As filed with the Securities and Exchange Commission on September 26, 2003
Registration No. 333-108305
=============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
/X/ PRE-EFFECTIVE AMENDMENT NO. 1
//POST-EFFECTIVE AMENDMENT NO.
THE TOCQUEVILLE TRUST
---------------------
(Exact Name of Registrant as Specified in Charter)
1675 Broadway, New York, New York 10019
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(Address of Principal Executive Offices)
(212) 698-0800
--------------
(Registrant's Telephone Number)
Francois D. Sicart
c/o The Tocqueville Trust
1675 Broadway, New York, New York 10019
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(Name and Address of Agent for Service)
with copies to:
Michael R. Rosella, Esq.
Paul, Hastings, Janofsky & Walker LLP
75 East 55th Street
New York, New York 10022
Approximate Date of Proposed Public Offering: As soon as practicable after the
Registration Statement becomes effective under the Securities Act of 1933.
It is proposed that this filing shall become effective on September 29, 2003,
pursuant to Rule 488 under the Securities Act of 1933, as amended.
No filing fee is due because the Registrant has previously registered an
indefinite number of shares under the Securities Act of 1933 pursuant to Section
24(f) under the Investment Company Act of 1940.
GINTEL FUND
6 Greenwich Office Park
Greenwich, Connecticut 06831
September 29, 2003
Dear Shareholders:
After 50 years in the investment industry, 30 years as an investment advisor and
20 years managing mutual funds, I have decided, at age 75, to retire from the
responsibility of actively managing other people's money. I would not do so,
however, without first making certain that the management of Gintel Fund
shareholders' investment assets are placed in responsible hands. The Trustees of
Gintel Fund have voted, subject to shareholder approval, to merge Gintel Fund
into The Tocqueville Fund, one of a series of four mutual funds in a Trust
managed by Tocqueville Asset Management, L.P., an investment advisory firm that
manages over $2.3 billion in mutual fund assets and individually-managed
accounts. Members of my family and I intend to vote in favor of this merger. The
current combined assets of the two funds are approximately $140 million.
The Tocqueville Fund has the same investment objective as the Gintel Fund:
long-term capital appreciation. Its Adviser follows a value approach to
investing, meaning that it seeks to invest in companies that Tocqueville's
research team has identified as out of favor or undervalued. The Tocqueville
Fund differs from Gintel Fund in that it is a diversified rather than a
non-diversified investment company. Tocqueville believes a diversified portfolio
reduces risk and volatility, a conservatism I embrace in these uncertain times.
Tocqueville's philosophy is otherwise similar to ours in that it relies heavily
on fundamental investment research, including continued dialogue and visits with
company management. As with Gintel Fund, significant investments in The
Tocqueville Fund are held by its management.
The Tocqueville Fund's investment advisory fee at 0.75% per year is lower than
our 1.00%, and its expense ratio, which includes the investment advisory fee, a
12b-1 Plan, and other customary mutual fund operating expenses, has historically
been lower than Gintel Fund's expense ratio.
After having met Robert Kleinschmidt, president of the firm and The Tocqueville
Fund's portfolio manager, and after having attended a number of investment
meetings with the rest of Tocqueville's 18-member investment and research staff
over the past few months, I have every confidence in the soundness of their
investment process and in their capabilities. Although I will no longer be
responsible for the investment management of your Fund, I intend to engage in an
ongoing relationship with Tocqueville Asset Management. I will share investment
research with Tocqueville and will be available to Tocqueville to share the
benefits of my 30 years experience as an investment adviser. In addition, Gintel
Asset Management, Inc. will continue to assist shareholders and answer any
questions you may have, just as we have in the past.
The Tocqueville Fund is registered in all 50 states, and because it has the same
transfer agent and custodian as we do, U.S. Bancorp Fund Services, LLC, and U.S.
Bank, N.A., respectively, the transition from our fund to theirs will be
relatively smooth and seamless.
This decision is made with a combination of regret and relief: regret that I
will be leaving a business that has consumed so much of my life and relief that
the Board of Trustees of Gintel Fund has found such a good replacement for the
management of our shareholders' assets. I urge you to vote in favor of this
merger and reorganization recommended by the Trustees of the Gintel Fund and to
give Tocqueville the opportunity to manage your money in the same sound and
sensible manner they have been practicing for almost 15 years.
Every vote counts. Please cast yours as early as possible, so that this
reorganization can be consummated within the time allowed.
Sincerely,
/s/ Robert M. Gintel
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Robert M. Gintel
Chairman of the Board and
Chief Executive Officer
Enclosures
2
GINTEL FUND
NOTICE OF SPECIAL MEETING OF
SHAREHOLDERS -- October 29, 2003
6 Greenwich Office Park
Greenwich, Connecticut 06831
(203) 622-6400
A Special Meeting of Shareholders of Gintel Fund ("Gintel") will be held
at 9:00 a.m. on October 29, 2003, at the offices of Gintel at 6 Greenwich Office
Park, Greenwich, Connecticut 06831, for the following purposes, all of which are
more fully described in the accompanying Combined Proxy Statement/Prospectus
dated September 29, 2003.
1. To approve the Agreement and Plan of Reorganization and Liquidation
between The Tocqueville Fund series of The Tocqueville Trust ("Tocqueville") and
Gintel which contemplates the transfer to Tocqueville of substantially all the
assets and liabilities of Gintel in exchange for shares of Tocqueville and the
distribution of such shares to the shareholders of Gintel, the liquidation and
dissolution of Gintel, and the termination of Gintel's registration under the
Investment Company Act of 1940, as amended.
2. To transact such other business as may properly come before the
meeting.
Only shareholders of record at the close of business on September 15, 2003, are
entitled to notice of, and to vote at, the meeting or any postponements or
adjournments thereof.
By Order of the Board of Trustees
FAY DALLAS-BROWNE, Secretary
Greenwich, Connecticut
September 29, 2003
Your vote is important no matter how many shares you owned on the record date.
Although you are invited to attend the Special Meeting and vote your shares in
person, if you are unable to attend, you may vote your shares by mail or
electronically by either a touch-tone telephone or the Internet.
In order to vote by mail, please indicate your voting instructions on the
enclosed proxy, date and sign it, and return it in the envelope provided, which
is addressed for your convenience and needs no postage if mailed in the United
States. If you later decide to attend the Special Meeting, you may revoke your
proxy and vote your shares in person.
In order to vote electronically, please see your proxy card for more information
and the instructions. However, if you want to change your vote, you may do so
using the proxy card, touch-tone telephone or Internet.
In order to avoid the additional expense to Gintel of further solicitation, we
ask for your cooperation in mailing your proxy promptly.
COMBINED PROXY STATEMENT/PROSPECTUS
RELATING TO THE ACQUISITION OF ASSETS OF
GINTEL FUND
6 Greenwich Office Park
Greenwich, Connecticut 06831
(203) 622-6400
BY AND IN EXCHANGE FOR SHARES OF
THE TOCQUEVILLE FUND
series of
THE TOCQUEVILLE TRUST
1675 Broadway
New York, New York 10019
(800) 355-7307
This Combined Proxy Statement/Prospectus relates to the proposed transfer
to The Tocqueville Fund series of The Tocqueville Trust ("Tocqueville") of
substantially all of the assets and liabilities of Gintel Fund ("Gintel") in
exchange for shares of Tocqueville to be distributed to the shareholders of
Gintel in liquidation and dissolution of Gintel (the "Reorganization"). As a
result of the proposed transaction, each shareholder of Gintel will receive that
number of full and fractional shares of Tocqueville equal in value at the time
of the exchange to the value of such shareholder's shares of Gintel (Tocqueville
and Gintel are collectively referred to as the "Funds").
The investment objective of Tocqueville is to seek long-term capital
appreciation. Tocqueville pursues this objective by investing primarily in the
equity securities of United States companies that are considered to be
undervalued or out of favor and provide an opportunity for capital appreciation.
This Combined Proxy Statement/Prospectus sets forth concisely information
about Tocqueville that shareholders of Gintel should know before investing and
should be read and retained by investors for future reference. Copies of the
prospectus for Tocqueville dated February 28, 2003, and the annual report for
Tocqueville for the fiscal year ended October 31, 2002, are enclosed herewith
and are incorporated by reference herein.
A Statement of Additional Information dated September 29, 2003, relating
to this Combined Proxy Statement/Prospectus has been filed with the Securities
and Exchange Commission (the "SEC") and is incorporated by reference herein. A
Statement of Additional Information for Tocqueville dated February 28, 2003,
containing additional and more detailed information about Tocqueville, has been
filed with the SEC and is incorporated by reference herein. In addition, a
prospectus for Gintel dated April 30, 2003, and a Statement of Additional
Information for Gintel dated April 30, 2003, have been filed with the SEC and
are incorporated by reference herein. Copies of these documents are available
without charge and can be obtained by writing to Gintel Asset Management, Inc.,
at 6 Greenwich Office Park, Greenwich,
Connecticut 06831, or by calling toll free (800) 243-5808, or by writing to
Tocqueville Asset Management L.P., at 1675 Broadway, New York, New York 10019,
or by calling toll free (800) 355-7307.
The Securities and Exchange Commission has not approved or disapproved
these securities or passed upon the adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
This Combined Proxy Statement/Prospectus is dated September 29, 2003.
ii
TABLE OF CONTENTS
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Page
INTRODUCTION.................................................................1
Synopsis...............................................................1
Principal Risk Factors.................................................4
Comparison of Fees and Expenses........................................5
INFORMATION ABOUT THE REORGANIZATION.........................................7
The Plan and Vote Required.............................................7
Method of Carrying Out the Plan........................................8
Description of Shares to be Issued.....................................9
Reasons for the Reorganization.........................................9
Tax Aspects...........................................................10
Capitalization Table (Unaudited)......................................12
ADDITIONAL INFORMATION ABOUT THE FUNDS......................................12
Investment Objectives and Policies....................................12
Investment Restrictions...............................................13
Portfolio Transactions................................................14
Dividends and Distributions...........................................14
Rights of Shareholders................................................14
Advisory Arrangements.................................................15
Distribution Arrangements.............................................16
Further Information...................................................16
VOTING MATTERS..............................................................17
Generally.............................................................17
Quorum and Adjournments...............................................18
Appraisal Rights......................................................19
FINANCIAL STATEMENTS........................................................19
OTHER MATTERS...............................................................19
iii
INTRODUCTION
Synopsis
This synopsis provides a concise summary of the information contained in
this Combined Proxy Statement/Prospectus, and presents key considerations for
shareholders of Gintel to assist them in determining whether to approve the
Agreement and Plan of Reorganization and Liquidation of Gintel (the "Plan").
The Proposed Transaction. On August 26, 2003, the Board of Trustees of
Gintel (the "Board") approved the Plan, which contemplates the transfer of
substantially all of the assets and liabilities of Gintel, except for the
outstanding claims of Gintel arising out of the settlement of the In Re Conseco,
Inc. Securities Litigation, which will be retained by Gintel for the benefit of
its shareholders, in exchange for shares of Tocqueville. Following the transfer,
shares of Tocqueville will be distributed to shareholders of Gintel in
liquidation of Gintel and Gintel subsequently will be dissolved. In connection
therewith, Gintel will deregister under the Investment Company Act of 1940, as
amended (the "Act"), by filing the appropriate application with the SEC. See
"Information About the Reorganization--The Plan and Vote Required" and
"Information About the Reorganization--Method of Carrying Out the Plan."
Both Funds are equity funds with similar investment objectives and
strategies. Gintel is managed by Gintel Asset Management, Inc. and Tocqueville
is managed by Tocqueville Asset Management L.P. (Tocqueville Asset Management
L.P. may be referred to herein as the "Tocqueville Adviser" and Gintel Asset
Management, Inc. may be referred to herein as the "Gintel Adviser" and together,
the "Advisers"). Each Fund's Board of Trustees and the Advisers recognize that
greater economies of scale and efficiencies can be attained by combining the
assets of the Funds and that since the investment objectives are very similar,
such a combination would not materially alter the nature of the Gintel
shareholders' investment.
As a result of the proposed Reorganization, each shareholder of Gintel
will receive that number of full and fractional shares of Tocqueville equal in
value at the time of the exchange to the value of such shareholder's shares of
Gintel. The Board has determined that the interests of existing shareholders of
Gintel will not be diluted as a result of the transactions contemplated by the
Reorganization. For the reasons set forth below under "Reasons for the
Reorganization," the Board, including the disinterested trustees, concluded that
the Reorganization would be in the best interests of the shareholders of Gintel
and recommends approval of the Plan.
Tax Consequences. In the opinion of Paul, Hastings, Janofsky & Walker LLP,
the proposed transaction will qualify as a tax-free reorganization for federal
income tax purposes. As a result, no gain or loss will be recognized by either
Tocqueville, Gintel, or the shareholders of Gintel as a result of the
Reorganization. However, Gintel will have non-qualifying gross income equal to
its reorganization expenses paid by the Advisers. See "Information About the
Reorganization--Tax Aspects."
Investment Objectives and Policies. The Funds are both open-end management
investment companies. The investment objective of Tocqueville is to seek
long-term capital appreciation. Tocqueville pursues this objective by investing
primarily in the equity securities of United States companies that Tocqueville
believes to be undervalued or out of favor. Tocqueville may invest up to 25% of
its total assets in securities of foreign issuers traded in the United States or
in American Depositary Receipts ("ADRs"). The investment objective of Gintel is
to seek capital
appreciation by focusing on a limited number of securities rather than broadly
diversifying its portfolio. Gintel seeks to achieve this objective by investing
primarily in the equity securities of United States companies whose shares are
listed or traded on major United States stock exchanges or in the
over-the-counter market. Gintel may invest up to 20% of its net assets in
securities of foreign issuers but has no current intention to do so. The
investment objectives and policies of the Funds are more fully described in
"Additional Information About the Funds--Investment Objectives and Policies."
Gintel is a non-diversified fund, which means that it could have a portfolio
which, at times, may focus on a limited number of issuers. To the extent that
Gintel invests in a small number of issuers, an investment in Gintel may involve
a greater risk of losing money than an investment in a diversified fund.
Tocqueville is a diversified fund, which means that Tocqueville is limited as to
amounts it may own of issuers with respect to 75% of its assets.
Investment Advisory, Administration and Distribution and Service Plan
Fees. Gintel Asset Management, Inc. is the investment adviser for Gintel and
Gintel & Co., LLC is the administrator for Gintel. Tocqueville Asset Management
L.P. is the investment adviser and administrator for Tocqueville. Currently, the
advisory fee payable by Gintel to the Gintel Adviser under the Investment
Advisory Agreement is equal to 1.00% of the average daily net assets. The
administrative services fee payable by Gintel to its administrator under the
Administrative Services Agreement is equal to 1.25% of the first $50 million of
the average daily net assets, 1.125% on the next $50 million of the average
daily net assets and 1.00% of the average daily net assets in excess of $100
million. Gintel's administrator, in its sole discretion, may use a portion of
its fees (not to exceed 0.25% of the average daily net assets of the Fund) to
compensate itself as well as other registered broker-dealers or financial
institutions for shareholder servicing activities. The advisory fee payable by
Tocqueville to its adviser under the Investment Advisory Agreement is equal to
..75% of the average daily net assets on the first $500 million and .65% of the
average daily net assets in excess of $500 million and the administrative
services fee payable by Tocqueville to its adviser under the Administrative
Services Agreement is equal to .15% of average daily net assets. See "Additional
Information About the Funds--Management Arrangements."
Tocqueville has adopted a Distribution and Service Plan pursuant to Rule
12b-1 under the Act which regulates the circumstances under which an investment
company may, directly or indirectly, bear the expenses of distributing its
shares. Tocqueville may pay up to .25% of its average daily net assets pursuant
to its Distribution and Service Plan to pay the cost of advertising, printing of
prospectuses and reports for other than existing shareholders, preparation and
distribution of advertising material and sales literature and payments to
dealers and shareholder servicing agents including Tocqueville's distributor who
enter into agreements with Tocqueville or its distributor. After the
consummation of the Reorganization, it is anticipated that the Tocqueville
Adviser will enter into a shareholder servicing agreement with the Gintel
Adviser whereby the Gintel Adviser will receive .25% of the average daily net
assets of certain accounts for which it provides shareholder servicing to the
Tocqueville Adviser. In addition, the Gintel Adviser will receive a sub-transfer
agency fee from the Tocqueville Adviser on certain assets of Tocqueville for
providing sub-transfer agency services. The Gintel Adviser will provide these
shareholder and sub-transfer agency services to former Gintel shareholders of
Tocqueville to assure an efficient and smooth transition into Tocqueville after
the consummation of the Reorganization. The Gintel Adviser will continue to
provide these services to these Tocqueville shareholders. Both the shareholder
servicing and the sub-transfer agency fees payable to the Gintel Adviser will be
paid by the Tocqueville Adviser and will not be paid from the assets of
Tocqueville.
Gintel has not adopted a Distribution and Service Plan pursuant to Rule
12b-1 under the Act.
2
Lepercq de Neuflize/Tocqueville Securities, L.P. (the "Tocqueville
Distributor") acts as the principal distributor for Tocqueville. The Tocqueville
Distributor, as agent for Tocqueville, uses its best efforts to distribute
shares of Tocqueville on a continuous basis. Tocqueville shares may be sold
through broker-dealers who have entered into sales agreements with the
Tocqueville Distributor. Shares of Tocqueville are offered for sale on a no-load
basis, which means that no sales commissions are charged on purchases of these
shares. However, Tocqueville charges a redemption fee of 2.00% (as a percentage
of the amount redeemed) on redemptions of shares held 120 days or less.
Quasar Distributors, LLC ("Quasar") acts as the principal distributor for
Gintel. Quasar, as agent for Gintel, uses its best efforts to distribute shares
of Gintel on a continuous basis. Shares of Gintel are offered for sale on a
no-load basis, which means that no sales commissions are charged on purchases of
these shares. However, Gintel charges a redemption fee of 2.00% (as a percentage
of the amount redeemed) on redemptions of shares held for 60 days or less.
