<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO.
_____
POST-EFFECTIVE AMENDMENT NO.
_____
VAN ECK/CHUBB FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
99 Park Avenue, 8th Floor, New York, New York 10016
(Address of Principal Executive Offices)
212-687-5200
(Registrant's Telephone Number)
Thaddeus Leszczynski, Esq.
Van Eck Associates Corporation
99 Park Avenue, 8th Floor, New York, New York 10016
(Name and Address of Agent for Service)
Copy to: Philip H. Newman, Esq., Goodwin Procter & Hoar, LLP
Exchange Place, Boston, Massachusetts 02109
__________________________________________________________________
Approximate Date of Proposed Public Offering: As soon as practicable after
the registration statement becomes effective under the Securities Act of 1933.
It is proposed that this filing will become effective on the thirtieth day
after the date of filing pursuant to Rule 488 under the Securities Act of 1933.
No filing fee is required because the Registrant has heretofore declared
its intention to register an indefinite number of shares of beneficial interest,
$.001 par value, of the Global Income Fund series, pursuant to Rule 24f-2.
<PAGE>
VAN ECK FUNDS
Cross-Reference Sheet
Pursuant to Rule 481(a) under the Securities Act of 1933
Form N-14 Item No. Location in Proxy Statement/Prospectus
- ----------------- --------------------------------------
PART A
1. Cover Page of Registration Statement; Prospectus Cover
Page
2. Table of Contents
3. Synopsis; Special Considerations and Risk Factors
4. Synopsis, The Reorganization
5. Prospectus Cover Page; Synopsis; and Additional
Information
6. Prospectus Cover Page; Synopsis; Additional Information
7. Notice of Special Meeting; Introduction; Synopsis; The
Reorganization; Van Eck/Chubb Global Income Fund; Global
Income Fund; Information Concerning Special Meeting;
Additional Information
8. Not Applicable
9. Not Applicable
PART B
10. Cover Page of Statement of Additional Information
11. Table of Contents
12. General Information
13. General Information
14. Financial Statement
<PAGE>
VAN ECK GLOBAL
[LOGO]
_____________, 1998
Dear Shareholder:
At this time, we are asking our shareholders to consider voting for the
reorganization of the Fund by means of a tax-free merger into the Van Eck/Chubb
Global Income Fund, which we believe to be in shareholders' best interests. The
reorganization is being proposed in part because both the Van Eck and Van
Eck/Chubb Global Income Funds are marketed through the same distribution
channels. Having two affiliated global income funds with substantially similar
investment objectives and policies will diffuse the distribution effort and
confuse brokers and the investing public. In addition, the expenses on a per
share basis will decrease for shareholders of the Fund.
Attached are the Notice and Proxy Statement/Prospectus for a Special Meeting of
Shareholders of Global Income Fund to be held on _________, April __, 1998 for
the purpose of considering the proposed Agreement and Plan of Reorganization and
Liquidation. PLEASE READ THE PROXY STATEMENT/PROSPECTUS CAREFULLY. IT DISCUSSES
THE PROPOSAL AS WELL AS THE REASONS WHY THE BOARD OF TRUSTEES RECOMMENDS THAT
YOU VOTE FOR THE PROPOSAL.
Please take a moment now to sign and return the proxy card in the enclosed
postage-paid envelope. Your prompt attention in this matter benefits all
shareholders. Thank you.
Sincerely,
John C. van Eck
Chairman of the Board
Van Eck Global, 99 Park Avenue, New York, NY 10016 tel. 212.687.5200 or
800.826.3251 fax 212.687.5248
<PAGE>
VAN ECK FUNDS
Global Income Fund
99 Park Avenue, New York, New York 10016
1-800-826-2333
_________________________________________
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
April ___, 1998
_________________________________________
A SPECIAL MEETING OF SHAREHOLDERS OF GLOBAL INCOME FUND (THE "FUND" or "GIF"), A
SERIES OF VAN ECK FUNDS (THE "TRUST"), will be held at 99 Park Avenue, 8th
Floor, New York, New York, on ______________, April ____, 1998 at _______, New
York Time, for the following purposes:
(1) To consider approval of the Agreement and Plan of Reorganization and
Liquidation involving the exchange of substantially all of the Fund's assets for
shares of Van Eck/Chubb Global Income Fund, a series of Van Eck/Chubb Funds,
Inc., the assumption of the liabilities of the Fund by Van Eck/Chubb Global
Income Fund, the distribution of Van Eck/Chubb Global Income Fund shares to the
Fund's shareholders and the liquidation of the Fund; and
(2) To act upon such other matters as may properly come before the meeting or
any adjournment or adjournments thereof.
Shareholders of record at the close of business on _______, ____________, 1998
are entitled to notice of, and to vote at, the meeting or any adjournment
thereof.
By order of the Board of Trustees
Thaddeus M. Leszczynski
Secretary
_______________, 1998
----------------------------
YOUR VOTE IS IMPORTANT!
----------------------------
____________________________________________________________________
WHETHER YOU EXPECT TO ATTEND THE MEETING OR NOT, PLEASE COMPLETE,
DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY.
____________________________________________________________________
<PAGE>
Investors are advised to read and retain this Proxy Statement/Prospectus for
future reference.
_______________________________________
VAN ECK FUNDS
99 Park Avenue, New York, New York 10016
1-800-826-2333
______________________________________
PROXY STATEMENT/PROSPECTUS
_______________________________________
Van Eck/Chubb Funds, Inc. has filed a Registration Statement with the Securities
and Exchange Commission (the "SEC") for the registration of the shares of Van
Eck/Chubb Global Income Fund ("VE/CGIF"), a series of Van Eck/Chubb Funds, Inc.,
to be offered to the shareholders of Global Income Fund ("GIF"), a series of
Van Eck Funds (the "Trust"), pursuant to an Agreement and Plan of Reorganization
and Liquidation of the Trust and Van Eck/Chubb Funds, Inc. involving the
exchange of GIF's assets for shares of VE/CGIF, the assumption of the
liabilities of GIF by VE/CGIF, the distribution of VE/CGIF shares to GIF's
shareholders and the subsequent liquidation of GIF (the "Reorganization").
VE/CGIF is a non-diversified series of Van Eck/Chubb Funds, Inc., an open-end
investment company, whose objective is to seek high current income and capital
appreciation by investing primarily in debt securities of domestic and foreign
issuers. VE/CGIF attempts to achieve its investment objective by investing its
assets primarily in debt securities of domestic and foreign issuers. There can
be no guarantee that VE/CGIF will achieve its investment objective.
The Prospectus (the "Prospectus") and Statement of Additional Information (the
"Statement of Additional Information") for VE/CGIF dated May 1, 1997 are
incorporated by reference into this Proxy Statement/Prospectus.
The Prospectus (the "Prospectus") and Statement of Additional Information (the
"Statement of Additional Information") for GIF dated April 30, 1997 are
incorporated by reference into this Proxy Statement/Prospectus.
This Proxy Statement/Prospectus sets forth concisely information about VE/CGIF
and GIF that the shareholders of GIF should know in considering the
Reorganization and should be retained for future reference. GIF has authorized
solicitation of proxies in connection with the Reorganization solely on the
basis of this Proxy Statement/Prospectus and the accompanying documents.
A Statement of Additional Information relating to the Reorganization (the
"Reorganization Statement of Additional Information") dated _______, 1998, is
incorporated by reference to this Proxy Statement/Prospectus and is available at
no cost by calling the telephone number listed above or by writing to the Funds
at the above address.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED ON THE
ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
This Proxy Statement/Prospectus is dated ________, 1998
<PAGE>
TABLE OF CONTENTS Page
- --------------------------------------------------------------------------------
Introduction...................................................................
Synopsis........................................................................
The Reorganization..........................................................
Investment Objectives and Policies..........................................
Reasons for the Transaction.................................................
Investment Advisory and Administrative Fees.................................
Other Fees..................................................................
Purchase Procedures/Sales Charges...........................................
Exchange Privileges.........................................................
Conversion Feature..........................................................
Redemption Procedures.......................................................
Dividends and Distributions.................................................
Net Asset Value.............................................................
Tax Consequences............................................................
Special Considerations and Risk Factors.........................................
The Reorganization..............................................................
Procedures......................................................................
Terms of the Plan of Reorganization and Liquidation.........................
Benefits to the Fund as a Result of Reorganization..........................
Tax Consequences of the Reorganization......................................
Capitalization..............................................................
Van Eck/Chubb Global Income Fund and Global Income Fund.........................
Financial Highlights........................................................
Van Eck/Chubb Global Income Fund (Class A)...........................
Global Income Fund...................................................
Management..................................................................
Share of VE/CGIF to be Issued in the Reorganization and Shares of GOF.......
Other Matters...............................................................
Information Concerning the Meeting..............................................
Date, Time and Place of Meeting.............................................
Solicitation, Revocation and Use of Proxies.................................
Record Date and Outstanding Shares..........................................
Security Ownership of Certain Beneficial Owners and Management..............
Voting Rights and Required Vote.............................................
Additional Information..........................................................
Agreement and Plan of Reorganization and Liquidation............................
<PAGE>
VAN ECK FUNDS
GLOBAL INCOME FUND
99 Park Avenue, 8th Floor, New York, New York 10016
(212)687-5200 . 1-800-826-3251
__________________________________________
PROXY STATEMENT/PROSPECTUS
Special Meeting of Shareholders
To Be Held on _________, April ___, 1998
99 Park Avenue, 8th Floor, New York, New York
__________________________________________
Introduction
This proxy statement is furnished to the shareholders of Global Income Fund in
connection with the solicitation by the Board of Trustees of Van Eck Funds, of
which GIF is a series, of proxies to be used at a special meeting of
shareholders of GIF to be held on April ___, 1998, or any adjournments thereof
(the "Meeting"), to approve or disapprove an Agreement and Plan of
Reorganization and Liquidation (the "Plan") which contemplates the exchange of
assets from GIF for shares of VE/CGIF (the "Reorganization Shares"), the
assumption of the liabilities of GIF by VE/CGIF, the distribution of such
Reorganization Shares to the shareholders of GIF and the subsequent liquidation
of GIF, as set forth herein (the "Reorganization"). As of _________, 1998 the
record date, there were outstanding ___________ shares of GIF and ____________
shares of VE/CGIF. Each shareholder of GIF will be entitled to one vote for each
share and a fractional vote for each fractional share held on the record date.
It is expected that the mailing of this proxy statement will commence on or
about ___________, 1998. VE/CGIF and GIF each may be referred to herein
individually as a "Fund" and collectively as the "Funds."
The enclosed form of proxy, if properly executed and returned, will be voted in
accordance with the choice specified thereon. The proxy will be voted in favor
of the proposal unless a choice is indicated to vote against the proposal.
Proxies properly executed and returned, but which fail to specify how the shares
are to be voted, will be voted FOR the proposal.
The proxy may be revoked at any time prior to the voting thereof by executing a
superseding proxy, by giving written notice to the secretary of the Trust at the
address listed on the front cover of this Proxy Statement/Prospectus or by
voting in person at the Meeting.
In the event there are not sufficient votes to approve the proposal at the time
of the Meeting, the Meeting may be adjourned in order to permit further
solicitations of proxies by GIF. If GIF proposes to adjourn the Meeting by a
vote of the shareholders, the persons named in the enclosed proxy card will vote
all shares for which they have voting authority in favor of such adjournment.
To the knowledge of GIF, as of _________, 1998 no shareholder owned of record or
beneficially 5% or more of the outstanding shares of that Fund, except as
follows:
In addition, as of ___________, 1998, John C. van Eck, Chairman and Trustee of
the Trust, and his wife owned ____% of GIF. As of the same date, all other
Trustees and officers of the Trust as a group owned ___% of GIF and less than 1%
of VE/CGIF. Van Eck Associates Corporation (the "Adviser") owned ___% of GIF's
shares, as of that date.
Expenses of the Reorganization directly attributable to the Reorganization will
be borne by Chubb Asset Managers, Inc., the Adviser and the Funds. As between
the Funds, their expenses will be allocated to the Fund incurring the expense or
on the basis of relative net assets. Other expenses will be allocated equitably
among the parties. In addition to the solicitation of proxies by mail, proxies
may be solicited by officers and/or employees of the Trust, the Adviser and/or
DST Systems, Inc., GIF's Transfer Agent and Dividend Paying Agent (the "Transfer
Agent" or "DST"), personally or by telephone or, telegraph, facsimile or other
means. Brokerage houses, banks and other fiduciaries will be requested to
forward
<PAGE>
soliciting material to the beneficial owners of the shares of the Fund and to
obtain authorization for the execution of proxies.
See also "Information Concerning the Meeting" below.
Synopsis
The following is a synopsis of the information contained in or incorporated by
reference in this Proxy Statement/Prospectus regarding the Reorganization, and
presents key considerations for shareholders of GIF to assist them in
determining whether to approve the Reorganization. See also "Special
Considerations and Risk Factors" below.
The Reorganization
The Trustees of the Trust, of which GIF is a series, have determined that the
Reorganization (as described herein) is in the best interests of the
shareholders of GIF and have given their approval to the transactions
contemplated in the Plan associated with the Reorganization. The result of the
Reorganization, if it is consummated, will be the exchange of assets from GIF
for Reorganization Shares, the assumption of the liabilities of GIF by VE/CGIF,
the distribution of such Reorganization Shares to the shareholders of GIF and
the subsequent liquidation of GIF. For more information see "The Reorganization"
below.
Investment Objectives and Policies
Summary Comparison between GIF and VE/CGIF. Although GIF and VE/CGIF differ in
some respects, they have many similarities in their investment objectives,
policies and portfolios.
Both VE/CGIF and GIF are nondiversified, as such term is defined in the
Investment Company Act of 1940, as amended (the "1940 Act"). The investment
objective of VE/CGIF (high current income and capital appreciation) and GIF
(high total return, with emphasis on current income) are substantially the same.
