One Commerce Square
Philadelphia, PA 19103
Delaware Group of Funds
- -----------------------
DELAWARE
GROUP
---------
1933 Act Rule 485(b)
1933 Act File No. 2-10765
1940 Act File No. 811-249
December 23, 1997
Filed via EDGAR (CIK #0000027801)
- ----------------------------------
Securities and Exchange Commission
Document Control
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: File No. 2-10765
DELAWARE GROUP EQUITY FUNDS I, INC.
FORM N-1A
Dear Commission:
Pursuant to Rule 485(b) of the Securities Act of 1933, submitted
electronically via the EDGAR system, please find Post-Effective
Amendment No. 105 on behalf of Delaware Group Equity Funds I,
Inc. (the "Registrant"). This filing is tagged to show changes
from the filing by Registrant of its Prospectuses and Statement
of Additional Information filed with the Commission on January 2,
1997 pursuant to Rule 497(j).
This filing is being made to make current the Registrant's
financial statements and to add certain non-material disclosure
of a general updating nature.
The financial statements incorporated into Registrant's Statement
of Additional Information appear in Registrant's Annual Reports,
which will be distributed to shareholders and will accompany any
response to requests for Registrant's Statement of Additional
Information. The Registrant's Annual Reports will also be
furnished to shareholders upon request and without charge.
The undersigned counsel has reviewed the enclosed Amendment and
represents that it does not contain any disclosure which would
render it ineligible to become effective pursuant to paragraph
(b) of Rule 485.
If there are any questions or comments about the enclosed filing,
please call the undersigned at (215) 255-1360 or George M.
Chamberlain, Jr., Esquire at (215) 255-2923.
Very truly yours,
/s/David P. O'Connor
- --------------------
David P. O'Connor
Assistant Vice President/
Assistant Secretary/
Senior Counsel
Enclosure
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
File No. 2-10765
_____
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
_____
_____
Pre-Effective Amendment No.
_____
_____
Post-Effective Amendment No. 105 X
_____
AND
_____
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
_____
Amendment No. 105
DELAWARE GROUP EQUITY FUNDS I, INC.
(Exact Name of Registrant as Specified in Charter)
1818 Market Street, Philadelphia, Pennsylvania 19103
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (215) 751-2923
George M. Chamberlain, Jr., 1818 Market Street, Philadelphia, PA 19103
(Name and Address of Agent for Service)
Approximate Date of Public Offering: December 30, 1997
It is proposed that this filing will become effective:
_____ immediately upon filing pursuant to paragraph (b)
X
_____ on December 30, 1997 pursuant to paragraph (b)
_____ 60 days after filing pursuant to paragraph (a)(1)
_____ on (date) pursuant to paragraph (a)(1)
_____ 75 days after filing pursuant to paragraph (a)(2)
_____ on (date) pursuant to paragraph (a)(2) of Rule 485.
Title of Securities Being Registered
Delaware Fund A Class, Delaware Fund B Class, Delaware Fund C Class, Delaware
Fund Institutional Class, Devon Fund A Class, Devon Fund B Class, Devon Fund
C Class and Devon Fund Institutional Class
--- C O N T E N T S ---
This Post-Effective Amendment No. 105 to Registration File No. 2-10765
includes the following:
1. Facing Page
2. Contents Page
3. Cross-Reference Sheets
4. Part A - Prospectuses
5. Part B - Statement of Additional Information
6. Part C - Other Information
7. Signatures
CROSS-REFERENCE SHEET
PART A
Location in
Item No. Description Prospectuses
Delaware Fund Delaware Fund
Devon Fund Devon Fund
A Classes/
B Classes/ Institutional
C Classes Classes
1 Cover Page Cover Cover
2 Synopsis Synopsis; Synopsis;
Summary of Summary of
Expenses Expenses
3 Condensed Financial Information Financial Financial
Highlights Highlights
4 General Description of Registrant Investment Investment
Objectives and Objectives and
Policies; Shares; Policies; Shares
Other Investment Other Investment
Policies and Policies and
Risk Factors Risk Factors
5 Management of the Funds Management of Management of
the Funds the Funds
6 Capital Stock and Other Securities Delaware Dividends and
Difference; Distributions;
Dividends and Taxes;
Distributions; Shares
Taxes; Shares
7 Purchase of Securities Cover; Cover;
Being Offered How to Buy How to Buy;
Shares; Calculation Shares;
of Offering Price Calculation of
and Net Asset Net Asset Value
Value Per Share; Per Share;
Management of Management of
the Funds the Funds
8 Redemption or Repurchase How to Buy How to Buy
Shares; Shares;
Redemption Redemption and
and Exchange Exchange
9 Pending Legal Proceedings None None
CROSS-REFERENCE SHEET
PART B
Location in Statement
Item Description of Additional
No. Information
Delaware Fund
Devon Fund
10 Cover Page Cover
11 Table of Contents Table of Contents
12 General Information and History General Information
13 Investment Objectives and Policies Investment Restrictions
and Policies
14 Management of the Registrant Officers and Directors
15 Control Persons and Principal
Holders of Securities Officers and Directors
16 Investment Advisory
and Other Services Plans Under Rule 12b-1
for the Fund Classes
(under Purchasing Shares);
Investment Management
Agreements; Officers and
Directors; General
Information; Financial
Statements
17 Brokerage Allocation Trading Practices
and Brokerage
18 Capital Stock and Other Securities Capitalization and
Noncumulative Voting
(under General Information)
19 Purchase, Redemption
and Pricing of Securities
Being Offered Purchasing Shares;
Determining Offering
Price and Net Asset
Value; Redemption and
Repurchase;
Exchange Privilege
20 Tax Status Taxes
21 Underwriters Purchasing Shares
22 Calculation of Performance Data Performance Information
23 Financial Statements Financial Statements
CROSS-REFERENCE SHEET
PART C
Location in
Part C
24 Financial Statements and Exhibits Item 24
25 Persons Controlled by or under Common
Control with Registrant Item 25
26 Number of Holders of Securities Item 26
27 Indemnification Item 27
28 Business and Other Connections
of Investment Adviser Item 28
29 Principal Underwriters Item 29
30 Location of Accounts and Records Item 30
31 Management Services Item 31
32 Undertakings Item 32
DELAWARE FUND PROSPECTUS
DEVON FUND DECEMBER 30, 1997
A CLASS SHARES
B CLASS SHARES
C CLASS SHARES
1818 MARKET STREET, PHILADELPHIA, PA 19103
FOR PROSPECTUS AND PERFORMANCE: NATIONWIDE 800-523-4640
INFORMATION ON EXISTING ACCOUNTS: (SHAREHOLDERS ONLY)
NATIONWIDE 800-523-1918
DEALER SERVICES: (BROKER/DEALERS ONLY)
NATIONWIDE 800-362-7500
REPRESENTATIVES OF FINANCIAL INSTITUTIONS:
NATIONWIDE 800-659-2259
This Prospectus describes shares of the Delaware Fund series
("Delaware Fund") and the Devon Fund series ("Devon Fund") of
Delaware Group Equity Funds I, Inc. ("Equity Funds I, Inc."), a
professionally-managed mutual fund of the series type. Delaware Fund's
objective is to seek a balance of capital appreciation, income and
preservation of capital. Devon Fund's objective is to seek current
income and capital appreciation.
Delaware Fund offers Delaware Fund A Class ("Class A Shares"),
Delaware Fund B Class ("Class B Shares") and Delaware Fund C Class
("Class C Shares"), and Devon Fund offers Devon Fund A Class ("Class A
Shares"), Devon Fund B Class ("Class B Shares") and Devon Fund C Class
("Class C Shares") (such classes, individually, a "Class" and,
collectively, the "Classes").
This Prospectus relates only to the Classes listed above and sets
forth information that you should read and consider before you invest.
Please retain it for future reference. The Funds' Statement of
Additional Information ("Part B" of Equity Funds I, Inc.'s registration
statement), dated December 30, 1997, as it may be amended from time to
time, contains additional information about each Fund and has been filed
with the Securities and Exchange Commission (the "SEC"). Part B is
incorporated by reference into this Prospectus and is available, without
charge, by writing to Delaware Distributors, L.P. at the above address
or by calling the above numbers. Each Fund's financial statements
appear in its Annual Report, which will accompany any response to
requests for Part B. The SEC also maintains a Web site
(http://www.sec.gov) that contains Part B, materials we incorporated by
reference, and other information regarding registrants that electronically
file with the SEC.
Delaware Fund also offers Delaware Fund Institutional Class, and
Devon Fund also offers Devon Fund Institutional Class. Those classes
are available for purchase only by certain investors. A prospectus for
Delaware Fund Institutional Class and Devon Fund Institutional Class can
be obtained by writing to Delaware Distributors, L.P. at the above
address or by calling the above number.
TABLE OF CONTENTS
COVER PAGE
SYNOPSIS
SUMMARY OF EXPENSES
FINANCIAL HIGHLIGHTS
INVESTMENT OBJECTIVES AND POLICIES
SUITABILITY
INVESTMENT STRATEGY
THE DELAWARE DIFFERENCE
PLANS AND SERVICES
CLASSES OF SHARES
HOW TO BUY SHARES
REDEMPTION AND EXCHANGE
DIVIDENDS AND DISTRIBUTIONS
TAXES
CALCULATION OF OFFERING PRICE AND
NET ASSET VALUE PER SHARE
MANAGEMENT OF THE FUNDS
OTHER INVESTMENT POLICIES AND
RISK CONSIDERATIONS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
BE SURE TO CONSULT YOUR FINANCIAL ADVISER WHEN MAKING INVESTMENTS.
MUTUAL FUNDS CAN BE A VALUABLE PART OF YOUR FINANCIAL PLAN; HOWEVER,
SHARES OF THE FUNDS ARE NOT FDIC OR NCUSIF INSURED, ARE NOT GUARANTEED
BY ANY BANK OR ANY CREDIT UNION, ARE NOT OBLIGATIONS OF ANY BANK OR ANY
CREDIT UNION, AND INVOLVE INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS
OF THE PRINCIPAL AMOUNT INVESTED. SHARES OF THE FUNDS ARE NOT BANK OR
CREDIT UNION DEPOSITS.
SYNOPSIS
INVESTMENT OBJECTIVES
The investment objective of Delaware Fund is to seek a balance of
capital appreciation, income and preservation of capital. The
investment objective of Devon Fund is to seek current income and capital
appreciation. For further details, see Investment Objectives and
Policies and Other Investment Policies and Risk Considerations.
RISK FACTORS AND SPECIAL CONSIDERATIONS
Delaware Fund typically invests a portion of its assets in
mortgage-backed and asset-backed securities (commonly considered to be
"derivative securities"), which may present greater risks than other
types of portfolio securities, and the investor should review the
descriptions of these risks in this Prospectus. See Mortgage-Backed
Securities and Asset-Backed Securities under Other Investment Policies
and Risk Considerations.
Devon Fund may enter into options and futures transactions for
hedging purposes to counterbalance portfolio volatility. While Devon
Fund does not engage in options and futures for speculative purposes,
there are risks that result from use of these instruments by the Fund,
and the investor should review the descriptions of these risks in this
Prospectus. See Futures Contracts and Options under Other Investment
Policies and Risk Considerations.
INVESTMENT MANAGER, DISTRIBUTOR AND SERVICE AGENT
Delaware Management Company, Inc. (the "Manager") furnishes
investment management services to the Funds, subject to the
supervision and direction of Equity Funds I, Inc.'s Board of Directors.
The Manager also provides investment management services to certain of
the other funds in the Delaware Group. Delaware Distributors, L.P. (the
"Distributor") is the national distributor for each Fund and for all of
the other mutual funds in the Delaware Group. Delaware Service Company,
Inc. (the "Transfer Agent") is the shareholder servicing, dividend
disbursing, accounting services and transfer agent for each Fund and for
all of the other mutual funds in the Delaware Group. See Summary of
Expenses and Management of the Funds for further information regarding
the Manager and the fees payable under each Fund's Investment Management
Agreement.
SALES CHARGES
The price of Class A Shares for each Fund includes a maximum
front-end sales charge of 4.75% of the offering price. The sales
charge is reduced on certain transactions of at least $100,000 but under
$1,000,000. For purchases of $1,000,000 or more, the front-end sales
charge is eliminated (subject to a contingent deferred sales charge ("
Limited CDSC") of 1% if shares are redeemed within 12 months of purchase
and a dealer commission was paid in connection with such purchase).
Class A Shares are subject to annual 12b-1 Plan expenses for the life of
the investment.
The price of each of the Class B Shares is equal to the net asset
value per share. Class B Shares are subject to a CDSC of: (i) 4% if
shares are redeemed within two years of purchase; (ii) 3% if shares are
redeemed during the third or fourth year following purchase; (iii) 2% if
shares are redeemed during the fifth year following purchase; and (iv)
1% if shares are redeemed during the sixth year following purchase.
Class B Shares are subject to annual 12b-1 Plan expenses for
approximately eight years after purchase.
The price of Class C Shares is equal to the net asset value per
share. Class C Shares are subject to a CDSC of 1% if shares are
redeemed within 12 months of purchase. Class C Shares are subject to
annual 12b-1 Plan expenses for the life of the investment.
See Classes of Shares and Distribution (12b-1) and Service under
Management of the Funds.
PURCHASE AMOUNTS
Generally, the minimum initial investment in any Class is $1,000.
Subsequent investments generally must be at least $100.
Each purchase of Class B Shares is subject to a maximum purchase
limitation of $250,000. For Class C Shares, each purchase must be in an
amount that is less than $1,000,000. An investor may exceed these
maximum purchase limitations for Class B Shares and Class C Shares by
making cumulative purchases over a period of time. An investor should
keep in mind, however, that reduced front-end sales charges apply to
investments of $100,000 or more in Class A Shares, and that Class A
Shares are subject to lower annual 12b-1 Plan expenses than Class B
Shares and Class C Shares and generally are not subject to a CDSC. The
minimum and maximum purchase amounts for retirement plans may vary. See
How to Buy Shares.
REDEMPTION AND EXCHANGE
Class A Shares of each Fund may be redeemed or exchanged at the net
asset value calculated after receipt of the redemption or exchange
request. Neither the Funds nor the Distributor assesses a charge for
redemptions or exchanges of Class A Shares, except for certain
redemptions of shares purchased at net asset value, which may be subject
to a CDSC if a dealer's commission was paid in connection with such
purchases. See Front-End Sales Charge Alternative - Class A Shares
under Classes of Shares.
Class B Shares and Class C Shares may be redeemed or exchanged at
the net asset value calculated after receipt of the redemption or
exchange request subject, in the case of redemptions, to any applicable
CDSC. Neither the Funds nor the Distributor assesses any charges other
than the CDSC for redemptions or exchanges of Class B Shares or Class C
Shares. There are certain limitations on an investor's ability to
exchange shares between the various classes of shares that are offered.
See Redemption and Exchange.
OPEN-END INVESTMENT COMPANY
Equity Funds I, Inc. is an open-end management investment company.
Each Funds' portfolio of assets is diversified as defined by the
Investment Company Act of 1940 (the "1940 Act"). Equity Funds I, Inc.
was first organized as a Delaware corporation in 1937 and
subsequently reorganized as a Maryland corporation on March 4, 1983.
See Shares under Management of the Funds.
<TABLE>
<CAPTION>
SUMMARY OF EXPENSES
A general comparison of the sales arrangements and other expenses applicable to each Funds'
Class A Shares, Class B Shares and Class C Shares follows:
Delaware Fund Devon Fund
Class A Class B Class C Class A Class B Class C
Shareholder Transaction Expenses Shares Shares Shares Shares Shares Shares
- ----------------------------------- ------- -------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Maximum Sales Charge Imposed
on Purchases (as a percentage
of offering price) 4.75% None None 4.75% None None
Maximum Sales Charge Imposed
on Reinvested Dividends (as a
percentage of offering price) None None None None None None
Maximum Contingent Deferred
Sales Charge (as a percentage
of original purchase price or
redemption proceeds, as
applicable) None* 4.00%* 1.00%* None* 4.00%* 1.00%*
Redemption Fees None** None** None** None** None** None**
</TABLE>
* Class A purchases of $1,000,000 or more may be made at net asset
value. However, if in connection with any such purchase a dealer
commission is paid to the financial adviser through whom such purchase
is effected, a Limited CDSC of 1% will be imposed on certain redemptions
within 12 months of purchase. Additional Class A purchase options
involving the imposition of a CDSC may be permitted as described in the
Prospectus from time to time. Class B Shares are subject to a CDSC of:
(i) 4% if shares are redeemed within two years of purchase; (ii) 3% if
shares are redeemed during the third or fourth year following purchase;
(iii) 2% if shares are redeemed during the fifth year following
purchase; (iv) 1% if shares are redeemed during the sixth year following
purchase; and (v) 0% thereafter. Class C Shares are subject to a CDSC
of 1% if shares are redeemed within 12 months of purchase. See
Contingent Deferred Sales Charge for Certain Redemptions of Class A
Shares Purchased at Net Asset Value under Redemption and Exchange, and
Deferred Sales Charge Alternative - Class B Shares , Level Sales Charge
Alternative - Class C Shares and Contingent Deferred Sales Charge -Class
B Shares and Class C Shares under Classes of Shares.
**CoreStates Bank, N.A. currently charges $7.50 per redemption for
redemptions payable by wire.
<TABLE>
<CAPTION>
Annual Operating Expenses Delaware Fund Devon Fund
(as a percentage of Class A Class B Class C Class A Class B Class C
average daily net assets) Shares Shares Shares Shares Shares Shares
- --------------------------------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Management Fees
(after voluntary waivers in
the case of Devon Fund) 0.51% 0.51% 0.51% 0.43%++ 0.43%++ 0.43%++
12b-1 Plan Expenses
(including service fees) 0.19%***/+ 1.00%*** 1.00%*** 0.30%*** 1.00%*** 1.00%***
Other Operating Expenses 0.27% 0.27% 0.27% 0.57%++ 0.57%++ 0.57%++
Total Operating Expenses
(after voluntary waivers
in the case of Devon Fund) 0.97% 1.78% 1.78% 1.30%++ 2.00%++ 2.00%++
</TABLE>
*** Class A Shares, Class B Shares and Class C Shares of each Fund are
subject to separate 12b-1 Plans. Long-term shareholders may pay more
than the economic equivalent of the maximum front-end sales charges
permitted by rules of the National Association of Securities Dealers,
Inc. (the "NASD"). See Distribution (12b-1) and Service under
Management of the Funds.
+ The actual 12b-1 Plan expenses to be paid and, consequently, the
Total Operating Expenses of Delaware Fund A Class may vary because of
the formula adopted by the Board of Directors for use in calculating the
12b-1 Plan expenses for this Class beginning June 1, 1992, but the 12b-1
Plan expenses will not be more than 0.30% nor less than 0.10%.
++ Beginning January 1, 1998, the Manager has elected voluntarily to waive
that portion, if any, of the annual management fees payable by Devon Fund
and to pay the Fund to the extent necessary to ensure that the "Total
Operating Expenses" of this Fund do not exceed 1.00% (exclusive of taxes,
interest, brokerage commissions, extraordinary expenses and 12b-1
expenses). This waiver and expense limitation will extend through June 30,
1998. From the commencement of the Fund's operations through December 31,
1997, the Manager voluntarily waived that portion, if any, of the annual
management fees payable by the Fund and paid the Fund's expenses to the
extent necessary to ensure that "Total Operating Expenses" of the Fund
(excluding 12b-1 expenses) did not exceed 0.95%. If no voluntary expense
waivers were in effect, it is estimated that the "Total Operating Expenses,"
as a percentage of average daily net assets, would be 1.42%, 2.12% and 2.12%
for Devon Fund A Class, Devon Fund B Class and Devon Fund C Class,
respectively, reflecting "Management Fees" of 0.60%.
For expense information about Delaware Fund Institutional Class and
Devon Fund Institutional Class of shares, see the separate prospectus
relating to those classes.
Investors utilizing the Delaware Group Asset Planner asset
allocation service also typically incur an annual maintenance fee of $35
per Strategy. However, effective November 1, 1996, the annual
maintenance fee is waived until further notice. Investors who utilize
the Asset Planner for an Individual Retirement Account ("IRA") will pay
an annual IRA fee of $15 per Social Security number. See Delaware Group
Asset Planner in Part B.
The following example illustrates the expenses that an investor
would pay on a $1,000 investment over various time periods, assuming (1)
a 5% annual rate of return, (2) redemption and no redemption at the end
of each time period and (3) for Class B Shares and Class C Shares,
payment of a CDSC at the time of redemption, if applicable. Devon
Fund's expenses reflect the voluntary waiver of fees by the Manager
beginning January 1, 1998 as discussed in this Prospectus.
<TABLE>
<CAPTION>
DELAWARE FUND
ASSUMING REDEMPTION ASSUMING NO REDEMPTION
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A SHARES $57(1) $77 $99 $161 $57 $77 $99 $161
CLASS B SHARES $58 $86 $116 $188(2) $18 $56 $96 $188(2)
CLASS C SHARES $28 $56 $96 $209 $18 $56 $96 $209
DEVON FUND
ASSUMING REDEMPTION ASSUMING NO REDEMPTION
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
CLASS A SHARES $60(1) $87 $115 $197 $60 $87 $115 $197
CLASS B SHARES $60 $93 $128 $215(2) $20 $63 $108 $215(2)
CLASS C SHARES $30 $63 $108 $233 $20 $63 $108 $233
</TABLE>
(1) Generally, no redemption charge is assessed upon redemption of
Class A Shares. Under certain circumstances, however, a Limited
CDSC or other CDSC, which has not been reflected in this
calculation, may be imposed on certain redemptions . See
Contingent Deferred Sales Charge for Certain Redemptions of
Class A Shares Purchased at Net Asset Value under Redemption and
Exchange.
(2) At the end of approximately eight years after purchase, Class B
Shares of a Fund will be automatically converted into Class A
Shares of that Fund. The example above assumes conversion of
Class B Shares at the end of the eighth year. However, the
conversion may occur as late as three months after the eighth
anniversary of purchase, during which time the higher 12b-1 Plan
fees payable by Class B Shares will continue to be assessed.
The ten year expense numbers for Class B Shares reflects the
expenses of Class B Shares for year eight and the expenses of
Class A Shares for years nine and ten. See Automatic Conversion
of Class B Shares under Classes of Shares for a description of
the automatic conversion feature.
This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be greater or less than
those shown.
The purpose of the above tables is to assist the investor in
understanding the various costs and expenses that an investor in each
Class will bear directly or indirectly.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
The following financial highlights are derived from the financial statements of Delaware Fund and Devon
Fund of Delaware Group Equity Funds I, Inc. and have been audited by Ernst & Young LLP, independent
auditors. The data should be read in conjunction with the financial statements, related notes, and the
reports of Ernst & Young LLP covering such financial information and highlights, all of which are
incorporated by reference into Part B. Further information about the Funds' performance is contained
in their Annual Reports to shareholders. A copy of each Fund's Annual Report (including the report of
Ernst & Young LLP) may be obtained from Equity Funds I, Inc. upon request at no charge.
Delaware Fund
DF-A-CHT Class A Shares
-----------------------------------------------------------------
Year Ended
10/31/97(1) 10/31/96(1) 10/31/95(1) 10/31/94(1) 10/31/93(1)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $21.260 $19.940 $18.000 $19.430 $18.720
Income From Investment Operations
- --------------------------------------------------
Net Investment Income 0.610 0.706 0.664 0.615 0.631
Net Gains (Losses) on Securities
(both realized and unrealized) 3.680 2.349 2.156 (0.285) 1.509
-------- -------- -------- -------- --------
Total From Investment Operations 4.290 3.055 2.820 0.330 2.140
-------- -------- -------- -------- --------
Less Distributions
- --------------------------------------------------
Dividends (from net investment income) (0.680) (0.655) (0.630) (0.600) (0.660)
Distributions (from capital gains) (1.920) (1.080) (0.250) (1.160) (0.770)
-------- -------- -------- -------- --------
Total Distributions (2.600) (1.735) (0.880) (1.760) (1.430)
-------- -------- -------- -------- --------
Net Asset Value, End of Period $22.950 $21.260 $19.940 $18.000 $19.430
======== ======== ======== ======== ========
- -------------------------------------------------------------------------------------------------------------------
Total Return(2) 22.05% 16.07% 16.26% 1.80% 11.91%
- -------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- --------------------------------------------------
Net Assets, End of Period (000's omitted) $554,448 $490,150 $493,243 $456,074 $507,528
Ratio of Expenses to Average Daily Net Assets .97% .99% .97% .97% .89%
Ratio of Net Investment Income to Average
Daily Net Assets 2.83% 3.39% 3.55% 3.31% 3.27%
Portfolio Turnover Rate 81% 92% 94% 142% 160%
Average Commission Rate Paid(3) $0.060 $0.060 N/A N/A N/A
<CAPTION>
Delaware Fund
DF-A-CHT (Continued) Class A Shares
-----------------------------------------------------------------
Year Ended
10/31/92(1) 10/31/91 10/31/90 10/31/89 10/31/88
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $18.810 $16.190 $17.480 $15.250 $16.850
Income From Investment Operations
- --------------------------------------------------
Net Investment Income 0.660 0.757 0.856 0.796 0.551
Net Gains (Losses) on Securities
(both realized and unrealized) 1.490 3.033 (1.366) 2.384 2.259
-------- -------- -------- -------- --------
Total From Investment Operations 2.150 3.790 (0.510) 3.180 2.810
-------- -------- -------- -------- --------
Less Distributions
- --------------------------------------------------
Dividends (from net investment income) (0.700) (0.880) (0.780) (0.950) (0.320)
Distributions (from capital gains) (1.540) (0.290) none none (4.090)
-------- -------- -------- -------- --------
Total Distributions (2.240) (1.170) (0.780) (0.950) (4.410)
-------- -------- -------- -------- --------
Net Asset Value, End of Period $18.720 $18.810 $16.190 $17.480 $15.250
======== ======== ======== ======== ========
- -------------------------------------------------------------------------------------------------------------------
Total Return(2) 12.37% 24.32% (3.17%) 21.66% 22.03%
- -------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- --------------------------------------------------
Net Assets, End of Period (000's omitted) $487,343 $453,449 $349,873 $361,625 $328,650
Ratio of Expenses to Average Daily Net Assets .79% .71% .75% .76% .77%
Ratio of Net Investment Income to Average Daily
Net Assets 3.64% 4.29% 4.99% 4.73% 4.01%
Portfolio Turnover Rate 144% 212% 147% 129% 180%
Average Commission Rate Paid(3) N/A N/A N/A N/A N/A
- ---------------------
(1) Reflects 12b-1 distribution expenses beginning June 1, 1992.
(2) Does not reflect any maximum sales charge that is or was in effect nor the 1% Limited CDSC that
would apply in the event of certain redemptions within 12 months of purchase. See Contingent Deferred
Sales Charge for Certain Purchases of Class A Shares Made at Net Asset Value.
(3) Computed by dividing the amount of commission paid by the total number of shares purchased and sold
during the period for which there was a commission charged.
</TABLE>
<TABLE>
<CAPTION>
DF-B-CHT
Delaware Fund Delaware Fund
Class B Shares Class C Shares
------------------------------------------------------------------------------
Period Period
9/6/94(1) Year 11/29/95(1)
Year Ended through Ended through
10/31/97 10/31/96 10/31/95 10/31/94 10/31/97 10/31/96
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $21.200 $19.900 $17.980 $18.340 $21.180 $20.500
Income From Investment Operations
- -----------------------------------------------
Net Investment Income 0.452 0.525 0.567 0.070 0.460 0.583
Net Gains (Losses) on Securities
(both realized and unrealized) 3.658 2.350 2.113 (0.280) 3.655 1.757
-------- -------- -------- -------- -------- --------
Total From Investment Operations 4.110 2.875 2.680 (0.210) 4.115 2.340
-------- -------- -------- -------- -------- --------
Less Distributions
- -----------------------------------------------
Dividends (from net investment income) (0.510) (0.495) (0.510) (0.150) (0.505) (0.580)
Distributions (from capital gains) (1.920) (1.080) (0.250) none (1.920) (1.080)
-------- -------- -------- -------- -------- --------
Total Distributions (2.430) (1.575) (0.760) (0.150) (2.425) (1.660)
-------- -------- -------- -------- -------- --------
Net Asset Value, End of Period $22.880 $21.200 $19.900 $17.980 $22.870 $21.180
======== ======== ======== ======== ======== ========
- -----------------------------------------------------------------------------------------------------------------------------
Total Return(2) 21.09% 15.15% 15.36% (1.14%) 21.07% 12.13%
- -----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------
Net Assets, End of Period (000's omitted) $16,659 $6,872 $3,383 $568 $8,090 $1,990
Ratio of Expenses to Average Daily Net Assets 1.78% 1.80% 1.79% 1.81% 1.78% 1.80%
Ratio of Net Investment Income to Average
Daily Net Asset 2.00% 2.58% 2.73% 2.47% 2.00% 2.58%
Portfolio Turnover Rate 81% 92% 94% 142% 81% 92%
Average Commission Rate Paid(3) $0.060 $0.060 N/A N/A $0.060 $0.060
- ---------------------
(1) Date of initial public offering; ratios have been annualized but total return has not been
annualized. Total return for this short of a time period may not be representative of longer term results.
(2) Does not include any CDSC which varies from 1% - 4%, depending upon the holding period for Delaware
Fund B Class and 1% for Delaware Fund C Class for 12 months from the date of purchase.
(3) Computed by dividing the amount of commission paid by the total number of shares purchased and sold
during the period for which there was a commission charged.
</TABLE>
<TABLE>
<CAPTION>
DVN-A-CHT
Devon Fund
Class A Shares
--------------------------------------------------
Period
12/29/93(1)
Year Ended through
10/31/97 10/31/96 10/31/95 10/31/94
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $14.160 $12.550 $10.830 $10.000
Income From Investment Operations
- -----------------------------------------------------------
Net Investment Income 0.182 0.216 0.207(2) 0.136
Net Gains (Losses) on Securities
(both realized and unrealized) 4.243 2.689 2.053 0.784
-------- -------- -------- --------
Total From Investment Operations 4.425 2.905 2.260 0.920
-------- -------- -------- --------
Less Distributions
- -----------------------------------------------------------
Dividends (from net investment income) (0.210) (0.205) (0.220) (0.090)
Distributions (from capital gains) (0.965) (0.640) (0.320) none
-------- -------- -------- --------
Total Distributions (1.175) (0.845) (0.540) (0.090)
-------- -------- -------- --------
Net Asset Value, End of Period $17.86 $14.61 $12.55 $10.83
======== ======== ======== ========
- ---------------------------------------------------------------------------------------------------------------
Total Return(3) 32.11% 24.14% 21.98% 11.09%
- ---------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------------------
Net Assets, End of Period (000's omitted) $49,262 $14,907 $8,846 $4,600
Ratio of Expenses to Average Daily Net Assets 1.25% 1.25% 1.25% 1.25%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitations 1.42% 1.84% 2.29% 3.26%
Ratio of Net Investment Income to Average Daily Net Assets 1.14% 1.67% 1.82% 1.96%
Ratio of Net Investment Income to Average Daily Net Assets
Prior to Expense Limitations 0.97% 1.08% 0.78% (0.05%)
Portfolio Turnover Rate 64% 80% 99% 180%
Average Commission Rate Paid(4) $0.060 $0.060 N/A N/A
- ---------------------
(1) Date of initial sale of Devon Fund A Class; ratios and total return have been annualized.
Total return for this short of a time period may not be representative of longer term results.
(2) 1995 per share information was based on the average shares outstanding method.
(3) Total return does not include any maximum sales charge that is or was in effect nor the 1%
Limited CDSC that would apply in the event of certain redemptions within 12 months of purchase.
See Contingent Deferred Sales Charge for Certain Purchases of Class A Shares Made at Net Asset
Value. Total return reflects the reflects expense limitation referenced under Summary of Expenses.
(4) Computed by dividing the amount of commission paid by the total number of shares purchased and
sold during the period for which there was a commission charged.
</TABLE>
<TABLE>
<CAPTION>
DVN-B-CHT Devon Fund Devon Fund
Class B Shares Class C Shares
------------------------------------------------------------------------------
Period Period
9/6/94(1) Year 11/29/95(2)
Year Ended through Ended through
10/31/97 10/31/96 10/31/95 10/31/94 10/31/97 10/31/96
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $14.540 $12.500 $10.820 $10.900 $14.530 $13.020
Income From Investment Operations
- ------------------------------------------------
Net Investment Income 0.081 0.136 0.127(3) 0.027 0.071 0.188
Net Gains (Losses) on Securities
(both realized and unrealized) 4.219 2.664 2.053 (0.077) 4.229 2.157
Total From Investment Operations 4.300 2.800 2.180 (0.050) 4.300 2.345
Less Distributions
- ------------------------------------------------
Dividends (from net investment income) (0.075) (0.120) (0.180) (0.030) (0.075) (0.195)
Distributions (from capital gains) (0.965) (0.640) (0.320) none (0.965) (0.640)
-------- -------- -------- -------- -------- --------
Total Distributions (1.040) (0.760) (0.500) (0.030) (1.040) (0.835)
Net Asset Value, End of Period $17.800 $14.540 $12.500 $10.820 $17.790 $14.530
======== ======== ======== ======== ======== ========
- ------------------------------------------------------------------------------------------------------------------------------
Total Return(4) 31.21% 23.38% 21.09% (0.46%) 31.24% 18.94%
- ------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------------------------------
Net Assets, End of Period (000's omitted) $28,757 $3,399 $863 $115 $5,876 $1,056
Ratio of Expenses to Average Daily Net Assets 1.95% 1.95% 1.95% 1.95% 1.95% 1.95%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitations 2.12% 2.54% 2.99% 3.96% 2.12% 2.54%
Ratio of Net Investment Income to Average Daily
Net Assets 0.44% 0.97% 1.12% 1.26% 0.44% 0.97%
Ratio of Net Investment Income to Average Daily
Net Assets Prior to Expense Limitations 0.26% 0.38% 0.08% (0.75%) 0.26% 0.38%
Portfolio Turnover Rate 64% 80% 99% 180% 64% 80%
Average Commission Rate Paid(5) $0.060 $0.060 N/A N/A $0.060 $0.060
- ---------------------
(1) Date of initial sale of Devon Fund B Class; ratios have been annualized but total return has not
been annualized. Total return for this short of a time period may not be representative of longer term results.
(2) Date of initial sale of Devon Fund C Class; ratios have been annualized but total return has not been
annualized. Total return for this short of a time period may not be representative of longer term results.
(3) 1995 per share information was based on the average shares outstanding method.
(4) Total return does not include any CDSC which varies from 1% - 4%, depending upon the holding period for
Devon Fund B Class and 1% for Devon Fund C Class for 12 months from the date of purchase. Total return
reflects the expense limitation referenced under Summary of Expenses.
(5) Computed by dividing the amount of commission paid by the total number of shares purchased and sold during
the period for which there was a commission charged.
</TABLE>
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of Delaware Fund is to seek a balance of
capital appreciation, income and preservation of capital. The
investment objective of Devon Fund is to seek current income and capital
appreciation. Although each Fund will constantly strive to attain its
investment objective, there can be no assurance that it will be
obtained. The objective of each Fund cannot be changed without
shareholder approval.
SUITABILITY
Each Fund may be suitable for investors interested in long-term
capital appreciation. Delaware Fund may be more suitable for investors
wishing to expose a portion of their assets to fixed-income securities,
while Devon Fund may be more suitable for investors seeking a greater
emphasis on common stocks and securities convertible into common stocks.
Investors in each Fund should be willing to accept the risks associated
with investments in equity securities. Investors in Delaware Fund and,
to a lesser extent, investors in Devon Fund should also be willing to
accept the risks associated with investments in fixed-income securities.
Net asset values may fluctuate in response to market conditions and, as
a result, neither Fund is appropriate for a short-term investor.
Ownership of Fund shares can reduce the bookkeeping and
administrative inconvenience that is typically connected with direct
purchases of the type of securities in which the Funds invest.
An investor should not consider a purchase of either Fund shares as
equivalent to a complete investment program. The Delaware Group
includes a family of funds, generally available through registered
investment dealers, which may be used together to create a more complete
investment program.
INVESTMENT STRATEGY
DELAWARE FUND - As a "balanced" fund, Delaware Fund will generally
invest at least 25% of its assets in fixed-income securities, including
U.S. government securities and corporate bonds. The remainder of the
Fund will be allocated to equity securities principally, including
convertible securities, and also to cash and cash equivalents. A
portion of the Fund's investment in certain convertible securities may
be deemed fixed-income in nature for purposes of this 25% fixed-income
allocation. The Fund may also invest in foreign securities.
The Fund uses a dividend-oriented valuation strategy to select
individual securities in which it will invest. In seeking capital
appreciation, the Fund invests primarily in common stocks of established
companies believed to have a potential for long-term capital growth. In
seeking current income and preservation of capital, in addition to
capital appreciation, the Fund invests in various types of fixed-income
securities, including U.S. government and government agency securities
and corporate bonds. The Fund generally invests in bonds that are rated
in the top four grades by a nationally-recognized rating agency (e.g.,
Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's Ratings
Group ("S&P")) at the time of purchase, or, if unrated, are determined
to be equivalent to the top four grades in the judgment of the Manager.
The fourth grade is considered medium grade and may have some
speculative characteristics. Typically, the maturity of the bonds will
range between five and 30 years. The Fund may invest not more than 5%
of its assets in convertible debentures rated below investment grade.
The Fund will analyze existing and expected economic and market
conditions and seek to identify those market sectors or individual
securities that are expected to benefit from those conditions. The
Fund's appraisal of these economic conditions will determine the types
of securities it will hold and the degree of investment emphasis placed
upon capital appreciation and income.
DEVON FUND - Devon Fund will seek to achieve its objective by
investing primarily in income-producing common stocks, with a focus on
common stocks that the Manager believes have the potential for above
average dividend increases over time. Under normal circumstances, the
Fund will generally invest at least 65% of its total assets in dividend
paying common stocks.
In selecting stocks for the Fund, the Manager will focus primarily
on dividend paying common stocks issued by companies with market
capitalizations in excess of $100 million but is not precluded from
purchasing shares of companies with market capitalizations of less than
$100 million. In seeking stocks with potential for above average
dividend increases, the Manager will consider such factors as the
historical growth rate of a dividend, the frequency of prior dividend
increases, the issuing company's potential to generate cash flows and
the price/earnings multiple of the stock relative to the market. The
Manager will generally avoid stocks that it believes are overvalued and
may select stocks with current dividend yields that are lower than the
current yield of the Standard & Poor's 500 Stock Index ("S&P 500") in
exchange for anticipated dividend growth.
While management believes that the Fund's objective may best be
attained by investing in common stocks, the Fund may also invest in
other securities including, but not limited to, convertible and
preferred securities, rights and warrants to purchase common stock and
various types of fixed-income securities, such as U.S. government and
government agency securities, corporate debt securities, and bank
obligations, and may also engage in futures transactions. The Fund may
invest in foreign securities.
* * *
For additional information about each Fund's investment policies
and certain risks associated with investments in certain types of
securities, see Other Investment Policies and Risk Considerations in
this Prospectus. Part B sets forth other investment restrictions.
THE DELAWARE DIFFERENCE
PLANS AND SERVICES
The Delaware Difference is our commitment to provide you with
superior information and quality service on your investments in the
Delaware Group of funds.
SHAREHOLDER PHONE DIRECTORY
INVESTOR INFORMATION CENTER
800-523-4640
FUND INFORMATION; LITERATURE; PRICE; YIELD AND PERFORMANCE FIGURES
SHAREHOLDER SERVICE CENTER
800-523-1918
INFORMATION ON EXISTING REGULAR INVESTMENT ACCOUNTS AND RETIREMENT
PLAN ACCOUNTS; WIRE INVESTMENTS; WIRE LIQUIDATIONS; TELEPHONE
LIQUIDATIONS AND TELEPHONE EXCHANGES
DELAPHONE
800-362-FUND
(800-362-3863)
PERFORMANCE INFORMATION
You can call the Investor Information Center at any time for
current performance information. Current yield and total return
information may also be included in advertisements and information given
to shareholders. Yields are computed on an annual basis over a 30-day
period.
SHAREHOLDER SERVICES
During business hours, you can call the Delaware Group's
Shareholder Service Center. Our representatives can answer any questions
about your account, the Funds, various service features and other funds
in the Delaware Group.
DELAPHONE SERVICE
Delaphone is an account inquiry service for investors with Touch-
Tone(R) phone service. It enables you to get information on your
account faster than the mailed statements and confirmations. Delaphone
also provides current performance information on the Funds, as well as
other funds in the Delaware Group. Delaphone is available seven days a
week, 24 hours a day.
STATEMENTS AND CONFIRMATIONS
You will receive quarterly statements of your account summarizing
all transactions during the period. A confirmation statement will be
sent following all transactions other than those involving a
reinvestment of dividends. You should examine statements and
confirmations immediately and promptly report any discrepancy by calling
the Shareholder Service Center.
DUPLICATE CONFIRMATIONS
If your financial adviser or investment dealer is noted on your
investment application, we will send a duplicate confirmation to him or
her. This makes it easier for your adviser to help you manage your
investments.
TAX INFORMATION
Each year, Equity Funds I, Inc. will mail to you information on the
tax status of your dividends and distributions.
DIVIDEND PAYMENTS
Dividends, capital gains and other distributions, if any, are
automatically reinvested in your account, unless you elect to receive
them in cash. You may also elect to have the dividends earned in one
fund automatically invested in another Delaware Group fund with a
different investment objective, subject to certain exceptions and
limitations.
For more information, see Additional Methods of Adding to Your
Investment - Dividend Reinvestment Plan under How to Buy Shares or call
the Shareholder Service Center.
MONEYLINE (SM) SERVICES
Delaware Group offers the following services for fast and
convenient transfer of funds between your personal bank account and your
Delaware Group fund account:
1. MONEYLINE (SM) DIRECT DEPOSIT SERVICE
If you elect to have your dividends and distributions paid in cash
and such dividends and distributions are in an amount of $25 or more,
you may choose the MoneyLine (SM) Direct Deposit Service and have such
payments transferred from your Fund account to your predesignated bank
account. See Dividends and Distributions. In addition, you may elect
to have your Systematic Withdrawal Plan payments transferred from your
Fund account to your predesignated bank account through this service.
See Systematic Withdrawal Plans under Redemption and Exchange.
2. MONEYLINE (SM) ON DEMAND
You or your investment dealer may request purchases and redemptions
of Fund shares by phone using MoneyLine (SM) On Demand. When you
authorize a Fund to accept such requests from you or your investment
dealer, funds will be withdrawn from (for share purchases) or deposited
to (for share redemptions) your predesignated bank account . Your
request will be processed the same day if you call prior to 4 p.m.,
Eastern time. There is a $25 minimum and $50,000 maximum limit for
MoneyLine (SM) On Demand transactions.
For each MoneyLine (SM) Service, it may take up to four business
days for the transactions to be completed. You can initiate either
service by completing an Account Services form. If your name and
address are not identical to the name and address on your Fund account,
you must have your signature guaranteed. The Funds do not charge a fee
for any MoneyLine (SM) Service; however, your bank may charge a fee.
Please call the Shareholder Service Center for additional information
about these services.
RETIREMENT PLANNING
An investment in the Funds may be a suitable investment option for
tax-deferred retirement plans. Delaware Group offers a full spectrum of
qualified and non-qualified retirement plans, including the popular
401(k) deferred compensation plan, IRA, and the new Roth IRA. Just call
the Delaware Group at 1-800-523-1918 for more information.
RIGHT OF ACCUMULATION
With respect to Class A Shares, the Right of Accumulation feature
allows you to combine the value of your current holdings of Class A
Shares, Class B Shares and Class C Shares of a Fund with the dollar
amount of new purchases of Class A Shares of a Fund to qualify for a
reduced front-end sales charge on such purchases of Class A Shares.
Under the COMBINED PURCHASES PRIVILEGE, you may also include certain
shares that you own in other funds in the Delaware Group. See Classes
of Shares.
LETTER OF INTENTION
The Letter of Intention feature permits you to obtain a reduced
front-end sales charge on purchases of Class A Shares by aggregating
certain of your purchases of Delaware Group fund shares over a 13-month
period. See Classes of Shares and Part B.
12-MONTH REINVESTMENT PRIVILEGE
The 12-Month Reinvestment Privilege permits you to reinvest
proceeds from a redemption of Class A Shares, within one year of the
date of the redemption, without paying a front-end sales charge. See
Part B.
EXCHANGE PRIVILEGE
The Exchange Privilege permits shareholders to exchange all or part
of their shares into shares of other funds in the Delaware Group,
subject to certain exceptions and limitations. For additional
information on exchanges, see Investing by Exchange under How to Buy
Shares, and Redemption and Exchange.
WEALTH BUILDER OPTION
You may elect to invest in the Funds through regular liquidations
of shares in your accounts in other funds in the Delaware Group.
Investments under this feature are exchanges and are therefore subject
to the same conditions and limitations as other exchanges of Fund
shares. See Additional Methods of Adding to Your Investment - Wealth
Builder Option and Investing by Exchange under How to Buy Shares, and
Redemption and Exchange.
FINANCIAL INFORMATION ABOUT THE FUNDS
Each fiscal year, you will receive an audited annual report and an
unaudited semi-annual report. These reports provide detailed
information about each Fund's investments and performance. Equity Funds
I, Inc.'s fiscal year ends on October 31.
CLASSES OF SHARES
ALTERNATIVE PURCHASE ARRANGEMENTS
Shares may be purchased at a price equal to the next determined net
asset value per share, subject to a sales charge which may be imposed,
at the election of the purchaser, at the time of the purchase for Class
A Shares ("front-end sales charge alternative"), or on a contingent
deferred basis for Class B Shares ("deferred sales charge alternative")
or Class C Shares ("level sales charge alternative").
Class A Shares. An investor who elects the front-end sales charge
alternative acquires Class A Shares, which incur a sales charge when
they are purchased, but generally are not subject to any sales charge
when they are redeemed. Class A Shares are subject to annual 12b-1 Plan
expenses of up to a maximum of 0.30% of average daily net assets of such
shares. Certain purchases of Class A Shares qualify for reduced front-
end sales charges. See Front-End Sales Charge Alternative - Class A
Shares, below. See also Contingent Deferred Sales Charge for Certain
Redemptions of Class A Shares Purchased at Net Asset Value under
Redemption and Exchange, and Distribution (12b-1) and Service under
Management of the Funds.
Class B Shares. An investor who elects the deferred sales charge
alternative acquires Class B Shares, which do not incur a front-end
sales charge when they are purchased, but are subject to a contingent
deferred sales charge if they are redeemed within six years of purchase.
Class B Shares are subject to annual 12b-1 Plan expenses of up to a
maximum of 1% (0.25% of which are service fees to be paid to the
Distributor, dealers or others for providing personal service and/or
maintaining shareholder accounts) of average daily net assets of such
shares for approximately eight years after purchase. Class B Shares
permit all of the investor's dollars to work from the time the
investment is made. The higher 12b-1 Plan expenses paid by Class B
Shares will cause such shares to have a higher expense ratio and to pay
lower dividends than Class A Shares. At the end of approximately eight
years after purchase, Class B Shares automatically will be converted
into Class A Shares and, thereafter, for the remainder of the life of
the investment, the annual 12b-1 Plan fee of up to 0.30% for Class A
Shares will apply. See Automatic Conversion of Class B Shares, below.
Class C Shares. An investor who elects the level sales charge
alternative acquires Class C Shares, which do not incur a front-end
sales charge when they are purchased, but are subject to a contingent
deferred sales charge if they are redeemed within 12 months of purchase.
Class C Shares are subject to annual 12b-1 Plan expenses of up to a
maximum of 1% (0.25% of which are service fees to be paid to the
Distributor, dealers or others for providing personal service and/or
maintaining shareholder accounts) of average daily net assets of such
shares for the life of the investment. The higher 12b-1 Plan expenses
paid by Class C Shares will cause such shares to have a higher expense
ratio and to pay lower dividends than Class A Shares. Unlike Class B
Shares, Class C Shares do not convert to another class.
The alternative purchase arrangements described above permit
investors to choose the method of purchasing shares that is most
suitable given the amount of their purchase, the length of time they
expect to hold their shares and other relevant circumstances. Investors
should determine whether, given their particular circumstances, it is
more advantageous to purchase Class A Shares and incur a front-end sales
charge, purchase Class B Shares and have the entire initial purchase
amount invested in a Fund with their investment being subject to a
CDSC if they redeem shares within six years of purchase, or purchase
Class C Shares and have the entire initial purchase amount invested in a
Fund with their investment being subject to a CDSC if they redeem shares
within 12 months of purchase. In addition, investors should consider
the level of annual 12b-1 Plan expenses applicable to each Class. The
higher 12b-1 Plan expenses on Class B Shares and Class C Shares will be
offset to the extent a return is realized on the additional money
initially invested upon the purchase of such shares. However, there can
be no assurance as to the return, if any, that will be realized on such
additional money. In addition, the effect of any return earned on such
additional money will diminish over time. In comparing Class B Shares
to Class C Shares, investors should also consider the duration of the
annual 12b-1 Plan expenses to which each of the classes is subject and
the desirability of an automatic conversion feature, which is available
only for Class B Shares.
For the distribution and related services provided to, and the
expenses borne on behalf of, the Funds, the Distributor and others will
be paid, in the case of Class A Shares, from the proceeds of the
front-end sales charge and 12b-1 Plan fees and, in the case of Class B
Shares and Class C Shares, from the proceeds of the 12b-1 Plan fees
and, if applicable, the CDSC incurred upon redemption. Financial advisers
may receive different compensation for selling Class A Shares, Class B Shares
and Class C Shares. Investors should understand that the purpose and
function of the respective 12b-1 Plans and the CDSCs applicable to Class
B Shares and Class C Shares are the same as those of the 12b-1 Plan and
the front-end sales charge applicable to Class A Shares in that such
fees and charges are used to finance the distribution of the respective
Classes. See Distribution (12b-1) and Service under Management of the
Funds.
Dividends, if any, paid on Class A Shares, Class B Shares and Class
C Shares will be calculated in the same manner, at the same time and
on the same day and will be in the same amount, except that the
additional amount of 12b-1 Plan expenses relating to Class B Shares and
Class C Shares will be borne exclusively by such shares. See
Calculation of Offering Price and Net Asset Value Per Share.
The NASD has adopted certain rules relating to investment company
sales charges. Equity Funds I, Inc. and the Distributor intend to
operate in compliance with these rules.
FRONT-END SALES CHARGE ALTERNATIVE - CLASS A SHARES
Class A Shares may be purchased at the offering price, which
reflects a maximum front-end sales charge of 4.75%. See Calculation of
Offering Price and Net Asset Value Per Share.
Purchases of $100,000 or more carry a reduced front-end sales
charge as shown in the following table:
DELAWARE FUND A CLASS AND DEVON FUND A CLASS
Dealer's
Commission***
Front-End Sales Charge as % of as % of
Offering Offering
Amount of Purchase Price Amount Invested** Price
Delaware Devon
Fund Fund
Less than $100,000 4.75% 4.97% 4.98% 4.00%
$100,000 but
under $250,000 3.75% 3.88% 3.92% 3.00%
$250,000 but
under $500,000 2.50% 2.57% 2.58% 2.00%
$500,000 but
under $1,000,000* 2.00% 2.05% 2.02% 1.60%
* There is no front-end sales charge on purchases of Class A Shares of
$1,000,000 or more but, under certain limited circumstances, a 1%
Limited CDSC may apply upon redemption of such shares.
** Based upon the net asset value per share of Class A Shares as of
the end of Equity Funds I, Inc.'s most recent fiscal year.
*** Financial institutions or their affiliated brokers may receive an
agency transaction fee in the percentages set forth above.
A Fund must be notified when a sale takes place which would qualify for
the reduced front-end sales charge on the basis of previous or current
purchases. The reduced front-end sales charge will be granted upon
confirmation of the shareholder's holdings by such Fund. Such reduced
front-end sales charges are not retroactive.
From time to time, upon written notice to all of its dealers, the
Distributor may hold special promotions for specified periods during
which the Distributor may reallow to dealers up to the full amount of
the front-end sales charge shown above. In addition, certain dealers
who enter into an agreement to provide extra training and information on
Delaware Group products and services and who increase sales of Delaware
Group funds may receive an additional commission of up to 0.15% of the
offering price. Dealers who receive 90% or more of the sales charge may
be deemed to be underwriters under the Securities Act of 1933 (the "1933
Act").
For initial purchases of Class A Shares of $1,000,000 or more, a
dealer's commission may be paid by the Distributor to financial advisers
through whom such purchases are made in accordance with the following
schedule:
DEALER'S COMMISSION
(AS A PERCENTAGE OF
AMOUNT OF PURCHASE AMOUNT PURCHASED)
Up to $2 million 1.00%
Next $1 million up to $3 million 0.75
Next $2 million up to $5 million 0.50
Amount over $5 million 0.25
For accounts with assets over $1 million, the dealer commission resets
annually to the highest incremental commission rate on the anniversary of
the first purchase. In determining a financial adviser's eligibility for the
dealer's commission, purchases of Class A Shares of other Delaware Group
funds as to which a Limited CDSC applies may be aggregated with those of
Class A Shares of a Fund. Financial advisers also may be eligible for a
dealer's commission in connection with certain purchases made under a
Letter of Intention or pursuant to an investor's Right of Accumulation.
Financial advisers should contact the Distributor concerning the
applicability and calculation of the dealer's commission in the case of
combined purchases.
An exchange from other Delaware Group funds will not qualify for
payment of the dealer's commission, unless a dealer's commission or
similar payment has not been previously paid on the assets being
exchanged. The schedule and program for payment of the dealer's
commission are subject to change or termination at any time by the
Distributor at its discretion.
Redemptions of Class A Shares purchased at net asset value may
result in the imposition of a Limited CDSC if the dealer's commission
described above was paid in connection with the purchase of those
shares. See Contingent Deferred Sales Charge for Certain Redemptions of
Class A Shares Purchased at Net Asset Value under Redemption and
Exchange.
COMBINED PURCHASES PRIVILEGE
By combining your holdings of Class A Shares with your holdings of
Class B Shares and/or Class C Shares of a Fund and shares of other funds
in the Delaware Group, except as noted below, you can reduce the
front-end sales charges on any additional purchases of Class A Shares.
Shares of Delaware Group Premium Fund, Inc. beneficially owned in
connection with ownership of variable insurance products may be combined
with other Delaware Group fund holdings. In addition, assets held in
any stable value product available through the Delaware Group may be
combined with other Delaware Group fund holdings. Shares of other funds
that do not carry a front-end sales charge or CDSC may not be included
unless they were acquired through an exchange from a Delaware Group fund
that does carry a front-end sales charge or CDSC.
This privilege permits you to combine your purchases and holdings
with those of your spouse, your children under 21 and any trust,
fiduciary or retirement account for the benefit of such family members.
It also permits you to use these combinations under a Letter of
Intention. A Letter of Intention allows you to make purchases over a
13-month period and qualify the entire purchase for a reduction in
front-end sales charges on Class A Shares.
Combined purchases of $1,000,000 or more, including certain
purchases made at net asset value pursuant to a Right of Accumulation or
under a Letter of Intention, may result in the payment of a dealer's
commission and the applicability of a Limited CDSC. Investors should
consult their financial advisers or the Shareholder Service Center about
the operation of these features. See Front-End Sales Charge Alternative
- -Class A Shares, above.
ALLIED PLANS
Class A Shares are available for purchase by participants in
certain 401(k) Defined Contribution Plans ("Allied Plans") which are
made available under a joint venture agreement between the Distributor
and another institution through which mutual funds are marketed and
which allow investments in Class A Shares of designated Delaware Group
funds ("eligible Delaware Group fund shares"), as well as shares of
designated classes of non-Delaware Group funds ("eligible non-Delaware
Group fund shares"). Class B Shares and Class C Shares are not eligible
for purchase by Allied Plans.
With respect to purchases made in connection with an Allied Plan,
the value of eligible Delaware Group and eligible non-Delaware Group
fund shares held by the Allied Plan may be combined with the dollar
amount of new purchases by that Allied Plan to obtain a reduced front-
end sales charge on additional purchases of eligible Delaware Group fund
shares.
Participants in Allied Plans may exchange all or part of their
eligible Delaware Group fund shares for other eligible Delaware Group
fund shares or for eligible non-Delaware Group fund shares at net asset
value without payment of a front-end sales charge. However, exchanges
of eligible fund shares, both Delaware Group and non-Delaware Group,
which were not subject to a front end sales charge, will be subject to
the applicable sales charge if exchanged for eligible Delaware Group
fund shares to which a sales charge applies. No sales charge will apply
if the eligible fund shares were previously acquired through the
exchange of eligible shares on which a sales charge was already paid or
through the reinvestment of dividends. See Investing by Exchange.
A dealer's commission may be payable on purchases of eligible
Delaware Group fund shares under an Allied Plan. In determining a
financial adviser's eligibility for a dealer's commission on net asset
value purchases of eligible Delaware Group fund shares in connection
with Allied Plans, all participant holdings in the Allied Plan will be
aggregated.
The Limited CDSC is applicable to redemptions of net asset value
purchases from an Allied Plan on which a dealer's commission has been
paid. Waivers of the Limited CDSC, as described under Waiver of Limited
Contingent Deferred Sales Charge - Class A Shares under Redemption and
Exchange, apply to redemptions by participants in Allied Plans except in
the case of exchanges between eligible Delaware Group and non-Delaware
Group fund shares. When eligible Delaware Group fund shares are
exchanged into eligible non-Delaware Group fund shares, the Limited CDSC
will be imposed at the time of the exchange, unless the joint venture
agreement specifies that the amount of the Limited CDSC will be paid by
the financial adviser or selling dealer. See Contingent Deferred Sales
Charge for Certain Redemptions of Class A Shares Purchased at Net Asset
Value under Redemption and Exchange.
BUYING CLASS A SHARES AT NET ASSET VALUE
Class A Shares of a Fund may be purchased at net asset value under
the Delaware Group Dividend Reinvestment Plan and, under certain
circumstances, the Exchange Privilege or the 12-Month Reinvestment
Privilege. See The Delaware Difference and Redemption and Exchange for
additional information.
Purchases of Class A Shares may be made at net asset value by
current and former officers, directors and employees (and members of
their families) of the Manager, any affiliate, any of the funds in the
Delaware Group, certain of their agents and registered representatives
and employees of authorized investment dealers and by employee benefit
plans for such entities. Individual purchases, including those in
retirement accounts, must be for accounts in the name of the individual
or a qualifying family member.
Purchases of Class A Shares may also be made by clients of
registered representatives of an authorized investment dealer at net
asset value within 12 months after the registered representative changes
employment, if the purchase is funded by proceeds from an investment
where a front-end sales charge, contingent deferred sales charge, or
other sales charge has been assessed. Purchases of Class A Shares may
also be made at net asset value by bank employees who provide services
in connection with agreements between the bank and unaffiliated brokers
or dealers concerning sales of shares of Delaware Group funds.
Officers, directors and key employees of institutional clients of the
Manager or any of its affiliates may purchase Class A Shares at net
asset value. Moreover, purchases may be effected at net asset value for
the benefit of the clients of brokers, dealers and registered investment
advisers affiliated with a broker or dealer, if such broker, dealer or
investment adviser has entered into an agreement with the Distributor
providing specifically for the purchase of Class A Shares in connection
with special investment products, such as wrap accounts or similar fee
based programs.
Purchases of Class A Shares at net asset value may also be made by
the following: institutions investing for the account of their trust
customers if they are not eligible to purchase shares of the
Institutional Class of a Fund; and any group retirement plan (excluding
defined benefit pension plans), or such plans of the same employer, for
which plan participant records are maintained on the Delaware Investment
& Retirement Services, Inc. ("DIRSI") proprietary record keeping system
that (i) has in excess of $500,000 of plan assets invested in Class A
Shares of Delaware Group funds and any stable value account available to
investment advisory clients of the Manager or its affiliates, or (ii) is
sponsored by an employer that has at any point after May 1, 1997 had
more than 100 employees while such plan has held Class A Shares of a
Delaware Group fund and such employer has properly represented to DIRSI
in writing that it has the requisite number of employees and has
received written confirmation back from DIRSI. See Group Investment
Plans for information regarding the applicability of the Limited CDSC.
Investments in Class A Shares made by plan level and/or participant
retirement accounts that are for the purpose of repaying a loan taken
from such accounts will be made at net asset value. Loan repayments
made to a Delaware Group account in connection with loans originated
from accounts previously maintained by another investment firm will also
be invested at net asset value.
Investors in Delaware-Voyageur Unit Investment Trusts may reinvest
monthly dividend checks and/or repayment of invested capital into Class
A Shares of any of the funds in the Delaware Group at net asset value.
A Fund must be notified in advance that an investment qualifies for
purchase at net asset value.
GROUP INVESTMENT PLANS
Group Investment Plans (e.g., SEP/IRA, SAR/SEP, SIMPLE IRA,
SIMPLE 401(k), Profit Sharing, Money Purchase Pension , 401(k) Defined
Contribution, and 403(b)(7) and 457 Deferred Compensation Plans) may
benefit from the reduced front-end sales charges available on Class A
Shares based on total plan assets. If a company has more than one
plan investing in the Delaware Group of funds, then the total amount
invested in all plans will be aggregated to determine the applicable
front-end sales charge reduction on each purchase, both initial and
subsequent, if, at the time of each such purchase, the company notifies
the Fund in which it is investing that it qualifies for the reduction.
Employees participating in such Group Investment Plans may also combine
the investments held in their plan account to determine the front-end
sales charge applicable to purchases in non-retirement Delaware Group
investment accounts if, at the time of each such purchase, they notify
the Fund in which they are investing that they are eligible to combine
purchase amounts held in their plan account.
The Limited CDSC is applicable to any redemptions of net asset
value purchases made on behalf of any group retirement plan on which a
dealer's commission has been paid only if such redemption is made
pursuant to a withdrawal of the entire plan from Delaware Group funds.
See Contingent Deferred Sales Charge for Certain Redemptions of Class A
Shares Purchased at Net Asset Value under Redemption and Exchange.
For additional information on retirement plans, including plan
forms, applications, minimum investments and any applicable account
maintenance fees, contact your investment dealer or the Distributor.
DEFERRED SALES CHARGE ALTERNATIVE - CLASS B SHARES
Class B Shares may be purchased at net asset value without a front-
end sales charge and, as a result, the full amount of the investor's
purchase payment will be invested in Fund shares. The Distributor
currently anticipates compensating dealers or brokers for selling Class
B Shares at the time of purchase from its own assets in an amount equal
to no more than 4% of the dollar amount purchased. In addition, from
time to time, upon written notice to all of its dealers, the Distributor
may hold special promotions for specified periods during which the
Distributor may pay additional compensation to dealers or brokers for
selling Class B Shares at the time of purchase. As discussed below,
however, Class B Shares are subject to annual 12b-1 Plan expenses and,
if redeemed within six years of purchase, a CDSC.
Proceeds from the CDSC and the annual 12b-1 Plan fees are paid to
the Distributor and others for providing distribution and related
services, and bearing related expenses, in connection with the sale of
Class B Shares. These payments support the compensation paid to dealers
or brokers for selling Class B Shares. Payments to the Distributor and
others under the Class B 12b-1 Plan may be in an amount equal to no more
than 1% annually. The combination of the CDSC and the proceeds of the
12b-1 Plan fees makes it possible for a Fund to sell Class B Shares
without deducting a front-end sales charge at the time of purchase.
Holders of Class B Shares who exercise the exchange privilege
described below will continue to be subject to the CDSC schedule for
Class B Shares described in this Prospectus, even after the exchange.
Such CDSC schedule may be higher than the CDSC schedule for Class B
Shares acquired as a result of the exchange. See Redemption and
Exchange.
AUTOMATIC CONVERSION OF CLASS B SHARES
Class B Shares, other than shares acquired through reinvestment of
dividends, held for eight years after purchase are eligible for
automatic conversion into Class A Shares. Conversions of Class B Shares
into Class A Shares will occur only four times in any calendar year, on
the last business day of the second full week of March, June, September
and December (each, a "Conversion Date"). If the eighth anniversary
after a purchase of Class B Shares falls on a Conversion Date, an
investor's Class B Shares will be converted on that date. If the eighth
anniversary occurs between Conversion Dates, an investor's Class B
Shares will be converted on the next Conversion Date after such
anniversary. Consequently, if a shareholder's eighth anniversary falls
on the day after a Conversion Date, that shareholder will have to hold
Class B Shares for as long as three additional months after the eighth
anniversary of purchase before the shares will automatically convert
into Class A Shares.
Class B Shares of a fund acquired through a reinvestment of
dividends will convert to the corresponding Class A Shares of that fund
(or, in the case of Delaware Group Cash Reserve, Inc., the Delaware Cash
Reserve Consultant Class) pro-rata with Class B Shares of that fund not
acquired through dividend reinvestment.
All such automatic conversions of Class B Shares will constitute
tax-free exchanges for federal income tax purposes. See Taxes.
LEVEL SALES CHARGE ALTERNATIVE - CLASS C SHARES
Class C Shares may be purchased at net asset value without a front-
end sales charge and, as a result, the full amount of the investor's
purchase payment will be invested in Fund shares. The Distributor
currently anticipates compensating dealers or brokers for selling Class
C Shares at the time of purchase from its own assets in an amount equal
to no more than 1% of the dollar amount purchased. As discussed below,
Class C Shares are subject to annual 12b-1 Plan expenses and, if
redeemed within 12 months of purchase, a CDSC.
Proceeds from the CDSC and the annual 12b-1 Plan fees are paid to
the Distributor and others for providing distribution and related
services, and bearing related expenses, in connection with the sale of
Class C Shares. These payments support the compensation paid to dealers
or brokers for selling Class C Shares. Payments to the Distributor and
others under the Class C 12b-1 Plan may be in an amount equal to no more
than 1% annually.
Holders of Class C Shares who exercise the exchange privilege
described below will continue to be subject to the CDSC schedule for
Class C Shares as described in this Prospectus. See Redemption and
Exchange.
CONTINGENT DEFERRED SALES CHARGE - CLASS B SHARES AND CLASS C SHARES
Class B Shares redeemed within six years of purchase may be subject
to a CDSC at the rates set forth below and Class C Shares redeemed
within 12 months of purchase may be subject to a CDSC of 1%. CDSCs are
charged as a percentage of the dollar amount subject to the CDSC. The
charge will be assessed on an amount equal to the lesser of the net
asset value at the time of purchase of the shares being redeemed or the
net asset value of those shares at the time of redemption. No CDSC will
be imposed on increases in net asset value above the initial purchase
price, nor will a CDSC be assessed on redemptions of shares acquired
through reinvestments of dividends or capital gains distributions. For
purposes of this formula, the "net asset value at the time of purchase"
will be the net asset value at purchase of Class B Shares or Class C
Shares of a Fund, even if those shares are later exchanged for shares of
another Delaware Group fund. In the event of an exchange of the shares,
the "net asset value of such shares at the time of redemption" will be
the net asset value of the shares that were acquired in the exchange.
The following table sets forth the rates of the CDSC for Class B
Shares of the Funds:
CONTINGENT DEFERRED
SALES CHARGE (AS A
PERCENTAGE OF
DOLLAR AMOUNT
YEAR AFTER PURCHASE MADE SUBJECT TO CHARGE)
0-2 4%
3-4 3%
5 2%
6 1%
7 and thereafter None
During the seventh year after purchase and, thereafter, until converted
automatically into Class A Shares, Class B Shares will still be subject
to the annual 12b-1 Plan expenses of up to 1% of average daily net
assets of those shares. See Automatic Conversion of Class B Shares,
above. Investors are reminded that the Class A Shares into which
Class B Shares will convert are subject to ongoing annual 12b-1 Plan
expenses of up to a maximum of 0.30% of average daily net assets of such
shares.
In determining whether a CDSC applies to a redemption of Class B
Shares, it will be assumed that shares held for more than six years are
redeemed first, followed by shares acquired through the reinvestment of
dividends or distributions, and finally by shares held longest during
the six-year period. With respect to Class C Shares, it will be assumed
that shares held for more than 12 months are redeemed first followed by
shares acquired through the reinvestment of dividends or distributions,
and finally by shares held for 12 months or less.
All investments made during a calendar month, regardless of what
day of the month the investment occurred, will age one month on the last
day of that month and each subsequent month.
The CDSC is waived on certain redemptions of Class B Shares and
Class C Shares. See Waiver of Contingent Deferred Sales Charge - Class
B Shares and Class C Shares under Redemption and Exchange.
OTHER PAYMENTS TO DEALERS -- CLASS A SHARES,
CLASS B SHARES AND CLASS C SHARES
From time to time at the discretion of the Distributor, all
registered broker/dealers whose aggregate sales of the Classes exceed
certain limits, as set by the Distributor, may receive from the
Distributor an additional payment of up to 0.25% of the dollar amount of
such sales. The Distributor may also provide additional promotional
incentives or payments to dealers that sell shares of the Delaware Group
of funds. In some instances, these incentives or payments may be
offered only to certain dealers who maintain, have sold, or may sell
certain amounts of shares.
Subject to pending amendments to the NASD's Conduct Rules , in
connection with the promotion of Delaware Group fund shares, the
Distributor may, from time to time, pay to participate in dealer-
sponsored seminars and conferences, reimburse dealers for expenses
incurred in connection with preapproved seminars, conferences and
advertising and may, from time to time, pay or allow additional
promotional incentives to dealers, which shall include non-cash
concessions, such as certain luxury merchandise or a trip to or
attendance at a business or investment seminar at a luxury resort, as
part of preapproved sales contests. Payment of non-cash compensation to
dealers is currently under review by the NASD and the Securities and
Exchange Commission. It is likely that the NASD's Conduct Rules will
be amended such that the ability of the Distributor to pay non-cash
compensation as described above will be restricted in some fashion. The
Distributor intends to comply with the NASD's Conduct Rules as they
may be amended.
DELAWARE FUND INSTITUTIONAL CLASS AND DEVON FUND INSTITUTIONAL CLASS
In addition to offering Class A Shares, Class B Shares and Class C
Shares, Delaware Fund also offers Delaware Fund Institutional Class and
Devon Fund also offers Devon Fund Institutional Class which are described
in a separate prospectus and are available for purchase only by certain
investors. Delaware Fund Institutional Class Shares and Devon Fund
Institutional Class shares generally are distributed directly by the
Distributor and do not have a front-end sales charge, a CDSC, or a
Limited CDSC and are not subject to 12b-1 Plan distribution expenses.
To obtain the prospectus that describes Delaware Fund Institutional
Class and Devon Fund Institutional Class, contact the Distributor by
writing to the address or by calling the telephone number listed on the
back cover of this Prospectus.
HOW TO BUY SHARES
PURCHASE AMOUNTS
Generally, the minimum initial purchase is $1,000 for Class A
Shares, Class B Shares and Class C Shares. Subsequent purchases of
shares of any Class generally must be $100 or more. For purchases under
the Uniform Gifts to Minors Act or Uniform Transfers to Minors Act or
through an Automatic Investing Plan, there is a minimum initial purchase
of $250 and a minimum subsequent purchase of $25. Minimum purchase
requirements do not apply to retirement plans other than IRAs, for which
there is a minimum initial purchase of $250 and a minimum subsequent
purchase of $25, regardless of which Class is selected.
There is a maximum purchase limitation of $250,000 on each purchase
of Class B Shares. For Class C Shares, each purchase must be in an
amount that is less than $1,000,000. An investor may exceed these
maximum purchase limitations by making cumulative purchases over a
period of time. In doing so, an investor should keep in mind that
reduced front-end sales charges are available on investments of $100,000
or more in Class A Shares, and that Class A Shares (i) are subject to
lower annual 12b-1 Plan expenses than Class B Shares and Class C Shares
and (ii) generally are not subject to a CDSC. For retirement plans, the
maximum purchase limitations apply only to the initial purchase of Class
B Shares or Class C Shares by the plan.
INVESTING THROUGH YOUR INVESTMENT DEALER
You can make a purchase of shares of the Funds through most
investment dealers who, as part of the service they provide, must
transmit orders promptly. They may charge for this service. If you
want a dealer but do not have one, the Delaware Group can refer you to
one.
INVESTING BY MAIL
1. Initial Purchases--An Investment Application or, in the case of a
retirement account, an appropriate retirement plan application, must be
completed, signed and sent with a check, payable to the specific Fund
and Class selected to Delaware Group at 1818 Market Street,
Philadelphia, PA 19103.
2. Subsequent Purchases--Additional purchases may be made at any
time by mailing a check payable to the specific Fund and Class selected.
Your check should be identified with your name(s) and account number.
An investment slip (similar to a deposit slip) is provided at the bottom
of transaction confirmations and dividend statements that you will
receive from Equity Funds I, Inc. Use of this investment slip can help
expedite processing of your check when making additional purchases.
Your investment may be delayed if you send additional purchases by
certified mail.
INVESTING BY WIRE
You may purchase shares by requesting your bank to transmit funds
by wire to CoreStates Bank, N.A., ABA #031000011, account number
1412893401 (include your name(s) and your account number for the Fund
and Class in which you are investing).
1. Initial Purchases--Before you invest, telephone the Shareholder
Service Center to get an account number. If you do not call first,
processing of your investment may be delayed. In addition, you must
promptly send your Investment Application or, in the case of a
retirement account, an appropriate retirement plan application, for
the specific Fund and Class selected, to Delaware Group at 1818 Market
Street, Philadelphia, PA 19103.
2. Subsequent Purchases--You may make additional investments anytime
by wiring funds to CoreStates Bank, N.A., as described above. You
should advise the Shareholder Service Center by telephone of each wire
you send.
If you want to wire investments to a retirement plan account, call
the Shareholder Service Center for special wiring instructions.
INVESTING BY EXCHANGE
If you have an investment in another mutual fund in the Delaware
Group, you may write and authorize an exchange of part or all of your
investment into shares of a Fund. If you wish to open an account by
exchange, call the Shareholder Service Center for more information. All
exchanges are subject to the eligibility and minimum purchase
requirements set forth in each fund's prospectus. See Redemption and
Exchange for more complete information concerning your exchange
privileges.
Holders of Class A Shares of a Fund may exchange all or part of
their shares for certain of the shares of other funds in the Delaware
Group, including other Class A Shares, but may not exchange their Class
A Shares for Class B Shares or Class C Shares of the Fund or of any
other fund in the Delaware Group. Holders of Class B Shares of a Fund
are permitted to exchange all or part of their Class B Shares only into
Class B Shares of other Delaware Group funds. Similarly, holders of
Class C Shares of a Fund are permitted to exchange all or part of their
Class C Shares only into Class C Shares of other Delaware Group funds.
Class B Shares of a Fund and Class C Shares of a Fund acquired by
exchange will continue to carry the CDSC and, in the case of Class B
Shares, the automatic conversion schedule of the fund from which the
exchange is made. The holding period of Class B Shares of a Fund
acquired by exchange will be added to that of the shares that were
exchanged for purposes of determining the time of the automatic
conversion into Class A Shares of that Fund.
Permissible exchanges into Class A Shares of a Fund will be made
without a front-end sales charge, except for exchanges of shares that
were not previously subject to a front-end sales charge (unless such
shares were acquired through the reinvestment of dividends).
Permissible exchanges into Class B Shares or Class C Shares of a Fund
will be made without the imposition of a CDSC by the fund from which the
exchange is being made at the time of the exchange.
See Allied Plans under Classes of Shares for information on
exchanges by participants in an Allied Plan.
