.
2. Distribution Payments. (a) The Fund either directly or
through the Investment Advisor, may make payments periodically (i) to the
Distributor or to any broker-dealer (a "Broker") who is registered under the
Securities Exchange Act of 1934 and a member in good standing of the National
Association of Securities Dealers, Inc. and who has entered into a selected
dealer agreement with the Distributor, (ii) to other persons or organizations
("Servicing Agents") who have entered into shareholder processing and service
agreements with the Trust on behalf of the Fund, the Investment Advisor or the
Distributor, regarding Class A shares of the Fund owned by shareholders for
which such broker is the dealer or holder of record or such servicing agent has
a servicing relationship, or (iii) for
<PAGE>
expenses associated with distribution of Fund Class A shares, including the
compensation of the sales personnel of the Distributor.
(b) The schedule of such fees and the basis upon which such
fees will be paid shall be determined from time to time by the Distributor and
the Investment Advisor, subject to approval by the Board of Trustees of the
Trust.
(c) Payments may also be made for any advertising and
promotional expenses relating to selling efforts, including but not limited to
the incremental costs of printing prospectuses, statements of additional
information, annual reports and other periodic reports for distribution to
persons who are not Class A shareholders of the Fund; the costs of preparing and
distributing any other supplemental sales literature; costs of radio,
television, newspaper and other advertising; telecommunications expenses,
including the cost of telephones, telephone lines and other communications
equipment, incurred by or for the Distributor in carrying out its obligations
under the Distribution Agreement.
(d) The aggregate amount of all payments by the Fund in any
fiscal year, to the Distributor, Brokers, Servicing Agents and for advertising
and promotional expenses pursuant to paragraphs (a), (b), (c) of this Section 2
shall not exceed 0.25% of the average daily net asset value attributable to
Class A shares of the Fund on an annual basis for such fiscal year, or such
lesser amounts as determined appropriate. The Plan will only make payments for
expenses actually incurred on a first-in, first-out basis. The amount of
expenses incurred in any year may not exceed the rate of reimbursement set forth
in the Plan. The unreimbursed amounts may be recovered through future payments
under the Plan. Carry-over amounts are not limited in the number of years they
may be carried forward. If
-2-
<PAGE>
the Plan is terminated in accordance with its terms, the obligations of the Fund
to make payments pursuant to the Plan will cease and the Fund will not be
required to make any payments past the date the Plan terminates.
3. Reports. Quarterly, in each year that this Plan remains in
effect, the Trust's Principal Financial Officer shall prepare and furnish to the
Board of Trustees of the Trust a written report, complying with the requirements
of Rule 12b-l, setting forth the amounts expended by the Fund under the Plan and
purposes for which such expenditures were made.
4. Approval of Plan. This Plan shall become effective upon
approval of the Plan, the form of Selected Dealer Agreement and the form of
Shareholder Service Agreement, by the majority votes of both (a) the Board of
Trustees and the Qualified Trustees (as defined in Section 6), cast in person at
a meeting called for the purpose of voting on the Plan and (b) the outstanding
Class A voting securities of the Fund, as defined in Section 2(a)(42) of the
Act.
5. Term. This Plan shall remain in effect for one year from
its adoption date and may be continued thereafter if this Plan and all related
agreements are approved at least annually by a majority vote of the Trustees,
including a majority of the Qualified Trustees, cast in person at a meeting
called for the purpose of voting on such Plan and agreements. This Plan may not
be amended in order to increase materially the amount to be spent for
distribution assistance without Class A shareholder approval in accordance with
Section 4 hereof. All material amendments to this Plan must be approved by a
vote of the
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<PAGE>
Board of Trustees, and of the Qualified Trustees (as hereinafter defined), cast
in person at a meeting called for the purpose of voting thereon.
6. Termination. This Plan may be terminated at any time by a
majority vote of the Trustees who are not interested persons (as defined in
section 2(a)(19) of the Act) of the Fund and have no direct or indirect
financial interest in the operation of the Plan or in any agreements related to
the Plan (the "Qualified Trustees") or by vote of a majority of the outstanding
Class A voting securities of the Fund, as defined in section 2(a)(42) of the
Act.
7. Nomination of "Disinterested" Trustees. While this Plan
shall be in effect, the selection and nomination of the "disinterested" Trustees
of the Trust shall be committed to the discretion of the Qualified Trustees then
in office.
