<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
File No. 2-28871
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ X ]
Pre-Effective Amendment No. [ ]
-------- ---
Post-Effective Amendment No. 53 [ X ]
--------
AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ X ]
Amendment No. 53 [ X ]
------
DELAWARE GROUP TREND FUND, 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: October 31, 1995
----------------
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
------
on August 29, 1995 pursuant to paragraph (b)
------
60 days after filing pursuant to paragraph (a)(1)
------
X on October 31, 1995 pursuant to paragraph (a)(1)
------
75 days after filing pursuant to paragraph (a)(2)
------
on (date) pursuant to paragraph (a)(2) of Rule 485
------
Registrant has registered an indefinite amount of
securities under the Securities Act of 1933 pursuant to
Section 24(f) of the Investment Company Act of 1940.
Registrant's 24f-2 Notice for its most recent fiscal year will
be filed on or about August 29, 1995.
<PAGE>
Form N-1A
File No. 2-28871
Delaware Group Trend Fund, Inc.
--- C O N T E N T S ---
This Post-Effective Amendment No. 53 to Registration File No. 2-28871 includes
the following:
1. Facing Page
2. Contents Page
3. Cross-Reference Sheet
4. Part A - Prospectuses
5. Part B - Statement of Additional Information
6. Part C - Other Information
7. Signatures
<PAGE>
Form N-1A
File No. 2-28871
Delaware Group Trend Fund, Inc.
CROSS-REFERENCE SHEET*
---------------------
PART A
------
<TABLE>
<CAPTION>
Location in
Item No. Description Prospectuses
- -------- ----------- ------------
<S> <C> <C> <C>
A Class/ Institutional
B Class/ Class
1 Cover Page........................................... Cover Cover
2 Synopsis............................................. Synopsis, Summary Synopsis,
of Expenses Summary of
Expenses
3 Condensed Financial Information...................... Financial Financial
Highlights Highlights
4 General Description of Registrant.................... Investment Investment
Objective and Objective
Policies, Shares and Policies,
Shares
5 Management of the Fund............................... Management of Management of
the Fund the Fund
6 Capital Stock and Other Securities................... Shares, Dividends Shares,
and Distributions, Dividends
Taxes, Delaware and
Difference Distributions,
Taxes
7 Purchase of Securities Being Offered................. Buying Shares, Buying Shares,
Cover, Cover,
Management of Management of
the Fund, the Fund,
Calculation of Calculation of
Offering Price Net Asset
and Net Asset Value Per Share
Value Per Share
8 Redemption or Repurchase............................. Redemption Redemption and
and Exchange,
Exchange, Buying Shares
Buying Shares
9 Pending Legal Proceedings............................ None None
</TABLE>
* This filing relates to Registrant's Trend Fund A Class and Trend Fund B Class,
which are combined in one prospectus, and Trend Fund Institutional Class,
which has its own prospectus. The three classes have a common Part B and Part
C.
<PAGE>
Form N-1A
File No. 2-28871
Delaware Group Trend Fund, Inc.
CROSS-REFERENCE SHEET
---------------------
PART B
------
<TABLE>
<CAPTION>
Location in Statement
Item No. Description of Additional Information
- -------- ----------- -------------------------
<S> <C> <C>
10 Cover Page........................................................... Cover
11 Table of Contents................................................... Table of Contents
12 General Information and History...................................... General Information
13 Investment Objective and Policies.................................... Investment Objective
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............................... Officers and Directors,
Plan Under Rule 12b-1
for the Fund Classes (under
Purchasing Shares), Investment
Management Agreement,
General Information,
Financial Statements
17 Brokerage Allocation and Other Practices............................. 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,
Redemption and Repurchase,
Determining Offering Price
and Net Asset Value,
Exchange Privilege
20 Tax Status........................................................... Taxes
21 Underwriters......................................................... Purchasing Shares
22 Calculation of Performance Data...................................... Performance Information
23 Financial Statements................................................. Financial Statements
</TABLE>
<PAGE>
Form N-1A
File No. 2-28871
Delaware Group Trend Fund, Inc.
CROSS-REFERENCE SHEET
---------------------
PART C
------
<TABLE>
<CAPTION>
Location in
Part C
------
<S> <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
</TABLE>
<PAGE>
TREND FUND PROSPECTUS
A CLASS SHARES October 31, 1995
B CLASS SHARES
--------------------------------------------------
1818 Market Street, Philadelphia, PA 19103
For Prospectus and Performance: Nationwide 800-523-4640,
Philadelphia 215-988-1333
Information on Existing Accounts: (Shareholders Only)
Nationwide 800-523-1918, Philadelphia 215-988-1241
Dealer Services: (broker/dealers only) Nationwide 800-362-7500,
Philadelphia 215-988-1050
This Prospectus describes the Trend Fund A Class of shares (the "Class A
Shares") and the Trend Fund B Class of shares (the "Class B Shares")
(individually, the "Class" and collectively, the "Classes") of Delaware Group
Trend Fund, Inc. (the "Fund"), a professionally-managed mutual fund. The Fund's
objective is to achieve capital appreciation by investing primarily in
securities of emerging and other growth-oriented companies.
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,
and Class B Shares may be purchased at a price equal to the next determined net
asset value per share. The Class A Shares are subject to a maximum front-end
sales charge of 5.75% and annual 12b-1 Plan expenses. The 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 12b-1 Plan expenses which are
higher than those to which Class A Shares are subject and are assessed against
the Class B Shares for no longer than approximately eight years after purchase.
See Summary of Expenses, and Automatic Conversion of Class B Shares under Buying
Shares. These alternatives permit an investor to choose the method of purchasing
shares that is most beneficial given the amount of the purchase, the length of
time the investor expects to hold the shares and other circumstances. See Buying
Shares.
The minimum initial investment with respect to the Class A Shares is $250 and
with respect to the Class B Shares is $1,000. Subsequent investments must be at
least $25 with respect to the Class A Shares and $100 with respect to the Class
B Shares. Class B Shares are also subject to a maximum purchase limitation of
$250,000. The Fund will therefore reject any order for purchase of more than
$250,000 for Class B Shares. See Buying Shares.
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. Part B of the Fund's registration statement, dated October 31, 1995,
as it may be amended from time to time, contains additional information about
the Fund and has been filed with the Securities and Exchange Commission. 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. The Fund's financial statements appear in its Annual
Report, which will accompany any response to requests for Part B.
The Fund also offers the Trend Fund Institutional Class. That class is
available for purchase only by certain enumerated institutions, has no front-end
or contingent deferred sales charge and is not subject to annual 12b-1 Plan
expenses. A prospectus for the Trend 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................................................................. 1
Synopsis................................................................... 2
Summary of Expenses........................................................ 3
Financial Highlights....................................................... 4
Investment Objective and Policies
Investment Strategy...................................................... 6
Suitability................................................................ 6
The Delaware Difference
Plans and Services....................................................... 7
Retirement Planning........................................................ 8
Buying Shares.............................................................. 9
Redemption and Exchange.................................................... 17
Dividends and Distributions................................................ 22
Taxes...................................................................... 22
Calculation of Offering Price and
Net Asset Value Per Share................................................ 23
Management of the Fund..................................................... 24
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 FUND 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 PRINCIPAL. SHARES OF THE FUND ARE NOT BANK
OR CREDIT UNION DEPOSITS.
- --------------------------------------------------------------------------------
1
<PAGE>
SYNOPSIS
Capitalization
The Fund offers three classes of shares: the Class A Shares, the Class B
Shares and the Trend Fund Institutional Class. The Fund has a present authorized
capitalization of one hundred million shares of capital stock with a $.50 par
value per share. Thirty-five million shares of that stock have been allocated to
the Class A Shares, twenty-five million shares have been allocated to the Class
B Shares and twenty-five million shares have been allocated to the Trend Fund
Institutional Class. See Shares under Management of the Fund.
Investment Manager, Distributor and Service Agent
Delaware Management Company, Inc. (the "Manager") is the investment manager
for the Fund. The Manager or its affiliate, Delaware International Advisers
Ltd., also manages the other funds in the Delaware Group. Delaware Distributors,
L.P. (the "Distributor") is the national distributor for the 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 and
transfer agent for the Fund and for all of the other mutual funds in the
Delaware Group. See Management of the Fund.
Sales Charge
The price of the Class A Shares includes a maximum front-end sales charge of
5.75% of the offering price, which is equivalent to 6.12% of the amount
invested, 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. Such shares are also subject to annual 12b-1 Plan expenses.
The price 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 also subject to annual 12b-1 Plan
expenses for no longer than approximately eight years after purchase. See Buying
Shares and Automatic Conversion of Class B Shares thereunder; and Distribution
(12b-1) and Service under Management of the Fund.
Minimum Investment
The minimum initial investment for the Class A Shares is $250 and for the
Class B Shares is $1,000 (see Part B or contact your investment dealer for each
Retirement Plan minimum), and subsequent investments must be at least $25 for
the Class A Shares and $100 for the Class B Shares. Class B Shares are also
subject to a maximum purchase limitation of $250,000. See Buying Shares.
Investment Objective
The objective of the Fund is to seek to achieve capital appreciation by
investing primarily in securities of emerging and other growth-oriented
companies. See Investment Objective and Policies.
Open-End Investment Company
The Fund, which was organized as a Maryland corporation in 1983, is an open-
end management investment company and its portfolio of assets is diversified for
purposes of the Investment Company Act of 1940 (the "1940 Act"). Previously, the
Fund was a Delaware corporation organized in 1966. See Shares under Management
of the Fund.
Investment Management Fees
The Manager furnishes investment management services to the Fund, subject to
the supervision and direction of the Board of Directors. Under the Investment
Management Agreement, the annual compensation paid to the Manager is equal to
3/4 of 1% of the average daily net assets, less a proportionate share of all
directors' fees paid to the unaffiliated directors by the Fund. See Management
of the Fund.
Redemption and Exchange
The Class A Shares of the Fund are redeemed or exchanged at the net asset
value calculated after receipt of the redemption or exchange request. Neither
the Fund 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 contingent deferred sales charge if such
purchases triggered the payment of a dealer's commission. The Class B Shares are
redeemed or exchanged at the net asset value calculated after receipt of the
redemption or exchange request, less, in the case of redemptions, any applicable
CDSC. Neither the Fund nor the Distributor assesses any additional charges for
redemptions or exchanges of the Class B Shares. See Redemption and Exchange.
2
<PAGE>
SUMMARY OF EXPENSES
A general comparison of the sales arrangements and other expenses
applicable to the Class A and Class B Shares follows:
<TABLE>
Class A Class B
Shareholder Transaction Expenses Shares Shares
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price)...................... 5.75% None
Maximum Sales Charge Imposed on Reinvested Dividends
(as a percentage of offering price)...................... None None
Contingent Deferred Sales Charge
(as a percentage of original purchase price or redemption
proceeds, whichever is lower)............................ None* 4.00%*
Redemption Fees............................................ None** None**
</TABLE>
<TABLE>
Annual Operating Expenses Class A Class B
(as a percentage of average daily net assets) Shares Shares***
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Management Fees............................................ 0.75% 0.75%
12b-1 Expenses (including service fees).................... 0.24%/+/++/ 1.00%/++/
Other Operating Expenses................................... 0.37% 0.37%
----- -----
Total Operating Expenses............................... 1.36%/+/ 2.12%
===== =====
</TABLE>
The purpose of this table is to assist the investor in understanding the
various costs and expenses that an investor in either of the Classes will bear
directly or indirectly. *With respect to the Class A Shares, purchases of $1
million or more may be made at net asset value; however, if in connection with
any such purchase, certain dealer commissions are paid to financial advisers
through whom such purchases are effected, a contingent deferred sales charge of
1% will be imposed in the event of certain redemptions within 12 months of
purchase ("Limited CDSC"). The 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. See
Contingent Deferred Sales Charge for Certain Purchases of Class A Shares Made at
Net Asset Value under Redemption and Exchange; and Deferred Sales Charge
Alternative--Class B Shares under Buying Shares. **CoreStates Bank, N.A.
currently charges $7.50 per redemption for redemptions payable by wire.
***"Annual Operating Expenses" for Class B Shares are based on the actual
expenses incurred by the Class during the period September 6, 1994, through June
30, 1995, and have been annualized. /+/The actual 12b-1 Plan expenses to be paid
and, consequently, the Total Operating Expenses of the Class A Shares, may be
somewhat more (but the 12b-1 Plan expenses may be no more than .30%) or somewhat
less (but the 12b-1 Plan expenses may be no less than .10%) because of the
formula adopted by the Board of Directors for use in calculating the 12b-1 Plan
expenses beginning June 1, 1992. See Distribution (12b-1) and Service. /++/Class
A Shares and Class B Shares 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. Also, see
Trend Fund Institutional Class for expense information about that class.
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 table
above, the Fund charges no redemption fees with respect to the Class A Shares
and, if shares are redeemed within six years after purchase, the Fund charges a
CDSC with respect to the Class B Shares.
<TABLE>
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> <C>
Class A Shares $71/1/ $98 $128 $212 Class B Shares $22 $66 $114 $226/2/
</TABLE>
An investor would pay the following expenses on the same $1,000 investment,
assuming no redemption at the end of the period:
<TABLE>
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> <C>
Class A Shares $71 $98 $128 $212 Class B Shares $62 $96 $134 $226/2/
</TABLE>
/1/Under certain circumstances, a Limited CDSC, which has not been reflected in
this calculation, may be imposed 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 under Redemption and Exchange.
/2/At the end of no more than approximately eight years after purchase, Class B
Shares will be automatically converted into Class A Shares. The example above
assumes conversion of Class B Shares at the end of year eight. 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. See Automatic Conversion of Class B Shares under
Buying Shares for a description of the automatic conversion feature. Years nine
and ten reflect expenses of the Class A Shares. The conversion will constitute a
tax-free exchange for federal income tax purposes. See Taxes.
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.
3
<PAGE>
FINANCIAL HIGHLIGHTS
The following financial highlights are derived from the financial statements of
Delaware Group Trend Fund, 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 report of Ernst & Young LLP covering such
financial information and highlights, all of which are incorporated by reference
into Part B. Further information about the Fund's performance is contained in
its Annual Report to shareholders. A copy of the Fund's Annual Report (including
the report of Ernst & Young LLP) may be obtained from the Fund upon request at
no charge.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Class A Shares
-------------------------------------------------------------------------------
Year Ended
6/30/95/1/ 6/30/94/1/ 6/30/93/1/ 6/30/92/1/ 6/30/91 6/30/90
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.......... $12.210 $13.980 $11.380 $ 8.920 $9.970 $10.870
Income From Investment Operations
- ---------------------------------
Net Investment Income (Loss)/3/............... (0.074) (0.042) (0.004) (0.005) (0.020) 0.146
Net Gains or Losses on Securities
(both realized and unrealized)............... 2.864 0.212 3.754 2.625 (0.460) 1.224
------- ------- ------- ------- ------ ------
Total From Investment Operations............ 2.790 0.170 3.750 2.620 (0.480) 1.370
------- ------- ------- ------- ------ ------
Less Distributions
- ------------------
Dividends (from net investment income)........ none none none none (0.050) (0.050)
Distributions (from capital gains)............ (0.790) (1.940) (1.150) (0.160) (0.520) (2.220)
Returns of Capital............................ none none none none none none
------- ------- ------- ------- ------ ------
Total Distributions......................... (0.790) (1.940) (1.150) (0.160) (0.570) (2.270)
------- ------- ------- ------- ------ ------
Net Asset Value, End of Period................ $14.210 $12.210 $13.980 $11.380 $8.920 $9.970
======= ======= ======= ======= ====== ======
- -------------------------------------------------------------------------------------------------------------------------------
Total Return/4/............................... 24.40% 0.59% 35.24% 29.31% (4.82%) 14.32%
- ------------
- -------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000's omitted)..... $318,933 $253,964 $219,826 $124,548 $78,631 $88,274
Ratio of Expenses to Average Daily Net Assets. 1.36% 1.37% 1.33% 1.18% 1.29% 1.27%
Ratio of Net Investment Income to Average
Daily Net Assets............................. (0.58%) (0.72%) (0.61%) (0.43%) (0.24%) 0.82%
Portfolio Turnover Rate....................... 64% 67% 75% 76% 67% 80%
<CAPTION>
6/30/89 6/30/88 6/30/87 6/30/86/2/
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.......... $ 8.130 $9.120 $8.910 $6.430
Income From Investment Operations
- ---------------------------------
Net Investment Income (Loss)/3/............... 0.018 (0.066) (0.082) (0.042)
Net Gains or Losses on Securities
(both realized and unrealized)............... 3.042 (0.924) 0.292 2.650
------- ------ ------ ------
Total From Investment Operations............ 3.060 (0.990) 0.210 2.608
------- ------ ------ ------
Less Distributions
- ------------------
Dividends (from net investment income)........ none none none (0.128)
Distributions (from capital gains)............ (0.320) none none none
Returns of Capital............................ none none none none
------- ------ ------ ------
Total Distributions......................... (0.320) none none (0.128)
------- ------ ------ ------
Net Asset Value, End of Period................ $10.870 $8.130 $9.120 $8.910
======= ====== ====== ======
- ---------------------------------------------------------------------------------------------------
Total Return/4/............................... 39.27% (10.86%) 2.36% 41.37%
- ------------
- ---------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000's omitted)..... $67,111 $59,879 $79,266 $109,884
Ratio of Expenses to Average Daily Net Assets. 1.28% 1.20% 1.18% 1.20%
Ratio of Net Investment Income to Average
Daily Net Assets............................. 0.19% (0.51%) (0.64%) (0.57%)
Portfolio Turnover Rate....................... 48% 63% 93% 113%
- ------------------------
</TABLE>
/1/Reflects 12b-1 distribution expenses beginning June 1, 1992.
/2/All figures prior to May 9, 1986, are adjusted for a 2-for-1 stock split paid
on that date.
/3/1995 per share information was based on the average shares outstanding
method.
/4/Does not reflect maximum sales charge of 5.75%.
4
<PAGE>
FINANCIAL HIGHLIGHTS
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B Shares
--------------
Period
9/6/94/1/
through
6/30/95
<S> <C>
Net Asset Value, Beginning of Period....................................... $12.110
Income From Investment Operations
- ---------------------------------
Net Investment Loss/2/..................................................... (0.142)
Net Gains or Losses on Securities (both realized and unrealized)........... 2.162
-------
Total From Investment Operations......................................... 2.020
-------
Less Distributions
- ------------------
Dividends (from net investment income)..................................... none
Distributions (from capital gains)......................................... none
Returns of Capital......................................................... none
-------
Total Distributions...................................................... none
-------
Net Asset Value, End of Period............................................. $14.130
=======
- --------------------------------------------------------------------------------------------
Total Return/3/............................................................ 16.68%/1/
- ------------
- --------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000's omitted).................................. $5,175
Ratio of Expenses to Average Daily Net Assets.............................. 2.12%/1/
Ratio of Net Investment Income to Average Daily Net Assets................. (1.34%)/1/
Portfolio Turnover Rate.................................................... 64%
</TABLE>
- ------------------------
/1/Date of initial public offering; ratios have been annualized but total return
has not been annualized.
/2/1995 per share information was based on the average shares outstanding
method.
/3/Does not reflect the contingent deferred sales charge which varies from 1%-4%
depending upon the holding period.
5
<PAGE>
INVESTMENT OBJECTIVE
AND POLICIES
INVESTMENT STRATEGY
The objective of the Fund is long-term capital appreciation. The strategy is
to invest primarily in the common stocks and securities convertible into common
stocks of emerging and other growth-oriented companies that, in the judgment of
the Manager, are responsive to changes within the marketplace and have the
fundamental characteristics to support growth.
The Fund will seek to identify changing and dominant trends within the
economy, the political arena and our society. The Fund will purchase securities
which it believes will benefit from these trends and which have the fundamentals
to exploit them. The fundamentals include managerial skills, product development
and sales and earnings.
In investing for capital appreciation, the Fund may hold securities for any
period of time. The Fund may also invest in foreign securities.
The Fund may purchase privately placed securities the resale of which is
restricted under applicable securities laws. Such securities may offer a higher
return than comparably registered securities but involve some additional risk as
they can be resold only in privately negotiated transactions, in accordance with
an exemption from the registration requirements under applicable securities laws
or after registration. The Fund will not purchase illiquid assets, including
such restricted securities, if more than 10% of the value of its assets would
then consist of illiquid securities.
Certain of the privately placed securities acquired by the Fund will be
eligible for resale by the Fund pursuant to Rule 144A under the Securities Act
of 1933 ("Rule 144A Securities"). Rule 144A permits many privately placed or
legally restricted securities to be freely traded without restriction among
certain institutional buyers such as the Fund. While maintaining oversight, the
Board of Directors of the Fund has delegated to the Manager the day-to-day
function of determining whether or not individual Rule 144A Securities are
liquid for purposes of the Fund's 10% limitation on investments in illiquid
securities.
Income is not an objective of the Fund. However, should the market warrant a
temporary defensive approach, the Fund may also invest in cash equivalents, and
fixed income obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities, as well as corporate bonds.
The Fund may invest in repurchase agreements, but will not normally do so
except to invest excess cash balances. In a repurchase agreement, the Fund
purchases a security and simultaneously agrees to sell it back to the seller at
a set (generally higher) price. Delays or losses could result if the other party
to the repurchase agreement defaults or becomes insolvent.
While the Fund is permitted under certain circumstances to borrow money, it
does not normally do so. The Fund will not purchase securities while any
borrowings are outstanding.
Although the Fund will constantly strive to attain the objective of long-term
capital growth, there can be no assurance that it will be attained. The
objective of the Fund may not be changed without shareholder approval. Part B
provides more information on the Fund's investment policies and restrictions.
Portfolio Loan Transactions
The 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 the 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, the 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.
SUITABILITY
The Fund may be suitable for the patient investor interested in long-term
capital appreciation. The prices of common stocks, especially those of smaller
companies, tend to fluctuate, particularly in the shorter term. The investor
should be willing to accept the risks associated with investments in growth-
oriented securities, some of which may be speculative and subject the Fund to an
additional risk. Also, ownership of Fund shares reduces the bookkeeping and
administrative inconveniences connected with direct purchases of these
securities.
Net asset value may fluctuate in response to the condition of individual
companies and general market and economic conditions and, as a result, the Fund
is not appropriate for a short-term investor.
This Fund is designed primarily for capital appreciation. Providing current
income is not an objective of the Fund. Any income produced is expected to be
minimal. An investor should not consider a purchase of 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 in
concert to create a more complete investment program.
6
<PAGE>
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
(Philadelphia 215-988-1333)
Fund Information; Literature;
Price, Yield and Performance Figures
Shareholder Service Center
800-523-1918
(Philadelphia 215-988-1241)
Information on Existing Regular Investment
Accounts and Retirement Plan Accounts;
Wire Investments; Wire Liquidations;
Telephone Liquidations; Telephone Exchanges
Delaphone
800-362-FUND
(800-362-3863)
Shareholder Services
During business hours, you can call the Fund's Shareholder Service Center. The
representatives can answer any of your questions about your account, the Fund,
the various service features and other funds in the Delaware Group.
Performance Information
During business hours, you can call the Investor Information Center to get
current performance information.
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 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 distributions. See
Dividend Reinvestment Plan below. You should examine statements and
confirmations immediately and promptly report any discrepancy by calling the
Shareholder Service Center.
Duplicate Confirmations
If your investment dealer is noted on your investment application, we will
send your dealer a duplicate confirmation. This makes it easier for your
investment dealer to help you manage your investments.
Tax Information
Each year, the Fund will mail you information on the tax status of your
dividends and distributions.
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. Also, you may be
permitted to 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 the Fund or other
Delaware Group funds may be effected without a front-end sales charge. Class B
Shares of the Fund or other Delaware Group funds acquired through reinvestments
of distributions will not be subject to a contingent deferred sales charge if
those shares are later redeemed. See Automatic Conversion of Class B Shares
under Buying Shares for information concerning the automatic conversion of Class
B Shares acquired by reinvesting dividends.
Holders of Class A Shares of the Fund may not reinvest their distributions in
the Class B Shares of any fund in the Delaware Group, including the Fund.
Holders of Class B Shares of the Fund may reinvest their distributions only in
the Class B Shares of the funds in the Delaware Group which offer that class of
shares (the "Class B Funds"). See Class B Funds under Buying Shares for a list
of the funds offering Class B Shares. For more information about reinvestments,
call the Shareholder Service Center.
Exchange Privilege
The Exchange Privilege permits shareholders to exchange all or part of their
shares into shares of the 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. Shareholders of Class B Shares
of the Fund are permitted to exchange all or part of their Class B Shares only
into the corresponding class of shares of the Class B Funds, subject to the
minimum purchase and other requirements set forth in each fund's prospectus.
Exchanges are not permitted between Class A Shares and Class B Shares of any of
the funds of the Delaware Group.
7
<PAGE>
Except as noted below, permissible exchanges can be made without payment of a
front-end sales charge or the imposition of a contingent deferred sales charge
at the time of the exchange, as applicable. Persons exchanging into the Class A
Shares from a fund in the Delaware Group offered without a front-end sales
charge may be required to pay the applicable front-end sales charge. See
Investing by Exchange under How to Buy Shares and Redemption and Exchange.
See Redemption and Exchange for additional information on exchanges.
Wealth Builder Option
You may be permitted to elect to have amounts in your account automatically
invested in shares of 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 Class A and Class B Shares. See Redemption and
Exchange.
Right of Accumulation
With respect to Class A Shares, the Right of Accumulation feature allows the
combining of Class A Shares and Class B Shares of the Fund that are currently
owned with the dollar amount of new purchases of Class A Shares for a reduced
front-end sales charge. Under the Combined Purchases Privilege, this includes
certain shares owned in other funds in the Delaware Group. See Buying Shares.
Letter of Intention
With respect to Class A Shares, the Letter of Intention feature permits the
aggregation of purchases over a 13-month period to obtain a reduced front-end
sales charge. See Part B.
12-Month Reinvestment Privilege
The 12-Month Reinvestment Privilege permits shareholders to reinvest proceeds
of Class A Shares redeemed, within one year from the redemption, without a
front-end sales charge. See Part B.
Financial Information about the Fund
Each fiscal year, you will receive an audited annual report and an unaudited
semi-annual report. These reports provide detailed information about the Fund's
investments and performance. The Fund's fiscal year ends on June 30.
RETIREMENT PLANNING
An investment in the Fund may also be suitable for tax-deferred Retirement
Plans. Among the Retirement Plans noted below, Class B Shares are available for
investment only by Individual Retirement Accounts, Simplified Employee Pension
Plans, 457 Deferred Compensation Plans and 403(b)(7) Deferred Compensation
Plans.
Retirement Plans may be subject to plan establishment fees, annual maintenance
fees and/or other administrative or Trustee fees. Fees are based on the number
of participants in the Plan as well as the services selected. Additional
information about fees is included in Retirement Plan materials. The minimum
initial investment in the Classes (as available) for each Plan is $250;
subsequent investments must be at least $25.
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 the Trend Fund Institutional Class. For
additional information on any of the Plans and Delaware's retirement services,
call the Shareholder Service Center or see Part B.
Individual Retirement Account ("IRA")
Individuals, even if they participate in an employer-sponsored retirement
plan, may establish their own retirement program for investments in each of the
Classes. Contributions to an IRA may be tax-deductible and earnings are tax-
deferred. Under the Tax Reform Act of 1986, the tax deductibility of IRA
contributions is restricted, and in some cases eliminated, for individuals who
participate in certain employer-sponsored retirement plans and whose annual
income exceeds certain limits. Existing IRAs and future contributions up to the
IRA maximums, whether deductible or not, still earn on a tax-deferred basis.
8
<PAGE>
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 Classes is available for investment by a SEP/IRA.
Salary Reduction Simplified Employee Pension Plan ("SAR/SEP")
Offers employers with 25 or fewer eligible employees the ability to establish
a SEP/IRA that permits salary deferral contributions. An employer may also elect
to make additional contributions to this Plan. Class B Shares are not available
for purchase by such Plans.
403(b)(7) Deferred Compensation Plan
Permits employees of public school systems or of certain types of non-profit
organizations to enter into a deferred compensation arrangement for the purchase
of shares of each of the Classes.
457 Deferred Compensation Plan
Permits employees of state and local governments and certain other entities to
enter into a deferred compensation arrangement for the purchase of shares of
each of the Classes.
Prototype Profit Sharing or Money Purchase Pension Plan
Offers self-employed individuals, partnerships and corporations a tax-
qualified plan which provides for the investment of contributions in Class A
Shares. Class B Shares are not available for purchase by such Plans.
Prototype 401(k) Defined Contribution Plan
Permits employers to establish a tax-qualified plan based on salary deferral
contributions. An employer may elect to make profit sharing contributions and/or
matching contributions into the Plan. Class B Shares are not available for
purchase by such Plans.
BUYING SHARES
Purchase Amounts
The minimum initial purchase with respect to the Class A Shares is $250 and
with respect to the Class B Shares is $1,000. Subsequent purchases must be $25
or more with respect to the Class A Shares and $100 or more with respect to the
Class B Shares. Retirement Plans have other minimums. Refer to Part B or call
the Shareholder Service Center for more information on these Plans. Class B
Shares are also subject to a maximum purchase limitation of $250,000.
Alternative Purchase Arrangements
Shares may be purchased at a price equal to the next determined net asset
value per share, plus a sales charge which may be imposed, at the election of
the purchaser, at the time of the purchase with respect to Class A Shares
("front-end sales charge alternative") or on a contingent deferred basis with
respect to Class B Shares ("deferred sales charge alternative").
Class A Shares. An investor who elects the front-end sales charge alternative
acquires Class A Shares. Although Class A Shares incur a sales charge when they
are purchased, generally they are not subject to any sales charge when they are
redeemed, but are subject to annual 12b-1 Plan expenses of up to a maximum of
.30% of average daily net assets of such shares. See Contingent Deferred Sales
Charge for Certain Purchases of Class A Shares Made at Net Asset Value and
Distribution (12b-1) and Service. Certain purchases of Class A Shares qualify
for reduced front-end sales charges. See Front-End Sales Charge Alternative--
Class A Shares, below.
Class B Shares. An investor who elects the deferred sales charge alternative
acquires Class B Shares. Class B Shares do not incur a front-end sales charge
when they are purchased, but they are subject to a sales charge if they are
redeemed within six years of purchase and are subject to annual 12b-1 Plan
expenses of up to a maximum of 1% (.25% of which are service fees to be paid by
the Fund to the Distributor, dealers or others for providing personal service
and/or maintaining shareholder accounts) of average daily net assets of such
shares for no longer than 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 those
related to the Class A Shares. At the end of no more than approximately eight
years after purchase, the Class B Shares are automatically converted into Class
A Shares. See Automatic Conversion of Class B Shares. Such conversion will
constitute a tax-free exchange for federal income tax purposes. See Taxes.
9
<PAGE>
The alternative purchase arrangements permit investors in the Fund to choose
the method of purchasing shares that is most beneficial given the amount of
their purchase, the length of time they expect to hold their shares and other
relevant circumstances. Investors should determine whether under their
particular circumstances it is more advantageous to incur a front-end sales
charge by purchasing Class A Shares or to have the entire initial purchase price
invested in the Fund with the investment thereafter being subject to a CDSC, if
shares are redeemed within six years of purchase, by purchasing Class B Shares.
As an illustration, investors who qualify for significantly reduced front-end
sales charges on purchases of Class A Shares, as described below, might elect
the front-end sales charge alternative because similar sales charge reductions
are not available for purchases under the deferred sales charge alternative.
Moreover, shares acquired under the front-end sales charge alternative are
subject to annual 12b-1 Plan expenses of up to .30%, whereas shares acquired
under the deferred sales charge alternative are subject to higher annual 12b-1
Plan expenses of 1% for no more than approximately eight years after purchase.
See Automatic Conversion of Class B Shares. However, because front-end sales
charges are deducted at the time of purchase, such investors would not have all
their funds invested initially. Certain other investors might determine it to be
more advantageous to have all their funds invested initially, although they
would be subject to a CDSC for up to six years after purchase as well as annual
12b-1 Plan expenses of 1% until the shares are automatically converted into
Class A Shares. The 12b-1 Plan distribution expenses with respect to the Class B
Shares will be offset to the extent any return is realized on the additional
funds initially invested under the deferred sales charge alternative. However,
there can be no assurance as to the return, if any, that will be realized on
such additional funds.
For the distribution and related services provided to, and the expenses borne
on behalf of, the Fund, the Distributor and others will be paid, in the case of
the Class A Shares, from the proceeds of the front-end sales charge and 12b-1
Plan fees and, in the case of the Class B Shares, from the proceeds of the 12b-1
Plan fees and, if applicable, the CDSC incurred upon redemption within six years
of purchase. Sales personnel may receive different compensation for selling
Class A or Class B Shares. INVESTORS SHOULD UNDERSTAND THAT THE PURPOSE AND
FUNCTION OF THE 12B-1 PLAN AND THE CDSC WITH RESPECT TO THE CLASS B SHARES ARE
THE SAME AS THOSE OF THE 12B-1 PLAN AND THE FRONT-END SALES CHARGE WITH RESPECT
TO THE CLASS A SHARES IN THAT THE FEES AND CHARGES PROVIDE FOR THE FINANCING OF
THE DISTRIBUTION OF THE RESPECTIVE CLASSES. See 12b-1 Distribution Plans--Class
A and Class B Shares.
Dividends paid by the Fund with respect to the Class A and Class B Shares, to
the extent any dividends are paid, will be calculated in the same manner at the
same time, on the same day and will be in the same amount, except that the
additional amount of 12b-1 Plan expenses relating to the Class B Shares will be
borne exclusively by such shares. See Calculation of Offering Price and Net
Asset Value Per Share. The shareholders of the Class A and Class B Shares each
have an exchange privilege by which they may exchange their Class A Shares or
Class B Shares for the Class A Shares or Class B Shares, respectively, of
certain other Delaware Group funds. See Exchange Privilege under The Delaware
Difference and Redemption and Exchange.
The NASD has adopted amendments to its Rules of Fair Practice relating to
investment company sales charges. The Fund and the Distributor intend to operate
in compliance with these rules with respect to both Class A and Class B Shares.
Front-End Sales Charge Alternative--Class A Shares
The Class A Shares may be purchased at the offering price which reflects a
maximum front-end sales charge of 5.75%. See Calculation of Offering Price and
Net Asset Value Per Share. Lower sales charges apply for larger purchases. See
the table below. The Class A Shares represent a proportionate interest in the
Fund's assets and are subject to annual 12b-1 Plan expenses. See Distribution
(12b-1) and Service under Management of the Fund.
10
<PAGE>
Reduced Front-End Sales Charges
Purchases of $100,000 or more at the offering price carry a reduced front-end
sales charge as shown in the following table.
Trend Fund A Class
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Front-End Sales Dealer's
Charge as % of Concession**
Amount of Purchase Offering Amount as % of
Price Invested Offering Price
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $100,000 5.75% 6.12% 5.00%
$100,000 but under $250,000 4.75 4.99 4.00
$250,000 but under $500,000 3.50 3.63 3.00
$500,000 but under $1,000,000* 3.00 3.09 2.60
</TABLE>
*There is no front-end sales charge on purchases of $1 million or more but,
under certain limited circumstances, a 1% Limited CDSC may apply with respect
to Class A Shares.
- --------------------------------------------------------------------------------
The Fund must be notified when a sale takes place which would qualify for the
reduced front-end sales charge on the basis of previous purchases and current
purchases. The reduced front-end sales charge will be granted upon confirmation
of the shareholder's holdings by the 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 dealers up to the full 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 concession of up to .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.
**Financial institutions or their affiliated brokers may receive an agency
transaction fee in the percentages set forth above.
- --------------------------------------------------------------------------------
For initial purchases of Class A Shares of $1,000,000 or more made on or after
June 1, 1993, 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:
<TABLE>
<CAPTION>
Dealer's Commission
-------------------
Amount of Purchase (as a percentage of amount purchased)
- ------------------
<S> <C>
Up to $2 million 1.00%
Next $1 million up to $3 million .75
Next $2 million up to $5 million .50
Amount over $5 million .25
</TABLE>
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 the Class A Shares of the Fund.
Financial advisers should contact the Distributor concerning the applicability
and calculation of the dealer's commission in the case of combined purchases.
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. The Distributor also should be consulted
concerning the availability of and program for these payments.
An exchange from other Delaware Group funds will not qualify for payment of
the dealer's commission, unless such exchange is from a Delaware Group fund with
assets as to which a dealer's commission or similar payment has not been
previously paid. The schedule and program for payment of the dealer's commission
are subject to change or termination at any time by the Distributor in 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 Purchases of Class A Shares Made at Net Asset Value under
Redemption and Exchange.
Combined Purchases Privilege
By combining your holdings in the Class A Shares with your holdings in the
Class B Shares of the Fund and, except as noted below, shares of the other funds
in the Delaware Group, you can reduce the front-end sales charges on any
additional purchases of Class A Shares. Except for shares of Delaware Group
Premium Fund, Inc. beneficially owned in connection with ownership of variable
insurance products, shares of other funds which do not carry a front-end sales
charge or CDSC may not be included unless they were acquired through an exchange
from one of the other Delaware Group funds which carried 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.
This 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.
11
<PAGE>
Combined purchases of $1,000,000 or more, including certain purchases made
pursuant to a Right of Accumulation or under a Letter of Intention, may trigger
the payment of a dealer's commission and the applicability of a Limited CDSC.
Investors should consult their financial advisers or the Transfer Agent about
the operation of these features. See Reduced Front-End Sales Charges under
Buying Shares.
Buying at Net Asset Value
Class A Shares may be purchased at net asset value under the Delaware Group
Dividend Reinvestment Plan and, under certain circumstances, the 12-month
Reinvestment Privilege and the Exchange 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 immediate 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 include retirement accounts and must be for accounts in the name of
the individual or a qualifying family member. Purchases of Class A Shares may be
made by clients of registered representatives of an authorized investment dealer
at net asset value within six 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 has been assessed and the redemption
of the investment did not result in the imposition of a contingent deferred
sales charge or other redemption charge. Purchases of Class A Shares also may be
made at net asset value by bank employees that provide services in connection
with agreements between the bank and unaffiliated brokers or dealers concerning
sales of Class A Shares. Also, 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.
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.
The Fund must be notified in advance that an investment qualifies for purchase
of Class A Shares at net asset value.
Group Investment Plans
Group Investment Plans (e.g., SEP/IRA, SAR/SEP, Prototype Profit Sharing,
Pension and 401(k) Defined Contribution Plans) may also benefit from the reduced
front-end sales charges relating to the Class A Shares set forth in the table on
page 11, based on total plan assets. In addition, 403(b)(7) and 457 Retirement
Plan Accounts may also benefit from a reduced front-end sales charge on Class A
Shares based on the total amount invested by all participants in the plan by
satisfying the following criteria: (i) the employer for which the plan was
established has 250 or more eligible employees and the plan lists only one
broker of record, or (ii) the plan includes employer contributions and the plan
lists only one broker of record. 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.
Employees participating in such Group Investment Plans may also combine the
investments made in their plan account when determining the front-end sales
charge on purchases to non-retirement Delaware Group investment accounts.
For additional information on these Plans, including Plan forms, applications,
minimum investments and any applicable account maintenance fees, contact your
investment dealer or the Distributor.
For other Retirement Plans and special services, see Retirement Planning.
Deferred Sales Charge Alternative--Class B Shares
Class B Shares may be purchased at net asset value without the imposition of a
front-end sales charge. The Class B Shares are being sold without a front-end
sales charge so that the Fund will invest the full amount of the investor's
purchase payment. The Distributor currently anticipates compensating dealers or
brokers for selling Class B Shares at the time of purchase from its own funds in
an amount equal to no more than 4% of the dollar amount purchased. As discussed
below, however, Class B Shares are subject to annual 12b-1 Plan expenses and, if
shares are redeemed within six years of purchase, a CDSC.
12
<PAGE>
Proceeds from the CDSC and the annual 12b-1 Plan fees are paid to the
Distributor and others for the distribution and related services provided to,
and the related expenses borne on behalf of, the Fund for the benefit of the
Class B Shares in connection with the sale of the Class B Shares, including the
compensation paid to dealers or brokers for selling Class B Shares. Payments to
the Distributor and others under the 12b-1 Plan relating to the Class B Shares
may be, annually, in an amount equal to no more than 1%. The combination of the
CDSC and the proceeds of the 12b-1 Plan fees facilitates the ability of the Fund
to sell the Class B Shares without a front-end sales charge being deducted at
the time of purchase.
Shareholders of the Class B Shares exercising the exchange privilege described
below will continue to be subject to the CDSC schedule of the Class B Shares
described in this Prospectus. Such schedule may be higher than the CDSC schedule
relating to the Class B Shares acquired as a result of the exchange. See
Redemption and Exchange.
Automatic Conversion of Class B Shares
Except for shares acquired through a reinvestment of dividends, Class B Shares
held for eight years after purchase are eligible for automatic conversion into
Class A Shares. The Fund will effect conversions of Class B Shares into Class A
Shares 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 an additional three months after the eighth anniversary after purchase before
the shares will automatically convert into Class A Shares.
Class B Shares of a fund acquired through 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.
Contingent Deferred Sales Charge
Class B Shares redeemed within six years of purchase may be subject to a CDSC
at the rates set forth below, charged as a percentage of the dollar amount
subject thereto. 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 the 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 B Shares of the Fund even if those shares are
later exchanged for Class B Shares of another Delaware Group fund and, 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 into which the
shares have been exchanged. Accordingly, no CDSC will be imposed on increases in
net asset value above the initial purchase price. In addition, no CDSC will be
assessed on redemption of shares received upon reinvestment of dividends or
capital gains distributions.
The following table sets forth the rates of the CDSC for the Class B Shares of
the Fund:
<TABLE>
<CAPTION>
Contingent Deferred
Sales Charge
(as a Percentage of
Year After Dollar Amount
Purchase Made Subject to Charge)
------------- -------------------
<S> <C>
0-2 4%
3-4 3%
5 2%
6 1%
7 and thereafter None
</TABLE>
During the seventh year after purchase and, thereafter, until converted
automatically into Class A Shares of the Fund, the Class B Shares will continue
to be subject to annual 12b-1 Plan expenses of 1% of average daily net assets
representing those shares. See Automatic Conversion of Class B Shares above.
Investors are reminded that the Class A Shares into which the Class B Shares
will convert are subject to ongoing annual 12b-1 Plan expenses of up to a
maximum of .30% of average daily net assets representing such shares.
13
<PAGE>
In determining whether a CDSC is applicable to a redemption, the calculation
will be determined in a manner that results in the lowest applicable rate being
charged. Therefore, with respect to the Class B Shares, it will be assumed that
the redemption is first for shares held over six years or shares acquired
pursuant to reinvestment of dividends or distributions and then of shares held
longest during the six-year period. The charge will not be applied to dollar
amounts representing an increase in the net asset value since the time of
purchase. All investments made during a calendar month, regardless of when
during 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 redemptions of Class B Shares in connection with the
following redemptions: (i) redemptions effected pursuant to the 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 or 403(b)(7) Deferred Compensation
Plan; (iii) required minimum distributions from an IRA, 403(b)(7) Deferred
Compensation Plan, or 457 Deferred Compensation Plan; and (iv) distributions
from an IRA, 403(b)(7) Deferred Compensation Plan or 457 Deferred Compensation
Plan due to death or disability.
12b-1 Distribution Plans--Class A and Class B Shares
Pursuant to the distribution plans adopted by the Fund pursuant to Rule 12b-1
under the 1940 Act, the Fund is permitted to pay the Distributor annual
distribution fees payable monthly of .30% of the average daily net assets of the
Class A Shares and 1% of the average daily net assets of the Class B Shares in
order to compensate the Distributor for providing distribution and related
services and bearing certain expenses of each Class. The Class B Shares' 12b-1
Plan is designed to permit an investor to purchase Class B Shares through
dealers or brokers without the assessment of a front-end sales charge and at the
same time permit the Distributor to compensate dealers and brokers in connection
with the sale of the Class B Shares. In this regard, the purpose and function of
the 12b-1 Plan and the CDSC with respect to the Class B Shares are the same as
those of the front-end sales charge and 12b-1 Plan with respect to the Class A
Shares in that the fees and charges provide for the financing of the
distribution of the respective Classes. For more detailed discussion of the 12b-
1 Plans relating to the Class A and Class B Shares, see Distribution (12b-1) and
Service.
Other Payments to Dealers--Class A and Class B Shares
In addition, 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 .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.
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. In addition, as noted above, the Distributor may pay
dealers a commission in connection with net asset value purchases.
Class B Funds
The following funds currently offer Class B Shares: DMC Tax-Free Income Trust-
Pennsylvania, Delaware Group Delchester High-Yield Bond Fund, Inc., Delaware
Group Government Fund, Inc., Limited-Term Government Fund of Delaware Group
Limited-Term Government Funds, Inc., Delaware Group Cash Reserve, Inc., Tax-Free
USA Fund, Tax-Free Insured Fund and Tax-Free USA Intermediate Fund of Delaware
Group Tax-Free Fund, Inc., Delaware Group DelCap Fund, Inc., Delaware Fund and
Devon Fund of Delaware Group Delaware Fund, Inc., Delaware Group Value Fund,
Inc., Decatur Income Fund and Decatur Total Return Fund of Delaware Group
Decatur Fund, Inc., Global Assets Series, Global Bond Series and International
Equity Series of Delaware Group Global & International Funds, Inc. and the Fund.
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Trend Fund Institutional Class
In addition to offering the Class A and Class B Shares, the Fund also offers
the Trend Fund Institutional Class of shares, which is described in a separate
prospectus relating to that class of shares. That class may be purchased 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) banks, trust companies and similar financial institutions
investing for their own account or for the account of their trust customers for
whom such financial institution is exercising investment discretion in
purchasing shares of a class; 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. Such Trend Fund Institutional Class shares generally
are distributed directly by the Distributor and do not have a front-end or
contingent deferred sales charge or a 12b-1 fee. Sales or service compensation
available in respect of such class, therefore, differs from that available in
respect of the Class A Shares and the Class B Shares. The 12b-1 Plan distri-
bution expenses borne by the Class A Shares and the Class B Shares, the front-
end sales charge and the Limited CDSC, if applicable, to which the Class A
Shares are subject, and the CDSC to which the Class B Shares are subject, may
affect the performance of these Classes. All three classes of shares have a
proportionate interest in the underlying portfolio of securities of the Fund.