ADDITIONAL METHODS OF ADDING TO YOUR INVESTMENT
Call the Shareholder Service Center for more information if you
wish to use the following services:
1. Automatic Investing Plan
THE AUTOMATIC INVESTING PLAN ENABLES YOU TO MAKE REGULAR MONTHLY
INVESTMENTS WITHOUT WRITING OR MAILING CHECKS. You may authorize Equity
Funds I, Inc. to transfer a designated amount monthly from your checking
account to your Fund account. Many shareholders use this as an
automatic savings plan. Shareholders should allow a reasonable amount
of time for initial purchases and changes to these plans to become
effective.
This option is not available to participants in the following
plans: SAR/SEP, SEP/IRA, SIMPLE IRA, SIMPLE 401(k), Profit Sharing and
Money Purchase Pension Plans, 401(k) Defined Contribution Plans, or
403(b)(7) or 457 Deferred Compensation Plans.
2. Direct Deposit
YOU MAY HAVE YOUR EMPLOYER OR BANK MAKE REGULAR INVESTMENTS
DIRECTLY TO YOUR ACCOUNT FOR you (for example: payroll deduction, pay
by phone, annuity payments). Each Fund also accepts preauthorized
recurring government and private payments by Electronic Fund Transfer,
which avoids mail time and check clearing holds on payments such as
social security, federal salaries, Railroad Retirement benefits, etc.
* * *
Should investments through an automatic investing plan or by direct
deposit be reclaimed or returned for some reason, Equity Funds I, Inc.
has the right to liquidate your shares to reimburse the government or
transmitting bank. If there are insufficient funds in your account, you
are obligated to reimburse the Fund.
3. MoneyLine (SM) On Demand
Through the MoneyLine (SM) On Demand service, you or your
investment dealer may call a Fund to request a transfer of funds from
your predesignated bank account to your Fund account. See MoneyLine
(SM) Services under The Delaware Difference for additional information
about this service.
4. Wealth Builder Option
You can use our Wealth Builder Option to invest in a Fund through
regular liquidations of shares in your accounts in other funds in the
Delaware Group. You may also elect to invest in other mutual funds in
the Delaware Group through the Wealth Builder Option through regular
liquidations of shares in your Fund account.
Under this automatic exchange program, you can authorize regular
monthly amounts (minimum of $100 per fund) to be liquidated from your
account in one or more funds in the Delaware Group and invested
automatically into any other account in a Delaware Group mutual fund
that you may specify. If in connection with the election of the Wealth
Builder Option, you wish to open a new account to receive the automatic
investment, such new account must meet the minimum initial purchase
requirements described in the prospectus of the fund that you select.
All investments under this option are exchanges and are therefore
subject to the same conditions and limitations as other exchanges noted
above. You can terminate your participation in Wealth Builder at any
time by giving written notice to the fund from which the exchanges are
made. See Redemption and Exchange.
This option is not available to participants in the following
plans: SAR/SEP, SEP/IRA, SIMPLE IRA, SIMPLE 401(k), Profit Sharing and
Money Purchase Pension Plans, 401(k) Defined Contribution Plans, or
403(b)(7) or 457 Deferred Compensation Plans.
5. Dividend Reinvestment Plan
You can elect to have your distributions (capital gains and/or
dividend income) paid to you by check or reinvested in your account.
Or, you may invest your distributions in certain other funds in the
Delaware Group, subject to the exceptions noted below as well as the
eligibility and minimum purchase requirements set forth in each fund's
prospectus.
Reinvestments of distributions into Class A Shares of a Fund or of
other Delaware Group funds are made without a front-end sales charge.
Reinvestments of distributions into Class B Shares of a Fund or of other
Delaware Group funds or into Class C Shares of a Fund or of other
Delaware Group funds are also made without any sales charge and will not
be subject to a CDSC if later redeemed. See Automatic Conversion of
Class B Shares under Classes of Shares for information concerning the
automatic conversion of Class B Shares acquired by reinvesting
dividends.
Holders of Class A Shares of a Fund may not reinvest their
distributions into Class B Shares or Class C Shares of any fund in the
Delaware Group, including the Funds. Holders of Class B Shares of a
Fund may reinvest their distributions only into Class B Shares of the
funds in the Delaware Group which offer that class of shares.
Similarly, holders of Class C Shares of a Fund may reinvest their
distributions only into Class C Shares of the funds in the Delaware
Group which offer that class of shares. For more information about
reinvestments, call the Shareholder Service Center.
Capital gains and/or dividend distributions for participants in
the following retirement plans are automatically reinvested into the
same Delaware Group fund in which their investments are held: SAR/SEP,
SEP/IRA, SIMPLE IRA, SIMPLE 401(k), Profit Sharing and Money Purchase
Pension Plans, 401(k) Defined Contribution Plans, or 403(b)(7) or 457
Deferred Compensation Plans.
PURCHASE PRICE AND EFFECTIVE DATE
The offering price and net asset value of Class A Shares, Class B
Shares and Class C Shares are determined as of the close of regular
trading on the New York Stock Exchange (ordinarily, 4 p.m., Eastern
time) on days when the Exchange is open.
The effective date of a purchase made through an investment dealer
is the date the order is received by the Fund in which the shares are
being purchased, its agent or designee. The effective date of a direct
purchase is the day your wire, electronic transfer or check is received,
unless it is received after the time the offering price or net asset
value of shares is determined, as noted above. Purchase orders received
after such time will be effective the next business day.
THE CONDITIONS OF YOUR PURCHASE
Each Fund reserves the right to reject any purchase order. If a
purchase is canceled because your check is returned unpaid, you are
responsible for any loss incurred. A Fund can redeem shares from your
account(s) to reimburse itself for any loss, and you may be restricted
from making future purchases in any of the funds in the Delaware Group.
Each Fund reserves the right to reject purchase orders paid by third-
party checks or checks that are not drawn on a domestic branch of a
United States financial institution. If a check drawn on a foreign
financial institution is accepted, you may be subject to additional bank
charges for clearance and currency conversion.
Each Fund also reserves the right, following shareholder
notification, to charge a service fee on non-retirement accounts that,
as a result of redemption, have remained below the minimum stated
account balance for a period of three or more consecutive months.
Holders of such accounts may be notified of their insufficient account
balance and advised that they have until the end of the current calendar
quarter to raise their balance to the stated minimum. If the account
has not reached the minimum balance requirement by that time, the Fund
will charge a $9 fee for that quarter and each subsequent calendar
quarter until the account is brought up to the minimum balance. The
service fee will be deducted from the account during the first week of
each calendar quarter for the previous quarter, and will be used to help
defray the cost of maintaining low-balance accounts. No fees will be
charged without proper notice, and no CDSC will apply to such
assessments.
Each Fund also reserves the right, upon 60 days' written notice, to
involuntarily redeem accounts that remain under the minimum initial
purchase amount as a result of redemptions. An investor making the
minimum initial investment may be subject to involuntary redemption
without the imposition of a CDSC or Limited CDSC if he or she redeems
any portion of his or her account.
REDEMPTION AND EXCHANGE
YOU CAN REDEEM OR EXCHANGE YOUR SHARES IN A NUMBER OF DIFFERENT
WAYS. The exchange service is useful if your investment requirements
change and you want an easy way to invest in other equity funds, tax-
advantaged funds, bond funds or money market funds. This service is
also useful if you are anticipating a major expenditure and want to move
a portion of your investment into a fund that has the checkwriting
feature. Exchanges are subject to the requirements of each fund and all
exchanges of shares constitute taxable events. See Taxes. Further, in
order for an exchange to be processed, shares of the fund being acquired
must be registered in the state where the acquiring shareholder resides.
You may want to consult your financial adviser or investment dealer to
discuss which funds in the Delaware Group will best meet your changing
objectives, and the consequences of any exchange transaction. You may
also call the Delaware Group directly for fund information.
All exchanges involve a purchase of shares of the fund into which
the exchange is made. As with any purchase, an investor should obtain
and carefully read that fund's prospectus before buying shares in an
exchange. The prospectus contains more complete information about the
fund, including charges and expenses.
Your shares will be redeemed or exchanged at a price based on the
net asset value next determined after a Fund receives your request in
good order, subject, in the case of a redemption, to any applicable CDSC
or Limited CDSC. For example, redemption or exchange requests
received in good order after the time the offering price and net asset
value of shares are determined will be processed on the next business
day. See Purchase Price and Effective Date under How to Buy Shares. A
shareholder submitting a redemption request may indicate that he or she
wishes to receive redemption proceeds of a specific dollar amount. In
the case of such a request, and in the case of certain redemptions from
retirement plan accounts, a Fund will redeem the number of shares
necessary to deduct the applicable CDSC in the case of Class B Shares
and Class C Shares, and, if applicable, the Limited CDSC in the case of
Class A Shares and tender to the shareholder the requested amount,
assuming the shareholder holds enough shares in his or her account for
the redemption to be processed in this manner. Otherwise, the amount
tendered to the shareholder upon redemption will be reduced by the
amount of the applicable CDSC or Limited CDSC. Redemption proceeds will
be distributed promptly, as described below, but not later than seven
days after receipt of a redemption request.
Except as noted below, for a redemption request to be in "good
order," you must provide your account number, account registration, and
the total number of shares or dollar amount of the transaction. For
exchange requests, you must also provide the name of the fund in which
you want to invest the proceeds. Exchange instructions and redemption
requests must be signed by the record owner(s) exactly as the shares are
registered. You may request a redemption or an exchange by calling the
Shareholder Service Center at 800-523-1918. Each Fund may suspend,
terminate, or amend the terms of the exchange privilege upon 60 days'
written notice to shareholders.
Each Fund will process written and telephone redemption requests to
the extent that the purchase orders for the shares being redeemed have
already settled. Each Fund will honor redemption requests as to shares
for which a check was tendered as payment, but a Fund will not mail or
wire the proceeds until it is reasonably satisfied that the purchase
check has cleared, which may take up to 15 days from the purchase date.
You can avoid this potential delay if you purchase shares by wiring
Federal Funds. Each Fund reserves the right to reject a written or
telephone redemption request or delay payment of redemption proceeds if
there has been a recent change to the shareholder's address of record.
There is no front-end sales charge or fee for exchanges made
between shares of funds which both carry a front-end sales charge. Any
applicable front-end sales charge will apply to exchanges from shares of
funds not subject to a front-end sales charge, except for exchanges
involving assets that were previously invested in a fund with a front-
end sales charge and/or exchanges involving the reinvestment of
dividends.
Holders of Class B Shares or Class C Shares that exchange their
shares ("Original Shares") for shares of other funds in the Delaware
Group (in each case, "New Shares") in a permitted exchange, will not be
subject to a CDSC that might otherwise be due upon redemption of the
Original Shares. However, such shareholders will continue to be subject
to the CDSC and, in the case of Class B Shares, the automatic conversion
schedule of the Original Shares as described in this Prospectus and any
CDSC assessed upon redemption will be charged by the fund from which the
Original Shares were exchanged. In an exchange of Class B Shares from a
Fund, the Fund's CDSC schedule may be higher than the CDSC schedule
relating to the New Shares acquired as a result of the exchange. For
purposes of computing the CDSC that may be payable upon a disposition of
the New Shares, the period of time that an investor held the Original
Shares is added to the period of time that an investor held the New
Shares. With respect to Class B Shares, the automatic conversion
schedule of the Original Shares may be longer than that of the New
Shares. Consequently, an investment in New Shares by exchange may
subject an investor to the higher 12b-1 fees applicable to Class B
Shares of a Fund for a longer period of time than if the investment in
New Shares were made directly.
Various redemption and exchange methods are outlined below. Except
for the CDSC applicable to certain redemptions of Class B Shares and Class C
Shares and the Limited CDSC applicable to certain redemptions of Class A
Shares purchased at net asset value, there is no fee charged by the Fund
or the Distributor for redeeming or exchanging your shares, but such
fees could be charged in the future. You may have your investment
dealer arrange to have your shares redeemed or exchanged. Your
investment dealer may charge for this service.
All authorizations given by shareholders, including selection of
any of the features described below, shall continue in effect until such
time as a written revocation or modification has been received by a Fund
or its agent.
WRITTEN REDEMPTION
You can write to each Fund at 1818 Market Street, Philadelphia, PA
19103 to redeem some or all of your shares. The request must be signed
by all owners of the account or your investment dealer of record. For
redemptions of more than $50,000, or when the proceeds are not sent to
the shareholder(s) at the address of record, the Funds require a
signature by all owners of the account and a signature guarantee for
each owner. Each signature guarantee must be supplied by an eligible
guarantor institution. Each Fund reserves the right to reject a
signature guarantee supplied by an eligible institution based on its
creditworthiness. The Funds may require further documentation from
corporations, executors, retirement plans, administrators, trustees or
guardians.
Payment is normally mailed the next business day after receipt of
your redemption request. If your Class A Shares are in certificate
form, the certificate(s) must accompany your request and also be in good
order. Certificates are issued for Class A Shares only if a shareholder
submits a specific request. Certificates are not issued for Class B
Shares or Class C Shares.
WRITTEN EXCHANGE
You may also write to each Fund (at 1818 Market Street,
Philadelphia, PA 19103) to request an exchange of any or all of your
shares into another mutual fund in the Delaware Group, subject to the
same conditions and limitations as other exchanges noted above.
TELEPHONE REDEMPTION AND EXCHANGE
To get the added convenience of the telephone redemption and
exchange methods, you must have the Transfer Agent hold your shares
(without charge) for you. If you choose to have your Class A Shares in
certificate form, you may redeem or exchange only by written request and
you must return your certificates.
The Telephone Redemption - Check to Your Address of Record service
and the Telephone Exchange service, both of which are described below,
are automatically provided unless you notify the Fund in which you have
your account in writing that you do not wish to have such services
available with respect to your account. Each Fund reserves the right to
modify, terminate or suspend these procedures upon 60 days' written
notice to shareholders. It may be difficult to reach the Funds by
telephone during periods when market or economic conditions lead to an
unusually large volume of telephone requests.
Neither the Funds nor their Transfer Agent is responsible for any
shareholder loss incurred in acting upon written or telephone
instructions for redemption or exchange of Fund shares which are
reasonably believed to be genuine. With respect to such telephone
transactions, each Fund will follow reasonable procedures to confirm
that instructions communicated by telephone are genuine (including
verification of a form of personal identification) as, if it does not,
such Fund or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent transactions. Instructions received by
telephone are generally tape recorded, and a written confirmation will
be provided for all purchase, exchange and redemption transactions
initiated by telephone. By exchanging shares by telephone, you are
acknowledging prior receipt of a prospectus for the fund into which your
shares are being exchanged.
TELEPHONE REDEMPTION--CHECK TO YOUR ADDRESS OF RECORD
THE TELEPHONE REDEMPTION FEATURE IS A QUICK AND EASY METHOD TO
REDEEM SHARES. You or your investment dealer of record can have
redemption proceeds of $50,000 or less mailed to you at your address of
record. Checks will be payable to the shareholder(s) of record.
Payment is normally mailed the next business day after receipt of the
redemption request. This service is only available to individual, joint
and individual fiduciary-type accounts.
TELEPHONE REDEMPTION--PROCEEDS TO YOUR BANK
Redemption proceeds of $1,000 or more can be transferred to your
predesignated bank account by wire or by check. You should authorize
this service when you open your account. If you change your
predesignated bank account, you must complete an Authorization Form and
have your signature guaranteed. For your protection, your authorization
must be on file. If you request a wire, your funds will normally be
sent the next business day. CoreStates Bank, N.A.'s fee (currently
$7.50) will be deducted from your redemption proceeds. If you ask for a
check, it will normally be mailed the next business day after receipt of
your redemption request to your predesignated bank account. There are
no separate fees for this redemption method, but the mail time may delay
getting funds into your bank account. Simply call the Shareholder
Service Center prior to the time the offering price and net asset value
are determined, as noted above.
MONEYLINE (SM) ON DEMAND
Through the MoneyLine (SM) On Demand service, you or your
investment dealer may call a Fund to request a transfer of funds from
your Fund account to your predesignated bank account. See MoneyLine
(SM) Services under The Delaware Difference for additional information
about this service.
TELEPHONE EXCHANGE
The Telephone Exchange feature is a convenient and efficient way to
adjust your investment holdings as your liquidity requirements and
investment objectives change. You or your investment dealer of record
can exchange your shares into other funds in the Delaware Group under
the same registration, subject to the same conditions and limitations as
other exchanges noted above. As with the written exchange service,
telephone exchanges are subject to the requirements of each fund, as
described above. Telephone exchanges may be subject to limitations as
to amounts or frequency.
SYSTEMATIC WITHDRAWAL PLANS
1. Regular Plans
This plan provides shareholders with a consistent monthly (or
quarterly) payment. THIS IS PARTICULARLY USEFUL TO SHAREHOLDERS LIVING
ON FIXED INCOMES, SINCE IT CAN PROVIDE THEM WITH A STABLE SUPPLEMENTAL
AMOUNT. With accounts of at least $5,000, you may elect monthly
withdrawals of $25 (quarterly $75) or more. The Funds do not recommend
any particular monthly amount, as each shareholder's situation and needs
vary. Payments are normally made by check. In the alternative, you may
elect to have your payments transferred from your Fund account to your
predesignated bank account through the MoneyLine (SM) Direct Deposit
Service. Your funds will normally be credited to your bank account up
to four business days after the payment date. There are no separate
fees for this redemption method. See MoneyLine (SM) Services under The
Delaware Difference for more information about this service.
2. Retirement Plans
For shareholders eligible under the applicable retirement plan to
receive benefits in periodic payments, the Systematic Withdrawal Plan
provides you with maximum flexibility. A number of formulas are
available for calculating your withdrawals depending upon whether the
distributions are required or optional. Withdrawals must be for $25 or
more; however, no minimum account balance is required. The MoneyLine
(SM) Direct Deposit Service described above is not available for certain
retirement plans.
* * *
Shareholders should not purchase additional shares while
participating in a Systematic Withdrawal Plan.
Redemptions of Class A Shares via a Systematic Withdrawal Plan may
be subject to a Limited CDSC if the original purchase was made at net
asset value within the 12 months prior to the withdrawal and a dealer's
commission was paid on that purchase. See Contingent Deferred Sales
Charge for Certain Redemptions of Class A Shares Purchased at Net Asset
Value, below.
The applicable CDSC for Class B Shares and Class C Shares redeemed
via a Systematic Withdrawal Plan will be waived if, on the date that the
Plan is established, the annual amount selected to be withdrawn is less
than 12% of the account balance. If the annual amount selected to be
withdrawn exceeds 12% of the account balance on the date that the
Systematic Withdrawal Plan is established, all redemptions under the
Plan will be subject to the applicable CDSC. Whether a waiver of the
CDSC is available or not, the first shares to be redeemed for each
Systematic Withdrawal Plan payment will be those not subject to a CDSC
because they have either satisfied the required holding period or were
acquired through the reinvestment of distributions. The 12% annual
limit will be reset on the date that any Systematic Withdrawal Plan is
modified (for example, a change in the amount selected to be withdrawn
or the frequency or date of withdrawals), based on the balance in the
account on that date. See Waiver of Contingent Deferred Sales Charge -
Class B Shares and Class C Shares, below.
For more information on Systematic Withdrawal Plans, call the
Shareholder Service Center.
CONTINGENT DEFERRED SALES CHARGE FOR CERTAIN REDEMPTIONS OF CLASS A
SHARES PURCHASED AT NET ASSET VALUE
A Limited CDSC will be imposed on certain redemptions of Class A
Shares (or shares into which such Class A Shares are exchanged) made
within 12 months of purchase, if such purchases were made at net asset
value and triggered the payment by the Distributor of the dealer's
commission previously described. See Classes of Shares.
The Limited CDSC will be paid to the Distributor and will be equal
to the lesser of 1% of: (1) the net asset value at the time of purchase
of the Class A Shares being redeemed; or (2) the net asset value of such
Class A Shares at the time of redemption. For purposes of this formula,
the "net asset value at the time of purchase" will be the net asset
value at purchase of the Class A Shares even if those shares are later
exchanged for shares of another Delaware Group fund and, in the event of
an exchange of Class A Shares, the "net asset value of such shares at
the time of redemption" will be the net asset value of the shares
acquired in the exchange.
Redemptions of such Class A Shares held for more than 12 months
will not be subjected to the Limited CDSC and an exchange of such Class
A Shares into another Delaware Group fund will not trigger the
imposition of the Limited CDSC at the time of such exchange. The period
a shareholder owns shares into which Class A Shares are exchanged will
count towards satisfying the 12-month holding period. The Limited CDSC
is assessed if such 12-month period is not satisfied irrespective of
whether the redemption triggering its payment is of Class A Shares of
a Fund or Class A Shares acquired in the exchange.
In determining whether a Limited CDSC is payable, it will be
assumed that shares not subject to the Limited CDSC are the first
redeemed followed by other shares held for the longest period of time.
The Limited CDSC will not be imposed upon shares representing reinvested
dividends or capital gains distributions, or upon amounts representing
share appreciation. All investments made during a calendar month,
regardless of what day of the month the investment occurred, will age
one month on the last day of that month and each subsequent month.
WAIVER OF LIMITED CONTINGENT DEFERRED SALES CHARGE - CLASS A SHARES
The Limited CDSC for Class A Shares on which a dealer's commission
has been paid will be waived in the following instances: (i)
redemptions that result from a Fund's right to liquidate a shareholder's
account if the aggregate net asset value of the shares held in the
account is less than the then-effective minimum account size; (ii)
distributions to participants from a retirement plan qualified under
section 401(a) or 401(k) of the Internal Revenue Code of 1986, as
amended (the "Code"), or due to death of a participant in such a plan;
(iii) redemptions pursuant to the direction of a participant or
beneficiary of a retirement plan qualified under section 401(a) or
401(k) of the Code with respect to that retirement plan; (iv) periodic
distributions from an IRA, SIMPLE IRA, or 403(b)(7) or 457 Deferred
Compensation Plan due to death, disability, or attainment of age 59 1/2,
and IRA distributions qualifying under Section 72(t) of the Internal
Revenue Code; (v) returns of excess contributions to an IRA; (vi)
distributions by other employee benefit plans to pay benefits; (vii)
distributions described in (ii), (iv), and (vi) above pursuant to a
systematic withdrawal plan; and (viii) redemptions by the classes of
shareholders who are permitted to purchase shares at net asset value,
regardless of the size of the purchase (see Buying Class A Shares at Net
Asset Value under Classes of Shares).
WAIVER OF CONTINGENT DEFERRED SALES CHARGE - CLASS B SHARES AND CLASS C
SHARES
The CDSC is waived on certain redemptions of Class B Shares in
connection with the following redemptions: (i) redemptions that result
from a Fund's right to liquidate a shareholder's account if the
aggregate net asset value of the shares held in the account is less than
the then-effective minimum account size; (ii) returns of excess
contributions to an IRA, SIMPLE IRA, SEP/IRA, or 403(b)(7) or 457
Deferred Compensation Plan; (iii) periodic distributions from an IRA,
SIMPLE IRA, SAR/SEP, SEP/IRA, or 403(b)(7) or 457 Deferred
Compensation Plan due to death, disability or attainment of age 59 1/2,
and IRA distributions qualifying under Section 72(t) of the Internal
Revenue Code; and (iv) distributions from an account if the redemption
results from the death of all registered owners of the account (in the
case of accounts established under the Uniform Gifts to Minors or
Uniform Transfers to Minors Acts or trust accounts, the waiver applies
upon the death of all beneficial owners) or a total and permanent
disability (as defined in Section 72 of the Code) of all registered
owners occurring after the purchase of the shares being redeemed.
The CDSC on Class C Shares is waived in connection with the
following redemptions: (i) redemptions that result from a Fund's right
to liquidate a shareholder's account if the aggregate net asset value of
the shares held in the account is less than the then-effective minimum
account size; (ii) returns of excess contributions to an IRA, SIMPLE
IRA, 403(b)(7) or 457 Deferred Compensation Plan, Profit Sharing Plan,
Money Purchase Pension Plan, or 401(k) Defined Contribution plan;
(iii) periodic distributions from a 403(b)(7) or 457 Deferred
Compensation Plan upon attainment of age 59 1/2, Profit Sharing Plan,
Money Purchase Plan , 401(k) Defined Contribution Plan upon
attainment of age 70 1/2, and IRA distributions qualifying under Section
72(t) of the Internal Revenue Code; (iv) distributions from a 403(b)(7)
or 457 Deferred Compensation Plan, Profit Sharing Plan, or 401(k)
Defined Contribution Plan, under hardship provisions of the plan; (v)
distributions from a 403(b)(7) or 457 Deferred Compensation Plan,
Profit Sharing Plan, Money Purchase Pension Plan or a 401(k) Defined
Contribution Plan upon attainment of normal retirement age under the
plan or upon separation from service; (vi) periodic distributions from
an IRA or SIMPLE IRA on or after attainment of age 59 1/2; and (vii)
distributions from an account if the redemption results from the death
of all registered owners of the account (in the case of accounts
established under the Uniform Gifts to Minors or Uniform Transfers to
Minors Acts or trust accounts, the waiver applies upon the death of all
beneficial owners) or a total and permanent disability (as defined in
Section 72 of the Code) of all registered owners occurring after the
purchase of the shares being redeemed.
In addition, the CDSC will be waived on Class B Shares and Class C
Shares redeemed in accordance with a Systematic Withdrawal Plan if the
annual amount selected to be withdrawn under the Plan does not exceed
12% of the value of the account on the date that the Systematic
Withdrawal Plan was established or modified.
DIVIDENDS AND DISTRIBUTIONS
Each Fund will normally make payments from net investment income on
a quarterly basis.
Payments from net realized securities profits of a Fund, if any,
will be distributed annually in the quarter following the close of the
fiscal year.
Each class of a Fund will share proportionately in the investment
income and expenses of that Fund, except that the per share dividends
from net investment income on Class A Shares, Class B Shares and
Class C Shares will vary due to the expenses under the 12b-1 Plan
applicable to each Class. Generally, the dividends per share on Class B
Shares and Class C Shares can be expected to be lower than the dividends
per share on Class A Shares because the expenses under the 12b-1 Plans
relating to Class B Shares and Class C Shares will be higher than the
expenses under the 12b-1 Plan relating to Class A Shares. See
Distribution (12b-1) and Service under Management of the Funds.
Both dividends and distributions, if any, are automatically
reinvested in your account at net asset value unless you elect
otherwise. Any payment by check of dividends or other distributions
which cannot be delivered by the United States Post Office or which
remains uncashed for a period of more than one year may be reinvested in
your account at the then-current net asset value and the dividend option
may be changed from cash to reinvest. If you elect to take your
dividends and distributions in cash and such dividends and distributions
are in an amount of $25 or more, you may choose the MoneyLine (SM)
Direct Deposit Service and have such payments transferred from your Fund
account to your predesignated bank account. See MoneyLine (SM)
Services under The Delaware Difference for more information about this
service.
TAXES
The tax discussion set forth below is included for general
information only. Investors should consult their own tax advisers
concerning the federal, state, local or foreign tax consequences of an
investment in a Fund.
On August 5, 1997, President Clinton signed into law the Taxpayer
Relief Act of 1997 (the "1997 Act"). This new law makes sweeping
changes in the Internal Revenue Code (the "Code"). Because many of
these changes are complex, and only indirectly affect the Funds and
their distributions to you, they are discussed in Part B. Changes in
the treatment of capital gains, however, are discussed in this section.
Each Fund has qualified, and intends to continue to qualify, as a
regulated investment company under Subchapter M of the Code. As such, a
Fund will not be subject to federal income tax, or to any excise tax, to
the extent its earnings are distributed as provided in the Code and it
satisfies certain other requirements relating to the sources of its
income and diversification of its assets.
Each Fund intends to distribute substantially all of its net
investment income and net capital gains, if any. Dividends from net
investment income or net short-term capital gains will be taxable to
those investors who are subject to income taxes as ordinary income,
whether received in cash or in additional shares. For corporate
investors, dividends from net investment income will generally qualify
in part for the corporate dividends-received deduction. The portion of
dividends paid by a Fund that so qualifies will be designated each year
in a notice from the Fund to the Fund's shareholders. For the fiscal
year ended October 31, 1997, 27% and 32% of, respectively, Delaware
Fund's and Devon Fund's dividends from net investment income qualified
for the corporate dividends-received deduction.
Distributions paid by a Fund from long-term capital gains, whether
received in cash or in additional shares, are taxable to those investors
who are subject to income taxes as long-term capital gains, regardless
of the length of time an investor has owned shares in that Fund. The
Funds do not seek to realize any particular amount of capital gains
during a year; rather, realized gains are a by-product of Fund
management activities. Consequently, capital gains distributions may be
expected to vary considerably from year to year. Also, for those
investors subject to tax, if purchases of shares in a Fund are made
shortly before the record date for a dividend or capital gains
distribution, a portion of the investment will be returned as a taxable
distribution.
THE TREATMENT OF CAPITAL GAIN DISTRIBUTIONS UNDER THE TAXPAYER RELIEF
ACT OF 1997
The 1997 Act creates a category of long-term capital gain for
individuals that will be taxed at new lower tax rates. For investors
who are in the 28% or higher federal income tax brackets, these gains
will be taxed at a maximum of 20%. For investors who are in the 15%
federal income tax bracket, these gains will be taxed at a maximum of
10%. Capital gain distributions will qualify for these new maximum tax
rates, depending on when a Fund's securities were sold and how long they
were held by that Fund before they were sold. Investors who want more
information on holding periods and other qualifying rules relating to
these new rates should review the expanded discussion in Part B, or
should contact their own tax advisers.
Equity Funds I, Inc. will advise you in its annual information
reporting at calendar year end of the amount of its capital gain
distributions which will qualify for these maximum federal tax rates.
Although dividends generally will be treated as distributed when
paid, dividends which are declared in October, November, or December to
shareholders of record on a specified date in one of those months, but
which, for operational reasons, may not be paid to the shareholder until
the following January, will be treated for tax purposes as if paid by
the Funds and received by the shareholder on December 31 of the year
declared.
The sale of shares of a Fund is a taxable event and may result in a
capital gain or loss to shareholders subject to tax. Capital gain or
loss may be realized from an ordinary redemption of shares or an
exchange of shares between the Funds and any other fund in the Delaware
Group. Any loss incurred on a sale or exchange of Fund shares that had
been held for six months or less will be treated as a long-term capital
loss to the extent of capital gain dividends received with respect to
such shares. All or a portion of the sales charge incurred in acquiring
a Fund's shares will be excluded from the federal tax basis of any of
such shares sold or exchanged within 90 days of their purchase (for
purposes of determining gain or loss upon sale of such shares) if the
sale proceeds are reinvested in that Fund or in another fund in the
Delaware Group of funds and a sales charge that would otherwise apply to
the reinvestment is reduced or eliminated. Any portion of such sales
charge excluded from the tax basis of the shares sold will be added to
the tax basis of the shares acquired in the reinvestment.
The automatic conversion of Class B Shares into Class A Shares at
the end of approximately eight years after purchase will be tax-free for
federal tax purposes. See Automatic Conversion of Class B Shares under
Classes of Shares.
In addition to the federal taxes described above, shareholders may
or may not be subject to various state and local taxes . For example,
distributions of interest income and capital gains realized from
certain types of U.S. government securities may be exempt from state
personal income taxes. Because investors' state and local taxes may
be different than the federal taxes described above, investors should
consult their own tax advisors.
Each year, Equity Funds I, Inc. will mail to you information on the
tax status of each Fund's dividends and distributions. Shareholders
will also receive each year information as to the portion of dividend
income, if any, that is derived from U.S. government securities that are
exempt from state income tax. Of course, shareholders who are not
subject to tax on their income would not be required to pay tax on
amounts distributed to them by a Fund.
Equity Funds I, Inc. is required to withhold 31% of taxable
dividends, capital gains distributions, and redemptions paid to
shareholders who have not complied with IRS taxpayer identification
regulations. You may avoid this withholding requirement by certifying
on your Investment Application your proper Taxpayer Identification
Number and by certifying that you are not subject to backup withholding.
See Taxes in Part B for additional information on tax matters
relating to each Fund and its shareholders.
CALCULATION OF OFFERING PRICE AND NET ASSET VALUE PER SHARE
The net asset value ("NAV") per share is computed by adding the
value of all securities and other assets in the portfolio, deducting any
liabilities (expenses and fees are accrued daily) and dividing by the
number of shares outstanding. Equity securities for which market
quotations are available are priced at market value. Debt securities
are priced on the basis of valuations provided by an independent pricing
service using methods approved by Equity Funds I, Inc.'s Board of
Directors. Short-term investments having a maturity of less than 60
days are valued at amortized cost, which approximates market value. All
other securities are valued at their fair value as determined in good
faith and in a method approved by Equity Funds I, Inc.'s Board of
Directors.
Class A Shares are purchased at the offering price per share, while
Class B Shares and Class C Shares are purchased at the NAV per share.
The offering price per share of Class A Shares consists of the NAV per
share next computed after the order is received, plus any applicable
front-end sales charges.
The offering price and NAV are computed as of the close of regular
trading on the New York Stock Exchange (ordinarily, 4 p.m., Eastern
time) on days when the Exchange is open.
The net asset values of all outstanding shares of each class of a
Fund will be computed on a pro-rata basis for each outstanding share
based on the proportionate participation in that Fund represented by the
value of shares of that class. All income earned and expenses incurred
by a Fund will be borne on a pro-rata basis by each outstanding share of
a class, based on each class' percentage in that Fund represented by the
value of shares of such classes, except that Delaware Fund Institutional
Class and Devon Fund Institutional Class will not incur any of the
expenses under Equity Funds I, Inc.'s 12b-1 Plans and Class A Shares,
Class B Shares and Class C Shares of each Fund alone will bear the 12b-1
Plan expenses payable under their respective 12b-1 Plans. Due to the
specific distribution expenses and other costs that will be allocable to
each class, the NAV of each class of a Fund will vary.
MANAGEMENT OF THE FUNDS
DIRECTORS
The business and affairs of Equity Funds I, Inc. are managed under
the direction of its Board of Directors. Part B contains additional
information regarding Equity Funds I, Inc.'s directors and officers.
INVESTMENT MANAGER
The Manager furnishes investment management services to each Fund.
The Manager and its predecessors have been managing the funds in
the Delaware Group since 1938. On October 31, 1997, the Manager and
its affiliates within the Delaware Group, including Delaware
International Advisers Ltd., were managing in the aggregate more than
$38 billion in assets in the various institutional or separately managed
(approximately $22,496,609,000) and investment company (approximately
$16,012,252,000) accounts.
The Manager is an indirect, wholly owned subsidiary of Delaware
Management Holdings, Inc. ("DMH"). On April 3, 1995, a merger between
DMH and a wholly owned subsidiary of Lincoln National Corporation
("Lincoln National") was completed. DMH and the Manager are now
indirect, wholly owned subsidiaries, and subject to the ultimate
control, of Lincoln National. Lincoln National, with headquarters in
Fort Wayne, Indiana, is a diversified organization with operations in
many aspects of the financial services industry, including insurance and
investment management. In connection with the merger, new Investment
Management Agreements between Equity Funds I, Inc. on behalf of each
Fund and the Manager were executed following shareholder approval.
The Manager manages each Fund's portfolio and makes investment
decisions which are implemented by Equity Funds I, Inc.'s Trading
Department. The Manager also administers Equity Funds I, Inc.'s affairs
and pays the salaries of all the directors, officers and employees of
Equity Funds I, Inc. who are affiliated with the Manager. For these
services, the Manager is paid an annual fee equal to: for Delaware
Fund, 0.60% on the first $100 million of average daily net assets of the
Fund, 0.525% on the next $150 million, 0.50% on the next $250 million
and 0.475% on the average daily net assets in excess of $500 million,
less the Fund's proportionate share of all directors' fees paid to the
unaffiliated directors by Equity Funds I, Inc.; and, for Devon Fund,
0.60% on the first $500 million of average daily net assets and 0.50% on
the average daily net assets in excess of $500 million. The directors
of Equity Funds I, Inc. annually review fees paid to the Manager.
Investment management fees paid by Delaware Fund for the fiscal year
ended October 31, 1997 were 0.51% of average daily net assets.
Investment management fees incurred by Devon Fund for the fiscal year
ended October 31, 1997 were 0.60% of average daily net assets , and
0.43% of average daily net assets were paid by this Fund as a result of
the voluntary waiver of fees by the Manager described under Summary of
Expenses.
George H. Burwell and Gary A. Reed have primary responsibility for
making day-to-day investment decisions for Delaware Fund and Mr. Burwell
has such responsibility for Devon Fund. Mr. Burwell, who has been
Equity Funds I, Inc.'s Senior Portfolio Manager for equities since 1992,
holds a BA from the University of Virginia. Prior to joining the
Delaware Group in 1992, Mr. Burwell was a portfolio manager for
Midlantic Bank in Edison, New Jersey, where he managed an equity mutual
fund and three commingled funds. Mr. Burwell is a CFA charterholder.
Mr. Reed has been Delaware Fund's Senior Portfolio Manager for
fixed-income since April 1995. He holds an AB in Economics from the
University of Chicago and an MA in Economics from Columbia University.
He began his career in 1978 with the Equitable Life Assurance Company in
New York City, where he specialized in credit analysis. Prior to
joining the Delaware Group in 1989, Mr. Reed was Vice President and
Manager of the fixed-income department at Irving Trust Company in New
York.
In making investment decisions for the Funds, Mr. Burwell and Mr.
Reed regularly consult with Wayne A. Stork, Richard G. Unruh, Jr. and
Paul E. Suckow. Mr. Stork, Chairman of the Manager and Equity Funds I,
Inc.'s Board of Directors, is a graduate of Brown University and
attended New York University's Graduate School of Business
Administration. Mr. Stork joined the Delaware Group in 1962 and has
served in various executive capacities at different times within the
Delaware organization. A graduate of Brown University, Mr. Unruh
received his MBA from the University of Pennsylvania's Wharton School
and joined the Delaware Group in 1982 after 19 years of investment
management experience with Kidder, Peabody & Co. Inc. Mr. Unruh was
named an Executive Vice President of Equity Funds I, Inc. in 1994. He
is also a member of the Board of the Manager and was named an Executive
Vice President of the Manager in 1994. He is on the Board of Directors
of Keystone Insurance Company and AAA Mid-Atlantic and is a former
president and current member of the Advisory Council of the Bond Club of
Philadelphia. Mr. Suckow is Delaware Group's Chief Investment Officer
for fixed-income. He is a CFA charterholder and a graduate of Bradley
University with an MBA from Western Illinois University. Mr. Suckow was
a fixed-income portfolio manager at the Delaware Group from 1981 to
1985. He returned to the Delaware Group in 1993 after eight years with
Oppenheimer Management Corporation where he served as Executive Vice
President and Director of Fixed Income.
PORTFOLIO TRADING PRACTICES
The Funds normally will not invest for short-term trading purposes.
However, each Fund may sell securities without regard to the length of
time they have been held. The degree of portfolio activity will affect
brokerage costs of a Fund and may affect taxes payable by the Fund's
shareholders to the extent that net capital gains are realized. Given
the Funds' investment objectives, their annual portfolio turnover rates
may exceed 100%. A turnover rate of 100% would occur, for example, if
all the investments in a Fund's portfolio at the beginning of the year
were replaced by the end of the year.
Each Fund uses its best efforts to obtain the best available price
and most favorable execution for portfolio transactions. Orders may be
placed with brokers or dealers who provide brokerage and research
services to the Manager or its advisory clients. These services may be
used by the Manager in servicing any of its accounts. Subject to best
price and execution, each Fund may consider a broker/dealer's sales of
shares of funds in the Delaware Group of funds in placing portfolio
orders and may place orders with broker/dealers that have agreed to
defray certain Fund expenses of such funds, such as custodian fees.
PERFORMANCE INFORMATION
From time to time, Delaware Fund and Devon Fund may quote total
return performance of their respective Classes in advertising and other
types of literature.
Total return will be based on a hypothetical $1,000 investment,
reflecting the reinvestment of all distributions at net asset value and:
(i) in the case of Class A Shares, the impact of the maximum front-end
sales charge at the beginning of each specified period; and (ii) in the
case of Class B Shares and Class C Shares, the deduction of any
applicable CDSC at the end of the relevant period. Each presentation
will include the average annual total return for one-, five-, and ten-
year or life-of-fund periods, as applicable. Each Fund may also
advertise aggregate and average total return information concerning a
Class over additional periods of time. In addition, each Fund may
present total return information that does not reflect the deduction of
the maximum front-end sales charge or any applicable CDSC. In this
case, such total return information would be more favorable than total
return information that includes the deductions of the maximum front-end
sales charge or any applicable CDSC.
Because securities prices fluctuate, investment results of the
Classes will fluctuate over time. Past performance is not a guarantee
of future results.
DISTRIBUTION (12B-1) AND SERVICE
The Distributor, Delaware Distributors, L.P., serves as the
national distributor for each Fund's shares under separate
Distribution Agreements with Equity Funds I, Inc. dated April 3, 1995,
as amended on November 29, 1995.
Equity Funds I, Inc. has adopted a separate distribution plan under
Rule 12b-1 for each of the Class A Shares, Class B Shares and Class C
Shares of the Funds (the "Plans"). Each Plan permits the Fund to which
the Plan relates to pay the Distributor from the assets of the
respective Classes a monthly fee for the Distributor's services and
expenses in distributing and promoting sales of shares.
These expenses include, among other things, preparing and
distributing advertisements, sales literature, and prospectuses and
reports used for sales purposes, compensating sales and marketing
personnel, holding special promotions for specified periods of time and
paying distribution and maintenance fees to brokers, dealers and others.
In connection with the promotion of shares of the Classes, the
Distributor may, from time to time, pay to participate in dealer-
sponsored seminars and conferences, and reimburse dealers for expenses
incurred in connection with preapproved seminars, conferences and
advertising. The Distributor may pay or allow additional promotional
incentives to dealers as part of preapproved sales contests and/or to
dealers who provide extra training and information concerning a Class
and increase sales of the Class. In addition, each Fund may make
payments from the 12b-1 Plan fees of its respective Classes directly to
others, such as banks, who aid in the distribution of Class shares or
provide services in respect of a Class, pursuant to service agreements
with Equity Funds I, Inc.
The 12b-1 Plan expenses relating to each of the Class B Shares and
Class C Shares of the Funds are also used to pay the Distributor for
advancing the commission costs to dealers with respect to the initial
sale of such shares.
The aggregate fees paid by a Fund from the assets of the respective
Classes to the Distributor and others under the Plans may not exceed (i)
0.30% of Class A Shares' average daily net assets in any year, and
(ii) 1% (0.25% of which are service fees to be paid by the Fund to the
Distributor, dealers and others, for providing personal service and/or
maintaining shareholder accounts) of each Fund's Class B Shares' and
Class C Shares' average daily net assets in any year. The actual 12b-1
expenses assessed against Delaware Fund A Class may be less than 0.30%,
but may not be less than 0.10%, because of the formula for calculating
the fee adopted by Equity Funds I, Inc.'s Board of Directors. See Part
B. Each Fund's Class A Shares, Class B Shares and Class C Shares will
not incur any distribution expenses beyond these limits, which may not
be increased without shareholder approval.
On September 23, 1993, the Board of Directors set the fee for Devon
Fund A Class at 0.30% of average daily net assets.
While payments pursuant to the Plans may not exceed 0.30% annually
with respect to Class A Shares, and 1% annually with respect to each
of the Class B Shares and Class C Shares, the Plans do not limit fees to
amounts actually expended by the Distributor. It is therefore possible
that the Distributor may realize a profit in any particular year.
However, the Distributor currently expects that its distribution
expenses will likely equal or exceed payments to it under the Plans.
The Distributor may, however, incur such additional expenses and make
additional payments to dealers from its own resources to promote the
distribution of shares of the Classes. The monthly fees paid to the
Distributor under the Plans are subject to the review and approval of
Equity Funds I, Inc.'s unaffiliated directors, who may reduce the fees
or terminate the Plans at any time.
The Plans do not apply to Delaware Fund Institutional Class of
shares or Devon Fund Institutional Class of shares. Those shares are
not included in calculating the Plans' fees, and the Plans are not used
to assist in the distribution and marketing of Delaware Fund
Institutional Class or Devon Fund Institutional Class.
The Transfer Agent, Delaware Service Company, Inc., serves as the
shareholder servicing, dividend disbursing and transfer agent for
Delaware Fund under an Agreement dated June 29, 1988 and for Devon Fund
under an Agreement dated December 29, 1993. The Transfer Agent also
provides accounting services to each Fund pursuant to the terms of a
separate Fund Accounting Agreement.
The directors annually review fees paid to the Distributor and
the Transfer Agent. The Distributor and the Transfer Agent are also
indirect, wholly owned subsidiaries of DMH.
EXPENSES
Each Fund is responsible for all of its own expenses other than
those borne by the Manager under the Investment Management Agreements
and those borne by the Distributor under the Distribution Agreements.
For the fiscal year ended October 31, 1997, the ratios of expenses to
average daily net assets for Class A Shares, Class B Shares and Class
C Shares of each Fund were as follows:
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
Delaware Fund 0.97% 1.78% 1.78%
Devon Fund 1.25%* 1.95%* 1.95%*
*Reflects the voluntary waiver of fees by the Manager.
The expense ratios of each Class reflects the impact of its 12b-1
Plan.
Shares
Equity Funds I, Inc. is an open-end management investment company.
Each Fund's portfolio of assets is diversified as defined by the 1940
Act. Commonly known as a mutual fund, Equity Funds I, Inc. was first
organized as a Delaware corporation in 1937 and subsequently reorganized
as a Maryland corporation on March 4, 1983 . Equity Funds I, Inc.
currently offers two series of shares - Delaware Fund series and Devon
Fund series. Fund shares have a par value of $1.00, equal voting
rights, except as noted below, and are equal in all other respects.
Each Fund will vote separately on any matter which affects only that
Fund. Shares of each Fund have a priority over shares of any other fund
of Equity Funds I, Inc. in the assets and income of that Fund.
All shares have noncumulative voting rights which means that the
holders of more than 50% of Equity Funds I, Inc.'s shares voting for the
election of directors can elect 100% of the directors if they choose to
do so. Under Maryland law, Equity Funds I, Inc. is not required, and
does not intend, to hold annual meetings of shareholders unless, under
certain circumstances, it is required to do so under the 1940 Act.
Shareholders of 10% or more of Equity Funds I, Inc.'s outstanding shares
may request that a special meeting be called to consider the removal of
a director.
In addition to Class A Shares, Class B Shares and Class C Shares,
Delaware Fund and Devon Fund offer Delaware Fund Institutional Class of
shares and Devon Fund Institutional Class of shares, respectively.
Shares of each Class represent proportionate interests in the assets of
the respective Fund and have the same voting and other rights and
preferences as the other classes of that Fund, except that shares of
Delaware Fund Institutional Class and Devon Fund Institutional Class are
not subject to, and may not vote on matters affecting, the Distribution
Plans under Rule 12b-1 relating to Class A Shares, Class B Shares and
Class C Shares. Similarly, as a general matter, the shareholders of
Class A Shares, Class B Shares and Class C Shares may vote only on
matters affecting the 12b-1 Plan that relates to the class of shares
that they hold. However, Class B Shares of a Fund may vote on any
proposal to increase materially the fees to be paid by that Fund under
the 12b-1 Plan relating to Class A Shares.
Effective as of the close of business December 27, 1996, the name
of Delaware Group Delaware Fund, Inc. was changed to Delaware Group
Equity Funds I, Inc. Also effective as of the close of business
December 27, 1996, the name of Common Stock series was changed to
Delaware Fund series. Effective as of the close of business August 28,
1995, the name Dividend Growth Fund was changed to Devon Fund and the
names of Dividend Growth Fund A Class, Dividend Growth Fund B Class and
Dividend Growth Fund Institutional Class were changed to Devon Fund A
Class, Devon Fund B Class and Devon Fund Institutional Class,
respectively.
OTHER INVESTMENT POLICIES AND RISK CONSIDERATIONS
MORTGAGE-BACKED SECURITIES--Each Fund may invest in mortgage-backed
securities issued or guaranteed by the U.S. government, its agencies or
instrumentalities or government sponsored corporations. Each Fund also
may invest in securities issued by certain private, non-government
corporations, such as financial institutions, if the securities are
fully collateralized at the time of issuance by securities or
certificates issued or guaranteed by the U.S. government, its agencies
or instrumentalities. Two principal types of mortgage-backed securities
are collateralized mortgage obligations (CMOs) and real estate mortgage
investment conduits (REMICs).
CMOs are debt securities issued by U.S. government agencies or by
financial institutions and other mortgage lenders and collateralized by
a pool of mortgages held under an indenture. CMOs are issued in a
number of classes or series with different maturities. The classes or
series are retired in sequence as the underlying mortgages are repaid.
Prepayment may shorten the stated maturity of the obligation and can
result in a loss of premium, if any has been paid. Certain of these
securities may have variable or floating interest rates and others may
be stripped (securities which provide only the principal or interest
feature of the underlying security).
REMICs, which were authorized under the Tax Reform Act of 1986, are
private entities formed for the purpose of holding a fixed pool of
mortgages secured by an interest in real property. REMICs are similar
to CMOs in that they issue multiple classes of securities.
CMOs and REMICs issued by private entities are not government
securities and are not directly guaranteed by any government agency.
They are secured by the underlying collateral of the private issuer.
Certain of these private-backed securities are 100% collateralized at
the time of issuance by securities issued or guaranteed by the U.S.
government, its agencies, or instrumentalities. Devon Fund currently
may invest in privately-issued CMOs and REMICs only if they are so
collateralized and rated at the time of purchase in the four highest
grades by a nationally-recognized rating agency (e.g., BBB or better by
S&P or Baa or better by Moody's).
Delaware Fund may invest its assets in CMOs and REMICs issued by
private entities whether or not the securities are 100% collateralized
at the time of issuance by securities issued or guaranteed by the U.S.
government, its agencies or instrumentalities (securities that are not
so collateralized are called "non-agency mortgage-backed securities").
Non-agency mortgage-backed securities may comprise of up to 20% of
Delaware Fund's assets, but all of these securities must (i) be rated at
the time of purchase in the four top rating categories by a nationally-
recognized statistical rating organization, and (ii) represent interests
in whole-loan mortgages, multi-family mortgages, commercial mortgages or
other mortgage collateral supported by a first mortgage lien on real
estate. Non-agency mortgage-backed securities are subject to the
interest rate and repayment risks to which other CMOs and REMICs issued
by private issuers are subject. Non-agency mortgage-backed securities
may also be subject to a greater risk of loss of interest and principal
because they are not collateralized by securities issued or guaranteed
by the U.S. government. In addition, timely information concerning the
loans underlying these securities may not be as readily available and
the market for these securities may be less liquid than the market for
other CMOs and REMICs.
ASSET BACKED SECURITIES--Delaware Fund and Devon Fund may invest in
securities which are backed by assets such as receivables on home equity
and credit loans, receivables regarding automobile, mobile home and
recreational vehicle loans, wholesale dealer floor plans and leases or
other loans or financial receivables currently available or which may be
developed in the future. All such securities must be rated in one of
the four highest rating categories by a reputable rating agency (e.g.,
BBB or better by S&P or Baa or better by Moody's).
Such receivables are securitized in either a pass-through or a pay-
through structure. Pass-through securities provide investors with an
income stream consisting of both principal and interest payments in
respect of the receivables in the underlying pool. Pay-through asset-
backed securities are debt obligations issued usually by a special
purpose entity, which are collateralized by the various receivables and
in which the payments on the underlying receivables provide the funds to
pay the debt service on the debt obligations issued.
The rate of principal payment on asset-backed securities generally
depends on the rate of principal payments received on the underlying
assets. Such rate of payments may be affected by economic and various
other factors such as changes in interest rates or the concentration of
collateral in a particular geographic area. Therefore, the yield may be
difficult to predict and actual yield to maturity may be more or less
than the anticipated yield to maturity. Due to the shorter maturity of
the collateral backing such securities, there tends to be less of a risk
of substantial prepayment than with mortgage-backed securities but the
risks of such prepayment does exist. Such asset-backed securities do,
however, involve certain risks not associated with mortgage-backed
securities, including the risk that security interests cannot be
adequately or in many cases ever established, and other risks which may
be peculiar to particular classes of collateral. For example, with
respect to credit card receivables, a number of state and federal
consumer credit laws give debtors the right to set off certain amounts
owed on the credit cards, thereby reducing the outstanding balance. In
the case of automobile receivables, there is a risk that the holders may
not have either a proper or first security interest in all of the
obligations backing such receivables due to the large number of vehicles
involved in a typical issuance and technical requirements under state
laws. Therefore, recoveries on repossessed collateral may not always be
available to support payments on the securities. For further discussion
concerning the risk of investing in such asset-backed securities, see
Part B.
REAL ESTATE INVESTMENT TRUSTS--Each Fund may invest in shares or
convertible bonds issued by real estate investment trusts ("REITS").
REITS invest primarily in income producing real estate as well as real
estate related loans or interests. A REIT is not taxed on income
distributed to shareholders if it complies with several requirements
relating to its organization, ownership, assets and income, and a
requirement that it distribute to its shareholders at least 95% of its
taxable income (other than net capital gains) for each taxable year.
Each Fund anticipates investing only in REITS that invest the majority
of their assets directly in real property and derive their income
primarily from rents, which are known as "equity REITS." Equity REITS
can also realize capital gains by selling properties that have
appreciated in value.
RESTRICTED AND ILLIQUID SECURITIES--Each Fund may purchase
privately placed securities the resale of which is restricted under
applicable securities laws. Most of the privately placed securities
acquired by the Fund will be eligible for resale by the Fund without
registration pursuant to Rule 144A ("Rule 144A Securities") under the
1933 Act. Rule 144A permits many privately placed and legally
restricted securities to be freely traded among certain institutional
buyers. Each Fund may invest not more than 10% of its assets in
illiquid securities. While maintaining oversight, the Board of
Directors of Equity Funds I, Inc. has delegated to the Manager the day-
to-day function of determining whether individual Rule 144A Securities
are liquid for purposes of each Fund's 10% limitation on investments in
illiquid securities. Devon Fund currently intends to limit its
investments in restricted securities, excluding Rule 144A Securities, to
not more than 5% of its assets.
The Board has instructed the Manager to consider the following
factors in determining the liquidity of a Rule 144A Security: (i) the
frequency of trades and trading volume for the security; (ii) whether at
least three dealers are willing to purchase or sell the security and the
number of potential purchasers; (iii) whether at least two dealers are
making a market in the security; (iv) the nature of the security and the
nature of the marketplace trades (e.g., the time needed to dispose of
the security, the method of soliciting offers, and the mechanics of
transfer).
If the Manager determines that a Rule 144A Security which was
previously determined to be liquid is no longer liquid and, as a result,
a Fund's holdings of illiquid securities exceed the Fund's limit noted
above on investments in such securities, the Manager will determine what
action to take to ensure that the Fund continues to adhere to such
limitation.
CONVERTIBLE SECURITIES--Each Fund may invest in convertible
securities, including corporate debentures, bonds, notes and preferred
stocks that may be converted into or exchanged for common stock. These
securities are generally convertible either at a stated price or a
stated rate (that is, for a specific number of shares of common stock or
other security). As with other fixed-income securities, the price of a
convertible security to some extent varies inversely with interest
rates. While providing a fixed-income stream, a convertible security
also affords the investor an opportunity, through its conversion
feature, to participate in the capital appreciation of the common stock
into which it is convertible. Each Fund may invest not more than 5% of
its assets in convertible debentures that are rated below investment
grade or are unrated but are determined by the Manager to be of
comparable quality. For a discussion concerning the risks of investing
in such securities, see Part B.
FOREIGN SECURITIES AND ADRS--Each Fund may invest up to 5% of its
assets in foreign securities. Each Fund may also invest without
limitation in sponsored and unsponsored American Depositary Receipts
("ADRs") that are actively traded in the United States. ADRs are
receipts typically issued by a U.S. bank or trust company which evidence
ownership of underlying securities issued by a foreign corporation.
"Sponsored" ADRs are issued jointly by the issuer of the underlying
security and a depository, and "unsponsored" ADRs are issued without the
participation of the issuer of the deposited security. Holders of
unsponsored ADRs generally bear all the costs of such facilities and the
depository of an unsponsored ADR facility frequently is under no
obligation to distribute shareholder communications received from the
issuer of the deposited security or to pass through voting rights to the
holders of such receipts in respect of the deposited securities.
Therefore, there may not be a correlation between information concerning
the issuer of the security and the market value of an unsponsored ADR.
Foreign markets may be more volatile than U.S. markets, and
investments in foreign securities involve sovereign risks in addition to
the normal risks associated with U.S. securities. These risks include
political risks, foreign taxes and exchange controls and currency
fluctuations. For example, foreign portfolio investments may fluctuate
in value due to changes in currency rates (i.e., the value of foreign
investments would increase with a fall in the value of the dollar) and
control regulations apart from market fluctuations. Each Fund may also
experience delays in foreign securities settlement.
Each Fund will, from time to time, conduct foreign currency
exchange transactions on a spot (i.e., cash) basis at the spot rate
prevailing in the foreign currency exchange market or through entering
into contracts to purchase or sell foreign currencies at a future date
(i.e., a "forward foreign currency" contract or "forward" contract).
Investors should be aware that there are costs and risks associated with
such currency transactions.
REPURCHASE AGREEMENTS--In order to invest its short-term cash
reserves or when in a temporary defensive posture, each Fund may enter
into repurchase agreements with banks or broker/dealers deemed to be
creditworthy by the Manager, under guidelines approved by the Board of
Directors. A repurchase agreement is a short-term investment in which
the purchaser (i.e., a Fund) acquires ownership of a debt security and
the seller agrees to repurchase the obligation at a future time and set
price, thereby determining the yield during the purchaser's holding
period. Generally, repurchase agreements are of short duration, often
less than one week, but on occasion for longer periods. Not more than
10% of a Fund's assets may be invested in repurchase agreements of over
seven-days' maturity or other illiquid assets. Should an issuer of a
repurchase agreement fail to repurchase the underlying security, the
loss to the Fund, if any, would be the difference between the repurchase
price and the market value of the security. Each Fund will limit its
investments in repurchase agreements to those which the Manager under
the guidelines of the Board of Directors determines to present minimal
credit risks and which are of high quality. In addition, each Fund must
have collateral of at least 100% of the repurchase price, including the
portion representing such Fund's yield under such agreements which is
monitored on a daily basis. Such collateral is held by the Custodian in
book entry form. Such agreements may be considered loans under the 1940
Act, but the Funds consider repurchase agreements contracts for the
purchase and sale of securities, and each seeks to perfect a security
interest in the collateral securities so that it has the right to keep
and dispose of the underlying collateral in the event of default.
The funds in the Delaware Group have obtained an exemption from the
joint-transaction prohibitions of Section 17(d) of the 1940 Act to allow
the Delaware Group funds jointly to invest cash balances. Each Fund of
Equity Funds I, Inc. may invest cash balances in a joint repurchase
agreement in accordance with the terms of the Order and subject
generally to the conditions described above.
PORTFOLIO LOAN TRANSACTIONS--Each Fund may loan up to 25% of its
assets to qualified broker/dealers or institutional investors for their
use relating to short sales or other security transactions.
The major risk to which a Fund would be exposed on a loan
transaction is the risk that the borrower would go bankrupt at a time
when the value of the security goes up. Therefore, each Fund will only
enter into loan arrangements after a review of all pertinent facts by
the Manager, subject to overall supervision by the Board of Directors,
including the creditworthiness of the borrowing broker, dealer or
institution and then only if the consideration to be received from such
loans would justify the risk. Creditworthiness will be monitored on an
ongoing basis by the Manager.
FUTURES CONTRACTS--Devon Fund may enter into futures contracts on
stocks and stock indices, and purchase or sell options on stock index
futures and stock indices. These activities will not be entered into
for speculative purposes, but rather for hedging purposes and to
facilitate the ability to quickly deploy into the stock market the
Fund's positions in cash, short-term debt securities and other money
market instruments, at times when the Fund's assets are not fully
invested in equity securities. Such positions will generally be
eliminated when it becomes possible to invest in securities that are
appropriate for the Fund.
A futures contract is a bilateral agreement providing for the
purchase and sale of a specified type and amount of a financial
instrument, or for the making and acceptance of a cash settlement, at a
stated time in the future for a fixed price. By its terms, a futures
contract provides for a specified settlement date on which the
securities underlying the contract are delivered, or in the case of
securities index futures contracts, the difference between the price at
which the contract was entered into and the contract's closing value is
settled between the purchaser and seller in cash. Futures contracts
differ from options in that they are bilateral agreements, with both the
purchaser and the seller equally obligated to complete the transaction.
In addition, futures contracts call for settlement only on the
expiration date, and cannot be "exercised" at any other time during
their term.
The purchase or sale of a futures contract also differs from the
purchase or sale of a security or the purchase of an option in that no
purchase price is paid or received. Instead, an amount of cash or cash
equivalents, which varies but may be as low as 5% or less of the value
of the contract, must be deposited with the broker as "initial margin"
as a good faith deposit. This amount is generally maintained in a
segregated account at the custodian bank. Subsequent payments to and
from the broker, referred to as "variation margin," are made on a daily
basis as the value of the index or instrument underlying the futures
contract fluctuates, making positions in the futures contract more or
less valuable, a process known as "marking to the market."
The Fund may also purchase and write options on the types of
futures contracts in which the Fund may invest, and enter into related
closing transactions. Options on futures are similar to options on
securities, as described below, except that options on futures give the
purchaser the right, in return for the premium paid, to assume a
position in a futures contract, rather than to actually purchase or sell
the futures contract, at a specified exercise price at any time during
the period of the option. In the event that an option written by the
Fund is exercised, the Fund will be subject to all the risks associated
with the trading of futures contracts, such as payment of variation
margin deposits. In addition, the writer of an option on a futures
contract, unlike the holder, is subject to initial and variation margin
requirements on the option position.
At any time prior to the expiration of a futures contract, a trader
may elect to close out its position by taking an opposite position on
the contract market on which the position was entered into, subject to
the availability of a secondary market, which will operate to terminate
the initial position. Likewise, a position in an option on a futures
contract may be terminated by the purchaser or seller prior to
expiration by effecting a closing purchase or sale transaction, subject
to availability of a secondary market, which is the purchase or sale of
an option of the same series (i.e., the same exercise price and
expiration date) as the option previously purchased or sold. The Fund
may realize a profit or a loss when closing out a futures contract or an
option on a futures contract.
To the extent that interest or exchange rates or securities prices
move in an unexpected direction, the Fund may not achieve the
anticipated benefits of investing in futures contracts and options
thereon, or may realize a loss. To the extent that the Fund purchases
an option on a futures contract and fails to exercise the option prior
to the exercise date, it will suffer a loss of the premium paid.
Further, the possible lack of a secondary market could prevent the Fund
from closing out its positions relating to futures. See Part B for a
further discussion of this investment technique.
OPTIONS--Devon Fund may write covered call options on individual
issues as well as write call options on stock indices. The Fund may
also purchase put options on individual issues and on stock indices.
The Manager will employ these techniques in an attempt to protect
appreciation attained, to offset capital losses and to take advantage of
the liquidity available in the option markets. The ability to hedge
effectively using options on stock indices will depend, in part, on the
correlation between the composition of the index and the Fund's
portfolio as well as the price movement of individual securities. The
Fund does not currently intend to write or purchase options on stock
indices.
While there is no limit on the amount of the Fund's assets which
may be invested in covered call options, the Fund will not invest more
than 2% of its net assets in put options. The Fund will only use
Exchange-traded options.
CALL OPTIONS
Writing Covered Call Options--A covered call option obligates Devon
Fund to sell one of its securities for an agreed price up to an agreed
date. When the Fund writes a call, it receives a premium and agrees to
sell the callable securities to a purchaser of a corresponding call
during the call period (usually not more than nine months) at a fixed
exercise price regardless of market price changes during the call
period. The advantage is that the Fund receives premium income for the
limited purpose of offsetting the costs of purchasing put options or
offsetting any capital loss or decline in market value of the security.
However, if the Manager's forecast is wrong, the Fund may not fully
participate in the market appreciation if the security's price rises.
Writing a Call Option on Stock Indices--Writing a call option on
stock indices is similar to the writing of a call option on an
individual stock. Stock indices used will include, but not be limited
to, the S&P 500, the Standard & Poor's 100 Index ("S&P 100") and the
Standard & Poor's Over-The-Counter 250 Index ("S&P OTC 250").
PUT OPTIONS
Purchasing a Put Option--A put option gives Devon Fund the right to
sell one of its securities for an agreed price up to an agreed date.
The advantage is that the Fund can be protected should the market value
of the security decline. However, the Fund must pay a premium whether
or not the put option is exercised. The Fund will, at all times
during which it holds a put option, own the security covered by such
option.
Purchasing a Put Option on Stock Indices--Purchasing a protective
put option on stock indices is similar to the purchase of protective
puts on an individual stock. Indices used will include, but not be
limited to, the S&P 500, the S&P 100 and the S&P OTC 250.
Closing Transactions--Closing transactions essentially let the Fund
offset a put option or covered call option prior to its exercise or
expiration. If the Fund cannot effect a closing transaction, it may
have to hold a security it would otherwise sell or deliver a security it
might want to hold.
OTHER INVESTMENT POLICIES--Neither Fund may concentrate investments
in any industry, which means that a Fund may generally not invest more
than 25% of its assets in any one industry.
In pursuing its investment objective, each Fund may hold securities
for any period of time. For temporary, defensive purposes, each Fund
may hold a substantial portion of its assets in cash, cash equivalents
or short-term obligations, including repurchase agreements. Each Fund
may also enter into repurchase agreements to invest excess cash
balances.
While each Fund is permitted under certain circumstances to borrow
money, neither Fund normally does so. A Fund will not purchase
investment securities while it has any borrowings outstanding.
Each Fund may purchase securities on a when-issued or delayed
delivery basis. It is the current intention of each Fund not to enter
into when-issued commitments exceeding in the aggregate 5% of the market
value of the Fund's total assets less liabilities other than obligations
created by these commitments.
* * *
Part B describes certain of these investment policies and risk
considerations. Part B also sets forth other investment policies, risk
considerations and more specific investment restrictions.
The Delaware Group includes funds with a wide range of investment
objectives. Stock funds, income funds, national and state-specific
tax- exempt funds, money market funds, global and international funds
and closed-end funds give investors the ability to create a portfolio
that fits their personal financial goals. For more information, contact
your financial adviser or call Delaware Group at 800-523-4640.
INVESTMENT MANAGER
Delaware Management Company, Inc.
One Commerce Square
Philadelphia, PA 19103
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
1818 Market Street
Philadelphia, PA 19103
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING,
ACCOUNTING SERVICES
AND TRANSFER AGENT
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
One Commerce Square
Philadelphia, PA 19103
INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103
CUSTODIAN
The Chase Manhattan Bank
4 Chase Metrotech Center
Brooklyn, NY 11245
DELAWARE FUND
DEVON FUND
A CLASS
B CLASS
C CLASS
P R O S P E C T U S
DECEMBER 30, 1997
DELAWARE
GROUP
DELAWARE FUND PROSPECTUS
DEVON FUND DECEMBER 30, 1997
INSTITUTIONAL CLASS SHARES
1818 MARKET STREET, PHILADELPHIA, PA 19103
FOR MORE INFORMATION ABOUT DELAWARE FUND INSTITUTIONAL CLASS AND
DEVON FUND INSTITUTIONAL CLASS CALL DELAWARE GROUP AT 800-828-5052.
This Prospectus describes shares of the Delaware Fund series
("Delaware Fund") and the Devon Fund series ("Devon Fund")
(individually, a "Fund" and, collectively, the "Funds"), of
Delaware Group Equity Funds I, Inc. ("Equity Funds I, Inc."), a
professionally-managed mutual fund of the series type. Delaware
Fund's investment objective is to seek a balance of capital
appreciation, income and preservation of capital. Devon Fund's
investment objective is to seek current income and capital
appreciation.
Delaware Fund offers Delaware Fund Institutional Class and Devon
Fund offers Devon Fund Institutional Class (individually, a "Class" and
collectively, the "Classes").
This Prospectus relates only to the Classes and sets forth
information that you should read and consider before you invest.
Please retain it for future reference. The Funds' Statement of
Additional Information ("Part B" of Equity Funds I, Inc.'s
registration statement), dated December 30, 1997, as it may be
amended from time to time, contains additional information about
the Funds and has been filed with the Securities and Exchange
Commission (the "SEC"). Part B is incorporated by reference into this
Prospectus and is available, without charge, by writing to Delaware
Distributors, L.P. at the above address or by calling the above
number. Each Fund's financial statements appear in its respective
Annual Report, which will accompany any response to requests for
Part B. The SEC also maintains a Web site (http://www.sec.gov) that
contains Part B, materials we incorporated by reference, and other
information regarding registrants that electronically file with
the SEC.
Delaware Fund also offers Delaware Fund A Class, Delaware
Fund B Class and Delaware Fund C Class, and Devon Fund also offers
Devon Fund A Class, Devon Fund B Class and Devon Fund C Class.
Shares of these classes are subject to sales charges and other
expenses, which may affect their performance. A prospectus for
these classes can be obtained by writing to Delaware Distributors,
L.P. at the above address or by calling 800-523-4640.
TABLE OF CONTENTS
COVER PAGE HOW TO BUY SHARES
SYNOPSIS REDEMPTION AND EXCHANGE
SUMMARY OF EXPENSES DIVIDENDS AND DISTRIBUTIONS
FINANCIAL HIGHLIGHTS TAXES
INVESTMENT OBJECTIVES AND POLICIES CALCULATION OF NET ASSET VALUE
SUITABILITY PER SHARE
INVESTMENT STRATEGY MANAGEMENT OF THE FUNDS
CLASSES OF SHARES OTHER INVESTMENT POLICIES AND
RISK CONSIDERATIONS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION,
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
BE SURE TO CONSULT YOUR FINANCIAL ADVISER WHEN MAKING INVESTMENTS.
MUTUAL FUNDS CAN BE A VALUABLE PART OF YOUR FINANCIAL PLAN; HOWEVER,
SHARES OF THE FUNDS ARE NOT FDIC OR NCUSIF INSURED, ARE NOT GUARANTEED
BY ANY BANK OR ANY CREDIT UNION, ARE NOT OBLIGATIONS OF ANY BANK OR
ANY CREDIT UNION, AND INVOLVE INVESTMENT RISK, INCLUDING THE POSSIBLE
LOSS OF THE PRINCIPAL AMOUNT INVESTED. SHARES OF THE FUNDS ARE NOT
BANK OR CREDIT UNION DEPOSITS.
SYNOPSIS
INVESTMENT OBJECTIVES
The investment objective of Delaware Fund is to seek a balance of
capital appreciation, income and preservation of capital. The
investment objective of Devon Fund is to seek current income and
capital appreciation. For further details, see Investment Objectives
and Policies and Other Investment Policies and Risk Considerations.
RISK FACTORS AND SPECIAL CONSIDERATIONS
Delaware Fund typically invests a portion of its assets in
mortgaged-backed and asset-backed securities (commonly considered to
be "derivative securities"), which may present greater risks than
other types of portfolio securities, and the investor should review
the descriptions of these risks in this Prospectus. See Mortgaged-
Backed Securities and Asset-Backed Securities under Other Investment
Policies and Risk Considerations.
Devon Fund may enter into options and futures transactions for
hedging purposes to counterbalance portfolio volatility. While Devon
Fund does not engage in options and futures for speculative purposes,
there are risks that result from use of these instruments by the Fund,
and the investor should review the descriptions of these risks in this
Prospectus. See Futures Contracts and Options under Other Investment
Policies and Risk Considerations.
INVESTMENT MANAGER, DISTRIBUTOR AND SERVICE AGENT
Delaware Management Company, Inc. (the "Manager") furnishes
investment management services to the Funds, subject to the
supervision and direction of Equity Funds I, Inc.'s Board of
Directors. The Manager also provides investment management services to
certain other funds in the Delaware Group. Delaware Distributors, L.P.
(the "Distributor") is the national distributor for each Fund and for
all of the other mutual funds in the Delaware Group. Delaware Service
Company, Inc. (the "Transfer Agent") is the shareholder servicing,
dividend disbursing, accounting services and transfer agent for each
Fund and for all of the other mutual funds in the Delaware Group. See
Summary of Expenses and Management of the Funds for further
information regarding the Manager and the fees payable under each
Fund's Investment Management Agreement.
PURCHASE PRICE
Shares of each Class offered by this Prospectus are available at
net asset value, without a front-end or contingent deferred sales
charge and are not subject to distribution fees under a Rule 12b-1
distribution plan. See Classes of Shares.
REDEMPTION AND EXCHANGE
Shares of each Class are redeemed or exchanged at the net asset
value calculated after receipt of the redemption or exchange request.
See Redemption and Exchange.
OPEN-END INVESTMENT COMPANY
Equity Funds I, Inc. is an open-end management investment
company. Each Fund's portfolio of assets is diversified as defined by
the Investment Company Act of 1940 (the "1940 Act"). Equity Funds I,
Inc. was first organized as a Delaware corporation in 1937 and
subsequently reorganized as a Maryland corporation on March 4, 1983.
See Shares under Management of the Funds.
<TABLE>
<CAPTION>
SUMMARY OF EXPENSES
Delaware Devon
Fund Fund
Institutional Institutional
Shareholder Transaction Expenses Class Class
-----------------------------------------------------------------------
<S> <C> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) None None
Maximum Sales Charge Imposed
on Reinvested Dividends
(as a percentage of offering price) None None
Exchange Fees None* None*
*Exchanges are subject to the requirements of each fund and a
front-end sales charge may apply.
</TABLE>
<TABLE>
<CAPTION>
Delaware
Annual Operating Expenses Fund Devon
Institutional Institutional Fund
(as a percentage of average daily net assets) Class Class
- -------------------------------------------------------------------------
<S> <C> <C>
Management Fees (after voluntary waivers
in the case of Devon Fund) 0.51% 0.43%**
12b-1 Fees None None
Other Operating Expenses 0.27% 0.57%**
Total Operating Expenses (after voluntary waivers
in the case of Devon Fund) 0.78% 1.00%**
</TABLE>
** Beginning January 1, 1998, the Manager has elected voluntarily to waive
that portion, if any, of the annual management fees payable by Devon Fund
and to pay the Fund to the extent necessary to ensure that the "Total
Operating Expenses" of Devon Fund Institutional Class did not exceed 1.00%
(exclusive of taxes, interest, brokerage commissions and extraordinary
expenses). This waiver and expense limitation will extend through
June 30, 1998. From the commencement of the Fund's operations through
December 31, 1997, the Manager voluntarily waived that portion, if any,
of the annual management fees payable by the Fund and paid the Fund's
expenses to the extent necessary to ensure that "Total Operating Expenses"
of the Fund did not exceed 1.00%. If no voluntary expense waivers were in
effect, it is estimated that the "Total Operating Expenses," as a percentage
of average daily net assets, would be 1.12% for Devon Fund Institutional
Class, reflecting "Management Fees" of 0.60%.
For expense information about Delaware Fund A Class, Delaware
Fund B Class, Delaware Fund C Class, Devon Fund A Class, Devon Fund B
Class and Devon Fund C Class, see the separate prospectus relating to
those classes.
The following example illustrates the expenses that an investor
would pay on a $1,000 investment over various time periods, assuming
(1) a 5% annual rate of return, and (2) redemption at the end of each
time period. As noted in the tables above, Equity Funds I, Inc.
charges no redemption fees. Devon Fund's expenses reflect the
voluntary waiver of fees by the Manager beginning January 1, 1998
as described in this Prospectus.
