Participating in the Offer may result in simplified
tax and investment recordkeeping as a result of receiving shares of the RKH ETF as opposed to taking delivery of the underlying,
unbundled securities represented by HOLDRS. Furthermore, we have structured the Offer so that a portion of the transaction is not
expected to be taxable. Although you will generally recognize taxable gain (or loss) with respect to securities underlying HOLDRS
that are sold in the Rebalancing Transaction, any unrealized gain (or loss) in respect of the underlying securities of HOLDRS that
are not sold by the Transition Manager in the Rebalancing Transaction and are transferred to the RKH ETF will generally not be
currently taxable and, instead, will generally remain deferred until the RKH ETF shares are sold by RKH HOLDRS Investors or the
RKH ETF sells such underlying securities (in which case, such recognized gain (or loss) will impact the RKH ETF’s overall
calculation of its income). In contrast, if an investor chooses not to participate in the Offer, the other alternatives, including
the sale of HOLDRS on the open market before or after the Offer or termination by the Trustee, may result in a fee (up to $10.00
per each round lot of 100 HOLDRS surrendered) and/or in different tax treatment, with the possibility that the entire transaction
is taxable. RKH HOLDRS Investors should consult their own tax advisors regarding potential tax consequences under all applicable
tax laws in light of their own circumstances.
By participating in the Offer and becoming shareholders
of the RKH ETF, RKH HOLDRS Investors will be subject to increased fees and expenses associated with holding shares of the RKH ETF
and will no longer have the ability to attend shareholder meetings, vote or receive copies of communications, proxy statements
and other materials with respect to matters affecting the securities held in the RKH ETF’s portfolio. RKH HOLDRS Investors
that become shareholders of the RKH ETF will also lose the right to withdraw the deposited securities (subject to a cancellation
fee) and bring an action against an issuer of the deposited securities. In addition, RKH HOLDRS Investors who tender their HOLDRS
for exchange in the Offer will generally recognize taxable gains (or losses) in connection with the sales of securities underlying
their HOLDRS made by the Transition Manager in the Rebalancing Transaction.
See
Section 5 – “Certain U.S. Federal Income Tax Consequences.”
The
Offer has been structured so that you will not bear any costs related to the Offer, including the
fee for canceling your HOLDRS if you tender your HOLDRS for exchange in the
Offer. Van Eck will bear the
costs of printing and mailing materials to you, certain legal and filing fees, and fees and expenses of the
Exchange Agent and the Information Agent in connection with the Offer; however,
because you own your HOLDRS through a securities
intermediary, your securities
intermediary may charge you a fee in connection with tendering your HOLDRS on
your behalf for shares of the RKH ETF. You should consult your securities intermediary to determine
whether any fees will apply.
See
Section 1 – “Terms of the Offer.”
What risks are associated with the Offer and
with an investment in shares of the RKH ETF?
By
participating in the Offer, you will assume the following risks:
Risks Associated with the Rebalancing Transaction:
The RKH ETF is prohibited by law from issuing its shares at a price other than net asset value per share. The Offer and the Rebalancing
Transaction have been structured so that the basket of securities the RKH ETF will receive in exchange for shares of the RKH ETF
will be the Rebalanced HOLDRS Securities. There are a number of steps which must be taken within a short period of time on the
day on which the Expiration Time occurs in order for the Rebalancing Transaction to occur and for the securities underlying your
HOLDRS to be transformed into the Rebalanced HOLDRS Securities, as described elsewhere in this Offer to Exchange. There is no guarantee
that all of these steps will occur on that day. While the Transition Manager has guaranteed that the trades required to consummate
the Rebalancing Transaction will be made in accordance with the instructions provided by Van Eck Securities and at the closing
price per share of the underlying securities on the day the Expiration Time occurs, if, because of market disruptions, the trades
are unable to be completed as planned by the settlement date in accordance with the instructions provided by Van Eck Securities
and the guarantee of the Transition Manager fails, the value of the Rebalanced HOLDRS Securities, and therefore the initial net
asset value of your shares of the RKH ETF, may be more or less than the value of the HOLDRS and may be more or less than the value
of the securities underlying your HOLDRS as of 4:00 p.m., New York City time, on the day the Expiration Time occurs. In all cases
the initial net asset value of your shares of the RKH ETF will be equal to the Rebalanced HOLDRS Securities Value.
Investors who tender their HOLDRS for exchange
in the Offer will generally recognize taxable gains (or losses) in connection with the sales of securities underlying their HOLDRS
made by the Transition Manager in the Rebalancing Transaction, although the exchange of Rebalanced HOLDRS Securities for shares
in the RKH ETF pursuant to the Offer is expected to generally not be a taxable transaction for U.S. federal income tax purposes.
This treatment depends upon the satisfaction of certain diversification requirements under U.S. federal income tax laws with respect
to the securities transferred to the RKH ETF. It is intended that these diversification requirements will be satisfied as a result
of the Rebalancing Transaction. If the Transition Manager, however, is not able to complete the Rebalancing Transaction as intended
prior to the transfer of securities into the RKH ETF, and the diversification requirements are not satisfied with respect to the
transferred securities, then the exchange of HOLDRS for shares in the RKH ETF would generally be a fully taxable transaction. The
RKH ETF will not make any distributions to assist tendering RKH HOLDRS Investors in paying any taxes that may result from the Rebalancing
Transaction.
The Transition Manager may not be able to complete
the Rebalancing Transaction as intended in the event of the following market disruptions: (1) a general suspension of, or limitation
on prices for, trading, clearing or settling in securities in the U.S. securities or financial markets, (2) declaration of a banking
moratorium or any suspension of payments in respect of banks in the United States or other major financial markets, (3) general
failure of transmission or communication facilities in the Borough of Manhattan, New York City, New York, or (4) commencement of
a war, armed hostilities, terrorist acts or other national or international calamity directly involving the United States, in each
case that occurs after the Expiration Time but prior to 4:00 p.m., New York City time, on that day.
Risks Associated with Market Fluctuations: The value of the securities
underlying your HOLDRS, which will be exchanged for shares of the RKH ETF with an initial net asset value equal to the Rebalanced
HOLDRS Securities Value, may increase or decrease (i) between the date of tender and 4:00 p.m., New York City time, on the day
the Expiration Time occurs, when the Rebalanced HOLDRS Securities Value will be calculated, and (ii) between 4:00 p.m., New York
City time, on the day the Expiration Time occurs and the time of the actual receipt of shares of the RKH ETF to be received by
you in exchange therefor and may be more or less than the value of HOLDRS at any time.
Risks
Associated with Absence of Guaranteed Delivery: Guaranteed delivery will not be available in connection with the Offer.
To the extent that you purchase HOLDRS prior to the Expiration Time and you
wish to tender these HOLDRS in the Offer, the purchase of such HOLDRS must
settle and HOLDRS must be tendered prior to the Expiration Time. In order to
ensure that your HOLDRS are tendered prior to the Expiration Time, contact your
securities intermediary to determine whether such securities intermediary has
established its own earlier cutoff date and time to tender in the Offer.
Risks Associated with Gains Derived from Corporate
RKH HOLDRS Investors: If a corporate RKH HOLDRS Investor, other than an S corporation, participates in the Offer, then the RKH
ETF may subsequently recognize taxable gain that will be subject to tax at the RKH ETF level to the extent of certain unrealized
net gains (at the time of the transfer of the underlying securities to the RKH ETF) in respect of the securities transferred by
the corporate RKH HOLDRS Investor to the RKH ETF. Such ETF-level tax will indirectly be borne by all RKH ETF shareholders. If you
are a corporation, other than an S corporation, you must indicate your status as a corporation in the Letter of Transmittal.
When you
own shares of the RKH ETF, you take on the risks inherent in an investment in
the RKH ETF. We have filed with the SEC a Tender Offer Statement on
Schedule TO, of which this Offer to Exchange forms a part. The RKH ETF
prospectus, which describes the principal risks of investing in the RKH ETF, is
attached as an exhibit to the Schedule TO. You should read the entire RKH ETF prospectus
carefully before you tender your HOLDRS, especially the risk factors set forth
in the RKH ETF prospectus.
Is the new RKH ETF expected to pay dividends
and distributions?
Yes. Like
other Market Vectors equity ETFs, the RKH ETF is expected to pay investors a
pro rata share of any dividends received. Typically, these are paid annually at
year end.
See
Section 8 – “Certain Information Concerning the RKH ETF and its Adviser”
for more information regarding the RKH ETF and its Adviser.
Who should I call if I have questions about
the Offer?
You may
call the Information Agent at 1-800-290-6424 (Toll Free) or 1-212-269-5550
(Collect) or email the Information Agent at marketvectorsetf@dfking.com. See
the back cover of this Offer to Exchange for additional contact information.
S-viii
THE EXCHANGE OFFER
1. Terms of the Offer.
Upon
the terms and subject to the conditions of the Offer (including, if the Offer
is extended or amended, the terms and conditions of such extension or amendment),
we will exchange all HOLDRS validly tendered prior to the Expiration Time and
not validly withdrawn as permitted under Section 4 – “Withdrawal
Rights”
so that a RKH HOLDRS Investor will receive shares of the RKH ETF. The term
“Expiration Time” means 11:00 a.m., New York City time, on December 20,
2011, unless we extend the period during which the Offer is open, in which event
the term “Expiration Time” means the latest time and date at which
the Offer, as so extended, expires. Each outstanding HOLDRS validly tendered
by a RKH HOLDRS Investor and delivered pursuant to the Offer will be exchanged
into one share of the RKH ETF.
