UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant |X|
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|_| Preliminary Proxy Statement
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14A-6(E)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-12
VAN ECK WORLDWIDE INSURANCE TRUST
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(Name of Registrant as Specified In Its Charter)
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[VAN ECK GLOBAL LOGO]
VAN ECK WORLDWIDE INSURANCE TRUST
99 PARK AVENUE
NEW YORK, NEW YORK 10016
January 27, 2006
Dear Shareholders:
Enclosed you will find several documents being provided to you in connection
with a Special Meeting of Shareholders ("Meeting") of each series of Van Eck
Worldwide Insurance Trust, to be held at 99 Park Avenue, 8th Floor, New York,
New York on March 6, 2006 at 10:00 a.m. New York Time. We hope this material
will receive your immediate attention and that, if you cannot attend the meeting
in person, you will vote your proxy promptly.
The Meeting is being held to obtain a vote: (a) to elect Trustees; and (b) to
modernize the investment restrictions of each series of Van Eck Worldwide
Insurance Trust. Shareholders of each series of Van Eck Worldwide Insurance
Trust are being asked to vote on the proposals that affect their fund as
outlined in the attached Proxy Statement.
THE TRUSTEES BELIEVE THAT THESE CHANGES ARE IN THE BEST INTERESTS OF EACH SERIES
OF VAN ECK WORLDWIDE INSURANCE TRUST AND THEIR SHAREHOLDERS AND RECOMMEND THAT
YOU VOTE IN FAVOR OF EACH PROPOSAL THAT APPLIES TO YOUR FUND.
The Notice of Special Meeting of Shareholders, the accompanying Proxy Statement,
and the proxy card for your fund are enclosed. Please read them carefully. If
you are unable to attend the meeting in person, we urge you to sign, date, and
return the proxy card (or vote by telephone or the Internet) so that your shares
may be voted in accordance with your instructions.
WE URGE YOU TO GIVE THE ENCLOSED MATERIAL YOUR PROMPT ATTENTION SO AS TO AVOID
THE EXPENSE OF ADDITIONAL MAILINGS AND TELEPHONE SOLICITATIONS.
Your vote is important to us. Thank you for taking the time to consider these
important proposals.
Sincerely yours,
/s/ Keith J. Carlson
Keith J. Carlson
Chief Executive Officer and President
Van Eck Worldwide Insurance Trust
VAN ECK WORLDWIDE INSURANCE TRUST
WORLDWIDE ABSOLUTE RETURN FUND
WORLDWIDE BOND FUND
WORLDWIDE EMERGING MARKETS FUND
WORLDWIDE HARD ASSETS FUND
WORLDWIDE REAL ESTATE FUND
99 PARK AVENUE
NEW YORK, NEW YORK 10016
212-687-5200 1-800-826-2333
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
MARCH 6, 2006
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To the Shareholders:
A Special Meeting of Shareholders ("Meeting") of Worldwide Absolute Return
Fund, Worldwide Bond Fund, Worldwide Emerging Markets Fund, Worldwide Hard
Assets Fund and Worldwide Real Estate Fund (each a "Fund"), each a series of Van
Eck Worldwide Insurance Trust, will be held at 99 Park Avenue, 8th Floor, New
York, New York on March 6, 2006 at 10:00 a.m. New York Time. The Meeting is
being held for the following purposes:
(1) To elect Trustees;
(2) To consider a series of proposals to modernize the investment
restrictions of the Funds; and
(3) To consider and act upon any other business that may properly come
before the meeting or any adjournments thereof.
The Proposals are discussed in greater detail in the attached Proxy
Statement. You are entitled to vote at the Meeting and any adjournment thereof
if you owned shares of one or more of the Funds at the close of business on
January 5, 2006. If you attend the Meeting, you may vote your shares in person.
Whether or not you intend to attend the Meeting in person, you may vote in any
of the following ways:
(1) MAIL: Vote, sign, date and return the enclosed proxy card in the
enclosed postage-paid envelope;
(2) TELEPHONE: Have your proxy card available. You may vote by telephone by
calling the number on your proxy card. Enter the 14-digit control
number on the proxy card. (A confirmation of your telephone vote will
be mailed to you.); or
(3) INTERNET: Have your proxy card available. Vote on the Internet by
accessing the website address on your proxy card. Enter your 14-digit
control number from your proxy card. Follow the simple instructions
found on the website.
By order of the Board of Trustees,
/s/ Joseph J. McBrien
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Joseph J. McBrien
Senior Vice President and Secretary
Van Eck Worldwide Insurance Trust
Dated: January 27, 2006
New York, New York
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YOUR VOTE IS IMPORTANT NO MATTER
HOW MANY SHARES YOU OWN.
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY SHAREHOLDER WHO
DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO INDICATE VOTING INSTRUCTIONS
ON THE ENCLOSED PROXY CARD, DATE AND SIGN IT, AND RETURN IT IN THE ENVELOPE
PROVIDED, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU SIGN,
DATE AND RETURN THE PROXY CARD BUT GIVE NO INSTRUCTIONS, YOUR SHARES WILL BE
VOTED "FOR" THE PROPOSALS DESCRIBED ABOVE AND "FOR" OR "AGAINST" ANY OTHER
MATTER ACTED UPON AT THE MEETING IN THE DISCRETION OF THE PERSONS NAMED AS
PROXIES. ALTERNATIVELY, YOU MAY VOTE YOUR PROXY BY TELEPHONE OR ON THE INTERNET
IN ACCORDANCE WITH THE INSTRUCTIONS ON THE ENCLOSED PROXY CARD.
TO AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION, WE ASK YOUR COOPERATION
IN MAILING YOUR PROXY PROMPTLY, NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY
BE.
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VAN ECK WORLDWIDE INSURANCE TRUST
WORLDWIDE ABSOLUTE RETURN FUND
WORLDWIDE BOND FUND
WORLDWIDE EMERGING MARKETS FUND
WORLDWIDE HARD ASSETS FUND
WORLDWIDE REAL ESTATE FUND
99 PARK AVENUE
NEW YORK, NEW YORK 10016
212-687-5200 1-800-826-2333
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PROXY STATEMENT
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SPECIAL MEETING OF SHAREHOLDERS
MARCH 6, 2006
INTRODUCTION
This Proxy Statement is being furnished to the shareholders of Worldwide
Absolute Return Fund, Worldwide Bond Fund, Worldwide Emerging Markets Fund,
Worldwide Hard Assets Fund and Worldwide Real Estate Fund (each a "Fund"), each
a series of Van Eck Worldwide Insurance Trust, a Massachusetts business trust,
by the Board of Trustees ("Board") of Van Eck Worldwide Insurance Trust in
connection with the solicitation of shareholder votes by proxy to be voted at
the Special Meeting of Shareholders or any adjournments thereof ("Meeting") to
be held on March 6, 2006 at 10:00 a.m. New York Time at 99 Park Avenue, 8th
Floor, New York, New York. It is expected that the Notice of Special Meeting,
Proxy Statement and proxy card will be first mailed to shareholders on or about
January 27, 2006.
As more fully described in this Proxy Statement, the purpose of the Meeting
is to vote on the following Proposals:
(1) To elect Trustees;
(2) To consider a series of proposals to modernize the investment
restrictions of the Funds; and
(3) To consider and act upon any other business that may properly come
before the meeting or any adjournments thereof.
1
Summarized below are the Proposals that shareholders of each Fund are being
asked to consider:
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FUND PROPOSAL
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ALL FUNDS
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1 To elect Trustees;
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2-H To modify the fundamental investment restriction on
commodities.
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2-I To modify the fundamental investment restriction on
concentration.
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WORLDWIDE BOND FUND
WORLDWIDE EMERGING MARKETS FUND
WORLDWIDE HARD ASSETS FUND
WORLDWIDE REAL ESTATE FUND
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2-A To modify the fundamental investment restriction on borrowing.
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2-B To modify the fundamental investment restriction on
underwriting.
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2-C To modify the fundamental investment restriction on lending.
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2-D To modify the fundamental investment restriction on senior
securities.
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2-E To modify the fundamental investment restriction on real
estate.
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2-F To eliminate the fundamental investment restriction on real
estate limited partnerships, oil, gas, and other mineral
leases.
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2-G To eliminate the fundamental investment restriction on
investing for the purpose of exercising control.
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WORLDWIDE EMERGING MARKETS FUND
WORLDWIDE HARD ASSETS FUND
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2-J To eliminate the existing fundamental investment restriction on
diversification.
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2
If the enclosed proxy card is executed properly and returned, shares
represented by it will be voted at the Meeting in accordance with the
instructions on the proxy. A proxy may nevertheless be revoked at any time prior
to its use by written notification received by Van Eck Worldwide Insurance
Trust, by the execution of a subsequently dated proxy or by attending the
Meeting and voting in person. However, if no instructions are specified on a
proxy, shares will be voted "FOR" Proposals (1) and (2) listed above, and "FOR"
or "AGAINST" any other matters acted upon at the Meeting in the discretion of
the persons named as proxies.
The close of business on January 5, 2006 has been fixed as the record date
for the determination of shareholders entitled to notice of and to vote at the
Meeting ("Record Date").
Each share will be entitled to one vote at the Meeting and fractional
shares will be entitled to proportionate fractional votes. As of the Record
Date, the following numbers of shares were outstanding with respect to each
class of each Fund:
FUND NUMBER OF SHARES OUTSTANDING
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Worldwide Absolute Return Fund
Initial Class 611,790.645
Worldwide Bond Fund
Initial Class 3,840,457.560
Class R1 907,170.648
Worldwide Emerging Markets Fund
Initial Class 9,922,818.801
Class R1 2,866,952.793
Worldwide Hard Assets Fund
Initial Class 15,399,766.005
Class R1 3,079,584.918
Worldwide Real Estate Fund
Initial Class 790,467.629
Class R1 250,199.943
The following shareholders are shown on Van Eck Worldwide Insurance Trust's
records as owning more than 5% of the outstanding shares of any class of a
Fund*:
3
THE INITIAL CLASS:
COMPANY WARF WBF WEMF WHAF WREF
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Van Eck Securities Corporation
99 Park Avenue
New York, NY 10016 28.899% n/a n/a n/a n/a
Nationwide Life Insurance Company
c/o IPO Portfolio Accounting
P.O. Box 182029
Columbus, OH 43218-2029 18.74% 86.864% 72.049% 32.026% 53.871%
Lincoln Benefit Life Insurance
Company Attn: Nebraska Service
Center 2940 S. 84th Street
Lincoln, NE 68506 27.731% n/a n/a n/a n/a
Canada Life Assurance of America
c/o Great West Life Mutual Fund
Trading 8515 E Orchard Rd. 2T2
Greenwood Village, CO 80111 15.006% n/a n/a n/a n/a
Jefferson National Life Insurance
Company Attn: Separate
Accounts 9920 Corporate Campus
Suite 1000 Louisville, KY 40223 8.377% 10.662% 7.021% n/a 26.429%
Security Life of Denver Insurance
Company c/o ING Fund Operations
Conveyor TN41 151 Farmington
Avenue Hartford, CT 06156-1506 n/a n/a 11.104% n/a n/a
New York Life Insurance & Annuity
Corp. Attn: Corporate Accounting
300 Interspace Parkway, Floor 2
Parsippany, NJ 07054 n/a n/a n/a 49.925% n/a
Midland National Life
Attn: Variable Annuities Services
P.O. Box 79907
Des Moines, IA 50325-0907 n/a n/a n/a n/a 11.117%
CLASS R1:
COMPANY WBF WEMF WHAF WREF
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Nationwide Life Insurance Company
c/o IPO Portfolio Accounting
P.O. Box 182029
Columbus, OH 43218-2029 99.995% 99.999% 99.999% 99.985%
* For the purpose of these tables, each Fund is abbreviated as follows:
Worldwide Absolute Return Fund ("WARF"), Worldwide Bond Fund ("WBF"),
Worldwide Emerging Markets Fund ("WEMF"), Worldwide Hard Assets Fund
("WHAF") and Worldwide Real Estate Fund ("WREF").
To the best knowledge of Van Eck Worldwide Insurance Trust's management, as
of the Record Date, the Trustees and officers of Van Eck Worldwide Insurance
Trust, as a group, beneficially or of record owned less than 1% of the
outstanding shares of each class of each Fund.
REQUIRED VOTE: The presence at the Meeting, in person or by proxy, of
shareholders entitled to cast a majority of each Fund's outstanding shares is
required for a quorum. In the event that a quorum is present at
4
the Meeting but sufficient votes to approve the new item are not received, the
persons named as proxies may propose one or more adjournments of such Meeting to
permit further solicitation of proxies. The affirmative vote of less than a
majority of the votes entitled to be cast represented in person or by proxy is
sufficient for adjournments. In such case, the persons named as proxies will
vote those proxies, which they are entitled to vote in favor of such item "FOR"
such an adjournment, and will vote those proxies required to be voted against
such item "AGAINST" such an adjournment. A shareholder vote may be taken on the
proposals in this Proxy Statement prior to any such adjournment if sufficient
votes have been received and it is otherwise appropriate.
The affirmative vote of a plurality of the votes cast at the Meeting on the
election of Trustees is required to elect a Trustee. Each item of proposal 2
requires approval by the lesser of (a) the vote of 67% or more of the voting
securities present at a meeting, if the holders of more than 50% of the
outstanding voting securities are present, or (b) the vote of more than 50% of
the outstanding shares (referred to herein as a "1940 Act Majority Vote").
Shareholders of each applicable Fund will vote separately on each item of
Proposal 2. Broker non-votes are shares held in street name for which the broker
indicates that instructions have not been received from the beneficial owners or
other persons entitled to vote and with respect to which the broker does not
have discretionary voting authority. Abstentions and broker non-votes will be
counted as shares present for purposes of determining whether a quorum is
present. Accordingly, abstentions and broker non-votes effectively will be a
vote against an adjournment because the required vote is a percentage of the
shares present at the Meeting. Abstentions and broker non-votes will also
effectively count as votes against each Proposal (with the exception of the
Proposal to elect Trustees) because the required vote is a specified percentage
of the votes cast at the Meeting. Abstentions and broker non-votes will have no
effect on the Proposal to elect Trustees because such election is based on a
plurality of the votes cast.
COPIES OF VAN ECK WORLDWIDE INSURANCE TRUST'S MOST RECENT ANNUAL AND SEMI-ANNUAL
REPORTS, INCLUDING FINANCIAL STATEMENTS, HAVE PREVIOUSLY BEEN DELIVERED TO
SHAREHOLDERS. SHAREHOLDERS MAY OBTAIN A FREE COPY OF VAN ECK WORLDWIDE INSURANCE
TRUST'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004, INCLUDING
AUDITED FINANCIAL STATEMENTS, AND/OR VAN ECK WORLDWIDE INSURANCE TRUST'S
SEMI-ANNUAL REPORT FOR THE PERIOD ENDED JUNE 30, 2005, BY CALLING TOLL-FREE AT
1-800-544-4653 OR BY MAILING A WRITTEN REQUEST TO VAN ECK WORLDWIDE INSURANCE
TRUST, 99 PARK AVENUE, NEW YORK, NEW YORK 10016.