8. Miscellaneous. (a) Any termination or noncontinuance of (i)
a Selected Dealer Agreement between the Distributor and a particular Broker or
(ii) a Shareholder Service Agreement between the Investment Advisor or the Trust
on behalf of the Fund and a particular person or organization, shall have no
effect on any similar agreements between Brokers or other persons and the Fund,
the Investment Advisor or the Distributor pursuant to this Plan.
(b) Neither the Distributor, the Investment Advisor nor the
Fund shall be under any obligation because of this Plan to execute any Selected
Dealer Agreement with any Broker or any Shareholder Service Agreement with any
person or organization.
(c) All agreements with any person or organization relating to
the implementation of this Plan shall be in writing and any agreement related to
this Plan shall be subject to termination, without penalty, pursuant to the
provisions of Section 6 hereof.
-4-
<PAGE>
Tocqueville Securities L.P.
1675 Broadway
New York, New York 10019
Re: Selected Dealer Agreement for
The Tocqueville Gold Fund - Class A Shares
Gentlemen:
We understand that The Tocqueville Gold Fund (the "Fund"), a
series of The Tocqueville Trust (the "Trust"), has adopted a plan (the "Plan")
pertaining to its Class A shares pursuant to Rule 12b-l of the Investment
Company Act of 1940, as amended (the "Act"), for making payments to selected
brokers for distribution assistance of the Fund's Class A shares.
We desire to enter into an Agreement with you for the sale and
distribution of the Class A shares of the Fund for which you are Distributor and
whose Class A shares are offered to the public at net asset value plus any
initial sales charge as set forth in the current prospectus. Upon acceptance of
this Agreement by you, we understand that we may offer and sell Class A shares
of the Fund, subject, however, to all of the terms and conditions hereof and to
your right to suspend or terminate the sale of such securities.
1. We understand that the Class A shares of the Fund covered
by this agreement will be offered and sold at the public offering price. The
public offering price is the net asset value described in the Fund's current
Prospectus in effect at the time the order for such shares is confirmed and
accepted on your behalf by the Fund plus any initial sales charge. We further
understand that all purchase requests and applications submitted by us are
subject to acceptance or rejection in the Fund's or your sole discretion.
2. We certify that we are members of the National Association
of Securities Dealers, Inc. ("NASD") and agree to maintain Membership in said
Association, or in the alternative, that we are foreign brokers not eligible for
membership in said Association. In either case, we agree to abide by all the
rules and regulations of the NASD which are binding upon underwriters and
brokers in the distribution of the shares of open-end investment companies,
including without limitation, Section 26 of Article III of the Rules of Fair
Practice, all of which are incorporated herein as if set forth in full. We
further agree to comply with all applicable state and Federal laws and the rules
and regulations of authorized regulatory agencies. We agree that we will not
sell or offer for sale, Class A shares of the Fund in any state or jurisdiction
where they are not exempt from registration or have not been qualified for sale.
<PAGE>
3. We will offer and sell the Class A shares of the Fund
covered by this Agreement only in accordance with the terms and conditions of
its then current Prospectus, and we will make no representations not included in
said Prospectus or in any authorized supplemental material supplied by you. We
will use our best efforts in the development and promotion of sales of the Class
A shares covered by this Agreement and agree to be responsible for the proper
instruction and training of all sales personnel employed by us, in order that
the Class A shares will be offered in accordance with the terms and conditions
of this Agreement and all applicable laws, rules and regulations. We agree to
hold you harmless and indemnify you in the event that we, or any of our sales
representatives, should violate any law, rule or regulation, or any provisions
of this Agreement, which may result in liability to you; and in the event you
determine to refund any amount paid by any investor by reason of any such
violation on our part, we shall return to you any distribution assistance
payments previously paid or allowed by you to us with respect to the transaction
for which the refund is made. All expenses which we incur in connection with our
activities under this Agreement shall be borne by us.
4. For purposes of this Agreement "Qualified Accounts" shall
mean: accounts of customers of ours who have purchased Fund Class A shares and
who use our facilities to communicate with the Fund or to effect redemptions or
additional purchases of Fund Class A shares and with respect to which we provide
shareholder and administration services, which services may include, without
limitation: answering inquiries regarding the Fund; assistance to customers in
changing dividend options, account designations and addresses; performance of
sub-accounting; establishment and maintenance of shareholder accounts and
records; processing purchase and redemption transactions; automatic investment
in Fund Class A shares of customer account cash balances; providing periodic
statements showing a customer's account balance and the integration of such
statements with those of other transactions and balances in the customer's other
accounts serviced by us; arranging for bank wires; and such other information
and services as you reasonably may request, to the extent we are permitted by
applicable statute, rule or regulation.