DELAWARE FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
INSTITUTIONAL CLASS -------------------------------------------
$8 $25 $43 $97
DEVON FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
INSTITUTIONAL CLASS -------------------------------------------
$10 $32 $55 $122
This example should not be considered a representation of past or
future expenses or performance. Actual expenses may be greater or less
than those shown.
The purpose of the above tables is to assist the investor in
understanding the various costs and expenses that an investor in
either Class will bear directly or indirectly.
FINANCIAL HIGHLIGHTS
The following financial highlights are derived from the financial
statements of Delaware Fund and Devon Fund of Delaware Group Equity
Funds I, Inc. and have been audited by Ernst & Young LLP, independent
auditors. The data should be read in conjunction with the financial
statements, related notes, and the reports of Ernst & Young LLP
covering such financial information and highlights, all of which are
incorporated by reference into Part B. Further information about the
Funds' performance is contained in their Annual Reports to
shareholders. A copy of each Fund's Annual Report (including the
report of Ernst & Young LLP) may be obtained from Equity Funds I, Inc.
upon request at no charge.
<TABLE>
<CAPTION>
DF-IC-CHT
Delaware Fund Institutional Class
----------------------------------------------------------------------------
Period
11/9/92(2)
Year Ended through
10/31/97(2) 10/31/96(2) 10/31/95(2) 10/31/94(2) 10/31/93 10/31/93(1)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $21.300 $19.980 $18.030 $19.460 $18.820 $18.720
Income From Investment Operations
- -----------------------------------------------
Net Investment Income 0.659 0.727 0.694 0.653 0.632 0.631
Net Gains (Losses) on Securities
(both realized and unrealized) 3.681 2.363 2.166 (0.293) 1.438 1.509
--------- --------- --------- --------- --------- ---------
Total From Investment Operations 4.340 3.090 2.860 0.360 2.070 2.140
--------- --------- --------- --------- --------- ---------
Less Distributions
- -----------------------------------------------
Dividends (from net investment income) (0.720) (0.690) (0.660) (0.630) (0.660) (0.660)
Distributions (from capital gains) (1.920) (1.080) (0.250) (1.160) (0.770) (0.770)
--------- --------- --------- --------- --------- ---------
Total Distributions (2.640) (1.770) (0.910) (1.790) (1.430) (1.430)
--------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period $23.000 $21.300 $19.980 $18.030 $19.460 $19.430
========= ========= ========= ========= ========= =========
- ----------------------------------------------------------------------------------------------------------------------------
Total Return 22.29% 16.25% 16.50% 1.96% 11.76% 11.91%(3)
- ----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------
Net Assets, End of Period (000's omitted) $153,176 $125,751 $108,747 $93,990 $72,052 $507,528
Ratio of Expenses to Average Daily Net Assets 0.78% 0.80% 0.79% 0.81% 0.77% 0.89%
Ratio of Net Investment Income to Average
Daily Net Assets 3.00% 3.58% 3.73% 3.47% 3.39% 3.27%
Portfolio Turnover Rate 81% 92% 94% 142% 160% 160%
Average Commission Rate Paid (4) $0.060 $0.060 N/A N/A N/A N/A
<CAPTION>
DF-IC-CHT (Continued)
Year Ended
10/31/92(1) 10/31/91(1) 10/31/90(1) 10/31/89(1) 10/31/88(1)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $18.810 $16.190 $17.480 $15.250 $16.850
Income From Investment Operations
- -------------------------------------------------------
Net Investment Income 0.660 0.757 0.856 0.796 0.551
Net Gains (Losses) on Securities
(both realized and unrealized) 1.490 3.033 (1.366) 2.384 2.259
--------- --------- --------- --------- ---------
Total From Investment Operations 2.150 3.790 (0.510) 3.180 2.810
--------- --------- --------- --------- ---------
Less Distributions
- -------------------------------------------------------
Dividends (from net investment income) (0.700) (0.880) (0.780) (0.950) (0.320)
Distributions (from capital gains) (1.540) (0.290) none none (4.090)
--------- --------- --------- --------- ---------
Total Distributions (2.240) (1.170) (0.780) (0.950) (4.410)
--------- --------- --------- --------- ---------
Net Asset Value, End of Period $18.720 $18.810 $16.190 $17.480 $15.250
========= ========= ========= ========= =========
- ------------------------------------------------------------------------------------------------------------------------
Total Return 12.37%(3) 24.32%(3) (3.17%)(3) 21.66%(3) 22.03%(3)
- ------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -------------------------------------------------------
Net Assets, End of Period (000's omitted) $487,343 $453,449 $349,873 $361,625 $328,650
Ratio of Expenses to Average Daily Net Assets 0.79% 0.71% 0.75% 0.76% 0.77%
Ratio of Net Investment Income to Average Daily Net Ass 3.64% 4.29% 4.99% 4.73% 4.01%
Portfolio Turnover Rate 144% 212% 147% 129% 180%
Average Commission Rate Paid (4) N/A N/A N/A N/A N/A
- -----------------------------
(1) Data are derived from data of Delaware Fund A Class which was subject to 12b-1 distribution expenses effective
June 1, 1992.
(2) Data are derived from Delaware Fund Institutional Class shares, which commenced operations on November 9, 1992.
Ratios and total return have been annualized.
(3) Does not reflect the maximum sales charge that is or was in effect nor the 1% limited contingent deferred
sales charge that would apply in the event of certain redemptions within 12 months of purchase for Delaware
Fund A Class.
(4) Computed by dividing the amount of commission paid by the total number of shares purchased and sold during
the period for which there was a commission charged.
</TABLE>
<TABLE>
<CAPTION>
DVN-IC-CHT
Devon Fund Institutional Class
--------------------------------------------------------------------
Period
12/29/93(1)
Year Ended through
10/31/97 10/31/96 10/31/95 10/31/94
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $14.670 $12.590 $10.860 $10.000
Income From Investment Operations
- ----------------------------------------------
Net Investment Income 0.211 0.267 0.241(3) 0.201
Net Gains (Losses) on Securities
(both realized and unrealized) 4.284 2.693 2.049 0.749
-------- -------- -------- --------
Total From Investment Operations 4.495 2.960 2.290 0.950
-------- -------- -------- --------
Less Distributions
- ----------------------------------------------
Dividends (from net investment income) (0.270) (0.240) (0.240) (0.090)
Distributions (from capital gains) (0.965) (0.640) (0.320) none
-------- -------- -------- --------
Total Distributions (1.235) (0.880) (0.560) (0.090)
-------- -------- -------- --------
Net Asset Value, End of Period $17.930 $14.670 $12.590 $10.860
======== ======== ======== ========
- ------------------------------------------------------------------------------------------------------------------
Total Return 32.57%(2) 24.56%(2) 22.26%(2) 11.45%(2)
- ------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ----------------------------------------------
Net Assets, End of Period (000's omitted) $5,749 $3,290 $2,870 $2,516
Ratio of Expenses to Average Daily Net Assets 0.95% 0.95% 0.95% 0.95%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation 1.12% 1.54% 1.99% 2.96%
Ratio of Net Investment Income to Average
Daily Net Assets 1.44% 1.97% 2.12% 2.26%
Ratio of Net Investment Income to Average Daily
Net Assets Prior to Expense Limitation 1.26% 1.38% 1.08% 0.25%
Portfolio Turnover Rate 64% 80% 99% 180%
Average Commission Rate Paid (4) $0.060 $0.060 N/A N/A
- --------------------------------
(1) Date of initial sale of Devon Fund Institutional Class. Ratios and total return have been annualized.
(2) Total return reflects expense limitation referenced under Summary of Expenses.
(3) 1995 per share information was based on the average shares outstanding method.
(4) Computed by dividing the amount of commission paid by the total number of shares purchased and sold during the
period for which there was a commission charged.
</TABLE>
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of Delaware Fund is to seek a balance of
capital appreciation, income and preservation of capital. The
investment objective of Devon Fund is to seek current income and
capital appreciation. Although each Fund will constantly strive to
attain its investment objective, there can be no assurance that it
will be obtained. The objective of each Fund cannot be changed without
shareholder approval.
SUITABILITY
Each Fund may be suitable for investors interested in long-term
capital appreciation. Delaware Fund may be more suitable for investors
wishing to expose a portion of their assets to fixed-income
securities, while Devon Fund may be more suitable for investors
seeking a greater emphasis on common stocks and securities convertible
into common stocks. Investors in each Fund should be willing to accept
the risks associated with investments in equity securities. in
Delaware Fund and, to a lesser extent, investors in Devon Fund should
also be willing to accept the risks associated with investments in
fixed-income securities. Net asset values may fluctuate in response to
market conditions and, as a result, neither Fund is appropriate for a
short-term investor.
Ownership of Fund shares can reduce the bookkeeping and
administrative inconvenience that is typically connected with direct
purchases of the type of securities in which the Funds invest.
An investor should not consider a purchase of either Fund shares
as equivalent to a complete investment program. The Delaware Group
includes a family of funds, generally available through registered
investment dealers, which may be used together to create a more
complete investment program.
INVESTMENT STRATEGY
DELAWARE FUND - As a "balanced" fund, Delaware Fund will
generally invest at least 25% of its assets in fixed-income
securities, including U.S. government securities and corporate bonds.
The remainder of the Fund will be allocated to equity securities
principally, including convertible securities, and also to cash and
cash equivalents. A portion of the Fund's investment in certain
convertible securities may be deemed fixed-income in nature for
purposes of this 25% fixed-income allocation. The Fund may also invest
in foreign securities.
The Fund uses a dividend-oriented valuation strategy to select
individual securities in which it will invest. In seeking capital
appreciation, the Fund invests primarily in common stocks of
established companies believed to have a potential for long-term
capital growth. In seeking current income and preservation of capital,
in addition to capital appreciation, the Fund invests in various types
of fixed-income securities, including U.S. government and government
agency securities and corporate bonds. The Fund generally invests in
bonds that are rated in the top four grades by a nationally-recognized
rating agency (e.g., Moody's Investors Service, Inc. ("Moody's") or
Standard & Poor's Ratings Group ("S&P")) at the time of purchase, or,
if unrated, are determined to be equivalent to the top four grades in
the judgment of the Manager. The fourth grade is considered medium
grade and may have some speculative characteristics. Typically, the
maturity of the bonds will range between five and 30 years. The Fund
may invest not more than 5% of its assets in convertible debentures
rated below investment grade.
The Fund will analyze existing and expected economic and market
conditions and seek to identify those market sectors or individual
securities that are expected to benefit from those conditions. The
Fund's appraisal of these economic conditions will determine the types
of securities it will hold and the degree of investment emphasis
placed upon capital appreciation and income.
DEVON FUND - Devon Fund will seek to achieve its objective by
investing primarily in income-producing common stocks, with a focus on
common stocks that the Manager believes have the potential for above
average dividend increases over time. Under normal circumstances, the
Fund will generally invest at least 65% of its total assets in
dividend paying common stocks.
In selecting stocks for the Fund, the Manager will focus
primarily on dividend paying common stocks issued by companies with
market capitalizations in excess of $100 million but is not precluded
from purchasing shares of companies with market capitalizations of
less than $100 million. In seeking stocks with potential for above
average dividend increases, the Manager will consider such factors as
the historical growth rate of a dividend, the frequency of prior
dividend increases, the issuing company's potential to generate cash
flows and the price/earnings multiple of the stock relative to the
market. The Manager will generally avoid stocks that it believes are
overvalued and may select stocks with current dividend yields that are
lower than the current yield of Standard & Poor's 500 Stock Index
("S&P 500") in exchange for anticipated dividend growth.
While management believes that the Fund's objective may best be
attained by investing in common stocks, the Fund may also invest in
other securities including, but not limited to, convertible and
preferred securities, rights and warrants to purchase common stock and
various types of fixed-income securities, such as U.S. government and
government agency securities, corporate debt securities, and bank
obligations, and may also engage in futures transactions. The Fund may
invest in foreign securities.
* * *
For additional information about each Fund's investment policies
and certain risks associated with investments in certain types of
securities, see Other Investment Policies and Risk Considerations in
this Prospectus. Part B sets forth other investment restrictions.
CLASSES OF SHARES
The Distributor serves as the national distributor for each Fund.
Shares of each Class may be purchased directly by contacting a Fund or
its agent or through authorized investment dealers. All purchases of
shares of each Class are at net asset value. There is no front-end or
contingent deferred sales charge.
INVESTMENT INSTRUCTIONS GIVEN ON BEHALF OF PARTICIPANTS IN AN
EMPLOYER-SPONSORED RETIREMENT PLAN ARE MADE IN ACCORDANCE WITH
DIRECTIONS PROVIDED BY THE EMPLOYER. EMPLOYEES CONSIDERING PURCHASING
SHARES OF A CLASS AS PART OF THEIR RETIREMENT PROGRAM SHOULD CONTACT
THEIR EMPLOYER FOR DETAILS.
Shares of each Class are available for purchase only by: (a)
retirement plans introduced by persons not associated with brokers or
dealers that are primarily engaged in the retail securities business
and rollover individual retirement accounts from such plans; (b) tax-
exempt employee benefit plans of the Manager, or its affiliates and
securities dealer firms with a selling agreement with the Distributor;
(c) institutional advisory accounts of the Manager, or its affiliates
and those having client relationships with Delaware Investment
Advisers, a division of the Manager, or its affiliates and their
corporate sponsors, as well as subsidiaries and related employee
benefit plans and rollover individual retirement accounts from such
institutional advisory accounts; (d) a bank, trust company and similar
financial institution investing for its own account or for the account
of its trust customers for whom such financial institution is
exercising investment discretion in purchasing shares of the Class,
except where the investment is part of a program that requires payment
to the financial institution of a Rule 12b-1 Plan fee; and (e)
registered investment advisers investing on behalf of clients that
consist solely of institutions and high net-worth individuals having
at least $1,000,000 entrusted to the adviser for investment purposes,
but only if the adviser is not affiliated or associated with a broker
or dealer and derives compensation for its services exclusively from
its clients for such advisory services.
DELAWARE FUND A CLASS, DELAWARE FUND B CLASS, DELAWARE FUND C CLASS,
DEVON FUND A CLASS, DEVON FUND B CLASS AND DEVON FUND C CLASS
In addition to offering Delaware Fund Institutional Class and
Devon Fund Institutional Class, Delaware Fund also offers Delaware
Fund A Class, Delaware Fund B Class and Delaware Fund C Class, and
Devon Fund also offers Devon Fund A Class, Devon Fund B Class and
Devon Fund C Class, which are described in a separate prospectus.
Shares of Delaware Fund A Class, Delaware Fund B Class, Delaware Fund
C Class, Devon Fund A Class, Devon Fund B Class and Devon Fund C Class
may be purchased through authorized investment dealers or directly by
contacting each Fund or its Distributor. Delaware Fund A Class and
Devon Fund A Class carry a front-end sales charge and have annual 12b-
1 expenses equal to a maximum of 0.30%. The maximum front-end sales
charge as a percentage of the offering price is 4.75% and is reduced
on certain transactions of $100,000 or more. Delaware Fund B Class,
Delaware Fund C Class, Devon Fund B Class and Devon Fund C Class have
no front-end sales charge but are subject to annual 12b-1 expenses
equal to a maximum of 1%. Shares of Delaware Fund B Class, Delaware
Fund C Class, Devon Fund B Class and Devon Fund C Class and certain
shares of Delaware Fund A Class, and Devon Fund A Class may be subject
to a contingent deferred sales charge upon redemption. To obtain a
prospectus relating to such classes contact the Distributor by writing
to the address or by calling the phone numbers listed on the back
cover of this Prospectus.
HOW TO BUY SHARES
Each Fund makes it easy to invest by mail, by wire, by exchange
and by arrangement with your investment dealer. In all instances,
investors must qualify to purchase the shares of the Classes.
INVESTING DIRECTLY BY MAIL
1. Initial Purchases--An Investment Application or, in the case of a
retirement plan account, an appropriate retirement plan application,
must be completed, signed and sent with a check payable to the
specific Fund and Class selected, to Delaware Group at 1818 Market
Street, Philadelphia, PA 19103.
2. Subsequent Purchases--Additional purchases may be made at any
time by mailing a check payable to the specific Fund and Class
selected. Your check should be identified with your name(s) and
account number.
INVESTING DIRECTLY BY WIRE
You may purchase shares by requesting your bank to transmit funds
by wire to CoreStates Bank, N.A., ABA #031000011, account number
1412893401 (include your name(s) and your account number for the Fund
and Class in which you are investing).
1. Initial Purchases--Before you invest, telephone the Client
Services Department at 800-828-5052 to get an account number. If you
do not call first, it may delay processing your investment. In
addition, you must promptly send your Investment Application or, in
the case of a retirement plan account, an appropriate retirement plan
application, for the specific Fund and Class selected, to Delaware
Group at 1818 Market Street, Philadelphia, PA 19103.
2. Subsequent Purchases--You may make additional investments anytime
by wiring funds to CoreStates Bank, N.A., as described above. You must
advise your Client Services Representative by telephone at 800-828-
5052 prior to sending your wire.
INVESTING BY EXCHANGE
If you have an investment in another mutual fund in the Delaware
Group and you qualify to purchase shares of the Classes, you may write
and authorize an exchange of part or all of your investment into the
Funds. However, shares of Delaware Fund B Class, Delaware Fund C
Class, Devon Fund B Class and Devon Fund C Class and Class B Shares
and Class C Shares of the other funds in the Delaware Group offering
such a class of shares may not be exchanged into the Classes. If you
wish to open an account by exchange, call your Client Services
Representative at 800-828-5052 for more information. See Redemption
and Exchange for more complete information concerning your exchange
privileges.
INVESTING THROUGH YOUR INVESTMENT DEALER
You can make a purchase of Fund shares through most investment
dealers who, as part of the service they provide, must transmit orders
promptly to the Fund. They may charge for this service.
PURCHASE PRICE AND EFFECTIVE DATE
The purchase price (net asset value) of each Class is determined
as of the close of regular trading on the New York Stock Exchange
(ordinarily, 4 p.m., Eastern time) on days when the Exchange is open.
The effective date of a purchase made through an investment
dealer is the date the order is received by the Fund in which the
shares are being purchased, its agent or designee. The effective date
of a direct purchase is the day your wire, electronic transfer or
check is received, unless it is received after the time the share
price is determined, as noted above. Purchase orders received after
such time will be effective the next business day.
THE CONDITIONS OF YOUR PURCHASE
Each Fund reserves the right to reject any purchase order.
If a purchase is canceled because your check is returned unpaid, you
are responsible for any loss incurred. A Fund can redeem shares from
your account(s) to reimburse itself for any loss, and you may be
restricted from making future purchases in any of the funds in the
Delaware Group. Each Fund reserves the right to reject purchase orders
paid by third-party checks or checks that are not drawn on a domestic
branch of a United States financial institution. If a check drawn on a
foreign financial institution is accepted, you may be subject to
additional bank charges for clearance and currency conversion.
Each Fund also reserves the right, upon 60 days' written notice,
to involuntarily redeem accounts that remain under $250 as a result of
redemptions.
REDEMPTION AND EXCHANGE
REDEMPTION AND EXCHANGE REQUESTS MADE ON BEHALF OF PARTICIPANTS
IN AN EMPLOYER-SPONSORED RETIREMENT PLAN ARE MADE IN ACCORDANCE WITH
DIRECTIONS PROVIDED BY THE EMPLOYER. EMPLOYEES SHOULD THEREFORE
CONTACT THEIR EMPLOYER FOR DETAILS.
Your shares will be redeemed or exchanged based on the net asset
value next determined after a Fund receives your request in good
order. For example, redemption and exchange requests received in good
order after the time the net asset value of shares is determined be
processed on the next business day. See Purchase Price and Effective
Date under How to Buy Shares. Except as otherwise noted below, for a
redemption request to be in "good order," you must provide your
account number, account registration, and the total number of shares
or dollar amount of the transaction. With regard to exchanges, you
must also provide the name of the fund in which you want to invest the
proceeds. Exchange instructions and redemption requests must be signed
by the record owner(s) exactly as the shares are registered. You may
request a redemption or an exchange by calling a Fund at 800-828-5052.
Redemption proceeds will be distributed promptly, as described below,
but not later than seven days after receipt of a redemption request.
All exchanges involve a purchase of shares of the fund into which
the exchange is made. As with any purchase, an investor should obtain
and carefully read that fund's prospectus before buying shares in an
exchange. The prospectus contains more complete information about the
fund, including charges and expenses.
Each Fund will process written and telephone redemption requests
to the extent that the purchase orders for the shares being redeemed
have already settled. Each Fund will honor written redemption requests
as to shares for which a check was tendered as payment, but neither
Fund will mail or wire the proceeds until it is reasonably satisfied
that the check has cleared, which may take up to 15 days from the
purchase date. You can avoid this potential delay if you purchase
shares by wiring Federal Funds. Each Fund reserves the right to reject
a written or telephone redemption request or delay payment of
redemption proceeds if there has been a recent change to the
shareholder's address of record.
Shares of a Class may be exchanged into any other Delaware Group
mutual fund provided: (1) the investment satisfies the eligibility and
other requirements set forth in the prospectus of the fund being
acquired, including the payment of any applicable front-end sales
charge; and (2) the shares of the fund being acquired are in a state
where that fund is registered. If exchanges are made into other shares
that are eligible for purchase only by those permitted to purchase
shares of the Classes, such exchange will be exchanged at net asset
value. Shares of the Classes may not be exchanged into Class B Shares
or Class C Shares of any of the funds in the Delaware Group. The Fund
may suspend, terminate, or amend the terms of the exchange privilege
upon 60 days' written notice to shareholders.
Various redemption and exchange methods are outlined below. No
fee is charged by the Funds or the Distributor for redeeming or
exchanging your shares although, in the case of an exchange, a sales
charge may apply. You may also have your investment dealer arrange to
have your shares redeemed or exchanged. Your investment dealer may
charge for this service.
All authorizations given by shareholders, including selection of
any of the features described below, shall continue in effect until
such time as a written revocation or modification has been received by
a Fund or its agent.
WRITTEN REDEMPTION AND EXCHANGE
You can write to a Fund at 1818 Market Street, Philadelphia, PA
19103 to redeem some or all of your shares or to request an exchange
of any or all your shares into another mutual fund in the Delaware
Group, subject to the same conditions and limitations as other
exchanges noted above. The request must be signed by all owners of the
account or your investment dealer of record.
For redemptions of more than $50,000, or when the proceeds are
not sent to the shareholder(s) at the address of record, each Fund
requires a signature by all owners of the account and may require a
signature guarantee. signature guarantee must be supplied by an
eligible guarantor institution. Each Fund reserves the right to reject
a signature guarantee supplied by an eligible institution based on its
creditworthiness. A Fund may require further documentation from
corporations, executors, retirement plans, administrators, trustees or
guardians.
Payment is normally mailed the next business day after receipt of
your redemption request. Certificates are issued for shares only if
you submit a specific request. If your shares are in certificate form,
the certificate(s) must accompany your request and also be in good
order.
You also may submit your written request for redemption or
exchange by facsimile transmission at the following number: 215-255-
8864.
TELEPHONE REDEMPTION AND EXCHANGE
To get the added convenience of the telephone redemption and
exchange methods, you must have the Transfer Agent hold your shares
(without charge) for you. If you choose to have your shares in
certificate form, you may redeem or exchange only by written request
and you must return your certificates.
The Telephone Redemption - Check to Your Address of Record
service and the Telephone Exchange service, both of which are
described below, are automatically provided unless you notify the Fund
in which you are investing in writing that you do not wish to have
such services available with respect to your account. Each Fund
reserves the right to modify, terminate or suspend these procedures
upon 60 days' written notice to shareholders. It may be difficult to
reach a Fund by telephone during periods when market or economic
conditions lead to an unusually large volume of telephone requests.
Neither the Funds nor their Transfer Agent is responsible for any
shareholder loss incurred in acting upon written or telephone
instructions for redemption or exchange of Fund shares which are
reasonably believed to be genuine. With respect to such telephone
transactions, a Fund will follow reasonable procedures to confirm that
instructions communicated by telephone are genuine (including
verification of a form of personal identification) as, if it does not,
the Fund or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent transactions. A written confirmation will
be provided for all purchase, exchange and redemption transactions
initiated by telephone. By exchanging shares by telephone, you are
acknowledging prior receipt of a prospectus for the fund into which
your shares are being exchanged.
TELEPHONE REDEMPTION-CHECK TO YOUR ADDRESS OF RECORD
You or your investment dealer of record can have redemption
proceeds of $50,000 or less mailed to you at your address of record.
Checks will be payable to the shareholder(s) of record. Payment is
normally mailed the next business day after receipt of the redemption
request.
TELEPHONE REDEMPTION-PROCEEDS TO YOUR BANK
Redemption proceeds of $1,000 or more can be transferred to your
predesignated bank account by wire or by check. You should authorize
this service when you open your account. If you change your
predesignated bank account, you must submit a written authorization
and you may need to have your signature guaranteed. For your
protection, your authorization must be on file. If you request a wire,
your funds will normally be sent the next business day. If you ask for
a check, it will normally be mailed the next business day after
receipt of your redemption request to your predesignated bank account.
There are no fees for this redemption method, but the mail time may
delay getting funds into your bank account. Simply call your Client
Services Representative prior to the time the net asset value is
determined, as noted above.
TELEPHONE EXCHANGE
You or your investment dealer of record can exchange shares into
any fund in the Delaware Group under the same registration. As with
the written exchange service, telephone exchanges are subject to the
same conditions and limitations as other exchanges noted above.
Telephone exchanges may be subject to limitations as to amounts or
frequency.
DIVIDENDS AND DISTRIBUTIONS
Each Fund will normally make payments from net investment income
on a quarterly basis. Payments from net realized securities profits of
a Fund, if any, will be distributed annually in the quarter following
the close of the fiscal year. Both dividends and distributions, if
any, are automatically reinvested in your account at net asset value.
Each class of a Fund will share proportionately in the investment
income and expenses of that Fund, except that the Classes will not
incur any distribution fees under the 12b-1 Plans which apply to
Delaware Fund A Class, Delaware Fund B Class, Delaware Fund C Class,
Devon Fund A Class, Devon Fund B Class and Devon Fund C Class.
TAXES
The tax discussion set forth below is included for general
information only. Investors should consult their own tax advisers
concerning the federal, state, local or foreign tax consequences of an
investment in a Fund.
On August 5, 1997, President Clinton signed into law the Taxpayer
Relief Act of 1997 (the "1997 Act"). This new law makes sweeping
changes in the Internal Revenue Code (the "Code"). Because many of
these changes are complex, and only indirectly affect the Funds and
their distributions to you, they are discussed in Part B. Changes in
the treatment of capital gains, however, are discussed in this
section.
Each Fund has qualified, and intends to continue to qualify, as a
regulated investment company under Subchapter M of the Code. As such,
a Fund will not be subject to federal income tax, or to any excise tax,
to the extent its earnings are distributed as provided in the Code and it
satisfies certain other requirements relating to the sources of its
income and diversification of its assets.
Each Fund intends to distribute substantially all of its net
investment income and net capital gains, if any. Dividends from net
investment income or net short-term capital gains will be taxable to
those investors who are subject to income taxes as ordinary income,
even though received in additional shares. For corporate investors,
dividends from net investment income will generally qualify in part
for the corporate dividends-received deduction. The portion of
dividends paid by a Fund that so qualifies will be designated each
year in a notice from Equity Funds I, Inc. to each Fund's
shareholders. For the fiscal year ended October 31, 1997, 27% and 32%
of, respectively, Delaware Fund's and Devon Fund's dividends from net
investment income qualified for the corporate dividends-received
deduction.
Distributions paid by a Fund from long-term capital gains,
received in additional shares, are taxable to those investors who are
subject to income taxes as long-term capital gains, regardless of the
length of time an investor has owned shares in the Fund. The Funds do
not seek to realize any particular amount of capital gains during a
year; rather, realized gains are a by-product of Fund management
activities. Consequently, capital gains distributions may be expected
to vary considerably from year to year. Also, for those investors
subject to tax, if purchases of shares in a Fund are made shortly
before the record date for a dividend or capital gains distribution, a
portion of the investment will be returned as a taxable distribution.
The Treatment of Capital Gain Distributions under the Taxpayer Relief
Act of 1997
The 1997 Act creates a category of long-term capital gain for
individuals that will be taxed at new lower tax rates. For investors
who are in the 28% or higher federal income tax brackets, these gains
will be taxed at a maximum of 20%. For investors who are in the 15%
federal income tax bracket, these gains will be taxed at a maximum of
10%. Capital gain distributions will qualify for these new maximum tax
rates, depending on when a Fund's securities were sold and how long
they were held by that Fund before they were sold. Investors who want
more information on holding periods and other qualifying rules
relating to these new rates should review the expanded discussion in
Part B, or should contact their own tax advisers.
Equity Funds I, Inc. will advise you in its annual information
reporting at calendar year end of the amount of its capital gain
distributions which will qualify for these maximum federal tax rates.
Although dividends generally will be treated as distributed when
paid, dividends which are declared in October, November, or December
to shareholders of record on a specified date in one of those months,
but which, for operational reasons, may not be paid to the shareholder
until the following January, will be treated for tax purposes as if
paid by a Fund and received by the shareholder on December 31 of the
year declared.
The sale of shares of a Fund is a taxable event and may result in
a capital gain or loss to shareholders subject to tax. Capital gain or
loss may be realized from an ordinary redemption of shares or an
exchange of shares between a Fund and any other fund in the Delaware
Group. Any loss incurred on a sale or exchange of Fund shares that had
been held for six months or less will be treated as a long-term
capital loss to the extent of capital gain dividends received with
respect to such shares.
In addition to the federal taxes described above, shareholders
may or may not be subject to various state and local taxes. For
example, distributions of interest income and capital gains realized
from certain types of U.S. government securities may be exempt from
state personal income taxes. Because investors' state and local taxes
may be different than the federal taxes described above, investors
should consult their own tax advisors.
Each year, Equity Funds I, Inc. will mail you information on the
tax status of each Fund's dividends and distributions. Shareholders
will also receive each year information as to the portion of dividend
income, if any, that is derived from U.S. government securities that
are exempt from state income tax. Of course, shareholders who are not
subject to tax on their income would not be required to pay tax on
amounts distributed to them by the Fund.
Equity Funds I, Inc. is required to withhold 31% of taxable
dividends, capital gains distributions, and redemptions paid to
shareholders who have not complied with IRS taxpayer identification
regulations. You may avoid this withholding requirement by certifying
on your Investment Application your proper Taxpayer Identification
Number and by certifying that you are not subject to backup
withholding.
See Taxes in Part B for additional information on tax matters
relating to each Fund and its shareholders.
CALCULATION OF NET ASSET VALUE PER SHARE
The purchase and redemption price of a Class is the net asset
value ("NAV") per share of Class shares next computed after the order
is received. The NAV is computed as of the close of regular trading on
the New York Stock Exchange (ordinarily, 4 p.m., Eastern time) on days
when the Exchange is open.
The NAV per share is computed by adding the value of all
securities and other assets in the portfolio, deducting any
liabilities (expenses and fees are accrued daily) and dividing by the
number of shares outstanding. Portfolio securities for which market
quotations are available are priced at market value. Debt securities
are priced at fair value by an independent pricing service using
methods approved by Equity Funds I, Inc.'s Board of Directors. Short-
term investments having a maturity of less than 60 days are valued at
amortized cost, which approximates market value. All other securities
are valued at their fair value as determined in good faith and in a
method approved by Equity Funds I, Inc.'s Board of Directors.
The net asset values of all outstanding shares of each class of a
Fund will be computed on a pro-rata basis for each outstanding share
based on the proportionate participation in that Fund represented by
the value of shares of that class. All income earned and expenses
incurred by each Fund will be borne on a pro-rata basis by each
outstanding share of a class, based on each class' percentage in a
Fund represented by the value of shares of such classes, except that
the Classes will not incur any of the expenses under the Funds' 12b-1
Plans and Delaware Fund A, B and C Classes and Devon Fund A, B and C
Classes alone will bear the 12b-1 Plan fees payable under their
respective 12b-1 Plans. Due to the specific distribution expenses and
other costs that will be allocable to each class, the net asset value
of and dividends paid to each class of a Fund will vary.
MANAGEMENT OF THE FUNDS
DIRECTORS
The business and affairs of Equity Funds I, Inc. are managed
under the direction of its Board of Directors. Part B contains
additional information regarding Equity Funds I, Inc.'s directors and
officers.
INVESTMENT MANAGER
The Manager furnishes investment management services to each
Fund.
The Manager and its predecessors have been managing the funds in
the Delaware Group since 1938. On October 31, 1997, the Manager and
its affiliates within the Delaware Group, including Delaware
International Advisers Ltd., were managing in the aggregate more than
$38 billion in assets in the various institutional or separately
managed (approximately $22,496,609,000) and investment company
(approximately $16,012,252,000) accounts.
The Manager is an indirect, wholly owned subsidiary of Delaware
Management Holdings, Inc. ("DMH"). On April 3, 1995, a merger between
DMH and a wholly owned subsidiary of Lincoln National Corporation
("Lincoln National") was completed. DMH and the Manager are now
indirect, wholly owned subsidiaries, and subject to the ultimate
control, of Lincoln National. Lincoln National, with headquarters in
Fort Wayne, Indiana, is a diversified organization with operations in
many aspects of the financial services industry, including insurance
and investment management. In connection with the merger, new
Investment Management Agreements between Equity Funds I, Inc. on
behalf of each Fund and the Manager were executed following
shareholder approval.
The Manager manages each Fund's portfolio and makes investment
decisions which are implemented by Equity Fund I, Inc.'s Trading
Department. The Manager also administers Equity Funds I, Inc.'s
affairs and pays the salaries of all the directors, officers and
employees of Equity Funds I, Inc. who are affiliated with the Manager.
For these services, the Manager is paid an annual fee equal to: for
Delaware Fund, 0.60% on the first $100 million of average daily net
assets of the Fund, 0.525% on the next $150 million, 0.50% on the next
$250 million and 0.475% on the average daily net assets in excess of
$500 million, less Delaware Fund's proportionate share of all
directors' fees paid to the unaffiliated directors of Equity Funds I,
Inc.; and, for Devon Fund, 0.60% on the first $500 million of average
daily net assets and 0.50% on the average daily net assets in excess
of $500 million. The directors annually review fees paid to the
Manager. Investment management fees paid by Delaware Fund for the
fiscal year ended October 31, 1997 were 0.51% of average daily net
assets. Investment management fees earned by Devon Fund for the fiscal
year ended October 31, 1997 were 0.60% of average daily net assets,
and 0.43% of average daily net assets were paid by this Fund as a
result of the voluntary waiver of fees by the Manager as described
under Summary of Expenses.
George H. Burwell and Gary A. Reed have primary responsibility
for making day-to-day investment decisions for Delaware Fund and Mr.
Burwell has such responsibility for Devon Fund. Mr. Burwell, who has
been Equity Funds I, Inc.'s Senior Portfolio Manager for equities
since 1992, holds a BA from the University of Virginia. Prior to
joining the Delaware Group in 1992, Mr. Burwell was a portfolio
manager for Midlantic Bank in Edison, New Jersey, where he managed an
equity mutual fund and three commingled funds. Mr. Burwell is a CFA
charterholder.
Mr. Reed has been Delaware Fund's Senior Portfolio Manager for
fixed-income since April 1995. He holds an AB in Economics from the
University of Chicago and an MA in Economics from Columbia University.
He began his career in 1978 with the Equitable Life Assurance Company
in New York City, where he specialized in credit analysis. Prior to
joining the Delaware Group in 1989, Mr. Reed was Vice President and
Manager of the fixed-income department at Irving Trust Company in New
York.
In making investment decisions for the Funds, Mr. Burwell and Mr.
Reed regularly consult with Wayne A. Stork, Richard G. Unruh, Jr. and
Paul E. Suckow. Mr. Stork, Chairman of the Manager and Equity Funds I,
Inc.'s Board of Directors, is a graduate of Brown University and
attended New York University's Graduate School of Business
Administration. Mr. Stork joined the Delaware Group in 1962 and has
served in various executive capacities at different times within the
Delaware organization. A graduate of Brown University, Mr. Unruh
received his MBA from the University of Pennsylvania's Wharton School
and joined the Delaware Group in 1982 after 19 years of investment
management experience with Kidder, Peabody & Co. Inc. Mr. Unruh was
named an Executive Vice President of Equity Funds I, Inc. in 1994. He
is also a member of the Board of the Manager and was named an
Executive Vice President of the Manager in 1994. He is on the Board of
Directors of Keystone Insurance Company and AAA Mid-Atlantic and is a
former president and current member of the Advisory Council of the
Bond Club of Philadelphia. Mr. Suckow is Delaware's Chief Investment
Officer for fixed-income. He is a CFA charterholder and a graduate of
Bradley University with an MBA from Western Illinois University. Mr.
Suckow was a fixed-income portfolio manager at the Delaware Group from
1981 to 1985. He returned to the Delaware Group in 1993 after eight
years with Oppenheimer Management Corporation, where he served as
Executive Vice President and Director of Fixed Income.
PORTFOLIO TRADING PRACTICES
The Funds normally will not invest for short-term trading
purposes. However, each Fund may sell securities without regard to the
length of time they have been held. The degree of portfolio activity
will affect brokerage costs of each Fund and may affect taxes payable
by a Fund's shareholders to the extent of any net realized capital
gains. A turnover rate of 100% would occur, for example, if all the
investments in a Fund's portfolio at the beginning of the year were
replaced by the end of the year.
Each Fund uses its best efforts to obtain the best available
price and most favorable execution for portfolio transactions. Orders
may be placed with brokers or dealers who provide brokerage and
research services to the Manager or its advisory clients. These
services may be used by the Manager in servicing any of its accounts.
Subject to best price and execution, each Fund may consider a
broker/dealer's sales of shares of funds in the Delaware Group of
funds in placing portfolio orders and may place orders with
broker/dealers that have agreed to defray certain Fund expenses of
such funds, such as custodian fees.
PERFORMANCE INFORMATION
From time to time, Delaware Fund and Devon Fund may quote total
return performance for their respective Class in advertising and other
types of literature.
Total return will be based on a hypothetical $1,000 investment,
reflecting the reinvestment of all distributions at net asset value.
Each presentation will include the average annual total return for
one-, five- and ten-year or life-of-fund periods, as applicable. Each
Fund may also advertise aggregate and average total return information
concerning a Class over additional periods of time.
Because securities prices fluctuate, investment results of a
Class will fluctuate over time and past performance should not be
considered as a guarantee of future results.
STATEMENTS AND CONFIRMATIONS
You will receive quarterly statements of your account summarizing
all transactions during the period. A confirmation statement will be
sent following all transactions other than those involving a
reinvestment of distributions. You should examine statements and
confirmations immediately and promptly report any discrepancy by
calling your Client Services Representative.
FINANCIAL INFORMATION ABOUT FUNDS
Each fiscal year, you will receive an audited annual report and
an unaudited semi-annual report. These reports provide detailed
information about each Fund's investments and performance. Equity
Funds I, Inc.'s fiscal year ends on October 31.
DISTRIBUTION AND SERVICE
The Distributor, Delaware Distributors, L.P. serves as the
national distributor of each Fund's shares under separate Distribution
Agreements with Equity Funds I, Inc. dated April 3, 1995, as amended
on November 29, 1995. The Distributor bears all of the costs of
promotion and distribution.
The Transfer Agent, Delaware Service Company, Inc., serves as the
shareholder servicing, dividend disbursing and transfer agent for
Delaware Fund under an Agreement dated June 29, 1988 and for Devon
Fund under an Agreement dated December 29, 1993. The Transfer Agent
also provides accounting services to the Funds pursuant to the terms
of a separate Fund Accounting Agreement. Certain recordkeeping and
other shareholder services that otherwise would be performed by the
Transfer Agent may be performed by certain other entities and the
Transfer Agent may elect to enter into an agreement to pay such other
entities for those services. In addition, participant account
maintenance fees may be assessed for certain recordkeeping services
provided as part of retirement plan and administration service
packages. These fees are based on the number of participants in the
plan and the various services selected. Fees will be quoted upon
request and are subject to change.
The directors annually review fees paid to the Distributor and
the Transfer Agent. The Distributor and the Transfer Agent are
indirect, wholly owned subsidiaries of DMH.
EXPENSES
Each Fund is responsible for all of its own expenses other than
those borne by the Manager under the Investment Management Agreements
and those borne by the Distributor under the Distribution Agreements.
For the fiscal year ended October 31, 1997, the ratio of operating
expenses to average daily net assets for Delaware Fund Institutional
Class was 0.78%. For the fiscal year ended October 31, 1997, the ratio
of operating expenses to average daily net assets for Devon Fund
Institutional Class was 0.95%, after voluntary fee waivers by the
Manager.
SHARES
Equity Funds I, Inc. is an open-end management investment
company. Each Fund's portfolio of assets is diversified as defined by
the 1940 Act. Commonly known as a mutual fund, Equity Funds I, Inc.
was first organized as a Delaware corporation in 1937 and subsequently
reorganized as a Maryland corporation on March 4, 1983.
Equity Funds I, Inc. currently offers two series of shares -
Delaware Fund series and Devon Fund series. Fund shares have a par
value of $1.00, equal voting rights, except as noted below, and are
equal in all other respects. Each Fund will vote separately on any
matter which affects only that Fund. Shares of each Fund have a
priority over shares of any other fund of Equity Funds I, Inc.
All shares have noncumulative voting rights which means that the
holders of more than 50% of Equity Funds I, Inc.'s shares voting for
the election of directors can elect 100% of the directors if they
choose to do so. Under Maryland law, Equity Funds I, Inc. is not
required, and does not intend, to hold annual meetings of shareholders
unless, under certain circumstances, it is required to do so under the
1940 Act. Shareholders of 10% or more of Equity Funds I, Inc.'s
outstanding shares may request that a special meeting be called to
consider the removal of a director.
In addition to the Classes, Delaware Fund and Devon Fund also
offer Delaware Fund A Class, Delaware Fund B Class and Delaware Fund C
Class, and Devon Fund A Class, Devon Fund B Class and Devon Fund C
Class, respectively. Shares of each class represent proportionate
interests in the assets of the respective Fund and have the same
voting and other rights and preferences as Delaware Fund Institutional
Class and Devon Fund Institutional Class, respectively, except that
shares of the Classes are not subject to, and may not vote on, matters
affecting, the Distribution Plans under Rule 12b-1 relating to
Delaware Fund A Class, Delaware Fund B Class, Delaware Fund C Class,
Devon Fund A Class, Devon Fund B Class and Devon Fund C Class.
Effective as of the close of business December 27, 1996, the name
of Delaware Group Delaware Fund, Inc. was changed to Delaware Group
Equity Funds I, Inc. Also effective as of the close of business
December 27, 1996, the name of Common Stock series was changed to
Delaware Fund series. Effective as of the close of business August 28,
1995, the name Dividend Growth Fund was changed to Devon Fund and the
names of Dividend Growth Fund A Class, Dividend Growth Fund B Class
and Dividend Growth Fund Institutional Class were changed to Devon
Fund A Class, Devon Fund B Class and Devon Fund Institutional Class,
respectively.
OTHER INVESTMENT POLICIES AND RISK CONSIDERATIONS
MORTGAGE-BACKED SECURITIES--Each Fund may invest in mortgage-
backed securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities or government sponsored corporations.
Each Fund also may invest in securities issued by certain private,
non-government corporations, such as financial institutions, if the
securities are fully collateralized at the time of issuance by
securities or certificates issued or guaranteed by the U.S.
government, its agencies or instrumentalities. Two principal types of
mortgage-backed securities are collateralized mortgage obligations
(CMOs) and real estate mortgage investment conduits (REMICs).
CMOs are debt securities issued by U.S. government agencies or by
financial institutions and other mortgage lenders and collateralized
by a pool of mortgages held under an indenture. CMOs are issued in a
number of classes or series with different maturities. The classes or
series are retired in sequence as the underlying mortgages are repaid.
Prepayment may shorten the stated maturity of the obligation and can
result in a loss of premium, if any has been paid. Certain of these
securities may have variable or floating interest rates and others may
be stripped (securities which provide only the principal or interest
feature of the underlying security).
REMICs, which were authorized under the Tax Reform Act of 1986,
are private entities formed for the purpose of holding a fixed pool of
mortgages secured by an interest in real property. REMICs are similar
to CMOs in that they issue multiple classes of securities. For further
discussion concerning the risk of investing in such asset-backed
securities, see Part B.
CMOs and REMICs issued by private entities are not government
securities and are not directly guaranteed by any government agency.
They are secured by the underlying collateral of the private issuer.
Certain of these private-backed securities are 100% collateralized at
the time of issuance by securities issued or guaranteed by the U.S.
government, its agencies, or instrumentalities. Devon Fund currently
may invest in privately-issued CMOs and REMICs only if they are so
collateralized and rated at the time of purchase in the four highest
grades by a nationally-recognized rating agency (e.g., BBB or better
by S&P or Baa or better by Moody's).
Delaware Fund may invest its assets in CMOs and REMICs issued by
private entities whether or not the securities are 100% collateralized
at the time of issuance by securities issued or guaranteed by the U.S.
government, its agencies or instrumentalities (securities that are not
so collateralized are called "non-agency mortgage-backed securities").
Non-agency mortgage-backed securities may comprise up to 20% of
Delaware Fund's assets, but all of these securities must (i) be rated
at the time of purchase in the four top rating categories by a
nationally-recognized statistical rating organization, and (ii)
represent interests in whole-loan mortgages, multi-family mortgages,
commercial mortgages or other mortgage collateral supported by a first
mortgage lien on real estate. Non-agency mortgage-backed securities
are subject to the interest rate and prepayment risks to which other
CMOs and REMICs issued by private issuers are subject. Non-agency
mortgage-backed securities may also be subject to a greater risk of
loss of interest and principal because they are not collateralized by
securities issued or guaranteed by the U.S. government. In addition,
timely information concerning the loans underlying these securities
may not be as readily available and the market for these securities
may be less liquid than the market for other CMOs and REMICs.
ASSET-BACKED SECURITIES--Delaware Fund and Devon Fund may invest in
securities which are backed by assets such as receivables on home
equity and credit loans, receivables regarding automobile, mobile home
and recreational vehicle loans, wholesale dealer floor plans and
leases or other loans or financial receivables currently available or
which may be developed in the future. All such securities must be
rated in one of the four highest rating categories by a reputable
rating agency (e.g., BBB or better by S&P or Baa or better by
Moody's).
Such receivables are securitized in either a pass-through or a
pay-through structure. Pass-through securities provide investors with
an income stream consisting of both principal and interest payments in
respect of the receivables in the underlying pool. Pay-through asset-
backed securities are debt obligations issued usually by a special
purpose entity, which are collateralized by the various receivables
and in which the payments on the underlying receivables provide the
funds to pay the debt service on the debt obligations issued.
The rate of principal payment on asset-backed securities
generally depends on the rate of principal payments received on the
underlying assets. Such rate of payments may be affected by economic
and various other factors such as changes in interest rates or the
concentration of collateral in a particular geographic area.
Therefore, the yield may be difficult to predict and actual yield to
maturity may be more or less than the anticipated yield to maturity.
Due to the shorter maturity of the collateral backing such securities,
there tends to be less of a risk of substantial prepayment than with
mortgage-backed securities but the risk of such a prepayment does
exist. Such asset-backed securities do, however, involve certain risks
not associated with mortgage-backed securities, including the risk
that security interests cannot be adequately or in many cases ever
established, and other risks which may be peculiar to particular
classes of collateral. For example, with respect to credit card
receivables, a number of state and federal consumer credit laws give
debtors the right to set off certain amounts owed on the credit cards,
thereby reducing the outstanding balance. In the case of automobile
receivables, there is a risk that the holders may not have either a
proper or first security interest in all of the obligations backing
such receivables due to the large number of vehicles involved in a
typical issuance and technical requirements under state laws.
Therefore, recoveries on repossessed collateral may not always be
available to support payments on the securities.
REAL ESTATE INVESTMENT TRUSTS--Each Fund may invest in shares or
convertible bonds issued by real estate investment trusts ("REITS").
REITS invest primarily in income producing real estate as well as real
estate related loans or interests. A REIT is not taxed on income
distributed to shareholders if it complies with several requirements
relating to its organization, ownership, assets and income, and a
requirement that it distribute to its shareholders at least 95% of its
taxable income (other than net capital gains) for each taxable year.
Each Fund anticipates investing only in REITS that invest the majority
of their assets directly in real property and derive their income
primarily from rents, which are known as "equity REITS." Equity REITS
can also realize capital gains by selling properties that have
appreciated in value.
RESTRICTED AND ILLIQUID SECURITIES--Each Fund may purchase
privately placed securities the resale of which is restricted under
applicable securities laws. Most of the privately placed securities
acquired by the Fund will be eligible for resale by the Fund without
registration pursuant to Rule 144A ("Rule 144A Securities") under the
Securities Act of 1933. Rule 144A permits many privately placed and
legally restricted securities to be freely traded among certain
institutional buyers. Each Fund may invest not more than 10% of its
assets in illiquid securities. While maintaining oversight, the Board
of Directors of Equity Funds I, Inc. has delegated to the Manager the
day-to-day function of determining whether individual Rule 144A
Securities are liquid for purposes of each Fund's 10% limitation on
investments in illiquid securities. Devon Fund currently intends to
limit its investments in restricted securities, excluding Rule 144A
Securities, to not more than 5% of its assets.
The Board has instructed the Manager to consider the following
factors in determining the liquidity of a Rule 144A Security: (i) the
frequency of trades and trading volume for the security; (ii) whether
at least three dealers are willing to purchase or sell the security
and the number of potential purchasers; (iii) whether at least two
dealers are making a market in the security; (iv) the nature of the
security and the nature of the marketplace trades (e.g., the time
needed to dispose of the security, the method of soliciting offers,
and the mechanics of transfer).
If the Manager determines that a Rule 144A Security which was
previously determined to be liquid is no longer liquid and, as a
result, the Fund's holdings of illiquid securities exceed the Fund's
limit noted above on investments in such securities, the Manager will
determine what action to take to ensure that the Fund continues to
adhere to such limitation.
CONVERTIBLE SECURITIES--Each Fund may invest in convertible
securities, including corporate debentures, bonds, notes and preferred
stocks that may be converted into or exchanged for common stock. These
securities are generally convertible either at a stated price or a
stated rate (that is, for a specific number of shares of common stock
or other security). As with other fixed-income securities, the price
of a convertible security to some extent varies inversely with
interest rates. While providing a fixed-income stream, a convertible
security also affords the investor an opportunity, through its
conversion feature, to participate in the capital appreciation of the
common stock into which it is convertible. Each Fund may invest not
more than 5% of its assets in convertible debentures that are rated
below investment grade or are unrated but are determined by the
Manager to be of comparable quality. For a discussion concerning the
risks of investing in such securities, see Part B.
FOREIGN SECURITIES AND ADRS--Each Fund may invest up to 5% of its
assets in foreign securities. Each Fund may also invest without
limitation in sponsored and unsponsored American Depositary Receipts
("ADRs") that are actively traded in the United States. ADRs are
receipts typically issued by a U.S. bank or trust company which
evidence ownership of underlying securities issued by a foreign
corporation. "Sponsored" ADRs are issued jointly by the issuer of the
underlying security and a depository, and "unsponsored" ADRs are
issued without the participation of the issuer of the deposited
security. Holders of unsponsored ADRs generally bear all the costs of
such facilities and the depository of an unsponsored ADR facility
frequently is under no obligation to distribute shareholder
communications received from the issuer of the deposited security or
to pass through voting rights to the holders of such receipts in
respect of the deposited securities. Therefore, there may not be a
correlation between information concerning the issuer of the security
and the market value of an unsponsored ADR.
Foreign markets may be more volatile than U.S. markets, and
investments in foreign securities involve sovereign risks in addition
to the normal risks associated with U.S. securities. These risks
include political risks, foreign taxes and exchange controls and
currency fluctuations. For example, foreign portfolio investments may
fluctuate in value due to changes in currency rates (i.e., the value
of foreign investments would increase with a fall in the value of the
dollar) and control regulations apart from market fluctuations. Each
Fund may also experience delays in foreign securities settlement.
Each Fund will, from time to time, conduct foreign currency
exchange transactions on a spot (i.e., cash) basis at the spot rate
prevailing in the foreign currency exchange market or through entering
into contracts to purchase or sell foreign currencies at a future date
(i.e., a "forward foreign currency" contract or "forward" contract).
Investors should be aware that there are costs and risks associated
with such currency transactions.
REPURCHASE AGREEMENTS--In order to invest its short-term cash
reserves or when in a temporary defensive posture, each Fund may enter
into repurchase agreements with banks or broker/dealers deemed to be
creditworthy by the Manager, under guidelines approved by the Board of
Directors. A repurchase agreement is a short-term investment in which
the purchaser (i.e., a Fund) acquires ownership of a debt security and
the seller agrees to repurchase the obligation at a future time and
set price, thereby determining the yield during the purchaser's
holding period. Generally, repurchase agreements are of short
duration, often less than one week, but on occasion for longer
periods. Not more than 10% of a Fund's assets may be invested in
repurchase agreements of over seven-days' maturity or other illiquid
assets. Should an issuer of a repurchase agreement fail to repurchase
the underlying security, the loss to the Fund, if any, would be the
difference between the repurchase price and the market value of the
security. Each Fund will limit its investments in repurchase
agreements to those which the Manager under the guidelines of the
Board of Directors determines to present minimal credit risks and
which are of high quality. In addition, each Fund must have collateral
of at least 100% of the repurchase price, including the portion
representing such Fund's yield under such agreements which is
monitored on a daily basis. Such collateral is held by the Custodian
in book entry form. Such agreements may be considered loans under the
1940 Act, but the Funds consider repurchase agreements contracts for
the purchase and sale of securities, and each seeks to perfect a
security interest in the collateral securities so that it has the
right to keep and dispose of the underlying collateral in the event of
default.
The funds in the Delaware Group have obtained an exemption from
the joint-transaction prohibitions of Section 17(d) of the 1940 Act to
allow the Delaware Group funds jointly to invest cash balances. Each
Fund of Equity Funds I, Inc. may invest cash balances in a joint
repurchase agreement in accordance with the terms of the Order and
subject generally to the conditions described above.
PORTFOLIO LOAN TRANSACTIONS--Each Fund may loan up to 25% of its
assets to qualified broker/dealers or institutional investors for
their use relating to short sales or other security transactions.
The major risk to which a Fund would be exposed on a loan
transaction is the risk that the borrower would go bankrupt at a time
when the value of the security goes up. Therefore, each Fund will only
enter into loan arrangements after a review of all pertinent facts by
the Manager, subject to overall supervision by the Board of Directors,
including the creditworthiness of the borrowing broker, dealer or
institution and then only if the consideration to be received from
such loans would justify the risk. Creditworthiness will be monitored
on an ongoing basis by the Manager.
FUTURES CONTRACTS--Devon Fund may enter into futures contracts on
stocks and stock indices, and purchase or sell options on stock index
futures and stock indices. These activities will not be entered into
for speculative purposes, but rather for hedging purposes and to
facilitate the ability to quickly deploy into the stock market the
Fund's positions in cash, short-term debt securities and other money
market instruments, at times when the Fund's assets are not fully
invested in equity securities. Such positions will generally be
eliminated when it becomes possible to invest in securities that are
appropriate for the Funds.
A futures contract is a bilateral agreement providing for the
purchase and sale of a specified type and amount of a financial
instrument, or for the making and acceptance of a cash settlement, at
a stated time in the future for a fixed price. By its terms, a futures
contract provides for a specified settlement date on which the
securities underlying the contract are delivered, or in the case of
securities index futures contracts, the difference between the price
at which the contract was entered into and the contract's closing
value is settled between the purchaser and seller in cash. Futures
contracts differ from options in that they are bilateral agreements,
with both the purchaser and the seller equally obligated to complete
the transaction. In addition, futures contracts call for settlement
only on the expiration date, and cannot be "exercised" at any other
time during their term.
The purchase or sale of a futures contract also differs from the
purchase or sale of a security or the purchase of an option in that no
purchase price is paid or received. Instead, an amount of cash or cash
equivalents, which varies but may be as low as 5% or less of the value
of the contract, must be deposited with the broker as "initial margin"
as a good faith deposit. This amount is generally maintained in a
segregated account at the custodian bank. Subsequent payments to and
from the broker, referred to as "variation margin," are made on a
daily basis as the value of the index or instrument underlying the
futures contract fluctuates, making positions in the futures contract
more or less valuable, a process known as "marking to the market."
The Fund may also purchase and write options on the types of
futures contracts in which the Fund may invest, and enter into related
closing transactions. Options on futures are similar to options on
securities, as described below, except that options on futures give
the purchaser the right, in return for the premium paid, to assume a
position in a futures contract, rather than to actually purchase or
sell the futures contract, at a specified exercise price at any time
during the period of the option. In the event that an option written
by the Fund is exercised, the Fund will be subject to all the risks
associated with the trading of futures contracts, such as payment of
variation margin deposits. In addition, the writer of an option on a
futures contract, unlike the holder, is subject to initial and
variation margin requirements on the option position.
At any time prior to the expiration of a futures contract, a
trader may elect to close out its position by taking an opposite
position on the contract market on which the position was entered
into, subject to the availability of a secondary market, which will
operate to terminate the initial position. Likewise, a position in an
option on a futures contract may be terminated by the purchaser or
seller prior to expiration by effecting a closing purchase or sale
transaction, subject to availability of a secondary market, which is
the purchase or sale of an option of the same series (i.e., the same
exercise price and expiration date) as the option previously purchased
or sold. The Fund may realize a profit or a loss when closing out a
futures contract or an option on a futures contract.
To the extent that interest or exchange rates or securities
prices move in an unexpected direction, the Fund may not achieve the
anticipated benefits of investing in futures contracts and options
thereon, or may realize a loss. To the extent that the Fund purchases
an option on a futures contract and fails to exercise the option prior
to the exercise date, it will suffer a loss of the premium paid.
Further, the possible lack of a secondary market could prevent the
Fund from closing out its positions relating to futures. See Part B
for a further discussion of this investment technique.
OPTIONS--Devon Fund may write covered call options on individual
issues as well as write call options on stock indices. The Fund may
also purchase put options on individual issues and on stock indices.
The Manager will employ these techniques in an attempt to protect
appreciation attained, to offset capital losses and to take advantage
of the liquidity available in the option markets. The ability to hedge
effectively using options on stock indices will depend, in part, on
the correlation between the composition of the index and the Fund's
portfolio as well as the price movement of individual securities. The
Fund does not currently intend to write or purchase options on stock
indices.
While there is no limit on the amount of the Fund's assets which
may be invested in covered call options, the Fund will not invest more
than 2% of its net assets in put options. The Fund will only use
Exchange-traded options.
CALL OPTIONS
Writing Covered Call Options--A covered call option obligates
Devon Fund to sell one of its securities for an agreed price up to an
agreed date. When the Fund writes a call, it receives a premium and
agrees to sell the callable securities to a purchaser of a
corresponding call during the call period (usually not more than nine
months) at a fixed exercise price regardless of market price changes
during the call period. The advantage is that the Fund receives
premium income for the limited purpose of offsetting the costs of
purchasing put options or offsetting any capital loss or decline in
market value of the security. However, if the Manager's forecast is
wrong, the Fund may not fully participate in the market appreciation
if the security's price rises.
Writing a Call Option on Stock Indices--Writing a call option on
stock indices is similar to the writing of a call option on an
individual stock. Stock indices used will include, but not be limited
to, the S&P 500, the Standard & Poor's 100 Index ("S&P 100") and the
Standard & Poor's Over-The-Counter 250 Index ("S&P OTC 250").
PUT OPTIONS
Purchasing a Put Option--A put option gives Devon Fund the right
to sell one of its securities for an agreed price up to an agreed
date. The advantage is that the Fund can be protected should the
market value of the security decline. However, the Fund must pay a
premium for this right which would be lost if the option is not
exercised. The Fund will, at all times during which it holds a put
option, own the security covered by such option.
Purchasing a Put Option on Stock Indices--Purchasing a protective
put option on stock indices is similar to the purchase of protective
puts on an individual stock. Indices used will include, but not be
limited to, the S&P 500, the S&P 100 and the S&P OTC 250.
Closing Transactions--Closing transactions essentially let the
Fund offset a put option or covered call option prior to its exercise
or expiration. If the Fund cannot effect a closing transaction, it may
have to hold a security it would otherwise sell or deliver a security
it might want to hold.
OTHER INVESTMENT POLICIES--Neither Fund may concentrate
investments in any industry, which means that a Fund may generally not
invest more than 25% of its assets in any one industry.
In pursuing its investment objective, each Fund may hold
securities for any period of time. For temporary, defensive purposes,
each Fund may hold a substantial portion of its assets in cash, cash
equivalents or short-term obligations, including repurchase
agreements. Each Fund may also enter into repurchase agreements to
invest excess cash balances.
While each Fund is permitted under certain circumstances to
borrow money, neither Fund normally does so. A Fund will not purchase
investment securities while it has any borrowings outstanding.
Each Fund may purchase securities on a when-issued or delayed
delivery basis. It is the current intention of each Fund not to enter
into when-issued commitments exceeding in the aggregate 5% of the
market value of the Fund's total assets less liabilities other than
obligations created by these commitments.
* * *
Part B describes certain of these investment policies and risk
considerations. Part B also sets forth other investment policies, risk
considerations and more specific investment restrictions.
For more information contact Delaware Group at 800-828-5052.
INVESTMENT MANAGER
Delaware Management Company, Inc.
One Commerce Square
Philadelphia, PA 19103
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
1818 Market Street
Philadelphia, PA 19103
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING,
ACCOUNTING SERVICES
AND TRANSFER AGENT
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
One Commerce Square
Philadelphia, PA 19103
INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103
CUSTODIAN
The Chase Manhattan Bank
4 Chase Metrotech Center
Brooklyn, NY 11245
DELAWARE FUND INSTITUTIONAL
DEVON FUND INSTITUTIONAL
PROSPECTUS
DECEMBER 30, 1997
DELAWARE
GROUP
PART B--STATEMENT OF ADDITIONAL INFORMATION
DECEMBER 30, 1997
DELAWARE GROUP EQUITY FUNDS I, INC.
1818 MARKET STREET
PHILADELPHIA, PA 19103
FOR MORE INFORMATION ABOUT DELAWARE FUND INSTITUTIONAL CLASS AND DEVON
FUND INSTITUTIONAL CLASS:
800-828-5052
FOR PROSPECTUS AND PERFORMANCE OF DELAWARE FUND A CLASS, DELAWARE FUND B
CLASS, DELAWARE FUND C CLASS, DEVON FUND A CLASS, DEVON FUND B CLASS AND
DEVON FUND C CLASS: NATIONWIDE 800-523-4640
INFORMATION ON EXISTING ACCOUNTS OF DELAWARE FUND A CLASS, DELAWARE FUND
B CLASS, DELAWARE FUND C CLASS, DEVON FUND A CLASS, DEVON FUND B CLASS
AND DEVON FUND C CLASS: (SHAREHOLDERS ONLY)
NATIONWIDE 800-523-1918
DEALER SERVICES: (BROKER/DEALERS ONLY) NATIONWIDE 800-362-7500
TABLE OF CONTENTS
COVER PAGE
INVESTMENT RESTRICTIONS AND POLICIES
PERFORMANCE INFORMATION
TRADING PRACTICES AND BROKERAGE
PURCHASING SHARES
INVESTMENT PLANS
DETERMINING OFFERING PRICE AND NET ASSET VALUE
REDEMPTION AND REPURCHASE
DIVIDENDS AND REALIZED SECURITIES PROFITS DISTRIBUTIONS
TAXES
INVESTMENT MANAGEMENT AGREEMENTS
OFFICERS AND DIRECTORS
EXCHANGE PRIVILEGE
GENERAL INFORMATION
APPENDIX A--DESCRIPTION OF RATINGS
APPENDIX B--IRA INFORMATION
APPENDIX C--PERFORMANCE OVERVIEW
APPENDIX D--THE COMPANY LIFE CYCLE
FINANCIAL STATEMENTS
Delaware Group Equity Funds I, Inc. ("Equity Funds I, Inc.") is a
professionally-managed mutual fund of the series type which currently
offers two series of shares: Delaware Fund series ("Delaware Fund")
and Devon Fund series ("Devon Fund") (individually, a "Fund", and
collectively, the "Funds").
Delaware Fund and Devon Fund offer, respectively, Delaware
Fund A Class and Devon Fund A Class ("Class A Shares"), Delaware
Fund B Class and Devon Fund B Class ("Class B Shares"), Delaware
Fund C Class and Devon Fund C Class ("Class C Shares") (Class A
Shares, Class B Shares and Class C Shares together referred to as the
"Fund Classes"), and Delaware Fund Institutional Class and Devon
Fund Institutional Class ("Institutional Classes").
Class B Shares, Class C Shares and Institutional Class shares of a
Fund may be purchased at a price equal to the next determined net asset
value per share. Class A Shares may be purchased at the public offering
price, which is equal to the next determined net asset value per share,
plus a front-end sales charge. Class A Shares are subject to a maximum
front-end sales charge of 4.75% and annual 12b-1 Plan expenses of up to
0.30%. Class B Shares are subject to a contingent deferred sales charge
("CDSC") which may be imposed on redemptions made within six years of
purchase and annual 12b-1 Plan expenses of up to 1%, which are assessed
against Class B Shares for approximately eight years after purchase.
See Automatic Conversion of Class B Shares under Classes of Shares in
the Fund Classes' Prospectus. Class C Shares are subject to a CDSC
which may be imposed on redemptions made within 12 months of purchase
and annual 12b-1 Plan expenses of up to 1%, which are assessed against
Class C Shares for the life of the investment.
This Statement of Additional Information ("Part B" of the
registration statement) supplements the information contained in the
current Prospectus for the Fund Classes dated December 30, 1997 and
the current Prospectus for the Institutional Classes dated December 30,
1997, as they may be amended from time to time. Part B should be read
in conjunction with the respective Class' Prospectus. Part B is not
itself a prospectus but is, in its entirety, incorporated by reference
into each Class' Prospectus. A prospectus relating to the Fund Classes
and a prospectus relating to the Institutional Classes may be obtained
by writing or calling your investment dealer or by contacting each
Fund's national distributor, Delaware Distributors, L.P. (the
"Distributor"), 1818 Market Street, Philadelphia, PA 19103.
All references to "shares" in this Part B refer to all Classes of
shares of Equity Funds I, Inc., except where noted.
INVESTMENT RESTRICTIONS AND POLICIES
INVESTMENT RESTRICTIONS--Equity Funds I, Inc. has adopted the
following fundamental restrictions for Delaware Fund and Devon Fund
which are applied to each Fund except as noted. Fundamental
restrictions may not be amended without approval of a majority of the
outstanding voting securities of a Fund, which is more than 50% of the
outstanding voting securities of that Fund which proposes to change its
fundamental policy, or 67% of the voting securities of that Fund which
proposes to change its fundamental policy present at a shareholder
meeting if the holders of more than 50% of such voting securities are
present in person or represented by proxy, whichever is less. The
percentage limitations contained in the restrictions and policies set
forth herein apply at the time of purchase of securities.
1. Not to invest more than 5% of the value of its assets in
securities of any one company (except U.S. government bonds) or purchase
more than 10% of the voting or nonvoting securities of any one company.
2. Not to acquire control of any company. (Equity Funds I,
Inc.'s Certificate of Incorporation permits control of companies to
protect investments already made, but its policy is not to acquire
control.)
3. Not to purchase or retain securities of a company which has
an officer or director who is an officer or director of Equity Funds I,
Inc. or an officer, director or partner of its investment manager if, to
the knowledge of Equity Funds I, Inc., one or more of such persons own
beneficially more than 1/2 of 1% of the shares of the company, and in
the aggregate more than 5% thereof.
4. No long or short positions on shares of Equity Funds I,
Inc. may be taken by its officers, directors or any of its affiliated
persons. Such persons may buy shares of Equity Funds I, Inc. for
investment purposes, however.
5. Not to purchase any security issued by any other investment
company if after such purchase it would: (a) own more than 3% of the
voting stock of such company, (b) own securities of such company having
a value in excess of 5% of Equity Funds I, Inc.'s assets or (c) own
securities of investment companies having an aggregate value in excess
of 10% of Equity Funds I, Inc.'s assets.
6. Not to act as an underwriter of securities of other
issuers, except that Equity Funds I, Inc. may acquire restricted
securities and securities which are not readily marketable under
circumstances where, if such securities are sold, Equity Funds I, Inc.
may be deemed an underwriter for purposes of the Securities Act of 1933
(the "1933 Act").
7. Not to invest in securities of other investment companies
except at customary brokerage commission rates or in connection with
mergers, consolidations or offers of exchange.
8. Not to make any investment in real estate unless necessary
for office space or the protection of investments already made. (This
restriction does not preclude Equity Funds I, Inc.'s purchase of
securities issued by real estate investment trusts.)
9. Not to sell short any security or property.
10. Not to deal in commodities, except that Devon Fund may
invest in financial futures, including futures contracts on stocks and
stock indices, interest rates, and foreign currencies, and other types
of financial futures that may be developed in the future, and may
purchase or sell options on such futures, and enter into closing
transactions with respect to those activities.
11. Not to borrow, except as a temporary measure for
extraordinary or emergency purposes and then not in excess of 10% of
gross assets taken at cost or market, whichever is lower, and not to
pledge more than 15% of gross assets taken at cost. Any borrowing will
be done from a bank and to the extent that such borrowing exceeds 5% of
the value of Equity Funds I, Inc.'s assets, asset coverage of at least
300% is required. In the event that such asset coverage shall at any
time fall below 300%, Equity Funds I, Inc. shall, within three days
thereafter (not including Sunday and holidays) or such longer period as
the Securities and Exchange Commission may prescribe by rules and
regulations, reduce the amount of its borrowings to an extent that the
asset coverage of such borrowings shall be at least 300%. Equity Funds
I, Inc. shall not issue senior securities as defined in the Investment
Company Act of 1940 (the "1940 Act"), except for notes to banks.
12. Not to make loans. However, the purchase of a portion of
an issue of publicly distributed bonds, debentures or other securities,
whether or not the purchase was made upon the original issuance of the
securities, and the entry into "repurchase agreements" are not to be
considered the making of a loan by Equity Funds I, Inc. and Equity Funds
I, Inc. may loan up to 25% of its assets to qualified broker/dealers or
institutional investors for their use relating to short sales or other
security transactions.
13. Not to invest more than 5% of the value of its total assets
in securities of companies less than three years old. Such three-year
period shall include the operation of any predecessor company or
companies.
INVESTMENT POLICIES
All investment policies of the Funds are nonfundamental and may be
changed without shareholder approval, except those identified above as
fundamental restrictions.
Each Fund has made a commitment that it will not invest in warrants
valued at the lower of cost or market exceeding 5% of such Fund's net
assets. Included within that amount, but not to exceed 2% of each
Fund's net assets, may be warrants not listed on the New York Stock
Exchange or American Stock Exchange.
Neither Fund currently invests its assets in real estate limited
partnerships or oil, gas and other mineral leases. Each Fund currently
intends to limit its investments in real estate investment trusts to not
more than 10% of each such Fund's net assets.
While each Fund is permitted under certain circumstances to borrow
money, neither Fund normally does so. Investment securities will not
normally be purchased by a Fund while it has an outstanding borrowing.
Neither Fund may concentrate investments in any industry, which means
that a Fund generally may not invest more than 25% of its assets in any
one industry.
MORTGAGE-BACKED SECURITIES
In addition to mortgage-backed securities issued or guaranteed by
the U.S. government, its agencies or instrumentalities or government
sponsored corporations, each Fund may also invest its assets in
securities issued by certain private, nongovernment corporations, such
as financial institutions. Certain of these private-backed securities
are fully collateralized at the time of issuance by securities or
certificates issued or guaranteed by the U.S. government, its agencies
or instrumentalities. Two principal types of mortgage-backed securities
are collateralized mortgage obligations (CMOs) and real estate mortgage
investment conduits (REMICs).
CMOs are debt securities issued by U.S. government agencies or by
financial institutions and other mortgage lenders and collateralized by
a pool of mortgages held under an indenture. CMOs are issued in a
number of classes or series with different maturities. The classes or
series are retired in sequence as the underlying mortgages are repaid.
Prepayment may shorten the stated maturity of the obligation and can
result in a loss of premium, if any has been paid. Certain of these
securities may have variable or floating interest rates and others may
be stripped (securities which provide only the principal or interest
feature of the underlying security).
REMICs, which were authorized under the Tax Reform Act of 1986, are
private entities formed for the purpose of holding a fixed pool of
mortgages secured by an interest in real property. REMICs are similar
to CMOs in that they issue multiple classes of securities.
CMOs and REMICs issued by private entities are not government
securities and are not directly guaranteed by any government agency.
They are secured by the underlying collateral of the private issuer.
Devon Fund will invest in such private-backed securities only if they
are 100% collateralized at the time of issuance by securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities.
Delaware Fund may invest its assets in CMOs and REMICs issued by private
entities whether or not the securities are 100% collateralized at the
time of issuance by securities issued or guaranteed by the U.S.
government, its agencies or instrumentalities (securities that are not
so collateralized are called "non-agency mortgage-backed securities").
Each Fund currently invests in privately-issued CMOs and REMICs only if
they are rated at the time of purchase in the four highest grades by a
nationally-recognized rating agency.
ASSET-BACKED SECURITIES
Each Fund may invest a portion of its assets in asset-backed
securities. The rate of principal payment on asset-backed securities
generally depends on the rate of principal payments received on the
underlying assets. Such rate of payments may be affected by economic
and various other factors such as changes in interest rates or the
concentration of collateral in a particular geographic area. Therefore,
the yield may be difficult to predict and actual yield to maturity may
be more or less than the anticipated yield to maturity. The credit
quality of most asset-backed securities depends primarily on the credit
quality of the assets underlying such securities, how well the entities
issuing the securities are insulated from the credit risk of the
originator or affiliated entities, and the amount of credit support
provided to the securities.
Asset-backed securities are often backed by a pool of assets
representing the obligations of a number of different parties. To
lessen the effect of failures by obligors on underlying assets to make
payments, such securities may contain elements of credit support. Such
credit support falls into two categories: (i) liquidity protection, and
(ii) protection against losses resulting from ultimate default by an
obligor on the underlying assets. Liquidity protection refers to the
provision of advances, generally by the entity administering the pool of
assets, to ensure that the receipt of payments due on the underlying
pool is timely. Protection against losses resulting from ultimate
default enhances the likelihood of payments of the obligations on at
least some of the assets in the pool. Such protection may be provided
through guarantees, insurance policies or letters of credit obtained by
the issuer or sponsor from third parties, through various means of
structuring the transaction or through a combination of such approaches.
The Funds will not pay any additional fees for such credit support,
although the existence of credit support may increase the price of a
security.
Examples of credit support arising out of the structure of the
transaction include "senior-subordinated securities" (multiple class
securities with one or more classes subordinate to other classes as to
the payment of principal thereof and interest thereon, with the result
that defaults on the underlying assets are borne first by the holders of
the subordinated class), creation of "reserve funds" (where cash or
investments, sometimes funded from a portion of the payments on the
underlying assets, are held in reserve against future losses) and "over
collateralization" (where the scheduled payments on, or the principal
amount of, the underlying assets exceeds that required to make payments
of the securities and pay any servicing or other fees). The degree of
credit support provided for each issue is generally based on historical
information respecting the level of credit information respecting the
level of credit risk associated with the underlying assets.
Delinquencies or losses in excess of those anticipated could adversely
affect the return on an investment in such issue.
PORTFOLIO LOAN TRANSACTIONS
Each Fund may loan up to 25% of its assets to qualified
broker/dealers or institutional investors for their use relating to
short sales or other security transactions.