Total Operating Expenses incurred by the Trend Fund Institutional Class as a
percentage of average daily net assets for the fiscal year ended June 30, 1995,
were 1.12%. See Part B for performance information about Trend Fund
Institutional Class. To obtain a prospectus which describes the Trend Fund
Institutional Class, contact the Distributor.
Dividend Orders
Some shareholders want the dividends earned in one fund automatically invested
in another Delaware Group fund with a different investment objective. For more
information on the requirements of the other funds, see Dividend Reinvestment
Plan under The Delaware Difference or call the Shareholder Service Center.
HOW TO BUY SHARES
The Fund makes it easy to invest by mail, by wire, by exchange and by
arrangement with your investment dealer.
Investing through Your Investment Dealer
You can make a purchase of shares of the Classes 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, we
can refer you to one.
Investing by Mail
1. Initial Purchases--An Investment Application must be completed, signed and
sent with a check payable to Trend Fund A Class or B Class, depending upon which
Class is being purchased, to 1818 Market Street, Philadelphia, PA 19103.
2. Subsequent Purchases--Additional purchases may be made at any time by mailing
a check payable to Trend Fund A Class or B Class, depending upon which Class is
being purchased. 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
the Fund, and should be used when you are making additional purchases. You can
expedite processing by including an investment slip with your check when making
additional purchases. Your investment may be delayed if you send additional
purchases by certified mail.
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<PAGE>
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 0114-2596 (include your
name(s) and your account number for the Class in which you are investing).
1. Initial Purchases--Before you invest, telephone the Fund's Shareholder
Service Center 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 to Trend Fund A Class or B Class, depending upon which Class is
being purchased, to 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 Fund's
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 the Fund. If you wish to open an account by exchange, call the
Shareholder Service Center for more information.
Exchanges will not be permitted between Class A Shares and Class B Shares of
the Fund or between the Class A Shares and Class B Shares of any other funds in
the Delaware Group. Class B Shares of any of the Class B Funds may be exchanged
for Class B Shares of the Fund. Class B Shares of the Fund acquired by exchange
will continue to carry the contingent deferred sales charge and the automatic
conversion schedules of the fund from which the exchange is made. The holding
period of the Class B Shares of the Fund will be added to that of the exchanged
shares for purposes of determining the time of the automatic conversion into
Class A Shares of the Fund.
Permissible exchanges into the Classes of the Fund will be made without a
front-end sales charge imposed by the Fund or, at the time of the exchange, a
contingent deferred sales charge imposed by the fund from which the exchange is
being made, except for exchanges into Class A Shares from funds not subject to a
front-end sales charge (unless such shares were acquired in an exchange from a
fund subject to such a charge or such shares were acquired through the
reinvestment of dividends).
Additional Methods of Adding to Your Investment
Call the Shareholder Service Center for more information if you wish to use
the following services:
1. Direct Deposit
You may wish to have your employer or bank make regular investments directly
to your account for you (for example: payroll deduction, pay by phone, annuity
payments). The 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.
2. Automatic Investing Plan
The Automatic Investing Plan enables you to make regular monthly investments
without writing or mailing checks. You may authorize the Fund to transfer a
designated amount monthly from your checking account into your Class account.
Many shareholders use this as an automatic savings plan for IRAs and other
purposes. 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, Profit Sharing and Money Purchase Pension Plans, 401(k) Defined
Contribution Plans, 403(b)(7) Deferred Compensation Plans or 457 Deferred
Compensation Plans.
* * *
Should investments by these two methods be reclaimed or returned for some
reason, the Fund has the right to liquidate your shares to reimburse the
government or transmitting bank. If there are insufficient funds in your Class
account, you are obligated to reimburse the Fund.
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<PAGE>
Purchase Price and Effective Date
The offering price and net asset value of the Class A and Class B 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 such exchange is open.
The effective date of a purchase made through an investment dealer is the date
the order is received by the Fund. 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. Those received after such time will be effective the
next business day.
The Conditions of Your Purchase
The Fund reserves the right to reject any purchase or exchange. If a purchase
is cancelled because your check is returned unpaid, you are responsible for any
loss incurred. The 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. The 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.
The Fund also reserves the right, following shareholder notification, to
charge a service fee on non-retirement accounts of the Class A Shares and Class
B Shares that 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 below minimum status 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
contingent deferred sales charge will apply to such assessments.
The Fund also reserves the right, upon 60 days' written notice, to redeem
accounts that remain under $250 as a result of redemptions. An investor making
the minimum initial investment will 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, bond funds, tax-advantaged 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 check writing feature. Exchanges are subject to the requirements of each
fund and all exchanges of shares from one fund or class to another pursuant to
this privilege constitute taxable events. See Taxes. You may want to call us for
more information or 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.
Your shares will be redeemed or exchanged based on the net asset value next
determined after we receive your request in good order subject, in the case of a
redemption, to any applicable CDSC or Limited CDSC. Redemption or exchange
requests received in good order after the time the offering price and net asset
value of shares are determined, as noted above, will be processed on the next
business day. See Purchase Price and Effective Date under Buying Shares. Except
as otherwise noted below, for a redemption request to be in "good order," you
must provide your Class account number, account registration, and the total
number of shares or dollar amount of the transaction. If a holder of Class B
Shares submits a redemption request for a specific dollar amount, the Fund will
redeem that number of shares necessary to deduct the applicable CDSC and tender
to the shareholder the requested amount to the extent enough shares are then
held in the shareholder account. With regard to exchanges, you must also provide
the name of the fund you want to receive 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 Fund
at 800-523-1918 (in Philadelphia, 215-988-1241). The Fund reserves the right to
reject exchange requests at any time. The Fund may suspend or terminate, or
amend the terms of, the exchange privilege upon 60 days' written notice to
shareholders.
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<PAGE>
The Fund will honor written redemption requests of shareholders who recently
purchased shares by check, but will not mail the proceeds until it is reasonably
satisfied the purchase check has cleared, which may take up to 15 days from the
purchase date. The Fund will not honor telephone redemptions for Class shares
recently purchased by check unless it is reasonably satisfied that the purchase
check has cleared. You can avoid this potential delay if you purchase shares by
wiring Federal Funds. The 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.
Class A Shares may be exchanged for certain of the shares of the other funds
in the Delaware Group, including other Class A Shares, subject to the
eligibility and minimum purchase requirements set forth in each fund's
prospectus. All Delaware Group funds offer Class A Shares. Class A Shares may
not be exchanged for Class B Shares of the funds offering such shares. Class B
Shares of the Fund may be exchanged only for the Class B Shares of any of the
Class B Funds. See Exchange Privilege under The Delaware Difference. In each
instance, permissible exchanges are subject to the minimum purchase and other
requirements set forth in each prospectus.
Permissible exchanges may be made at net asset value, provided: (1) the
investment satisfies the eligibility and minimum purchase requirements set forth
in the prospectus of the fund being acquired; and (2) the shares of the fund
being acquired are in a state where that fund is registered.
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 transfers involving assets that were previously
invested in a fund with a front-end sales charge and/or transfers involving the
reinvestment of dividends.
Holders of the Class B Shares that exchange their shares ("outstanding Class B
Shares") for the Class B Shares of other Class B Funds ("new Class B Shares")
will not be subject to a CDSC that might otherwise be due upon redemption of the
outstanding Class B Shares. However, such shareholders will continue to be
subject to the CDSC and automatic conversion schedules of the outstanding Class
B Shares described in this Prospectus and any CDSC assessed upon redemption will
be charged by the Fund. The Fund's CDSC schedule may be higher than the CDSC
schedule relating to the new Class B Shares acquired as a result of the
exchange. For purposes of computing the CDSC that may be payable upon a
disposition of the new Class B Shares, the holding period for the outstanding
Class B Shares is added to the holding period of the new Class B Shares. The
automatic conversion schedule of the outstanding Class B Shares may be longer
than that of the new Class B Shares. Consequently, an investment in new Class B
Shares by exchange may subject an investor to the higher 12b-1 fees applicable
to Class B Shares for a longer time than if the investment in new Class B Shares
was made directly.
Different redemption and exchange methods are outlined below. Except for the
CDSC with respect to redemption of Class B Shares and the Limited CDSC with
respect 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
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 with respect to an account, including
selection of any of the features described below, shall continue in effect until
revoked or modified in writing and until such time as such written revocation or
modification has been received by the Fund or its agent.
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.
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<PAGE>
Written Redemption
You can write to the Fund at 1818 Market Street, Philadelphia, PA 19103 to
redeem some or all of your Class A or Class B 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 Fund requires 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. The Fund
reserves the right to reject a signature guarantee supplied by an eligible
institution based on its creditworthiness. The Fund may require further
documentation from corporations, executors, retirement plans, administrators,
trustees or guardians.
The redemption request is effective at the net asset value next determined
after it is received in good order. Class B Shares may be subject to a CDSC and
Class A Shares may be subject to a Limited CDSC with respect to certain shares
purchased at net asset value. Payment is normally mailed the next business day,
but no later than seven days, after receipt of your request. If your Class A
Shares are in certificate form, the certificate must accompany your request and
also be in good order. The Fund only issues certificates for Class A Shares if a
shareholder submits a specific request. The Fund does not issue certificates for
Class B Shares.
Written Exchange
You can also write to the Fund (at 1818 Market Street, Philadelphia, PA 19103)
to request an exchange of any or all of your Class A or Class B 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 can only redeem
or exchange by written request and you must return your certificates.
The Telephone Redemption service enabling you to have redemption proceeds
mailed to your address of record and the Telephone Exchange service, both of
which are described below, are automatically provided unless you notify the Fund
in writing that you do not wish to have such service available with respect to
your account. The 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 Fund by telephone during periods when market or economic conditions
lead to an unusually large volume of telephone requests.
Neither the Fund 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. With
respect to such telephone transactions, the 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. 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 record address. Checks will be payable to the
shareholder(s) of record. Payment is normally mailed the next business day, but
no later than seven days, after receipt of the request. This service is only
available to individual, joint and individual fiduciary-type accounts.
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<PAGE>
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, the Fund
requires an Authorization Form with 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. If you ask for a check,
it will normally be mailed the next business day, but no later than seven days,
after receipt of your request to your predesignated bank account. Except for any
CDSC which may be applicable to the Class B Shares and the Limited CDSC which
may be applicable to purchases made at net asset value with respect to the Class
A Shares, there are no fees for this method, but the mail time may delay getting
funds into your bank account. Simply call the Fund's Shareholder Service Center
prior to the time the offering price and net asset value are determined, as
noted above.
If expedited payment by check or wire could adversely affect the Fund, the
Fund may take up to seven days to pay.
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 Class A
or Class B Shares into any fund 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 Plan for Class A Shares
1. Regular Plans
This plan provides holders of the Class A Shares 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 Fund does 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 Delaware Group's
MoneyLine service. Your funds will normally be credited to your bank account two
business days after the payment date. Except with respect to the Limited CDSC
which may be applicable to Class A Shares as noted below, there are no fees for
this method. You can initiate this service by completing an Authorization
Agreement. If the name and address on your bank account are not identical to the
name and address on your Fund account, you must have your signature guaranteed.
Please call the Shareholder Service Center for additional information.
2. Retirement Plans
For shareholders eligible under the applicable Retirement Plan to receive
benefits in periodic payments, the Fund's 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 service described above is not available with
respect to Retirement Plans.
* * *
Shareholders should not purchase Class A Shares while participating in a
Systematic Withdrawal Plan. Also, redemptions of Class A Shares pursuant to a
Systematic Withdrawal Plan may be subject to a Limited CDSC if the original
purchase was made within the 12 months prior to the withdrawal at net asset
value and a dealer's commission has been paid on that purchase. See Contingent
Deferred Sales Charge for Certain Purchases of Class A Shares Made at Net Asset
Value. For more information on both of these plans, call the Shareholder Service
Center.
The Systematic Withdrawal Plan is not available with respect to the Class B
Shares.
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<PAGE>
Wealth Builder Option
Shareholders may elect to invest in other mutual funds in the Delaware Group
through our Wealth Builder Option. Under this automatic exchange program,
shareholders can authorize regular monthly amounts (minimum of $100 per fund) to
be liquidated from their Class account and invested automatically into one or
more funds in the Delaware Group. Investments under this option are exchanges
and are therefore subject to the same conditions and limitations as other
exchanges of Class A and Class B Shares noted above.
Shareholders can also use the Wealth Builder Option to invest in the Fund
through regular liquidations of shares in their accounts in other funds in the
Delaware Group, subject to the same conditions and limitations as other
exchanges noted above. Shareholders can terminate their participation at any
time by written notice to the Fund. See Redemption and Exchange.
This option is not available to participants in the following plans: SAR/SEP,
SEP/IRA, Profit Sharing and Money Purchase Pension Plans, 401(k) Defined
Contribution Plans, 403(b)(7) Deferred Compensation Plans or 457 Deferred
Compensation Plans.
Contingent Deferred Sales Charge for Certain Purchases of Class A Shares Made at
Net Asset Value
For purchases of Class A Shares, a Limited CDSC will be imposed by the Fund
upon 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 described above. See Buying 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
into which the Class A Shares have been exchanged.
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 Fund assesses the Limited CDSC if such 12-month period is not
satisfied irrespective of whether the redemption triggering its payment is of
the Class A Shares of the Fund or the Class A Shares into which the Class A
Shares of the Fund have been exchanged.
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 when during the month the investment occurred,
will age one month on the last day of that month and each subsequent month.
The Limited CDSC will be waived in the following instances: (i) redemptions
effected pursuant to the 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) distributions from a section
403(b)(7) Plan or an IRA due to death, disability, or attainment of age 59 1/2;
(v) tax-free 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 at Net
Asset Value).
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DIVIDENDS AND DISTRIBUTIONS
The Fund will make payments from net investment income and net realized
securities profits, if any, twice a year. The first payment would be made during
the first quarter of the next fiscal year. The second payment would be made near
the end of the calendar year if necessary to comply with certain requirements
of the Internal Revenue Code. During the fiscal year ended June 30, 1995,
distributions totaling $0.79 per share of the Class A Shares were paid from
realized securities profits. On August 7, 1995, a distribution of $0.55 per
share of the Class A Shares and the Class B Shares was paid from realized
securities profits to shareholders of record July 28, 1995.
Each of the Classes will share proportionately in the investment income and
expenses of the Fund, except that: (i) the per share dividends and distributions
on the Class B Shares will be lower than the per share dividends and
distributions on the Class A Shares as a result of the higher expenses under the
12b-1 Plan relating to the Class B Shares; and (ii) the per share dividends and
distributions on both the Class A Shares and the Class B Shares will be lower
than the per share dividends and distributions on the Trend Fund Institutional
Class as such class will not incur any expenses under the Rule 12b-1 Plans. See
Distribution (12b-1) and Service under Management of the Fund.
Both dividends and distributions, if any, are automatically reinvested in your
account at net asset value unless you elect otherwise. Any check in payment of
dividends or other distributions which cannot be delivered by the 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. 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 elect the Delaware Group's MoneyLine service
to enable such payments to be transferred from your Fund account to your
predesignated bank account. Your funds will normally be credited to your bank
account two business days after the payment date. There are no fees for this
method. See Systematic Withdrawal Plan for Class A Shares under Redemption and
Exchange for information regarding authorization of this service. This service
is not available with respect to Retirement Plans. (See The Delaware Difference
for more information on reinvestment options.)
TAXES
The Fund has qualified, and intends to continue to qualify, as a regulated
investment company under Subchapter M of the Internal Revenue Code (the "Code").
As such, the 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.
The 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 you 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 the Fund that so
qualifies will be designated each year in a notice mailed to the Fund's
shareholders.
Distributions paid by the 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 the Fund. The Fund does not seek to realize any
particular amount of capital gains during a year; rather, realized gains are a
byproduct 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 the 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.
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 Fund and received by the shareholder
on December 31 of the year declared.
The sale of shares of the 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
two mutual funds (or two series or portfolios of a mutual fund). Any loss
incurred on sale or exchange of the Fund's shares which 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 purchasing Fund shares will be excluded from the
federal tax basis of any of such shares sold or exchanged within ninety (90)
days of their purchase (for purposes of
22
<PAGE>
determining gain or loss upon sale of such shares) if the sale proceeds are
reinvested in the 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
no longer than approximately eight years after purchase will be tax-free for
federal tax purposes. Shareholders should consult their own tax advisers
regarding specific questions as to federal, state, local or foreign taxes. See
Automatic Conversion of Class B Shares under Buying Shares.
In addition to federal taxes, shareholders may be subject to state and local
taxes on distributions. Distributions of interest income and capital gains
realized from certain types of U.S. Government securities may be exempt from
state personal income taxes. Shares of the Fund are exempt from Pennsylvania
county personal property taxes.
Each year, the Fund will mail you information on the tax status of the 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.
The Fund 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 Account Registration Form your proper Taxpayer
Identification Number and by certifying that you are not subject to backup
withholding.
The tax discussion set forth above is included for general information only.
Prospective investors should consult their own tax advisers concerning the
federal, state, local or foreign tax consequences of an investment in the Fund.
See Taxes in Part B for additional information on tax matters relating to the
Fund and its shareholders.
CALCULATION OF OFFERING
PRICE AND NET ASSET VALUE
PER SHARE
Class A Shares are purchased at the offering price and Class B Shares are
purchased at the net asset value ("NAV") per share. The offering price of the
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 such 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.
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 the
Fund's Board of Directors.
Each of the Fund's three classes will bear, pro-rata, all of the common
expenses of the Fund. The net asset values of all outstanding shares of each
class of the Fund will be computed on a pro-rata basis for each outstanding
share based on the proportionate participation in the Fund represented by the
value of shares of that class. All income earned and expenses incurred by the
Fund will be borne on a pro-rata basis by each outstanding share of a class,
based on each class' percentage in the Fund represented by the value of shares
of such classes, except that the Trend Fund Institutional Class will not incur
any of the expenses under the Fund's 12b-1 Plans and the Class A and Class B
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 and dividends paid to each class
of the Fund will vary.
23
<PAGE>
MANAGEMENT OF THE FUND
Directors
The business and affairs of the Fund are managed under the direction of its
Board of Directors. Part B contains additional information regarding the
directors and officers.
Investment Manager
The Manager furnishes investment management services to the Fund.
The Manager and its predecessors have been managing the funds in the Delaware
Group since 1938. On June 30, 1995, the Manager and its affiliate, Delaware
International Advisers Ltd., were supervising in the aggregate more than $26
billion in assets in the various institutional (approximately $16,227,892,000)
and investment company (approximately $9,916,645,000) 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. As a result of the merger, DMH became a wholly-owned subsidiary and
the Manager became an indirect, wholly-owned subsidiary of Lincoln National and
both are now 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, a
new Investment Management Agreement between the Fund and the Manager was
executed following shareholder approval.
The Manager manages the Fund's portfolio and makes investment decisions which
are implemented by the Fund's Trading Department. The Manager also administers
the Fund's affairs and pays the salaries of all the directors, officers and
employees of the Fund who are affiliated with the Manager. For these services,
the Manager is paid an annual fee of 3/4 of 1% of the average daily net assets
of the Fund, less all directors' fees paid to unaffiliated directors. This fee
was paid by the Fund during the last fiscal year. This fee is higher than that
paid by many other funds. The fee may be higher or lower than that paid by funds
with comparable investment objectives. Investment management fees paid by the
Fund for the fiscal year ended June 30, 1995, were 0.75% of average daily net
assets.
Edward N. Antoian has primary responsibility for making day-to-day investment
decisions for the Fund. He has been the Fund's senior portfolio manager since
1984. A graduate of The State University of New York at Albany with an MBA in
Finance from the University of Pennsylvania's Wharton School, Mr. Antoian began
his career with Price Waterhouse. Prior to joining the Delaware Group in June
1984, he worked in the Institutional Equity Department of E.F. Hutton in
Philadelphia. A Chartered Financial Analyst, Mr. Antoian is a member of the
Philadelphia Finance Association and the Philadelphia Securities Association.
In making investment decisions for the Fund, Mr. Antoian regularly consults
with Wayne A. Stork, William H. Miller and other members of Delaware's equity
department. Mr. Stork, Chairman of the Manager and the Fund's Board of
Directors, is a graduate of Brown University and attended New York University's
Graduate School of Business Administration. Mr. Miller is an Assistant Portfolio
Manager. He holds a BA in Economics from Trinity College. Prior to joining the
Delaware Group in 1995, he worked as a technology analyst for Janney Montgomery
Scott in Philadelphia and he has also served as an institutional salesman for
Rutherford Brown & Catherwood.
Portfolio Trading Practices
The Fund normally will not invest for short-term trading purposes. However,
the 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 the Fund
and may affect taxes payable by the Fund's shareholders. Given the Fund's
investment objective, its annual portfolio turnover rate may exceed 100%. A
turnover rate of 100% would occur, for example, if all the investments in the
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. During the past two fiscal years,
the Fund's portfolio turnover rates were 67% for 1994 and 64% for 1995.
24
<PAGE>
The 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, the Fund may consider a
broker/dealer's sales of Fund shares in placing portfolio orders and may place
orders with broker/dealers that have agreed to defray certain Fund expenses such
as custodian fees.
Performance Information
From time to time, the Fund may quote total return performance of the 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, 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 periods, as relevant. The Fund may
also advertise aggregate and average total return information concerning a Class
over additional periods of time. In addition, the 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 which includes deductions of the
maximum front-end sales charge or any applicable CDSC.
Because stock prices fluctuate, investment results of the Classes will
fluctuate over time and past performance should not be considered as a
representation of future results.
Distribution (12b-1) and Service
The Distributor, Delaware Distributors, L.P. (which formerly conducted
business as Delaware Distributors, Inc.), serves as the national distributor for
the Fund under a Distribution Agreement dated April 3, 1995.
The Fund has adopted a distribution plan under Rule 12b-1 for the Class A
Shares and a separate distribution plan under Rule 12b-1 for the Class B Shares
(the "Plans"). The Plans permit the Fund to pay the Distributor from the assets
of the respective Classes a monthly fee for its 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 Class A and Class B Shares, 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, the Fund may make payments
from the assets of the respective Class 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 the Fund.
The 12b-1 Plan expenses relating to the Class B Shares 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 the Fund from the assets of the respective Classes
to the Distributor and others under the Plans may not exceed .30% of the Class A
Shares' average daily net assets in any year, and 1% (.25% of which are service
fees to be paid by the Fund to the Distributor, dealers or others, for providing
personal service and/or maintaining shareholder accounts) of the Class B Shares'
average daily net assets in any year. The Class A and Class B Shares will not
incur any distribution expenses beyond these limits, which may not be increased
without shareholder approval. The Distributor may, however, incur additional
expenses and make additional payments to dealers from its own resources to
promote the distribution of shares of the Classes.
Effective June 1, 1992, the Board of Directors has determined that the annual
fee payable on a monthly basis, under the Plan relating to the Class A Shares,
will be equal to the sum of (i) the amount obtained by multiplying .30% by the
average daily net assets represented by shares of the Class A Shares that are
acquired by shareholders on or after June 1, 1992, and (ii) the amount obtained
by multiplying .10% by the average daily net assets represented by shares of the
Class A Shares that were acquired before June 1, 1992. While this is the method
for calculating the Class A Shares' 12b-1 fee, the fee is a Class expense so
that all shareholders, regardless of when they purchase their shares, will bear
12b-1 expenses at the same per share rate. As Class A Shares are sold on or
after June 1, 1992, the initial rate of at least .10% will increase over time.
Thus, as the proportion of Class A Shares purchased on or after June 1, 1992, to
Class A Shares outstanding prior to June 1, 1992, increases, the expenses
attributable to payments under the Plan will also increase (but will not exceed
.30% of average
25
<PAGE>
daily net assets). While this describes the current formula for calculating the
fees which will be payable under the Plan, such Plan permits a full .30% on all
Class A Shares' assets to be paid at any time following Board approval.
The Fund's Plans do not apply to the Trend 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 Trend Fund Institutional
Class shares.
While payments pursuant to the Plans may not exceed .30% annually with respect
to the Class A Shares and 1% annually with respect to the Class B 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 monthly fees
paid to the Distributor are subject to the review and approval of the Fund's
unaffiliated directors who may reduce the fees or terminate the Plans at any
time.
The staff of the Securities and Exchange Commission ("SEC") has proposed
amendments to Rule 12b-1 and other related regulations that could impact Rule
12b-1 Distribution Plans. The Fund 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.
The Transfer Agent, Delaware Service Company, Inc., serves as the shareholder
servicing, dividend disbursing and transfer agent for the Fund under an
Agreement dated June 29, 1988. The directors annually review service fees paid
to the Transfer Agent.
The Distributor and the Transfer Agent are also indirect, wholly-owned
subsidiaries of DMH.
Expenses
The Fund is responsible for all of its own expenses other than those borne by
the Manager under the Investment Management Agreement and those borne by the
Distributor under the Distribution Agreement. The Class A Shares' ratio of
expenses to average daily net assets for the fiscal year ended June 30, 1995,
was 1.36%. The Class B Shares' ratio of expenses to average daily net assets for
the period September 6, 1994, (date of initial public offering) through June 30,
1995, was 2.12%, annualized. The expense ratio of each Class reflects the impact
of its respective 12b-1 Plan.
Shares
The Fund is an open-end management investment company and its portfolio of
assets is diversified for purposes of the 1940 Act. Commonly known as a mutual
fund, the Fund was organized as a Maryland corporation on March 4, 1983.
Previously, it was a Delaware corporation organized in 1966.
Fund shares have a par value of $.50, equal voting rights, except as noted
below, and are equal in all other respects. All Fund shares have noncumulative
voting rights which means that the holders of more than 50% of the Fund's shares
voting for the election of directors can elect 100% of the directors if they
choose to do so. Under Maryland law, the Fund 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 the Fund's shares may request that a special meeting be called to
consider the removal of a director.
The Fund also offers the Trend Fund Institutional Class of shares as well as
the Class A and Class B Shares. Shares of each class represent proportionate
interests in the assets of the Fund and have the same voting and other rights
and preferences as the other classes of the Fund, except that shares of the
Trend Fund Institutional Class are not subject to, and may not vote on matters
affecting, the Distribution Plans under Rule 12b-1 relating to the Class A and
Class B Shares. Similarly, the shareholders of the Class A Shares may not vote
on matters affecting the Fund's Plan under Rule 12b-1 relating to the Class B
Shares, and the shareholders of the Class B Shares may not vote on matters
affecting the Fund's Plan under Rule 12b-1 relating to the Class A Shares.
However, the Class B Shares may vote on any proposal to increase materially the
fees to be paid by the Fund under the Rule 12b-1 Plan relating to the Class A
Shares.
Prior to September 6, 1994, the Trend Fund A Class was known as the Trend Fund
Class and the Trend Fund Institutional Class was known as the Trend Fund
(Institutional) class.
26
<PAGE>
Trend
[PHOTO OF GEORGE WASHINGTON Fund
CROSSING THE DELAWARE RIVER] -----------
A Class
B Class
PROSPECTUS
OCTOBER 31, 1995
DELAWARE
GROUP
--------
The Delaware Group includes funds with a wide range of investment
objectives. Stock funds, income funds, tax-free funds, money market funds,
global and international funds and closed-end equity 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, in Philadelphia call 215-988-1333.
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
and Transfer Agent
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103
Legal Counsel
Stradley, Ronon, Stevens & Young
One Commerce Square
Philadelphia, PA 19103
Independent Auditors
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103
Custodian
Chemical Bank
450 West 33rd Street
New York, NY 10001
P-003/P-064[--] RRD895
Printed in the U.S.A.
<PAGE>
TREND FUND PROSPECTUS
INSTITUTIONAL October 31, 1995
--------------------------------------------------
1818 Market Street, Philadelphia, PA 19103
For more information about the Trend Fund Institutional Class call
Delaware Group at 800-828-5052.
This Prospectus describes the Trend Fund Institutional Class (the "Class") of
shares of Delaware Group Trend Fund, Inc. (the "Fund"). The Fund's objective is
to achieve capital appreciation by investing primarily in securities of emerging
and other growth-oriented companies.
Shares of this Class are available for purchase only by certain enumerated
institutions and are offered at net asset value without the imposition of a
front-end or contingent deferred sales charge and without a 12b-1 charge. See
Buying Shares.
This Prospectus relates only to the Class and sets forth information that you
should read and consider before you invest. Please retain it for future
reference. Part B of the Fund's registration statement, dated October 31, 1995,
as it may be amended from time to time, contains additional information about
the Fund and has been filed with the Securities and Exchange Commission. 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. The Fund's financial statements appear in its Annual
Report, which will accompany any response to requests for Part B.
The Fund also offers the Trend Fund A Class and the Trend Fund B Class. Shares
of the Trend Fund A Class carry a front-end sales charge and are subject to
ongoing distribution expenses. Shares of the Trend Fund B Class are subject to
ongoing distribution expenses and a contingent deferred sales charge upon
redemption. A prospectus for these classes 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.................................................................. 1
Synopsis.................................................................... 2
Summary of Expenses......................................................... 3
Financial Highlights........................................................ 4
Investment Objective and Policies
Investment Strategy....................................................... 5
Suitability............................................................... 5
Buying Shares............................................................... 6
Redemption and Exchange..................................................... 8
Dividends and Distributions................................................. 10
Taxes....................................................................... 10
Calculation of Net Asset Value Per Share.................................... 11
Management of the Fund...................................................... 12
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 FUND 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 PRINCIPAL. SHARES OF THE FUND ARE NOT BANK
OR CREDIT UNION DEPOSITS.
- --------------------------------------------------------------------------------
1
<PAGE>
SYNOPSIS
Capitalization
The Fund offers the Trend Fund Institutional Class, the Trend Fund A Class and
the Trend Fund B Class. The Fund has a present authorized capitalization of one
hundred million shares of capital stock with a $.50 par value per share. Twenty-
five million shares of that stock have been allocated to the Trend Fund
Institutional Class, thirty-five million shares have been allocated to the Trend
Fund A Class and twenty-five million shares have been allocated to the Trend
Fund B Class. See Shares under Management of the Fund.
Investment Manager, Distributor and Service Agent
Delaware Management Company, Inc. (the "Manager") is the investment manager
for the Fund. The Manager or its affiliate, Delaware International Advisers
Ltd., also manages the other funds in the Delaware Group. Delaware Distributors,
L.P. (the "Distributor") is the national distributor for the 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 and
transfer agent for the Fund and for all of the other mutual funds in the
Delaware Group. See Management of the Fund.
Purchase Price
Shares of the 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 Buying
Shares.
Investment Objective
The objective of the Fund is to seek to achieve capital appreciation by
investing primarily in securities of emerging and other growth-oriented
companies. See Investment Objective and Policies.
Open-End Investment Company
The Fund, which was organized as a Maryland corporation in 1983, is an open-
end management investment company and its portfolio of assets is diversified for
purposes of the Investment Company Act of 1940 (the "1940 Act"). Previously, it
was a Delaware corporation organized in 1966. See Shares under Management of the
Fund.
Investment Management Fees
The Manager furnishes investment management services to the Fund, subject to
the supervision and direction of the Board of Directors. Under the Investment
Management Agreement, the annual compensation paid to the Manager is equal to
3/4 of 1% of the average daily net assets, less a proportionate share of all
directors' fees paid to the unaffiliated directors by the Fund. See Management
of the Fund.
Redemption and Exchange
Shares of the Class are redeemed or exchanged at the net asset value
calculated after receipt of the redemption or exchange request. See Redemption
and Exchange.
2
<PAGE>
SUMMARY OF EXPENSES
<TABLE>
<CAPTION>
Shareholder Transaction Expenses
- --------------------------------------------------------------------------------
<S> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price).............................. None
Maximum Sales Charge Imposed on Reinvested Dividends
(as a percentage of offering price).............................. None
Redemption Fees.................................................... None*
Exchange Fees...................................................... None**
<CAPTION>
Annual Operating Expenses
(as a percentage of average daily net assets)
- --------------------------------------------------------------------------------
<S> <C>
Management Fees.................................................... 0.75%
12b-1 Fees......................................................... None
Other Operating Expenses........................................... 0.37%
-----
Total Operating Expenses........................................ 1.12%
=====
</TABLE>
The purpose of this table is to assist the investor in understanding the
various costs and expenses that an investor in the Class will bear directly or
indirectly. *CoreStates Bank, N.A. currently charges $7.50 per redemption for
redemptions payable by wire. **Exchanges are subject to the requirements of each
fund and a front-end sales charge may apply. See Trend Fund A Class and Trend
Fund B Class for expense information about 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 table
above, the Fund charges no redemption fees.
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C>
$11 $36 $62 $136
</TABLE>
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.
3
<PAGE>
FINANCIAL HIGHLIGHTS
The following financial highlights are derived from the financial statements of
Delaware Group Trend Fund, 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 report of Ernst & Young LLP covering such
financial information and highlights, all of which are incorporated by reference
into Part B. Further information about the Fund's performance is contained in
its Annual Report to shareholders. A copy of the Fund's Annual Report (including
the report of Ernst & Young LLP) may be obtained from the Fund upon request at
no charge.
<TABLE>
<CAPTION>
Period
11/23/92/1/
Year Ended through
6/30/95/1/ 6/30/94/1/ 6/30/93 6/30/93/2/ 6/30/92/2/
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............. $12.250 $13.990 $12.760 $11.380 $ 8.920
Income From Investment Operations
- ---------------------------------
Net Investment Income (Loss)/4/.................. (0.044) (0.002) (0.035) (0.004) (0.005)
Net Gains or Losses on Securities
(both realized and unrealized)................. 2.884 0.202 1.615 3.754 2.625
------- ------- ------- ------- --------
Total From Investment Operations............... 2.840 0.200 1.580 3.750 2.620
------- ------- ------- ------- --------
Less Distributions
- ------------------
Dividends (from net investment income)........... none none none none none
Distributions (from capital gains)............... (0.790) (1.940) (0.350) (1.150) (0.160)
Returns of Capital............................... none none none none none
------- ------- ------- ------- --------
Total Distributions............................ (0.790) (1.940) (0.350) (1.150) (0.160)
------- ------- ------- ------- --------
Net Asset Value, End of Period................... $14.300 $12.250 $13.990 $13.980 $11.380
======= ======= ======= ======= =======
Total Return..................................... 24.74% 0.83% 21.69% 35.24%/5/ 29.31%/5/
- ------------
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000's omitted)........ $55,437 $13,499 $2,237 $219,826 $124,548
Ratio of Expenses to Average Daily Net Assets.... 1.12% 1.15% 1.21% 1.33% 1.18%
Ratio of Net Investment Income to Average Daily
Net Assets..................................... (0.34%) (0.50%) (0.49%) (0.61%) (0.43%)
Portfolio Turnover Rate.......................... 64% 67% 75% 75% 76%
</TABLE>
<TABLE>
<CAPTION>
Year Ended
6/30/91/2/ 6/30/90/2/ 6/30/89/2/ 6/30/88/2/ 6/30/87/2/ 6/30/86/2/3/
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............. $9.970 $10.870 $ 8.130 $9.120 $8.910 $6.430
Income From Investment Operations
- ---------------------------------
Net Investment Income (Loss)/4/.................. (0.020) 0.146 0.018 (0.066) (0.082) (0.042)
Net Gains or Losses on Securities
(both realized and unrealized)................. (0.460) 1.224 3.042 (0.924) 0.292 2.650
------ ------- ------- ------ ------ ------
Total From Investment Operations............... (0.480) 1.370 3.060 0.990 0.210 2.608
------ ------- ------- ------ ------ ------
Less Distributions
- ------------------
Dividends (from net investment income)........... (0.050) (0.050) none none none (0.128)
Distributions (from capital gains)............... (0.520) (2.220) (0.320) none none none
Returns of Capital............................... none none none none none none
------ ------- ------- ------ ------ ------
Total Distributions............................ (0.570) (2.270) (0.320) none none (0.128)
------ ------- ------- ------ ------ ------
Net Asset Value, End of Period................... $8.920 $ 9.970 $10.870 $8.130 $9.120 $8.910
====== ======= ======= ====== ====== ======
Total Return..................................... (4.82%)/5/ 14.32%/5/ 39.27%/5/ (10.86%)/5/ 2.36%/5/ 41.37%/5/
- ------------
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000's omitted)........ $78,631 $88,274 $67,111 $59,879 $79,266 $109,884
Ratio of Expenses to Average Daily Net Assets.... 1.29% 1.27% 1.28% 1.20% 1.18% 1.20%
Ratio of Net Investment Income to Average Daily
Net Assets..................................... (0.24%) 0.82% 0.19% (0.51%) (0.64%) (0.57%)
Portfolio Turnover Rate.......................... 67% 80% 48% 63% 93% 113%
</TABLE>
- ----------------
/1/Data are derived from Trend Fund Institutional Class (until September 6,
1994, referred to as Trend Fund (Institutional) class), which commenced
operations on November 23, 1992. Ratios and total return for the period
November 23, 1992, through June 30, 1993, have been annualized.
/2/Data are derived from data of the Trend Fund A Class (until September 6,
1994, referred to as Trend Fund class) which was subject to 12b-1
distribution expenses effective June 1, 1992.
/3/All figures prior to May 9, 1986, are adjusted for a 2-for-1 stock split paid
on that date.
/4/1995 per share information was based on the average shares outstanding
method.
/5/Does not reflect maximum sales charge of 5.75% applicable to Trend Fund A
Class.
4
<PAGE>
INVESTMENT OBJECTIVE
AND POLICIES
INVESTMENT STRATEGY
The objective of the Fund is long-term capital appreciation. The strategy is
to invest primarily in the common stocks and securities convertible into common
stocks of emerging and other growth-oriented companies that, in the judgment of
the Manager, are responsive to changes within the marketplace and have the
fundamental characteristics to support growth.
The Fund will seek to identify changing and dominant trends within the
economy, the political arena and our society. The Fund will purchase securities
which it believes will benefit from these trends and which have the fundamentals
to exploit them. The fundamentals include managerial skills, product development
and sales and earnings.
In investing for capital appreciation, the Fund may hold securities for any
period of time. The Fund may also invest in foreign securities.
The Fund may purchase privately placed securities the resale of which is
restricted under applicable securities laws. Such securities may offer a higher
return than comparably registered securities but involve some additional risk as
they can be resold only in privately negotiated transactions, in accordance with
an exemption from the registration requirements under applicable securities laws
or after registration. The Fund will not purchase illiquid assets, including
such restricted securities, if more than 10% of the value of its assets would
then consist of illiquid securities.
Certain of the privately placed securities acquired by the Fund will be
eligible for resale by the Fund pursuant to Rule 144A under the Securities Act
of 1933 ("Rule 144A Securities"). Rule 144A permits many privately placed or
legally restricted securities to be freely traded without restriction among
certain institutional buyers such as the Fund. While maintaining oversight, the
Board of Directors of the Fund has delegated to the Manager the day-to-day
function of determining whether or not individual Rule 144A Securities are
liquid for purposes of the Fund's 10% limitation on investments in illiquid
securities.
Income is not an objective of the Fund. However, should the market warrant a
temporary defensive approach, the Fund may also invest in cash equivalents, and
fixed income obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities, as well as corporate bonds.
The Fund may invest in repurchase agreements, but will not normally do so
except to invest excess cash balances. In a repurchase agreement, the Fund
purchases a security and simultaneously agrees to sell it back to the seller at
a set (generally higher) price. Delays or losses could result if the other party
to the repurchase agreement defaults or becomes insolvent.
While the Fund is permitted under certain circumstances to borrow money, it
does not normally do so. The Fund will not purchase securities while any
borrowings are outstanding.
Although the Fund will constantly strive to attain the objective of long-term
capital growth, there can be no assurance that it will be attained. The
objective of the Fund may not be changed without shareholder approval. Part B
provides more information on the Fund's investment policies and restrictions.
Portfolio Loan Transactions
The 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 the 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, the 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.
SUITABILITY
The Fund may be suitable for the patient investor interested in long-term
capital appreciation. The prices of common stocks, especially those of smaller
companies, tend to fluctuate, particularly in the shorter term. The investor
should be willing to accept the risks associated with investments in growth-
oriented securities, some of which may be speculative and subject the Fund to an
additional risk. Also, ownership of Fund shares reduces the bookkeeping and
administrative inconveniences connected with direct purchases of these
securities.
Net asset value may fluctuate in response to the condition of individual
companies and general market and economic conditions and, as a result, the Fund
is not appropriate for a short-term investor.
5
<PAGE>
This Fund is designed primarily for capital appreciation. Providing current
income is not an objective of the Fund. Any income produced is expected to be
minimal. An investor should not consider a purchase of 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 in
concert to create a more complete investment program.
BUYING SHARES
The Distributor serves as the national distributor for the Fund. Shares of the
Class may be purchased directly by contacting the Fund or its agent or through
authorized investment dealers. All purchases of shares of the 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 the Class as part of their
retirement program should contact their employer for details.
Shares of the 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
plans 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) banks, trust companies and similar financial institutions
investing for their own account or for the account of their trust customers for
whom such financial institution is exercising investment discretion in
purchasing shares of the Class; 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.
Trend Fund A Class and Trend Fund B Class
In addition to offering the Trend Fund Institutional Class, the Fund also
offers the Trend Fund A Class and the Trend Fund B Class, which are described in
a separate prospectus relating only to those classes. Shares of Trend Fund A
Class and Trend Fund B Class may be purchased through authorized investment
dealers or directly by contacting the Fund or its agent. The Trend Fund A Class
carries a front-end sales charge and has annual 12b-1 expenses equal to a
maximum of .30%. The maximum front-end sales charge as a percentage of the
offering price is 5.75% (6.12% as a percentage of the amount invested) and is
reduced on certain transactions of $100,000 or more. The Trend Fund B Class has
no front-end sales charge but is subject to annual 12b-1 expenses equal to a
maximum of 1%. Shares of the Trend Fund B Class and certain shares of the Trend
Fund A Class may be subject to a contingent deferred sales charge upon
redemption. The 12b-1 Plan distribution expenses borne by the Trend Fund A Class
and the Trend Fund B Class, the front-end sales charge and the limited
contingent deferred sales charge, if applicable, to which the Trend Fund A Class
is subject and the contingent deferred sales charge to which the Trend Fund B
Class is subject may affect performance of those classes. Sales or service
compensation available in respect of such classes, therefore, differs from that
available in respect of the Class. All three classes of shares have a
proportionate interest in the underlying portfolio of securities of the Fund.
Total Operating Expenses incurred by the Trend Fund A Class as a percentage of
average daily net assets for the fiscal year ended June 30, 1995 were 1.36%.
Such expenses incurred by the Trend Fund B Class were 2.12%, annualized. See
Part B for performance information about Trend Fund A Class and Trend Fund B
Class. To obtain a prospectus relating to the Trend Fund A Class and Trend Fund
B Class, contact the Distributor.
HOW TO BUY SHARES
The 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 shares of the Class.
Investing Directly by Mail
1. Initial Purchases--An Investment Application must be completed, signed and
sent with a check payable to Trend Fund Institutional Class, to 1818 Market
Street, Philadelphia, PA 19103.
2. Subsequent Purchases--Additional purchases may be made at any time by mailing
a check payable to Trend Fund Institutional Class. Your check should be
identified with your name(s) and account number.
6
<PAGE>
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 0114-2596 (include your
name(s) and your account number for the class in which you are investing).
1. Initial Purchases--Before you invest, telephone the Fund's 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 to Trend Fund Institutional Class, to 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 Class, you may write and authorize an exchange
of part or all of your investment into the Class. However, shares of the Trend
Fund B Class and the Class B Shares of the other funds in the Delaware Group
offering such a class of shares may not be exchanged into the Class. If you wish
to open an account by exchange, call your Client Services Representative at
800-828-5052 for more information.
Investing through Your Investment Dealer
You can make a purchase of Class shares through most investment dealers who,
as part of the service they provide, must transmit orders promptly. They may
charge for this service.
Purchase Price and Effective Date
The purchase price (net asset value) is determined as of the close of regular
trading on the New York Stock Exchange (ordinarily, 4 p.m., Eastern time) on
days when such exchange is open.
The effective date of a purchase made through an investment dealer is the date
the order is received by the Fund. 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. Those
received after such time will be effective the next business day.
The Conditions of Your Purchase
The Fund reserves the right to reject any purchase or exchange. If a purchase
is cancelled because your check is returned unpaid, you are responsible for any
loss incurred. The 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. The 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.
The Fund also reserves the right, upon 60 days' written notice, to redeem
accounts that remain under $250 as a result of redemptions.
7
<PAGE>
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 we receive your request in good order. Redemption and exchange
requests received in good order after the time the net asset value of shares is
determined, as noted above, will be processed on the next business day. See
Purchase Price and Effective Date under Buying Shares. Except as otherwise noted
below, for a redemption request to be in "good order," you must provide your
Class 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 you want to receive 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 Fund at 800-828-5052.
The Fund will honor written redemption requests of shareholders who recently
purchased shares by check, but will not mail the proceeds until it is reasonably
satisfied the purchase check has cleared, which may take up to 15 days from the
purchase date. The Fund will not honor telephone redemptions for Class shares
recently purchased by check unless it is reasonably satisfied that the purchase
check has cleared. You can avoid this potential delay if you purchase shares by
wiring Federal Funds. The 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 the 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 Class, such exchange will be exchanged at
net asset value. Shares of the Class may not be exchanged into the Class B
Shares of the funds in the Delaware Group. The Fund reserves the right to reject
exchange requests at any time. The Fund may suspend or terminate, or amend the
terms of, the exchange privilege upon 60 days' written notice to shareholders.