5. In consideration of the services and facilities described
herein, we shall be entitled to receive from you such fees as are set forth in
the Plan for Payment of Certain Expenses for Distribution or Shareholder
Servicing Assistance of Class A Shares (the "Plan") and as described in Exhibit
A. We understand that the payment of such fees has been authorized pursuant to a
Plan approved by the Board of Trustees and Class A shareholders of the Fund and
shall be paid only so long as this Agreement is in effect.
6. The frequency of payment, the terms of any right to sell in
a territory, and any other supplemental terms, conditions or qualifications for
us to receive such payments are subject to change by you from time to time, upon
30 days' written notice. Any orders placed after the effective date of such
change shall be subject to the fee rates in effect at the time of receipt of the
payment by the Fund or you. Such 30-day period may be waived at
-2-
<PAGE>
your sole option in the event such change increases the distribution assistance
payments due us.
7. Payment for Class A shares shall be made to the Fund and
shall be received by the Fund promptly after the acceptance of our order. If
such payment is not received by the Fund, we understand that the Fund reserves
the right without notice, forthwith to cancel the sale, or, at the Fund's
option, to sell the Class A shares ordered by us back to the Fund in which
latter case we may be held responsible for any loss, including loss of profit,
suffered by the Fund resulting from our failure to make payments aforesaid.
8. Your obligations to us under this Agreement are subject to
all the provisions of any underwriting agreements you have or may enter into
with the Fund. We understand and agree that in performing our services covered
by this Agreement we are acting as principal, and you are in no way responsible
for the manner of our performance or for any of our acts or omissions in
connection therewith. Nothing in this Agreement or in the Plan shall be
construed to constitute us or any of our agents, employees or representatives as
your agent, partner or employee, or the agent, partner or employee of the Fund.
9. This Agreement shall terminate automatically (i) in the
event of its assignment, the term "assignment" for this purpose having the
meaning defined in Section 2(a)(4) of the Act or (ii) in the event the Plan is
terminated.
10. This Agreement may be terminated at any time (without
payment of any penalty) by a majority of the "Qualified Trustees" as defined in
the Plan or by a vote of a majority of the outstanding Class A voting securities
of the Fund as defined in the Plan (on not more than 60 days' written notice to
us at our principal place of business). We, on 60 days' written notice addressed
to you at your principal place of business, may terminate this Agreement. You
may also terminate this Agreement for cause on violation by us of any of the
provisions of this Agreement, said termination to become effective on the date
of mailing notice to us of such termination. Without limiting the generality of
the foregoing and any provision hereof to the contrary notwithstanding, our
expulsion from the NASD will automatically terminate this Agreement without
notice; our suspension from the NASD or violation of applicable state or Federal
laws or rules and regulations of authorized regulatory agencies will terminate
this Agreement effective upon date of mailing notice to us of such termination.
Your failure to terminate for any cause shall not constitute a waiver of your
right to terminate at a later date for any such cause.
11. A copy of the Agreement and Declaration of Trust is on
file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees as
Trustees and not individually and that the obligations of this instrument are
not binding upon any of the Trustees or Class A shareholders individually but
are binding only upon the assets and property of the Fund.
-3-
<PAGE>
12. All communications to you shall be sent to you at your
offices at 1675 Broadway, New York, N.Y. 10019. Any notice to us shall be duly
given if mailed or telegraphed to us at the address shown on this Agreement.
13. This Agreement shall become effective as of the date when
it is executed and dated by you below. This Agreement and all the rights and
obligations of the parties hereunder shall be governed by and construed under
the laws of the State of New York.
----------------------------------------
(Broker/Dealer)
By:
--------------------------------------
Name:
Title:
----------------------------------------
(Address)
----------------------------------------
(City) (State) (Zip Code)
ACCEPTED:
TOCQUEVILLE SECURITIES L.P.