It is the understanding of Delaware Management Company, Inc. (the
"Manager") that the staff of the Securities and Exchange Commission (the
"SEC") permits portfolio lending by registered investment companies if
certain conditions are met. These conditions are as follows: 1) each
transaction must have 100% collateral in the form of cash, short-term
U.S. government securities, or irrevocable letters of credit payable by
banks acceptable to a Fund from the borrower; 2) this collateral must be
valued daily and should the market value of the loaned securities
increase, the borrower must furnish additional collateral to the Fund;
3) the Fund must be able to terminate the loan after notice, at any
time; 4) the Fund must receive reasonable interest on any loan, and any
dividends, interest or other distributions on the lent securities, and
any increase in the market value of such securities; 5) the Fund may pay
reasonable custodian fees in connection with the loan; and 6) the voting
rights on the lent securities may pass to the borrower; however, if the
directors of Equity Funds I, Inc. know that a material event will occur
affecting an investment loan, they must either terminate the loan in
order to vote the proxy or enter into an alternative arrangement with
the borrower to enable the directors to vote the proxy.
The major risk to which a Fund would be exposed on a portfolio loan
transaction is the risk that the borrower would go bankrupt at a time
when the value of the security goes up. Therefore, each Fund will only
enter into loan arrangements after a review of all pertinent facts by
the Manager, under the supervision of the Board of Directors, including
the creditworthiness of the borrowing broker, dealer or institution and
then only if the consideration to be received from such loans would
justify the risk. Creditworthiness will be monitored on an ongoing
basis by the Manager.
RESTRICTED AND ILLIQUID SECURITIES
Most of the privately placed securities acquired by a Fund will be
eligible for resale by the Fund without registration pursuant to Rule
144A ("Rule 144A Securities") under the 1933 Act. While maintaining
oversight, the Board of Directors has delegated to the Manager the day-
to-day function of determining whether individual Rule 144A Securities
are liquid for purposes of each Fund's 10% limitation on investments in
illiquid securities. The Board has instructed the Manager to consider
the following factors in determining the liquidity of a Rule 144A
Security: (i) the frequency of trades and trading volume for the
security; (ii) whether at least three dealers are willing to purchase or
sell the security and the number of potential purchasers; (iii) whether
at least two dealers are making a market in the security; and (iv) the
nature of the security and the nature of the marketplace trades (e.g.,
the time needed to dispose of the security, the method of soliciting
offers, and the mechanics of transfer).
Investing in Rule 144A Securities could have the effect of
increasing the level of a Fund's illiquidity to the extent that
qualified institutional buyers become, for a period of time,
uninterested in purchasing these securities. If the Manager determines
that a Rule 144A Security which was previously determined to be liquid
is no longer liquid and, as a result, a Fund's holdings of illiquid
securities exceed the Fund's 10% limit on investment in such securities,
the Manager will determine what action shall be taken to ensure that the
Fund continues to adhere to such limitation.
CONVERTIBLE SECURITIES
Each Fund may invest in convertible securities, including corporate
debentures, bonds, notes and preferred stocks that may be converted into
or exchanged for common stock. While providing a fixed-income stream
(generally higher in yield than the income derivable from a common stock
but lower than that afforded by a non-convertible debt security), a
convertible security also affords the investor an opportunity, through
its conversion feature, to participate in the capital appreciation of
the common stock into which it is convertible. As the market price of
the underlying common stock declines, convertible securities tend to
trade increasingly on a yield basis and so may not experience market
declines to the same extent as the underlying common stock. When the
market price of the underlying common stock increases, the price of a
convertible security tends to rise as a reflection of the value of the
underlying common stock. To obtain such a higher yield, a Fund may be
required to pay for a convertible security an amount in excess of the
value of the underlying common stock. Common stock acquired by a Fund
upon conversion of a convertible security will generally be held for so
long as the Manager anticipates such stock will provide a Fund with
opportunities which are consistent with a Fund's investment objectives
and policies.
Each Fund may invest not more than 5% of its assets in convertible
debentures that are rated below investment grade or are unrated but are
determined by the Manager to be of comparable quality. Investing in
convertible debentures that are rated below investment grade or unrated
but of comparable quality entails certain risks, including the risk of
loss of principal, which may be greater than the risks involved in
investing in investment grade convertible debentures. Under rating
agency guidelines, lower rated securities and comparable unrated
securities will likely have some quality and protective characteristics
that are outweighed by large uncertainties or major risk exposures to
adverse conditions.
A Fund may have difficulty disposing of such lower rated
convertible debentures because the trading market for such securities
may be thinner than the market for higher rated convertible debentures.
To the extent a secondary trading market for these securities does
exist, it generally is not as liquid as the secondary trading market for
higher rated securities. The lack of a liquid secondary market as well
as adverse publicity with respect to these securities, may have an
adverse impact on market price and the Fund's ability to dispose of
particular issues in response to a specific economic event such as a
deterioration in the creditworthiness of the issuer. The lack of a
liquid secondary market for certain securities also may make it more
difficult for a Fund to obtain accurate market quotations for purposes
of pricing the Fund's portfolio and calculating its net asset value.
The market behavior of convertible securities in lower rating categories
is often more volatile than that of higher quality securities. Lower
quality convertible securities are judged by Moody's Investors Service,
Inc. ("Moody's") and Standard & Poor's Ratings Group ("S&P") to have
speculative elements or characteristics; their future cannot be
considered as well assured and earnings and asset protection may be
moderate or poor in comparison to investment grade securities.
In addition, such lower quality securities face major ongoing
uncertainties or exposure to adverse business, financial or economic
conditions, which could lead to inadequate capacity to meet timely
payments. The market values of securities rated below investment grade
tend to be more sensitive to company specific developments and changes
in economic conditions than higher rated securities. Issuers of these
securities are often highly leveraged, so that their ability to service
their debt obligations during an economic downturn or during sustained
periods of rising interest rates may be impaired. In addition, such
issuers may not have more traditional methods of financing available to
them, and may be unable to repay debt at maturity by refinancing.
FOREIGN SECURITIES
Each Fund may invest in securities of foreign companies. However,
neither Fund will invest more than 5% of the value of its total assets,
at the time of purchase, in foreign securities (other than securities of
Canadian issuers registered under the Securities Exchange Act of 1934
(the "1934 Act") or American Depositary Receipts, on which there are no
such limits).
There has been in the past, and there may be again in the future,
an interest equalization tax levied by the United States in connection
with the purchase of foreign securities such as those purchased by a
Fund. Payment of such interest equalization tax, if imposed, would
reduce a Fund's rate of return on its investment. Dividends paid by
foreign issuers may be subject to withholding and other foreign taxes
which may decrease the net return on such investments as compared to
dividends paid to a Fund by United States corporations.
Investors should recognize that investing in foreign corporations
involves certain considerations, including those set forth below, which
are not typically associated with investing in United States
corporations. Foreign corporations are not generally subject to uniform
accounting, auditing and financial standards and requirements comparable
to those applicable to United States corporations. There may also be
less supervision and regulation of foreign stock exchanges, brokers and
listed corporations than exist in the United States. A Fund may be
affected either unfavorably or favorably by fluctuations in the relative
rates of exchange as between the currencies of different nations and
control regulations. Furthermore, there may be the possibility of
expropriation or confiscatory taxation, political, economic or social
instability or diplomatic developments which could affect assets of
either Fund held in foreign countries.
Each Fund will, from time to time, conduct foreign currency
exchange transactions on a spot (i.e., cash) basis at the spot rate
prevailing in the foreign currency exchange market or through entering
into contracts to purchase or sell foreign currencies at a future date
(i.e., a "forward foreign currency" contract or "forward" contract).
Investors should be aware that there are costs and risks associated with
such currency transactions. Each Fund may enter into forward contracts
to "lock in" the price of a security it has agreed to purchase or sell,
in terms of U.S. dollars or other currencies in which the transaction
will be consummated. When the Manager believes that the currency of a
particular foreign country may suffer a decline against the U.S. dollar
or against another currency, each Fund may enter into a forward contract
to sell, for a fixed amount of U.S. dollars or other appropriate
currency, the amount of foreign currency approximating the value of some
or all of a Fund's securities denominated in such foreign currency. It
is impossible to predict precisely the market value of portfolio
securities at the expiration of the forward contract. Accordingly, it
may be necessary for a Fund to purchase or sell additional foreign
currency on the spot market (and bear the expense of such purchase or
sale) if the market value of the security is less than or greater than
the amount of foreign currency the Fund is obligated to deliver.
Each Fund may incur gains or losses from currency transactions. No
type of foreign currency transaction will eliminate fluctuations in the
prices of a Fund's foreign securities or will prevent loss if the prices
of such securities should decline.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS
Devon Fund may enter into futures contracts on stocks and stock
indices, purchase and sell options on such futures, and enter into
closing transactions with respect to those activities. The Fund
currently intends to limit such investments to the extent that not more
than 5% of its assets are required as futures contract margin deposits
and premiums on options and only to the extent that obligations under
such contracts and transactions represent not more than 20% of the
Fund's assets. A futures contract may be purchased and sold only on an
exchange, known as a "contract market," designated by the Commodity
Futures Trading Commission for the trading of such contract, and only
through a registered futures commission merchant which is a member of
such contract market. A commission must be paid on each completed
purchase and sale transaction.
When the Fund enters into a futures transaction, it must deliver to
the futures commission merchant selected by the Fund an amount referred
to as "initial margin." This amount is maintained by the futures
commission merchant in an account at the Fund's custodian bank.
Thereafter, a "variation margin" may be paid by the Fund to, or drawn by
the Fund from, such account in accordance with controls set for such
accounts, depending upon changes in the price of the underlying
securities subject to the futures contract.
Although futures contracts by their terms generally call for the
actual delivery or acquisition of underlying securities or the cash
value of the index, in most cases the contractual obligation is
fulfilled before the date of the contract without having to make or take
such delivery. The contractual obligation is offset by buying (or
selling, as the case may be) on a commodities exchange an identical
futures contract calling for delivery in the same month. Such a
transaction, which is effected through a member of an exchange, cancels
the obligation to make or take, as the case may be, delivery of the
securities or cash value of the index underlying the contractual
obligations. At the time such transaction is effected, a final
determination of variation margin is made and any loss experienced by
the Fund must be paid to the contract market clearing house while any
profit due to the Fund must be delivered to it.
Positions taken in futures markets are not normally held to
maturity, but instead liquidated through offsetting transactions which
may result in a profit or a loss. While the Fund's futures contracts on
securities will usually be liquidated in this manner, the Fund may
instead make or take delivery of the underlying securities whenever it
appears economically advantageous to do so. The clearing house
associated with the market on which futures on the securities are traded
guarantees that, if still open, the sale or purchase will be performed
on settlement date.
The Fund may enter into such futures contracts to protect against
the adverse affects of fluctuations in security prices or interest rates
without actually buying or selling the securities. For example, if
interest rates are expected to increase, the Fund might enter into
futures contracts for the sale of debt securities. Such a sale would
have much the same effect as selling an equivalent value of the debt
securities in the portfolio owned by the Fund. If interest rates did
increase, the value of the debt securities in the portfolio would
decline, but the value of the futures contracts to the Fund would
increase at approximately the same rate, thereby keeping the net asset
value of the Fund from declining as much as it otherwise would have.
Similarly, when it is expected that interest rates may decline, futures
contracts may be purchased to hedge in anticipation of subsequent
purchases of securities at higher prices. Since the fluctuations in
the value of futures contracts should be similar to those of debt
securities, the Fund could take advantage of the anticipated rise in
value of debt securities without actually buying them until the market
had stabilized. At that time, the futures contracts could be liquidated
and the Fund could then buy debt securities on the cash market.
With respect to options on futures contracts, when the Fund is not
fully invested, it may purchase a call option on a futures contract to
hedge against a market advance due to declining interest rates. The
purchase of a call option on a futures contract is similar in some
respects to the purchase of a call option on an individual security.
Depending on the pricing of the option compared to either the price of
the futures contract upon which it is based, or the price of the
underlying debt securities, it may or may not be less risky than
ownership of the futures contract or underlying debt securities.
The writing of a call option on a futures contract constitutes a
partial hedge against the declining price of the security which is
deliverable upon exercise of the futures contract. If the futures price
at the expiration of the option is below the exercise price, the Fund
will retain the full amount of the option premium which provides a
partial hedge against any decline that may have occurred in the Fund's
portfolio holdings. The writing of a put option on a futures contract
constitutes a partial hedge against the increasing price of the security
which is deliverable upon exercise of the futures contract. If the
futures price at the expiration of the option is higher than the
exercise price, the Fund will retain the full amount of the option
premium which provides a partial hedge against any increase in the price
of securities which the Fund intends to purchase.
Call and put options on stock index futures are similar to options
on securities except that, rather than the right to purchase or sell
stock at a specified price, options on a stock index future give the
holder the right to receive cash. Upon exercise of the option, the
delivery of the futures position by the writer of the option to the
holder of the option will be accompanied by delivery of the accumulated
balance in the writer's futures margin account which represents the
amount by which the market price of the futures contract, at exercise,
exceeds, in the case of a call, or is less than, in the case of a put,
the exercise price of the futures contract. If an option is exercised
on the last trading day prior to the expiration date of the option, the
settlement will be made entirely in cash equal to the difference between
the exercise price of the option and the closing price of the futures
contract on the expiration date.
If a put or call option the Fund has written is exercised, the Fund
will incur a loss which will be reduced by the amount of the premium it
receives. Depending on the degree of correlation between changes in the
value of its portfolio securities and changes in the value of its
futures positions, the Fund's losses from existing options on futures
may, to some extent, be reduced or increased by changes in the value of
portfolio securities. The purchase of a put option on a futures
contract is similar in some respects to the purchase of protective puts
on portfolio securities. For example, the Fund will purchase a put
option on a futures contract to hedge the Fund's portfolio against the
risk of rising interest rates.
To the extent that interest rates move in an unexpected direction,
the Fund may not achieve the anticipated benefits of futures contracts
or options on futures contracts or may realize a loss. For example, if
the Fund is hedged against the possibility of an increase in interest
rates which would adversely affect the price of securities held in its
portfolio and interest rates decrease instead, the Fund will lose part
or all of the benefit of the increased value of its securities which it
has because it will have offsetting losses in its futures position. In
addition, in such situations, if the Fund had insufficient cash, it
may be required to sell securities from its portfolio to meet daily
variation margin requirements. Such sales of securities may, but will
not necessarily, be at increased prices which reflect the rising market.
The Fund may be required to sell securities at a time when it may be
disadvantageous to do so.
Further, with respect to options on futures contracts, the Fund may
seek to close out an option position by writing or buying an offsetting
position covering the same securities or contracts and have the same
exercise price and expiration date. The ability to establish and close
out positions on options will be subject to the maintenance of a liquid
secondary market, which cannot be assured.
OPTIONS
Devon Fund may write call options and purchase put options on a
covered basis only and will not engage in option writing strategies for
speculative purposes.
A. COVERED CALL WRITING--The Fund may write covered call
options from time to time on such portion of its portfolio, without
limit, as the Manager determines is appropriate in seeking to obtain the
investment objective. A call option gives the purchaser of such option
the right to buy, and the writer, in this case the Fund, has the
obligation to sell the underlying security at the exercise price during
the option period. The advantage to the Fund of writing covered calls
is that the Fund receives additional income, in the form of a premium,
which may offset any capital loss or decline in market value of the
security. However, if the security rises in value, the Fund may not
fully participate in the market appreciation.
During the option period, a covered call option writer may be
assigned an exercise notice by the broker/dealer through whom such call
option was sold requiring the writer to deliver the underlying security
against payment of the exercise price. This obligation is terminated
upon the expiration of the option period or at such earlier time in
which the writer effects a closing purchase transaction. A closing
purchase transaction cannot be effected with respect to an option once
the option writer has received an exercise notice for such option.
With respect to both options on actual portfolio securities owned
by the Fund and options on stock indices, the Fund may enter into
closing purchase transactions. A closing purchase transaction is one in
which the Fund, when obligated as a writer of an option, terminates its
obligation by purchasing an option of the same series as the option
previously written.
Closing purchase transactions will ordinarily be effected to
realize a profit on an outstanding call option, to prevent an underlying
security from being called, to permit the sale of the underlying
security or to enable the Fund to write another call option on the
underlying security with either a different exercise price or expiration
date or both. The Fund may realize a net gain or loss from a closing
purchase transaction depending upon whether the net amount of the
original premium received on the call option is more or less than the
cost of effecting the closing purchase transaction. Any loss incurred
in a closing purchase transaction may be partially or entirely offset by
the premium received from a sale of a different call option on the same
underlying security. Such a loss may also be wholly or partially offset
by unrealized appreciation in the market value of the underlying
security. Conversely, a gain resulting from a closing purchase
transaction could be offset in whole or in part by a decline in the
market value of the underlying security.
If a call option expires unexercised, the Fund will realize a
short-term capital gain in the amount of the premium on the option, less
the commission paid. Such a gain, however, may be offset by
depreciation in the market value of the underlying security during the
option period. If a call option is exercised, the Fund will realize a
gain or loss from the sale of the underlying security equal to the
difference between the cost of the underlying security, and the proceeds
of the sale of the security plus the amount of the premium on the
option, less the commission paid.
The market value of a call option generally reflects the market
price of an underlying security. Other principal factors affecting
market value include supply and demand, interest rates, the price
volatility of the underlying security and the time remaining until the
expiration date.
Devon Fund will write call options only on a covered basis, which
means that the Fund will own the underlying security subject to a call
option at all times during the option period. Unless a closing purchase
transaction is effected, the Fund would be required to continue to hold
a security which it might otherwise wish to sell, or deliver a security
it would want to hold. Options written by the Fund will normally have
expiration dates between one and nine months from the date written. The
exercise price of a call option may be below, equal to or above the
current market value of the underlying security at the time the option
is written.
B. PURCHASING PUT OPTIONS--Devon Fund may invest up to 2% of
its total assets in the purchase of put options. The Fund will, at all
times during which it holds a put option, own the security covered by
such option.
The Fund intends to purchase put options in order to protect
against a decline in the market value of the underlying security below
the exercise price less the premium paid for the option ("protective
puts"). The ability to purchase put options will allow the Fund to
protect unrealized gain in an appreciated security in its portfolio
without actually selling the security. If the security does not drop in
value, the Fund will lose the value of the premium paid. The Fund may
sell a put option which it has previously purchased prior to the sale of
the securities underlying such option. Such sales will result in a net
gain or loss depending on whether the amount received on the sale is
more or less than the premium and other transaction costs paid on the
put option which is sold.
The Fund may sell a put option purchased on individual portfolio
securities or stock indices. Additionally, the Fund may enter into
closing sale transactions. A closing sale transaction is one in which
the Fund, when it is the holder of an outstanding option, liquidates its
position by selling an option of the same series as the option
previously purchased.
OPTIONS ON STOCK INDICES
A stock index assigns relative values to the common stocks included
in the index with the index fluctuating with changes in the market
values of the underlying common stock.
Options on stock indices are similar to options on stocks but have
different delivery requirements. Stock options provide the right to
take or make delivery of the underlying stock at a specified price. A
stock index option gives the holder the right to receive a cash
"exercise settlement amount" equal to (i) the amount by which the fixed
exercise price of the option exceeds (in the case of a put) or is less
than (in the case of a call) the closing value of the underlying index
on the date of exercise, multiplied by (ii) a fixed "index multiplier."
Receipt of this cash amount will depend upon the closing level of the
stock index upon which the option is based being greater than (in the
case of a call) or less than (in the case of a put) the exercise price
of the option. The amount of cash received will be equal to such
difference between the closing price of the index and exercise price of
the option expressed in dollars times a specified multiple. The writer
of the option is obligated, in return for the premium received, to make
delivery of this amount. Gain or loss to the Fund on transactions in
stock index options will depend on price movements in the stock market
generally (or in a particular industry or segment of the market) rather
than price movements of individual securities.
As with stock options, Devon Fund may offset its position in stock
index options prior to expiration by entering into a closing transaction
on an Exchange or it may let the option expire unexercised.
A stock index fluctuates with changes in the market values of the
stock so included. Some stock index options are based on a broad market
index such as the Standard & Poor's 500 Stock Index ("S&P 500") or the
New York Stock Exchange Composite Index, or a narrower market index such
as the Standard & Poor's 100 Index ("S&P 100"). Indices are also based
on an industry or market segment such as the AMEX Oil and Gas Index or
the Computer and Business Equipment Index. Options on stock indices are
currently traded on the following Exchanges among others: The Chicago
Board Options Exchange, New York Stock Exchange and American Stock
Exchange.
The effectiveness of purchasing or writing stock index options as a
hedging technique will depend upon the extent to which price movements
in the Fund's portfolio correlate with price movements of the stock
index selected. Because the value of an index option depends upon
movements in the level of the index rather than the price of a
particular stock, whether the Fund will realize a gain or loss from the
purchase or writing of options on an index depends upon movements in the
level of stock prices in the stock market generally or, in the case of
certain indices, in an industry or market segment, rather than movements
in the price of a particular stock. Since the Fund's portfolio will not
duplicate the components of an index, the correlation will not be exact.
Consequently, the Fund bears the risk that the prices of the securities
being hedged will not move in the same amount as the hedging instrument.
It is also possible that there may be a negative correlation between the
index or other securities underlying the hedging instrument and the
hedged securities which would result in a loss on both such securities
and the hedging instrument. Accordingly, successful use by the Fund of
options on stock indices will be subject to the Manager's ability to
predict correctly movements in the direction of the stock market
generally or of a particular industry. This requires different skills
and techniques than predicting changes in the price of individual
stocks.
Positions in stock index options may be closed out only on an
Exchange which provides a secondary market. There can be no assurance
that a liquid secondary market will exist for any particular stock index
option. Thus, it may not be possible to close such an option. The
inability to close options positions could have an adverse impact on the
Fund's ability to effectively hedge its securities. Devon Fund will
enter into an option position only if there appears to be a liquid
secondary market for such options.
The Fund will not engage in transactions in options on stock
indices for speculative purposes but only to protect appreciation
attained, to offset capital losses and to take advantage of the
liquidity available in the option markets.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES
Each Fund may purchase securities on a when-issued or delayed
delivery basis. In such transactions, instruments are purchased with
payment and delivery taking place in the future in order to secure what
is considered to be an advantageous yield or price at the time of the
transaction. Delivery of and payment for these securities may take as
long as a month or more after the date of the purchase commitment. A
Fund will maintain with its custodian a separate account with a
segregated portfolio of securities in an amount at least equal to these
commitments. The payment obligation and the interest rates that will be
received are each fixed at the time a Fund enters into the commitment
and no interest accrues to the Fund until settlement. Thus, it is
possible that the market value at the time of settlement could be higher
or lower than the purchase price if the general level of interest rates
has changed. It is a current policy of each Fund not to enter into
when-issued commitments exceeding in the aggregate 5% of the market
value of such Fund's total assets less liabilities other than the
obligations created by these commitments.
PERFORMANCE INFORMATION
From time to time, each Fund may state its Classes' total return
and yield in advertisements and other types of literature. Any
statements of total return or yield performance data for a Class will be
accompanied by information on the average annual compounded rate of
return for that Class over the most recent one-, five- and ten-year
or life- of-fund periods, as applicable. Each Fund may also advertise
aggregate and average total return information for its Classes over
additional periods of time. Each Fund may also advertise yield
information for its Classes for various periods of time.
The average annual total rate of return for each Class is based on
a hypothetical $1,000 investment that includes capital appreciation and
depreciation during the stated periods. The following formula will be
used for the actual computations:
n
P(1+T) = ERV
Where: P = a hypothetical initial purchase order of
$1,000 from which, in the case of only Class
A Shares, the maximum front-end sales charge
is deducted;
T = average annual total return;
n = number of years;
ERV = redeemable value of the hypothetical $1,000
purchase at the end of the period after the
deduction of the applicable CDSC, if any,
with respect to Class B Shares and Class C
Shares.
In presenting performance information for Class A Shares, the
Limited CDSC, applicable to only certain redemptions of those shares,
will not be deducted from any computations of total return. See the
Prospectus for the Fund Classes for a description of the Limited CDSC
and the limited instances in which it applies. All references to a CDSC
in this Performance Information section will apply to Class B Shares or
Class C Shares.
Aggregate or cumulative total return is calculated in a similar
manner, except that the results are not annualized. Each calculation
assumes the maximum front-end sales charge, if any, is deducted from the
initial $1,000 investment at the time it is made with respect to Class A
Shares, and that all distributions are reinvested at net asset value,
and, with respect to Class B Shares and Class C Shares, reflects the
deduction of the CDSC that would be applicable upon complete redemption
of such shares. In addition, each Fund may present total return
information that does not reflect the deduction of the maximum front-end
sales charge or any applicable CDSC.
Each Fund may also state total return performance of its Classes in
the form of an average total return. This average annual return will be
computed by taking the sum of annual returns, then dividing that figure
by the number of years in the overall period indicated. The computation
will reflect the impact of the maximum front-end sales charge or CDSC,
if any, paid on the illustrated investment amount against the first
year's return. The performance of Class B Shares and Class C Shares may
also be computed without taking into account any applicable CDSC. From
time to time, each Fund may quote actual total return performance in
advertising and other types of literature compared to indices or
averages of alternative financial products available to prospective
investors. For example, the performance comparisons may include the
average return of various bank instruments, some of which may carry
certain return guarantees offered by leading banks and thrifts as
monitored by Bank Rate Monitor, and those of generally-accepted
corporate bond and government security price indices of various
durations prepared by Lehman Brothers and Salomon Brothers, Inc. These
indices are not managed for any investment goal.
The performance of Class A Shares and the Institutional Class of
Delaware Fund and Devon Fund, as shown below, is the average annual
total return quotations through October 31, 1997. The average annual
total return for Class A Shares at offer reflects the maximum front-end
sales charge of 4.75% paid on the purchase of shares. The average
annual total return for Class A Shares at net asset value (NAV) does not
reflect the payment of any front-end sales charge. Pursuant to
applicable regulation, total return shown for Delaware Fund
Institutional Class for the periods prior to the commencement of
operations of such Class is calculated by taking the performance of
Delaware Fund A Class and adjusting it to reflect the elimination of all
sales charges. However, for those periods, no adjustment has been made
to eliminate the impact of 12b-1 payments, and performance would have
been affected had such an adjustment been made.
Securities prices fluctuated during the periods covered and past
results should not be considered as representative of future
performance. On June 14, 1988, Delaware Fund's investment objective was
changed from growth with income to a balance of capital appreciation,
income and preservation of capital.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
DELAWARE FUND DELAWARE FUND DELAWARE FUND
CLASS A SHARES(1)(2) CLASS A SHARES(1) INSTITUTIONAL
(AT OFFER) (AT NAV) CLASS(3)
<S> <C> <C> <C>
1 year ended
10/31/97 16.25% 22.05% 22.29%
3 years ended
10/31/97 16.19% 18.10% 18.31%
5 years ended
10/31/97 12.32% 13.41% 13.61%
10 years ended
10/31/97 13.63% 14.19% 14.28%
15 years ended
10/31/97 12.75% 13.11% 13.18%
Period 4/25/38(4)
through 10/31/97 11.27% 11.36% 11.37%
</TABLE>
(1) Delaware Fund A Class began paying 12b-1 payments on June 1,
1992 and performance prior to that date does not reflect such payments.
(2) Prior to November 29, 1995, the maximum front-end sales charge
was 5.75%. Effective November 29, 1995, the maximum front-end sales
charge was reduced to 4.75% and the above performance numbers are
calculated using 4.75% as the applicable sales charge, and are more
favorable than they would have been had they been calculated using
5.75%.
(3) Date of initial public offering of Institutional Class shares
was November 9, 1992.
(4) Date of initial public offering of Delaware Fund A Class.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN(1)
DEVON FUND DEVON FUND DEVON FUND
CLASS A SHARES CLASS A SHARES INSTITUTIONAL
(AT OFFER)(2) (AT NAV) CLASS
<S> <C> <C> <C>
1 year ended
10/31/97 25.83% 32.11% 32.57%
3 years ended
10/31/97 23.98% 26.00% 26.39%
Period 12/29/93(3)
through 10/31/97 21.03% 22.58% 22.95%
</TABLE>
(1) Certain expenses of this Fund have been waived and reimbursed by
the Manager. In the absence of such waiver and reimbursement,
performance would have been affected negatively.
(2) Prior to November 29, 1995, the maximum front-end sales charge
was 5.75%. Effective November 29, 1995, the maximum front-end sales
charge was reduced to 4.75% and the above performance numbers are
calculated using 4.75% as the applicable sales charge, and are more
favorable than they would have been had they been calculated using
5.75%.
(3) Date of initial public offering of Devon Fund A Class.
The performance of Delaware Fund B Class and Devon Fund B Class, as
shown below, is the average annual total return quotation through
October 31, 1997. The average annual total return for Class B Shares
including deferred sales charge reflects the deduction of the applicable
CDSC that would be paid if the shares were redeemed at October 31,
1997. The average annual total return for Class B Shares excluding
deferred sales charge assumes the shares were not redeemed at October
31, 1997 and therefore does not reflect the deduction of a CDSC.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
DELAWARE FUND DELAWARE FUND
CLASS B SHARES CLASS B SHARES
(INCLUDING DEFERRED (EXCLUDING DEFERRED
SALES CHARGE) SALES CHARGE)
<S> <C> <C>
1 year ended
10/31/97 17.09% 21.09%
3 years ended
10/31/97 16.43% 17.17%
Period 9/6/94(1)
through 10/31/97 15.15% 15.85%
(1) Date of initial public offering of Delaware Fund B Class.
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN(1)
DEVON FUND DEVON FUND
CLASS B SHARES CLASS B SHARES
(INCLUDING DEFERRED (EXCLUDING DEFERRED
SALES CHARGE) SALES CHARGE)
<S> <C> <C>
1 year ended
10/31/97 27.21% 31.21%
3 years ended
10/31/97 24.51% 25.15%
Period 9/6/94(2)
through 10/31/97 23.01% 23.61%
</TABLE>
(1) Certain expenses of this Fund have been waived and reimbursed by
the Manager. In the absence of such waiver and reimbursement,
performance would have been affected negatively.
(2) Date of initial public offering of Devon Fund B Class.
The performance of Delaware Fund C Class and Devon Fund C Class, as
shown below, is the average annual total return quotation through
October 31, 1997. The average annual total return for Class C
Shares including deferred sales charge reflects the deduction of the
applicable CDSC that would be paid if the shares were redeemed at
October 31, 1997. The average annual total return for Class C
Shares excluding deferred sales charge assumes the shares were not
redeemed at October 31, 1997 and therefore does not reflect the
deduction of a CDSC.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
DELAWARE FUND DELAWARE FUND
CLASS C SHARES CLASS C SHARES
(INCLUDING DEFERRED (EXCLUDING DEFERRED
SALES CHARGE) SALES CHARGE)
<S> <C> <C>
1 year ended
10/31/97 20.07% 21.07%
Period 11/29/95(1)
through 10/31/97 17.22% 17.22%
</TABLE>
(1) Date of initial public offering of Delaware Fund C Class.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN(1)
DEVON FUND DEVON FUND
CLASS C SHARES CLASS C SHARES
(INCLUDING DEFERRED (EXCLUDING DEFERRED
SALES CHARGE) SALES CHARGE)
<S> <C> <C>
1 year ended
10/31/97 30.24% 31.24%
Period 11/29/95(2)
through 10/31/97 26.05% 26.05%
</TABLE>
(1) Certain expenses of this Fund have been waived and reimbursed by
the Manager. In the absence of such waiver and reimbursement,
performance would have been affected negatively.
(2) Date of initial public offering of Devon Fund C Class.
Statistical and performance information and various indices
compiled and maintained by organizations such as those listed below
may also be used in preparing exhibits comparing certain industry trends
and competitive mutual fund performance to comparable activity and
performance of the Funds and in illustrating general financial planning
principles. From time to time, certain mutual fund performance ranking
information, calculated and provided by these organizations, may also be
used in the promotion of sales in each Fund. Any indices used are not
managed for any investment goal and a direct investment in an index is
not possible.
CDA Technologies, Inc., Lipper Analytical Services, Inc. and
Morningstar, Inc. are performance evaluation services that maintain
statistical performance databases, as reported by a diverse universe of
independently-managed mutual funds.
Ibbotson Associates, Inc. is a consulting firm that provides a variety
of historical data including total return, capital appreciation and
income on the stock market as well as other investment asset classes,
and inflation. With their permission, this information will be used
primarily for comparative purposes and to illustrate general financial
planning principles.
Interactive Data Corporation is a statistical access service that
maintains a database of various international industry indicators, such
as historical and current price/earning information, individual equity
and fixed-income price and return information.
Compustat Industrial Databases, a service of Standard & Poor's, may also
be used in preparing performance and historical stock and bond market
exhibits. This firm maintains fundamental databases that provide
financial, statistical and market information covering more than 7,000
industrial and non-industrial companies.
Russell Indexes is an investment analysis service that provides both
current and historical stock performance information, focusing on the
business fundamentals of those firms issuing the security.
Salomon Brothers and Lehman Brothers are statistical research firms that
maintain databases of international market, bond market, corporate and
government-issued securities of various maturities. This information,
as well as unmanaged indices compiled and maintained by these firms,
will be used in preparing comparative illustrations. In addition, the
performance of multiple indices compiled and maintained by these firms
may be combined to create a blended performance result for comparative
performances. Generally, the indices selected will be representative of
the types of securities in which the Funds may invest and the
assumptions that were used in calculating the blended performance will
be described.
From time to time, each Fund may also quote its Classes' actual
total return performance, dividend results and other performance
information, in advertising and other types of literature and may
compare that information to, or may separately illustrate similar
information reported by, the S&P 500, the Dow Jones Industrial Average
and other unmanaged indices. The S&P 500, which is comprised of 500
selected common stocks, most of which are listed on the New York Stock
Exchange, is heavily weighted toward stocks with large market
capitalizations and represents approximately two-thirds of the total
market value of all domestic stocks.
The S&P 500 and the Dow Jones Industrial Average are industry-
accepted unmanaged indices of generally-conservative securities used for
measuring general market performance. The total return performance
reported will reflect the reinvestment of all distributions on a
quarterly basis and market price fluctuations. The indices do not take
into account any sales charge or other fees.
Total return performance for each Class of the Funds will be
computed by adding all reinvested income and realized securities profits
distributions plus the change in net asset value during a specific
period and dividing by the offering price at the beginning of the
period. It will reflect the maximum sales charge, if any, paid for the
illustrated investment amount, but will not reflect any income taxes
payable by shareholders on the reinvested distributions included in the
calculation. Because securities prices fluctuate, past performance
should not be considered as a representation of the results which may be
realized from an investment in either Fund in the future.
Comparative information on the Consumer Price Index and the CDA
Balanced Fund Index may also be included. The Consumer Price Index, as
prepared by the U.S. Bureau of Labor Statistics, is the most commonly
used measure of inflation. It indicates the cost fluctuations of a
representative group of consumer goods. It does not represent a return
from an investment. The CDA Balanced Fund Index was developed and is
maintained by CDA Technologies, Inc. The Index is comprised of 64
separately-managed, balanced mutual funds. It reflects the reinvestment
of any dividend and capital gains distributions paid during a specified
period.
The following tables present examples, for purposes of
illustration only, of cumulative total return performance for each
Class through October 31, 1997. For these purposes, the calculations
assume the reinvestment of any capital gains distributions and income
dividends paid during the indicated periods. The performance of each
Class, as shown below, does not reflect any income taxes payable by
shareholders on the reinvested distributions included in the
calculations. The performance of Class A Shares reflects the maximum
front-end sales charge paid on the purchase of shares but may also be
shown without reflecting the impact of any front-end sales charge. The
performance of Class B Shares and Class C Shares is calculated both with
the applicable CDSC included and excluded. On June 14, 1988, Delaware
Fund's investment objective was changed from growth with income to a
balance of capital appreciation, income and preservation of capital.
The net asset values of each Fund fluctuate so shares, when redeemed,
may be worth more or less than the original investment and each Fund's
results should not be considered as representative of future
performance. Comparative information on the Dow Jones Industrial Average
and the S&P 500 is also included.
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
DELAWARE FUND DELAWARE FUND
CLASS A SHARES(1) INSTITUTIONAL DOW JONES STANDARD &
(AT OFFER) CLASS(2) INDUSTRIAL(3) POOR'S 500(3)
<S> <C> <C> <C> <C>
3 months ended
10/31/97 (5.57%) (0.79%) (9.09%) (3.75%)
6 months ended
10/31/97 8.32%(4) 13.85% 7.12% 15.16%
9 months ended
10/31/97 8.88% 14.43% 10.74% 17.94%
1 year ended
10/31/97 16.25% 22.29% 25.78% 32.10%
3 years ended
10/31/97 56.86% 65.61% 103.96% 107.20%
5 years ended
10/31/97 78.74% 89.26% 161.41% 147.27%
10 years ended
10/31/97 258.88% 280.07% N/A 386.61%
15 years ended
10/31/97 504.63% 540.27% N/A 1,019.86%
Period 4/25/38(5)
through 10/31/97 57,421.98% 60,785.58% N/A N/A
</TABLE>
(1) Delaware Fund A Class began paying 12b-1 payments on June 1,
1992 and performance prior to that date does not reflect such payments.
Prior to November 29, 1995, the maximum front-end sales charge was
5.75%. Effective November 29, 1995, the maximum front-end sales charge
was reduced to 4.75% and the above performance numbers are calculated
using 4.75% as the applicable sales charge, and are more favorable than
they would have been had they been calculated using 5.75%.
(2) Date of initial public offering of Delaware Fund Institutional
Class was November 9, 1992. Pursuant to applicable regulation, total
return shown for Delaware Fund Institutional Class for the periods prior
to the commencement of operations of such Class is calculated by taking
the performance of Delaware Fund A Class and adjusting it to reflect the
elimination of all sales charges. However, for those periods no
adjustment has been made to eliminate the impact of 12b-1 payments, and
performance would have been affected had such an adjustment been made.
(3) Source--Lipper Analytical Services, Inc.
(4) For the six months ended October 31, 1997, cumulative total
return for Delaware Fund A Class at net asset value was 13.72%.
(5) Date of initial public offering of Delaware Fund A Class.
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
DELAWARE FUND DELAWARE FUND
CLASS B SHARES CLASS B SHARES
(INCLUDING (EXCLUDING
DEFERRED DEFERRED DOW JONES STANDARD &
SALES CHARGE) SALES CHARGE) INDUSTRIAL(1) POOR'S 500(1)
<S> <C> <C> <C> <C>
3 months ended
10/31/97 (4.98%) (1.04%) (9.09%) (3.75%)
6 months ended
10/31/97 9.24% 13.24% 7.12% 15.16%
9 months ended
10/31/97 9.59% 13.59% 10.74% 17.94%
1 year ended
10/31/97 17.09% 21.09% 25.78% 32.10%
3 years ended
10/31/97 57.85% 60.85% 103.96% 107.20%
Period 9/6/94(2)
through 10/31/97 56.01% 59.01% 104.63% 106.67%
</TABLE>
(1) Source--Lipper Analytical Services, Inc.
(2) Date of initial public offering of Delaware Fund B Class.
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
DELAWARE FUND DELAWARE FUND
CLASS C SHARES CLASS C SHARES
(INCLUDING (EXCLUDING
DEFERRED DEFERRED DOW JONES STANDARD &
SALES CHARGE) SALES CHARGE) INDUSTRIAL(1) POOR'S 500(1)
<S> <C> <C> <C> <C>
3 months ended
10/31/97 (2.03%) (1.04%) (9.09%) (3.75%)
6 months ended
10/31/97 12.30% 13.30% 7.12% 15.16%
9 months ended
10/31/97 12.60% 13.60% 10.74% 17.94%
1 year ended
10/31/97 20.07% 21.07% 25.78% 32.10%
Period 11/29/95(2)
through 10/31/97 35.76% 35.76% 52.64% 57.02%
</TABLE>
(1) Source--Lipper Analytical Services, Inc.
(2) Date of initial public offering of Delaware Fund C Class.
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
DEVON FUND DEVON FUND
CLASS A SHARES(1)(2) INSTITUTIONAL DOW JONES STANDARD &
(AT OFFER) CLASS(1) INDUSTRIAL(3) POOR'S 500(3)
<S> <C> <C> <C> <C>
3 months ended
10/31/97 (6.14%) (1.30%) (9.09%) (3.75%)
6 months ended
10/31/97 12.49%(4) 18.33% 7.12% 15.16%
9 months ended
10/31/97 13.93% 19.95% 10.74% 17.94%
1 year ended
10/31/97 25.83% 32.57% 25.78% 32.10%
3 years ended
10/31/97 90.56% 101.89% 103.96% 107.20%
Period 12/29/93(5)
through 10/31/97 108.16% 121.17% 117.27% 114.66%
</TABLE>
(1) Certain expenses of this Fund have been waived and reimbursed by
the Manager. In the absence of such waiver and reimbursement,
performance would have been affected negatively.
(2) Prior to November 29, 1995, the maximum front-end sales charge
was 5.75%. Effective November 29, 1995, the maximum front-end sales
charge was reduced to 4.75% and the above performance numbers are
calculated using 4.75% as the applicable sales charge and are more
favorable than they would have been had they been calculated using
5.75%.
(3) Source--Lipper Analytical Services, Inc.
(4) For the six months ended October 31, 1997, cumulative total
return for Devon Fund A Class at net asset value was 18.11%.
(5) Date of initial public offering of Devon Fund A Class.
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
DEVON FUND DEVON FUND
CLASS B SHARES CLASS B SHARES
(INCLUDING (EXCLUDING
DEFERRED DEFERRED DOW JONES STANDARD &
SALES CHARGE)(1) SALES CHARGE)(1) INDUSTRIAL(2) POOR'S 500(2)
<S> <C> <C> <C> <C>
3 months ended
10/31/97 (5.51%) (1.58%) (9.09%) (3.75%)
6 months ended
10/31/97 13.69% 17.69% 7.12% 15.16%
9 months ended
10/31/97 14.99% 18.99% 10.74% 17.94%
1 year ended
10/31/97 27.21% 31.21% 25.78% 32.10%
3 years ended
10/31/97 93.03% 96.03% 103.96% 107.20%
Period 9/6/94(3)
through 10/31/97 92.14% 95.14% 104.63% 106.67%
</TABLE>
(1) Certain expenses of this Fund have been waived and reimbursed by
the Manager. In the absence of such waiver and reimbursement,
performance would have been affected negatively.
(2) Source--Lipper Analytical Services, Inc.
(3) Date of initial public offering of Devon Fund B Class.
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
DEVON FUND DEVON FUND
CLASS C SHARES CLASS C SHARES
(INCLUDING (EXCLUDING
DEFERRED DEFERRED DOW JONES STANDARD &
SALES CHARGE)(1) SALES CHARGE)(1) INDUSTRIAL(2) POOR'S 500(2)
<S> <C> <C> <C> <C>
3 months ended
10/31/97 (2.56%) (1.58%) (9.09%) (3.75%)
6 months ended
10/31/97 16.78% 17.78% 7.12% 15.16%
9 months ended
10/31/97 18.08% 19.08% 10.74% 17.94%
1 year ende
10/31/97 30.24% 31.24% 25.78% 32.10%
Period 11/29/95(3)
through 10/31/97 56.10% 56.10% 52.64% 57.02%
</TABLE>
(1) Certain expenses of this Fund have been waived and reimbursed by
the Manager. In the absence of such waiver and reimbursement,
performance would have been affected negatively.
(2) Source--Lipper Analytical Services, Inc.
(3) Date of initial public offering of Devon Fund C Class.
For additional performance information, see Appendix C -
Performance Overview.
Because every investor's goals and risk threshold are different,
the Distributor, as distributor for each Fund and the other mutual funds
in the Delaware Group, will provide general information about investment
alternatives and scenarios that will allow investors to assess their
personal goals. This information will include general material about
investing as well as materials reinforcing various industry-accepted
principles of prudent and responsible financial planning. One typical
way of addressing these issues is to compare an individual's goals and
the length of time the individual has to attain these goals to his or
her risk threshold. In addition, the Distributor will provide
information that discusses the Manager's overriding investment
philosophy and how that philosophy impacts a Fund's, and other Delaware
Group funds', investment disciplines employed in seeking their
objectives. The Distributor may also from time to time cite general or
specific information about the institutional clients of the Manager,
including the number of such clients serviced by the Manager.
DOLLAR-COST AVERAGING
For many people, deciding when to invest can be a difficult
decision. Security prices tend to move up and down over various market
cycles and logic says to invest when prices are low. However, even
experts can't always pick the highs and the lows. By using a strategy
known as dollar-cost averaging, you schedule your investments ahead of
time. If you invest a set amount on a regular basis, that money will
always buy more shares when the price is low and fewer when the price is
high. You can choose to invest at any regular interval--for example,
monthly or quarterly--as long as you stick to your regular schedule.
Dollar-cost averaging looks simple and it is, but there are important
things to remember.
Dollar-cost averaging works best over longer time periods, and it
doesn't guarantee a profit or protect against losses in declining
markets. If you need to sell your investment when prices are low, you
may not realize a profit no matter what investment strategy you utilize.
That's why dollar-cost averaging can make sense for long-term goals.
Since the potential success of a dollar-cost averaging program depends
on continuous investing, even through periods of fluctuating prices, you
should consider your dollar-cost averaging program a long-term
commitment and invest an amount you can afford and probably won't need
to withdraw. You also should consider your financial ability to
continue to purchase shares during periods of high fund share prices.
Delaware Group offers three services -- Automatic Investing Program,
Direct Deposit Program and the Wealth Builder Option -- that can help to
keep your regular investment program on track. See Investing by
Electronic Fund Transfer - Direct Deposit Purchase Plan and Automatic
Investing Plan under Investment Plans and Wealth Builder Option under
Investment Plans for a complete description of these services, including
restrictions or limitations.
The example below illustrates how dollar-cost averaging can work.
In a fluctuating market, the average cost per share over a period of
time will be lower than the average price per share for the same time
period.
Number
Investment Price Per of Shares
Amount Share Purchased
Month 1 $100 $10.00 10
Month 2 $100 $12.50 8
Month 3 $100 $5.00 20
Month 4 $100 $10.00 10
----- ------ ----
$400 $37.50 48
Total Amount Invested: $400
Total Number of Shares Purchased: 48
Average Price Per Share: $9.38 ($37.50/4)
Average Cost Per Share: $8.33 ($400/48 shares)
This example is for illustration purposes only. It is not intended
to represent the actual performance of any stock or bond fund in the
Delaware Group of Funds.
TRADING PRACTICES AND BROKERAGE
Brokers or dealers are selected to execute transactions on behalf
of each Fund for the purchase or sale of portfolio securities on the
basis of its judgment of their professional capability to provide the
service. The primary consideration is to have brokers or dealers
execute transactions at best price and execution. Best price and
execution refers to many factors, including the price paid or received
for a security, the commission charged, the promptness and reliability
of execution, the confidentiality and placement accorded the order and
other factors affecting the overall benefit obtained by the account on
the transaction. A number of trades are made on a net basis where a
Fund either buys securities directly from the dealer or sells them to
the dealer. In these instances, there is no direct commission charged
but there is a spread (the difference between the buy and sell price)
which is the equivalent of a commission. When a commission is paid, a
Fund pays reasonably competitive brokerage commission rates based upon
the professional knowledge of Equity Funds I, Inc.'s trading department
as to rates paid and charged for similar transactions throughout the
securities industry. In some instances, a Fund pays a minimal share
transaction cost when the transaction presents no difficulty.
During the fiscal years ended October 31, 1995 , 1996 and 1997,
the aggregate dollar amounts of brokerage commissions paid by Delaware
Fund were $918,750 , $651,024 and $718,048, respectively. For the
fiscal years ended October 31, 1995, 1996 and 1997, the aggregate
dollar amounts of brokerage commissions paid by Devon Fund were
$29,982, $36,082 and $157,621, respectively.
The Manager may allocate out of all commission business generated
by all of the funds and accounts under its management, brokerage
business to brokers or dealers who provide brokerage and research
services. These services include advice, either directly or through
publications or writings, as to the value of securities, the
advisability of investing in, purchasing or selling securities, and the
availability of securities or purchasers or sellers of securities;
furnishing of analyses and reports concerning issuers, securities or
industries; providing information on economic factors and trends;
assisting in determining portfolio strategy; providing computer software
and hardware used in security analyses; and providing portfolio
performance evaluation and technical market analyses. Such services are
used by the Manager in connection with its investment decision-making
process with respect to one or more funds and accounts managed by it,
and may not be used, or used exclusively, with respect to the fund or
account generating the brokerage.
During the fiscal year ended October 31, 1997, portfolio
transactions of Delaware Fund in the amount of $315,120,559, resulting
in brokerage commissions of $396,274, were directed to brokers for
brokerage and research services provided. During the same period,
portfolio transactions of Devon Fund in the amount of $56,820,421,
resulting in brokerage commissions of $82,435, were directed to
brokers for brokerage and research services provided.
As provided in the 1934 Act and each Fund's Investment Management
Agreement, higher commissions are permitted to be paid to broker/dealers
who provide brokerage and research services than to broker/dealers who
do not provide such services if such higher commissions are deemed
reasonable in relation to the value of the brokerage and research
services provided. Although transactions are directed to broker/dealers
who provide such brokerage and research services, the Funds believe
that the commissions paid to such broker/dealers are not, in general,
higher than commissions that would be paid to broker/dealers not
providing such services and that such commissions are reasonable in
relation to the value of the brokerage and research services provided.
In some instances, services may be provided to the Manager which
constitute in some part brokerage and research services used by the
Manager in connection with its investment decision-making process and
constitute in some part services used by the Manager in connection with
administrative or other functions not related to its investment
decision-making process. In such cases, the Manager will make a good
faith allocation of brokerage and research services and will pay out of
its own resources for services used by the Manager in connection with
administrative or other functions not related to its investment
decision-making process. In addition, so long as no fund is
disadvantaged, portfolio transactions which generate commissions or
their equivalent are allocated to broker/dealers who provide daily
portfolio pricing services to a Fund and to other funds in the Delaware
Group. Subject to best price and execution, commissions allocated to
brokers providing such pricing services may or may not be generated by
the funds receiving the pricing service.
The Manager may place a combined order for two or more accounts or
funds engaged in the purchase or sale of the same security if, in its
judgment, joint execution is in the best interest of each participant
and will result in best price and execution. Transactions involving
commingled orders are allocated in a manner deemed equitable to each
account or fund. When a combined order is executed in a series of
transactions at different prices, each account participating in the
order may be allocated an average price obtained from the executing
broker. It is believed that the ability of the accounts to participate
in volume transactions will generally be beneficial to the accounts and
funds. Although it is recognized that, in some cases, the joint
execution of orders could adversely affect the price or volume of the
security that a particular account or fund may obtain, it is the opinion
of the Manager and Equity Funds I, Inc.'s Board of Directors that the
advantages of combined orders outweigh the possible disadvantages of
separate transactions.
Consistent with the Conduct Rules of the National Association of
Securities Dealers, Inc. (the "NASD"), and subject to seeking best price
and execution, a Fund may place orders with broker/dealers that have
agreed to defray certain expenses of the funds in the Delaware Group
of funds such as custodian fees, and may, at the request of the
Distributor, give consideration to sales of shares of such funds as a
factor in the selection of brokers and dealers to execute Fund portfolio
transactions.
PORTFOLIO TURNOVER
Management frequently transfers investments between securities, or
types of securities, in carrying out its investment policy. As a
result, a Fund may, at times, buy and sell more investment securities
and thereby incur greater brokerage commissions than funds which do not
frequently transfer investments. The rate of portfolio turnover is not
a limiting factor when management deems it desirable to purchase or sell
securities.
The degree of portfolio activity may affect taxes payable by a
Fund's shareholders to the extent of any net realized capital gains. A
turnover rate of 100% would occur, for example, if all the investments
in a Fund's portfolio at the beginning of the year were replaced by the
end of the year. The turnover rate also may be affected by cash
requirements from redemptions and repurchases of Fund shares.
The portfolio turnover of each Fund is calculated by dividing the
lesser of purchases or sales of portfolio securities for the particular
fiscal year by the monthly average of the value of the portfolio
securities owned by the Fund during the particular fiscal year,
exclusive of securities whose maturities at the time of acquisition are
one year or less.
During the past two fiscal years, Delaware Fund's portfolio
turnover rates were approximately 92% for 1996 and 81% for 1997.
During the past two fiscal years, Devon Fund's portfolio turnover rates
were approximately 80% for 1996 and 64% for 1997.
Should it become necessary to sell investments for monies with
which to redeem shares, the Board of Directors, in its discretion, may
deduct from the net asset value the brokerage commissions and other
costs incurred to determine the redemption price. However, Equity Funds
I, Inc. has never redeemed or repurchased shares other than at net asset
value.
PURCHASING SHARES
The Distributor serves as the national distributor for each Fund's
shares and has agreed to use its best efforts to sell shares of each
Fund. See the Prospectuses for information on how to invest. Shares of
each Fund are offered on a continuous basis and may be purchased through
authorized investment dealers or directly by contacting Equity Funds I,
Inc. or the Distributor.
The minimum initial investment generally is $1,000 for Class A
Shares, Class B Shares and Class C Shares. Subsequent purchases of such
Classes generally must be at least $100. The initial and subsequent
investment minimums for Class A Shares will be waived for purchases by
officers, directors and employees of any Delaware Group fund, the
Manager or any of the Manager's affiliates if the purchases are made
pursuant to a payroll deduction program. Shares purchased pursuant to
the Uniform Gifts to Minors Act or Uniform Transfers to Minors Act and
shares purchased in connection with an Automatic Investing Plan are
subject to a minimum initial purchase of $250 and a minimum subsequent
purchase of $25. Accounts opened under the Delaware Group Asset Planner
service are subject to a minimum initial investment of $2,000 per Asset
Planner Strategy selected. There are no minimum purchase requirements
for the Institutional Classes, but certain eligibility requirements must
be satisfied.
Each purchase of Class B Shares is subject to a maximum purchase
limitation of $250,000. For Class C Shares, each purchase must be in an
amount that is less than $1,000,000. See Investment Plans for purchase
limitations applicable to retirement plans. Equity Funds I, Inc. will
reject any purchase order for more than $250,000 of Class B Shares and
$1,000,000 or more of Class C Shares. An investor may exceed these
limitations by making cumulative purchases over a period of time. In
doing so, an investor should keep in mind, however, that reduced front-
end sales charges apply to investments of $100,000 or more in Class A
Shares, and that Class A Shares are subject to lower annual 12b-1 Plan
expenses than Class B Shares and Class C Shares and generally are not
subject to a CDSC.
Selling dealers are responsible for transmitting orders promptly.
Equity Funds I, Inc. reserves the right to reject any order for the
purchase of its shares of either Fund if in the opinion of management
such rejection is in such Fund's best interest.
The NASD has adopted amendments to its Conduct Rules , as amended,
relating to investment company sales charges. Equity Funds I, Inc. and
the Distributor intend to operate in compliance with these rules.
Class A Shares are purchased at the offering price which reflects a
maximum front-end sales charge of 4.75%; however, lower front-end sales
charges apply for larger purchases. See the table below. Class A
Shares are also subject to annual 12b-1 Plan expenses.
Class B Shares are purchased at net asset value and are subject to
a CDSC of: (i) 4% if shares are redeemed within two years of purchase;
(ii) 3% if shares are redeemed during the third or fourth year following
purchase; (iii) 2% if shares are redeemed during the fifth year
following purchase; and (iv) 1% if shares are redeemed during the sixth
year following purchase. Class B Shares are also subject to annual 12b-
1 Plan expenses which are higher than those to which Class A Shares are
subject and are assessed against Class B Shares for approximately
eight years after purchase. See Automatic Conversion of Class B Shares
under Classes of Shares in the Fund Classes' Prospectus.
Class C Shares are purchased at net asset value and are subject to
a CDSC of 1% if shares are redeemed within 12 months following purchase.
Class C Shares are also subject to annual 12b-1 Plan expenses for the
life of the investment which are equal to those to which Class B Shares
are subject.
Institutional Class shares are purchased at the net asset value per
share without the imposition of a front-end or contingent deferred sales
charge or 12b-1 Plan expenses. See Plans Under Rule 12b-1 for the
Fund Classes under Purchasing Shares, and Determining Offering Price and
Net Asset Value in this Part B.
Class A Shares, Class B Shares, Class C Shares and Institutional
Class shares represent a proportionate interest in a Fund's assets and
will receive a proportionate interest in that Fund's income, before
application, as to Class A, Class B and Class C Shares, of any
expenses under that Fund's 12b-1 Plans.
Certificates representing shares purchased are not ordinarily
issued unless, in the case of Class A Shares or Institutional Class
shares, a shareholder submits a specific request. Certificates are not
issued in the case of Class B Shares or Class C Shares or in the case of
any retirement plan account including self-directed IRAs. However,
purchases not involving the issuance of certificates are confirmed to
the investor and credited to the shareholder's account on the books
maintained by Delaware Service Company, Inc. (the "Transfer Agent").
The investor will have the same rights of ownership with respect to such
shares as if certificates had been issued. An investor that is
permitted to obtain a certificate may receive a certificate representing
full share denominations purchased by sending a letter signed by each
owner of the account to the Transfer Agent requesting the certificate.
No charge is assessed by Equity Funds I, Inc. for any certificate
issued. A shareholder may be subject to fees for replacement of a lost
or stolen certificate, under certain conditions, including the cost of
obtaining a bond covering the lost or stolen certificate. Please contact
a Fund for further information. Investors who hold certificates
representing any of their shares may only redeem those shares by written
request. The investor's certificate(s) must accompany such request.
ALTERNATIVE PURCHASE ARRANGEMENTS
The alternative purchase arrangements of Class A Shares, Class B
Shares and Class C Shares permit investors to choose the method of
purchasing shares that is most suitable for their needs given the amount
of their purchase, the length of time they expect to hold their shares
and other relevant circumstances. Investors should determine whether,
given their particular circumstances, it is more advantageous to
purchase Class A Shares and incur a front-end sales charge and annual
12b-1 Plan expenses of up to a maximum of 0.30% of the average daily net
assets of Class A Shares, or to purchase either Class B or Class C
Shares and have the entire initial purchase amount invested in the Fund
with the investment thereafter subject to a CDSC and annual 12b-1 Plan
expenses. Class B Shares are subject to a CDSC if the shares are
redeemed within six years of purchase, and Class C Shares are subject to
a CDSC if the shares are redeemed within 12 months of purchase. Class B
and Class C Shares are each subject to annual 12b-1 Plan expenses of up
to a maximum of 1% (0.25% of which are service fees to be paid to the
Distributor, dealers or others for providing personal service and/or
maintaining shareholder accounts) of average daily net assets of the
respective Class. Class B Shares will automatically convert to Class A
Shares at the end of approximately eight years after purchase and,
thereafter, be subject to annual 12b-1 Plan expenses of up to a maximum
of 0.30% of average daily net assets of such shares. Unlike Class B
Shares, Class C Shares do not convert to another Class.
CLASS A SHARES - DELAWARE FUND AND DEVON FUND
Purchases of $100,000 or more of Class A Shares at the offering
price carry reduced front-end sales charges as shown in the accompanying
table, and may include a series of purchases over a 13-month period
under a Letter of Intention signed by the purchaser. See Special
Purchase Features - Class A Shares, below for more information on ways
in which investors can avail themselves of reduced front-end sales
charges and other purchase features.
DELAWARE FUND
DEVON FUND
CLASS A SHARES
DEALER'S
FRONT-END SALES CHARGE AS % OF COMMISSION***
OFFERING AMOUNT AS % OF
AMOUNT OF PURCHASE PRICE INVESTED** OFFERING PRICE
Delaware Devon
Fund Fund
Less than $100,000 4.75% 4.97% 4.98% 4.00%
$100,000 but under $250,000 3.75 3.88 3.92 3.00
$250,000 but under $500,000 2.50 2.57 2.58 2.00
$500,000 but under $1,000,000* 2.00 2.05 2.02 1.60
* There is no front-end sales charge on purchases of $1,000,000
or more of Class A Shares but, under certain limited circumstances, a 1%
contingent deferred sales charge may apply upon redemption of such
shares. The contingent deferred sales charge ("Limited CDSC") that may
be applicable arises only in the case of certain shares that were
purchased at net asset value and triggered the payment of a dealer's
commission.
** Based on the net asset value per share of Class A Shares as of
the end of Equity Funds I, Inc.'s most recent fiscal year.
*** Financial institutions or their affiliated brokers may receive
an agency transaction fee in the percentages set forth above.
A Fund must be notified when a sale takes place which would qualify for
the reduced front-end sales charge on the basis of previous or current
purchases. The reduced front-end sales charge will be granted upon
confirmation of the shareholder's holdings by such Fund. Such reduced
front-end sales charges are not retroactive.
From time to time, upon written notice to all of its dealers, the
Distributor may hold special promotions for specified periods during
which the Distributor may reallow to dealers up to the full amount of
the front-end sales charges shown above. Dealers who receive 90% or
more of the sales charge may be deemed to be underwriters under the
1933 Act.
Certain dealers who enter into an agreement to provide extra
training and information on Delaware Group products and services and who
increase sales of Delaware Group funds may receive an additional
commission of up to 0.15% of the offering price in connection with sales
of Class A Shares. Such dealers must meet certain requirements in terms
of organization and distribution capabilities and their ability to
increase sales. The Distributor should be contacted for further
information on these requirements as well as the basis and circumstances
upon which the additional commission will be paid. Participating
dealers may be deemed to have additional responsibilities under the
securities laws.
DEALER'S COMMISSION
For initial purchases of Class A Shares of $1,000,000 or more, a
dealer's commission may be paid by the Distributor to financial advisers
through whom such purchases are effected in accordance with the
following schedule:
DEALER'S COMMISSION
(AS A PERCENTAGE OF
AMOUNT OF PURCHASE AMOUNT PURCHASED)
Up to $2 million 1.00%
Next $1 million up to $3 million 0.75
Next $2 million up to $5 million 0.50
Amount over $5 million 0.25
In determining a financial adviser's eligibility for the dealer's
commission, purchases of Class A Shares of other Delaware Group funds as
to which a Limited CDSC applies (see Contingent Deferred Sales Charge
for Certain Redemptions of Class A Shares Purchased at Net Asset Value
under Redemption and Exchange in the Fund Classes' Prospectus) may be
aggregated with those of the Class A Shares of a Fund. Financial
advisers also may be eligible for a dealer's commission in connection
with certain purchases made under a Letter of Intention or pursuant to
an investor's Right of Accumulation. Financial advisers should contact
the Distributor concerning the applicability and calculation of the
dealer's commission in the case of combined purchases.
An exchange from other Delaware Group funds will not qualify for
payment of the dealer's commission, unless a dealer's commission or
similar payment has not been previously paid on the assets being
exchanged. The schedule and program for payment of the dealer's
commission are subject to change or termination at any time by the
Distributor at its discretion.
Contingent Deferred Sales Charge - Class B Shares and Class C Shares
Class B Shares and Class C Shares are purchased without a front-end
sales charge. Class B Shares redeemed within six years of purchase may
be subject to a CDSC at the rates set forth below, and Class C Shares
redeemed within 12 months of purchase may be subject to a CDSC of 1%.
CDSCs are charged as a percentage of the dollar amount subject to the
CDSC. The charge will be assessed on an amount equal to the lesser of
the net asset value at the time of purchase of the shares being redeemed
or the net asset value of those shares at the time of redemption. No
CDSC will be imposed on increases in net asset value above the initial
purchase price, nor will a CDSC be assessed on redemptions of shares
acquired through reinvestment of dividends or capital gains
distributions. See Waiver of Contingent Deferred Sales Charge--Class B
and Class C Shares under Redemption and Exchange in the Prospectus for
the Fund Classes for a list of the instances in which the CDSC is
waived.
The following table sets forth the rates of the CDSC for Class B
Shares of each Fund:
CONTINGENT DEFERRED
SALES CHARGE (AS A
PERCENTAGE OF
DOLLAR AMOUNT
YEAR AFTER PURCHASE MADE SUBJECT TO CHARGE)
0-2 4%
3-4 3%
5 2%
6 1%
7 and thereafter None
During the seventh year after purchase and, thereafter, until converted
automatically into Class A Shares, Class B Shares will still be subject
to the annual 12b-1 Plan expenses of up to 1% of average daily net
assets of those shares. At the end of approximately eight years after
purchase, the investor's Class B Shares will be automatically converted
into Class A Shares of the same Fund. See Automatic Conversion of Class
B Shares under Classes of Shares in the Fund Classes' Prospectus. Such
conversion will constitute a tax-free exchange for federal income tax
purposes. See Taxes in the Prospectus for the Fund Classes.
PLANS UNDER RULE 12B-1 FOR THE FUND CLASSES
Pursuant to Rule 12b-1 under the 1940 Act, Equity Funds I, Inc.
has adopted a separate plan for each of Class A Shares, Class B
Shares and Class C Shares of each Fund (the "Plans"). Each Plan
permits a Fund to pay for certain distribution, promotional and related
expenses involved in the marketing of only the Class of shares to
which the Plan applies. The Plans do not apply to Institutional
Classes of shares. Such shares are not included in calculating the
Plans' fees, and the Plans are not used to assist in the distribution
and marketing of shares of Institutional Classes. Shareholders of
Institutional Classes may not vote on matters affecting the Plans.
The Plans permit a Fund, pursuant to its Distribution Agreement, to
pay out of the assets of Class A Shares, Class B Shares and Class C
Shares monthly fees to the Distributor for its services and expenses in
distributing and promoting sales of shares of such classes. These
expenses include, among other things, preparing and distributing
advertisements, sales literature and prospectuses and reports used for
sales purposes, compensating sales and marketing personnel, and paying
distribution and maintenance fees to securities brokers and dealers who
enter into agreements with the Distributor. The Plan expenses relating
to Class B Shares and Class C Shares are also used to pay the
Distributor for advancing the commission costs to dealers with respect
to the initial sale of such shares.
In addition, each Fund may make payments out of the assets of
Class A Shares, Class B Shares and Class C Shares directly to other
unaffiliated parties, such as banks, who either aid in the distribution
of shares of, or provide services to, such classes.
The maximum aggregate fee payable by a Fund under the Plans, and a
Fund's Distribution Agreement, is on an annual basis, up to 0.30% of
average daily net assets of Class A Shares, and up to 1% (0.25% of
which are service fees to be paid to the Distributor, dealers and others
for providing personal service and/or maintaining shareholder accounts)
of each of the Class B Shares' and Class C Shares' average daily net
assets for the year. Equity Funds I, Inc.'s Board of Directors may
reduce these amounts at any time.
Effective June 1, 1992, Equity Funds I, Inc.'s Board of Directors
has determined that the annual fee, payable on a monthly basis, for
Delaware Fund A Class under its Plan will be equal to the sum of: (i)
the amount obtained by multiplying 0.30% by the average daily net assets
represented by shares of Delaware Fund A Class that were acquired by
shareholders on or after June 1, 1992; and (ii) the amount obtained by
multiplying 0.10% by the average daily net assets represented by shares
of Delaware Fund A Class that were acquired before June 1, 1992. While
this is the method for calculating the 12b-1 fees to be paid by Delaware
Fund A Class, the fee is a Class expense so that all shareholders of
that Class, regardless of when they purchased their shares, will bear
12b-1 expenses at the same per share rate. As Delaware Fund A Class
shares are sold on or after June 1, 1992, the initial rate of at least
0.10% will increase over time. Thus, as the proportion of Delaware Fund
A Class shares purchased on or after June 1, 1992 to Delaware Fund A
Class shares outstanding prior to June 1, 1992 increases, the expenses
attributable to payments under the Plan will also increase (but will not
exceed 0.30% of average daily net assets). While this describes the
current formula for calculating the fees which will be payable under the
Plan, the Plan permits the Fund to pay a full 0.30% on all Delaware Fund
A Class assets at any time.
On September 23, 1993, Equity Funds I, Inc.'s Board of Directors
set the fee for Devon Fund A Class at 0.30% of average daily net assets.
All of the distribution expenses incurred by the Distributor and
others, such as broker/dealers, in excess of the amount paid on behalf
of Class A Shares, Class B Shares and Class C Shares would be borne by
such persons without any reimbursement from such Fund Classes. Subject
to seeking best price and execution, a Fund may, from time to time, buy
or sell portfolio securities from or to firms which receive payments
under the Plans.
From time to time, the Distributor may pay additional amounts from
its own resources to dealers for aid in distribution or for aid in
providing administrative services to shareholders.
The Plans and the Distribution Agreements, as amended, have all
been approved by the Board of Directors of Equity Funds I, Inc.,
including a majority of the directors who are not "interested persons"
(as defined in the 1940 Act) of Equity Funds I, Inc. and who have no
direct or indirect financial interest in the Plans by vote cast in
person at a meeting duly called for the purpose of voting on the Plans
and such Agreements. Continuation of the Plans and the Distribution
Agreements, as amended, must be approved annually by the Board of
Directors in the same manner as specified above.
Each year, the directors must determine whether continuation of the
Plans is in the best interest of shareholders of, respectively, Class A
Shares, Class B Shares and Class C Shares of each Fund and that there is
a reasonable likelihood of the Plan relating to a Class providing a
benefit to that Class. The Plans and the Distribution Agreements, as
amended, may be terminated with respect to a Class at any time without
penalty by a majority of those directors who are not "interested
persons" or by a majority vote of the relevant Class' outstanding voting
securities. Any amendment materially increasing the percentage payable
under the Plans must likewise be approved by a majority vote of the
relevant Class' outstanding voting securities, as well as by a majority
vote of those directors who are not "interested persons." With respect
to each Class A Shares' Plan, any material increase in the maximum
percentage payable thereunder must also be approved by a majority of the
outstanding voting securities of the respective Fund's B Class. Also,
any other material amendment to the Plans must be approved by a majority
vote of the directors including a majority of the noninterested
directors of Equity Funds I, Inc. having no interest in the Plans. In
addition, in order for the Plans to remain effective, the selection and
nomination of directors who are not "interested persons" of Equity Funds
I, Inc. must be effected by the directors who themselves are not
"interested persons" and who have no direct or indirect financial
interest in the Plans. Persons authorized to make payments under the
Plans must provide written reports at least quarterly to the Board of
Directors for their review.
For the fiscal year ended October 31, 1997, payments from Class
A Shares , Class B Shares and Class C Shares of Delaware Fund amounted
to $1,060,423, $109,230 and $51,331, respectively. Such amounts
were used for the following purposes:
Delaware Fund Delaware Fund Delaware Fund
A Class B Class C Class
Advertising ----- ----- -----
Annual/Semi-Annual Reports $23,564 ----- -----
Broker Trails $698,698 $25,011 $6,259
Broker Sales Charges ----- $45,084 $38,395
Dealer Service Expenses $29,725 ----- -----
Interest on Broker Sales Charges ----- $31,672 $1,803
Commissions to Wholesalers $40,080 $5,263 $3,752
Promotional-Broker Meetings $42,828 $1,286 $572
Promotional-Other $68,298 ----- -----
Prospectus Printing $33,469 ----- -----
Telephone $9,267 ----- $101
Wholesaler Expenses $114,494 $914 $449
Other ----- ----- -----
For the fiscal year ended October 31, 1997, payments from Class
A Shares , Class B Shares and Class C Shares of Devon Fund amounted to
$89,397, $132,098 and $29,446, respectively. Such amounts were
used for the following purposes:
Devon Fund Devon Fund Devon Fund
A Class B Class C Class
Advertising $984 ----- -----
Annual/Semi-Annual Reports $2,884 ----- -----
Broker Trails $70,430 $30,153 $3,189
Broker Sales Charges ----- $55,494 $23,758
Dealer Service Expenses ----- ----- -----
Interest on Broker Sales Charges ----- $36,975 $1,041
Commissions to Wholesalers $2,162 $7,898 $1,361
Promotional-Broker Meetings $738 $1,570 $97
Promotional-Other $11,477 ----- -----
Prospectus Printing $722 ----- -----
Telephone ----- $8 -----
Wholesaler Expenses ----- ----- -----
Other ----- ----- -----
Equity Funds I, Inc. intends to amend the Plans, if necessary, to
comply with any new rules or regulations the SEC may adopt with respect
to Rule 12b-1.
OTHER PAYMENTS TO DEALERS - CLASS A SHARES, CLASS B SHARES AND CLASS C
SHARES
From time to time, at the discretion of the Distributor, all
registered broker/dealers whose aggregate sales of Fund Classes exceed
certain limits as set by the Distributor, may receive from the
Distributor an additional payment of up to 0.25% of the dollar amount of
such sales. The Distributor may also provide additional promotional
incentives or payments to dealers that sell shares of the Delaware Group
of funds. In some instances, these incentives or payments may be
offered only to certain dealers who maintain, have sold or may sell
certain amounts of shares.
Payment to dealers made in connection with seminars, conferences or
contests relating to the promotion of Fund shares may be in an amount up
to 100% of the expenses incurred or awards made. The Distributor may
also pay a portion of the expense of preapproved dealer advertisements
promoting the sale of Delaware Group fund shares.
SPECIAL PURCHASE FEATURES - CLASS A SHARES
BUYING CLASS A SHARES AT NET ASSET VALUE
Class A Shares may be purchased without a front-end sales charge
under the Dividend Reinvestment Plan and, under certain circumstances,
the Exchange Privilege and the 12-Month Reinvestment Privilege.
Current and former officers, directors and employees of Equity
Funds I, Inc., any other fund in the Delaware Group, the Manager, or any
of the Manager's current affiliates and those that may in the future be
created, legal counsel to the funds and registered representatives and
employees of broker/dealers who have entered into Dealer's Agreements
with the Distributor may purchase Class A Shares and any such class of
shares of any of the funds in the Delaware Group, including any fund
that may be created, at the net asset value per share. Family members
(regardless of age) of such persons at their direction, and any employee
benefit plan established by any of the foregoing funds, corporations,
counsel or broker/dealers may also purchase shares at net asset value.
Class A Shares may also be purchased at net asset value by current and
former officers, directors and employees (and members of their families)
of the Dougherty Financial Group LLC.
Purchases of Class A Shares may also be made by clients of
registered representatives of an authorized investment dealer at net
asset value within 12 months of a change of the registered
representative's employment, if the purchase is funded by proceeds from
an investment where a front-end sales charge, contingent deferred sales
charge or other sales charge has been assessed. Purchases of Class A
Shares may also be made at net asset value by bank employees who provide
services in connection with agreements between the bank and unaffiliated
brokers or dealers concerning sales of shares of Delaware Group funds.
Officers, directors and key employees of institutional clients of the
Manager or any of its affiliates may purchase Class A Shares at net
asset value. Moreover, purchases may be effected at net asset value for
the benefit of the clients of brokers, dealers and registered investment
advisers affiliated with a broker or dealer, if such broker, dealer or
investment adviser has entered into an agreement with the Distributor
providing specifically for the purchase of Class A Shares in connection
with special investment products, such as wrap accounts or similar fee
based programs. Such purchasers are required to sign a letter stating
that the purchase is for investment only and that the securities may not
be resold except to the issuer. Such purchasers may also be required to
sign or deliver such other documents as Equity Funds I, Inc. may
reasonably require to establish eligibility for purchase at net asset
value.
Purchases of Class A Shares at net asset value may also be made by
the following: financial institutions investing for the account of their
trust customers if they are not eligible to purchase shares of the
institutional class of a Fund; any group retirement plan (excluding
defined benefit pension plans), or such plans of the same employer, for
which plan participant records are maintained on the Delaware Investment
& Retirement Services, Inc. ("DIRSI") proprietary record keeping system
that (i) has in excess of $500,000 of plan assets invested in Class A
Shares of Delaware Group funds and any stable value product available
through the Delaware Group, or (ii) is sponsored by an employer that has
at any point after May 1, 1997 had more than 100 employees while such
plan has held Class A Shares of a Delaware Group fund and such employer
has properly represented to DIRSI in writing that it has the requisite
number of employees and has received written confirmation back from
DIRSI.