Different redemption and exchange methods are outlined below. There is no fee
charged by the Fund or the Distributor for redeeming or exchanging your shares.
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 with respect to an account, including
selection of any of the features described below, shall continue in effect until
revoked or modified in writing and until such time as such written revocation or
modification has been received by the Fund or its agent.
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.
8
<PAGE>
Written Redemption and Exchange
You can write to the Fund at 1818 Market Street, Philadelphia, PA 19103 to
redeem some or all of your Class shares or to request an exchange of any or all
your Class 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, the Fund requires a signature by all
owners of the account and may require a signature guarantee. Each signature
guarantee must be supplied by an eligible guarantor institution. The Fund
reserves the right to reject a signature guarantee supplied by an eligible
institution based on its creditworthiness. The Fund may require further
documentation from corporations, executors, retirement plans, administrators,
trustees or guardians.
The redemption request is effective at the net asset value next determined
after it is received in good order. Payment is normally mailed the next business
day, but no later than seven days, after receipt of your request. The Fund does
not issue certificates for shares unless you submit a specific request. If your
shares are in certificate form, the certificate must accompany your request and
also be in good order.
Shareholders also may submit their written request for redemption or exchange
by facsimile transmission at the following number: 215-972-8864.
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 can only redeem or
exchange by written request and you must return your certificates.
The Telephone Redemption service enabling redemption proceeds to be mailed to
the account address of record and the Telephone Exchange service, both of which
are described below, are automatically provided unless you notify the Fund in
writing that you do not wish to have such service available with respect to your
account. The 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 Fund by telephone during periods when market or economic conditions
lead to an unusually large volume of telephone requests.
Neither the Fund nor the Transfer Agent is responsible for any shareholder
loss incurred in acting upon written or telephone instructions for redemption or
exchange of Class shares which are reasonably believed to be genuine. With
respect to such telephone transactions, the 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 record address. Checks will be payable to
the shareholder(s) of record. Payment is normally mailed the next business day,
but no later than seven days, after receipt of the 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, the Fund
requires a written authorization and may require that you 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. If you ask for a check, it will normally be mailed the next business
day, but no later than seven days, after receipt of your request to your
predesignated bank account. There are no fees for this 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.
9
<PAGE>
DIVIDENDS AND DISTRIBUTIONS
The Fund will make payments from net investment income and net realized
securities profits, if any, twice a year. The first payment would be made during
the first quarter of the next fiscal year. The second payment would be made near
the end of the calendar year if necessary to comply with certain requirements of
the Internal Revenue Code. During the fiscal year ended June 30, 1995,
distributions totaling $0.79 per share of the Class were paid from realized
securities profits. On August 7, 1995, a distribution of $0.55 per share of the
Class was paid from realized securities profits to shareholders of record
July 28, 1995.
Each class of the Fund will share proportionately in the investment income and
expenses of the Fund, except that the Class will not incur any distribution fee
under the 12b-1 Plans which apply to the Trend Fund A Class and the Trend Fund B
Class.
Both dividends and distributions, if any, are automatically reinvested in your
account at net asset value.
TAXES
The Fund has qualified, and intends to continue to qualify, as a regulated
investment company under Subchapter M of the Internal Revenue Code (the "Code").
As such, the 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.
The 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 you 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 the Fund that so qualifies
will be designated each year in a notice mailed to the Fund's shareholders.
Distributions paid by the 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 Fund does not seek to realize any particular
amount of capital gains during a year; rather, realized gains are a byproduct 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 the 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.
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 Fund and received by the shareholder
on December 31 of the year declared.
The sale of shares of the 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
two mutual funds (or two series or portfolios of a mutual fund). Any loss
incurred on sale or exchange of the Fund's shares which 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.
10
<PAGE>
In addition to federal taxes, shareholders may be subject to state and local
taxes on distributions. Distributions of interest income and capital gains
realized from certain types of U.S. Government securities may be exempt from
state personal income taxes. Shares of the Fund are exempt from Pennsylvania
county personal property taxes.
Each year, the Fund will mail you information on the tax status of the 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.
The Fund 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 Account Registration Form your proper Taxpayer
Identification Number and by certifying that you are not subject to backup
withholding.
The tax discussion set forth above is included for general information only.
Prospective investors should consult their own tax advisers concerning the
federal, state, local or foreign tax consequences of an investment in the Fund.
See Taxes in Part B for additional information on tax matters relating to the
Fund and its shareholders.
CALCULATION OF NET ASSET VALUE PER SHARE
The purchase and redemption price of the Class is the net asset value ("NAV")
per share of the Class 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 such 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.
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 the
Fund's Board of Directors.
Each of the Fund's three classes will bear, pro-rata, all of the common
expenses of the Fund. The net asset values of all outstanding shares of each
class of the Fund will be computed on a pro-rata basis for each outstanding
share based on the proportionate participation in the Fund represented by the
value of shares of that class. All income earned and expenses incurred by the
Fund will be borne on a pro-rata basis by each outstanding share of a class,
based on each class' percentage in the Fund represented by the value of shares
of such classes, except that the Class will not incur any of the expenses under
the Fund's 12b-1 Plans and Trend Fund A and B Classes alone will bear the 12b-1
Plan fees 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 and dividends paid to each class of the Fund will vary.
11
<PAGE>
MANAGEMENT OF THE FUND
Directors
The business and affairs of the Fund are managed under the direction of its
Board of Directors. Part B contains additional information regarding the
directors and officers.
Investment Manager
The Manager furnishes investment management services to the Fund.
The Manager and its predecessors have been managing the funds in the Delaware
Group since 1938. On June 30, 1995, the Manager and its affiliate, Delaware
International Advisers Ltd., were supervising in the aggregate more than $26
billion in assets in the various institutional (approximately $16,227,892,000)
and investment company (approximately $9,916,645,000) 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. As a result of the merger, DMH became a wholly-owned subsidiary and
the Manager became an indirect, wholly-owned subsidiary of Lincoln National and
both are now 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, a
new Investment Management Agreement between the Fund and the Manager was
executed following shareholder approval.
The Manager manages the Fund's portfolio and makes investment decisions which
are implemented by the Fund's Trading Department. The Manager also administers
the Fund's affairs and pays the salaries of all the directors, officers and
employees of the Fund who are affiliated with the Manager. For these services,
the Manager is paid an annual fee of 3/4 of 1% of the average daily net assets
of the Fund, less all directors' fees paid to unaffiliated directors. This fee
was paid by the Fund during the last fiscal year. This fee is higher than that
paid by many other funds. The fee may be higher or lower than that paid by funds
with comparable investment objectives. Investment management fees paid by the
Fund for the fiscal year ended June 30, 1995 were 0.75% of average daily net
assets.
Edward N. Antoian has primary responsibility for making day-to-day investment
decisions for the Fund. He has been the Fund's senior portfolio manager since
1984. A graduate of The State University of New York at Albany with an MBA in
Finance from the University of Pennsylvania's Wharton School, Mr. Antoian began
his career with Price Waterhouse. Prior to joining the Delaware Group in June
1984, he worked in the Institutional Equity Department of E.F. Hutton in
Philadelphia. A Chartered Financial Analyst, Mr. Antoian is a member of the
Philadelphia Finance Association and the Philadelphia Securities Association.
In making investment decisions for the Fund, Mr. Antoian regularly consults
with Wayne A. Stork, William H. Miller and other members of Delaware's equity
department. Mr. Stork, Chairman of the Manager and the Fund's Board of
Directors, is a graduate of Brown University and attended New York University's
Graduate School of Business Administration. Mr. Miller is an Assistant Portfolio
Manager. He holds a BA in Economics from Trinity College. Prior to joining the
Delaware Group in 1995, he worked as a technology analyst for Janney Montgomery
Scott in Philadelphia and he has also served as an institutional salesman for
Rutherford Brown & Catherwood.
12
<PAGE>
Portfolio Trading Practices
The Fund normally will not invest for short-term trading purposes. However,
the 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 the Fund
and may affect taxes payable by the Fund's shareholders. Given the Fund's
investment objective, its annual portfolio turnover rate may exceed 100%. A
turnover rate of 100% would occur, for example, if all the investments in the
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. During the past two fiscal years,
the Fund's portfolio turnover rates were 67% for 1994 and 64% for 1995.
The 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, the Fund may consider a
broker/dealer's sales of Fund shares in placing portfolio orders and may place
orders with broker/dealers that have agreed to defray certain Fund expenses such
as custodian fees.
Performance Information
From time to time, the Fund may quote total return performance of the 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 periods. The Fund may also advertise
aggregate and average total return information concerning the Class over
additional periods of time.
Because stock prices fluctuate, investment results of the Class will fluctuate
over time and past performance should not be considered as a representation of
future results.
Statements and Confirmations
You will receive quarterly statements of your account as well as confirmations
of all investments and redemptions. You should examine statements and
confirmations immediately and promptly report any discrepancy by calling your
Client Services Representative.
Financial Information about the Fund
Each fiscal year, you will receive an audited annual report and an unaudited
semi-annual report. These reports provide detailed information about the Fund's
investments and performance. The Fund's fiscal year ends on June 30.
13
<PAGE>
Distribution and Service
The Distributor, Delaware Distributors, L.P. (which formerly conducted
business as Delaware Distributors, Inc.), serves as the national distributor for
the Fund under a Distribution Agreement dated April 3, 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 the Fund under an
Agreement dated June 29, 1988. The directors annually review service fees paid
to the Transfer Agent. 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 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 by the
employer. Fees will be quoted upon request and are subject to change.
The Distributor and the Transfer Agent are also indirect, wholly-owned
subsidiaries of DMH.
Expenses
The Fund is responsible for all of its own expenses other than those borne by
the Manager under the Investment Management Agreement and those borne by the
Distributor under the Distribution Agreement. The ratio of operating expenses to
average daily net assets for the Class was 1.12% for the fiscal year ended
June 30, 1995.
Shares
The Fund is an open-end management investment company. The Fund's portfolio of
assets is diversified for purposes of the 1940 Act. Commonly known as a mutual
fund, the Fund was organized as a Maryland corporation on March 4, 1983.
Previously, it was a Delaware corporation organized in 1966.
Fund shares have a par value of $.50, equal voting rights, except as noted
below, and are equal in all other respects. All Fund shares have noncumulative
voting rights which means that the holders of more than 50% of the Fund's shares
voting for the election of directors can elect 100% of the directors if they
choose to do so. Under Maryland law, the Fund 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 the Fund's shares may request that a special meeting be called to
consider the removal of a director.
The Fund also offers the Trend Fund A Class and the Trend Fund B Class of
shares which represent proportionate interests in the assets of the Fund and
have the same voting and other rights and preferences as the Class, except that
shares of the Class are not subject to, and may not vote on matters affecting,
the Distribution Plans under Rule 12b-1 relating to the Trend Fund A Class and
the Trend Fund B Class.
Prior to September 6, 1994, the Trend Fund Institutional Class was known as
the Trend Fund (Institutional) class and the Trend Fund A Class was known as the
Trend Fund class.
14
<PAGE>
Trend
Fund [PHOTO OF GEORGE WASHINGTON
- ------------ CROSSING THE DELAWARE RIVER]
Institutional
PROSPECTUS
OCTOBER 31, 1995
DELAWARE
GROUP
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
and Transfer Agent
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103
Legal Counsel
Stradley, Ronon, Stevens & Young
One Commerce Square
Philadelphia, PA 19103
Independent Auditors
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103
Custodian
Chemical Bank
450 West 33rd Street
New York, NY 10001
P-043[--] RRD895
Printed in the U.S.A.
<PAGE>
- --------------------------------------------------------------------------------
TREND FUND
- --------------------------------------------------------------------------------
A CLASS
- --------------------------------------------------------------------------------
B CLASS
- --------------------------------------------------------------------------------
INSTITUTIONAL CLASS
- --------------------------------------------------------------------------------
CLASSES OF DELAWARE GROUP
- --------------------------------------------------------------------------------
TREND FUND, INC.
- --------------------------------------------------------------------------------
PART B
Statement of
Additional Information
- --------------------------------------------------------------------------------
OCTOBER 31, 1995
DELAWARE
GROUP
--------
The Delaware Group includes funds with a wide range of investment objectives.
Stock funds, income funds, tax-free funds, money market funds, global and
international funds and closed-end equity 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, in Philadelphia call
215-988-1333 and shareholders of the Institutional Class 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
AND TRANSFER AGENT
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young
One Commerce Square
Philadelphia, PA 19103
INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103
CUSTODIAN
Chemical Bank
450 West 33rd Street
New York, NY 10001
AI-003/AI-064/AI-043 [6/95] UG895
<PAGE>
- --------------------------------------------------------------------------------
PART B--STATEMENT OF ADDITIONAL INFORMATION
OCTOBER 31, 1995
- --------------------------------------------------------------------------------
DELAWARE GROUP
- --------------------------------------------------------------------------------
TREND FUND, INC.
- --------------------------------------------------------------------------------
1818 Market Street
Philadelphia, PA 19103
- --------------------------------------------------------------------------------
For more information about the Trend Fund
Institutional Class: 800-828-5052
For Prospectus and Performance of the Trend Fund
A Class and the Trend Fund B Class:
Nationwide 800-523-4640
Philadelphia 215-988-1333
Information on Existing Accounts of the Trend Fund
A Class and the Trend Fund B Class:
(SHAREHOLDERS ONLY)
Nationwide 800-523-1918
Philadelphia 215-988-1241
Dealer Services:
(BROKER/DEALERS ONLY)
Nationwide 800-362-7500
Philadelphia 215-988-1050
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Cover Page 1
- --------------------------------------------------------------------------------
Investment Objective and Policies 2
- --------------------------------------------------------------------------------
Performance Information 4
- --------------------------------------------------------------------------------
Trading Practices and Brokerage 7
- --------------------------------------------------------------------------------
Purchasing Shares 8
- --------------------------------------------------------------------------------
Investment Plans 14
- --------------------------------------------------------------------------------
Determining Offering Price and
Net Asset Value 17
- --------------------------------------------------------------------------------
Redemption and Repurchase 17
- --------------------------------------------------------------------------------
Dividends and Realized Securities Profits
Distributions 20
- --------------------------------------------------------------------------------
Taxes 21
- --------------------------------------------------------------------------------
Investment Management Agreement 21
- --------------------------------------------------------------------------------
Officers and Directors 22
- --------------------------------------------------------------------------------
Exchange Privilege 25
- --------------------------------------------------------------------------------
General Information 27
- --------------------------------------------------------------------------------
Appendix A--IRA Information 29
- --------------------------------------------------------------------------------
Appendix B--Performance Overview 33
- --------------------------------------------------------------------------------
Appendix C--The Company Life Cycle 36
- --------------------------------------------------------------------------------
Financial Statements 37
- --------------------------------------------------------------------------------
Delaware Group Trend Fund, Inc. (the "Fund") is a professionally-managed
mutual fund. The Fund offers three classes (individually, a "Class" and
collectively, the "Classes") of shares--the Trend Fund A Class (the "Class A
Shares"), the Trend Fund B Class (the "Class B Shares") (Class A Shares and
Class B Shares together, referred to as "Fund Classes") and the Trend Fund
Institutional Class (the "Institutional Class"). Class B Shares and
Institutional Class shares 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. The Class A Shares are subject to a
maximum front-end sales charge of 5.75% and annual 12b-1 Plan expenses. The
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 12b-1 Plan
expenses which are higher than those to which Class A Shares are subject and are
assessed against the Class B Shares for no longer than approximately eight years
after purchase. See Automatic Conversion of Class B Shares in the Fund Classes'
Prospectus. All references to "shares" in this Statement of Additional
Information ("Part B" of the registration statement) refer to all Classes of
shares of the Fund, except where noted.
This Part B supplements the information contained in the current Prospectuses
for the Fund Classes and the Institutional Class dated October 31, 1995, as may
be amended from time to time. It 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
Class may be obtained by writing or calling your investment dealer or by
contacting the Fund's national distributor, Delaware Distributors, L.P. (the
"Distributor"), 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The objective of the Fund, which is a fundamental policy and cannot be changed
without shareholder approval, is capital appreciation. The strategy is to invest
primarily in the common stocks and securities convertible into common stocks of
emerging and other growth-oriented companies that, in the judgment of Delaware
Management Company, Inc. (the "Manager"), are responsive to changes within the
marketplace and have the fundamental characteristics to support growth. Income
will not be a significant investment factor except so far as future dividend
growth may affect market appraisal of a security. Purchases and sales of
portfolio securities will be based upon management's judgment of economic and
market trends in addition to fundamental investment analysis. The Fund will seek
to identify changing and dominant trends affecting securities values which it
believes will offer the opportunities for growth of capital, such as trends in
the overall economic environment (including social, political, monetary and
technological trends); trends within a company and its industry reflected by,
for example, improving managerial skills, new product development and sales and
earnings trends; and trends in market prices of various types of categories of
investments. Since the production of income is not an objective of the Fund, any
income earned and paid to shareholders will likely be minimal. An investor
should not consider a purchase of Fund shares as equivalent to a complete
investment program.
Although the Fund will constantly strive to attain the objective of capital
appreciation, of course there can be no assurance that it will be attained. It
also should be borne in mind that investing in securities believed to have a
potential for capital appreciation may involve exposure to a greater risk than
securities which do not have growth characteristics, and that the shares of the
Fund will fluctuate in value. Investing for this objective, the Fund usually
will invest in common stocks or securities convertible into common stocks of
emerging and other growth-oriented companies, some of which may be of a
speculative nature and subject the Fund to an additional risk. However, from
time to time, the Fund may, in its judgment, depending upon prevailing
circumstances, and for defensive purposes without limit as to the proportion of
assets invested, hold varying proportions of cash, U.S. Government securities,
nonconvertible securities and straight debt securities.
In investing for capital appreciation, the Fund may hold securities for any
period of time. See Portfolio Turnover under Trading Practices and Brokerage.
While the Fund is permitted to do so, it normally does not invest in
repurchase agreements, except to invest excess cash balances. A repurchase
agreement is a short-term investment by which the purchaser 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. 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. The 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, the Fund must have collateral
of at least 100% of the repurchase price, including the portion representing the
Fund's yield under such agreements which is monitored on a daily basis.
The funds in the Delaware Group have obtained an exemption from the joint-
transaction prohibitions of Section 17(d) of the Investment Company Act of 1940
(the "1940 Act") to allow the Delaware Group funds jointly to invest cash
balances. The Fund 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.
While the Fund is permitted under certain circumstances to borrow money and
invest in investment company securities, it does not normally do so. Investment
securities will not normally be purchased while the Fund has an outstanding
borrowing.
The Fund may purchase privately placed securities which may be resold only in
privately negotiated transactions, in accordance with an exemption from
registration under applicable securities laws or after registration. The
registration process may involve delays which could result in the Fund obtaining
a less favorable price on resale. In addition, to the extent that there is no
established trading market for restricted securities, it will be more difficult
for the Fund to obtain precise valuations for such securities in its portfolio.
As a result, judgment may play a greater role in valuing such securities than is
normally the case.
Certain of the privately placed securities acquired by the Fund will be
eligible for resale pursuant to Rule 144A under the Securities Act of 1933
("Rule 144A Securities"). The Fund's Board of Directors has instructed the
Manager to consider the following factors in determining the liquidity of Rule
144A Securities: (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).
Investing in Rule 144A Securities could have the effect of increasing the level
of the Fund's illiquidity to the extent that qualified institutional buyers
become, for a period of time, uninterested in purchasing these securities.
Although it is not a matter of fundamental policy, the Fund may invest not
more than 5% of its assets in foreign securities. Foreign markets may be more
volatile than U.S. markets. Such investments involve sovereign risk in addition
to the normal risks associated with American securities. These risks include
political risks, foreign taxes and exchange controls and currency fluctuations.
For
2
<PAGE>
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 decrease with a rise in the value of the
dollar) and control regulations apart from market fluctuations. The Fund may
also experience delays in foreign securities settlement.
Portfolio Loan Transactions
The 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 the Manager that the staff of the Securities and
Exchange Commission 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 the 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; 6) the voting rights on the lent securities may pass to the
borrower; however, if the directors of the Fund 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 the 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, the 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.
Investment Restrictions
The Fund has the following investment restrictions which may not be amended
without approval of a majority of the outstanding voting securities, which is
the lesser of a) 67% or more of the voting securities present in person or by
proxy at a meeting if the holders of more than 50% of the outstanding voting
securities are present or represented by proxy; or b) more than 50% of the
outstanding voting securities. 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.
3. Not to purchase or retain securities of any company which has an officer
or director who is an officer or director of the Fund, or an officer, director
or partner of its investment manager if, to the knowledge of the Fund, 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. Not to invest in securities of other investment companies except at
customary brokerage commissions rates or in connection with mergers,
consolidations or offers of exchange.
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
the Fund's assets or (c) own securities of investment companies having an
aggregate value in excess of 10% of the Fund's assets.
6. 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 the Fund's purchase of securities issued by real estate investment
trusts.) Any investment in real estate together with any investment in illiquid
assets cannot exceed 10% of the value of the Fund's assets.
7. Not to sell short any security or property.
8. Not to deal in commodities.
9. Not to borrow money in excess of 10% of the value of its assets, and then
only as a temporary measure for extraordinary or emergency purposes. Any
borrowing will be done from a bank and to the extent that such borrowing exceeds
5% of the value of the Fund's assets, asset coverage of at least 300% is
required. In the event that such asset coverage shall at any time fall below
300%, the Fund 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%. The
Fund shall not issue senior securities as defined in the Investment Company Act
of 1940, except for notes to banks.
10. 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
the Fund and the 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.
11. 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.
12. Not to act as an underwriter of securities of other issuers.
13. No long or short positions on shares of the Fund may be taken by its
officers, directors or any of its affiliated
3
<PAGE>
persons. Such persons may buy shares of the Fund for investment purposes,
however, as described under Purchasing Shares.
14. Not to invest more than 25% of its assets in any one particular industry.
Although it is not a matter of fundamental policy, the Fund has also made a
commitment that it will not invest in warrants valued at the lower of cost or
market exceeding 5% of the Fund's net assets. Included within that amount, but
not to exceed 2% of the Fund's net assets, may be warrants not listed on the New
York Stock Exchange or American Stock Exchange. In addition, although not a
fundamental investment restriction, the Fund currently does not invest its
assets in real estate limited partnerships or oil, gas and other mineral leases.
PERFORMANCE INFORMATION
From time to time, the Fund may state each Class' total return in
advertisements and other types of literature. Any statements of total return
performance data for a Class will be accompanied by information on the average
annual compounded rate of return for that Class over, as relevant, the most
recent one-, five- and ten-year periods. The Fund may also advertise aggregate
and average total return information of each Class over additional 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:
P(1+T)(to the nth power) = ERV
Where: P = a hypothetical initial purchase order
of $1,000 from which the maximum
front-end sales charge with respect to
Class A Shares, if any, 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.
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 the Class B Shares, includes
the CDSC that would be applicable upon complete redemption of such shares. In
addition, the Fund may present total return information that does not reflect
the deduction of the maximum front-end sales charge or any applicable CDSC.
The performance of the Class A Shares and the Institutional Class, as shown
below, is the average annual total return quotations for the one-, three-,
five-, ten- and fifteen-year periods ended June 30, 1995 and for the life of
these Classes, computed as described above. The average annual total return for
the Class A Shares at offer reflects the maximum front-end sales charges paid on
the purchase of shares. The average annual total return for the Class A Shares
at net asset value (NAV) does not reflect the payment of the maximum front-end
sales charge of 5.75%. Stock prices fluctuated during the periods covered and
past results should not be considered as representative of future performance.
Pursuant to applicable regulation, total return shown for the Institutional
Class for the periods prior to the commencement of operations of such Class is
calculated by taking the performance of the Class A Shares 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.
<TABLE>
<CAPTION>
Average Annual Total Return
Class A Class A
Shares/1/ Shares/1/ Institutional
(At Offer) (At NAV) Class/2/
<S> <C> <C> <C>
1 year ended 6/30/95 17.29% 24.40% 24.74%
3 years ended 6/30/95 16.85% 19.17% 19.40%
5 years ended 6/30/95 14.44% 15.81% 15.94%
10 years ended 6/30/95 14.96% 15.64% 15.71%
15 years ended 6/30/95 16.40% 16.86% 16.91%
Period 10/3/68/3/
through 6/30/95 8.49% 8.73% 8.75%
</TABLE>
/1/ Class A Shares began paying 12b-1 payments on June 1, 1992 and performance
prior to that date does not reflect such payments.
/2/ Date of initial public offering was November 23, 1992.
/3/ Date of initial public offering of Class A Shares.
The performance of the Class B Shares, as shown below, is the aggregate total
return quotation for the period September 6, 1994 (date of initial public
offering) through June 30, 1995. The aggregate 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 June 30, 1995. The aggregate
total return for Class B Shares excluding deferred sales charge assumes the
shares were not redeemed at June 30, 1995 and therefore does not reflect the
deduction of a CDSC.
<TABLE>
<CAPTION>
Aggregate Total Return
Class B Shares Class B Shares
(Including (Excluding
Deferred Deferred
Sales Charge) Sales Charge)
<S> <C> <C>
Period 9/6/94/1/ through 6/30/95 12.68% 16.68%
</TABLE>
/1/ Date of initial public offering of Class B Shares; total return for this
short of a time period may not be representative of longer-term results.
From time to time, the Fund may also quote each Class' 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
4
<PAGE>
Standard and Poor's 500 Stock Index and the Dow Jones Industrial Average and
other unmanaged indices.
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 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. In seeking a particular investment objective, the Fund's
portfolio primarily includes common stocks considered by the Manager to be more
aggressive than those tracked by these indices.
Comparative information on the Consumer Price Index and the CDA Growth 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 Growth Index was
developed and is maintained by CDA Technologies, Inc. The Index is comprised of
230 separately-managed, growth-oriented equity mutual funds. It reflects the
reinvestment of any dividend and capital gains distributions paid during a
specified period.
Statistical and performance information and various indices compiled and
maintained by organizations such as the following may also be used in preparing
exhibits comparing certain industry trends and competitive mutual fund
performance to comparable Fund activity and performance 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 the Fund. Any indices used are not
managed for any investment goal.
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.
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.
The Fund may also state total return performance for each Class in the form of
an average annual return. This average annual return figure will be computed by
taking the sum of a Class' 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 or contingent deferred sales charge, if any,
paid on the illustrated investment amount against the first year's return. From
time to time, the Fund may quote actual total return performance for each Class
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 following table is an example, for the purposes of illustration only, of
cumulative total return performance for the Class A Shares and the Institutional
Class for the three-, six- and nine-month periods ended June 30, 1995, for the
one-, three-, five-, ten- and fifteen-year periods ended June 30, 1995 and for
the life of these Classes. For these purposes, the calculations assume the
reinvestment of any capital gains distributions and income dividends paid during
the indicated periods. Comparative information on the Standard & Poor's 500
Stock Index, the Dow Jones Industrial Average and the NASDAQ Composite Index is
also included.
The performance of the Class A Shares and the Institutional Class, as shown
below, reflects maximum front-end sales charges, if any, paid on the purchase of
shares, as applicable, but not any income taxes payable by shareholders on the
reinvested distributions included in the calculations. The net asset value of a
Class fluctuates so shares, when redeemed, may be worth more or less than the
original investment, and a Class' results should not be considered as
representative of future performance.
5
<PAGE>
<TABLE>
<CAPTION>
Cumulative Total Return
Class A Standard
Shares/1/ Institutional & Poor's Dow Jones NASDAQ
(at Offer) Class/2/ 500 Industrial Composite
<S> <C> <C> <C> <C> <C>
3 months ended
6/30/95 4.8% 11.2% 9.5% 10.3% 14.2%
6 months ended
6/30/95 14.0% 21.1% 20.2% 20.4% 24.1%
9 months ended
6/30/95 10.0% 16.9% 20.2% 21.0% 22.1%
1 year ended
6/30/95 17.3% 24.7% 26.1% 29.2% 32.2%
3 years ended
6/30/95 59.6% 70.2% 45.2% 49.5% 65.6%
5 years ended
6/30/95 96.3% 109.5% 76.8% 84.1% 101.9%
10 years ended
6/30/95 303.3% 330.3% 292.7% 380.6% 215.1%
15 years ended
6/30/95 875.3% 941.3% 743.8% 872.1% 491.6%
Period 10/3/68/3/
through 6/30/95 782.8% 842.2% 1,404.1% 1,418.7% N/A
</TABLE>
/1/ Class A Shares began paying 12b-1 payments on June 1, 1992 and performance
prior to that date does not reflect such payments.
/2/ Date of initial public offering was November 23, 1992. Pursuant to
applicable regulation, total return shown for the Institutional Class for
the periods prior to the commencement of operations of such Class is
calculated by taking the performance of the Class A Shares 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/ Date of initial public offering of Class A Shares.
The performance of the Class B Shares, as shown below, is the cumulative total
return quotation for the three-, six- and nine-month periods ended June 30, 1995
and for the life of this Class. The aggregate 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 June 30, 1995. The aggregate
total return for Class B Shares excluding deferred sales charge assumes the
shares were not redeemed at June 30, 1995 and therefore does not reflect the
deduction of a CDSC. Comparative information on the Standard & Poor's 500 Stock
Index, the Dow Jones Industrial Average and the NASDAQ Composite Index is also
included.
<TABLE>
<CAPTION>
Cumulative Total Return
Class B Class B
Shares Shares
(Including (Excluding
Deferred Deferred Standard
Sales Sales & Poor's Dow Jones NASDAQ
Charge) Charge) 500 Industrial Composite
<S> <C> <C> <C> <C> <C>
3 months ended
6/30/95 6.9% 10.9% 9.5% 10.3% 14.2%
6 months ended
6/30/95 16.5% 20.5% 20.2% 20.4% 24.1%
9 months ended
6/30/95 12.1% 16.1% 20.2% 21.0% 22.1%
Period 9/6/94/1/
through 6/30/95 12.7% 16.7% 18.1% 19.5% 22.9%
</TABLE>
/1/ Date of initial public offering of Class B Shares; total return for this
short of a time period may not be representative of longer-term results.
For additional performance information, see Appendix B.
Because every investor's goals and risk threshold are different, the
Distributor, as distributor for the Fund and 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
personal 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 the 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.
THE POWER OF COMPOUNDING
When you opt to reinvest your current income for additional Fund shares, your
investment is given yet another opportunity to grow. It's called the Power of
Compounding and the following chart illustrates just how powerful it can be.
6
<PAGE>
COMPOUNDED RETURNS
Results of various assumed fixed rates of return on a $10,000 investment
compounded monthly for 10 years:
[BAR GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
9% Rate of Return 11% Rate of Return 13% Rate of Return
----------------- ------------------ ------------------
<S> <C> <C> <C>
Dec. '85 $10,938 $11,157 $11,380
Dec. '86 11,964 12,448 12,951
Dec. '87 13,086 13,889 14,739
Dec. '88 14,314 15,496 16,773
Dec. '89 15,657 17,289 19,089
Dec. '90 17,126 19,289 21,723
Dec. '91 18,732 21,522 24,722
Dec. '92 20,489 24,012 28,134
Dec. '93 22,411 26,791 31,017
Dec. '94 24,514 29,891 36,437
</TABLE>
These figures are calculated assuming a fixed constant investment return and
assume no fluctuation in the value of principal. These figures do not reflect
payment of applicable taxes, are not intended to be a projection of investment
results and do not reflect the actual performance results of any of the Classes.
TRADING PRACTICES AND BROKERAGE
The Fund selects brokers or dealers to execute transactions 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 the Fund either
buys the 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, the Fund pays reasonably competitive
brokerage commission rates based upon the professional knowledge of its trading
department as to rates paid and charged for similar transactions throughout the
securities industry. In some instances, the Fund pays a minimal share
transaction cost when the transaction presents no difficulty.
During the fiscal years ended June 30, 1993, 1994 and 1995, the aggregate
dollar amounts of brokerage commissions paid by the Fund were $205,614, $188,574
and $542,083, 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 June 30, 1995, portfolio transactions of the Fund
in the amount of $58,447,750, resulting in brokerage commissions of $258,819,
were directed to brokers for brokerage and research services provided.
As provided in the Securities Exchange Act of 1934 and the 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 Fund believes 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 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 the 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
7
<PAGE>
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 the Fund's Board of Directors that the advantages of combined
orders outweigh the possible disadvantages of separate transactions.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. (the "NASD"), and subject to seeking best price and
execution, the Fund may place orders with broker/dealers that have agreed to
defray certain Fund expenses such as custodian fees, and may, at the request of
the Distributor, give consideration to sales of shares of the Fund as a factor
in the selection of brokers and dealers to execute Fund portfolio transactions.
Portfolio Turnover
In investing for capital appreciation, the Fund may hold securities for any
period of time. It is anticipated that, given the Fund's investment objective,
its annual portfolio turnover rate will be higher than that of many other
investment companies. A turnover rate of 100% would occur, for example, if all
the investments in the Fund's portfolio at the beginning of the year were
replaced by the end of the year. The degree of portfolio activity will affect
brokerage costs of the Fund and may affect taxes payable by the Fund's
shareholders. Total brokerage costs generally increase with higher portfolio
turnover rates. To the extent the Fund realizes gains on securities held for
less than six months, such gains are taxable to the shareholder or to the Fund
at ordinary income tax rates. The turnover rate also may be affected by cash
requirements from redemptions and repurchases of Fund shares.
The portfolio turnover rate of the 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, the Fund's portfolio turnover rates were 67%
for 1994 and 64% for 1995.
PURCHASING SHARES
The Distributor serves as the national distributor for the Fund's three
classes of shares--the Class A Shares, the Class B Shares and the Institutional
Class, and has agreed to use its best efforts to sell shares of the Fund. See
the Prospectuses for information on how to invest. Shares of the Fund are
offered on a continuous basis, and may be purchased through authorized
investment dealers or directly by contacting the Fund or its agent. The minimum
for initial investments with respect to the Class A Shares is $250 and with
respect to the Class B Shares is $1,000. The minimum initial investment with
respect to 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.
For any subsequent investment, the investment minimum is $25 with respect to the
Class A Shares and $100 with respect to the Class B Shares. The minimum
subsequent investment with respect to the 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. Class B Shares are also subject to a maximum
purchase limitation of $250,000. The Fund will therefore reject any order for
purchase of more than $250,000 of Class B Shares. (See Investment Plans for
minimums applicable to each of the Fund's master Retirement Plans.) There are no
minimum purchase requirements for the Institutional Class, but certain
eligibility requirements must be satisfied. Selling dealers have the
responsibility of transmitting orders promptly. The Fund reserves the right to
reject any order for the purchase of its shares if in the opinion of management
such rejection is in the Fund's best interest.
Certificates representing shares purchased are not ordinarily issued unless a
shareholder submits a specific request. Certificates are not issued in the case
of the Class B Shares. 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 shares purchased by
sending a letter to the Transfer Agent requesting the certificate. No charge is
made for any certificate issued. 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.
8
<PAGE>
The NASD has adopted amendments to its Rules of Fair Practice relating to
investment company sales charges. The Fund 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 5.75%; 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 12b-1 Plan expenses which are higher than those to which Class A
Shares are subject and are assessed against the Class B Shares for no longer
than approximately eight years after purchase. See Automatic Conversion of Class
B Shares in the Fund Classes' Prospectus, and Determining Offering Price and Net
Asset Value and Plans Under Rule 12b-1 for the Fund Classes in this Part B.
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. Institutional Class shares, Class A Shares and Class B
Shares represent a proportionate interest in the Fund's assets and will receive
a proportionate interest in the Fund's income, before application, as to the
Class A and Class B Shares, of any expenses under the Fund's 12b-1 Plans.
Alternative Purchase Arrangements
The alternative purchase arrangements of the Class A and Class B Shares permit
investors to choose the method of purchasing shares that is most beneficial
given the amount of their purchase, the length of time they expect to hold their
shares and other relevant circumstances. Investors should determine whether,
under their particular circumstances, it is more advantageous to purchase the
Class A Shares and incur a front-end sales charge and annual 12b-1 Plan expenses
of up to a maximum of .30% of the av erage daily net assets of the Class A
Shares or to purchase the Class B Shares and have the entire initial purchase
price invested in the Fund with the investment thereafter subject to a CDSC if
shares are redeemed within six years of purchase and annual 12b-1 Plan expenses
of 1% (.25% of which are service fees to be paid by the Fund to the Distributor,
dealers or others for providing personal service and/or maintaining shareholder
accounts) of the average daily net assets of the Class B Shares for no longer
than approximately eight years after purchase.
Class A Shares
Purchases of $100,000 or more of the Class A Shares at the offering price
currently 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 for more information on ways in which investors can avail
themselves of reduced front-end sales charges and other purchase features.
<TABLE>
<CAPTION>
Class A Shares
- --------------------------------------------------------------------------------------
Front-End Sales Charge Dealer's
as % of Concession**
Amount of Purchase Offering Amount as % of
Price Invested Offering Price
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $100,000 5.75% 6.12% 5.00%
$100,000 but under $250,000 4.75 4.99 4.00
$250,000 but under $500,000 3.50 3.63 3.00
$500,000 but under $1,000,000* 3.00 3.09 2.60
</TABLE>
*There is no front-end sales charge on purchases of $1 million or more but,
under certain limited circumstances, a 1% contingent deferred sales charge may
apply. The contingent deferred sales charge ("Limited CDSC") that may be
applicable to purchases of Class A Shares arises only in the case of certain
net asset value purchases which have triggered the payment of a dealer's
commission.
- --------------------------------------------------------------------------------
The Fund must be notified when a sale takes place which would qualify for the
reduced front-end sales charge on the basis of previous purchases and current
purchases. The reduced front-end sales charge will be granted upon confirmation
of the shareholder's holdings by the 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 dealers up to the full front-end sales charge shown above. Dealers
who receive 90% or more of the sales charge may be deemed to be underwriters
under the Securities Act of 1933.
**Financial institutions or their affiliated brokers may receive an agency
transaction fee in the percentages set forth above.
- --------------------------------------------------------------------------------
Certain dealers who enter into an agreement to provide extra training and
information on Delaware Group products and services and to increase sales of
Delaware Group funds may receive an additional concession of up to .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 concession will be paid. Participating dealers may be
deemed to have additional responsibilities under the securities laws.
Dealer's Commission--Class A Shares
For initial purchases of Class A Shares of $1,000,000 or more made on or after
June 1, 1993, 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:
<TABLE>
<CAPTION>
Dealer's Commission
-------------------
Amount of Purchase (as a percentage of
------------------ amount purchased)
<S> <C>
Up to $2 million 1.00%
Next $1 million up to $3 million .75
Next $2 million up to $5 million .50
Amount over $5 million .25
</TABLE>
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
9
<PAGE>
applies (see Redemption and Repurchase) may be aggregated with those of the
Class A Shares of the Fund. Financial advisers should contact the Distributor
concerning the applicability and calculation of the dealer's commission in the
case of combined purchases. 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. The Distributor
also should be consulted concerning the availability of and program for these
payments.
An exchange from other Delaware Group funds will not qualify for payment of
the dealer's commission, unless such exchange is from a Delaware Group fund with
assets as to which a dealer's commission or similar payment has not been
previously paid. The schedule and program for payment of the dealer's commission
are subject to change or termination at any time by the Distributor in its
discretion.
Class B Shares
Class B Shares are purchased without the imposition of a front-end sales
charge at the time of purchase. Class B Shares redeemed within six years of
purchase may be subject to a CDSC at the rates set forth below, charged as a
percentage of the dollar amount subject thereto. 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 the shares at the time of
redemption. Accordingly, no CDSC will be imposed on increases in net asset value
above the initial purchase price. In addition, no CDSC will be assessed on
redemption of shares received upon reinvestment of dividends or capital gains.
See the Prospectus for the Fund Classes under Buying Shares--Contingent Deferred
Sales Charge for a list of the instances in which the CDSC is waived.
The following table sets forth the rates of the CDSC for the Class B Shares of
the Fund:
<TABLE>
<CAPTION>
Contingent Deferred
Sales Charge
(as a Percentage of
Year After Dollar Amount
Purchase Made Subject to Charge)
------------- -------------------
<S> <C>
0-2 4%
3-4 3%
5 2%
6 1%
7 and thereafter None
</TABLE>
During the seventh year after purchase and, thereafter, until converted
automatically into Class A Shares of the Fund, the Class B Shares will continue
to be subject to annual 12b-1 Plan expenses of 1% of average daily net assets
representing such shares. At the end of no longer than approximately eight years
after purchase, the investor's Class B Shares will be automatically converted
into Class A Shares of the Fund. See Automatic Conversion of Class B 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, the Fund has adopted a separate
plan for each of the Class A Shares and the Class B Shares of the Fund (the
"Plans"). The Plan relating to the Class A Shares permits the Fund to pay for
certain distribution, promotional and related expenses involved in the marketing
of only the Class A Shares. Similarly, the Plan relating to the Class B Shares
permits the Fund to pay for certain distribution, promotional and related
expenses involved in the marketing of only the Class B Shares. The Plans do not
apply to the Institutional Class 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 the Institutional Class shares. Shareholders of
the Institutional Class may not vote on matters affecting the Plans.
The Plans permit the Fund, pursuant to the Distribution Agreement, to pay out
of the assets of the Class A Shares and Class B 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 12b-1 Plan expenses relating to the
Class B 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, the Fund may make payments out of the assets of the Class A
Shares and the Class B Shares directly to other unaffiliated parties, such as
banks, who either aid in the distribution of shares of the Fund Classes or
provide services to such classes.
The maximum aggregate fee payable by the Fund under the Plans, and the Fund's
Distribution Agreement, is on an annual basis .30% of the Class A Shares'
average daily net assets for the year, and 1% (.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 the Class B Shares' average daily
net assets for the year. The Fund's Board of Directors may reduce these amounts
at any time.
Effective June 1, 1992, the Board of Directors has determined that the annual
fee, payable on a monthly basis, for the Class A Shares, under its Plan, will be
equal to the sum of: (i) the amount obtained by multiplying .30% by the average
daily net assets represented by shares of the Class A Shares that were acquired
by shareholders on or after June 1, 1992, and (ii) the amount obtained by
multiplying .10% by the average daily net assets represented by shares of the
Class A Shares that were acquired before June 1, 1992. While this is the method
for calculating the 12b-1 fees to be paid by the Class A Shares, 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
10
<PAGE>
same per share rate. As Class A Shares are sold on or after June 1, 1992, the
initial rate of at least .10% will increase over time. Thus, as the proportion
of Class A Shares purchased on or after June 1, 1992 to Class A Shares
outstanding prior to June 1, 1992 increases, the expenses attributable to
payments under the Plan will also increase (but will not exceed .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 .30% on all Class A Shares assets at any time.
All of the distribution expenses incurred by the Distributor and others, such
as broker/dealers, in excess of the amount paid on behalf of the Class A and
Class B Shares would be borne by such persons without any reimbursement from
such classes. Subject to seeking best price and execution, the 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, the Distribution Agreement and the services agreement relating
thereto have all been approved by the Board of Directors of the Fund,
including a majority of the directors who are not "interested persons" (as
defined in the 1940 Act) of the Fund and who have no direct or indirect
financial interest in the Plans or any related agreements, 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, the Distribution Agreement and
the form of services agreement 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, the Class A Shares
and the Class B Shares and that there is a reasonable likelihood of the Plan
relating to a Fund Class providing a benefit to that Class. The Plans, the
Distribution Agreement and the services agreement with any broker/dealers or
others relating to a Fund Class may be terminated at any time without penalty
by a majority of those directors who are not "interested persons" or by a
majority vote of the outstanding voting securities of the relevant Fund
Class. Any amendment materially increasing the percentage payable under the
Plans must likewise be approved by a majority vote of the outstanding voting
securities of the relevant Fund Class, as well as by a majority vote of those
directors who are not "interested persons." 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 the Fund 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 the Fund 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 June 30, 1995, payments from the Class A Shares
pursuant to its Plan amounted to $671,067 and such payments were used for the
following purposes: Annual and Semi-Annual Reports--$23,141; Broker Trails--
$522,922; Commissions to Wholesalers--$73,738; Promotional-Broker Meetings--
$9,113; Promotional-Other--$15,052; Telephone--$2,095; Wholesaler Expenses--
$22,343; and Prospectus Printing--$2,663.
For the period September 6, 1994 (date of initial public offering) through
June 30, 1995, payments from the Class B Shares pursuant to its Plan amounted
to $16,004 and such payments were used for the following purposes: Broker
Sales Charges--$5,902; Commissions to Wholesalers--$815; Promotional-Broker
Meetings--$48; Telephone--$25; Interest on Broker Sales Charges--$5,300; and
Broker Trails--$3,914.
Other Payments to Dealers--Class A and Class B 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 .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.
In connection with the sale of Delaware Group fund shares, the Distributor
may, at its own expense, pay to participate in or reimburse dealers with whom
it has a selling agreement for expenses incurred in connection with seminars
and conferences sponsored by such dealers and may pay or allow additional
promotional incentives, 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, in the form of sales contests to
dealers who sell shares of the funds. Such seminars and conferences and the
terms of such sales contests must be preapproved by the Distributor. Payment
may be up to 100% of the expenses incurred or awards made in connection with
seminars, conferences or contests relating to the promotion of fund shares.
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 at Net Asset Value
The Class A Shares may be purchased without a front-end sales charge under
the Dividend Reinvestment Plan and, under certain circumstances, the 12-Month
Reinvestment Privilege and the Exchange Privilege.
Current and former officers, directors and employees of the Fund, any other
fund in the Delaware Group, the Manager, or any of the Manager's affiliates
that may in the future be created, legal counsel to the funds and registered
representatives and employees of broker/dealers who have
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<PAGE>
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. Spouses, parents, brothers, sisters and children (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. Purchases of Class A Shares may also
be made by clients of registered representatives of an authorized investment
dealer at net asset value within six 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 has been assessed and the
redemption of the investment did not result in the imposition of a contingent
deferred sales charge or other redemption charges. Purchases of Class A
Shares also may be made at net asset value by bank employees that provide
services in connection with agreements between the bank and unaffiliated
brokers or dealers concerning sales of Class A Shares. Also, 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
the Fund may reasonably require to establish eligibility for purchase at net
asset value. The Fund must be notified in advance that the trade qualifies
for purchase at net asset value.