5
PROPOSAL 1: TO ELECT TRUSTEES.
FUNDS TO WHICH THIS PROPOSAL APPLIES: ALL FUNDS
Proposal No. 1 relates to the election of Trustees to the Board of the
Trust at the Meeting. The Board is asking shareholders of the Trust to elect the
following nominees as Trustees: Richard C. Cowell, Jon Lukomnik, David J.
Olderman, Ralph F. Peters, Wayne H. Shaner, R. Alastair Short, and Richard D.
Stamberger. None of the nominees are "interested persons" of the Trust, as
defined in the 1940 Act (such individuals are commonly called "Independent
Trustees").
Each nominee has consented to serve as a Trustee and to being named in this
Proxy Statement. If elected, each nominee will serve as an Independent Trustee
until the next meeting of shareholders, if any, called for the purpose of
electing Trustees or until the election and qualification of a successor. If a
Trustee sooner dies, resigns, retires or is removed as provided in the
organizational documents of the Trust, the Board may, in its discretion and
subject to the 1940 Act, select another person to fill the vacant position. The
Board has adopted a mandatory retirement policy for Independent Trustees. Under
the mandatory retirement policy, an Independent Trustee shall resign from the
Board by December 31 of the year by which he or she attains the age of 75, or
when a successor is duly appointed and assumes office, whichever occurs later.
With respect to Messrs. Cowell, Olderman, Peters and Stamberger, each of whom
was an Independent Trustee at the time this policy was adopted, it was decided
that these Independent Trustees shall be required to retire at the latter of age
75 or December 31, 2007.
Messrs. Cowell, Olderman, Peters, Short and Stamberger currently serve as
Independent Trustees of the Trust. Messrs. Cowell, Olderman, Peters and
Stamberger have been previously elected by shareholders of the Trust. Mr. Short
has not previously been elected by the shareholders of the Trust. Messrs.
Lukomnik and Shaner (the "New Nominees") are not currently Trustees of the
Trust. Pursuant to the mandatory retirement policy of the Board, Messrs. Cowell
and Peters will be required to retire no later than December 31, 2007, although
each individual has indicated that he may retire sooner. In addition, Mr.
Olderman has indicated to the Board that he expects to retire from the Board
prior to attaining the mandatory retirement age. Mr. Jan F. van Eck, who has
been a Trustee since 1998 and currently serves as the only "interested" Trustee
of the Trust, has indicated to the Board his intention not to remain on the
Board as a Trustee and not to stand for election as a Trustee pursuant to this
Proxy Statement.
With respect to the New Nominees, the Trust's Governance Committee, which
consists of all the Independent Trustees, and consists solely of the Independent
Trustees, and which, among other things, considers recommendations on nomination
for Trustees, reviewed the qualifications, experience and background of the New
Nominees, each of whom is not an "interested person" of the Trust. Based upon
this review, the
6
Governance Committee recommended the New Nominees to the current Board as
candidates for nominations as Independent Trustees. At a meeting of the Board
held on December 8, 2005, after discussion and further consideration of the
matter, the Board voted to nominate the New Nominees for election by
shareholders.
The Board has considered the various aspects affecting the desirable
composition of the Board and the appropriate timing of submitting the New
Nominees to shareholder vote. These include the anticipated retirements of
Messrs. Cowell, Olderman and Peters on or prior to December 31, 2007; regulatory
requirements applicable to the election of mutual fund trustees; and the ongoing
regulatory inquiries involving the Adviser, as more fully described in this
Proxy Statement. The Board has determined that it would be in the best interest
of the Trust and its shareholders to continue with all the Independent Trustees
currently serving. In addition, the Board has determined that it would be in the
best interest of the Trust and its shareholders to elect additional Independent
Trustees at this time, so as to allow the new Independent Trustees time to serve
on the Board alongside the current Independent Trustees prior to the expected
retirement of Messrs. Cowell, Olderman and Peters, and facilitate an orderly
succession of Independent Trustee duties and responsibilities. The Board also
deems it advantageous at this time to enhance the Board's independence by having
a Board that is composed in its entirety of Independent Trustees.
The election of the Independent Trustees will become effective as of March
7, 2006, the date of the next regularly scheduled meeting of the Board. As of
such date, the Board will be composed of 7 members, all of whom will be
Independent Trustees. The 1940 Act requires that a majority of the Trustees be
elected by the shareholders of the Trust. In addition, under the 1940 Act, new
Trustees cannot be appointed by the Trustees to fill vacancies unless, after
those appointments, at least two-thirds of the Trustees have been elected by
shareholders. Therefore, the New Nominees cannot become Independent Trustees
without an election by shareholders.
The persons named as proxies on the enclosed proxy card will vote FOR the
election of each of the Trustee Nominees unless the shareholder specifically
indicates on his or her proxy card a desire to withhold authority to vote for
any nominee. Each Trustee Nominee has consented to be named in this Proxy
Statement and has indicated a willingness to serve if elected. Neither the Board
nor management has any reason to believe that any Trustee Nominee will be
unavailable for election. However, if any of the Trustee Nominees should not be
available for election, the persons named as proxies (or their substitutes) may
vote for other persons in their discretion.
The following tables set forth certain information regarding each of the
Trustee Nominees and the officers of the Trust. Unless otherwise noted, each of
the Trustee Nominees and officers have engaged in the principal occupation
listed in the following table for five years or more.
7
INFORMATION REGARDING TRUSTEE NOMINEES
FOR ELECTION AT MEETING
POSITION(S),
TERM OF
OFFICE(2) NUMBER OF
AND LENGTH PORTFOLIOS OTHER
OF TIME PRINCIPAL IN FUND DIRECTORSHIPS
NAME, ADDRESS(1) WITH THE OCCUPATION(S) DURING COMPLEX(3) HELD OUTSIDE
AND AGE TRUST PAST 5 YEARS OVERSEEN FUND COMPLEX
- ---------------- ------------ -------------------- ---------- ------------
INDEPENDENT TRUSTEES:
Richard C. Cowell Trustee Private investor 9 Director, West Indies & Caribbean
78++[paragraph] since 1985 Development Ltd.; Director/Trustee of
two other investment companies advised
by the Adviser.
Jon Lukomnik N/A Managing Partner, Sinclair Capital LLC; N/A None
49 Consultant to various asset management
companies.
David J. Olderman Trustee Private investor 9 Director, Greif, Inc., Ladig, Inc., and
70++[paragraph] since 1994 Minnesota Public Radio; Director/Trustee
of two other investment companies advised
by the Adviser.
Ralph F. Peters Trustee Private investor 9 Director/Trustee of two other investment
76++[paragraph] since 1987 companies advised by the Adviser.
Wayne H. Shaner N/A Managing Partner, Rockledge Partners LLC, N/A Director, The Torray Funds, since 1993
58 since September 2003; Public Member (Chairman of the Board since December
Investment Committee, Maryland State 2005).
Retirement System since 1991; Vice
President, Investments, Lockheed Martin
Corporation (formerly Martin Marietta
Corporation), 1976-September 2003.
8
POSITION(S),
TERM OF
OFFICE(2) NUMBER OF
AND LENGTH PORTFOLIOS OTHER
OF TIME PRINCIPAL IN FUND DIRECTORSHIPS
NAME, ADDRESS(1) WITH THE OCCUPATION(S) DURING COMPLEX(3) HELD OUTSIDE
AND AGE TRUST PAST 5 YEARS OVERSEEN FUND COMPLEX
- ---------------- ------------ -------------------- ---------- ------------
R. Alastair Short Vice Chairman Managing Director, The GlenRock Group, LLC 9 Director/Trustee of two other investment
52++[paragraph] Trustee since (private equity investment firm), May 1, companies advised by the Adviser.
June 2004 2004 to present; President, Apex
Capital Corporation (personal investment
vehicle), Jan. 1988 to present; President,
Matrix Global Investments, Inc. and
predecessor company (private investment
company), Sept. 1995 to Jan. 1999.
Richard D. Chairman President and CEO, SmartBrief. Com 9 Director/Trustee of two other investment
Stamberger Trustee companies advised by the Adviser.
46++[paragraph] since 1994
- ---------------------
(1) The address for each Trustee and Officer is 99 Park Avenue, 8th
Floor, New York, New York 10016.
(2) Each Trustee serves until resignation, death, retirement or
removal. The Board established a mandatory retirement policy
applicable to all Independent Trustees, which provides that
Independent Trustees shall resign from the Board on December 31 of
the year such Trustee reaches the age of 75. With respect to
Messers. Cowell, Olderman and Peters, the mandatory retirement
policy requires retirement at the later of age 75 or December 31,
2007. Officers are elected yearly by the Trustees.
(3) The Fund Complex consists of Van Eck Funds, Van Eck Funds, Inc.
and Van Eck Worldwide Insurance Trust.
++ Member of the Governance Committee.
[paragraph] Member of the Audit Committee.
9
The van Eck family currently owns 100% of the shares of the Funds' Adviser.
The investment adviser and manager of the Funds is Van Eck Associates
Corporation (the "Adviser"), a Delaware corporation, pursuant to an Advisory
Agreement with the Trust. John C. van Eck, Sigrid van Eck, Jan F. van Eck and
Derek S. van Eck own 100% of the voting stock of the Adviser.
INFORMATION ABOUT THE TRUST'S OFFICERS
The executive officers of the Trust are elected annually by the Board of
Trustees. Each officer holds the office until the qualification of his or her
successor. The names, birthdates and principal occupations during the past five
years of the Trust's current executive officers are set forth in the table
below.
POSITION(S),
OFFICER'S NAMES, TERM OF OFFICE AND
ADDRESS(1) AND LENGTH OF TIME PRINCIPAL OCCUPATIONS
AGE WITH THE TRUST DURING PAST FIVE YEARS
- ------------------ ----------------------- ---------------------------
OFFICERS:
Heidi L. Cain Assistant Secretary and Assistant Secretary and Assistant Vice President, Van Eck Associates Corporation,
27 Assistant Vice President Van Eck Securities Corporation and Van Eck Absolute Return Advisers Corp., since
since December 2005 December 2005; Staff Attorney, Van Eck Associates Corporation since January 2005;
Student, New York University School of Law, August 2003 - May 2004; Student,
Golden Gate University School of Law, August 2000 - August 2003; Legal
Investigator, Northern California Innocence Project, January 2003 - July 2003;
Legal Extern, Hon. Phyllis J. Hamilton, Federal District Court Judge for the
Northern District of California, September 2002 - December 2002; Law Clerk, Law
Offices of Jeffrey Schwartz, September 2001 - January 2003; Legal Assistant,
Buchman & O'Brien, September 2000 - August 2001; Officer of two other investment
companies advised by the Adviser.
Charles T. Cameron Vice President since 1996 President, Worldwide Bond Fund; Director of Trading, Van Eck Associates
43 Corporation; Co-Portfolio Manager, Worldwide Bond Fund Series; Officer of two
other investment companies advised by the Adviser.
10
POSITION(S),
OFFICER'S NAMES, TERM OF OFFICE(2) AND
ADDRESS(1) AND LENGTH OF TIME PRINCIPAL OCCUPATIONS
AGE WITH THE TRUST DURING PAST FIVE YEARS
- ------------------ ----------------------- ---------------------------
Keith J. Carlson Chief Executive Officer President, Van Eck Associates Corporation, and Van Eck Securities Corporation
49 and President since 2004 since February 2004; Private Investor, June 2003 - January 2004; Independent
Consultant, Waddell & Reed, Inc., April 2002 - May 2003; Senior Vice President,
Waddell & Reed, Inc., December 2002 - March 2003; President/Chief Executive
Officer/Directors, Ivy Mackenzie Distributors, Inc., June 1993-December 2002;
Chairman/Director/President, Ivy Mackenzie Services Corporation, June 1993 -
December 2002; Chairman/Director/Senior Vice President, Ivy Management Inc.,
January 1992 - December 2002; President/Chief Executive
Officer/Director/Executive Vice President/Senior Vice President, April
1985-December 2002; Officer of two other investment companies advised by the
Adviser.
Susan C. Lashley Vice President since 1988 Vice President, Van Eck Associates Corporation; Vice President, Mutual Fund
50 Operations, Van Eck Securities Corporation; Officer of two other investment
companies advised by the Adviser.
Thaddeus Chief Compliance Officer Chief Compliance Officer, Van Eck Absolute Return Advisers Corporation and
Leszczynski since September 2005 Van Eck Associates Corporation since September 2005; Founder and Vice President,
59 EARN Corporation, July 2004 to present; Private Practice Lawyer, January 2002 to
present; Executive Vice President, Asian Financial Network Ltd., September 2000
- January 2001; Vice President, Prudential Insurance Company, March 1998 -
August 2000; Officer of two other investment companies advised by the Adviser.
Thomas K. Lynch Vice President and Vice President, Van Eck Associates Corporation and Van Eck Absolute Return
49 Treasurer since 2005 Advisers Corp., since April 2005; Second Vice President, Investment Reporting,
Teachers Personal Investors Services, Inc., September 1996 to April 2005;
Director, TIAA-CREF Individual & Institutional Services, Inc., January 1996 to
April 2005; Senior Manager, Audits, Grant Thornton, December 1993 to
January 1996; Senior Manager, Audits, McGladrey & Pullen, December 1986 to
December 1993; Officer of two other investment companies advised by the Adviser.
Joseph J. McBrien Senior Vice President Senior Vice President, General Counsel, and Secretary, Van Eck Associates
57 and Secretary since Corporation, Van Eck Securities Corporation, and Van Eck Absolute Return Advisers
December 2005 Corp., since December 2005; Managing Director, Chatsworth Securities LLC,
March 2001 - November 2005; Private Investor/Consultant, September 2000 -
February 2001; Executive Vice President and General Counsel, Mainstay Management
LLC, September 1999 - August 2000; Officer of two other investment companies
advised by the Adviser.
11
POSITION(S),
OFFICER'S NAMES, TERM OF OFFICE AND
ADDRESS(1) AND LENGTH OF TIME PRINCIPAL OCCUPATIONS
AGE WITH THE TRUST DURING PAST FIVE YEARS
- ------------------ ----------------------- ---------------------------
Bruce J. Smith Vice President and Senior Vice President and Chief Financial Officer, Van Eck Associates
50 Treasurer since 1985 Corporation; Senior Vice President, Chief Financial Officer, Treasurer and
Controller, Van Eck Securities Corporation and Van Eck Absolute Return Advisers
Corp.; Officer of two other investment companies advised by the Adviser.
Derek S. van Eck Executive Vice President President of Worldwide Hard Assets Fund series and the Worldwide Real Estate Fund
41 Since 2004 series of Van Eck Worldwide Insurance Trust and the Global Hard Assets Fund
series of Van Eck Funds; Director of Van Eck Associates Corporation; Director and
Executive Vice President, Van Eck Securities Corporation; Director and Executive
Vice President, Van Eck Absolute Return Advisers Corp.; Director, Greylock
Capital Associates LLC.
Jan F. van Eck Executive Vice President Director and Executive Vice President, Van Eck Associates Corporation; Director,
42+ since 2005 Executive Vice President and Chief Compliance Officer, Van Eck Securities
Corporation; Director and President, Van Eck Absolute Return Advisers
Corporation; Director, Greylock Capital Associates LLC.