Except as stated below, the Funds' investment policies and restrictions are also
substantially similar. One difference is that VE/CGIF must invest at least 65%
of its assets in bonds and debentures, rather than all types of debt instruments
meeting its investment objective. In addition, VE/CGIF may borrow only 5% of
assets for temporary emergency or extraordinary purposes, while GIF may borrow
up to 30% of its assets for investment purposes. On the other hand, VE/CGIF may
concentrate its investments in a single industry and make short sales against
the box, which GIF cannot.
GIF. GIF is a non-diversified series of the Trust. Van Eck Associates
Corporation acts as investment adviser to GIF. This Fund seeks high total return
through a flexible policy of investing globally, primarily in debt securities.
Under normal market conditions, the Fund invests at least 65% of its total
assets in debt securities. Such securities include obligations issued or
guaranteed by a government or any of its political subdivisions, agencies or
instrumentalities or by a supranational organization such as the World Bank or
European Economic Community, bonds, debentures, notes, commercial paper,
certificates of deposit, and repurchase agreements, as well as debt obligations
which may have a call on a common stock or commodity by means of conversion
privilege or attached warrants. The long-term assets of the Fund consists of
debt securities rated B or better by S&P or Moody's or if unrated, of comparable
quality in the judgment of the Adviser. Debt securities rated BBB (investment
grade), BB or B will not exceed 25% of total net assets. Debt rated BB or B is
lower quality debt (commonly referred to as "junk bonds"). Lower rated debt may
offer higher returns, but also presents a greater risk of default than do higher
rated securities. As to debt securities rated BBB, BB or B, it is the Adviser's
intention to invest only in debt issued by a government or one of its agencies,
instrumentalities, political subdivisions or authorities.
There is no limit on the amount the Fund may invest in any one country or in
securities denominated in the currency of any country. Normally, the Fund will
invest in at least three countries besides the United States. GIF may invest in
debt instruments having varied maturities, although the Adviser expects the
average maturity to be between three and ten years.
2
<PAGE>
The Fund may invest 5% of its assets in options on equity securities and up to
5% of its net assets in warrants, including options and warrants traded in over-
the-counter markets. Not more than 2% may be invested in warrants that are not
listed on the New York Stock Exchange or American Stock Exchange. The Fund may
invest up to 5% of its assets at the time of purchase in preferred stocks and
preferred stocks which may be convertible into common stock. The Fund may buy
and sell financial futures contracts and options on financial futures contracts
and may purchase or sell puts and calls on foreign currencies and securities.
The Fund may invest in "when-issued" securities, "partly paid" securities
(securities paid for over a period of time) and securities of foreign issuers.
In addition, the Fund may lend its portfolio securities and borrow money for
investment purposes (i.e., leverage its portfolio).
When the Adviser determines that a temporary defensive strategy is warranted,
the Fund may invest in securities maturing in 13 months or less, and most or all
of its investments may be in the United States or another country.
VE/CGIF. VE/CGIF is a non-diversified series of Van Eck/Chubb Funds, Inc.
Chubb Asset Managers, Inc. acts as investment adviser to VE/CGIF. The Fund
seeks high current income and capital appreciation by investing primarily in
debt securities of domestic and foreign issuers. VE/CGIF invests at least 65%
of its assets in bonds and debentures. Such securities include securities
issued by domestic and foreign governments and their agencies and political
subdivisions, corporations and financial institutions, and supranational
entities, such as the International Bank for Reconstruction and Development
("World Bank"), the Asian Development Bank, the European Development Bank and
the European Community. No more than 25% of the Fund's total assets may be
invested in debt that is rated lower than investment grade (junk bonds).
The Fund will allocate its assets among debt securities of issuers in three
separate investment areas: (1) the United States, (2) developed foreign
countries, and (3) emerging markets. Under normal conditions, the Fund will
invest at least 65% of its total assets in at least three different countries
(one of which may be the United States). The average maturity of debt securities
in VE/CGIF's portfolio will fluctuate depending on the investment adviser's
judgment as to future interest rates and market conditions.
VE/CGIF may also buy and sell derivatives such as financial futures contracts,
bond index futures contracts and foreign currency futures contracts. The
VE/CGIF may purchase and sell any of these futures contracts for hedging
purposes and not for speculation. It may be engaged in such transactions only
if the total contract value of the futures contracts does not exceed 20% of the
Fund's assets. In addition, the VE/CGIF may invest in options on foreign
currency exchange contracts, options on foreign currencies, including cross
currency hedges, "when issued" securities and collaterized mortgage obligations
and lend up to 30% of its portfolio securities.
For temporary or defensive purposes, the Fund may invest in high quality
domestic money market instruments, high quality domestic short term debt
securities or may hold the Fund's assets in cash or cash equivalents without
limitation.
Reasons for the Transaction
On October 1, 1997, the Adviser became the investment administrator of Van
Eck/Chubb Funds, Inc. (formerly Chubb Investment Funds, Inc.), and Van Eck
Securities Corporation (the "Distributor") began serving as distributor of the
shares of the Van Eck/Chubb Funds, including VE/CGIF. Both the Van Eck Funds
and the Van Eck/Chubb Funds are marketed through the same distribution channels.
Therefore, there is an overlap between the two Funds. Having two affiliated
global income funds with substantially similar investment objectives and
policies will diffuse the distribution effort and may confuse brokers and the
investing public. In addition, performance of VE/CGIF is comparable or better
than GIF and expenses based on a percentage of net assets should come down to
some extent as a result of an increased asset base.
The Board of Trustees determined that participation in the Reorganization, as
described herein, is in the best interests of GIF and that the interests of
existing GIF shareholders will not be diluted as a result of such participation.
The Board also considered a number of factors and alternatives in addition to
the one stated in the preceding paragraph. The Trustees determined that the
Reorganization provided greater
3
<PAGE>
benefits to shareholders than other options, such as the liquidation of GIF.
Liquidating GIF would have required most shareholders to recognize either gains
or losses in the current tax year when many shareholders might have preferred to
defer such gains or losses. An exchange into VE/CGIF would force the shareholder
to recognize a gain or loss for tax purposes, whereas the Reorganization will
achieve the same result, but on a tax-free basis. The redemption procedure and
exchange privilege, which are described below, allow any shareholder not
desiring to participate in the Reorganization to achieve the same results as
liquidation of GIF. The Board also considered the compatibility of the Funds'
investment objectives, policies, restrictions and portfolios; any factors which
might require an adjustment to the exchange price or formula, such as costs or
tax and other benefits to be derived by the Funds; tax consequences of the
Reorganization; relative benefits to be derived by the Adviser and/or its
affiliates or other persons; and other factors.
Investment Advisory and Administrative Fees
Van Eck Associates Corporation acts as the investment adviser for GIF. The
Adviser also acts as investment adviser or sub-investment adviser to other
mutual funds registered with the Securities and Exchange Commission under the
1940 Act and manages or advises managers of portfolios of pension plans and
others. Total aggregate assets under management of the Adviser on December 31,
1997 were approximately $1.5 billion. John C. van Eck, Chairman and President of
Van Eck Funds and Van Eck Worldwide Insurance Trust and a Director of Van
Eck/Chubb Funds, Inc., together with members of his immediate family, own 100%
of the voting stock of the Adviser.
Chubb Asset Managers Inc. acts as the investment adviser to VE/CGIF. Total
aggregate assets under management of Chubb Asset Managers Inc. on December 31,
1997 were $ ______.
GIF pays investment advisory fees to the Adviser according to the following
schedule (1):
Net Assets Advisory Fee
- ---------- ------------
$0-$500 million......................................... 0.75 of 1%
Next $250 million....................................... 0.65 of 1%
Over $750 million....................................... 0.50 of 1%
VE/CGIF pays investment advisory fees and investment administrative fees to
Chubb Asset Managers Inc. according to the following schedule (2):
<TABLE>
<CAPTION>
Net Assets Advisory Fee Administrative Fee Total Fees
- ---------- ----------- ------------------ ----------
<S> <C> <C> <C>
$0- $200 million........................................ .20% .45% .65%
Next $1.1 billion....................................... .19% .41% .60%
Over $1.3 billion....................................... .18% .37% .55%
</TABLE>
- ------
(1) The advisory fee is payable monthly, computed at the indicated average daily
net assets.
(2) The advisory and administrative fees are payable monthly, computed at the
indicated average daily net assets. The Adviser will receive these fees for
three years or until assets in all of the Van Eck/Chubb Funds reach $500
million, whichever occurs first.
Other Fees and Benefits
VE/CGIF has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act. Pursuant to this Plan, VE/CGIF pays a fee to the Distributor accrued daily
at an annual rate of .50% of its average daily net assets, of which .25% is a
servicing fee and .25% may be used to finance sales or promotional activities.
No payment of service fees under the Rule 12b-1 Plan is made to securities
dealers unless the dealer has sold shares of the Van Eck/Chubb Funds in excess
of $1 million. For the fiscal year ended December 31, 1997, the then-
distributor of VE/CGIF's shares, Chubb Securities Corporation, waived payment of
distribution fees in excess of .___% of average daily net assets. VE/CGIF's Rule
12b-1 Plan is a "reimbursement-type plan". The Plan of Distribution in effect
for VE/CGIF is described in more detail in the Prospectus for VE/CGIF under
"Distribution Plan."
GIF has also adopted a reimbursement-type Plan of Distribution. Under GIF's
Rule 12b-1 Plan, GIF's
4
<PAGE>
shares are subject to a 12b-1 fee accrued daily at an annual rate of .25% of
average daily net assets, all or some of which are used for payments to agents
or brokers who service shareholder accounts of GIF and the remainder of which is
used for other actual promotional and distribution expenses incurred by the
Distributor. Any 12b-1 Plan fee accrued by GIF in excess of payments to brokers
and agents and reimbursement to the Distributor for its actual expenses will be
retained by GIF. A reimbursement plan may provide for the payment of interest as
a distribution expense.
Neither Fund will recognize any gain or loss on the transaction. VE/CGIF will
have the same basis and holding period in the assets received as GIF. As of
December 31, 1997, GIF had capital loss carryforwards available to offset future
capital gains of [$5,575,103] expiring December 31, 2002 and December 31, 2004,
in the amounts of [$4,267,868] and [$1,307,235], respectively. Under the
Internal Revenue Code, the utilization of these loses in future years may be
limited.
VE/CGIF's total operating expenses for the year ended December 31, 1997 were
1.35% of average daily net assets. (annualized). Had these fees and expenses
not been assumed, the expense ratios for that period would have been 1.61%. No
decision has been made as to the amount of any future expense waivers. GIF's
total operating expenses for the year ended December 31, 1997 were 1.66%.
The following table provides a comparison of the transaction and operating
expenses paid by VE/CGIF and GIF. It is intended to assist an investor in
understanding the various direct and indirect costs and expenses borne by an
investor in the Funds. The sales charges are the maximum sales charges an
investor would incur. Sales charges decline depending on the amount of the
purchase, the number of shares an investor already owns or use of various
investment programs. See "Purchase of Shares" in the Prospectuses. The
investment adviser, the administrator and/or the Distributor of each Fund may
from time to time waive fees and/or reimburse certain expenses of a Fund.
Shareholder Transaction Expenses
<TABLE>
<CAPTION>
VE/CGIF
Post -
VE/CGIF* GIF Merger
-------- --- -------
<S> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases (as a
percent of offering price)........................... 3.00% 4.75% 4.75%
VE/CGIF
Annual Fund Operating Expenses Post-
(as a percentage of average net assets) VE/CGIF** GIF Merger
- -------------------------------------- --------- --- -----
Management Fee ...................................... .20% .75% .20%
12b-1 Fee/Shareholder Servicing Fee***............... .50% .25% .50%
Administration....................................... .45% .21% .45%
Transfer and Dividend Disbursing Fees................ .14% .21% .21%
Custodian
Fees................................................ .04% .02% .03%
Other Expenses....................................... .28% .22% .05%
- --------------
Total Fund Operating Expenses........................ 1.61% 1.66% 1.44%
Reimbursement/Waiver as a result of Expense Cap**.... (0.26) (------) (.09)
===== ======= ====
Net Expenses after Reimbursement/Waiver 1.35% 1.66% 1.35%
</TABLE>
_______________
* Effective April 6, 1998, VE/CGIF's maximum sales charge will be 4.75%.
** VE/CGIF's investment adviser has temporarily reimbursed and/or waived
certain operating expenses of VE/CGIF including management and
administrative fees. Such temporary reimbursement/waiver has had the effect
of lowering the Fund's expense ratio.
*** Long-term shareholders in Funds may pay more than the economic equivalent of
the maximum front-end sales charge permitted by the NASD. The shareholder
servicing fee will not exceed .25%.
5
<PAGE>
Example: You would bear the following expenses on a $1,000 investment, including
maximum sales load, assuming (1) 5% annual return and (2) redemption
at the end of each time period.
<TABLE>
<CAPTION>
VE/CGIF
Post-
VE/CGIF GIF Merger
------ --- -------
<S> <C> <C> <C>
1 Year........................................... $43.33 $ 63.48 $ 43.33
3 Years.......................................... $71.48 $ 97.06 $ 71.48
5 Years.......................................... $101.72 $132.98 $101.72
10 Years......................................... $187.51 $233.67 $187.51
</TABLE>
This table should not be considered a representation of past or future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return. Actual return may be greater or less than the assumed amount.
Purchase Procedures/Sales Charges
After the Reorganization, shareholders of GIF will be shareholders of VE/CGIF,
and therefore subsequent purchases of shares of VE/CGIF will be subject to the
applicable initial sales charge as described in "Synopsis-Shareholder
Transaction Expenses" above.