After the Expiration Time, assuming all conditions
of the Offer are satisfied or waived at the Expiration Time and the RKH ETF accepts the tendered HOLDRS for exchange, Van Eck Securities
Corporation, an affiliate of the adviser of Market Vectors ETF Trust (“Van Eck Securities”), will instruct BNY ConvergEx
Execution Solutions LLC (the “Transition Manager”) to sell certain of the securities underlying the tendered HOLDRS
and purchase certain other securities in the open market such that securities purchased, together with the securities underlying
the tendered HOLDRS that are not sold, conform as closely as reasonably possible to the portfolio of securities then making up
the Market Vectors U.S. Listed Bank and Brokerage 25 Index. The purchases and sales performed by the Transition Manager are hereinafter
referred to as the “Rebalancing Transaction” and the securities formerly underlying the tendered HOLDRS, immediately giving effect
to the Rebalancing Transaction, are hereinafter referred to as the “Rebalanced HOLDRS Securities.” The Rebalancing
Transaction will be structured so that, assuming all trades are completed as planned, the aggregate value of the securities sold
will be the same as the aggregate value of the securities purchased, and no commissions or fees will be charged in respect of those
trades. Therefore, Van Eck expects the value of the Rebalanced HOLDRS Securities (the “Rebalanced HOLDRS Securities Value”)
will be the same as the aggregate value of the securities formerly underlying the tendered HOLDRS, in each case measured as of
4:00 p.m., New York City time, on the day on which the Expiration Time occurs. The Rebalanced HOLDRS Securities will then be exchanged
into shares of the RKH ETF, and the initial net asset value of shares of the RKH ETF will be equal to the Rebalanced HOLDRS Securities
Value. See answer to questions “What is the market value of my HOLDRS and of the securities underlying my HOLDRS as of a
recent date? How can I determine the indicative Rebalanced HOLDRS Securities Value as of a recent date?” and “What
risks are associated with the Offer and with an investment in shares of the RKH ETF?—Risks Associated with the Rebalancing
Transaction.”
The
Offer is conditioned upon, among other things, the occurrence of the following
events: (i) the Minimum Condition having been satisfied or waived; (ii) each
of the Agreement Conditions (defined in Section 16 – “Certain Conditions
of the Offer”) having been satisfied or waived; and (iii) each of the
General Conditions (defined in Section 16 – “Certain Conditions
of the Offer”)
having been satisfied or waived. Based on the closing market price per HOLDRS
on November 7, 2011, the Minimum Condition would be satisfied if 361,324 HOLDRS
are validly tendered pursuant to the Offer. If any such condition is not
satisfied as of the Expiration Time, we may (i) terminate the Offer
and return all tendered HOLDRS to tendering RKH HOLDRS Investors, (ii) extend
the Offer and, subject to withdrawal rights as set forth in Section 4 – “Withdrawal
Rights,” retain all such HOLDRS until the expiration of the Offer as so
extended, (iii) waive such condition and, subject to any requirement to
extend the period of time during which the Offer is open, exchange all HOLDRS
validly tendered prior to the Expiration Time and not validly withdrawn or
(iv) delay acceptance to exchange HOLDRS, subject to applicable law, until
satisfaction or waiver of the conditions to the Offer.
If we
extend the Offer, are delayed in exchanging HOLDRS (whether before or after our
acceptance for exchange of HOLDRS) or are unable to accept HOLDRS for exchange
pursuant to the Offer for any reason, then, without prejudice to our rights
under this Offer to Exchange, the Exchange Agent may retain tendered HOLDRS on
our behalf, and such HOLDRS may not be validly withdrawn except to the extent
that tendering RKH HOLDRS Investors are entitled to withdrawal rights as
described herein under Section 4 – “Withdrawal Rights.” However, our ability to
delay the exchange of HOLDRS that we have accepted for exchange is limited by
Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), which requires us to exchange the securities offered or return
the securities deposited by or on behalf of RKH HOLDRS Investors promptly after
the termination or withdrawal of the Offer.
Except as
set forth above, and subject to the applicable rules and regulations of the
SEC, we expressly reserve the right to waive any condition to the Offer, and/or
modify the other terms and conditions of the Offer. Any extension, delay,
termination or amendment of the Offer will be followed as promptly as
practicable by public announcement thereof, and such announcement in the case
of an extension will be made no later than the time the NYSE Arca opens
on the day on which the Offer is scheduled to expire. Without limiting
the manner in which we may choose to make any public announcement, we currently
intend to make announcements regarding the Offer by issuing press releases and
making any appropriate filings with the SEC.
If
we make a material change in the terms of the Offer or the information concerning
the Offer or if we waive a material condition of the Offer, we will disseminate
additional offering materials and extend the Offer for the appropriate
period under Rule 14d-4(b) of the Exchange Act. The minimum period during which
an offer must remain open following material changes in the terms of the Offer
or information concerning the Offer, other than a change in price or a change
in the number of securities sought, will depend upon the facts and circumstances,
including the relative materiality of the terms or information changes. In the
SEC’s view, an offer should remain open for a minimum of five business days
from the date the material change is first published, sent or given to RKH
HOLDRS Investors, and with respect to a change in price or a change in
percentage of securities sought, a minimum ten business day period generally
is required to allow for adequate dissemination to recipients and investor
response.
If, on or
before the Expiration Time, we change the exchange consideration for HOLDRS
accepted for exchange in the Offer, such change in consideration will be paid
to all RKH HOLDRS Investors whose HOLDRS are exchanged in the Offer, whether or
not such HOLDRS were tendered before the announcement of the increase in
consideration.
We
expressly reserve the right, in our sole discretion, subject to the applicable
rules and regulations of the SEC, not to accept for exchange any HOLDRS validly
tendered if, at the Expiration Time, any of the conditions to the Offer have
not been satisfied or waived, including those set forth in Section 16 –
“Certain Conditions of the Offer.”
If, on or
prior to the scheduled Expiration Time, all of the conditions to the Offer have
not been satisfied or, where permitted by applicable law, waived in writing by
us, as applicable, the Offer may be extended, if desired or if requested by
Merrill Lynch, for successive periods of up to five business days each, but in
no event for more than twenty business days in total or past December 31, 2011,
in order to permit the satisfaction of such conditions; provided, however, that
we shall have the sole right to extend the Offer, for successive periods of up
to five business days each, but in no event for more than ten business days in
total or past December 31, 2011, even if the conditions to the Offer have been
met; provided, further, that we acknowledge and agree that in choosing to so
extend the Offer, we shall be deemed to have waived any failure of any conditions
of the Offer to be satisfied at the end of such extension period(s) and shall
be required to accept for exchange HOLDRS validly tendered and not validly
withdrawn in the Offer, and to consummate the Offer, immediately following such
extension period(s). Subject to compliance with Rule 14e-1(c) under the
Exchange Act, we may, without the consent of Merrill Lynch, extend the Offer
for any period required by any rule, regulation or interpretation of the SEC,
or the staff thereof, applicable to the Offer.
See Section
17 – “Extension of Offer Period; Termination; Amendments.”
We do not
currently intend to provide a subsequent offering period for the Offer,
although we reserve the right to do so. If a decision is made to extend the Offer
or to provide for a subsequent offering period, we will inform the Exchange
Agent of that fact and will make a public announcement of the extension or
subsequent offering period, no later than the time the NYSE Arca opens
on the day on which the Offer is scheduled to expire.
2. Acceptance of HOLDRS for Exchange.
Subject to
the satisfaction or waiver of all the conditions to the Offer set forth in
Section 16 – “Certain Conditions of the Offer,” as discussed in Section 1
– “Terms of the Offer,” we will accept for exchange all HOLDRS validly tendered
and not validly withdrawn pursuant to the Offer prior to the Expiration Time.
In all
cases, we will exchange HOLDRS accepted for exchange pursuant to the Offer only
after timely receipt by the Exchange Agent of the confirmation of a book-entry
transfer of such HOLDRS (a “Book-Entry Confirmation”) into the Exchange Agent’s
account at DTC pursuant to the procedures set forth in Section 3 –
“Procedures for Accepting the Offer and Tendering HOLDRS.”
For
purposes of the Offer, we will be deemed to have accepted for exchange HOLDRS
validly tendered and not validly withdrawn as, if and when we give oral or
written notice to the Exchange Agent of our acceptance for exchange of such
HOLDRS pursuant to the Offer. Upon the terms and subject to the conditions of
the Offer, HOLDRS accepted for exchange pursuant to the Offer will be
exchanged by the delivery of shares of the RKH ETF with an initial net asset
value equal to the Rebalanced HOLDRS Securities Value to or to the order of the
Exchange Agent, which will act as agent for tendering RKH HOLDRS Investors
for the purpose of receiving the offered shares of the RKH ETF and causing
such shares to be delivered to DTC for allocation to tendering RKH HOLDRS
Investors whose HOLDRS have been accepted for exchange.
If we
extend the Offer, or are delayed in our acceptance for exchange of HOLDRS or
are unable to accept HOLDRS for exchange pursuant to the Offer for any reason,
then, without prejudice to our rights under the Offer, the Exchange Agent may
retain tendered HOLDRS on our behalf, and such HOLDRS may not be validly
withdrawn except to the extent that tendering RKH HOLDRS Investors are entitled
to withdrawal rights as described herein under Section 4 – “Withdrawal
Rights” and as otherwise required by Rule 14e-1(c) under the Exchange Act.
Under
no circumstances will we pay interest on the exchanged HOLDRS by reason of any
extension of the Offer or any delay in making such exchange.
If any
tendered HOLDRS are not accepted for exchange for any reason pursuant to the
terms and conditions of the Offer, such HOLDRS will be returned to the accounts
at DTC from which they were tendered as promptly as practicable following the
expiration or termination of the Offer.
3. Procedures for Accepting the Offer and Tendering
HOLDRS.
A:
Proper Tender of HOLDRS.