- ----------------
1 The address for each Officer is 99 Park Avenue, 8th Floor, New York, New
York 10016.
+ As of the date of this Proxy Statement, Mr. Jan F. van Eck serves as an
"interested trustee," as defined in the 1940 Act.
12
TRUSTEE COMPENSATION
A compensation schedule for the independent Trustees was established by the
Governance Committee and approved by the Board. The Trustee compensation
schedule generally includes the following for the entire Van Eck fund complex:
i) a retainer in the amount of $5,000 per quarter, ii) a meeting fee in the
amount of $5,000 per meeting in which the Trustee participates either in person
or via telephone, iii) a fee in the amount of $2,500 per quarter to the
Chairman, and iv) a fee in the amount of $750 per quarter to the chairpersons of
both the Audit Committee and the Governance Committee. The table below includes
certain information relating to the compensation of the Trustees paid by the
Trust for the fiscal year ended December 31, 2005. Annual Trustee fees may be
reviewed periodically and changed by the Trust's Board.
COMPENSATION TABLE
PENSION OR TOTAL
RETIREMENT COMPEN-
AGGREGATE DEFERRED BENEFITS ESTIMATED SATION FROM
COMPEN- COMPEN- ACCRUED AS ANNUAL THE TRUST
SATION SATION PART OF THE BENEFITS AND THE FUND
NAME OF FROM THE FROM THE TRUST'S UPON COMPLEX PAID
DIRECTOR TRUST TRUST EXPENSES RETIREMENT TO TRUSTEE+
- ------------- ------------ ------------ ------------ ----------- --------------
Richard C.
Cowell $32,283.62 $ 0 N/A N/A $57,500
David J.
Olderman $37,851.72 $ 0 N/A N/A $67,500
Ralph F.
Peters $34,352.48 $ 0 N/A N/A $61,250
R. Alastair
Short* $32,248.96 $ 0 N/A N/A $57,500
Richard D.
Stamberger* $25,707.62 $7,932.79 N/A N/A $60,112.78++
- ----------------
* Effective January 1, 2006, Mr. Stamberger became Chairman of the Board and
Mr. Short became Vice Chairman.
+ The "Fund Complex" consists of Van Eck Funds, Van Eck Funds, Inc., and Van
Eck Worldwide Insurance Trust.
++ This includes deferred compensation from the entire complex.
TRUSTEE NOMINEE SHARE OWNERSHIP
The following table sets forth the dollar range of equity securities
beneficially owned by each Trustee and Trustee Nominee in the Trust and in all
registered investment companies in the Fund Complex as of the Record Date.
13
AGGREGATE DOLLAR
RANGE OF EQUITY
SECURITIES IN ALL
DOLLAR RANGE OF REGISTERED INVESTMENT
NAME OF TRUSTEE OR EQUITY SECURITIES COMPANIES OVERSEEN BY
TRUSTEE NOMINEE IN THE TRUST TRUSTEE IN FUND COMPLEX
- ------------------------ --------------------- -----------------------------
Richard C. Cowell None $10,001 - $50,000
David J. Olderman None $10,001 - $50,000
Ralph F. Peters None $10,001 - $50,000
R. Alastair Short None $10,001 - $50,000
Richard D. Stamberger None Over $100,000
TRUSTEE NOMINEES
Jon Lukomnik None None
Wayne H. Shaner None None
BOARD OF TRUSTEES AND COMMITTEE MEETINGS
The Board of Trustees is responsible for supervising the operation of the
Trust. It establishes the major policies, and provides guidelines to the Adviser
and others who provide services to the Trust. The Board of Trustees met five
times during the Trust's fiscal year ended December 31, 2005. Each Trustee
attended at least 75% of the total number of meetings of the Board. Since
January 1, 2006, Richard D. Stamberger has served as the Chairman of the Board,
and R. Alastair Short as Vice Chairman. The Board of Trustees has an Audit
Committee and a Governance Committee.
AUDIT COMMITTEE
During the 2005 fiscal year, the members of the Audit Committee were
Richard C. Cowell, David J. Olderman, Ralph F. Peters, R. Alastair Short, and
Richard D. Stamberger, all of whom are Independent Trustees. This Committee met
twice during 2005. Each committee member attended at least 75% of the total
number of meetings of the Audit Committee. The duties of this Committee include
meeting with representatives of the Company's independent accountants to review
fees, services, procedures, conclusions and recommendations of independent
auditors and to discuss the Company's system of internal controls. Thereafter,
the Committee reports to the Board of the Committee's findings and
recommendations concerning internal accounting matters as well as its
recommendation for retention or dismissal of the auditing firm. The Audit
Committee Charter, specifically describing the duties of this committee, is
attached as Exhibit B. Currently, the Audit Committee's financial experts are
David J. Olderman and R. Alastair Short. Mr. Short has served as the Chairman of
the Audit Committee since January 1, 2006.
14
GOVERNANCE COMMITTEE
During the 2005 fiscal year, the members of the Governance Committee of the
Board of Trustees were Richard C. Cowell, David J. Olderman, Ralph F. Peters, R.
Alastair Short, and Richard D. Stamberger, all of whom are Independent Trustees.
This Committee met three times during 2004. Each Committee member attended at
least 75% of the total number of meetings of the Governance Committee. The
duties of this Committee include consideration of recommendations on nominations
for Trustees, review of the composition of the Board, and recommendations of
meetings, compensation and similar corporate matters. The Charter, which
includes the policies, procedures and responsibilities of the Governance
Committee, is attached as Exhibit C. Mr. Peters has served as the Chairman of
the Governance Committee.
The Independent Trustees are solely responsible for nominating Independent
Trustees for election by shareholders. All Trustees considered for appointment
or nomination are required to complete a questionnaire designed to elicit
information concerning his or her real or perceived independence in relation to
the Trust, other Van Eck funds, the Adviser or any of their affiliated persons,
any potential conflicts of interest, and other factual information necessary for
compliance with the securities laws.
The Independent Trustees shall, when identifying candidates for the
position of Independent Trustee, consider candidates recommended by a
shareholder of a Fund if such recommendation provides sufficient background
information concerning the candidate and evidence that the candidate is willing
to serve as an Independent Trustee if selected, and is received in a
sufficiently timely manner. Shareholders should address recommendations in
writing to the attention of the Governance Committee, c/o the Secretary of the
Trust. The Secretary shall retain copies of any shareholder recommendations
which meet the foregoing requirements for a period of not more than 12 months
following receipt. The Secretary shall have no obligation to acknowledge receipt
of any shareholder recommendations.
ADDITIONAL INDEPENDENT TRUSTEES SESSIONS
The Independent Trustees meet regularly in executive sessions among
themselves and with their counsel to consider a variety of matters affecting the
Trust. These sessions generally occur prior to, or during, scheduled Board
meetings and at such other times as the Independent Trustees may deem necessary.
15
COMMUNICATION WITH TRUSTEES
Correspondence intended for an individual Trustee or for the Board may be
sent to the attention of the individual Trustee or to the Board, in the care of
the Secretary of the Trust, at 99 Park Avenue, 8th Floor, New York, New York
10016. All communications addressed to the Board of Trustees or any individual
Trustee will be logged and sent to the Board or individual Trustee. The Trust
does not hold annual meetings of shareholders and, therefore, does not have a
policy with respect to Trustees' attendance at such meetings.
REQUIRED VOTE: Election of each nominee as a Trustee of the Trust requires
the vote of a plurality of the votes cast at the Meeting in person or by proxy,
provided that a quorum is present. All shares of all Funds will vote as a single
class for Proposal 1. Shareholders who vote FOR Proposal 1 will vote FOR each
nominee. THOSE SHAREHOLDERS WHO WISH TO WITHHOLD THEIR VOTE ON ANY SPECIFIC
NOMINEE(S) MAY DO SO ON THE PROXY CARD.
----------
THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" EACH OF THE NOMINEES IN PROPOSAL 1
----------
PROPOSAL 2 -- TO MODERNIZE THE FUNDS' INVESTMENT RESTRICTIONS
ABOUT THE FUNDS' INVESTMENT POLICIES
The Funds have adopted certain investment restrictions or policies that are
"fundamental," meaning that as a matter of law they cannot be changed without
shareholder approval. Restrictions and policies that the Funds have not
designated as being fundamental are considered to be non-fundamental and may be
changed without shareholder approval. All mutual funds are required to adopt
fundamental policies with respect to a limited number of matters.
MODERNIZING THE FUNDS' INVESTMENT POLICIES
The Board of Trustees, together with the Funds' Adviser, has reviewed the
Funds' current fundamental restrictions and has concluded that certain
restrictions should be modified or eliminated based on the development of new
practices and changes in applicable law and to facilitate administration of the
Funds. Over time, the Funds have adopted fundamental restrictions to reflect
certain regulatory, business or industry conditions. Changes in applicable law
now permit investment companies like the Funds to eliminate certain of these
restrictions. Some of the Funds' current restrictions
16
may also limit a Fund from investing in a security that is both consistent with
its investment objective and considered by the portfolio manager to be a good
investment for such Fund.
The revised restrictions maintain important investor protections while
providing flexibility to respond to changing markets, new investment
opportunities and future changes in applicable law. In some cases, only
technical changes are being made to simplify the language of the restriction or
standardize the language among the funds in the Van Eck fund complex. The
proposed modifications are expected to facilitate the management of the Funds'
assets and simplify the process of monitoring compliance with investment
restrictions.
The current investment restrictions are listed in the "Investment
Restrictions" section of the Funds' statement of additional information. Both
the Funds' current investment restrictions and the proposed investment
restrictions are additionally listed in Exhibit A, attached hereto. The Funds'
registration statement, which includes the prospectus and statement of
additional information, will be revised to reflect the changes to the
restrictions, as part of its annual update.
CONFORMING THE FUNDS' INVESTMENT POLICIES
The Boards of Directors/Trustees of four other funds in the Van Eck fund
complex: Emerging Markets Fund, Global Hard Assets Fund and International
Investors Gold Fund (each a series of Van Eck Funds) and Mid-Cap Value Fund (the
sole series of Van Eck Funds, Inc.) are recommending that similar changes be
made to the investment restrictions of those funds. The purpose of these
parallel proposals is to conform the policies among the Funds in the Van Eck
fund complex. The Board of Trustees believes that these changes will promote
administrative convenience and provide the Funds with increased investment
flexibility. The effect of implementing these proposals should be to reduce the
burdens of monitoring, and ensuring compliance with, varying sets of policies
among certain funds in the Van Eck fund complex. The revised restrictions (with
variations required by the specific investment focus of each fund) will be the
standard form for funds in the Van Eck fund complex.
NO CHANGE TO YOUR FUNDS' INVESTMENT OBJECTIVES
The Board of Trustees does not believe that any of these changes will
materially impact the way the Funds are managed in the immediate future. The
revised restrictions do not affect the investment objectives of the Funds, which
remain unchanged. The revised restrictions may give the Funds an increased
ability to engage in certain activities. However, the proposed modifications are
not expected to significantly affect the manner in which the Funds are managed,
the investment program of the Funds or
17
the investment performance of the Funds. THE ADVISER HAS REPRESENTED TO THE
BOARD OF TRUSTEES THAT IT WILL NOT EXERCISE ANY OF THE EXPANDED AUTHORITY
PERMITTED UNDER THE REVISED RESTRICTIONS WITHOUT SEEKING SPECIFIC BOARD
APPROVAL, AND, IN THE CASE OF ANY MATERIAL CHANGE, GIVING SHAREHOLDERS SIXTY
DAYS' ADVANCE NOTICE.
WHAT YOU SHOULD CONSIDER
You are being asked to vote on the changes recommended by the Board of
Trustees because the restrictions are fundamental and may be changed only with
shareholder approval, as required by the 1940 Act. The Board of Trustees expects
that you will benefit from the proposed changes to your Fund's fundamental
investment restrictions in several ways, including:
o The proposed changes expand the range of investment opportunities and
techniques available to manage each Fund's portfolio.
o The Board of Trustees will have additional flexibility to respond more
quickly to new developments and changing trends in the marketplace
when it determines that a response is both appropriate and prudent.
o By minimizing the number of policies that can be changed only by
shareholder vote, the Board of Trustees will have greater flexibility
to modify policies of the Fund, as appropriate, in response to
changing markets and in light of new investment opportunities and
instruments. The Fund will then be able to avoid the costs and delays
associated with holding a shareholder meeting when making changes to
investment policies that, at a future time, the Board of Trustees
consider to be in the best interests of the Fund.
o The proposed changes to the Funds' investment restrictions are
designed to produce a clearer, more concise and streamlined set of
restrictions, which also will facilitate the compliance efforts of the
Fund.
o The Boards of Directors/Trustees of the following funds in the Van Eck
fund complex are making similar proposals to their shareholders: Van
Eck Funds and Van Eck Funds, Inc.
In order to fully benefit from the proposed changes, the Board of Trustees
may change some of the non-fundamental policies of the Funds.
To the extent multiple proposals apply to any of the Funds, the adoption of
any of these proposals is not contingent on the adoption of any other proposal.
18
PROPOSAL 2-A: TO MODIFY THE FUNDAMENTAL INVESTMENT RESTRICTION ON BORROWING.
FUNDS TO WHICH THIS PROPOSAL APPLIES: WORLDWIDE BOND FUND, WORLDWIDE EMERGING
MARKETS FUND, WORLDWIDE HARD ASSETS FUND AND WORLDWIDE REAL ESTATE FUND.
If shareholders of a Fund approve Proposal 2-A, the Fund's current
fundamental investment restriction on borrowing, set forth in Exhibit A to this
Proxy Statement, would be modified to read as follows:
"The Fund may not borrow money, except as permitted under the 1940 Act, as
amended and as interpreted or modified by regulation from time to time."
DISCUSSION OF PROPOSED MODIFICATIONS. The 1940 Act requires every mutual
fund to set forth a fundamental investment restriction indicating the extent to
which the fund may borrow money. Under the 1940 Act, a fund may borrow from
banks, provided that the net assets of the fund plus the amount of all
borrowings is no less than 300% of the amount of such borrowings. The fund is
required to be able to restore asset coverage within three days, if it should
decline to less than 300%. In addition, the 1940 Act permits a fund to borrow,
on a temporary basis, up to 5% of its assets from non-banks.
Currently, each Fund may borrow up to 30% of the value of its net assets to
increase its holdings of portfolio securities. These restrictions are more
limited than the 1940 Act permits. If approved, each Fund will be permitted to
borrow to the maximum extent allowed under the 1940 Act.
As stated above, the Funds have no intention of exercising any expanded
authority permitted by this proposed change without prior Board approval and, if
the change is material, notice to shareholders. Each of the Funds is already
permitted to borrow under its current restrictions, and is thus currently
subject to risks associated with borrowing. Nonetheless, if this expanded
authority were exercised, each Fund would be subject to a greater degree of risk
associated with borrowing, including the risks of leveraging. Leverage
exaggerates the effect of rises or falls in prices of securities bought with
borrowed money, and entails costs associated with borrowing, including fees and
interest.
REQUIRED VOTE. Approval of Proposal 2-A with respect to each Fund requires
the affirmative vote of a 1940 Act Majority of all shares of such Fund.