Purchases, Redemptions and Exchanges. The Funds sell and redeem their
shares on a continuing basis at their net asset values and do not impose a sales
charge for either sales or redemptions. All other purchase and redemption
procedures applicable to the Funds are substantially the same except as follows:
(1) Gintel imposes a 2.00% redemption fee (as a percentage of the amount
redeemed) on redemptions of shares held for 60 days or less. Tocqueville imposes
a 2.00% redemption fee on certain redemptions of shares held less than 120 days.
Shares of Tocqueville issued to Gintel shareholders as a result of the proposed
Reorganization will be deemed to be held for the period the shares were held in
Gintel prior to the Reorganization and in Tocqueville after the Reorganization
for purposes of determining whether the redemption fee is applicable; (2) Gintel
may redeem a shareholder's account if the balance in the account falls below
$2,500 for a period of three months or longer other than as a result of a
decline in the NAV per share and the shareholder, after having been given 60
days' notice, does not bring the account balance above such amount. Tocqueville
may redeem a shareholder's account if the balance in the account falls below
$500 for a period of three months or more due to redemptions. Shareholders of
Tocqueville will be given at least 60 days' written notice of any proposed
redemption and the option to purchase additional shares to avoid the redemption;
and (3) pursuant to Tocqueville's exchange privileges, Tocqueville shareholders
can exchange some or all of their shares for shares of the other three funds in
The Tocqueville Trust i.e., The Tocqueville Small Cap Value Fund, The
Tocqueville International Value Fund and The Tocqueville Gold Fund, which retain
the Tocqueville Adviser as investment adviser. Tocqueville shareholders also can
exchange some or all of their shares for shares of certain funds managed by an
affiliate of Tocqueville's transfer agent.
Other Considerations. In the event the shareholders of Gintel do not
approve the Reorganization, the Board will consider possible alternatives to the
proposed Reorganization, including the liquidation of Gintel. Shareholders have
no right of appraisal, but may continue to redeem their shares in accordance
with normal Gintel redemption policies.
Cost of the Reorganization. All legal fees associated with this
Reorganization (which are not expected to exceed $25,000) will be borne
exclusively by the Tocqueville Adviser. All other costs associated with this
Reorganization incurred by Gintel including the cost of the preparation and
distribution of the proxies and proxy statements and any
3
other out-of-pocket expenses in an amount of approximately $30,000 will be borne
equally by the Tocqueville Adviser and the Gintel Adviser.
This Synopsis is qualified by reference to the more complete information
contained elsewhere in this Combined Prospectus/Proxy Statement, including
information incorporated by reference herein.
Principal Risk Factors
Since the Funds both invest primarily in common stocks of United States
companies, investors are subject to risks inherent in an investment in common
stocks, including stock market fluctuations, fluctuations in the value of the
Funds' portfolios and liquidity risks (the risk that a trading market may not
exist for a stock when the Funds decide to sell it). When stock prices
fluctuate, the Funds' share prices may go down in value. Also, common stocks
selected by each Fund may or may not increase in value when the stock market is
rising or may fail to perform as expected. Additionally, Gintel may invest up to
20% of its net assets in securities of foreign issuers but has no current
intention to do so. Tocqueville may invest up to 25% of its total assets in
securities of foreign issuers traded in the United States or in ADRs. ADRs are
certificates issued by U.S. banks representing the right to receive securities
of a foreign issuer deposited with that bank or corresponding bank. Investments
in such securities involve additional risks including fluctuations in foreign
exchange rates, future political and economic developments and possible
imposition of exchange controls or other foreign governmental laws or
restrictions. Also, foreign companies are not subject to accounting, auditing
and financial reporting standards and requirements comparable to those of United
States companies. Thus, the prices of securities in different countries are
subject to different economic, financial, political and social factors. As of
August 31, 2003, Tocqueville had approximately 17.2% of its net assets in
securities of foreign issuers. Tocqueville does not intend to significantly
increase its holdings in securities of foreign issuers after the Reorganization.
Comparison of Fees and Expenses
The following table shows the comparative fees and expenses of the Funds.
The table also reflects the pro forma fees for Tocqueville after giving effect
to the Reorganization. Based upon this comparison, Gintel shareholders will bear
the benefit of a decrease in the applicable current estimated expense ratio of
the Reorganization.
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FEE TABLE
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Pro Forma
Gintel Tocqueville Combined
-------- ------------- -----------
Shareholder Fees
- ----------------
(fees that are paid directly from your
investment)
Maximum Sales Charge (Load) Imposed on
Purchases (as a percentage of offering
price)................................. None None None
Maximum Deferred Sales Charge (Load)
(as a percentage of offering price).... None None None
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4
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Maximum Sales Charge (Load) Imposed on
Reinvestment Dividends................. None None None
Redemption Fee......................... 2.00%(1) 2.00%(2) 2.00%(2)
Exchange Fee........................... None (3) (3)
Maximum Account Fee.................... None None None
Annual Fund Operating Expenses
- ------------------------------
(expenses that are deducted from Fund Pro Forma
assets) Gintel Tocqueville Combined
-------- ------------- -----------
(as a % of average net assets)
Advisory Fees.......................... 1.00% .75% .75%
Rule 12b-1 Fee......................... .00% .25% .25%
Other Expenses......................... .90%(4) .41%(5) .33%
Total Annual Fund Operating Expenses... 1.90% 1.41%(5) 1.33%
(1) The redemption fee is paid to Gintel to reimburse it for expenses and costs
associated with redemptions. Gintel imposes a redemption fee on shares held
60 days or less.
(2) A redemption fee is imposed on redemptions of shares held 120 days or less.
Redemptions to which the fee applies include redemptions of shares resulting
from an exchange made pursuant to the Exchange Privilege. The redemption fee
will not apply to redemptions of shares where (i) the Tocqueville Adviser or
Lepercq, de Neuflize/Tocqueville Securities, L.P. is the shareholder of
record, or exercises discretion over the account and (ii) the redemption
(including a redemption resulting from an exchange) is made from a
retirement account. In addition, The Tocqueville Trust may waive the
redemption fee when the Tocqueville Adviser determines that the imposition
of the redemption fee is not necessary to protect Tocqueville from the
effects of redemptions by investors who use Tocqueville as a short-term
trading vehicle. The Transfer Agent charges a $15 service fee for each
payment of redemption proceeds made by wire.
(3) The Transfer Agent charges a $5 fee for each telephone exchange.
(4) Gintel does not pay brokerage commissions directly for buying and selling
securities; therefore, imputed brokerage commissions, which are paid by
Gintel & Co., LLC under Gintel's Administrative Services Agreement, are
excluded.
(5) Other Expenses and Total Annual Fund Operating Expenses are .40% and 1.40%,
respectively, after voluntary waiver by the Tocqueville Adviser. This waiver
may be terminated at any time.
Example
This Example is intended to help you compare the cost of investing in Gintel,
Tocqueville and the combined fund. The expenses shown are at levels anticipated
for the current fiscal year.
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5
- -------------------------------------------------------------------------------
The Example assumes that you invest $10,000 in a fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
1 Year 3 Years 5 Years 10 Years
Gintel: $193 $597 $1,026 $2,222
Tocqueville: $144 $446 $771 $1,691
Pro Forma Combined: $135 $421 $729 $1,601
- -------------------------------------------------------------------------------
INFORMATION ABOUT THE REORGANIZATION
The Plan and Vote Required
On August 26, 2003, the Board of Gintel adopted the Plan and approved the
Plan's submission to the shareholders of Gintel. The Plan (a copy of which is
set forth in full as Exhibit A to this combined Proxy Statement/Prospectus)
contemplates the Reorganization under which (i) substantially all of the assets
and liabilities of Gintel, except for the outstanding claims of Gintel arising
out of the settlement of the In Re Conseco, Inc. Securities Litigation, which
will be retained by Gintel for the benefit of its shareholders, would be
transferred to Tocqueville in exchange for shares of Tocqueville, (ii) these
shares would be distributed among the shareholders of Gintel and (iii) Gintel
would be liquidated and dissolved and its registration under the Act would be
terminated.
The result of the carrying out of the Plan would be that (i) Tocqueville
would add to its gross assets and liabilities substantially all of the assets
(net of any liability for portfolio securities purchased but not settled) and
liabilities of Gintel and (ii) the shareholders of Gintel would become
shareholders of Tocqueville as soon as practicable after the closing. In
essence, shareholders of Gintel who vote their shares in favor of the Plan are
electing to redeem their shares of Gintel at net asset value and reinvest the
proceeds in shares of Tocqueville at net asset value without sales charge and
without recognition of taxable gain or loss for federal income tax purposes (see
"Tax Aspects" below). The Tocqueville Adviser will bear the cost of all legal
expenses associated with the Reorganization. Management estimates that all legal
expenses will not exceed $25,000. The Tocqueville Adviser and the Gintel Adviser
will equally bear all other expenses associated with the Reorganization,
including accounting, printing, transfer agency, filing, proxy soliciting,
transfer taxes and similar expenses incurred. Management estimates that these
expenses of the Reorganization will not exceed $30,000. Liabilities as of the
date of the transfer of assets will consist primarily of accrued but unpaid
normal operating expenses of Gintel including the cost of any portfolio
securities purchased but not yet settled.
The vote of the holders of at least a majority of the outstanding shares
of Gintel entitled to vote at the meeting is required for the approval of the
Plan, including the liquidation and dissolution of Gintel. If the shareholders
do not approve the Plan, the Reorganization will not be effected and the Board
will consider possible alternatives, including the liquidation of Gintel.
Method of Carrying Out the Plan
The consummation of the transactions contemplated by the Plan is
contingent upon the approval of this proposal by the shareholders of Gintel and
the receipt of the opinions and
6
certificates set forth in Sections 10 and 11 of the Plan and the occurrence of
the events described in those Sections.
Under the Plan, substantially all the assets and liabilities of Gintel
will be delivered to Tocqueville in exchange for shares of Tocqueville. The
actual exchange of assets is expected to take place on or about October 30, 2003
(defined in the Plan as the "Closing Date"). Under the Plan, all redemptions of
shares of Gintel shall be permanently suspended on or about (assuming a October
30, 2003, Closing Date) October 29, 2003; only redemption requests received in
proper form on or prior to the close of business on that date shall be fulfilled
by Gintel; redemption requests received by Gintel after that date will be
treated as requests for redemptions of shares of Tocqueville to be distributed
to the shareholders requesting redemption. The number of full and fractional
shares of Tocqueville to be issued to shareholders of Gintel will be based on
the relative net asset values per share of Gintel and Tocqueville determined at
or immediately preceding the effective time of the Reorganization. Portfolio
securities of both Funds will be valued in accordance with the valuation
practices as described under "Net Asset Value" in each Fund's Prospectus.
After the Closing Date, Gintel will distribute on a pro rata basis to its
shareholders of record on September 15, 2003, shares of Tocqueville received by
Gintel at closing, in liquidation and cancellation of the outstanding shares of
Gintel. To assist Gintel in this distribution, Tocqueville, in accordance with a
shareholder list supplied by Gintel, will cause its transfer agent to credit and
confirm an appropriate number of shares of Tocqueville to each shareholder of
Gintel. No certificates for shares of Tocqueville will be issued.
Under the Plan, within one year after the Closing Date, Gintel shall (a)
effect its liquidation and dissolution under Massachusetts law, terminate its
registration under the Act and file a final report to the SEC under the Act, and
(b) either pay or make provision for all of its debts and taxes.
If the Plan is approved by shareholders, Gintel reserves the right to sell
portfolio securities and/or purchase other securities, to the extent necessary
so that the asset composition of Gintel is consistent with the investment
policies and restrictions of Tocqueville. To the extent Gintel sells securities
at a gain, current shareholders may receive a capital gain dividend. Transaction
costs associated with any such purchases and sales would be borne equally by the
Advisers. However, it is not the present intention of Gintel to engage in such
transactions. In addition, Tocqueville does not intend to realign its portfolio
after the Reorganization.
Under the Plan, either of the Funds may abandon and terminate the Plan at
any time prior to the Closing Date without liability if (i) the other party
breaches any material provision of the Plan, (ii) prior to the Closing Date, any
legal, administrative or other proceeding shall be instituted or threatened
seeking to restrain or otherwise prohibit the transactions contemplated by the
Plan and/or asserting a material liability of either party, which proceeding has
not been terminated or the threat thereto removed prior to the Closing Date or
(iii) on the Valuation Date (as defined in the Plan attached hereto as Exhibit
A) either party has, pursuant to the Act or any rule, regulation or order
thereunder, suspended the redemption of its shares and such suspension continues
for a period of 60 days beyond the Valuation Date.
In the event that the Plan is not consummated for any reason, the Board of
Gintel will consider and may submit to the shareholders other alternatives.
7
Description of Shares to be Issued
Full and fractional shares of Tocqueville will be issued to shareholders
of Gintel in accordance with the procedures under the Plan as described above.
Each share will be fully paid and nonassessable when issued and transferable
without restriction and will have no preemptive or conversion rights.
Reasons for the Reorganization
The Board considered the Reorganization and adopted the Plan at a meeting
on August 26, 2003. At the meeting, the Gintel Adviser recommended to the Board
that they adopt the Plan and approve the Plan's submission to the shareholders
of Gintel.
Management of the Funds is of the view that both Funds would benefit from
the Reorganization because of the economies of scale that would come with a
larger asset base. Management has informed the Board of its belief that a
reduction in expenses could potentially be realized as a result of the
elimination of duplicative costs presently incurred for services that are
performed for both Funds.
In making its recommendation, Management considered the similarities of
the investment objectives and policies of the Funds and the fact that the Funds
share the same service providers. Further, Management considered that the
Reorganization would be effected as a tax-free reorganization.
Given the above factors and the similarity in the investment strategies of
the Funds, the Gintel Adviser concluded that combining the two Funds would be
appropriate and would enable the shareholders of Gintel to benefit from certain
economies of scale. The Gintel Adviser indicated to the Board its belief that
the most appropriate method of combining the Funds would be through a tax-free
reorganization of the assets of the Funds. The Gintel Adviser also stated its
belief that the Reorganization is a better alternative than a taxable redemption
of Gintel shares or an outright liquidation and dissolution, and the Board
concurred.
In considering the Gintel Adviser's proposal, the Board considered other
alternatives including continuing Gintel with management other than Tocqueville
and liquidation of Gintel. The Board recognized the ability of shareholders to
redeem shares of Gintel at any time prior to the Reorganization. The Board
considered the effect of the Reorganization on Gintel's tax loss carryforward
which would be reduced but a portion of which would be available going forward
to benefit Gintel shareholders who become shareholders of Tocqueville. The Board
also reviewed the proposed treatment of payments due to Gintel pursuant to the
settlement of the In Re Conseco, Inc. Securities Litigation to assure that
Gintel shareholders received the benefit of any such recoveries notwithstanding
the Reorganization.
The Board also inquired into a number of other factors which include the
expense ratios and the investment performance of the Funds. The Board was
informed of the expense ratios of the Funds for the most recently completed
fiscal year which for Gintel is 1.90% and for Tocqueville is 1.41%. See the Fee
Table beginning on page 4 which reflects the proposed impact on overall expense
ratios applicable to Gintel's shareholders.
The Board also considered the following comparative investment performance
information regarding the Funds:
8
- --------------------------------------------------------------------------------
Total Return Information for Periods Ended December 31, 2002
- --------------------------------------------------------------------------------
One Year Five Years Ten Years
- --------------------------------------------------------------------------------
Gintel*
Return Before Taxes (23.93)% (7.80)% 2.34%
Return After Taxes on (23.93)% (9.55)% 0.34%
Distributions
Return After Taxes on (14.69)% (4.90)% 2.24%
Distributions and Sales of
Fund Shares
- --------------------------------------------------------------------------------
Russell 2000 Index** (20.48)% (1.36)% 7.15%
S&P 500 Index*** (22.15)% (0.62)% 9.32%
- --------------------------------------------------------------------------------
Tocqueville
Return Before Taxes (14.53)% (0.15)% 9.18%
Return After Taxes on (14.53)% (1.44)% 7.03%
Distributions
Return After Taxes on (8.92)% (0.39)% 6.91%
Distributions and Sales of
Fund Shares
- --------------------------------------------------------------------------------
S&P 500 Index**** (22.10)% (0.59)% 9.34%
(reflects no deduction for
fees, expenses or taxes)
- --------------------------------------------------------------------------------
- ---------------
* Results are net of expenses, with dividends and capital gains reinvested.
** The Russell 2000 Index excludes the 1,000 largest companies included in
the Russell 3000. The average capitalization of companies included in the
Russell 2000 is $490 million as of June 30, 2002. The Russell 3000 is a
weighted index of the 3,000 largest United States companies based on total
market capitalization. The Russell 2000 Index reflects no deduction for
fees, expenses, or taxes.
- --------------------------------------------------------------------------------
9
- --------------------------------------------------------------------------------
*** The S&P 500 Index consists of 500 stocks chosen for market size,
liquidity, and industry group representation. It is a market-value
weighted index (stock price times number of shares outstanding), with each
stock's weight in the index proportionate to its market value. The S&P 500
is one of the most widely used benchmarks of United States equity
performance. The S&P 500 index reflects no deduction for fees, expenses,
or taxes.
**** Average annual total return is a measure of Tocqueville's performance over
time. Tocqueville's average annual return is compared with the S&P 500
Index. While Tocqueville does not seek to match the returns of the S&P 500
Index, this Index is a good indicator of general stock market performance.
You may not invest directly in the S&P 500 Index and, unlike Tocqueville,
it does not incur fees and expenses.