2
A
RKH HOLDRS Investor that wishes to tender HOLDRS in the Offer must take, or
instruct the securities
intermediary through which it holds HOLDRS to take, the following actions:
(a) cause DTC to transmit an Agent’s Message prior to the Expiration Time via
DTC’s confirmation system, to the Exchange Agent stating that DTC has received
an express acknowledgement from a participant in DTC that such participant has
received and agrees to be bound by the terms and conditions of the Offer and
the Letter of Transmittal and (b) make a book entry transfer of HOLDRS to the
account established by the Exchange Agent at DTC for the purpose of receiving
the tenders of HOLDRS prior to the Expiration Time. Securities intermediaries may establish their own cutoff dates and
times to receive instructions from customers to tender HOLDRS in the Offer. Guaranteed
delivery will not be available in connection with the Offer. You
should contact your securities
intermediary to determine the cutoff date and time applicable to you. RKH
HOLDRS Investors who hold their HOLDRS through a securities intermediary should consult such institution as to
whether it charges any service fees.
The term
“Agent’s Message” means a message, transmitted by DTC to and received by the
Exchange Agent and forming a part of a Book-Entry Confirmation, that states
that DTC has received an express acknowledgment from the participant in DTC
tendering HOLDRS that are the subject of such Book-Entry Confirmation, that
such participant has received and agrees to be bound by the terms of this Offer
to Exchange and the Letter of Transmittal and that we may enforce such
agreement against such participant.
The
acceptance of HOLDRS for exchange by the RKH ETF will constitute a binding
agreement between the tendering RKH HOLDRS Investor and the RKH ETF upon the
terms and subject to the conditions of the Offer, including the tendering RKH
HOLDRS Investor’s representations that (i) such RKH HOLDRS Investor has a net
long position in HOLDRS being tendered within the meaning of Rule 14e-4
promulgated under the Exchange Act and (ii) the tender of such HOLDRS complies
with Rule 14e-4.
By
participating in the Offer, a tendering RKH HOLDRS Investor represents and
warrants that such RKH HOLDRS Investor is not an “affiliated person” of the RKH
ETF within the meaning of Section 2(a)(3) of the 1940 Act, or an “affiliated
person” of such a person, and is not prohibited by the 1940 Act from
participating in the Offer.
By
tendering HOLDRS in the Offer subject to, and effective upon, acceptance for
exchange of HOLDRS tendered in accordance with the terms and subject to the
conditions of the Offer, in consideration of the acceptance for exchange of
such HOLDRS in accordance with the terms of the Offer, the tendering RKH HOLDRS
Investor shall be deemed to (i) sell, assign and transfer to, or upon the order
of, the RKH ETF all right, title and interest in and to all HOLDRS that are
being tendered and that are being accepted for exchange pursuant to the Offer
(and any and all dividends and distributions in respect of such HOLDRS having
a record date on or after the Expiration Time) and (ii) irrevocably constitute
and appoint Van Eck Securities and the Exchange Agent the true and lawful
agents and attorneys-in-fact of the RKH HOLDRS Investor with respect to such
HOLDRS (and any such dividends and distributions), with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest) to receive all benefits and otherwise exercise all
rights of beneficial ownership of such HOLDRS (and any such dividends and
distributions), all in accordance with the terms of the Offer and to authorize
(a) Van Eck Securities to act on its behalf in connection with the
Rebalancing Transaction; (b) Van Eck Securities to retain the Transition Manager as the manager of the Rebalancing Transaction
and as authorized participant when placing the initial creation order with the RKH ETF; (c) Van Eck Securities to instruct the
Transition Manager to consummate the Rebalancing Transaction on its behalf and to exchange the Rebalanced HOLDRS Securities for
shares of the RKH ETF; and (d) the Exchange Agent to surrender the tendered HOLDRS to the Trustee for cancellation and the transfer
of the securities underlying the tendered HOLDRS to the Transition Manager on the date of settlement, which we expect to be three
trading days after the date on which the purchases and sales performed by the Transition Manager in connection with the Rebalancing
Transaction are conducted; but, in each case, only if all conditions of the Offer are satisfied or waived at the Expiration Time
and the RKH ETF accepts the tendered HOLDRS for exchange. Upon such acceptance for exchange, all prior powers of attorney given
by the tendering RKH HOLDRS Investor with respect to such HOLDRS (and any such dividends and distributions) will, without further
action, be revoked and no subsequent powers of attorney may be given by the tendering RKH HOLDRS Investor (and, if given, will
not be effective).
By
tendering HOLDRS in the Offer, and in accordance with the terms and conditions
of the Offer, the tendering RKH HOLDRS Investor also shall be deemed to
represent and warrant that: (a) the tendering RKH HOLDRS Investor has full
power and authority to tender, sell, assign and transfer the tendered HOLDRS (and
any and all dividends and distributions declared in respect of such HOLDRS
having a record date on or after the Expiration Time); (b) when and to the
extent the RKH ETF accepts such HOLDRS for exchange, the RKH ETF will acquire
good, marketable and unencumbered title thereto, free and clear of all liens,
restrictions, charges, proxies, encumbrances or other obligations relating to
their sale or transfer, and not subject to any adverse claim; (c) on request,
the tendering RKH HOLDRS Investor will execute and deliver any additional
documents deemed by the Exchange Agent or the RKH ETF to be necessary or
desirable to complete the sale, assignment and transfer of the tendered HOLDRS
(and any and all dividends and distributions declared in respect of such HOLDRS
after the Expiration Time); and (d) the tendering RKH HOLDRS Investor has read
and agreed to all of the terms of this Offer to Exchange and the Letter of
Transmittal.
3
B.
Book-Entry Transfer.
The
Exchange Agent will establish an account with respect to HOLDRS at DTC for
purposes of the Offer within two business days after the date of the
commencement of the Offer (“Book-Entry Transfer Facility”). Any financial
institution that is a participant in the Book-Entry Transfer Facility systems
of DTC may make a book-entry delivery of any HOLDRS by causing DTC to transfer
such HOLDRS into the Exchange Agent’s account at DTC in accordance with DTC’s
procedures for such transfer. However, although delivery of HOLDRS may be
effected through book-entry transfer at DTC, an Agent’s Message must be
received by the Exchange Agent prior to the Expiration Time.
C.
Determination of Validity.
All
questions as to the validity, form, eligibility (including time of receipt) and
acceptance for any tender of HOLDRS for exchange will be determined by us, in
our sole discretion. We reserve the absolute right to reject any and all
tenders determined by us not to be in proper form or the acceptance for
exchange of which may, in the opinion of our counsel, be unlawful. We also
reserve the absolute right to waive any defect or irregularity in the tender of
any HOLDRS of any particular RKH HOLDRS Investor, whether or not similar
defects or irregularities are waived in the case of other RKH HOLDRS Investors.
No tender of HOLDRS will be deemed to have been validly made until all defects
and irregularities have been cured or waived to our satisfaction. None of the
RKH ETF, the Exchange Agent, the Information Agent or any other person will be
under any duty to give notification of any defects or irregularities in tenders
or incur any liability for failure to give any such notification.
The
delivery is at the option and risk of the tendering RKH HOLDRS Investor, and
the delivery will be deemed made only when actually received by the Exchange
Agent (including receipt of a Book-Entry Confirmation). In all cases,
sufficient time should be allowed to ensure timely delivery.
Notwithstanding
any other provision of the Offer, HOLDRS accepted for exchange pursuant to the
Offer will in all cases only be made after timely receipt by the Exchange Agent
of a Book-Entry Confirmation of a book-entry transfer of such HOLDRS into the
Exchange Agent’s account at DTC pursuant to the procedures set forth in this
Section 3.
D.
Backup Withholding.
Payments
made pursuant to the Offer generally may be subject to information reporting
and backup withholding of U.S. federal income tax, at the rate of 28%, if a
U.S. Holder (as defined in Section 5) (a) fails to furnish such U.S. Holder’s
correct U.S. taxpayer identification number (generally on IRS Form W-9), (b)
furnishes an incorrect U.S. taxpayer identification number, (c) is notified by
the IRS that such U.S. Holder has previously failed to properly report items
subject to backup withholding tax, or (d) fails to certify, under penalty of
perjury, that such U.S. Holder has furnished its correct U.S. taxpayer
identification number and that the IRS has not notified such U.S. Holder that it
is subject to backup withholding tax. However, certain exempt persons
(including corporations and certain non-U.S. individuals) generally are
excluded from these information reporting and backup withholding rules,
provided they properly demonstrate their eligibility for exemption. Backup
withholding tax is not an additional U.S. federal income tax and any amounts
withheld under the U.S. backup withholding tax rules will be allowed as a
credit against a U.S. Holder’s U.S. federal income tax liability, if any, or
will be refunded, if such U.S. Holder furnishes required information to the IRS
in a timely manner. Each RKH HOLDRS Investor should consult its own tax advisor
regarding the information reporting and backup withholding rules. Each
tendering RKH HOLDRS Investor that is a U.S. Holder must have on file with, or
provide to, its securities
intermediary a valid IRS Form W-9 to prevent backup withholding of U.S. federal
income tax at a rate generally equal to 28% of the gross payments made pursuant
to the Offer. Each tendering RKH HOLDRS Investor that is a non-U.S. person must
have on file with, or provide to, its securities
intermediary a valid applicable Form W-8, in order to avoid backup withholding.
4. Withdrawal Rights.
Except as
otherwise provided in this Section 4, tenders of HOLDRS made pursuant to
the Offer are irrevocable.
HOLDRS
tendered pursuant to the Offer may be validly withdrawn prior to the Expiration
Time and, unless theretofore accepted for exchange by the RKH ETF pursuant to
the Offer, may also be validly withdrawn at any time after December 31, 2011.
Once the RKH ETF accepts HOLDRS for exchange pursuant to the Offer, all tenders
not previously validly withdrawn become irrevocable.
For a
withdrawal to be effective, a written or facsimile transmission notice of
withdrawal must be timely received by the Exchange Agent at one of its
addresses set forth on the back cover page of this Offer to Exchange. Any such
notice of withdrawal
4
must specify the name of the person who tendered such HOLDRS to be
validly withdrawn, the number of HOLDRS to be validly withdrawn and the name of
the registered holder of such HOLDRS, if different from that of the person who
tendered such HOLDRS. If HOLDRS have been tendered pursuant to the procedure
set forth in Section 3 – “Procedures for Accepting the Offer and Tendering
HOLDRS,” any notice of withdrawal must also specify the name and number of the
account at DTC to be credited with the validly withdrawn HOLDRS.