19
----------
THE BOARD UNANIMOUSLY RECOMMENDS THAT
YOU VOTE "FOR" PROPOSAL NO. 2-A.
----------
PROPOSAL NO. 2-B: TO MODIFY THE FUNDAMENTAL INVESTMENT RESTRICTION ON
UNDERWRITING.
FUNDS TO WHICH THIS PROPOSAL APPLIES: WORLDWIDE BOND FUND, WORLDWIDE EMERGING
MARKETS FUND, WORLDWIDE HARD ASSETS FUND AND WORLDWIDE REAL ESTATE FUND.
If shareholders of each Fund approve Proposal 2-B, the Fund's current
fundamental investment restriction on underwriting securities, set forth in
Exhibit A to this Proxy Statement, would be modified to read as follows:
"The Fund may not engage in the business of underwriting securities issued
by others, except to the extent that the Fund may be considered an
underwriter within the meaning of the Securities Act of 1933 in the
disposition of restricted securities or in connection with its investments
in other investment companies."
DISCUSSION OF PROPOSED MODIFICATIONS. The 1940 Act requires every mutual
fund to set forth a fundamental policy regarding the extent to which the fund
may engage in the business of underwriting securities issued by other persons.
This requirement of the 1940 Act is in recognition of the fact that the business
of purchasing securities for the purpose of engaging in a distribution of the
securities to the public (i.e., the business of underwriting securities)
involves significantly different risks than the business of purchasing and
subsequently selling securities as part of the business of investing in
securities. Under the Federal securities laws, the term "underwriting" is
construed broadly and could include the purchase and resale of securities by a
fund in circumstances in which such securities were not registered under the
Federal securities laws when ini-tially purchased by the fund. Similarly, in
circumstances in which a fund invests a substantial portion of its assets in the
securities of one or more other investment companies, the fund might be deemed
to be an underwriter of the securities of the other investment companies.
Although none of the Funds purchases securities with a view towards distribution
of such securities, each Fund may from time to time purchase and resell
"restricted" securities or invest in shares of other investment companies. The
proposed changes to each Fund's investment restriction on underwriting
securities of others, as set forth in Exhibit A, is intended to clarify that
such activities will not violate the Fund's fundamental restriction prohibiting
20
the Fund from engaging in the business of underwriting the securities issued by
another person.
The Funds' current restrictions generally state that the Funds may not
underwrite any issue of securities. The restriction excludes the sale of
restricted securities from this prohibition. The proposed modification would
make this restriction uniform among the funds in the Van Eck complex. It would
also preserve the exception for the disposition of restricted securities and add
an exception for shares of other investment companies from the broad
prohibition.
REQUIRED VOTE. Approval of Proposal 2-B with respect to each Fund requires
the affirmative vote of a 1940 Act Majority of all shares of such Fund.
----------
THE BOARD UNANIMOUSLY RECOMMENDS THAT
YOU VOTE "FOR" PROPOSAL NO. 2-B.
----------
PROPOSAL NO. 2-C: TO MODIFY THE FUNDAMENTAL INVESTMENT RESTRICTION ON LENDING.
FUNDS TO WHICH THIS PROPOSAL APPLIES: WORLDWIDE BOND FUND, WORLDWIDE EMERGING
MARKETS FUND, WORLDWIDE HARD ASSETS FUND AND WORLDWIDE REAL ESTATE FUND.
If shareholders of each Fund approve Proposal 2-C, the Funds' current
fundamental investment restriction on lending, set forth in Exhibit A to this
Proxy Statement, would be modified to read as follows:
"The Fund may not make loans, except that the Fund may (i) lend portfolio
securities, (ii) enter into repurchase agreements, (iii) purchase all or a
portion of an issue of debt securities, bank loan participation interests,
bank certificates of deposit, bankers' acceptances, debentures or other
securities, whether or not the purchase is made upon the original issuance
of the securities, and (iv) participate in an interfund lending program
with other registered investment companies."
DISCUSSION OF PROPOSED MODIFICATIONS. The 1940 Act requires every mutual
fund to set forth a fundamental investment restriction indicating the extent to
which the fund may make loans to other persons. The Funds' current restriction
is substantially similar to what is proposed in that it generally prohibits the
making of loans and specifies that an investment in debt instruments does not
constitute the making of a loan. The lending restrictions also specifically
exclude repurchase agreements. (A repurchase agreement is an agreement to
purchase a security,
21
coupled with an agreement to sell that security back to the original seller at
an agreed upon date, at a price that generally depends on current interest
rates. The 1940 Act treats these agreements as loans.) The Funds currently
permit the lending of securities with an aggregate market value of one-third of
their respective total assets.
The proposed modifications would: (1) allow a Fund to lend securities to
the full extent permitted under the 1940 Act. (SEC staff interpretations of the
1940 Act generally allow a fund to lend securities with an aggregate market
value of up to 331/3% of its total assets. When a fund lends its portfolio
securities, the fund's "total assets" will include collateral received in
connection with the loan.); (2) expressly permit the use of repurchase
agreements by a Fund; (3) clarify that a Fund may make investments in debt
obligations in pursuit of its investment program and (4) participate in an
interfund lending program with other registered investment companies. The Funds
would only participate in such an interfund lending program if they received
appropriate exemptive relief from the SEC.
As stated above, the Funds have no intention of exercising any expanded
authority permitted by this proposed change without prior Board approval and, if
the change is material, notice to shareholders. Each of the Funds is already
permitted to lend its portfolio securities under its current restrictions, and
is thus currently subject to risks associated with securities lending. The risks
include the risk of loss arising from the investment of collateral and/or the
failure of a borrower to return the borrowed securities at the end of the loan.
REQUIRED VOTE. Approval of Proposal 2-C with respect to each Fund requires
the affirmative vote of a 1940 Act Majority of all shares of such Fund.
----------
THE BOARD UNANIMOUSLY RECOMMENDS THAT
YOU VOTE "FOR" PROPOSAL NO. 2-C.
----------
22
PROPOSAL NO. 2-D: TO MODIFY THE FUNDAMENTAL INVESTMENT RESTRICTION ON SENIOR
SECURITIES.
FUNDS TO WHICH THIS PROPOSAL APPLIES: WORLDWIDE BOND FUND, WORLDWIDE EMERGING
MARKETS FUND, WORLDWIDE HARD ASSETS FUND AND WORLDWIDE REAL ESTATE FUND.
If shareholders of each Fund approve Proposal 2-D, the Fund's current
fundamental investment restriction on issuing senior securities, set forth in
Exhibit A to this Proxy Statement, would be modified to read as follows:
"The Fund may not issue senior securities, except as permitted under the
1940 Act, as amended and as interpreted or modified by regulation from time
to time."
DISCUSSION OF PROPOSED MODIFICATIONS. The 1940 Act requires every mutual
fund to set forth a fundamental investment restriction indicating the extent to
which the fund may issue "senior securities." The term "senior securities"
generally refers to evidence of indebtedness of fund obligations that have a
priority over a fund's common stock with respect to the distribution of fund
assets or the payment of dividends. Section 18 (f) (1) of the 1940 Act prohibits
every mutual fund from issuing any senior securities except for bank borrowings
(which meet the 300% coverage test discussed above in Proposal 2-A). The Rules
adopted by the SEC also permit a fund to issue multiple classes of shares to be
used in different distribution channels each of which may be subject to
different expenses and, therefore, may pay different dividends.
The SEC staff has articulated certain guidelines under which it will not
treat certain leveraged transactions as senior securities. These transactions
include: reverse repurchase agreements, purchasing "when issued" securities,
selling securities short, buying and selling financial futures contracts and
selling put and call options. The SEC will not treat any of these as senior
securities provided the transaction is "covered" to limit the potential
leverage. A fund generally can cover its risk either by being "long" with
respect to the instrument underlying the transaction or by segregating or
earmarking on its custodian's books liquid securities equal in value to the
fund's potential exposure.
The Funds' current restrictions prohibit the issuance of senior securities,
except to the extent that permissible borrowings may be construed as an issuance
of senior securities. The restrictions then carve out various (but not all) of
the leveraged transactions that the SEC staff has focused on over the years. The
listing in the current restrictions varies for each Fund.
The proposed modifications would make this restriction uniform for all the
Funds in the Van Eck complex and would permit the Funds to issue senior
securities to the extent permitted by the 1940 Act. Together with the revised
restriction on borrowing, the restriction proposed here would
23
make clear that the Funds can take full advantage of the latitude allowed by the
1940 Act in this area.
As stated above, the Funds have no intention of exercising the expanded
authority permitted by this proposed change without prior Board approval and, if
the change is material, notice to shareholders. Each of the Funds is already
permitted to issue senior securities under its current restrictions, and is thus
currently subject to risks associated with issuing senior securities.
Nonetheless, if the authority under the proposed restriction were exercised,
each Fund would be subject to a greater degree of risk associated with issuing
senior securities, such as risks associated with borrowing, as stated in
Proposal 2-A.
REQUIRED VOTE. Approval of Proposal 2-D with respect to each Fund requires
the affirmative vote of a 1940 Act Majority of all shares of such Fund.
----------
THE BOARD UNANIMOUSLY RECOMMENDS THAT
YOU VOTE "FOR" PROPOSAL NO. 2-D.
----------
PROPOSAL NO. 2-E: TO MODIFY THE FUNDAMENTAL INVESTMENT RESTRICTION ON REAL
ESTATE.
FUNDS TO WHICH THIS PROPOSAL APPLIES: WORLDWIDE BOND FUND, WORLDWIDE EMERGING
MARKETS FUND, WORLDWIDE HARD ASSETS FUND AND WORLDWIDE REAL ESTATE FUND.
If shareholders of each Fund approve Proposal 2-E, the Fund's current
fundamental investment restriction on real estate investments, set forth in
Exhibit A to this Proxy Statement, would be modified to read as follows:
"The Fund may not purchase or sell real estate, except that the Fund may
(i) invest in securities of issuers that invest in real estate or interests
therein, (ii) invest in mortgage-related securities and other securities
that are secured by real estate or interests therein, and (iii) hold and
sell real estate acquired by the Fund as a result of the ownership of
securities."
DISCUSSION OF PROPOSED MODIFICATIONS. The 1940 Act requires every mutual
fund to set forth a fundamental investment restriction indicating the extent to
which the fund may engage in the purchase and sale of real estate. Each Fund's
current restriction generally prohibits the purchase or holding of real estate.
It also provides an exception for the
24
purchase or holding of securities of companies that deal in real estate,
including real estate investment trusts, and securities which are collateralized
by real estate or interests therein. The proposed modifications would make this
restriction uniform for all of the funds in the Van Eck complex and preserve the
ability to invest in all real estate-related securities and companies whose
business consists in whole or in part of investing in real estate, including
real estate investment trusts. It would also clarify that each Fund could hold
and sell real estate acquired as a result of the ownership of securities (for
example, if there was a default on a mortgage security owned by a Fund).
REQUIRED VOTE. Approval of Proposal 2-E with respect to each Fund requires
the affirmative vote of a 1940 Act Majority of all shares of such Fund.
----------
THE BOARD UNANIMOUSLY RECOMMENDS THAT
YOU VOTE "FOR" PROPOSAL NO. 2-E.
----------
PROPOSALS 2-F & 2-G
PROPOSALS 2-F AND 2-G, DISCUSSED BELOW, PROPOSE ELIMINATING EXISTING INVESTMENT
RESTRICTIONS. NONE OF THESE RESTRICTIONS ARE REQUIRED UNDER APPLICABLE LAW. AS
NOTED IN THE INTRODUCTION TO PROPOSAL 2 IN THIS PROXY STATEMENT, THE ADVISER HAS
AGREED THAT IT WILL NOT EXERCISE ANY EXPANDED AUTHORITY PERMITTED AS A RESULT OF
THE CHANGES CONTEMPLATED IN THIS PROXY STATEMENT WITHOUT SEEKING BOARD APPROVAL,
AND, IN THE CASE OF ANY MATERIAL CHANGE, GIVING SHAREHOLDERS SIXTY DAYS ADVANCED
NOTICE.
PROPOSAL NO. 2-F: TO ELIMINATE THE FUNDAMENTAL INVESTMENT RESTRICTION ON REAL
ESTATE LIMITED PARTNERSHIPS, AND OIL, GAS AND MINERALS LEASES.
FUNDS TO WHICH THIS PROPOSAL APPLIES: WORLDWIDE BOND FUND, WORLDWIDE EMERGING
MARKETS FUND, WORLDWIDE HARD ASSETS FUND AND WORLDWIDE REAL ESTATE FUND.
If shareholders approve Proposal 2-F, each Fund's current fundamental
investment policy indicating the extent to which the Fund may invest in real
estate limited partnerships, and prohibiting investments in oil, gas and
minerals leases, set forth in Exhibit A to this Proxy Statement, would be
eliminated.
25
DISCUSSION OF PROPOSED MODIFICATIONS. There is no requirement under the
1940 Act or any applicable law that an investment company have a fundamental
investment restriction with respect to investment in real estate partnerships,
or oil, gas and minerals leases. The current policy was derived from state laws
that have been preempted by amendments to the federal securities laws. In order
to maximize the Fund's investment flexibility, this restriction should be
eliminated.
As stated above, the Funds have no intention of exercising the expanded
authority permitted by this proposed change without prior Board approval and, if
a material change, notice to shareholders. If this authority were exercised,
however, the Funds would be subject to special risks associated with oil, gas
and mineral leases. These risks include the potential of greater price
fluctuations than the underlying commodity, reflecting volatility of energy and
basic materials prices and possible instability of supply of various energy
commodities. The Funds may also be subject to other risks such as exploration
and depletion risks and interest rate risks.
REQUIRED VOTE. Approval of Proposal 2-F requires the affirmative vote of a
1940 Act Majority of all shares of the Fund.
----------
THE BOARD UNANIMOUSLY RECOMMENDS THAT
YOU VOTE "FOR" PROPOSAL NO. 2-F.
----------
PROPOSAL NO. 2-G: TO ELIMINATE THE FUNDAMENTAL INVESTMENT RESTRICTION ON
INVESTING FOR THE PURPOSE OF EXERCISING CONTROL.
FUNDS TO WHICH THIS PROPOSAL APPLIES: WORLDWIDE BOND FUND, WORLDWIDE
EMERGING MARKETS FUND, WORLDWIDE HARD ASSETS FUND AND WORLDWIDE REAL ESTATE
FUND.
If shareholders approve Proposal 2-G, each Fund's current fundamental
investment restriction on investing for the purpose of exercising control or
management, set forth in Exhibit A to this Proxy Statement, would be eliminated.
DISCUSSION OF PROPOSED MODIFICATIONS. There is no requirement under the
1940 Act or any applicable law that the Funds have an affirmative restriction on
this subject if they do not intend to make investments for the purpose of
exercising control. Moreover, there is no requirement that any restriction that
they do have regarding control be categorized as fundamental. The current
restriction was derived from state laws that have been preempted by amendments
to the federal securities laws.
26
In order to maximize the Fund's investment flexibility, this restriction should
be eliminated.