Investments in Class A Shares made by plan level and/or participant
retirement accounts that are for the purpose of repaying a loan taken
from such accounts will be made at net asset value. Loan repayments
made to a Delaware Group account in connection with loans originated
from accounts previously maintained by another investment firm will also
be invested at net asset value.
Investors in Delaware-Voyageur Unit Investment Trusts may reinvest
monthly dividend checks and/or repayment of invested capital into Class
A Shares of any of the Funds in the Delaware Group at net asset value.
Equity Funds I, Inc. must be notified in advance that the trade
qualifies for purchase at net asset value.
LETTER OF INTENTION
The reduced front-end sales charges described above with respect to
Class A Shares are also applicable to the aggregate amount of purchases
made within a 13-month period pursuant to a written Letter of Intention
provided by the Distributor and signed by the purchaser, and not legally
binding on the signer or Equity Funds I, Inc. which provides for the
holding in escrow by the Transfer Agent, of 5% of the total amount of
Class A Shares intended to be purchased until such purchase is completed
within the 13-month period. A Letter of Intention may be dated to
include shares purchased up to 90 days prior to the date the Letter is
signed. The 13-month period begins on the date of the earliest
purchase. If the intended investment is not completed, except as noted
below, the purchaser will be asked to pay an amount equal to the
difference between the front-end sales charge on Class A Shares
purchased at the reduced rate and the front-end sales charge otherwise
applicable to the total shares purchased. If such payment is not made
within 20 days following the expiration of the 13-month period, the
Transfer Agent will surrender an appropriate number of the escrowed
shares for redemption in order to realize the difference. Such
purchasers may include the value (at offering price at the level
designated in their Letter of Intention) of all their shares of the
Funds and of any class of any of the other mutual funds in the Delaware
Group (except shares of any Delaware Group fund which do not carry a
front-end sales charge, CDSC or Limited CDSC other than shares of
Delaware Group Premium Fund, Inc. beneficially owned in connection with
the ownership of variable insurance products, unless they were acquired
through an exchange from a Delaware Group fund which carried a front-end
sales charge, CDSC or Limited CDSC) previously purchased and still held
as of the date of their Letter of Intention toward the completion of
such Letter.
Employers offering a Delaware Group retirement plan may also
complete a Letter of Intention to obtain a reduced front-end sales
charge on investments of Class A Shares made by the plan. The aggregate
investment level of the Letter of Intention will be determined and
accepted by the Transfer Agent at the point of plan establishment. The
level and any reduction in front-end sales charge will be based on
actual plan participation and the projected investments in Delaware
Group funds that are offered with a front-end sales charge, CDSC or
Limited CDSC for a 13-month period. The Transfer Agent reserves the
right to adjust the signed Letter of Intention based on this acceptance
criteria. The 13-month period will begin on the date this Letter of
Intention is accepted by the Transfer Agent. If actual investments
exceed the anticipated level and equal an amount that would qualify the
plan for further discounts, any front-end sales charges will be
automatically adjusted. In the event this Letter of Intention is not
fulfilled within the 13-month period, the plan level will be adjusted
(without completing another Letter of Intention) and the employer will
be billed for the difference in front-end sales charges due, based on
the plan's assets under management at that time. Employers may also
include the value (at offering price at the level designated in their
Letter of Intention) of all their shares intended for purchase that are
offered with a front-end sales charge, CDSC or Limited CDSC of any
class. Class B Shares and Class C Shares of a Fund and other Delaware
Group funds which offer corresponding classes of shares may also be
aggregated for this purpose.
COMBINED PURCHASES PRIVILEGE
In determining the availability of the reduced front-end sales
charge previously set forth with respect to Class A Shares, purchasers
may combine the total amount of any combination of Class A Shares,
Class B Shares and/or Class C Shares of the Funds, as well as shares of
any other class of any of the other Delaware Group funds (except shares
of any Delaware Group fund which do not carry a front-end sales charge,
CDSC or Limited CDSC, other than shares of Delaware Group Premium Fund,
Inc. beneficially owned in connection with the ownership of variable
insurance products, unless they were acquired through an exchange from a
Delaware Group fund which carried a front-end sales charge, CDSC or
Limited CDSC). In addition, assets held by investment advisory clients
of the Manager or its affiliates in a stable value account may be
combined with other Delaware Group fund holdings.
The privilege also extends to all purchases made at one time by an
individual; or an individual, his or her spouse and their children under
21; or a trustee or other fiduciary of trust estates or fiduciary
accounts for the benefit of such family members (including certain
employee benefit programs).
RIGHT OF ACCUMULATION
In determining the availability of the reduced front-end sales
charge with respect to the Class A Shares, purchasers may also combine
any subsequent purchases of Class A Shares, Class B Shares and Class C
Shares of a Fund, as well as shares of any other class of any of the
other Delaware Group funds which offer such classes (except shares of
any Delaware Group fund which do not carry a front-end sales charge,
CDSC or Limited CDSC, other than shares of Delaware Group Premium Fund,
Inc. beneficially owned in connection with the ownership of variable
insurance products, unless they were acquired through an exchange from a
Delaware Group fund which carried a front-end sales charge, CDSC or
Limited CDSC). If, for example, any such purchaser has previously
purchased and still holds Class A Shares and/or shares of any other of
the classes described in the previous sentence with a value of $40,000
and subsequently purchases $60,000 at offering price of additional
shares of Class A Shares, the charge applicable to the $60,000 purchase
would currently be 3.75%. For the purpose of this calculation, the
shares presently held shall be valued at the public offering price that
would have been in effect were the shares purchased simultaneously with
the current purchase. Investors should refer to the table of sales
charges for Class A Shares to determine the applicability of the Right
of Accumulation to their particular circumstances.
12-MONTH REINVESTMENT PRIVILEGE
Holders of Class A Shares of a Fund (and of Institutional Classes
holding shares which were acquired through an exchange from one of the
other mutual funds in the Delaware Group offered with a front-end sales
charge) who redeem such shares have one year from the date of redemption
to reinvest all or part of their redemption proceeds in Class A Shares
of that Fund or in Class A Shares of any of the other funds in the
Delaware Group, subject to applicable eligibility and minimum purchase
requirements, in states where shares of such other funds may be sold, at
net asset value without the payment of a front-end sales charge. This
privilege does not extend to Class A Shares where the redemption of the
shares triggered the payment of a Limited CDSC. Persons investing
redemption proceeds from direct investments in mutual funds in the
Delaware Group offered without a front-end sales charge will be required
to pay the applicable sales charge when purchasing Class A Shares. The
reinvestment privilege does not extend to a redemption of either Class B
Shares or Class C Shares.
Any such reinvestment cannot exceed the redemption proceeds (plus
any amount necessary to purchase a full share). The reinvestment will
be made at the net asset value next determined after receipt of
remittance. A redemption and reinvestment could have income tax
consequences. It is recommended that a tax adviser be consulted with
respect to such transactions. Any reinvestment directed to a fund in
which the investor does not then have an account will be treated like
all other initial purchases of a fund's shares. Consequently, an
investor should obtain and read carefully the prospectus for the fund in
which the investment is intended to be made before investing or sending
money. The prospectus contains more complete information about the
fund, including charges and expenses.
Investors should consult their financial advisers or the Transfer
Agent, which also serves as the Funds' shareholder servicing agent,
about the applicability of the Limited CDSC (see Contingent Deferred
Sales Charge for Certain Redemptions of Class A Shares Purchased at Net
Asset Value under Redemption and Exchange in the Fund Classes'
Prospectus) in connection with the features described above.
GROUP INVESTMENT PLANS
Group Investment Plans which are not eligible to purchase shares of
the Institutional Classes may also benefit from the reduced front-end
sales charges for investments in Class A Shares set forth in the table
on page 00, based on total plan assets. If a company has more than one
plan investing in the Delaware Group of funds, then the total amount
invested in all plans would be used in determining the applicable front-
end sales charge reduction upon each purchase, both initial and
subsequent, upon notification to the Fund in which the investment is
being made at the time of each such purchase. Employees participating
in such Group Investment Plans may also combine the investments made in
their plan account when determining the applicable front-end sales
charge on purchases to non-retirement Delaware Group investment accounts
if they so notify the Fund in which they are investing in connection
with each purchase. See Retirement Plans for the Fund Classes under
Investment Plans for information about Retirement Plans.
INSTITUTIONAL CLASSES
The Institutional Class of each Fund is available for purchase only
by: (a) retirement plans introduced by persons not associated with
brokers or dealers that are primarily engaged in the retail securities
business and rollover individual retirement accounts from such plans;
(b) tax-exempt employee benefit plans of the Manager or its affiliates
and securities dealer firms with a selling agreement with the
Distributor; (c) institutional advisory accounts of the Manager or its
affiliates and those having client relationships with Delaware
Investment Advisers, a division of the Manager, or its affiliates and
their corporate sponsors, as well as subsidiaries and related employee
benefit plans and rollover individual retirement accounts from such
institutional advisory accounts; (d) a bank, trust company and similar
financial institution investing for its own account or for the account
of its trust customers for whom such financial institution is exercising
investment discretion in purchasing shares of the Class, except where
the investment is part of a program that requires payment of the
financial institution of a Rule 12b-1 Plan fee; and (e) registered
investment advisers investing on behalf of clients that consist solely
of institutions and high net-worth individuals having at least
$1,000,000 entrusted to the adviser for investment purposes, but only if
the adviser is not affiliated or associated with a broker or dealer and
derives compensation for its services exclusively from its clients for
such advisory services.
Shares of Institutional Classes are available for purchase at net
asset value, without the imposition of a front-end or contingent
deferred sales charge and are not subject to Rule 12b-1 expenses.
INVESTMENT PLANS
REINVESTMENT PLAN/OPEN ACCOUNT
Unless otherwise designated by shareholders in writing, dividends
from net investment income and distributions from realized securities
profits, if any, will be automatically reinvested in additional shares
of the respective Fund Class in which an investor has an account (based
on the net asset value in effect on the reinvestment date) and will be
credited to the shareholder's account on that date. All dividends and
distributions of Institutional Classes are reinvested in the accounts
of the holders of such shares (based on the net asset value in effect on
the reinvestment date). A confirmation of each dividend payment from
net investment income will be mailed to shareholders quarterly. A
confirmation of any distributions from realized securities profits will
be mailed to shareholders in the first quarter of the fiscal year.
Under the Reinvestment Plan/Open Account, shareholders may purchase
and add full and fractional shares to their plan accounts at any time
either through their investment dealers or by sending a check or money
order to the specific Fund and Class in which shares are being
purchased. Such purchases, which must meet the minimum subsequent
purchase requirements set forth in the Prospectuses and this Part B, are
made for Class A Shares at the public offering price, and for Class B
Shares, Class C Shares and Institutional Classes at the net asset
value, at the end of the day of receipt. A reinvestment plan may be
terminated at any time. This plan does not assure a profit nor protect
against depreciation in a declining market.
REINVESTMENT OF DIVIDENDS IN OTHER DELAWARE GROUP FUNDS
Subject to applicable eligibility and minimum initial purchase
requirements and the limitations set forth below, holders of Class A
Shares, Class B Shares and Class C Shares may automatically reinvest
dividends and/or distributions in any of the mutual funds in the
Delaware Group, including the Funds, in states where their shares may be
sold. Such investments will be at net asset value at the close of
business on the reinvestment date without any front-end sales charge or
service fee. The shareholder must notify the Transfer Agent in writing
and must have established an account in the fund into which the
dividends and/or distributions are to be invested. Any reinvestment
directed to a fund in which the investor does not then have an account
will be treated like all other initial purchases of a fund's shares.
Consequently, an investor should obtain and read carefully the
prospectus for the fund in which the investment is intended to be made
before investing or sending money. The prospectus contains more
complete information about the fund, including charges and expenses.
See also Additional Methods of Adding to Your Investment - Dividend
Reinvestment Plan under How to Buy Shares in the Prospectus for the Fund
Classes.
Subject to the following limitations, dividends and/or
distributions from other funds in the Delaware Group may be invested in
shares of the Funds, provided an account has been established.
Dividends from Class A Shares may not be directed to Class B Shares or
Class C Shares. Dividends from Class B Shares may only be directed to
other Class B Shares and dividends from Class C Shares may only be
directed to other Class C Shares.
This option is not available to participants in the following
plans: SAR/SEP, SEP/IRA, SIMPLE IRA, SIMPLE 401(k), Profit Sharing and
Money Purchase Pension Plans, 401(k) Defined Contribution Plans, or
403(b)(7) or 457 Deferred Compensation Plans.
INVESTING BY ELECTRONIC FUND TRANSFER
Direct Deposit Purchase Plan--Investors may arrange for either Fund
to accept for investment in Class A Shares, Class B Shares or Class C
Shares, through an agent bank, preauthorized government or private
recurring payments. This method of investment assures the timely credit
to the shareholder's account of payments such as social security,
veterans' pension or compensation benefits, federal salaries, Railroad
Retirement benefits, private payroll checks, dividends, and disability
or pension fund benefits. It also eliminates lost, stolen and delayed
checks.
Automatic Investing Plan--Shareholders of Class A Shares, Class B
Shares and Class C Shares may make automatic investments by authorizing,
in advance, monthly payments directly from their checking account for
deposit into their Fund account. This type of investment will be
handled in either of the following ways. (1) If the shareholder's bank
is a member of the National Automated Clearing House Association
("NACHA"), the amount of the investment will be electronically deducted
from his or her account by Electronic Fund Transfer ("EFT"). The
shareholder's checking account will reflect a debit each month at a
specified date although no check is required to initiate the
transaction. (2) If the shareholder's bank is not a member of NACHA,
deductions will be made by preauthorized checks, known as Depository
Transfer Checks. Should the shareholder's bank become a member of NACHA
in the future, his or her investments would be handled electronically
through EFT.
This option is not available to participants in the following
plans: SAR/SEP, SEP/IRA, SIMPLE IRA, SIMPLE 401(k), Profit Sharing and
Money Purchase Pension Plans, 401(k) Defined Contribution Plans, or
403(b)(7) or 457 Deferred Compensation Plans.
* * *
Initial investments under the Direct Deposit Purchase Plan and the
Automatic Investing Plan must be for $250 or more and subsequent
investments under such plans must be for $25 or more. An investor
wishing to take advantage of either service must complete an
authorization form. Either service can be discontinued by the
shareholder at any time without penalty by giving written notice.
Payments to a Fund from the federal government or its agencies on
behalf of a shareholder may be credited to the shareholder's account
after such payments should have been terminated by reason of death or
otherwise. Any such payments are subject to reclamation by the federal
government or its agencies. Similarly, under certain circumstances,
investments from private sources may be subject to reclamation by the
transmitting bank. In the event of a reclamation, a Fund may liquidate
sufficient shares from a shareholder's account to reimburse the
government or the private source. In the event there are insufficient
shares in the shareholder's account, the shareholder is expected to
reimburse the Fund.
DIRECT DEPOSIT PURCHASES BY MAIL
Shareholders may authorize a third party, such as a bank or
employer, to make investments directly to their Fund accounts. Either
Fund will accept these investments, such as bank-by-phone, annuity
payments and payroll allotments, by mail directly from the third party.
Investors should contact their employers or financial institutions who
in turn should contact Equity Funds I, Inc. for proper instructions.
WEALTH BUILDER OPTION
Shareholders can use the Wealth Builder Option to invest in the
Fund Classes through regular liquidations of shares in their accounts in
other mutual funds in the Delaware Group. Shareholders of the Fund
Classes may elect to invest in one or more of the other mutual funds in
the Delaware Group through the Wealth Builder Option. See Wealth
Builder Option and Redemption and Exchange in the Prospectus for the
Fund Classes.
Under this automatic exchange program, shareholders can authorize
regular monthly investments (minimum of $100 per fund) to be liquidated
from their account and invested automatically into other mutual funds in
the Delaware Group, subject to the conditions and limitations set forth
in the Fund Classes' Prospectus. The investment will be made on the
20th day of each month (or, if the fund selected is not open that day,
the next business day) at the public offering price or net asset value,
as applicable, of the fund selected on the date of investment. No
investment will be made for any month if the value of the shareholder's
account is less than the amount specified for investment.
Periodic investment through the Wealth Builder Option does not
insure profits or protect against losses in a declining market. The
price of the fund into which investments are made could fluctuate.
Since this program involves continuous investment regardless of such
fluctuating value, investors selecting this option should consider their
financial ability to continue to participate in the program through
periods of low fund share prices. This program involves automatic
exchanges between two or more fund accounts and is treated as a purchase
of shares of the fund into which investments are made through the
program. See Exchange Privilege for a brief summary of the tax
consequences of exchanges. Shareholders can terminate their
participation in Wealth Builder at any time by giving written notice to
the fund from which exchanges are made.
This option is not available to participants in the following
plans: SAR/SEP, SEP/IRA, SIMPLE IRA, SIMPLE 401(k), Profit Sharing and
Money Purchase Pension Plans, 401(k) Defined Contribution Plans, or
403(b)(7) or 457 Deferred Compensation Plans. This option also is not
available to shareholders of the Institutional Classes.
Delaware Group Asset Planner
To invest in Delaware Group funds using the Delaware Group Asset
Planner asset allocation service, you should complete a Delaware Group
Asset Planner Account Registration Form, which is available only from a
financial adviser or investment dealer. Effective September 1, 1997,
the Delaware Group Asset Planner Service is only available to financial
advisers or investment dealers who have previously used this service.
The Delaware Group Asset Planner service offers a choice of four
predesigned asset allocation strategies (each with a different
risk/reward profile) in predetermined percentages in Delaware Group
funds. With the help of a financial adviser, you may also design a
customized asset allocation strategy.
The sales charge on an investment through the Asset Planner service
is determined by the individual sales charges of the underlying funds
and their percentage allocation in the selected Strategy. Exchanges
from existing Delaware Group accounts into the Asset Planner service may
be made at net asset value under the circumstances described under
Investing by Exchange in the Prospectus. Also see Buying Class A Shares
at Net Asset Value under Classes of Shares. The minimum initial
investment per Strategy is $2,000; subsequent investments must be at
least $100. Individual fund minimums do not apply to investments made
using the Asset Planner service. Class A, Class B and Class C Shares
are available through the Asset Planner service. Generally, only shares
within the same class may be used within the same Strategy. However,
Class A Shares of a Fund and of other funds in the Delaware Group may be
used in the same Strategy with consultant class shares that are offered
by certain other Delaware Group funds.
An annual maintenance fee, currently $35 per Strategy, is due at
the time of initial investment and by September 30 of each subsequent
year. The fee, payable to Delaware Service Company, Inc. to defray
extra costs associated with administering the Asset Planner service,
will be deducted automatically from one of the funds within your Asset
Planner account if not paid by September 30. However, effective
November 1, 1996, the annual maintenance fee is waived until further
notice. Investors who utilize the Asset Planner for an IRA will
continue to pay an annual IRA fee of $15 per Social Security number.
Investors will receive a customized quarterly Strategy Report
summarizing all Delaware Group Asset Planner investment performance and
account activity during the prior period. Confirmation statements will
be sent following all transactions other than those involving a
reinvestment of distributions.
Certain shareholder services are not available to investors using
the Asset Planner service, due to its special design. These include
Delaphone, Checkwriting, Wealth Builder Option and Letter of Intention.
Systematic Withdrawal Plans are available after the account has been
open for two years.
RETIREMENT PLANS FOR THE FUND CLASSES
An investment in either Fund may be suitable for tax -deferred
retirement plans. Delaware Group offers a full spectrum of qualified
and non-qualified retirement plans , including the 401(k) deferred
compensation plan, Individual Retirement Account ("IRA"), and the new
Roth IRA. See Appendix B for additional information on IRAs.
The CDSC may be waived on certain redemptions of Class B Shares and
Class C Shares. See Waiver of Contingent Deferred Sales Charge - Class
B Shares and Class C Shares under Redemption and Exchange in the
Prospectuses for the Fund Classes for a list of the instances in which
the CDSC is waived.
Purchases of Class B Shares are subject to a maximum purchase
limitation of $250,000 for retirement plans. Purchases of Class C
Shares must be in an amount that is less than $1,000,000 for such plans.
The maximum purchase limitations apply only to the initial purchase of
shares by the retirement plan.
Minimum investment limitations generally applicable to other
investors do not apply to retirement plans, other than Individual
Retirement Accounts for which there is a minimum initial purchase of
$250, and a minimum subsequent purchase of $25, regardless of which
class is selected. Retirement plans may be subject to plan
establishment fees, annual maintenance fees and/or other administrative
or trustee fees. Fees are based upon the number of participants in the
plan as well as the services selected. Additional information about
fees is included in retirement plan materials. Fees are quoted upon
request. Annual maintenance fees may be shared by Delaware Management
Trust Company, the Transfer Agent, other affiliates of the Manager and
others that provide services to such plans.
Certain shareholder investment services available to non-retirement
plan shareholders may not be available to retirement plan shareholders.
Certain retirement plans may qualify to purchase shares of the
Institutional Classes. See Institutional Classes, above. For
additional information on any of the plans and Delaware's retirement
services, call the Shareholder Service Center telephone number.
It is advisable for an investor considering any one of the
retirement plans described below to consult with an attorney, accountant
or a qualified retirement plan consultant. For further details,
including applications for any of these plans, contact your investment
dealer or the Distributor.
Taxable distributions from the retirement plans may be subject to
withholding.
Please contact your investment dealer or the Distributor for the
special application forms required for the plans .
PROTOTYPE PROFIT SHARING OR MONEY PURCHASE PENSION PLANS
Prototype Plans are available for self-employed individuals,
partnerships and corporations. These plans can be maintained as Section
401(k), profit sharing or money purchase pension plans. Contributions
may be invested only in Class A Shares and Class C Shares.
INDIVIDUAL RETIREMENT ACCOUNT ("IRA")
A document is available for an individual who wants to establish an
IRA and make contributions which may be tax-deductible, even if the
individual is already participating in an employer-sponsored retirement
plan. Even if contributions are not deductible for tax purposes, as
indicated below, earnings will be tax-deferred. In addition, an
individual may make contributions on behalf of a spouse who has no
compensation for the year or, for years prior to 1997, elects to be
treated as having no compensation for the year. Investments in each of
the Fund Classes are permissible.
An individual can contribute up to $2,000 to his or her IRA each
year. Contributions may or may not be deductible depending upon the
taxpayers adjusted gross income and whether the taxpayer or his or her
spouse is an active participant in an employer-sponsored retirement
plan. Even if a taxpayer (or his or her spouse) is an active
participant in an employer-sponsored retirement plan, the full $2,000
deduction is still available if the taxpayer's adjusted gross income is
below $25,000 ($40,000 for taxpayers filing joint returns). A partial
deduction is allowed for married couples with incomes between $40,000
and $50,000, and for single individuals with incomes between $25,000 and
$35,000. No deductions are available for contributions to IRAs by
taxpayers whose adjusted gross income before IRA deductions exceeds
$50,000 ($35,000 for singles) and who are active participants in an
employer-sponsored retirement plan. Taxpayers who are not allowed
deductions on IRA contributions still can make nondeductible IRA
contributions of as much as $2,000 for each working spouse ($2,250 for
one-income couples for years prior to 1997), and defer taxes on interest
or other earnings from the IRAs. Special rules apply for determining
the deductibility of contributions made by married individuals filing
separate returns.
Effective for tax years beginning after 1996, one-income couples
can contribute up to $2,000 to each spouse's IRA provided the combined
compensation of both spouses is at least equal to the total
contributions for both spouses. If the working spouse is an active
participant in an employer-sponsored retirement plan and earns over
$40,000, the maximum deduction limit is reduced in the same way that the
limit is reduced for contributions to a non-spousal IRA.
A company or association may establish a Group IRA for employees or
members who want to purchase shares of a Fund. Purchases of $1 million
or more of Class A Shares qualify for purchase at net asset value but
may, under certain circumstances, be subject to a Limited CDSC. See
Purchasing Shares for information on reduced front-end sales charges
applicable to Class A Shares.
Investments generally must be held in the IRA until age 59 1/2 in
order to avoid premature distribution penalties, but distributions
generally must commence no later than April 1 of the calendar year
following the year in which the participant reaches age 70 1/2.
Individuals are entitled to revoke the account, for any reason and
without penalty, by mailing written notice of revocation to Delaware
Management Trust Company within seven days after the receipt of the IRA
Disclosure Statement or within seven days after the establishment of the
IRA, except, if the IRA is established more than seven days after
receipt of the IRA Disclosure Statement, the account may not be revoked.
Distributions from the account (except for the pro-rata portion of any
nondeductible contributions) are fully taxable as ordinary income in the
year received. Excess contributions removed after the tax filing
deadline, plus extensions, for the year in which the excess
contributions were made are subject to a 6% excise tax on the amount of
excess. Premature distributions (distributions made before age 59 1/2,
except for death, disability and certain other limited circumstances)
will be subject to a 10% excise tax on the amount prematurely
distributed, in addition to the income tax resulting from the
distribution. See Alternative Purchase Arrangements - Class B Shares
and Class C Shares under Classes of Shares, Contingent Deferred Sales
Charge - Class B Shares and Class C Shares under Classes of Shares, and
Waiver of Contingent Deferred Sales Charge - Class B and Class C Shares
under Redemption and Exchange in the Fund Classes' Prospectuses
concerning the applicability of a CDSC upon redemption.
Effective January 1, 1997, the 10% premature distribution penalty
will not apply to distributions from an IRA that are used to pay medical
expenses in excess of 7.5% of adjusted gross income or to pay health
insurance premiums by an individual who has received unemployment
compensation for 12 consecutive weeks.
See Appendix B for additional IRA information.
SIMPLIFIED EMPLOYEE PENSION PLAN ("SEP/IRA")
A SEP/IRA may be established by an employer who wishes to sponsor a
tax-sheltered retirement program by making contributions on behalf of
all eligible employees. Each of the Fund Classes is available for
investment by a SEP/IRA.
SALARY REDUCTION SIMPLIFIED EMPLOYEE PENSION PLAN ("SAR/SEP")
Although new SAR/SEP plans may not be established after December
31, 1996 , existing plans may be maintained by employers having 25 or
fewer employees . An employer may elect to make additional
contributions to such existing plans.
PROTOTYPE 401(K) DEFINED CONTRIBUTION PLAN
Section 401(k) of the Internal Revenue Code (the "Code") permits
employers to establish qualified plans based on salary deferral
contributions. Plan documents are available to enable employers to
establish a plan. An employer may also elect to make profit sharing
contributions and/or matching contributions with investments in only
Class A Shares and Class C Shares or certain other funds in the Delaware
Group. Purchases under the plan may be combined for purposes of
computing the reduced front-end sales charge applicable to Class A
Shares as set forth in the table on page 00.
DEFERRED COMPENSATION PLAN FOR PUBLIC SCHOOLS AND NON-PROFIT
ORGANIZATIONS ("403(B)(7)")
Section 403(b)(7) of the Code permits public school systems and
certain non-profit organizations to use mutual fund shares held in a
custodial account to fund deferred compensation arrangements for their
employees. A custodial account agreement is available for those
employers who wish to purchase any of the Fund Classes in conjunction
with such an arrangement. Applicable front-end sales charges with
respect to Class A Shares for such purchases are set forth in the table
on page 00.
DEFERRED COMPENSATION PLAN FOR STATE AND LOCAL GOVERNMENT EMPLOYEES
("457")
Section 457 of the Code permits state and local governments, their
agencies and certain other entities to establish a deferred compensation
plan for their employees who wish to participate. This enables
employees to defer a portion of their salaries and any federal (and
possibly state) taxes thereon. Such plans may invest in shares of any
of the Fund Classes. Although investors may use their own plan, there
is available a Delaware Group 457 Deferred Compensation Plan.
Interested investors should contact the Distributor or their investment
dealers to obtain further information. Applicable front-end sales
charges for such purchases of Class A Shares are set forth in the table
on page 00.
SIMPLE IRA
A SIMPLE IRA combines many of the features of an Individual
Retirement Account (IRA) and a 401(k) Plan but is easier to administer
than a typical 401(k) Plan. It requires employers to make contributions
on behalf of their employees and also has a salary deferral feature that
permits employees to defer a portion of their salary into the plan on a
pre-tax basis.
SIMPLE 401(k)
A SIMPLE 401(k) is like a regular 401(k) except that plan sponsors
are limited to 100 employees and, in exchange for mandatory plan sponsor
contributions, discrimination testing is no longer required. Class B
Shares are not available for purchase by such plans.
DETERMINING OFFERING PRICE AND NET ASSET VALUE
Orders for purchases of Class A Shares are effected at the offering
price next calculated by the Fund in which shares are being purchased
after receipt of the order by the Fund or its agent. Orders for
purchases of Class B Shares, Class C Shares and the Institutional
Classes are effected at the net asset value per share next calculated
after receipt of the order by the Fund in which shares are being
purchased or its agent. Selling dealers have the responsibility of
transmitting orders promptly.
The offering price for Class A Shares consists of the net asset
value per share plus any applicable sales charges. Offering price and
net asset value are computed as of the close of regular trading on the
New York Stock Exchange (ordinarily, 4 p.m., Eastern time) on days when
the Exchange is open. The New York Stock Exchange is scheduled to be
open Monday through Friday throughout the year except for New Year's
Day, Martin Luther King, Jr.'s Birthday, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas.
When the New York Stock Exchange is closed, the Funds will generally be
closed, pricing calculations will not be made and purchase and
redemption orders will not be processed.
An example showing how to calculate the net asset value per share
and, in the case of Class A Shares, the offering price per share, is
included in each Fund's financial statements which are incorporated by
reference into this Part B.
Each Fund's net asset value per share is computed by adding the
value of all securities and other assets in the portfolio, deducting any
liabilities and dividing by the number of shares outstanding. Expenses
and fees are accrued daily. In determining a Fund's total net assets,
portfolio securities listed or traded on a national securities exchange,
except for bonds, are valued at the last sale price on the exchange upon
which such securities are primarily traded. For valuation purposes,
foreign currencies and foreign securities denominated in foreign
currency values will be converted into U.S. dollars values at the mean
between the bid and offered quotations of such currencies against U.S.
dollars based on rates in effect that day. Securities not traded on a
particular day, over-the-counter securities, and government and agency
securities are valued at the mean value between bid and asked prices.
Money market instruments having a maturity of less than 60 days are
valued at amortized cost. Debt securities (other than short-term
obligations) are valued on the basis of valuations provided by a pricing
service when such prices are believed to reflect the fair value of such
securities. Use of a pricing service has been approved by the Board of
Directors. Prices provided by a pricing service take into account
appropriate factors such as institutional trading in similar groups of
securities, yield, quality, coupon rate, maturity, type of issue,
trading characteristics and other market data. If no quotations are
available, all other securities and assets are valued at fair value as
determined in good faith and in a method approved by the Board of
Directors.
Each Class of a Fund will bear, pro-rata, all of the common
expenses of that Fund. The net asset values of all outstanding shares
of each Class of a Fund will be computed on a pro-rata basis for each
outstanding share based on the proportionate participation in that Fund
represented by the value of shares of that Class. All income earned and
expenses incurred by a Fund, will be borne on a pro-rata basis by each
outstanding share of a Class, based on each Class' percentage in that
Fund represented by the value of shares of such Classes, except that
Institutional Classes will not incur any of the expenses under Equity
Funds I, Inc.'s 12b-1 Plans and Class A Shares, Class B Shares and
Class C Shares alone will bear the 12b-1 Plan expenses payable under
their respective Plans. Due to the specific distribution expenses and
other costs that will be allocable to each Class, the net asset value of
each Class of a Fund will vary.
REDEMPTION AND REPURCHASE
Any shareholder may require a Fund to redeem shares by sending a
written request, signed by the record owner or owners exactly as the
shares are registered, to the Fund, at 1818 Market Street, Philadelphia,
PA 19103. In addition, certain expedited redemption methods described
below are available when stock certificates have not been issued.
Certificates are issued for Class A Shares and Institutional Class
shares only if a shareholder specifically requests them. Certificates
are not issued for Class B Shares or Class C Shares. If stock
certificates have been issued for shares being redeemed, they must
accompany the written request. For redemptions of $50,000 or less paid
to the shareholder at the address of record, the request must be signed
by all owners of the shares or the investment dealer of record, but a
signature guarantee is not required. When the redemption is for more
than $50,000, or if payment is made to someone else or to another
address, signatures of all record owners are required and a signature
guarantee may be required. Each signature guarantee must be supplied by
an eligible guarantor institution. Each Fund reserves the right to
reject a signature guarantee supplied by an eligible institution based
on its creditworthiness. The Funds may request further documentation
from corporations, retirement plans, executors, administrators, trustees
or guardians.
In addition to redemption of Fund shares, the Distributor, acting
as agent of the Funds, offers to repurchase Fund shares from
broker/dealers acting on behalf of shareholders. The redemption or
repurchase price, which may be more or less than the shareholder's cost,
is the net asset value per share next determined after receipt of the
request in good order by the respective Fund or its agent, subject to
applicable CDSC or Limited CDSC. This is computed and effective at the
time the offering price and net asset value are determined. See
Determining Offering Price and Net Asset Value. The Funds and the
Distributor end their business days at 5 p.m., Eastern time. This offer
is discretionary and may be completely withdrawn without further notice
by the Distributor.
Orders for the repurchase of Fund shares which are submitted to the
Distributor prior to the close of its business day will be executed at
the net asset value per share computed that day (subject to the
applicable CDSC or Limited CDSC), if the repurchase order was received
by the broker/dealer from the shareholder prior to the time the offering
price and net asset value are determined on such day. The selling
dealer has the responsibility of transmitting orders to the Distributor
promptly. Such repurchase is then settled as an ordinary transaction
with the broker/dealer (who may make a charge to the shareholder for
this service) delivering the shares repurchased.
Certain redemptions of Class A Shares purchased at net asset value
may result in the imposition of a Limited CDSC. See Contingent Deferred
Sales Charge for Certain Redemptions of Class A Shares Purchased at Net
Asset Value under Redemption and Exchange in the Prospectus for the Fund
Classes. Class B Shares are subject to a CDSC of: (i) 4% if shares are
redeemed within two years of purchase; (ii) 3% if shares are redeemed
during the third or fourth year following purchase; (iii) 2% if shares
are redeemed during the fifth year following purchase; and (iv) 1% if
shares are redeemed during the sixth year following purchase. Class C
Shares are subject to a CDSC of 1% if shares are redeemed within 12
months following purchase. See Contingent Deferred Sales Charge - Class
B Shares and Class C Shares under Classes of Shares in the Prospectus
for the Fund Classes. Except for the applicable CDSC or Limited CDSC
and, with respect to the expedited payment by wire described below for
which, in the case of the Fund Classes, there is currently a $7.50 bank
wiring cost, neither the Funds nor the Distributor charges a fee for
redemptions or repurchases, but such fees could be charged at any time
in the future.
Payment for shares redeemed will ordinarily be mailed the next
business day, but in no case later than seven days, after receipt of a
redemption request in good order; provided, however, that each
commitment to mail or wire redemption proceeds by a certain time, as
described below, is modified by the qualifications described in the next
paragraph.
Each Fund will process written or telephone redemption requests to
the extent that the purchase orders for the shares being redeemed have
already been settled. A Fund will honor the redemption requests as to
shares for which a check was tendered as payment, but a Fund will not
mail or wire the proceeds until it is reasonably satisfied that the
check has cleared. This potential delay can be avoided by making
investments by wiring Federal Funds.
If a shareholder has been credited with a purchase by a check which
is subsequently returned unpaid for insufficient funds or for any other
reason, the Fund involved will automatically redeem from the
shareholder's account the shares purchased by the check plus any
dividends earned thereon. Shareholders may be responsible for any
losses to a Fund or to the Distributor.
In case of a suspension of the determination of the net asset value
because the New York Stock Exchange is closed for other than weekends or
holidays, or trading thereon is restricted or an emergency exists as a
result of which disposal by a Fund of securities owned by it is not
reasonably practical, or it is not reasonably practical for a Fund
fairly to value its assets, or in the event that the SEC has provided
for such suspension for the protection of shareholders, a Fund may
postpone payment or suspend the right of redemption or repurchase. In
such case, the shareholder may withdraw the request for redemption or
leave it standing as a request for redemption at the net asset value
next determined after the suspension has been terminated.
Payment for shares redeemed or repurchased may be made either in
cash or kind, or partly in cash and partly in kind. Any portfolio
securities paid or distributed in kind would be valued as described in
Determining Offering Price and Net Asset Value. Subsequent sale by an
investor receiving a distribution in kind could result in the payment of
brokerage commissions. However, Equity Funds I, Inc. has elected to be
governed by Rule 18f-1 under the 1940 Act pursuant to which each Fund is
obligated to redeem shares solely in cash up to the lesser of $250,000
or 1% of the net asset value of such Fund during any 90-day period for
any one shareholder.
The value of a Fund's investments is subject to changing market
prices. Thus, a shareholder reselling shares to a Fund may sustain
either a gain or loss, depending upon the price paid and the price
received for such shares.
EXPEDITED TELEPHONE REDEMPTIONS
Shareholders of the Fund Classes or their investment dealers of
record wishing to redeem any amount of shares of $50,000 or less for
which certificates have not been issued may call the Shareholder Service
Center at 800-523-1918 or, in the case of shareholders of the
Institutional Classes, their Client Services Representative at 800-828-
5052 prior to the time the offering price and net asset value are
determined, as noted above, and have the proceeds mailed to them at the
address of record. Checks payable to the shareholder(s) of record will
normally be mailed the next business day, but no later than seven days,
after the receipt of the redemption request. This option is only
available to individual, joint and individual fiduciary-type accounts.
In addition, redemption proceeds of $1,000 or more can be
transferred to your predesignated bank account by wire or by check by
calling the phone numbers listed above. An authorization form must have
been completed by the shareholder and filed with the relevant Fund
before the request is received. Payment will be made by wire or check
to the bank account designated on the authorization form as follows:
1. PAYMENT BY WIRE: Request that Federal Funds be wired to the
bank account designated on the authorization form. Redemption proceeds
will normally be wired on the next business day following receipt of the
redemption request. There is a $7.50 wiring fee (subject to change)
charged by CoreStates Bank, N.A. which will be deducted from the
withdrawal proceeds each time the shareholder requests a redemption from
Class A Shares, Class B Shares and Class C Shares. If the proceeds are
wired to the shareholder's account at a bank which is not a member of
the Federal Reserve System, there could be a delay in the crediting of
the funds to the shareholder's bank account.
2. PAYMENT BY CHECK: Request a check be mailed to the bank
account designated on the authorization form. Redemption proceeds will
normally be mailed the next business day, but no later than seven days,
from the date of the telephone request. This procedure will take longer
than the Payment by Wire option (1 above) because of the extra time
necessary for the mailing and clearing of the check after the bank
receives it.
REDEMPTION REQUIREMENTS: In order to change the name of the bank
and the account number it will be necessary to send a written request to
the relevant Fund and a signature guarantee may be required. Each
signature guarantee must be supplied by an eligible guarantor
institution. The Funds reserve the right to reject a signature
guarantee supplied by an eligible institution based on its
creditworthiness.
To reduce the shareholder's risk of attempted fraudulent use of the
telephone redemption procedure, payment will be made only to the bank
account designated on the authorization form.
If expedited payment under these procedures could adversely affect
a Fund, such Fund may take up to seven days to pay the shareholder.
Neither the Funds nor the Funds' Transfer Agent is responsible for
any shareholder loss incurred in acting upon written or telephone
instructions for redemption or exchange of Fund shares which are
reasonably believed to be genuine. With respect to such telephone
transactions, each Fund will follow reasonable procedures to confirm
that instructions communicated by telephone are genuine (including
verification of a form of personal identification) as, if it does not,
such Fund or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent transactions. Telephone instructions
received by shareholders of the Fund Classes are generally tape
recorded. A written confirmation will be provided for all purchase,
exchange and redemption transactions initiated by telephone.
SYSTEMATIC WITHDRAWAL PLANS
Shareholders of Class A Shares, Class B Shares and Class C Shares
who own or purchase $5,000 or more of shares at the offering price, or
net asset value, as applicable, for which certificates have not been
issued may establish a Systematic Withdrawal Plan for monthly
withdrawals of $25 or more, or quarterly withdrawals of $75 or more,
although the Funds do not recommend any specific amount of withdrawal.
This $5,000 minimum does not apply for a Fund's prototype retirement
plans. Shares purchased with the initial investment and through
reinvestment of cash dividends and realized securities profits
distributions will be credited to the shareholder's account and
sufficient full and fractional shares will be redeemed at the net asset
value calculated on the third business day preceding the mailing date.
Checks are dated either the 1st or the 15th of the month, as
selected by the shareholder (unless such date falls on a holiday or a
weekend), and are normally mailed within two business days. Both
ordinary income dividends and realized securities profits distributions
will be automatically reinvested in additional shares of the Class at
net asset value. This plan is not recommended for all investors and
should be started only after careful consideration of its operation and
effect upon the investor's savings and investment program. To the
extent that withdrawal payments from the plan exceed any dividends
and/or realized securities profits distributions paid on shares held
under the plan, the withdrawal payments will represent a return of
capital, and the share balance may in time be depleted, particularly in
a declining market.
The sale of shares for withdrawal payments constitutes a taxable
event and a shareholder may incur a capital gain or loss for federal
income tax purposes. This gain or loss may be long-term or short-term
depending on the holding period for the specific shares liquidated.
Premature withdrawals from retirement plans may have adverse tax
consequences.
Withdrawals under this plan made concurrently with the purchases of
additional shares may be disadvantageous to the shareholder. Purchases
of Class A Shares through a periodic investment program in a fund
managed by the Manager must be terminated before a Systematic Withdrawal
Plan with respect to such shares can take effect, except if the
shareholder is a participant in one of our retirement plans or is
investing in Delaware Group funds which do not carry a sales charge.
Redemptions of Class A Shares pursuant to a Systematic Withdrawal Plan
may be subject to a Limited CDSC if the purchase was made at net asset
value and a dealer's commission has been paid on that purchase.
Redemptions of Class B Shares or Class C Shares pursuant to a Systematic
Withdrawal Plan may be subject to a CDSC, unless the annual amount
selected to be withdrawn is less than 12% of the account balance on
the date that the Systematic Withdrawal Plan was established. See
Waiver of Contingent Deferred Sales Charge - Class B Shares and Class C
Shares and Waiver of Limited Contingent Deferred Sales Charge - Class A
Shares under Redemption and Exchange in the Prospectus for the Fund
Classes. Shareholders should consult with their financial advisers to
determine whether a Systematic Withdrawal Plan would be suitable for
them.
An investor wishing to start a Systematic Withdrawal Plan must
complete an authorization form. If the recipient of Systematic
Withdrawal Plan payments is other than the registered shareholder, the
shareholder's signature on this authorization must be guaranteed. Each
signature guarantee must be supplied by an eligible guarantor
institution. The Funds reserve the right to reject a signature
guarantee supplied by an eligible institution based on its
creditworthiness. This plan may be terminated by the shareholder or the
Transfer Agent at any time by giving written notice.
The Systematic Withdrawal Plan is not available for Institutional
Classes.
DIVIDENDS AND REALIZED SECURITIES PROFITS DISTRIBUTIONS
Each Fund will normally make payments from net investment income on
a quarterly basis. Any payments from net realized securities profits
will be made during the first quarter of the next fiscal year.
Each Class of shares of each Fund will share proportionately in the
investment income and expenses of that Fund, except that Class A Shares,
Class B Shares and Class C Shares alone will incur distribution fees
under their respective 12b-1 Plans.
Dividends are automatically reinvested in additional shares at the
net asset value of the ex-dividend date unless, in the case of
shareholders in the Fund Classes, an election to receive dividends in
cash has been made. Dividend payments of $1.00 or less will be
automatically reinvested, notwithstanding a shareholder's election to
receive dividends in cash. If such a shareholder's dividends increase
to greater than $1.00, the shareholder would have to file a new election
in order to begin receiving dividends in cash again. Any check in
payment of dividends or other distributions which cannot be delivered by
the United States Post Office or which remains uncashed for a period of
more than one year may be reinvested in the shareholder's account at the
then-current net asset value and the dividend option may be changed from
cash to reinvest. Each Fund may deduct from a shareholder's account the
costs of that Fund's effort to locate a shareholder if a shareholder's
mail is returned by the Post Office or such Fund is otherwise unable to
locate the shareholder or verify the shareholder's mailing address.
These costs may include a percentage of the account when a search
company charges a percentage fee in exchange for their location
services.
TAXES
It is the policy of each Fund to pay out substantially all net
investment income and net realized gains to relieve it of federal income
tax liability on that portion of its income paid to shareholders under
the Code. Each Fund has met these requirements in previous years and
intends to meet them this year. Each Fund is treated as a separate tax
entity, and any capital gains and losses for each Fund are calculated
separately.
Distributions representing net investment income or short-term
capital gains are taxable as ordinary income to shareholders. The tax
status of dividends and distributions paid to shareholders will not be
affected by whether they are paid in cash or in additional shares. A
portion of these distributions may be eligible for the dividends-
received deduction for corporations. For the fiscal year ended October
31, 1997, 27% and 32% of dividends paid from net investment income
of Delaware Fund and Devon Fund, respectively, were eligible for this
deduction. The portion of dividends paid by a Fund that so qualifies
will be designated each year in a notice to that Fund's shareholders,
and cannot exceed the gross amount of dividends received by such Fund
from domestic (U.S.) corporations that would have qualified for the
dividends-received deduction in the hands of that Fund if such Fund was
a regular corporation. The availability of the dividends-received
deduction is subject to certain holding period and debt financing
restrictions imposed under the Code on the corporation claiming the
deduction.
Shareholders will be notified annually by each Fund as to the
federal income tax status of dividends and distributions.
Distributions may also be subject to state and local taxes;
shareholders are advised to consult with their tax advisers in this
regard.
Prior to purchasing shares, you should carefully consider the
impact of dividends or realized securities profits distributions which
have been declared but not paid. Any such dividends or realized
securities profits paid shortly after a purchase of shares by an
investor will have the effect of reducing the per share net asset value
of such shares by the amount of the dividends or realized securities
profits distributions. All or a portion of such dividends or realized
securities profits distributions, although in effect a return of
capital, are subject to taxes which may be at ordinary income tax rates.
The purchase of shares just prior to the ex-dividend date has an adverse
effect for income tax purposes.
Net long-term gain from the sale of securities when realized and
distributed (actually or constructively) is taxable as capital gain, and
these gains are currently taxed at long-term capital gain rates. If the
net asset value of shares were reduced below a shareholder's cost by
distribution of gain realized on sale of securities, such distribution
would be a return of investment though taxable as stated above. The
portfolio securities of Delaware Fund and Devon Fund had a net
unrealized appreciation for tax purposes of $103,624,812 and
$9,360,778, respectively, as of October 31, 1997.
In order to qualify as a regulated investment company for federal
income tax purposes, the Funds must meet certain specific requirements,
including:
(i) A Fund must maintain a diversified portfolio of securities,
wherein no security (other than U.S. government securities and
securities of other regulated investment companies) can exceed 25% of a
Fund's total assets, and, with respect to 50% of a Fund's total assets,
no investment (other than cash and cash items, U.S. government
securities and securities of other regulated investment companies) can
exceed 5% of a Fund's total assets;
(ii) A Fund must derive at least 90% of its gross income from
dividends, interest, payments with respect to securities loans, and
gains from the sale or disposition of stock and securities or foreign
currencies, or other income derived with respect to its business of
investing in such stock, securities, or currencies;
(iii) A Fund must distribute to its shareholders at least 90%
of its net investment income and net tax-exempt income for each of its
fiscal years, and
(iv) A Fund must realize less than 30% of its gross income for
each fiscal year from gains from the sale of securities and certain
other assets that have been held by a Fund for less than three months
("short-short income"). The Taxpayer Relief Act of 1997 (the "1997
Act") repealed the 30% short-short income test for tax years of
regulated investment companies beginning after August 5, 1997; however,
this rule may have continuing effect in some states for purposes of
classifying a Fund as a regulated investment company.
The Code requires a Fund to distribute at least 98% of its taxable
ordinary income earned during the calendar year and 98% of its capital
gain net income earned during the 12 month period ending October 31 (in
addition to amounts from the prior year that were neither distributed
nor taxed to a Fund) to you by December 31 of each year in order to
avoid federal excise taxes. Each Fund intends as a matter of policy to
declare and pay sufficient dividends in December or January (which are
treated by you as received in December) but does not guarantee and can
give no assurances that its distributions will be sufficient to
eliminate all such taxes.
The straddle rules of Section 1092 may apply. Generally, the
straddle provisions require the deferral of losses to the extent of
unrecognized gains related to the offsetting positions in the straddle.
Excess losses, if any, can be recognized in the year of loss. Deferred
losses will be carried forward and recognized in the year that
unrealized losses exceed unrealized gains.
The 1997 Act has also added new provisions for dealing with
transactions that are generally called "Constructive Sale Transactions."
Under these rules, a Fund must recognize gain (but not loss) on any
constructive sale of an appreciated financial position in stock, a
partnership interest or certain debt instruments. A Fund will generally
be treated as making a constructive sale when it: 1) enters into a
short sale on the same or substantially identical property; 2) enters
into an offsetting notional principal contract; or 3) enters into a
futures or forward contract to deliver the same or substantially
identical property. Other transactions (including certain financial
instruments called collars) will be treated as constructive sales as
provided in Treasury regulations to be published. There are also
certain exceptions that apply for transactions that are closed before
the end of the 30th day after the close of the taxable year.
Investment in Foreign Currencies and Foreign Securities--The Funds
are authorized to invest certain limited amounts in foreign securities.
Such investments, if made, will have the following additional tax
consequences to each Fund:
Under the Code, gains or losses attributable to fluctuations in
foreign currency exchange rates which occur between the time a Fund
accrues income (including dividends), or accrues expenses which are
denominated in a foreign currency, and the time a Fund actually collects
such income or pays such expenses generally are treated as ordinary
income or loss. Similarly, on the disposition of debt securities
denominated in a foreign currency and on the disposition of certain
options, futures, forward contracts, gain or loss attributable to
fluctuations in the value of foreign currency between the date of
acquisition of the security or contract and the date of its disposition
are also treated as ordinary gain or loss. These gains or losses,
referred to under the Code as "Section 988" gains or losses, may
increase or decrease the amount of a Fund's net investment company
taxable income, which, in turn, will affect the amount of income to be
distributed to you by a Fund.
If a Fund's Section 988 losses exceed a Fund's other net investment
company taxable income during a taxable year, a Fund generally will not
be able to make ordinary dividend distributions to you for that year, or
distributions made before the losses were realized will be
recharacterized as return of capital distributions of federal income tax
purposes, rather than as an ordinary dividend or capital gain
distribution. If a distribution is treated as a return of capital, your
tax basis in your Fund shares will be reduced by a like amount (to the
extent of such basis), and any excess of the distribution over your tax
basis in your Fund shares will be treated as capital gain to you.
The 1997 Act generally requires that foreign income be translated
into U.S. dollars at the average exchange rate for the tax year in which
the transactions are conducted. Certain exceptions apply to taxes paid
more than two years after the taxable year to which they relate. This
new law may require a Fund to track and record adjustments to foreign
taxes paid on foreign securities in which it invests. Under a Fund's
current reporting procedure, foreign security transactions are recorded
generally at the time of each transaction using the foreign currency
spot rate available for the date of each transaction. Under the new
law, a Fund will be required to record a fiscal year end (and at
calendar year end for excise tax purposes) an adjustment that reflects
the difference between the spot rates recorded for each transaction and
the year-end average exchange rate for all of a Fund's foreign
securities transactions. There is a possibility that the mutual fund
industry will be given relief from this new provision, in which case no
year-end adjustments will be required.
The Funds may be subject to foreign withholding taxes on income
from certain of its foreign securities. If more than 50% of the total
assets of a Fund at the end of its fiscal year are invested in
securities of foreign corporations, a Fund may elect to pass-through to
you your pro rata share of foreign taxes paid by a Fund. If this
election is made, you will be: (i) required to include in your gross
income your pro rata share of foreign source income (including any
foreign taxes paid by a Fund); and (ii) entitled to either deduct your
share of such foreign taxes in computing your taxable income or to claim
a credit for such taxes against your U.S. income tax, subject to certain
limitations under the Code. You will be informed by a Fund at the end
of each calendar year regarding the availability of any such foreign tax
credits and the amount of foreign source income (including any foreign
taxes paid by a Fund). If a Fund elects to pass-through to you the
foreign income taxes that it has paid, you will be informed at the end
of the calendar year of the amount of foreign taxes paid and foreign
source income that must be included on your federal income tax return.
If a Fund invests 50% or less of its total assets in securities of
foreign corporations, it will not be entitled to pass-through to you
your pro-rata shares of foreign taxes paid by a Fund. In this case,
these taxes will be taken as a deduction by a Fund, and the income
reported to you will be the net amount after these deductions. The 1997
Act also simplifies the procedures by which investors in funds that
invest in foreign securities can claim tax credits on their individual
income tax returns for the foreign taxes paid by a Fund. These
provisions will allow investors who pay foreign taxes of $300 or less on
a single return or $600 or less on a joint return during any year (all
of which must be reported on IRS Form 1099-DIV from a Fund to the
investor) to claim a tax credit against their U.S. federal income tax
for the amount of foreign taxes paid by a Fund. This process will allow
you, if you qualify, to bypass the burdensome and detailed reporting
requirements on the foreign tax credit schedule (Form 1116) and report
your foreign taxes paid directly on page 2 of Form 1040. You should
note that this simplified procedure will not be available until calendar
year 1998.
Investment in Passive Foreign Investment Company securities--The
Funds may invest in shares of foreign corporations which may be
classified under the Code as passive foreign investment companies
("PFICs"). In general, a foreign corporation is classified as a PFIC if
at least one-half of its assets constitute investment-type assets or 75%
or more of its gross income is investment-type income. If a Fund
receives an "excess distribution" with respect to PFIC stock, that Fund
itself may be subject to U.S. federal income tax on a portion of the
distribution, whether or not the corresponding income is distributed by
a Fund to you. In general, under the PFIC rules, an excess distribution
is treated as having been realized ratably over the period during which
a Fund held the PFIC shares. A Fund itself will be subject to tax on
the portion, if any, of an excess distribution that is so allocated to
prior Fund taxable years, and an interest factor will be added to the
tax, as if the tax had been payable in such prior taxable years. In
this case, you would not be permitted to claim a credit on your own tax
return for the tax paid by a Fund. Certain distributions from a PFIC as
well as gain from the sale of PFIC shares are treated as excess
distributions. Excess distributions are characterized as ordinary
income even though, absent application of the PFIC rules, certain
distribution might have been classified as capital gain. This may have
the effect of increasing Fund distributions to you that are treated as
ordinary dividends rather than long-term capital gain dividends.
A Fund may be eligible to elect alternative tax treatment with
respect to PFIC shares. Under an election that currently is available
in some circumstances, a Fund generally would be required to include in
its gross income its share of the earnings of a PFIC on a current basis,
regardless of whether distributions are received from the PFIC during
such period. If this election were made, the special rules, discussed
above, relating to the taxation of excess distributions, would not
apply. In addition, the 1997 Act provides for another election that
would involve marking-to-market a Fund's PFIC shares at the end of each
taxable year (and on certain other dates as prescribed in the Code),
with the result that unrealized gains would be treated as though they
were realized. A Fund would also be allowed an ordinary deduction for
the excess, if any, of the adjusted basis of its investment in the PFIC
stock over its fair market value at the end of the taxable year. This
deduction would be limited to the amount of any net mark-to-market gains
previously included with respect to that particular PFIC security. If a
Fund were to make this second PFIC election, tax at that Fund's level
under the PFIC rules would generally be eliminated.
The application of the PFIC rules may affect, among other things,
the amount of tax payable by a Fund (if any), the amounts distributable
to you by a Fund, the time at which these distributions must be made,
and whether these distributions will be classified as ordinary income or
capital gain distributions to you.
You should be aware that it is not always possible at the time
shares of a foreign corporation are acquired to ascertain that the
foreign corporation is a PFIC, and that there is always a possibility
that a foreign corporation will become a PFIC after a Fund acquires
shares in that corporation. While a Fund will generally seek to avoid
investing in PFIC shares to avoid the tax consequences detailed above,
there are no guarantees that it will do so and it reserves the right to
make such investments as a matter of its fundamental investment policy.
Most foreign exchange gains are classified as ordinary income which
will be taxable to you as such when distributed. Similarly, you should
be aware that any foreign exchange losses realized by a Fund, including
any losses realized on the sale of foreign debt securities, are
generally treated as ordinary losses for federal income tax purposes.
This treatment could increase or reduce a Fund's income available for
distribution to you, and may cause some or all of a Fund's previously
distributed income to be classified as a return of capital.
INVESTMENT MANAGEMENT AGREEMENTS
The Manager, located at One Commerce Square, Philadelphia, PA
19103, furnishes investment management services to each Fund, subject to
the supervision and direction of Equity Funds I, Inc.'s Board of
Directors.
The Manager and its predecessors have been managing the funds in
the Delaware Group since 1938. On October 31, 1997, the Manager and
its affiliates within the Delaware Group, including Delaware
International Advisers Ltd., were managing in the aggregate more than
$38 billion in assets in the various institutional or separately managed
(approximately $22,496,609,000) and investment company (approximately
$16,012,252,000) accounts.
Each Fund's Investment Management Agreement is dated April 3, 1995
and was approved by shareholders on March 29, 1995. Each Agreement has
an initial term of two years and may be renewed each year only so long
as such renewal and continuance are specifically approved at least
annually by the Board of Directors or by vote of a majority of the
outstanding voting securities of the Fund to which the Agreement
relates, and only if the terms of and the renewal thereof have been
approved by the vote of a majority of the directors of Equity Funds I,
Inc. who are not parties thereto or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on
such approval. Each Agreement is terminable without penalty on 60 days'
notice by the directors of Equity Funds I, Inc. or by the Manager. Each
Agreement will terminate automatically in the event of its assignment.
The annual compensation paid by each Fund for investment management
services is equal to: for Delaware Fund, 0.60% on the first $100
million of average daily net assets of the Fund, 0.525% on the next $150
million, 0.50% on the next $250 million and 0.475% on the average daily
net assets in excess of $500 million, less the Fund's proportionate
share of all directors' fees paid to the unaffiliated directors by
Delaware Fund; and, for Devon Fund, 0.60% on the first $500 million of
average daily net assets and 0.50% on the average daily net assets in
excess of $500 million. On October 31, 1997, the total net assets of
Delaware Fund were $732,373,204 and the total net assets of Devon Fund
were $89,643,786. Under the general supervision of the Board of
Directors, the Manager makes all investment decisions which are
implemented by each Fund. The Manager pays the salaries of all
directors, officers and employees who are affiliated with both the
Manager and Equity Funds I, Inc. The investment management fees paid by
Delaware Fund for the fiscal years ended October 31, 1995, 1996 and
1997 were $2,953,762, $3,164,486 and $3,492,255, respectively.
Investment management fees incurred by Devon Fund for the fiscal years
ended October 31, 1995, 1996 and 1997 were $57,382, $103,041 and
$310,229, respectively. However, no fees were paid by Devon Fund during
these years as a result of the waiver described below.
Except for those expenses borne by the Manager under the Investment
Management Agreements and the Distributor under the Distribution
Agreements, each Fund is responsible for all of its own expenses. Among
others, these include the Funds' proportionate share of rent and certain
other administrative expenses; the investment management fees; transfer
and dividend disbursing agent fees and costs; custodian expenses;
federal and state securities registration fees; proxy costs; and the
costs of preparing prospectuses and reports sent to shareholders. The
ratios of expenses to average daily net assets for the fiscal year ended
October 31, 1997 for each Class of each Fund were as follows:
<TABLE>
<CAPTION>
Class A Shares Class B Shares Class C Shares Institutional Class
<S> <C> <C> <C> <C>
DELAWARE FUND 0.97% 1.78% 1.78% 0.78%
DEVON FUND 1.25% 1.95% 1.95% 0.95%
</TABLE>
The ratios for Class A Shares, Class B Shares and Class C Shares
of each Fund reflect the impact of their respective 12b-1 Plans. The
ratios for each Class of Devon Fund reflects the waiver of fees noted
below.
Beginning January 1, 1998, the Manager has elected voluntarily
to waive that portion, if any, of the annual management fees payable
by Devon Fund and to pay the Fund to the extent necessary to ensure
that the Total Operating Expenses of this Fund do not exceed 1.00%
(exclusive of taxes, interest, brokerage commissions, extraordinary
expenses and 12b-1 expenses). This waiver and expense limitation will
extend through June 30, 1998. From commencement of the Fund's operations
through December 31, 1997, the Manager voluntarily waived that portion,
if any, of the annual management fees payable by the Fund and paid the
Fund's expenses to the extent necessary to ensure that Total Operating
Expenses of the Fund (excluding 12b-1 expenses) did not exceed 0.95%.
DISTRIBUTION AND SERVICE
The Distributor, Delaware Distributors, L.P. (which formerly
conducted business as Delaware Distributors, Inc.), located at 1818
Market Street, Philadelphia, PA 19103, serves as the national
distributor of each Fund's shares under separate Distribution Agreements
dated April 3, 1995, as amended on November 29, 1995. The Distributor
is an affiliate of the Manager and bears all of the costs of promotion
and distribution, except for payments by each Fund on behalf of Class
A Shares, Class B Shares and Class C Shares under their respective 12b-1
Plans. Prior to January 3, 1995, Delaware Distributors, Inc. ("DDI")
served as the national distributor of each Fund's shares. On that date,
Delaware Distributors, L.P., a newly formed limited partnership,
succeeded to the business of DDI. All officers and employees of DDI
became officers and employees of Delaware Distributors, L.P. DDI is the
corporate general partner of Delaware Distributors, L.P. and both DDI
and Delaware Distributors, L.P. are indirect, wholly owned subsidiaries
of Delaware Management Holdings, Inc.
The Transfer Agent, Delaware Service Company, Inc., another
affiliate of the Manager located at 1818 Market Street, Philadelphia, PA
19103, serves as each Funds' shareholder servicing, dividend disbursing
and transfer agent of Delaware Fund shares pursuant to a Shareholders
Services Agreement dated June 29, 1988 and of Devon Fund shares pursuant
to a Shareholders Services Agreement dated December 29, 1993. The
Transfer Agent also provides accounting services to the Funds pursuant
to the terms of a separate Fund Accounting Agreement. The Transfer
Agent is also an indirect, wholly owned subsidiary of Delaware
Management Holdings, Inc.
OFFICERS AND DIRECTORS
The business and affairs of Equity Funds I, Inc. are managed under
the direction of its Board of Directors.
Certain officers and directors of Equity Funds I, Inc. hold
identical positions in each of the other funds in the Delaware Group.
As of November 30, 1997, Equity Funds I, Inc.'s officers and
directors owned less than 1% of the outstanding shares of Delaware Fund
A Class, Delaware Fund B Class, Delaware Fund C Class and Delaware Fund
Institutional Class. As of the same date, the Fund's officers and
directors held less than 1% of the outstanding shares of Devon Fund A
Class, Devon Fund B Class, Devon Fund C Class and Devon Fund
Institutional Class.
As of November 30, 1997, management believes the following
accounts held 5% or more of the outstanding shares of Class A Shares,
Class B Shares, Class C Shares and the Institutional Class of each Fund:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Class Name and Address of Account Share Amount Percentage
Delaware Fund B Class Merrill Lynch, Pierce, Fenner & Smith, Inc.
For the Sole Benefit of its Customers
Attention: Fund Administration
4800 Deer Lake Drive East, 3rd Floor
Jacksonville, FL 32246 40,633(1) 5.48%
Delaware Fund C Class Merrill Lynch, Pierce, Fenner & Smith, Inc.
For the Sole Benefit of its Customers
Attention: Fund Administration
4800 Deer Lake Drive East, 3rd Floor
Jacksonville, FL 32246 33,508(1) 8.96%
Donaldson Lufkin Jenrette
Securities Corporation, Inc.
P.O. Box 2052
Jersey City, NJ 07303 20,076(1) 5.37%
</TABLE>
(1) Equity Funds I, Inc. believes that these shares are held of
record for the benefit of others.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Class Name and Address of Account Share Amount Percentage
Delaware Fund Price Waterhouse LLP Savings Plan
Institutional Class 1410 North Westshore Boulevard
P.O. Box 30004
Tampa, FL 33630 3,956,067 59.04%
Federated Life Insurance Company
Separate Sub-Account A
Attention: Tom Koch
P.O Box 328
Owatonna, MN 55060 663,395 9.90%
South Trust Bank of Alabama
Trust Thompson Tractor
Attention: Angela McNac
P.O. Box 830804
Birmingham, AL 35283 609,967 9.10%
Meg & Co.
c/o US National Bank Trust Dept.
P.O. Box 520
Johnstown, PA 15907 405,966 6.06%
Devon Fund B Class Merrill Lynch, Inc.
Mutual Fund Operations
Attention: Book Entry
4800 Deer Lake Drive East, 3rd Floor
Jacksonville, FL 32246 193,443(1) 11.36%
</TABLE>
(1) Equity Funds I, Inc. believes that these shares are held of
record for the benefit of others.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Class Name and Address of Account Share Amount Percentage
Devon Fund C Class Donaldson Lufkin Jenrette
Securities Corporation, Inc.
P.O. Box 2052
Jersey City, NJ 07303 50,322(1) 14.26%
Merrill Lynch, Pierce, Fenner & Smith, Inc.
For the Sole Benefit of its Customers
Attention: Fund Administration
4800 Deer Lake Drive East, 3rd Floor
Jacksonville, FL 32246 45,715(1) 12.95%
Devon Fund Delaware Management Company
Institutional Class Employee Profit Sharing Trust
c/o Rick Seidel
1818 Market Street
Philadelphia, PA 19103 194,675(2) 59.11%
WCSEL PC Pension Plan
2200 Clarendon Boulevard
13th Floor
Arlington, VA 22201 55,997(1) 17.00%
ISTCO
One South Church Road
P.O. Box 523
Belleville, IL 62222 46,964 14.26%
</TABLE>
(1) Equity Funds I, Inc. believes that these shares are held of
record for the benefit of others.
(2) Shares held of record by Delaware Management Company Employee
Profit Sharing Trust are held for the benefit of others.
DMH Corp., Delvoy, Inc., Delaware Management Company, Inc.,
Delaware Distributors, L.P., Delaware Distributors, Inc., Delaware
Service Company, Inc., Delaware Management Trust Company, Delaware
International Holdings Ltd., Founders Holdings, Inc., Delaware
International Advisers Ltd., Delaware Capital Management, Inc. and
Delaware Investment & Retirement Services Inc. are direct or indirect,
wholly owned subsidiaries of Delaware Management Holdings, Inc ("DMH").
On April 3, 1995, a merger between DMH and a wholly owned subsidiary of
Lincoln National Corporation ("Lincoln National") was completed. In
connection with the merger, new Investment Management Agreements between
Global Funds, Inc. and the Manager on behalf of each Fund were executed
following shareholder approval. DMH and the Manager are now indirect,
wholly owned subsidiaries, and subject to the ultimate control, of
Lincoln National. Lincoln National, with headquarters in Fort Wayne,
Indiana, is a diversified organization with operations in many aspects
of the financial services industry, including insurance and investment
management.
Directors and principal officers of Equity Funds I, Inc. are
noted below along with their ages and their business experience for the
past five years. Unless otherwise noted, the address of each officer
and director is One Commerce Square, Philadelphia, PA 19103.
*WAYNE A. STORK (60)
Chairman and Director of Equity Funds I, Inc., 32 other investment
companies in the Delaware Group and Delaware Capital Management, Inc.
Chairman, President, Chief Executive Officer, Director and/or
Trustee of DMH Corp., Delaware Distributors, Inc. and Founders
Holdings, Inc.
Chairman, President, Chief Executive Officer, Chief Investment
Officer and Director of Delaware Management Company, Inc.
Chairman, Chief Executive Officer and Director of Delaware
International Advisers Ltd. and Delaware International
Holdings Ltd.
President and Chief Executive Officer of Delvoy, Inc.
Chairman of Delaware Distributors, L.P. and Delaware Management
Holdings, Inc.
Director of Delaware Service Company, Inc. and Delaware Investment
& Retirement Services, Inc.
During the past five years, Mr. Stork has served in various
executive capacities at different times within
the Delaware organization.
______________________
*Director affiliated with the Funds' investment manager and considered
an "interested person" as defined in the
1940 Act.
* Jeffrey J. Nick (44)
President, Chief Executive Officer and Director and/or Trustee of
Equity Funds I, Inc.and 32 other investment companies in the
Delaware Group.
President, Chief Executive Officer and Director of Lincoln National
Investment Companies, Inc. and Delaware Management Holdings, Inc.
President of Lincoln Funds Corporation.
From 1992 to 1996, Mr. Nick was Managing Director of Lincoln
National UK plc and from 1989 to 1992, he was Senior Vice
President responsible for corporate planning and development for
Lincoln National Corporation.
RICHARD G. UNRUH, JR. (58)
Executive Vice President of Equity Funds I, Inc., each of the
other 32 investment companies in the Delaware Group,
Delaware Management Holdings, Inc. and Delaware Capital Management,
Inc.
Executive Vice President and Director of Delaware Management
Company, Inc.
Director of Delaware International Advisers Ltd.
During the past five years, Mr. Unruh has served in various
executive capacities at different times within the Delaware
organization.
PAUL E. SUCKOW (50)
Executive Vice President/Chief Investment Officer, Fixed Income of
Equity Funds I, Inc., each of the other 32 investment
companies in the Delaware Group, Delaware Management Company, Inc.
and Delaware Management Holdings, Inc.
Executive Vice President and Director of Founders Holdings, Inc.
Executive Vice President of Delaware Capital Management, Inc.
Director of Founders CBO Corporation.
Director of HYPPCO Finance Company Ltd.
Before returning to the Delaware Group in 1993, Mr. Suckow was
Executive Vice President and Director of Fixed Income for
Oppenheimer Management Corporation, New York, NY from 1985 to 1992.
Prior to that, Mr. Suckow was a fixed-income portfolio manager for
the Delaware Group.
WALTER P. BABICH (70)
Director and/or Trustee of Equity Funds I, Inc. and each of the
other 32 investment companies in the Delaware Group.
460 North Gulph Road, King of Prussia, PA 19406.
Board Chairman, Citadel Constructors, Inc.
From 1986 to 1988, Mr. Babich was a partner of Irwin & Leighton and
from 1988 to 1991, he was a partner of I&L Investors.
- ----------------------
*Director affiliated with the Funds' investment manager and considered
an "interested person" as defined in the
1940 Act.
ANTHONY D. KNERR (59)
Director and/or Trustee of Equity Funds I, Inc. and each of the
other 32 investment companies in the Delaware Group.
500 Fifth Avenue, New York, NY 10110.
Founder and Managing Director, Anthony Knerr & Associates.
From 1982 to 1988, Mr. Knerr was Executive Vice President/Finance
and Treasurer of Columbia University, New York. From 1987 to 1989,
he was also a lecturer in English at the University. In addition,
Mr. Knerr was Chairman of The Publishing Group, Inc., New York,
from 1988 to 1990. Mr. Knerr founded The Publishing Group, Inc.
in 1988.
ANN R. LEVEN (57)
Director and/or Trustee of Equity Funds I, Inc. and each of the
other 32 investment companies in the Delaware Group.
785 Park Avenue, New York, NY 10021.
Treasurer, National Gallery of Art.
From 1984 to 1990, Ms. Leven was Treasurer and Chief Fiscal Officer
of the Smithsonian Institution, Washington, DC, and from 1975 to 1992,
she was Adjunct Professor of Columbia Business School.
W. THACHER LONGSTRETH (77)
Director and/or Trustee of Equity Funds I, Inc. and each of the
other 32 investment companies in the Delaware Group.
City Hall, Philadelphia, PA 19107.
Philadelphia City Councilman.
THOMAS F. MADISON (61)
Director and/or Trustee of Equity Funds I, Inc. and each of the
other 32 investment companies in the Delaware Group.
President and Chief Executive Officer, MLM Partners, Inc.
200 South Fifth Street, Suite 2100, Minneapolis, Minnesota 55402.
Mr. Madison has also been Chairman of the Board of Communications
Holdings, Inc. since 1996. From February to September 1994, Mr. Madison
served as Vice Chairman--Office of the CEO of The Minnesota Mutual Life
Insurance Company and from 1988 to 1993, he was President of U.S. WEST
Communications--Markets.
CHARLES E. PECK (72)
Director and/or Trustee of Equity Funds I, Inc. and each of the
other 32 investment companies in the Delaware Group.
P.O. Box 1102, Columbia, MD 21044.
Secretary/Treasurer, Enterprise Homes, Inc.
From 1981 to 1990, Mr. Peck was Chairman and Chief Executive
Officer of The Ryland Group, Inc., Columbia, MD.
DAVID K. DOWNES (57)
Executive Vice President, Chief Operating Officer, Chief
Financial Officer of Equity Funds I, Inc., each of the other
32 investment companies in the Delaware Group, Delaware Management
Holdings, Inc, Founders CBO Corporation, Delaware Capital Management,
Inc. and Delaware Distributors, L.P.
Executive Vice President, Chief Operating Officer, Chief
Financial Officer and Director of Delaware Management Company,
Inc., DMH Corp., Delaware Distributors, Inc., Founders
Holdings, Inc. and Delvoy, Inc.
President, Chief Executive Officer, Chief Financial Officer and
Director of Delaware Service Company, Inc.
President, Chief Operating Officer, Chief Financial Officer and
Director of Delaware International Holdings Ltd.
Chairman, Chief Executive Officer and Director of Delaware Management
Trust Company and Delaware Investment & Retirement Services, Inc.
Director of Delaware International Advisers Ltd. and Delaware
Voyageur Holding, Inc.
Vice President of Lincoln Funds Corporation.
Before joining the Delaware Group in 1992, Mr. Downes was Chief
Administrative Officer, Chief
Financial Officer and Treasurer of Equitable Capital Management Corporation,
New York, from December 1985 through August 1992, Executive Vice President
from December 1985 through March 1992, and Vice Chairman from March 1992
through August 1992.
GEORGE M. CHAMBERLAIN, JR. (50)
Senior Vice President, Secretary and General Counsel of Equity
Funds I, Inc., each of the other 32 investment companies in
the Delaware Group, Delaware Distributors, L.P. and Delaware Management
Holdings, Inc.
Senior Vice President, Secretary, General Counsel and Director of
DMH Corp., Delaware Management Company, Inc., Delaware
Distributors, Inc., Delaware Service Company, Inc., Founders
Holdings, Inc., Delaware Investment & Retirement Services, Inc.,
Delaware Capital Management, Inc. and Delvoy, Inc.
Executive Vice President, Secretary, General Counsel and Director
of Delaware Management Trust Company.
Senior Vice President and Director of Delaware International
Holdings Ltd.
Director of Delaware International Advisers Ltd. and Delaware
Voyageur Holding, Inc.
Secretary of Lincoln Funds Corporation.
Attorney.
During the past five years, Mr. Chamberlain has served in various
capacities at different times within the Delaware organization.
JOSEPH H. HASTINGS (48)
Senior Vice President/Corporate Controller of Equity Funds I, Inc.,
each of the other 32 investment companies in the Delaware
Group and Founders Holdings, Inc.