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.
Letter of Intention
The reduced front-end sales charges described above with respect to the
Class A Shares are also applicable to the aggregate amount of purchases made
by any such purchaser previously enumerated 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 the Fund, which
provides for the holding in escrow by the Transfer Agent, of 5% of the total
amount of the 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 the 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
Fund 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 or contingent deferred sales charge, 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 shares which do) previously purchased and still held as of the
date of their Letter of Intention toward the completion of such Letter. For
purposes of satisfying an investor's obligation under a Letter of Intention,
Class B Shares of the Fund and the corresponding class of shares of other
Delaware Group funds which offer such shares may be aggregated with the Class A
Shares of the Fund and the corresponding class of shares of the other Delaware
Group funds.
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 the 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 or contingent deferred sales charge 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 or contingent deferred sales charge of any class. Class B Shares
of the Fund and other Delaware Group funds which offer a corresponding class
of shares may also be aggregated for this purpose.
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Combined Purchases Privilege
In determining the availability of the reduced front-end sales charge
previously set forth with respect to the Class A Shares, purchasers may
combine the total amount of any combination of the Fund Classes of the Fund
as well as 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
or contingent deferred sales charge, 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 shares which do).
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 the
age 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 the Fund Classes of the Fund as well as 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 or
contingent deferred sales charge, 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 shares
which do). 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 the Class A
Shares, the charge applicable to the $60,000 purchase would currently be
4.75%. 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
Shareholders of the Class A Shares (and of the Institutional Class holding
shares which were acquired through an exchange of one of the other mutual
funds in the Delaware Group offered with a front-end sales charge) who redeem
such shares of the Fund have one year from the date of redemption to reinvest
all or part of their redemption proceeds in Class A Shares of the 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 redemption of
Class B 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 proposed 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 Fund's shareholder servicing agent, about the
applicability of the Limited CDSC (see Contingent Deferred Sales Charge for
Certain Purchases of Class A Shares Made 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 Class may also benefit from the reduced front-end sales charges
for investments in Class A Shares set forth in the table on page 9, 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.
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. For other Retirement Plans and special services, see
Retirement Plans for the Fund Classes under Investment Plans.
Trend Fund Institutional Class
The Institutional Class 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 account from such institutional
advisory accounts; (d) banks, trust companies and similar financial
institutions investing for their own
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<PAGE>
account or for the account of their trust customers for whom such financial
institution is exercising investment discretion in purchasing shares of the
class; 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 the Institutional Class 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 the Institutional
Class are reinvested in the account of the holders of such shares (based on
the net asset value of the Fund in effect on the reinvestment date). A
confirmation of each dividend payment from net investment income and of
distributions from realized securities profits, if any, will be mailed to
shareholders in the first quarter of the fiscal year. A confirmation of any
distributions paid near the end of the calendar year to comply with certain
requirements of the Internal Revenue Code will normally be mailed to
shareholders at or promptly following the time that such payment is made.
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 Fund for
$25 or more with respect to the Class A Shares and $100 or more with respect
to the Class B Shares; no minimum applies to the Institutional Class. Such
purchases are made for the Class A Shares at the public offering price, and
for the Class B Shares and Institutional Class 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 purchase requirements and the
limitations set forth below, shareholders of the Class A Shares and Class B
Shares may automatically reinvest dividends and/or distributions from the
Fund in any of the other mutual funds in the Delaware Group, including the
Fund, 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 proposed to be made before investing or
sending money. The prospectus contains more complete information about the
fund, including charges and expenses. See also Dividend Reinvestment Plan 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 Fund,
provided an account has been established. Dividends from the Class A Shares
may not be directed to the Class B Shares of another fund in the Delaware
Group. Dividends from the Class B Shares may only be directed to the Class B
Shares of another fund in the Delaware Group that offers such class of shares.
See Class B Funds in the Fund Classes' Prospectus for the funds in the Delaware
Group that are eligible for investment by holders of Fund shares.
This option is not available to participants in the following plans: SAR/SEP,
SEP/IRA, Profit Sharing and Money Purchase Pension Plans, 401(k) Defined
Contribution Plans, 403(b)(7) Deferred Compensation Plans or 457 Deferred
Compensation Plans.
Investing by Electronic Fund Transfer
Direct Deposit Purchase Plan--Investors of the Class A Shares and the Class B
Shares may arrange for the Fund to accept for investment, 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 the Class A Shares and Class B
Shares may make automatic investments by authorizing, in advance, monthly
payments directly from their checking account for deposit into the Class.
This type of investment will be handled in either of the two ways noted
below. (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
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<PAGE>
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, Profit Sharing and Money Purchase Pension Plans, 401(k)
Defined Contribution Plans, 403(b)(7) Deferred Compensation Plans or 457
Deferred Compensation Plans.
* * *
Investments under the Direct Deposit Purchase Plan and the Automatic
Investing Plan must be for $25 or more with respect to the Class A Shares and
$100 or more with respect to the Class B Shares. 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 the 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, the 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. The 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 the Fund for
proper instructions.
Retirement Plans for the Fund Classes
An investment in the Fund may be suitable for tax-deferred Retirement
Plans. Among the Retirement Plans noted below, Class B Shares are available
for investment only by Individual Retirement Accounts, Simplified Employee
Pension Plans, 457 Deferred Compensation Plans and 403(b)(7) Deferred
Compensation Plans. The CDSC may be waived on certain redemptions of Class B
Shares. See the Prospectus for the Fund Classes under Buying
Shares--Contingent Deferred Sales Charge for a list of the instances in which
the CDSC is waived.
The minimum initial investment for each of the Retirement Plans described
below is $250; subsequent investments must be at least $25. Retirement Plans
may be subject to plan establishment fees, annual maintenance fees and/or
other administrative or Trustee fees. Fees are based on the number of
participants in the Plan as well as the services selected. Additional
information about fees is included in Retirement Plan materials. 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. Fees are subject to change.
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
Class. See Trend Fund Institutional Class above. For additional information
on any of the Plans and Delaware's retirement services, call the Shareholder
Service Center telephone number.
With respect to the annual maintenance fees per account referred to above,
"account" shall mean any account or group of accounts within a Plan type
identified by a common tax identification number between or among them.
Shareholders are responsible for notifying the Fund when more than one
account is maintained under a single tax identification 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 described below may be
subject to withholding.
Please contact your investment dealer or the Distributor for the special
application forms required for the Plans described below.
Prototype Profit Sharing or Money Purchase Pension Plans
Prototype Plans are available for self-employed individuals, partnerships
and corporations which replace the former Keogh and corporate retirement
plans. These Plans contain profit sharing or money purchase pension plan
provisions. Contributions may be invested only in Class A Shares.
Individual Retirement Account ("IRA")
A document is available for an individual who wants to establish an
Individual Retirement Account ("IRA") by making 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 elects to be treated as having no
compensation for the year. Investments in each of the Fund Classes are
permissible.
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The Tax Reform Act of 1986 (the "Act") restructured, and in some cases
eliminated, the tax deductibility of IRA contributions. Under the Act, the
full deduction for IRAs ($2,000 for each working spouse and $2,250 for
one-income couples) was retained for all taxpayers who are not covered by an
employer-sponsored retirement plan. Even if a taxpayer (or his or her spouse)
is covered by an employer-sponsored retirement plan, the full 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. The Act does not permit
deductions 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), 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.
A company or association may establish a Group IRA for employees or members
who want to purchase shares of the Fund. Purchases of $1 million or more of
the Class A Shares qualify for purchase at net asset value but may, under
certain circumstances, be subject to a Limited CDSC. See Purchasing Shares
concerning 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 Class B Shares under Alternative Purchase
Arrangements concerning the applicability of a CDSC upon redemption.
See Appendix A 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")
Employers with 25 or fewer eligible employees can establish this plan
which permits employer contributions and salary deferral contributions in
Class A Shares only.
Prototype 401(k) Defined Contribution Plan
Section 401(k) of the Internal Revenue Code of 1986 (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 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 9.
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 either 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 9.
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 either 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 9.
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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 after receipt of the order by the Fund or its
agent. Orders for purchases of Class B Shares and the Institutional Class are
effected at the net asset value per share next calculated after receipt of
the order by the Fund or its agent. Selling dealers have the responsibility
of transmitting orders promptly.
The offering price for the 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 such 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, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas. When the New York Stock Exchange is closed, the Fund 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 the Class A Shares, the offering price per share, is included in
the Fund's financial statements which are incorporated by reference into this
Part B.
The Fund's net asset value per share is computed by adding the value of all
the 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 the Fund's total net assets, portfolio securities
primarily listed or traded on a national securities exchange, except for bonds,
are valued at the last sale price on that exchange. 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. Subject to the foregoing, securities for
which market quotations are not readily available and other assets are valued at
fair value as determined in good faith and in a method approved by the Board of
Directors.
Each Class of the Fund will bear, pro-rata, all of the common expenses of
the Fund. The net asset values of all outstanding shares of each Class of the
Fund will be computed on a pro-rata basis for each outstanding share based on
the proportionate participation in the Fund represented by the value of
shares of that Class. All income earned and expenses incurred by the Fund
will be borne on a pro-rata basis by each outstanding share of a Class, based
on each Class' percentage in the Fund represented by the value of shares of
such Classes, except that the Institutional Class will not incur any of the
expenses under the Fund's 12b-1 Plans and shares of the Fund Classes alone
will bear the 12b-1 Plan fees 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 and dividends paid to each Class of the
Fund will vary.
REDEMPTION AND REPURCHASE
Any shareholder may require the 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, 1818 Market Street, Philadelphia, PA 19103. In
addition, certain expedited redemption methods described below are available
when stock certificates have not been issued. The Fund does not issue
certificates for Class A Shares or Institutional Class shares, unless a
shareholder specifically requests them. The Fund does not issue certificates for
Class B 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 Fund requires a
request signed by all owners of the shares or the investment dealer of record,
but does not require signature guarantees. 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. The Fund reserves the right to reject a signature guarantee
supplied by an eligible institution based on its creditworthiness. The Fund may
request further documentation from corporations, retirement plans, executors,
administrators, trustees or guardians.
In addition to redemption of shares by the Fund, the Distributor, acting as
agent of the Fund, 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 Fund
or its agent, less any applicable contingent deferred sales charge. 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 Fund and
the Distributor end their business day 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 busi-
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ness day will be executed at the net asset value per share computed that day
(less any applicable contingent deferred sales charge), 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 Purchases of Class A Shares Made at Net Asset Value under Redemption and
Exchange in the Prospectus for the Fund Classes. The 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. See
Contingent Deferred Sales Charge under Buying Shares in the Prospectus for the
Fund Classes. Except for such contingent deferred sales charges and, with
respect to the expedited payment by wire described below, for which there is
currently a $7.50 bank wiring cost, neither the Fund 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.
If a shareholder who recently purchased shares by check seeks to redeem all or
a portion of those shares in a written request, the Fund will honor the
redemption request but will not mail the proceeds until it is reasonably
satisfied of the collection of the investment check. 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 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 the 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 the Fund of securities owned by it is not reasonably practical, or
it is not reasonably practical for the Fund fairly to value its assets, or in
the event that the Securities and Exchange Commission has provided for such
suspension for the protection of shareholders, the 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 in either 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, the Fund has
elected to be governed by Rule 18f-1 under the 1940 Act pursuant to which the
Fund is obligated to redeem shares solely in cash up to the lesser of $250,000
or 1% of the net asset value of the Fund during any 90-day period for any one
shareholder.
The value of the Fund's investments is subject to changing market prices.
Thus, a shareholder reselling shares to the Fund may sustain either a gain or
loss, depending upon the price paid and the price received for such shares.
Small Accounts
Due to the relatively higher costs of maintaining small accounts, the Fund
reserves the right to redeem shares in any of its accounts at the then-current
net asset value if the total investment in the Fund has a value of less than
$250 as a result of redemptions. As a consequence, an investor who makes only
the minimum investment in a Class will be subject to involuntary redemption if
any portion of the investment is redeemed. Before the Fund redeems such shares
and sends the proceeds to the shareholder, the shareholder will be notified in
writing that the value of the shares in the account is less than $250 and will
be allowed 60 days from that date of notice to make an additional investment to
meet the required minimum of $250. Any redemption in an inactive account
established with a minimum investment may trigger mandatory redemption. No
contingent deferred sales charge will apply to the redemptions described in this
paragraph of the Class A and the Class B Shares.
* * *
The Fund has available certain redemption privileges, as described below. The
Fund reserves the right to suspend or terminate these expedited payment
procedures upon 60 days' written notice to shareholders.
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 Fund at 800-523-1918 (in Philadelphia,
215-988-1241) or, in the case of shareholders of the Institutional Class, 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 record address. 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
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<PAGE>
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 Fund, as described
above. An authorization form must have been completed by the shareholder and
filed with the 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. 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 Fund and a
signature guarantee may be required. Each signature guarantee must be supplied
by an eligible guarantor institution. The Fund reserves 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.
The Fund will not honor telephone redemptions for Fund shares recently
purchased by check unless it is reasonably satisfied that the purchase check
has cleared.
If expedited payment under these procedures could adversely affect the Fund,
the Fund may take up to seven days to pay the shareholder.
Neither the Fund 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. With
respect to such telephone transactions, the 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. 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 Plan
Shareholders of the Class A Shares who own or purchase $5,000 or more of
shares at the offering price 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 Fund does not recommend
any specific amount of withdrawal. This $5,000 minimum does not apply for the
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 the 15th of the month (unless such date falls on a holiday or
a Sunday) 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 by the holders of Class A Shares or any similar
plan of any other investment company charging a front-end sales charge made
concurrently with the purchases of the Class A Shares of this or the shares of
any other investment company will ordinarily be disadvantageous to the
shareholder because of the payment of duplicative sales charges. Shareholders
should not purchase Class A Shares while participating in a Systematic
Withdrawal Plan and a periodic investment program in a fund managed by the
Manager must be terminated before a Systematic Withdrawal Plan 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. Also,
redemptions 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.
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 Fund reserves the right to reject a
signature guarantee
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<PAGE>
supplied by an eligible institution based on its credit-worthiness. 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 with respect to the Class B
Shares or the Institutional Class.
Wealth Builder Option
Shareholders of the Fund Classes may elect to invest in one or more of the
other mutual funds in the Delaware Group through our Wealth Builder Option.
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. See Wealth Builder Option and Redemption and Exchange in the
Prospectus for the Fund Classes.
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 also 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, subject to the conditions and limitations described
in the Fund Classes' Prospectus. Shareholders can terminate their participation
at any time by written notice to the Fund.
This option is not available to participants in the following plans: SAR/SEP,
SEP/IRA, Profit Sharing and Money Purchase Pension Plans, 401(k) Defined
Contribution Plans, 403(b)(7) Deferred Compensation Plans or 457 Deferred
Compensation Plans. This option also is not available to shareholders of the
Institutional Class.
DIVIDENDS AND REALIZED SECURITIES PROFITS DISTRIBUTIONS
The Fund will make payments from its net investment income and net realized
securities profits, if any, twice a year. The first payment would be made during
the first quarter of the next fiscal year. The second payment would be made near
the end of the calendar year to comply with certain requirements of the Internal
Revenue Code. During the fiscal year ended June 30, 1995, distributions totaling
$0.790 per share of each of the Class A Shares and Institutional Class were paid
from realized securities profits. On August 7 1995, a distribution of $0.550 per
share of each Class was paid from realized securities profits to shareholders of
record July 28, 1995.
All dividends and any capital gains distributions will be automatically
reinvested for the shareholder in additional shares at net asset value unless,
in the case of shareholders in the Fund Classes, the shareholder requests in
writing that such dividends and/or distributions be paid in cash. 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.
Each Class of shares of the Fund will share proportionately in the investment
income and expenses of the Fund, except that the Class A Shares and the Class B
Shares alone will incur distribution fees under their respective 12b-1 Plans.
Any check in payment of dividends or other distributions which cannot be
delivered by the 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. The
Fund may deduct from a shareholder's account the costs of the Fund's effort to
locate a shareholder if a shareholder's mail is returned by the Post Office or
the 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.
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<PAGE>
TAXES
It is the Fund's policy to pay out substantially all net investment income and
net realized gains to shareholders to relieve the Fund of federal income tax
liability on that portion of its income paid to shareholders under Subchapter M
of the Internal Revenue Code. The Fund has met these requirements in previous
years and intends to meet them this year. Such distributions are taxable as
ordinary income or capital gain to those shareholders who are liable for federal
income tax. The Fund also intends to meet the calendar year distribution
requirements imposed by the Internal Revenue Code to avoid the imposition of a
4% excise tax.
Distributions may also be subject to state and local taxes; shareholders are
advised to consult with their tax advisers in this regard. Shares of the Fund
will be exempt from Pennsylvania personal property taxes.
Dividends representing net investment income or short-term capital gains are
taxable to shareholders as ordinary income. Distributions of long-term capital
gains, if any, are taxable as long-term capital gain regardless of the length of
time an investor has held such shares, and these gains are currently taxed at
long-term capital gain rates. The tax status of dividends and distributions 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. The portion of dividends paid by the Fund that so
qualifies will be designated each year in a notice mailed to the Fund's
shareholders, and cannot exceed the gross amount of dividends received by the
Fund from domestic (U.S.) corporations that would have qualified for the
dividends-received deduction in the hands of the Fund if the 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. Advice as to the tax status of each
year's dividends and distributions, when paid, will be mailed annually.
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 Fund's portfolio
securities had an unrealized appreciation for tax purposes of $70,754,373 as of
June 30, 1995.
Prior to purchasing shares of the Fund, 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
distributions 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.
INVESTMENT MANAGEMENT AGREEMENT
The Manager, located at One Commerce Square, Philadelphia, PA 19103, furnishes
investment management services to the Fund, subject to the supervision and
direction of the Fund's Board of Directors.
The Manager and its predecessors have been managing the funds in the Delaware
Group since 1938. The aggregate assets of these funds on June 30, 1995 were
approximately $9,916,645,000. Investment advisory services are also provided to
institutional accounts with assets on June 30, 1995 of approximately
$16,227,892,000.
The Investment Management Agreement for the Fund is dated April 3, 1995 and
was approved by shareholders on March 29, 1995.
The 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, and only if the terms and the renewal thereof
have been approved by the vote of a majority of the directors of the Fund 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. The Agreement is
terminable without penalty on 60 days' notice by the directors of the Fund or by
the Manager. The Agreement will terminate automatically in the event of its
assignment.
The compensation paid by the Fund for investment management services is equal
to 1/16 of 1% per month (3/4 of 1% per year) of the Fund's average daily net
assets, less all directors' fees paid to the unaffiliated directors of the Fund.
This fee is higher than that paid by funds with comparable investment
objectives. On June 30, 1995, the total net assets of the Fund were
$379,545,139. Under the general supervision of the Board of Directors, the
Manager makes all investment decisions which are implemented by the Fund. The
Manager pays the salaries of all directors, officers and employees who are
affiliated with both the Manager and the Fund. Investment management fees paid
by the Fund during the past three fiscal years were $1,249,159 for 1993,
$2,006,549 for 1994 and $2,300,627 for 1995.
Except for those expenses borne by the Manager under the Investment Management
Agreement and the Distributor under the Distribution Agreement, the Fund is
responsible for all of its own expenses. Among others, these include the Fund's
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 ratio of expenses to average daily net assets for the Class A Shares for the
fiscal year ended June 30, 1995 was 1.36%, which reflects the impact of its
12b-1 Plan. The ratio of expenses to average daily net assets for the
Institutional Class was
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<PAGE>
1.12% for the fiscal year ended June 30, 1995. The ratio of expenses to average
daily net assets for the Class B Shares for the period September 6, 1994 (date
of initial public offering) through June 30, 1995 was 2.12%, annualized.
By California regulation, the Manager is required to waive certain fees and
reimburse the Fund for certain expenses to the extent that the Fund's annual
operating expenses, exclusive of taxes, interest, brokerage commissions and
extraordinary expenses, exceed specified percentages of net assets. At present,
the most restrictive limit is 2 1/2% of the first $30 million of average daily
net assets, 2% of the next $70 million of average daily net assets and 1 1/2% of
any additional average daily net assets. For the fiscal year ended June 30,
1995, no reimbursement was necessary or paid.
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 Fund shares under
a Distribution Agreement dated April 3, 1995. The Distributor is an affiliate of
the Manager and bears all of the costs of promotion and distribution, except for
payments by the Fund on behalf of the Class A Shares and Class B Shares under
their respective 12b-1 Plans. Prior to January 3, 1995, Delaware Distributors,
Inc. ("DDI") served as the national distributor of the 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 the
Fund's shareholder servicing, dividend disbursing and transfer agent pursuant to
a Shareholders Services Agreement dated June 29, 1988. The Transfer Agent is
also an indirect, wholly-owned subsidiary of Delaware Management Holdings, Inc.
OFFICERS AND DIRECTORS
The business and affairs of the Fund are managed under the direction of its
Board of Directors.
Certain officers and directors of the Fund hold identical positions in each of
the other funds in the Delaware Group. On July 31, 1995, the Fund's officers and
directors owned less than 1% of the outstanding shares of the Class A Shares and
the Class B Shares and the approximately 1.49% of the outstanding shares of the
Institutional Class.
As of July 31, 1995, the Fund believes Merrill Lynch, Pierce Fenner & Smith,
Mutual Fund Operations, P.O. Box 41621, Jacksonville, FL 32203 held of record
2,132,350 shares (9.54%) of the outstanding shares of the Class A Shares.
As of July 31, 1995, the Fund believes Merrill Lynch, Pierce Fenner & Smith,
Attn. Book Entry, 4800 Deer Lake Dr. East, 3rd Fl.,Jacksonville, FL 32246 held
of record 33,274 shares (8.25%) of the outstanding shares of the Class B Shares.
The Fund believes the following shareholders held 5% or more of the
outstanding shares of the Institutional Class as of July 31, 1995: Woodstock,
c/o Wood County Trust Company, 181 2nd Street South, P.O. Box 8000, Wisconsin
Rapids, WI 54495--656,228 shares (16.63%); Iceberg & Co., by State Street Bank &
Trust Co., P.O. Box 1992, Boston, MA 02105--450,096 shares (11.40%); Trustees
for Harrah's Entertainment Savings and Retirement Plan, 1023 Cherry Road,
Memphis, TN 38117--387,567 shares (9.82%); Bank of New York, Trst First Hospital
Corp., Retirement Plan, Attn. Greg Tyrka, Master Trust/Custodian, 1 Wall Street,
New York, NY 10005--359,107 shares (9.10%); Iceberg & Co., by State Street Bank
& Trust Co., Trst Glaxo Inc. Retirement Plan, P.O. Box 1992, Boston, MA 02105--
305,849 shares (7.75%); Delaware Management Co., Employee Profit Sharing Trust,
1818 Market Street, Philadelphia, PA 19103--289,749 shares (7.34%); Fidelity
Management Trust Co., FBO Delta Family Care Savings Plan, Financial Operations,
Stock Trading Location KW1C, 100 Magellan, 1st Floor, Covington, KY 41015--
279,372 shares (7.08%); and Northern Trust, Trst PHH Corp., P.O. Box 92956,
Chicago, IL 60690--207,720 shares (5.26%). Shares held by Delaware Management
Co., Employee Profit Sharing Trust are known to be beneficially owned by others.
DMH Corp., 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. and Delaware Investment Counselors, 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, a new Investment Management Agreement
between the Fund and the Manager was executed following shareholder approval. As
a result of the merger, DMH became a wholly-owned subsidiary, and the Manager
became an indirect, wholly-owned subsidiary, of Lincoln National and both are
now 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 the Fund 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.
22
<PAGE>
*Wayne A. Stork (58)
Chairman, Director and/or Trustee of the Fund, each of
the other 16 funds in the Delaware Group and
Delaware Investment Counselors, Inc.
Chairman, Chief Executive Officer, Chief Investment
Officer and Director of Delaware Management
Company, Inc.
Chairman, Chief Executive Officer and Director of
Delaware Management Holdings, Inc., DMH Corp.,
Delaware International Advisers Ltd., Delaware
International Holdings Ltd. and Founders Holdings,
Inc.
Director of Delaware Distributors, Inc. and Delaware
Service Company, Inc.
During the past five years, Mr. Stork has served in various
executive capacities at different times within the
Delaware organization.
Brian F. Wruble (52)
President and Chief Executive Officer of the Fund and
15 other funds in the Delaware Group (which
excludes Delaware Pooled Trust, Inc.).
Director of Delaware International Advisers Ltd. and
Delaware Investment Counselors, Inc.
President, Chief Operating Officer and Director of
Delaware Management Holdings, Inc., DMH
Corp. and Delaware Management Company, Inc.
Chairman, Chief Executive Officer and Director of
Delaware Service Company, Inc.
Chairman and Director of Delaware Distributors, Inc.
Chairman of Delaware Distributors, L.P.
President of Founders Holdings, Inc.
President and Chief Operating Officer of Delaware
International Holdings Ltd.
From 1992 to 1995, Mr. Wruble was a director of the
Fund and a director and/or trustee of each of the
other funds in the Delaware Group. Before joining
the Delaware Group in 1992, Mr. Wruble was
Chairman, President and Chief Executive Officer of
Equitable Capital Management Corporation from
July 1985 through April 1992 and was Executive Vice
President of Equitable Life Assurance Society of the
United States from September 1984 through April 1992
and Chief Investment Officer from April 1991 through
April 1992. Mr. Wruble has previously held executive
positions with Smith Barney, Harris Upham, and
H.C. Wainwright & Co.
- --------------
*Director affiliated with the investment manager of the
Fund and considered an "interested person" as defined in
the Investment Company Act of 1940.
Winthrop S. Jessup (49)
Executive Vice President of the Fund, 15 other funds in
the Delaware Group (which excludes Delaware
Pooled Trust, Inc.) and Delaware Management
Holdings, Inc.
President and Chief Executive Officer of Delaware Pooled
Trust, Inc.
President and Director of Delaware Investment
Counselors, Inc.
Executive Vice President and Director of DMH Corp.,
Delaware Management Company, Inc., Delaware
International Holdings Ltd. and Founders Holdings,
Inc.
Vice Chairman and Director of Delaware Distributors, Inc.
Vice Chairman of Delaware Distributors, L.P.
Director of Delaware Management Trust Company,
Delaware Service Company, Inc. and Delaware
International Advisers Ltd.
During the past five years, Mr. Jessup has served in various
executive capacities at different times within the
Delaware organization.
Richard G. Unruh, Jr. (55)
Executive Vice President of the Fund and each of the
other 16 funds in the Delaware Group.
Executive Vice President and Director of Delaware
Management Company, Inc.
Senior Vice President of Delaware Management Holdings,
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.
Walter P. Babich (67)
Director and/or Trustee of the Fund and each of the other
16 funds 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.
Anthony D. Knerr (56)
Director and/or Trustee of the Fund and each of the other
16 funds in the Delaware Group.
500 Fifth Avenue, New York, NY 10110.
Consultant, 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.
23
<PAGE>
Ann R. Leven (54)
Director and/or Trustee of the Fund and each of the other
16 funds 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 1994, she was
Adjunct Professor of Columbia Business School.
W. Thacher Longstreth (74)
Director and/or Trustee of the Fund and each of the other
16 funds in the Delaware Group.
1617 John F. Kennedy Boulevard, Philadelphia, PA 19103.
Vice Chairman, Packquisition Corp., a financial printing,
commercial printing and information processing firm.
Philadelphia City Councilman.
President, MLW, Associates.
Director, Tasty Baking Company.
Director, Healthcare Services Group.
Charles E. Peck (69)
Director and/or Trustee of the Fund and each of the other
16 funds in the Delaware Group.
P.O. Box 1102, Columbia, MD 21044.
Secretary, 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 (55)
Senior Vice President/Chief Administrative Officer/Chief
Financial Officer of the Fund, each of the other 16 funds
in the Delaware Group and Delaware Management
Company, Inc.
Chairman and Director of Delaware Management Trust
Company.
Senior Vice President/Chief Administrative Officer/Chief
Financial Officer/Treasurer of Delaware Management
Holdings, Inc.
Senior Vice President/Chief Financial Officer/Treasurer and
Director of DMH Corp.
Senior Vice President/Chief Administrative Officer/Chief
Financial Officer and Director of Delaware Service
Company, Inc.
Senior Vice President/Chief Administrative Officer and
Director of Delaware Distributors, Inc.
Senior Vice President/Chief Administrative Officer of
Delaware Distributors, L.P.
Chief Financial Officer and Director of Delaware
International Holdings Ltd.
Senior Vice President/Chief Financial Officer/Treasurer of
Delaware Investment Counselors, Inc.
Senior Vice President and Director of Founders Holdings, Inc.
Director of Delaware International Advisers Ltd.
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. (48)
Senior Vice President and Secretary of the Fund, each of
the other 16 funds in the Delaware Group, Delaware
Management Holdings, Inc., Delaware Distributors,
L.P. and Delaware Investment Counselors, Inc.
Executive Vice President, Secretary and Director of
Delaware Management Trust Company.
Senior Vice President, Secretary and Director of DMH
Corp., Delaware Management Company, Inc.,
Delaware Distributors, Inc. and Delaware Service
Company, Inc.
Corporate Vice President, Secretary and Director of
Founders Holdings, Inc.
Secretary and Director of Delaware International
Holdings Ltd.
Director of Delaware International Advisers Ltd.
Attorney.
During the past five years, Mr. Chamberlain has served
in various capacities at different times within the
Delaware organization.
Edward N. Antoian (39)
Vice President/Senior Portfolio Manager of the Fund, of
seven other equity funds in the Delaware Group
and of Delaware Management Company, Inc.
During the past five years, Mr. Antoian has served in
such capacities within the Delaware organization.
Joseph H. Hastings (45)
Vice President/Corporate Controller of the Fund, each of
the other 16 funds in the Delaware Group, Delaware
Management Holdings, Inc., DMH Corp., Delaware
Management Company, Inc., Delaware Distributors,
L.P., Delaware Distributors, Inc., Delaware Service
Company, Inc., Delaware Investment Counselors,
Inc. and Founders Holdings, Inc.
Executive Vice President/Treasurer/Chief Financial Officer
of Delaware Management Trust Company.
Assistant Treasurer of Founders CBO 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 (33)
Vice President/Treasurer of the Fund, each of the other
16 funds in the Delaware Group, Delaware
Management Company, Inc., Delaware Distributors, L.P.,
Delaware Distributors, Inc., Delaware Service
Company, Inc., Founders Holdings, Inc. and Founders
CBO Corporation.
Prior to 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.
24
<PAGE>
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 June 30, 1995 and an estimate of annual benefits to be received upon
retirement under the Delaware Group Retirement Plan for Directors/Trustees as of
June 30, 1995.
<TABLE>
<CAPTION>
Pension or
Retirement Estimated Total
Benefits Annual Compensation
Aggregate Accrued Benefits from all 17
Compensation as Part of Upon Delaware
Name from Fund Fund Expenses Retirement* Group Funds
<S> <C> <C> <C> <C>
W. Thacher Longstreth $1,874.54 None $18,100 $47,187.96
Ann R. Leven $2,170.84 None $18,100 $55,323.95
Walter P. Babich $2,171.30 None $18,100 $55,323.04
Anthony D. Knerr $1,205.90 None $18,100 $32,996.57
Charles E. Peck $1,716.54 None $18,100 $44,052.00
</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 June 30, 1995, he or she would be entitled to annual payments totaling
$18,100, 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.
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. The Fund reserves the right to reject exchange requests at any
time. The 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 Fund receives written notice from the shareholder to the
contrary.
Shareholders or their investment dealers of record may contact the Transfer
Agent at 800-523-1918 (in Philadelphia, 215-988-1241) or, in the case of
shareholders of the Institutional Class, 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 the 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 Fund's Prospectuses, neither the Fund 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.
Following is a summary of the investment objectives of the other Delaware
Group funds:
Delaware Fund seeks long-term growth by 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. Devon Fund seeks current
income and capital apprecia-
25
<PAGE>
tion by investing primarily in income-producing common stocks, with a focus
on common stocks the Manager believes have the potential for above average
dividend increases over time.
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.
Delchester Fund seeks as high a current income as possible by investing
principally in corporate bonds, and also in U.S. Government securities and
commercial paper.
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.
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 Pennsylvania Fund seeks a high level of current interest income
exempt from federal and, to the extent possible, certain 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.
Delaware Group Premium Fund offers nine series available exclusively as
funding vehicles for certain insurance company separate accounts. Equity/Income
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. High Yield 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. Money
Market Series seeks the highest level of income consistent with preservation of
capital and liquidity through investments in short-term money market
instruments. Growth Series seeks long-term capital appreciation by investing its
assets in a diversified portfolio of securities exhibiting the potential for
significant growth. Multiple Strategy 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 value
appears 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.
Emerging Growth 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 marketplace and to have fundamental characteristics
to support growth. Income is not an objective.
For more complete information about any of these funds, including charges
and expenses, you can obtain a prospectus from the Distributor. Read it
carefully before you invest or forward funds.
26
<PAGE>
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 Fund. The Manager or its
affiliate, Delaware International Advisers Ltd., also manages the other funds
in the Delaware Group. The Manager, through a separate division, also manages
private investment accounts. While investment decisions of the Fund are made
independently from those of the other funds and accounts, they may make
investment decisions at the same time.
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 the 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 the Fund. The Distributor
and, in its capacity as such, DDI received net commissions from the Fund,
after reallowances to dealers, as follows:
Total
Amount Net
of Under- Amounts Commission
Fiscal writing Reallowed to
Year Ending Commission to Dealers Distributor
- ----------- ---------- ---------- -----------
June 30, 1995 $1,202,397 $1,042,162 $160,235
June 30, 1994 3,019,096 2,618,113 400,983
June 30, 1993 2,621,552 2,403,272 218,280
For the fiscal year ended June 30, 1995, the Distributor and, in its
capacity as the Fund's national distributor, DDI received Limited CDSC
payments in the amount of $11,335 with respect to the Class A Shares. There
were no such payments for the fiscal years ended June 30, 1993 and 1994.
For the period September 6, 1994 (date of initial public offering) through
June 30, 1995, the Distributor and, in its capacity as the Fund's national
distributor, DDI received CDSC payments in the amount of $3,720 with respect
to the Class B Shares.
Effective as of January 3, 1995, all such payments described above have
been paid to Delaware Distributors, L.P.
The Transfer Agent, an affiliate of the Manager, acts as shareholder
servicing, dividend disbursing and transfer agent for the Fund and for the
other mutual funds in the Delaware Group. The Transfer Agent is paid a fee by
the 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 Manager and its affiliates own the name "Delaware Group." Under certain
circumstances, including the termination of the Fund's advisory relationship
with the Manager or its distribution relationship with the Distributor, the
Manager and its affiliates could cause the Fund to delete the words "Delaware
Group" from the Fund's name.
Chemical Bank, 450 West 33rd Street, New York, NY 10001, is custodian of
the Fund's securities and cash. As custodian for the Fund, Chemical Bank
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.
The legality of the issuance of the shares offered hereby, pursuant to
registration under the Investment Company Act Rule 24f-2, has been passed
upon for the Fund by Messrs. Stradley, Ronon, Stevens & Young, Philadelphia,
Pennsylvania.
Capitalization
The Fund has a present authorized capitalization of one hundred million
shares of capital stock with a $.50 par value per share. The Fund offers
three classes of shares, each representing a proportionate interest in the
assets of the Fund, and each having the same voting and other rights and
preferences as the other classes of the Fund, except that shares of the
Institutional Class may not vote on any matter affecting the Fund Classes'
Distribution Plans under Rule 12b-1. Similarly, the shareholders of the Class
A Shares may not vote on matters affecting the Fund's Plan under Rule 12b-1
relating to the Class B Shares, and the shareholders of the Class B Shares
may not vote on matters affecting the Fund's Plan under Rule 12b-1 relating
to the Class A Shares. However, the Class B Shares may vote on a proposal to
increase materially the fees to be paid by the Fund under the Rule 12b-1 Plan
relating to the Class A Shares. General expenses of the 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 the Class A and Class B Shares will
be allocated solely to those classes. The Board of Directors has
27
<PAGE>
allocated thirty-five million shares to the Trend Fund A Class, twenty-five
million shares to the Trend Fund B Class and twenty-five million shares to
the Trend Fund Institutional Class.
Shares have no preemptive rights, are fully transferable and, when issued,
are fully paid and nonassessable.
Prior to September 6, 1994, the Trend Fund A Class was known as the Trend
Fund class and the Trend Fund Institutional Class was known as the Trend Fund
(Institutional) class.
Noncumulative Voting
These shares have noncumulative voting rights which means that the holders
of more than 50% of the shares of the Fund 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 Securities and Exchange
Commission.
28
<PAGE>
APPENDIX A--IRA INFORMATION
The Tax Reform Act of 1986 restructured, and in some cases eliminated, the
tax deductibility of IRA contributions. Under the Act, the full deduction for
IRAs ($2,000 for each working spouse and $2,250 for one-income couples) was
retained for all taxpayers who are not covered by an employer-sponsored
retirement plan. Even if a taxpayer (or his or her spouse) is covered by an
employer-sponsored retirement plan, the full 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. The Act does not permit deductions 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), 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.
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 up-front 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.
29
<PAGE>
Even if your IRA contribution is no longer deductible, the benefits of
savings 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, like the Fund, your bottom line at retirement could be lower -- it could
also be much higher.
<TABLE>
<CAPTION>
$2,000 Invested Annually Assuming a 10% Annualized Return
<S> <C> <C> <C>
15% Tax Bracket Single -- $0 - $22,750
--------------- Joint -- $0 - $38,000
</TABLE>
<TABLE>
<CAPTION>
How Much You
End of Cumulative How Much You Have With Full IRA
Year Investment Amount Have Without IRA Deduction
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
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
- --------------------------------------------------------------------------------
</TABLE>
[Without IRA -- investment of $1,700($2,000 less 15%) earning 8.5% (10% less
15%)]
<TABLE>
<S> <C> <C> <C>
28% Tax Bracket Single -- $22,751 - $55,100
--------------- Joint -- $38,001 - $91,850
</TABLE>
<TABLE>
<CAPTION>
End of Cumulative How Much You How Much You Have 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
- -------------------------------------------------------------------------------------------------------------
</TABLE>
[Without IRA -- investment of $1,440 ($2,000 less 28%) earnings 7.2% (10% less
28%)]
[With IRA -- No Deduction -- investment of $1,440 ($2,000 less 28%) earning 10%]
<TABLE>
<S> <C> <C> <C>
31% Tax Bracket Single -- $55,101 - $115,000
--------------- Joint -- $91,851 - $140,000
</TABLE>
<TABLE>
<CAPTION>
End of Cumulative How Much You How Much You Have 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
- -------------------------------------------------------------------------------------------------------------
</TABLE>
[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%]
30
<PAGE>
<TABLE>
<S> <C> <C> <C>
36% Tax Bracket* Single -- $115,001 - $250,000
--------------- Joint -- $140,001 - $250,000
</TABLE>
<TABLE>
<CAPTION>
End of Cumulative How Much You How Much You Have 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
- ----------------------------------------------------------------------------------------------------
</TABLE>
[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>
<S> <C> <C>
39.6% Tax Bracket* Single -- over $250,000
Joint -- over $250,000
</TABLE>
<TABLE>
<CAPTION>
End of Cumulative How Much You How Much You Have 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
- ----------------------------------------------------------------------------------------------------
</TABLE>
[Without IRA -- investment of $1,280 ($2,000 less 39.6%) earning 6.04% (10%
less 39.6%)]
[With IRA -- No Deduction -- investment of $1,280 ($2,000 less 39.6%) earning
10%]
<TABLE>
<CAPTION>
$2,000 SINGLE INVESTMENT AT A RETURN OF 10% COMPOUNDED ANNUALLY
TAXABLE__ TAXABLE__ TAXABLE__ TAXABLE__ TAXABLE__ TAX
YEARS 39.6%* 36%* 31% 28% 15% DEFERRED
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10 $ 3,595 $ 3,719 $ 3,898 $ 4,008 $ 4,522 $ 5,187
- ---------------------------------------------------------------------------------
15 4,820 5,072 5,441 5,675 6,799 8,354
- ---------------------------------------------------------------------------------
20 6,463 6,916 7,596 8,034 10,224 13,455
- ---------------------------------------------------------------------------------
30 11,618 12,861 14,803 16,102 23,117 34,899
- ---------------------------------------------------------------------------------
40 20,884 23,916 28,849 32,272 52,266 90,519
- ---------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
$2,000 INVESTMENT ANNUALLY AT A RETURN OF 10% COMPOUNDED ANNUALLY
TAXABLE__ TAXABLE__ TAXABLE__ TAXABLE__ TAXABLE__ TAX
YEARS 39.6%* 36%* 31% 28% 15% DEFERRED
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10 $ 28,006 $ 28,581 $ 29,400 $ 29,904 $ 32,192 $ 35,062
- ---------------------------------------------------------------------------------
15 49,514 51,067 53,314 54,714 61,264 69,899
- ---------------------------------------------------------------------------------
20 78,351 81,731 86,697 89,838 104,978 126,005
- ---------------------------------------------------------------------------------
30 168,852 180,566 198,360 209,960 269,546 361,887
- ---------------------------------------------------------------------------------
40 331,537 364,360 415,973 450,711 641,631 973,704
- ---------------------------------------------------------------------------------
</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 $250,000. The above tables do not reflect the personal
exemption phaseout nor the limitations of itemized deductions that may apply.
31
<PAGE>
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, 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.
And it pays to shop around. If you get just 2% more per year, it can make a
big difference when you retire. A constant 8% versus 10% return, both
compounded annually, illustrates the point. This chart is based on a yearly
investment of $2,000 on January 1. After 30 years the difference can mean as
much as 50% more!
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
8% Return 10% Return
<S> <C> <C>
10 Years $ 31,291 $ 35,062
20 Years 98,846 126,005
30 Years 244,692 361,887
</TABLE>
The statistical exhibits above are for illustration purposes only and do
not reflect the actual performance for the Fund either in the past or in the
future.
32
<PAGE>
APPENDIX B
Trend Fund Performance Overview
The following table illustrates the total return on one share invested in the
Trend Fund A Class during the 10-year period ended June 30, 1995./1/ 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.
Trend Fund A Class
<TABLE>
<CAPTION>
Cumula-
tive net
asset
value at
Maximum Net Asset Distributions year-end
offering Value ------------------------ with all
Year price at --------------- From From distribu-
ended begin- Begin- invest- realized tions
June ning of ning of End of ment securi- rein-
30 year/2/ year year income ties profits vested
- ---- ------- ------- ------ ------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
1986 $ 6.82 $ 6.43 $ 8.91 $0.128 -- $ 9.09
1987 9.45 8.91 9.12 -- -- 9.30
1988 9.68 9.12 8.13 -- -- 8.29
1989 8.63 8.13 10.87 -- $0.320 11.55
1990 11.53 10.87 9.97 0.050 2.220 13.21
1991 10.58 9.97 8.92 0.050 0.520 12.57
1992 9.46 8.92 11.38 -- 0.160 16.25
1993 12.07 11.38 13.98 -- 1.150 21.98
1994 14.83 13.98 12.21 -- 1.940 22.11
1995 12.95 12.21 14.21 -- 07.90 27.50
----- -----
Total Distributions $0.228 $7.100
<CAPTION>
PERCENTAGE CHANGES DURING YEAR
-----------------------------------------------------------------------------------------------------------------
Trend Fund
-----------------------------------------------
Year Maximum Offering Price Net Asset Value Standard & DowJones Consumer
ended to Net Asset Value to Net Asset Value Poor's 500/5/ Industrial/5/ Price Index/5/
June -----------------------------------------------------------------------------------------------------------------
30 Annual Cumulative/3/ Annual Cumulative/4/ Annual Cumulative Annual Cumulative Annual Cumulative
- ---- ------ ------------- ------ ------------- ------ ---------- ------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1986 33.2% 33.2% 41.4% 41.4% 35.9% 35.9% 47.8% 47.8% 1.7% 1.7%
1987 -3.5 36.4 2.4 44.7 25.2 70.0 32.2 95.4 3.7 5.5
1988 -16.0 21.6 -10.9 29.0 -6.9 58.3 -8.3 79.2 3.9 9.7
1989 31.3 69.3 39.3 79.6 20.5 90.7 18.7 112.7 5.2 15.4
1990 7.7 93.6 14.3 105.4 16.5 122.1 22.7 161.0 4.7 20.7
1991 -10.3 84.2 -4.8 95.5 7.4 138.4 4.6 173.1 4.7 26.4
1992 21.9 138.2 29.3 152.8 13.4 170.4 17.7 221.4 3.1 30.3
1993 27.5 222.2 35.2 241.8 13.6 207.2 9.2 251.0 3.0 34.2
1994 -5.2 224.1 0.6 243.9 1.4 211.5 5.9 271.9 2.5 37.6
1995 17.3 303.3 24.4 327.8 26.1 292.7 29.2 380.5 3.0 41.7
Total Distributions
</TABLE>
- ------------------
/1/ All figures prior to May 9, 1986 are adjusted for a 2-for-1 stock split paid
on that date. The Trend 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 5.75% of total investment. There are
reduced sales charges for investments of $100,000 or more.
/3/ Reflects an offering price of $6.82 on June 30, 1985.
/4/ Reflects a net asset value of $6.43 on June 30, 1985.
/5/ Source: Lipper Analytical.
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 aggressive growth common stocks, which differ from
those in the indices.
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.
33
<PAGE>
Trend Fund Performance Overview
The following table illustrates the total return on one share invested in the
Trend Fund B Class during the period September 6, 1994 (date of initial public
offering) through June 30, 1995. 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.