- --------------------------------------------------------------------------------
Thus, the factors considered by the Board included, among other things:
(1) recent and anticipated asset and expense levels of the Funds and future
prospects of each Fund; (2) the similarity of the investment advisory,
distribution and administration arrangements, and the fact that Gintel expects
the Reorganization to result in savings in fixed expenses because of resulting
efficiencies in administration, portfolio management and marketing; (3) the
terms of the proposed shareholder servicing agreement to be entered into by the
Advisers whereby the Gintel Adviser will provide shareholder and sub-transfer
agency services to former Gintel shareholders of Tocqueville to assure an
efficient and smooth transition into Tocqueville after the consummation of the
Reorganization; (4) alternative options to the Reorganization; (5) the terms and
conditions of the Reorganization; (6) the similarity of the investment
objectives, policies and restrictions of the Funds; (7) the tax free status of
the Reorganization; (8) potential tax consequences if there is no
Reorganization; and (9) the possibility that the assets of Gintel may not grow
over time.
Based upon these factors, the Board, including the Trustees who are not
interested persons of Gintel, has determined that the Reorganization of Gintel
would be in the best interests of Gintel's shareholders and that no
shareholder's interest would be diluted as a consequence thereof, and approves
the Plan's submission to the shareholders of Gintel.
Tax Aspects
Immediately prior to the Valuation Date referred to in the Plan, Gintel
will pay a dividend or dividends which, together with all previous such
dividends, shall have the effect of distributing to Gintel's shareholders all of
Gintel's investment company taxable income (computed without regard to any
deduction for dividends paid) for taxable years ending on or prior to the
Closing Date and all of its net capital gain, if any (after reduction for any
available capital loss carry forward), realized in taxable years ending on or
prior to the Closing Date. Such dividends will be included in the income of
Gintel's shareholders as dividend income and capital gain, respectively.
The exchange of the assets of Gintel for shares of Tocqueville and the
assumption by Tocqueville of the liabilities of Gintel, and the liquidation of
Gintel, are intended to qualify for federal income tax purposes as a tax-free
reorganization under Section 368(a)(1)(C) of the Internal Revenue Code (the
"Code"). As a condition to the closing of the proposed transaction, the Funds
will each receive the opinion of Paul, Hastings, Janofsky & Walker LLP, counsel
to Tocqueville, to the effect that, based on certain assumptions and on the
existing provisions of the Code, Treasury Regulations issued thereunder, current
Revenue Rulings, Revenue Procedures and court decisions, for federal income tax
purposes:
(1) Gintel's transfer of substantially all of its assets to Tocqueville
in exchange for shares of Tocqueville and Tocqueville's assumption of all of
Gintel's liabilities, followed by Gintel's 10
distribution of Tocqueville shares to Gintel's shareholders as part of the
liquidation of Gintel, will qualify as a tax-free "reorganization" within the
meaning of Section 368(a)(1)(C) of the Code. The Funds will each be "a party to
a reorganization" within the meaning of Section 368(b) of the Code,
(2) no gain or loss will be recognized by the shareholders of Gintel
upon the exchange of Gintel shares for Tocqueville shares (Section 354(a) of the
Code),
(3) Gintel will not recognize gain or loss upon the transfer of
substantially all of its assets to Tocqueville in exchange for shares of
Tocqueville and Tocqueville's assumption of all of the liabilities of Gintel
(Sections 361(a) and 357(a) of the Code), or upon the distribution of such
shares of Tocqueville to Gintel's shareholders in exchange for all of their
shares in Gintel (Section 361(c) of the Code),
(4) Tocqueville will not recognize gain or loss upon its receipt of
Gintel's assets in exchange for shares of Tocqueville (Section 1032(a) of the
Code),
(5) the basis of shares of Tocqueville received by the shareholders of
Gintel will be the same as their basis in the shares of Gintel surrendered in
exchange therefor (Section 358(a)(1) of the Code),
(6) the holding period of shares of Tocqueville received by the
shareholders of Gintel in exchange for Gintel shares will include the period
during which they held Gintel shares surrendered, provided that such Gintel
shares are capital assets on the date of the exchange (Section 1223(1) of the
Code),
(7) the tax basis of the assets of Gintel acquired by Tocqueville will
be the same as the tax basis of such assets to Gintel immediately prior to the
transaction (Section 362(b) of the Code), and
(8) the holding period of the assets of Gintel in the hands of
Tocqueville will include the period during which those assets were held by
Gintel (Section 1223(2) of the Code).
Gintel will have non-qualifying income in an amount equal to its
reorganization expenses paid by the Advisers. Gintel does not expect such
non-qualifying income to prevent it from qualifying as a regulated investment
company.
Immediately prior to the Reorganization, Gintel will have a capital loss
("CL") carryover. Tocqueville will be limited in its ability to use this CL
carryover in the future because Gintel will be treated as having undergone an
ownership change under Section 382 of the Code. As a result, Tocqueville will be
able to use the CL carryover in any year only up to an amount equal to the
product of (i) the value of Gintel on the date of the Reorganization and (ii)
the long-term tax-exempt rate as of that date published by the Internal Revenue
Service. For August 2003, the long-term tax-exempt rate is 4.35%.
Shareholders of Gintel should consult their tax advisers regarding the
effect, if any, of the proposed transaction in light of their individual
circumstances. Since the foregoing discussion
only relates to the federal income tax consequences of the proposed transaction,
shareholders of Gintel should also consult their tax advisers as to state and
local tax consequences, if any, of the proposed transaction.
11
Capitalization Table (Unaudited)
The table below sets forth the existing capitalization of the Funds, as
well as the pro forma capitalization, as of April 30, 2003.
- --------------------------------------------------------------------------------
Tocqueville
After Transfer of
Gintel Tocqueville Gintel
- --------------------------------------------------------------------------------
Net Assets $63,231,484 $69,264,259 $132,495,743
- --------------------------------------------------------------------------------
Shares Outstanding 7,096,194 4,954,890 9,477,886
- --------------------------------------------------------------------------------
Net Asset Value Per Share $ 8.91 $ 13.98 $ 13.98
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION ABOUT THE FUNDS
Additional information about the Funds is presented below. Shareholders of
Gintel should bear in mind that the Reorganization will not result in any change
in the investment management or day-to-day operation of Tocqueville. Such
information is incorporated herein by reference from (i) Tocqueville's
Prospectus dated February 28, 2003, enclosed herewith, and Tocqueville's
Statement of Additional Information dated February 28, 2003; and (ii) Gintel's
Prospectus and Statement of Additional Information, both dated April 30, 2003.
Investment Objectives and Policies
The investment objectives and policies of the Funds are substantially
similar. Both Funds seek long-term capital appreciation primarily through
investment in equity securities. Under normal circumstances, the Funds will have
most of their assets invested in domestic equity securities, including common
stocks, securities convertible into common stocks or rights or warrants to
subscribe for or purchase common stocks. However, Gintel also may invest 20% of
its net assets in the securities of foreign issuers but has no current intention
to do so. Tocqueville may invest 25% of its total assets in securities of
foreign issuers traded in the United States or in ADRs. Critical factors that
will be considered in the selection of any securities in which the Funds may
invest will include the values of individual securities relative to other
investment alternatives, trends in the determinants of corporate profits,
corporate cash flow, balance sheet changes, management capability and practices,
and the economic and political outlook.
The investment objective of Tocqueville is to seek long-term capital
appreciation. Tocqueville seeks to achieve its investment objective by investing
primarily in common stocks of United States companies. Tocqueville follows a
value approach to investing, meaning that it seeks to invest in companies that
the portfolio manager has identified as out of favor or undervalued. The
portfolio manager will identify companies that are undervalued based on his
judgment of relative value and growth potential. This judgment will be based
primarily on: the company's past growth and profitability or the portfolio
manager's belief that the company has achieved better results than similar
companies in a depressed industry which the portfolio manager believes will
improve within the next two years. The portfolio manager will generally consider
the following stocks to be out of favor: stocks which have underperformed market
indices for at least one year and companies which have a historically low stock
price in relation
12
to the company's sales, potential earnings or underlying assets. The portfolio
manager will purchase stocks for Tocqueville's portfolio when they meet the
above criteria and have a limited risk of further decline. The portfolio manager
will sell stocks when they are no longer considered to be good values.
The investment objective of Gintel is also capital appreciation. Gintel
seeks to achieve its goal by focusing on a limited number of securities rather
than broadly diversifying its portfolio. Gintel invests primarily in the equity
securities of United States companies whose shares are listed or traded on major
United States stock exchanges or in the over-the-counter market. Gintel seeks to
maximize capital appreciation by using a bottom-up approach to select internally
researched growth and value securities with long-term investment opportunities
through careful research and then allocating a meaningful portion of portfolio
assets to these selections.
Gintel is a non-diversified fund, which means that it could have a
portfolio which, at times, may focus on a limited number of issuers. To the
extent that Gintel invests in a small number of issuers, an investment in Gintel
may involve a greater risk of losing money than an investment in a diversified
fund. Tocqueville is a diversified fund, which means that Tocqueville is limited
as to amounts it may own of issuers with respect to 75% of its assets.
Investment Restrictions
The Funds each have certain fundamental investment restrictions that
cannot be changed unless approved by a majority of the outstanding shares of
each of the Funds' shares that would be affected by such a change. These
restrictions can be found under the caption "Investment Restrictions" in each
Fund's respective Statement of Additional Information.
The investment restrictions applicable to the Funds are substantially
similar except for the differences noted below. Tocqueville, as a diversified
Fund, is prohibited with respect to 75% of the value of the Fund's assets, to
purchase any securities (other than obligations issued or guaranteed by the
United States government or its agencies or instrumentalities) if, immediately
after such purchase, more than 5% of the value of the Fund's total assets would
be invested in securities of any one issuer, or more than 10% of the outstanding
voting securities of any one issuer would be owned by the Fund. Tocqueville is
also prohibited from (i) issuing senior securities; (ii) concentrating its
investments in particular industries (less than 25% of the value of
Tocqueville's assets will be invested in any one industry); (iii) making loans
of money or securities other than (a) through the purchase of publicly
distributed bonds, debentures or other corporate or governmental obligations,
(b) by investing in repurchase agreements, and (c) by lending its portfolio
securities, provided the value of such loaned securities does not exceed 33-1/3%
of its total assets; (iv) borrowing money except from banks and not in excess of
10% of the value of Tocqueville's total assets (Tocqueville may not purchase
securities while borrowings exceed 5% of the value of its total assets); (v)
buying or selling real estate, commodities, or commodity contracts, except that
Tocqueville may purchase or sell futures or options on futures; (vi)
underwriting securities; (vii) investing in precious metals other than in
accordance with its investment objective and policy, if as a result Tocqueville
would then have more than 10% of its total net assets (taken at current value)
invested in such precious metals; and (viii) participating in a joint investment
account.
Gintel, as a non-diversified fund, may not with respect to 50% of its
assets, invest more than 5% of its total assets, at market value, in the
securities of one issuer (except the securities of the United States government)
and may not purchase 10% of the outstanding voting securities of a single
issuer; may not with respect to the other 50% of its assets, invest more than
25% of the market value of its total assets in a single issuer. Gintel is also
prohibited from (i) borrowing money except that it may, from time to time,
borrow money to the maximum extent permitted by the Act, from banks at
prevailing interest rates and invest the funds in additional securities, the
13
Fund's borrowings are limited so that, immediately after such borrowings, the
value of the Fund's assets (including borrowings), less its liabilities (not
including borrowings), is at least three times the amount of the borrowings; and
(ii) making loans of money or securities other than (a) through the purchase of
securities in accordance with the Fund's investment objective, and (b) by
lending portfolio securities in an amount not to exceed 10% of the Fund's total
assets. Gintel also may not invest in restricted securities (securities that
must be registered under the Securities Act of 1933, as amended, before they may
be offered and sold to the public).
Portfolio Transactions
Subject to the supervision of the Boards of the Funds, decisions to buy
and sell securities for the Funds are made by the respective investment adviser.
Both Boards have authorized the allocation of brokerage to affiliated
broker-dealers on an agency basis to effect portfolio transactions for the Funds
and both have adopted procedures incorporating the standards of Rule 17e-1 of
the Act (relating to the payment of brokerage commissions to affiliated
broker-dealers). The Board of Gintel has authorized Gintel & Co., LLC, its
administrator and an affiliated broker-dealer, to supervise and to effect a
substantial amount of the portfolio transaction of Gintel's portfolio
transactions. Both the Gintel Adviser and the Tocqueville Adviser are further
authorized to allocate the orders placed by them on behalf of the Funds to
unaffiliated brokers. With respect to the selection of a broker to execute each
particular transaction, the brokerage practices of both Funds are substantially
similar.
Dividends and Distributions
The Funds have elected to be treated as regulated investment companies
under the Code. By qualifying, the Funds generally will not be subject to
federal income tax to the extent they distribute their investment company
taxable income and net capital gains in the manner required under the Code. It
is each Fund's policy to distribute to shareholders substantially all of its net
investment income and net capital gains each year, if any.
Rights of Shareholders
Both of the Funds are Massachusetts business trusts. As Massachusetts
business trusts, the operation of the Funds is governed by their respective
Declaration of Trust and applicable Massachusetts law. Shares of the Funds are
redeemable at their net asset value. The voting rights of both Funds are
substantially the same. The shares of each Fund entitle the holder to one vote
per share on the election of trustees and all other matters submitted to
shareholders. All shares of each class of each such Fund participate equally in
its dividends and distributions and in its net assets on liquidation, and all
shares of each, when issued, are fully paid and non-assessable, freely
transferable and have no preference, pre-emptive or conversion rights. It is
contemplated that neither Fund will hold regular annual meetings of
shareholders.
Advisory Arrangements
The Tocqueville Investment Advisory Agreement provides that the
Tocqueville Adviser identify and analyze possible investments for the Fund,
determine the amount and timing of such investments, and the form of investment.
The Tocqueville Adviser has the responsibility of monitoring and reviewing the
Fund's portfolio, and, on a regular basis, to recommend the ultimate disposition
of such investments. It is the Tocqueville Adviser's responsibility to cause
14
the purchase and sale of securities in the Fund's portfolio, subject at all
times to the policies set forth by Tocqueville's Board of Trustees.
The Gintel Investment Advisory Agreement provides that the Gintel Adviser
shall supervise the investment and reinvestment of the cash, securities or other
properties comprising Gintel's assets, subject at all times to the policies and
controls of the Trustees. The Gintel Adviser is also responsible for decisions
to buy and sell securities for Gintel, broker-dealer selection, and negotiation
of its brokerage commission rates.
The advisory fee for Tocqueville is .75% of the average daily net assets
on the first $500 million and .65% of the average daily net assets in excess of
$500 million. The advisory fee for Gintel is 1.00% of the average daily net
assets.
Pursuant to the Administrative Services Agreement between Tocqueville and
its adviser, the Tocqueville Adviser supervises the administration of all
aspects of Tocqueville's operations, including Tocqueville's receipt of services
for which Tocqueville is obligated to pay, provides Tocqueville with general
office facilities and provides, at Tocqueville's expense, the services of
persons necessary to perform such supervisory, administrative and clerical
functions as are needed to effectively operate Tocqueville.
The Tocqueville Adviser receives a fee from Tocqueville equal to .15% of
average daily net assets under the Administrative Services Agreement.
Pursuant to the Administrative Services Agreement between Gintel and
Gintel & Co., LLC (the "Gintel Administrator"), the Gintel Administrator is
responsible for providing administrative services to Gintel, including but not
limited to paying certain expenses of Gintel, including expenses associated with
maintaining certain books and records of Gintel, assisting in the filing of
Gintel documents, arranging for the printing and mailing of prospectuses,
statements of additional information, proxy statements and other reports or
other materials provided to Gintel's shareholders, the payment of any dividend,
distribution, withdrawal or redemption, whether in shares or in cash, and
various other administrative functions.
The Administrative Services Agreement also permits the Gintel
Administrator, at its sole discretion, to use a portion of its fee, in an amount
not to exceed 0.25% of the Fund's average daily net assets, to compensate itself
as well as certain other registered broker-dealers or financial institutions for
certain shareholder servicing activities. Therefore, the Administrative Services
Agreement also provides that the Gintel Administrator may, from time to time,
pay a shareholder servicing fee to certain registered brokers, including itself
for services provided in connection with the processing of orders for purchase
or redemption of Gintel's shares and certain other persons or entities for
furnishing services to specific shareholder accounts. In addition, the Gintel
Administrator may use income from sources other than its fee to compensate
persons for distribution and shareholder servicing or to pay for other
distribution-related expenses.
In addition, the Gintel Administrator shall be responsible for all
brokerage commissions in connection with the purchase or sale of Gintel's
portfolio securities (excluding applicable transaction costs such as SEC fees,
exchange fees and certain sales and transfer taxes which will be paid by the
Fund). However, brokerage commissions paid on trades executed through
non-affiliated brokers will continue to be paid by Gintel and credited against
the administrative services fee to be paid to the Gintel Administrator.
15
The Gintel Administrator receives a fee from Gintel at the annual rate of
1.25% of the first $50 million of average daily net assets, plus 1.125% of the
next $50 million of average daily net assets, plus 1.0% of the average daily net
assets in excess of $100 million.
Distribution Arrangements
Tocqueville has adopted a Distribution and Service Plan pursuant to 12b-1
under the Act whereby Tocqueville distributes Fund shares through the
Tocqueville Distributor. Under the Plan, the Fund may finance activities which
are primarily intended to result in the sale of the Fund's shares, including,
but not limited to, advertising, printing of prospectuses and reports for other
than existing shareholders, preparation and distribution of advertising material
and sales literature and payments to dealers and shareholder servicing agents
including the Tocqueville Distributor who enter into agreements with the Fund or
its distributor. After the consummation of the Reorganization, it is anticipated
that the Tocqueville Adviser will enter into a shareholder servicing agreement
with the Gintel Adviser whereby the Gintel Adviser will receive .25% of the
average daily net assets in certain accounts for which it provides shareholder
servicing to the Tocqueville Adviser. In addition, the Gintel Adviser will
receive a sub-transfer agency fee from the Tocqueville Adviser on certain assets
of Tocqueville for providing sub-transfer agency services. The Gintel Adviser
will provide these shareholder and sub-transfer agency services to former Gintel
shareholders of Tocqueville to assure an efficient and smooth transition into
Tocqueville after the consummation of the Reorganization. The Gintel Adviser
will continue to provide these services to these Tocqueville shareholders. Both
the shareholder servicing and the sub-transfer agency fees payable to the Gintel
Adviser will be paid by the Tocqueville Adviser and will not be paid from the
assets of Tocqueville.