Withdrawals
of HOLDRS may not be rescinded. Any HOLDRS validly withdrawn will thereafter be
deemed not to have been validly tendered for purposes of the Offer to Exchange.
However, validly withdrawn HOLDRS may be re-tendered by again following one of
the procedures described in Section 3 – “Procedures for Accepting the
Offer and Tendering HOLDRS” at any time prior to the Expiration Time.
No
withdrawal rights apply during any subsequent offering period or with respect
to HOLDRS validly tendered in the Offer and accepted for exchange.
See
Section 1 – “Terms of the Offer.”
We
will determine, in our sole discretion, all questions as to the form and
validity (including time of receipt) of any notice of withdrawal. None of the RKH
ETF, the Exchange Agent, the Information Agent or any other person will be
under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification.
5. Certain U.S. Federal Income Tax Consequences.
The
following is a summary of certain U.S. federal income tax consequences of the
Offer to RKH HOLDRS Investors who exchange their HOLDRS for shares of the
RKH ETF. The discussion is for general information only and does not purport
to consider all aspects of U.S. federal income taxation that might be relevant.
The discussion is based on current provisions of the Internal Revenue Code of
1986 as amended (the “Code”),
existing, proposed and temporary regulations thereunder and administrative
and judicial interpretations thereof, all of which are subject to change,
possibly with a retroactive effect. The discussion applies only to RKH HOLDRS
Investors who hold HOLDRS as capital assets within the meaning of Section
1221 of the Code.
This
summary does not discuss all aspects of U.S. federal income taxation which may
be relevant to certain types of RKH HOLDRS Investors subject to special U.S.
federal income tax rules (e.g., financial institutions, broker-dealers,
partnerships or other pass-through entities, non-U.S. persons and entities,
insurance companies, expatriates, tax-exempt organizations, RKH HOLDRS
Investors who hold their HOLDRS as part of a hedge, straddle or conversion or
other integrated transaction). In addition, the RKH ETF has not sought a ruling
from the Internal Revenue Service (the “IRS”) or an opinion from its tax
counsel regarding any U.S. federal income tax consequences of the Offer and
there is no assurance that the IRS would not challenge any of the conclusions
set forth herein.
The
discussion below applies only to RKH HOLDRS Investors that are U.S. Holders.
For purposes of this discussion, a “U.S. Holder” is a beneficial owner of
HOLDRS that is for U.S. federal income tax purposes: (i) an individual who is a
citizen or resident of the United States; (ii) a corporation, or other entity
taxable as a corporation for U.S. federal income tax purposes, created or
organized in or under the laws of the United States, any state thereof or the
District of Columbia; (iii) an estate the income of which is subject to U.S.
federal income taxation regardless of its source; or (iv) a trust, if a court
within the United States is able to exercise primary jurisdiction over its
administration and one or more U.S. persons have authority to control all of
its substantial decisions, or if the trust has a valid election in effect under
applicable Treasury regulations to be treated as a U.S. person. This discussion
does not consider the effect of any foreign, state or local tax laws.
If a
partnership (or other entity taxable as a partnership for U.S. federal income
tax purposes) holds HOLDRS, the U.S. federal income tax treatment of a partner
will generally depend on the status of the partner and the activities of the
partnership. Partnerships that hold HOLDRS, and partners in such partnerships,
should consult their own tax advisors regarding the U.S. federal, state, local
and foreign tax consequences to them of participating in the Offer. RKH HOLDRS
Investors that are neither U.S. Holders nor partnerships should also consult
their own tax advisors regarding the U.S. federal, state, local and foreign tax
consequences to them of participating in the Offer.
Because
individual circumstances may differ, each RKH HOLDRS Investor should consult
its, his or her own tax advisor to determine the applicability of the rules
discussed below and the particular tax effects of the Offer, including the
application and effect of any state, local and foreign tax laws and of changes
in such laws.
Investors who tender their HOLDRS for exchange
in the Offer will generally recognize taxable gains (or losses) in connection with the sales of securities underlying their HOLDRS
made by the Transition Manager in the Rebalancing Transaction, although the exchange of HOLDRS for shares in the RKH ETF pursuant
to the Offer will generally not be a taxable transaction.
As of the date hereof, we expect that approximately 77% of the value of the securities underlying HOLDRS will be sold by the Transition
Manager in the Rebalancing Transaction, although this percentage may change between now and the Expiration Time.
In particular, Section 351(a) of the Code states the general rule that
“no gain or loss shall be recognized if property is transferred to a corporation by one or more persons solely in exchange
for stock in such corporation” if immediately after the exchange such persons along with any other transferors own at least
80 percent of the voting power of the stock of the corporation and at least 80 percent of each class of nonvoting stock of the
corporation. Section 351(e) of the Code, however, contains an exception to the nonrecognition of gain and loss for transfers of
property to an “investment company.” A transfer of property to the RKH ETF will be treated as a transfer to an investment
company only if the transfer results in a diversification of the interests of the transferring persons. Diversification will not
result if the transferring persons transfer either identical property to the company or a diversified portfolio of securities.
It is intended that the Rebalancing Transaction will result in each RKH HOLDRS Investor transferring a diversified portfolio of
securities to the RKH ETF. However, as discussed above, in the Rebalancing Transaction, the Transition Manager will sell certain
securities underlying HOLDRS which are tendered for exchange in the Offer and purchase other securities in the open market so that
the portfolio of securities transferred to the RKH ETF on behalf of RKH HOLDRS Investors conforms as closely as reasonably possible
to the securities in the Index. The amount of taxable gains (or loss) recognized in the Rebalancing Transaction by U.S. Holders
will depend on the particular securities sold and will depend on the U.S. Holder’s tax basis in the securities sold. Thus,
although U.S. Holders who tender their HOLDRS for exchange in the Offer will generally recognize taxable gains (or losses) with
respect to securities underlying HOLDRS that are sold in the Rebalancing Transaction, any unrealized gain (or loss) in respect
of the underlying securities of HOLDRS that are not sold by the Transition Manager in the Rebalancing Transaction and are transferred
to the RKH ETF will generally not be currently taxable and, instead, will generally remain deferred until the RKH ETF shares are
sold by RKH HOLDRS Investors or the RKH ETF sells such underlying securities (in which case, such recognized gain (or loss) will
impact the RKH ETF’s overall calculation of its income). The gross amount of sales of each security will be allocated to
each RKH HOLDRS Investor on a pro rata basis.
U.S. Holders who tender their HOLDRS for exchange
in the Offer will have a tax basis in the shares of the RKH ETF received in the Offer equal to the tax basis of their share of
the underlying securities transferred to the RKH ETF, after taking into account the sales and purchases by the Transition Manager
in the Rebalancing Transaction. A U.S. Holder’s initial tax basis in each of the securities
underlying HOLDRS, regardless of whether such securities are sold in the Rebalancing Transaction or transferred to the RKH ETF,
is generally determined by allocating the purchase price for HOLDRS among the underlying securities based on their relative fair
market values at the time of purchase of HOLDRS. A U.S. Holder’s tax basis in their share of the securities purchased in
the Rebalancing Transaction will generally equal the purchase price for such securities.
Information on the sales of underlying securities
and purchases by the Transition Manger in connection with the Rebalancing Transaction will be available on the www.vaneck.com website
following the consummation of the Rebalancing Transaction. It will be the responsibility of the tendering U.S. Holder, in consultation
with its tax advisor, to determine the amount of any gain or loss to such tendering U.S. Holder that will generally result from
the Rebalancing Transaction, along with such U.S. Holder’s tax basis in shares of the RKH ETF received in the exchange.
5
6. Price Range of HOLDRS; Dividends.
HOLDRS
are listed and principally trade on NYSE Arca under the symbol “RKH.” On
November 9, 2011, the last full day of trading before the commencement of the
Offer, the reported closing sales price of HOLDRS on NYSE Arca was $67.43 per
HOLDRS. RKH HOLDRS Investors are urged to obtain a current market quotation
for HOLDRS.
The net
dividends on HOLDRS paid by the RKH HOLDRS Trust in its last two calendar years
were as follows:
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|
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Calendar Year
|
|
Net Dividend
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|
|
|
|
|
|
|
2009
|
|
$
|
0.95894
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|
|
|
|
|
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|
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2010
|
|
$
|
0.563073
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|
7. Certain Information Concerning RKH HOLDRS Trust.
Except
as specifically set forth herein, the information concerning RKH HOLDRS Trust
contained in this Offer to Exchange has been taken from or is based upon
publicly available documents and records on file with the SEC and other public
sources, and is qualified in its entirety by reference to such documents and records.
None of the RKH ETF, the Exchange Agent or the Information Agent can take
responsibility for the accuracy or completeness of the information contained in
such documents and records or for any failure by RKH HOLDRS Trust to disclose
events which may have occurred or which may affect the significance or accuracy
of any such information but which are unknown to the RKH ETF, the Exchange
Agent or the Information Agent. The RKH ETF, the Exchange Agent and the
Information Agent have relied upon the accuracy of the information included in
such publicly available documents and records and other public sources and have
not made any independent attempt to verify the accuracy of such information.
RKH
HOLDRS Trust was formed under the depositary trust agreement, dated as of May
18, 2000, as amended (the “Trust Agreement”), among The Bank of New York
Mellon, as trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated,
other depositors and the holders and beneficial owners from time to time of HOLDRS
issued thereunder. RKH HOLDRS Trust is not a registered investment company
under the 1940 Act. RKH HOLDRS Trust currently holds securities issued by a
group of specified companies that were, at the time of the initial offering on
June 22, 2000, generally considered to be involved in various segments of the
regional banking industry. There are currently 17 companies included in RKH HOLDRS
Trust as of November 7, 2011, which may change as a result of reconstitution
events, distributions of securities by underlying issuers or other events. HOLDRS
are separate from the underlying securities that are represented by HOLDRS.