Exchange Privileges
Shareholders of VE/CGIF may exchange shares into U.S. Government Money Fund and
into Class A shares of any of the other Van Eck Funds. Shareholders of VE/CGIF
(except for those with fiduciary retirement plan accounts, who must effect a
"transfer of assets" to the Van Eck Funds' plan custodian, Investors Fiduciary
Trust Co.) may exchange into a Van Eck Fund at net asset value.
Shareholders of GIF may exchange into shares of any of the Van Eck/Chubb Funds,
which are: Capital Appreciation Fund, Global Income Fund, Government Securities
Fund, Growth and Income Fund, Money Market Fund, Tax-Exempt Fund and Total
Return Fund. Shareholders of GIF (except for those with Investors Fiduciary
Trust Company fiduciary retirement plan accounts, who must effect a "transfer of
assets" to the Van Eck/Chubb Funds' plan custodian, Firstar Trust Company) may
exchange into a Van Eck/Chubb Fund at net asset value.
In addition, each Fund reserves the right to terminate, modify or impose a fee
in connection with the exchange privilege as described in more detail in the
Prospectuses and Statements of Additional Information under "Exchange
Privilege."
Exchanges out of GIF will be accepted up to the business day prior to the
Exchange Date.
Redemption Procedures
Shares of GIF may be redeemed at any time. Shares may be redeemed by writing to
DST Systems, Inc., P.O. Box 418407, Kansas City, Missouri 64141, the Fund's
transfer agent, through the shareholder's broker or agent (although they may
charge a fee for their services) or, if the shareholder has so elected, by
contacting DST by telephone. Redemptions of GIF shares will be accepted up to
the business day prior to the Exchange Date. See also "Redemption of Shares" in
the GIF Prospectus for more information.
Shares of VE/CGIF may be redeemed at any time. Shares may be redeemed by
forwarding a written request to the Fund's transfer agent. Prior to April 6,
1998, write to Firstar Trust Company, Mutual Fund Services, Third Floor, P.O.
Box 701, Milwaukee, WI 53201-0701 or by overnight courier write to Van Eck/Chubb
Global Income Fund, c/o Firstar Trust Company, 615 East Michigan Street,
Milwaukee, WI 53202-5207. Beginning April 6, 1998, write to DST Systems, Inc.
at the address above. See also "Redemption or Repurchase" in the VE/CGIF
Prospectus for more information.
6
<PAGE>
Dividends and Distributions
If the Reorganization is approved by shareholders, GIF intends to declare any
applicable dividends and distributions prior to the Exchange Date. VE/CGIF
generally declares and distributes dividends from ordinary income on a monthly
basis and distributes net capital gains if any, annually. GIF generally
declares and pays dividends monthly and any net realized capital gains resulting
from investment activity annually.
Net Asset Value
The net asset value of VE/CGIF and GIF is determined at the close of business on
each day the New York Stock Exchange is open for trading. Each Fund computes net
asset value by dividing the value of its securities, plus cash and other assets
(including interest and dividends accrued but not yet received), less all
liabilities (including accrued expenses), by the number of shares outstanding.
Expenses, including fees paid to the investment adviser and/or administrator,
are accrued daily for the Funds.
Tax Consequences
Prior to or upon the closing of the Reorganization, counsel to GIF and VE/CGIF,
Goodwin, Procter & Hoar LLP, will opine that, subject to the customary
assumptions and representations, on the basis of the existing provisions of the
Internal Revenue Code of 1986 as amended (the "Code"), the Treasury Regulations
promulgated thereunder and current administrative and judicial interpretations
thereof, for Federal income tax purposes: (i) the transfer of all or
substantially all of the assets of GIF to VE/CGIF solely in exchange for VE/CGIF
shares and the assumption by VE/CGIF of some of GIF's liabilities and the
distribution of such shares to the shareholders of GIF, as provided in the Plan,
will constitute a reorganization within the meaning of Section 368(a)(1)(C) of
the Code, and VE/CGIF and GIF will each be a "party to a reorganization" within
the meaning of Section 368(b); (ii) GIF will not recognize gain or loss on the
transfer of its assets to VE/CGIF in the Reorganization; (iii) GIF will not
recognize a gain or loss upon its distribution to its shareholders of the
VE/CGIF shares received in the Reorganization; (iv) VE/CGIF will not recognize a
gain or loss upon the receipt of the assets of GIF in exchange for the VE/CGIF
shares; (v) shareholders of GIF will not recognize a gain or loss on the
exchange of shares of GIF for shares of VE/CGIF provided that such shareholders
receive solely VE/CGIF shares (including fractional shares) in exchange for
their GIF shares; (vi) the tax basis of the GIF assets acquired by VE/CGIF will
be the same to VE/CGIF as the tax basis of such assets to GIF immediately prior
to the Reorganization and the holding period of the assets of GIF in the hands
of VE/CGIF will include the period during which those assets were held by GIF;
(vii) the aggregate tax basis of the VE/CGIF shares received by the shareholders
of GIF will be the same as the aggregate tax basis of GIF shares exchanged by
such shareholder immediately prior to the Reorganization; and (viii) the holding
period of the VE/CGIF shares (including fractional shares) received by
shareholders of GIF will include the holding period that the GIF shares
exchanged were held (provided that the GIF shares exchanged were held as a
capital asset on the date of the Reorganization). For a discussion of additional
tax considerations, see "The Reorganization-Tax Consequences of the
Reorganization" below.
Special Considerations and Risk Factors
Except as stated below, the Funds' investment objectives, policies and
restrictions are substantially similar. One difference is that VE/CGIF must
invest at least 65% of its assets in bonds and debentures, rather than all types
of debt instruments meeting its investment objective. In addition, VE/CGIF may
borrow only 5% of assets and not for investment purposes. On the other hand,
VE/CGIF may concentrate its investments in a single industry and make short
sales against the box, which GIF cannot.
VE/CGIF may concentrate (i.e., invest more than 25% of its assets) in a single
industry. Because of this, together with the fact that both VE/CGIF and GIF are
non-diversified funds (i.e., the Funds are not limited in how much they can
invest in a single issuer), the value of the shares of a VE/CGIF may be more
susceptible to any single economic, political or regulatory event than would the
shares of a diversified fund or a fund that is not permitted to concentrate.
A short sale occurs when VE/CGIF sells a security which it does not own by
borrowing from a broker. In
7
<PAGE>
the event that the value of the security increases, the Fund will suffer a loss
as it will have to repurchase the security at the higher price. Short sales also
may incur higher transaction costs than regular transactions.
Since both VE/CGIF and GIF invest extensively in debt securities, any risks
inherent in such investments are applicable to both Funds. The market value of
debt securities generally varies in direct response to changes in interest rates
and the financial condition of the issuer. During periods of declining interest
rates, the value of debt securities generally increases. Conversely, during
periods of rising interest rates, the value of such securities generally
declines. Debt securities with similar maturities may have different yields,
depending upon several factors, including the relative financial condition of
the issuers. Both Funds may invest in high yield or "junk" bonds. Such low rated
and unrated securities and investments in emerging market debt securities
generally involve greater volatility of price and risk of principal and income,
including the possibility of default by, or bankruptcy of, the issuers of the
securities. The existence of limited markets for particular high yield bonds or
low rated securities may reduce liquidity and may also make it more difficult
for a Fund to obtain accurate market quotations for the purpose of valuing the
Fund's portfolio.
VE/CGIF and GIF both invest in securities issued by foreign issuers. As a
result, each Fund may from time to time hold foreign currencies, and therefore,
the value of the assets of each Fund (and thus their net asset values) may be
affected by changes in currency exchange rates. To the extent such currencies
are held by a Fund, such Fund's performance will be less favorable if foreign
currency exchange rates move adversely relative to the U.S. dollar. Investments
in foreign securities may involve a greater degree of risk than investments in
domestic securities due to the possibility of exchange controls, less publicly
available information, and the possibility of expropriation, confiscatory
taxation or political, economic or social instability. In addition, some foreign
companies are not generally subject to the same uniform accounting, auditing and
financial reporting standards as are American companies, and there may be less
government supervision and regulation of foreign stock exchanges, brokers and
companies. Foreign securities may also be subject to foreign taxes, higher
custodian fees and dividend collection fees which could reduce the yield on such
securities.
For investment purposes, both VE/CGIF and GIF may enter into currency, options,
futures and other derivatives transactions. Among the risks of effecting
transactions in derivatives for investment purposes are market risk, in that the
Fund has market exposure to instruments it would otherwise not be permitted to
invest in (excessive exposure to low credits), and settlement (both legal and
operation) risk with the various counterparties. The use of derivatives is a
highly specialized activity which involves investment techniques and risks
different from those associated with ordinary portfolio transactions. If the
investment adviser is incorrect in its forecasts about market values and
currency exchange rates, the investment performance of the Fund would be less
favorable than it would have been if this investment technique were not used.
In addition, transactions costs may be greater.
While it is the policy of GIF and VE/CGIF generally not to engage in trading for
short-term gains, both GIF and VE/CGIF may effect portfolio transactions without
regard to the holding period if, in the judgment of the investment adviser, such
transactions are advisable in light of a change in circumstances of a particular
company, within a particular industry or country, or in general market, economic
or political conditions. This may lead to a higher portfolio turnover ratio. The
annual portfolio turnover rate for GIF for the fiscal year ended December 31,
1996 was 157.5% while VE/CGIF's portfolio turnover rate for the same period was
80.70%. The portfolio turnover rate for GIF for the year ended December 31, 1997
was _____% while VE/CGIF's portfolio rate for the same period was ______%. The
portfolio turnover rate of the Funds may vary greatly from year to year. To the
extent that a Fund has a higher portfolio turnover rate, its overall expenses
may increase due to certain transactional costs incurred as a result of
effecting a securities trade (such as brokerage commissions).
See "Risk Factors" in the GIF Prospectus and Statement of Additional Information
and "Additional Risk Factors" in the VE/CGIF Prospectus and Statement of
Additional Information for a more detailed discussion of the risks involved with
each Fund's investment practices and strategies.
8
<PAGE>
The Reorganization
Procedures
The Adviser is hereby soliciting shareholders of GIF to vote for the approval of
the Reorganization. It is anticipated that the Meeting will be held on April
___, 1998 at 99 Park Avenue, 8th Floor, New York, New York at _______ , New York
Time. If GIF's shareholders approve the Reorganization, the Reorganization will
take place on or about April __, 1998.
Terms of the Agreement and Plan of Reorganization and Liquidation
The following is a summary of the significant terms of the Plan which has been
considered and approved by the Trustees of Van Eck Funds at a meeting held on
December 10, 1997 and by the Directors of Van Eck/Chubb Funds, Inc. at a meeting
held on December 9, 1997. A copy of the Plan is attached to this Proxy
Statement/Prospectus as Exhibit A. This summary is qualified in its entirety by
reference to the Plan.
Valuation of Assets and Liabilities. The assets of VE/CGIF and GIF will be
valued on the business day prior to the date on which the Reorganization will
take place (the "Exchange Date"). The assets in each portfolio will be valued
according to the procedures set forth under "Determination of Net Asset Value"
in VE/CGIF's Statement of Additional Information and "Purchase of Shares" in
GIF's Statement of Additional Information (a summary of that method appears
above under "Synopsis-Net Asset Value"). Redemption requests for GIF which have
not been settled as of the Exchange Date will be treated as liabilities for
purposes of the Reorganization. Exchange requests as to GIF shares received on
the Exchange Date will be treated and processed as exchanges from VE/CGIF and
will be effected as of the close of business on the Exchange Date.
Distribution of Shares and Transfer of Assets. On the Exchange Date, VE/CGIF
will issue to GIF a number of Class A shares of beneficial interest, the
aggregate net asset value of which will equal the aggregate net asset value of
the assets transferred to VE/CGIF by GIF on the Exchange Date. Each shareholder
of GIF will receive a number of Class A shares of VE/CGIF having an aggregate
net asset value equal to the value of his or her shares of GIF. No sales charge
or fee of any kind will be charged to the shareholders of GIF in connection with
their receipt of Class A shares of VE/CGIF in the Reorganization.
Expenses. Expenses of the Reorganization directly attributable to the
Reorganization will be borne by Chubb Asset Managers, Inc., the Adviser and the
Funds. As between the Funds, their expenses will be allocated to the Fund
incurring the expense or on the basis of relative net assets. Other expenses
will be allocated equitably among the parties.
Required Approvals. Under the provisions of the Amended and Restated Master
Trust Agreement of the Trust, the liquidation of GIF may be authorized at any
time by vote of a majority of Trustees then in office subject to approval of a
majority of the outstanding voting shares of the Fund, as defined in the 1940
Act. Such majority is defined as the lesser of (i) 67% or more of the
outstanding shares present at the meeting, provided the holders of 50% or more
of the outstanding shares are present in person or by proxy, or (ii) more than
50% of the outstanding shares.
Amendments and Conditions. The Plan may be amended at any time prior to the
Exchange Date with respect to any of the terms therein except that following the
meeting of the shareholders of GIF, no such amendment may have the effect of
changing the provisions of the Plan determining the number of VE/CGIF shares to
be issued to GIF shareholders to their detriment without their further approval.
The obligations of VE/CGIF and GIF are subject to various conditions, including
a registration statement on Form N-14 being declared effective by the Securities
and Exchange Commission, approval of the Reorganization by the shareholders of
GIF and the continuing accuracy of various representations and warranties of
VE/CGIF and GIF being confirmed by the respective parties.
9
<PAGE>
Benefits to GIF as a Result of the Reorganization
1. GIF and VE/CGIF are affiliated funds, marketed through the same distribution
channels. To have two global income funds may be confusing to brokers and
investors. The overall investment objectives, policies and portfolios of GIF and
VE/CGIF are substantially similar. Performance of VE/CGIF is comparable to or
better than that of GIF. By combining the Funds, the net expenses to average
net assets are likely to decrease for investors of GIF.