Gintel has not adopted a Distribution and Service Plan pursuant to Rule
12b-1 under the Act.
Further Information
The Funds file reports and other information with the SEC. Proxy material,
reports and other information about the Funds which are of public record can be
inspected and copied at public reference facilities maintained by the SEC at 450
Fifth Street, N.W., Washington, DC 20549, and at the SEC's regional office at
233 Broadway, New York, New York 10279, and copies of such materials can be
obtained at prescribed rates from the Public Reference Branch, Office of
Consumer Affairs and Information Services, SEC, Washington, DC 20549, or by
e-mailing the SEC at publicinfo@sec.gov.
VOTING MATTERS
Generally
This Combined Prospectus/Proxy Statement is being furnished in connection
with the solicitation of proxies by the Board of Gintel for use at a Special
Meeting of Shareholders (the "Meeting") to be held at the offices of Gintel at 6
Greenwich Office Park, Greenwich, Connecticut, on October 29, 2003, at 9:00 a.m.
or any postponement or adjournment thereof, to approve or disapprove the Plan.
It is expected that the solicitation of proxies will be primarily by the mailing
of this Combined Prospectus/Proxy Statement and the materials accompanying it.
Supplemental solicitations may be made by mail, telephone or personal interviews
by officers and representatives of Gintel. It is anticipated that banks,
broker-dealers and other institutions will be requested to forward proxy
materials to beneficial owners and to obtain authorization for the execution of
proxies. The Advisers may, upon request, reimburse banks, broker-dealers and
other institutions for their expenses in forwarding proxy materials to
beneficial owners.
16
Only shareholders of record of Gintel at the close of business on
September 15, 2003 (the "Record Date"), will be entitled to vote at the Meeting.
As of the Record Date, there were 6,755,757.984 shares of Gintel issued and
outstanding, with each whole share entitled to one vote and each fraction of a
share entitled to a proportionate fraction of a vote.
As of the Record Date, the officers and trustees of Gintel, as a group,
owned 43.65% of the outstanding shares of Gintel.
As of the Record Date, the officers and trustees of Tocqueville, as a
group, owned 4.13% of the outstanding shares of Tocqueville.
As of the Record Date, the following person(s) owned of record or
beneficially 5% or more of the outstanding shares of Gintel:
Nature of
Name and Address % of Ownership Ownership
- ---------------- -------------- ---------
Robert Gintel Florida Intangible Tax Trust 29.32% Record
(Ellen Gerstein & Stephen Stavrides, Trustees)
5 Bay Ridge Road
Key Largo, Florida 33037
Barbara Gintel Florida Intangible Tax Trust 10.19% Record
(Ellen Gerstein & Stephen Stavrides, Trustees)
5 Bay Ridge Road
Key Largo, Florida 33037
As of the Record Date, the following person(s) owned of record or
beneficially 5% or more of the outstanding shares of Tocqueville.
Nature of
Name and Address % of Ownership Ownership
- ---------------- -------------- ---------
RBC Dain Rauscher 6.50% Record
The Bank of Bermuda
6 Front Street
Hamilton HM11 Bermuda
Balsa & Co. 5.91% Record
Mutual Funds Unit
14221 Dallas Parkway
Dallas, Texas 75254
The beneficial owner of 25% or more of a voting security is presumed to
have "control" for purposes of the Act, absent a determination to the contrary
by the SEC. A person who controls the Funds could have effective control over
the outcome of matters submitted to a vote of shareholders of the Funds. Based
on the information provided above, as of the Record Date, the following
person owned a controlling interest in Gintel:
Name and Address % of Ownership
- ---------------- --------------
Robert Gintel Florida Intangible Tax Trust 29.32%
(Ellen Gerstein & Stephen Stavrides, Trustees)
5 Bay Ridge Road
Key Largo, Florida 33037
Based on the information provided above, as of the Record Date, [no
person] owned a controlling interest in Tocqueville.
If the accompanying proxy is executed and returned in time for the
Meeting, the shares covered thereby will be voted in accordance with the
instructions thereon. In the absence of any instructions, such proxy will be
voted to approve the Plan. Any shareholder giving a proxy may revoke it at any
time before the Meeting by submitting to Gintel a written notice of revocation
or a subsequently executed proxy, by attending the Meeting and voting in
person or by touch-tone telephone or the Internet.
If a proxy represents a broker "non-vote" (that is, a proxy from a broker
or nominee indicating that such person has not received instructions from the
beneficial owner or other person entitled to vote shares on a particular matter
with respect to which the broker or nominee does not have discretionary power)
or is marked with an abstention (collectively, "abstentions"), the shares
represented thereby will be considered to be present at the meeting for purposes
of determining the existence of a quorum for the transaction of business. These
broker non-votes and abstentions will not be treated as votes in favor of the
Plan.
Quorum and Adjournments
The presence of the holders of a majority of the outstanding shares of
Gintel, in person or by proxy, constitutes a quorum. However, the mere presence
of a quorum at the Meeting may not
17
be sufficient to approve one or more of the proposals. If at the time any
session of the Meeting is called to order a quorum is not present, in person or
by proxy, the persons named as proxies may vote those proxies which have been
received to adjourn the Meeting to a later date. In the event that a quorum is
present but sufficient votes in favor of one or more of the proposals have not
been received, the persons named as proxies may propose one or more adjournments
of the Meeting to permit further solicitation of proxies with respect to any
such proposal. All such adjournments will require the affirmative vote of a
majority of the shares present in person or by proxy at the session of the
Meeting to be adjourned. The persons named as proxies will vote those proxies
which they are entitled to vote in favor of the proposal, in favor of such an
adjournment, and will vote those proxies required to be voted against the
proposal, against any such adjournment. A vote may be taken on one or more of
the proposals in this proxy statement prior to any such adjournment if
sufficient votes for its approval have been received and it is otherwise
appropriate.
Appraisal Rights
Under the Commonwealth of Massachusetts and the Act, shareholders do not
have any rights of share appraisal. Shareholders have the right to redeem their
shares of Gintel at net asset value at any time until the close of business on
the business day prior to the Closing Date of the Reorganization and,
thereafter, on any business day shareholders may redeem at net asset value their
shares of Tocqueville acquired by them in the Reorganization.
FINANCIAL STATEMENTS
The audited financial statements for the fiscal year ended October 31,
2002, for Tocqueville, contained in Tocqueville's annual report to shareholders,
have been audited by PricewaterhouseCoopers LLP, independent auditors, as stated
in their report, which is incorporated herein by reference. Tocqueville's
unaudited semi-annual report to shareholders for the six months ended April 30,
2003, is also incorporated herein by reference. The audited financial statements
for the fiscal year ended December 31, 2002, for Gintel, contained in Gintel's
2002 annual report to shareholders, have been audited by Eisner LLP, independent
auditors, as stated in their reports, which are incorporated herein by
reference.
OTHER MATTERS
As a Massachusetts business trust, Gintel is not required, and does not
intend, to hold regular annual meetings. Shareholders who wish to present
proposals at any future shareholder meeting must present such proposals to the
Board at a reasonable time prior to the solicitation of any shareholder proxy.
18
The management does not know of any matters to be presented at this
Meeting other than that mentioned in this Proxy Statement. If any matters
properly come before the meeting, the shares represented by proxies will be
voted with respect thereto in accordance with the best judgment of the person or
persons voting the proxies.
By Order of the Board of Trustees
FAY DALLAS-BROWNE, Secretary
September 29, 2003
19
FORM OF PROXY CARD
CONTROL NUMBER:
3 EASY WAYS TO VOTE YOUR PROXY
1. Automated Touch Tone Voting: Call toll-free
1-800-690-6903 and use the control number
shown below:
2. On the Internet at www.proxyweb.com and use
the control number shown below.
3. Return this proxy card using the enclosed
postage-paid envelope.
GINTEL FUND
PROXY FOR SPECIAL SHAREHOLDERS MEETING TO BE HELD OCTOBER 29, 2003
The undersigned shareholder of Gintel Fund, revoking previous proxies, hereby
appoints Stephen G. Stavrides and Fay Dallas-Browne, and each of them, as
attorneys-in-fact and proxies of the undersigned, with full power of
substitution, to attend the Special Meeting of Shareholders of Gintel Fund to be
held on October 29, 2003, at the offices of Gintel Fund, 6 Greenwich Office
Park, Greenwich, Connecticut 06831, at 9:00 a.m., Eastern time, and at all
adjournments thereof, and to vote the shares held in the name of the undersigned
on the record date for said meeting on the proposal specified on reverse side.
As to any other matter, said attorneys-in-fact shall vote in accordance with
their best judgment.
Please mark your proxy, date and sign it below and return it promptly in the
accompanying envelope which requires no postage if mailed in the United States.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR HEREON. When signing as
attorney, executor, administrator, trustee, guardian, etc., please give your
full title as such. Joint owners should each sign this proxy. If account is
registered in the name of a corporation, partnership or other entity, a duly
authorized individual must sign on its behalf and give title.
Date ________________________________________
_____________________________________________
| |
| |
|_____________________________________________|
Signature(s) and Title(s), if applicable
(Sign in the box)
PLEASE FILL IN ONE OF THE BOXES SHOWN USING BLACK OR BLUE INK
OR NUMBER 2 PENCIL. |X|
PLEASE DO NOT USE FINE POINT PENS
- --------------------------------------------------------------------------------
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.
MANAGEMENT RECOMMENDS A VOTE FOR THE PROPOSAL BELOW. THE SHARES REPRESENTED
HEREBY WILL BE VOTED AS INDICATED BELOW OR FOR THE PROPOSAL IF NO CHOICE IS
INDICATED.
Vote on Proposal
To approve the Agreement and Plan of Reorganization and For Against Abstain
Liquidation between The Tocqueville Fund series of The
Tocqueville Trust ("Tocqueville") and Gintel Fund | | | | | |
("Gintel") which contemplates the transfer to
Tocqueville of substantially all the assets and
liabilities of Gintel in exchange for shares of
Tocqueville and the distribution of such shares to the
shareholders of Gintel, the liquidation and dissolution
of Gintel, and the termination of the Gintel's
registration under the Investment Company Act of 1940,
as amended.
In their discretion, the proxies are authorized to vote on such other
business as may properly come before the meeting or any adjournment thereof.
PLEASE SIGN ON REVERSE SIDE
STATEMENT OF ADDITIONAL INFORMATION
Relating to the acquisition of the assets of
GINTEL FUND
6 Greenwich Office Park
Greenwich, Connecticut 06831
by and in exchange for shares of
THE TOCQUEVILLE FUND
series of
THE TOCQUEVILLE TRUST
1675 Broadway
New York, New York 10019
This Statement of Additional Information, relating specifically to the
proposed acquisition of substantially all of the assets of the Gintel Fund
("Gintel") by The Tocqueville Fund series of The Tocqueville Trust
("Tocqueville"), consists of this cover page, pro forma financial statements and
the following described documents, each of which is incorporated by reference
herein:
The Statement of Additional Information of Tocqueville dated February
28, 2003;
The Annual Report of Tocqueville for the year ended October 31, 2002, and
the Semi-Annual Report of Tocqueville for the six months ended April 30, 2003;
and
The Annual Report of Gintel for the year ended December 31, 2002.
This Statement of Additional Information is not a prospectus. A Combined
Proxy Statement/Prospectus dated September 29, 2003, relating to the
above-referenced transaction may be obtained from Tocqueville Asset Management
L.P., 1675 Broadway, New York, New York 10019, (800) 355-7307. This Statement of
Additional Information relates to, and should be read in conjunction with, such
Combined Proxy Statement/Prospectus.
Shown below are financial statements for both Gintel and Tocqueville and
Pro Forma financial statements for the Combined Fund at April 30, 2003 and
October 31, 2002, as though the reorganization occurred as of that date. The
first table presents Statements of Assets and Liabilities (unaudited) for both
Gintel and Tocqueville and Pro Forma figures for the Combined Fund. The second
table presents Statements of Operations (unaudited) for both Gintel and
Tocqueville and Pro Forma figures for the Combined Fund. The third table
presents Portfolio of Investments (unaudited) for both Gintel and Tocqueville
and Pro Forma figures for the Combined Fund. The tables are followed by the
Notes to the Pro Forma Financial Statements (unaudited).
The date of this Statement of Additional Information is September 29,
2003.