REQUIRED VOTE. Approval of Proposal 2-G requires the affirmative vote of a
1940 Act Majority of all shares of the Fund.
----------
THE BOARD UNANIMOUSLY RECOMMENDS THAT
YOU VOTE "FOR" PROPOSAL NO. 2-G.
----------
PROPOSAL NO. 2-H: TO MODIFY THE FUNDAMENTAL INVESTMENT RESTRICTION ON
COMMODITIES.
FUNDS TO WHICH THIS PROPOSAL APPLIES: ALL FUNDS
If shareholders of each Fund approve Proposal 2-H, the Fund's current
fundamental investment restriction on investing in commodities, set forth in
Exhibit A to this Proxy Statement, would be modified to read as follows:
"The Fund may not purchase or sell commodities, unless acquired as a result
of owning securities or other instruments, but it may purchase, sell or
enter into financial options and futures, forward and spot currency
contracts, swap transactions and other financial contracts or derivative
instruments and may invest in securities or other instruments backed by
commodities."
DISCUSSION OF PROPOSED MODIFICATIONS. The 1940 Act requires every mutual
fund to set forth a fundamental investment restriction indicating the extent to
which the fund may engage in the purchase and sale of commodities. All of the
Funds currently generally prohibit the purchase or sale of commodities or
commodity futures contracts. The Worldwide Bond Fund, Worldwide Emerging Markets
Fund, Worldwide Hard Assets Fund and Worldwide Real Estate Fund, however, permit
the use of stock and bond index futures contracts and foreign currency futures
contracts (and in the case of the Worldwide Hard Assets Fund, commodity futures
contracts on gold or other natural resources or on an index thereon) for hedging
purposes. In addition, the Worldwide Bond Fund, Worldwide Emerging Markets Fund,
Worldwide Hard Assets Fund and Worldwide Real Estate Fund restrict initial
margin on futures contracts to 5% of each Fund's total assets. Further,
Worldwide Hard Assets Fund reserves the right to invest in gold, silver and
other hard metals.
The proposed modifications would (i) make each of the Fund's investment
restrictions uniform, (ii) significantly expand each Fund's ability to use
financial futures contracts and (iii) eliminate the Worldwide Bond Fund's,
27
Worldwide Emerging Markets Fund's, Worldwide Hard Assets Fund's and Worldwide
Real Estate Fund's limitations on initial margin and their respective abilities
to invest in gold, silver and other hard metals.
As stated above, the Funds have no intention of exercising the expanded
authority permitted by this proposed change without prior Board approval and, if
the change is material, notice to shareholders. If this authority were
exercised, however, the Funds would be subject to risks associated with
financial futures contracts, which entail leverage risks (as stated in Proposal
2-A) and the risk that the portfolio's position in a futures contract may be
illiquid at certain times. In addition, to the extent that each Fund would
potentially make equity investments in companies in the real estate, precious
metals and natural resources industries, it may be subject to risks relating to
these commodities. These risks include international political and economic
developments, inflation, and other factors. Each of the Fund's portfolio
securities may experience substantial price fluctuations as a result of these
factors.
REQUIRED VOTE. Approval of Proposal 2-H with respect to each Fund requires
the affirmative vote of a 1940 Act Majority of all shares of such Fund.
----------
THE BOARD UNANIMOUSLY RECOMMENDS THAT
YOU VOTE "FOR" PROPOSAL NO. 2-H.
----------
PROPOSAL NO. 2-I: TO MODIFY THE FUNDAMENTAL INVESTMENT RESTRICTION ON
CONCENTRATION.
FUNDS TO WHICH THIS PROPOSAL APPLIES: ALL FUNDS
If shareholders of each Fund approve Proposal 2-I, the Fund's current
fundamental investment restriction on concentration set forth in Exhibit A to
this Proxy Statement, would be modified to read as follows:
For the Worldwide Absolute Return Fund, Worldwide Emerging Markets Fund and
Worldwide Bond Fund:
"The Fund may not purchase any security if, as a result of that purchase,
25% or more of its total assets would be invested in securities of issuers
having their principal business activities in the same industry. This limit
does not apply to securities issued or guaranteed by the U.S. government,
its agencies or instrumentalities."
28
FOR THE WORLDWIDE REAL ESTATE FUND:
"The Fund may not purchase any security if, as a result of that purchase,
25% or more of its total assets would be invested in securities of issuers
having their principal business activities in the same industry except that
the Fund will invest 25% or more of its total assets in equity securities
of domestic and foreign companies that own significant real estate assets
or that are principally engaged in the real estate industry. This limit
does not apply to securities issued or guaranteed by the U.S. government,
its agencies or instrumentalities."
FOR THE WORLDWIDE HARD ASSETS FUND:
"The Fund may not purchase any security if, as a result of that purchase,
25% or more of its total assets would be invested in securities of issuers
having their principal business activities in the same industry, except
that the Fund will invest greater than 25% or more of its total assets in
"hard asset" industries as defined in the Prospectus. This limit does not
apply to securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities."
DISCUSSION OF PROPOSED MODIFICATIONS. The 1940 Act requires every mutual
fund to set forth a fundamental investment restriction indicating the extent to
which the fund may concentrate investments in a particular industry or group of
industries. Each Fund's current restrictions on concentration generally
prohibits each Fund from investing more than 25% of its total assets in the
securities of issuers having its principal business activities in the same
industry. The restrictions of Worldwide Bond Fund, Worldwide Hard Assets Fund
and Worldwide Real Estate Fund, however, exclude securities issued or guaranteed
by the U.S. government, its agencies, or instrumentalities from the calculation.
The proposed modifications would clarify exactly what each Funds' concentration
policy is, rather than making a general reference to what is otherwise stated in
the Funds' investment objectives.
REQUIRED VOTE. Approval of Proposal 2-I with respect to each Fund requires
the affirmative vote of a 1940 Act Majority of all shares of such Fund.
----------
THE BOARD UNANIMOUSLY RECOMMENDS THAT
YOU VOTE "FOR" PROPOSAL NO. 2-I.
----------
29
PROPOSAL 2-J, DISCUSSED BELOW, PROPOSES TO ELIMINATE AN EXISTING INVESTMENT
RESTRICTION. THIS RESTRICTION IS NOT REQUIRED UNDER APPLICABLE LAW. AS NOTED IN
THE INTRODUCTION TO PROPOSAL 2 IN THIS PROXY STATEMENT, THE ADVISER HAS AGREED
THAT IT WILL NOT EXERCISE ANY EXPANDED AUTHORITY PERMITTED AS A RESULT OF THE
CHANGES CONTEMPLATED IN THIS PROXY STATEMENT WITHOUT SEEKING BOARD APPROVAL,
AND, IN THE CASE OF ANY MATERIAL CHANGE, GIVING SHAREHOLDERS SIXTY DAYS ADVANCED
NOTICE.
PROPOSAL NO. 2-J: TO ELIMINATE THE FUNDAMENTAL INVESTMENT RESTRICTION ON
DIVERSIFICATION.
FUNDS TO WHICH THIS PROPOSAL APPLIES: WORLDWIDE EMERGING MARKETS FUND AND
WORLDWIDE HARD ASSETS FUND.
If shareholders approve Proposal 2-J, each Fund's current fundamental
investment restriction on diversification, set forth in Exhibit A to this Proxy
Statement, would be eliminated.
DISCUSSION OF PROPOSED MODIFICATIONS. The 1940 Act requires every mutual
fund to state whether it is diversified or non-diversified, but does not require
an investment restriction to reflect this selection. The Worldwide Emerging
Markets Fund and Worldwide Hard Assets Fund have elected to be classified as
diversified funds. This means that each Fund's assets are subject to stricter
limits on the amount of assets that can be invested in any one issuer. Because
the Funds are currently registered as diversified, an investment restriction to
this end is unnecessary. The proposed change is intended to provide the Funds
flexibility to adjust their policies in the event that the 1940 Act requirements
change in the future, eliminate any inconsistencies between the diversification
standards under the 1940 Act and the investment restrictions of the Fund and
standardize the language among the diversified and non-diversified funds in the
Van Eck fund complex.
REQUIRED VOTE. Approval of Proposal 2-J with respect to each Fund requires
the affirmative vote of a 1940 Act Majority of all shares of such Fund.
----------
THE BOARD UNANIMOUSLY RECOMMENDS THAT
YOU VOTE "FOR" PROPOSAL NO. 2-J.
----------
30
INFORMATION ON THE FUNDS'
INDEPENDENT PUBLIC ACCOUNTANTS
Van Eck Worldwide Insurance Trust's financial statements for the fiscal
year ended December 31, 2005 are being audited by Ernst & Young LLP ("E&Y"),
Five Times Square, New York, New York 10036. E&Y has informed Van Eck Worldwide
Insurance Trust that it has no material direct or indirect financial interest in
any of the Funds and that investments in the Funds by its personnel and their
family members are prohibited where appropriate to maintaining the auditors'
independence. In the opinion of the Board, the services provided by E&Y are
compatible with maintaining the independence of Van Eck Worldwide Insurance
Trust's auditors. The Board has appointed E&Y as the independent public
accountants for Van Eck Worldwide Insurance Trust for the fiscal year ending
December 31, 2006.
Representatives of E&Y are not expected to be present at the Meeting but
have been given the opportunity to make a statement if they so desire and will
be available should any matter arise requiring their presence.
AUDIT FEES
For the fiscal years ended December 31, 2004 and December 31, 2005, the
aggregate fees billed by E&Y for professional services rendered for the audit of
Van Eck Worldwide Insurance Trust's annual financial statements, the review of
the financial statements included in the Funds' annual reports to shareholders,
and services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements, were $140,460 and $157,600
respectively. E&Y did not bill any fees for the fiscal years ended December 31,
2004 and December 31, 2005, for audit services provided to the Adviser.
AUDIT-RELATED FEES
The aggregate fees billed in each of the last two fiscal years for
assurance and related services by the principal accountant that are reasonably
related to the performance of the audit of the Van Eck Worldwide Insurance
Trust's financial statements and are not reported above in Audit Fees was $0 and
$19,500 for 2004 and 2005, respectively. The nature of the services provided was
quarterly fair valuation procedures and a semi-annual review.
TAX FEES
The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax compliance,
tax advice, and tax planning was $17,000 and $18,000 for 2004 and 2005,
respectively. The nature of the services provided was the preparation of U.S.
tax returns.
31
ALL OTHER FEES
The principal accountant did not bill any fees for products or services
other than those reported in Audit Fees, Audit-Related Fees and Tax Fees for
2004 and 2005.
AUDIT COMMITTEE'S PRE-APPROVAL POLICIES AND PROCEDURES
The Audit Committee has delegated to the Chairperson of the Committee
authority to pre-approve the engagement of an accountant to provide audit and
non-audit services to the Trust, subject to ratification of such pre-approval by
the Audit Committee at the Committee's next meeting.
The Audit Committee approved 100% of the audit and non-audit services
provided by the accountant for both 2004 and 2005.
No hours were attributable to persons other than the principal accountant's
full-time permanent employees for the work performed by the principal accountant
to audit the Van Eck Worldwide Insurance Trust's financial statement for the
2004 fiscal year.
For fiscal years 2004 and 2005, Van Eck Worldwide Insurances Trust's
accountant did not bill any non-audit fees for services rendered to the Van Eck
Worldwide Insurance Trust or the Van Eck Worldwide Insurance Trust's investment
adviser and any entity controlling, controlled by, or under common control with
the Adviser that provides ongoing services to the Van Eck Worldwide Insurance
Trust.
The Audit Committee of the Board of Trustees considered whether the
provision of non-audit services rendered to the Van Eck Worldwide Insurance
Trust's investment adviser and any entity controlling, controlled by, or under
common control with the Adviser that provides ongoing services to the Van Eck
Worldwide Insurance Trust that were not pre-approved by the Audit Committee
since the engagement did not relate directly to the operations and financial
reporting of the Van Eck Worldwide Insurance Trust is compatible with
maintaining the principal accountant's independence.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
E&Y did not bill any fees for professional services rendered to Van Eck
Worldwide Insurance Trust for information technology services relating to
financial information systems design and implementation for Van Eck Worldwide
Insurance Trust's fiscal year ended December 31, 2005. Similarly, E&Y did not
bill any fees for professional services rendered to the Adviser, any investment
sub-adviser or any other service provider affiliated with the Adviser for
information technology services relating to financial
32
information systems design and implementation for the year ended December 31,
2005.
ALL OTHER FEES
E&Y did not bill any fees for the fiscal years ended December 31, 2004 and
2005, for other services provided to Van Eck Worldwide Insurance Trust. E&Y did
not bill any fees for the fiscal years ended December 31, 2004 and 2005, for
other services provided to the Adviser, any investment sub-adviser or any other
service provider affiliated with the Adviser.
REGULATORY MATTERS
In connection with their investigations of practices identified as
"market timing" and "late trading" of mutual fund shares, the Office of the New
York State Attorney General and the SEC have requested and received information
from the Adviser. The investigations are ongoing, and the Adviser is continuing
to cooperate with such investigations. If it is determined that the Adviser or
its affiliates engaged in improper or wrongful activity that caused a loss to a
Fund, the Board of Trustees of the Funds will determine the amount of
restitution that should be made to a Fund or its shareholders. At the present
time, the amount of such restitution, if any, has not been determined.
In July 2004, the Adviser received a so-called "Wells Notice" from the SEC
in connection with the SEC's investigation of market-timing activities. This
Wells Notice informed the Adviser that the SEC staff is considering recommending
that the SEC bring a civil or administrative action alleging violations of U.S.
securities laws against the Adviser and two of its senior officers. Under SEC
procedures, the Adviser has an opportunity to respond to the SEC staff before
the staff makes a formal recommendation. The time period for the Adviser's
response has been extended until further notice from the SEC. There cannot be
any assurance that, if the SEC and/or the New York Attorney General were to
assess sanctions against the Adviser, such sanctions would not materially and
adversely affect the Adviser.
The Board determined that the Adviser is cooperating with the SEC, the NYAG
and the Independent Trustees in connection with these matters and that the
Adviser has taken appropriate steps to implement policies and procedures
reasonably designed to prevent harmful market timing activities by investors in
the Funds. In addition, the Board concluded that the Adviser has acted in good
faith in providing undertakings to the Board to make restitution of damages, if
any, that may have resulted from any prior wrongful actions of the Adviser and
that it would be appropriate to permit the SEC and the NYAG to bring to
conclusion their pending regulatory
33
investigations prior to the Board making any final determination of its own with
respect to these same matters.
OTHER MATTERS
No business, other than as set forth above, is expected to come before the
Meeting. Should any other matters requiring a vote of shareholders properly come
before the Meeting, the persons named in the enclosed proxy will vote thereon in
accordance with their best judgment in the interests of Van Eck Worldwide
Insurance Trust.
SOLICITATION OF PROXIES
The solicitation of proxies, the cost of which will be borne by the Funds,
will be made primarily by mail but may also be made by telephone by Management
Information Services Corporation ("MIS"), professional proxy solicitors, who
will be paid fees and expenses of approximately $18,000 for soliciting services.