Senior Vice President/Corporate Controller and Treasurer of
Delaware Management Holdings, Inc., DMH Corp., Delaware
Management Company, Inc., Delaware Distributors, L.P., Delaware
Distributors, Inc., Delaware Service Company, Inc., Delaware Capital
Management, Inc., Delaware International Holdings Ltd. and Delvoy,
Inc.
Chief Financial Officer/Treasurer of Delaware Investment &
Retirement Services, Inc.
Executive Vice President/Chief Financial Officer/Treasurer of
Delaware Management Trust Company.
Senior Vice President/Assistant Treasurer of Founders CBO
Corporation.
Treasurer of Lincoln Funds Corporation.
1818 Market Street, Philadelphia, PA 19103.
Before joining the Delaware Group in 1992, Mr. Hastings was Chief
Financial Officer for Prudential Residential Services, L.P.,
New York, NY from 1989 to 1992. Prior to that, Mr. Hastings
served as Controller and Treasurer for Fine Homes International, L.P.,
Stamford, CT from 1987 to 1989.
MICHAEL P. BISHOF (35)
Senior Vice President/Treasurer of Equity Funds I, Inc., each of
the other 32 investment companies in the Delaware Group
and Founders Holdings, Inc.
Senior Vice President/Investment Accounting of Delaware Management
Company, Inc. and Delaware Service Company, Inc.
Senior Vice President and Treasurer/Manager of Investment
Accounting of Delaware Distributors, L.P.
Senior Vice President and Manager of Investment Accounting of
Delaware International Holdings Ltd.
Assistant Treasurer of Founders CBO Corporation.
Before joining the Delaware Group in 1995, Mr. Bishof was a Vice
President for Bankers Trust, New York, NY from 1994 to 1995, a
Vice President for CS First Boston Investment Management, New
York, NY from 1993 to 1994 and an Assistant Vice President for Equitable
Capital Management Corporation, New York, NY from 1987 to 1993.
GEORGE H. BURWELL (36)
Vice President/Senior Portfolio Manager of Equity Funds I, Inc.,
seven other investment companies in the Delaware Group and
Delaware Management Company, Inc.
Before joining the Delaware Group in 1992, Mr. Burwell was a
portfolio manager for Midlantic Bank, New Jersey. In addition,
he was a security analyst for Balis & Zorn, New York and for
First Fidelity Bank, New Jersey.
GARY A. REED (43)
Vice President/Senior Portfolio Manager of Equity Funds I, Inc.,
nine other investment companies in the Delaware Group,
Delaware Management Company, Inc. and Delaware Capital Management, Inc.
During the past five years, Mr. Reed has served in such capacities
within the Delaware organization.
The following is a compensation table listing for each director
entitled to receive compensation, the aggregate compensation received
from the Fund and the total compensation received from all Delaware
Group funds for the fiscal year ended October 31, 1997 and an estimate
of annual benefits to be received upon retirement under the Delaware
Group Retirement Plan for Directors/Trustees as of October 31, 1997.
<TABLE>
<CAPTION>
PENSION OR
RETIREMENT
BENEFITS TOTAL
ACCRUED ESTIMATED COMPENSATION
AGGREGATE AS PART OF ANNUAL FROM ALL 33
COMPENSATION EQUITY BENEFITS DELAWARE GROUP
FROM EQUITY FUNDS I, INC. UPON INVESTMENT
NAME FUNDS I, INC. EXPENSES RETIREMENT* COMPANIES
<S> <C> <C> <C> <C>
W. Thacher Longstreth $2,872 None $38,000 $58,618
Ann R. Leven $3,149 None $38,000 $63,743
Walter P. Babich $3,095 None $38,000 $62,743
Anthony D. Knerr $3,095 None $38,000 $62,743
Charles E. Peck $2,775 None $38,000 $55,432
Thomas F. Madison** $1,304 None $38,000 $30,913
</TABLE>
* Under the terms of the Delaware Group Retirement Plan for
Directors/Trustees, each disinterested director who, at the time of his
or her retirement from the Board, has attained the age of 70 and served
on the Board for at least five continuous years, is entitled to receive
payments from each fund in the Delaware Group for a period equal to the
lesser of the number of years that such person served as a director or
the remainder of such person's life. The amount of such payments will
be equal, on an annual basis, to the amount of the annual retainer that
is paid to directors of each fund at the time of such person's
retirement. If an eligible director retired as of October 31, 1997,
he or she would be entitled to annual payments totaling $38,000, in
the aggregate, from all of the funds in the Delaware Group, based on the
number of funds in the Delaware Group as of that date.
** Thomas F. Madison joined Equity Funds I, Inc.'s Board of
Directors on April 30, 1997.
EXCHANGE PRIVILEGE
The exchange privileges available for shareholders of the Classes
and for shareholders of classes of other funds in the Delaware Group are
set forth in the relevant prospectuses for such classes. The following
supplements that information. Each Fund may modify, terminate or
suspend the exchange privilege upon 60 days' notice to shareholders.
All exchanges involve a purchase of shares of the fund into which
the exchange is made. As with any purchase, an investor should obtain
and carefully read that fund's prospectus before buying shares in an
exchange. The prospectus contains more complete information about the
fund, including charges and expenses. A shareholder requesting an
exchange will be sent a current prospectus and an authorization form for
any of the other mutual funds in the Delaware Group. Exchange
instructions must be signed by the record owner(s) exactly as the shares
are registered.
An exchange constitutes, for tax purposes, the sale of one fund and
the purchase of another. The sale may involve either a capital gain or
loss to the shareholder for federal income tax purposes.
In addition, investment advisers and dealers may make exchanges
between funds in the Delaware Group on behalf of their clients by
telephone or other expedited means. This service may be discontinued or
revised at any time by the Transfer Agent. Such exchange requests may
be rejected if it is determined that a particular request or the total
requests at any time could have an adverse effect on any of the funds.
Requests for expedited exchanges may be submitted with a properly
completed exchange authorization form, as described above.
TELEPHONE EXCHANGE PRIVILEGE
Shareholders owning shares for which certificates have not been
issued or their investment dealers of record may exchange shares by
telephone for shares in other mutual funds in the Delaware Group. This
service is automatically provided unless the relevant Fund receives
written notice from the shareholder to the contrary.
Shareholders or their investment dealers of record may contact the
Shareholder Service Center at 800-523-1918 or, in the case of
shareholders of the Institutional Classes, their Client Services
Representative at 800-828-5052, to effect an exchange. The
shareholder's current Fund account number must be identified, as well as
the registration of the account, the share or dollar amount to be
exchanged and the fund into which the exchange is to be made. Requests
received on any day after the time the offering price and net asset
value are determined will be processed the following day. See
Determining Offering Price and Net Asset Value. Any new account
established through the exchange will automatically carry the same
registration, shareholder information and dividend option as the account
from which the shares were exchanged. The exchange requirements of the
fund into which the exchange is being made, such as sales charges,
eligibility and investment minimums, must be met. (See the prospectus
of the fund desired or inquire by calling the Transfer Agent or, as
relevant, your Client Services Representative.) Certain funds are not
available for retirement plans.
The telephone exchange privilege is intended as a convenience to
shareholders and is not intended to be a vehicle to speculate on short-
term swings in the securities market through frequent transactions in
and out of the funds in the Delaware Group. Telephone exchanges may be
subject to limitations as to amounts or frequency. The Transfer Agent
and each Fund reserve the right to record exchange instructions received
by telephone and to reject exchange requests at any time in the future.
As described in the Funds' Prospectuses, neither the Funds nor the
Transfer Agent is responsible for any shareholder loss incurred in
acting upon written or telephone instructions for redemption or exchange
of Fund shares which are reasonably believed to be genuine.
RIGHT TO REFUSE TIMING ACCOUNTS
With regard to accounts that are administered by market timing
services ("Timing Firms") to purchase or redeem shares based on changing
economic and market conditions ("Timing Accounts"), the Funds will
refuse any new timing arrangements, as well as any new purchases (as
opposed to exchanges) in Delaware Group funds from Timing Firms. A Fund
reserves the right to temporarily or permanently terminate the exchange
privilege or reject any specific purchase order for any person whose
transactions seem to follow a timing pattern who: (i) makes an exchange
request out of the Fund within two weeks of an earlier exchange request
out of the Fund, or (ii) makes more than two exchanges out of the Fund
per calendar quarter, or (iii) exchanges shares equal in value to at
least $5 million, or more than 1/4 of 1% of the Fund's net assets.
Accounts under common ownership or control, including accounts
administered so as to redeem or purchase shares based upon certain
predetermined market indicators, will be aggregated for purposes of the
exchange limits.
RESTRICTIONS ON TIMED EXCHANGES
Timing Accounts operating under existing timing agreements may only
execute exchanges between the following eight Delaware Group funds: (1)
Decatur Income Fund, (2) Decatur Total Return Fund, (3) Delaware Fund,
(4) Limited-Term Government Fund, (5) USA Fund, (6) Delaware Cash Reserve,
(7) Delchester Fund and (8) Tax-Free Pennsylvania Fund. No other Delaware
Group funds are available for timed exchanges. Assets redeemed or exchanged
out of Timing Accounts in Delaware Group funds not listed above may not be
reinvested back into that Timing Account. Each Fund reserves the right to
apply these same restrictions to the account(s) of any person whose
transactions seem to follow a time pattern (as described above).
Each Fund also reserves the right to refuse the purchase side of an
exchange request by any Timing Account, person, or group if, in the
Manager's judgment, the Fund would be unable to invest effectively in
accordance with its investment objectives and policies, or would
otherwise potentially be adversely affected. A shareholder's purchase
exchanges may be restricted or refused if a Fund receives or anticipates
simultaneous orders affecting significant portions of the Fund's assets.
In particular, a pattern of exchanges that coincide with a "market
timing" strategy may be disruptive to a Fund and therefore may be
refused.
Except as noted above, only shareholders and their authorized
brokers of record will be permitted to make exchanges or redemptions.
* * *
Following is a summary of the investment objectives of the other
Delaware Group funds:
TREND FUND seeks long-term growth by investing in common stocks
issued by emerging growth companies exhibiting strong capital
appreciation potential.
SMALL CAP VALUE FUND seeks capital appreciation by investing
primarily in common stocks whose market values appear low relative to
their underlying value or future potential.
DELCAP FUND seeks long-term capital growth by investing in common
stocks and securities convertible into common stocks of companies that
have a demonstrated history of growth and have the potential to support
continued growth.
DECATUR INCOME FUND seeks the highest possible current income by
investing primarily in common stocks that provide the potential for
income and capital appreciation without undue risk to principal.
DECATUR TOTAL RETURN FUND seeks long-term growth by investing primarily
in securities that provide the potential for income and capital
appreciation without undue risk to principal. BLUE CHIP FUND seeks to
achieve long-term capital appreciation. Current income is a secondary
objective. It seeks to achieve these objectives by investing primarily
in equity securities and any securities that are convertible into equity
securities. QUANTUM FUND seeks to achieve long-term capital
appreciation. It seeks to achieve this objective by investing primarily
in equity securities of medium- to large-sized companies expected to
grow over time that meet the Fund's "Social Criteria" strategy.
DELCHESTER FUND seeks as high a current income as possible by
investing principally in high yield, high risk corporate bonds, and also
in U.S. government securities and commercial paper. STRATEGIC INCOME
FUND seeks to provide investors with high current income and total
return by using a multi-sector investment approach, investing
principally in three sectors of the fixed-income securities markets:
high yield, higher risk securities, investment grade fixed-income
securities and foreign government and other foreign fixed-income
securities.
U.S. GOVERNMENT FUND seeks high current income by investing
primarily in long-term debt obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
LIMITED-TERM GOVERNMENT FUND seeks high, stable income by investing
primarily in a portfolio of short- and intermediate-term securities
issued or guaranteed by the U.S. government, its agencies or
instrumentalities and instruments secured by such securities. U.S.
GOVERNMENT MONEY FUND seeks maximum current income with preservation of
principal and maintenance of liquidity by investing only in short-term
securities issued or guaranteed as to principal and interest by the U.S.
government, its agencies or instrumentalities, and repurchase agreements
collateralized by such securities, while maintaining a stable net asset
value.
DELAWARE CASH RESERVE seeks the highest level of income consistent
with the preservation of capital and liquidity through investments in
short-term money market instruments, while maintaining a stable net
asset value.
REIT FUND seeks to achieve maximum long-term total return with
capital appreciation as a secondary objective. It seeks to achieve its
objectives by investing in securities of companies primarily engaged in
the real estate industry.
TAX-FREE USA FUND seeks high current income exempt from federal
income tax by investing in municipal bonds of geographically-diverse
issuers. TAX-FREE INSURED FUND invests in these same types of
securities but with an emphasis on municipal bonds protected by
insurance guaranteeing principal and interest are paid when due. TAX-
FREE USA INTERMEDIATE FUND seeks a high level of current interest income
exempt from federal income tax, consistent with the preservation of
capital by investing primarily in municipal bonds.
TAX-FREE MONEY FUND seeks high current income, exempt from federal
income tax, by investing in short-term municipal obligations, while
maintaining a stable net asset value.
TAX-FREE NEW JERSEY FUND seeks a high level of current interest
income exempt from federal income tax and New Jersey state and local
taxes, consistent with preservation of capital. TAX-FREE OHIO FUND
seeks a high level of current interest income exempt from federal income
tax and Ohio state and local taxes, consistent with preservation of
capital. TAX-FREE PENNSYLVANIA FUND seeks a high level of current
interest income exempt from federal income tax and Pennsylvania state
and local taxes, consistent with the preservation of capital.
INTERNATIONAL EQUITY FUND seeks to achieve long-term growth without
undue risk to principal by investing primarily in international
securities that provide the potential for capital appreciation and
income. GLOBAL BOND FUND seeks to achieve current income consistent
with the preservation of principal by investing primarily in global
fixed-income securities that may also provide the potential for capital
appreciation. GLOBAL ASSETS FUND seeks to achieve long-term total
return by investing in global securities which will provide higher
current income than a portfolio comprised exclusively of equity
securities, along with the potential for capital growth. EMERGING
MARKETS FUND seeks long-term capital appreciation by investing primarily
in equity securities of issuers located or operating in emerging
countries.
U.S. GROWTH FUND seeks to maximize capital appreciation by
investing in companies of all sizes which have low dividend yields,
strong balance sheets and high expected earnings growth rates relative
to their industry. OVERSEAS EQUITY FUND seeks to maximize total
return (capital appreciation and income), principally through
investments in an internationally diversified portfolio of equity
securities. NEW PACIFIC FUND seeks long-term capital appreciation by
investing primarily in companies which are domiciled in or have their
principal business activities in the Pacific Basin.
DELAWARE GROUP PREMIUM FUND, Inc. offers 15 funds available
exclusively as funding vehicles for certain insurance company separate
accounts. DECATUR TOTAL RETURN Series seeks the highest possible
total rate of return by selecting issues that exhibit the potential for
capital appreciation while providing higher than average dividend
income. DELCHESTER SERIES seeks as high a current income as possible
by investing in rated and unrated corporate bonds, U.S. government
securities and commercial paper. CAPITAL RESERVES SERIES seeks a high
stable level of current income while minimizing fluctuations in
principal by investing in a diversified portfolio of short- and
intermediate-term securities. CASH RESERVE SERIES seeks the highest
level of income consistent with preservation of capital and liquidity
through investments in short-term money market instruments. DELCAP
SERIES seeks long-term capital appreciation by investing its assets in a
diversified portfolio of securities exhibiting the potential for
significant growth. DELAWARE SERIES seeks a balance of capital
appreciation, income and preservation of capital. It uses a dividend-
oriented valuation strategy to select securities issued by established
companies that are believed to demonstrate potential for income and
capital growth. INTERNATIONAL EQUITY SERIES seeks long-term growth
without undue risk to principal by investing primarily in equity
securities of foreign issuers that provide the potential for capital
appreciation and income. VALUE SERIES seeks capital appreciation by
investing in small- to mid-cap common stocks whose market values appear
low relative to their underlying value or future earnings and growth
potential. Emphasis will also be placed on securities of companies that
may be temporarily out of favor or whose value is not yet recognized by
the market. TREND SERIES seeks long-term capital appreciation by
investing primarily in small-cap common stocks and convertible
securities of emerging and other growth-oriented companies. These
securities will have been judged to be responsive to changes in the
market place and to have fundamental characteristics to support growth.
Income is not an objective. GLOBAL BOND SERIES seeks to achieve current
income consistent with the preservation of principal by investing
primarily in global fixed-income securities that may also provide the
potential for capital appreciation. STRATEGIC INCOME Series seeks high
current income and total return by using a multi-sector investment
approach, investing primarily in three sectors of the fixed-income
securities markets: high-yield, higher risk securities; investment
grade fixed-income securities; and foreign government and other foreign
fixed-income securities. DEVON SERIES seeks current income and capital
appreciation by investing primarily in income-producing common stocks,
with a focus on common stocks that the investment manager believes have
the potential for above-average dividend increases over time. EMERGING
MARKETS SERIES seeks to achieve long-term capital appreciation by
investing primarily in equity securities of issuers located or operating
in emerging countries. CONVERTIBLE SECURITIES SERIES seeks a high level
of total return on its assets through a combination of capital
appreciation and current income by investing primarily in convertible
securities. QUANTUM SERIES seeks to achieve long-term capital
appreciation by investing primarily in equity securities of medium to
large-sized companies expected to grow over time that meet the Series'
"Social Criteria" strategy.
DELAWARE-VOYAGEUR US GOVERNMENT SECURITIES FUND seeks to provide a
high level of current income consistent with the prudent investment risk
by investing in U.S. Treasury bills, notes, bonds, and other obligations
issued or unconditionally guaranteed by the full faith and credit of the
U.S. Treasury, and repurchase agreements fully secured by such
obligations.
DELAWARE-VOYAGEUR TAX-FREE ARIZONA INSURED FUND seeks to provide a
high level of current income exempt from federal income tax and the
Arizona personal income tax, consistent with the preservation of
capital. Delaware-Voyageur Minnesota Insured Fund seeks to provide a
high level of current income exempt from federal income tax and the
Minnesota personal income tax, consistent with the preservation of
capital.
DELAWARE-VOYAGEUR TAX-FREE MINNESOTA INTERMEDIATE FUND seeks to
provide a high level of current income exempt from federal income tax
and the Minnesota personal income tax, consistent with preservation of
capital. The Fund seeks to reduce market risk by maintaining an average
weighted maturity from five to ten years.
DELAWARE-VOYAGEUR TAX-FREE CALIFORNIA INSURED FUND seeks to
provide a high level of current income exempt from federal income tax
and the California personal income tax, consistent with the preservation
of capital. DELAWARE-VOYAGEUR TAX-FREE FLORIDA INSURED FUND seeks to
provide a high level of current income exempt from federal income tax,
consistent with the preservation of capital. The Fund will seek to
select investments that will enable its shares to be exempt from the
Florida intangible personal property tax. DELAWARE-VOYAGEUR TAX-FREE
FLORIDA FUND seeks to provide a high level of current income exempt from
federal income tax, consistent with the preservation of capital. The
Fund will seek to select investments that will enable its shares to be
exempt from the Florida intangible personal property tax. DELAWARE-
VOYAGEUR TAX-FREE KANSAS FUND seeks to provide a high level of current
income exempt from federal income tax, the Kansas personal income tax
and the Kansas Intangible personal property tax, consistent with the
preservation of capital. DELAWARE-VOYAGEUR TAX-FREE MISSOURI INSURED
FUND seeks to provide a high level of current income exempt from federal
income tax and the Missouri personal income tax, consistent with the
preservation of capital. DELAWARE-VOYAGEUR TAX-FREE NEW MEXICO FUND
seeks to provide a high level of current income exempt from federal
income tax and the New Mexico personal income tax, consistent with the
preservation of capital. DELAWARE-VOYAGEUR TAX-FREE OREGON INSURED FUND
seeks to provide a high level of current income exempt from federal
income tax and the Oregon personal income tax, consistent with the
preservation of capital. DELAWARE-VOYAGEUR TAX-FREE UTAH FUND seeks to
provide a high level of current income exempt from federal income tax,
consistent with the preservation of capital. DELAWARE-VOYAGEUR TAX-FREE
WASHINGTON INSURED FUND seeks to provide a high level of current income
exempt from federal income tax, consistent with the preservation of
capital.
DELAWARE-VOYAGEUR TAX-FREE FLORIDA INTERMEDIATE FUND seeks to
provide a high level of current income exempt from federal income tax,
consistent with the preservation of capital. The Fund will seek to
select investments that will enable its shares to be exempt from the
Florida intangible personal property tax. The Fund seeks to reduce
market risk by maintaining an average weighted maturity from five to ten
years.
DELAWARE-VOYAGEUR TAX-FREE ARIZONA FUND seeks to provide a high
level of current income exempt from federal income tax and the Arizona
personal income tax, consistent with the preservation of capital.
DELAWARE-VOYAGEUR TAX-FREE CALIFORNIA FUND seeks to provide a high level
of current income exempt from federal income tax and the California
personal income tax, consistent with the preservation of capital.
DELAWARE-VOYAGEUR TAX-FREE IOWA FUND seeks to provide a high level of
current income exempt from federal income tax and the Iowa personal
income tax, consistent with the preservation of capital. DELAWARE-
VOYAGEUR TAX-FREE IDAHO FUND seeks to provide a high level of current
income exempt from federal income tax and the Idaho personal income tax,
consistent with the preservation of capital. DELAWARE-VOYAGEUR
MINNESOTA HIGH YIELD MUNICIPAL BOND FUND seeks to provide a high level
of current income exempt from federal income tax and the Minnesota
personal income tax primarily through investment in medium and lower
grade municipal obligations. NATIONAL HIGH YIELD MUNICIPAL FUND seeks
to provide a high level of income exempt from federal income tax,
primarily through investment in medium and lower grade municipal
obligations. DELAWARE-VOYAGEUR TAX-FREE NEW YORK FUND seeks to provide
a high level of current income exempt from federal income tax and the
personal income tax of the state of New York and the city of New York,
consistent with the preservation of capital. DELAWARE-VOYAGEUR TAX-FREE
WISCONSIN FUND seeks to provide a high level of current income exempt
from federal income tax and the Wisconsin personal income tax,
consistent with the preservation of capital.
DELAWARE-VOYAGEUR TAX-FREE COLORADO FUND seeks to provide a high
level of current income exempt from federal income tax and the Colorado
personal income tax, consistent with the preservation of capital.
AGGRESSIVE GROWTH Fund seeks long-term capital appreciation, which
the Fund attempts to achieve by investing primarily in equity securities
believed to have the potential for high earnings growth. Although the
Fund, in seeking its objective, may receive current income from
dividends and interest, income is only an incidental consideration in
the selection of the Fund's investments. GROWTH STOCK FUND has an
objective of long-term capital appreciation. The Fund seeks to achieve
its objective from equity securities diversified among individual
companies and industries. TAX-EFFICIENT EQUITY FUND seeks to obtain for
taxable investors a high total return on an after-tax basis. The Fund
will attempt to achieve this objective by seeking to provide a high
long-term after-tax total return through managing its portfolio in a
manner that will defer the realization of accrued capital gains and
minimize dividend income.
DELAWARE-VOYAGEUR TAX-FREE MINNESOTA FUND seeks to provide a high
level of current income exempt from federal income tax and the Minnesota
personal income tax, consistent with the preservation of capital.
DELAWARE-VOYAGEUR TAX-FREE NORTH DAKOTA FUND seeks to provide a high
level of current income exempt from federal income tax and the North
Dakota personal income tax, consistent with the preservation of capital.
For more complete information about any of the Delaware Group
funds, including charges and expenses, you can obtain a prospectus from
the Distributor. Read it carefully before you invest or forward funds.
Each of the summaries above is qualified in its entirety by the
information contained in each fund's prospectus(es).
GENERAL INFORMATION
The Manager is the investment manager of the Funds. The Manager
also provides investment management services to certain of the other
funds in the Delaware Group. The Manager, through a separate division,
also manages private investment accounts. While investment decisions of
the Funds are made independently from those of the other funds and
accounts, investment decisions for such other funds and accounts may be
made at the same time as investment decisions for the Funds.
The Manager also manages the investment options for Delaware
Medallion [SM] III Variable Annuity. Medallion is issued by Allmerica
Financial Life Insurance and Annuity Company (First Allmerica Financial
Life Insurance Company in New York and Hawaii). Delaware Medallion
offers 15 different investment series ranging from domestic equity
funds, international equity and bond funds and domestic fixed income
funds. Each investment series available through Medallion utilizes an
investment strategy and discipline the same as or similar to one of the
Delaware Group mutual funds available outside the annuity. See Delaware
Group Premium Fund, Inc., above.
Access persons and advisory persons of the Delaware Group of funds,
as those terms are defined in SEC Rule 17j-1 under the 1940 Act, who
provide services to the Manager, Delaware International Advisers Ltd. or
their affiliates, are permitted to engage in personal securities
transactions subject to the exceptions set forth in Rule 17j-1 and the
following general restrictions and procedures: (1) certain blackout
periods apply to personal securities transactions of those persons; (2)
transactions must receive advance clearance and must be completed on the
same day as the clearance is received; (3) certain persons are
prohibited from investing in initial public offerings of securities and
other restrictions apply to investments in private placements of
securities; (4) opening positions may only be closed-out at a profit
after a 60-day holding period has elapsed; and (5) the Compliance
Officer must be informed periodically of all securities transactions and
duplicate copies of brokerage confirmations and account statements must
be supplied to the Compliance Officer.
The Distributor acts as national distributor for each Fund and for
the other mutual funds in the Delaware Group. As previously described,
prior to January 3, 1995, DDI served as the national distributor for
each Fund. The Distributor, DDLP (for all periods after January 3,
1995) and, in its capacity as such, DDI prior to January 3, 1995,
received net commissions from each Fund on behalf of Class A Shares,
after reallowances to dealers, as follows:
DELAWARE FUND
CLASS A SHARES
TOTAL
FISCAL AMOUNT OF AMOUNTS NET
YEAR UNDERWRITING REALLOWED COMMISSION
ENDED COMMISSIONS TO DEALERS TO DISTRIBUTOR
10/31/97 $558,308 $464,226 $94,082
10/31/96 393,463 329,065 $64,398
10/31/95 545,446 471,630 73,816
DEVON FUND
CLASS A SHARES
TOTAL
FISCAL AMOUNT OF AMOUNTS NET
YEAR UNDERWRITING REALLOWED COMMISSION
ENDED COMMISSIONS TO DEALERS TO DISTRIBUTOR
10/31/97 $531,475 $440,937 $90,538
10/31/96 104,547 87,806 16,741
10/31/95 79,219 68,054 11,165
The Distributor and, in its capacity as such, DDI received in the
aggregate Limited CDSC payments with respect to Class A Shares of each
Fund as follows:
LIMITED CDSC PAYMENTS
FISCAL YEAR
ENDED DELAWARE FUND A CLASS DEVON FUND A CLASS
10/31/97 $85,849 $-0-
10/31/96 --- ---
10/31/95 --- ---
The Distributor and, in its capacity as such, DDI received in the
aggregate CDSC payments with respect to Class B Shares of each Fund as
follows:
CDSC PAYMENTS
FISCAL YEAR
ENDED DELAWARE FUND B CLASS DEVON FUND B CLASS
10/31/97 $32,664 $10,367
10/31/96 13,943 512
10/31/95 789 ---
The Distributor received CDSC payments with respect to Class C
Shares of each Fund as follows:
CDSC PAYMENTS
FISCAL YEAR
ENDED DELAWARE FUND C CLASS DEVON FUND C CLASS
10/31/97 $2,595 $669
10/31/96* 127 98
*Date of initial public offering was November 29, 1995.
Effective as of January 3, 1995, all such payments described above
have been paid to the Distributor.
The Transfer Agent, an affiliate of the Manager, acts as
shareholder servicing, dividend disbursing and transfer agent for each
Fund and for the other mutual funds in the Delaware Group. The Transfer
Agent is paid a fee by each Fund for providing these services consisting
of an annual per account charge of $5.50 plus transaction charges for
particular services according to a schedule. Compensation is fixed each
year and approved by the Board of Directors, including a majority of the
disinterested directors. The Transfer Agent also provides accounting
services to each Fund. Those services include performing all functions
related to calculating each Fund's net asset value and providing all
financial reporting services, regulatory compliance testing and the
related accounting services. For its services, the Transfer Agent is
paid a fee based on total assets of all funds in the Delaware Group for
which it provides such accounting services. Such fee is equal to 0.25%
multiplied by the total amount of assets in the complex for which the
Transfer Agent furnishes accounting services, where such aggregate
complex assets are $10 billion or less, and 0.20% of assets if such
aggregate complex assets exceed $10 billion. The fees are charged to
each fund, including each Fund, on an aggregate pro-rata basis. The
asset-based fee payable to the Transfer Agent is subject to a minimum
fee calculated by determining the total number of investment portfolios
and associated classes.
The Manager and its affiliates own the name "Delaware Group."
Under certain circumstances, including the termination of Equity Funds
I, Inc.'s advisory relationship with the Manager or its distribution
relationship with the Distributor, the Manager and its affiliates could
cause Equity Funds I, Inc. to delete the words "Delaware Group" from
Equity Funds I, Inc.'s name.
The Chase Manhattan Bank ("Chase"), 4 Chase Metrotech Center,
Brooklyn, NY 11245 is custodian of each Fund's securities and cash. As
custodian for a Fund, Chase maintains a separate account or accounts for
the Fund; receives, holds and releases portfolio securities on account
of the Fund; receives and disburses money on behalf of the Fund; and
collects and receives income and other payments and distributions on
account of the Fund's portfolio securities.
CAPITALIZATION
Equity Funds I, Inc. has a present authorized capitalization of
five hundred million shares of capital stock with a $1 par value per
share. Each Fund currently offers four classes of shares. The Board
of Directors has allocated one hundred million shares to Delaware Fund A
Class, twenty-five million shares to Delaware Fund B Class, twenty-five
million shares to Delaware Fund C Class, fifty million shares to
Delaware Fund Institutional Class, fifty million shares to Devon Fund A
Class, twenty-five million shares to Devon Fund B Class, twenty-five
million to Devon Fund C Class, and twenty-five million shares to Devon
Fund Institutional Class.
Each Class of each Fund represents a proportionate interest in the
assets of that Fund, and each has the same voting and other rights and
preferences as the other classes except that shares of an Institutional
Class may not vote on any matter affecting the Fund Classes' Plans under
Rule 12b-1. Similarly, as a general matter, shareholders of Class A
Shares, Class B Shares and Class C Shares of each Fund may vote only on
matters affecting the 12b-1 Plan that relates to the class of shares
they hold. However, Class B Shares of each Fund may vote on any
proposal to increase materially the fees to be paid by a Fund under the
Rule 12b-1 Plan relating to Class A Shares. General expenses of a Fund
will be allocated on a pro-rata basis to the classes according to asset
size, except that expenses of the Rule 12b-1 Plans of that Fund's Class
A, Class B and Class C Shares will be allocated solely to those classes.
While shares of Equity Funds I, Inc. have equal voting rights on matters
affecting both Funds, each Fund would vote separately on any matter
which it is directly affected by, such as any change in its own
investment objective and policy or action to dissolve the Fund and as
otherwise prescribed by the 1940 Act. Shares of each Fund have a
priority in that Fund's assets, and in gains on and income from the
portfolio of that Fund.
Prior to November 9, 1992, Equity Funds I, Inc. offered only one
series, now known as Delaware Fund and one class of shares, Delaware
Fund A Class. Beginning November 9, 1992, Delaware Fund began offering
Delaware Fund Institutional Class. Beginning December 29, 1993, Equity
Funds I, Inc. offered Devon Fund which offered Devon Fund A Class and
Devon Fund Institutional Class. Class B Shares for each Fund were not
offered prior to September 6, 1994, and beginning as of November 29,
1995, each Fund began offering Class C Shares.
Effective as of the close of business December 27, 1996, the name
of Delaware Group Delaware Fund, Inc. was changed to Delaware Group
Equity Funds I, Inc. Also effective as of the close of business
December 27, 1996, the name of Common Stock series was changed to
Delaware Fund series.
Prior to September 6, 1994, Delaware Fund A Class was known as
Delaware Fund class and Delaware Fund Institutional Class was known as
Delaware Fund (Institutional) class, and, prior to the same date,
Dividend Growth Fund A Class was known as Dividend Growth Fund class and
the Dividend Growth Fund Institutional Class was known as Dividend
Growth Fund (Institutional) class. Effective as of the close of
business on August 28, 1995, the name Dividend Growth Fund was changed
to Devon Fund and the names of Dividend Growth Fund A Class, Dividend
Growth Fund B Class and Dividend Growth Fund Institutional Class were
changed to Devon Fund A Class, Devon Fund B Class and Devon Fund
Institutional Class, respectively.
All shares have no preemptive rights, are fully transferable and,
when issued, are fully paid and nonassessable and, except as described
above, have equal voting rights.
NONCUMULATIVE VOTING
EQUITY FUNDS I, INC. SHARES HAVE NONCUMULATIVE VOTING RIGHTS WHICH
MEANS THAT THE HOLDERS OF MORE THAN 50% OF THE SHARES OF EQUITY FUNDS I,
INC. VOTING FOR THE ELECTION OF DIRECTORS CAN ELECT ALL THE DIRECTORS IF
THEY CHOOSE TO DO SO, AND, IN SUCH EVENT, THE HOLDERS OF THE REMAINING
SHARES WILL NOT BE ABLE TO ELECT ANY DIRECTORS.
This Part B does not include all of the information contained in
the Registration Statement which is on file with the SEC.
APPENDIX A--DESCRIPTION OF RATINGS
COMMERCIAL PAPER
Excerpts from S&P's description of its two highest commercial paper
ratings: A-1--judged to be the highest investment grade category
possessing the highest relative strength; A-2--investment grade category
possessing less relative strength than the highest rating.
Excerpts from Moody's description of its two highest commercial
paper ratings: P-1--the highest grade possessing greatest relative
strength; P-2--second highest grade possessing less relative strength
than the highest grade.
BONDS
Excerpts from Moody's description of its bond ratings: Aaa--judged
to be the best quality. They carry the smallest degree of investment
risk; Aa--judged to be of high quality by all standards; A--possess
favorable attributes and are considered "upper medium" grade
obligations; Baa--considered as medium grade obligations. Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time; Ba--judged to have speculative
elements; their future cannot be considered as well assured. Often the
protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the
future. Uncertainty of position characterizes bonds in this class; B--
generally lack characteristics of the desirable investment. Assurance
of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small; Caa--are of poor
standing. Such issues may be in default or there may be present
elements of danger with respect to principal or interest; Ca--represent
obligations which are speculative in a high degree. Such issues are
often in default or have other marked shortcomings; C--the lowest rated
class of bonds and issues so rated can be regarded as having extremely
poor prospects of ever attaining any real investment standing.
Excerpts from S&P's description of its bond ratings: AAA--highest
grade obligations. They possess the ultimate degree of protection as to
principal and interest; AA--also qualify as high grade obligations, and
in the majority of instances differ from AAA issues only in a small
degree; A--strong ability to pay interest and repay principal although
more susceptible to changes in circumstances; BBB--regarded as having an
adequate capacity to pay interest and repay principal; BB, B, CCC, CC--
regarded, on balance, as predominantly speculative with respect to
capacity to pay interest and repay principal in accordance with the
terms of the obligation. BB indicates the lowest degree of speculation
and CC the highest degree of speculation. While such debt will likely
have some quality and protective characteristics, these are outweighed
by large uncertainties or major risk exposures to adverse conditions; C-
- -reserved for income bonds on which no interest is being paid; D--in
default, and payment of interest and/or repayment of principal is in
arrears.
APPENDIX B--IRA INFORMATION
An individual can contribute up to $2,000 to his or her IRA each
year. Contributions may or may not be deductible depending upon the
taxpayers adjusted gross income and whether the taxpayer or his or her
spouse is an active participant in an employer-sponsored retirement
plan. Even if a taxpayer (or his or her spouse) is an active
participant in an employer-sponsored retirement plan, the full $2,000
deduction is still available if the taxpayer's adjusted gross income is
below $25,000 ($40,000 for taxpayers filing joint returns). A partial
deduction is allowed for married couples with incomes between $40,000
and $50,000, and for single individuals with incomes between $25,000 and
$35,000. No deductions are available for contributions to IRAs by
taxpayers whose adjusted gross income before IRA deductions exceeds
$50,000 ($35,000 for singles) and who are active participants in an
employer-sponsored retirement plan. Taxpayers who were not allowed
deductions on IRA contributions still can make nondeductible IRA
contributions of as much as $2,000 for each working spouse ($2,250 for
one-income couples for years prior to 1997), and defer taxes on interest
or other earnings from the IRAs. Special rules apply for determining
the deductibility of contributions made by married individuals filing
separate returns.
Effective for tax years beginning after 1996, one-income couples
can contribute up to $2,000 to each spouse's IRA provided the combined
compensation of both spouses is at least equal to the total
contributions for both spouses. If the working spouse is an active
participant in an employer-sponsored retirement plan and earns over
$40,000, the maximum deduction limit is reduced in the same way that the
limit is reduced for contributions to a non-spousal IRA.
As illustrated in the following tables, maintaining an Individual
Retirement Account remains a valuable opportunity.
For many, an IRA will continue to offer both an upfront tax break
with its tax deduction each year and the real benefit that comes with
tax-deferred compounding. For others, losing the tax deduction will
impact their taxable income status each year. Over the long term,
however, being able to defer taxes on earnings still provides an
impressive investment opportunity--a way to have money grow faster due
to tax-deferred compounding.
Even if your IRA contribution is no longer deductible, the benefits
of saving on a tax-deferred basis can be substantial. The following
tables illustrate the benefits of tax-deferred versus taxable
compounding. Each reflects a constant 10% rate of return, compounded
annually, with the reinvestment of all proceeds. The tables do not take
into account any sales charges or fees. Of course, earnings accumulated
in your IRA will be subject to tax upon withdrawal. If you choose a
mutual fund with a fluctuating net asset value, such as either Fund,
your bottom line at retirement could be lower--it could also be much
higher.
$2,000 INVESTED ANNUALLY ASSUMING A 10% ANNUALIZED RETURN
15% Tax Bracket Single $0- $24,650
Joint $0- $41,200
HOW MUCH YOU
END OF CUMULATIVE HOW MUCH YOU HAVE WITH FULL
YEAR INVESTMENT AMOUNT HAVE WITHOUT IRA IRA DEDUCTION
1 $ 2,000 $ 1,844 $ 2,200
5 10,000 10,929 13,431
10 20,000 27,363 35,062
15 30,000 52,074 69,899
20 40,000 89,231 126,005
25 50,000 145,103 216,364
30 60,000 229,114 361,887
35 70,000 355,438 596,254
40 80,000 545,386 973,704
[Without IRA--investment of $1,700 ($2,000 less 15%) earning 8.5% (10%
less 15%)]
28% Tax Bracket Single $24,651-$59,750
Joint $40,201-$99,600
<TABLE>
<CAPTION>
HOW MUCH YOU HAVE
END OF CUMULATIVE HOW MUCH YOU WITH FULL IRA
YEAR INVESTMENT AMOUNT HAVE WITHOUT IRA NO DEDUCTION DEDUCTION
<S> <C> <C> <C> <C>
1 $ 2,000 $ 1,544 $ 1,584 $ 2,200
5 10,000 8,913 9,670 13,431
10 20,000 21,531 25,245 35,062
15 30,000 39,394 50,328 69,899
20 40,000 64,683 90,724 126,005
25 50,000 100,485 155,782 216,364
30 60,000 151,171 260,559 361,887
35 70,000 222,927 429,303 596,254
40 80,000 324,512 701,067 973,704
[Without IRA--investment of $1,440 ($2,000 less 28%) earning 7.2% (10%
less 28%)]
[With IRA--No Deduction--investment of $1,440 ($2,000 less 28%) earning
10%]
</TABLE>
31% Tax Bracket Single $59,751-$124,650
Joint $99,601-$151,750
<TABLE>
<CAPTION>
HOW MUCH YOU HAVE
END OF CUMULATIVE HOW MUCH YOU WITH FULL IRA
YEAR INVESTMENT AMOUNT HAVE WITHOUT IRA NO DEDUCTION DEDUCTION
<S> <C> <C> <C> <C>
1 $ 2,000 $ 1,475 $ 1,518 $ 2,200
5 10,000 8,467 9,268 13,431
10 20,000 20,286 24,193 35,062
15 30,000 36,787 48,231 69,899
20 40,000 59,821 86,943 126,005
25 50,000 91,978 149,291 216,364
30 60,000 136,868 249,702 361,887
35 70,000 199,536 411,415 596,254
40 80,000 287,021 671,855 973,704
[Without IRA--investment of $1,380 ($2,000 less 31%) earning 6.9% (10%
less 31%)]
[With IRA--No Deduction--investment of $1,380 ($2,000 less 31%) earning
10%]
</TABLE>
36% Tax Bracket* Single $124,651-$271,050
Joint $151,751-$271,050
<TABLE>
<CAPTION>
HOW MUCH YOU HAVE
END OF CUMULATIVE HOW MUCH YOU WITH FULL IRA
YEAR INVESTMENT AMOUNT HAVE WITHOUT IRA NO DEDUCTION DEDUCTION
<S> <C> <C> <C> <C>
1 $ 2,000 $ 1,362 $ 1,408 $ 2,200
5 10,000 7,739 8,596 13,431
10 20,000 18,292 22,440 35,062
15 30,000 32,683 44,736 69,899
20 40,000 52,308 80,643 126,005
25 50,000 79,069 138,473 216,364
30 60,000 115,562 231,608 361,887
35 70,000 165,327 381,602 596,254
40 80,000 233,190 623,170 973,704
[Without IRA--investment of $1,280 ($2,000 less 36%) earning 6.4% (10%
less 36%)]
[With IRA--No Deduction--investment of $1,280 ($2,000 less 36%) earning
10%]
</TABLE>
39.6% Tax Bracket* Single over $271,050
Joint over $271,050
<TABLE>
<CAPTION>
HOW MUCH YOU HAVE
END OF CUMULATIVE HOW MUCH YOU WITH FULL IRA
YEAR INVESTMENT AMOUNT HAVE WITHOUT IRA NO DEDUCTION DEDUCTION
<S> <C> <C> <C> <C>
1 $ 2,000 $ 1,281 $ 1,329 $ 2,200
5 10,000 7,227 8,112 13,431
10 20,000 16,916 21,178 35,062
15 30,000 29,907 42,219 69,899
20 40,000 47,324 76,107 126,005
25 50,000 70,677 130,684 216,364
30 60,000 101,986 218,580 361,887
35 70,000 143,965 360,137 596,254
40 80,000 200,249 588,117 973,704
[Without IRA--investment of $1,208 ($2,000 less 39.6%) earning 6.04%
(10% less 39.6%)]
[With IRA--No Deduction--investment of $1,208 ($2,000 less 39.6%)
earning 10%]
</TABLE>
- ------------------------------------------
* For tax years beginning after 1992, a 36% tax rate applies to all
taxable income in excess of the maximum dollar amounts subject to the
31% tax rate. In addition, a 10% surtax (not applicable to capital
gains) applies to certain high-income taxpayers. It is computed by
applying a 39.6% rate to taxable income in excess of $271,050. The
above tables do not reflect the personal exemption phaseout nor the
limitations of itemized deductions that may apply.
THE VALUE OF STARTING YOUR IRA EARLY
The following illustrates how much more you would have contributing
$2,000 each January--the earliest opportunity--compared to contributing
on April 15th of the following year--the latest opportunity, for each
tax year.
After 5 years $3,528 more
10 years $6,113
20 years $17,228
30 years $47,295
Compounded returns for the longest period of time is the key. The
above illustration assumes a 10% rate of return and the reinvestment of
all proceeds.
THE POWER OF TAX-DEFERRED COMPOUNDING
Over time, tax-deferred investing has the potential to double your
investment earnings. The following examples are based on a $2000
invested on January 1 each year and assumes an 8% fixed rate of return,
with no fluctuation in the value of principal. The figures do not
reflect the impact of any fees or sales charges. These figures are for
illustration only and are not intended to represent any future
investment results.
Accumulated Value
Over 10 years Tax Bracket
$26, 403 39.6%
$26,881 36%
$27,516 31%
$27,905 28%
$31,828 Tax-deferred
Over 20 years
$69,544 39.6%
$71, 986 36%
$75,540 31%
$77,767 28%
$102,476 Tax-deferred
Over 40 years
$254,528 39.6%
$274,662 36%
$305,626 31%
$326,046 28%
$607,355 Tax-deferred
APPENDIX D--THE COMPANY LIFE CYCLE
Traditional business theory contends that a typical company
progresses through basically four stages of development, keyed closely
to a firm's sales.
1. EMERGING GROWTH--a period of experimentation in which the
company builds awareness of a new product or firm.
2. ACCELERATED DEVELOPMENT--a period of rapid growth with
potentially high profitability and acceptance of the product.
3. MATURING PHASE--a period of diminished real growth due to
dependence on replacement or sustained product demand.
4. CYCLICAL STAGE--a period in which a company faces a
potential saturation of demand for its product. At this point, a firm
either diversifies or becomes obsolete.
Hypothetical Corporate Life Cycle
[Chart appears here]
Hypothetical Corporate Life Cycle Chart shows in a line illustration,
the stages that a typical company would go through, beginning with the
emerging state where sales growth continues at a steep pace to the
mature phase where growth levels off to the cyclical stage where sales
show more definitive highs and lows.
The above chart illustrates the path traditionally followed by
companies that successfully survive the growth sequence.
FINANCIAL STATEMENTS
Ernst & Young LLP serves as the independent auditors for Equity
Funds I, Inc. and, in its capacity as such, audits the annual financial
statements of each of the Funds. The Funds' Statements of Net Assets,
Statements of Assets and Liabilities, Statements of Operations,
Statements of Changes in Net Assets, Financial Highlights, and Notes to
Financial Statements, as well as the reports of Ernst & Young LLP,
independent auditors, for the fiscal year ended October 31, 1997, are
included in the Funds' Annual Reports to shareholders. The
financial statements, the notes relating thereto, the financial
highlights and the reports of Ernst & Young LLP listed above are
incorporated by reference from the Annual Reports into this Part B.
The Delaware Group includes funds with a wide range of investment
objectives. Stock funds, income funds, national and state-specific
tax-exempt funds, money market funds, global and international funds and
closed-end funds give investors the ability to create a portfolio that
fits their personal financial goals. For more information, shareholders
of the Fund Classes should contact their financial adviser or call
Delaware Group at 800-523-4640 and shareholders of the Institutional
Classes should contact Delaware Group at 800-828-5052.
INVESTMENT MANAGER
Delaware Management Company, Inc.
One Commerce Square
Philadelphia, PA 19103
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
1818 Market Street
Philadelphia, PA 19103
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING,
ACCOUNTING SERVICES
AND TRANSFER AGENT
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
One Commerce Square
Philadelphia, PA 19103
INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103
CUSTODIAN
The Chase Manhattan Bank
4 Chase Metrotech Center
Brooklyn, NY 11245
DELAWARE FUND
A CLASS
B CLASS
C CLASS
INSTITUTIONAL CLASS
DEVON FUND
A CLASS
B CLASS
C CLASS
INSTITUTIONAL CLASS
CLASSES OF DELAWARE GROUP
EQUITY FUNDS I, INC.
PART B
STATEMENT OF
ADDITIONAL INFORMATION
DECEMBER 30, 1997
DELAWARE
GROUP
APPENDIX C--PERFORMANCE OVERVIEW
Delaware Fund Performance Overview
The following table illustrates the total return on one share
invested in Delaware Fund A Class(1) during the 10-year period ended
October 31, 1997. The results reflect the reinvestment of all
dividends and realized securities profits distributions at the net asset
value reported at the time of distribution. No adjustment has been made
for any income taxes payable by shareholders on income dividends or
realized securities profits distributions accepted in shares.
<TABLE>
<CAPTION>
Delaware Fund A Class
Cumula-
tive net
asset
Net Asset value at
Maximum Value Distributions year-end
offering ----------- ------------------- with all
Year price at Begin- From From distribu-
ended begin- ning End Invest- realized tions
Oct ning of of of ment securi- rein-
31 year(2) year year income ties profits vested
- ----- ------ ------ ------ ------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
1988 17.69 16.85 15.25 0.32 4.09 20.56
1989 16.01 15.25 17.48 0.95 --- 25.02
1990 18.35 17.48 16.19 0.78 --- 24.23
1991 17.00 16.19 18.81 0.88 0.29 30.11
1992 19.75 18.81 18.72 0.70 1.54 33.84
1993 19.65 18.72 19.43 0.66 0.77 37.87
1994 20.40 19.43 18.00 0.60 1.16 38.55
1995 18.90 18.00 19.94 0.63 0.25 44.83
1996 20.93 19.94 21.26 0.66 1.08 52.03
1997 22.32 21.26 22.95 0.68 1.92 63.50
------ -----
Total Distributions $6.86 $11.10
Delaware Fund A Class (Continued)
PERCENTAGE CHANGES DURING YEAR
- ----------------------------------------------------------------------------------------------------------
Delaware Fund
---------------------------------
Maximum Net Asset
Offering Value Lipper
Price To to Net Balanced
Year Net Asset Asset Standard & Dow Jones Consumer Average
ended Value Value Poor's 500(3) Industrial(3) Price Index Index(3)
Oct -------------------------------------------------------------------------------------------------------------------------
31 Annual Cumulative(1) Annual Cumulative(1) Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative
- ------ ------- ---------- ------ ---------- ------ ---------- ------ ---------- ------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1988 16.2 16.2 22.03 22.0 14.8 14.8 12.0 12.0% 4.3 4.3 13.2 13.2
1989 15.9 41.4 21.68 48.5 26.4 45.0 28.3 43.6 4.5 9.0 16.9 32.3
1990 -7.8 36.9 -3.17 43.8 -7.5 34.1 -4.1 37.7 6.3 15.9 -3.8 27.2
1991 18.4 70.2 24.30 78.7 33.4 79.0 30.0 79.0 2.9 19.2 28.2 63.1
1992 7.0 91.3 12.38 100.8 10.0 96.8 8.4 94.0 3.2 23.0 8.8 77.4
1993 6.6 114.1 11.91 124.8 14.9 126.1 17.4 127.6 2.8 26.4 15.6 105.1
1994 -3.0 117.9 1.79 128.8 3.9 134.9 9.2 148.6 2.6 29.7 -0.7 103.7
1995 10.8 153.4 16.28 166.0 26.4 196.8 25.0 210.7 2.8 33.4 18.0 140.4
1996 10.6 194.1 16.07 208.8 24.1 268.3 29.7 303.0 3.0 37.4 21.1 191.0
1997 16.30 259.0 22.05 276.9 32.1 386.6 25.8 406.9 2.1 40.2 20.1 249.5
</TABLE>
(1) Delaware Fund A Class began paying 12b-1 payments on June 1, 1992
and performance prior to that date does not reflect such payments.
(2) Reflects a maximum sales charge of 4.75% of total investment.
There are reduced sales charges for investments of $100,000 or more.
(3) Source: Lipper Analytical Services, Inc.
This period was one of generally rising common stock prices but also
covers several years of declining prices. The results illustrated
should not be considered as representative of dividend income or capital
gain or loss which may be realized from an investment in the Fund today.
The Standard & Poor's 500 Stock Index and the Dow Jones Industrial
Average are industry-accepted unmanaged indices of generally-
conservative securities used for measuring general market performance.
The performance illustrated for these indices reflects the reinvestment
of all distributions on a quarterly basis and market price fluctuations.
The indices do not take into account any sales charge or other fees. In
seeking a particular investment objective, the Fund's portfolio
primarily includes common stocks, which may differ from those in the
indices, and may also include investments in fixed-income securities.
The Consumer Price Index, as prepared by the U.S. Bureau of Labor
Statistics, is the most commonly used measure of inflation. It
indicates the cost fluctuations of a representative group of consumer
goods. It does not represent a return from an investment.
Lipper Analytical Services, Inc. is a performance evaluation service
that maintains statistical performance databases, as reported by a
diverse universe of independently-managed mutual funds.
APPENDIX C--PERFORMANCE OVERVIEW
Delaware Fund Performance Overview
The following table illustrates the total return on one share
invested in Delaware Fund B Class during the period September 6, 1994
(date of initial public offering) through October 31, 1997. The
results reflect the reinvestment of all dividends and realized
securities profits distributions at the net asset value reported at the
time of distribution. No adjustment has been made for any income taxes
payable by shareholders on income dividends or realized securities
profits distributions accepted in shares.
<TABLE>
<CAPTION>
Delaware Fund B Class
Cumula-
tive net
asset
Net Asset value at
Maximum Value Distributions year-end
offering ----------- ------------------- with all
Year price at Begin- From From distribu-
ended begin- ning End Invest- realized tions
Oct ning of of of ment securi- rein-
31 year(2) year year income ties profits vested
- ----- ------ ------ ------ ------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
1994 $18.34 $18.34 $17.98 $0.15 --- $18.13
1995 17.98 17.98 19.90 0.51 0.25 20.92
1996 19.90 19.90 21.20 0.50 1.08 24.08
1997 21.20 21.20 22.88 0.51 1.92 29.16
------ -----
Total Distributions $1.67 $3.25
Delaware Fund B Class (Continued)
PERCENTAGE CHANGES DURING YEAR
- ---------------------------------------------------------------------------------------------------------
Delaware Fund
---------------------------------
Lipper
Returns Returns Balanced
Year Including Excluding Standard & Dow Jones Consumer Average
ended CDSC CDSC Poor's 500(2) Industrial(2) Price Index(2) Index(2)
Oct -----------------------------------------------------------------------------------------------------------------------
31 Annual Cumulative(1) Annual Cumulative(1) Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative
- ------ ------- ---------- ------ ---------- ------ ---------- ------ ---------- ------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1994 --- -1.1% --- -1.1% --- 0.5% --- 0.7% --- 0.3% --- -1.6%
1995 15.4 14.1 15.36 14.1 26.4 27.1 25.0 25.8 2.8 3.2 18.0 16.1
1996 15.2 31.3 15.15 31.3 24.1 57.7 29.7 63.2 3.0 6.3 21.1 40.6
1997 18.1 55.1 21.09 59.0 32.1 108.3 25.8 105.3 2.1 8.5 20.1 68.8
</TABLE>
(1) Reflects a net asset value of $18.84 on September 2, 1994.
(2) Source: Lipper Analytical Services, Inc.
The Standard & Poor's 500 Stock Index and the Dow Jones Industrial
Average are industry-accepted unmanaged indices of generally-
conservative securities used for measuring general market performance.
The performance illustrated for these indices reflects the reinvestment
of all distributions on a quarterly basis and market price fluctuations.
The indices do not take into account any sales charge or other fees. In
seeking a particular investment objective, the Fund's portfolio
primarily includes common stocks, which may differ from those in the
indices, and may also include investments in fixed-income securities.
The Consumer Price Index, as prepared by the U.S. Bureau of Labor
Statistics, is the most commonly used measure of inflation. It
indicates the cost fluctuations of a representative group of consumer
goods. It does not represent a return from an investment.
Lipper Analytical Services, Inc. is a performance evaluation service
that maintains statistical performance databases, as reported by a
diverse universe of independently-managed mutual funds.
APPENDIX C--PERFORMANCE OVERVIEW
Delaware Fund Performance Overview
The following table illustrates the total return on one share
invested in Delaware Fund C Class during the period November 29, 1995
(date of initial public offering) through October 31, 1997. The
results reflect the reinvestment of all dividends and realized
securities profits distributions at the net asset value reported at the
time of distribution. No adjustment has been made for any income taxes
payable by shareholders on income dividends or realized securities
profits distributions accepted in shares.
<TABLE>
<CAPTION>
Delaware Fund C Class
Cumula-
tive net
asset
Net Asset value at
Maximum Value Distributions year-end
offering ----------- ------------------- with all
Year price at Begin- From From distribu-
ended begin- ning End Invest- realized tions
Oct ning of of of ment securi- rein-
31 year(2) year year income ties profits vested
- ----- ------ ------ ------ ------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
1996 $20.50 $20.50 $21.18 $0.58 $1.08 $22.48
1997 21.18 21.18 22.87 0.51 1.92 27.22
------ -----
Total Distributions $1.09 $3.00
Delaware Fund C Class (Continued)
PERCENTAGE CHANGES DURING YEAR
- ---------------------------------------------------------------------------------------------------------
Delaware Fund
---------------------------------
Lipper
Returns Returns Balanced
Year Including Excluding Standard & Dow Jones Consumer Average
ended CDSC CDSC Poor's 500(2) Industrial(2) Price Index(2) Index(2)
Oct ------------------------------------------------------------------------------------------------------------------------
31 Annual Cumulative(1) Annual Cumulative(1) Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative
- ------ ------- ---------- ------ ---------- ------ ---------- ------ ---------- ------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996 --- 12.1% --- 12.1% --- 18.9% --- 21.1% --- 3.1% --- 16.2%
1997 2.11 35.8 21.07 35.8 32.1 57.0 25.8 52.3 2.1 5.2 20.1 39.5
</TABLE>
(1) Reflects a net asset value of $20.50 on November 29, 1995.
(2) Source: Lipper Analytical Services, Inc.
The Standard & Poor's 500 Stock Index and the Dow Jones Industrial
Average are industry-accepted unmanaged indices of generally-
conservative securities used for measuring general market performance.
The performance illustrated for these indices reflects the reinvestment
of all distributions on a quarterly basis and market price fluctuations.
The indices do not take into account any sales charge or other fees. In
seeking a particular investment objective, the Fund's portfolio
primarily includes common stocks, which may differ from those in the
indices, and may also include investments in fixed-income securities.
The Consumer Price Index, as prepared by the U.S. Bureau of Labor
Statistics, is the most commonly used measure of inflation. It
indicates the cost fluctuations of a representative group of consumer
goods. It does not represent a return from an investment.
Lipper Analytical Services, Inc. is a performance evaluation service
that maintains statistical performance databases, as reported by a
diverse universe of independently-managed mutual funds.
APPENDIX C--PERFORMANCE OVERVIEW
Delaware Fund Performance Overview
The following table illustrates the total return on one share
invested in Delaware Fund Institutional Class(1) during the 10-year
period ended October 31, 1997. The results reflect the reinvestment
of all dividends and realized securities profits distributions at the
net asset value reported at the time of distribution. No adjustment has
been made for any income taxes payable by shareholders on income
dividends or realized securities profits distributions accepted in
shares.
<TABLE>
<CAPTION>
Delaware Fund Institutional Class
Cumula-
tive net
asset
Net Asset value at
Value Distributions year-end
----------- ------------------- with all
Year Begin- From From distribu-
ended ning End Invest- realized tions
Oct of of ment securi- rein-
31 year year income ties profits vested
- ----- ------ ------ ------ ------------ ----------
<S> <C> <C> <C> <C> <C>
1988 16.85 15.25 0.32 4.09 20.56
1989 15.25 17.48 0.95 --- 25.02
1990 17.48 16.19 0.78 --- 24.23
1991 16.19 18.81 0.88 0.29 30.11
1992 18.81 18.72 0.70 1.54 33.84
1993 18.72 19.46 0.66 0.77 37.94
1994 19.46 18.03 0.63 1.16 38.68
1995 18.03 19.98 0.66 0.25 45.06
1996 19.98 21.30 0.69 1.08 52.39
1997 21.30 23.00 0.72 1.92 64.06
------ ------
Total Distributions $6.99 $11.10
Delaware Fund Institutional Class (Continued)
PERCENTAGE CHANGES DURING YEAR
- ---------------------------------------------------------------------------------------------------------
Delaware Fund
---------------------------------
Net Asset
Value Lipper
to Net Balanced
Year Asset Standard & Dow Jones Consumer Average
ended Value Poor's 500(2) Industrial(2) Price Index(2) Index(2)
Oct ---------------------------------------------------------------------------------------------------
31 Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative
- ------ ------- ---------- ------ ---------- ------ ---------- ------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1988 22.03 22.0 14.8 14.8 12.0 12.0 4.3 4.3 13.2 13.2
1989 21.68 48.5 26.4 45.0 28.3 43.6 4.5 9.0 16.9 32.3
1990 -3.17 43.8 -7.5 34.1 -4.1 37.7 6.3 15.9 -3.8 27.2
1991 24.30 78.7 33.4 79.0 30.0 79.0 2.9 19.2 28.2 63.1
1992 12.38 100.8 10.0 96.8 8.4 94.0 3.2 23.0 8.8 77.4
1993 12.10 125.1 14.9 126.1 17.4 127.8 2.8 26.4 15.6 105.1
1994 1.96 129.6 3.9 134.9 9.2 148.6 2.6 29.7 -0.7 103.7
1995 16.50 167.4 26.4 196.8 25.0 210.7 2.8 33.4 18.0 140.4
1996 16.25 210.9 24.1 268.3 29.7 303.0 3.0 37.4 21.1 191.0
1997 22.29 280.2 32.1 386.6 25.8 406.9 2.1 40.2 20.1 249.5
</TABLE>
(1) Performance for Delaware Fund Institutional Class for periods
prior to November 9, 1992 (date of initial public offering) is
calculated by taking the performance of Delaware Fund A Class and
adjusting it to reflect the elimination of all sales charges.
However, for those periods, no adjustment has been made to eliminate the
impact of 12b-1 payments applicable to Delaware Fund A Class beginning
June 1, 1992, and performance would have been affected had such an
adjustment been made.
(2) Source: Lipper Analytical Services, Inc.
This period was one of generally rising common stock prices but also
covers several years of declining prices. The results illustrated
should not be considered as representative of dividend income or capital
gain or loss which may be realized from an investment in the Fund today.
The Standard & Poor's 500 Stock Index and the Dow Jones Industrial
Average are industry-accepted unmanaged indices of generally-
conservative securities used for measuring general market performance.
The performance illustrated for these indices reflects the reinvestment
of all distributions on a quarterly basis and market price fluctuations.
The indices do not take into account any sales charge or other fees. In
seeking a particular investment objective, the Fund's portfolio
primarily includes common stocks, which may differ from those in the
indices, and may also include investments in fixed-income securities.
The Consumer Price Index, as prepared by the U.S. Bureau of Labor
Statistics, is the most commonly used measure of inflation. It
indicates the cost fluctuations of a representative group of consumer
goods. It does not represent a return from an investment.
Lipper Analytical Services, Inc. is a performance evaluation service
that maintains statistical performance databases, as reported by a
diverse universe of independently-managed mutual funds.
APPENDIX C--PERFORMANCE OVERVIEW
Devon Fund Performance Overview
The following table illustrates the total return on one share
invested in Devon Fund A Class during the period December 29, 1993 (date
of initial public offering) through October 31, 1997. The results
reflect the reinvestment of all dividends and realized securities
profits distributions at the net asset value reported at the time of
distribution. No adjustment has been made for any income taxes payable
by shareholders on income dividends or realized securities profits
distributions accepted in shares.
<TABLE>
<CAPTION>
Devon Fund A Class
Cumula-
tive net
asset
Net Asset value at
Maximum Value Distributions year-end
offering ----------- ------------------- with all
Year price at Begin- From From distribu-
ended begin- ning End Invest- realized tions
Oct ning of of of ment securi- rein-
31 year(1) year year income ties profits vested
- ----- ------ ------ ------ ------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1994 $10.50 $10.00 $10.83 $0.09 --- $10.93
1995 11.37 10.83 12.55 0.22 $0.32 13.33
1996 13.18 12.55 14.61 0.21 0.64 16.55
1997 15.34 14.61 17.86 0.21 0.97 21.86
------ -----
Total Distributions $0.73 $1.93
Devon Fund A Class (Continued)
PERCENTAGE CHANGES DURING YEAR
- ---------------------------------------------------------------------------------------------------------
Devon Fund
---------------------------------
Maximum Net Asset
Offering Value Lipper
Price To to Net Balanced
Year Net Asset Asset Standard & Dow Jones Consumer Average
ended Value Value Poor's 500(4) Industrial(4) Price Index(4) Index(4)
Oct -------------------------------------------------------------------------------------------------------------------------
31 Annual Cumulative(2) Annual Cumulative(3) Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative
- ------ ------- ---------- ------ ---------- ------ ---------- ------ ---------- ------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1994 --- 4.1% --- 9.3% --- 2.7% --- 5.4% --- 2.5% --- 2.4%
1995 16.2 27.0 22.0 33.3 26.4 29.8 25.0 31.7 2.8 5.4 20.2 23.1
1996 18.2 57.6 24.1 65.5 24.1 61.1 29.7 70.6 3.0 8.5 21.4 49.4
1997 25.8 108.2 32.1 118.6 32.1 112.8 25.8 114.8 2.1 10.8 28.0 91.3
</TABLE>
(1) Reflects a maximum sales charge of 4.75%. There are reduced
sales charges for investment of $100,000 or more.
(2) Reflects an offering price of $10.50 on December 28, 1993.
(3) Reflects a net asset value of $10.00 on December 28, 1993.
(4) Source: Lipper Analytical Services, Inc.
The Standard & Poor's 500 Stock Index and the Dow Jones Industrial
Average are industry-accepted unmanaged indices of generally-
conservative securities used for measuring general market performance.
The performance illustrated for these indices reflects the reinvestment
of all distributions on a quarterly basis and market price fluctuations.
The indices do not take into account any sales charge or other fees. In
seeking a particular investment objective, the Fund's portfolio
primarily includes common stocks, which may differ from those in the
indices, and may also include investments in fixed-income securities.
The Consumer Price Index, as prepared by the U.S. Bureau of Labor
Statistics, is the most commonly used measure of inflation. It
indicates the cost fluctuations of a representative group of consumer
goods. It does not represent a return from an investment.
Lipper Analytical Services, Inc. is a performance evaluation
service that maintains statistical performance databases, as reported by
a diverse universe of independently-managed mutual funds.
APPENDIX C--PERFORMANCE OVERVIEW
Devon Fund Performance Overview
The following table illustrates the total return on one share
invested in Devon Fund B Class during the period September 6, 1994 (date
of initial public offering) through October 31, 1997. The results
reflect the reinvestment of all dividends and realized securities
profits distributions at the net asset value reported at the time of
distribution. No adjustment has been made for any income taxes payable
by shareholders on income dividends or realized securities profits
distributions accepted in shares.
<TABLE>
<CAPTION>
Devon Fund B Class
Cumula-
tive net
asset
Net Asset value at
Maximum Value Distributions year-end
offering ----------- ------------------- with all
Year price at Begin- From From distribu-
ended begin- ning End Invest- realized tions
Oct ning of of of ment securi- rein-
31 year year year income ties profits vested
- ----- ------ ------ ------ ------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
1994 $10.90 $10.90 $10.82 $0.03 --- $10.85
1995 10.82 10.82 12.50 0.18 $0.32 13.13
1996 12.50 12.50 14.54 0.12 0.64 16.20
1997 14.54 14.54 17.80 0.08 0.97 21.26
------ -----
Total Distributions $0.41 $1.93
Devon Fund B Class (Continued)
PERCENTAGE CHANGES DURING YEAR
- ---------------------------------------------------------------------------------------------------------
Devon Fund
---------------------------------
Lipper
Returns Returns Balanced
Year Including Excluding Standard & Dow Jones Consumer Average
ended CDSC CDSC Poor's 500(2) Industrial(2) Price Index(2) Index(2)
Oct ------------------------------------------------------------------------------------------------------------------------
31 Annual Cumulative(1) Annual Cumulative(1) Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative
- ------ ------- ---------- ------ ---------- ------ ---------- ------ ---------- ------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1994 --- -0.5% --- -0.5% --- 0.5% --- 0.7% --- 0.3% --- -1.6%
1995 21.1 20.5 21.1 20.5 26.4 27.1 25.0 25.8 2.8 3.2 20.2 18.3
1996 23.4 48.7 23.4 48.7 24.1 57.7 29.7 63.2 3.0 6.3 21.4 43.6
1997 28.2 90.6 31.2 95.0 32.1 108.3 25.8 105.2 2.1 8.5 28.0 83.8
</TABLE>
(1) Reflects a net asset value of $10.90 on September 2, 1994.
(2) Source: Lipper Analytical Services, Inc.
The Standard & Poor's 500 Stock Index and the Dow Jones Industrial
Average are industry-accepted unmanaged indices of generally-
conservative securities used for measuring general market performance.
The performance illustrated for these indices reflects the reinvestment
of all distributions on a quarterly basis and market price fluctuations.
The indices do not take into account any sales charge or other fees. In
seeking a particular investment objective, the Fund's portfolio
primarily includes common stocks, which may differ from those in the
indices, and may also include investments in fixed-income securities.
The Consumer Price Index, as prepared by the U.S. Bureau of Labor
Statistics, is the most commonly used measure of inflation. It
indicates the cost fluctuations of a representative group of consumer
goods. It does not represent a return from an investment.
Lipper Analytical Services, Inc. is a performance evaluation service
that maintains statistical performance databases, as reported by a
diverse universe of independently-managed mutual funds.
APPENDIX C--PERFORMANCE OVERVIEW
Devon Fund Performance Overview
The following table illustrates the total return on one share
invested in Devon Fund C Class during the period November 29, 1995 (date
of initial public offering) through October 31, 1997. The results
reflect the reinvestment of all dividends and realized securities
profits distributions at the net asset value reported at the time of
distribution. No adjustment has been made for any income taxes payable
by shareholders on income dividends or realized securities profits
distributions accepted in shares.
<TABLE>
<CAPTION>
Devon Fund C Class
Cumula-
tive net
asset
Net Asset value at
Maximum Value Distributions year-end
offering ----------- ------------------- with all
Year price at Begin- From From distribu-
ended begin- ning End Invest- realized tions
Oct ning of of of ment securi- rein-
31 year year year income ties profits vested
- ----- ------ ------ ------ ------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
1996 $13.02 $13.02 $14.53 $0.20 $0.64 $15.49
1997 14.53 14.53 17.79 0.08 0.97 20.32
----- -----
Total Distributions $0.28 $1.61
Devon Fund C Class (Continued)
PERCENTAGE CHANGES DURING YEAR
- ---------------------------------------------------------------------------------------------------------
Devon Fund
---------------------------------
Lipper
Returns Returns Balanced
Year Including Excluding Standard & Dow Jones Consumer Average
ended CDSC CDSC Poor's 500(2) Industrial(2) Price Index(2) Index(2)
Oct ------------------------------------------------------------------------------------------------------------------------
31 Annual Cumulative(1) Annual Cumulative(1) Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative
- ------ ------- ---------- ------ ---------- ------ ---------- ------ ---------- ------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996 --- 18.9% --- 18.9% --- 18.9% --- 21.1 --- 3.1% --- 16.4%
1997 31.2 56.1 31.2 56.1 32.1 57.0 25.8 52.3 2.1 5.2 28.0 49.0
</TABLE>
(1) Reflects a net asset value of $13.02 on November 29, 1995.
(2) Source: Lipper Analytical Services, Inc.
The Standard & Poor's 500 Stock Index and the Dow Jones Industrial
Average are industry-accepted unmanaged indices of generally-
conservative securities used for measuring general market performance.
The performance illustrated for these indices reflects the reinvestment
of all distributions on a quarterly basis and market price fluctuations.
The indices do not take into account any sales charge or other fees. In
seeking a particular investment objective, the Fund's portfolio
primarily includes common stocks, which may differ from those in the
indices, and may also include investments in fixed-income securities.
The Consumer Price Index, as prepared by the U.S. Bureau of Labor
Statistics, is the most commonly used measure of inflation. It
indicates the cost fluctuations of a representative group of consumer
goods. It does not represent a return from an investment.
Lipper Analytical Services, Inc. is a performance evaluation service
that maintains statistical performance databases, as reported by a
diverse universe of independently-managed mutual funds.
APPENDIX C--PERFORMANCE OVERVIEW
Devon Fund Performance Overview
The following table illustrates the total return on one share
invested in Devon Fund Institutional Class during the period December
29, 1993 (date of initial public offering) through October 31, 1997.
The results reflect the reinvestment of all dividends and realized
securities profits distributions at the net asset value reported at the
time of distribution. No adjustment has been made for any income taxes
payable by shareholders on income dividends or realized securities
profits distributions accepted in shares.
<TABLE>
<CAPTION>
Devon Fund Institutional Class
Cumula-
tive net
asset
Net Asset value at
Value Distributions year-end
----------- ------------------- with all
Year Begin- From From distribu-
ended ning End Invest- realized tions
Oct of of ment securi- rein-
31 year year income ties profits vested
- ----- ------ ------ ------ ------------ ----------
<S> <C> <C> <C> <C> <C>
1994 $10.00 $10.86 $0.09 ---- $10.96
1995 10.86 12.59 0.24 $0.32 13.39
1996 12.59 14.67 0.24 0.64 16.68
1997 14.67 17.93 0.27 0.97 22.12
----- -----
Total Distributions $0.84 $1.93
Devon Fund Institutional Class (Continued)
PERCENTAGE CHANGES DURING YEAR
- ------------------------------------------------------------------------------------------------------------
Devon Fund
---------------------------------
Lipper
Net Asset Value Balanced
Year to Standard & Dow Jones Consumer Average
ended Net Asset Value Poor's 500(2) Industrial(2) Price Index(2) Index(2)
Oct ---------------------------------------------------------------------------------------------------
31 Annual Cumulative(1) Annual Cumulative Annual Cumulative Annual Cumulative Annual Cumulative
- ------ ------- ---------- ------ ---------- ------ ---------- ------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1994 ---- 9.6% ---- 2.7% ---- 5.4 ---- 2.5 --- 2.4%
1995 22.3 33.9 26.4 29.8 25.0 31.7 2.8 5.4 20.2 23.1
1996 24.6 66.8 24.1 61.1 29.7 70.8 3.0 8.5 21.4 49.4
1997 32.6 121.2 32.1 112.8 25.8 114.8 2.1 10.8 28.0 91.3
</TABLE>
(1) Reflects a net asset value of $10.00 on December 28, 1993.
(2) Source: Lipper Analytical Services, Inc.
The Standard & Poor's 500 Stock Index and the Dow Jones Industrial
Average are industry-accepted unmanaged indices of generally-
conservative securities used for measuring general market performance.
The performance illustrated for these indices reflects the reinvestment
of all distributions on a quarterly basis and market price fluctuations.
The indices do not take into account any sales charge or other fees. In
seeking a particular investment objective, the Fund's portfolio
primarily includes common stocks, which may differ from those in the
indices, and may also include investments in fixed-income securities.
The Consumer Price Index, as prepared by the U.S. Bureau of Labor
Statistics, is the most commonly used measure of inflation. It
indicates the cost fluctuations of a representative group of consumer
goods. It does not represent a return from an investment.
Lipper Analytical Services, Inc. is a performance evaluation service
that maintains statistical performance databases, as reported by a
diverse universe of independently-managed mutual funds.
(SAI-DF/DVN-PART B)
PART C
Other Information
Item 24. Financial Statements and Exhibits
(a)Financial Statements:
Part A - Financial Highlights
*Part B- Statements of Net Assets
Statements of Assets and Liabilities
Statements of Operations
Statements of Changes in Net Assets
Notes to Financial Statements
Accountant's Reports
*The financial statements and Accountant's Reports listed
above are incorporated by reference into Part B from the
Registrant's Annual Reports for Delaware Fund and Devon Fund
for the fiscal year ended October 31, 1997.
(b)Exhibits:
(1) Articles of Incorporation.
(a) Articles of Incorporation, as amended and
supplemented to date, incorporated into this filing
by reference to Post-Effective Amendment No. 102
filed November 22, 1995.
(b) Executed Articles Supplementary (November 28,
1995) incorporated into this filing by reference to
Post-Effective Amendment No. 103 filed December 29,
1995.