By:
----------------------------------
Name:
Title:
Dated:
-4-
<PAGE>
The Tocqueville Fund
1675 Broadway
New York, New York 10019
Re: Shareholder Service Agreement for
The Tocqueville Gold Fund - Class A Shares
Gentlemen:
We understand that The Tocqueville Gold Fund (the "Fund"), a
series of The Tocqueville Trust (the "Trust"), has adopted a plan (the "Plan")
pertaining to its Class A shares pursuant to Rule 12b-1 of the Investment
Company Act of 1940, as amended (the "Act"), for making payments to certain
persons for distribution assistance and shareholder servicing of the Fund's
Class A shares.
We desire to enter into an Agreement with the Fund for the
servicing of Class A shareholders of, and the administration of Class A
shareholder accounts in, the Fund. Subject to the Fund's acceptance of this
Agreement, the terms and conditions of this Agreement, shall be as follows:
1. We shall provide shareholder and administration services
for certain shareholders of the Fund who purchase Class A shares of the Fund as
a result of their relationship to us, as further designated in Exhibit A hereto
("Qualified Accounts"). Such services may include, without limitation, some or
all of the following: answering inquiries regarding the Fund; assistance in
changing dividend options, account designations and addresses; assistance in
processing purchase and redemption transactions; and such other information and
services as the Fund reasonably may request, to the extent we are permitted by
applicable statute, rule or regulation to provide such information or services.
2. We agree to make available to the Fund, upon the Fund's
request, such information relating to our clients who are beneficial owners of
Fund Class A shares and their transactions in Fund Class A shares as may be
required by applicable laws and regulations or as may be reasonably requested by
the Fund.
3. We shall provide to the Fund copies of the lists of members
of our organization, if any, and make available to the Fund any publications and
other facilities of our organization for the placement of advertisements or
promotional materials and sending information regarding the Fund, to enable the
Fund to solicit for sale and to sell Class A shares to such members.
<PAGE>
4. We shall provide such facilities and personnel (which may
be all or any part of the facilities currently used in our business, or all or
any personnel employed by us) as is necessary or beneficial for providing
information and services to Class A shareholders maintaining Qualified Accounts
with the Fund, and to assist the Fund in servicing accounts of such
shareholders.
5. Neither we nor any of our employees or agents are
authorized to make any representation concerning Fund Class A shares except
those contained in the then-current Fund Prospectus, copies of which will be
supplied by the Fund to us; and we shall have no authority to act as agent for
the Fund.
6. In consideration of the services and facilities described
herein, we shall be entitled to receive from the Fund such fees as are set forth
in Exhibit B hereto. We understand that the payment of such fees has been
authorized pursuant to the Plan approved by the Trustees and Class A
shareholders of the Fund and shall be paid only so long as the Plan and this
Agreement is in effect.
7. The Fund reserves the right, at the Fund's discretion and
without notice, to suspend the sale of Class A shares or withdraw the sale of
Class A shares of the Fund.
8. This Agreement shall terminate automatically (i) in the
event of its assignment, the term "assignment" for this purpose having the
meaning defined in Section 2(a)(4) of the Act or (ii) in the event that the Plan
terminates.
9. This Agreement may be terminated at any time (without
payment of any penalty) by a majority of the "Qualified Trustees" as defined in
the Plan or by a vote of a majority of the outstanding Class A voting securities
of the Fund as defined in the Plan (on not more than 60 days' written notice to
us at our principal place of business). We, on 60 days' written notice addressed
to the Fund at its principal place of business, may terminate this Agreement.
The Fund may also terminate this Agreement for cause on violation by us of any
of the provisions of this Agreement or in the event that the Plan shall
terminate, said termination to become effective on the date of mailing notice to
us of such termination. The Fund's failure to terminate for any cause shall not
constitute a waiver of its right to terminate at a later date for any such
cause.
10. A copy of the Agreement and Declaration of Trust is on
file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees as
Trustees and not individually and that the obligations of this instrument are
not binding upon any of the Trustees or Class A shareholders individually but
are binding only upon the assets and property of the Fund.
-2-
<PAGE>
11. All communications to the Fund shall be sent to the Fund
at the address set forth above. Any notice to us shall be duly given if mailed
or telegraphed to us at the address set forth below.
12. This Agreement shall become effective as of the date when
it is executed and dated by the Fund below. This Agreement and all the rights
and obligations of the parties hereunder shall be governed by and construed
under the laws of the State of New York.
-----------------------------------------
(Firm Name)
-----------------------------------------
(Address)
-----------------------------------------
(City) (State) (Zip Code)
By:
--------------------------------------
Name:
Title:
ACCEPTED:
By:
----------------------------------
Name:
Title:
Dated:
-3-