All expenses in connection with preparing this Proxy Statement and its
enclosures and additional solicitation expenses will be borne by the Funds and
the Adviser, as appropriate. If votes are recorded by telephone, MIS will use
procedures designed to authenticate shareholders' identities, to allow
shareholders to authorize the voting of their shares in accordance with their
instructions and to confirm that shareholders instructions have been properly
recorded. Shareholders also may vote by mail or through a secure Internet site.
Proxies by telephone or Internet may be revoked at any time before they are
voted in the same manner that proxies voted by mail may be revoked.
THE FUNDS' ADVISER, DISTRIBUTOR, AND ADMINISTRATOR
Van Eck Associates Corporation is located at 99 Park Avenue, New York, New
York 10016. The Adviser serves as manager and investment adviser to Van Eck
Worldwide Insurance Trust pursuant to an Investment Advisory Agreement.
Van Eck Securities Corporation, 99 Park Avenue, New York, New York 10016,
serves as each Fund's distributor pursuant to underwriting agreements with each
Fund and is compensated for its distribution and shareholder services pursuant
to each Fund's Rule 12b-1 plan. Van Eck Securities Corporation is a wholly-owned
subsidiary of Adviser.
The Adviser serves as administrator to the Funds pursuant to a management
and administration agreement.
34
SHAREHOLDER PROPOSALS
As a general matter, Van Eck Worldwide Insurance Trust does not hold
regular annual or other regular meetings of shareholders. Any shareholder who
wishes to submit proposals to be considered at a special meeting of Van Eck
Worldwide Insurance Trust's shareholders should send such proposals to Van Eck
Worldwide Insurance Trust at 99 Park Avenue, New York, New York 10016. Proposals
must be received a reasonable period of time prior to any meeting to be included
in the proxy materials or otherwise to be considered at the meeting. Moreover,
inclusion of such proposals is subject to limitations under the federal
securities laws. Persons named as proxies for any subsequent shareholders
meeting will vote in their discretion with respect to proposals submitted on an
untimely basis.
By order of the Board of Trustees,
/s/ Joseph J. McBrien
---------------------
Joseph J. McBrien
Senior Vice President and Secretary
Van Eck Worldwide Insurance Trust
Dated: January 27, 2006
New York, New York
35
EXHIBIT A
VAN ECK WORLDWIDE INSURANCE TRUST
FUNDAMENTAL INVESTMENT RESTRICTIONS
WORLDWIDE BOND FUND
PROPOSAL EXISTING FUNDAMENTAL INVESTMENT RESTRICTION PROPOSED CHANGE
- ------------------------------------------------------------------------------------------------------------------------------------
2-A BORROWING. The Fund may not borrow money, except that BORROWING. The Fund may not borrow money, except
the Fund may borrow up to 30% of the value of its net assets as permitted under the 1940 Act, as amended and
to increase its holdings of portfolio securities. as interpreted or modified by regulation from
time to time.
- ------------------------------------------------------------------------------------------------------------------------------------
2-B UNDERWRITING. The Fund may not underwrite any issue of UNDERWRITING. The Fund may not engage in the
securities (except to the extent that the Fund may be deemed business of underwriting securities issued
to be an underwriter within the meaning of the Securities Act by others, except to the extent that the Fund
of 1933, as amended, in the disposition of restricted securities). may be considered an underwriter within the
meaning of the Securities Act of 1933 in the
disposition of restricted securities or in
connection with its investments in other
investment companies.
- ------------------------------------------------------------------------------------------------------------------------------------
2-C LENDING. The Fund may not make loans, except by (i) purchase LENDING. The Fund may not make loans, except
of marketable bonds, debentures, commercial paper and similar that the Fund may (i) lend portfolio securities,
marketable evidences of indebtedness (such as structured (ii) enter into repurchase agreements,
notes, indexed securities and swaps), and (ii) repurchase (iii) purchase all or a portion of an issue of
agreements. The Fund may lend to broker-dealers portfolio debt securities, bank loan participation
securities with an aggregate market value up to one-third of interests, bank certificates of deposit,
its total assets. bankers' acceptances, debentures or other
securities, whether or not the purchase is made
upon the original issuance of the securities,
and (iv) participate in an interfund lending
program with other registered investment
companies.
- ------------------------------------------------------------------------------------------------------------------------------------
2-D SENIOR SECURITIES. The Fund may not issue senior securities SENIOR SECURITIES. The Fund may not issue senior
except insofar as the Fund may be deemed to have issued a securities, except as permitted under the
senior security by reason of (i) borrowing money in accordance 1940 Act, as amended and as interpreted or
with restrictions described above; (ii) entering into forward modified by regulation from time to time.
foreign currency contracts; and (iii) financial futures contracts
purchased on margin.
- ------------------------------------------------------------------------------------------------------------------------------------
2-E REAL ESTATE. The Fund may not purchase or sell real estate, REAL ESTATE. The Fund may not purchase or sell
although the Fund may purchase securities of companies which real estate, except that the Fund may invest in
deal in real (i) invest in securities of issuers that estate, real estate or interests therein, (ii) invest in
including securities of real estate investment trusts, and may mortgage-related securities and other securities
purchase securities which are secured by interests in real estate. that are secured by real estate or interests
therein, and (iii) hold and sell real estate
acquired by the Fund as a result of the
ownership of securities.
- ------------------------------------------------------------------------------------------------------------------------------------
2-F REAL ESTATE LIMITED PARTNERSHIPS, OIL, GAS AND [Eliminated]
MINERALS LEASES. The Fund may not invest in real estate
limited partnerships or in oil, gas or other mineral leases.
- ------------------------------------------------------------------------------------------------------------------------------------
A-1 A-2
PROPOSAL EXISTING FUNDAMENTAL INVESTMENT RESTRICTION PROPOSED CHANGE
- ------------------------------------------------------------------------------------------------------------------------------------
2-G EXERCISING CONTROL. The Fund may not make investments [Eliminated]
for the purpose of exercising control or management.
- ------------------------------------------------------------------------------------------------------------------------------------
2-H COMMODITIES. The Fund may not purchase or sell commodities COMMODITIES. The Fund may not purchase or sell
or commodity futures contracts (for the purpose of this commodities, unless acquired as a result of
restriction, instruments, but it may purchase, sell or forward owning securities or other enter into financial
foreign exchange contracts are not deemed to be a commodity options and futures, forward and spot currency
or commodity contract) except that the Fund may, for hedging contracts, swap transactions and other financial
purposes only, buy and sell financial futures contracts which contracts or derivative instruments and may
may include stock and bond index futures contracts and foreign invest in securities or other instruments
currency futures contracts. The Fund may not commit more than backed by commodities.
5% of its total assets to initial margin deposits on
futures contracts not used for hedging purposes.
- ------------------------------------------------------------------------------------------------------------------------------------
2-I CONCENTRATION. The Fund may not invest more than 25 CONCENTRATION. The Fund may not purchase any
percent of the value of the Fund's total assets in the securities security if, as a result of that purchase, 25%
industry, provided that this limitation does not apply to or more of its total assets would be invested in
obligations issued or guaranteed by the United States securities of issuers having their principal
Government, its agencies or instrumentalities. business activities in the same industry.
This limit does not apply to securities issued
or guaranteed by the U.S. government, its
agencies or instrumentalities.
- ------------------------------------------------------------------------------------------------------------------------------------
A-3 A-4
EXHIBIT A
VAN ECK WORLDWIDE INSURANCE TRUST
FUNDAMENTAL INVESTMENT RESTRICTIONS
WORLDWIDE EMERGING MARKETS FUND
PROPOSAL EXISTING FUNDAMENTAL INVESTMENT RESTRICTION PROPOSED CHANGE
- ------------------------------------------------------------------------------------------------------------------------------------
2-A BORROWING. The Fund may not borrow money, except that the BORROWING. The Fund may not borrow money, except
Fund may borrow up to 30% of the value of its net assets to as permitted under the 1940 Act, as amended and
increase its holdings of portfolio securities. as interpreted or modified by regulation from
time to time.
- ------------------------------------------------------------------------------------------------------------------------------------
2-B UNDERWRITING. The Fund may not underwrite any issue of UNDERWRITING. The Fund may not engage in the
securities (except to the extent that the Fund may be deemed business of underwriting securities issued by
to be an underwriter within the meaning of the Securities Act others, except to the extent that the Fund may
of 1933, as amended, in the disposition of restricted securities). be considered an underwriter within the meaning
of the Securities Act of 1933 in the disposition
of restricted securities or in connection with
its investments in other investment companies.
- ------------------------------------------------------------------------------------------------------------------------------------
2-C LENDING. The Fund may not make loans, except by (i) purchase LENDING. The Fund may not make loans, except
of marketable bonds, debentures, commercial paper and similar that the Fund may (i) lend portfolio securities,
marketable evidences of indebtedness (such as structured notes, (ii) enter into repurchase agreements,
indexed securities and swaps), and (ii) repurchase agreements. (iii) purchase all or a portion of an issue of
The Fund may lend to broker-dealers portfolio securities with an debt securities, bank loan participation
aggregate market value up to one-third of its total assets. interests, bank certificates of deposit,
bankers' acceptances, debentures or other
securities, whether or not the purchase is made
upon the original issuance of the securities,
and (iv) participate in an interfund lending
program with other registered investment
companies.
- ------------------------------------------------------------------------------------------------------------------------------------
2-D SENIOR SECURITIES. The Fund may not issue senior securities SENIOR SECURITIES. The Fund may not issue senior
except insofar as the Fund may be deemed to have issued a securities, except as permitted under the
senior security by reason of (i) borrowing money in accordance 1940 Act, as amended and as interpreted or
with restrictions described above; (ii) entering into forward modified by regulation from time to time.
foreign currency contracts; (iii) financial futures contracts
purchased on margin; and (iv) foreign currency swaps.
- ------------------------------------------------------------------------------------------------------------------------------------
2-E REAL ESTATE. The Fund may not purchase or sell real estate, REAL ESTATE. The Fund may not purchase or sell
although the Fund may purchase securities of companies real estate, except that the Fund may (i) invest
which deal in real estate, including securities of real estate in securities of issuers that invest in real
investment trusts, and may purchase securities which are estate or interests therein, (ii) invest in
secured by interests in real estate. mortgage-related securities and other securities
that are secured by real estate or interests
therein, and (iii) hold and sell real estate
acquired by the Fund as a result of the
ownership of securities.
- ------------------------------------------------------------------------------------------------------------------------------------
2-F REAL ESTATE LIMITED PARTNERSHIPS, OIL, GAS AND [Eliminated]
MINERALS LEASES. The Fund may not invest in real estate
limited partnerships or in oil, gas or other mineral leases.
- ------------------------------------------------------------------------------------------------------------------------------------
2-G EXERCISING CONTROL. The Fund may not make investments [Eliminated]
for the purpose of exercising control or management.
- ------------------------------------------------------------------------------------------------------------------------------------
A-5 A-6
PROPOSAL EXISTING FUNDAMENTAL INVESTMENT RESTRICTION PROPOSED CHANGE
- ------------------------------------------------------------------------------------------------------------------------------------
2-H COMMODITIES. The Fund may not purchase or sell commodities COMMODITIES. The Fund may not purchase or sell
or commodity futures contracts (for the purpose of this commodities, unless acquired as a result of
restriction, forward foreign exchange contracts are not deemed owning securities or other instruments, but it
to be a commodity or commodity contract) except that the Fund may purchase, sell or enter into financial
may, for hedging and other purposes, buy and sell financial options and futures, forward and spot currency
futures contracts which may include stock and bond index contracts, swap transactions and other financial
to be a commodity or commodity contract) except that the Fund contracts or derivative instruments and may
futures contracts and foreign currency futures contracts. The invest in securities or other instruments
Fund may not commit more than 5% of its total assets to initial backed by commodities.
margin deposits on futures contracts not used for hedging
purposes (except that margin deposits for futures positions
entered into for bona fide hedging purposes are excluded
from the 5% limitation).
- ------------------------------------------------------------------------------------------------------------------------------------
2-I CONCENTRATION. The Fund may not invest more than 25 CONCENTRATION. The Fund may not purchase any
percent of the value of the Fund's total assets in the securities security if, as a result of that purchase, 25%
of issuers having their principal business activities in the same or more of its total assets would be invested in
industry, except as otherwise stated in any Fund's fundamental securities of issuers having their principal
investment objective, and provided that this limitation does not business activities in the same industry. This
apply to obligations issued or guaranteed by the United States limit does not apply to securities issued or
Government, its agencies or instrumentalities. guaranteed by the U.S. government, its agencies
or instrumentalities.
- ------------------------------------------------------------------------------------------------------------------------------------
2-J DIVERSIFICATION. The Fund may not, as to 75% of its total [Eliminated]
assets, purchase securities of any issuer, if immediately thereafter
(i) more than 5% of a Fund's total assets (taken at market value)
would be invested in the securities of such issuer, or (ii) more
than 10% of the outstanding voting securities of such issuer
would be held by the Fund (provided that these limitations do not
apply to obligations of the United States Government, its
agencies or instrumentalities).
- ------------------------------------------------------------------------------------------------------------------------------------
A-7 A-8
EXHIBIT A
VAN ECK WORLDWIDE INSURANCE TRUST
FUNDAMENTAL INVESTMENT RESTRICTIONS
WORLDWIDE HARD ASSETS FUND
PROPOSAL EXISTING FUNDAMENTAL INVESTMENT RESTRICTION PROPOSED CHANGE
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2-A BORROWING. The Fund may not borrow money, except that the BORROWING. The Fund may not borrow money, except
Fund may borrow up to 30% of the value of its net assets to as permitted under the 1940 Act, as amended and
increase its holdings of portfolio securities. as interpreted or modified by regulation from
time to time.
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2-B UNDERWRITING. The Fund may not underwrite any issue of UNDERWRITING. The Fund may not engage in the
securities (except to the extent that the Fund may be deemed to business of underwriting securities issued by
be an underwriter within the meaning of the Securities Act of others, except to the extent that the Fund may
1933, as amended, in the disposition of restricted securities). be considered an underwriter within the meaning
of the Securities Act of 1933 in the disposition
of restricted securities or in connection with
its investments in other investment companies.
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2-C LENDING. The Fund may not make loans, except by (i) purchase LENDING. The Fund may not make loans, except
of marketable bonds, debentures, commercial paper and that the Fund may (i) lend portfolio securities,
similar marketable evidences of indebtedness (such as structured (ii) enter into repurchase agreements, (iii)
notes, indexed securities and swaps), and (ii) repurchase purchase all or a portion of an issue of debt
agreements. The Fund may lend to broker-dealers portfolio securities, bank loan participation interests,
securities with an aggregate market value up to one-third of bank certificates of deposit, bankers'
of its total assets. acceptances, debentures or other securities,
whether or not the purchase is made upon the
original issuance of the securities, and (iv)
participate in an interfund lending program with
other registered investment companies.
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2-D SENIOR SECURITIES. The Fund may not issue senior securities SENIOR SECURITIES. The Fund may not issue senior
except insofar as the Fund may be deemed to have issued a securities, except as permitted under the 1940
senior security by reason of (i) borrowing money in accordance Act, as amended and as interpreted or modified
with restrictions described above; (ii) entering into forward by regulation from time to time.
foreign currency contracts; (iii) financial futures contracts
purchased on margin; and (iv) commodity futures contracts
purchased on margin.