PRO FORMA FINANCIAL STATEMENTS
Statements of Assets and Liabilities as of April 30, 2003 (Unaudited)
The Tocqueville
Tocqueville (Pro Forma)
Gintel Fund Fund Adjustments Combined
--------------- -------------- -------------- --------------
Assets
Investments, at value (1) $ 62,551,942 $ 69,465,796 $132,017,738
Cash 354 425 779
Receivable for investments sold 813,141 53,370 866,511
Receivable for fund shares sold - 103,806 103,806
Dividends, interest and other receivables 5,285 58,328 63,613
Prepaid assets - 59,914 59,914
--------------- -------------- -------------- --------------
Total Assets 63,370,722 69,741,639 133,112,361
--------------- -------------- -------------- --------------
Liabilities
Payable for investments purchased - 307,433 307,433
Payable for fund shares redeemed - 58,420 58,420
Payable to Adviser 51,545 47,654 99,199
Accrued distribution fee - 12,005 12,005
Accrued expenses and other liabilities 87,693 51,868 139,561
--------------- -------------- -------------- --------------
Total Liabilities 139,238 477,380 - 616,618
--------------- -------------- -------------- --------------
Net Assets $ 63,231,484 $ 69,264,259 $ - $132,495,743
--------------- -------------- -------------- --------------
Net assets consisted of:
Paid in capital 114,198,168 67,364,315 181,562,483
Accumulated net investment income (loss) (1,740,885) 151,685 (1,589,200)
Accumulated net realized loss (50,490,269) (532,724) (51,022,993)
Net unrealized appreciation on: -
Investments 1,264,470 2,280,983 3,545,453
--------------- -------------- -------------- --------------
Net assets $ 63,231,484 $ 69,264,259 - $132,495,743
--------------- -------------- -------------- --------------
Shares of beneficial interest outstanding
(unlimited shares of $0.01 par value authorized) 7,096,194 4,954,890 (2,573,198) 9,477,886
Net asset value, offering and redemption price per share $ 8.91 $ 13.98 $ 13.98
--------------- -------------- -------------- --------------
(1) Cost of Investments $ 61,350,138 $ 67,184,813 $128,534,951
See Notes to Pro Forma Financial Statements (Unaudited)
Statements of Operations for the six months ended April 30, 2003 (Unaudited)
Tocqueville
The Tocqueville (Pro Forma)
Gintel Fund Fund Adjustments Combined
--------------- -------------- -------------- --------------
Investment Income:
Dividends* $ 56,962 $ 598,382 $ - $ 655,344
Interest 391,905 11,288 - 403,193
Other Income 18,187 - - 18,187
--------------- -------------- -------------- --------------
467,054 609,670 - 1,076,724
--------------- -------------- -------------- --------------
Expenses:
Investment Adviser's fee 314,582 253,982 (70,553) 498,011
Custody fees - 16,131 749 16,880
Fund accounting fees - 18,549 (1,992) 16,557
Transfer agent and shareholder services - 28,069 28,069
Professional fees - 19,258 19,258
Distribution fees - 84,661 81,343 166,004
Administration fee 306,384 50,796 (257,578) 99,602
Printing and mailing expense - 1,224 1,224
Registration fees - 12,614 12,614
Trustee fees and expenses 27,521 4,524 (27,521) 4,524
Insurance expense - 3,439 3,439
Other 1,488 - 1,488
--------------- -------------- -------------- --------------
Total expenses before waivers 649,975 493,247 (275,552) 867,670
Less: Fees waived - (19,190) 19,190 -
--------------- -------------- -------------- --------------
Net expenses 649,975 474,057 (256,362) 867,670
--------------- -------------- -------------- --------------
Net Investment Income(Loss) (182,921) 135,613 256,362 209,054
Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments 506,591 (486,228) - 20,363
Net change in unrealized appreciation on:
Investments 2,254,256 3,199,302 - 5,453,558
--------------- -------------- -------------- --------------
Net gain on investments 2,760,847 2,713,074 - 5,473,921
--------------- -------------- -------------- --------------
Net Increase in Net Assets Resulting from
Operations $ 2,577,926 $ 2,848,687 256,362 $ 5,682,975
--------------- -------------- -------------- --------------
* Net of Foreign Taxes Withheld $ - $ - - $ -
--------------- -------------- -------------- --------------
Portfolio of Investments as of April 30, 2003 (Unaudited)
Tocqueville
Gintel Tocqueville Proforma
Common Stocks - 59.4% Shares Value Shares Value Shares Value
- ---------------------- ------ ----- ------ ----- ------ -----
Advertising - 0.8%
The Interpublic Group of Companies, Inc. 100,000 1,140,000 100,000 1,140,000
---------- ---------- ----------
1,140,000 1,140,000
Beverages - 0.6%
The Coca-Cola Company 20,000 808,000 20,000 808,000
---------- ---------- ----------
808,000 808,000
Chemical/Industrial - 2.4%
The Dow Chemical Company 10,000 326,400 10,000 326,400
E.I du Pont de Nemours and Company 25,000 1,063,250 25,000 1,063,250
Olin Corporation 100,000 1,812,000 100,000 1,812,000
---------- ---------- ----------
326,400 2,875,250 3,201,650
Communications - 1.2%
Tellabs, Inc. 250,000 1,545,000 250,000 1,545,000
---------- ---------- ----------
1,545,000 1,545,000
Computers - 0.2%
Sun Microsystems, Inc. 70,000 231,000 70,000 231,000
---------- ---------- ----------
231,000 231,000
Consumer Products - 0.6%
Colgate-Palmolive Company 15,000 857,550 15,000 857,550
---------- ---------- ----------
857,550 857,550
Data Storage - 2.7%
EMC Corporation 400,000 3,636,000 400,000 3,636,000
---------- ---------- ----------
3,636,000 3,636,000
Drilling Equipment - 2.9%
Tesco Corporation 200,000 2,120,000 200,000 2,120,000
Varco International, Inc. 100,000 1,759,000 100,000 1,759,000
---------- ---------- ----------
3,879,000 3,879,000
Eating and Drinking Places - 1.3%
McDonald's Corporation 100,000 1,710,000 100,000 1,710,000
---------- ---------- ----------
1,710,000 1,710,000
Electric, Gas and Sanitary Services - 2.8%
FPL Group, Inc. 40,000 2,434,800 40,000 2,434,800
Hawaiian Electric Industries, Inc. 30,000 1,240,500 30,000 1,240,500
---------- ---------- ----------
3,675,300 3,675,300
Portfolio of Investments as of April 30, 2003 (Unaudited)
Tocqueville
Gintel Tocqueville Proforma
Common Stocks - 59.4% Shares Value Shares Value Shares Value
- ---------------------- ------ ----- ------ ----- ------ -----
Energy - 0.7%
Exxon Mobil Corporation 25,000 880,000 25,000 880,000
---------- ---------- ----------
880,000 880,000
Financial - 1.6%
American Express Company 20,000 757,200 20,000 757,200
J.P. Morgan Chase & Co. 17,500 513,625 17,500 513,625
SouthTrust Corporation 30,000 805,830 30,000 805,830
---------- ---------- ----------
2,076,655 2,076,655
Furniture & Fixtures - 0.7%
Steelcase Inc. 100,000 959,000 100,000 959,000
---------- ---------- ----------
959,000 959,000
Healthcare - 1.7%
Humana Inc. 200,000 2,210,000 200,000 2,210,000
---------- ---------- ----------
2,210,000 2,210,000
Industrial Equipment - 1.9%
Federal Signal Corporation 75,000 1,296,000 75,000 1,296,000
Honeywell International Inc. 50,000 1,180,000 50,000 1,180,000
---------- ---------- ----------
2,476,000 2,476,000
Insurance/Reinsurance Carriers - 4.2%
The Allstate Corporation 50,000 1,889,500 50,000 1,889,500
IPC Holdings, Ltd. 70,000 2,404,500 70,000 2,404,500
Unitrin, Inc. 50,000 1,235,500 50,000 1,235,500
---------- ---------- ----------
5,529,500 5,529,500
Investment Management/Advisory Services - 0.4%
Alliance Capital Management Holding L.P. 15,000 478,200 15,000 478,200
---------- ---------- ----------
478,200 478,200
Machine Tools & Related Products - 0.9%
Kennametal Inc. 40,000 1,259,600 40,000 1,259,600
---------- ---------- ----------
1,259,600 1,259,600
Mail Systems/Technology - 0.3%
Pitney Bowes Inc. 10,000 351,100 10,000 351,100
---------- ---------- ----------
351,100 351,100
Media - 1.0%
Viacom Inc. - Class A 20,000 868,400 20,000 868,400
Viacom Inc. - Class B 10,000 434,100 10,000 434,100
---------- ---------- ----------
1,302,500 1,302,500
Medical Instruments - 0.1%
Milestone Scientific Inc. 555,000 116,550 555,000 116,550
---------- ---------- ----------
116,550 116,550
Metal Mining - 5.9%
Alcoa Inc. 75,000 1,719,750 75,000 1,719,750
Inco Limited 100,000 1,838,000 100,000 1,838,000
Portfolio of Investments as of April 30, 2003 (Unaudited)
Tocqueville
Gintel Tocqueville Proforma
Common Stocks - 59.4% Shares Value Shares Value Shares Value
- ---------------------- ------ ----- ------ ----- ------ -----
Newmont Mining Corporation 100,000 2,702,000 100,000 2,702,000
Phelps Dodge Corporation 50,000 1,559,500 50,000 1,559,500
---------- ---------- ----------
7,819,250 7,819,250
Money Center Banks - 3.0%
The Bank of New York Company, Inc. 100,000 2,645,000 100,000 2,645,000
Mitsubishi Tokyo Financial Group, Inc. (MFTG) 400,000 1,408,000 400,000 1,408,000
---------- ---------- ----------
4,053,000 4,053,000
Oil & Gas Exploration and Production - 2.0%
Devon Energy Corporation 12,420 586,845 12,420 586,845
Murphy Oil Corporation 50,000 2,082,500 50,000 2,082,500
---------- ---------- ----------
2,669,345 2,669,345
Oil & Gas Extraction - 1.1%
Core Laboratories N.V. 150,000 1,500,000 150,000 1,500,000
---------- ---------- ----------
1,500,000 1,500,000
Paper and Allied Products - 2.1%
Temple-Inland Inc. 50,000 2,265,000 50,000 2,265,000
Weyerhaeuser Company 10,000 495,900 10,000 495,900
---------- ---------- ----------
2,760,900 2,760,900
Petroleum Refining - 0.5%
ChevronTexaco Corporation 10,000 628,100 10,000 628,100
---------- ---------- ----------
628,100 628,100
Pharmaceuticals - 2.9%
Bristol-Myers Squibb Company 50,000 1,277,000 50,000 1,277,000
Merck & Co. Inc. 25,000 1,454,500 25,000 1,454,500
Onyx Pharmaceuticals, Inc. 40,000 357,600 40,000 357,600
Pfizer Inc. 25,000 768,750 25,000 768,750
---------- ---------- ----------
768,750 3,089,100 3,857,850
Pumps & Valves - 0.9%
Flowserve Corporation 75,000 1,158,000 75,000 1,158,000
---------- ---------- ----------
1,158,000 1,158,000
Retail-Building Products - 1.1%
The Home Depot, Inc. 50,000 1,406,500 50,000 1,406,500
---------- ---------- ----------
1,406,500 1,406,500
Retail-Pharmacy - 0.6%
Walgreen Co. 25,000 771,500 25,000 771,500
---------- ---------- ----------
771,500 771,500
Semi-Conductor Equipment - 0.3%
KLA-Tencor Corporation 10,000 410,000 10,000 410,000
---------- ---------- ----------
410,000 410,000
Software - 2.7%
Autodesk, Inc. 100,000 1,556,000 100,000 1,556,000
Microsoft Corporation 50,000 1,278,000 50,000 1,278,000
Portfolio of Investments as of April 30, 2003 (Unaudited)
Tocqueville
Gintel Tocqueville Proforma
Common Stocks - 59.4% Shares Value Shares Value Shares Value
- ---------------------- ------ ----- ------ ----- ------ -----
Systems & Computer Technology Corporation 100,000 717,000 100,000 717,000
---------- ---------- ----------
3,551,000 3,551,000
Technology - 2.4%
CheckFree Corp. 100,000 2,757,000 100,000 2,757,000
Universal Display Corporation 50,000 489,500 50,000 489,500
---------- ---------- ----------
2,757,000 489,500 3,246,500
Toy Manufacturing - 1.6%
Mattel, Inc. 100,000 2,174,000 100,000 2,174,000
---------- ---------- ----------
2,174,000 2,174,000
Transportation Equipment - 1.7%
The Boeing Company 50,000 1,364,000 50,000 1,364,000
Northrop Grumman Corporation 10,000 879,500 10,000 879,500
---------- ---------- ----------
2,243,500 2,243,500
Wireless Mobile Computing Systems - 1.2%
Symbol Technologies, Inc. 145,000 1,584,850 145,000 1,584,850
---------- ---------- ----------
1,584,850 1,584,850
Wireless Networking Equipment - 0.4%
InterDigital Communications Corporation 10,000 225,300 10,000 225,300
Proxim Corporation 506,325 344,301 506,325 344,301
---------- ---------- ----------
569,601 569,601
- ------------------------------------------------------------------------------------------------------------------------------------
Total Common Stocks (Cost $75,243,714) 10,024,705 68,701,796 78,726,501
- ------------------------------------------------------------------------------------------------------------------------------------
Tocqueville
Gintel Fund Tocqueville Proforma
Principal Value Principal Value Principal Value
Short-Term Investments - 40.2%
GE Capital Corp. Commercial Paper, 1.23%, 5/1/03 2,500,000 2,500,000 2,500,000 2,500,000
Repurchase Agreement with U.S. Bank, N.A.,
1.05%, dated 4/30/03, due 5/1/03, collateralized by
a U.S. Treasury Note valued at $779,027.
Repurchase proceeds of $764,022 (cost $764,000). 764,000 764,000 764,000 764,000
U.S. Treasury Bill - 1.40% 5/1/03 14,012,000 14,012,000 14,012,000 14,012,000
U.S. Treasury Bill - 1.145% 5/8/03 12,010,000 12,007,548 12,010,000 12,007,548
U.S. Treasury Bill - 1.24% 5/15/03 10,008,000 10,004,108 10,008,000 10,004,108
U.S. Treasury Bill - 1.20% 5/22/03 14,012,000 14,003,581 14,012,000 14,003,581
- ------------------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (Cost $53,291,237) 52,527,237 764,000 53,291,237
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments (Cost $128,534,951) - 99.6% 62,551,942 69,465,796 132,017,738
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Other Assets less Liabilities - 0.4% 679,542 (201,537) 478,005
- ------------------------------------------------------------------------------------------------------------------------------------
Total Net Assets - 100.0% 63,231,484 69,264,259 132,495,743
===== ============ =========== ============
Notes to the Pro Forma Financial Statements April 30, 2003 (Unaudited)
1. BASIS OF COMBINATION
The Pro Forma Combined Statement of Assets and Liabilities, including the
Portfolio of Investments ("Pro Forma Statements") as of April 30, 2003, and
the related Combined Statement of Operations for the six months ended April 30,
2003, reflect the accounts of The Tocqueville Fund series of The Tocqueville
Trust ("Tocqueville") and Gintel Fund ("Gintel"). The Pro Forma Combined
Statement of Assets and Liabilities has been restated to reflect a tax free
exchange of Gintel shares as of the close of business on April 30, 2003.
Tocqueville's adviser, Tocqueville Asset Management L.P., and Gintel's adviser,
Gintel & Co., LLC, will equally pay all the costs associated with the
reorganization except for the legal expenses which will be paid solely by
Tocqueville Asset Management L.P.
The Pro Forma Statements give effect to the proposed transfer of
substantially all assets and liabilities of Gintel in exchange for shares of
Tocqueville. In conjunction with the reorganization, Tocqueville is the
surviving fund.
The Pro Forma Statements should be read in conjunction with the historical
financial statements of Tocqueville and Gintel included in their respective
Statements of Additional Information.
2. VALUATION
Investments in securities, including foreign securities, traded on an
exchange or quoted on the over-the-counter market are valued at the last sale
price or, if no sale occurred during the day, at the mean between closing bid
and asked prices, as last reported by a pricing service approved by the
Trustees. When market quotations are not readily available, or when restricted
securities or other assets are being valued, such assets are valued at fair
value as determined in good faith by or under procedures established by the
Trustees. Short-term investments are stated at cost which, together with accrued
interest, approximates fair value.
3. CAPITAL SHARES
The Pro Forma Combined net asset value per share assumes the issuance of
additional shares of Tocqueville which would have been issued at April 30, 2003,
in connection with the proposed reorganization. The amount of additional shares
assumed to be issued was calculated based on the April 30, 2003, net asset
value per share of Tocqueville ($13.98).
The Pro Forma number of shares outstanding are determined as follows:
Shares of
Tocqueville: 4,954,890
Additional Shares to
be issued to Gintel: 4,522,996
Pro Forma
Shares Outstanding: 9,477,886
7
The Pro Forma Statements assume that all shares of Gintel outstanding on
April 30, 2003, were exchanged, tax free, for shares of Tocqueville.
4. PRO FORMA OPERATING EXPENSES
The Pro Forma Statement of Operations assumes expense adjustments based on
the agreements of Tocqueville, the surviving entity. Certain accounts have been
adjusted to reflect the expenses of the combined entity more closely. Pro Forma
operating expenses include the expenses of Tocqueville and Gintel combined,
adjusted for certain items which are factually supportable. All fees other than
the Trustee fees and expenses have been charged to the combined entity based
upon the contracts, in effect for Tocqueville at the level of assets of the
combined fund for the stated period.