Trend Fund B Class
<TABLE>
<CAPTION>
Cumula-
tive net
asset
value at
Maximum Net Asset Distributions year-end
offering Value ----------------------- with all
Period price at ------------------ From From distribu-
ended begin- Begin- invest- realized tions
June ning of ning of End of ment securi- rein-
30 year year year income ties profits vested
- ------ -------- --------- ------ -------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
1995 $12.11 $12.11 $14.13 -- -- $14.13
------ ------
Total Distributions $0.000 $0.000
<CAPTION>
PERCENTAGE CHANGES DURING YEAR
-----------------------------------------------------------------------------------------------------------------
Trend Fund
-----------------------------------------------
Period Returns Including Returns Excluding Standard & Dow Jones Consumer
ended CDSC/1/ CDSC/1/ Poor's 500/3/ Industrial/3/ Price Index/3/
June -----------------------------------------------------------------------------------------------------------------
30 Annual Cumulative/2/ Annual Cumulative/2/ Annual Cumulative Annual Cumulative Annual Cumulative
- ------ ------ ------------- ------ ------------- ------ ---------- ------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1995 12.7% 12.7% 16.7% 16.7% 18.3% 18.3% 19.9% 19.9% 2.4% 2.4%
Total Distributions
</TABLE>
/1/ The return provided below is on an aggregate basis. Total return for this
short of a time period may not be representative of longer-term results.
/2/ Reflects a net asset value of $12.11 on September 2, 1994.
/3/ Source: Lipper Analytical.
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 aggressive growth common stocks, which differ from
those in the indices.
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.
34
<PAGE>
Trend Fund Performance Overview
The following table illustrates the total return on one share invested in the
Trend Fund Institutional Class/1/ during the 10-year period ended June 30, 1995.
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.
Trend Fund Institutional Class
<TABLE>
<CAPTION>
Cumula-
tive net
asset
value at
Maximum Net Asset Distributions year-end
offering Value ------------------------- with all
Year price at ------------------- From From distribu-
ended begin- Begin- invest- realized tions
June ning of ning of End of ment securi- rein-
30 year year year income ties profits vested
- ----- -------- -------- -------- ------ ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
1986 $ 6.43 $ 6.43 $ 8.91 $0.128 -- $ 9.09
1987 8.91 8.91 9.12 -- -- 9.30
1988 9.12 9.12 8.13 -- -- 8.29
1989 8.13 8.13 10.87 -- $0.320 11.55
1990 10.87 10.87 9.97 0.050 2.220 13.21
1991 9.97 9.97 8.92 0.050 0.520 12.57
1992 8.92 8.92 11.38 -- 0.160 16.25
1993 11.38 11.38 13.99 -- 1.150 21.98
1994 13.99 13.99 12.25 -- 1.940 22.11
1995 12.25 12.25 14.30 -- 0.790 27.50
------ ------
Total Distributions $0.228 $7.100
<CAPTION>
PERCENTAGE CHANGES DURING YEAR
----------------------------------------------------------------------------------------------------------------------
Trend Fund
-------------------
Year Net Asset Value Standard & Dow Jones Consumer
ended to Net Asset Value Poor's 500/3/ Industrial/3/ Price Index/3/
June ---------------------------------------------------------------------------------------------------------------------
30 Annual Cumulative/2/ Annual Cumulative Annual Cumulative Annual Cumulative
- ----- ------ ------------ ------ ---------- ------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1986 41.4% 41.4% 35.9% 35.9% 47.8% 47.8% 1.7% 1.7%
1987 2.4 44.7 25.2 70.0 32.2 95.4 3.7 5.5
1988 -10.9 29.0 -6.9 58.3 -8.3 79.2 3.9 9.7
1989 39.3 79.6 20.5 90.7 18.7 112.7 5.2 15.4
1990 14.3 105.4 16.5 122.1 22.7 161.0 4.7 20.7
1991 -4.8 95.5 7.4 138.4 4.6 173.1 4.7 26.4
1992 29.3 152.8 13.4 170.4 17.7 221.4 3.1 30.3
1993 35.3 242.1 13.6 207.2 9.2 251.0 3.0 34.2
1994 0.8 244.9 1.4 211.5 5.9 271.9 2.5 37.6
1995 24.7 330.3 26.1 292.7 29.2 380.5 3.0 41.7
Total Distributions
</TABLE>
- --------------
/1/ Performance for Trend Fund Institutional Class for periods prior to November
23, 1992 (date of initial public offering) is calculated by taking the
performance of the Trend Fund A Class and adjusting it to reflect the
elimination of all sales charges.
/2/ Reflects a net asset value of $6.43 on June 30, 1985.
/3/ Source: Lipper Analytical.
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 aggressive growth common stocks, which differ from
those in the indices.
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.
35
<PAGE>
APPENDIX C
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
[GRAPH 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.
36
<PAGE>
FINANCIAL STATEMENTS
Ernst & Young LLP serves as the independent auditors for the Fund and, in
its capacity as such, audits the financial statements contained in the Fund's
Annual Report. The Fund's Statement of Net Assets, Statement of Operations,
Statement of Changes in Net Assets and Notes to Financial Statements, as well
as the report of Ernst & Young LLP, independent auditors, for the fiscal year
ended June 30, 1995 are included in the Fund's Annual Report to shareholders.
The financial statements, the notes relating thereto and the report of Ernst
& Young LLP listed above are incorporated by reference from the Annual Report
into this Part B.
37
<PAGE>
Form N-1A
File No. 2-28871
Delaware Group Trend Fund, Inc.
PART C
------
Other Information
-----------------
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements:
Part A - Financial Highlights
*Part B - Statement of Net Assets
Statement of Operations
Statement of Changes in Net Assets
Notes to Financial Statements
Accountant's Report
* The financial statements and Accountant's Report listed above are
incorporated by reference from the Registrant's Annual Report for
the fiscal year ended June 30, 1995 into Part B.
(b) Exhibits:
(1) Articles of Incorporation. Attached as Exhibit.
-------------------------
(2) By-Laws. Attached as Exhibit.
-------
(3) Voting Trust Agreement. Inapplicable.
----------------------
(4) Copies of All Instruments Defining the Rights of Holders.
--------------------------------------------------------
(a) Articles of Incorporation, Articles of Amendment and
----------------------------------------------------
Articles Supplementary. Article Fifth of the
-----------------------
Incorporation, Article Eleventh of Articles of
Amendment and Article Second of Articles
Supplementary attached in Exhibit 24(b)(1).
(b) By-Laws. Article II, Article III, as amended, and
-------
Article XIII, which was subsequently redesignated as
Article XIV attached in Exhibit 24(b)(2).
i
<PAGE>
Form N-1A
File No. 2-28871
Delaware Group Trend Fund, Inc.
(5) Investment Management Agreement. Investment Management
-------------------------------
Agreement between Delaware Management Company, Inc. and the
Registrant dated April 3, 1995 attached as Exhibit.
(6) (a) Distribution Agreement. Incorporated by reference to
----------------------
Post-Effective Amendment No. 51 filed June 30, 1994.
(b) Administration and Service Agreement. Form of
------------------------------------
Administration and Service Agreement incorporated by
reference to Post-Effective Amendment No. 51 filed
June 30, 1994.
(c) Dealer's Agreement. Dealer's Agreement included as
------------------
Module Name DEALERS_AGREE.
(d) Form of Mutual Fund Agreement for the Delaware Group
of Funds included as Module Name MUTUAL_FUND_AGR.
(7) Bonus, Profit Sharing, Pension Contracts. Amended and
----------------------------------------
Restated Profit Sharing Plan included as Module Name
PROF_SHARE_PLAN.
(8) Custodian Agreement. Incorporated by reference to Post-
-------------------
Effective Amendment No. 43 filed August 25, 1989 and Post-
Effective Amendment No. 45 filed June 25, 1991.
(9) Other Material Contracts. Incorporated by reference to
------------------------
Post-Effective Amendment No. 40 filed June 30, 1988.
(10) Opinion of Counsel. Will be filed with letter relating to
------------------
Rule 24f-2 on or about August 29, 1995.
(11) Consent of Auditors. Attached as Exhibit.
-------------------
(12-13) Inapplicable.
(14) Model Plans. Model Plans included as Module Name
-----------
MODEL_PLANS.
**(15) Plans under Rule 12b-1. Incorporated by reference to Post-
----------------------
Effective Amendment No. 51 filed June 30, 1994.
**Relates only to Trend Fund A Class and Trend Fund B Class only.
ii
<PAGE>
Form N-1A
File No. 2-28871
Delaware Group Trend Fund, Inc.
(16) Schedules of Computation for each Performance Quotation.
-------------------------------------------------------
Attached as Exhibit.
(17) Financial Data Schedules. Attached as Exhibit.
------------------------
(18) Inapplicable.
(19) Other: Directors' Power of Attorney. Attached as Exhibit.
----------------------------
Item 25. Persons Controlled by or under Common Control with Registrant. None.
-------------------------------------------------------------
Item 26. Number of Holders of Securities.
-------------------------------
(1) (2)
Number of
Title of Class Record Holders
-------------- --------------
Delaware Group Trend Fund, Inc.'s:
Trend Fund A Class
Common Stock Par Value 30,985 Accounts
$.50 Per Share as of July 31, 1995
Trend Fund B Class
Common Stock Par Value 668 Accounts
$.50 Per Share as of July 31, 1995
Trend Fund Institutional Class
Common Stock Par Value 37 Accounts
$.50 Per Share as of July 31, 1995
Item 27. Indemnification. Incorporated by reference to Post-Effective
---------------
Amendment No. 31 filed June 27, 1983 Article VII of the By-Laws, as
amended, attached in Exhibit 24(b)(2).
iii
<PAGE>
Form N-1A
File No. 2-28871
Delaware Group Trend Fund, Inc.
Item 28. Business and Other Connections of Investment Adviser.
----------------------------------------------------
Delaware Management Company, Inc. (the "Manager") or its affiliate,
Delaware International Advisers Ltd., also serves as investment manager to the
other funds in the Delaware Group (Delaware Group Delaware Fund, Inc., Delaware
Group Value Fund, Inc., Delaware Group DelCap Fund, Inc., Delaware Group Decatur
Fund, Inc., Delaware Group Delchester High-Yield Bond Fund, Inc., Delaware Group
Government Fund, Inc., Delaware Group Limited-Term Government Funds, Inc.,
Delaware Group Cash Reserve, Inc., Delaware Group Tax-Free Fund, Inc., DMC Tax-
Free Income Trust-Pennsylvania, Delaware Group Tax-Free Money Fund, Inc.,
Delaware Group Premium Fund, Inc., Delaware Group Global & International Funds,
Inc., Delaware Pooled Trust, Inc., Delaware Group Dividend and Income Fund, Inc.
and Delaware Group Global Dividend and Income Fund, 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 servicing, dividend disbursing and transfer agent for all of the
other mutual funds in the Delaware Group.
The following persons serving as directors or officers of the Manager
have held the following positions during the past two years:
<TABLE>
<CAPTION>
Name and Principal
Business Address* Positions and Offices with Manager and Other Positions and Offices Held
- ------------------ -----------------------------------------------------------------------
<S> <C>
Wayne A. Stork Chairman of the Board, Chief Executive Officer, Chief
Investment Officer and Director of Delaware Management
Company, Inc.; Chairman of the Board and Director of the
Registrant, each of the other funds in the Delaware Group
and Delaware Investment Counselors, Inc.; Chairman, Chief
Executive Officer and Director of Delaware Management
Holdings, Inc., DMH Corp., Delaware International Advisers
Ltd., Delaware International Holdings Ltd. and Founders
Holdings, Inc.; and Director of Delaware Distributors, Inc.
and Delaware Service Company, Inc.
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
iv
<PAGE>
Form N-1A
File No. 2-28871
Delaware Group Trend Fund, Inc.
<TABLE>
<CAPTION>
Name and Principal
Business Address* Positions and Offices with Manager and Other Positions and Offices Held
- -------------------- -----------------------------------------------------------------------
<S> <C>
Brian F. Wruble President, Chief Operating Officer and Director of
Delaware Management Company, Inc., Delaware Management
Holdings, Inc. and DMH Corp.; President and Chief
Executive Officer of the Registrant and, with the
exception of Delaware Pooled Trust, Inc., each of the
other funds in the Delaware Group; Director of Delaware
International Advisers Ltd. and Delaware Investment
Counselors, Inc.; Chairman, Chief Executive Officer and
Director of Delaware Service Company, Inc.; Chairman and
Director of Delaware Distributors, Inc.; Chairman of
Delaware Distributors, L.P.; President of Founders
Holdings, Inc.; and President and Chief Operating Officer
of Delaware International Holdings Ltd.
Winthrop S. Jessup Executive Vice President and Director of Delaware
Management Company, Inc., DMH Corp., Delaware
International Holdings Ltd. and Founders Holdings, Inc.;
Executive Vice President of the Registrant and, with the
exception of Delaware Pooled Trust, Inc., each of the
other funds in the Delaware Group and Delaware Management
Holdings, Inc.; President and Chief Executive Officer of
Delaware Pooled Trust, Inc.; Vice Chairman of Delaware
Distributors, L.P.; Vice Chairman and Director of
Delaware Distributors, Inc.; Director of Delaware Service
Company, Inc., Delaware Managment Trust Company and
Delaware International Advisers Ltd.; and President and
Director of Delaware Investment Counselors, Inc.
Richard G. Unruh, Jr. Executive Vice President and Director of Delaware
Management Company, Inc.; Executive Vice President of the
Registrant and each of the other funds in the Delaware
Group; Senior Vice President of Delaware Management
Holdings, Inc.; and Director of Delaware International
Advisers Ltd.
Paul E. Suckow Senior 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.; Senior Vice
President and Director of Founders Holdings, Inc.; and
Director of Founders CBO Corporation
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103
v
<PAGE>
Form N-1A
File No. 2-28871
Delaware Group Trend Fund, Inc.
<TABLE>
<CAPTION>
Name and Principal
Business Address* Positions and Offices with Manager and Other Positions and Offices Held
- -------------------- -----------------------------------------------------------------------
<S> <C>
David K. Downes Senior Vice President, Chief Administrative Officer
and Chief Financial Officer of Delaware Management
Company, Inc., the Registrant, each of the other
funds in the Delaware Group and Delaware
Distributors, L.P.; Chairman and Director of Delaware
Management Trust Company; Senior Vice President,
Chief Administrative Officer, Chief Financial Officer
and Treasurer of Delaware Management Holdings, Inc.;
Senior Vice President, Chief Financial Officer,
Treasurer and Director of DMH Corp.; Senior Vice
President, Chief Administrative Officer, Chief
Financial Officer and Director of Delaware
Distributors, Inc. and Delaware Service Company,
Inc.; Chief Financial Officer and Director of
Delaware International Holdings Ltd.; Senior Vice
President, Chief Financial Officer and Treasurer of
Delaware Investment Counselors, Inc.; Senior Vice
President and Director of Founders Holdings, Inc.;
and Director of Delaware International Advisers Ltd.
George M. Chamberlain, Jr. Senior Vice President, Secretary and Director of
Delaware Management Company, Inc., DMH Corp.,
Delaware Distributors, Inc. and Delaware Service
Company, Inc.; Senior Vice President and Secretary of
the Registrant, each of the other funds in the
Delaware Group, Delaware Distributors, L.P., Delaware
Investment Counselors, Inc. and Delaware Management
Holdings, Inc.; Executive Vice President, Secretary
and Director of Delaware Management Trust Company;
Corporate Vice President, Secretary and Director of
Founders Holdings, Inc.; Secretary and Director of
Delaware International Holdings Ltd.; and Director of
Delaware International Advisers Ltd.
Richard J. Flannery Managing Director/Corporate Tax & Affairs of 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 CBO Corporation, Delaware International
Holdings Ltd. and Delaware Investment Counselors,
Inc.; Vice President of the Registrant and each of
the other funds in the Delaware Group; Managing
Director/Corporate Tax & Affairs and Director of
Founders Holdings, Inc.; and Director of Delaware
International Advisers Ltd.
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
vi
<PAGE>
Form N-1A
File No. 2-28871
Delaware Group Trend Fund, Inc.
<TABLE>
<CAPTION>
Name and Principal
Business Address* Positions and Offices with Manager and Other Positions and Offices Held
- ------------------- -----------------------------------------------------------------------
<S> <C>
Michael P. Bishof/1/ Vice President and Treasurer of Delaware Management
Company, Inc., the Registrant, each of the other funds
in the Delaware Group, Delaware Distributors, L.P.,
Delaware Distributors, Inc., Delaware Service Company,
Inc., Founders Holdings, Inc. and Founders CBO
Corporation
Eric E. Miller 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., DMH Corp., Delaware Distributors, L.P.,
Delaware Distributors Inc., Delaware Service Company,
Inc., Delaware Management Trust Company, Founders
Holdings, Inc. and Delaware Investment Counselors, Inc.
Joseph H. Hastings Vice President/Corporate Controller 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 Investment Counselors, Inc. and Founders
Holdings, Inc.; Executive Vice President, Chief
Financial Officer and Treasurer of Delaware Management
Trust Company; and Assistant Treasurer of Founders CBO
Corporation
Bruce A. Ulmer Vice President/Director of Internal Audit of Delaware
Management Company, Inc., the Registrant, each of the
funds in the Delaware Group, Delaware Management
Holdings, Inc., DMH Corp. and Delaware Management Trust
Company
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 and Delaware Investment Counselors, Inc.
Rosemary E. Milner Vice President/Legal of Delaware Management Company,
Inc., the Registrant, each of the other funds in the
Delaware Group, Delaware Distributors, L.P. and
Delaware Distributors, Inc.
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
vii
<PAGE>
Form N-1A
File No. 2-28871
Delaware Group Trend Fund, Inc.
<TABLE>
<CAPTION>
Name and Principal
Business Address* Positions and Offices with Manager and Other Positions and Offices Held
- ----------------------- -----------------------------------------------------------------------
<S> <C>
Douglas L. Anderson/2/ Vice President/Operations of Delaware Management
Company, Inc. and Delaware Service Company, Inc.;
and Vice President/Operations and Director of
Delaware Management Trust Company
Diane Z. Frustaci Vice President/Human Resources of Delaware
Management Company, Inc., Delaware Distributors,
L.P. and Delaware Distributors, Inc; and Vice
President/Director of Human Resources of Delaware
Service Company, Inc.
Michael T. Taggart/3/ Vice President/Facilities Management and
Administrative Services of Delaware Management
Company, Inc.
Gerald T. Nichols Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., and 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 and Director
of Founders CBO Corporation
J. Michael Pokorny Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., and each of the tax-exempt
funds and the fixed income funds in the Delaware
Group
Gary A. Reed Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., and each of the tax-exempt
funds and the fixed income funds in the Delaware
Group and Delaware Investment Counselors, Inc.
Paul A. Matlack Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., and 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 Secretary and Director
of Founders CBO Corporation
James R. Raith, Jr. Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., and each of the tax-exempt
funds and the fixed income funds in the Delaware
Group; Vice President of Founders Holdings, Inc.;
and President and Director of Founders CBO
Corporation
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
viii
<PAGE>
Form N-1A
File No. 2-28871
Delaware Group Trend Fund, Inc.
<TABLE>
<CAPTION>
Name and Principal
Business Address* Positions and Offices with Manager and Other Positions and Offices Held
- --------------------- -----------------------------------------------------------------------
<S> <C>
Patrick P. Coyne Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., and each of the tax-
exempt funds and the fixed income funds in the
Delaware Group
Roger A. Early/4/ Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., and each of the tax-
exempt funds and the fixed income funds in the
Delaware Group
Edward N. Antoian Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., the Registrant and each
of the other equity funds in the Delaware Group
George H. Burwell Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., the Registrant and each
of the other equity funds in the Delaware Group
John B. Fields Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., the Registrant, each of
the other equity funds in the Delaware Group and
Delaware Investment Counselors, Inc.
Edward A. Trumpbour Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., the Registrant and each
of the other equity funds in the Delaware Group
David C. Dalrymple Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., the Registrant and each
of the other equity funds in the Delaware Group
Richelle S. Maestro Vice President and Assistant Secretary of Delaware
Management Company, Inc., Delaware Management
Holdings, Inc., Delaware Distributors, L.P.,
Delaware Distributors, Inc., Delaware Service
Company, Inc., the Registrant, each of the other
funds in the Delaware Group, DMH Corp., Delaware
Management Trust Company, Delaware Investment
Counselors, Inc. and Founders Holdings, Inc.; and
Assistant Secretary of Founders CBO Corporation
Jennifer L. Craney Assistant Vice President/Fixed Income Trading of
Delaware Management Company, Inc.; and Assistant
Vice President/Fixed Income of each of the tax-
exempt funds, the fixed income funds and the
closed-end funds in the Delaware Group
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
ix
<PAGE>
Form N-1A
File No. 2-28871
Delaware Group Trend Fund, Inc.
<TABLE>
<CAPTION>
Name and Principal
Business Address* Positions and Offices with Manager and Other Positions and Offices Held
- ----------------------- -----------------------------------------------------------------------
<S> <C>
Robert C. Fett Assistant Vice President/Fixed Income Research of
Delaware Management Company, Inc.; and Assistant Vice
President/Municipal Credit Research of each of the
tax-exempt funds and the fixed income funds in the
Delaware Group
Paul Grillo Assistant Vice President/Fixed Income Trading of
Delaware Management Company, Inc., and each of the
tax-exempt funds and the fixed income funds and the
closed-end funds in the Delaware Group
Robert C. Whiteman Assistant Vice President/Fixed Income Trading of
Delaware Management Company, Inc. and each of the
tax-exempt funds, the fixed income funds and the
closed-end funds in the Delaware Group
Cynthia I. Isom Assistant Vice President/Fixed Income Trading of
Delaware Management Company, Inc.; and Assistant Vice
President/Trading of each of the tax-exempt funds,
the fixed income funds and the closed-end funds in
the Delaware Group
Lorraine Warren Assistant Vice President/Trading of Delaware
Management Company, Inc., and each of the tax-exempt
funds and the fixed income funds in the Delaware
Group
Helen C. Merichko Assistant Vice President/Administration and Planning
of Delaware Management Company, Inc., Delaware
Distributors, L.P. and Delaware Distributors, Inc.
Richard W. Buckmaster/5/ Assistant Vice President/Internal Audit of Delaware
Management Company, Inc., the Registrant and each of
the funds in the Delaware Group
Susan L. Hanson/6/ Assistant Vice President/Assistant Controller of
Delaware Management Company, Inc.
John P. Haydu Assistant Vice President/Corporate Accounting of
Delaware Management Company, Inc.
Audrey E. Kohart/7/ Assistant Vice President/Assistant Controller of
Delaware Management Company, Inc.
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
x
<PAGE>
Form N-1A
File No. 2-28871
Delaware Group Trend Fund, Inc.
<TABLE>
<CAPTION>
Name and Principal
Business Address* Positions and Offices with Manager and Other Positions and Offices Held
- ----------------------- -----------------------------------------------------------------------
<S> <C>
Patricia A. McDonnell Assistant Vice President/Corporate Accounting of
Delaware Management Company, Inc.
Donald G. Padilla/8/ Assistant Vice President/Investor Relations/Products
Reporting of Delaware Management Company, Inc.
Patricia A. Olivieri Human Resources Officer of Delaware Management
Company, Inc.
Nancy L. Nessler/9/ Human Resources Officer of Delaware Management
Company, Inc.
</TABLE>
/1/ VICE PRESIDENT/GLOBAL INVESTMENT MANAGEMENT OPERATIONS, Bankers Trust and
VICE PRESIDENT, CS First Boston Investment Management prior to June 1995.
/2/ VICE PRESIDENT OF OPERATIONS, Supervised Service Company prior to March
1994.
/3/ ASSISTANT VICE PRESIDENT/ADMINISTRATIVE SERVICES, United Pacific Life
Insurance prior to January 1994.
/4/ SENIOR VICE PRESIDENT AND PORTFOLIO MANAGER, Federated Investors prior to
July 1994.
/5/ SENIOR EDP AUDIT MANAGER, The Vanguard Group prior to November 1993.
/6/ MANAGER OF FINANCIAL ADVISORY SERVICES, Coopers & Lybrand prior to March
1994.
/7/ BUDGET AND FINANCIAL ANALYST, Reliance Insurance prior to June 1993.
/8/ MANAGER/INVESTMENT ACCOUNTING, The Vanguard Group prior to October 1994.
/9/ EMPLOYMENT RECRUITER, Silo, Inc. prior to February 1994.
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
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:
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Offices
Business Address* with Underwriter with Registrant
- --------------------------- -------------------- --------------------
<S> <C> <C>
Delaware Distributors, Inc. General Partner None
Delaware Management
Company, Inc. Limited Partner Investment Manager
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xi
<PAGE>
Form N-1A
File No. 2-28871
Delaware Group Trend Fund, Inc.
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Offices
Business Address* with Underwriter with Registrant
- ------------------------- -------------------- --------------------
<S> <C> <C>
Delaware Investment
Counselors, Inc. Limited Partner None
Brian F. Wruble Chairman President and Chief
Executive Officer
Winthrop S. Jessup Vice Chairman Executive Vice President
Keith E. Mitchell President and Chief None
Executive Officer
David K. Downes Senior Vice President/Chief Senior Vice President/Chief
Administrative Officer Administrative Officer/Chief
Financial Officer
George M. Chamberlain, Jr. Senior Vice President/ Senior Vice President/
Secretary Secretary
J. Lee Cook Senior Vice President/ None
National Sales Manager
Stephen H. Slack Senior Vice President/ None
Wholesaler
William F. Hostler Senior Vice President/ None
Marketing Services
Minette van Noppen Senior Vice President/ None
Retirement Services
Richard J. Flannery Managing Director/Corporate Vice President
and Tax Affairs
Eric E. Miller Vice President/ Vice President/
Assistant Secretary Assistant Secretary
Richelle S. Maestro Vice President/ Vice President/
Assistant Secretary Assistant Secretary
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xii
<PAGE>
Form N-1A
File No. 2-28871
Delaware Group Trend Fund, Inc.
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Offices
Business Address* with Underwriter with Registrant
- ------------------------ ------------------- --------------------
<S> <C> <C>
Joseph H. Hastings Vice President/ Vice President/
Corporate Controller Corporate Controller
Michael P. Bishof Vice President/Treasurer Vice President/Treasurer
Lisa O. Brinkley Vice President/ Vice President/
Compliance Compliance
Rosemary E. Milner Vice President/Legal Vice President/Legal
Diane M. Anderson Vice President/Retirement None
Services
Diane Z. Frustaci Vice President/Human Resources None
Denise F. Guerriere Vice President/Client Services None
Julia R. Vander Els Vice President/ None
Retirement Services
Jerome J. Alrutz Vice President/ None
Retirement Services
Martin J. Cole Vice President/ None
Retirement Services
Joanne A. Mettenheimer Vice President/ None
National Accounts
Christopher H. Price Vice President/Annuity None
Marketing & Administration
Thomas S. Butler Vice President/ None
DDI Administration
Frank Albanese Vice President/Wholesaler None
William S. Carroll Vice President/Wholesaler None
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xiii
<PAGE>
Form N-1A
File No. 2-28871
Delaware Group Trend Fund, Inc.
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Offices
Business Address* with Underwriter with Registrant
- ------------------------- -------------------- --------------------
<S> <C> <C>
William S. Castetter Vice President/Wholesaler None
Thomas J. Chadie Vice President/Wholesaler None
Robert M. Frank Vice President/Wholesaler None
Douglas R. Glennon Vice President/Wholesaler None
Alan D. Kessler Vice President/Wholesaler None
William M. Kimbrough Vice President/Wholesaler None
Mac McAuliffe Vice President/Wholesaler None
Patrick L. Murphy Vice President/Wholesaler None
Henry W. Orvin Vice President/Wholesaler None
Jackson B. Reece, Jr. Vice President/Wholesaler None
Philip G. Rickards Vice President/Wholesaler None
Dion D. Rooney Vice President/Wholesaler None
Michael W. Rose Vice President/Wholesaler None
Thomas E. Sawyer Vice President/Wholesaler None
Sanford G. Simmons, Jr. Vice President/Wholesaler None
Robert E. Stansbury Vice President/Wholesaler None
Larry D. Stone Vice President/Wholesaler None
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xiv
<PAGE>
Form N-1A
File No. 2-28871
Delaware Group Trend Fund, Inc.
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Offices
Business Address* with Underwriter with Registrant
- ----------------------- -------------------- --------------------
<S> <C> <C>
Holly W. Reimel Assistant Vice President/ None
Telemarketing
Daniel J. O'Brien Assistant Vice President/ None
Insurance Products
Helen C. Merichko Assistant Vice President/ None
Administration & Planning
Catherine A. Seklecki Assistant Vice President/ None
Retirement Services
Jodie L. Johnson Assistant Vice President/ None
National Accounts
Dinah J. Huntoon Assistant Vice President/ None
Product Management
Catherine Love Assistant Vice President/ None
National Accounts
Maria E. Pollack Assistant Vice President/ None
Administration Manager
Susan T. Friestedt Assistant Vice President/ None
Customer Service
Ellen M. Krott Assistant Vice President/ None
Communications
Andrew J. Whittaker Assistant Vice President/ None
Wholesaler
Zina DeVassal Marketing Officer/ None
Wholesaler
Michael P. Gain Assistant Vice President/Financial None
Institutions Division
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xv
<PAGE>
Form N-1A
File No. 2-28871
Delaware Group Trend Fund, Inc.
(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.
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.
xvi
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, this Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in
this City of Philadelphia and Commonwealth of Pennsylvania on this 25th day of
August, 1995.
DELAWARE GROUP TREND FUND, INC.
By/s/Brian F. Wruble
-------------------------------------
Brian F. Wruble
President and Chief Executive Officer
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:
<TABLE>
<CAPTION>
Signature Title Date
- ---------------------------------- -------------------------------------- ---------------
<S> <C> <C>
/s/Wayne A. Stork Chairman of the Board and Director August 25, 1995
- ----------------------------------
Wayne A. Stork
/s/Brian F. Wruble President and Chief Executive Officer August 25, 1995
- ----------------------------------
Brian F. Wruble
Senior Vice President/Chief Financial
Officer/Chief Administrative Officer
(Principal Financial Officer and
/s/David K. Downes Principal Accounting Officer) August 25, 1995
- ----------------------------------
David K. Downes
/s/Walter P. Babich Director August 25, 1995
- ----------------------------------
Walter P. Babich
/s/Anthony D. Knerr Director August 25, 1995
- ----------------------------------
Anthony D. Knerr
/s/Ann R. Leven Director August 25, 1995
- ----------------------------------
Ann R. Leven
/s/W. Thacher Longstreth Director August 25, 1995
- ----------------------------------
W. Thacher Longstreth
/s/Charles E. Peck Director August 25, 1995
- ----------------------------------
Charles E. Peck
</TABLE>
*By/s/Wayne A. Stork
-----------------------------
Wayne A. Stork
as Attorney-in-Fact for
each of the persons indicated
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Exhibit
- ----------- -------
EX-99.B1 Articles of Incorporation
EX-99.B2 By-Laws
EX-99.B5 Investment Management Agreement
EX-99.B6C Dealer's Agreement
(Module Name
DEALERS_AGREE)
EX-99.B6D Form of Mutual Fund Agreement for the
(Module Name Delaware Group of Funds
MUTUAL_FUND_AGR)
EX-99.B7 Amended and Restated Profit Sharing Plan
(Module Name
PROF_SHARE_PLAN)
EX-99.B11 Consent of Auditors
EX-99.B14 Amended Model Plans
(Module Name
MODEL_PLANS)
EX-99.B16 Schedules of Computation for each
Performance Quotation
EX-27 Financial Data Schedules
EX-99.B19 Directors' Power of Attorney
<PAGE>
Exhibit 99.B1
DELAWARE GROUP TREND FUND, INC.
ARTICLES SUPPLEMENTARY
TO
ARTICLES OF INCORPORATION
Delaware Group Trend Fund, Inc., a Maryland corporation having its
principal office in Baltimore, Maryland (the "Corporation"), hereby certifies,
in accordance with Section 2-208 of the Maryland General Corporation Law, to
the State Department of Assessments and Taxation of Maryland that:
FIRST: The Board of Directors of the Corporation has adopted
a resolution classifying a third class of shares of Common Stock of the
Corporation as the Trend Fund B Class and allocating 25,000,000 shares of
authorized, unissued and unclassified Common Stock, par value $0.50 per share,
to the Trend Fund B Class (the "B Class").
SECOND: The shares of the B Class shall represent
proportionate interests in the same portfolio of investments as the shares of
the Trend Fund (Institutional) class and the Trend Fund class of the
Corporation. The shares of the B Class shall have the same preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends, qualifications, or terms or conditions of redemption as the shares
of the Trend Fund (Institutional) class and the Trend Fund class, all as set
forth in the Articles of Incorporation of the Corporation, except for the
differences hereafter set forth:
1. The dividends and distributions of investment income
and capital gains with respect to the B Class of shares of Common Stock shall
be in such amounts as may be declared from time to time by the Board of
Directors, and such dividends and distributions may vary with respect to such
class from the dividends and distributions of investment income and capital
gains with respect to the other classes of Common Stock of the Corporation to
reflect differing allocations of the expenses of the Corporation among the
classes and any resultant difference among the net asset values per share of
the classes, to such extent and for such purposes as the Board of Directors
may deem appropriate. The allocation of investment income and capital gains
and expenses and liabilities of the Corporation among the three classes of
Common Stock of the Corporation shall be determined by the Board of Directors
in a manner that is consistent with the order, as applicable, dated November
9, 1992 (Investment Company Act of 1940 Release No. 19086) issued by the
Securities and Exchange Commission, and any future order or any rule or
interpretation under the Investment Company Act of 1940, as amended, that
modifies or supersedes such order;
<PAGE>
2. Except as may otherwise be required by law pursuant to any
applicable order, rule or interpretation issued by the Securities and Exchange
Commission, or otherwise, the holders of the B Class shares shall have (i)
exclusive voting rights with respect to any matter submitted to a vote of
stockholders that affects only holders of the B Class shares, including
without limitation, the provision of any Distribution Plan adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940, as amended, (a
"Distribution Plan") applicable to the B Class and (ii) no voting rights with
respect to the provisions of any Distribution Plan applicable to the existing
classes of Common Stock or with regard to any other matter submitted to a vote
of stockholders which does not affect holders of the B Class shares.
3. (a) Each share of the B Class, other than shares
described in paragraph (3)(b) herein, shall be converted automatically, and
without any action or choice on the part of the holder thereof, into shares of
the Trend Fund class on the Conversion Date. The term "Conversion Date" when
used herein shall mean a date set forth in the prospectus of the B Class, as
such prospectus may be amended from time to time, that is no later than three
months after either (i) the date on which the eighth anniversary of the date
of issuance of the share occurs, or (ii) any such other anniversary date as
may be determined by the Board of Directors and set forth in the prospectus of
the B Class, as such prospectus may be amended from time to time; provided
that any such other anniversary date determined by the Board of Directors
shall be a date that will occur prior to the anniversary date set forth in
clause (i) and any such other date theretofore determined by the Board of
Directors shall be a date that will occur prior to the anniversary date set
forth in clause (i) and any such other date theretofore determined by the
Board of Directors pursuant to this clause (ii); but further provided that,
subject to the provisions of the next sentence, for any shares of the B Class
acquired through an exchange, or through a series of exchanges, as permitted
by the Corporation as provided in the prospectus of the B Class, as such
prospectus may be amended from time to time, from another investment company
or another series of the Corporation (an "eligible investment company"), the
Conversion Date shall be the conversion date applicable to the shares of stock
of the eligible investment company originally subscribed for in lieu of the
Conversion Date of any stock acquired through exchange if such eligible
investment company issuing the stock originally subscribed for had a
conversion feature, but not later than the Conversion Date determined under
(i) above. For the purpose of calculating the holding period required for
conversion, the date of issuance of a share of the B Class shall mean (i) in
the case of a share of the B Class obtained by the holder thereof through an
original subscription to the Corporation, the date of the issuance of such
share of the B Class, or (ii) in the case of a share of the B Class obtained
by the holder thereof through an exchange, or through a series of exchanges,
from an eligible investment company, the date of issuance of the share of the
eligible investment company to which the holder originally subscribed.
(b) Each share of the B Class (i)
<PAGE>
purchased through the automatic reinvestment of a dividend or distribution
with respect to the B Class or the corresponding B Class of any other
investment company or any other series of the Corporation issuing such class
of shares or (ii) issued pursuant to an exchange privilege granted by the
Corporation in an exchange or series of exchanges for shares originally
purchased through the automatic reinvestment of a dividend or distribution
with respect to shares of capital stock of an eligible investment company
shall be segregated in a separate sub-account on the stock records of the
Corporation for each of the holders of record thereof. On any Conversion
Date, a number of the shares held in the separate sub-account of the holder of
record of the share or shares being converted, calculated in accordance with
the next following sentence, shall be converted automatically, and without any
action or choice on the part of the holder, into shares of the Trend Fund
class. The number of shares in the holder's separate sub-account so converted
shall (i) bear the same ratio to the total number of shares maintained in the
separate sub-account on the Conversion Date (immediately prior to conversion)
as the number of shares of the holder converted on the Conversion Date
pursuant to paragraph (3)(a) hereof bears to the total number of B Class
shares of the holder on the Conversion Date (immediately prior to conversion)
after subtracting the shares then maintained in the holder's separate sub-
account, or (ii) be such other number as may be calculated in such other
manner as may be determined by the Board of Directors and set forth in the
prospectus of the B Class, as such prospectus may be amended from time to
time.
(c) The number of shares of the Trend Fund class into which a
share of the B Class is converted pursuant to paragraphs 3(a) and 3(b) hereof
shall equal the number (including for this purpose fractions of a share)
obtained by dividing the net asset value per share of the B Class for purposes
of sales and redemption thereof on the Conversion Date by the net asset value
per share of the Trend Fund class for purposes of sales and redemption thereof
on the Conversion Date.
(d) On the Conversion Date, the shares of the B Class
converted into shares of the Trend Fund class will no longer be deemed
outstanding and the rights of the holders thereof (except the right to receive
(i) the number of shares of the Trend Fund class into which the shares of the
B Class have been converted and (ii) declared but unpaid dividends to the
Conversion Date or such other date set forth in the prospectus of the B Class,
as such prospectus may be amended from time to time and (iii) the right to
vote converting shares of the B Class held as of any record date occurring on
or before the Conversion Date and theretofore set with respect to any meeting
held after the Conversion Date) will cease. Certificates representing shares
of the Trend Fund class resulting from the conversion need not be issued until
certificates representing shares of the B Class converted, if issued, have
been received by the Corporation or its agent duly endorsed for transfer.
<PAGE>
(e) The automatic conversion of the B Class into the Trend
Fund class as set forth in paragraphs 3(a) and 3(b) of this Article SECOND
shall be suspended at any time that the Board of Directors determines (i) that
there is not available a reasonably satisfactory opinion of counsel to the
effect that (x) the assessment of the higher fee under the Distribution Plan
with respect to the B Class does not result in the Corporation's dividends or
distributions constituting a "preferential dividend" under the Internal
Revenue Code of 1986, as amended, and (y) the conversion of the B Class does
not constitute a taxable event under federal income tax law, or (ii) any other
condition to conversion set forth in the prospectus of the B Class, as such
prospectus may be amended from time to time, is not satisfied.
(f) The automatic conversion of the B Class into the Trend
Fund class as set forth in paragraphs 3(a) and 3(b) hereof may also be
suspended by action of the Board of Directors at any time that the Board of
Directors determines such suspension to be appropriate in order to comply
with, or satisfy the requirements of the Investment Company Act of 1940, as
amended, and in effect from time to time, or any rule, regulation or order
issued thereunder relating to voting by the holders of the B Class on any
Distribution Plan with respect to the Trend Fund class and in effect from time
to time, and in connection with, or in lieu of, any such suspension, the Board
of Directors may provide holders of the B Class with alternative conversion or
exchange rights into other classes of stock of the Corporation in a manner
consistent with the law, rule, regulation or order giving rise to the possible
suspension of the conversion right.
THIRD: The shares of the B Class have been classified by the
Board of Directors pursuant to authority contained in the Articles of
Incorporation of the Corporation.
IN WITNESS WHEREOF, Delaware Group Trend Fund, Inc. has caused these
Articles Supplementary to be signed in its name and on its behalf this 2nd day
of September, 1994.
DELAWARE GROUP TREND FUND, INC.
By:/s/George M. Chamberlain, Jr.
-----------------------------
George M. Chamberlain, Jr.
Senior Vice President
ATTEST:
/s/Eric E. Miller
-------------------
Eric E. Miller
Assistant Secretary
<PAGE>
THE UNDERSIGNED, Senior Vice President of DELAWARE GROUP TREND FUND,
INC., who executed on behalf of the said Corporation the foregoing Articles
Supplementary, of which this instrument is made a part, hereby acknowledges,
in the name of and on behalf of said Corporation, said Articles Supplementary
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 authorization and approval thereof are true in all
material respects, under the penalties of perjury.
/s/George M. Chamberlain, Jr.
-----------------------------
George M. Chamberlain, Jr.
Senior Vice President
<PAGE>
DELAWARE GROUP TREND FUND, INC.
ARTICLES SUPPLEMENTARY
TO
ARTICLES OF INCORPORATION
Delaware Group Trend Fund, Inc., a Maryland corporation having its
principal office in Baltimore, Maryland (the "Corporation"), hereby certifies,
in accordance with Section 2-208 of the Maryland General Corporation Law, to
the State Department of Assessments and Taxation of Maryland that:
FIRST: The Board of Directors of the Corporation, at a
meeting duly convened and held on January 16, 1992, adopted a resolution
designating the Trend Fund (Institutional) class of shares (as distinguished
from the existing Trend Fund class of shares) as the second class of the
Common Stock series of the Corporation and allocating Twenty-Five Million
(25,000,000) shares of authorized and unissued Common Stock, with a par value
of Fifty Cents ($.50) per share, to each class of the Corporation.
SECOND: The shares of the Trend Fund (Institutional) class
and the Trend Fund class shall represent proportionate interests in the same
portfolio of investments of the Common Stock series. The shares of the Trend
Fund (Institutional) class of the Corporation shall have the same rights and
privileges, and shall be subject to the same limitations and priorities as the
shares of the Trend Fund class, all as set forth in the Articles of
Incorporation of the Corporation, provided that dividends paid on the shares
of the Trend Fund (Institutional) class of shares shall not reflect any
reduction for payment of fees under the Distribution Plan of the Trend Fund
class adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940,
as amended, and provided further, that the shares of the Trend Fund
(Institutional) class shall not vote upon or with respect to any matter
relating to or arising from any such Distribution Plan.
THIRD: The shares of the Trend Fund (Institutional) class
and the Trend Fund class of the Corporation have been classified by the Board
of Directors pursuant to authority contained in the Articles of Incorporation
of the Corporation.
<PAGE>
IN WITNESS WHEREOF, Delaware Group Trend Fund, Inc. has caused these
Articles Supplementary to be signed in its name and on its behalf this 22nd
day of May, 1992.
DELAWARE GROUP TREND FUND, INC.
By:/s/George M. Chamberlain, Jr.
-----------------------------
George M. Chamberlain, Jr.
Vice President
ATTEST:
/s/Eric E. Miller
-------------------
Eric E. Miller
Assistant Secretary
THE UNDERSIGNED, Vice President of DELAWARE GROUP TREND FUND, INC.,
who executed on behalf of the said Corporation the foregoing Articles
Supplementary, of which this instrument is made a part, hereby acknowledges,
in the name of and on behalf of said Corporation, said Articles Supplementary
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/George M. Chamberlain, Jr.
-----------------------------
George M. Chamberlain, Jr.
<PAGE>
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
DELTA TREND FUND, INC.
DELTA TREND FUND, INC., a Maryland corporation having its principal
office in Baltimore City, Maryland (the "Corporation"), hereby certifies to
the State Department of Assessments and Taxation of Maryland, that:
ONE: ARTICLE SECOND of the Articles of Incorporation is hereby
amended in its entirety to read as follows:
SECOND: The name of the corporation is Delaware Group Trend
------
Fund, Inc.
The Corporation expressly agrees and acknowledges that the
name "Delaware Group" is the sole property of Delaware Management
Company, Inc. ("DMC"), that similar names are used by affiliated funds
in the investment business with the permission of DMC, and that the
Corporation's use of such name is with the permission of DMC. The
Corporation further expressly agrees and acknowledges that its use of
"Delaware Group" in its name may be terminated by DMC if the
Corporation ceases to use Delaware Management Company, Inc. as its
investment adviser or Delaware Distributors, Inc. ("DDI") as its
principal underwriter (or to use affiliates of DMC and DDI for such
purposes). The Corporation further expressly agrees and acknowledges
that in such event DMC may require the Corporation to present to its
shareholders, at the next annual or special meeting of the Corporation
held after such request, a proposal to change the name of the
Corporation to delete reference to the name "Delaware Group." The
Corporation further expressly agrees and acknowledges in such event to
use its best efforts to promptly comply with such request to change
its name and that the Board of Directors of the Corporation shall
recommend such a proposal to it shareholders. The Corporation further
expressly acknowledges and agrees, upon shareholder approval of such a
proposal, to make and cause to be made such filings to effect the
change of name as may be necessary with the State of Maryland, the
United States Securities and Exchange Commission, or other regulatory
authorities.
TWO: Pursuant to Section 2-604(b) of the Maryland General
Corporation Law, the board of directors of the Corporation on April 7, 1988
duly adopted a resolution setting forth the foregoing amendment to the
Articles of Incorporation, declaring said amendment to the Articles of
Incorporation advisable and directing that it be submitted for consideration
by the shareholders of the Corporation at the annual meeting to be held on
June 14, 1988.
THIRD: Notice setting forth said amendment to the Articles of
Incorporation and stating that a purpose of
<PAGE>
the meeting of the shareholders would be to take action thereon was given, as
required by law, to all shareholders entitled to vote thereon. The amendment
to the Articles of Incorporation was approved by the shareholders of the
Corporation at said meeting by the affirmative vote of a majority of all the
votes entitled to be cast thereon. (Approval by a majority of all the votes
entitled to be cast on the matter is authorized pursuant to the Articles of
Incorporation of the Corporation.)