2. The Reorganization allows shareholders of GIF to defer recognition of gains
or losses on their shares until they choose to recognize such gains and losses.
As more fully explained in "The Reorganization-Tax Consequences" below, as of
the Exchange Date, GIF will obtain an opinion from Fund counsel that the
Reorganization has been structured to be consummated, for Federal income tax
purposes, on a tax-free basis. Thus, a shareholder of GIF will be able to defer
the recognition of any gains or losses on his or her shares of GIF until shares
of VE/CGIF received pursuant to the Reorganization are exchanged or sold. If GIF
were liquidated rather than reorganized, a shareholder would have no choice but
to recognize any gains or losses in the current tax year.
Tax Consequences of the Reorganization
The Reorganization has been structured with the intention that it will qualify
for Federal income tax purposes as a tax-free reorganization under Section
368(a)(1)(C) of the Code. VE/CGIF and GIF have both elected to qualify as a
regulated investment company under the Code, and VE/CGIF intends to continue to
elect to so qualify. Upon the closing of the Reorganization, counsel to GIF and
VE/CGIF, Goodwin, Procter & Hoar LLP, will opine that, subject to the customary
assumptions and representations, on the basis of the existing provisions of the
Code, the Treasury Regulations promulgated thereunder and current administrative
and judicial interpretations thereof, for Federal income tax purposes: (i) the
transfer of all or substantially all of the assets of GIF to VE/CGIF solely in
exchange for VE/CGIF shares and the assumption by VE/CGIF of some of GIF's
liabilities and the distribution of such shares to the shareholders of GIF, as
provided in the Plan, will constitute a "reorganization" within the meaning of
Section 368(a)(1)(C) of the Code, and VE/CGIF and GIF will each be a "party to a
reorganization" within the meaning of Section 368(b); (ii) GIF will not
recognize gain or loss on the transfer of its assets to VE/CGIF in the
Reorganization; (iii) GIF will not recognize gain or loss upon its distribution
to its shareholders of the VE/CGIF shares received in the Reorganization; (iv)
VE/CGIF will not recognize a gain or loss upon the receipt of the assets of GIF
in exchange for the VE/CGIF shares; (v) shareholders of GIF will not recognize a
gain or loss on the exchange of shares of GIF for shares of VE/CGIF provided
that such shareholders receive solely VE/CGIF shares (including fractional
shares) in exchange for their GIF shares; (vi) the tax basis of the GIF assets
acquired by VE/CGIF will be the same to VE/CGIF as the tax basis of such assets
to GIF immediately prior to the Reorganization and the holding period of the
assets of GIF in the hands of VE/CGIF will include the period during which those
assets were held by GIF; (vii) the aggregate tax basis of the VE/CGIF shares
received by the shareholders of GIF will be the same as the aggregate tax basis
of GIF shares exchanged by such shareholder immediately prior to the
Reorganization; and (viii) the holding period of the VE/CGIF shares (including
fractional shares) received by shareholders of GIF will include the holding
period that the GIF shares exchanged were held (provided that the GIF shares
exchanged were held as a capital asset on the date of the Reorganization). The
receipt of such opinions upon the closing of the transaction is a condition to
the closing of the Reorganization. If the transfer of assets of GIF in exchange
for VE/CGIF shares and the assumption by VE/CGIF of the liabilities of GIF were
deemed not to constitute a tax-free reorganization, each GIF shareholder would
recognize gain or loss equal to the difference between the value of the VE/CGIF
shares such shareholder acquires and the tax basis of such shareholder's GIF
shares.
Shareholders should consult their tax advisors regarding the effect, if any of
the Reorganization in light of their individual circumstances. Since the
foregoing relates only to Federal income tax consequences, shareholders should
also consult with their tax advisors as to the state and local tax consequences,
if any, of the Reorganization.
10
<PAGE>
Capitalization
The following table sets forth, as of December 31, 1997, the capitalization of
VE/CGIF and GIF(Class A shares).
Capitalization
<TABLE>
<CAPTION>
Pro Forma
Reorganization
---------
VE/CGIF GIF VE/CGIF
----------- ----------- -----------
<S> <C> <C> <C>
Total Net Assets ................ $52,087,567 $41,924,752 $94,012,319
Shares Outstanding .............. 5,404,248 4,936,240 9,753,289
----------- ----------- -----------
Net Asset Value Per Share ....... $ 9.64 $8.49 $ 9.64
</TABLE>
Management
Directors/Trustees. The management of the business and affairs of GIF is the
responsibility of the Board of Trustees of Van Eck Funds. The Trustees of Van
Eck Funds (of which GIF is a series) consist of nine persons, five of whom are
not "interested persons" as defined in the 1940 Act. The management of the
business and affairs of VE/CGIF is the responsibility of the Board of Directors
of Van Eck/Chubb Funds, Inc. The Directors of Van Eck/Chubb Funds, Inc. (of
which VE/CGIF is a series) consist of five persons, three of whom are not
"interested persons" as defined in the 1940 Act.
Investment Adviser and Administrator. Van Eck Associates Corporation, 99 Park
Avenue, New York, New York 10016, serves as the investment adviser and manager
to GIF. Chubb Asset Managers, Inc., 15 Mountain View Road, Warren, New Jersey
07061, serves as investment adviser to VE/CGIF and Van Eck Associates
Corporation serves as investment administrator to the Fund.
Under the Trust's Investment Advisory Agreement, the Adviser provides GIF with a
continuous investment program which includes determining which securities should
be bought, sold or held. The Adviser also manages the business and affairs of
GIF. Pursuant to the Investment Management Agreement for VE/CGIF, Chubb Asset
Managers, Inc. is responsible for the investment of VE/CGIF's portfolio,
consistent with the Fund's investment objective, policies and restrictions.
GIF and VE/CGIF pay advisory fees at the rates indicated under "Synopsis-
Investment Advisory Fees" above. VE/CGIF pays a separate fee for administrative
services. The advisory fee paid to the Adviser with respect to GIF is higher
than the fees paid by most investment companies. For additional information, see
"Management" in the GIF Prospectus, "Management of the Company" and "Management
Fees and Expenses" in the VE/CGIF Prospectus, and "Investment Advisory Services"
in both Funds' Statements of Additional Information.
Portfolio Managers. Messrs. Charles Cameron and Gregory Krenzer are Co-Portfolio
Managers of GIF. Mr. Cameron is Chief Trader for the Adviser and an officer of
the Trust and another mutual fund advised by the Adviser. Mr. Krenzer is
portfolio manager of the U.S. Government Money Fund series of the Trust. Both
Messrs. Caneron and Krenzer also serve as co-portfolio managers of another
global income fund advised by the Adviser. Marjorie Raines, who serves as
Senior Vice-President of Chubb Asset Managers Inc. and has been employed by
Chubb Asset Managers, Inc. since before 1987, serves as portfolio manager of
VE/CGIF. The VE/CGIF portfolio managers have a support staff of three
individuals, two of whom are analysts.
Transfer Agent. The Transfer Agent and Dividend Paying Agent for GIF is DST
Systems, Inc., P.O. Box
11
<PAGE>
418407, Kansas City, Missouri 64141. The Transfer Agent and Dividend Paying
Agent for VE/CGIF until April 6, 1998 is Firstar Trust Company, Mutual Fund
Service, Third Floor, P.O. Box 701, Milwaukee, WI 53201-0701. Thereafter, DST
Systems Inc. will assume that function.
Shares of VE/CGIF to be Issued in the Reorganization and Shares of GIF
Shares. On the Exchange Date, all shareholders of GIF will be given a number of
Class A shares of common stock, par value $.01, of VE/CGIF having an aggregate
net asset value equal to the net asset value of his or her shares of GIF. The
shares of VE/CGIF to be issued in the Reorganization will be identical in all
respects to all Class A shares of VE/CGIF then outstanding.
Voting Rights. Shareholders of VE/CGIF and GIF are entitled to one vote for each
share and a fractional vote for each fractional share held with respect to the
election of Directors/Trustees (to the extent hereafter provided) and other
matters submitted to a vote of shareholders. With respect to the Rule 12b-1
Plans in effect for GIF and VE/CGIF, the Plans may not be amended to increase
materially the amount of expenditures unless such amendment is approved by a
vote of the majority of the outstanding voting securities of that Fund. Thus,
there will ordinarily be no shareholder meeting unless required by the 1940 Act.
The Boards of the Trust and Van Eck/Chubb Funds, Inc. are self-perpetuating
bodies until fewer than 50% of their members were elected by the shareholders.
Under the Trust's Amended and Restated Master Trust Agreement, any Trustee may
be removed by a vote of two-thirds of the outstanding Trust shares (outstanding
Trust shares include shares of all series of the Trust and not solely shares of
GIF); and holders of ten percent or more of the outstanding shares of the Trust
can require Trustees to call a meeting of shareholders for purposes of voting on
the removal of one or more Trustees. Under the Bylaws of Van Eck/Chubb Funds,
Inc., any Director may be removed by a vote of a majority of the votes entitled
to be cast for the election of Directors at any meeting of stockholders duly
called and at which a quorum is present. With respect to each of GIF and
VE/CGIF, each issued and outstanding share is entitled to participate equally in
dividends and distributions declared by such Fund and, upon liquidation or
dissolution, in the net assets of such Fund remaining after satisfaction of
outstanding liabilities.
Shareholder Liability. Under Massachusetts law, the shareholders of the Trust
could, under certain circumstances, be held personally liable for the
obligations of the Trust. However, the Amended and Restated Master Trust
Agreement of the Trust disclaims shareholder liability for acts or obligations
of the Trust and requires that notice of such disclaimer be given in each
agreement, obligation or instrument entered into or executed by the Trust or the
Trustees. The Amended and Restated Master Trust Agreement provides for
indemnification out of the Trust's property for all losses and expenses of any
shareholder held personally liable for the obligations of the Trust. Thus, the
risk of a shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which the Trust itself would be unable
to meet its obligations. The Adviser believes that, in view of the above, the
risk of personal liability to shareholders is remote.
Control. As of ______, 1998, there were no persons who exercised control over
VE/CGIF or GIF as "control" is defined in the 1940 Act.
Other Classes. As of the date hereof, neither GIF nor VE/CGIF has any classes of
securities outstanding as defined in the 1940 Act other than the Class A shares
described herein.
Shareholder Inquiries. Shareholder inquiries with respect to VE/CGIF or GIF
should be addressed to the Funds by telephone at (800) 826-2333 or in writing at
the address set forth on the cover page of the Proxy Statement/Prospectus.
Dividends and Distributions. Any dividends and capital gains paid by GIF may be
received by the shareholder in cash or may be reinvested in that Fund at the net
asset value (without imposition of a sales charge) on the day so determined by
the Board of Trustees. In addition, dividends and capital gains may also be
reinvested in Class A shares of any other series of Van Eck Funds. Any dividends
and capital gains paid by VE/CGIF will be automatically reinvested in additional
shares of the Fund at the Fund's NAV at the close of business on the payment
date of the dividend or distribution unless the shareholder elects to receive
all dividends and/or distributions either in cash or to invest them without
imposition of any sales charge in any other Van Eck/Chubb Fund at such fund's
net asset value at the
12
<PAGE>
close of business on the payment date.
Tax Consequences. For a discussion of the tax consequences associated with an
investment in GIF, see "Taxes" in Van Eck Funds' Statement of Additional
Information and see "Taxes and Dividends" in the Van Eck/Chubb Funds, Inc.
Statement of Additional Information. Shareholders are urged to consult their tax
advisors regarding specific questions as to Federal, foreign, state and local
taxes.
Purchase of Shares. Both prior to and subsequent to the Reorganization, shares
of VE/CGIF will be offered continuously for sale by the Distributor or by
brokers and agents that have entered into selling group or selling agency
agreements with the Distributor, 99 Park Avenue, New York, New York 10016. The
Reorganization will have no effect on the purchase procedures for shares of
VE/CGIF. See "Purchase of Shares" in the Prospectuses. For more information on
the Distributor, see "The Distributor" in the Statement of Additional
Information for Van Eck Funds.
VE/CGIF and GIF have adopted Rule 12b-1 Plans in accordance with the 1940 Act.
The 12b-1 Plans are described in "Synopsis-Other Fees" above. Each Rule 12b-1
Plan must be approved annually by the Board of Directors/Trustees. For more
discussion of the Rule 12b-1 Plans, see "Plan of Distribution" in the GIF
Prospectus and "Distribution Plan" in the VE/CGIF Prospectus.
Redemption Procedures. While shares of each Fund will be redeemed on the day on
which proper instructions are received by its transfer agent, redemption
procedures for VE/CGIF are not identical to those for GIF. See "Redemption of
Shares" in the Van Eck Funds' Prospectuses and "Redemption or Repurchase" in the
VE/CGIF Prospectus.
Other Matters
It is not anticipated that any matters other than the adoption of the Plan
described above will be brought before the Meeting. If, however, any other
business is properly brought before the Meeting, proxies will be voted in
accordance with the judgment of the persons designated on such proxies.
Information Concerning The Meeting
Date, Time and Place of Meeting
The Meeting for shareholders of GIF will be held on April __, 1998 at 99 Park
Avenue, 8th Floor, New York, New York 10016 at __________, New York Time.
Solicitation, Revocation and Use of Proxies
A shareholder executing and returning a proxy has the power to revoke it at any
time prior to its exercise by executing a superseding proxy or by submitting a
notice of revocation to the Secretary of the Trust at 99 Park Avenue, 8th Floor,
New York, New York 10016. Although mere attendance at the Meeting will not
revoke a proxy, a shareholder present at the Meeting may withdraw his or her
proxy and vote in person.
All shares represented by properly executed proxies, unless such proxies have
previously been revoked, will be voted at the Meeting in accordance with the
directions on the proxies; if no direction is indicated, the shares will be
voted "FOR" the approval of the Plan and any other proposals.