HOLDRS
are registered under the Exchange Act. Accordingly, RKH HOLDRS Trust is subject
to modified information reporting requirements pursuant to the Exchange Act.
Because the securities of the issuers of the underlying securities held by RKH
HOLDRS Trust are registered under the Exchange Act, the issuers of the
underlying securities are required to file periodically financial and other
information specified by the SEC. Information provided to or filed with the SEC
by the issuers of the underlying securities held by RKH HOLDRS Trust with
respect to their registered securities is available for inspection at the SEC’s
Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference room. Copies of such information may be obtainable by mail, upon
payment of the SEC’s customary charges, by writing to the SEC at 100 F Street,
N.E., Washington, D.C. 20549-0213. The SEC also maintains a website on the
Internet at
6
http://www.sec.gov
that contains reports, proxy statements and other information regarding
registrants filed electronically with the SEC.
8. Certain Information Concerning the RKH ETF and its
Adviser.
The RKH ETF
is a series of Market Vectors ETF Trust, which was organized as a Delaware
statutory trust on March 15, 2001. Market Vectors ETF Trust is an open-end
management investment company that is registered under the 1940 Act. The RKH
ETF was organized to acquire the assets of RKH HOLDRS Trust by means of the
Offer and has not conducted any unrelated activities since its organization.
Market Vectors ETF Trust’s principal executive offices are located at 335
Madison Avenue, 19th Floor, New York, New York 10017 and its telephone number
at that address is (212) 293-2000.
The Adviser
is registered under the Investment Advisers Act of 1940 and was incorporated in
the State of Delaware. The Adviser has been an investment adviser since 1955
and also acts as adviser or sub-adviser to other mutual funds, exchange-traded
funds, other pooled investment vehicles and separate accounts. The Adviser’s
principal executive offices are located at 335 Madison Avenue, 19th Floor, New
York, New York 10017 and its telephone number at that address is (212)
293-2000.
The name,
citizenship, business address, present principal occupation or employment and
five-year employment history of each of the trustees and executive officers of
the RKH ETF and the Adviser are listed in Schedule I to this Offer to Exchange.
During the
last five years, none of the RKH ETF, the Adviser or, to the best knowledge of
the RKH ETF and the Adviser, any of the persons listed in Schedule I to this
Offer to Exchange (i) has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) was a party
to any judicial or administrative proceeding (except for matters that were
dismissed without sanction or settlement) that resulted in a judgment, decree
or final order enjoining the person from future violations of, or prohibiting
activities subject to, federal or state securities laws, or a finding of any
violation of such laws.
As of the
date of the Offer, none of the RKH ETF, the Adviser or, to the best knowledge
of the RKH ETF and the Adviser, any of the persons listed in Schedule I to
this Offer to Exchange, or any associate or majority-owned subsidiary of any
such person, beneficially owns any HOLDRS and (ii) none of the RKH ETF,
the Adviser or, to the best knowledge of the RKH ETF and the Adviser, any of
the persons listed in Schedule I to this Offer to Exchange, or any associate or
majority-owned subsidiary of the RKH ETF, has effected any transaction in
HOLDRS during the past sixty days.
Except as
described in this Offer to Exchange, none of the RKH ETF, the Adviser or, to
the best knowledge of the RKH ETF and the Adviser, any of the persons listed in
Schedule I to this Offer to Exchange, has any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of RKH HOLDRS Trust, including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or voting of
such securities, finder’s fees, joint ventures, loan or option arrangements,
puts or calls, guarantees of loans, guarantees against loss, guarantees of
profits, division of profits or loss or the giving or withholding of proxies.
Except as
set forth in this Offer to Exchange, none of the RKH ETF, the Adviser or, to
the best knowledge of the RKH ETF and the Adviser, any of the persons listed on
Schedule I hereto, has had any business relationship or transaction with
RKH HOLDRS Trust or any of its executive officers, directors or affiliates that
is required to be reported under the rules and regulations of the SEC
applicable to the Offer. Except as set forth in this Offer to Exchange, there
have been no contacts, negotiations or transactions between the RKH ETF, the
Adviser or any of their subsidiaries or, to the best knowledge of the RKH ETF
and the Adviser, any of the persons listed in Schedule I to this Offer to
Exchange, on the one hand, and Merrill Lynch or its affiliates, on the other
hand, concerning a merger, consolidation or acquisition, tender offer or other
acquisition of securities of RKH HOLDRS Trust, an election of directors or a
sale or other transfer of a material amount of assets during the past two
years.
Available
Information. Pursuant to Rule 14d-3 under
the Exchange Act, we have filed with the SEC a Tender Offer Statement on
Schedule TO (the “Schedule TO”), of which the Offer to Exchange forms
a part, and exhibits to the Schedule TO. The Schedule TO and the
exhibits thereto, as well as other information filed by the RKH ETF with the
SEC, are available for inspection at the SEC’s Public Reference Room at
100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference room. Copies of
such information may be obtainable by mail, upon payment of the SEC’s customary
charges, by writing to the SEC at such address. The SEC also maintains a
website on the Internet at http://www.sec.gov
that contains the Schedule TO and the exhibits thereto and other
information that the RKH ETF has filed electronically with the SEC.
7
9. Source and Amount of Funds.
We do not
need any outside funds to effect the exchange of HOLDRS issued by RKH HOLDRS
Trust for shares of the RKH ETF, upon the terms and subject to the conditions
set forth in the Offer.
The Offer
is not conditioned upon any financing arrangements.
10. Background of the Offer; Past Contacts or
Negotiations with RKH HOLDRS Trust.
In response
to an auction process initiated by Bank of America Corporation, on January 14,
2011, Van Eck submitted a non-binding indication of interest to enter into a
strategic transaction with Merrill Lynch, structured as a customary acquisition
or licensing in perpetuity of certain assets, including intellectual property,
related to the HOLDRS platform, which acquisition would be conditioned on the
successful exchange offer of certain HOLDRS constituting part of the HOLDRS
platform. Beginning in February 2011, Merrill Lynch granted
Van Eck access to an electronic data room, which included information about the
HOLDRS platform and copies of certain agreements related to the HOLDRS business.
In response to a request by Bank of America Corporation, on February 14,
2011, Van Eck submitted a revised non-binding indication of interest.
On
March 10, 2011, Merrill Lynch distributed a draft asset purchase agreement to
Van Eck and requested that Van Eck submit its best and final offer by March 28,
2011. On March 28, 2011, Van Eck submitted a revised proposal, together
with a draft asset purchase agreement showing proposed changes by Van Eck.
On April
14, 2011, Van Eck and Merrill Lynch entered into an exclusivity agreement with
an exclusivity period through May 30, 2011 (which was subsequently extended
through July 29, 2011). On April 27, 2011, representatives of Van Eck and
Merrill Lynch and their respective counsel met to discuss potential structuring
for the exchange offers, potential amendments to the depositary trust
agreements for the RKH HOLDRS Trust and the trusts related to the other HOLDRS
and other process-related issues.
During the
spring and summer of 2011, Van Eck, Merrill Lynch and their respective counsel
negotiated the terms of the transaction, exchanged drafts
of the asset purchase agreement, disclosure schedules and related documents and
attended meetings and had calls to discuss various provisions of such documents.
On August
11, 2011, Merrill Lynch and Van Eck entered into the Asset Purchase Agreement
pursuant to which Merrill Lynch has agreed to sell or license to Van Eck,
Merrill Lynch’s right, title and interest to certain registered intellectual
property, unregistered trademarks and copyrights, data, software and other
materials as specified in the Asset Purchase Agreement that relate to the
rights of Merrill Lynch with respect to existing HOLDRSSM trusts, including
RKH HOLDRS Trust, and the calculation, management and licensing of HOLDRS. The
Asset Purchase Agreement contemplates six separate exchange offers, including
the Offer. If any one of the exchange offers is consummated, regardless of
whether the Offer is consummated, RKH HOLDRS Trust will be terminated and
liquidated. The transaction was
announced in a press release issued by Van Eck prior to the opening of the
financial markets on August 12, 2011.
On
November 10, 2011, we commenced the Offer.
11. Purpose of the Offer; Plans for RKH HOLDRS Trust;
Appraisal Rights.
Purpose
of the Offer. We are making the Offer because we
wish to include all of the assets of RKH HOLDRS Trust in the RKH ETF. On August
11, 2011, Merrill Lynch and Van Eck entered into the Asset Purchase Agreement.
The Asset Purchase Agreement contemplates six separate exchange offers,
including the Offer.
Plans
for RKH HOLDRS Trust. Trading in HOLDRS will be
halted on NYSE Arca approximately 30 minutes prior to the Expiration Time.
Trading in HOLDRS will thereafter be suspended and HOLDRS will be delisted
following termination of RKH HOLDRS Trust, which we expect to occur
concurrently with the closing under the Asset Purchase Agreement. After the
Expiration Time, the RKH ETF expects that HOLDRS issued by RKH HOLDRS Trust
will no longer trade on either NYSE Arca or any other national securities
exchange and will no longer use a HOLDRS ticker symbol. Pursuant to the
provisions of RKH HOLDRS Trust, at any time after expiration of a four-month
period following the closing under the Asset Purchase Agreement, the Trustee
has the right to sell the
securities underlying your HOLDRS. See Section 14 – “Certain Effects of the
Offer.”
Appraisal
Rights. You do not have any appraisal rights as a
result of the Offer.
8
12. Interest of Trustees and Executive Officers;
Transactions and Arrangements Concerning HOLDRS.
The
Trustees and executive officers of the RKH ETF and their associates (as that term is
defined in Rule 12b-2 under the Exchange Act) did not beneficially own any
HOLDRS as of the date of this Offer to Exchange.