FOURTH: The amendment to the Articles of Incorporation as
hereinabove set forth has been duly advised by the board of directors and
approved by the shareholders of the Corporation.
FIFTH: The amendment to the Articles of Incorporation as
hereinabove set forth shall be duly filed with Maryland Department of
Assessments and Taxation on June 15, 1988, the effective time being 5:00 p.m.
on that date.
IN WITNESS WHEREOF, Delta Trend Fund, has caused these Articles of
Amendment to be signed by its President and attested by its Secretary on June
14, 1988.
Attest: Delta Trend Fund, Inc.
/s/George M. Chamberlain, Jr. /s/John H. Durham
----------------------------------------------------
George M. Chamberlain, Jr. John H. Durham
Secretary President
THE UNDERSIGNED, President of Delta Trend Fund, 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/John H. Durham
-----------------
John H. Durham
President
<PAGE>
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
DELTA TREND FUND, INC.
DELTA TREND FUND, INC., a Maryland corporation having its principal
office in Baltimore City, Maryland (the "Corporation"), hereby certifies to
the State Department of Assessments and Taxation of Maryland, that:
ONE: (a) The Articles of Incorporation are hereby amended, as
permitted under Section 2-602 of the Maryland General Corporation Law, to
change the number of authorized shares, whether issued or unissued, into a
different number of shares of the same class, having a proportionately
different par value per share.
(b) To accomplish such amendment, the first paragraph of
ARTICLE FIFTH of the Articles of Incorporation is hereby amended in its
entirety to read as follows:
FIFTH: The total number of shares of stock which the
Corporation shall have authority to issue is One Hundred Million
(100,000,000) shares of stock, with a par value of Fifty Cents
($.50) per share, to be known and designated as Common Stock, such
shares of Common Stock having an aggregate par value of Fifty
Million Dollars ($50,000,000).
TWO: Effective upon the close of business of the day of filing of
these Articles of Amendment with the State Department of Assessments and
Taxation of Maryland, each outstanding share of common stock, par value One
Dollar ($1.00) per share, owned of record by a holder, shall be changed and
converted into Two (2) shares of common stock, par value Fifty Cents ($.50)
per share. Fractions of outstanding shares shall be proportionately changed
and converted.
THREE: The Board of Directors of the Corporation on January 16,
1986 duly adopted a resolution setting forth the above stated amendment to
ARTICLE FIFTH of the Articles of Incorporation, declaring said amendment of
the Articles of Incorporation advisable and directing that it be submitted for
consideration by the stockholders entitled to vote thereon.
FOUR: Notice setting forth a summary of the changes to be effected
by said amendment to ARTICLE FIFTH and stating that a purpose of the annual
meeting of the stockholders would be to take action on said amendment was
given, as required by law, to all stockholders entitled to vote thereon. The
amendments to the Articles of Incorporation was approved by the stockholders
of the Corporation at said annual meeting, held on April 15, 1986, by the
affirmative vote of a majority of all the votes entitled to be cast thereon.
(Approval by a majority of all the votes entitled to be cast on said matter is
authorized
<PAGE>
pursuant to the Articles of Incorporation of the Corporation.)
FIVE: The amendment to the Articles of Incorporation hereinabove
set forth has been declared advisable by the Board of Directors and approved
by the stockholders of the Corporation.
SIX: (a) The total number of shares of stock which the Corporation
was heretofore authorized to issue is Fifty Million (50,000,000) shares of
stock, with a par value of One Dollar ($1.00) per share, known and designated
as Common Stock, with an aggregate par value of Fifty Million Dollars
($50,000,000).
(b) The total number of shares of stock which the Corporation
is authorized to issue is changed by this amendment to One Hundred Million
(100,000,000) shares of stock, with a par value of Fifty Cents ($.50) per
share, to be known and designated as Common Stock, with an aggregate par value
of Fifty Million Dollars ($50,000,000).
IN WITNESS WHEREOF, DELTA TREND FUND, INC. has caused these Articles
of Amendment to be signed by its president or vice president and attested to
by its secretary or assistant secretary on May 5, 1986.
DELTA TREND FUND, INC.
By:/s/John H. Durham
-----------------
John H. Durham
President
ATTEST:
/s/George M. Chamberlain, Jr.
-----------------------------
George M. Chamberlain, Jr.
Secretary
THE UNDERSIGNED, President of DELTA TREND 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/John H. Durham
-----------------
John H. Durham
<PAGE>
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
DELTA TREND FUND, INC.
DELTA TREND FUND, INC., a Maryland corporation having its principal
office in Baltimore City, Maryland (the "Corporation"), hereby certifies to
the State Department of Assessments and Taxation of Maryland, that:
ONE: ARTICLE ELEVENTH of the Articles of Incorporation is hereby
amended in its entirety to read as follows:
ELEVENTH: Subject to the Investment Company Act of 1940, as
amended, each of the following actions, to the extent required to
be approved by the shareholders under the Maryland General
Corporation Law, shall be approved by a majority of all votes
entitled to be cast on the matter:
(i) Amendment or amendment and restatement of the Articles;
(ii) Reduction of stated capital;
(iii) Consolidation, merger, share exchange or transfer of
assets;
(iv) Distribution in partial liquidation; or
(v) Voluntary dissolution.
TWO: The board of directors of the Corporation on February 21,
1985 duly adopted a resolution setting forth the foregoing amendment to the
Articles of Incorporation, declaring said amendment of the Articles of
Incorporation advisable and directing that it be submitted for consideration
by the stockholders of the Corporation at the annual meeting to be held on
April 16, 1985.
<PAGE>
THIRD: Notice setting forth said amendment to the Articles of
Incorporation and stating that a purpose of the meeting of the stockholders
would be to take action thereon, was given, as required by law, to all
stockholders entitled to vote thereon. The amendment to the Articles of
Incorporation was approved by the stockholders of the Corporation at said
meeting by the affirmative vote of a majority of all the votes entitled to be
cast thereon. (Approval by a majority of all of the votes entitled to be cast
on the matter is authorized pursuant to the Articles of Incorporation of the
Corporation.)
FOURTH: The amendment to the Articles of Incorporation as
hereinabove set forth has been duly advised by the board of directors and
approved by the stockholders of the Corporation.
IN WITNESS WHEREOF, Delta Trend Fund, Inc. has caused these Articles
of Amendment to be signed by its President or Vice President and attested by
its Secretary or Assistant Secretary on April 26, 1985.
Attest: DELTA TREND FUND, INC.
/s/Donald M. Allen By:/s/William P. Brady
------------------ -------------------
Donald M. Allen William P. Brady
Secretary Executive Vice President
THE UNDERSIGNED, Executive Vice President of DELTA TREND 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/William P. Brady
-------------------
William P. Brady
<PAGE>
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
DELTA TREND FUND, INC.
DELTA TREND FUND, INC., a Maryland corporation having its principal
office in Baltimore City, Maryland (the "Corporation"), hereby certifies to
the State Department of Assessments and Taxation of Maryland, that:
ONE: The first paragraph of ARTICLE FIFTH of the Articles of
Incorporation is hereby amended in its entirety to read as follows:
The total number of shares of stock which the Corporation shall have
authority to issue is Fifty Million (50,000,000) shares of stock, with
a par value of One Dollar ($1.00) per share, to be known and
designated as Common Stock, such shares of Common Stock having an
aggregate par value of Fifty Million Dollars ($50,000,000).
TWO: The board of directors of the Corporation on December 15,
1983 duly adopted a resolution setting forth the foregoing amendment to the
Articles of Incorporation, declaring said amendment of the Articles of
Incorporation advisable and directing that it be submitted for consideration
by the stockholders of the Corporation at the annual meeting to be held on
April 17, 1984.
THIRD: Notice setting forth a summary of the changes to be
effected by said amendment to the Articles of Incorporation and stating that a
purpose of the meeting of the stockholders would be to take action thereon,
was given, as required by law, to all stockholders entitled to vote thereon.
The amendment to the Articles of Incorporation was approved by the
stockholders of the Corporation at said meeting by the affirmative vote of
61.8 percent of all the votes entitled to be cast thereon. (The Articles of
Incorporation of the Corporation authorizes approval by a majority of all of
the votes entitled to be cast on the matter.)
FOURTH: The amendment to the Articles of Incorporation as
hereinabove set forth has been duly advised by the board of directors and
approved by the stockholders of the Corporation.
FIFTH: (a) The total number of shares of stock which the
Corporation was heretofore authorized to issue is Ten Million (10,000,000)
shares, all of one class, of the par value of One Dollar ($1.00) per share,
and of the aggregate par value of Ten Million Dollars ($10,000,000).
(b) The total number of shares of stock is increased by
this amendment to Fifty Million (50,000,000) shares, all of one class, of the
par value of One Dollar ($1.00) per share, and of the aggregate par value of
Fifty Million Dollars ($50,000,000).
<PAGE>
IN WITNESS WHEREOF, Delta Trend Fund, Inc. has caused these Articles
of Amendment to be signed by its President or Vice President and attested by
its Secretary or Assistant Secretary on May 4, 1984.
DELTA TREND FUND, INC.
By:/s/Thomas F. Glancey
---------------------
Thomas F. Glancey
Attest:
/s/George M. Chamberlain, Jr.
-----------------------------
George M. Chamberlain, Jr.
Assistant Secretary
THE UNDERSIGNED, Executive Vice President of DELTA TREND 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/Thomas F. Glancey
---------------------
Thomas F. Glancey
<PAGE>
AGREEMENT AND ARTICLES OF MERGER
--------------------------------
AGREEMENT AND ARTICLES OF MERGER, dated as of the 4th day of March,
1983 (hereinafter referred to as the "Agreement"), by and between DELTA TREND
FUND, INC., a Maryland Corporation (hereinafter referred to as "Maryland
Corporation" or the "Surviving Corporation"), and DELTA TREND FUND, INC., a
Delaware Corporation (hereinafter referred to as "Delaware Corporation"), said
corporations being hereinafter sometimes collectively referred to as the
"Constituent Corporations."
BACKGROUND
----------
Maryland Corporation is a corporation duly organized and existing
under the laws of the State of Maryland, having been incorporated on March 4,
1983 under the General Corporation Law of the State of Maryland, and has
authorized capital stock consisting of 10,000,000 common shares, par value
$1.00 per share, with an aggregate par value of $10,000,000.
Delaware Corporation is a corporation duly organized and existing
under the laws of the State of Delaware, having been incorporated on November
17, 1966 under the General Corporation Law of the State of Delaware, and has
authorized capital stock consisting of 10,000,000 shares of common stock, par
value $1.00 per share, with an aggregate par value of $10,000,000.
The principal office of Maryland Corporation in the State of Maryland
is located in Baltimore City. Delaware Corporation has no principal office in
the State of Maryland and is not registered or qualified to do business in the
State of Maryland. Delaware Corporation does not possess any interest in real
property situated in the State of Maryland, the title to which could be
affected by recording an instrument in the Maryland land records.
The Boards of Directors of each of the Constituent Corporations have
adopted this Agreement as a Plan of Reorganization intended to qualify as such
under the provisions of Section 368(a)(1)(F) of the Internal Revenue Code of
1954, as amended.
The Board of Directors of Maryland Corporation and the Board of
Directors of Delaware Corporation have, by resolutions duly adopted, approved
this Agreement and the merger of the Delaware Corporation into Maryland
Corporation as being advisable and in the best interests of their respective
corporations and stockholders, and have directed the submission of this
Agreement to their respective stockholders.
NOW THEREFORE, in consideration of the premises and the mutual
covenants and conditions hereinafter contained, and intending to be legally
bound, the parties hereto agree as follows:
ARTICLE I
---------
<PAGE>
1.1 Delaware Corporation and Maryland Corporation agree that Delaware
Corporation shall be merged into Maryland Corporation (hereinafter the
"Merger"). Maryland Corporation shall be the Surviving Corporation and shall
be governed by the laws of the State of Maryland. The terms and conditions of
the Merger and the mode of carrying the same into effect are as herein set
forth in this Agreement.
1.2 The Articles of Incorporation of Maryland Corporation as they
shall exist on the Effective Date of the Merger (as hereinafter defined) shall
constitute the Articles of Incorporation of the Surviving Corporation.
1.3 The By-laws of Maryland Corporation as they exist on the Effective
Date of the Merger shall constitute the By-laws of the Surviving Corporation.
1.4 The Directors of Delaware Corporation on the Effective Date of the
Merger shall constitute the Board of Directors of the Surviving Corporation
and shall hold office until their terms expire at the annual meeting of
stockholders of the Surviving Corporation in 1984, and until their successors
are elected and shall qualify.
1.5 Arthur Young & Company shall continue as auditors to report upon
the financial condition of the Surviving Corporation for the fiscal year
ending June 30, 1983 provided the appointment of Arthur Young & Company for
the Delaware Corporation is approved by the stockholders of Delaware
Corporation.
ARTICLE II
----------
2.1 The manner and basis of converting the issued and outstanding
shares of the common stock of Delaware Corporation into the shares of common
stock of the Maryland Corporation shall be as follows:
Each share or fraction thereof of common stock of Delaware
Corporation issued and outstanding on the Effective Date of the Merger
(excluding any Treasury shares of Delaware Corporation which shares shall
cease to exist) shall thereupon be converted into an equal number of whole and
fractional shares of common stock of Maryland Corporation and each certificate
representing shares of Delaware Corporation shall represent the same number of
shares of Maryland Corporation. Each holder of a Delaware Corporation stock
certificate representing shares of Maryland Corporation shall at any time
thereafter have the right to surrender the same to Maryland Corporation and to
receive in exchange a certificate representing equal number of shares of
common stock of Maryland Corporation.
2.2 Each of the shares of Maryland Corporation common stock
outstanding on the Effective Date of the Merger shall be retired and restored
to the status of authorized but unissued.
ARTICLE III
-----------
3.1 The Merger shall become effective when, subject to the terms and
conditions hereof, the following actions
<PAGE>
shall have in all respects been completed:
(i) this Agreement shall have been adopted by the stockholders
of Maryland Corporation and Delaware Corporation in accordance with the
requirements of the laws of the States of Maryland and Delaware, respectively,
which adoption shall have been certified hereon by the Secretary or an
Assistant Secretary of Delaware Corporation, and
(ii) this Agreement, certified as aforesaid, shall have been
executed, acknowledged and filed in accordance with the requirements of the
laws of the States of Maryland and Delaware.
The date and time when the Merger shall become effective as
aforesaid is herein referred to as the "Effective Date of the Merger." As
soon as practicable after the Effective Date of the Merger, the Surviving
Corporation shall, pursuant to Section 103(c)(5) of the General Corporation
Law of the State of Delaware, cause a copy of this Agreement, certified by the
Secretary of State of the State of Delaware, to be recorded in the Office of
Recorder of the County of New Castle, Delaware.
3.2 On the Effective Date of the Merger, the separate existence of
Delaware Corporation shall cease, except to the extent, if any, continued by
statute. All the assets, rights, privileges, powers and franchises of
Delaware Corporation and all debts due on whatever account to it, shall be
taken and deemed to be transferred to and vested in the Surviving Corporation
without further act or deed; and all such assets, rights, privileges, powers
and franchises, and all and every other interest of Delaware Corporation shall
be thereafter as effectually the property of the Surviving Corporation as they
were of Delaware Corporation; and the title to and interest in any real estate
vested by deed, lease or otherwise, unto either of the Constituent
Corporations, shall not revert or be in any way impaired. The Surviving
Corporation shall be responsible for all the liabilities and obligations of
Delaware Corporation, but the liabilities of the Constituent Corporations or
of their stockholders, directors, or officers shall not be affected by the
Merger, nor shall the right of the creditors thereof or any persons dealing
with such corporations, or any liens upon the property of such corporations,
be impaired by the Merger, and any claim existing or action or proceeding
pending by or against either of such corporations may be prosecuted to
judgment as if the Merger had not taken place, or the Surviving Corporation
may be proceeded against or substituted in place of Delaware Corporation.
Except as otherwise specifically set forth in this Agreement, the identity,
existence, purposes, powers, franchise, rights, immunities and liabilities of
Maryland Corporation shall continue unaffected and unimpaired by the Merger.
3.3 All corporate acts, plans, policies, resolutions, approvals, and
authorizations of the stockholders, Board of Directors, committees of the
Board of Directors and agents of Delaware Corporation, which were effective
immediately prior to the Effective Date of the Merger shall be taken for all
purposes as the acts, plans, policies, resolutions, approvals and
authorizations of the
<PAGE>
Surviving Corporation and shall be as effective and binding thereon as the
same were with respect to Delaware Corporation.
3.4 Prior to the Effective Date of the Merger the Constituent
Corporations shall take such action as shall be necessary or appropriate in
order to effect the Merger. In case at any time after the Effective Date of
the Merger the Surviving Corporation shall determine that any further
conveyance, assignment or other documents or any further action is necessary
or desirable to vest in or confirm to the Surviving Corporation full title to
all the properties, assets, rights, privileges, and franchises of the
Constituent Corporations, the officers and directors of the Constituent
Corporations, at the expense of the Surviving Corporation, shall execute and
deliver all such instruments and take all such action as the Surviving
Corporation may determine to be necessary or desirable in order to vest in and
confirm to the Surviving Corporation title to and possession of all such cash
and securities and other properties, assets, rights, privileges and
franchises, and otherwise to carry out the purpose of this Agreement.
3.5 The Surviving Corporation hereby (1) agrees that it may be served
with process in the State of Delaware in any proceeding for the enforcement of
any obligation of Delaware Corporation as well as for the enforcement of any
obligation of the Surviving Corporation arising from the Merger, including any
suit or other proceeding to enforce the right of any stockholder as determined
in appraisal proceedings pursuant to the provisions of Section 262 of the
General Corporation Law of the State of Delaware, (2) irrevocably appoints the
Secretary of State of the State of Delaware as its agent to accept service of
process in any such suit or other proceedings, and (3) specifies the following
as the address to which a copy of such process shall be mailed by the
Secretary of State of the State of Delaware: Donald M. Allen, Corporate Vice
President and Secretary, Delta Trend Fund, Inc., Ten Penn Center Plaza,
Philadelphia, PA 19103.
ARTICLE IV
----------
4.1 Each of the Constituent Corporations represents and warrants to
the other that:
(a) Such corporation is duly organized and existing in good
standing under the laws of its jurisdiction of incorporation.
(b) It has full power and authority to carry on its business as
it is presently being conducted and to enter into the Merger.
(c) There is no suit, action or legal or administrative
proceeding pending, or to its knowledge threatened, against it which, if
adversely determined, might materially and adversely affect its financial
condition or the conduct of its business.
(d) At the Effective Date of the Merger, consummation of the
transactions contemplated hereby will not
<PAGE>
result in the breach of or constitute a default under any agreement or
instrument by which it is bound.
(e) All of its presently outstanding shares are validly issued,
fully paid and non-assessable.
(f) Immediately prior to the Effective Date of the Merger such
corporation will have valid and unencumbered title to its cash, securities,
and other assets, if any.
ARTICLE V
---------
5.1 The obligations of each of the Constituent Corporations to
consummate the Merger shall be subject to the following conditions:
(a) The representations and warranties of the other corporation
contained herein shall be true as of and at the Effective Date of the Merger
with the same effect as though made at such date and such other Constituent
Corporation shall have performed all obligations required by this Agreement to
be performed by it prior to the Effective Date;
(b) Such authority and orders from the Securities and Exchange
Commission (the "Commission") and state securities commissions as may be
necessary to permit the parties to carry out the transactions contemplated by
this Agreement shall have been received;
(c) One or more post-effective amendments to the Delaware
Corporation's Registration Statement on Form N-1 under the Securities Act of
1933 and the Investment Company Act of 1940, containing (i) such amendments to
such Registration Statement as are determined by the Maryland Corporation to
be necessary and appropriate as a result of the Merger, and (ii) the adoption
by the Maryland Corporation as its own of such Registration Statement, as so
amended, shall have been filed with the Commission, and such post-effective
amendment or amendments to the Registration Statement shall have become
effective, and no stop-order suspending the effectiveness of the Registration
Statement shall have been issued, and no proceeding for that purpose shall
have been initiated or threatened by the Commission (other than any such stop-
order, proceeding or threatened proceeding which shall have been withdrawn or
terminated);
(d) Confirmation shall have been received from the Commission or
the staff thereof that the Maryland Corporation shall, effective upon or
before the Effective Date of the Merger, be duly registered as a diversified,
open-end management investment company under the Investment Company Act of
1940, as amended;
(e) Each party shall have received an opinion of Stradley, Ronon,
Stevens & Young, Philadelphia, Pennsylvania, to the effect that the Merger
contemplated by this Agreement qualifies as a "reorganization" under Section
368(a)(1)(F) of the Internal Revenue Code of 1954, as amended, and as such no
gain or loss will be recognized by either Constituent Corporation or to the
stockholders thereof;
<PAGE>
(f) Each party shall have received an opinion from Stradley,
Ronon, Stevens & Young in the form and substance satisfactory to it, relating
to its authority to engage in the transactions contemplated hereby and to the
effect (i) that this Agreement has been duly authorized, executed and
delivered by the Constituent Corporations and constitutes a legal, valid and
binding agreement of each such party in accordance with its terms; (ii) the
shares of common stock of the Maryland Corporation to be issued pursuant to
the terms of this Agreement, have been duly authorized and, when issued and
delivered as provided in this Agreement, will have been validly issued and
fully paid and will be nonassessable; (iii) the Maryland Corporation is duly
organized and validly existing under the laws of the State of Maryland.
(g) The shares of common stock of the Maryland Corporation shall
have been duly qualified for offering to the public in those states of the
United States and jurisdictions in which they are presently qualified, so as
to permit the transfers contemplated by this Agreement to be consummated;
(h) The holders of at least a majority of the outstanding shares
of common stock of Delaware Corporation and of Maryland Corporation shall have
each voted in favor of the adoption of this Agreement and the Merger at an
annual or special meeting or any adjournment thereof.
ARTICLE VI
----------
Each of the Constituent Corporations agree that each shall bear such
expenses as have been incurred by it in connection with the Merger.
ARTICLE VII
-----------
7.1 Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated and the Merger abandoned at
any time (whether before or after adoption hereof by the stockholders of the
Constituent Corporations) prior to the Effective date of the Merger:
(a) by mutual consent of the Constituent Corporations;
or
(b) by either of the Constituent Corporations if any condition
set forth in Article V hereof has not been fulfilled or waived by it.
7.2 An election by a Constituent Corporation to terminate this
Agreement and abandon the Merger shall be exercised by its Board of Directors.
7.3 At any time prior to the filing of this Agreement, any of the
terms or conditions of this Agreement may be waived by the Constituent
Corporation entitled to the benefit thereof by action taken by its Board of
Directors or its President if, in the judgment of the Board of Directors or
President taking such action, such waiver will not have a
<PAGE>
material adverse effect on the benefits intended under this Agreement to the
stockholders of the Constituent Corporation on behalf of which such action is
taken.
ARTICLE VIII
------------
The respective representations and warranties of the Constituent
Corporations contained in Article IV hereof shall expire with, and be
terminated by, the Merger and neither the respective Constituent Corporations
nor any of their directors or officers shall be under any liability with
respect to any such representations or warranties after the Effective Date of
the Merger. This provision shall not protect any director or officer of
either of the Constituent Corporations against any liability to such
corporation or to its stockholders to which he would otherwise be subject.
ARTICLE IX
----------
9.1 This Agreement constitutes the entire agreement between the
parties and there are no agreements, understandings, restrictions or
warranties between the parties other than those set forth herein or herein
provided for.
9.2 This Agreement may be executed in any number of counterparts each
of which shall be deemed to be an original but all of such counterparts
together shall constitute but one instrument.
IN WITNESS WHEREOF, each of the Constituent Corporations has caused
this Agreement and Articles of Merger to be executed on its behalf by its
President and its corporate seal to be affixed thereto and attested by its
Secretary all as of the day and year first above written.
DELTA TREND FUND, INC.,
Attest: a Maryland Corporation
/s/Donald M. Allen By:/s/John H. Durham
------------------ -----------------
Donald M. Allen John H. Durham
Secretary President
Attest: DELTA TREND FUND, INC.,
a Delaware Corporation
/s/Donald M. Allen By:/s/John H. Durham
------------------ -----------------
Donald M. Allen John H. Durham
Secretary President
<PAGE>
CERTIFICATION OF ADOPTION
OF
AGREEMENT AND ARTICLES OF MERGER
--------------------------------
The undersigned hereby certify that the terms and conditions of the
merger as set forth in the foregoing Agreement and Articles of Merger were
advised, authorized and approved by each of the constituent corporations in
the manner and by the vote required by its charter and the laws of the state
where it is organized, to wit, by the Board of Directors and stockholders of
Delaware Corporation and Maryland Corporation.
Attest: DELTA TREND FUND, INC.,
a Maryland Corporation
/s/Donald M. Allen By:/s/John H. Durham
------------------ -----------------
Donald M. Allen John H. Durham
Secretary President
Attest: DELTA TREND FUND, INC.,
a Delaware Corporation
/s/Donald M. Allen By:/s/John H. Durham
------------------ -----------------
Donald M. Allen John H. Durham
Secretary President
THE UNDERSIGNED, President of DELTA TREND FUND, INC., a Maryland
corporation, who executed on behalf of said corporation the foregoing
Agreement and Articles of Merger and the Certification of Adoption of
Agreement and Articles of Merger, hereby acknowledges, in the name and on
behalf of said corporation, the foregoing Agreement and Articles of Merger and
Certificate of Adoption of Agreement and Articles of Merger 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
are true in all material respects, under the penalties of perjury.
/s/John H. Durham
-----------------
John H. Durham
THE UNDERSIGNED, President of DELTA TREND FUND, INC., a Delaware
corporation, who executed on behalf of said corporation the foregoing
Agreement and Articles of Merger and the Certification of Adoption of
Agreement and Articles of Merger, hereby acknowledges, in the name and on
behalf of said corporation, the foregoing Agreement and Articles of Merger and
Certificate of Adoption of Agreement and Articles of Merger to be the
corporate act of said corporation and further certifies that, to the best of
his knowledge,
<PAGE>
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/John H. Durham
-----------------
John H. Durham
I, DONALD M. ALLEN, Secretary of DELTA TREND FUND, INC., a Delaware
corporation, hereby certify that a majority of the outstanding shares of
capital stock of said corporation entitled to vote hereon voted for the
adoption of this Agreement and Articles of Merger.
/s/Donald M. Allen
------------------
Donald M. Allen
<PAGE>
ARTICLES OF MERGER
MERGING
DELTA TREND FUND, INC. (DEL CORP)
INTO
DELTA TREND FUND, INC. (MD. CORP) Survivor
approved and received for record by the State Department of Assessments and
Taxation of Maryland April 29, 1983 at 4:30 o'clock P.M. as in conformity
with law and ordered recorded.
--------------------
Recorded in Liber /s/ 2589, folio 02584, one of the Charter Records of
the State Department of Assessments and taxation of Maryland.
--------------------
Bonus tax paid $ Recording fee paid $ 32.00
----- ------
Special Fee paid $
-----
-------------------
To the clerk of the Circuit Court of Baltimore City
IT IS HEREBY CERTIFIED, that the within instrument, together with all
indorsements thereon, has been received, approved and recorded by the State
Department of Assessments and Taxation of Maryland.
AS WITNESS my hand and seal of the said Department at Baltimore.
------------------------------
<PAGE>
ARTICLES OF INCORPORATION
OF
DELTA TREND FUND, INC.
FIRST: The undersigned, George M. Chamberlain, Jr. whose post
-----
office address is Ten Penn Center Plaza, Philadelphia, Pennsylvania 19103, and
being at least eighteen years of age, does hereby cause to be filed these
Articles of Incorporation for the purpose of forming a corporation under the
General Corporation Law of the State of Maryland.
SECOND: The name of the corporation is Delta Trend Fund, Inc.
------
THIRD: The nature of the business, objects and purposes proposed to
-----
be transacted, promoted and carried on by the corporation is to do any and all
of the things herein set forth, as fully and to the same extent as natural
persons might or could do, and in any part of the world, viz:
1. To purchase, become interested in, receive, own, hold, invest and
reinvest in, sell, negotiate, exchange, transfer, assign, mortgage, pledge,
turn to account, realize upon, and otherwise acquire and dispose of securities
of every kind, character and description, issued or created by, or secured
upon the property, income or revenues of individuals, associations, public and
private corporations, the United States of America, its agencies and
instrumentalities, or any territory, state, county, city, town, district or
other political sub-division, or any foreign government or any political sub-
division thereof; and to acquire or become interested in any such securities
by original subscription, underwriting, participation in syndicates, purchase,
exchange, or otherwise. The term "securities", whenever used herein, shall,
consistent with the context, and without limiting the generality of the
foregoing, include shares of stock (preferred, common and debenture), scrip,
purchase or subscription warrants or other rights, voting trust certificates,
certificates of interest or participation in any profit sharing agreement,
pre-organization certificates or subscriptions, fractional or undivided
interests in oil, gas or other mineral rights, investment contracts, evidences
or interest, ownership, or indebtedness, call or time loans, notes,
acceptances, bills of exchange, commercial paper, choses in action, bonds,
debentures, mortgages, collateral trust certificates, and in general any
interests or instruments commonly known as securities, or any certificate of
interest or participation in, any temporary or interim certificate for, or
receipt for, any of the foregoing, and any securities, negotiable or non-
negotiable, secured or unsecured, and however described.
<PAGE>
2. To exercise all rights, powers and privileges with reference to or
incident to ownership, use and enjoyment of any of such securities, including,
but without limitation, the right, power and privilege to own, vote, hold,
purchase, sell, negotiate, assign, exchange, transfer, mortgage, pledge or
otherwise deal with, dispose of, use, exercise or enjoy any rights, title,
interest, powers or privileges under or with reference to any of such
securities; and to do any and all acts and things for the preservation,
protection, improvement and enhancement in value of any of such securities, or
designed to accomplish any such purpose.
3. To purchase or otherwise acquire, own, hold, sell, exchange,
assign, transfer, mortgage, pledge or otherwise dispose of, property of all
kinds, including, but without limitation, specie, money, and foreign exchange,
to the extent permitted by law, except that the corporation shall not
purchase, own, or sell commodities or future contracts for the delivery of
commodities.
4. To buy, sell, mortgage, encumber, hold, own, exchange, rent or
otherwise acquire and dispose of, and to develop, improve, manage subdivide,
build, erect, construct, alter and maintain buildings, structures, and other
improvements on real property or its own use for business offices exclusively
and may acquire real estate as a result of the foreclosure of mortgages
securing the payment of securities then owned by the corporation, or as a
result of any reorganization or other readjustment in connection with any
securities then owned by the corporation, or otherwise for the purpose of the
proper administration of the investments of the corporation in securities.
Nothing contained in this paragraph shall be construed to restrict the power
of the corporation, subject to all other restrictions and limitations
contained in these Articles of Incorporation, to invest in securities, as
defined in paragraph 1 of Article Third of these Articles of Incorporation,
whether or not any such security shall be deemed to be an interest in real
estate.
5. To borrow or raise moneys for any of the purposes of the
corporation, and from time to time, draw, make, accept, endorse, execute and
issue bonds, debentures, notes, drafts, acceptances, bills of exchange,
warrants and other negotiable or non-negotiable instruments and evidences of
indebtedness and other securities; and to secure the payment thereof and of
the interest thereon by mortgage upon or pledge of, or by conveyance or
assignment in trust of, the whole or any part of the property and franchises
of the corporation, real, personal, and mixed, tangible or intangible, and
wheresoever situate, whether at the time owned or thereafter acquired, and to
issue, sell, negotiate, pledge, or otherwise dispose of such bonds or other
obligations of the corporation for its corporate purposes. The corporation
shall not voluntarily incur an aggregate amount of indebtedness at any time
exceeding 25% of the total appraised value of all the property and assets of
the corporation, excepting that, in the event of an emergency and by
affirmative vote of not less than two-thirds in number of all directors of the
corporation, the Board of Directors may authorize the corporation voluntarily
to incur for a period not exceeding one year, an aggregate amount of
indebtedness
<PAGE>
exceeding 25%, but not exceeding 40%, of the total appraised value of all the
property and assets of the corporation.
6. To acquire all or any part of the good will, rights, property, and
business of any individual, association or corporation; to pay for the same in
cash or in shares of stock, bonds, notes or other obligations of the
corporation, or otherwise. To hold, utilize, operate, reorganize, liquidate,
and in any manner dispose of the whole or any part of the good will, rights,
property and business so acquired; to assume in connection therewith the whole
or any part of the liabilities and obligations of any such person, association
or corporation; and to conduct in any lawful manner the whole or any part of
the business thus acquired.
7. To enter into, make, perform and carry out contracts and
undertakings of every kind for any lawful purpose, without limit as to amount,
with any individual, association or corporation.
8. To purchase, sell and transfer, re-acquire, hold, trade and deal
in, the bonds, debentures and other securities of the corporation, from time
to time, to such extent and in such manner and upon such terms as the Board of
Directors shall, consistent with the provisions of these Articles of
Incorporation, determine; and to purchase and re-acquire, from time to time,
the shares of its own capital stock; provided, however, that the corporation
shall not have power to trade or deal in the shares of its own Common Stock.
9. To conduct its business and maintain offices both within and
without the State of Maryland, and in all other states and territories and the
District of Columbia, in all dependencies, colonies or possessions of the
United States and any foreign countries and places, and to purchase or
otherwise acquire, hold, possess, convey, transfer or otherwise dispose of
real and personal property in all thereof to the extent that the same may be
permissible under their respective laws.
10. To carry out all or any part of the foregoing objects and
purposes, and to exercise any and all of the foregoing rights and powers, and
to do any and all of the foregoing rights and powers, and to do any and all of
the foregoing acts and things, as principal, factor, agent, contractor or
otherwise, either alone or through or in conjunction with, or jointly with,
any individual, association or corporation.
11. In general to carry on any other business in connection with the
foregoing, and to have and exercise all the powers conferred by the laws of
the State of Maryland upon corporations formed under the General Corporation
Law thereof.
The foregoing clauses shall each be construed as purposes, objects and
powers, and it is hereby expressly provided that the foregoing enumeration of
specific purposes, objects and powers shall not be held to limit or restrict
in any manner the powers of the corporation, and that they are in furtherance
of, and in addition to, and not in limitation of, the general powers conferred
upon the corporation by the laws of the State of Maryland or otherwise; nor
shall the
<PAGE>
enumeration of one thing be deemed to exclude another, although it be of like
nature, not expressed.
It is the intention that the purposes, objects and powers specified in
this Article Third, and all sub-divisions thereof, shall, except as otherwise
expressly provided, in no wise be limited or restricted by reference to or
inference from the terms of any other clause or subdivision of this Article
Third, and that each of the purposes, objects and powers specified in this
Article Third shall be regarded as independent purposes, objects and powers.
FOURTH: The post office address of the principal office of the
------
corporation in the State of Maryland is:
c/o The Corporation Trust, Incorporated
32 South Street
Baltimore, Maryland 21202
The name and post office address of the initial resident agent of the
corporation in the State of Maryland is:
The Corporation Trust, Incorporated
32 South Street
Baltimore, Maryland 21202
FIFTH: The total number of shares of stock which the Corporation
-----
shall have authority to issue is Ten Million (10,000,000) shares of stock,
with a par value of One Dollar ($1.00) per share, to be known and designated
as Common Stock, such shares of Common Stock having an aggregate par value of
Ten Million Dollars ($10,000,000).
The Board of Directors of the corporation shall have the power to
issue shares in one or more series which together with the issued shares of
stock of the corporation shall have such designations as the Board may
determine and (subject to any applicable rule, regulation or order of the
Securities and Exchange Commission or other applicable law or regulation)
shall have such preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications, terms and
conditions of redemption and other characteristics as the Board may determine
(or in the absence of contrary determination, such as set forth herein). At
any time when there are no shares outstanding or subscribed for a particular
series previously established and designated by the Board of Directors, the
series may be liquidated by similar means. If the Board so determines, one or
more series of stock may be treated for all purposes other than dividends as
if all shares of such series were shares of one series. The dividends payable
to the holders of any series (subject to any applicable rule, regulation or
order of the Securities and Exchange Commission or any other applicable law or
regulation) shall be determined by the Board and need not be individually
declared, but may be declared and paid in accordance with a formula adopted by
the Board. Except as otherwise provided herein, all references in these
Articles of Incorporation to Common Stock or series of stock shall apply
without discrimination to the shares of each series of stock.
The holders of each share of stock of the corporation shall be
entitled to one vote for each full share, and a fractional vote for each
fractional share of stock,
<PAGE>
irrespective of the series then standing in his or her name in the books of
the corporation. On any matter submitted to a vote of shareholders, all
shares of the corporation then issued and outstanding and entitled to vote,
irrespective of the series, shall be voted in the aggregate and not by series
except (1) when otherwise expressly provided by the Maryland General
Corporation Law, or (2) when required by the Investment Company Act of 1940,
as amended, shares shall be voted by individual series; and (3) when the
matter does not affect any interest of a particular series, then only
shareholders of the affected series shall be entitled to vote thereon.
Each series of stock of the corporation shall have the following
powers, preferences and participating, voting, or other special rights and the
qualifications, restrictions, and limitations thereof shall be as follows:
1. All consideration received by the corporation for the issue or
sale of stock of each series, together with all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation thereof, and any funds or payments derived from any reinvestment
of such proceeds in whatever form the same may be, shall irrevocably belong to
the series of shares of stock with respect to which such assets, payments or
funds were received by the corporation for all purposes, subject only to the
rights of creditors, and shall be so handled upon the books of account of the
corporation. Such assets, income, earnings, profits and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation thereof
and any assets derived from any reinvestment of such proceeds, in whatever
form the same may be, are herein referred to as "assets belonging to" such
series.
2. The Board of Directors may from time to time declare and pay
dividends or distributions, in stock or in cash, on any or all series of
stock; provided, such dividends or distributions on shares of any series of
stock shall be paid only out of earnings, surplus, or other lawfully available
assets belonging to such series.
3. The Board of Directors shall have the power in its discretion to
distribute in any fiscal year as dividends, including dividends designated in
whole or in part as capital gain distributions, amounts sufficient, in the
opinion of the Board of Directors, to enable the corporation to qualify as a
"regulated investment company" under the Internal Revenue Code of 1954, as
amended, or any successor or comparable statute thereto, and regulations
promulgated thereunder, and to avoid liability for the corporation for Federal
income tax in respect of that year and to make other appropriate adjustments
in connection therewith.
4. In the event of the liquidation of dissolution of the corporation,
shareholders of each series shall be entitled to receive, as a series, out of
the assets of the corporation available for distribution to shareholders, but
other than general assets not belonging to any particular series of stock, the
assets belonging to such series, and the assets so distributable to the
shareholders of any series shall be distributed among such shareholders in
proportion to the number of shares of such series held by them and recorded
<PAGE>
on the books of the corporation. In the event that there are any general
assets not belonging to any particular series of stock and available for
distribution, such distribution shall be made to the holders of stock of all
series in proportion to the asset value of the respective series determined as
hereinafter provided.
5. The assets belonging to any series of stock shall be charged with
the liabilities in respect to such series, and shall also be charged with its
share of the general liabilities of the corporation, in proportion to the
asset value of the respective series determined as hereinafter provided. The
determination of the Board of Directors shall be conclusive as to the amount
of liabilities, including accrued expenses and reserves, as to the allocation
of the same as to a given series, and as to whether the same or general assets
of the corporation are allocable to one or more series.
The Board of Directors may provide for a holder of any series of stock
of the corporation, who surrenders his certificate in good form for transfer
to the corporation or, if the shares in question are not represented by
certificates, who delivers to the corporation a written request in good order
signed by the shareholder, to convert the shares in question on such basis as
the Board may provide, into shares of stock of any other series of the
corporation.
The net asset value per share of a series of the corporation's common
stock shall be determined in accordance with the Investment Company Act of
1940, as amended, and with generally accepted accounting principles, by adding
the market or appraised value of all securities, cash and other assets of the
corporation pertaining to that series, subtracting the liabilities determined
by the Board of Directors to be applicable to that series, allocating any
general assets and general liabilities to that series, and dividing the net
result by the number of shares of that series outstanding. Securities and
other investments and assets will be valued at fair value as determined in
good faith by the Board of Directors.
The holders of the shares of Common Stock of the corporation shall
have no preemptive rights to subscribe to further or additional shares of its
Common Stock.
Without action or consent of the stockholders of the corporation, the
Board of Directors shall have authority, subject to the provisions of these
Articles of Incorporation, to issue shares of Common Stock of the Corporation,
from time to time, for such consideration, not less than the par value
thereof, as may be fixed from time to time by the Board of Directors.
SIXTH: The number of directors of the Corporation shall be three,
-----
or such other number as may from time to time be fixed by the By-Laws of the
corporation or pursuant to authorization contained in such By-Laws, but the
number of directors shall never be less than three; provided, notwithstanding
anything herein to the contrary, the board of directors shall initially
consist of one director. The name of the director who shall act as such until
successors are duly chosen and qualify is: James P. Schellenger.
SEVENTH: The corporation is to have perpetual
-------
<PAGE>
existence.
EIGHTH: The private property of the stockholders shall not be liable
------
for the payment of corporate debts to any extent whatever.
NINTH: In furtherance, and not in limitation of the powers
-----
conferred by statute, the Board of Directors of the corporation is expressly
authorized:
1. To make, alter and amend the By-Laws of the corporation, to fix
the amount to be reserved as working capital over and above its capital stock
paid in, and to authorize and cause to be executed mortgages and liens upon
the real and personal property of the corporation.
2. By resolution or resolutions passed by a majority of the whole
board, to designate one or more committees, each committee to consist of two
or more of the directors of the corporation, which, to the extent permitted in
such resolution or resolutions, or in the By-Laws of the corporation, shall
have and may exercise the powers of the Board of Directors in the management
of the business and affairs of the corporation, and may have the power to
authorize the seal of the corporation to be affixed to all papers which may
require it. Such committee or committees shall have such name or names as may
be provided for in the By-Laws of the corporation, or as may be determined
from time to time by resolution adopted by the Board of Directors.
3. Pursuant to the affirmative vote of the holders of at least a
majority of the shares of the capital stock of the corporation issued and
outstanding, given at a meeting of the stockholders duly called for that
purpose, or when authorized by the written consent of the holders of a
majority of the shares of the capital stock of the corporation issued and
outstanding, the Board of Directors shall have power and authority at any
meeting to authorize the sale, lease or exchange of all of the property and
assets of the corporation, including its good will and its corporate
franchises, upon such terms and conditions as the Board of Directors may deem
expedient and for the best interests of the corporation.
4. The corporation may in its By-Laws confer powers upon its Board of
Directors in addition to the foregoing, and in addition to the powers and
authorities expressly conferred upon them by statute.
5. The Board of Directors shall have power generally to exercise all
such powers and do all such acts and things as may be exercised or done by the
corporation, subject, nevertheless, to the provisions of the statutes of the
State of Maryland and of these Articles of Incorporation, including any
amendments thereof, and of the By-Laws of the corporation.
TENTH: The following provisions are inserted for the management of
-----
the business and for the conduct of the affairs of the corporation:
1. The Board of Directors shall have power to fix
<PAGE>
an initial offering price which shall yield to the corporation not less than
the par value thereof, at which the shares of the Common Stock of the
corporation shall be offered for sale, and to determine from time to time
thereafter the offering price which shall yield to the corporation not less
than the par value thereof, of the shares of the Common Stock; provided,
however, that no shares of the Common Stock of the corporation shall be issued
or sold for a consideration which shall be less than the liquidation value of
such shares, determined as hereinafter provided, except in the case of shares
of such Common Stock issued in payment of a dividend properly declared and
payable.
The liquidation value of the property and assets of the corporation
shall be determined by or under the direction of the Board of Directors of the
corporation by deducting from the total appraised value of all of the property
and assets of the corporation, determined in the manner hereinafter provided,
all debts, obligations and liabilities of the corporation (including, but
without limitation of the generality of any of the foregoing, any or all
debts, obligations, liabilities or claims of any and every kind and nature,
whether fixed, accrued, or unmatured, and any reserves or charges, determined
in accordance with sound accounting practice, for any or all thereof, whether
for taxes, including estimated taxes or unrealized book profits, expenses,
contingencies or otherwise) and a reasonable approximation of brokers'
commission, taxes, stock transfer fees and other costs which would be incurred
in liquidating all of the property and assets of the corporation.
In determining the total appraised value of all the property and
assets of the corporation:
(a) Securities owned shall be valued at market value, or in the
absence of readily available market quotations at fair value, both as
determined pursuant to methods approved by the Board of Directors and in
accordance with applicable statutes and regulations.
(b) Dividends declared but not yet received, or rights, in respect of
securities which are quoted ex-dividend or ex-rights, shall be included in the
value of such securities as determined by or pursuant to the direction of the
Board of Directors on the day the particular securities are first quoted ex-
dividend or ex-rights, and on each succeeding day until the said dividends or
rights are received and become part of the assets of the corporation.
(c) The value of any other assets of the corporation (and any of the
assets mentioned in paragraphs (a) or (b), in the event of a national
financial emergency determined to be such by the Board of Directors, in their
discretion) shall be determined in such manner as may be approved from time to
time by or pursuant to the direction of the Board of Directors.
The liquidation value of each share of the Common Stock of the
corporation shall be determined by dividing the total liquidation value of the
property and assets of the corporation by the total number of shares of its
Common Stock then issued and outstanding, including any shares sold by the
corporation up to and including the date as of which such liquidation value is
to be determined whether or not
<PAGE>
certificates therefor have actually been issued. In case the liquidation
value of each share so determined shall include a fraction of one cent, such
liquidation value of each shall be adjusted to the nearest full cent.