(c) Executed Articles of Amendment (December 1996)
attached as Exhibit.
(2) By-Laws. By-Laws, as amended to date, incorporated
into this filing by reference to Post-Effective Amendment
No. 102 filed November 22, 1995.
(3) Voting Trust Agreement. Inapplicable.
Part C - Other Information
(Continued)
(4) Copies of All Instruments Defining the Rights of
Holders.
(a) Articles of Incorporation, Articles of
Amendment and Articles Supplementary.
(i) Article Second of Articles Supplementary
(September 6, 1994), Article Fifth of Articles
Supplementary (November 30, 1993), Article Second
of Articles Supplementary (May 22, 1992), Article
Fifth of Articles of Incorporation (March 4,
1983) and Article Eleventh of Articles of
Amendment (May 2, 1985) incorporated into this
filing by reference to Post-Effective Amendment
No. 102 filed November 22, 1995.
(ii) Executed Articles Third and Fourth of
Articles Supplementary (November 28, 1995)
incorporated into this filing by reference to
Post-Effective Amendment No. 103 filed December
29, 1995.
(b) By-Laws. Article II, Article III, as amended,
and Article XIII, which was subsequently redesignated
as Article XIV, incorporated into this filing by
reference to Post-Effective Amendment No. 102 filed
November 22, 1995.
(5) Investment Management Agreements.
(a) Investment Management Agreement (April 3,
1995) between Delaware Management Company, Inc. and
the Registrant on behalf of Delaware Fund
incorporated into this filing by reference to Post-
Effective Amendment No. 102 filed November 22, 1995.
(b) Investment Management Agreement (April 3,
1995) between Delaware Management Company, Inc. and
the Registrant on behalf of Devon Fund incorporated
into this filing by reference to Post-Effective
Amendment No. 102 filed November 22, 1995.
(6) (a) Distribution Agreements.
(i) Executed Distribution Agreement (April
3, 1995) between Delaware Distributors, L.P. and
the Registrant on behalf of Delaware Fund
incorporated into this filing by reference to
Post-Effective Amendment No. 103 filed December
29, 1995.
(ii) Executed Distribution Agreement (April
3, 1995) between Delaware Distributors, L.P. and
the Registrant on behalf of Devon Fund
incorporated into this filing by reference to
Post-Effective Amendment No. 103 filed December
29, 1995.
Part C - Other Information
(Continued)
(iii) Executed Amendment No. 1 to
Distribution Agreement (November 29, 1995)
between Delaware Distributors, L.P. and the
Registrant on behalf of Delaware Fund
incorporated into this filing by reference to
Post-Effective Amendment No. 103 filed December
29, 1995.
(iv) Executed Amendment No. 1 to Distribution
Agreement (November 29, 1995) between Delaware
Distributors, L.P. and the Registrant on behalf
of Devon Fund incorporated into this filing by
reference to Post-Effective Amendment No. 103
filed December 29, 1995.
(b) Administration and Service Agreement. Form of
Administration and Service Agreement (as amended
November 1995) (Module) incorporated into this filing
by reference to Post-Effective Amendment No. 102
filed November 22, 1995.
(c) Dealer's Agreement. Dealer's Agreement (as amended
November 1995) (Module) incorporated into this filing
by reference to Post-Effective Amendment No. 102
filed November 22, 1995.
(d) Mutual Fund Agreement for the Delaware Group
of Funds (November 1995) (Module) incorporated into
this filing by reference to Post-Effective Amendment
No. 103 filed December 29, 1995.
(7) Bonus, Profit Sharing, Pension Contracts.
(a) Amended and Restated Profit Sharing Plan
(November 17, 1994) incorporated into this filing by
reference to Post-Effective Amendment No. 102 filed
November 22, 1995.
(b) Amendment to Profit Sharing Plan (December 21,
1995) (Module) incorporated into this filing by
reference to Post-Effective Amendment No. 104 filed
December 24, 1996.
(8) Custodian Agreements.
(a) Executed Custodian Agreement (May 1, 1996)
between The Chase Manhattan Bank and the Registrant
on behalf of Delaware Fund and Devon Fund (Module)
incorporated into this filing by reference to Post-
Effective Amendment No. 104 filed December 24, 1996.
(i) Amendment (November 1997) to Custodian
Agreement between The Chase Manhattan Bank and
the Registrant on behalf of Delaware Fund and
Devon Fund attached as Exhibit.
PART C - Other Information
(Continued)
(b) Form of Securities Lending Agreement between
The Chase Manhattan Bank and the Registrant on behalf
of Delaware Fund and Devon Fund incorporated into
this filing by reference to Post-Effective Amendment
No. 104 filed December 24, 1996.
(9) Other Material Contracts.
(a) Executed Shareholders Services Agreement (June
29, 1988) between Delaware Service Company, Inc. and
the Registrant on behalf of Delaware Fund
incorporated into this filing by reference to Post-
Effective Amendment No. 104 filed December 24, 1996.
(i) Amended Schedule A (January 1, 1997) to
Shareholders Services Agreement between
Delaware Service Company, Inc. and the
Registrant on behalf of Delaware Fund
attached as Exhibit.
(ii) Amended Schedule A (July 1, 1997) to
Shareholders Services Agreement between
Delaware Service Company, Inc. and the
Registrant on behalf of Delaware Fund
attached as Exhibit.
(iii) Amended Schedule A (October 14, 1997)
to Shareholders Services Agreement between
Delaware Service Company, Inc. and the
Registrant on behalf of Delaware Fund
attached as Exhibit.
(b) Executed Shareholders Services Agreement
(December 29, 1993) between Delaware Service Company,
Inc. and the Registrant on behalf of Devon Fund
incorporated into this filing by reference to Post-
Effective Amendment No. 104 filed December 24, 1996.
(i) Amended Schedule A (January 1, 1997) to
Shareholders Services Agreement between
Delaware Service Company, Inc. and the
Registrant on behalf of Devon Fund
attached as Exhibit.
(ii) Amended Schedule A (July 1, 1997) to
Shareholders Services Agreement between
Delaware Service Company, Inc. and the
Registrant on behalf of Devon Fund
attached as Exhibit.
(iii) Amended Schedule A (October 14, 1997)
to Shareholders Services Agreement between
Delaware Service Company, Inc. and the
Registrant on behalf of Devon Fund
attached as Exhibit.
PART C - Other Information
(Continued)
(c) Executed Delaware Group of Funds Fund
Accounting Agreement (August 19, 1996) between
Delaware Service Company, Inc. and the Registrant on
behalf of Delaware Fund and Devon Fund incorporated
into this filing by reference to Post-Effective
Amendment No. 104 filed December 24, 1996.
(d) Executed Amendment No. 3 (December 27, 1996)
to Delaware Group of Funds Fund Accounting Agreement
attached as Exhibit.
(e) Executed Amendment No. 4 (February 24, 1997)
to Delaware Group of Funds Fund Accounting Agreement
attached as Exhibit.
(f) Executed Amendment No. 4A (April 14, 1997) to Delaware
Group of Funds Fund Accounting Agreement attached as
Exhibit.
(g) Executed Amendment No. 5 (May 1, 1997) to Delaware
Group of Funds Fund Accounting Agreement attached as
Exhibit.
(h) Executed Amendment No. 6 (July 21, 1997) to Delaware
Group of Funds Fund Accounting Agreement attached as
Exhibit.
(10) Opinion of Counsel. Inapplicable.
(11) Consent of Auditors. Attached as Exhibit.
(12-13) Inapplicable.
(14) Model Plans. Incorporated into this filing by
reference to Post-Effective Amendment No. 97 filed October
28, 1993 and Post-Effective Amendment No. 102 filed
November 22, 1995.
**(15) Plans under Rule 12b-1.
(a) Executed Plan under Rule 12b-1 (November 29,
1995) for Delaware Fund A Class incorporated into
this filing by reference to Post-Effective Amendment
No. 103 filed December 29, 1995.
(b) Executed Plan under Rule 12b-1 (November 29,
1995) for Delaware Fund B Class incorporated into
this filing by reference to Post-Effective Amendment
No. 103 filed December 29, 1995.
(c) Executed Plan under Rule 12b-1 (November 29,
1995) for Delaware Fund C Class incorporated into
this filing by reference to Post-Effective Amendment
No. 103 filed December 29, 1995.
**Relates to Class A, B and C Shares of each Fund of the Registrant.
PART C - Other Information
(Continued)
(d) Executed Plan under Rule 12b-1 (November 29,
1995) for Devon Fund A Class incorporated into this
filing by reference to Post-Effective Amendment No.
103 filed December 29, 1995.
(e) Executed Plan under Rule 12b-1 (November 29,
1995) for Devon Fund B Class incorporated into this
filing by reference to Post-Effective Amendment No.
103 filed December 29, 1995.
(f) Executed Plan under Rule 12b-1 (November 29,
1995) for Devon Fund C Class incorporated into this
filing by reference to Post-Effective Amendment No.
103 filed December 29, 1995.
(16) Schedules of Computation for each Performance Quotation.
(a) Incorporated into this filing by reference to
Post-Effective Amendment No. 102 filed November 22,
1995, Post-Effective Amendment No. 103 filed December
29, 1995 and Post-Effective Amendment No. 104 filed
December 24, 1996.
(b) Schedules of Computation for each Performance
Quotation for periods not previously shown attached
as Exhibit.
(17) Financial Data Schedules. Attached as Exhibit.
(18) Plan under Rule 18f-3.
(a) Plan under Rule 18f-3 (September 18, 1997)
attached as Exhibit.
(b) Amended Appendix A to Plan under Rule 18f-3 attached as
Exhibit.
(19) Other: Directors' Power of Attorney.
(a) Incorporated into this filing by reference to Post-
Effective Amendment No. 102 filed November 22, 1995
(b) Power of Attorney for Thomas F. Madison and Jeffrey J.
Nick attached as Exhibit.
Item 25. Persons Controlled by or under Common Control with
Registrant. None.
PART C - Other Information
(Continued)
Item 26. Number of Holders of Securities.
(1) (2)
Number of
Title of Class Record Holders
Delaware Group Equity Funds I, Inc.'s
Delaware Fund series:
Delaware Fund A Class
Common Stock Par Value 23,449 Accounts as of
$1.00 Per Share November 30, 1997
Delaware Fund B Class
Common Stock Par Value 1,347 Accounts as of
$1.00 Per Share November 30, 1997
Delaware Fund C Class
Common Stock Par Value 343 Accounts as of
$1.00 Per Share November 30, 1997
Delaware Fund Institutional Class
Common Stock Par Value 62 Accounts as of
$1.00 Per Share November 30, 1997
Delaware Group Equity Funds I, Inc.'s
Devon Fund series:
Devon Fund A Class
Common Stock Par Value 4,489 Accounts as of
$1.00 Per Share November 30, 1997
Devon Fund B Class
Common Stock Par Value 2,713 Accounts as of
$1.00 Per Share November 30, 1997
Devon Fund C Class
Common Stock Par Value 498 Accounts as of
$1.00 Per Share November 30, 1997
Devon Fund Institutional Class
Common Stock Par Value 15 Accounts as of
$1.00 Per Share November 30, 1997
Item 27.Indemnification. Incorporated into this filing by reference
to Post-Effective Amendment No. 78 filed October 26, 1983 and
Post-Effective Amendment No. 102 filed November 22, 1995.
PART C - Other Information
(Continued)
Item 28. Business and Other Connections of Investment Adviser.
Delaware Management Company, Inc. (the "Manager") serves as
investment manager to the Registrant and also serves as
investment manager or sub-adviser to certain of the other funds
in the Delaware Group (Delaware Group Equity Funds II, Inc.,
Delaware Group Equity Funds III, Inc., Delaware Group Equity
Funds IV, Inc., Delaware Group Equity Funds V, Inc., Delaware
Group Government Fund, Inc., Delaware Group Income Funds, Inc.,
Delaware Group Limited-Term Government Funds, Inc., Delaware
Group Cash Reserve, Inc., Delaware Group Tax-Free Fund, Inc.,
Delaware Group State Tax-Free Income Trust, Delaware Group Tax-
Free Money Fund, Inc., Delaware Group Premium Fund, Inc.,
Delaware Group Global & International Funds, Inc., Delaware
Pooled Trust, Inc., Delaware Group Adviser Funds, Inc., Delaware
Group Dividend and Income Fund, Inc., Delaware Group Global
Dividend and Income Fund, Inc., Voyageur Tax-Free Funds, Inc.,
Voyageur Intermediate Tax-Free Funds, Inc., Voyageur Insured
Funds, Inc., Voyageur Funds, Inc., Voyageur Investment Trust,
Voyageur Investment Trust II, Voyageur Mutual Funds, Inc.,
Voyageur Mutual Funds II, Inc., Voyageur Mutual Funds III, Inc.,
Voyageur Arizona Municipal Income Fund, Inc., Voyageur Colorado
Insured Municipal Income Fund, Inc., Voyageur Florida Insured
Municipal Income Fund, Voyageur Minnesota Municipal Fund, Inc.,
Voyageur Minnesota Municipal Fund II, Inc. and Voyageur Minnesota
Municipal Fund III, Inc.) and provides investment advisory
services to institutional accounts, primarily retirement plans
and endowment funds. In addition, certain directors of the
Manager also serve as directors/trustees of the other Delaware
Group funds, and certain officers are also officers of these
other funds. A company owned by the Manager's parent company
acts as principal underwriter to the mutual funds in the Delaware
Group (see Item 29 below) and another such company acts as the
shareholder services, dividend disbursing, accounting servicing
and transfer agent for all of the mutual funds in the Delaware
Group.
PART C - Other Information
(Continued)
The following persons serving as directors or officers of the
Manager have held the following positions during the past two
years:
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------- --------------------------------------------------
Wayne A. Stork Chairman of the Board, President, Chief Executive
Officer, Chief Investment Officer and Director of
Delaware Management Company, Inc.; Chairman of the
Board, President, Chief Executive Officer and
Director of DMH Corp., Delaware Distributors, Inc.
and Founders Holdings, Inc.; Chairman, Chief
Executive Officer and Director of Delaware
Management Holdings, Inc., Delaware International
Holdings Ltd. and Delaware International Advisers
Ltd.; Chairman of the Board and Director of the
Registrant, each of the other funds in the
Delaware Group and Delaware Capital Management,
Inc.; Chairman of Delaware Distributors, L.P.;
President and Chief Executive Officer of Delvoy,
Inc.; and Director of Delaware Service Company,
Inc. and Delaware Investment & Retirement
Services, Inc.
Richard G. Unruh, Jr. Executive Vice President and Director of
Delaware Management Company, Inc.; Executive Vice
President of the Registrant, each of the other
funds in the Delaware Group, Delaware Management
Holdings, Inc. and Delaware Capital Management,
Inc; and Director of Delaware International
Advisers Ltd.
Board of Directors, Chairman of Finance Committee,
Keystone Insurance Company since 1989, 2040 Market
Street, Philadelphia, PA; Board of Directors,
Chairman of Finance Committee, AAA Mid
Atlantic, Inc.since 1989, 2040 Market Street,
Philadelphia, PA; Board of Directors,
Metron, Inc. since 1995, 11911 Freedom Drive,
Reston, VA
Paul E. Suckow Executive Vice President/Chief Investment Officer,
Fixed Income of Delaware Management Company, Inc.,
the Registrant, each of the other funds in the
Delaware Group and Delaware Management
Holdings, Inc.; Executive Vice President and
Director of Founders Holdings, Inc.; Executive
Vice President of Delaware Capital Management,
Inc.; and Director of Founders CBO Corporation
Director, HYPPCO Finance Company Ltd.
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
PART C - Other Information
(Continued)
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------- -----------------------------------------------
David K. Downes Executive Vice President, Chief Operating
Officer, Chief Financial Officer and Director
of Delaware Management Company, Inc., DMH Corp,
Delaware Distributors, Inc., Founders
Holdings, Inc. and Delvoy, Inc.; Executive Vice
President, Chief Operating Officer and Chief
Financial Officer of the Registrant and each
of the other funds in the Delaware Group,
Delaware Management Holdings, Inc., Founders
CBO Corporation, Delaware Capital Management,
Inc. and Delaware Distributors, L.P.; President,
Chief Executive Officer, Chief Financial Officer
and Director of Delaware Service Company, Inc.;
President, Chief Operating Officer, Chief
Financial Officer and Director of Delaware
International Holdings Ltd.; Chairman, Chief
Executive Officer and Director of Delaware
Investment & Retirement Services, Inc.; Chairman
and Director of Delaware Management Trust Company;
Director of Delaware International Advisers Ltd.;
and Vice President of Lincoln Funds Corporation
Chief Executive Officer and Director of Forewarn,
Inc. since 1993, 8 Clayton Place, Newtown Square, PA
George M. Chamberlain, Senior Vice President, General Counsel, Secretary
Jr. and Director of Delaware Management Company, Inc.,
DMH Corp., Delaware Distributors, Inc., Delaware
Service Company, Inc., Founders Holdings, Inc.,
Delaware Capital Management, Inc., Delaware
Investment & Retirement Services, Inc. and Delvoy,
Inc.; Senior Vice President, Secretary and General
Counsel of the Registrant, each of the other funds
in the Delaware Group, Delaware Distributors, L.P.
and Delaware Management Holdings, Inc.; Senior
Vice President and Director of Delaware
International Holdings Ltd.; Executive Vice
President, Secretary, General Counsel and Director
of Delaware Management Trust Company; Director of
Delaware International Advisers Ltd.; Secretary of
Lincoln Funds Corporation
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
PART C - Other Information
(Continued)
Name and Principal Positions and Offices with the Manager and its
Business Address* Affiliates and Other Positions and Offices Held
- -------------------- -------------------------------------------------
Richard J. Flannery Senior Vice President/Corporate and International
Affairs of the Registrant, each of the other
funds in the Delaware Group, Delaware Management
Holdings, Inc., DMH Corp., Delaware Management
Company, Inc., Delaware Distributors, Inc., Delaware
Distributors, L.P., Delaware Management Trust
Company, Delaware Capital Management, Inc.,
Delaware Service Company, Inc. and Delaware
Investment & Retirement Services, Inc.;
Executive Vice President/Corporate & International
Affairs and Director of Delaware International
Holdings Ltd.; Senior Vice President/ Corporate
and International Affairs and Director of Founders
Holdings, Inc. and Delvoy, Inc.; Senior Vice
President of Founders CBO Corporation; and
Director of Delaware International Advisers Ltd.
Director, HYPPCO Finance Company Ltd.
Limited Partner of Stonewall Links, L.P. since 1991,
Bulltown Rd., Elverton, PA; Director and Member
of Executive Committee of Stonewall Links, Inc.
since 1991, Bulltown Rd., Elverton, PA
Michael P. Bishof Senior Vice President and Treasurer of the
Registrant, each of the other funds in the
Delaware Group and Founders Holdings, Inc.;
Senior Vice President/Investment Accounting of
Delaware Management Company, Inc. and Delaware
Service Company, Inc.; Senior Vice President and
Treasurer/ Manager, Investment Accounting of
Delaware Distributors, L.P.; Assistant Treasurer
of Founders CBO Corporation; and Senior Vice
President and Manager of Investment Accounting
of Delaware International Holdings Ltd.
Joseph H. Hastings Senior Vice President/Corporate Controller and
Treasurer of Delaware Management Holdings, Inc.,
DMH Corp., Delaware Management Company, Inc.,
Delaware Distributors, Inc., Delaware Capital
Management, Inc., Delaware Distributors, L.P.,
Delaware Service Company, Inc., Delaware
International Holdings Ltd. and Delvoy, Inc.;
Senior Vice President/Corporate Controller of
the Registrant, each of the other funds in the
Delaware Group and Founders Holdings, Inc.;
Executive Vice President, Chief Financial Officer
and Treasurer of Delaware Management Trust Company;
Chief Financial Officer and Treasurer of Delaware
Investment & Retirement Services, Inc.; Senior
Vice President/Assistant Treasurer of Founders
CBO Corporation; and Treasurer of Lincoln Funds
Corporation.
Michael T. Taggart Senior Vice President/Facilities Management and
Administrative Services of Delaware Management
Company, Inc.
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
PART C - Other Information
(Continued)
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- -------------------- ------------------------------------------------
Douglas L. Anderson Senior Vice President/Operations of Delaware
Management Company, Inc., Delaware Investment
and Retirement Services, Inc. and Delaware Service
Company, Inc.; Senior Vice President/ Operations
and Director of Delaware Management Trust Company
James L. Shields Senior Vice President/Chief Information Officer
of Delaware Management Company, Inc., Delaware
Service Company, Inc. and Delaware Investment &
Retirement Services, Inc.
Eric E. Miller Vice President, Assistant Secretary and Deputy
General Counsel of the Registrant and each of
the other funds in the Delaware Group, Delaware
Management Company, Inc., Delaware Management
Holdings, Inc., DMH Corp., Delaware Distributors,
L.P., Delaware Distributors Inc., Delaware Service
Company, Inc., Delaware Management Trust Company,
Founders Holdings, Inc., Delaware Capital
Management, Inc. and Delaware Investment &
Retirement Services, Inc.; and Vice President
and Assistant Secretary of Delvoy, Inc.
Richelle S. Maestro Vice President and Assistant Secretary of
Delaware Management Company, Inc., the
Registrant, each of the other funds in the
Delaware Group, Delaware Management Holdings, Inc.,
Delaware Distributors, L.P., Delaware Distributors,
Inc., Delaware Service Company, Inc., DMH Corp.,
Delaware Management Trust Company, Delaware
Capital Management, Inc., Delaware Investment
& Retirement Services, Inc., Founders Holdings,
Inc. and Delvoy, Inc.; Vice President and
Secretary of Delaware International Holdings Ltd.;
and Secretary of Founders CBO Corporation;
Partner of Tri-R Associates since 1989, 10001
Sandmeyer Lane, Philadelphia, PA
Richard Salus(1) Vice President/Assistant Controller of Delaware
Management Company, Inc. and Delaware Management
Trust Company
Bruce A. Ulmer Vice President/Director of LNC Internal Audit
of Delaware Management Company, Inc., the
Registrant, each of the other funds in the
Delaware Group, Delaware Management Holdings,
Inc., DMH Corp., Delaware Management Trust
Company and Delaware Investment & Retirement
Services, Inc.; Vice President/Director of
Internal Audit of Delvoy, Inc.
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
PART C - Other Information
(Continued)
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------- -----------------------------------------------
Steven T. Lampe Vice President/Taxation of Delaware Management
Company, Inc., the Registrant, each of the
other funds in the Delaware Group, Delaware
Management Holdings, Inc., DMH Corp., Delaware
Distributors, L.P., Delaware Distributors, Inc.,
Delaware Service Company, Inc., Delaware
Management Trust Company, Founders Holdings, Inc.,
Founders CBO Corporation, Delaware Capital
Management, Inc., Delaware Investment & Retirement
Services, Inc. and Delvoy, Inc.
Christopher Adams Vice President/Strategic Planning of Delaware
Management Company, Inc. and Delaware Service
Company, Inc.
Susan L. Hanson Vice President/Strategic Planning of Delaware
Management Company, Inc. and Delaware Service
Company, Inc.
Dennis J. Mara(2) Vice President/Acquisitions of Delaware
Management Company, Inc.
Scott Metzger Vice President/Business Development of Delaware
Management Company, Inc. and Delaware Service
Company, Inc.
Lisa O. Brinkley Vice President/Compliance of Delaware Management
Company, Inc., the Registrant, each of the other
funds in the Delaware Group, DMH Corp., Delaware
Distributors, L.P., Delaware Distributors, Inc.,
Delaware Service Company, Inc., Delaware Management
Trust Company, Delaware Capital Management, Inc.
and Delaware Investment & Retirement Services,
Inc.; Vice President of Delvoy, Inc.
Rosemary E. Milner Vice President/Legal Registrations of Delaware
Management Company, Inc., the Registrant, each
of the other funds in the Delaware Group, Delaware
Distributors, L.P. and Delaware Distributors, Inc.
Mary Ellen Carrozza Vice President/Client Services of Delaware
Management Company, Inc. and the Registrant
Gerald T. Nichols Vice President/Senior Portfolio Manager of
Delaware Management Company, Inc., each of
the tax-exempt funds, the fixed income funds
and the closed-end funds in the Delaware Group;
Vice President of Founders Holdings, Inc.; and
Treasurer, Assistant Secretary and Director of
Founders CBO Corporation
Paul A. Matlack Vice President/Senior Portfolio Manager of
Delaware Management Company, Inc., each of
the tax-exempt funds, the fixed income funds
and the closed-end funds in the Delaware Group;
Vice President of Founders Holdings, Inc.; and
President and Director of Founders CBO Corporation.
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
PART C - Other Information
(Continued)
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
Gary A. Reed Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., the Registrant, each of
the tax-exempt funds and the fixed income funds in
the Delaware Group and Delaware Capital
Management, Inc.
Patrick P. Coyne Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., each of the tax-exempt
funds and the fixed income funds in the Delaware
Group and Delaware Capital Management, Inc.
Roger A. Early Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., the Registrant, each of
the tax-exempt funds and the fixed income funds in
the Delaware Group
Mitchell L. Conery(3) Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc. and each of the tax-exempt
and fixed income funds in the Delaware Group
George H. Burwell Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., the Registrant and each
of the equity funds in the Delaware Group
John B. Fields Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., each of the equity funds
in the Delaware Group and Delaware Capital
Management, Inc.
Gerald S. Frey(4) Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc. and each of the equity
funds in the Delaware Group
Christopher Beck(5) Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc. and each of the equity funds
in the Delaware Group
Elizabeth H. Howell(6) Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc. and the Delaware-Voyageur
Tax-Free Minnesota Intermediate, Delaware-Voyageur
Minnesota Insured, Delaware-Voyageur Tax-Free
Minnesota, Delaware-Voyageur Tax-Free Idaho,
Delaware-Voyageur Tax-Free Kansas, Delaware-Voyageur
Tax-Free Missouri, Delaware-Voyageur Tax-Free Oregon,
Delaware-Voyageur Tax-Free Washington, Delaware-
Voyageur Tax-Free Iowa and Delaware-Voyageur Tax-Free
Wisconsin Funds
Andrew M. McCullagh(7) Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc. and the Delaware-Voyageur
Tax-Free Arizona Insured, Delaware-Voyageur Tax-Free
Arizona, Delaware-Voyageur Tax-Free California
Insured, Delaware-Voyageur Tax-Free Colorado,
Delaware-Voyageur Tax-Free New Mexico, Delaware-
Voyageur Tax-Free North Dakota and Delaware-Voyageur
Tax-Free Utah Funds.
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
PART C - Other Information
(Continued)
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------- -----------------------------------------------
Babak Zenouzi Vice President/Senior Portfolio Manager of
Delaware Management Company, Inc. and each
of the equity funds and the closed-end funds
in the Delaware Group
Paul Grillo Vice President/Portfolio Manager of Delaware
Management Company, Inc. and each of the
tax-exempt and fixed income funds in the
Delaware Group
Marshall T. Bassett Vice President/Portfolio Manager of Delaware
Management Company, Inc. and each of the equity
funds in the Delaware Group
John Heffern Vice President/Portfolio Manager of Delaware
Management Company, Inc. and each of the equity
funds in the Delaware Group
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
(1) SENIOR MANAGER, Ernst & Young LLP prior to December 1996.
(2) CORPORATE CONTROLLER, IIS prior to July 1997 and DIRECTOR,FINANCIAL
PLANNING, Decision One prior to March 1996.
(3) INVESTMENT OFFICER, Travelers Insurance prior to January 1997.
(4) SENIOR DIRECTOR, Morgan Grenfell Capital Management prior to June 1996.
(5) SENIOR PORTFOLIO MANAGER, Pitcairn Trust Company prior to May 1997.
(6) SENIOR PORTFOLIO MANAGER, Voyageur Fund Managers, Inc. prior to May 1997.
(7) SENIOR VICE PRESIDENT, SENIOR PORTFOLIO MANAGER, Voyageur Asset
Management LLC prior to May 1997.
Item 29. Principal Underwriters.
(a) Delaware Distributors, L.P. serves as principal underwriter
for all the mutual funds in the Delaware Group.
(b) Information with respect to each director,
officer or partner of principal underwriter:
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
Delaware General Partner None
Distributors, Inc.
Delaware Management
Company, Inc. Limited Partner Investment Manager
Delaware Capital
Management, Inc. Limited Partner None
Wayne A. Stork Chairman Chairman
Bruce D. Barton President and Chief None
Executive Officer
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
PART C - Other Information
(Continued)
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
David K. Downes Senior Vice President, Executive Vice President/
Chief Administrative Chief Operating Officer/
Officer and Chief Chief Financial
Financial Officer Officer
George M. Senior Vice President/ Senior Vice President/
Chamberlain, Jr. Secretary/General Secretary/General
Counsel Counsel
Terrence P. Senior Vice President/ None
Cunningham Financial Institutions
Thomas E. Sawyer Senior Vice President/ None
National Sales Director
Dana B. Hall Senior Vice President/ None
Key Accounts
Mac McAuliffe Senior Vice President/ None
Sales Manager,
Western Division
William F. Hostler Senior Vice President/ None
Marketing Services
J. Chris Meyer Senior Vice President/ None
Director Product
Management
Stephen H. Slack Senior Vice President/ None
Wholesaler
William M. Senior Vice President/ None
Kimbrough Wholesaler
Daniel J. Brooks Senior Vice President/ None
Wholesaler
Richard J. Flannery Senior Vice President/ Senior Vice President/
Corporate and Corporate and
International Affairs International Affairs
Bradley L. Kolstoe Senior Vice President/ None
Western Division
Sales Manager
Henry W. Orvin Senior Vice President/ None
Eastern Division
Sales Manager -
Wire/Regional Channel
Michael P. Bishof Senior Vice President Senior Vice President/
and Treasurer/Manager, Treasurer
Investment Accounting
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
PART C - Other Information
(Continued)
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
Joseph H. Hastings Senior Vice President/ Senior Vice President/
Corporate Controller Corporate Controller
& Treasurer
Eric E. Miller Vice President/Assistant Vice President/Assistant
Secretary/Deputy Secretary/Deputy
General Counsel General Counsel
Richelle S. Maestro Vice President/ Vice President/
Assistant Secretary Assistant Secretary
Steven T. Lampe Vice President/Taxation Vice President/Taxation
Lisa O. Brinkley Vice President/ Vice President/
Compliance Compliance
Rosemary E. Milner Vice President/ Vice President/
Legal Registrations Legal Registrations
Daniel H. Carlson Vice President/ None
Strategic Marketing
Diane M. Anderson Vce President/ None
Plan Record Keeping
and Administration
Anthony J. Scalia Vice President/ None
Defined Contribution
Sales, SW Territory
Courtney S. West Vice President/ None
Defined Contribution
Sales, NE Territory
Denise F. Guerriere Vice President/ None
Client Services
Gordon E. Searles Vice President/ None
Client Services
Julia R. Vander Els Vice President/ None
Participant Services
Jerome J. Alrutz Vice President/ None
Retail Sales
Joanne A. Vice President/New
Mettenheimer Business Development None
Scott Metzger Vice President/ Vice President/
Business Development Business Development
* Business address of each is 1818 Market Street, Philadelphia, PA. 19103.
PART C - Other Information
(Continued)
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
Stephen C. Hall Vice President/ None
Institutional Sales
Gregory J. McMillan Vice President/ None
National Accounts
Christopher H. Vice President/Manager, None
Price Insurance
Stephen J. DeAngelis Vice President/Product None
Development
Andrew W. Whitaker Vice President/ None
Financial Institutions
Jesse Emery Vice President/Marketing None
Communications
Darryl S. Grayson Vice President, Broker/ None
Dealer Internal Sales
Susan T. Friestedt Vice President/ None
Client Service
Dinah J. Huntoon Vice President/Product None
Manager Equity
Soohee Lee Vice President/ None
Fixed Income
Product Management
Michael J. Woods Vice President/ None
UIT Product
Management
Ellen M. Krott Vice President/Marketing None
Dale L. Kurtz Vice President/ None
Marketing Support
Holly W. Reimel Vice President/Manager, None
Key Accounts
David P. Anderson Vice President/Wholesaler None
Lee D. Beck Vice President/Wholesaler None
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
PART C - Other Information
(Continued)
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
Gabriella Bercze Vice President/ None
Wholesaler
Terrence L. Bussard Vice President/ None
Wholesaler
William S. Carroll Vice President/ None
Wholesaler
William L. Vice President/ None
Castetter Wholesaler
Thomas J. Chadie Vice President/ None
Wholesaler
Thomas C. Vice President/ None
Gallagher Wholesaler
Douglas R. Glennon Vice President/ None
Wholesaler
Ronald A. Haimowitz Vice President/ None
Wholesaler
Christopher L. Vice President/ None
Johnston Wholesaler
Michael P. Jordan Vice President/Wholesaler None
Jeffrey A. Keinert Vice President/Wholesaler None
Thomas P. Kennett Vice President/ Wholesaler None
Debbie A. Marler Vice President/Wholesaler None
Nathan W. Medin Vice President/Wholesaler None
Roger J. Miller Vice President/Wholesaler None
Patrick L. Murphy Vice President/Wholesaler None
Stephen C. Nell Vice President/Wholesaler None
Julia A. Nye Vice President/Wholesaler None
Joseph T. Owczarek Vice President/Wholesaler None
Mary Ellen Vice President/Wholesaler None
Pernice-Fadden
Mark A. Pletts Vice President/Wholesaler None
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
PART C - Other Information
(Continued)
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
Philip G. Rickards Vice President/ None
Wholesaler
Laura E. Roman Vice President/ None
Wholesaler
Linda Schulz Vice President/ None
Wholesaler
Edward B. Sheridan Vice President/ None
Wholesaler
Robert E. Stansbury Vice President/ None
Wholesaler
Julia A. Stanton Vice President/ None
Wholesaler
Larry D. Stone Vice President/ None
Wholesaler
Edward J. Wagner Vice President/ None
Wholesaler
Wayne W. Wagner Vice President/ None
Wholesaler
John A. Wells Vice President/ None
Marketing Technology
Scott Whitehouse Vice President/ None
Wholesaler
Frank C. Tonnemaker Vice President None
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
(c) Not Applicable.
Item 30. Location of Accounts and Records.
All accounts and records are maintained in Philadelphia at
1818 Market Street, Philadelphia, PA 19103 or One Commerce
Square, Philadelphia, PA 19103.
PART C - Other Information
(Continued)
Item 31. Management Services. None.
Item 32. Undertakings.
(a) Not Applicable.
(b) Not Applicable.
(c) The Registrant hereby undertakes to furnish each
person to whom a prospectus is delivered with a copy of
the Registrant's latest annual report to shareholders,
upon request and without charge.
(d) The Registrant hereby undertakes to promptly call a
meeting of shareholders for the purpose of voting upon the
question of removal of any director when requested in
writing to do so by the record holders of not less than
10% of the outstanding shares.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Registrant certifies that it
meets all of the requirements for effectiveness of this
Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in this City of Philadelphia,
Commonwealth of Pennsylvania on this 19th day of December, 1997.
DELAWARE GROUP EQUITY FUNDS I, INC.
By /s/ Wayne A. Stork
Wayne A. Stork
Chairman
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated:
SIGNATURE TITLE DATE
/s/ Wayne A. Stork * Chairman of the Board December 19, 1997
- ---------------------------- and Director
Wayne A. Stork
Executive Vice President/
Chief Operating Officer/
Chief Financial Officer
/s/ David K. Downes * (Principal Financial December 19, 1997
- ---------------------------- Officer and Principal
David K. Downes Accounting Officer)
/s/Walter P. Babich * Director December 19, 1997
- ----------------------------
Walter P. Babich
/s/Anthony D. Knerr * Director December 19, 1997
- ----------------------------
Anthony D. Knerr
/s/Ann R. Leven * Director December 19, 1997
- ----------------------------
Ann R. Leven
/s/W. Thacher Longstreth * Director December 19, 1997
- ----------------------------
W. Thacher Longstreth
/s/Thomas F. Madison * Director December 19, 1997
- ----------------------------
Thomas F. Madison
/s/Jeffrey J. Nick * Director December 19, 1997
- ----------------------------
Jeffrey J. Nick
/s/Charles E. Peck * Director December 19, 1997
- ----------------------------
Charles E. Peck
*By /s/ Wayne A. Stork
Wayne A. Stork
as Attorney-in-Fact for
each of the persons indicated
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Exhibits
to
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
INDEX TO EXHIBITS
Exhibit No. Exhibit
EX-99.B1C Executed Articles of Amendment (December 1996)
EX-99.B8AI Amendment (November 1997) to Custodian Agreement
(May 1, 1996) between The Chase Manhattan Bank and
the Registrant on behalf of Delaware Fund and Devon
Fund
EX-99.B9AI Amended Schedule A (January 1, 1997) to Shareholders
Services Agreement between Delaware Service Company,
Inc. and the Registrant on behalf of Delaware Fund
EX-99.B9AII Amended Schedule A (July 1, 1997) to Shareholders
Services Agreement between Delaware Service Company,
Inc. and the Registrant on behalf of Delaware Fund
EX-99.B9AIII Amended Schedule A (October 14, 1997) to
Shareholders Services Agreement between Delaware
Service Company, Inc. and the Registrant on behalf
of Delaware Fund
EX-99.B9BI Amended Schedule A (January 1, 1997) to Shareholders
Services Agreement between Delaware Service Company,
Inc. and the Registrant on behalf of Devon Fund
EX-99.B9BII Amended Schedule A (July 1, 1997) to Shareholders
Services Agreement between Delaware Service Company,
Inc. and the Registrant on behalf of Devon Fund
EX-99.B9BIII Amended Schedule A (October 14, 1997) to
Shareholders Services Agreement between Delaware
Service Company, Inc. and the Registrant on behalf
of Devon Fund
EX-99.B9D Executed Amendment No. 3 (December 27, 1996) to
Delaware Group of Funds Fund Accounting Agreement
EX-99.B9E Executed Amendment No. 4 (February 24, 1997) to
Delaware Group of Funds Fund Accounting Agreement
EX-99.B9F Executed Amendment No. 4A (April 14, 1997) to
Delaware Group of Funds Fund Accounting Agreement
EX-99.B9G Executed Amendment No. 5 (May 1, 1997) to Delaware
Group of Funds Fund Accounting Agreement
EX-99.B9H Executed Amendment No. 6 (July 21, 1997) to Delaware
Group of Funds Fund Accounting Agreement
EX-99.B11 Consent of Auditors
EX-99.B16B Schedules of Computation for periods not previously filed
INDEX TO EXHIBITS
(Continued)
Exhibit No. Exhibit
EX-27 Financial Data Schedules
EX-99.B18A Plan under Rule 18f-3 (September 18, 1997)
EX-99.B18B Amended Appendix A to Plan under Rule 18f-3
EX-99.B19B Power of Attorney for Thomas F. Madison and Jeffrey J. Nick
EX-99.B1C
Exhibit 24(b)(1)(c)
DELAWARE GROUP DELAWARE FUND, INC.
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
DELAWARE GROUP DELAWARE FUND, INC., a Maryland corporation
having its principal office in Baltimore, Maryland (hereinafter
called the "Corporation"), hereby certifies to the State
Department of Assessments and Taxation of Maryland that:
FIRST: The Corporation is registered as an open-end management
investment company under the Investment Company Act of 1940, as
amended.
SECOND: The first sentence of ARTICLE SECOND of the Articles of
Incorporation, as amended and supplemented, is hereby amended to
read as follows:
SECOND: The name of the corporation is Delaware
Group Equity Funds I, Inc.
THIRD: The Articles of Incorporation of the Corporation, as
amended and supplemented, are further amended by changing the
name of the Corporation's Common Stock Series (the "Series"), to
the Delaware Fund series, and by deleting the old series name
from the Articles of Incorporation, as amended and supplemented
to date, and inserting in lieu thereof the new series name as
changed hereby.
FOURTH: The Articles of Incorporation of the Corporation, as
amended and supplemented, are further amended by changing the
name of the Delaware Fund class of shares of the Series to the
Delaware Fund A Class of shares; by changing the name of the
Delaware Fund (Institutional) class of shares of the Series to
the Delaware Fund Institutional Class of shares; and by deleting
the old names of such classes from the Articles of Incorporation,
as amended and supplemented to date, and inserting in lieu
thereof, the new names of such classes as changed hereby.
The name of the other two classes of Common Stock of the
Series, the Delaware Fund B Class and the Delaware Fund C Class,
shall remain unchanged.
FIFTH: The amendments to the Articles of Incorporation of the
Corporation as set forth above have been duly approved by a
majority of the entire Board of Directors of the Corporation as
required by law and are limited to changes permitted by Section 2-
605(a)(4) of the Maryland General Corporation Law to be made
without action by the stockholders of the Corporation.
SIXTH: The amendments to the Articles of Incorporation of the
Corporation as set forth above do not change the preferences,
conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, or terms or
conditions of redemption of the shares that are the subject of
the name changes.
SEVENTH: These Articles of Amendment shall become effective at
5:00 P.M. on February 10, 1997.
IN WITNESS WHEREOF, DELAWARE GROUP DELAWARE FUND, INC. has
caused these Articles of Amendment to be signed on its name and
on its behalf by its Assistant Vice-President and attested by its
Assistant Secretary on February 7, 1997.
DELAWARE GROUP DELAWARE FUND, INC.
By: /S/David P. O'Connor
---------------------
David P. O'Connor
Assistant Vice President
Attest:
/S/Eric E. Miller
- ----------------------
Eric E. Miller
Assistant Secretary
THE UNDERSIGNED, Assistant Vice President of DELAWARE GROUP
DELAWARE FUND, INC., who executed on behalf of said Corporation
the foregoing Articles of Amendment, of which this certificate is
made a part, hereby acknowledges, in the name and on behalf of
said Corporation, the foregoing Articles of Amendment to be the
corporate act of said Corporation and further certifies that, to
the best of his knowledge, information and belief, the matters
and facts set forth therein with respect to the approval thereof
are true in all material respects, under the penalties of
perjury.
/S/David P. O'Connor
---------------------
David P. O'Connor
Assistant Vice President
EX-99.B8AI
EXHIBIT 24(b)(8)(a)(i)
AMENDMENT, dated November 20, 1997 to the May 1, 1996
custody agreement ("Agreement"), between those registered
investment companies listed on Schedule A to the Agreement (each
a "Customer"), having a place of business at 1818 Market Street,
Philadelphia, PA 19103 and The Chase Manhattan Bank ("Bank"),
having a place of business at 270 Park Ave., New York, N.Y. 10017-
2070.
It is hereby agreed as follows:
Section 1. Except as modified hereby, the Agreement is
confirmed in all respects. Capitalized terms used herein without
definition shall have the meanings ascribed to them in the
Agreement.
Section 2. The Agreement is amended by deleting the mutual
fund rider thereto and inserting, in lieu thereof, the following
mutual fund rider:
1. Add a new Section 15 to the Agreement as follows:
15. COMPLIANCE WITH SEC RULE 17F-5 ("RULE 17F-5").
(a) Customer's board of directors (or equivalent body)
(hereinafter "Board") hereby delegates to Bank, and Bank hereby
accepts the delegation to it, of the obligation to perform as
Customer's "Foreign Custody Manager" (as that term is defined in
Rule 17f-5(a)(2)) adopted under the Investment Company Act of
1940 ("Act"), as amended ("1940 Act"), the following
responsibilities in a manner consistent with Rule 17f-5, to: (i)
select Eligible Foreign Custodians (as that term is defined in
Rule 17f-5(a)(1), and as the same may be amended from time to
time, or that have otherwise been made exempt pursuant to an SEC
exemptive order); (ii) enter into written contracts with such
Eligible Foreign Custodians that are banks or trust companies and
with Eligible Foreign Custodians that are "Securities
Depositories" (as defined in Rule 17f-5(a)(6)) and that are not
Compulsory Depositories (as defined below) where the Depository
has such a contract; and (iii) to monitor the appropriateness of
maintaining Assets of the series of the Customer with such
Eligible Foreign Custodians; provided that, Bank shall not be
responsible for these duties with respect to any compulsory
Securities Depository ("Compulsory Depository"). A Compulsory
Depository shall mean a Securities Depository or clearing agency
the use of which is compulsory because: (1) its use is required
by law or regulation or (2) maintaining securities outside the
depository is not consistent with prevailing custodial practices
in the country which the Depository serves. Compulsory
Depositories used by Chase as of the date hereof are set forth in
Appendix 1-A hereto. Appendix 1-A may be amended on notice to
Customer from time to time. In that connection, Bank shall
notify Customer promptly of pending changes to Appendix 1-A.
(b) In connection with the foregoing, Bank shall:
(i) provide written reports to Customer's Board upon the
placement of Assets with a particular Eligible Foreign
Custodian and of any Material Change (as defined below) in
the arrangements with such Eligible Foreign Custodians, with
such reports to be provided to Customer's Board at such
times as the Board deems reasonable and appropriate based on
the circumstances of Customer's foreign custody arrangements
(and until further notice from Customer such reports shall
be provided within 30 days after Bank becomes aware of any
such Material Change. For purposes of the foregoing, a
Material Change shall include, but shall not be limited to,
Bank's decision to remove Customer's Assets from a
particular Eligible Foreign Custodian, an event that has a
material adverse affect on an Eligible Foreign Custodian's
financial or operational strength, any non-compliance by an
Eligible Foreign Custodian with a "Material Term" of Bank's
subcustodian agreement with such Eligible Foreign Custodian
(as defined below) or any failure by an Eligible Foreign
Custodian to meet the requirements for its status as such
under Rule 17f-5. A Material Term shall mean a term which
provides that (a) the Customer will be adequately
indemnified or its Assets adequately insured, or an adequate
combination thereof, in the event of loss; (b) the Assets of
the Series will not be subject to any right, charge,
security interest, lien or claim of any kind in favor of an
Eligible Foreign Custodian or such Eligible Foreign
Custodian's creditors, except a claim of payment for their
safe custody or administration, or in the case of cash
deposits, liens or rights in favor of creditors of the
Eligible Foreign Custodian arising under bankruptcy,
insolvency or similar laws; (c) beneficial ownership for the
Assets of the Series will be freely transferable without the
payment of money or value other than for safe custody or
administration of the Assets of the Series; (d) adequate
records will be maintained identifying the Assets as
belonging to the Customer or the Series or as being held by
a third party for the benefit of the Customer or the Series;
(e) the independent auditors for the Customer will be given
access to those records or confirmation of the contents of
those records; and (f) the Customer will receive periodic
reports with respect to the safekeeping of the Series'
Assets, including, but not necessarily limited to,
notification of any transfer to or from the Customer's
account or a third party account containing Assets held for
the benefit of the Customer. In addition, in the event that
a contract with an Eligible Foreign Custodian does not
include any or all of the terms described in (a) through (f)
of this paragraph 15(b)(i), a Material Term shall mean a
term which, in the Bank's judgment, if not complied with,
would cause the contract not to provide the same or greater
level of care and protection for Customer's Assets than if
the contract contained the provisions described in (a)
through (f) of this paragraph 15(b)(i).
(ii) exercise such reasonable care, prudence and diligence
in performing as Customer's Foreign Custody Manager as a
person having responsibility for the safekeeping of Assets
would exercise;
(iii) in selecting an Eligible Foreign Custodian, first have
determined that Assets placed and maintained in the
safekeeping of such Eligible Foreign Custodian shall be
subject to reasonable care, based on the standards
applicable to custodians in the relevant market, after
having considered all factors relevant to the safekeeping of
such Assets, including, without limitation, those factors
set forth in Rule 17f-5(c)(1)(i)-(iv);
(iv) determine that the written contract with the Eligible
Foreign Custodian (or, in the case of an Eligible Foreign
Custodian that is a Securities Depository or clearing
agency, such contract, the rules or established practices or
procedures of the depository, or any combination of the
foregoing) requires that the Eligible Foreign Custodian will
provide reasonable care for Assets based on the standards
applicable to custodians in the relevant market.
(v) have established a system to monitor the continued
appropriateness of maintaining Assets with particular
Eligible Foreign Custodians based on the standards set forth
herein and of the governing contractual arrangements based
on the standards set forth in Rule 17f-5(c)(2), as it may be
amended from time to time.
Subject to (b)(i)-(v) above, Bank is hereby authorized to place
and maintain Assets on behalf of Customer with Eligible Foreign
Custodians pursuant to a written contract which either contains
the terms described in Rule 17f-5(c)(2)(i) or which, in lieu of
any or all of the terms described in Rule 17f-5(c)(2)(i),
contains such other provisions which the Bank determines will
provide in their entirety, the same or a greater level of care
and protection for the Customer's Assets as the provisions of
Rule 17f-5(c)(2)(i) in their entirety. The written contract
shall be in such form as deemed appropriate by Bank. In
addition, with respect to Eligible Foreign Custodians that are
non-compulsory Securities Depositories, reliance may be had on
such a contract, the rules or established practices and
procedures of such Depository or any combination thereof.
(c) Except as expressly provided herein, Customer shall be
solely responsible to assure that the maintenance of Assets
hereunder complies with the rules, regulations, interpretations
and exemptive orders promulgated by or under the authority of the
SEC which are applicable to Fund's business or which have been
granted to Fund. Bank shall advise Customer of any exemptive
orders which it obtains which may have an impact on Bank's
relationship with Customer.
(d) Bank represents to Customer that it is a U.S. Bank as
defined in Rule 17f-5(a)(7). Customer represents to Bank that:
(1) the Assets being placed and maintained in Bank's custody are
subject to the 1940 Act, as the same may be amended from time to
time; (2) its Board has determined that it is reasonable to rely
on Bank to perform as Customer's Foreign Custody Manager.
Nothing contained herein shall require Bank, on Customer's
behalf, to make any selection regarding countries in which
Customer invests or to engage in any monitoring of Customer's
decision to invest in any particular country in which Bank
selects , contracts and monitors Eligible Foreign Custodians, as
Customer's Foreign Custody Manager pursuant to the Agreement.
(e) Bank shall provide to Customer such information as is
specified in Appendix 1-B hereto. Customer hereby acknowledges
that: (i) such information is solely designed to inform Customer
of market conditions and procedures, but is not intended to
influence Customer's investment decisions; and (ii) Bank has
gathered the information from sources it considers reliable, but
that Bank shall have no responsibility for inaccuracies or
incomplete information except to the extent that Bank was
negligent in selecting the sources of such information.
2. Add the following after the first sentence of Section 3
of the Agreement:
At the request of Customer, Bank may, but need not, add to
Schedule A an Eligible Foreign Custodian that is either a
bank or a non-Compulsory Depository where Bank has not acted
as Foreign Custody Manager with respect to the selection
thereof. Bank shall notify Customer in the event that it
elects not to add any such entity.
3. Add the following language to the end of Section 3 of
the Agreement:
The term Subcustodian as used herein shall mean the
following:
(a) a "U.S. Bank," which shall mean a U.S. bank as defined
in Rule 17f-5(a)(7); and
(b) with respect to Securities for which the primary market
is outside the U.S. an "Eligible Foreign Custodian," shall
mean (i) a banking institution or trust company,
incorporated or organized under the laws of a country other
than the United States, that is regulated as such by that
country's government or an agency thereof, (ii) a majority-
owned direct or indirect subsidiary of a U.S. Bank or bank
holding company which subsidiary is incorporated or
organized under the laws of a country other than the United
States; (iii) a Securities Depository or clearing agency
(other than a Compulsory Depository), incorporated or
organized under the laws of a country other than the United
States, that acts as a system for the central handling of
securities or equivalent book-entries in that country and
that is regulated by a foreign financial regulatory autho
rity as defined under section 2(a)(50) of the 1940 Act, (iv)
a Securities Depository or clearing agency organized under
the laws of a country other than the United States that acts
as a transnational system ("Transnational Depository") for
the central handling of securities or equivalent
book-entries, and (v) any other entity that shall have been
so qualified by exemptive order, rule or other appropriate
action of the SEC.
The term Subcustodian as used in Section 12(a)(i) (except
the last sentence thereof) shall not include any Eligible
Foreign Custodians as to which Bank has not acted as Foreign
Custody Manager, any Compulsory Depository and any
Transnational Depository.
4. Add the following after the word "administration" at the
end of Subsection 4(d)(i): "or, in the case of cash deposits,
liens or rights in favor of creditors of Subcustodian arising
under bankruptcy, insolvency, or similar laws".
5. Delete all of Subsection 4(e) after the word "located"
in (ii) thereof and add the word "and" between "Subcustodian" and
"(ii)".
*********************
IN WITNESS WHEREOF, the parties have executed this Amendment
as of the date first above written.
Customer THE CHASE MANHATTAN BANK
By: /s/ Michael P. Bishof By: /s/ Rosemary M. Stidmon
Name: Michael P. Bishof Name: Rosemary M. Stidmon
Title: Senior Vice President/ Title: Vice President
Treasurer
Date: Nov. 20, 1997 Date: Nov. 20, 1997
APPENDIX A
Delaware Group Adviser Funds, Inc.
U.S. Growth Fund
Overseas Equity Fund
New Pacific Fund
Delaware Group Equity Funds I, Inc.
Delaware Fund
Devon Fund
Delaware Group Equity Funds II, Inc.
Blue Chip Fund
Quantum Fund
Delaware Group Equity Funds IV, Inc.
DelCap Fund
Capital Appreciation Fund
Delaware Group Equity Funds V, Inc.
Retirement Income Fund
Small Cap Value Fund
Delaware Pooled Trust, Inc.
The International Equity Portfolio
The International Fixed Income Portfolio
The Global Equity Portfolio
The Global Fixed Income Portfolio
The High-Yield Bond Portfolio
The Labor Select International Equity Portfolio
The Real Estate Investment Trust Portfolio
The Real Estate Investment Trust Portfolio II
The Emerging Markets Portfolio
Delaware Group Global & International Funds, Inc.
Emerging Markets Series
Global Assets Series
Global Bond Series
Global Equity Series
International Equity Series
International Small Cap Series
APPENDIX A CON'T
Delaware Group Premium Fund, Inc.
Convertible Securities Series
Devon Series
Emerging Markets Series
Quantum Series
Strategic Income Series
Global Bond Series
DelCap Series
International Equity Series
Delaware Series
Value Series
Voyageur Mutual Funds III, Inc.
Tax-Efficient Equity Fund
Dated: November 20, 1997
Appendix 1-A
COMPULSORY DEPOSITORIES
Argentina Caja de Valores Equity, Corporate &
Government Debt
Australia Austraclear Ltd. Corporate Debt, Money
Market & Semi-Government Debt
CHESS Equity
(Clearing House Electronic Sub-
register System)
RITS Government Debt
(Reserve Bank Information and
Transfer System)
Austria Oesterreichische Kontrolbank AG Equity, Corporate +
Government Debt
Belgium CIK Equity + Corporate
(Caisse Interprofessionnelle de Debt
Depots et de Virements de Titres)
Banque Nationale de Belgique Treasury Bills +
Government Debt
Brazil BOVESPA Equity
(Bolsa de Valores de Sao Paolo)
BVRJ Equity
(Bolsa de Valores de Rio de
Janeiro)
Canada CDS Equity, Corporate +
(Canadian Depository for Government Debt
Securities)
China, SSCCRC Equity
Shanghai (Shanghai Securities Central
Clearing and Registration Corp.)
China, SSCC Equity
Shenzhen (Shenzhen Securities
Registration Co., Ltd.)
Czech SCP Equity + Long-Term
Republic (Securities Center) Government Debt
TKD Treasury Bills +
(Trh Kratkododich Dlluhopisu or Money Market
Short-Term Bond Market)
Denmark VP Equity, Corporate +
(Vaerdipapircentralen) Government Debt
Egypt Misr Clearing & Sec. Dep. Equity
Estonia EVK Equity
(Estonian Central Depository for
Securities Ltd.)
Euromarket Cedel & Euroclear Euro-Debt
Finland CSR Equity + Government
(Central Share Registry Finland) Debt
Helsinki Money Market Center Money Market
Ltd.
France SICOVAM Equity + Corporate
(Banque de France) Debt.
France SATURNE Government Debt.
(Banque de France)
Germany DKV Equity, Corporate +
(Deutscher Kassenverein) Government Debt
Greece Apothetirio Titlon A.E. Equity
Bank of Greece Government Debt
Hong Kong CCASS Equity
(Central Clearing and
Settlement System)
CMU Corporate +
(Central Moneymarkets Unit) Government Debt
Hungary Keler Ltd. Equity + Government
Debt
Ireland CREST Equity
GSO Government Debt
(Gilt Settlement Office)
Israel TASE Clearing House Equity, Corporate +
(Tel Aviv Stock Exchange Government Debt
Clearing House)
Italy Monte Titoli Equity + Corporate Debt
Bank of Italy Government Debt
Japan Bank of Japan Registered Government
Debt
Latvia LCD Equity + Government
(Latvian Central Depository) Debt
Lebanon Midclear Equity
(Custodian and Clearing Center
of Lebanon and the Middle East)
Luxembourg Cedel Equity
Malaysia MCD Equity
(Malaysian Central Depository
Snd Bhd)
Mauritius CDS Equity
(Central Depository System)
Mexico Indeval Equity, Corporate +
(Institucion para el Deposito Government Debt.
de Valores)
Morocco Maroclear Equity + Corporate Debt
Bank Al'Maghrib Government Debt
Netherlands NECIGEF/KAS Associate NV Equity, Corp. + Govt. D
De Nederlandsche Bank N.V. Money Market
Netherlands NIEC Premium Bonds
(Nederlands Interpforessioneel
Effectencentrum B.V.)
New Zealand Austraclear New Zealand Equity, Corporate +
Government Debt
Norway VPS Equity, Corporate +
(Verdipapirsentralen) Government Debt
Oman NONE
Pakistan CDC Equity
(Central Depository Company of
Pakistan Ltd.)
Peru CAVALI Equity
(Caja de Valores)
Philippines PCD Equity
(Philippine Central Depository)
Poland NDS Equity, Long-Term
(National Securities Government Debt +
Depository) Vouchers
CRT Treasury-Bills
(Central Registry of Treasury-
Bills)
Portugal Interbolsa Equity, Corporate +
Government Debt
Romania SNCDD - RASDAQ Equity
(National Company for Clearing,
Settlement and Depository for
Securities)
Budapest Stock Exchange Equity
Registry
National Bank of Romania Treasury-Bills
Russia MICEX GKO's
(Moscow Interbank Currency (Gosudarstvennye
Exchange) Kratkosrochnye
Obyazatelstva [T-
Bills])
OFZ's
(Obligatsyi
Federalnogo Zaima
[Federal Loan Bonds])s
Singapore CDP Equity + Corporate
(Central Depository Pte. Ltd.) Debt and Malaysian
equities traded on CLOB
Monetary Authority of Singapore Government Debt
Slovak SCP Equity + Government
Republic (Stredisko Cennych Papiru) Debt
National Bank of Slovakia Treasury-Bills
So. Africa CD Corporate + Government
(Central Depository) Debt
So. Korea KSD Equity, Corporate +
Government Debt
Spain SCLV Equity + Corporate
(Servicio de Compensacion y Debt.
Liquidacion de Valores)
CBEO Government Debt
(Central Book Entry Office)
Sri Lanka CDS Equity
(Central Depository System
(Private) Ltd.)
Sweden VPC Equity, Corporate +
(Vardepapperscentralen AB) Government Debt
Switzerland SEGA Equity, Corporate +
(Schweizerische Effekten-Giro Government Debt
AG)
Taiwan TSCD Equity + Government
(Taiwan Securities Central Debt
Depository Co., Ltd.)
Thailand TSDC Equity, Corporate +
(Thailand Securities Depository Government Debt
Company Ltd.)
Tunisia STICODEVAM Equity
(Societe Tunisienne
Interprofessionnelle pour la
Compensation et le Depot des
Valeurs Mobilieres)
Ministry of Finance Government Debt
tradable on the stock
exchange (BTNBs)
Central Bank of Tunisia Government Debt not
tradable on the stock
exchange (BTCs)
Turkey Takas Bank Equity + Corporate
Debt
Central Bank of Turkey Government Debt
United CREST Equity + Corp. Debt
Kingdom
CMO Sterling CDs & CP
(Central Moneymarket Office)
CGO Gilts
(Central Gilts Office)
United DTC Equity + Corporate
States (Depository Trust Company) Debt
PTC Mortgage Back Debt
(Participants Trust Company)
Fed Book-Entry Government Debt.
Zambia LuSE Equity + Government
(LuSE Central Shares Depository Debt
Ltd.)
Appendix 1-B
Information Regarding Country Risk
1. To aid Customer's board in its determinations
regarding Country Risk, Bank shall furnish board annually
and upon the initial placing of Assets into a country the
following information (check items applicable):
A Opinions of local counsel concerning:
___ i. Whether applicable foreign law would restrict
the access afforded Customer's independent public
accountants to books and records kept by an
eligible foreign custodian located in that
country.
___ ii. Whether applicable foreign law would restrict
the Customer's ability to recover its assets in
the event of the bankruptcy of an Eligible Foreign
Custodian located in that country.
___ iii. Whether applicable foreign law would restrict
the Customer's ability to recover assets that are
lost while under the control of an Eligible
Foreign Custodian located in the country.
B. Written information concerning:
___ i. The likelihood of expropriation,
nationalization, freezes, or confiscation of
Customer's assets.
___ ii. Whether difficulties in converting Customer's
cash and cash equivalents to U.S. dollars are
reasonably foreseeable.]
C. A market report with respect to the following topics:
(i) securities regulatory environment, (ii) foreign
ownership restrictions, (iii) foreign exchange, (iv)
securities settlement and registration, (v) taxation,
and (vi) compulsory depositories (including depository
evaluation).
2. To aid Customer's board in monitoring Country Risk,
Bank shall furnish board the following additional
information:
Market flashes, including with respect to changes in
the information in market reports.
EX-99.B9AI
Exhibit 24(b)(9)(a)(i)
SCHEDULE A
----------
DELAWARE GROUP EQUITY FUNDS I, INC. - DELAWARE FUND
(THE "FUND")
SHAREHOLDERS SERVICES AGREEMENT
COMPENSATION SCHEDULE
1. Delaware Service Company, Inc. ("DSC") will determine and report
to the Fund, at least annually, the compensation for services to
be provided to the Fund for DSC's forthcoming fiscal year or
period.
2. In determining such compensation, DSC will fix and report a fee to
be charged per account and/or transaction, as may be applicable,
for services provided. DSC will bill, and the Fund will pay, such
compensation monthly.
3. For the period commencing on January 1, 1997, the charge will
consist of two charges for all the Funds in the Delaware Group,
except the Delaware Group Premium Fund, Inc. and the Delaware
Pooled Trust, Inc., an annual charge and a per transaction charge
for each account on the transfer agent's records and each account
on an automated retirement processing system. These charges are
as follows:
A. ANNUAL CHARGE
-------------
Daily Dividend Funds $11.00 Per Annum
- ---------------
Other Funds $5.50 Per Annum
Merrill Lynch - Omnibus Accounts
Regular Accounts $11.00 Per Annum
Accounts with a Contingent
Deferred Sales Charge $14.00 Per Annum
Networked Accounts $3.00 - 6.00 Per Annum
SCHEDULE A
----------
DELAWARE GROUP EQUITY FUNDS I, INC. - DELAWARE FUND
(THE "FUND")
SHAREHOLDERS SERVICES AGREEMENT
COMPENSATION SCHEDULE
CONTINUED
B. TRANSACTION CHARGE
Transaction Charge
-----------------------------------------------
1. Dividend Payment $0.25
2. New Account $6.00
3. Purchase:
a. Wire $8.00
b. Automated $1.50
c. Other $2.60
4. Transfer $8.00
5. Certificate Issuance $4.00
6. Liquidations
a. Wires $12.25
b. Drafts $0.75
c. Money Market Regular $4.50
d. Other Regular $4.50
7. Exchanges
a. Dividend Exchanges $3.00
b. Other $10.00
4. For the period commencing January 1, 1997, DSC's compensation for
providing services to the Delaware Group Premium Fund, Inc. (the
"Premium Fund") will be $50,000 annually. DSC will bill, and the
Premium Fund will pay, such compensation monthly, allocated among
the current Series of the Premium Fund based on the relative
percentage of assets of each Series at the time of billing and
adjusted appropriately to reflect the length of time a particular
Series is in operation during any billing period.
5. For the period commencing January 1, 1997, DSC's compensation for
providing services to the Portfolios of Delaware Pooled Trust,
Inc. (the "Trust") will be $25,000 annually. DSC will bill, and
the Trust will pay, such compensation monthly allocated among the
current Portfolios of the Trust based on the relative percentage
of assets of each Portfolio at the time of billing and adjusted
appropriately to reflect the length of time a particular Portfolio
is in operation during any billing period.
EX-99.B9AII
Exhibit 24(b)(9)(a)(ii)
SCHEDULE A
----------
DELAWARE GROUP EQUITY FUNDS I, INC. - DELAWARE FUND
(THE "FUND")
SHAREHOLDERS SERVICES AGREEMENT
COMPENSATION SCHEDULE
1. Delaware Service Company, Inc. ("DSC") will determine and report
to the Fund, at least annually, the compensation for services to
be provided to the Fund for DSC's forthcoming fiscal year or
period.
2. In determining such compensation, DSC will fix and report a fee to
be charged per account and/or transaction, as may be applicable,
for services provided. DSC will bill, and the Fund will pay, such
compensation monthly.
3. For the period commencing on January 1, 1997, the charge will
consist of two charges for all the Funds in the Delaware Group,
except the Delaware Group Premium Fund, Inc. and the Delaware
Pooled Trust, Inc., an annual charge and a per transaction charge
for each account on the transfer agent's records and each account
on an automated retirement processing system. These charges are
as follows:
A. ANNUAL CHARGE
-------------
Daily Dividend Funds $11.00 Per Annum
- -----------
Other Funds $5.50 Per Annum
Merrill Lynch - Omnibus Accounts*
Regular Accounts $11.00/$16.00 Per Annum
Accounts with a Contingent
Deferred Sales Charge $14.00/$19.00 Per Annum
Networked Accounts $3.00 - 6.00 Per Annum
*Until January 1, 1998, the annual charge for funds currently added to
the Merrill Lynch systems prior to July 1, 1997 will be $11.00 and
$14.00, respectively. Thereafter, the annual charge for those funds
will be $16.00 and $19.00, respectively. The annual charge for funds
added to the Merrill Lynch system on or after July 1, 1997 will be
$16.00/19.00, respectively.
SCHEDULE A
----------
DELAWARE GROUP EQUITY FUNDS I, INC. - DELAWARE FUND
(THE "FUND")
SHAREHOLDERS SERVICES AGREEMENT
COMPENSATION SCHEDULE
CONTINUED
B. TRANSACTION CHARGE
------------------
Transaction Charge
----------------------------------------------------
1. Dividend Payment $0.25
2. New Account $6.00
3. Purchase:
a. Wire $8.00
b. Automated $1.50
c. Other $2.60
4. Transfer $8.00
5. Certificate Issuance $4.00
6. Liquidations
a. Wires $12.25
b. Drafts $0.75
c. Money Market Regular $4.50
d. Other Regular $4.50
7. Exchanges
a. Dividend Exchanges $3.00
b. Other $10.00
4. For the period commencing January 1, 1997, DSC's compensation for
providing services to the Delaware Group Premium Fund, Inc. (the
"Premium Fund") will be $50,000 annually. DSC will bill, and the
Premium Fund will pay, such compensation monthly, allocated among
the current Series of the Premium Fund based on the relative
percentage of assets of each Series at the time of billing and
adjusted appropriately to reflect the length of time a particular
Series is in operation during any billing period.
5. For the period commencing January 1, 1997, DSC's compensation for
providing services to the Portfolios of Delaware Pooled Trust,
Inc. (the "Trust") will be $25,000 annually. DSC will bill, and
the Trust will pay, such compensation monthly allocated among the
current Portfolios of the Trust based on the relative percentage
of assets of each Portfolio at the time of billing and adjusted
appropriately to reflect the length of time a particular Portfolio
is in operation during any billing period.
EX-99.B9AIII
Exhibit 24(b)(9)(a)(iii)
SCHEDULE A
----------
DELAWARE GROUP EQUITY FUNDS I, INC. - DELAWARE FUND
(THE "FUND")
SHAREHOLDERS SERVICES AGREEMENT
COMPENSATION SCHEDULE
1. Delaware Service Company, Inc. ("DSC") will determine and report
to the Fund, at least annually, the compensation for services to
be provided to the Fund for DSC's forthcoming fiscal year or
period.
2. In determining such compensation, DSC will fix and report a fee
to be charged per account and/or transaction, as may be
applicable, for services provided. DSC will bill, and the Fund
will pay, such compensation monthly.
3. For the period commencing on January 1, 1997, the charge will
consist of two charges for all the Funds in the Delaware Group,
except the Delaware Group Premium Fund, Inc. and the Delaware
Pooled Trust, Inc. (other than with respect to The Real Estate
Investment Trust Portfolio), an annual charge and a per
transaction charge for each account on the transfer agent's
records and each account on an automated retirement processing
system. These charges are as follows:
A. ANNUAL CHARGE
-------------
Daily Dividend Funds $11.00 Per Annum
- -------------
Other Funds $5.50 Per Annum
Merrill Lynch - Omnibus Accounts*
Regular Accounts $11.00/$16.00 Per Annum
Accounts with a Contingent
Deferred Sales Charge $14.00/$19.00 Per Annum
Networked Accounts $3.00 - 6.00 Per Annum
*Until January 1, 1998, the annual charge for funds currently added to
the Merrill Lynch systems prior to July 1, 1997 will be $11.00 and
$14.00, respectively. Thereafter, the annual charge for those funds
will be $16.00 and $19.00, respectively. The annual charge for funds
added to the Merrill Lynch system on or after July 1, 1997 will be
$16.00/19.00, respectively.
SCHEDULE A
----------
DELAWARE GROUP EQUITY FUNDS I, INC. - DELAWARE FUND
(THE "FUND")
SHAREHOLDERS SERVICES AGREEMENT
COMPENSATION SCHEDULE
CONTINUED
B. TRANSACTION CHARGE
------------------
Transaction Charge
-----------------------------------------------
1. Dividend Payment $0.25
2. New Account $6.00
3. Purchase:
a. Wire $8.00
b. Automated $1.50
c. Other $2.60
4. Transfer $8.00
5. Certificate Issuance $4.00
6. Liquidations
a. Wires $12.25
b. Drafts $0.75
c. Money Market Regular $4.50
d. Other Regular $4.50
7. Exchanges
a. Dividend Exchanges $3.00
b. Other $10.00
4. For the period commencing January 1, 1997, DSC's compensation for
providing services to the Delaware Group Premium Fund, Inc. (the
"Premium Fund") will be $50,000 annually. DSC will bill, and the
Premium Fund will pay, such compensation monthly, allocated among
the current Series of the Premium Fund based on the relative
percentage of assets of each Series at the time of billing and
adjusted appropriately to reflect the length of time a particular
Series is in operation during any billing period.
5. For the period commencing January 1, 1997, DSC's compensation for
providing services to the Portfolios (other than The Real Estate
Investment Trust Portfolio) of Delaware Pooled Trust, Inc. (the
"Trust") will be $25,000 annually. DSC will bill, and the Trust
will pay, such compensation monthly allocated among the current
Portfolios (other than The Real Estate Investment Trust Portfolio)
of the Trust based on the relative percentage of assets of each
Portfolio at the time of billing and adjusted appropriately to
reflect the length of time a particular Portfolio is in operation
during any billing period.
EX99.B9BI
Exhibit 24(b)(9)(b)(i)
SCHEDULE A
----------
DELAWARE GROUP EQUITY FUNDS I, INC. - DEVON FUND
(THE "FUND")
SHAREHOLDERS SERVICES AGREEMENT
COMPENSATION SCHEDULE
1. Delaware Service Company, Inc. ("DSC") will determine and report
to the Fund, at least annually, the compensation for services to
be provided to the Fund for DSC's forthcoming fiscal year or
period.
2. In determining such compensation, DSC will fix and report a fee to
be charged per account and/or transaction, as may be applicable,
for services provided. DSC will bill, and the Fund will pay, such
compensation monthly.
3. For the period commencing on January 1, 1997, the charge will
consist of two charges for all the Funds in the Delaware Group,
except the Delaware Group Premium Fund, Inc. and the Delaware
Pooled Trust, Inc., an annual charge and a per transaction charge
for each account on the transfer agent's records and each account
on an automated retirement processing system. These charges are
as follows:
A. ANNUAL CHARGE
-------------
Daily Dividend Funds $11.00 Per Annum
- -----------------
Other Funds $5.50 Per Annum
Merrill Lynch - Omnibus Accounts
Regular Accounts $11.00 Per Annum
Accounts with a Contingent
Deferred Sales Charge $14.00 Per Annum
Networked Accounts $3.00 - 6.00 Per Annum
DELAWARE GROUP EQUITY FUNDS I, INC. - DEVON FUND
(THE "FUND")
SHAREHOLDERS SERVICES AGREEMENT
COMPENSATION SCHEDULE
CONTINUED
B. TRANSACTION CHARGE
------------------
Transaction Charge
-----------------------------------------------
1. Dividend Payment $0.25
2. New Account $6.00
3. Purchase:
a. Wire $8.00
b. Automated $1.50
c. Other $2.60
4. Transfer $8.00
5. Certificate Issuance $4.00
6. Liquidations
a. Wires $12.25
b. Drafts $0.75
c. Money Market Regular $4.50
d. Other Regular $4.50
7. Exchanges
a. Dividend Exchanges $3.00
b. Other $10.00
4. For the period commencing January 1, 1997, DSC's compensation for
providing services to the Delaware Group Premium Fund, Inc. (the
"Premium Fund") will be $50,000 annually. DSC will bill, and the
Premium Fund will pay, such compensation monthly, allocated among
the current Series of the Premium Fund based on the relative
percentage of assets of each Series at the time of billing and
adjusted appropriately to reflect the length of time a particular
Series is in operation during any billing period.
5. For the period commencing January 1, 1997, DSC's compensation for
providing services to the Portfolios of Delaware Pooled Trust,
Inc. (the "Trust") will be $25,000 annually. DSC will bill, and
the Trust will pay, such compensation monthly allocated among the
current Portfolios of the Trust based on the relative percentage
of assets of each Portfolio at the time of billing and adjusted
appropriately to reflect the length of time a particular Portfolio
is in operation during any billing period.
EX-99.B9BII
Exhibit 24(b)(9)(b)(ii)
SCHEDULE A
----------
DELAWARE FUND EQUITY FUNDS I, INC. - DEVON FUND
(THE "FUND")
SHAREHOLDERS SERVICES AGREEMENT
COMPENSATION SCHEDULE
1. Delaware Service Company, Inc. ("DSC") will determine and report
to the Fund, at least annually, the compensation for services to
be provided to the Fund for DSC's forthcoming fiscal year or
period.
2. In determining such compensation, DSC will fix and report a fee to
be charged per account and/or transaction, as may be applicable,
for services provided. DSC will bill, and the Fund will pay, such
compensation monthly.
3. For the period commencing on January 1, 1997, the charge will
consist of two charges for all the Funds in the Delaware Group,
except the Delaware Group Premium Fund, Inc. and the Delaware
Pooled Trust, Inc., an annual charge and a per transaction charge
for each account on the transfer agent's records and each account
on an automated retirement processing system. These charges are
as follows:
A. ANNUAL CHARGE
-------------
Daily Dividend Funds $11.00 Per Annum
- -------------
Other Funds $5.50 Per Annum
Merrill Lynch - Omnibus Accounts*
Regular Accounts $11.00/$16.00 Per Annum
Accounts with a Contingent
Deferred Sales Charge $14.00/$19.00 Per Annum
Networked Accounts $3.00 - 6.00 Per Annum
*Until January 1, 1998, the annual charge for funds currently added to
the Merrill Lynch systems prior to July 1, 1997 will be $11.00 and
$14.00, respectively. Thereafter, the annual charge for those funds
will be $16.00 and $19.00, respectively. The annual charge for funds
added to the Merrill Lynch system on or after July 1, 1997 will be
$16.00/19.00, respectively.