8
PRO FORMA FINANCIAL STATEMENTS
Statements of Assets and Liabilities as of October 31, 2002 (Unaudited)
The Tocqueville
Tocqueville (Pro Forma)
Gintel Fund Fund Adjustments Combined
----------- ----------- ----------- -----------
Assets
Investments, at value(1) $65,272,217 $71,175,430 $136,447,647
Cash 743 - 743
Receivable for investments
sold 43,854 761,792 805,646
Receivable for fund shares
sold - 190,430 190,430
Dividends, interest and other
receivables 2,084 42,065 44,149
Prepaid assets - 13,177 13,177
----------- ----------- ----------- -------------
Total Assets 65,318,898 72,182,894 $137,501,792
----------- ----------- ----------- -------------
Liabilities
Payable for investments
purchased - 1,790,068 1,790,068
Payable for fund shares
redeemed - 51,000 51,000
Payable to Adviser 53,909 79,795 133,704
Accrued distribution fee - 28,490 28,490
Accrued expenses and other
liabilities 87,515 99,639 187,154
----------- ----------- ----------- -------------
Total Liabilities 141,424 2,048,992 2,190,416
----------- ----------- ----------- -------------
Net Assets $65,177,474 $70,133,902 $135,311,376
----------- ----------- ----------- -------------
Net assets consisted of:
Paid in capital 118,751,001 76,938,473 195,689,474
Accumulated net investment
income (loss) (1,556,881) - (1,556,881)
Accumulated net realized gain
(loss) (51,243,860) (5,886,252) (57,130,112)
Net unrealized appreciation
(depreciation) on: -
Investments (772,786) (918,319) (1,691,105)
----------- ----------- ----------- -------------
Net assets $65,177,474 $70,133,902 $135,311,376
----------- ----------- ----------- -------------
Shares of beneficial interest
outstanding (unlimited
shares of $0.01 par value
authorized) 7,621,462 5,226,933 (2,764,720) 10,083,675
Net asset value, offering and
redemption price per share $ 8.55 $ 13.42 $ 13.42
----------- ----------- ----------- -------------
(1)Cost of Investments $66,293,002 $72,093,749 $138,386,751
See Notes to Pro Forma Financial Statements (Unaudited)
2
Statements of Operations for the twelve months ended October 31, 2002 (Unaudited)
The Tocqueville
Tocqueville (Pro Forma)
Gintel Fund Fund Adjustments Combined
----------- ----------- ----------- -----------
Investment Income:
Dividends* $ 47,781 $ 789,067 $ - $ 836,848
Interest 1,286,222 23,125 - 1,309,347
Other Income 42,003 - - 42,003
----------- ----------- --------- ---------
1,376,006 812,192 - 2,188,198
----------- ----------- --------- ---------
Expenses:
Investment Adviser's fee 878,504 454,990 (269,217) 1,064,277
Custody fees - 13,464 22,117 35,581
Fund accounting fees - 23,824 10,166 33,990
Transfer agent and shareholder
services - 33,583 33,583
Professional fees - 39,410 39,410
Distribution fees - 151,664 203,095 354,759
Administration fee 1,050,842 90,999 (928,986) 212,855
Printing and mailing expense - 12,339 12,339
Registration fees - 20,366 20,366
Trustee fees and expenses 55,498 8,383 (55,498) 8,383
Insurance expense - 4,211 4,211
Other 66,750 393 67,143
----------- ----------- --------- ---------
Total expenses before waivers 2,051,594 853,626 (1,018,323) 1,886,897
Less: Fees waived - (4,436) 4,436 -
----------- ------------ --------- ---------
Net expenses 2,051,594 849,190 (1,013,887) 1,886,897
----------- ----------- ----------- ---------
Net Investment Income (Loss) (675,588) (36,998) 1,013,887 301,301
----------- ----------- --------- ---------
Realized and Unrealized Gain
(Loss):
Net realized gain (loss) on
investments (53,729,035) (46,399) - (53,775,434)
Net change in unrealized
appreciation (depreciation)
on:
Investments 37,414,134 (10,396,836) - 27,017,298
----------- ---------- ---------- -----------
Net gain (loss) on
investments (16,314,901) (10,443,235) - (26,758,136)
----------- ----------- --------- -----------
Net Increase (Decrease) in Net
Assets Resulting from
Operations $(16,990,489)$(10,480,233) 1,013,887 $(26,456,835)
------------ ------------ --------- -----------
*Net of Foreign Taxes
Withheld $ - $ 4,806 $ - $ 4,806
------------ ------------ -------- -----------
See Notes to Pro Forma Financial Statements (Unaudited)
3
Portfolio of Investments as of October 31, 2002 (Unaudited)
Tocqueville
Gintel Fund Tocqueville Proforma
Shares Value Shares Value Shares Value
------ ----- ------ ----- ------ -----
Common Stocks - 56.2%
- ----------------------
Advertising - 1.6%
The Interpublic Group of
Companies, Inc. $ 110,000 $1,316,700 110,000 $1,316,700
Viacom Inc. - Class A 10,000 445,900 10,000 445,900
Viacom Inc. - Class B 10,000 446,100 10,000 446,100
---------- ---------- -----------
2,208,700 2,208,700
Biotechnology - 0.0%
Thermogenesis Corp. 15,000 18,600 15,000 18,600
---------- ---------- -----------
18,600 18,600
Business Services - 0.2%
Optimal Robotics Corp. 50,000 310,500 50,000 310,500
---------- ---------- -----------
310,500 310,500
Chemical/Industrial - 2.2%
E.I du Pont de Nemours and
Company 25,000 1,031,250 25,000 1,031,250
Olin Corporation 120,000 1,951,200 120,000 1,951,200
---------- ---------- -----------
2,982,450 2,982,450
Communications - 2.0%
AT&T Corp. 90,000 1,173,600 90,000 1,173,600
Tellabs, Inc. 200,000 1,536,000 200,000 1,536,000
---------- ---------- -----------
2,709,600 2,709,600
Data Storage - 1.9%
EMC Corporation 500,000 2,555,000 500,000 2,555,000
---------- ---------- -----------
2,555,000 2,555,000
Drilling Equipment - 1.2%
Varco International, Inc. 100,000 1,644,000 100,000 1,644,000
---------- ---------- -----------
1,644,000 1,644,000
Eating and Drinking Places - 1.0%
McDonald's Corporation 75,000 1,358,250 75,000 1,358,250
---------- ---------- -----------
1,358,250 1,358,250
Education - 0.7%
Systems & Computer
Technology Corporation 100,000 942,000 100,000 942,000
---------- ---------- -----------
942,000 942,000
Electric, Gas and Sanitary
Services - 2.5%
FPL Group, Inc. 40,000 2,359,200 40,000 2,359,200
Hawaiian Electric Industries, Inc. 20,000 957,400 20,000 957,400
---------- ---------- -----------
3,316,600 3,316,600
Energy - 0.8%
Anadarko Petroleum
Corporation 10,000 445,400 10,000 445,400
ChevronTexaco Corporation 5,000 338,150 5,000 338,150
ConocoPhillips 5,000 242,500 5,000 242,500
---------- ---------- ----------
1,026,050 1,026,050
Entertainment - 1.1%
Imax Corporation 300,000 1,497,000 300,000 1,497,000
---------- ---------- ----------
1,497,000 1,497,000
Financial Institutions - 0.3%
Net.B@nk, Inc. 40,000 395,200 40,000 395,200
---------- ---------- ----------
395,200 395,200
Freight - 0.9%
Alexander & Baldwin, Inc. 50,000 1,162,550 50,000 1,162,550
---------- ---------- ----------
1,162,550 1,162,550
Furniture & Fixtures - 0.7%
Steelcase Inc. 100,000 911,000 100,000 911,000
---------- ---------- ----------
911,000 911,000
Industrial Equipment - 0.9%
Honeywell International Inc. 50,000 1,197,000 50,000 1,197,000
---------- ---------- ----------
1,197,000 1,197,000
4
Tocqueville
Gintel Fund Tocqueville Proforma
Shares Value Shares Value Shares Value
------ ----- ------ ----- ------ -----
Insurance Agents, Brokers
and Services - 1.8%
Humana Inc. 200,000 2,436,000 200,000 2,436,000
---------- ---------- ----------
2,436,000 2,436,000
Insurance/Reinsurance
Carriers - 4.9%
The Allstate Corporation 50,000 1,989,000 50,000 1,989,000
American International
Group, Inc. 15,000 938,250 15,000 938,250
IPC Holdings, Ltd. 70,000 2,181,900 70,000 2,181,900
Unitrin, Inc. 50,000 1,575,000 50,000 1,575,000
---------- ---------- ----------
6,684,150 6,684,150
Medical Instruments - 0.1%
Milestone Scientific Inc. 555,000 166,500 555,000 166,500
---------- ---------- ----------
166,500 166,500
Metal Mining - 4.6%
Inco Limited 115,000 2,196,500 115,000 2,196,500
Newmont Mining Corporation 100,000 2,472,000 100,000 2,472,000
Phelps Dodge Corporation 50,000 1,551,000 50,000 1,551,000
---------- ---------- ----------
6,219,500 6,219,500
Money Center Banks - 4.0%
Bank of America Corporation 40,000 2,792,000 40,000 2,792,000
The Bank of New York
Company, Inc. 25,000 650,000 25,000 650,000
Mitsubishi Tokyo
Financial Group, Inc. (MFTG) 300,000 1,923,000 300,000 1,923,000
---------- ---------- ----------
5,365,000 5,365,000
Non-Depository Credit
Institutions - 0.7%
American Express Company 25,000 909,250 25,000 909,250
---------- ---------- ----------
909,250 909,250
Oil & Gas Extraction - 1.6%
Ivanhoe Energy Inc. 300,000 180,000 300,000 180,000
Tesco Corporation 206,900 2,017,275 206,900 2,017,275
---------- ---------- ----------
2,197,275 2,197,275
Paper and Allied Products - 1.5%
Temple-Inland Inc. 50,000 2,051,000 50,000 2,051,000
---------- ---------- ----------
2,051,000 2,051,000
Petroleum Refining - 3.1%
Core Laboratories NV 130,000 1,225,900 130,000 1,225,900
Murphy Oil Corporation 35,000 2,934,050 35,000 2,934,050
---------- ---------- ----------
4,159,950 4,159,950
Pharmaceuticals - 2.1%
Bristol-Myers Squibb
Company 43,500 1,070,535 43,500 1,070,535
Merck & Co. Inc. 20,000 1,084,800 20,000 1,084,800
Schering-Plough Corporation 35,000 747,250 35,000 747,250
---------- ---------- ----------
2,902,585 2,902,585
Primary Metal Industries - 1.2%
Alcoa Inc. 75,000 1,654,500 75,000 1,654,500
---------- ---------- ----------
1,654,500 1,654,500
Pumps & Valves - 0.3%
Flowserve Corporation 40,000 468,800 40,000 468,800
---------- ---------- ----------
468,800 468,800
Software - 2.4%
Adobe Systems Incorporated 30,000 709,200 30,000 709,200
Autodesk, Inc. 100,000 1,170,000 100,000 1,170,000
Microsoft Corporation 25,000 1,336,750 25,000 1,336,750
---------- ---------- ----------
3,215,950 3,215,950
Technology - 6.1%
CheckFree Corp. 475,000 7,733,000 475,000 7,733,000
Universal Display Corporation 60,000 540,600 60,000 540,600
---------- ---------- ----------
7,733,000 540,600 8,273,600
5
Tocqueville
Gintel Fund Tocqueville Proforma
Shares Value Shares Value Shares Value
------ ----- ------ ----- ------ -----
Toy Manufacturing - 1.4%
Mattel, Inc. 100,000 1,836,000 100,000 1,836,000
---------- ---------- ----------
1,836,000 1,836,000
Transportation Equipment - 1.3%
The Boeing Company 60,000 1,785,000 60,000 1,785,000
---------- ---------- ----------
1,785,000 1,785,000
Wireless Mobile Computing
Systems - 0.9%
Symbol Technologies, Inc. 145,000 1,254,250 145,000 1,254,250
---------- ---------- ----------
1,254,250 1,254,250
Wireless Networking
Equipment - 0.2%
Proxim Corporation 250,000 212,500 250,000 212,500
---------- ---------- ----------
212,500 212,500
- -------------------------------------------------------------------------------------------------------------
Total Common Stocks
(Cost $76,598,169) 10,836,350 65,189,960 76,026,310
- -------------------------------------------------------------------------------------------------------------
Principal Principal Principal
Fixed Income Securities - 0.1% Amount Amount Amount
------ ------ ------
Conseco Inc., 8.50%,10/15/2049 1,500,000 131,250 1,500,000 131,250
- -------------------------------------------------------------------------------------------------------------
Total Fixed Income Securities
(Cost $1,500,000) 131,250 131,250
- -------------------------------------------------------------------------------------------------------------
Tocqueville
Gintel Fund Tocqueville Proforma
Principal Value Principal Value Principal Value
--------- ----- ----------- ----- --------- -----
Short-Term Investments - 44.5%
GE Capital Corp. Commercial
Paper, 1.72%, 11/1/02 1,765,000 1,765,000 1,765,000 1,765,000
Repurchase Agreement with U.S.
Bank, N.A.,
1.15%, dated 10/31/02, due
11/01/02, collateralized by
U.S. Treasury Note valued at
$1,441,233.
Repurchase proceeds of
$1,413,045 (cost $1,413,000). 1,413,000 1,413,000 1,413,000 1,413,000
U.S. Treasury Bill - 1.85%
11/7/02 11,013,000 11,010,284 11,013,000 11,010,284
U.S. Treasury Bill - 1.87%
11/14/02 18,022,000 18,012,043 18,022,000 18,012,043
U.S. Treasury Bill - 1.90%
11/21/02 13,517,000 13,505,360 13,517,000 13,505,360
U.S. Treasury Bill - 1.89%
11/29/02 10,023,000 10,011,930 10,023,000 10,011,930
U.S. Treasury Bill - 1.70%
1/23/03 300,000 299,025 300,000 299,025
U.S. Treasury Bill - 1.60%
3/27/03 2,300,000 2,287,221 2,300,000 2,287,221
U.S. Treasury Bill - 1.40%
5/1/03 2,000,000 1,986,224 2,000,000 1,986,224
- ------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments
(Cost $60,288,582) 54,304,617 5,985,470 60,290,087
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Total Investments
(Cost $138,386,751) - 100.8% 65,272,217 71,175,430 136,447,647
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Liabilities, less Other Assets - (0.8%) (94,743) (1,041,528) (1,136,271)
- ------------------------------------------------------------------------------------------------------------------
Total Net Assets - 100.0% $65,177,474 $70,133,902 $135,311,376
=========== =========== ============
See Notes to Pro Forma Financial Statements (Unaudited)
6
Notes to the Pro Forma Financial Statements October 31, 2002 (Unaudited)
1. BASIS OF COMBINATION
The Pro Forma Combined Statement of Assets and Liabilities, including the
Portfolio of Investments ("Pro Forma Statements") as of October 31, 2002, and
the related Combined Statement of Operations for the twelve months ended October
31, 2002, reflect the accounts of The Tocqueville Fund series of The Tocqueville
Trust ("Tocqueville") and Gintel Fund ("Gintel"). The Pro Forma Combined
Statement of Assets and Liabilities has been restated to reflect a tax free
exchange of Gintel shares as of the close of business on October 31, 2002.
Tocqueville's adviser, Tocqueville Asset Management L.P., and Gintel's adviser,
Gintel & Co., LLC, will equally pay all the costs associated with the
reorganization except for the legal expenses which will be paid solely by
Tocqueville Asset Management L.P.
The Pro Forma Statements give effect to the proposed transfer of
substantially all assets and liabilities of Gintel in exchange for shares of
Tocqueville. In conjunction with the reorganization, Tocqueville is the
surviving fund.
The Pro Forma Statements should be read in conjunction with the historical
financial statements of Tocqueville and Gintel included in their respective
Statements of Additional Information.
2. VALUATION
Investments in securities, including foreign securities, traded on an
exchange or quoted on the over-the-counter market are valued at the last sale
price or, if no sale occurred during the day, at the mean between closing bid
and asked prices, as last reported by a pricing service approved by the
Trustees. When market quotations are not readily available, or when restricted
securities or other assets are being valued, such assets are valued at fair
value as determined in good faith by or under procedures established by the
Trustees. Short-term investments are stated at cost which, together with accrued
interest, approximates fair value.
3. CAPITAL SHARES
The Pro Forma Combined net asset value per share assumes the issuance of
additional shares of Tocqueville which would have been issued at October 31,
2002, in connection with the proposed reorganization. The amount of additional
shares assumed to be issued was calculated based on the October 31, 2002, net
asset value per share of Tocqueville ($13.42).
The Pro Forma number of shares outstanding are determined as follows:
Shares of
Tocqueville: 5,226,933
Additional Shares to
be issued to Gintel: 4,855,700
Pro Forma
Shares Outstanding: 10,082,633
7
The Pro Forma Statements assume that all shares of Gintel outstanding on
October 31, 2002, were exchanged, tax free, for shares of Tocqueville.
4. PRO FORMA OPERATING EXPENSES
The Pro Forma Statement of Operations assumes expense adjustments based on
the agreements of Tocqueville, the surviving entity. Certain accounts have been
adjusted to reflect the expenses of the combined entity more closely. Pro Forma
operating expenses include the expenses of Tocqueville and Gintel combined,
adjusted for certain items which are factually supportable. All fees other than
Trustee fees and expenses have been charged to the combined entity based upon
the contracts in effect for Tocqueville at the level of assets of the combined
fund for the stated period.
8
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION
AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION dated this 26th day
of August, 2003, by and between Gintel Fund (the "Fund"), a Massachusetts
business trust, and The Tocqueville Fund series of The Tocqueville Trust (the
"Trust"), a Massachusetts business trust.
W I T N E S S E T H:
WHEREAS, the parties are each open-end investment management
companies; and
WHEREAS, the parties hereto desire to provide for the acquisition by
the Trust of substantially all of the assets and liabilities of the Fund solely
in exchange for shares of beneficial interest (par value $.01) ("shares") of the
Trust, which shares of the Trust will thereafter be distributed by the Fund pro
rata to its shareholders in complete liquidation and complete cancellation of
its shares;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties agree as follows:
1. The parties hereto hereby adopt an Agreement and Plan of
Reorganization and Liquidation (the "Agreement") pursuant to Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code") as follows: The
reorganization will be comprised of the acquisition by the Trust of
substantially all of the properties, assets and liabilities of the Fund, except
for the outstanding claims of the Fund arising out of the settlement of the In
Re Conseco, Inc. Securities Litigation, which will be retained by the Fund for
the benefit of its shareholders, solely in exchange for shares of the Trust,
followed by the distribution of such Trust shares to the shareholders of the
Fund in exchange for their shares of the Fund, and the liquidation and
dissolution of the Fund all upon and subject to the terms of the Agreement
hereinafter set forth.
The share transfer books of the Fund will be permanently closed on
the Valuation Date (as hereinafter defined) and only redemption requests made by
shareholders of the Fund pursuant to Section 22(e) of the Investment Company Act
of 1940 (the "Act") received in proper form on or prior to the close of business
on the Valuation Date shall be fulfilled by the Fund; redemption requests
received by the Fund after that date shall be treated as requests for the
redemption of the shares of the Trust to be distributed to the shareholder in
question as provided in Section 5.
2. On the Closing Date (as hereinafter defined), substantially all
of the assets and liabilities of the Fund on that date shall be delivered to the
Trust and the number of shares of the Trust having an aggregate net asset value
equal to the value of the assets of the Fund will be transferred and delivered
to the Fund.
3. The net asset value of shares of the Trust and the value of the
assets of the Fund to be transferred shall in each case be determined as of the
close of business of the New York Stock Exchange on the Valuation Date. The
computation of the net asset value of the shares of the Trust and the Fund shall
be done in the manner used by the Trust and the Fund, respectively, in the
computation of such net asset value per share as set forth in their respective
A-1
prospectuses. The methods used by the Trust in such computation shall be applied
to the valuation of the assets of the Fund to be transferred to the Trust.
The Fund shall declare and pay, immediately prior to the Valuation
Date, a dividend or dividends which, together with all previous such dividends,
shall have the effect of distributing to the Fund's shareholders all of the
Fund's investment company taxable income for taxable years ending on or prior to
the Closing Date (computed without regard to any dividends paid) and all of its
net capital gain, if any, realized in taxable years ending on or prior to the
Closing Date (after reduction for any capital loss carry-forward) (the "RIC
dividend").
4. The closing shall be at the office of the Fund at 6 Greenwich
Office Park, Greenwich, Connecticut 06831, at 9:00 a.m. on October 30, 2003, or
at such other time, date or place as the parties may designate or as provided
below (the "Closing Date"). The business day preceding the Closing Date is
herein referred to as the "Valuation Date."
In the event that on the Valuation Date either party has, pursuant
to the Act or any rule, regulation or order thereunder, suspended the redemption
of its shares or postponed payment therefor, the Closing Date shall be postponed
until the first business day after the date when both parties have ceased such
suspension or postponement; provided, however, that if such suspension shall
continue for a period of 60 days beyond the Valuation Date, then the other party
to this Agreement shall be permitted to terminate this Agreement without
liability to either party for such termination.
5. As soon as practicable after the closing, the Fund shall
distribute on a pro rata basis to those persons who were shareholders of the
Fund on the Valuation Date the shares of the Trust received by the Fund pursuant
to the Agreement in liquidation and cancellation of the outstanding shares of
the Trust. For the purpose of the distribution by the Fund of such shares of the
Trust to its shareholders, the Trust will promptly cause U.S. Bancorp Fund
Services, LLC (the "Transfer Agent") to: (a) credit an appropriate number of
shares of the Trust on the books of the Trust to each shareholder of the Fund in
accordance with a list (the "Shareholder List") of its shareholders received
from the Fund; and (b) confirm an appropriate number of shares of the Trust to
each shareholder of the Fund. No certificates for shares of the Trust will be
issued.
The Shareholder List shall indicate, as of the close of business on
the Valuation Date, the name and address of each shareholder of the Fund,
indicating his or her share balance. The Fund agrees to supply the Shareholder
List to the Trust not later than the Closing Date.
6. As soon as practicable, and in any event within one year after
the closing, the Fund shall (a) effect its dissolution with the proper
Massachusetts authorities, terminate its registration under the Act and file a
final annual report on Form N-SAR with the Securities and Exchange Commission
under that Act and (b) either pay or make provision for payment of all of its
liabilities and taxes.
7. Subsequent to the date of approval by shareholders of the Fund of
the transactions contemplated by this Agreement and prior to the Closing Date,
there shall be coordination between the parties as to their respective
portfolios so that, after the closing, the
A-2
Trust will be in compliance with all of its investment policies and
restrictions. At the time of delivery of portfolio securities for examination as
provided in Section 8, the Fund shall deliver to the Trust two copies of a list
setting forth the securities then owned by the Fund and the respective federal
income tax basis thereof.