13. Mechanics Involving the Offer.
If all
conditions of the Offer are satisfied or waived at the Expiration Time, the
following will occur:
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The RKH ETF will give the Exchange Agent notice of acceptance of HOLDRS to be exchanged. |
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Upon receipt of the written instructions from Van Eck Securities, acting as attorney-in-fact on behalf of
all tendering RKH HOLDRS Investors and their securities intermediaries, the Transition Manager will sell certain of the underlying
securities of the tendered HOLDRS and purchase certain other securities in the open market such that securities purchased, together
with the securities underlying the tendered HOLDRS that are not sold, conform as closely as reasonably possible to the portfolio
of securities then making up the Index. The purchases and sales performed by the Transition Manager are hereinafter referred to
as the “Rebalancing Transaction” and the securities underlying the tendered HOLDRS, immediately after giving effect to
the Rebalancing Transaction, are hereinafter referred to as the “Rebalanced HOLDRS Securities.” RKH HOLDRS
Investors who tender their HOLDRS for exchange in the Offer will generally recognize taxable gains (or losses) in connection with
the sales of securities underlying their HOLDRS made by the Transition Manager in the Rebalancing Transaction. As of the date hereof,
we expect that approximately 77% of the value of the securities underlying HOLDRS will be sold by the Transition Manager in the
Rebalancing Transaction, although this percentage may change between now and the Expiration Time. The amount of taxable gain (or
loss) recognized in the Rebalancing Transaction by RKH HOLDRS Investors will depend on the particular securities sold and will
vary depending on the RKH HOLDRS Investor's tax basis in the securities sold. See Section 5 – “Certain U.S. Federal
Income Tax Consequences” for a discussion of the tax consequences of the Offer. |
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• |
The basket of the securities compiled by the Transition Manager that results from the Rebalancing Transaction
is expected to comply with the composition of the Index provided by Van Eck Securities to the Transition Manager (which will set
forth the relative percentages of each security to be included in such basket, excluding any residual cash). |
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• |
Each outstanding HOLDRS validly tendered by a RKH HOLDRS Investor and delivered pursuant to the Offer will
be exchanged into one share of the RKH ETF with an initial net asset value equal to the Rebalanced HOLDRS Securities Value. The
Rebalancing Transaction will be structured so that, assuming all trades are completed as planned, the aggregate value of the securities
sold will be the same as the aggregate value of the securities purchased, and no commissions or fees will be charged in respect
of those trades. Therefore, Van Eck expects the Rebalanced HOLDRS Securities Value will be the same as the aggregate value of the
securities formerly underlying the tendered HOLDRS, in each case measured as of 4:00 p.m., New York City time, on the day on which
the Expiration Time occurs. The Rebalanced HOLDRS Securities will then be exchanged into shares of the RKH ETF, and the initial
net asset value of shares of the RKH ETF will be equal to the Rebalanced HOLDRS Securities Value. Because the initial net asset
value of shares of the RKH ETF will be calculated based on the Rebalanced HOLDRS Securities Value, such value could be at a premium
or a discount to the last trading price of your HOLDRS tendered for exchange as of the Expiration Time and at a premium or a discount
to the last trading price of the securities underlying your HOLDRS as of 4:00 p.m., New York City time, on the day on which the
Expiration Time occurs. Further, the Rebalanced HOLDRS Securities Value could be different from the value of the securities formerly
underlying the tendered HOLDRS if, because of market disruptions, all of the purchases and sales comprising the Rebalancing Transaction
cannot be completed as planned by the settlement date. See answer to questions “What is the market value of my HOLDRS and
of the securities underlying my HOLDRS as of a recent date? How can I determine the indicative Rebalanced HOLDRS Securities Value
as of a recent date?” and “What risks are associated with the Offer and with an investment in shares of the RKH ETF?—Risks
Associated with the Rebalancing Transaction.” |
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• |
The purchases and sales performed by the Transition Manager in connection with the Rebalancing Transaction
will be made without cost to you or Van Eck Global, and the Transition Manager has guaranteed that, assuming it receives the required
instructions from Van Eck Securities in a timely manner, they will be made in compliance with the instructions and at the closing
price per share of the underlying securities on the day the Expiration Time occurs. The Transition Manager will not be paid a fee
but will be permitted to keep all profits, and will assume all losses, on the purchases and sales performed by the Transition Manager
in the Rebalancing Transaction. |
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• |
On the date of settlement, which we expect to be three trading days after the date on which the purchases
and sales performed by the Transition Manager in connection with the Rebalancing Transaction are conducted, the Exchange Agent
will surrender the tendered HOLDRS to the Trustee, who will cancel such HOLDRS, and deliver the underlying securities to the Transition
Manager. That portion of the underlying securities that were sold in the Rebalancing Transaction through the Transition Manager
will then be delivered in settlement of the trades. The remainder of the underlying securities and the securities purchased in
the Rebalancing Transaction will be transferred by the Transition Manager, acting in its capacity as authorized participant, to
the RKH ETF. |
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Upon delivery of the securities described in the preceding bullet point, the RKH ETF shall cause the shares
of the RKH ETF to be delivered to the Exchange Agent through the Transition Manager, acting in its capacity as authorized participant,
which will then cause the shares to be delivered, to DTC, for allocation to the tendering RKH HOLDRS Investors. |
Because the composition of the Index will not
be known until the Expiration Time, the extent to which the Transition Manager will need to purchase and sell securities in connection
with the Rebalancing Transaction (and the amount of taxable gains (or losses) you will generally recognize in respect of the Rebalancing
Transaction) will also be unknown until that time. As the Rebalancing Transaction is being made prior to the contribution of securities
to the RKH ETF, the RKH ETF will not make any distribution to assist tendering RKH HOLDRS Investors in paying any taxes which may
result from the Rebalancing Transaction.
By tendering your HOLDRS for exchange in
the Offer, you will be authorizing (i) Van Eck Securities to act as your attorney-in-fact on your behalf in connection with the
Rebalancing Transaction; (ii) Van Eck Securities to retain the Transition Manager as the manager of the Rebalancing Transaction
and as authorized participant when placing the initial creation order with the RKH ETF; (iii) Van Eck Securities to instruct the
Transition Manager to consummate the Rebalancing Transaction on your behalf and to exchange the Rebalanced HOLDRS Securities for
shares of the RKH ETF; and (iv) the Exchange Agent to surrender the tendered HOLDRS to the Trustee for cancellation and the transfer
of the securities underlying your HOLDRS to the Transition Manager on the date of settlement, which we expect to be three trading
days after the date on which the purchases and sales performed by the Transition Manager in connection with the Rebalancing Transaction
are conducted; but, in each case, only if all conditions of the Offer are satisfied or waived at the Expiration Time and the RKH
ETF accepts the tendered HOLDRS for exchange.
14. Certain Effects of the Offer.
Termination of RKH HOLDRS Trust.
Trading in
HOLDRS will be halted on NYSE Arca approximately 30 minutes prior to the Expiration
Time. Trading in HOLDRS will thereafter be suspended and HOLDRS will be
delisted following termination of RKH HOLDRS Trust which we expect to occur
concurrently with the closing under the Asset Purchase Agreement. After the
Expiration Time, the RKH ETF expects that HOLDRS issued by RKH HOLDRS Trust
will no longer trade on either NYSE Arca or any other national securities
exchange and will no longer use a HOLDRS ticker symbol. Therefore, if you do
not tender your HOLDRS for exchange in the Offer, you may not be able to trade
your HOLDRS after the Expiration Time. Following the termination of RKH HOLDRS
Trust but prior to its liquidation, you will still be able to surrender your
HOLDRS to the Trustee, pay applicable fees (up to $10.00 per each round lot of
100 HOLDRS surrendered) and expenses and receive delivery of the securities
underlying your HOLDRS, together with any dividends or other distributions or net proceeds from
the sale of any rights or other property received prior to the Expiration Time
with respect thereto. Pursuant to the provisions of RKH HOLDRS Trust, at
any time after expiration of a four-month period following the closing under
the Asset Purchase Agreement, the Trustee has the right to sell the securities underlying your HOLDRS.
After any such liquidation you would be entitled to receive your proportionate
share of the net proceeds, after deduction of applicable fees and expenses,
upon surrender of your HOLDRS to the Trustee. The Asset Purchase Agreement
contemplates six separate exchange offers, including the Offer. If any one of
the exchange offers is consummated, regardless of whether the Offer is
consummated, RKH HOLDRS Trust will be terminated and liquidated. The delivery
of any underlying securities by RKH HOLDRS Trust to you in exchange for your
HOLDRS will not be a taxable event for U.S. federal income tax purposes,
9
except to the extent that you receive cash in lieu of any fractional
securities. To the extent the Trustee sells the securities underlying your
HOLDRS and you receive the net proceeds, you will be treated in the same manner
as if you sold your HOLDRS.
15. Corporate Actions; Dividends and Distributions.
If, on or
after the date of the Offer, RKH HOLDRS Trust splits, combines or otherwise
changes HOLDRS then, without prejudice to our rights under Section 16 –
“Certain Conditions of the Offer,” we may make such adjustments in the terms of
the Offer as we deem appropriate to reflect such split, combination or other
change, including the number or type of securities offered to be exchanged.
Any
dividend or other distribution in respect of underlying securities of HOLDRS
having a record date before the Expiration Time will be payable to the tendering
RKH HOLDRS Investors.
16. Certain Conditions of the Offer.
Notwithstanding
any other provisions of the Offer and in addition to our right to extend, amend
or terminate the Offer in accordance with applicable law, we shall be required
to accept for exchange or, subject to any applicable rules and regulations of
the SEC, including Rule 14e-1(c) under the Exchange Act (relating to our
obligation to pay for or return tendered HOLDRS promptly after termination or
expiration of the Offer), exchange any tendered HOLDRS if:
(1) the
Minimum Condition shall have been satisfied or waived;
(2) the
conditions set forth in Article VI of the Asset Purchase Agreement, which
include: (a) truthfulness of representations, warranties and covenants set
forth therein, (b) absence of any governmental order which could make any
transaction contemplated therein illegal, and (c) effectiveness of the
registration statements for the RKH ETF (the “Agreement Conditions”), shall
have been satisfied or waived; and
(3) the
General Conditions shall have been satisfied or waived.