SCHEDULE A
----------
DELAWARE GROUP EQUITY FUNDS I, INC. - DEVON FUND
(THE "FUND")
SHAREHOLDERS SERVICES AGREEMENT
COMPENSATION SCHEDULE
CONTINUED
B. TRANSACTION CHARGE
------------------
Transaction Charge
-----------------------------------------------
1. Dividend Payment $0.25
2. New Account $6.00
3. Purchase:
a. Wire $8.00
b. Automated $1.50
c. Other $2.60
4. Transfer $8.00
5. Certificate Issuance $4.00
6. Liquidations
a. Wires $12.25
b. Drafts $0.75
c. Money Market Regul $4.50
d. Other Regular $4.50
7. Exchanges
a. Dividend Exchanges $3.00
b. Other $10.00
4. For the period commencing January 1, 1997, DSC's compensation for
providing services to the Delaware Group Premium Fund, Inc. (the
"Premium Fund") will be $50,000 annually. DSC will bill, and the
Premium Fund will pay, such compensation monthly, allocated among
the current Series of the Premium Fund based on the relative
percentage of assets of each Series at the time of billing and
adjusted appropriately to reflect the length of time a particular
Series is in operation during any billing period.
5. For the period commencing January 1, 1997, DSC's compensation for
providing services to the Portfolios of Delaware Pooled Trust,
Inc. (the "Trust") will be $25,000 annually. DSC will bill, and
the Trust will pay, such compensation monthly allocated among the
current Portfolios of the Trust based on the relative percentage
of assets of each Portfolio at the time of billing and adjusted
appropriately to reflect the length of time a particular Portfolio
is in operation during any billing period.
EX-99.B9BIII
Exhibit 24(b)(9)(b)(iii)
SCHEDULE A
----------
DELAWARE GROUP EQUITY FUNDS I, INC. - DEVON FUND
(THE "FUND")
SHAREHOLDERS SERVICES AGREEMENT
COMPENSATION SCHEDULE
1. Delaware Service Company, Inc. ("DSC") will determine and
report to the Fund, at least annually, the compensation for
services to be provided to the Fund for DSC's forthcoming
fiscal year or period.
2. In determining such compensation, DSC will fix and report a
fee to be charged per account and/or transaction, as may be
applicable, for services provided. DSC will bill, and the
Fund will pay, such compensation monthly.
3. For the period commencing on January 1, 1997, the charge
will consist of two charges for all the Funds in the
Delaware Group, except the Delaware Group Premium Fund, Inc.
and the Delaware Pooled Trust, Inc. (other than with respect
to The Real Estate Investment Trust Portfolio), an annual
charge and a per transaction charge for each account on the
transfer agent's records and each account on an automated
retirement processing system. These charges are as follows:
A. ANNUAL CHARGE
-------------
Daily Dividend Funds $11.00 Per Annum
- --------
Other Funds $5.50 Per Annum
Merrill Lynch - Omnibus Accounts*
Regular Accounts $11.00/$16.00 Per Annum
Accounts with a Contingent
Deferred Sales Charge $14.00/$19.00 Per Annum
Networked Accounts $3.00 - 6.00 Per Annum
*Until January 1, 1998, the annual charge for funds currently
added to the Merrill Lynch systems prior to July 1, 1997 will be
$11.00 and $14.00, respectively. Thereafter, the annual charge
for those funds will be $16.00 and $19.00, respectively. The
annual charge for funds added to the Merrill Lynch system on or
after July 1, 1997 will be $16.00/19.00, respectively.
SCHEDULE A
DELAWARE GROUP EQUITY FUNDS I, INC. - DEVON FUND
(THE "FUND")
SHAREHOLDERS SERVICES AGREEMENT
COMPENSATION SCHEDULE
CONTINUED
B. TRANSACTION CHARGE
Transaction Charge
1. Dividend Payment $0.25
2. New Account $6.00
3. Purchase:
a. Wire $8.00
b. Automated $1.50
c. Other $2.60
4. Transfer $8.00
5. Certificate Issuance $4.00
6. Liquidations
a. Wires $12.25
b. Drafts $0.75
c. Money Market Regular $4.50
d. Other Regular $4.50
7. Exchanges
a. Dividend Exchanges $3.00
b. Other $10.00
4. For the period commencing January 1, 1997, DSC's
compensation for providing services to the Delaware Group
Premium Fund, Inc. (the "Premium Fund") will be $50,000
annually. DSC will bill, and the Premium Fund will pay,
such compensation monthly, allocated among the current
Series of the Premium Fund based on the relative percentage
of assets of each Series at the time of billing and adjusted
appropriately to reflect the length of time a particular
Series is in operation during any billing period.
5. For the period commencing January 1, 1997, DSC's
compensation for providing services to the Portfolios (other
than The Real Estate Investment Trust Portfolio) of Delaware
Pooled Trust, Inc. (the "Trust") will be $25,000 annually.
DSC will bill, and the Trust will pay, such compensation
monthly allocated among the current Portfolios (other than
The Real Estate Investment Trust Portfolio) of the Trust
based on the relative percentage of assets of each Portfolio
at the time of billing and adjusted appropriately to reflect
the length of time a particular Portfolio is in operation
during any billing period.
EX-99.B9D
Exhibit 24(b)(9)(d)
AMENDMENT NO.3 TO
SCHEDULE A
TO DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT
Delaware Group Cash Reserve, Inc.
Delaware Group Decatur Fund, Inc.
Decatur Income Fund
Decatur Total Return Fund
Delaware Group Delaware Fund, Inc.
Delaware Fund
Devon Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group Tax-Free Fund, Inc.
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U.S. Government Money Fund
Delaware Group Trend Fund, Inc.
Delaware Group Income Funds, Inc.
Delchester Fund
Strategic Income Fund (New)
*Except as otherwise noted, all Portfolios included on this
Schedule A are Existing Portfolios for purposes of the
compensation described on Schedule B to that Fund Accounting
Agreement between Delaware Service Company, Inc. and the Delaware
Group of Funds dated as of August 19, 1996 ("Agreement"). All
portfolios added to this Schedule A by amendment executed by a
Company on behalf of such Portfolio hereof shall be a New
Portfolio for purposes of Schedule B to the Agreement.
DMC Tax-Free Income Trust - Pennsylvania
Delaware Group Value Fund, Inc.
Value Fund
Retirement Income Fund (New)
Delaware Group Global & International Funds, Inc.
International Equity Fund
Global Bond Fund
Global Assets Fund
Emerging Markets Fund (New)
Delaware Group Equity Funds IV, Inc.
DelCap Fund
Multi-Cap Equity Fund (New)
Delaware Pooled Trust, Inc.
The Defensive Equity Portfolio
The Aggressive Growth Portfolio
The International Equity Portfolio
The Defensive Equity Small/Mid-Cap Portfolio (New)
The Defensive Equity Utility Portfolio (New)
The Labor Select International Equity Portfolio
The Real Estate Investment Trust Portfolio
The Fixed Income Portfolio
The Limited-Term Maturity Portfolio (New)
The Global Fixed Income Portfolio
The International Fixed Income Portfolio (New)
The High-Yield Bond Portfolio (New)
Delaware Group Premium Fund, Inc.
Equity/Income Series
High Yield Series
Capital Reserves Series
Money Market Series
Growth Series
Multiple Strategy Series
International Equity Series
Value Series
Emerging Growth Series
Global Bond Series (New)
Delaware Group Government Fund, Inc.
Delaware Group Adviser Funds, Inc.
Enterprise Fund
U.S. Growth Fund
World Growth Fund
New Pacific Fund
Federal Bond Fund
Corporate Income Fund
Dated as of: December 27, 1996
DELAWARE SERVICE COMPANY, INC.
By: /s/David K. Downes
David K. Downes
Senior Vice President/Chief
Administrative Officer/Chief
Financial Officer
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP DECATUR FUND, INC.
DELAWARE GROUP DELAWARE FUND, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND,INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE GROUP TREND FUND, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DMC TAX-FREE INCOME TRUST - PENNSYLVANIA
DELAWARE GROUP VALUE FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP DELCAP FUND, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP ADVISER FUNDS, INC.
By: /s/Wayne A. Stork
Wayne A. Stork
Chairman, President and
Chief Executive Officer
DELAWARE POOLED TRUST, INC.
By: /s/Wayne A. Stork
Wayne A. Stork
Chairman
EX-99.B9E
Exhibit 24(b)(9)(e)
AMENDMENT NO. 4 TO
SCHEDULE A
TO DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT
Delaware Group Cash Reserve, Inc.
Delaware Group Equity Funds II, Inc.
Decatur Income Fund
Decatur Total Return Fund
Blue Chip Fund (New)
Quantum Fund (New)
Delaware Group Equity Funds I, Inc.
Delaware Fund
Devon Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group Tax-Free Fund, Inc.
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U.S. Government Money Fund
Delaware Group Trend Fund, Inc.
Delaware Group Income Funds, Inc.
Delchester Fund
Strategic Income Fund
High-Yield Opportunities Fund (New)
*Except as otherwise noted, all Portfolios included on this
Schedule A are Existing Portfolios for purposes of the
compensation described on Schedule B to that Fund Accounting
Agreement between Delaware Service Company, Inc. and the Delaware
Group of Funds dated as of August 19, 1996 ("Agreement"). All
portfolios added to this Schedule A by amendment executed by a
Company on behalf of such Portfolio hereof shall be a New
Portfolio for purposes of Schedule B to the Agreement.
DMC Tax-Free Income Trust - Pennsylvania
Delaware Group Equity Funds V, Inc.
Value Fund
Retirement Income Fund
Delaware Group Global & International Funds, Inc.
International Equity Fund
Global Bond Fund
Global Assets Fund
Emerging Markets Fund
Delaware Group Equity Funds IV, Inc.
DelCap Fund
Capital Appreciation Fund
Delaware Pooled Trust, Inc.
The Defensive Equity Portfolio
The Aggressive Growth Portfolio
The International Equity Portfolio
The Defensive Equity Small/Mid-Cap Portfolio
The Defensive Equity Utility Portfolio
The Labor Select International Equity Portfolio
The Real Estate Investment Trust Portfolio
The Fixed Income Portfolio
The Limited-Term Maturity Portfolio
The Global Fixed Income Portfolio
The International Fixed Income Portfolio
The High-Yield Bond Portfolio
Delaware Group Premium Fund, Inc.
Equity/Income Series
High Yield Series
Capital Reserves Series
Money Market Series
Growth Series
Multiple Strategy Series
International Equity Series
Value Series
Emerging Growth Series
Global Bond Series
Delaware Group Government Fund, Inc.
Delaware Group Adviser Funds, Inc.
Enterprise Fund
U.S. Growth Fund
World Growth Fund
New Pacific Fund
Federal Bond Fund
Corporate Income Fund
Dated as of: FEBRUARY 24, 1997
DELAWARE SERVICE COMPANY, INC.
By: /s/ David K. Downes
David K. Downes
Senior Vice President/Chief
Administrative Officer/Chief
Financial Officer
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND,INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE GROUP TREND FUND, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DMC TAX-FREE INCOME TRUST - PENNSYLVANIA
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP ADVISER FUNDS, INC.
By: /s Wayne A. Stork
Wayne A. Stork
Chairman, President and
Chief Executive Officer
DELAWARE POOLED TRUST, INC.
By: /s/ Wayne A. Stork
Wayne A. Stork
Chairman
EX-99.B9F
Exhibit 24(b)(9)(f)
AMENDMENT NO. 4A
to
SCHEDULE A
of
DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT
Delaware Group Adviser Funds, Inc.
Corporate Income Fund
Enterprise Fund
Federal Bond Fund
New Pacific Fund
U.S. Growth Fund
World Growth Fund
Delaware Group Cash Reserve, Inc.
Delaware Group Equity Funds I, Inc. (formerly Delaware)
Delaware Fund
Devon Fund
Delaware Group Equity Funds II, Inc. (formerly Decatur)
Blue Chip Fund (New)
Decatur Income Fund
Decatur Total Return Fund
Quantum Fund (New)
Delaware Group Equity Funds IV, Inc. (formerly DelCap)
Capital Appreciation Fund (New)
DelCap Fund
Delaware Group Equity Funds V, Inc. (formerly Value)
Value Fund
Retirement Income Fund (New)
Delaware Group Government Fund, Inc.
Government Income Series (U.S. Government Fund)
- ---------------------
*Except as otherwise noted, all Portfolios included on this
Schedule A are Existing Portfolios for purposes of the
compensation described on Schedule B to that Fund Accounting
Agreement between Delaware Service Company, Inc. and the Delaware
Group of Funds dated as of August 19, 1996 ("Agreement"). All
portfolios added to this Schedule A by amendment executed by a
Company on behalf of such Portfolio hereof shall be a New
Portfolio for purposes of Schedule B to the Agreement.
Delaware Group Global & International Funds, Inc.
Emerging Markets Fund (New)
Global Assets Fund
Global Bond Fund
International Equity Fund
Delaware Group Income Funds, Inc. (formerly Delchester)
Delchester Fund
High-Yield Opportunities Fund (New)
Strategic Income Fund (New)
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U.S. Government Money Fund
Delaware Pooled Trust, Inc.
The Aggressive Growth Portfolio
The Defensive Equity Portfolio
The Defensive Equity Small/Mid-Cap Portfolio (New)
The Emerging Markets Portfolio (New)
The Fixed Income Portfolio
The Global Fixed Income Portfolio
The High-Yield Bond Portfolio (New)
The International Equity Portfolio
The International Fixed Income Portfolio (New)
The Labor Select International Equity Portfolio
The Limited-Term Maturity Portfolio (New)
The Real Estate Investment Trust Portfolio
Delaware Group Premium Fund, Inc.
Capital Reserves Series
Cash Reserve Series
Decatur Total Return Series
Delaware Series
Delchester Series
DelCap Series
Global Bond Series (New)
International Equity Series
Trend Series
Value Series
Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group Trend Fund, Inc.
DMC Tax-Free Income Trust - Pennsylvania (doing business as Tax-
Free Pennsylvania Fund)
Dated as of: April 14, 1997
DELAWARE SERVICE COMPANY, INC.
By: /s/ David K. Downes
David K. Downes
President, Chief Executive Officer and Chief Financial Officer
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
DELAWARE GROUP TREND FUND, INC.
DMC TAX-FREE INCOME TRUST-PENNSYLVANIA
By: /s/ Wayne A. Stork
Wayne A. Stork
Chairman, President and
Chief Executive Officer
DELAWARE POOLED TRUST, INC.
By: /s/ Wayne A. Stork
Wayne A. Stork
President and
Chief Executive Officer
EX-99.B9G
Exhibit 24(b)(9)(g)
AMENDMENT NO. 5
to
SCHEDULE A
of
DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT
Delaware Group Adviser Funds, Inc.
Corporate Income Fund
Enterprise Fund
Federal Bond Fund
New Pacific Fund
U.S. Growth Fund
World Growth Fund
Delaware Group Cash Reserve, Inc.
Delaware Group Equity Funds I, Inc. (formerly Delaware)
Delaware Fund
Devon Fund
Delaware Group Equity Funds II, Inc. (formerly Decatur)
Blue Chip Fund (New)
Decatur Income Fund
Decatur Total Return Fund
Quantum Fund (New)
Delaware Group Equity Funds IV, Inc. (formerly DelCap)
Capital Appreciation Fund (New)
DelCap Fund
Delaware Group Equity Funds V, Inc. (formerly Value)
Value Fund
Retirement Income Fund (New)
Delaware Group Government Fund, Inc.
Government Income Series (U.S. Government Fund)
- ---------------------
*Except as otherwise noted, all Portfolios included on this
Schedule A are Existing Portfolios for purposes of the compensation
described on Schedule B to that Fund Accounting Agreement between
Delaware Service Company, Inc. and the Delaware Group of Funds dated as
of August 19, 1996 ("Agreement"). All portfolios added to this Schedule
A by amendment executed by a Company on behalf of such Portfolio hereof
shall be a New Portfolio for purposes of Schedule B to the Agreement.
Delaware Group Global & International Funds, Inc.
Emerging Markets Fund (New)
Global Assets Fund
Global Bond Fund
International Equity Fund
Delaware Group Income Funds, Inc. (formerly Delchester)
Delchester Fund
High-Yield Opportunities Fund (New)
Strategic Income Fund (New)
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U. S. Government Money Fund
Delaware Pooled Trust, Inc.
The Aggressive Growth Portfolio
The Defensive Equity Portfolio
The Defensive Equity Small/Mid-Cap Portfolio (New)
The Defensive Equity Utility Portfolio (New)
The Emerging Markets Portfolio (New)
The Fixed Income Portfolio
The Global Fixed Income Portfolio
The High-Yield Bond Portfolio (New)
The International Equity Portfolio
The International Fixed Income Portfolio (New)
The Labor Select International Equity Portfolio
The Limited-Term Maturity Portfolio (New)
The Real Estate Investment Trust Portfolio
Delaware Group Premium Fund, Inc.
Capital Reserves Series
Cash Reserve Series
Convertible Securities Series (New)
Decatur Total Return Series
Delaware Series
Delchester Series
Devon Series (New)
Emerging Markets Series (New)
DelCap Series
Global Bond Series (New)
International Equity Series
Quantum Series (New)
Strategic Income Series (New)
Trend Series
Value Series
Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group Trend Fund, Inc.
DMC Tax-Free Income Trust-Pennsylvania
(doing business as Tax-Free Pennsylvania Fund)
Voyageur Funds, Inc.
Voyageur U.S. Government Securities Fund (New)
Voyageur Insured Funds, Inc.
Arizona Insured Tax Free Fund (New)
Colorado Insured Fund (New)
Minnesota Insured Fund (New)
National Insured Tax Free Fund (New)
Voyageur Intermediate Tax Free Funds, Inc.
Arizona Limited Term Tax Free Fund (New)
California Limited Term Tax Free Fund (New)
Colorado Limited Term Tax Free Fund (New)
Minnesota Limited Term Tax Free Fund (New)
National Limited Term Tax Free Fund (New)
Voyageur Investment Trust
California Insured Tax Free Fund (New)
Florida Insured Tax Free Fund (New)
Florida Tax Free Fund (New)
Kansas Tax Free Fund (New)
Missouri Insured Tax Free Fund (New)
New Mexico Tax Free Fund (New)
Oregon Insured Tax Free Fund (New)
Utah Tax Free Fund (New)
Washington Insured Tax Free Fund (New)
Voyageur Investment Trust II
Florida Limited Term Tax Free Fund (New)
Voyageur Mutual Funds, Inc.
Arizona Tax Free Fund (New)
California Tax Free Fund (New)
Iowa Tax Free Fund (New)
Idaho Tax Free Fund (New)
Minnesota High Yield Municipal Bond Fund (New)
National High Yield Municipal Bond Fund (New)
National Tax Free Fund (New)
New York Tax Free Fund (New)
Wisconsin Tax Free Fund (New)
Voyageur Mutual Funds II, Inc.
Colorado Tax Free Fund (New)
Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund (New)
Growth Stock Fund (New)
International Equity Fund (New)
Tax Efficient Equity Fund (New)
Voyageur Tax Free Funds, Inc.
Minnesota Tax Free Fund (New)
North Dakota Tax Free Fund (New)
Dated as of May 1, 1997
DELAWARE SERVICE COMPANY, INC.
By: /s/ David K. Downes
David K. Downes
President, Chief Executive Officer and Chief Financial Officer
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP LIMITED -TERM GOVERNMENT FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX FREE MONEY FUND, INC.
DELAWARE GROUP TREND FUND, INC.
DMC TAX-FREE INCOME TRUST-PENNSYLVANIA
VOYAGEUR FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.
By: /s/ Wayne A. Stork
Wayne A. Stork
Chairman, President and
Chief Executive Officer
EX-99.B9H
Exhibit 24(b)(9)(h)
AMENDMENT NO. 6
TO
SCHEDULE A
OF
DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT
Delaware Group Adviser Funds, Inc.
Corporate Income Fund
Enterprise Fund
Federal Bond Fund
New Pacific Fund
U.S. Growth Fund
World Growth Fund
Delaware Group Cash Reserve, Inc.
Delaware Group Equity Funds I, Inc. (formerly Delaware)
Delaware Fund
Devon Fund
Delaware Group Equity Funds II, Inc. (formerly Decatur)
Blue Chip Fund (New)
Decatur Income Fund
Decatur Total Return Fund
Quantum Fund (New)
Delaware Group Equity Funds IV, Inc. (formerly DelCap)
Capital Appreciation Fund (New)
DelCap Fund
Delaware Group Equity Funds V, Inc. (formerly Value)
Value Fund
Retirement Income Fund (New)
Delaware Group Government Fund, Inc.
Government Income Series (U.S. Government Fund )
- ------------------
*Except as otherwise noted, all Portfolios included on this Schedule A
are Existing Portfolios for purposes of the compensation described on
Schedule B to that Fund Accounting Agreement between Delaware Service
Company, Inc. and the Delaware Group of Funds dated as of August 19, 1996
("Agreement"). All portfolios added to this Schedule A by amendment
executed by a Company on behalf of such Portfolio hereof shall be a New
Portfolio for purposes of Schedule B to the Agreement.
Delaware Group Global & International Funds, Inc.
Emerging Markets Fund (New)
Global Assets Fund
Global Bond Fund
International Equity Fund
Global Equity Fund (New)
International Small Cap Fund (New)
Delaware Group Income Funds, Inc. (formerly Delchester)
Delchester Fund
High-Yield Opportunities Fund (New)
Strategic Income Fund (New)
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U. S. Government Money Fund
Delaware Pooled Trust, Inc.
The Aggressive Growth Portfolio
The Defensive Equity Portfolio
The Defensive Equity Small/Mid-Cap Portfolio (New)
The Defensive Equity Utility Portfolio (New)
The Emerging Markets Portfolio (New)
The Fixed Income Portfolio
The Global Fixed Income Portfolio
The High-Yield Bond Portfolio (New)
The International Equity Portfolio
The International Fixed Income Portfolio (New)
The Labor Select International Equity Portfolio
The Limited-Term Maturity Portfolio (New)
The Real Estate Investment Trust Portfolio
Delaware Group Premium Fund, Inc.
Capital Reserves Series
Cash Reserve Series
Convertible Securities Series (New)
Decatur Total Return Series
Delaware Series
Delchester Series
Devon Series (New)
Emerging Markets Series (New)
DelCap Series
Global Bond Series (New)
International Equity Series
Quantum Series (New)
Strategic Income Series (New)
Trend Series
Value Series
Delaware Group State Tax-Free Income Trust
Tax-Free New Jersey Fund (New)
Tax-Free Ohio Fund (New)
Tax-Free Pennsylvania Fund
Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group Trend Fund, Inc.
Voyageur Funds, Inc.
Voyageur U.S. Government Securities Fund (New)
Voyageur Insured Funds, Inc.
Arizona Insured Tax Free Fund (New)
Colorado Insured Fund (New)
Minnesota Insured Fund (New)
National Insured Tax Free Fund (New)
Voyageur Intermediate Tax Free Funds, Inc.
Arizona Limited Term Tax Free Fund (New)
California Limited Term Tax Free Fund (New)
Colorado Limited Term Tax Free Fund (New)
Minnesota Limited Term Tax Free Fund (New)
National Limited Term Tax Free Fund (New)
Voyageur Investment Trust
California Insured Tax Free Fund (New)
Florida Insured Tax Free Fund (New)
Florida Tax Free Fund (New)
Kansas Tax Free Fund (New)
Missouri Insured Tax Free Fund (New)
New Mexico Tax Free Fund (New)
Oregon Insured Tax Free Fund (New)
Utah Tax Free Fund (New)
Washington Insured Tax Free Fund (New)
Voyageur Investment Trust II
Florida Limited Term Tax Free Fund (New)
Voyageur Mutual Funds, Inc.
Arizona Tax Free Fund (New)
California Tax Free Fund (New)
Iowa Tax Free Fund (New)
Idaho Tax Free Fund (New)
Minnesota High Yield Municipal Bond Fund (New)
National High Yield Municipal Bond Fund (New)
National Tax Free Fund (New)
New York Tax Free Fund (New)
Wisconsin Tax Free Fund (New)
Voyageur Mutual Funds II, Inc.
Colorado Tax Free Fund (New)
Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund (New)
Growth Stock Fund (New)
International Equity Fund (New)
Tax Efficient Equity Fund (New)
Voyageur Tax Free Funds, Inc.
Minnesota Tax Free Fund (New)
North Dakota Tax Free Fund (New)
Dated as of July 21, 1997
DELAWARE SERVICE COMPANY, INC.
By: /s/ David K. Downes
-------------------
David K. Downes
President, Chief Executive Officer and Chief Financial Officer
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP LIMITED -TERM GOVERNMENT FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX FREE MONEY FUND, INC.
DELAWARE GROUP TREND FUND, INC.
DMC TAX-FREE INCOME TRUST-PENNSYLVANIA
VOYAGEUR FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.
By: /s/ Wayne A. Stork
------------------
Wayne A. Stork
Chairman, President and
Chief Executive Officer
EX99.B11
EXHIBIT 24(b)(11)
Consent of Ernst & Young LLP, Independent Auditors
We consent to the references to our firm under the captions
"Financial Highlights" in the Prospectuses and "Financial
Statements" in the Statement of Additional Information and
to the incorporation by reference in this Post-Effective
Amendment No. 105 to the Registration Statement (Form N-1A)
(No.2-10765) of Delaware Group Equity Funds I, Inc. of our
reports dated April 4, 1997, included in the 1997 Annual
Reports to Shareholders.
/s/Ernst & Young LLP
Ernst & Young LLP
Philadelphia, Pennsylvania
December 22, 1997
Report of Independent Auditors
To the Shareholders and Board of Directors
Delaware Group Equity Funds I, Inc. - Delaware Fund
We have audited the accompanying statement of net assets of
Delaware Group Equity Funds I, Inc. - Delaware Fund as of
October 31, 1997, and the related statement of operations
for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended,
and the financial highlights for each of the periods
indicated therein. These financial statements and financial
highlights are the responsibility of the Fund's management.
Our responsibility is to express an opinion on these
financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable assurance
about whether the financial statements and financial
highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements and
financial highlights. Our procedures included confirmation
of securities owned as of October 31, 1997, by
correspondence with the Fund's custodian and brokers. An
audit also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material
respects, the financial position of Delaware Group Equity
Funds I, Inc. - Delaware Fund at October 31, 1997, the
results of its operations for the year then ended, the
changes in its net assets for each of the two years in the
period then ended, and its financial highlights for each of
the periods indicated therein, in conformity with generally
accepted accounting principles.
/s/Ernst & Young LLP
Ernst & Young LLP
Philadelphia, Pennsylvania
December 4, 1997
Report of Independent Auditors
To the Shareholders and Board of Directors
Delaware Group Equity Funds I, Inc. - Devon Fund
We have audited the accompanying statement of net assets of
Delaware Group Equity Funds I, Inc. - Devon Fund as of
October 31, 1997, and the related statement of operations
for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended,
and the financial highlights for each of the periods
indicated therein. These financial statements and financial
highlights are the responsibility of the Fund's management.
Our responsibility is to express an opinion on these
financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable assurance
about whether the financial statements and financial
highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements and
financial highlights. Our procedures included confirmation
of securities owned as of October 31, 1997 by correspondence
with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material
respects, the financial position of Delaware Group Equity
Funds I, Inc. - Devon Fund at October 31, 1997, the results
of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then
ended, and its financial highlights for each of the periods
indicated therein, in conformity with generally accepted
accounting principles.
/s/Ernst & Young LLP
Ernst & Young LLP
Philadelphia, Pennsylvania
December 4, 1997
EX-99.B16B
Exhibit 24(b)(16)(b)
AT NAV
Delaware Group Equity Funds I, Inc.- Delaware Fund
B Class
Cumulative Total Return Performance
Three Years
Initial Investment $1,000.00
Beginning NAV $17.98
Initial Shares 55.617
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
1995 55.617 $0.760 2.381 57.998
1996 57.998 $1.575 4.661 62.659
1997 62.659 $2.430 7.642 70.301
Ending Shares 70.301
Ending NAV x $22.88
----------
Investment Return $1,608.49
Total Return Performance
- ------------------------
Investment Return $1,608.49
Less Initial Investment $1,000.00
----------
$608.49 /$1,000.00 x 100
Total Return: 60.85%
Delaware Group Equity Funds I, Inc.- Delaware Fund
B Class
Average Annual Total Return Performance
Three Years
n
P(1 + T) = ERV
THREE
YEARS
- -------
3
$1000(1 + T) = $1,608.49
T = 17.17%
0.1717
1608.6
Including CDSC
Delaware Group Equity Funds I, Inc.- Delaware Fund
B Class
Cumulative Total Return Performance
Three Years (INCLUDING CDSC)
- -----------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $17.98
Initial Shares 55.617
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
1995 55.617 $0.760 2.381 57.998
1996 57.998 $1.575 4.661 62.659
1997 62.659 $2.430 7.642 70.301
Ending Shares 70.301
Ending NAV x $22.88
--------
$1,608.49
Less CDSC $30.00
--------
Investment Return $1,578.49
Total Return Performance
- ------------------------
Investment Return $1,578.49
Less Initial Investment $1,000.00
--------
$578.49 /$1,000.00 x 100
Total Return: 57.85%
Delaware Group Equity Funds I, Inc.- Delaware Fund
B Class
Average Annual Total Return Performance
Three Years (INCLUDING CDSC)
n
P(1 + T) = ERV
THREE
YEARS
- -------
3
$1000(1 + T) = $1,578.49
T = 16.43%
0.1643
1578.3
AT NAV
Delaware Group Equity Funds I, Inc.- Delaware Fund
C Class
Cumulative Total Return Performance
ONE YEAR
Initial Investment $1,000.00
Beginning NAV $21.18
Initial Shares 47.214
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
1997 47.214 $2.425 5.725 52.939
Ending Shares 52.939
Ending NAV x $22.87
----------
Investment Return $1,210.71
Total Return Performance
- ------------------------
Investment Return $1,210.71
Less Initial Investment $1,000.00
----------
$210.71 /$1,000.00 x 100
Total Return: 21.07%
Delaware Group Equity Funds I, Inc.- Delaware Fund
C Class
Average Annual Total Return Performance
ONE YEAR
n
P(1 + T) = ERV
ONE
YEAR
- -------
1
$1000(1 + T) = $1210.71
T = 21.07%
0.2107
1210.7
Including CDSC
Delaware Group Equity Funds I, Inc.- Delaware Fund
C Class
Cumulative Total Return Performance
ONE YEAR (INCLUDING CDSC)
Initial Investment $1,000.00
Beginning NAV $21.18
Initial Shares 47.214
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
1997 47.214 $2.425 5.725 52.939
Ending Shares 52.939
Ending NAV x $22.87
--------
Investment Return $1,210.71
Less CDSC $10.00
--------
Investment Return $1,200.71
Total Return Performance
- ------------------------
Investment Return $1,200.71
Less Initial Investment $1,000.00
--------
$200.71 /$1,000.00 x 100
Total Return: 20.07%
Delaware Group Equity Funds I, Inc.- Delaware Fund
C Class
Average Annual Total Return Performance
ONE YEAR (INCLUDING CDSC)
n
P(1 + T) = ERV
ONE
YEAR
- -------
1
$1000(1 + T) = $1,200.71
T = 20.07%
0.2007
1200.7
AT NAV
Delaware Group Equity Funds I, Inc.- Devon Fund
A Class
Cumulative Total Return Performance
Three Years (at NAV)
Initial Investment $1,000.00
Beginning NAV $10.83
Initial Shares 92.336
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
1995 92.336 $0.540 4.862 97.198
1996 97.198 $0.845 6.450 103.648
1997 103.648 $1.175 8.368 112.016
Ending Shares 112.016
Ending NAV x $17.86
----------
Investment Return $2,000.61
Total Return Performance
- ------------------------
Investment Return $2,000.61
Less Initial Investment $1,000.00
----------
$1,000.61 /$1,000.00 x 100
Total Return: 100.06%
Delaware Group Equity Funds I, Inc.- Devon Fund
A Class
Average Annual Total Return Performance
Three Years (at NAV)
n
P(1 + T) = ERV
THREE
YEARS
- -------
3
$1000(1 + T) = $2,000.61
T = 26.00%
0.26
2000.4
AT OFFER
Delaware Group Equity Funds I, Inc.- Devon Fund
A Class
Cumulative Total Return Performance
Three Years (at offer price)
Initial Investment $1,000.00
Beginning Offer Price $11.37
Initial Shares 87.951
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
1995 87.951 $0.540 4.631 92.582
1996 92.582 $0.845 6.143 98.725
1997 98.725 $1.175 7.971 106.696
Ending Shares 106.696
Ending Offer Price x $17.86
--------
Investment Return $1,905.59
Total Return Performance
- ------------------------
Investment Return $1,905.59
Less Initial Investment $1,000.00
--------
$905.59 /$1,000.00 x 100
Total Return: 90.56%
Delaware Group Equity Funds I, Inc.- Devon Fund
A Class
Average Annual Total Return Performance
Three Years (at offer price)
n
P(1 + T) = ERV
THREE
YEARS
- -------
3
$1000(1 + T) = $1,905.59
T = 23.98%
0.2397
1905.7
AT NAV
Delaware Group Equity Funds I, Inc.- Devon Fund
B Class
Cumulative Total Return Performance
Three Years
Initial Investment $1,000.00
Beginning NAV $10.82
Initial Shares 92.421
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
1995 92.421 $0.500 4.530 96.951
1996 96.951 $0.760 5.799 102.750
1997 102.750 $1.040 7.381 110.131
Ending Shares 110.131
Ending NAV x $17.80
----------
Investment Return $1,960.33
Total Return Performance
- ------------------------
Investment Return $1,960.33
Less Initial Investment $1,000.00
----------
$960.33 /$1,000.00 x 100
Total Return: 96.03%
Delaware Group Equity Funds I, Inc.- Devon Fund
B Class
Average Annual Total Return Performance
Three Years
n
P(1 + T) = ERV
THREE
YEARS
- -------
3
$1000(1 + T) = $1,960.33
T = 25.15%
0.2515
1960.2
Including CDSC
Delaware Group Equity Funds I, Inc.- Devon Fund
B Class
Cumulative Total Return Performance
Three Years (INCLUDING CDSC)
Initial Investment $1,000.00
Beginning NAV $10.82
Initial Shares 92.421
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
1995 92.421 $0.500 4.530 96.951
1996 96.951 $0.760 5.799 102.750
1997 102.750 $1.040 7.381 110.131
Ending Shares 110.131
Ending NAV x $17.80
--------
$1,960.33
Less CDSC $30.00
--------
Investment Return $1,930.33
Total Return Performance
- ------------------------
Investment Return $1,930.33
Less Initial Investment $1,000.00
--------
$930.33 /$1,000.00 x 100
Total Return: 93.03%
Delaware Group Equity Funds I, Inc.- Devon Fund
B Class
Average Annual Total Return Performance
Three Years (INCLUDING CDSC)
n
P(1 + T) = ERV
THREE
YEARS
- -------
3
$1000(1 + T) = $1,930.33
T = 24.51%
0.2451
1930.2
AT NAV
Delaware Group Equity Funds I, Inc.- Devon Fund
C Class
Cumulative Total Return Performance
ONE YEAR
Initial Investment $1,000.00
Beginning NAV $14.53
Initial Shares 68.823
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
1997 68.823 $1.040 4.947 73.770
Ending Shares 73.770
Ending NAV x $17.79
----------
Investment Return $1,312.37
Total Return Performance
- ------------------------
Investment Return $1,312.37
Less Initial Investment $1,000.00
----------
$312.37 /$1,000.00 x 100
Total Return: 31.24%
Delaware Group Equity Funds I, Inc.- Devon Fund
C Class
Average Annual Total Return Performance
ONE YEAR
n
P(1 + T) = ERV
ONE
YEAR
- -------
1
$1000(1 + T) = $1312.37
T = 31.24%
0.3124
1312.4
Including CDSC
Delaware Group Equity Funds I, Inc.- Devon Fund
C Class
Cumulative Total Return Performance
ONE YEAR (INCLUDING CDSC)
Initial Investment $1,000.00
Beginning NAV $14.53
Initial Shares 68.823
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
1997 68.823 $1.040 4.947 73.770
Ending Shares 73.770
Ending NAV x $17.79
--------
Investment Return $1,312.37
Less CDSC $10.00
--------
Investment Return $1,302.37
Total Return Performance
- ------------------------
Investment Return $1,302.37
Less Initial Investment $1,000.00
--------
$302.37 /$1,000.00 x 100
Total Return: 30.24%
Delaware Group Equity Funds I, Inc.- Devon Fund
C Class
Average Annual Total Return Performance
ONE YEAR (INCLUDING CDSC)
n
P(1 + T) = ERV
ONE
YEAR
- -------
1
$1000(1 + T) = $1,302.37
T = 30.24%
0.3024
1302.4
AT NAV
Delaware Group Equity Funds I, Inc.- Devon Fund
Institutional Class
Cumulative Total Return Performance
Three Years
Initial Investment $1,000.00
Beginning NAV $10.86
Initial Shares 92.081
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
1995 92.081 $0.560 5.028 97.109
1996 97.109 $0.880 6.702 103.811
1997 103.811 $1.235 8.789 112.600
Ending Shares 112.600
Ending NAV x $17.93
----------
Investment Return $2,018.92
Total Return Performance
- ------------------------
Investment Return $2,018.92
Less Initial Investment $1,000.00
----------
$1,018.92 /$1,000.00 x 100
Total Return: 101.89%
Delaware Group Equity Funds I, Inc.- Devon Fund
Institutional Class
Average Annual Total Return Performance
Three Years
n
P(1 + T) = ERV
THREE
YEARS
- -------
3
$1000(1 + T) = $2,018.92
T = 26.39%
0.2639
2019
EX-27
Exhibit 24(b)(17)
[ARTICLE] 6
[CIK] 0000027801
[NAME] DELAWARE GROUP EQUITY FUNDS I, INC.
[SERIES]
[NUMBER] 011
[NAME] DELAWARE FUND A CLASS
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] OCT-31-1997
[PERIOD-END] OCT-31-1997
[INVESTMENTS-AT-COST] 628,813,175
[INVESTMENTS-AT-VALUE] 732,441,737
[RECEIVABLES] 7,331,359
[ASSETS-OTHER] 240,665
[OTHER-ITEMS-ASSETS] 5,352
[TOTAL-ASSETS] 740,019,113
[PAYABLE-FOR-SECURITIES] 6,322,942
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 1,322,967
[TOTAL-LIABILITIES] 7,645,909
[SENIOR-EQUITY] 31,895,404
[PAID-IN-CAPITAL-COMMON] 511,416,669
[SHARES-COMMON-STOCK] 24,154,955
[SHARES-COMMON-PRIOR] 23,058,229
[ACCUMULATED-NII-CURRENT] 2,991,674
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 82,440,895
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 103,628,562
[NET-ASSETS] 554,448,340
[DIVIDEND-INCOME] 9,154,195
[INTEREST-INCOME] 16,658,635
[OTHER-INCOME] 0
[EXPENSES-NET] 6,466,275
[NET-INVESTMENT-INCOME] 19,346,555
[REALIZED-GAINS-CURRENT] 83,369,699
[APPREC-INCREASE-CURRENT] 30,998,183
[NET-CHANGE-FROM-OPS] 133,714,437
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 16,272,302
[DISTRIBUTIONS-OF-GAINS] 44,815,558
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 41,923,741
[NUMBER-OF-SHARES-REDEEMED] 67,004,197
[SHARES-REINVESTED] 47,456,233
[NET-CHANGE-IN-ASSETS] 107,610,348
[ACCUMULATED-NII-PRIOR] 4,879,763
[ACCUMULATED-GAINS-PRIOR] 56,216,990
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 3,492,255
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 6,466,275
[AVERAGE-NET-ASSETS] 523,418,659
[PER-SHARE-NAV-BEGIN] 21.260
[PER-SHARE-NII] 0.610
[PER-SHARE-GAIN-APPREC] 3.680
[PER-SHARE-DIVIDEND] 0.680
[PER-SHARE-DISTRIBUTIONS] 1.920
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 22.950
[EXPENSE-RATIO] 0.970
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
[ARTICLE] 6
[CIK] 0000027801
[NAME] DELAWARE GROUP EQUITY FUNDS I, INC.
[SERIES]
[NUMBER] 012
[NAME] DELAWARE FUND B CLASS
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] OCT-31-1997
[PERIOD-END] OCT-31-1997
[INVESTMENTS-AT-COST] 628,813,175
[INVESTMENTS-AT-VALUE] 732,441,737
[RECEIVABLES] 7,331,359
[ASSETS-OTHER] 240,665
[OTHER-ITEMS-ASSETS] 5,352
[TOTAL-ASSETS] 740,019,113
[PAYABLE-FOR-SECURITIES] 6,322,942
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 1,322,967
[TOTAL-LIABILITIES] 7,645,909
[SENIOR-EQUITY] 31,895,404
[PAID-IN-CAPITAL-COMMON] 511,416,669
[SHARES-COMMON-STOCK] 728,001
[SHARES-COMMON-PRIOR] 324,181
[ACCUMULATED-NII-CURRENT] 2,991,674
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 82,440,895
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 103,628,562
[NET-ASSETS] 16,658,926
[DIVIDEND-INCOME] 9,154,195
[INTEREST-INCOME] 16,658,635
[OTHER-INCOME] 0
[EXPENSES-NET] 6,466,275
[NET-INVESTMENT-INCOME] 19,346,555
[REALIZED-GAINS-CURRENT] 83,369,699
[APPREC-INCREASE-CURRENT] 30,998,183
[NET-CHANGE-FROM-OPS] 133,714,437
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 261,292
[DISTRIBUTIONS-OF-GAINS] 710,891
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 10,047,187
[NUMBER-OF-SHARES-REDEEMED] 2,119,134
[SHARES-REINVESTED] 910,380
[NET-CHANGE-IN-ASSETS] 107,610,348
[ACCUMULATED-NII-PRIOR] 4,879,763
[ACCUMULATED-GAINS-PRIOR] 56,216,990
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 3,492,255
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 6,466,275
[AVERAGE-NET-ASSETS] 11,228,631
[PER-SHARE-NAV-BEGIN] 21.200
[PER-SHARE-NII] 0.452
[PER-SHARE-GAIN-APPREC] 3.658
[PER-SHARE-DIVIDEND] 0.510
[PER-SHARE-DISTRIBUTIONS] 1.920
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 22.880
[EXPENSE-RATIO] 1.780
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
[ARTICLE] 6
[CIK] 0000027801
[NAME] DELAWARE GROUP EQUITY FUNDS I, INC.
[SERIES]
[NUMBER] 013
[NAME] DELAWARE FUND C CLASS
<TABLE>
<S>
<C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] OCT-31-1997
[PERIOD-END] OCT-31-1997
[INVESTMENTS-AT-COST] 628,813,175
[INVESTMENTS-AT-VALUE] 732,441,737
[RECEIVABLES] 7,331,359
[ASSETS-OTHER] 240,665
[OTHER-ITEMS-ASSETS] 5,352
[TOTAL-ASSETS] 740,019,113
[PAYABLE-FOR-SECURITIES] 6,322,942
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 1,322,967
[TOTAL-LIABILITIES] 7,645,909
[SENIOR-EQUITY] 31,895,404
[PAID-IN-CAPITAL-COMMON] 511,416,669
[SHARES-COMMON-STOCK] 353,768
[SHARES-COMMON-PRIOR] 93,924
[ACCUMULATED-NII-CURRENT] 2,991,674
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 82,440,895
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 103,628,562
[NET-ASSETS] 8,090,196
[DIVIDEND-INCOME] 9,154,195
[INTEREST-INCOME] 16,658,635
[OTHER-INCOME] 0
[EXPENSES-NET] 6,466,275
[NET-INVESTMENT-INCOME] 19,346,555
[REALIZED-GAINS-CURRENT] 83,369,699
[APPREC-INCREASE-CURRENT] 30,998,183
[NET-CHANGE-FROM-OPS] 133,714,437
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 110,135
[DISTRIBUTIONS-OF-GAINS] 217,176
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 6,084,168
[NUMBER-OF-SHARES-REDEEMED] 811,843
[SHARES-REINVESTED] 315,208
[NET-CHANGE-IN-ASSETS] 107,610,348
[ACCUMULATED-NII-PRIOR] 4,879,763
[ACCUMULATED-GAINS-PRIOR] 56,216,990
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 3,492,255
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 6,466,275
[AVERAGE-NET-ASSETS] 4,817,470
[PER-SHARE-NAV-BEGIN] 21.180
[PER-SHARE-NII] 0.460
[PER-SHARE-GAIN-APPREC] 3.655
[PER-SHARE-DIVIDEND] 0.505
[PER-SHARE-DISTRIBUTIONS] 1.920
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 22.870
[EXPENSE-RATIO] 1.780
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
[ARTICLE] 6
[CIK] 0000027801
[NAME] DELAWARE GROUP EQUITY FUNDS I, INC.
[SERIES]
[NUMBER] 014
[NAME] DELAWARE FUND INSTITUTIONAL CLASS
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] OCT-31-1997
[PERIOD-END] OCT-31-1997
[INVESTMENTS-AT-COST] 628,813,175
[INVESTMENTS-AT-VALUE] 732,441,737
[RECEIVABLES] 7,331,359
[ASSETS-OTHER] 240,665
[OTHER-ITEMS-ASSETS] 5,352
[TOTAL-ASSETS] 740,019,113
[PAYABLE-FOR-SECURITIES] 6,322,942
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 1,322,967
[TOTAL-LIABILITIES] 7,645,909
[SENIOR-EQUITY] 31,895,404
[PAID-IN-CAPITAL-COMMON] 511,416,669
[SHARES-COMMON-STOCK] 6,658,680
[SHARES-COMMON-PRIOR] 5,904,013
[ACCUMULATED-NII-CURRENT] 2,991,674
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 82,440,895
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 103,628,562
[NET-ASSETS] 153,175,742
[DIVIDEND-INCOME] 9,154,195
[INTEREST-INCOME] 16,658,635
[OTHER-INCOME] 0
[EXPENSES-NET] 6,466,275
[NET-INVESTMENT-INCOME] 19,346,555
[REALIZED-GAINS-CURRENT] 83,369,699
[APPREC-INCREASE-CURRENT] 30,998,183
[NET-CHANGE-FROM-OPS] 133,714,437
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 4,590,915
[DISTRIBUTIONS-OF-GAINS] 11,402,169
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 29,047,615
[NUMBER-OF-SHARES-REDEEMED] 29,541,550
[SHARES-REINVESTED] 15,968,541
[NET-CHANGE-IN-ASSETS] 107,610,348
[ACCUMULATED-NII-PRIOR] 4,879,763
[ACCUMULATED-GAINS-PRIOR] 56,216,990
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 3,492,255
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 6,466,275
[AVERAGE-NET-ASSETS] 141,250,373
[PER-SHARE-NAV-BEGIN] 21.300
[PER-SHARE-NII] 0.659
[PER-SHARE-GAIN-APPREC] 3.681
[PER-SHARE-DIVIDEND] 0.720
[PER-SHARE-DISTRIBUTIONS] 1.920
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 23.000
[EXPENSE-RATIO] 0.780
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
[ARTICLE] 6
[CIK] 0000027801
[NAME] DELAWARE GROUP EQUITY FUNDS I, INC.
[SERIES]
[NUMBER] 021
[NAME] DEVON FUND A CLASS
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] OCT-31-1997
[PERIOD-END] OCT-31-1997
[INVESTMENTS-AT-COST] 80,180,170
[INVESTMENTS-AT-VALUE] 89,551,050
[RECEIVABLES] 900,076
[ASSETS-OTHER] 408
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 90,451,534
[PAYABLE-FOR-SECURITIES] 400,310
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 407,438
[TOTAL-LIABILITIES] 807,748
[SENIOR-EQUITY] 5,024,343
[PAID-IN-CAPITAL-COMMON] 69,446,986
[SHARES-COMMON-STOCK] 2,757,834
[SHARES-COMMON-PRIOR] 1,020,347
[ACCUMULATED-NII-CURRENT] 59,952
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 5,741,625
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 9,370,880
[NET-ASSETS] 49,261,907
[DIVIDEND-INCOME] 1,033,970
[INTEREST-INCOME] 199,844
[OTHER-INCOME] 0
[EXPENSES-NET] 745,693
[NET-INVESTMENT-INCOME] 488,121
[REALIZED-GAINS-CURRENT] 5,746,895
[APPREC-INCREASE-CURRENT] 6,227,315
[NET-CHANGE-FROM-OPS] 12,462,331
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 362,273
[DISTRIBUTIONS-OF-GAINS] 1,104,351
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 38,641,388
[NUMBER-OF-SHARES-REDEEMED] 11,875,438
[SHARES-REINVESTED] 1,427,106
[NET-CHANGE-IN-ASSETS] 66,991,944
[ACCUMULATED-NII-PRIOR] 72,096
[ACCUMULATED-GAINS-PRIOR] 1,662,834
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 310,229
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 836,550
[AVERAGE-NET-ASSETS] 30,654,531
[PER-SHARE-NAV-BEGIN] 14.61
[PER-SHARE-NII] 0.182
[PER-SHARE-GAIN-APPREC] 4.243
[PER-SHARE-DIVIDEND] 0.210
[PER-SHARE-DISTRIBUTIONS] 0.965
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 17.860
[EXPENSE-RATIO] 1.25
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
[ARTICLE] 6
[CIK] 0000027801
[NAME] DELAWARE GROUP EQUITY FUNDS I, INC.
[SERIES]
[NUMBER] 022
[NAME] DEVON FUND B CLASS
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] OCT-31-1997
[PERIOD-END] OCT-31-1997
[INVESTMENTS-AT-COST] 80,180,170
[INVESTMENTS-AT-VALUE] 89,551,050
[RECEIVABLES] 900,076
[ASSETS-OTHER] 408
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 90,451,534
[PAYABLE-FOR-SECURITIES] 400,310
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 407,438
[TOTAL-LIABILITIES] 807,748
[SENIOR-EQUITY] 5,024,343
[PAID-IN-CAPITAL-COMMON] 69,446,986
[SHARES-COMMON-STOCK] 1,615,428
[SHARES-COMMON-PRIOR] 233,773
[ACCUMULATED-NII-CURRENT] 59,952
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 5,741,625
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 9,370,880
[NET-ASSETS] 28,757,111
[DIVIDEND-INCOME] 1,033,970
[INTEREST-INCOME] 199,844
[OTHER-INCOME] 0
[EXPENSES-NET] 745,693
[NET-INVESTMENT-INCOME] 488,121
[REALIZED-GAINS-CURRENT] 5,746,895
[APPREC-INCREASE-CURRENT] 6,227,315
[NET-CHANGE-FROM-OPS] 12,462,331
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 55,613
[DISTRIBUTIONS-OF-GAINS] 264,305
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 22,994,757
[NUMBER-OF-SHARES-REDEEMED] 689,717
[SHARES-REINVESTED] 309,109
[NET-CHANGE-IN-ASSETS] 66,991,944
[ACCUMULATED-NII-PRIOR] 72,096
[ACCUMULATED-GAINS-PRIOR] 1,662,834
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 310,229
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 836,550
[AVERAGE-NET-ASSETS] 13,878,195
[PER-SHARE-NAV-BEGIN] 14.54
[PER-SHARE-NII] 0.081
[PER-SHARE-GAIN-APPREC] 4.219
[PER-SHARE-DIVIDEND] 0.075
[PER-SHARE-DISTRIBUTIONS] 0.965
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 17.800
[EXPENSE-RATIO] 1.95
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
[ARTICLE] 6
[CIK] 0000027801
[NAME] DELAWARE GROUP EQUITY FUNDS I, INC.
[SERIES]
[NUMBER] 023
[NAME] DEVON FUND C CLASS
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] OCT-31-1997
[PERIOD-END] OCT-31-1997
[INVESTMENTS-AT-COST] 80,180,170
[INVESTMENTS-AT-VALUE] 89,551,050
[RECEIVABLES] 900,076
[ASSETS-OTHER] 408
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 90,451,534
[PAYABLE-FOR-SECURITIES] 400,310
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 407,438
[TOTAL-LIABILITIES] 807,748
[SENIOR-EQUITY] 5,024,343
[PAID-IN-CAPITAL-COMMON] 69,446,986
[SHARES-COMMON-STOCK] 330,385
[SHARES-COMMON-PRIOR] 72,657
[ACCUMULATED-NII-CURRENT] 59,952
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 5,741,625
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 9,370,880
[NET-ASSETS] 5,875,898
[DIVIDEND-INCOME] 1,033,970
[INTEREST-INCOME] 199,844
[OTHER-INCOME] 0
[EXPENSES-NET] 745,693
[NET-INVESTMENT-INCOME] 488,121
[REALIZED-GAINS-CURRENT] 5,746,895
[APPREC-INCREASE-CURRENT] 6,227,315
[NET-CHANGE-FROM-OPS] 12,462,331
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 11,501
[DISTRIBUTIONS-OF-GAINS] 82,511
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 4,650,415
[NUMBER-OF-SHARES-REDEEMED] 354,298
[SHARES-REINVESTED] 90,323
[NET-CHANGE-IN-ASSETS] 66,991,944
[ACCUMULATED-NII-PRIOR] 72,096
[ACCUMULATED-GAINS-PRIOR] 1,662,834
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 310,229
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 836,550
[AVERAGE-NET-ASSETS] 2,644,909
[PER-SHARE-NAV-BEGIN] 14.53
[PER-SHARE-NII] 0.071
[PER-SHARE-GAIN-APPREC] 4.229
[PER-SHARE-DIVIDEND] 0.075
[PER-SHARE-DISTRIBUTIONS] 0.965
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 17.790
[EXPENSE-RATIO] 1.95
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
[ARTICLE] 6
[CIK] 0000027801
[NAME] DELAWARE GROUP EQUITY FUNDS I, INC.
[SERIES]
[NUMBER] 024
[NAME] DEVON FUND INSTITUTIONAL CLASS
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] OCT-31-1997
[PERIOD-END] OCT-31-1997
[INVESTMENTS-AT-COST] 80,180,170
[INVESTMENTS-AT-VALUE] 89,551,050
[RECEIVABLES] 900,076
[ASSETS-OTHER] 408
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 90,451,534
[PAYABLE-FOR-SECURITIES] 400,310
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 407,438
[TOTAL-LIABILITIES] 807,748
[SENIOR-EQUITY] 5,024,343
[PAID-IN-CAPITAL-COMMON] 69,446,986
[SHARES-COMMON-STOCK] 320,696
[SHARES-COMMON-PRIOR] 224,213
[ACCUMULATED-NII-CURRENT] 59,952
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 5,741,625
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 9,370,880
[NET-ASSETS] 5,748,870
[DIVIDEND-INCOME] 1,033,970
[INTEREST-INCOME] 199,844
[OTHER-INCOME] 0
[EXPENSES-NET] 745,693
[NET-INVESTMENT-INCOME] 488,121
[REALIZED-GAINS-CURRENT] 5,746,895
[APPREC-INCREASE-CURRENT] 6,227,315
[NET-CHANGE-FROM-OPS] 12,462,331
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 70,878
[DISTRIBUTIONS-OF-GAINS] 216,937
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 3,219,483
[NUMBER-OF-SHARES-REDEEMED] 2,002,961
[SHARES-REINVESTED] 287,815
[NET-CHANGE-IN-ASSETS] 66,991,944
[ACCUMULATED-NII-PRIOR] 72,096
[ACCUMULATED-GAINS-PRIOR] 1,662,834
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 310,229
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 836,550
[AVERAGE-NET-ASSETS] 4,667,482
[PER-SHARE-NAV-BEGIN] 14.67
[PER-SHARE-NII] 0.211
[PER-SHARE-GAIN-APPREC] 4.284
[PER-SHARE-DIVIDEND] 0.270
[PER-SHARE-DISTRIBUTIONS] 0.965
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 17.930
[EXPENSE-RATIO] 0.95
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
EX-99.B18A
Exhibit 24(b)(18)(a)
THE DELAWARE GROUP OF FUNDS
MULTIPLE CLASS PLAN PURSUANT TO RULE 18F-3
This Multiple Class Plan (the "Plan") has been adopted by a
majority of the Board of Directors of each of the investment
companies listed on Appendix A as may be amended from time to
time (each individually a "Fund," and collectively, the "Funds"),
including a majority of the Directors who are not interested
persons of each Fund, pursuant to Rule 18f-3 under the Investment
Company Act of 1940, as amended (the "Act"). The Board of each
Fund has determined that the Plan, including the allocation of
expenses, is in the best interests of the Fund as a whole, each
series of shares offered by such Fund (individually and
collectively the "Series") where the Fund offers its shares in
multiple series, and each class of shares offered by the Fund or
Series, as relevant. The Plan sets forth the provisions relating
to the establishment of multiple classes of shares for each Fund
and, if relevant, its Series. To the extent that a subject
matter set forth in this Plan is covered by a Fund's Articles of
Incorporation or By-Laws, such Articles of Incorporation or By-
Laws will control in the event of any inconsistencies with
descriptions contained in this Plan.
The term "Portfolio," when used in this Plan in the context
of a Fund that offers only a single series of shares, shall be a
reference to the Fund, and when used in the context of a Fund
that offers multiple series of shares, shall be a reference to
each series of such Fund.
CLASSES
1. Appendix A to this Plan describes the classes to be
issued by each Portfolio and identifies the names of such
classes.
FRONT-END SALES CHARGE
2. Class A shares carry a front-end sales charge as
described in the Funds' relevant prospectuses; and Class B, Class
C and Institutional Class shares are sold without a front-end
sales charge.
CONTINGENT DEFERRED SALES CHARGE
3. Class A shares are not subject to a contingent deferred
sales charge ("CDSC"), except as described in the Fund's relevant
prospectus.
4. Class B shares redeemed within six years of their
purchase shall be assessed a CDSC at the following rate: (i)
4.00% if shares are redeemed within two years of purchase; (ii)
3.00% if shares are redeemed during the third or fourth year
following purchase; (iii) 2.00% if shares are redeemed during the
fifth year following purchase; (iv) 1.00% if shares are redeemed
during the sixth year following purchase; and (vi) 0% thereafter.
5. Class C shares redeemed within twelve months of their
purchase shall be assessed a CDSC at the rate of 1.00% of the
lesser of (i) the net asset value at the time of redemption, or
(ii) the original net asset value at the time of purchase.
6. The CDSC for each class is waived in certain
circumstances, as described in the Funds' relevant prospectuses.
Shares that are subject to a CDSC age one month at the end of the
month in which the shares were purchased, regardless of the
specific date during the month that the shares were purchased.
7. Institutional Class shares are not subject to a CDSC.
RULE 12b-1 PLANS
8. In accordance with the Rule 12b-1 Plan for the Class A
shares of each Portfolio, the Fund shall pay to Delaware
Distributors, L.P. (the "Distributor") a monthly fee not to
exceed 0.30% per annum of such Portfolio's average daily net
assets represented by Class A shares as may be determined by the
Fund's Board of Directors from time to time. The monthly fee
shall be reduced by the aggregate sums paid by or on behalf of
such Portfolio to persons other than broker-dealers (the "Service
Providers") pursuant to servicing agreements.
9. In accordance with the Rule 12b-1 Plan for the Class B
shares of each Portfolio, the Fund shall pay to the Distributor a
monthly fee not to exceed 0.75% per annum of such Portfolio's
average daily net assets represented by Class B shares as may be
determined by the Fund's Board of Directors from time to time.
In addition to these amounts, the Fund shall pay (i) to the
Distributor for payment to dealers or others, or (ii) directly to
others, an amount not to exceed 0.25% per annum of such
Portfolio's average daily net assets represented by Class B
shares, as a service fee pursuant to dealer or servicing
agreements.
10. In accordance with the Rule 12b-1 Plan for the Class C
shares of each Portfolio, the Fund shall pay to the Distributor a
monthly fee not to exceed 0.75% per annum of such Portfolio's
average daily net assets represented by Class C shares as may be
determined by the Fund's Board of Directors from time to time.
In addition to these amounts, the Fund shall pay (i) to the
Distributor for payment to dealers or others, or (ii) directly to
others, an amount not to exceed 0.25% per annum of such
Portfolio's average daily net assets represented by Class C
shares, as a service fee pursuant to dealer or servicing
agreements.
11. A Rule 12b-1 Plan has not been adopted for the
Institutional Class shares of any Portfolio.
ALLOCATION OF EXPENSES
12. The Fund shall allocate to each class of shares of a
Portfolio any fees and expenses incurred by the Fund in
connection with the distribution or servicing of such class of
shares under a Rule 12b-1 Plan, if any, adopted for such class.
In addition, the Fund reserves the right, subject to approval by
the Fund's Board of Directors, to allocate fees and expenses of
the following nature to a particular class of shares of a
Portfolio (to the extent that such fees and expenses actually
vary among each class of shares or vary by types of services
provided to each class of shares of the Portfolio):
(i) transfer agency and other recordkeeping costs;
(ii) Securities and Exchange Commission and blue sky
registration or qualification fees;
(iii) printing and postage expenses related to printing
and distributing class specific materials, such as
shareholder reports, prospectuses and proxies to
current shareholders of a particular class or to
regulatory authorities with respect to such class of
shares;
(iv) audit or accounting fees or expenses relating
solely to such class;
(v) the expenses of administrative personnel and
services as required to support the shareholders of
such class;
(vi) litigation or other legal expenses relating solely
to such class of shares;
(vii) Directors' fees and expenses incurred as a result
of issues relating solely to such class of shares; and
(viii) other expenses subsequently identified and
determined to be properly allocated to such class of
shares.
13. Except for any expenses that are allocated to a
particular class as described in paragraph 11 above, all expenses
incurred by a Portfolio will be allocated to each class of shares
of such Portfolio on the basis of the net asset value of each
such class in relation to the net asset value of the Portfolio.
ALLOCATION OF INCOME AND GAINS
14. Income and realized and unrealized capital gains and
losses of a Portfolio will be allocated to each class of shares
of such Portfolio on the basis of the net asset value of each
such class in relation to the net asset value of the Portfolio.
CONVERSIONS
15. (a) Except for shares acquired through a reinvestment
of dividends or distributions, Class B shares held for eight
years after purchase are eligible for automatic conversion into
Class A shares of the same Portfolio in accordance with the terms
described in the relevant prospectus. Class B shares acquired
through a reinvestment of dividends or distributions will convert
into Class A shares of the same Portfolio pro rata with the Class
B shares that were not acquired through the reinvestment of
dividends and distributions.
(b) The automatic conversion feature of Class B shares
shall be suspended at any time that the Board of Directors of the
Fund determines that there is not available a reasonably
satisfactory opinion of counsel to the effect that (i) the
assessment of the higher fee under the Fund's Rule 12b-1 Plan for
Class B does not result in the Fund's dividends or distributions
constituting a preferential dividend under the Internal Revenue
Code of 1986, as amended, and (ii) the conversion of Class B
shares into Class A shares does not constitute a taxable event
under federal income tax law. In addition, the Board of
Directors of a Fund may suspend the automatic conversion feature
by determining that any other condition to conversion set forth
in the relevant prospectus, as amended from time to time, is not
satisfied.
(c) The Board of Directors of a Fund may also suspend
the automatic conversion of Class B shares if it determines that
suspension is appropriate to comply with the requirements of the
Act, or any rule or regulation issued thereunder, relating to
voting by Class B shareholders on the Fund's Rule 12b-1 Plan for
Class A or, in the alternative, the Board of Directors may
provide Class B shareholders with alternative conversion or
exchange rights.
16. Class A, Class C and Institutional Class shares do not
have a conversion feature.
EXCHANGES
17. Exchanges are permitted between Class A Shares and
Institutional Class Shares of a Portfolio or of any other
Portfolio in the Delaware Group funds; Class B shares of a
Portfolio may only be exchanged for Class B shares of any other
Portfolio in the Delaware Group; Class C shares of a Portfolio
may only be exchanged for Class C shares of any other Portfolio
in the Delaware Group. All exchanges are subject to the
eligibility and minimum purchase requirements set forth in the
Funds' prospectuses. Exchanges cannot be made between open-end
and closed-end funds within the Delaware Group.
18. Each class will vote separately with respect to the
Rule 12b-1 Plan related to that class; provided, however, that
Class B shares of a Portfolio may vote on any proposal to
materially increase the fees to be paid by the Fund under the
Rule 12b-1 Plan for the Class A shares of the same Portfolio.
19. On an ongoing basis, the Directors, pursuant to their
fiduciary responsibilities under the Act and otherwise, will
monitor the Portfolio for the existence of any material conflicts
between the interests of all the classes of shares offered by
such Portfolio. The Directors, including a majority of the
Directors who are not interested persons of the Fund, shall take
such action as is reasonably necessary to eliminate any such
conflict that may develop. The Manager and the Distributor shall
be responsible for alerting the Board to any material conflicts
that arise.
20. As described more fully in the Funds' relevant
prospectuses, broker-dealers that sell shares of a Portfolio will
be compensated differently depending on which class of shares the
investor selects.
21. Each Fund reserves the right to increase, decrease or
waive the CDSC imposed on any existing or future class of shares
of a Portfolio within the ranges permissible under applicable
rules and regulations of the Securities and Exchange Commission
(the "SEC") and the rules of the National Association of
Securities Dealers, Inc. (the "NASD"), as such rules may be
amended or adopted from time to time. Each Fund may in the
future alter the terms of the existing classes of such Portfolio
or create new classes in compliance with applicable rules and
regulations of the SEC and the NASD.
22. All material amendments to this Plan must be approved
by a majority of the Directors of each Fund affected by such
amendments, including a majority of the Directors who are not
interested persons of the Fund.
EX-99.B18B
Exhibit 24(b)(18)(b)
APPENDIX A
LIST OF FUNDS AND THEIR CLASSES
1. Delaware Group Equity Funds I, Inc.
Delaware Fund
Delaware Fund A Class
Delaware Fund B Class
Delaware Fund C Class
Delaware Fund Institutional Class
Devon Fund
Devon Fund A Class
Devon Fund B Class
Devon Fund C Class
Devon Fund Institutional Class
2. Delaware Group Equity Funds II, Inc.
Decatur Income Fund
Decatur Income Fund A Class
Decatur Income Fund B Class
Decatur Income Fund C Class
Decatur Income Fund Institutional Class
Decatur Total Return Fund
Decatur Total Return Fund A Class
Decatur Total Return Fund B Class
Decatur Total Return Fund C Class
Decatur Total Return Fund Institutional Class
Blue Chip Fund (Added February 24, 1997)
Blue Chip Fund A Class
Blue Chip Fund B Class
Blue Chip Fund C Class
Blue Chip Fund Institutional Class
Quantum Fund (Added February 24, 1997)
Quantum Fund A Class
Quantum Fund B Class
Quantum Fund C Class
Quantum Fund Institutional Class
3. Delaware Group Equity Funds III, Inc.
Trend Fund
Trend Fund A Class
Trend Fund B Class
Trend Fund C Class
Trend Fund Institutional Class
4. Delaware Group Equity Funds V, Inc.
Value Fund
Value Fund A Class
Value Fund B Class
Value Fund C Class
Value Fund Institutional Class
Retirement Income Fund (Added November 29, 1996)
Retirement Income Fund A Class
Retirement Income Fund B Class
Retirement Income Fund C Class
Retirement Income Fund Institutional Class
5. Delaware Group Equity Funds IV, Inc.
DelCap Fund
DelCap Fund A Class
DelCap Fund B Class
DelCap Fund C Class
DelCap Fund Institutional Class
Capital Appreciation Fund (Added November 29, 1996)
Capital Appreciation Fund A Class
Capital Appreciation Fund B Class
Capital Appreciation Fund C Class
Capital Appreciation Fund Institutional Class
6. Delaware Group Global & International Funds, Inc.
International Equity Series
International Equity Fund A Class
International Equity Fund B Class
International Equity Fund C Class
International Equity Fund Institutional Class
Global Bond Series
Global Bond Fund A Class
Global Bond Fund B Class
Global Bond Fund C Class
Global Bond Fund Institutional Class
Global Assets Series
Global Assets Fund A Class
Global Assets Fund B Class
Global Assets Fund C Class
Global Assets Fund Institutional Class
Emerging Markets Series (Added May 1, 1996)
Emerging Markets Fund A Class
Emerging Markets Fund B Class
Emerging Markets Fund C Class
Emerging Markets Fund Institutional Class
International Small Cap Series (Added July 21, 1997)
International Small Cap Fund A Class
International Small Cap Fund B Class
International Small Cap Fund C Class
International Small Cap Fund Institutional Class
Global Equity Series (Added July 21, 1997)
Global Equity Fund A Class
Global Equity Fund B Class
Global Equity Fund C Class
Global Equity Fund Institutional Class
7. Delaware Group Income Funds, Inc.
Strategic Income Fund (Added September 30, 1996)
Strategic Income Fund A Class
Strategic Income Fund B Class
Strategic Income Fund C Class
Strategic Income Fund Institutional Class
EX-99.B19b
Exhibit 24(b)(19)(b)
APPENDIX A
List of Funds and Their Classes
1. Delaware Group Equity Funds I, Inc.
Delaware Fund
Delaware Fund A Class
Delaware Fund B Class
Delaware Fund C Class
Delaware Fund Institutional Class
Devon Fund
Devon Fund A Class
Devon Fund B Class
Devon Fund C Class
Devon Fund Institutional Class
2. Delaware Group Equity Funds II, Inc.
Decatur Income Fund
Decatur Income Fund A Class
Decatur Income Fund B Class
Decatur Income Fund C Class
Decatur Income Fund Institutional Class
Decatur Total Return Fund
Decatur Total Return Fund A Class
Decatur Total Return Fund B Class
Decatur Total Return Fund C Class
Decatur Total Return Fund Institutional Class
Blue Chip Fund (Added February 24, 1997)
Blue Chip Fund A Class
Blue Chip Fund B Class
Blue Chip Fund C Class
Blue Chip Fund Institutional Class
Quantum Fund (Added February 24, 1997)
Quantum Fund A Class
Quantum Fund B Class
Quantum Fund C Class
Quantum Fund Institutional Class
3. Delaware Group Equity Funds III, Inc.
Trend Fund
Trend Fund A Class
Trend Fund B Class
Trend Fund C Class
Trend Fund Institutional Class
4. Delaware Group Equity Funds V, Inc.
Value Fund
Value Fund A Class
Value Fund B Class
Value Fund C Class
Value Fund Institutional Class
Retirement Income Fund (Added November 29, 1996)
Retirement Income Fund A Class
Retirement Income Fund B Class
Retirement Income Fund C Class
Retirement Income Fund Institutional Class
5. Delaware Group Equity Funds IV, Inc.
DelCap Fund
DelCap Fund A Class
DelCap Fund B Class
DelCap Fund C Class
DelCap Fund Institutional Class
Capital Appreciation Fund (Added November 29, 1996)
Capital Appreciation Fund A Class
Capital Appreciation Fund B Class
Capital Appreciation Fund C Class
Capital Appreciation Fund Institutional Class
6. Delaware Group Global & International Funds, Inc.
International Equity Series
International Equity Fund A Class
International Equity Fund B Class
International Equity Fund C Class
International Equity Fund Institutional Class
Global Bond Series
Global Bond Fund A Class
Global Bond Fund B Class
Global Bond Fund C Class
Global Bond Fund Institutional Class
Global Assets Series
Global Assets Fund A Class
Global Assets Fund B Class
Global Assets Fund C Class
Global Assets Fund Institutional Class
Emerging Markets Series (Added May 1, 1996)
Emerging Markets Fund A Class
Emerging Markets Fund B Class
Emerging Markets Fund C Class
Emerging Markets Fund Institutional Class
International Small Cap Series (Added July 21, 1997)
International Small Cap Fund A Class
International Small Cap Fund B Class
International Small Cap Fund C Class
International Small Cap Fund Institutional Class
Global Equity Series (Added July 21, 1997)
Global Equity Fund A Class
Global Equity Fund B Class
Global Equity Fund C Class
Global Equity Fund Institutional Class
7. Delaware Group Income Funds, Inc.
Strategic Income Fund (Added September 30, 1996)
Strategic Income Fund A Class
Strategic Income Fund B Class
Strategic Income Fund C Class
Strategic Income Fund Institutional Class
8. Delaware Pooled Trust, Inc.
The Real Estate Investment Trust Portfolio
(Added October 14, 1997)
REIT Fund A Class
REIT Fund B Class
REIT Fund C Class
REIT Fund Institutional Class
EX-99.B19B
Exhibit 24(b)(19)(b)
POWER OF ATTORNEY
The undersigned, a member of the Boards of Directors/Trustees
of the Delaware Group Funds listed on Exhibit A to this Power of
Attorney, hereby constitutes and appoints Wayne A. Stork, W. Thacher
Longstreth and Walter P. Babich and any one of them acting singly, his
true and lawful attorneys-in-fact, in his name, place, and stead, to
execute and cause to be filed with the Securities and Exchange
Commission and other federal or state government agency or body,
such registration statements, and any and all amendments thereto as
either of such designees may deem to be appropriate under the
Securities Act of 1933, as amended, the Investment Company Act of
1940, as amended, and all other applicable federal and state
securities laws.
IN WITNESS WHEREOF, the undersigned has executed this instrument as
of this 1st day of May, 1997.
/s/Thomas F. Madison
- ------------------------
Thomas F. Madison
POWER OF ATTORNEY
EXHIBIT A
DELAWARE GROUP FUNDS
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP TREND FUND, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DMC TAX-FREE INCOME TRUST-PENNSYLVANIA
DELAWARE GROUP DIVIDEND AND INCOME FUND, INC.
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC.
VOYAGEUR FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.
VOYAGEUR TAX FREE FUNDS, INC.
VOYAGEUR ARIZONA MUNICIPAL INCOME FUND, INC.
VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUND, INC.
VOYAGEUR FLORIDA INSURED MUNICIPAL INCOME FUND
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND, INC.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND II, INC.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND III, INC.
POWER OF ATTORNEY
The undersigned, a member of the Boards of Directors/Trustees
of the Delaware Group Funds listed on Exhibit A to this Power of
Attorney, hereby constitutes and appoints Wayne A. Stork, W. Thacher
Longstreth and Walter P. Babich and any one of them acting singly, his
true and lawful attorneys-in-fact, in his name, place, and stead, to
execute and cause to be filed with the Securities and Exchange
Commission and other federal or state government agency or body,
such registration statements, and any and all amendments thereto as
either of such designees may deem to be appropriate under the
Securities Act of 1933, as amended, the Investment Company Act of
1940, as amended, and all other applicable federal and state
securities laws.
IN WITNESS WHEREOF, the undersigned has executed this instrument
as of this 1st day of May, 1997.
/s/Jeffrey J. Nick
- ----------------------
Jeffrey J. Nick
POWER OF ATTORNEY
EXHIBIT A
DELAWARE GROUP FUNDS
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP TREND FUND, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DMC TAX-FREE INCOME TRUST-PENNSYLVANIA
DELAWARE GROUP DIVIDEND AND INCOME FUND, INC.
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC.
VOYAGEUR FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.
VOYAGEUR TAX FREE FUNDS, INC.
VOYAGEUR ARIZONA MUNICIPAL INCOME FUND, INC.
VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUND, INC.
VOYAGEUR FLORIDA INSURED MUNICIPAL INCOME FUND
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND, INC.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND II, INC.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND III, INC.