Record Date and Outstanding Shares
Only holders of record of GIF's shares of beneficial interest, par value $.001
per share, at the close of business on ___________, 1998 (the "Record Date") are
entitled to vote at the Meeting and any adjournment thereof. At the close of
business on the Record Date, there were ______________shares of GIF outstanding
and entitled to vote.
Security Ownership of Certain Beneficial Owners and Management
13
<PAGE>
No person or entity owns beneficially 5% or more of the shares of GIF or VE/CGIF
except as stated in "Introduction" above.
Voting Rights and Required Vote
Voting procedures are described under "The Reorganization-Terms of the Agreement
and Plan of Reorganization" above.
A proxy that is properly executed by a client and returned to his or her broker,
which holds GIF shares for the client in its own name, and that is accompanied
by the client's instructions to withhold authority to vote with respect to the
reorganization proposal, represents a broker "non-vote" (that is, a proxy from a
broker or nominee indicating that such person has not received instructions from
the beneficial owner or other person entitled to vote shares on the particular
matter with respect to which the broker or nominee does not have discretionary
power). The shares represented thereby will be considered not to be present at
the Special Meeting for purposes of determining the existence of a quorum for
the transaction of business for that proposal and will be deemed not cast with
respect to such proposal. Also, a properly executed and returned proxy marked
with an abstention will be considered present at the Meeting for purposes of
determining the existence of a quorum for the transaction of business. However,
abstentions and broker "non-votes" do not constitute a vote "for" or "against"
the matter, and, therefore, have the effect of a negative vote on matters which
require approval by a requisite percentage of the outstanding shares.
In the event a quorum is not present at the Meeting or in the event that a
quorum is present but sufficient votes to approve the Plan are not received, the
persons named as proxies may propose one or more adjournments of such Meeting to
permit further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares voted at the Meeting in person or
by proxy. The persons named as proxies will vote those proxies that they are
entitled to vote in such manner as they determine to be in the best interest of
shareholders with respect to any proposal to adjourn the Meeting. A shareholder
vote may be taken on the Reorganization prior to such adjournment if sufficient
votes have been received for approval.
Under Massachusetts law, shareholders of a registered investment company are not
entitled to demand fair value of the shares and will be bound by the terms of
the Reorganization if the Plan is approved at the Meeting. Any shareholder in
GIF may, however, either redeem his or her shares at net asset value or exchange
his or her shares into another Van Eck Fund or Van Eck/Chubb Fund prior to the
date of the Reorganization.
Additional Information
This Proxy Statement/Prospectus and the related Statement of Additional
Information do not include all the information set forth in the registration
statements and exhibits relating thereto which the Trust and Van Eck/Chubb
Funds, Inc., respectively, have filed with the Securities and Exchange
Commission, Washington, DC 20549, under the Securities Act of 1933 and the
Investment Company Act of 1940, to which reference is hereby made.
Reports, proxy statements, registration statements and other information filed
by the Trust and Van Eck/Chubb Funds, Inc., can be inspected and copied at the
public reference facilities of the Securities and Exchange Commission in
Washington, DC and Regional Offices of the Commission located at 7 World Trade
Center, New York, New York 10048 and Suite 1400, 500 West Madison Street,
Chicago, Illinois 60621. Copies of such material can also be obtained by mail
from the Public Reference Branch, Office of Consumer Affairs and Information
Services, Securities and Exchange Commission, 450 Fifth Street, N.W.,
Washington, DC 20549 and its public reference facilities in New York, New York
and Chicago, Illinois, at prescribed rates.
14
<PAGE>
Exhibit A
Agreement and
Plan of Reorganization and Liquidation
AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION dated as of December
10,1997 (the "Plan") by and between Van Eck Funds, a Massachusetts business
trust (the "Trust"), on behalf of Global Income Fund, a series of the Trust, and
Van Eck/Chubb Funds, Inc., a Maryland corporation (the "Corporation") on behalf
of Van Eck/Chubb Global Income Fund, a series of the Corporation. Global
Income Fund and Van Eck/Chubb Global Income Fund are collectively referred to as
the "Funds" and individually as a "Fund".
WITNESSETH:
WHEREAS, the Trust and the Corporation are each an open-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act");
WHEREAS, this Plan is intended to be and is adopted as a plan of reorganization
and liquidation within the meaning of Section 368(a)(1)(C) of the Internal
Revenue Code of 1986, as amended, such reorganization to consist of the transfer
of all of the assets of Global Income Fund in exchange solely for Class A shares
of common stock, par value $0.01 per share, of the Van Eck/Chubb Global Income
Fund ("Van Eck/Chubb Global Income Fund Shares") and the assumption by Van
Eck/Chubb Global Income Fund of all of the stated liabilities of Global Income
Fund and the distribution, after the Closing hereinafter referred to, of Van
Eck/Chubb Global Income Fund Shares to the shareholders of Global Income Fund in
liquidation of Global Income Fund, all upon the terms and conditions hereinafter
set forth in this Plan; and
WHEREAS, the Trustees of the Trust, including a majority of the Trustees who are
not interested persons, and the Directors of the Corporation, including a
majority of the Directors who are not interested persons, have determined with
regard to its constituent Fund that participating in the transactions
contemplated by this Plan is in the best interests of that Fund.
NOW, THEREFORE, the Trust and the Corporation hereby agree as follows:
1. Transfer of Assets. Subject to the terms and conditions set forth herein, at
the closing provided for in Section 5 (herein referred to as the "Closing"), the
Trust shall transfer all of the assets of Global Income Fund, and assign all
Assumed Liabilities (as hereinafter defined), to Van Eck/Chubb Global Income
Fund, and the Company, on behalf of Van Eck/Chubb Global Income Fund, shall
acquire all such assets, and shall assume all such Assumed Liabilities, upon
delivery to the Trust of Van Eck/Chubb Global Income Fund Shares having a net
asset value equal to the value of the net assets of Global Income Fund
transferred (the "New Shares"). "Assumed Liabilities" shall mean all
liabilities, expenses, costs, charges and reserves reflected in an unaudited
statement of assets and liabilities of Global Income Fund as of the close of
business on the Valuation Date (as hereinafter defined), determined in
accordance with generally accepted accounting principles consistently applied
from the prior audited period. The net asset value of the New Shares and the
value of the net assets of Global Income Fund to be transferred shall be
determined as of the close of regular trading on the New York Stock Exchange on
the business day next preceding the Closing (the "Valuation Date") using the
valuation procedures set forth in the then-current prospectus and statement of
additional information of Van Eck/Chubb Global Income Fund.
All Assumed Liabilities of Global Income Fund, to the extent that they exist at
or after the Closing, shall after the Closing attach to Van Eck/Chubb Global
Income Fund and may be enforced against Van Eck/Chubb Global Income Fund to the
same extent as if the same had been incurred by Van Eck/Chubb Global Income
Fund.
2. Liquidation of Global Income Fund. At or as soon as practicable after the
Closing, Global Income Fund will be liquidated and the New Shares delivered to
the Trust on behalf of Global Income Fund will be distributed to shareholders of
Global Income Fund, each shareholder to receive the number of New Shares equal
to the pro rata portion of shares of beneficial interest of Global Income Fund
held by such shareholder as of the close of business on the Valuation Date. Such
liquidation and distribution will be accompanied by the establishment of an open
account on the stock records of Van Eck/Chubb Global
<PAGE>
Income Fund in the name of each shareholder of Global Income Fund and
representing the respective pro rata number of New Shares due such shareholder.
As soon as practicable after the Closing, the Trust shall file on behalf of
Global Income Fund such instruments of dissolution, if any, as are necessary to
effect the dissolution of Global Income Fund and shall take all other steps
necessary to complete liquidation and dissolution of Global Income Fund. As of
the Closing, each outstanding certificate which, prior to the Closing,
represented shares of Global Income Fund will be deemed for all purposes to
evidence ownership of the number of Van Eck/Chubb Global Income Fund Shares
issuable with respect thereto pursuant to the Reorganization. After the Closing,
certificates of originally represented shares of Global Income Fund will be
rendered nonnegotiable; upon special request and surrender of such certificates
to the Corporation's transfer agent, holders of these non-negotiatble
certificates shall be entitled to receive certificates representing the number
of Van Eck/Chubb Global Income Fund shares issuable with respect thereto.
3. Representations and Warranties.
(a) The Trust, on behalf of Global Income Fund, hereby represents and warrants
to the Corporation on behalf of Van Eck/Chubb Global Income Fund as follows:
(i) the Trust is duly organized, validly existing and in good standing
under the laws of the Commonwealth of Massachusetts and has full
power and authority to conduct its business as presently
conducted;
(ii) the Trust has full power and authority to execute, deliver and
carry out the terms of this Plan on behalf of Global Income Fund;
(iii) the execution and delivery of this Plan on behalf of the Global
Income Fund and the consummation of the transactions contemplated
hereby are duly authorized and no other proceedings on the part of
the Trust or the shareholders of the Global Income Fund (other
than as contemplated in Section 4(I)) are necessary to authorize
this Plan and the transactions contemplated hereby;
(iv) this plan has been duly executed by the Trust on behalf of Global
Income Fund and constitutes its valid and binding obligations,
enforceable in accordance with its terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium and other
rights affecting creditors' rights generally, and general
equitable principles;
(v) neither the execution and delivery of this Plan by the trust on
behalf of Global Income Fund, nor the consummation by the Trust on
behalf of Global Income Fund of the transactions contemplated
hereby will conflict with, result in a breach of or default under,
the Amended and Restated Master Trust Agreement of the Trust (the
"Master Trust Agreement") or the By-Laws of the Trust, as each may
be amended, or any statute, regulation, order, judgment or decree,
or any instrument, contract or other Plan to which the Trust is a
party or by which the Trust or any of its assets is subject or
bound; and
(vi) no authorization, consent or approval of any governmental or other
public body or authority or any other party is necessary for the
execution an delivery of this Plan by the Trust on behalf of
Global Income Fund or the consummation of any transactions
contemplated hereby by the Trust, other than as shall be obtained
at or prior to the Closing.
(b) The Corporation, on behalf of Van Eck/Chubb Global Income Fund, hereby
represents and warrants to Global Income Fund as follows:
(i) the Corporation is duly organized, validly existing and in good
standing under the laws of the State of Maryland and has full
power and authority to conduct is business as presently conducted;
(ii) the Corporation has full power and authority to execute, deliver
and carry out the terms of this Plan on behalf of Van Eck/Chubb
Global Income Fund;
(iii) the execution and delivery of this Plan on behalf of Van Eck/Chubb
Global Income Fund and the consummation of the transactions
contemplated hereby are duly authorized and no other proceedings
on the part of the Corporation or the shareholders of Van
Eck/Chubb Global Income Fund are necessary to authorize this Plan
and the transactions contemplated hereby;
<PAGE>
(iv) this Plan has been duly executed by the Corporation on behalf of
Van Eck/Chubb Global Income Fund and constitutes its valid and
binding obligation, enforceable in accordance with its terms,
subject to applicable bankruptcy, reorganization, insolvency,
moratorium and other rights affecting creditors' rights generally,
and general equitable principles;
(v) neither the execution and delivery of this Plan by the Corporation
on behalf of Van Eck/Chubb Global Income Fund, nor the
consummation by the Corporation on behalf of Van Eck/Chubb Global
Income Fund of the transaction contemplated hereby will conflict
with, result in a breach or violation of or constitute (or with
notice, lapse of time or both constitute) a breach of or default
under, the Articles of Amendment and Restatement or By-Laws of the
Corporation, as each may be amended, or any statute, regulation,
order, judgment or decree, or any instrument, contract or other
Plan to which the Corporation is a party or by which the
Corporation or any of its assets is subject or bound; and
(vi) no authorization, consent or approval of any governmental or other
public body or authority or any other party is necessary for the
execution and delivery of this Plan by the Corporation on behalf
of Van Eck/Chubb Global Income Fund or the consummated of any
transactions contemplated hereby by the Corporation, other than as
shall be obtained at or prior to the Closing.
4. Conditions Precedent. The obligations of the Trust and/or the Corporation, as
the case may be, to effectuate the Plan of Reorganization and Liquidation
hereunder shall be subject to the satisfaction of the following conditions:
(a) At or immediately prior to the Closing, the Trust shall have declared and
paid a dividend or dividends which, together with all previous such
dividends, shall have the effect of distributing to the shareholders of
Global Income Fund all of the Fund's investment company taxable income, if
any, for taxable years ending at or prior to the Closing (computed without
regard to any deduction for dividends paid) and all of its net capital gain,
if any, realized in taxable years ending at or prior to the Closing (after
reduction for any capital loss carry-forward);
(b) Such authority and orders from the Securities and Exchange Commission (the
"Commission") and state securities commissions as may be necessary to permit
the Trust and the Corporation to carry out the transactions contemplated by
this Plan shall have been received;
(c) A registration statement of the Corporation on Form N-14 under the
Securities Act of 1933, as amended (the "Securities Act"), registering the
New Shares under the Securities Act, and such amendment or amendments
thereto as are determined by the Board of Directors of the Corporation to be
necessary or appropriate to effect such registration of the New Shares (the
"Registration Statement"), shall have been filed with the Commission and the
Registration Statement shall have become effective, and no stop-order
suspending the effectiveness of such Registration Statement shall have been
issued, and no proceeding for that purpose shall have been initiated or
threatened by the Commission (and not withdrawn or terminated);
(d) All necessary actions shall have been taken in order to enable Van Eck/Chubb
Global Income Fund to offer the New Shares to the public in all states in
which the ability to offer such New Shares is required for consummation of
the transactions contemplated hereunder;
(e) All representations and warranties of the Trust on behalf of Global Income
Fund contained in this Plan shall be true and correct in all material
respects as of the date hereof and as of the Closing, with the same force
and effect as if then made, and the Corporation on behalf of Van Eck/Chubb
Global Income Fund shall have received a certificate of an officer of the
trust acting on behalf of Global Income Fund to that effect in form and
substance reasonably satisfactory to the Corporation on behalf of Van
Eck/Chubb Global Income Fund;
(f) All representations and warranties of the Corporation on behalf of Van
Eck/Chubb Global Income contained in this Plan shall be true and correct in
all material respects as of the date hereof and as of
<PAGE>
the Closing, with the same force and effect as if then made, and the Trust
on behalf of Global Income Fund shall have received a certificate of an
officer of the Corporation acting on behalf of Van Eck/Chubb Global Income
Fund to that effect in form and substance reasonably satisfactory to the
Trust on behalf of Global Income Fund;
(g) The Trustees of the Trust and the Directors of the Corporation shall have
received a legal opinion from counsel, in form and substance reasonably
satisfactory to the Trustees of the Trust and the Directors of the
Corporation, as to such matters as the Trustees or Directors may reasonably
request, including an opinion regarding the tax consequences of the
reorganization;
(h) The Corporation on behalf of Van Eck/Chubb Global Income Fund shall have
certain agreed upon procedures performed by independent auditors, selected
by the Corporation, on the unaudited statement of assets and liabilities
described in Section 1 of this Plan, and shall have received a report
thereon in accordance with established accounting standards;
(i) A vote approving this Plan and the reorganization contemplated hereby shall
have been adopted by at least a majority (as defined in the 1940 Act) of the
outstanding shares of beneficial interest of Global Income Fund entitled to
vote at a Meeting of Shareholders of Global Income Fund duly called for such
purpose.