2. To the extent permitted by law, and except in the case of a
national financial emergency determined to be such by the Board of Directors
in their discretion, the corporation shall repurchase shares of its Common
Stock from its stockholders upon request of the holder thereof received by the
corporation or its designated agent during business hours of any business day,
provided such request be followed promptly by surrender of the certificate or
certificates for such shares in form for transfer, together with such proof of
the authenticity of signatures as may be reasonably required by, or pursuant
to the direction of the Board of Directors of the corporation, and accompanied
by proper stock transfer stamps. Shares repurchased upon any such request
shall be purchased by the corporation at a price not less than the liquidation
value of such shares determined in the manner provided in Paragraph (1) of
this Article Tenth, as of the close of business on the day following the day
during which such request was received by the corporation on which the New
York Stock Exchange shall be open for trading for its entire business day,
unless the corporation and the holder of such shares shall agree that the
purchase price of such shares shall be determined as of the time prior
thereto, but which shall not be earlier than the close of business on the day
on which the New York Stock Exchange shall have been open for trading during
its entire business day preceding the day during which such request shall have
been received by the corporation. If the time so agreed upon for determining
such purchase price shall be an intermediate time other than the close of
business on a business day, then the purchase price to be paid for such shares
shall be an amount not less than the liquidation value of such shares as of
the close of business on the preceding day on which the New York Stock
Exchange shall be open for trading for its entire business day, plus or minus
such amount, if any, as the corporation shall estimate properly to reflect the
fluctuation in the value of the corporation's assets between the close of
business on such preceding day and the time so agreed upon, as measured by the
Dow-Jones Averages, or other similar market averages. In no case shall the
price paid by the corporation for such repurchased shares exceed asset value
per share, which shall be defined as the value per share of the corporation's
assets, appraised as set forth in Paragraph (1) above, less all liabilities,
but without making deduction for brokers' commissions, taxes, stock transfer
fees and other costs which would be incurred in liquidating all of the
property and assets of the corporation.
After receipt of any such request from a stockholder, the corporation
shall mail to such stockholder a written confirmation of the repurchase of
such shares, which shall state the number of shares to be repurchased by the
corporation, the time as of which the purchase price of such shares is to be
determined, and the purchase price of such shares.
Payments for shares of its Common Stock so repurchased by the
corporation shall be made in cash, except in the event that the Board of
Directors shall adopt a special resolution (notice of which shall be given
forthwith
<PAGE>
to all stockholders of the corporation in the manner provided in the By-Laws)
authorizing, during such period of time as the board may fix, payment of such
shares by the delivery to stockholders whose shares shall be repurchased by
the corporation of any assets of the corporation of a value equivalent to the
purchase price of the shares of its Common Stock so purchased by the
corporation, or, at the option of the corporation, by the payment to such
stockholder of such equivalent value partly in cash and partly by the delivery
of such assets. The value of any part of such purchase price paid by the
delivery of such assets. The value of any part of such purchase price paid by
the delivery of assets of the corporation shall be determined as provided in
sub-paragraphs (a), (b) and (c) of paragraph (1) of this Article Tenth. In
order to avoid delivering securities in kind in unreasonably small
denominations (that is, less than ten shares in the case of stocks and $1,000
principal amount in the case of bonds, etc.) the corporation may adjust any
interest in any security so to be delivered to any such stockholder to
somewhat more or less than such stockholder's arithmetical proportion of such
security, and may adjust fractional differences in cash or in securities, and
any such adjustment made by the corporation in good faith shall be binding
upon such stockholder and upon all other stockholders of the corporation,
past, present or future.
Payment for shares of its Common Stock so repurchased by the
corporation shall be made by the corporation as provided above within three
business days on which New York Stock Exchange shall be open for trading
during its entire business day after the receipt of the request from a
stockholder for the purchase of such shares, but in any event within sixty
days after the receipt of such request by the corporation; provided, however,
that if payment shall be made by delivery of assets of the corporation, as
provided above, any securities to be delivered as part of such payment shall
be delivered as promptly as any necessary transfers of such securities on the
books of the several corporations whose securities are to be delivered may be
made, but not necessarily within such sixty day period. Anything contained in
this paragraph to the contrary notwithstanding, the corporation shall not be
required to make payment for any shares so repurchased unless and until the
stockholder requesting such purchase shall have surrendered the certificate or
certificates for such shares in form for transfer and accompanied by proper
stock transfer stamps, as set forth above.
The right of any holder of shares of the Common Stock of the
corporation to receive dividends thereon and all other rights of such
stockholder with respect to the shares so repurchased by the corporation shall
cease and determine from and after the time as of which the purchase price of
such shares shall be fixed, as provided above, except the right of such
stockholder to receive payment for such shares as provided for herein.
Payment for shares of its Common Stock so repurchased by the corporation,
either in cash or by delivery of assets of the corporation as provided for
above, shall be binding and effective, upon receipt and acceptance thereof by
any stockholder whose shares shall be repurchased by the corporation, as a
discharge and release, as of the time when the purchase price of such shares
shall be fixed, as provided above, to the corporation, to the Board of
Directors, and to all holders of other shares of the Common
<PAGE>
Stock of the corporation, past, present and future, in respect of any
liability hereunder, except for willful misfeasance, gross negligence or
fraud.
3. Meetings of stockholders may be held without the State of
Maryland, if the By-Laws so provide. The books of the corporation may be kept
(subject to any provision contained in the statutes) outside of the State of
Maryland at such place or places as may be from time to time designated by the
Board of Directors.
4. The corporation shall not purchase or acquire any property from
any of its directors or officers, or from any partnership of which any of its
directors or officers shall be a member, or from any association or
corporation of which any one or more of its directors or officers shall own
twenty-five percent (25%) or more of the outstanding shares of the capital
stock or of the beneficial interest therein.
ELEVENTH: Subject to the Investment Company Act of 1940, as
--------
amended, the corporation may take or authorize any action upon the concurrence
of such proportion of votes entitled to be cast thereon as specified in the
by-laws of the corporation, notwithstanding any provision of the Maryland
General Corporation Law requiring a greater proportion, provided that such
provisions of law allow a corporation to act by a lesser proportion.
TWELFTH: The corporation reserves the right to amend, alter,
-------
change or repeal any provision contained in these Articles of Incorporation,
in the manner now or hereafter prescribed by statute, and all rights conferred
upon stockholders herein are granted subject to this reservation.
IN WITNESS WHEREOF, the undersigned incorporator of Delta Trend Fund,
Inc. who executed the foregoing Articles of Incorporation hereby acknowledged
the same to be his act and further acknowledge that, to the best of his
knowledge the matters and facts set forth therein are true and all material
respects under the penalties of perjury.
Dated the 4th day of March, 1983.
/s/George M. Chamberlain, Jr.
-----------------------------
George M. Chamberlain, Jr.
<PAGE>
EXHIBIT 99.B2
DELAWARE GROUP TREND FUND, INC.
CERTIFICATION OF AMENDMENT TO BY-LAWS
AMENDING SECTION 7 OF ARTICLE III
JANUARY 28, 1995
The Undersigned Secretary of Delaware Group Trend Fund, Inc. does
hereby certify that at the Board of Directors of the Fund at a meeting duly
called and held on January 28, 1995 did adopt the following resolution
amending Section 7 of Article III of the Fund's by-laws:
RESOLVED, that Article III, Section 7, be amended
in its entirely to read as follows:
Section 7. At any meeting of the stockholders
of the Corporation every stockholder having the
right to vote shall be entitled, in person or by
proxy appointed by an instrument in writing
subscribed by such stockholder or by his duly
authorized attorney-in-fact and bearing a date
not more than eleven months prior to said
meeting unless such instrument provides for a
longer period, to one vote for each share of
stock having voting power registered in his name
on the books of the Corporation.
IN WITNESS WHEREOF, I have hereto subscribed my name this 28th day of
January, 1995.
/s/George M. Chamberlain, Jr.
-----------------------------
George M. Chamberlain, Jr.
Secretary
<PAGE>
DELAWARE GROUP TREND FUND, INC.
CERTIFICATION OF AMENDMENT TO BY-LAWS
AMENDING SECTION 2 OF ARTICLE VI
NOVEMBER 21, 1991
The Undersigned Secretary of Delaware Group Trend Fund, Inc. does
hereby certify that at the Board of Directors of the Fund at a meeting duly
called and held on November 21, 1991 did adopt the following resolution
amending Section 2 of Article VI of the Fund's by-laws:
RESOLVED, that Article VI, Section 2 of the Fund's
by-laws be amended to read in its entirely as
follows:
Section 2. The Chairman of the Board shall be elected from the
membership of the Board of Directors, but other officers need not be members
of the Board of Directors. Any two or more offices may be held by the same
person except the offices of President and Vice President. All officers of
the Corporation shall serve for one year and until their successors shall have
been duly elected and shall have qualified; provided, however, that any
officer may be removed at any time, either with or without cause, by action by
the Board of Directors.
AND FURTHER RESOLVED, that the appropriate
officers of the Fund are hereby authorized to take
such other steps as may be necessary to implement
the aforesaid amendment.
IN WITNESS WHEREOF, I have hereto subscribed my name this 21st day of
November, 1991.
/s/George M. Chamberlain, Jr.
-----------------------------
George M. Chamberlain, Jr.
<PAGE>
DELAWARE GROUP TREND FUND, INC.
CERTIFICATION OF AMENDMENT TO BY-LAWS
AMENDING SECTION 8 OF ARTICLE IV
JULY 22, 1991
The Undersigned Secretary of Delaware Group Trend Fund, Inc. does
hereby certify that at the Board of Directors of the Fund at a meeting duly
called and held on July 22, 1991 did adopt the following resolution amending
Section 8 of Article IV of the Fund's by-laws:
RESOLVED, that Article IV, Section 8, be amended
in its entirely to read as follows:
Section 8. The Board of Directors may hold their meetings and keep
the books of the Corporation outside of the State of Maryland at such place or
places as it may from time to time determine.
AND FURTHER RESOLVED, that the Secretary of the
Fund is hereby authorized and directed to include a
certified copy of this Amendment with the corporate
records of the Fund; and further
RESOLVED, that the books and records of the Fund
shall be maintained at the offices of the Fund in
the City of Philadelphia.
IN WITNESS WHEREOF, I have hereto subscribed my name this 22nd day of
July, 1991.
/s/George M. Chamberlain, Jr.
-----------------------------
George M. Chamberlain, Jr.
<PAGE>
DELAWARE GROUP TREND FUND, INC.
CERTIFICATION OF AMENDMENT TO BY-LAWS
AMENDING SECTION 2 OF ARTICLE III
JANUARY 17, 1991
The Undersigned secretary of Delaware Group Trend Fund, Inc. does
hereby certify that at the Board of Directors of the Fund at a meeting duly
called and held on January 17, 1991 did adopt the following resolution
amending Section 2 of ARTICLE III of the Fund's by-laws:
WHEREAS, the Board of Directors of the Fund deems
it to be in the best interests of the Fund to amend
the By-Laws of the Fund to provide that holders of
at least 10% of the Fund's shares be permitted, at
the Fund's cost, to call a special stockholders
meeting for any purpose, in order to enable the
Fund's shares to be qualified and sold in the state
of California; and therefore be it
RESOLVED, that the By-Laws of the Fund are hereby
amended bye inserting, as amended Section 2 of
ARTICLE III, the following:
Section 2.
Special meetings of the stockholders may be
called at any time by the Chairman, President or
a majority of the members of the Board of
Directors and shall be called by the Secretary
upon the written request of the holders of at
least ten percent of the shares of the capital
stock of the Corporation issued and outstanding
and entitled to vote at such meeting. Upon
receipt of a written request from such holders
entitled to call a special meeting, which shall
state the purpose of the meeting and the matter
proposed to be acted on at it, the Secretary
shall issue notice of such meeting. The cost of
preparing and mailing the notice of a special
meeting of stockholders shall be borne by the
Corporation. Special meetings of the
stockholders shall be held at the principal
office of the Corporation, or at such other
place within or without the
<PAGE>
State of Maryland as the Board of Directors
may from time to time direct, or at such place
within or without the State of Maryland as shall
be specified in the notice of such meeting.
IN WITNESS WHEREOF, I have here subscribed my name this 17th day of
January, 1991.
/s/George M. Chamberlain, Jr.
-----------------------------
George M. Chamberlain, Jr.
<PAGE>
DELAWARE GROUP TREND FUND, INC.
CERTIFICATION OF AMENDMENT TO BY-LAWS
INSERTING A NEW ARTICLE VII AND RENUMBERING THE SUBSEQUENT
ARTICLES
FEBRUARY 16, 1989
The Undersigned Secretary of Delaware Group Trend Fund, Inc. does
hereby certify that the Board of Directors of the Fund at a meeting duly
called and held on February 16, 1989 did adopt the following resolutions
inserting a new Article VII and renumbering the subsequent articles of the
Fund's by-laws:
WHEREAS, the Board of Directors of the Fund deems it to be in the
best interests of the Fund to amend the By-Laws of the Fund to allow
indemnification of officers and directors to the full extent provided by
Maryland law;
NOW THEREFORE, BE IT RESOLVED, that the By-Laws of the Fund are
hereby amended by renumbering ARTICLES VIII, IX, X, XI, XII AND XIII as
ARTICLES IX, X, XI, XII, XIII AND XIV, and by inserting as ARTICLE VII, the
following:
"INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 1. The Corporation shall indemnify each Officer and
Director made party to a proceeding, by reason of service in such
capacity, to the fullest extent, and in the manner provided, under
Section 2-418 of the Maryland General Corporation Law: (i) unless it
is proved that the person seeking indemnification did not meet the
standard of conduct set forth in subsection (b) (1) of such section;
and (ii) provided, that the Corporation shall not indemnify any
Officer or Director for any liability to the Corporation or its
security holders arising from the wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of such person's office.
Section 2. The provisions of clause (i) of Section 1 herein
notwithstanding, the Corporation shall indemnify each Officer and
Director against reasonable expenses incurred in connection with the
successful defense of any proceeding to which each such Officer or
Director is a party by reason of service in such capacity.
<PAGE>
Section 3. The Corporation, in the manner and to the extent
provided by applicable law, shall advance to each Officer and Director
who is made party to a proceeding by reason of service in such
capacity the reasonable expenses incurred by such person in connection
therewith."
IN WITNESS WHEREOF, I have hereto subscribed my name this 16th day of
February, 1989.
/s/George M. Chamberlain, Jr.
------------------------------
George M. Chamberlain, Jr.
Secretary
<PAGE>
DELAWARE GROUP TREND FUND, INC.
CERTIFICATION OF AMENDMENT TO BY-LAWS
ARTICLE 3, SECTION
JUNE 16, 1988
The Undersigned Secretary of Delaware Group Trend Fund, Inc. does
hereby certify that the Board of Directors of the Fund at a meeting duly
called and held on June 16, 1988 did adopt the following resolution amending
Article 3, Section 2 of the Fund's by-laws:
RESOLVED, that Article III, Section 2 of the By-
laws of the Fund be amended to read as follows:
Section 2. Special meetings of the stockholders
may be called at any time by the Chairman, President
or a majority of the members of the Board of
Directors and shall be called by the Secretary upon
the written request of the holders of at least
twenty-five percent of the shares of the capital
stock of the Corporation issued and outstanding and
entitled to vote at such meeting; provided, if the
matter proposed to be acted on is substantially the
same as a matter voted on at any special meeting
held during the preceding twelve months, such
written request shall be made by holders of at least
a majority of the capital stock of the Corporation
issued and outstanding and entitled to vote at such
meetings. A special meeting of the stockholders
shall also be called by the Secretary upon the
written request of at least ten percent of the
shares of the capital stock of the Corporation
issued and outstanding and entitled to vote at such
meeting, for the express purpose of voting upon the
question of removal of a director or directors. Upon
receipt of a written request from such holders
entitled to call a special meeting, which shall
state the purpose of the meeting and the matter
proposed to be acted on at it, the Secretary shall
inform the holders who made such request of the
reasonably estimated cost of preparing and mailing a
notice of a meeting and upon payment of such costs
to the Corporation the Secretary shall issue notice
of such meeting. Special meetings of the
stockholders shall be held at the principal office
of the Corporation, or at such other place within or
without the State of Maryland as the Board of
Directors may from time to time direct, or at such
place within or without the State of Maryland as
shall be
<PAGE>
specified in the notice of such meeting.
IN WITNESS WHEREOF, I have hereto subscribed my name this 16th day of
June, 1988.
/s/George M. Chamberlain, Jr.
-----------------------------
George M. Chamberlain, Jr.
Secretary
<PAGE>
DELAWARE GROUP TREND FUND, INC.
CERTIFICATION OF AMENDMENT TO BY-LAWS
ARTICLE 3, SECTION 1
AND
ARTICLE 4, SECTION 2 AND 4
JUNE 14, 1988
The Undersigned Secretary of Delaware Group Trend Fund, Inc. does
hereby certify that the Shareholders of the Fund at a meeting duly called and
held on June 14, 1988 did adopt the following resolution amending Article 3,
Section 1 and Article 4, Section 2 and 4 of the Fund's by-laws:
ARTICLE III
Section 1. An annual meeting of the
shareholders of the Corporation for the election
of directors and for the transaction of general
business shall not be required to be held in any
year except that an annual meeting must be held
in any year if any of the following items is
required to be acted upon by shareholders under
the Investment Company Act of 1940; election of
directors, approval of the investment advisory
agreement, ratification of the selection of
independent public accountants, or approval of a
distribution agreement. Any such meeting shall
be held at the principal office of the
Corporation, or at such other place within or
without the State of Maryland as the Board of
Directors may from time to time prescribe, on
the third Tuesday in April at 10:00 am. or at
such other date and time as the Board of
Directors may from time to time prescribe. A
notice of any change in the place of the annual
meeting shall be given to each shareholder not
less than ten days before the election is held.
ARTICLE IV
* * *
Section 2. The directors shall be elected by the
shareholders of the Corporation at an annual meeting,
if held, or at a special meeting called for such
purpose, and shall hold office until their successors
shall be duly elected and qualified.
* * *
Section 4. The Board of Directors shall have
power to fill vacancies occurring on the Board,
whether by death, resignation or otherwise. A
vacancy on the Board of
<PAGE>
Directors resulting from any cause except an
increase in the number of directors may be filled
by a vote of the majority of the remaining members
of the Board, though less than a quorum. A vacancy
on the Board of Directors resulting from an
increase in the number of directors may be filled
by a majority of the entire Board of Directors. A
director elected by the Board of Directors to fill
a vacancy shall serve until the next annual
meeting, whenever held, or special meeting called
for that purpose, and until his successor is
elected and qualifies.
IN WITNESS WHEREOF, I have hereto subscribed my name this 14th day of
June, 1988.
/s/George M. Chamberlain, Jr.
-----------------------------
George M. Chamberlain, Jr.
Secretary
<PAGE>
DELTA TREND FUND, INC.
BY-LAWS
ARTICLE I
OFFICES
Section 1. The principal office of the Corporation shall be in the
City of Baltimore, State of Maryland. The Corporation shall also have offices
at such other places as the Board of Directors may from time to time determine
or the business of the Corporation may require.
ARTICLE II
STOCKHOLDERS AND STOCK CERTIFICATES
Section 1. Every stockholder of record shall be entitled to a stock
certificate representing the shares owned by him. Stock certificates shall be
in such form as may be required by law and as the Board of Directors shall
prescribe. Every stock certificate shall be signed by the Chairman or the
President or a Vice President and by the Treasurer or an Assistant Treasurer,
or the Secretary or an Assistant Secretary, and sealed with the corporate
seal, which may be a facsimile, either engraved or printed. Stock
certificates may bear the facsimile signatures of the officers authorized to
sign such certificates.
Section 2. Shares of the capital stock of the Corporation shall be
transferable only on the books of the Corporation by the person in whose name
such shares are registered, or by his duly authorized attorney or
representative. In all cases of transfer by an attorney-in-fact, the original
power of attorney, or an official copy thereof duly certified, shall be
deposited and remain with the Corporation or its duly authorized transfer
agent. In case of transfers by executors, administrators, guardians or other
legal representatives, duly authenticated evidence of their authority shall be
produced, and may be required to be deposited and remain with the Corporation
or its duly authorized transfer agent. No transfer shall be made unless and
until the certificate issued to the transferor shall be delivered to the
Corporation or its duly authorized transfer agent, properly endorsed.
Section 3. Any person desiring a certificate for shares of the
capital stock of the Corporation to be issued in lieu of one lost or destroyed
shall make an affidavit or affirmation setting forth the loss or destruction
of such stock certificate, and shall advertise such loss or destruction in
such manner as the Board of Directors may require, and shall, if the Board of
Directors shall so require, give the Corporation a bond or indemnity, in such
form and with such security as may be satisfactory to the Board, indemnifying
the Corporation against any loss that may result upon the issuance of a new
stock certificate. Upon receipt of such affidavit and proof of publication of
the advertisement of such loss or destruction, and the bond, if any, required
by the Board of Directors, a new stock
<PAGE>
certificate may be issued of the same tenor and for the number of shares as
the one alleged to have been lost or destroyed.
Section 4. The Corporation shall be entitled to treat the holder of
record of any share or shares of its capital stock as the owner thereof and,
accordingly', shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether
or not the Corporation shall have express or other notice thereof.
ARTICLE III
MEETING OF STOCKHOLDERS
Section 1. The annual meeting of the stockholders of the Corporation
for the election of Directors and for the transaction of general business
shall be held at the principal office of the Corporation, or at such other
place within or without the State of Maryland as the Board of Directors may
from time to time prescribe, on the third Tuesday in April at 10:00 a.m. in
each year after the year 1985, unless that day shall be duly designated as a
legal holiday, in which event the annual meeting of the stockholders shall be
held on the first day following which is not a legal holiday. A notice of any
change in the place of the annual meeting shall be given to each stockholder
not less than ten days before the election is held.
Section 2. Special meetings of the stockholders may be called at any
time by the Chairman, President or a majority of the members of the Board of
Directors and shall be called by the Secretary upon the written request of the
holders of at least twenty-five percent of the shares of the capital stock of
the Corporation issued and outstanding and entitled to vote at such meeting;
provided, if the matter proposed to be acted on is substantially the same as a
matter voted on at any special meeting held during the preceding twelve
months, such written request shall be made by holders of at least a majority
of the capital stock of the Corporation issued and outstanding and entitled to
vote at such meetings. Upon receipt of a written request from such holders
entitled to call a special meeting, which shall state the purpose of the
meeting and the matter proposed to be acted on at it, the Secretary shall
inform the holders who made such request of the reasonably estimated cost of
preparing and mailing a notice of a meeting and upon payment of such costs to
the Corporation the Secretary shall issue notice of such meeting. Special
meetings of the stockholders shall be held at the principal office of the
Corporation, or at such other place within or without the State of Maryland as
the Board of Directors may from time to time direct, or at such place within
or without the State of Maryland as shall be specified in the notice of such
meeting.
Section 3. Notice of the time and place of the annual or any special
meeting of the stockholders shall be given to each stockholder entitled to
notice of such meeting not less than ten days nor more than ninety days prior
to the date of such meeting. In the case of special meetings of the
stockholders, the notice shall specify the object or objects
<PAGE>
of such meeting, and no business shall be transacted at such meeting other
than that mentioned in the call.
Section 4. The Board of Directors may close the stock transfer books
of the Corporation for a period not exceeding twenty days preceding the date
of any meeting of stockholders, or the date for payment of any dividend, or
the date for the allotment of rights, or the date when any change or
conversion or exchange of capital stock shall go into effect, or for a period
of not exceeding twenty days in connection with the obtaining of the consent
of stockholders for any purpose; provided, however, that in lieu of' closing
the stock transfer books as aforesaid, the Board of Directors may fix in
advance a date, not exceeding ninety days preceding the date of any meeting of
stockholders, or the date for payment of any dividend, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
capital stock shall go into effect, or a date in connection with obtaining
such consent, as a record date for the determination of the stockholders
entitled to notice of, and to vote at any such meeting and any adjournment
thereof, or entitled to receive payment of any such dividend, or to any such
allotment of rights, or to exercise the rights in respect of any such change,
conversion or exchange of capital stock or to give such consent, and in such
case such stockholders and only such stockholders as shall be stockholders of
record on the date so fixed shall be entitled to such notice of, and to vote
at, such meeting and any adjournment thereof, or to receive payment of such
dividend or to receive such allotment of rights or to exercise such rights, or
to give such consent, as the case may be, notwithstanding any transfer of any
stock on the books of the Corporation after any such record date fixed as
aforesaid.
Section 5. At all meetings of the stockholders a quorum shall consist
of the holders of a majority of the outstanding shares of the capital stock of
the Corporation entitled to vote at such meeting. In the absence of a quorum
no business shall be transacted except that the stockholders present in person
or by proxy and entitled to vote at such meeting shall have power to adjourn
the meeting from time to time to a date not more than one hundred twenty days
after the original record date without further -notice other than announcement
at the meeting. At any such adjourned meeting at which a quorum shall be
present any business may be transacted which might have been transacted at the
meeting on the date specified in the original notice. If a quorum is present
at any meeting, the holders of a majority of the shares of capital stock of
the Corporation issued and outstanding and entitled to vote at the meeting who
shall be present in person or by proxy at such meeting shall have power to
approve any matter properly before the meeting, except a plurality of all
votes cast at a meeting at which a quorum is present shall be sufficient for
the election of a director. The holders of such majority shall also have
power to adjourn the meeting to any specific time or times, and no notice of
any such adjourned meeting need be given to stockholders absent or otherwise.
Section 6. At all meetings of the stockholders the following order of
business shall be substantially observed,
<PAGE>
as far as it is consistent with the purpose of the meeting:
Election of Directors;
Ratification of Selection of Auditors;
New business.
Section 7. At any meeting of the stockholders of the Corporation
every stockholder having the right to vote shall be entitled, in person or by
proxy appointed by an instrument in writing subscribed by such stockholder and
bearing a date not more than eleven months prior to said meeting unless such
instrument provides for a longer period, to one vote for each share of stock
having voting power registered in his name on the books of the Corporation.
ARTICLE IV
DIRECTORS
Section 1. The Board of Directors shall consist of not less than
three nor more than twelve members. The Board of Directors may by a vote of
the entire board increase or decrease the number of directors without a vote
of the stockholders; provided, that any such decrease shall not affect the
tenure of office of any director. Directors need not hold any shares of the
capital stock of the Corporation.
Section 2. The directors shall be elected annually by the
stockholders of the Corporation at their annual meeting, and shall hold office
for the term of one year and until their successors shall be duly elected and
shall qualify.
Section 3. The Board of Directors shall have the control and
management of the business of the Corporation, and in addition to the powers
and authority by these By-Laws expressly conferred upon them, may exercise,
subject to the provisions of the laws of the State of Maryland and of the
Articles of Incorporation of the Corporation, all such powers of the
Corporation and do all such acts and things as are not required by law or by
the Articles of Incorporation to be exercised or done by the stockholders.
Section 4. The Board of Directors shall have power to fill vacancies
occurring on the Board, whether by death, resignation or otherwise. A vacancy
on the Board of Directors resulting from any cause except an increase in the
number of directors may be filled by a vote of the majority of the remaining
members of the Board, though less than a quorum. A vacancy on the Board of
Directors resulting from an increase in the number of directors may be filled
by a majority of the entire Board of Directors. A director elected by the
Board of Directors to fill a vacancy shall serve until the next annual meeting
of stockholders and until his successor is elected and qualifies. If less
than a majority of the directors in office shall have been elected by the
stockholders, a meeting of the stockholders shall be called as required under
the Investment Company Act of 1940, as amended.
Section 5. The Board of Directors shall have power to appoint, and at
its discretion to remove or suspend, any
<PAGE>
officers, managers, superintendents, subordinates, assistants, clerks, agents
and employees, permanently or temporarily, as the Board may think fit, and to
determine their duties and to fix, and from time to time to change, their
salaries or emoluments, and to require security in such instances and in such
amounts as it may deem proper.
Section 6. In case of the absence of an officer of the Corporation,
or for any other reason which may seem sufficient to the Board of Directors,
the Board may delegate his powers and duties for the time being to any other
officer of the Corporation or to any director.
Section 7. The Board of Directors may, by resolution or resolutions
passed by a majority of the whole Board, designate one or more committees,
each committee to consist of two or more of the directors of the Corporation
which, to the extent provided in such resolution or resolutions and by
applicable law, shall have and may exercise the powers of the Board of
Directors in the management of the business and affairs of the Corporation.
Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the Board of Directors.
Any such committee shall keep regular minutes of its proceedings, and shall
report the same to the Board when required.
Section 8. The Board of Directors may hold their meetings and keep
the books of the Corporation, except the original or a duplicate stock ledger
and the original or a certified copy of these By-Laws, outside of the State of
Maryland, at such place or places as they may from time to time determine.
Section 9. The Board of Directors shall have power to fix, and from
time to time to change the compensation, if any, of the directors of the
Corporation.
Section 10. Upon retirement of a Director, the Board may elect him or
her to the position of Director Emeritus. Said Director Emeritus shall serve
for one year and may be re-elected by the Board from year to year thereafter.
Said Director Emeritus shall not vote at meetings of Directors and shall not
be held responsible for actions of the Board but shall receive fees paid to
Board members for serving as such.
ARTICLE V
DIRECTORS MEETINGS
Section 1. The first regular meeting of the Board of Directors shall
be held each year within seven business days following the annual meeting of
stockholders at which the Directors are elected. Regular meetings of the
Board of Directors shall also be held without notice at such times and places
as may be from time to time prescribed by the Board.
Section 2. Special meetings of the Board of Directors may be called
at any time by the Chairman, and shall be called by the Chairman upon the
written request of a majority of the members of the Board of Directors.
Unless notice is waived by all the members of the Board of Directors, notice
of any special meeting shall be given to
<PAGE>
each director at least twenty-four hours prior to the date of such meeting,
and such notice shall provide the time and place of such special meeting.
Section 3. One-third of the entire Board of Directors shall
constitute a quorum for the transaction of business at any meeting; except
that if the number of directors on the Board is less than six, two members
shall constitute a quorum for the transaction of business at any meeting. The
act of a majority of the directors present at any meeting where there is a
quorum shall be the act of the Board of Directors except as may be otherwise
Section 4. The order of business at meetings of the Board of
Directors shall be prescribed from time to time by the Board.
ARTICLE VI
OFFICERS AND AGENTS
Section 1. At the first meeting of the Board of Directors after the
election of Directors in each year, the Board shall elect a Chairman, a
president and Chief Executive Officer, one or more Vice Presidents, a
Secretary and a Treasurer and may elect or appoint one or more Assistant
Secretaries, one or more Assistant Treasurers, and such other officers and
agents as the Board may deem necessary and as the business of the Corporation
may require.
Section 2. The Chairman of the Board and the President shall be
elected from the membership of the Board of Directors, but other officers need
not be members of the Board of Directors. Any two or more offices may be held
by the same person except the offices of President and Vice President. All
officers of the Corporation shall serve for one year and until their
successors shall have been duly elected and shall have qualified; provided,
however, that any officer may be removed at any time,' either with or without
cause, by action by the Board of Directors.
ARTICLE
DUTIES OF OFFICERS
CHAIRMAN OF THE BOARD
Section 1. The Chairman of the Board shall preside at all meetings of
the stockholders and the Board of Directors and shall be a member ex officio
of all standing committees. He shall have those duties and responsibilities as
shall be assigned to him by the Board of Directors. In the absence,
resignation, disability or death of the President, the Chairman shall exercise
all the powers and perform all the duties of the President until his return,
or until such disability shall be removed or until a new President shall have
been elected.
PRESIDENT
Section 2. The President shall be the Chief Executive Officer and
head of the Corporation, and in the
<PAGE>
recess of the Board of Directors shall have the general control and management
of its business and affairs, subject, however to the regulations of the Board
of Directors.
The President shall, in the absence of the Chairman, preside at all
meetings of the stockholders and the Board of Directors. In the event of the
absence, resignation, disability or death of the Chairman, the President shall
exercise all powers and perform all duties of the Chairman until his return,
or until such disability shall have been removed or until a new Chairman shall
have been elected.
VICE PRESIDENTS
Section 3. The Executive Vice President, and the Vice Presidents,
shall have those duties and responsibilities as shall be assigned to them by
the Chairman or the President. In the event of the absence, resignation,
disability or death of the Chairman and President, the Executive Vice
President shall exercise all the powers and perform all the duties of the
President until his return, or until such disability shall be removed or until
a new President shall have been elected.
THE SECRETARY AND ASSISTANT SECRETARIES
Section 4. The Secretary shall attend all meetings of the
stockholders and shall record all the proceedings thereof in a book to be kept
for that purpose, and he shall be the custodian of the corporate seal of the
Corporation. In the absence of the Secretary, an Assistant Secretary or any
other person appointed or elected by the Board of Directors, as is elsewhere
in these Bylaws provided, may exercise the rights and perform the duties of
the Secretary.
Section 5. The Assistant Secretary, or, if there be more than one
Assistant Secretary, then the Assistant Secretaries in the order of their
seniority, shall, in the absence or disability of the Secretary, perform the
duties and exercise the powers of the secretary. Any Assistant Secretary
elected by the Board shall also perform such other duties and exercise such
other powers as the Board of Directors shall from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 6. The Treasurer shall keep full and correct accounts of the
receipts and expenditures of the Corporation in books belonging to the
Corporation, and shall deposit all monies and valuable effects in the name and
to the credit of the Corporation and in such depositories as may be designated
by the Board of Directors, and shall, if the Board shall so direct, give bond
with sufficient security and in such amount as may be required by the Board of
Directors for the faithful performance of his duties.
He shall disburse funds of the Corporation as may be ordered by the
Board of Directors, taking proper vouchers for such disbursements, and shall
render to the President and Board of Directors at the regular meetings of the
Board, or whenever they may require it, an account of all his
<PAGE>
transactions as the chief fiscal officer of the Corporation and of the
financial condition of the Corporation, and shall present each year before the
annual meeting of the stockholders a full financial report of the preceding
fiscal year.
Section 7. The Assistant Treasurer, or, if there be more than one
Assistant Treasurer, then the Assistant Treasurers in the order of their
seniority, shall, in the absence or disability of the Treasurer, perform the
duties and exercise the powers of the Treasurer. Any Assistant Treasurer
elected by the board shall also perform such duties and exercise such powers
as the Board of Directors shall from time to time prescribe.
ARTICLE VIII
CHECKS, DRAFTS, NOTES, ETC.
Section 1. All checks shall bear the signature of such person or
persons as the Board of Directors may from time to time direct.
Section 2. All notes and other similar obligations and acceptances of
drafts by the Corporation shall be signed by such person or persons as the
Board of Directors may from time to time direct.
Section 3. Any officer of the Corporation or any other employee, as
the Board of Directors may from time to time direct, shall have full power to
endorse for deposit all checks and all negotiable paper drawn payable to his
or their order or to the order of the Corporation.
ARTICLE IX
CORPORATE SEAL
Section 1. The corporate seal of the Corporation shall have inscribed
thereon the name of the Corporation, the year of its organization, and the
words "Corporate Seal, Maryland." Such seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
ARTICLE X
DIVIDENDS
Section 1. Dividends upon the shares of the capital stock of the
Corporation may, subject to the provisions of the Articles of Incorporation of
the Corporation, if any, be declared by the Board of Directors at any regular
or special meeting, pursuant to law. Dividends may be paid in cash, in
property, or in shares of the capital stock of the Corporation.
Section 2. Before payment of any dividend there may be set aside out
of any funds of the Corporation available for dividends such sum or sums as
the Board of Directors may, from time to time, in their absolute discretion,
think proper as a reserve fund to meet contingencies, or for equalizing
<PAGE>
dividends, or for repairing or maintaining any property of the Corporation, or
for such other purpose as the Board of Directors shall deem to be for the best
interests of the Corporation, and the Board of Directors may abolish any such
reserve in the manner in which it was created.
ARTICLE XI
FISCAL YEAR
Section 1. The fiscal year of the Corporation shall begin on July 1
of each year, and end on June 30 of each year.
ARTICLE XII
NOTICES
Section 1. Whenever under the provisions of these By-Laws notice is
required to be given to any director or stockholder, such notice is deemed
given when it is personally delivered, left at the residence or usual place of
business of the director or stockholder, or mailed to such director or
stockholder at such address as shall appear on the books of the Corporation
and such notice, if mailed, shall be deemed to be given at the time it shall
be so deposited in the United States mail postage prepaid. In the case of
directors, such notice may also be given orally by telephone or by telegraph
or cable.
Section 2. Any notice required to be given under these By-Laws may be
waived in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein.
ARTICLE XIII
AMENDMENTS
Section 1. These By-Laws may be amended, altered or repealed by the
affirmative vote of the holders of a majority of the shares of capital stock
of the Corporation issued and outstanding and entitled to vote thereon, or by
a majority of the Board of Directors, as the case may be.
<PAGE>
AMENDMENT TO BY-LAWS
DELTA TREND FUND, INC.
At the meeting of the Board of Directors held September 20, 1984 the
following Resolutions amending the By-Laws were adopted:
RESOLVED, that Article VI, Section 1 be amended
as of September 30, 1984 to read as follows:
Section 1. At the first meeting of the Board of
Directors after the election of Directors in each
year the Board shall elect a Chairman, a President
and Chief Executive Officer, one or more Vice
Presidents, a Secretary and a Treasurer, and may
elect or appoint one or more Assistant
Secretaries, one or more Assistant Treasurers, and
such other officers and agents as the Board may
deem necessary and as the business of the
Corporation may require.
RESOLVED, that Article VII, Section 1 be amended
as of September 30, 1984 to read as follows:
Section 1. The Chairman of the Board shall
preside at all meetings of the stockholders and
the Board of Directors and shall be a member ex-
officio of all standing committees. He shall have
those duties and responsibilities as shall be
assigned to him by the Board of Directors. In the
absence, resignation, disability or death of the
President, the Chairman shall exercise all the
powers and perform all the duties of the President
until his return, or until such disability shall
be moved or until a new President shall have been
elected.
FURTHER RESOLVED, that Article VII, Section 3 be
amended as of September 30, 1984 to read as
follows:
Section 3. The President shall be the Chief
Executive Officer and head of the Corporation, and
in the recess of the Board of Directors shall have
the general control and management of its business
and affairs, subject, however, to the regulations
of the Board of Directors.
The President shall, in the absence of the
Chairman, preside at all meetings of the
stockholders and the Board of Directors. In the
event of the absence, resignation, disability or
death of the Chairman, the President shall
exercise all powers and perform all duties of the
Chairman until his
<PAGE>
return, or until such disability shall have been
removed or until a new Chairman shall have been
elected.
FURTHER RESOLVED, that Article VII, Section 4 be
amended as of September 30, 1984 to read as
follows:
Section 4. The Executive Vice President, and the
Vice Presidents, shall have those duties and
responsibilities as shall be assigned to them by
the Chairman or the President. In the event of the
absence, resignation, disability or death of the
Chairman and President, the Executive Vice
President shall exercise all the powers and
perform all the duties of the President until his
return, or until such disability shall be removed
or until a new President shall have been elected.
I, Donald M. Allen, Secretary of Delta Trend Fund, Inc., do hereby
certify that the foregoing is a true and correct copy of the Resolutions
adopted by the Board of Directors at their meeting held September 20, 1984.
/s/Donald M. Allen
------------------
Donald M. Allen
<PAGE>
DELTA TREND FUND, INC.
BY-LAWS
ARTICLE I
OFFICES
Section 1. The principal office of the Corporation shall be in the
City of Baltimore, State of Maryland. The Corporation shall also have offices
at such other places as the Board of Directors may from time to time determine
and the business of the Corporation may require.
ARTICLE II
STOCKHOLDERS AND STOCK CERTIFICATES
Section 1. Every stockholder of record shall be entitled to a stock
certificate representing the shares owned by him. Stock certificates shall be
in such form as may be required by law and as the Board of Directors shall
prescribe. Every stock certificate shall be signed by the Chairman or the
President or a Vice President and by the Treasurer or an Assistant Treasurer,
or the Secretary or an Assistant Secretary, and sealed with the corporate
seal, which may be a facsimile, either engraved or printed. Whenever
permitted by law, the Board of Directors may authorize the issuance of stock
certificates bearing the facsimile signatures of the officers authorized to
sign such certificates.
Section 2. Shares of the capital stock of the Corporation shall be
transferable only on the books of the Corporation by the person in whose name
such shares are registered, or by his duly authorized attorney or
representative. In all cases of transfer by an attorney, the original letter
of attorney, or an official copy thereof duly certified, shall be deposited
and remain with the Corporation or its duly authorized transfer agent. In
case of transfers by executors, administrators, guardians or other legal
representatives, duly authenticated evidence of their authority shall be
produced, and may be required to be deposited and remain with the Corporation
or its duly authorized transfer agent. No transfer shall be made unless and
until the certificate issued to the transferor shall be delivered to the
Corporation or its duly authorized transfer agent, properly endorsed.
Section 3. Any person desiring a certificate for shares of the capital
stock of the Corporation to be issued in lieu of one lost or destroyed shall
make an affidavit or affirmation setting forth the loss or destruction of such
stock certificate, and shall advertise such loss or destruction in such manner
as the Board of Directors may require, and shall, if the Board of Directors
shall so require, give the Corporation a bond of indemnity, in such form and
with such security as may be satisfactory to the Board, indemnifying the
Corporation against any loss that may result upon the issuance of a new stock
certificate. Upon receipt of such affidavit and proof of publication of the
advertisement of such loss or destruction, and the bond, if
<PAGE>
any, required by the Board of Directors, a new stock certificate may be issued
of the same tenor and for the number of shares as the one alleged to have been
lost or destroyed.
Section 4. The Corporation shall be entitled to treat the holder of
record of any share or shares of its capital stock as the owner thereof and,
accordingly, shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether
or not the Corporation shall have express or other notice thereof, except as
otherwise provided by the laws of the State of Maryland.
ARTICLE III
MEETING OF STOCKHOLDERS
Section 1. The annual meeting of the stockholders of the Corporation
for the election of Directors and for the transaction of general business
shall be held at the principal office of the Corporation, or at such other
place within or without the State of Maryland as the Board of Directors may
from time to time prescribe, on the third Tuesday in April at 10:00 a.m. in
each year after the year 1983, unless that day shall be duly designated as a
legal holiday, in which event the annual meeting of the stockholders shall be
held on the first day following which is not a legal holiday. The place of
the annual meeting of the stockholders of the Corporation shall be changed
within sixty days next before the day on which such meeting is to be held. A
notice of any change in the place of the annual meeting shall be given to each
stockholder twenty days before the election is held.
Section 2. Special meetings of the stockholders may be called at any
time by the Chairman and shall be called at any time by the Chairman, or by
the Secretary, upon the written request of a majority of the members of the
Board of Directors, or upon the written request of the holders of a majority
of the shares of the capital stock of the Corporation issued and outstanding
and entitled to vote at such meeting. Upon receipt of a written request from
any person or persons entitled to call a special meeting, which shall state
the object of the meeting, it shall be the duty of the Chairman, or, in his
absence, the Secretary, to call such meeting to be held not less than ten days
nor more than sixty days after the receipt of such request. Special meetings
of the stockholders shall be held at the principal office of the Corporation,
or at such other place within or without the State of Maryland as the Board of
Directors may from time to time direct, or at such place within or without the
State of Maryland as shall be specified in the notice of such meeting.
Section 3. Notice of the time and place of the annual or any special
meeting of the stockholders shall be given to each stockholder entitled to
notice of such meeting at least ten days prior to the date of such meeting.
In the case of special meetings of the stockholders, the notice shall specify
the object or objects of such meeting, and no
<PAGE>
business shall be transacted at such meeting other than that mentioned in the
call.
Section 4. The Board of Directors may close the stock transfer books
of the Corporation for a period not exceeding sixty days preceding the date of
any meeting of stockholders, or the date for payment of any dividend, or the
date for the allotment of rights, or the date when any change or conversion or
exchange of capital stock shall go into effect, or for a period of not
exceeding sixty days in connection with the obtaining of the consent of
stockholders for any purpose; provided, however, that in lieu of closing the
stock transfer books as aforesaid, the Board of Directors may fix in advance a
date, not exceeding sixty days preceding the date of any meeting of
stockholders, or the date for the payment of any dividend, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
capital stock shall go into effect, or a date in connection with obtaining
such consent, as a record date for the determination of the stockholders
entitled to notice of, and to vote any such meeting and any adjournment
thereof, or entitled to receive payment of any such dividend, or to any such
allotment of rights, or to exercise the rights in respect of any such change,
conversion or exchange of capital stock or to give such consent, and in such
case such stockholders and only such stockholders as shall be stockholders of
record on the date so fixed shall be entitled to such notice of, and to vote
at, such meeting and any adjournment thereof, or to receive payment of such
dividend or to receive such allotment of rights or to exercise such rights, or
to give such consent, as the case may be, notwithstanding any transfer of any
stock on the books of the Corporation after any such record date fixed as
aforesaid.
Section 5. At least ten days before every election of directors of the
Corporation, the Secretary shall prepare and file in the office where the
election is to be held a complete list of the stockholders entitled to vote at
the ensuing election, arranged in alphabetical order, with the residence of
each stockholder and the number of voting shares held by him, and such list
shall at all times, during the usual hours for business and during the whole
time of said election, be open to the examination of any stockholder.
Section 6. At all meetings of the stockholders a quorum shall consist
of the persons representing a majority of the outstanding shares of the
capital stock of the Corporation entitled to vote at such meeting. In the
absence of a quorum no business shall be transacted except that the
stockholders present in person or by proxy and entitled to vote at such
meeting shall have power to adjourn the meeting from time to time without
notice other than announcement at the meeting until a quorum shall be present.
At any such adjourned meeting at which a quorum shall be present any business
may be transacted which might have been transacted at the meeting on the date
specified in the original notice. If a quorum is present at any meeting, the
holder of the majority of the shares of capital stock of the Corporation
issued and outstanding and entitled to vote at the meeting who shall be
present in person or by proxy at the meeting shall have power to act upon all
matters properly before the meeting, and shall also have power to adjourn the
meeting to any specific time or times, and no notice of any such adjourned
meeting need be given to stockholders absent or otherwise.