8. Portfolio securities or written evidence acceptable to the Trust
of record ownership thereof by The Depository Trust Company or through the
Federal Reserve Book Entry System or any other depository approved by the Fund
pursuant to Rule 17f-4 under the Act shall be presented by the Fund to the Trust
or, at its request, to its custodian bank, for examination no later than five
business days preceding the Closing Date, and shall be delivered, or transferred
by appropriate transfer or assignment documents, by the Fund on the Closing Date
to the Trust duly endorsed in proper form for transfer in such condition as to
constitute good delivery thereof in accordance with the custom of brokers and
shall be accompanied by all necessary state transfer stamps, if any, or a check
for the appropriate purchase price thereof. The cash delivered, if any, shall be
in the form of certified or bank cashiers checks or by bank wire payable to the
order of the Trust. The number of shares (to the nearest whole share) of the
Trust being delivered against the securities and cash of the Fund, registered in
the name of the Fund, shall be delivered to the Fund on the Closing Date. Such
shares shall thereupon be assigned by the Fund to its shareholders so that the
shares of the Trust may be distributed as provided in Section 5.
If, at the Closing Date, the Fund is unable to make delivery under
this Section 8 to the Trust of any of its portfolio securities or cash for the
reason that any of such securities purchased by the Fund, or the cash proceeds
of a sale of portfolio securities, prior to the Closing Date have not yet been
delivered to it or the Fund's custodian, then the delivery requirements of this
Section 8 with respect to said undelivered securities or cash will be waived and
the Fund will deliver to the Trust by or on the Closing Date and with respect to
said undelivered securities or cash executed copies of an agreement or
agreements of assignment in a form reasonably satisfactory to the Trust,
together with such other documents, including a due bill or due bills and
brokers' confirmation slips as may reasonably be required by the Trust.
9. The Trust shall assume the liabilities (including for portfolio
securities purchased which have not settled) of the Fund, but the Fund will,
nevertheless, use its best efforts to discharge all known liabilities, so far as
may be possible, prior to the Closing Date. The expenses of the Fund and the
Trust, respectively, related to the reorganization including accounting,
printing, filing, proxy soliciting and portfolio transfer taxes, if any, will be
borne equally by the Fund's and the Trust's adviser, except that all legal
expenses related to the reorganization will be borne solely by the Trust's
Adviser.
10. The obligations of the Trust hereunder shall be subject to the
following conditions:
A. The Board of Trustees of the Fund shall have authorized the
execution of this Agreement and the shareholders of the Fund shall have approved
the transactions contemplated herein, and the Fund shall have furnished to the
Trust copies of resolutions to that effect certified by the Secretary or an
Assistant Secretary of the Fund; such shareholder approval shall have been by
the vote of the holders of a majority of the outstanding voting securities of
the
A-3
Fund entitled to vote at a meeting for which proxies have been solicited by
the Combined Proxy Statement/Prospectus.
B. The Trust shall have received an opinion dated the Closing Date
of Kramer Levin Naftalis & Frankel LLP, to the effect that (i) the Fund is a
validly existing Massachusetts business trust under the laws of Massachusetts
with full corporate powers to carry on its business as then being conducted and
to enter into and perform this Agreement; and (ii) all corporate action
necessary to make this Agreement, according to its terms, valid, binding and
enforceable on the Fund and to authorize effectively the transactions
contemplated by this Agreement have been taken by the Fund.
C. The representations and warranties of the Fund contained herein
shall be true and correct at and as of the Closing Date, and the Trust shall
have been furnished with a certificate of the President or the Secretary or the
Treasurer of the Fund, dated the Closing Date, to that effect.
D. On the Closing Date, the Fund shall have furnished to the Trust a
certificate of the Treasurer of the Fund as to the amount of the capital loss
carry-over and net unrealized appreciation or depreciation, if any, with respect
to the Fund as of the Closing Date.
E. A Registration Statement filed by the Trust solely under the
Securities Act of 1933 on Form N-14 and containing a preliminary form of the
Combined Proxy Statement/Prospectus shall have become effective under that Act
not later than October 31, 2003.
F. The Trust shall have received an opinion, dated the Closing Date,
of Paul, Hastings, Janofsky & Walker LLP, to the same effect as the opinion
contemplated by Section 11D of this Agreement.
11. The obligations of the Fund hereunder shall be subject to the
following conditions:
A. The Board of Trustees of the Trust shall have authorized the
execution of this Agreement and the transactions contemplated hereby, and the
Trust shall have furnished to the Fund copies of resolutions to that effect
certified by the Secretary or an Assistant Secretary of the Trust.
B. The Fund shall have received an opinion dated the Closing Date of
Paul, Hastings, Janofsky & Walker LLP, to the effect that (i) the Trust is a
validly existing Massachusetts business trust under the laws of Massachusetts
with full corporate powers to carry on its business as then being conducted and
to enter into and perform this Agreement; (ii) all corporate action necessary to
make this Agreement, according to its terms, valid, binding and enforceable upon
the Trust and to authorize effectively the transactions contemplated by this
Agreement have been taken by the Trust, and (iii) the shares of the Trust to be
issued hereunder are duly authorized and when issued will be validly issued,
fully-paid and non-assessable.
C. The representations and warranties of the Trust contained herein
shall be true and correct at and as of the Closing Date, and the Fund shall have
been furnished with a
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certificate of the President or the Secretary or the Treasurer of the Trust to
that effect dated the Closing Date.
D. The Fund shall have received an opinion of Paul, Hastings,
Janofsky & Walker LLP to the effect that for federal income tax purposes:
(a) The Fund's transfer of substantially all of its assets to the
Trust solely in exchange for shares of the Trust, followed by the Fund's
distribution of shares of the Trust to the Fund's shareholders as part of the
liquidation of the Fund will qualify as a tax-free "reorganization" within the
meaning of Section 368(a)(1)(C) of the Code. The Fund and the Trust will each be
"a party to a reorganization" within the meaning of Section 368(b) of the Code;
(b) No gain or loss will be recognized by the shareholders of the
Fund upon the exchange of shares of the Trust for the shares of the Fund
(Section 354(a) of the Code);
(c) The Fund will not recognize gain or loss under the provisions of
the Code upon the transfer of substantially all of its assets to the Trust
solely in exchange for shares of the Trust and the Trust's assumption of all of
the liabilities of the Fund (Sections 361(a) and 357(a) of the Code);
(d) The Trust will not recognize gain or loss upon its receipt of
substantially all of the Fund's assets solely in exchange for shares of the
Trust (Section 1032(a) of the Code);
(e) The basis of the shares of the Trust received by the
shareholders of the Fund will be the same as the basis in the shares of the Fund
surrendered in exchange therefor (Section 358(a)(1) of the Code);
(f) The holding period of the shares of the Trust received in
exchange for Fund shares by the shareholders of the Fund will include the period
that the shareholders of the Fund held the Fund shares surrendered in exchange
therefor, provided that such Fund shares are held by the shareholders as capital
assets on the date of the exchange (Section 1223(1) of the Code);
(g) The tax basis of the Fund's assets acquired by the Trust will be
the same as the tax basis of such assets to the Fund immediately prior to the
transaction (Section 362(b) of the Code); and
(h) The holding period of the assets of the Fund in the hands of the
Trust will include the period during which those assets were held by the Fund
(Section 1223(2) of the Code).
E. A Registration Statement filed by the Trust under the Securities
Act of 1933 on Form N-14, containing a preliminary form of the Combined Proxy
Statement/Prospectus shall have become effective under that Act not later than
October 31, 2003.
12. The Fund hereby represents and warrants that:
(a) The financial statements of the Fund as of December 31, 2002,
heretofore furnished to the Trust present fairly the financial position, results
of operations, and changes in
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net assets of the Fund as of that date, in conformity with accounting principles
generally accepted in the United States of America applied on a basis consistent
with the preceding year; and that from January 1, 2003, through the date hereof,
there have not been, and through the Closing Date there will not be, any
material adverse change in the business or financial condition of the Fund, it
being agreed that a decrease in the size of the Fund due to a diminution in the
value of its portfolio and/or redemption of its shares shall not be considered a
material adverse change;
(b) The prospectus contained in the Fund's Registration Statement
under the Securities Act of 1933, as amended, is true, correct and complete,
conforms to the requirements of the Securities Act of 1933 and does not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. The Registration Statement, as amended, was, as of the date of the
filing of the last Post-Effective Amendment, true, correct and complete,
conformed to the requirements of the Securities Act of 1933 and did not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading;
(c) There is no material contingent liability of the Fund and no
material legal, administrative or other proceedings pending or, to the knowledge
of the Fund, threatened against the Fund, not reflected in such prospectus;
(d) There are no material contracts outstanding to which the Fund is
a party other than those ordinary in the conduct of its business;
(e) The Fund is a validly existing Massachusetts business trust;
(f) All federal and other tax returns and reports of the Fund
required by law to be filed have been filed, and all federal and other taxes
shown as due on said returns and reports have been paid or provision shall have
been made for the payment thereof and to the best of the knowledge of the Fund
no such return is currently under audit and no assessment has been asserted with
respect to such returns and to the extent such tax returns with respect to the
taxable year of the Fund ended December 31, 2002, have not been filed, such
returns will be filed when required and the amount of tax shown as due thereon
shall be paid when due;
(g) The Fund has elected to be treated as a regulated investment
company and, for each fiscal year of its operations, the Fund has met the
requirements of Subchapter M of the Code for qualification and treatment as a
regulated investment company and the Fund intends to meet such requirements with
respect to its current taxable year. The Fund is an investment company within
the meaning of Section 368(a)(2)(F)(i) and (iii) of the Code and satisfies the
diversification requirements of Section 368(a)(2)(F)(ii). Not more than 25
percent of the value of the Fund's total assets is invested in the stock and
securities of any one issuer, and not more than 50 percent of the value of the
Fund's total assets is invested in the stock and securities of five or fewer
issuers;
(h) The Fund will transfer to the Trust assets representing at least
90 percent of the fair market value of the net assets and 70 percent of the
gross assets held by the Fund
A-6
immediately prior to the transaction. In calculating these percentages, all
redemptions and distributions (other than distributions required pursuant to
Section 22(e) of the Act or to enable the Fund to qualify as a regulated
investment company) made by the Fund immediately prior to the transfer and which
are part of the plan of reorganization will be considered as assets held by the
Fund immediately prior to the transfer;
(i) There is no plan or intention by the shareholders of the Fund
who own five percent or more of the Fund's shares, and, to the best of the
knowledge of management of the Fund, there is no plan or intention on the part
of the remaining shareholders of the Fund to sell, exchange, or otherwise
dispose of a number of shares of the Trust received in the transaction that
would reduce the Fund's shareholders' ownership of shares of the Trust to a
number of shares having a value as of the Closing Date of less than 50 percent
of the value of all of the formerly outstanding stock of the Fund as of the
Closing Date. There are no dissenters' rights in the transaction, and no cash
will be exchanged for stock of the Fund in lieu of fractional shares of the
Trust. Shares of the Fund and shares of the Trust held by a shareholder of the
Fund and otherwise sold, redeemed, or disposed of prior or subsequent to the
transaction will be considered in making this representation;
(j) The Fund will distribute the shares of the Trust and any other
property it receives in this transaction, and its other properties, in pursuance
of the plan of reorganization;
(k) The Fund's liabilities assumed by the Trust and the liabilities
to which the transferred assets of the Fund are subject were incurred in the
ordinary course of its business;
(l) The Fund is not under the jurisdiction of a court in a Title 11
or similar case within the meaning of Section 368(a)(3)(A) of the Code;
(m) As soon as practicable, but in no event later than 12 months
following the date that all of the assets are transferred to the Trust, the Fund
will be liquidated and dissolved under state law;
(n) The fair market value of the assets of the Fund transferred to
the Trust will equal or exceed the sum of the liabilities assumed by the Trust
plus the amount of liabilities, if any, to which the transferred assets are
subject;
(o) The sum of the liabilities of the Fund to be assumed by the
Trust and the expenses of the transaction do not exceed twenty percent of the
fair market value of the assets of the Fund;
13. The Trust hereby represents and warrants that:
(a) The financial statements of the Trust as of October 31, 2002, heretofore
furnished to the Fund, present fairly the financial position, results of
operations, and changes in net assets of the Trust, as of that date, in
conformity with accounting principles generally accepted in the United States of
America applied on a basis consistent with the preceding year; and that from
November 1, 2002, through the date hereof, there have not been, and through the
Closing Date there will not be, any material adverse changes in the business or
financial condition of the Trust, it being understood that a decrease in the
size of the Trust due to a
A-7
diminution in the value of its portfolio and/or redemption of its shares shall
not be considered a material or adverse change;
(b) The prospectus contained in the Trust's Registration Statement
under the Securities Act of 1933, as amended, is true, correct and complete,
conforms to the requirements of the Securities Act of 1933 and does not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. The Registration Statement, as amended, was, as of the date of the
filing of the last Post-Effective Amendment, true, correct and complete,
conformed to the requirements of the Securities Act of 1933 and did not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading;
(c) There is no material contingent liability of the Trust and no
material, legal, administrative or other proceedings pending or, to the
knowledge of the Trust, threatened against the Trust, not reflected in such
prospectus;
(d) There are no material contracts outstanding to which the Trust
is a party other than those ordinary in the conduct of its business and there
are not outstanding options or rights to acquire its shares;
(e) The Trust is a validly existing Massachusetts business trust;
has all necessary and material federal, state and local authorizations to own
all its properties and assets and to carry on its business as now being
conducted; the shares of the Trust which the Trust issues to the Fund pursuant
to this Agreement will be duly authorized, validly issued, fully-paid and
non-assessable; will conform to the description thereof contained in the Trust's
Registration Statement, and will be duly registered under the Securities Act of
1933 and the states where registration is required; and the Trust is duly
registered under the Act and such registration has not been revoked or rescinded
and is in full force and effect;
(f) All federal and other tax returns and reports of the Trust
required by law to be filed have been filed, and all federal and other taxes
shown due on said returns and reports have been paid or provision shall have
been made for the payment thereof and to the best of the knowledge of the Trust
no such return is currently under audit and no assessment has been asserted with
respect to such returns and to the extent such tax returns with respect to the
taxable year of the Trust ended October 31, 2002, have not been filed, such
returns will be filed when required and the amount of tax shown as due thereon
shall be paid when due;
(g) The shares of the Trust constitute voting stock for purposes of
Sections 368(a)(1)(C) and 368(c) of the Code;
(h) The Trust has elected to be treated as a regulated investment
company and, for each fiscal year of its operations, it has met the requirements
of Subchapter M of the Code for qualification and treatment as a regulated
investment company and it intends to meet such requirements with respect to its
current taxable year. The Trust is an investment company that meets the
requirements of a regulated investment company as defined in Section
368(a)(2)(F)(i) of the Code. Not more than 25 percent of the value of the
Trust's total
A-8
assets is invested in the stock and securities of any one issuer, and not more
than 50 percent of the value of the Trust's total assets is invested in the
stock and securities of five or fewer issuers;
(i) The Trust has no plan or intention (i) to sell or dispose of any
of the assets transferred by the Fund, except for dispositions made in the
ordinary course of business or dispositions necessary to maintain its status as
a regulated investment company or (ii) to redeem or reacquire any of the shares
issued by it;
(j) After consummation of the transactions contemplated by the
Agreement, the Trust will continue to operate its business in a substantially
unchanged manner;
(k) Following the transaction, the Trust will continue the historic
business of the Fund or use a significant portion of the Fund's historic
business assets in a business; and
(l) The Trust does not own, directly or indirectly, nor has it owned
during the past five years directly or indirectly, any shares of the Fund.
14. Each party hereby represents to the other that no broker or
finder has been employed by it with respect to this Agreement or the
transactions contemplated hereby. Each party also represents and warrants to the
other that the information concerning it in the Combined Proxy
Statement/Prospectus will not as of its date contain any untrue statement of a
material fact or omit to state a fact necessary to make the statements
concerning it therein not misleading and that the financial statements
concerning it will present the information shown fairly in accordance with
generally accepted accounting principles consistently applied. Each party also
represents and warrants to the other that this Agreement is valid, binding and
enforceable in accordance with the terms and that the execution, delivery and
performance of this Agreement will not result in any violation of, or be in
conflict with, any provision of any charter, by-laws, contract, agreement,
judgment, decree or order to which it is subject or to which it is a party. The
Trust hereby represents to and covenants with the Fund that, if the
reorganization becomes effective, the Trust will treat each shareholder of the
Fund who received any of its share of the Trust as a result of the
reorganization as having made the minimum initial purchase of shares of the
Trust received by such shareholder for the purpose of making additional
investments in shares of such class, regardless of the value of the shares of
the Trust received. Each party hereby further represents and warrants that:
(a) The fair market value of the shares of the Trust received by
each shareholder of the Fund will be approximately equal to the fair market
value of the shares of the Fund surrendered in the exchange;
(b) The Trust and the Fund's advisers will share equally in paying
all of the expenses, if any, incurred by the Fund and the Trust in connection
with this transaction except that the Trust's adviser will pay for all of the
legal expenses incurred in connection with this transaction; and
(c) There is no intercorporate indebtedness existing between the
Fund and the Trust that was issued, acquired, or will be settled at a discount.
A-9
15. The Trust agrees that it will prepare and file a Registration
Statement under the Securities Act of 1933 on Form N-14 and which shall contain
a preliminary form of proxy statement and prospectus contemplated by Rule 145
under the Securities Act of 1933. The final form of such proxy statement and
prospectus, as amended, is referred to in this Agreement as the "Combined Proxy
Statement/Prospectus" and that term shall include any prospectus and/or report
to shareholders of the Trust which is included in the material mailed to the
shareholders of the Fund. Each party agrees that it will use its best efforts to
have such Registration Statement declared effective and to supply such
information concerning itself for inclusion in the Combined Proxy
Statement/Prospectus as may be necessary or desirable in this connection.