5. Closing. The Closing shall be held at the offices of the Trust and shall
occur (a) immediately prior to the opening of business on the first Monday
following receipt of all necessary regulatory approvals and the final
adjournment of meetings of shareholders of Global Income Fund at which this Plan
is considered or (b) such later time as the parties may agree. All acts taking
place at the Closing shall be deemed to take place simultaneously unless
otherwise provided. At, or as soon as may be practicable following the Closing,
the Trust shall distribute the New Shares to Global Income Fund Record Holders
(as herein defined) by instructing Van Eck/Chubb Global Income Fund to register
the appropriate number of New Shares in the names of Global Income Fund's
shareholders and Van Eck/Chubb Global Income Fund will promptly comply with said
instruction. The shareholders of record of the Global Income Fund as of the
close of business on the Valuation Date shall be certified by the Trust's
transfer agent (the "Global Income Fund Record Holders").
6. Expenses. All expenses of the Trust and the Corporation attributable to the
transactions contemplated by this Plan, other than any registration fee payable
to the Commission in connection with the registration of New Shares under the
Securities Act or any filing or notification fee payable to the Commission or
state securities commission in connection with the transactions contemplated by
this Plan, will be borne by Chubb Asset Managers, Inc. and Van Eck Associates
Corporation, for which each shall be jointly and severally liable. Any
registration fee payable to the Commission in connection with the registration
of New Shares under the Securities Act or any filing or notification fee payable
to the Commission or state securities commission in connection with the
transactions contemplated by this Plan shall be payable by such Fund required to
pay such fee. All fees payable by any party as described herein shall be
payable by such party regardless of whether the transactions contemplated hereby
are consummated.
7. Termination. This Plan and the transactions contemplated hereby may be
terminated and abandoned by resolution of the Board of Trustees of the Trust or
the Board of Directors of the Corporation with respect to either of Global
Income Fund or Van Eck/Chubb Global Income Fund, at any time prior to the
Closing, if circumstances should develop that, in the opinion of the Board, in
its sole discretion, make proceeding with this Plan inadvisable for either Fund.
In the event of any such termination, there shall be no liability for damages on
the part of either Global Income Fund or Van Eck/Chubb Global Income Fund, or
their respective Trustees/Directors or officers, to the other party, except with
respect to the payment of expenses as contemplated in Section 6 hereof.
8. Amendments. This Plan may be amended, waived or supplemented in such manner
as may be mutually agreed upon in writing by the authorized officers of the
Trust and the Corporation; provided, however, that following the meeting of
Global Income Fund shareholders called by the Trust pursuant to Section 4(i) of
this Plan, no such amendment, waiver or supplement may have the effect of
changing the provisions for determining the number of Van Eck/Chubb Global
Income Fund Shares to be issued to the Global Income Fund shareholders under
this Plan to the detriment of such shareholders without their
<PAGE>
further approval.
9. Governing Law. This Plan shall be governed and construed in accordance with
the laws of the Commonwealth of Massachusetts, without giving effect to the
conflicts of laws provisions thereof.
10. Further Assurances. Unless the Plan has been terminated pursuant to Section
7 hereof, the Trust with respect to Global Income Fund, and the Corporation with
respect to Van Eck/Chubb Global Income Fund, shall take such further action,
prior to, at, and after the Closing as may be necessary or desirable and proper
to consummate the transactions contemplated hereby.
11. Limitations of Liability. The term "Van Eck Funds" means and refers to the
Trustees from time to time serving under the Master Trust Agreement, as the same
may subsequently thereto have been, or subsequently hereto may be, amended. It
is expressly agreed that the obligations of the Trust hereunder shall not be
binding upon any of the Trustees, shareholders, nominees, officers, agents or
employees of the Trust, personally, but bind only the assets and property of the
Global Income Fund series of the Trust, as provided in the Master Trust
Agreement. The execution and delivery of this Plan has been authorized by the
Trustees of the Trust and signed by an authorized officer of the Trust, acting
as such, and neither such authorization nor such execution and delivery shall be
deemed to have been made individually or to impose any personal liability, but
shall bind only the Trust property of the Global Income Fund series of the Trust
as provided in the Van Eck Funds Master Trust Agreement. The Master Trust
Agreement of the Trust provide, and it is expressly agreed, that each Sub-trust
shall be solely and exclusively responsible for the payment of its debts,
liabilities and obligations, and that no other Sub-trust shall be responsible
for the same.
IN WITNESS WHEREOF, the Trustees of the Trust and the Directors of the
Corporation have caused this Plan to be executed on behalf of its constituent
Fund as of the date first set forth above by their duly authorized
representatives.
Attest: Van Eck Funds -
Global Income Fund
/s/ Thaddeus Leszczynski By: /s/ John C. van Eck
- -------------------------------- --------------------------
Thaddeus Leszczynski, John C. van Eck,
Secretary President
Van Eck/Chubb Funds
Van Eck/Chubb Global Income Fund
/s/ Thaddeus Leszczynski By: /s/ Michael O'Reilly
- -------------------------------- ---------------------------
Thaddeus Leszczynski, Michael O'Reilly,
Secretary President
We acknowledge our obligations under Section 6 of this Plan and agree to perform
those obligations in accordance with the terms of this Plan.
Chubb Asset Managers, Inc. Van Eck Associates Corporation
By: By:
---------------------------- ----------------------------
<PAGE>
VAN ECK FUNDS
GLOBAL INCOME FUND
99 Park Avenue, 8th Floor
New York, New York 10016
1-800-826-2333
_______________________________________
STATEMENT OF ADDITIONAL INFORMATION
_______________________________________
This Statement of Additional Information is not a prospectus and should be read
in conjunction with the Proxy Statement/Prospectus of Global Income Fund (the
"Fund" or "GIF"), a series of Van Eck Funds, dated ________, 1998, which is
enclosed. This Statement of Additional Information has been incorporated by
reference into the Proxy Statement/Prospectus.
Further information about the Van Eck/Chubb Global Income Fund ("VE/CGIF")
series of Van Eck/Chubb Funds, Inc. is contained in and incorporated by
reference to its latest Prospectus and Statement of Additional Information,
dated May 1, 1997, and its Annual Report to shareholders for the year ended
December 31, 1997, all of which are incorporated by reference herein and are
available at no cost by either calling Van Eck/Chubb Funds, Inc. at the phone
number listed above or by writing to the above address.
Further information about the Fund is contained in and incorporated by reference
to its latest Prospectus and Statement of Additional Information, dated April
30, 1997, and its Annual Report to Shareholders for the year ended December 31,
1997, all of which are incorporated by reference herein and are available at no
cost by either calling GIF at the phone number listed above or by writing to the
above address.
The following is the pro-forma information for VE/GIF and GIF.
THIS STATEMENT OF ADDITIONAL INFORMATION IS DATED ______________, 1998.
<PAGE>
TABLE OF CONTENTS Page
- --------------------------------------------------------------------------------
General Information...................................................... 2
General Information
The shareholders of GIF are being asked to approve an Agreement and Plan of
Reorganization and Liquidation (the "Plan") which contemplates the exchange of
substantially all of the assets of GIF for shares of VE/CGIF, the assumption of
the liabilities of GIF by VE/CGIF, the distribution of VE/CGIF shares to the
shareholders of GIF and the liquidation of GIF. VE/CGIF is an open-end, non-
diversified management investment company and a series of Van Eck/Chubb Funds,
Inc., which is organized as a Maryland corporation. A Special Meeting of
Shareholders to consider the Plan and other matters described in the Proxy
Statement/Prospectus will be held at 99 Park Avenue, 8th Floor, New York, New
York on ___________, April _______, 1998 at ___________, New York Time.
For detailed information about the Plan, shareholders of GIF should refer to the
Proxy Statement/Prospectus.
2
<PAGE>
COMBINED SCHEDULE OF INVESTMENTS FOR
VAN ECK/CHUBB GLOBAL INCOME AND
VAN ECK GLOBAL INCOME FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Market Value
---------------------------------------
Van Eck/ Pro Forma
Chubb Van Eck for
Local Par Global Global Income Combined
Currency Value Income Fund Fund Fund
-------- --------- ----------- ------------- ----------
<S> <C> <C> <C> <C> <C>
COMMON STOCK - 0.19%
Russia - 0.19%
Vimpel-Communications, ADR....................................... USD 150,000 $ 178,125 0 178,125
----------- ----------
TOTAL COMMON STOCK (Cost $150,000)....................... 178,125 0 178,125
----------- ----------
GOVERNMENT AND AGENCY OBLIGATIONS - 92.24%
Australia - 0.69%
Australian Government Bond, 9.50%, due 08/15/00.................. AUD 650,000 497,552 0 497,552
New South Wales Treasury, 9.250%, due 06/20/05................... AUD 200,000 151,845 0 151,845
----------- ------------- ----------
649,397 0 649,397
----------- ------------- ----------
Belgium - 1.05%
Kingdom of Belgium, 6.500%, due 03/31/05......................... BEF 4,000,000 115,769 0 115,769
Kingdom of Belgium, 7.000%, due 05/15/06......................... BEF 29,000,000 866,810 0 866,810
----------- ------------- ----------
982,579 0 982,579
----------- ------------- ----------
Canada - 3.35%
Government of Canada, 9.500%, due 06/01/20....................... CAD 1,000,000 931,552 0 931,552
Government of Canada, 6.500%, due 06/01/20....................... CAD 575,000 424,270 0 424,270
Government of Canada, 8.000%, due 06/01/27....................... CAD 2,000,000 0 1,793,432 1,793,432
----------- ------------- ----------
1,355,822 1,793,432 3,149,254
----------- ------------- ----------
Denmark - 0.80%
Kingdom of Denmark, 7.000%, due 11/15/07......................... DKK 1,160,000 186,253 0 186,253
Kingdom of Denmark, 7.000%, due 12/15/04......................... DKK 3,600,000 572,855 0 572,855
----------- ------------- ----------
759,108 0 759,108
----------- ------------- ----------
France - 12.44%
Caisse Centrale, 5.768%, due 06/27/04............................ FRF 6,000,000 5,978,100 0 5,978,100
France O.A.T.,5.50%, due 04/25/07................................ FRF 13,500,000 2,274,840 0 2,274,840
France O.A.T., 7.250%, due 04/25/06.............................. FRF 3,740,000 705,344 0 705,344
BTNS, 5.50%, due 10/12/01........................................ FRF 16,000,000 0 2,734,118 2,734,118
----------- ------------- ----------
8,958,284 2,734,118 11,692,402
----------- ------------- ----------
Germany - 9.66%
Bundesobligation, 6.00%, due 07/04/07............................ DEM 1,900,000 1,104,884 0 1,104,884
Bundesobligation, 6.75%, due 07/15/04............................ DEM 6,500,000 3,939,647 0 3,939,647
International Bank for Reconstruction & Development, 6.125% due
09/27/02....................................................... DEM 1,050,000 614,178 0 614,178
International Bank for Reconstruction & Development, 5.875% due
11/10/03....................................................... DEM 1,050,000 606,005 0 606,005
Deutschland Republic, 7.375%, due 01/03/05....................... DEM 4,500,000 0 2,816,122 2,816,122
----------- ------------- ----------
6,264,714 2,816,122 9,080,836
----------- ------------- ----------
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Market Value
---------------------------------------
Chubb Van Eck
Local Par Global Global Income
Currency Value Income Fund Fund Total
-------- ------------- ----------- ------------- ----------
<S> <C> <C> <C> <C> <C>
GOVERNMENT AND AGENCY OBLIGATIONS - 92.24%
Ireland - 1.15%
Government of Ireland, 8.00%, due 8/18/06...................... IRE 650,000 0 1,082,063 1,082,063
----------- ------------- ----------
Italy - 4.79%
BTPS, 10.00%, due 08/01/03..................................... ITL 2,200,000,000 $ 1,529,286 0 1,529,286
BTPS, 8.250%, due 07/01/99..................................... ITL 625,000,000 370,453 0 370,453
BTPS, 6.75%, due 07/01/07...................................... ITL 2,500,000,000 1,536,751 0 1,536,751
BTPS, 7.50%, due 10/01/99...................................... ITL 1,800,000 0 1,062,062 1,062,062
----------- ------------- ----------
3,436,490 1,062,062 4,498,552
----------- ------------- ----------
Japan - 4.45%
Government of Japan, 6.30% , due 09/20/01...................... JPY 275,000,000 2,517,110 0 2,517,110
Government of Japan, 2.60%, due 09/20/07....................... JPY 205,000,000 1,668,926 0 1,668,926
----------- ------------- ----------
4,186,036 0 4,186,036
----------- ------------- ----------
Mexico - 0.35%
United Mexican State, 7.00%, due 06/03/00...................... MXP 500,000 327,900 0 327,900
----------- ------------- ----------
Netherlands - 3.48%
Hermes Euro Rail BV, 11.50%, due 08/15/07...................... NLG 750,000 798,750 0 798,750
Government of Netherlands, 8.250%, due 02/15/07................ NLG 550,000 327,826 0 327,826
Government of Netherlands, 8.250%, due 09/15/07................ NLG 550,000 329,859 0 329,859
Government of Netherlands, 6.00%, due 01/15/06................. NLG 3,500,000 1,813,074 0 1,813,074
----------- ------------- ----------
3,269,509 0 3,269,509
----------- ------------- ----------
New Zealand - 3.22%