- ------------------------------------------------------------------------------------------------------------------------------------
2-E REAL ESTATE. The Fund may not purchase or sell real estate, REAL ESTATE. The Fund may not purchase or sell
although the Fund may purchase securities of companies which real estate, except that the Fund may (i) invest
deal in real estate, including securities of real estate investment in securities of issuers that invest in real
trusts, and may purchase securities which are secured by estate or interests therein, (ii) invest in
interests in real estate. mortgage-related securities and other securities
that are secured by real estate or interests
therein, and (iii) hold and sell real estate
acquired by the Fund as a result of the ownership
of securities.
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A-9 A-10
PROPOSAL EXISTING FUNDAMENTAL INVESTMENT RESTRICTION PROPOSED CHANGE
- ------------------------------------------------------------------------------------------------------------------------------------
2-F REAL ESTATE LIMITED PARTNERSHIPS, OIL, GAS AND [Eliminated]
MINERALS LEASES. The Fund may not invest in real estate
limited partnerships or in oil, gas or other mineral leases.
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2-G EXERCISING CONTROL. The Fund may not make investments [Eliminated]
for the purpose of exercising control or management.
- ------------------------------------------------------------------------------------------------------------------------------------
2-H COMMODITIES. The Fund may not purchase or sell commodities COMMODITIES. The Fund may not purchase or sell
or commodity futures contracts (for the purpose of this restriction, commodities, unless acquired as a result of
forward foreign exchange contracts are not deemed to be a owning securities or other instruments, but it
commodity or commodity contract) except that the Fund may, may purchase, sell or enter into financial
for hedging purposes only, buy and sell financial futures options and futures, forward and spot currency
contracts which may include stock and bond index futures contracts, swap transactions and other financial
contracts and foreign currency futures contracts. The Fund may, contracts or derivative instruments and may
for hedging purposes only, buy and sell commodity futures invest in securities or other instruments backed
contracts on gold and other natural resources or on an index by commodities.
thereon. The Fund may not commit more than 5% of its total
assets to initial margin deposits on futures contracts not used
for hedging purposes (except that margin deposits for futures
positions entered into for bona fide hedging purposes are
excluded from the 5% limitation). In addition, the Fund may
invest in gold bullion and coins.
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2-I CONCENTRATION. The Fund may not invest more than 25 CONCENTRATION. The Fund may not purchase any
percent of the value of the Fund's total assets in the securities security if, as a result of that purchase, 25%
of issuers having their principal business activities in the same or more of its total assets would be invested in
industry, except as otherwise stated in the Fund's fundamental securities of issuers having their principal
investment objective, and provided that this limitation does not business activities in the same industry, except
apply to obligations issued or guaranteed by the United States that the Fund will invest greater than 25% or
Government, its agencies or instrumentalities. more of its total assets in "hard asset"
industries as defined in the Prospectus. This
limit does not apply to securities issued or
guaranteed by the U.S. government, its agencies
or instrumentalities.
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2-J DIVERSIFICATION. The Fund may not, as to 75% of its total assets, [Eliminated]
purchase securities of any issuer, if immediately thereafter (i)
more than 5% of the Fund's total assets (taken at market value)
would be invested in the securities of such issuer, or (ii) more
than 10% of the outstanding securities of any class of such issuer
would be held by the Fund (provided that these limitations do not
apply to obligations of the United States Government, its agencies
or instrumentalities).
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A-11 A-12
EXHIBIT A
VAN ECK WORLDWIDE INSURANCE TRUST
FUNDAMENTAL INVESTMENT RESTRICTIONS
WORLDWIDE REAL ESTATE FUND
PROPOSAL EXISTING FUNDAMENTAL INVESTMENT RESTRICTION PROPOSED CHANGE
- ------------------------------------------------------------------------------------------------------------------------------------
2-A BORROWING. The Fund may not borrow money, except that the BORROWING. The Fund may not borrow money, except
Fund may borrow up to 30% of the value of its net assets to as permitted under the 1940 Act, as amended and
increase its holdings of portfolio securities. as interpreted or modified by regulation from
time to time.
- ------------------------------------------------------------------------------------------------------------------------------------
2-B UNDERWRITING. The Fund may not underwrite any issue of UNDERWRITING. The Fund may not engage in the
securities (except to the extent that the Fund may be deemed to business of underwriting securities issued by
be an underwriter within the meaning of the Securities Act of others, except to the extent that the Fund may
1933, as amended, in the disposition of restricted securities). be considered an underwriter within the meaning
of the Securities Act of 1933 in the disposition
of restricted securities or in connection with
its investments in other investment companies.
- ------------------------------------------------------------------------------------------------------------------------------------
2-C LENDING. The Fund may not make loans, except by (i) purchase LENDING. The Fund may not make loans, except
of marketable bonds, debentures, commercial paper and similar that the Fund may (i) lend portfolio securities,
marketable evidences of indebtedness (such as structured notes, (ii) enter into repurchase agreements, (iii)
indexed securities and swaps), and (ii) repurchase agreements. purchase all or a portion of an issue of debt
The Fund may lend to broker-dealers portfolio securities with an securities, bank loan participation interests,
aggregate market value up to one-third of its total assets. bank certificates of deposit, bankers'
acceptances, debentures or other securities,
whether or not the purchase is made upon the
original issuance of the securities, and (iv)
participate in an interfund lending program with
other registered investment companies.
- ------------------------------------------------------------------------------------------------------------------------------------
2-D SENIOR SECURITIES. The Fund may not issue senior securities SENIOR SECURITIES. The Fund may not issue senior
except insofar as the Fund may be deemed to have issued a securities, except as permitted under the 1940
senior security by reason of (i) borrowing money in accordance Act, as amended and as interpreted or modified
with restrictions described above; (ii) entering into forward by regulation from time to time.
foreign currency contracts; (iii) financial futures contracts
purchased on margin; and (iv) foreign currency swaps.
- ------------------------------------------------------------------------------------------------------------------------------------
2-E REAL ESTATE. The Fund may not purchase or sell real estate, REAL ESTATE. The Fund may not purchase or sell
although the Fund may purchase securities of companies real estate, except that the Fund may (i) invest
which deal in real estate, including securities of real estate in securities of issuers that invest in real
investment trusts, and may purchase securities which are estate or interests therein, (ii) invest in
secured by interests in real estate. mortgage-related securities and other securities
that are secured by real estate or interests
therein, and (iii) hold and sell real estate
acquired by the Fund as a result of the
ownership of securities.
- ------------------------------------------------------------------------------------------------------------------------------------
2-F REAL ESTATE LIMITED PARTNERSHIPS, OIL, GAS AND [Eliminated]
MINERALS LEASES. The Fund may not invest in oil, gas or other
mineral leases.
- ------------------------------------------------------------------------------------------------------------------------------------
A-13 A-14
PROPOSAL EXISTING FUNDAMENTAL INVESTMENT RESTRICTION PROPOSED CHANGE
- ------------------------------------------------------------------------------------------------------------------------------------
2-G EXERCISING CONTROL. The Fund may not make investments [Eliminated]
for the purpose of exercising control or management.
- ------------------------------------------------------------------------------------------------------------------------------------
2-H COMMODITIES. The Fund may not purchase or sell commodities or COMMODITIES. The Fund may not purchase or sell
commodity futures contracts (for the purpose of this restriction, commodities, unless acquired as a result of
forward foreign exchange contracts are not deemed to be a commodity owning securities or other instruments, but it
or commodity contract) except that the Fund may, for hedging may purchase, sell or enter into financial
purposes only, buy and sell financial futures contracts which may options and futures, forward and spot currency
include stock and bond index futures contracts and foreign currency contracts, swap transactions and other financial
futures contracts. The Fund may, for hedging purposes only, buy and contracts or derivative instruments and may
sell commodity futures contracts on gold and other natural resources invest in securities or other instruments backed
or on an index thereon. The Fund may not commit more than 5% of its by commodities.
total assets to initial margin deposits on futures contracts not
used for hedging purposes (except that margin deposits for futures
positions entered into for bona fide hedging purposes are excluded
from the 5% limitation).
- ------------------------------------------------------------------------------------------------------------------------------------
2-I CONCENTRATION. The Fund may not invest more than 25 CONCENTRATION. The Fund may not purchase any
percent of the value of the Fund's total assets in the securities security if, as a result of that purchase, 25%
of issuers having their principal business activities in the same or more of its total assets would be invested in
industry, except as otherwise stated in the Fund's fundamental securities of issuers having their principal
investment objective, and provided that this limitation does not business activities in the same industry except
apply to obligations issued or guaranteed by the United States real that the Fund will invest 25% or more of its
Government, its agencies or instrumentalities. total assets in equity securities of domestic
and foreign companies that own significant
estate assets or that are principally engaged in
the real estate industry. This limit does not
apply to securities issued or guaranteed by the
U.S. government, its agencies or
instrumentalities.
- ------------------------------------------------------------------------------------------------------------------------------------
A-15 A-16
EXHIBIT A
VAN ECK WORLDWIDE INSURANCE TRUST
FUNDAMENTAL INVESTMENT RESTRICTIONS
WORLDWIDE ABSOLUTE RETURN FUND
PROPOSAL EXISTING FUNDAMENTAL INVESTMENT RESTRICTION PROPOSED CHANGE
- ------------------------------------------------------------------------------------------------------------------------------------
2-H COMMODITIES. The Fund may not purchase or sell commodities COMMODITIES. The Fund may not purchase or sell
or commodity contracts, except the Fund may purchase and commodities, unless acquired as a result of
sell derivatives (including but not limited to options, futures owning securities or other instruments, but it
contracts and options on futures contracts) whose value is tied may purchase, sell or enter into financial
to the value of a financial index or a financial instrument or options and futures, forward and spot spot
other asset (including, but not limited to, securities indexes, currency contracts, swap transactions and other
interest rates, securities, currencies and physical commodities). financial contracts or derivative instruments
and may invest in securities or other
instruments backed by commodities.
- ------------------------------------------------------------------------------------------------------------------------------------
2-I CONCENTRATION. The Fund may not purchase a security if, after CONCENTRATION. The Fund may not purchase any
giving effect to the purchase, more than 25% of its total assets security if, as a result of that purchase, 25%
would be invested in the securities of one or more issuers or more of its total assets would be invested in
conducting their principal business activities in the same industry. securities of issuers having their principal
business activities in the same industry. This
limit does not apply to securities issued or
guaranteed by the U.S. government, its agencies
or instrumentalities.
- ------------------------------------------------------------------------------------------------------------------------------------
A-17 A-18
EXHIBIT B
VAN ECK FUNDS
VAN ECK FUNDS, INC.
VAN ECK WORLDWIDE INSURANCE TRUST
AUDIT COMMITTEE CHARTER
ORGANIZATION
There shall be a committee of each of the Boards of Trustees/Directors of
each Van Eck Fund, Van Eck Funds, Inc., and Van Eck Worldwide Insurance Trust
(the "Funds") to be known as the Audit Committee. The Audit Committee shall be
composed of at least three trustees/directors, each of whom is not an
"interested person" (as defined in the Investment Company Act of 1940, as
amended (the "1940 Act")) of the Fund and is free of any relationship that, in
the opinion of the Board of Trustees/Directors (the "Board"), would interfere
with their exercise of independent judgment as a committee member. No member of
the Audit Committee shall receive any compensation from the Funds except
compensation for service as a member of a Fund's Board or a committee of the
Board. As referred to herein, "management" of the Fund shall include employees
of Van Eck Associates Corporation, or any of the Funds' investment advisers,
distributor or sub advisers.
Unless it determines that no member of the Audit Committee qualifies as an
audit committee financial expert as defined in Item 3 of Form N-CSR (in
accordance with the criteria below) the Board will identify one (or in its
discretion, more than one) member of the Audit Committee as an Audit Committee
financial expert. The identification of an Audit Committee member as an audit
committee financial expert does not impose on the member any duties,
obligations, or liability that are greater than the duties, obligations, and
liability imposed on Audit Committee members in general.
STATEMENT OF POLICY
The Audit Committee shall provide assistance to the Funds'
Trustees/Directors in fulfilling their responsibilities to the shareholders,
potential shareholders, and investment community relating to accounting,
reporting practices of the Funds, and the quality and integrity of the financial
reports of the Fund. In so doing, it is the responsibility of the Audit
Committee to maintain free and open means of communication between the
Trustees/Directors, the independent auditors, the internal auditors, and the
management of the Funds.
B-1
PURPOSES OF THE AUDIT COMMITTEE
The purposes of the Audit Committee are:
o to oversee the accounting and financial reporting processes of each
Fund and its internal control over financial reporting and, as the
Audit Committee deems appropriate, to inquire into the internal control
over financial reporting of certain third-party service providers;
o to oversee the quality and integrity of the Funds' financial statements
and the independent audit thereof;
o to oversee, or, as appropriate, assist Board oversight of, the Funds'
compliance with legal and regulatory requirements that relate to the
Funds' accounting and financial reporting, internal control over
financial reporting and independent audits;
o to approve prior to appointment the engagement of the Funds'
independent auditors and, in connection therewith, to review and
evaluate the qualifications, independence and performance of the Funds'
independent auditors; and
o to act as a liaison between the Funds' independent auditors and the
full Board.
The independent auditors for the Funds shall report directly to the Audit
Committee.
RESPONSIBILITIES AND POWERS OF THE AUDIT COMMITTEE
In carrying out its purposes, the Audit Committee believes its policies and
procedures should remain flexible, in order to best react to changing conditions
and in the interest of establishing accounting and reporting practices of the
Funds that are in accordance with all requirements.