The
“General Conditions” mean that none of the following shall have occurred and be
continuing:
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any
pending claim, action, suit, arbitration, inquiry, proceeding or
investigation by or before any federal, national, supranational, state,
provincial, local or other government, governmental, regulatory or
administrative authority, agency or commission or any court, tribunal, or
judicial or arbitral body in connection with the Offer which, in our
reasonable judgment, either (a) has, or is reasonably likely to have, a
Material Adverse Effect (as defined below) on the assets purchased under the
Asset Purchase Agreement, Merrill Lynch or Van Eck, (b) would prohibit,
prevent, or delay beyond December 31, 2011, the consummation of the Offer to
Exchange, or (c) would materially impair the contemplated benefits of the
Offer to Exchange to Van Eck;
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a
federal, national, supranational, state, provincial, local or similar
statute, law, ordinance, regulation, rule, code, requirement or rule of law
(including any state or federal securities laws), order, writ, judgment,
injunction, decree, stipulation, determination or award entered by or with
any federal, national, supranational, state, provincial, local or other
government, governmental, regulatory or administrative authority, agency or
commission or any court, tribunal, or judicial or arbitral body, has been
enacted, entered, issued, promulgated, enforced or deemed applicable by any
federal, national, supranational, state, provincial, local or other
government governmental, regulatory or administrative authority, agency or
commission or any court, tribunal, or judicial or arbitral body which, in our
reasonable judgment, either (a) has, or is reasonably likely to have, a
Material Adverse Effect on the assets purchased under the Asset Purchase
Agreement, Merrill Lynch or Van Eck, (b) would prohibit, prevent, or delay
beyond December 31, 2011, the consummation of the Offer to Exchange, or (c)
would materially impair the contemplated benefits of the Offer to Exchange to
Van Eck;
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•
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the
Trustee has taken or overtly threatened to take any action that challenges
the validity or effectiveness of the procedures used by us in the making of
the Offer to Exchange or the acceptance of HOLDRS pursuant to the Offer to
Exchange which, in our reasonable judgment, either (a) has, or is reasonably
likely to have, a Material Adverse Effect on the assets purchased under the
Asset Purchase Agreement, Merrill Lynch or Van Eck, (b) would prohibit,
prevent, or delay beyond December 31, 2011, the consummation of the Offer to
Exchange, or (c) would materially impair our contemplated benefits of the
Offer to Exchange to Van Eck;
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there
has occurred or be reasonably likely to occur any event or condition not
described in the three immediately preceding bullets which, in our reasonable
judgment, either (a) has, or is reasonably likely to have, a Material Adverse
Effect on the assets purchased under the Asset Purchase Agreement, Merrill
Lynch or Van Eck, (b) would prohibit, prevent, or delay
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10
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beyond
December 31, 2011, the consummation of the Offer to Exchange, or (c) would
materially impair the contemplated benefits of the Offer to Exchange to Van
Eck;
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there
exists, in our reasonable judgment, any actual legal impediment to the
acceptance for exchange of, some or all of HOLDRS under the procedures
described in the Offer to Exchange; or
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there
exists (a) any general suspension of, or limitation on prices for, trading in
securities in the United States securities or financial markets, (b) any significant
adverse change in the United States or other major securities or financial markets,
(c) a declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States or other major financial markets, (d)
a commencement of a war, armed hostilities, terrorist acts or other national
or international calamity directly or indirectly involving the United States
or (e) in the case of any of the foregoing existing on the date hereof,
a material acceleration or worsening thereof.
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“Material
Adverse Effect” means any material adverse change in or effect on the assets,
liabilities or conditions (financial or otherwise) of the assets purchased
under the Asset Purchase Agreement or any materially adverse change in or
affect on (including material delay) the ability of Van Eck or Merrill Lynch to
perform their respective obligations under the Asset Purchase Agreement.
Based
on the closing market price per HOLDRS on November 7, 2011, the Minimum Condition
would be satisfied if 361,324 HOLDRS are validly tendered pursuant to the Offer.
The
foregoing conditions are for our sole benefit and our affiliates, may be
asserted by us in our sole discretion, regardless of the circumstances giving
rise to any such conditions, and may be waived by us in whole or in part at any
time and from time to time prior to the Expiration Time, subject to applicable
law. We expressly reserve the right to waive any of the conditions to the Offer
and to make any change in the terms of or conditions to the Offer. If we make
a material change in the terms of the Offer or the information concerning
the Offer or if we waive a material condition of the Offer, we will disseminate
additional offering materials and extend the Offer for the appropriate
period under Rule 14d-4(b) of the Exchange Act. The failure by us at any time
to exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
The Offer
is also contingent upon the effectiveness of the registration statement
relating to the shares of the RKH ETF.
17. Extension of Offer Period; Termination;
Amendments.
If, on or
prior to the scheduled Expiration Time, all of the conditions to the Offer have
not been satisfied or, where permitted by applicable law, waived in writing by
Van Eck or Merrill Lynch, as applicable, the Offer may be extended upon the
request of either Van Eck or Merrill Lynch for successive periods of up to five
business days each, but in no event for more than twenty business days in total
or past December 31, 2011, in order to permit the satisfaction of such
conditions; provided, however, that Van Eck shall have the sole right to extend
the Offer, for successive periods of up to five business days each, but in no
event for more than ten business days in total or past December 31, 2011, even
if the conditions to the Offer have been met; provided, further, that Van Eck
acknowledges and agrees that in choosing to so extend the Offer, Van Eck shall
be deemed to have waived any failure of any conditions of the Offer to be
satisfied at the end of such extension period(s) and shall be required to
accept for exchange HOLDRS validly tendered and not validly withdrawn in the
Offer, and to consummate the Offer, immediately following such extension
period(s). Van Eck may, without the consent of Merrill Lynch, extend the Offer
for any period required by any rule, regulation or interpretation of the SEC,
or the staff thereof, applicable to the Offer.
Without
limiting the manner in which the RKH ETF may choose to make a public
announcement of extension of the Offer, except as provided by applicable law
(including Rule 13e-4(d)(2), Rule 13e-4(e)(3) and Rule 14e-1(d) under the
Exchange Act), the RKH ETF shall have no obligation to publish, advertise or
otherwise communicate any such public announcement.
If
the RKH ETF materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer,
the RKH ETF will extend the Offer for the appropriate period under Rule 14d-4(b)
of the Exchange Act and new disclosure, to the extent required, will be provided
to RKH HOLDRS Investors. These rules require that the minimum period during
which an offer must remain open following material changes in the terms of
the offer or information concerning the offer (other than a change in price
or a change in percentage of securities sought) will depend on the facts
and circumstances, including the relative materiality of such terms or information.
If (i) the RKH ETF increases or decreases the price to be paid for HOLDRS,
or the RKH ETF decreases the number of HOLDRS being sought and (ii) the Offer
is scheduled to expire at any time earlier than the expiration of a period
ending on the tenth business day from, and including, the date that notice
of such increase or decrease is first published, sent or given, the Offer
will be extended at least until the expiration of such period of ten business
days.
11
18. Fees and Expenses.
We retained
D.F. King & Co. Inc. to be the Information Agent and The Bank of New York
Mellon, acting through BNY Mellon Shareowner Services, to be the Exchange Agent
in connection with the Offer. The Information Agent may contact RKH HOLDRS
Investors by mail, telephone, telecopy, telegraph or personal interview and may
request banks and securities
intermediaries to forward materials relating to the Offer to beneficial owners
of HOLDRS. The expenses of the Offer, including the fees to be paid to the
Information Agent and the Exchange Agent, will be borne by us.
The
Information Agent and the Exchange Agent each will receive reasonable and
customary compensation for their respective services in connection with the
Offer, will be reimbursed for reasonable out-of-pocket expenses and will be
indemnified against certain liabilities and expenses in connection therewith,
including certain liabilities under federal securities laws.
In the
ordinary course of business, the Information Agent, the Exchange Agent and
their respective affiliates may actively trade or hold securities or loans of
the RKH ETF and RKH HOLDRS Trust for their own accounts or for the accounts of
customers and, accordingly, the Information Agent, the Exchange Agent and/or
its respective affiliates may at any time hold long or short positions in these
securities or loans.
We will not
pay any fees or commissions to any securities
intermediary or to any other person (other than to the Information Agent and
the Exchange Agent in their capacities as such) in connection with the
solicitation of tenders of HOLDRS pursuant to the Offer. Securities intermediaries will, upon request,
be reimbursed by us for customary mailing and handling expenses incurred by
them in forwarding offering materials to their customers.
19. Miscellaneous.
The
Offer is not being made to (nor will tenders be accepted from or on behalf
of) RKH HOLDRS Investors in any jurisdiction in which the making of the Offer
or the acceptance thereof would not be in compliance with the securities,
blue sky or other laws of such jurisdiction. However, we may, in our sole
discretion, take such action as we may deem necessary to make the Offer in
any such jurisdiction and extend the Offer to RKH HOLDRS Investors in such jurisdiction.
No
person has been authorized to give any information or to make any
representation on behalf of the RKH ETF not contained herein or in the Letter
of Transmittal, and, if given or made, such information or representation must
not be relied upon as having been authorized. No securities intermediary or
other person shall be deemed to be the agent of the RKH ETF, the Exchange Agent
or the Information Agent for the purpose of the Offer.