Government of New Zealand, 8.00%, due 11/15/06................. NZD 1,500,000 0 927,127 927,127
Government of New Zealand, 8.00%, due 03/15/02................. NZD 3,300,000 0 2,100,694 2,100,694
----------- ------------- ----------
0 3,027,821 3,027,821
----------- ------------- ----------
Spain - 2.70%
Government of Spain, 9.40%, due 04/30/99....................... ESP 28,000,000 194,938 0 194,938
Government of Spain, 8.80%, due 04/30/06....................... ESP 77,000,000 615,196 0 615,196
Government of Spain, 8.00%, due 05/30/04....................... ESP 50,000,000 375,859 0 375,859
Government of Spain, 5.25%, due 01/31/03....................... ESP 45,000,000 295,684 0 295,684
Kingdom of Spain, 4.750%, due 03/14/05......................... JPY 40,000,000 369,683 0 369,683
Government of Spain, 7.40%, due 07/30/99....................... ESP 100,000,000 0 683,746 683,746
----------- ------------- ----------
1,851,360 683,746 2,535,106
----------- ------------- ----------
Sweden - 6.93%
Sweden Government Bond, 6.000%, due 02/09/05................... SEK 16,300,000 546,867 1,526,141 2,073,008
SGB, 10.25%, due 05/05/03...................................... SEK 9,500,000 227,916 1,215,552 1,443,468
Swiss Bank Corp. cd 5.770%, due 03/17/98....................... SEK 3,000,000 3,000,000 0 3,000,000
----------- ------------- ----------
3,774,783 2,741,693 6,516,476
----------- ------------- ----------
United Kingdom - 13.80%
U.K. Gilt, 8.00%, 06/07/21..................................... GBP 600,000 1,202,792 0 1,202,792
U.K. Treasury, 7.500%, due 12/07/06............................ GBP 2,098,000 3,720,200 0 3,720,200
U.K. Treasury, 7.75%, due 09/08/06............................. GBP 2,800,000 0 5,031,410 5,031,410
GBP Government, 7.50%, due 12/07/20............................ GBP 1,700,000 0 3,019,733 3,019,733
----------- ------------- ----------
4,922,992 8,051,143 12,974,135
----------- ------------- ----------
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
SHORT-TERM OBLIGATIONS - 0.45%
GE Capital Commercial Paper, 5.65%, due 01/02/98............... USD 425,000 0 424,933 424,933
----------- ------------- ----------
TOTAL SHORT-TERM (Cost $424,933)............................... 0 424,933 424,933
----------- ------------- ----------
Market Value
---------------------------------------
Van Eck/ Van Eck
Local Par Chubb Global Global
Currency Value Income Fund Income Fund Total
-------- ------------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C>
GOVERNMENT AND AGENCY
OBLIGATIONS - Continued
United States - 23.38%
U.S. Treasury Note, 6.13%, due 08/15/07........................ USD 1,400,000 $ 1,439,376 0 $ 1,439,376
U.S. Treasury Note, 6.63%, due 05/15/07........................ USD 4,750,000 5,030,549 0 5,030,549
U.S. Treasury Note, 8.75%, due 08/15/2020...................... USD 800,000 0 1,067,001 1,067,001
U.S. Treasury Note, 6.63%, due 02/05/2027...................... USD 1,500,000 0 1,628,439 1,628,439
U.S. Treasury Note, 5.63%, due 01/31/1998...................... USD 1,000,000 0 1,000,313 1,000,313
U.S. Treasury Note, 6.50%, due 08/15/2005...................... USD 3,700,000 0 3,861,879 3,861,879
U.S. Treasury Note, 6.25%, due 02/15/2007...................... USD 2,000,000 0 2,065,002 2,065,002
U.S. Treasury Note, 6.00%, due 08/15/2000...................... USD 4,750,000 0 4,785,630 4,785,630
U.S. Treasury Note, 6.75%, due 08/15/2026...................... USD 1,000,000 0 1,101,251 1,101,251
----------- ------------- ----------
6,469,925 15,509,514 21,979,439
----------- ------------- ----------
TOTAL GOVERNMENT AND AGENCY OBLIGATIONS
(Cost $ 56,268,760)........................................ 47,208,903 39,501,714 86,710,617
CORPORATE BONDS - 3.92%
Brazil - 0.52%
Comtel Brasileira, Series 144A, 10.75%, due 02/26/04........... USD 500,000 486,250 0 486,250
Japan - 0.51%
Export-Import Bank of Japan, 4.63%, due 02/26/04............... JPY 54,000,000 479,789 0 479,789
Mexico - 0.53%
PanAmerica Beverage, 7.25%, due 07/01/09....................... MXP 500,000 500,000 0 500,000
United States - 0.54%
Global Telesyst, 8.75%, due 06/30/00........................... USD 500,000 505,000 0 505,000
United Kingdom - 1.82%
J.P. Morgan, 7.75%, due 12/30/03............................... GBP 1,000,000 0 1,714,688 1,714,688
----------- ------------- ----------
TOTAL CORPORATE BONDS.......................................... 1,971,039 1,714,688 3,685,727
----------- ------------- ----------
Option purchased - 0.04%
1,500,000 DEM/USD Currency Opt. 98 Feb. (cost 26,250)..... 25,256 0 25,256
650,000 DEM/USD Currency Opt. 98 Feb. (cost 12,350)....... 15,514 0 15,514
---------- ------------- -----------
40,770 0 40,770
TOTAL INVESTMENTS..(cost $92,030,382)........................ 96.84% 49,398,837 41,641,335 91,040,172
Other assets less liabilities.................................. 3.16% 2,688,730 283,417 2,972,147
------- ----------- ------------- -----------
TOTAL NET ASSETS............................................. 100.00% $52,087,567 41,924,752 94,012,319
======= =========== ============= ===========
</TABLE>
Currency Classification
- -----------------------
Australian dollar......AUD Japanese yen...........JPY
Belgium franc..........BEF Mexican peso...........MXP
Canadian dollar........CAD Netherlands guilder....NLG
Danish krone...........DKK New Zealand dollar.....NZD
French franc...........FRF Spanish peseta.........ESP
Great British pound....GBP Swedish krona..........SEK
German mark............DEM United States dollar...USD
Irish punt.............IRE
Italian lira...........ITL
- ---------------
* Aggregate cost for Federal income tax purposes.
See Notes to financial statements.
<PAGE>
The following unaudited pro forma Combined Statement of Assets,
Liabilities and Capital for the Combined Fund has been derived from the
Statements of Assets, Liabilities and Capital of the respective Funds at
December 31, 1997 and such information has been adjusted to give effect to the
Reorganization as if the Reorganization had occurred at December 31, 1997. The
pro forma Combined Statements of Assets, Liabilities and Capital is presented
for informational purposes only and does not purport to be indicative of the
financial condition that actually would have resulted if the Reorganization had
been consummated at December 31, 1997. The pro forma Combined Statement of
Assets, Liabilites and Capital should be read in conjunction with the Fund's
financial statements and related notes thereto which are included in this Joint
Proxy Statement and Prospectus.
COMBINED STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
As of December 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Van Eck/
Global Income Chubb Global Pro Forma for
Fund Income Fund Adjustments Combined Fund
<S> <C> <C> <C> <C>
ASSETS:
Investments at Cost.............................................. $ 42,299,187 $ 49,731,200 $0 $ 92,030,387
Investments at Value............................................. $ 41,641,335 $ 49,398,837 $0 $ 91,040,172
Receivables:
Cash and currencies............................................ 0 1,538,630 0 1,538,630
Interest and Dividends......................................... 1,042,831 1,002,629 0 2,045,460
Due from Administrator......................................... 0 4,143 0 4,143
From Broker.................................................... 0 158,899 0 158,899
Unrealized appreciation on forward currency contracts.......... 80,183 0 0 80,183
Capital shares sold............................................ 2,504 50 0 2,554
Deferred organization costs and other assets..................... 352,737 27,726 0 380,463
--------------------------------------------------------------
Total Assets............................................. 43,119,590 52,130,914 0 95,250,504
--------------------------------------------------------------
LIABILITIES:
Payables:
Due to custodian............................................... 487,475 0 0 487,475
Capital Shares repurchased..................................... 358,344 0 0 358,344
Unrealized depreciation on forward foreign currency contracts.. 180,694 3,151 0 183,845
Dividends payable.............................................. 56,076 2,810 0 58,886
Securities purchased........................................... 0 1,982 0 1,982
Accounts payable............................................... 112,249 35,404 0 147,653
--------------------------------------------------------------
Total Liabilities........................................ 1,194,838 43,347 0 1,238,185
--------------------------------------------------------------
Net Assets....................................................... $ 41,924,752 $ 52,087,567 $0 $ 92,012,319
==============================================================
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
Capital:
Capital Stock-Global Income Fund an unlimited number of $.001 par
value shares authorized and Van Eck/Chubb Global Income Fund
$0.01 par value, 100,000,000 shares authorized per share
(4,936,240 shares of Global Income Fund and 5,404,248
shares of Van Eck/Chubb Global Income Fund issued and
outstanding, and 9,753,288 shares for the Combined Fund,
as adjusted.................................................... $ 4,936 $ 51,490 $ 41,117 $ 97,533
Capital paid in excess of par.................................... 48,609,986 51,490,349 (6,456,363) 93,643,972
Undistributed investment income -- net........................... 501,559 607,999 1,109,558
Accumulated realized capital losses on investments -- net........ (6,415,256) 136,753 6,415,256 136,753
Unrealized appreciation on investments -- net.................... (776,473) (199,024) (975,497)
------------- ------------ ----------- -------------
Total -- Equivalent to $8.49 net asset value per share of
Van Eck/Chubb Global Fund Common Stock, and $9.64 net
asset value per share of Global Income Fund Common
Stock and $9.64 net asset value per share for the Combined
Fund, as adjusted
Total Capital.................................................... $ 52,087,567 $ 41,924,752 $ -- $ 94,012,319
============= ============ =========== =============
</TABLE>
<PAGE>
The following unaudited pro forma Combined Statement of Operations for the
Combined Fund has been derived from the statements of operations of the
respective Funds for the six months ended December 31, 1997, and such
information has been adjusted to give effect to the Reorganization as if the
Reorganization had occurred on December 31, 1997. The pro forma Combined
Statement of Operations is presented for informational purposes only and does
not purport to be indicative of the results of operations that actually would
have resulted if the Reorganization had been consummated on December 31, 1997
nor which may result from future operations. The pro forma Combined Statement of
Operations should be read in conjunction with the Funds' financial statements
and related notes thereto which are included in this Joint Proxy Statement and
Prospectus.
COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Van Eck/
Global Income Chubb Global ProForma for
Fund Income Fund Adjustment Combined Fund
<S> <C> <C> <C> <C>
INCOME:
Dividends............................................................ $0 $0 $0 $0
Interest............................................................. 3,416,452 872,783 0 4,289,235
--------------------------------------------------------
Total Income..................................................... 3,416,452 872,783 0 4,289,235
--------------------------------------------------------
EXPENSES:
Advisory fee......................................................... 419,471 29,248 0 448,719
Distribution......................................................... 139,815 73,120 0 212,935
Custodian............................................................ 9,897 5,647 0 15,544
Transfer agency...................................................... 119,157 12,161 0 131,318
Administrative fee................................................... 115,620 65,808 0 181,428
Registration......................................................... 18,867 11,397 0 30,264
Professional......................................................... 38,715 15,628 0 54,343
Reports to shareholders.............................................. 30,129 5,904 0 36,033
Trustees fees and expenses........................................... 1,437 1,289 0 2,726
Amortization of deferred organizational costs........................ 0 2,690 0 2,690
Other................................................................ 33,155 5,625 0 38,780
--------------------------------------------------------
Total Expenses................................................... 926,263 228,517 0 1,154,780
Expenses waived by the Advisor....................................... 0 (31,092) 0 (31,092)
NET EXPENSES..................................................... 926,263 197,425 0 1,123,688
--------------------------------------------------------
NET INVESTMENT INCOME............................................ 2,490,189 675,358 0 3,165,547
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net Realized Gain on Investments..................................... 444,917 84,386 0 529,303
Net Realized Loss from Foreign Currency Transactions................. (1,268,288) (457,713) 0 (1,726,001)
Net Realized Loss from Options....................................... 0 (20,190) 0 (20,190)
Change in Unrealized Appreciation of Investments..................... (1,467,637) (543,059) 0 (2,010,696)
Change in Unrealized Depreciation of Foreign
Currency Receivables and Payables.................................. (122,809) 4,077 0 (118,732)
-------------- ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...... $76,372 ($257,141) $0 ($180,769)
========================================================
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
PRO FORMA FOOTNOTES OF MERGER BETWEEN
VAN ECK/CHUBB GLOBAL INCOME FUND AND GLOBAL INCOME FUND
December 31, 1997 (unaudited)
1. GENERAL
The accompanying pro forma financial statements are presented to show the effect
of the proposed acquisition of Global Income Fund by Van Eck/Chubb Global Income
Fund, as if such acquisition had taken place as of January 1, 1998.