In carrying out its purposes, the Audit Committee shall have the following
responsibilities and powers with respect to each Fund:
o to approve prior to appointment the engagement of auditors to annually
audit and provide their opinion on the Fund's financial statements, to
recommend to those Board members who are not "interested persons" (as
that term is defined in Section 2(a)(19) of the 1940 Act) the
selection, retention or termination of the Fund's independent auditors
and, in connection therewith, to review and evaluate matters
potentially affecting the independence and capabilities of the
auditors;
o to approve prior to appointment the engagement of the auditor to
provide other audit services to the Fund or to provide non-audit
B-2
services to the Fund, its investment adviser or any entity controlling,
controlled by, or under common control with the investment adviser
("adviser affiliate") that provides ongoing services to the Fund, if
the engagement relates directly to the operations and financial
reporting of the Fund; and to develop, to the extent deemed appropriate
by the Audit Committee, policies and procedures for pre-approval of the
engagement of the Fund's auditors to provide any of the foregoing
services, including policies and procedures by which the Audit
Committee may delegate to one or more of its members authority to grant
such pre-approvals on behalf of the Audit Committee (subject to
subsequent reporting to the Audit Committee). The Audit Committee
hereby delegates to each of its members the authority to pre-approve
any non-audit services referred to above between meetings of the Audit
Committee, provided that: (i) all reasonable efforts shall be made to
obtain such pre-approval from the Chairperson of the Committee prior to
seeking such pre-approval from any other member of the Committee; and
(ii) all such pre-approvals shall be reported to the Audit Committee
not later than the next meeting thereof.
o to consider the controls applied by the auditors and any measures taken
by management in an effort to assure that all items requiring
pre-approval by the Audit Committee are identified and referred to the
Audit Committee in a timely fashion;
o to consider whether the non-audit services provided by the Fund's
auditor to the Fund's investment adviser or any adviser affiliate that
provides ongoing services to the Fund, which services were not
pre-approved by the Audit Committee, are compatible with maintaining
the auditor's independence;
o to receive at least annually and prior to the filing with the SEC of
the independent auditors' report on the Fund's financial statements, a
report from such independent auditors of: (i) all critical accounting
policies and practices used by the Fund (or, in connection with any
update, any changes in such accounting policies and practices), (ii)
all material alternative accounting treatments within GAAP that have
been discussed with management since the last annual report or update,
including the ramifications of the use of the alternative treatments
and the treatment preferred by the accounting firm, (iii) other
material written communications between the independent auditors and
the management of the Fund since the last annual report or update, (iv)
a description of all non-audit services provided, including fees
associated with the
B-3
services, to the fund complex of which the Fund is a part since the
last annual report or update that was not subject to the pre-approval
requirements as discussed above; and (v) any other matters of concern
relating to the Fund's financial statements, including any uncorrected
misstatements (or audit differences) whose effects management believes
are immaterial, both individually and in aggregate, to the financial
statements taken as a whole. If this information is not communicated to
the Audit Committee within 90 days prior to the audit report's filing
with the SEC, the independent auditors will be required to provide an
update, in the 90 day period prior to the filing, of any changes to the
previously reported information;
o to review the arrangements for and scope of the annual audit and any
special audits;
o to review and approve the fees proposed to be charged to the Fund by
the auditors for each audit and non-audit service;
o to consider information and comments from the auditors with respect to
the Fund's accounting and financial reporting policies, procedures and
internal control over financial reporting (including the Fund's
critical accounting policies and practices), to consider management's
responses to any such comments and, to the extent the Audit Committee
deems necessary or appropriate, to promote improvements in the quality
of the Fund's accounting and financial reporting and to determine
whether recommendations for such improvements have been implemented;
o to consider information and comments from the auditors with respect to,
and meet with the auditors to discuss any matters of concern relating
to, the Fund's financial statements, including any adjustments to such
statements recommended by the auditors, and to review the auditors'
opinion on the Fund's financial statements;
o to resolve disagreements between management and the auditors regarding
financial reporting;
o to review with the Fund's principal executive officer and/or principal
financial officer in connection with required certifications on Form
N-CSR any significant deficiencies in the design or operation of
internal control over financial reporting or material weaknesses
therein and any reported evidence of fraud involving management or
other employees who have a significant role in the Fund's internal
control over financial reporting;
B-4
o to establish procedures for the receipt, retention and treatment of
complaints received by the Fund relating to accounting, internal
accounting controls, or auditing matters, and the confidential,
anonymous submission by employees of the Fund, its investment adviser,
administrator, principal underwriter and any other provider of
accounting related services to the Fund, of concerns about accounting
or auditing matters, and to address reports from attorneys or auditors
of possible violations of federal or state law or fiduciary duty;
o to investigate or initiate an investigation of reports of improprieties
or suspected improprieties in connection with the Fund's accounting or
financial reporting;
o to report its activities to the full Board on a regular basis and to
make such recommendations with respect to the above and other matters
as the Audit Committee may deem necessary or appropriate; and
o to perform such other functions and to have such powers as may be
necessary or appropriate in the efficient and lawful discharge of the
powers set forth in this charter.
The Audit Committee shall have the resources and authority appropriate to
discharge its responsibilities, including appropriate funding, as determined by
the Audit Committee, for payment of compensation to the auditors for the purpose
of conducting the audit and rendering their audit report, the authority to
retain and compensate special counsel and other experts or consultants as the
Audit Committee deems necessary, and the authority to obtain specialized
training for Audit Committee members, at the expense of the Fund.
The Audit Committee may delegate any portion of its authority to a
subcommittee of one or more members.
ROLE OF THE AUDIT COMMITTEE
The function of the Audit Committee is oversight; it is management's
responsibility to maintain appropriate systems for accounting and internal
control over financial reporting, and the auditor's responsibility to plan and
carry out a proper audit. Specifically, Fund's management is responsible for:
(1) the preparation, presentation and integrity of the Fund's financial
statements; (2) the maintenance of appropriate accounting and financial
reporting principles and policies; and (3) the maintenance of internal control
over financial reporting and other procedures designed to assure compliance with
accounting standards and applicable laws and regulations. The independent
auditors are responsible for planning and carrying out an audit
B-5
consistent with applicable legal and professional standards and the terms of
their engagement letter. Nothing in this charter shall be construed to reduce
the responsibilities or liabilities of the Funds' service providers, including
the auditors.
Although the Audit Committee is expected to take a detached and questioning
approach to the matters that come before it, the review of a Fund's financial
statements by the Audit Committee is not an audit, nor does the Audit
Committee's review substitute for the responsibilities of a Fund's management
for preparing, or the independent auditors for auditing, the financial
statements. Members of the Audit Committee are not full-time employees of the
Funds and, in serving on this Audit Committee, are not, and do not hold
themselves out to be, acting as accountants or auditors. As such, it is not the
duty or responsibility of the Audit Committee or its members to conduct "field
work" or other types of auditing or accounting reviews or procedures.
In discharging their duties the members of the Audit Committee are entitled
to rely on information, opinions, reports, or statements, including financial
statements and other financial data, if prepared or presented by: (1) one or
more officers of a Fund whom the director reasonably believes to be reliable and
competent in the matters presented; (2) legal counsel, public accountants, or
other persons as to matters the director reasonably believes are within the
person's professional or expert competence; or (3) a Board committee of which
the director is not a member.
OPERATIONS OF THE AUDIT COMMITTEE
o The Audit Committee shall meet at such times as the Committee may
determine, no less frequently than annually, and is empowered to hold
special meetings as circumstances require. The chair or a majority of
the members shall be authorized to call a meeting of the Audit
Committee and send notice thereof.
o The Audit Committee shall ordinarily meet in person; however, members
may attend telephonically, and the Committee may act by written
consent, to the extent permitted by law and by the Fund's bylaws.
o The Audit Committee shall have the authority to meet privately and to
admit non-members individually by invitation.
o The Audit Committee shall regularly meet, in separate executive
sessions, with representatives of Fund management and the Fund's
independent auditors and, as the Committee deems appropriate, shall
meet with internal legal counsel and compliance personnel of
B-6
the Fund's investment adviser and with entities that provide
significant accounting or administrative services to the Fund.
o The Audit Committee shall prepare and retain minutes of its meetings,
which shall be submitted to the Board, and appropriate documentation of
decisions made outside of meetings by delegated authority.
o The Audit Committee may select one of its members to be the chair and
may select a vice chair.
o A majority of the members of the Audit Committee shall constitute a
quorum for the transaction of business at any meeting of the Audit
Committee. The action of a majority of the members of the Audit
Committee present at a meeting at which a quorum is present shall be
the action of the Audit Committee.
o The Board shall adopt and approve this charter and may amend it on the
Board's own motion. The Audit Committee shall review this charter at
least annually and recommend to the full Board any changes the
Committee deems appropriate.
B-7
EXHIBIT C
VAN ECK FUNDS
VAN ECK FUNDS, INC.
VAN ECK WORLDWIDE INSURANCE TRUST
GOVERNANCE COMMITTEE CHARTER
ORGANIZATION
There shall be a committee of each of the Boards of Trustees/Directors of
each Van Eck Funds, Van Eck Funds, Inc., and Van Eck Worldwide Insurance Trust
(the "Funds") to be known as the Governance Committee. The Governance Committee
shall be composed of each trustee/director named to the Governance Committee who
is not an "interested person" (as defined in the Investment Company Act of 1940,
as amended (the "1940 Act")) of the Fund and is free of any relationship that,
in the opinion of the Board of Trustees/Directors, would interfere with their
exercise of independent judgment as a committee member. As referred to herein,
"management" of the Fund shall include employees and affiliated persons as
defined in the 1940 Act of Van Eck Associates Corporation, or any of the Funds'
investment advisers, distributor or sub advisers.
STATEMENT OF POLICY
The Governance Committee shall provide assistance to the Funds'
trustees/directors in fulfilling their responsibilities to the shareholders
relating to corporate governance matters including, but not by way of
limitation, nomination of trustees/directors, election of trustees/directors,
retirement policies of non-interested trustees/directors, addressing and
resolving conflicts of interests, and the quality and integrity of the
functioning of the Board. In so doing, it is the responsibility of the
Governance Committee to maintain free and open communication between the
trustees/directors and the management of the Funds. The Governance Committee
shall have access to independent counsel, auditors and other advisers, as it
deems necessary.
In discharging its responsibilities, the Governance Committee will have
broad authority to react promptly and appropriately to changing conditions and
to ensure practices of the Funds are in accordance with all legal requirements
and are of the highest level of integrity.
RESPONSIBILITIES
The Governance Committee will:
o Meet at least once per year or more frequently as circumstances
require. The committee may ask members of management and
C-1
others to attend the meeting and provide pertinent information as
necessary.
o Investigate and consider any matter brought to its attention within the
scope of its duties, with the power to retain outside counsel and other
experts at the Fund's expense for this purpose as it deems appropriate.
o Submit minutes of all meetings of the Governance Committee, or in the
alternative, report to the full Board of Trustees/Directors on matters
discussed at each committee meeting.
o Review periodically the effectiveness and composition of the overall
Board, Board Committees, and the Lead Director and other related
matters giving consideration to such factors including: frequency of
the meetings, nature and quality of the materials provided to the Board
by management and others, adequacy of the time scheduled at meetings to
adequately focus on agenda matters, input by the Board in setting the
agenda, opportunity to meet separately with counsel and outside
advisers, active and meaningful participation by members at Board
meetings, appropriate and diverse skills and background of Board
members, and agreement with management's objectives.
o Review periodically the compensation of Board and Committee members for
reasonableness.
o Review the investment of trustees/directors in the Funds and review
policies, such as a deferred compensation plan, intended to promote
investment in the Funds by the trustees/directors.
o Review activities, including actual or potential conflicts of
interests, of Board members as they relate to any relationship with
management to insure ongoing independence of Board members.
o Adopt and review the adequacy and effectiveness of codes of ethics as
it applies to the activities of the Board and management.
o Review and recommend a retirement policy to the Board which may include
the appropriateness of a mandatory retirement age, a grandfather
provision for current board members, and consideration of terms and/or
term limits for trustees/directors.
o Perform such other functions as assigned by law, the Funds' charter or
bylaws, or the Board of Trustees/Directors.
o Review periodically the adequacy of the Governance Committee Charter.
C-2
INDEMNIFICATION
The Governance Committee and each of its members shall be indemnified and
held harmless by the Funds from any loss, cost, liability, damage and/or expense
(including reasonable attorneys' and accountants' fees and expenses) ("Loss")
arising directly or indirectly from participation or service on the Governance
Committee or actions taken (or not taken) by such member or the Governance
Committee. Nothing in this paragraph shall relieve the Governance Committee or
any member from Loss arising from gross negligence, willful misconduct or
actions taken in bad faith. The Funds agree to maintain appropriate
Directors/Officers liability insurance.
C-3
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VOTING BY MAIL: Complete and return your Proxy
Card in the addressed envelope.
If you vote by telephone or Internet, you do
not need to mail your proxy.
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999 999 999 999 99 <--
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VAN ECK WORLDWIDE INSURANCE TRUST PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
FUND NAME PRINTS HERE TO BE HELD MARCH 6, 2006
The undersigned shareholder of the above-referenced fund (the "Fund"), a series
of Van Eck Funds, (the "Company"), having received Notice of the Meeting of
Shareholders of the Fund and the Proxy Statement accompanying such Notice,
hereby constitutes and appoints Keith J. Carlson and Joseph J. McBrien, 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 10016 on March 6, 2006 at 10:00 a.m. New York Time, and at any
and all adjournments thereof, with all powers the undersigned would possess if
personally present. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.
THIS PROXY IS SOLICITED ON BEHALF IF NOT VOTING BY TELEPHONE, PLEASE SIGN,
OF THE BOARD OF TRUSTEES. | DATE AND RETURN THIS PROXY PROMPTLY
| USING THE ENCLOSED ENVELOPE.
Date
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Signature(s) and Title(s), if applicable (Sign in the Box)
Note: Please date and sign exactly as name or names appear
herein. When signing as attorney, executor, trustee,
guardian, or officer of the corporation, please give your
full title as such.
|
| | Van Eck Proxy - dm
|
THIS PROXY CARD WILL BE VOTED AS SPECIFIED. IF NO CHOICE IS SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE PROPOSALS. PLEASE REFER TO THE ACCOMPANYING PROXY
STATEMENT FOR A DISCUSSION OF THE PROPOSALS.
| PLEASE FILL IN BOX(ES) AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL. |X| |
| PLEASE DO NOT USE FINE POINT PENS. |
THE BOARD RECOMMENDS A VOTE FOR THE PROPOSALS.
1. To elect the following nominees as Trustees: FOR WITHHOLD FOR ALL
(01) R. C. Cowell, (02) J. Lukomnik, (03) D.J. Olderman, (04) R.F. Peters, ALL ALL EXCEPT
(05) W.H. Shaner, (06) R. A. Short, (07) R.D. Stamberger
|_| |_| |_|
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL, MARK THE BOX "FOR
ALL EXCEPT" AND WRITE THE NOMINEE'S NUMBER ON THE LINE BELOW.
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2. To modify or eliminate fundamental investment restrictions to modernize the FOR ALL AGAINST ABSTAIN
investment restrictions of the Funds; (EXCEPT ALL ALL
AS
(2A) Borrowing (ALL EXCEPT WORLDWIDE (2G) Investing for the purposes |_| |_| |_|
ABSOLUTE RETURN FUND) of exercising control (ALL
(2B) Underwriting (ALL EXCEPT WORLDWIDE EXCEPT WORLDWIDE ABSOLUTE
ABSOLUTE RETURN FUND) RETURN FUND)
(2C) Lending (ALL EXCEPT WORLDWIDE (2H) Commodities
ABSOLUTE RETURN FUND) (2I) Concentration
(2D) Senior securities (ALL EXCEPT (2J) Diversification (WORLDWIDE
WORLDWIDE ABSOLUTE RETURN FUND) EMERGING MARKETS FUND AND
(2E) Real estate (ALL EXCEPT WORLDWIDE WORLDWIDE HARD ASSETS FUND
ABSOLUTE RETURN FUND) ONLY)
(2F) Real estate limited partnerships,
oil, gas, and minerals (ALL EXCEPT
WORLDWIDE ABSOLUTE RETURN FUND)
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INSTRUCTIONS: IF YOU WISH TO WITHHOLD A VOTE FROM A PARTICULAR
SUB-PROPOSAL PLEASE WRITE THE NUMBER AND LETTER(S) OF THE SUB-PROPOSAL
ON THE LINE ABOVE AND INDICATE A "VOTE AGAINST" OR AN "ABSTENTION".
| PLEASE SIGN AND DATE ON THE REVERSE SIDE. Van Eck Proxy - dm |
| |