16. The obligations of the parties under this Agreement shall be
subject to the right of either party to abandon and terminate this Agreement
without liability if the other party breaches any material provision of this
Agreement or if any material legal, administrative or other proceeding shall be
instituted or threatened between the date of this Agreement and the Closing Date
(i) seeking to restrain or otherwise prohibit the transactions contemplated
hereby and/or (ii) asserting a material liability of either party, which
proceeding has not been terminated or the threat thereof removed prior to the
Closing Date.
17. This Agreement may be executed in several counterparts, each of
which shall be deemed an original, but all taken together shall constitute one
Agreement. The rights and obligations of each party pursuant to this Agreement
shall, however, not be assignable.
18. All prior or contemporaneous agreements and representations are
merged into this Agreement, which constitutes the entire contract between the
parties hereto. No amendment or modification hereof shall be of any force and
effect unless in writing and signed by the parties and no party shall be deemed
to have waived any provision herein for its benefit unless it executes a written
acknowledgment of such waiver.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
A-10
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed and attested by its officers thereunto duly authorized on the date
first set forth above.
THE TOCQUEVILLE FUND series of
THE TOCQUEVILLE TRUST
By: /s/ Robert W. Kleinschmidt
-------------------------------
Name: Robert W. Kleinschmidt
Title:President
Attest:
/s/ John Cassidy
- ---------------------------------
GINTEL FUND
By: /s/ Robert M. Gintel
-------------------------------
Name: Robert M. Gintel
Title:Chairman and Chief Executive Officer
Attest:
/s/ Stephen Stavrides
- ---------------------------------
A-11
PART C
OTHER INFORMATION
Item 15 Indemnification
Article VIII of the Registrant's Agreement and Declaration of Trust
provides as follows:
The Trust shall indemnify each of its Trustees and officers (including
persons who serve at the Trust's request as directors, officers or trustees of
another organization in which the Trust has any interest as a shareholder,
creditor or otherwise) (hereinafter referred to as a "Covered Person") against
all liabilities and expenses, including but not limited to amounts paid in
satisfaction of judgments, in compromise or as fines and penalties, and counsel
fees reasonably incurred by any Covered Person in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or criminal,
before any court or administrative or legislative body, in which such Covered
Person may be or may have been involved as a party or otherwise or with which
such Covered Person may be or may have been threatened, while in office or
thereafter, by reason of being or having been such a Covered Person except with
respect to any matter as to which such Covered Person shall have been finally
adjudicated in any such action, suit or other proceeding (a) not to have acted
in good faith in the reasonable belief that such Covered Person's action was in
the best interests of the Trust or (b) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such Covered
Person's office. Expenses, including counsel fees so incurred by any such
Covered Person (but excluding amounts paid in satisfaction of judgments, in
compromise or as fines or penalties) shall be paid from time to time by the
Trust in advance of the final disposition of any such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such Covered Person to repay
amounts so paid to the Trust if it is ultimately determined that indemnification
of such expenses is not authorized under this Article, provided, however, that
either (a) such Covered Person shall have provided appropriate security for such
undertaking, (b) the Trust shall be insured against losses arising from any such
advance payments or (c) either a majority of the disinterested Trustees acting
on the matter (provided that a majority of the disinterested Trustees then in
office act on the matter), or independent legal counsel in a written opinion
shall have determined, based upon a review of readily available facts (as
opposed to a full trial type inquiry) that there is reason to believe that such
Covered Person will be found entitled to indemnification under this Article.
As to any matter disposed of (whether by a compromise payment, pursuant to
a consent decree or otherwise) without an adjudication by a court, or by any
other body before which the proceeding was brought, that such Covered Person
either (a) did not act in good faith in the reasonable belief that his or her
action was in the best interests of the Trust or (b) is liable to the Trust or
its Shareholders by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of his or her
office, indemnification shall be provided if (a) approved as in the best
interests of the Trust, after notice that it involves such indemnification, by
at least a majority of the disinterested Trustees acting on the matter (provided
that a majority of the disinterested Trustees then in office act on the matter)
upon a determination, based upon a review of readily available facts (as opposed
to a full trial type inquiry) that such Covered Person acted in good faith in
the reasonable belief that his or her action was in the best interests of the
Trust and is not liable to the Trust or its Shareholders by reasons of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office, or (b) there has been obtained an
opinion in writing of independent legal counsel, based upon a review of readily
available facts (as opposed to a full trial type inquiry) to the effect that
such Covered Person appears to have acted in good faith in the reasonable belief
that his or her action was in the best interests of the Trust and that such
indemnification would not protect such Covered Person against any liability to
the Trust to which he or she would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office. Any approval pursuant to this
Section shall not prevent the recovery from any Covered Person of any amount
paid to such Covered Person in accordance with this Section as indemnification
if such Covered Person is subsequently adjudicated by a court of competent
jurisdiction not to have acted in good faith in the reasonable belief that such
Covered Person's action was in the best interests of the Trust or to have been
liable to the Trust or its Shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to Covered Persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a Covered
Person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such Covered Person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be governed by the
final adjudication of such issue.
Item 16 Exhibits
(1) (a) Agreement and Declaration of Trust of the Registrant. (1)
(1) (b) Amendment to the Agreement and Declaration of Trust of the
Registrant dated August 19, 1991. (2)
(1) (c) Amendment to the Agreement and Declaration of Trust of the
Registrant dated August 4, 1995. (1)
(2) Amended and Restated By-laws of the Registrant. (2)
(3) Not Applicable.
(4) Agreement and Plan of Reorganization and Liquidation is filed herewith
as Exhibit A of this Form N-14.
- --------------------
(1) Previously filed in Post-Effective Amendment No. 26 to the Registrant's
Registration Statement on Form N-1A on January 30, 2002, and
incorporated by reference herein.
(2) Previously filed in Post-Effective Amendment No. 27 to the Registrant's
Registration Statement on Form N-1A on February 27, 2003, and
incorporated by reference herein.
2
(5) Form of certificate for shares of beneficial interest, par value $.01
per share, of the Registrant. (2)
(6) (a) Form of Investment Advisory Agreement between the Registrant, on
behalf of The Tocqueville Gold Fund, and the Adviser. (3)
(6) (b) Investment Advisory Agreement between the Registrant, on behalf of
The Tocqueville Fund, and the Adviser. (1)
(6) (c) Investment Advisory Agreement between the Registrant, on behalf of
The Tocqueville Small Cap Value Fund, and the Adviser. (1)
(6) (d) Investment Advisory Agreement between the Registrant, on behalf of
The Tocqueville International Value Fund, and the
Adviser. (1)
(7) Distribution Agreement, as amended, between the Registrant and Lepercq,
de Neuflize/Tocqueville Securities, L.P. (2)
(8) Not Applicable.
(9) (a) Custodian Agreement between the Registrant and U.S. Bank, N.A.
(formerly Firstar Bank, N.A.) and Amendment to the Custodian
Agreement. (2)
(9) (b) Custodian Agreement between the Registrant, on behalf of The
Tocqueville Gold Fund, and U.S. Bank, N.A. (formerly Firstar Bank,
N.A.) and Amendment to the Custodian Agreement. (2)
(9) (c) Global Custody Tri-Party Agreement between The Chase Manhattan
Bank, U.S. Bank, N.A. (formerly Firstar Trust Company) and the
Registrant, on behalf of The Tocqueville Small Cap Value
Fund. (2)
(9) (d) Form of Amendment to the Global Custody Tri-Party Agreement between
The Chase Manhattan Bank, U.S. Bank, N.A. (formerly Firstar Bank, N.A.)
and the Registrant, on behalf of The Tocqueville Small Cap Value Fund.
(2)
(9) (e) Form of Global Custody Tri-Party Agreement between The Chase
Manhattan Bank, U.S. Bank, N.A. (formerly Firstar Trust Company) and
the Registrant, on behalf of The Tocqueville Gold Fund. (1)
(9) (f) Form of Amendment to the Global Custody Tri-Party Agreement between
The Chase Manhattan Bank, U.S. Bank, N.A. (formerly Firstar Bank, N.A.)
and the Registrant, on behalf of The Tocqueville Gold Fund. (2)
- --------------------
(1) Previously filed in Post-Effective Amendment No. 26 to the Registrant's
Registration Statement on Form N-1A on January 30, 2002, and
incorporated by reference herein.
(2) Previously filed in Post-Effective Amendment No. 27 to the Registrant's
Registration Statement on Form N-1A on February 27, 2003, and
incorporated by reference herein.
(3) Previously filed in Post-Effective Amendment No. 19 to the Registrant's
Registration Statement on Form N-1A on April 15, 1998, and incorporated
by reference herein.
3
(9) (g) Global Custody Tri-Party Agreement between The Chase Manhattan
Bank, U.S. Bank, N.A. (formerly Firstar Trust Company) and the
Registrant, on behalf of The Tocqueville International Value Fund
(formerly Tocqueville Europe Fund). (4)
(9) (h) Form of Amendment to the Global Custody Tri-Party Agreement between
The Chase Manhattan Bank, U.S. Bank, N.A. (formerly Firstar Bank, N.A.)
and the Registrant on behalf of The Tocqueville International Value
Fund. (2)
(10) (a) Plan for Payment of Certain Expenses for Distribution or
Shareholder Servicing Assistance of Class A Shares of The
Tocqueville Fund. (2)
(10) (b) Plan for Payment of Certain Expenses for Distribution or
Shareholder Servicing Assistance of Class A Shares of The
Tocqueville Small Cap Value Fund. (2)
(10) (c) Plan for Payment of Certain Expenses for Distribution or
Shareholder Servicing Assistance of Class A Shares of The
International Value Fund. (2)
(10) (d) Plan for Payment of Certain Expenses for Distribution or
Shareholder Servicing Assistance of Class A Shares of The
Tocqueville Gold Fund. (2)
(10) (e) Distribution Agreement, as amended, between the Registrant and
Lepercq, de Neuflize/Tocqueville Securities, L.P., (See
exhibit (e) above). (2)
(11) Opinion and Consent of Paul, Hastings, Janofsky & Walker LLP regarding
the validity of the shares to be issued by the Registrant. (5)
(12) Opinion and Consent of Paul, Hastings, Janofsky & Walker LLP regarding
certain tax matters. (5)
(13) (a) Administration Agreement between the Registrant and the Adviser.(2)
- ---------------------
(2) Previously filed in Post-Effective Amendment No. 27 to the Registrant's
Registration Statement on Form N-1A on February 27, 2003, and incorporated
by reference herein.
(4) Previously filed in Post-Effective Amendment No. 16 to the Registrant's
Registration Statement on Form N-1A on February 28, 1997, and incorporated
by reference herein.
(5) Previously filed in Registrant's Registration Statement on Form N-14 on
August 28, 2003, and incorporated by reference herein.
4
(13) (b) Fund Sub-Administration Servicing Agreement between the Adviser and
Firstar Trust Company. (6)
(13) (c) Amendment to the Fund Sub-Administration Servicing Agreement
between the Adviser and U.S. Bancorp Fund Services, LLC (formerly
Firstar Mutual Fund Services, LLC). (2)
(13) (d) Transfer Agent Agreement between the Registrant and U.S. Bancorp
Fund Services, LLC (formerly Firstar Trust Company) and Amendment to
the Transfer Agent Agreement. (2)
(13) (e) Transfer Agent Agreement between the Registrant, on behalf of The
Tocqueville Gold Fund, and U.S. Bancorp Fund Services, LLC (formerly
Firstar Trust Company) and Amendment to the Transfer
Agent Agreement. (2)
(13) (f) Addendum to Transfer Agent Agreements between the Registrant and
U.S. Bancorp Fund Services, LLC. (2)
(13) (g) Fund Accounting Servicing Agreement between the Registrant and U.S.
Bancorp Fund Services, LLC (formerly Firstar Trust Company) and
Amendment to the Fund Accounting Servicing Agreement.
(2)
(13) (h) Fund Accounting Servicing Agreement between the Registrant, on
behalf of The Tocqueville Gold Fund, and U.S. Bancorp Fund Services,
LLC (formerly Firstar Trust Company) and Amendment to the
Fund Accounting Servicing Agreement. (2)
(13) (i) Fulfillment Servicing Agreement between the Registrant and U.S.
Bancorp Fund Services, LLC (formerly Firstar Trust Company) and
Amendment to the Fulfillment Servicing Agreement. (2)
(13) (j) Form of Fulfillment Servicing Agreement between the Registrant, on
behalf of The Tocqueville Gold Fund, and U.S. Bancorp Fund Services,
LLC (formerly Firstar Trust Company). (6)
- --------------------
(2) Previously filed in Post-Effective Amendment No. 27 to the Registrant's
Registration Statement on Form N-1A on February 27, 2003, and incorporated
by reference herein.
(6) Previously filed in Post-Effective Amendment No. 25 to the Registrant's
Registration Statement on Form N-1A on February 28, 2001, and incorporated
by reference herein.
5
(14) (a) Consent of PricewaterhouseCoopers LLP is filed herewith.
(14) (b) Consent of Eisner LLP is filed herewith.
(15) Not Applicable.
(16) Powers of Attorney for The Tocqueville Trust. (2)
(17) (a) Multiple Class Plan (in accordance with Rule 18f-3) of the
Tocqueville Trust. (2)
(17) (b) Code of Ethics for the Registrant, Adviser and Lepercq, de
Neuflize/Tocqueville Securities, L.P. (2)
(17) (c) Form of Proxy ballot for Gintel Fund is filed herewith.
(17) (d) Prospectus and Statement of Additional Information for The
Tocqueville Trust. (2)
(17) (e) Prospectus and Statement of Additional Information for the Gintel
Fund. (7)
(17) (f) Annual Report for the fiscal ended October 31, 2002, for The
Tocqueville Trust. (8)
(17) (g) Semi-Annual Report for the six months ended April 30, 2003, for the
Tocqueville Trust. (9)
(17) (h) Gintel Fund Proxy Voting Instructions are filed herewith. (10)
- ---------------------
(2) Previously filed in Post-Effective Amendment No. 27 to the Registrant's
Registration Statement on Form N-1A on February 27, 2003, and incorporated
by reference herein.
(7) Previously filed in Post-Effective Amendment No. 26 to the Gintel Fund's
Registration Statement on ForN-1A on April 30, 2003, and incorporated by
reference herein.
(8) Previously filed in Registrant's Annual Report on Form N-30D filed on
January 7, 2003, and incorporated by reference herein.
(9) Previously filed in Registrant's Semi-Annual Report on Form N-CSR filed on
July 8, 2003, and incorporated by reference herein.
(10) Previously filed in Gintel Fund's Annual Report on Form N-30D filed on
February 27, 2003, and on April 2, 2003, as amended, and incorporated by
reference herein.
Item 17 Undertakings
(1) The undersigned agrees that, prior to any public reoffering of the
securities registered through the use of a prospectus which is part of this
registration statement by any person or party who is deemed to be an underwriter
within the meaning of Rule 145(c) of the Securities Act of 1933, the reoffering
prospectus will contain the information called for by the applicable
registration form for the reofferings by persons who may be deemed underwriters,
in addition to the information called for by the other items of the applicable
form.
(2) The undersigned registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as part of an amendment to the
registration statement and will not be used until the amendment is effective,
and that, in determining any liability under the 1933 Act, each post-effective
amendment shall be deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering of them.
6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Pre-Effective Amendment No. 1 to the Registration Statement
on Form N-14 to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of New York, and State of New York on the 26th day of
September, 2003.
THE TOCQUEVILLE TRUST
By: /s/ Francois D. Sicart
----------------------
Francois D. Sicart
Principal Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 1 to the Registration Statement on Form N-14 has
been signed by the following persons in the capacities indicated on the 26th day
of September, 2003.
Signatures Title Date
---------- ----- ----
/s/ Francois D. Sicart Principal Executive Officer and Trustee September 26, 2003
- ------------------------
Francois D. Sicart
/s/ Robert Kleinschmidt President, Principal Operating Officer, September 26, 2003
- ------------------------ Principal Financial Officer and Trustee
Robert Kleinschmidt
James B. Flaherty* Trustee
Inge Heckel* Trustee
Francois Letaconnoux* Trustee
Lucille G. Bono* Trustee
Larry M. Senderhauf* Trustee
Guy A. Main* Trustee
James W. Gerard* Trustee
/s/ Roger Cotta September 26, 2003
- ------------------------
Roger Cotta
Attorney-in-Fact*
- ------------------------
* Powers of Attorney are incorporated by reference herein as Exhibit (16).
7
Exhibit 14(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in the Combined Proxy
Statement/Prospectus and Statement of Additional Information constituting parts
of this Registration Statement on Form N-14 (the "N-14 Registration Statement")
of our report dated December 13, 2002, relating to the financial statements and
financial highlights which appears in the October 31, 2002, Annual Report to
Shareholders of The Tocqueville Trust which is also incorporated by reference
into the N-14 Registration Statement. We also consent to the references to us
under the headings "Financial Statements" in such the N-14 Registration
Statement.
We also consent to the references to us under the headings "Financial
Highlights" and "Counsel and Independent Accountants" in The Tocqueville Trust's
registration statement on Form N-1A dated February 28, 2003, which is
incorporated by reference into this N-14 Registration Statement.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
New York, New York
September 26, 2003
Exhibit 14(b)
INDEPENDENT AUDITORS' CONSENT
We consent to incorporation by reference in the Combined Proxy
Statement/Prospectus and Statement of Additional Information constituting parts
of this Registration Statement on Form N-14 (the "N-14 Registration Statement")
of The Tocqueville Trust of our report dated January 23, 2003, relating to the
statement of assets and liabilities of Gintel Fund, including the schedule of
investments as of December 31, 2002, and the related statement of operations for
the year then ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
periods presented which report appears in the December 31, 2002, annual report
on Form N-SAR of Gintel Fund.
/s/ Eisner LLP
Eisner LLP
New York, New York
September 26, 2003