Under the terms of the Plan of Reorganization, the combination of Van Eck/Chubb
Global Income Fund and Global Income Fund will be taxed as a tax-free business
combination and accordingly will be accounted for by a method of accounting for
tax free mergers of investment companies (sometimes referred to as the pooling
without restatement method). The acquisition would be accomplished by an
acquisition of the net assets of Global Income Fund in exchange for shares of
Van Eck/Chubb Global Income Fund at net asset value. The statement of assets and
liabilities and the related statement of operations of Van Eck/Chubb Global
Income Fund and Global Income Fund have been combined as of and for the year
ended December 31, 1997.
The accompanying pro forma financial statements should be read in conjunction
with the financial statements and schedule of investments of Global Income Fund
and Van Eck/Chubb Global Income Fund which are included in their respective
annual reports dated December 31, 1997.
The following notes refer to the accompanying pro forma financial statements as
if the above mentioned acquisition of Van Eck/Chubb Global Income Fund and
Global Income Fund had taken place as of January 1, 1998.
2. SIGNIFICANT ACCOUNTING POLICIES
Van Eck/Chubb Global Income Fund is a Maryland corporation, registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company.
The significant accounting policies consistently followed by Van Eck/Chubb
Global Income Fund are (a) securities transactions are accounted for on the
trade date (b) Debt instruments are valued on the basis of quotes provided by a
pricing service; short-term investments that have a maturity of more than 60
days are valued at prices based on market quotations; short-term investments
that have a maturity of 60 days or less are valued at cost plus accreted
discount, or minus amortized premiums, as applicable (c) interest income is
recorded on the accrual basis (d) gains or losses on the sale of securities are
calculated by using the first-in, first-out method (e) direct expenses are
charged to the fund (f) dividends and distributions to shareholders are recorded
on the ex-dividend date (g) Van Eck/Chubb Global Income Fund intends to comply
with the requirements of the Internal Revenue Code pertaining to regulated
investment companies and to make the required distributions to shareholders;
therefore, no provision for Federal income taxes has been made.
3. PRO FORMA ADJUSTMENTS
The accompanying pro forma financial statements reflect changes in fund shares
as if the merger had taken place on December 31, 1997. Adjustments made to
expenses for duplicated services that would not have been incurred if the merger
took place on January 1, 1998.
4. MANAGEMENT AGREEMENT AND TRANSACTIONS WITH AFFILIATED PERSONS
Chubb Asset Managers, Inc. acts as investment manager of Van Eck/Chubb Global
Income Fund. Van Eck/Chubb Global Income Fund pays Chubb Asset Managers, Inc.
a management fee calculated at the annual rate of 0.20% on average daily net
assets and 0.45% on average daily net assets payable to Van Eck Associates Corp.
as the investment administrator. All fees are calculated daily and paid monthly.
<PAGE>
PART C
OTHER INFORMATION
Item 15. Indemnification
Reference is made to Article VII, Section 10 of the Registrant's Amended and
Restated Articles of Incorporation filed herein as Exhibit 1 to this
Registration Statement and to Article V of the Registrant's By-Laws filed herein
as Exhibit 2 to this Registration Statement. The Articles of Incorporation
provide that neither an officer nor director of the Registrant will be liable to
the Registrant or its shareholders for monetary damages for breach of fiduciary
duty as an officer or director, except to the extent such limitation of
liability is not otherwise permitted by law. The By-Laws provide that the
Registrant will indemnify its directors and officers to the extent permitted or
required by Maryland law. A resolution of the Board of Directors specifically
approving payment or advancement of expenses to an officer is required by the
By-Laws. Indemnification may not be made if the director or officer has
incurred liability by reason or willful misfeasance, bad faith, gross negligence
or reckless disregard of duties in the conduct of his/her office ("Disabling
Conduct"). The means of determining whether indemnification shall be made are
(1) a final decision by a court or other-body before
WHOM THE PROCEEDING IS BROUGHT THAT THE DIRECTOR OR OFFICER WAS NOT LIABLE BY
reason of Disabling Conduct, or (2) in the absence of such a decision, a
reasonable determination, based on a review of the facts, that the director or
officer was not liable by reason of Disabling Conduct. Such latter
determination may be made either by (a) vote of a majority of directors who are
neither interested persons (as defined in the Investment Company Act of 1940)
nor parties to the proceeding or (b) independent legal counsel in a written
opinion. The advancement of legal expenses may not occur unless the director or
officer agrees to repay the advance (if it is determined that he/she is not
entitled to the indemnification) and one of three other conditions is satisfied:
(1) the director or officer provides security for his/her agreement to repay,
(2) the Registrant is insured against loss by reason of lawful advances, or (3)
the directors who are not interested persons and are not parties to the
proceedings, or independent counsel in a written opinion, determine that there
is reason to believe that the director or officer will be found entitled to
indemnification. The directors and officers are currently covered for
liabilities incurred in their capacities as such directors and officers under
the terms of a joint liability insurance policy. This policy also covers the
directors and officers of Chubb Investment Advisory, Chubb Asset and Chubb
America Fund, Inc. The policy also insures the Registrant, Chubb Investment
Advisory, Chubb Asset and Chubb America Fund, Inc. for errors and omissions
liabilities.
Insofar as indemnification for liability arising under the Securities
Act of 1933 (the "Securities Act") may be permitted to directors, 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 Securities 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 director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
ITEM 16: Exhibits
1. a. Amended and Restated Articles of Incorporation.
b. Articles Supplementary to the Amended and Restated Articles of
Incorporation.
c. Articles Supplementary to the Amended and Restated Articles of
Incorporation.
2. Amended and Restated By-Laws
3. Not applicable.
4. Not Applicable.
<PAGE>
5. a. Specimen of Certificate of Stock of the Chubb Money Market Fund.
b. Specimen of Certificate of Stock of the Chubb Government Securities
Fund.
c. Specimen of Certificate of Stock of the Chubb Total Return Fund.
d. Specimen of Certificate of Stock of the Chubb Tax-Exempt Fund.
e. Specimen of Certificate of Stock of the Chubb Growth and Income Fund.
f. Specimen of Certificate of Stock of the Chubb Capital Appreciation
Fund.
g. Specimen of Certificate of Stock of the Chubb Global Income Fund.
6. a. Investment Management Agreement between Chubb Investment Funds, Inc.,
Chubb Investment Advisory Corporation and Chubb Asset Managers, Inc. with
respect to Chubb Money Market Fund./1/
b. Technical Amendment to Investment Management Agreement between Chubb
Investment Funds, Inc., Chubb Investment Advisory Corporation and Chubb
Asset Managers, Inc. with respect to Chubb Money Market Fund.
c. Investment Management Agreement between Chubb Investment Funds, Inc.,
Chubb Investment Advisory Corporation and Chubb Asset Managers, Inc.
with respect to Chubb Government Securities Fund.
d. Technical Amendment to Investment Management Agreement between Chubb
Investment Funds, Inc., Chubb Investment Advisory Corporation and Chubb
Asset Managers, Inc. with respect to Chubb Government Securities Fund.
e. Investment Management Agreement between Chubb Investment Funds, Inc.,
Chubb Investment Advisory Corporation and Chubb Asset Managers, Inc.
with respect to Chubb Total Return Fund.
f. Technical Amendment to Investment Management Agreement between Chubb
Investment Funds, Inc., Chubb Investment Advisory Corporation and Chubb
Asset Managers, Inc. with respect to Chubb Total Return Fund.
g. Investment Management Agreement between Chubb Investment Funds, Inc.,
Chubb Investment Advisory Corporation and Chubb Asset Managers, Inc.
with respect to Chubb Tax-Exempt Fund.
h. Technical Amendment to Investment Management Agreement between Chubb
Investment Funds, Inc., Chubb Investment Advisory Corporation and Chubb
Asset Managers, Inc. with respect to Chubb Tax-Exempt Fund.
i. Investment Management Agreement between Chubb Investment Funds, Inc.,
Chubb Investment Advisory Corporation and Chubb Asset Managers, Inc.
with respect to Chubb Growth Fund, (now known as the Chubb Growth and
Income Fund).
j. Technical Amendment to Investment Management Agreement between Chubb
Investment Funds, Inc., Chubb Investment Advisory Corporation and Chubb
Asset Managers, Inc. with respect to Chubb Growth Fund.
k. Investment Management Agreement between Chubb Investment Funds, Inc.,
Chubb Investment Advisory Corporation and Chubb Asset Managers, Inc.
with respect to Chubb Capital Appreciation Fund.
l. Investment Management Agreement between Chubb Investment Funds, Inc.,
Chubb Investment Advisory Corporation and Chubb Asset Managers, Inc.
with respect to Chubb Global Income Fund.
<PAGE>
7.a. Fund Distribution Agreement between Chubb Investment Funds, Inc.
and Chubb Securities Corporation.
b. Specimen Copy of Selected Dealers Agreement.
8. Not applicable.
9. Custodial Services Agreement between Chubb Investment Funds, Inc. and
Citibank, N.A.
10.Rule 12b-1Plan./1/
11. Opinion and Consent of counsel as to legality of the securities
being registered.
a. Opinion and Consent of Counsel as to legality of the
securities being registered.
12. To be filed.
13. a. Shareholder Services Agreement between Chubb Investment Funds,
Inc. and Firstar Trust Company.
b. Agreement for Waiver of Fees and Assumption of Expenses between
Chubb Investment Funds, Inc., Chubb Investment Advisory Corporation,
Chubb Asset Managers, Inc., Chubb Securities Corporation, and Chubb
Life Insurance Company of New Hampshire./4/
14. Consent of Ernst & Young LLP.* - To be filed.
15. Not Applicable.
16. Power of Attorney.
17. Not Applicable.
ITEM 17. UNDERTAKINGS
------------
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a prospectus
which is part of this registration statement by any person or party who
is deemed to be an underwriter within the meaning of Rule 145(c) of the
Securities Act of 1933, as amended, the reoffering prospectus will
contain the information called for by the applicable registration form
for reofferings by persons who may be deemed underwriters, in addition
to the information called for by the other items of applicable form.
(2) The undersigned Registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as a part of an amendment
to the registration statement and will not be used until the amendment
is effective, and that, in determining liability under the Securities
Act of 1933, as amended, each post-effective amendment shall be deemed
to be a new registration statement for the securities offered herein,
and the offering of the securities at that time shall be deemed to be
the initial bona fide offering of them.
<PAGE>
SIGNATURES
----------
As required by the Securities Act of 1933, the registration statement on Form
N-14 has been signed on behalf of the Registrant by the undersigned, thereunto
duly authorized, in the City of New York, State of New York, on the 29th day of
January, 1998.
Van Eck/Chubb Funds, Inc.
By: /s/ Michael O'Reilly
---------------------------
Michael O'Reilly, President
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
on the date indicated:
Signature Title Date
/s/ Michael O'Reilly President, Director 1/29/98
- ----------------------
Michael O'Reilly
/s/ Bruce J. Smith Chief Financial Officer 1/29/98
- ----------------------
Bruce J. Smith
/s/ Jeremy H. Biggs Director 1/29/98
- ----------------------
Jeremy H. Biggs
/s/ Wesley G. McCain Director 1/29/98
- ----------------------
Wesley G. McCain
/s/ David J. Olderman Director 1/29/98
- ----------------------
David J. Olderman
/s/ John C. van Eck Director 1/29/98
- ----------------------
John C. van Eck
<PAGE>
VAN ECK FUNDS
GLOBAL INCOME FUND
PROXY FOR SPECIAL SHAREHOLDERS MEETING TO BE HELD APRIL ___, 1998
The undersigned shareholder of GLOBAL INCOME FUND, (the "Fund"), a series
of Van Eck Funds (the "Trust"), having received Notice of the Meeting of
Shareholders of the Fund to be held on April __, 1998 and the Proxy
Statement/Prospectus accompanying such Notice, hereby constitutes and appoints
Barbara Allen and Susan Grant and each of them, true and lawful attorneys or
attorney for the undersigned, with several powers of substitution, for and in
the name, place and stead of the undersigned, to attend and vote all shares of
the Fund which the undersigned would be entitled to vote at the Meeting to be
held at 99 Park Avenue, 8th Floor, New York, New York, on April ___, 1998, at
____ New York Time, and at any and all adjournments thereof, with all powers the
undersigned would possess if personally present.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSAL ON THE REVERSE
SIDE HEREOF. THE SHARES REPRESENTED HERBY WILL BE VOTED AS INDICATED ON THE
REVERSE SIDE OR FOR THE PROPOSAL IF NO CHOICE IS INDICATED.
PLEASE MARK YOUR PROXY, DATE AND SIGN IT ON THE REVERSE SIDE AND RETURN IT
PROMPTLY IN THE ACCOMPANYING ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.
- --------------------------------------------------------------------------------
Back of Proxy
- -------------
PROPOSAL
To approve the Agreement and Plan of Reorganization and Liquidation involving
the exchange of substantially all of the Fund's assets for shares of Van
Eck/Chubb Global Income Fund, a series of the Van Eck/Chubb Funds, Inc., the
assumption of liabilities of the Fund by Van Eck/Chubb Global Income Fund, the
distribution of such shares to the shareholders of the Fund and the subsequent
liquidation of the Fund.
FOR _________ AGAINST ABSTAIN __________
Dated: ______________________ 1998
________________________
Signature of shareholder
_______________________
Signature of Co-owner
For joint accounts, all co-owners must
sign. Executors, administrators,
trustees,etc. should so indicate when
signing.