We have
filed with the SEC a Tender Offer Statement on Schedule TO pursuant to
Rule 14d-3 of the General Rules and Regulations under the Exchange Act,
together with exhibits furnishing certain additional information with respect
to the Offer to Exchange, and may file amendments thereto. A copy of such
documents and any amendments thereto may be examined at, and copies may be
obtained from, the SEC in the manner set forth under Section 8 – “Certain
Information Concerning the RKH ETF and its Adviser” above.
| November 10, 2011 |
Market
Vectors ETF Trust |
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12
SCHEDULE I
TRUSTEES AND EXECUTIVE OFFICERS OF THE RKH ETF AND THE INVESTMENT ADVISER
TRUSTEES AND EXECUTIVE OFFICERS OF THE RKH
ETF
The name,
current principal occupation or employment and material occupations, positions,
offices or employment during the past five years of each of the trustees and
executive officers of Market Vectors ETF Trust are set forth below. The current
business address and telephone number of each such trustee and executive
officer is c/o Market Vectors ETF Trust, 335 Madison Avenue, 19th Floor, New
York, New York 10017, (212) 293-2000. Unless otherwise indicated, each trustee
and executive officer is a citizen of the United States of America.
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NAME AND
POSITION
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PRINCIPAL
OCCUPATION OR EMPLOYMENT AT PRESENT AND DURING PAST FIVE YEARS
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Jan F.
van Eck*
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Trustee
since 2006; President and Chief Executive Officer since 2009.
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Trustee, President and
Chief Executive Officer
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Director,
President and Owner of the Adviser, Van Eck Associates Corporation; Director
and President, Van Eck Securities Corporation (“Van Eck Securities”);
Director and President, Van Eck Absolute Return Advisers Corp. (“VEARA”).
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Director,
National Committee on US-China Relations.
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David H.
Chow
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Chairman
since 2008 and Trustee since 2006.
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Chairman and Trustee
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Founder
and CEO, DanCourt Management LLC (strategy consulting firm), March 1999 to
present.
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Director,
Audit Committee Chairman and Compensation Committee member, Forward
Management, LLC, May 2008 to present; Trustee, Berea College of Kentucky and
Vice-Chairman of the Investment Committee.
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R.
Alastair Short
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Trustee
since 2006.
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Trustee
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President,
Apex Capital Corporation (personal investment vehicle), January 1988 to
present; Vice Chairman, W.P. Stewart & Co., Inc. (asset management firm),
September 2007 to September 2008; and Managing Director, The GlenRock Group,
LLC (private equity investment firm), May 2004 to September 2007.
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Chairman
and Independent Director, EULAV Asset Management, January 2011 to present;
Independent Director, Tremont offshore funds, June 2009 to present; Director,
Kenyon Review; Director, The Medici Archive Project.
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Richard D. Stamberger
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Trustee
since 2006.
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Trustee
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Director,
President and CEO, SmartBrief, Inc. (media company).
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Russell G. Brennan
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Assistant
Vice President and Assistant Treasurer since 2008.
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Assistant Vice President
and Assistant Treasurer
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Manager
(Portfolio Administration) of the Adviser, September 2005 to October 2008;
Vice President, Robeco Investment Management, July 1990 to September 2005;
Officer of other investment companies advised by the Adviser.
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Charles T. Cameron
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Vice
President since 2006.
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Vice President
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Director
of Trading for the Adviser, May 1995 to present; Portfolio Manager for
certain funds advised by the Adviser, December 1997 to present; Officer of
other investment companies advised by the Adviser.
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NAME AND
POSITION
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PRINCIPAL
OCCUPATION OR EMPLOYMENT AT PRESENT AND DURING PAST FIVE YEARS
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John J. Crimmins
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Treasurer
since 2009.
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Treasurer
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Vice
President of Portfolio Administration of the Adviser June 2009 to present;
Vice President of VESC and VEARA, June 2009 to present; Chief Financial,
Operating and Compliance Officer, Kern Capital Management LLC, September 1997
to February 2009; Officer of other investment companies advised by the
Adviser.
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Susan C. Lashley
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Vice
President since 2006.
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Vice President
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Vice
President of the Adviser, May 2002 to present, and Vice President of Van Eck
Securities, July 1999 to present; Officer of other investment companies
advised by the Adviser.
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Thomas K. Lynch
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Chief
Compliance Officer since 2007.
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Chief Compliance Officer
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Chief
Compliance Officer of the Adviser and VEARA, December 2006 to present; Chief
Compliance Officer of Van Eck Securities, August 2008 to present; Vice
President of the Adviser, VEARA and Van Eck Securities; Treasurer, April 2005
to December 2006; Second Vice President of Investment Reporting, TIAA-CREF,
January 1996 to April 2005; Officer of other investment companies advised by
the Adviser.
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Laura I. Martínez
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Assistant
Vice President and Assistant Secretary since 2008.
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Assistant Vice President
and Assistant Secretary
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Assistant
Vice President, Associate General Counsel and Assistant Secretary of the
Adviser, VESC and VEARA, August 2008 to present; Associate, Davis Polk &
Wardwell, October 2005 to June 2008; Stanford Law School, September 2002 to
June 2005; Officer of other investment companies advised by the Adviser.
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Joseph J. McBrien
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Senior
Vice President, Secretary and Chief Legal Officer since 2006.
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Senior Vice President,
Secretary and Chief Legal Officer
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Senior
Vice President, General Counsel and Secretary of the Adviser, Van Eck
Securities and VEARA, December 2005 to present; Director of Van Eck
Securities and VEARA, October 2010 to present; Managing Director, Chatsworth
Securities LLC, March 2001 to November 2005; Officer of other investment
companies advised by the Adviser.
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Jonathan R. Simon
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Vice
President and Assistant Secretary since 2006.
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Vice President and
Assistant Secretary
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Vice
President, Associate General Counsel and Assistant Secretary of the Adviser,
VESC and VEARA, July 2006 to present; Associate, Schulte Roth & Zabel,
July 2004 to July 2006; Associate, Carter Ledyard & Milburn LLP,
September 2001-July 2004; Officer of other investment companies advised by
the Adviser.
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Bruce J. Smith
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Senior
Vice President and Chief Financial Officer since 2006.
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Senior Vice President and
Chief Financial Officer
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Senior
Vice President, Chief Financial Officer, Treasurer and Controller of the
Adviser, Van Eck Securities and VEARA, December 2005 to present; Director of
the Adviser, Van Eck Securities and VEARA, October 2010 to present; Officer
of other investment companies advised by the Adviser.
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* “Interested person” of the Trust within the meaning of the 1940
Act. Mr. van Eck is an officer of the Adviser.
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I-2
DIRECTORS AND EXECUTIVE OFFICERS OF THE
ADVISER
The name, current principal occupation or employment and material
occupations, positions, offices or employment during the past five years of
each of the directors and executive officers of Van Eck Associates Corporation
are set forth below. The current business address and telephone number of each
such director and executive officer is 335 Madison Avenue, 19th Floor, New
York, New York 10017, (212) 293-2000. Unless otherwise indicated, each director
and executive officer is a citizen of the United States of America.
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NAME AND
POSITION
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PRINCIPAL
OCCUPATION OR EMPLOYMENT AT PRESENT AND DURING PAST FIVE YEARS
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John C.
van Eck
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Retired.
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Chairman
and Director
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Jan F.
van Eck
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Trustee
since 2006; President and Chief Executive Officer since 2009 of Market Vectors ETF Trust.
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Director, President and
Owner
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Director,
President and Owner of the Adviser, Van Eck Associates Corporation; Director
and President, Van Eck Securities; Director and President, Van Eck Absolute
Return Advisers Corp. (“VEARA”).
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Director,
National Committee on US-China Relations.
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Joseph J. McBrien
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Senior
Vice President, Secretary and Chief Legal Officer of Market Vectors ETF Trust
since 2006.
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Senior Vice President,
Secretary and Chief Legal Officer
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Senior
Vice President, General Counsel and Secretary of the Adviser, Van Eck
Securities and VEARA December 2005 to present; Director of Van Eck Securities
and VEARA October 2010 to present; Managing Director, Chatsworth Securities
LLC, March 2001 to November 2005; Officer of other investment companies
advised by the Adviser.
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Bruce J. Smith
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Senior
Vice President and Chief Financial Officer of Market Vectors ETF Trust since
2006.
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Director, Senior Vice
President, Chief Financial Officer, Treasurer and Controller
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Senior
Vice President, Chief Financial Officer, Treasurer and Controller of the
Adviser, Van Eck Securities and VEARA, December 2005 to present; Director of
the Adviser, Van Eck Securities and VEARA, October 2010 to present; Officer
of other investment companies advised by the Adviser.
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William
A. Ullman
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Managing
Director, Harbor Drive Fund, LP since 2010.
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Director
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Managing
Member, Right Wall Capital Management, LLC, April 2006 to March 2010,
Managing Director/Senior Managing Director, at Bear Stearns, March 1997 to
April 2006.
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Susan
Marino
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Senior
Vice President and Director of National Accounts since 2007.
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Senior Vice President
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National
Accounts Manager at Credit Suisse Asset Management, September 1998 to
December 2006.
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Harvey
Hirsch
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Senior
Vice President of Marketing since 2007; Consultant to Adviser, May 2002 to April
2007.
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Senior Vice President
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I-3
The Exchange Agent for the Offer is:
The Bank of
New York Mellon,
acting through BNY Mellon Shareowner Services
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By Mail:
The Bank of New York
Mellon,
acting through BNY Mellon Shareowner Services
480 Washington Boulevard, 27th Floor
Jersey City, NJ 07310
1-866-300-4353 (Toll Free)
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By Overnight Courier:
The Bank of New York
Mellon,
acting through BNY Mellon Shareowner Services
480 Washington Boulevard, 27th Floor
Jersey City, NJ 07310
1-866-300-4353 (Toll Free)
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Questions or requests for assistance may be directed to the Information
Agent or the Exchange Agent at its address and telephone numbers listed below
and above. Additional copies of the Offer to Exchange and the Letter of
Transmittal may also be obtained from the Information Agent.
The Information Agent for the Offer is:
D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, NY 10005
1-800-290-6424 (Toll Free)
1-212-269-5550 (Collect)
Email:
marketvectorsetf@dfking.com
I-4