Section 7. At all meetings of the stockholders the following order of
business shall be substantially observed, as far as it is consistent with the
purpose of the meeting:
Election of Directors;
Ratification of Selection of Auditors;
New Business.
Section 8. At any meeting of the stockholders of the Corporation every
stockholder having the right to vote shall be entitled, in person or by proxy
appointed, by an instrument in writing subscribed by such stockholder and
bearing a date not more than three years prior to said meeting unless such
instrument provides for a longer period, to one vote for each share of stock
having voting power registered in his name on the books of the Corporation.
Except where the transfer books of the Corporation shall have been closed, or
a date shall have been fixed as a record date for the determination of the
stockholders entitled to vote at such meeting, no share of stock shall be
voted on at any election of the Directors which shall have been transferred on
the books of the Corporation with twenty days next preceding such election of
Directors.
ARTICLE IV
DIRECTORS
Section 1. The Board of Directors shall consist of not less than three
nor more than twelve members, who may be any persons, whether or not they hold
any shares of the capital stock of the Corporation.
Section 2. The directors shall be elected annually by the stockholders
of the Corporation at their annual meeting, and shall hold office for the term
of one year and until their successors shall be duly elected and shall
qualify.
Section 3. The Board of Directors shall have the control and
management of the business of the Corporation, and in addition to the powers
and authority by these By-Laws expressly conferred upon them, may subject to
the provisions of the laws of the State of Maryland and of the Certificate of
Incorporation of the Corporation, exercise all such powers of the Corporation
and do all such acts and things as are not required by law or by the
Certificate of Incorporation to be exercised or done by the stockholders.
Section 4. The Board of Directors shall have power to fill vacancies
occurring on the Board, whether by death, resignation or otherwise. A vacancy
on the Board of Directors may be filled by a vote of the majority of the
remaining members of the Board, though less than a quorum, but such election
shall be deemed to be only for the balance of the unexpired term.
<PAGE>
Section 5. The Board of Directors shall have power to appoint, and at
its discretion to remove or suspend, any officer, officers, manager,
superintendents, subordinates, assistants, clerks, agents and employees,
permanently or temporarily, as the Board may think fit, and to determine their
duties and to fix, and from time to time to change, their salaries or
emolument, and to require security in such instances and in such amounts as it
may deem proper. No contract of employment for services to be rendered to the
Corporation shall be of longer duration than two weeks, unless such contract
of employment shall be in writing, signed by the officers of the Corporation
and approved by the Board of Directors.
Section 6. In case of the absence of an officer of the Corporation, or
for any other reason which may seem sufficient to the Board of Directors, the
Board may delegate his powers and duties for the time being to any other
officer of the Corporation or to any director.
Section 7. The Board of Directors may, by resolution or resolutions
passed by a majority of the whole Board, designate one or more committees,
each committee to consist of two or more of the directors of the Corporation
which, to the extent provided in such resolution or resolutions, shall have
and may exercise the powers of the Board of Directors in the management of the
business and affairs of the Corporation, and may have power to authorize the
seal of the Corporation to be affixed to all papers which may require it.
Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the Board of Directors.
Any such committee shall keep regular minutes of its proceedings, and shall
report the same to the Board when required.
Section 8. The Board of Directors may hold their meetings and keep the
books of the Corporation, except the original or duplicate stock ledger,
outside of the State of Maryland, at such place or places as they may from
time to time determine.
Section 9. The Board of Directors shall have power to fix, and from
time to time to change the compensation, if any, of the directors of the
Corporation.
Section 10.Upon the retirement of a Director, the Board may elect
him or her to the position of Director Emeritus. Said Director Emeritus shall
serve for one year and may be re-elected by the Board from year to year
thereafter. Said Director Emeritus shall not vote at meetings of Directors
and shall not be held responsible for actions of the Board but shall receive
fees paid to Board members for serving as such.
ARTICLE V
DIRECTORS MEETINGS
Section 1. The first regular meeting of the Board of Directors shall
be held each year within seven business days following the annual meeting of
stockholders at which the Directors are elected. Regular meetings of the
Board of
<PAGE>
Directors shall also be held without notice at such times and places as may be
from time to time prescribed by the Board.
Section 2. Special meetings of the Board of Directors may be called at
any time by the Chairman, and shall be called by the Chairman upon the written
request of a majority of the members of the Board of Directors. Unless notice
is waived by all the members of the Board of Directors, notice of any special
meeting shall be sent to each director at least twenty-four hours prior to the
date of such meeting, and such notice shall state the time, place and object
or objects of such special meeting.
Section 3. Three members of the Board of Directors shall constitute a
quorum for the transaction of business at any meeting. The act of a majority
of the directors present at any meeting where there is a quorum shall be the
act of the Board of Directors except as may be otherwise specifically provided
by statute or by the Certificate of Incorporation or by these By-Laws.
Section 4. The order of business at meetings of the Board of Directors
shall be prescribed from time to time by the Board.
ARTICLE VI
OFFICERS AND AGENTS
Section 1. At the first meeting of the Board of Directors after the
election of directors in each year, the Board shall elect a Chairman and Chief
Executive Officer, a President, a Secretary and a Treasurer and may elect or
appoint one or more Assistant Secretaries, one or more Assistant Treasurers,
and such other officers and agents as the Board may deem necessary and as the
business of the Corporation may require.
Section 2. The President and the Chairman of the Board shall be
elected from the membership of the Board of Directors, but other officers need
not be members of the Board of Directors. Any two or more offices may be held
by the same person except the offices of President and Vice President. All
officers of the Corporation shall serve for one year and until their
successors shall have been duly elected and shall have qualified; provided,
however, that any officer may be removed at any time, either with or without
cause, by action by the Board of Directors.
ARTICLE VII
DUTIES OF OFFICERS
CHAIRMAN OF THE BOARD
Section 1. The Chairman of the Board shall be the Chief Executive
Officer and head of the Corporation, and in the recess of the Board of
Directors shall have the general control and management of its business and
affairs, subject, however, to the regulations of the Board of Directors. He
shall preside at all meetings of the stockholders and the Board of Directors
and shall be a member ex officio of all standing committees.
<PAGE>
Section 2. The Chairman shall call all special or other meetings of
the stockholders and Board of Directors. In case the Chairman shall at any
time neglect or refuse to call a special meeting of the stockholders when
requested so to do by a majority of the directors, or by the stockholders
representing a majority of the stock of the Corporation, as is elsewhere in
these By-Laws provided, then and in such case, such special meeting shall be
called by the Secretary, or in the event of his neglect or refusal to call
such meeting, may be called by a majority of the directors or by the
stockholders representing a majority of the stock of the corporation, who
desire such special meeting, as the case may be, upon notice as hereinbefore
provided.
PRESIDENT
Section 3. The President shall have those duties and responsibilities
as shall be assigned to him by the Chairman or the Board of Directors, and
those not specifically reserved to the Chairman by law or by the Board of
Directors.
The President shall, in the absence of the Chairman,
preside at all meetings of the stockholders and the Board of Directors. In the
event of the absence, resignation, disability or death of the Chairman, the
President shall exercise all powers and perform all duties of the Chairman
until his return, or until such disability shall have been removed or until a
new Chairman shall have been elected.
VICE PRESIDENTS
Section 4. The Executive Vice President, and the Vice Presidents,
shall have those duties and responsibilities as shall be assigned to them by
the Chairman or the President. In the event of the absence, resignation,
disability or death of the President, the Executive Vice President shall
exercise all the powers and perform all the duties of the President until his
return, or until such disability shall be removed or until a new President
shall have been elected.
THE SECRETARY AND ASSISTANT SECRETARIES
Section 5. The Secretary shall attend all meetings of the stockholders
and shall record all the proceedings thereof in a book to be kept for that
purpose, and he shall be the custodian of the corporate seal of the
Corporation. In the absence of the Secretary, an Assistant Secretary or any
other person appointed or elected by the Board of Directors, as is elsewhere
in these By-laws provided, may exercise the rights and perform the duties of
the Secretary.
Section 6. The Assistant Secretary, or, if there be more than one
Assistant Secretary, then the Assistant Secretaries in the order of their
seniority, shall, in the absence or disability of the Secretary, perform the
duties and exercise the powers of the secretary. Any Assistant Secretary
elected by the Board shall also perform such other
<PAGE>
duties and exercise such other powers as the Board of Directors shall from
time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 7. The Treasurer shall keep full and correct accounts of the
receipts and expenditures of the Corporation in books belonging to the
Corporation, and shall deposit all monies and valuable effects in the name and
to the credit of the Corporation and in such depositories as may be designated
by the Board of Directors, and shall, if the Board shall so direct, give bond
with sufficient security and in such amount as may be required by the Board of
Directors for the faithful performance of his duties.
He shall disburse funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and Board of Directors at the
regular meetings of the Board, or whenever they may require it, an account of
all his transactions as the chief fiscal officer of the Corporation and of the
financial condition of the Corporation, and shall present each year before the
annual meeting of the stockholders a full financial report of the preceding
fiscal year.
Section 8. The Assistant Treasurer, or, if there be more than one
Assistant Treasurer, then the Assistant Treasurers in the order of their
seniority, shall, in the absence or disability of the Treasurer, perform the
duties and exercise the powers of the Treasurer. Any Assistant Treasurer
elected by the board shall also perform such duties and exercise such powers
as the Board of Directors shall from time to time prescribe.
ARTICLE VIII
CHECKS, DRAFTS, NOTES, ETC.
Section 1. All checks shall bear the signature of such person or
persons as the Board of Directors may from time to time direct.
Section 2. All notes and other similar obligations and acceptances of
drafts by the Corporation shall be signed by such person or persons as the
Board of Directors may from time to time direct.
Section 3. Any officer of the Corporation or any other employee, as
the Board of Directors may from time to time direct, shall have full power to
endorse for deposit all checks and all negotiable paper drawn payable to his
or their order or to the order of the Corporation.
ARTICLE IX
CORPORATE SEAL
Section 1. The Corporate seal of the Corporation shall have inscribed
thereon the name of the Corporation, the year of its organization, and the
words "Corporate Seal, Maryland". Such seal may be used by causing it or a
<PAGE>
facsimile thereof to be impressed or affixed or reproduced or otherwise.
Section 2. Before payment of any dividend there may be set aside out
of any funds of the Corporation available for dividends such sum or sums as
the Board of Directors may, from time to time, in their absolute discretion,
think proper as a reserve fund to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation, or
for such other purpose as the Board of Directors shall deem to be for the best
interests of the Corporation, and the Board of Directors may abolish any such
reserve in the manner in which it was created.
ARTICLE X
DIVIDENDS
Section 1. Dividends upon the shares of the capital stock of the
Corporation may, subject to the provisions of the Certificate of Incorporation
of the Corporation, if any, be declared by the Board of Directors at any
regular or special meeting, pursuant to law. Dividends may be paid in cash,
in property, or in shares of the capital stock of the Corporation.
ARTICLE XI
FISCAL YEAR
Section 1. The fiscal year of the Corporation shall begin on July l of
each year, and end on June 30 of each year.
ARTICLE XII
NOTICES
Section 1. Whenever under the provisions of these By-Laws notice is
required to be given to any director or stockholder, it shall not be construed
to mean personal notice, and such notice may be given in writing, by mail, by
depositing the same in the post office or letter box, in a postpaid sealed
wrapper, addressed to such director or stockholder at such address as shall
appear on the books of the Corporation, or, if the address of such director or
stockholder does not appear on the books of the Corporation, to such director
or stockholder at the General Post Office in the City of Baltimore, Maryland,
and such notice shall be deemed to be given at the time it shall be so
deposited in the post office or letter box. In the case of directors, such
notice may also be given by telephone, telegraph or cable.
Section 2. Any notice required to be given under these By-Laws may be
waived in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein.
Each director and officer (and his heirs, executors and
administrators) may be indemnified by the Corporation against reasonable costs
and expenses incurred by him in connection with any action, suit or proceeding
to which he may be made a party by reason of his being or having
<PAGE>
been a director or officer of the Corporation, except in relation to any
actions, suits or proceedings, in which he has been adjudged liable because of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties in the conduct of his office. In the absence of an adjudication which
expressly absolves the director or officer of liability to the Corporation or
its stockholders for willful misfeasance, bad faith, gross negligence or
reckless disregard of the conduct of his office, or in the event of a
settlement, each director and officer (and his heirs, executors and
administrators) may be indemnified by the Corporation against payments made,
including reasonable costs and expenses, provided that such indemnity shall be
conditioned upon the prior determination by two thirds of the members of the
Board of Directors of the Corporation that the director or officer has no
liability by reason of willful misfeasance, bad faith, gross negligence in the
performance of duties or the reckless disregard of the duties involved in the
conduct of his office. Such payments in settlement, including reasonable costs
and expenses incident to settlement, shall not exceed costs and expenses which
would have been reasonably incurred if the action, suit or proceeding would
have been litigated and concluded. Such a determination by the Board of
Directors and the payments of amounts by the Corporation on the basis thereof
shall not prevent a stockholder from challenging such indemnification by
appropriate legal proceedings. The foregoing rights and indemnification shall
not be exclusive of any other rights to which officers and directors may be
entitled to according to law.
ARTICLE XIII
AMENDED
Section 1. These By-Laws may be amended, altered, repealed or added to
at the annual meeting of the stockholders of the Corporation or of the Board
of Directors, or at any special meeting of the stockholders or of the Board of
Directors called for that purpose, by the affirmative vote of the holders of a
majority of the shares of capital stock of the Corporation then issued and
outstanding and entitled to vote, or by a majority of the whole Board of
Directors, as the case may be.
<PAGE>
EXHIBIT 99.B5
DELAWARE GROUP TREND FUND, INC.
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, made by and between DELAWARE GROUP TREND FUND, INC., a
Maryland corporation (the "Fund"), and DELAWARE MANAGEMENT COMPANY, INC., a
Delaware corporation (the "Investment Manager").
W I T N E S S E T H:
WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 and engages in the
business of investing and reinvesting its assets in securities; and
WHEREAS, the Investment Manager is a registered Investment Adviser
under the Investment Advisers Act of 1940 and engages in the business of
providing investment management services; and
WHEREAS, the indirect parent company of the Investment Manager
completed on the date hereof a merger transaction which resulted in a change
of control of the Investment Manager and an automatic termination of the
previous Investment Management Agreement dated as of the 29th day of June,
1988; and
WHEREAS, the Board of Directors and shareholders of the Fund have
determined to enter into a new Investment Management Agreement with the
Investment Manager to be effective as of the date hereof.
<PAGE>
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and each of the parties hereto intending to be legally bound, it is
agreed as follows:
1. The Fund hereby employs the Investment Manager to manage the
investment and reinvestment of the Fund's assets and to administer its
affairs, subject to the direction of the Board and officers of the Fund for
the period and on the terms hereinafter set forth. The Investment Manager
hereby accepts such employment and agrees during such period to render the
services and assume the obligations herein set forth for the compensation
herein provided. The Investment Manager shall, for all purposes herein, be
deemed to be an independent contractor, and shall, unless otherwise expressly
provided and authorized, have no authority to act for or represent the Fund in
any way, or in any way be deemed an agent of the Fund. The Investment Manager
shall regularly make decisions as to what securities to purchase and sell on
behalf of the Fund and shall give written instructions to the Trading
Department maintained by the Fund for implementation of such decisions and
shall furnish the Board of Directors of the Fund with such information and
reports regarding the Fund's investments as the Investment Manager deems
appropriate or as the Directors of the Fund may reasonably request.
2. The Fund shall conduct its own business and affairs and shall
bear the expenses and salaries necessary and incidental thereto including, but
not in limitation of the foregoing, the costs incurred in: the maintenance of
its corporate existence; the maintenance of its own books, records and
procedures; dealing with its own shareholders; the payment of dividends;
transfer of stock,
<PAGE>
including issuance, redemption and repurchase of shares; preparation of share
certificates; reports and notices to shareholders; calling and holding of
shareholders' meetings; miscellaneous office expenses; brokerage commissions;
custodian fees; legal and accounting fees; and taxes.
Directors, officers and employees of the Investment Manager may be
directors, officers and employees of the funds of which Delaware Management
Company, Inc. is Investment Manager. Directors, officers and employees of the
Investment Manager who are directors, officers and/or employees of the funds
shall not receive any compensation from the funds for acting in such dual
capacity.
In the conduct of the respective businesses of the parties hereto
and in the performance of this Agreement, the Fund and Investment Manager may
share facilities common to each, with appropriate proration of expenses
between them.
3. (a) The Fund shall place and execute its own orders for the
purchase and sale of portfolio securities with broker/dealers. Subject to the
primary objective of obtaining the best available prices and execution, the
Fund will place orders for the purchase and sale of portfolio securities with
such broker/dealers selected from among those designated from time to time by
the Investment Manager, who provide statistical, factual and financial
information and services to the Fund, to the Investment Manager, or to any
other fund for which the Investment Manager provides investment advisory
services and/or with broker/dealers who sell shares of the Fund or who sell
shares of any other fund for which the Investment Manager provides investment
advisory services. Broker/dealers who sell shares of the funds of which
Delaware Management Company, Inc. is Investment Manager, shall only
<PAGE>
receive orders for the purchase or sale of portfolio securities to the extent
that the placing of such orders is in compliance with the Rules of the
Securities and Exchange Commission and the National Association of Securities
Dealers, Inc.
(b) Notwithstanding the provisions of subparagraph (a) above and
subject to such policies and procedures as may be adopted by the Board of
Directors and officers of the Fund, the Investment Manager may ask the Fund,
and the Fund may agree, to pay a member of an exchange, broker or dealer, an
amount of commission for effecting a securities transaction in excess of the
amount of commission another member of an exchange, broker or dealer would
have charged for effecting that transaction, in such instances where it and
the Investment Manager have determined in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and
research services provided by such member, broker or dealer, viewed in terms
of either that particular transaction or the Investment Manager's overall
responsibilities with respect to the Fund and to other funds for which the
Investment Manager exercises investment discretion.
4. As compensation for the services to be rendered to the Fund
by the Investment Manager under the provisions of this Agreement, the Fund
shall pay to the Investment Manager monthly a fee equal to one-sixteenth of
one percent (the equivalent of three-quarters of one percent per annum) of the
daily average net assets of the Fund during the month, less all fees paid to
members of the Board of Directors of the Fund during the same period.
<PAGE>
If this Agreement is terminated prior to the end of any calendar
month, the management fee shall be prorated for the portion of any month in
which this Agreement is in effect according to the proportion which the number
of calendar days during which the Agreement is in effect bears to the number
of calendar days in the month, and shall be payable within 10 days after the
date of termination.
5. The services to be rendered by the Investment Manager to the
Fund under the provisions of this Agreement are not to be deemed to be
exclusive, and the Investment Manager shall be free to render similar or
different services to others so long as its ability to render the services
provided for in this Agreement shall not be impaired thereby.
6. The Investment Manager, its directors, officers, employees,
agents and shareholders may engage in other businesses, may render investment
advisory services to other investment companies, or to any other corporation,
association, firm or individual, and may render underwriting services to the
Fund or to any other investment company, corporation, association, firm or
individual.
7. In the absence of willful misfeasance, bad faith, gross
negligence, or a reckless disregard of the performance of duties of the
Investment Manager to the Fund, the Investment Manager shall not be subject to
liabilities to the Fund or to any shareholder of the Fund for any action or
omission in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale of any
security, or otherwise.
8. This Agreement shall be executed and become effective as of
the date written below if approved by
<PAGE>
the vote of a majority of the outstanding voting securities of the Fund. It
shall continue in effect for a period of two years and may be renewed
thereafter only so long as such renewal and continuance is specifically
approved at least annually by the Board of Directors or by vote of a majority
of the outstanding voting securities of the Fund and only if the terms and the
renewal hereof have been approved by a vote of a majority of the Directors of
the Fund, who are not parties hereto or interested persons of any such party,
cast in person at a meeting called for the purpose of voting on such approval.
No amendment to this Agreement shall be effective unless the terms thereof
have been approved by the vote of a majority of the outstanding voting
securities of the Fund and by the vote of a majority of Directors of the Fund
who are not parties to the Agreement or interested persons of any such party,
cast in person at a meeting called for the purpose of voting on such approval.
Notwithstanding the foregoing, this Agreement may be terminated by the Fund at
any time, without the payment of a penalty, on sixty days' written notice to
the Investment Manager of the Fund's intention to do so, pursuant to action by
the Board of Directors of the Fund or pursuant to a vote of a majority of the
outstanding voting securities of the Fund. The Investment Manager may
terminate this Agreement at any time, without the payment of penalty on sixty
days' written notice to the Fund of its intention to do so. Upon termination
of this Agreement, the obligations of all the parties hereunder shall cease
and terminate as of the date of such termination, except for any obligation to
respond for a breach of this Agreement committed prior to such termination,
and except for the obligation of the Fund to pay to the Investment Manager
<PAGE>
the fee provided in Paragraph 4 hereof, prorated to the date of termination.
This Agreement shall automatically terminate in the event of its assignment.
9. This Agreement shall extend to and bind the heirs,
executors, administrators and successors of the parties hereto.
10. For the purposes of this Agreement, the terms "vote of a
majority of the outstanding voting securities";
"interested persons"; and "assignment" shall have the meanings defined in the
Investment Company Act of 1940.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
by having it signed by their duly authorized officers as of the 3rd day of
April, 1995.
DELAWARE GROUP TREND FUND, INC.
Attest:/s/Eric E. Miller By:/s/Brian F. Wruble
----------------- ------------------
Eric E. Miller Brian F. Wruble
DELAWARE MANAGEMENT COMPANY, INC.
Attest:/s/Richelle S. Maestro By:/s/Wayne A. Stork
---------------------- --------------------
Richelle S. Maestro Wayne A. Stork
<PAGE>
DELAWARE
GROUP Dealer's Agreement
========
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We invite you, as a selected dealer, to participate as principal in the
distribution of the shares of all of the Funds in the Delaware Group of
Investment Companies which retain us, Delaware Distributors, L.P., to act as
exclusive national distributor. The term "Fund" as used in this Agreement,
refers to each Fund in the Delaware Group which retains us to promote and
sell its shares, and any Fund which may hereafter be added to the Delaware
Group and retain us as national distributor. Such additional Funds will be
included in this Agreement upon our providing you with written notice of such
inclusion.
OFFERING PRICE TO PUBLIC: Orders for shares received from you and accepted by
a Fund or its agent, Delaware Service Company, Inc., will be at the public
offering price applicable to each order as set forth in that Fund's
Prospectus. The manner of computing the net asset value of shares, the public
offering price and the effective time of orders received from you are
described in the Prospectus for each Fund. We reserve the right, at any time
and without notice, to suspend the sale of Fund Shares.
CONCESSIONS TO YOU: You will be entitled to deduct the applicable concession
as set forth in the then current Prospectus of a Fund from the purchase price
of certain purchase orders placed by you for shares of a Fund having a sales
charge. We reserve the right from time to time, without prior notice, to
modify, suspend or eliminate such concessions by amendment, sticker or
supplement to the Prospectus for the Fund. If any shares confirmed to you
under the terms of this Agreement are redeemed or repurchased by the Fund or
by us as agent for the Fund, or are tendered for redemption or repurchase,
within seven business days after the date of our confirmation of the original
purchase order, you shall promptly refund to us the concession allowed to you
on such shares.
PURCHASE PLANS: The purchase price on all orders placed by you and any
concessions or other fees otherwise due to you under this Agreement will be
subject to the then current terms and provisions of any applicable special
plans and accounts (e.g., volume purchases, letters of intent, right of
accumulation, combined purchases privilege, exchange and reinvestment
privileges and retirement plan accounts) as set forth from time to time in
the Prospectus. We must be notified when an order is placed if it qualifies
for a reduced sales charge under any of these plans. We reserve the right, at
any time, without prior notice, to modify, suspend or eliminate any such
plans or accounts by amendment, sticker or supplement to the Prospectus for
the Fund.
SALES, ORDERS AND CONFIRMATIONS: In offering Fund shares to the public or
otherwise, you shall act as dealer for your own account, and in no
transaction shall you have any authority to act as agent for the Fund, for
any other selected dealer or for us. No person is authorized to make any
representations concerning the shares of the Fund except those contained in
the Prospectus and in written information issued by the Fund or by us as a
supplement to such Prospectus. In purchasing Fund shares, you shall rely only
on such representations.
All sales must be made subject to confirmation and orders are subject to
acceptance or rejection by the Fund in its sole discretion. Your orders must be
wired, telephoned or written to the Fund or its agent. You agree to place
orders for the same number of shares sold by you at the price at which such
shares are sold. You agree that you will not purchase Fund shares except for
investment or for the purpose of covering purchase orders already received
and that you will not, as principal, sell Fund shares unless purchased by you
from the Fund under the terms hereof. You also agree that you will not
withhold placing with us orders received from your customers so as to profit
yourself from such withholding. Each of your orders shall be confirmed by you
in writing on the same day.
<PAGE>
PAYMENT AND ISSUANCE OF CERTIFICATES: The shares purchased by you hereunder
shall be paid for in full at the public offering price, less any concession to
you as set forth above, by check payable to the Fund, at its office, within five
business days after our acceptance of your order. If not so paid, we reserve the
right to cancel the sale and to hold you responsible for any loss sustained by
us or the Fund (including lost profit) in consequence. Certificates representing
the Fund's shares will not be issued unless a specific request is received from
the purchaser. Certificates, if requested, will be issued in the names indicated
by registration instructions accompanying your payment.
REDEMPTION: The Prospectus describes the provisions whereby the Fund, under
all ordinary circumstances, will redeem shares held by shareholders on
demand. You agree that you will not make any representations to shareholders
relating to the redemption of their shares other than the statements
contained in the Prospectus and the underlying organizational documents of
the Fund, to which it refers, and that you will quote as the redemption price
only the price determined by the Fund. You shall not repurchase any shares
from your customers at a price below that next quoted by the Fund for
redemption. You may charge a reasonable fee for services in connection with
the repurchase by you from your customers of shares. You may hold such
repurchased shares only for investment purposes or submit such shares to the
Fund for redemption.
12b-1 PLAN: With respect to any Fund that has a Distribution Plan under Rule
12b-1 (a "12b-1 Plan") of the Investment Company Act of 1940 (the "1940
Act"), we expect you to provide distribution and marketing services in the
promotion of the Fund's shares and services and assistance to your customers
who own Fund shares, including but not limited to, answering inquiries
regarding the Fund or the status of a customer's account, assisting in
changing dividend options, account designations and addresses and providing
information to customers relating to maintaining their investment in the
Fund. For such services we will pay you a fee, as established by us from time
to time, based on a portion of the net asset value of the accounts of your
clients in the Fund. We are permitted to make this payment under the terms of
the 12b-1 Plans adopted by certain of the Funds, as such Plans may be in
effect from time to time; provided, however, that no payments shall be due
and paid to you hereunder unless and until the form of this Agreement shall
have been approved by a majority of the Board of Directors or Trustees of the
Fund and by a majority of the directors or trustees who are not "interested
persons" of us, the Fund or its investment manager, as such term is defined
in the 1940 Act (i.e., non-interested directors or trustees) by vote cast in
person at a meeting called for the purpose of voting on this form of
Agreement. The 12b-1 Plans in effect on the date of this Agreement are
substantially in the form set forth as Exhibit A hereto. Each Fund reserves the
right to terminate or suspend its 12b-1 Plan at any time as specified in the
Plan and we reserve the right, at any time, without notice, to modify, suspend
or terminate payments hereunder in connection with such 12b-1 Plan. You will
furnish the Fund and us with such information as may be reasonably requested
by the Fund or its directors or trustees or by us with respect to such fees
paid to you pursuant to this Agreement.
LEGAL COMPLIANCE: This Agreement and any transaction with, or payment to, you
pursuant to the terms hereof is conditioned on your representation to us
that, as of the date of this Agreement you are, and at all times during its
effectiveness you will be: (a) a registered broker/dealer under the
Securities Exchange Act of 1934 and qualified under applicable state
securities laws in each jurisdiction in which you are required to be
qualified to act as a broker/dealer in securities, and a member in good
standing of the National Association of Securities Dealers, Inc. (the "NASD");
or (b) a foreign broker/dealer not eligible for membership in the NASD and
otherwise in compliance with applicable U.S. federal and state securities
laws. You agree to notify us promptly in writing and immediately suspend sales
of Fund shares if this representation ceases to be true. You also agree that,
whether you are a member of the NASD or a foreign broker/dealer not eligible
for such membership, you will comply with the rules of the NASD including, in
particular, Sections 2 and 26 of Article III thereof, and that you will
maintain adequate records with respect to your transactions with the Funds.
<PAGE>
BLUE SKY MATTERS: We shall have no obligation or responsibility with respect
to your right to sell Fund shares in any state or jurisdiction. From time to
time we may furnish you with information identifying the states and
jurisdictions under the securities laws of which it is believed a Fund's
shares may be sold. You will not transact orders for Fund shares in states or
jurisdictions in which we indicate Fund shares may not be sold. You agree to
offer and sell Fund shares outside the United States only in compliance with
all applicable laws, rules and regulations of any foreign government having
jurisdiction over such transactions in addition to any applicable laws, rules
and regulations of the United States.
LITERATURE: We will furnish you with copies of each Fund's Prospectus, sales
literature and other information made publicly available by the Fund, in
reasonable quantities upon your request. You agree to deliver a copy of the
current Prospectus in accordance with the provisions of the Securities Act of
1933 to each purchaser of Fund shares for whom you act as broker. We shall
file Fund sales literature and promotional material with NASD and SEC as
required. You may not publish or use any sales literature or promotional
materials with respect to the Funds without our prior review and written
approval.
NOTICES AND COMMUNICATIONS: All communications from you should be addressed
to us at One Commerce Square, 2005 Market Street, Philadelphia, PA 19103. Any
notice from us to you shall be deemed to have been duly given if mailed or
telegraphed to you at the address set forth below. Each of us may change the
address to which notices shall be sent by notice to the other in accordance
with the terms hereof.
TERMINATION: This Agreement may be terminated by either party at any time by
written notice to that effect and will terminate without notice upon the
appointment of a trustee for you under the Securities Investor Protection
Act, or any other act of insolvency by you. Notwithstanding the ter mination
of this Agreement, you shall remain liable for any amounts otherwise owing to
us or the Funds and for your portion of any transfer tax or other liability
which may be asserted or assessed against the Fund, or us, or upon any one or
more of the selected dealers based upon the claim that the selected dealers
or any of them constitute a partnership, an unincorporated business or other
separate entity.
AMENDMENT: This Agreement may be amended or revised at any time by us upon
notice to you and, unless you notify us in writing to the contrary, you will
be deemed to have accepted such modifications. Additional or modified forms
of Rule 12b-1 Plans may be included in this Agreement from time to time.
GENERAL: Your acceptance hereof will constitute an obligation on your part to
observe all the terms and conditions hereof. In the event you breach any of
the terms and conditions of this Agreement, you will indemnify us, the Funds,
and our affiliates for any damages, losses, costs and expenses (including
reasonable attorneys' fees) arising out of or relating to such breach and we
may offset any such damages, losses, costs and expenses against any amounts
due to you hereunder. Nothing contained herein shall constitute you, us and
any dealers an association or partnership. All references in this Agreement
to the "Prospectus" refer to the then current version of the Prospectus and
include the Statement of Additional Information incorporated by reference
therein and any stickers or supplements thereto. This Agreement supercedes
and replaces any prior agreement between us and you with respect to your
purchase and sale of Fund shares and is to be construed in accordance with
the laws of the State of Delaware.
Please confirm this Agreement by executing one copy of this Agreement below
and returning it to us. Keep the enclosed duplicate copy for your records.
DELAWARE DISTRIBUTORS, L.P.
By: Delaware Distributors, Inc., General Partner
By: /s/ Keith E. Mitchell
----------------------------------------
Name: Keith E. Mitchell
Title: President/Chief Executive Officer
<PAGE>
_____________________________________________________________________________
DEALER'S AGREEMENT ACCEPTANCE
DELAWARE DISTRIBUTORS, L.P.
The undersigned hereby confirms the Dealer's Agreement and acknowledges that
any purchase of Fund shares made during the effectiveness of this Agreement
is subject to all the applicable terms and conditions set forth in this
Agreement, and agrees to pay for the shares at the price and upon the terms
and conditions stated in the Agreement. The undersigned hereby acknowledges
receipt of Prospectuses relating to the Fund shares and confirms that, in
executing the Dealer's Agreement, it has relied on such Prospectuses and not
on any other statement whatsoever, written or oral.
INVESTMENT DEALER PLEASE SIGN HERE AND COMPLETE BELOW
BY:_________________________________________ DATE________________________
Name:_______________________________________
Title:______________________________________
____________________________________________
FIRM
____________________________________________
FIRM'S TAX IDENTIFICATION NUMBER
____________________________________________
STREET ADDRESS
____________________________________________
CITY/STATE/ZIP
<PAGE>
EXHIBIT A-1
FORM OF 12b-1 PLANS
A CLASS AND CONSULTANT CLASS SHARES
The 12b-1 Plans adopted by Funds in the Delaware Group
offering A Class Shares that are subject to a front-end sales
charge or Consultant Class Shares (money market funds) are
substantially in the following form:
DISTRIBUTION PLAN
The following Distribution Plan (the "Plan") has been adopted pursuant to Rule
12b-1 under the Investment Company Act of 1940 (the "Act") by the Fund (the
"Fund"), on behalf of the Fund_______________ Class ("Class"). The Plan has
been approved by a majority of the Board of Directors, including a majority of
the directors who are not interested persons of the Fund and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreements related thereto, cast in person at a meeting called for the
purpose of voting on such Plan. Such approval by the directors included a
determination that in the exercise of reasonable business judgment and in
light of their fiduciary duties, there is a reasonable likelihood that the
Plan will benefit the Fund and its shareholders. The Plan has also been
approved by a vote of the holders of a majority of the outstanding voting
securities of the Class as defined in the Act.
The Fund is a corporation organized under the laws of the State of Maryland
authorized to issue different series of securities and is an open-end
management investment company registered under the Act. Delaware Management
Company, Inc. ("DMC") or Delaware International Advisers Ltd. ("Delaware
International"), an affiliate of DMC, serves as the Fund's investment adviser
and manager pursuant to an Investment Management Agreement. Delaware Service
Company, Inc. serves as the Fund's shareholder servicing, dividend disbursing
and transfer agent. Delaware Distributors, L.P. (the "Distributor") is the
principal underwriter and national distributor for the Fund's shares,
including shares of the Class, pursuant to the Distribution Agreement between
the Distributor and the Fund ("Distribution Agreement").
The Distributor may enter into agreements with other registered
broker/dealers substantially in the form of the Dealer Agreement in the
implementation of this Plan and of the Distribution Agreement between it and
the Fund. The Fund may, in addition, enter into arrangements with other than
broker/dealers which are not "affiliated persons" or "interested persons" of
the Fund, DMC, Delaware International, or the Distributor to provide to the
Fund services in the Fund's marketing of shares of the Class, such
arrangements to be reflected by Service Agreements.
The Plan provides that:
1. The Fund shall pay a monthly fee not to exceed 0.3% (3/10 of 1%) per annum
of the Fund's average daily net assets represented by shares of the Class
(the "Maximum Amount") as may be determined by the Fund's Board of Directors
from time to time. Such monthly fee shall be reduced by the aggregate sums
paid by the Fund to other than broker-dealers (the "Service Providers")
pursuant to Service Agreements referred to above.
2. (a) The Distributor shall use the monies paid to it pursuant to paragraph 1
above to furnish, or cause or encourage others to furnish, services and
incentives in connection with the promotion, offering and sale of Class
shares and, where suitable and appropriate, the retention of Class shares by
shareholders.
(b) The Service Providers shall use the monies paid respectively
to them to reimburse themselves for the actual costs they have incurred in
confirming that their customers have received the Prospectus and Statement of
Additional Information, if applicable , and as a fee for: (1) assisting such
customers in maintaining proper records with the Fund; (2) answering
questions relating to their respective accounts; and (3) aiding in
maintaining the investment of their respective customers in the Class.
<PAGE>
3. The Distributor shall report to the Fund at least monthly on the amount and
the use of the monies paid to it under the Plan. The Service Providers shall
inform the Fund monthly and in writing of the amounts each claims under the
Service Agreement and the Plan; both the Distributor and the Service
Providers shall furnish the Board of Directors of the Fund with such other
information as the Board may reasonably request in connection with the
payments made under the Plan and the use thereof by the Distributor and the
Service Providers, respectively, in order to enable the Board to make an
informed determination of the amount of the Fund's payments and whether the
Plan should be continued.
4. The officers of the Fund shall furnish to the Board of Directors of the
Fund, for their review, on a quarterly basis, a written report of the amounts
expended under the Plan and the purposes for which such expenditures were
made.
5. This Plan shall take effect on the date on which the Class commences
operations with public shareholders ("Commencement Date"); thereafter, it
shall continue in effect for a period of more than one year from the
Commencement Date only so long as such continuance is specifically approved at
least annually by a vote of the Board of Directors of the Fund, and of the
directors who are not interested persons of the Fund and have no direct or
indirect financial interest in the operation of the Plan or in any agreements
related to the Plan ("non-interested directors"), cast in person at a meeting
called for the purpose of voting on such Plan.
6. (a) The Plan may be terminated at any time by vote of a majority of the
non-interested directors or by vote of a majority of the outstanding voting
securities of the Class.
(b) The Plan may not be amended to increase materially the amount
to be spent for distribution pursuant to paragraph 1 thereof without approval
by the shareholders of the Class.
7. The Distribution Agreement between the Fund and the Distributor, and the
Service Agreements between the Fund and the Service Providers, shall
specifically have a copy of this Plan attached to and its terms and
provisions incorporated respectively by reference in such agreements.
8. All material amendments to this Plan shall be approved by the
non-interested directors in the manner described in paragraph 5 above.
9. So long as the Plan is in effect, the selection and nomination of the
Fund's non-interested directors shall be committed to the discretion of such
non-interested directors.
10. The definitions contained in Sections 2(a)(3), 2(a)(4), 2(a)(19) and
2(a)(42) of the Act shall govern the meaning of "affiliated person,"
"assignment," "interested person(s)" and "vote of a majority of the
outstanding voting securities," respectively, for purposes of this Plan.
<PAGE>
Exhibit A-2
FORM OF 12b-1 PLANS
B CLASS SHARES
The 12b-1 Plans adopted by the Funds in the Delaware Group
offering B Class Shares are substantially in the following form:
DISTRIBUTION PLAN
The following Distribution Plan (the "Plan") has been adopted pursuant to Rule
12b-1 under the Investment Company Act of 1940 (the "Act") by the Fund (the
"Fund"), on behalf of the Fund B Class (the "Class"). The Plan has been
approved by a majority of the Board of Directors, including a majority of the
Directors who are not interested persons of the Fund and who have no direct or
indirect financial interest in the operation of the Plan or in any agreements
related thereto, cast in person at a meeting called for the purpose of voting
on such Plan. Such approval by the Directors included a determination that in
the exercise of reasonable business judgment and in light of their fiduciary
duties, there is a reasonable likelihood that the Plan will benefit the Fund
and its shareholders. The Plan has been approved by a vote of the holders of
a majority of the outstanding voting securities of the Class, as defined in
the Act.
The Fund is a corporation organized under the laws of the State of Maryland,
is authorized to issue different series and classes of securities and is an
open-end management investment company registered under the Act. Delaware
Management Company, Inc. ("DMC") or Delaware International Advisers Ltd.
("Delaware International"), an affiliate of DMC, serves as the Fund's
investment adviser and manager pursuant to an Investment Management
Agreement. Delaware Service Company, Inc. serves as the Fund's shareholder
servicing, dividend disbursing and transfer agent. Delaware Distributors,
L.P. (the "Distributor") is the principal underwriter and national
distributor for the Fund's shares, including shares of the Class, pursuant to
the Distribution Agreement between the Distributor and the Fund
("Distribution Agreement").
The Plan provides that:
1.(a) The Fund shall pay to the Distributor a monthly fee not to exceed 0.75%
(3/4 of 1%) per annum of the Fund's average daily net assets represented by
shares of the Class as may be determined by the Fund's Board of Directors
from time to time.
(b) In addition to the amounts described in paragraph 1(a) above, 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% (1/4 of 1%) per annum of
the Fund's average daily net assets represented by shares of the Class, as a
service fee pursuant to dealer or servicing agreements, the forms of which
have been approved from time to time by the Fund's Board of Directors.
2.(a) The Distributor shall use the monies paid to it pursuant to paragraph
1(a) above to assist in the distribution and promotion of shares of the
Class. Payments made to the Distributor under the Plan may be used for, among
other things, preparation and distribution of advertisements, sales
literature and prospectuses and reports used for sales purposes, as well as
compensation related to sales and marketing personnel, and holding special
promotions. In addition, such fees may be used to pay for advancing the
commission costs to dealers with respect to the sale of Class shares.
(b) The monies to be paid pursuant to paragraph 1(b) above shall be used to
pay dealers or others for, among other things, furnishing personal services
and maintaining shareholder accounts, which services include confirming that
customers have received the Prospectus and Statement of Additional
Information, if applicable; assisting such customers in maintaining proper
records with the Fund; answering questions relating to their respective
accounts; and aiding in maintaining the investment of their respective
customers in the Fund.
<PAGE>
3. The Distributor shall report to the Fund at least monthly on the amount
and the use of the monies paid to it under paragraph 1(a) above. In addition,
the Distributor and others shall inform the Fund monthly and in writing of
the amounts paid under paragraph 1(b) above; both the Distributor and any
others receiving fees under the Plan shall furnish the Board of Directors of
the Fund with such other information as the Board may reasonably request in
connection with the payments made under the Plan and the use thereof by the
Distributor and others in order to enable the Board to make an informed
determination of the amount of the Fund's payments and whether the Plan
should be continued.
4. The officers of the Fund shall furnish to the Board of Directors of the
Fund, and the Directors shall review, on a quarterly basis, a written report
of the amounts expended under the Plan and the purposes for which such
expenditures were made.
5. This Plan shall take effect at such time as the Distributor shall notify
the Fund in writing of the commencement of the Plan (the "Commencement
Date"); thereafter, the Plan shall continue in effect for a period of more
than one year from the Commencement Date only so long as such continuance is
specifically approved at least annually by a vote of the Board of Directors
of the Fund, and of the Directors who are not interested persons of the Fund
and have no direct or indirect financial interest in the operation of the
Plan or in any agreements related to the Plan ("non-interested Directors"),
cast in person at a meeting called for the purpose of voting on such Plan.
6. (a) The Plan may be terminated at any time by vote of a majority of the
non-interested Directors or by vote of a majority of the outstanding voting
securities of the Class.
(b) The Plan may not be amended to increase materially the amount to be
spent for distribution pursuant to paragraph 1 thereof without approval by the
shareholders of the Class.
7. The Distribution Agreement between the Fund and the Distributor, and any
dealers or servicing agreements between the Distributor and brokers or others
or between the Fund and others receiving a servicing fee, shall specifically
have a copy of this Plan attached to, and its terms and provisions
incorporated respectively by reference in, such agreements.
8. All material amendments to this Plan shall be approved by the
non-interested Directors in the manner described in paragraph 5 above.
9. So long as the Plan is in effect, the selection and nomination of the
Fund's non-interested Directors shall be committed to the discretion of such
non-interested Directors.
10. The definitions contained in Sections 2(a)(3), 2(a)(4), 2(a)(19) and
2(a)(42) of the Act shall govern the meaning of "affiliated person,"
"assignment" "interested person(s)" and "vote of a majority of the outstanding
voting securities," respectively, for the purposes of this Plan.
This Plan shall take effect on the Commencement Date, as previously defined.
AA-17A-1/95-U
<PAGE>
MUTUAL FUND AGREEMENT
FOR THE DELAWARE GROUP OF FUNDS
Gentlemen:
We are the national distributor for the Delaware Group of Funds with exclusive
right to sell and distribute Fund shares. (The term "Funds" in this Agreement
refers to each or any of the Funds that from time to time comprise the Delaware
Group and for whom we act as distributor.) You have indicated that you wish to
act as agent for your customers in connection with the purchase, sale and
redemption of Fund shares and desire to provide certain services to your
customers relating to their ownership of Fund shares, all in accordance with the
terms of this Agreement.
AGENT FOR CUSTOMERS: In placing orders for the purchase and sale of Fund shares,
you will be acting as agent for your customers and will not have any authority
to act as agent for us, any of the Funds or any of our affiliates or
representatives. Neither you nor any of your employees or agents are authorized
to make any representations concerning the Funds or Fund shares except those
contained in the then current "Prospectus" and in written information issued by
the Fund or by us as a supplement to the Prospectus. In purchasing Fund shares
your customers may rely only on such authorized information.
OFFERING PRICE TO PUBLIC: Orders for shares received from you and accepted by
the Fund or its agent, Delaware Service Co. Inc., will be at the public offering
price applicable to each order as set forth in the Prospectus. The manner of
computing the net asset value, the public offering price and the effective time
of orders received from you are described in the Prospectus for each Fund. We
reserve the right at any time, without notice, to suspend the sale of Fund
shares or withdraw the public offering.
SALES, ORDERS AND CONFIRMATIONS: All orders must be made subject to
confirmation. Your orders must be wired, telephoned or written to the Fund or
its agent. You agree to place orders on behalf of your customers for the number
of shares, and at the price, as in bona fide orders from your customers. We will
not accept any conditional orders. We will send a written confirmation of each
trade indicating that the trade was on a fully disclosed basis to your customer.
It is agreed and understood that, whether shares are registered in the
purchaser's name, in your name or in the name of your nominee, your customer
will have full beneficial ownership of the Fund shares.
AGENCY FEES: On each order accepted by us for a Fund with a sales charge, we
understand that you will charge your customer an agency commission or agency
transaction fee ("agency fee") as set forth in the schedule of sales concessions
and agency fees set forth in that Fund's Prospectus, as it may be amended from
time to time. This fee shall be subject to the provisions of all terms set forth
in the Prospectus for volume purchases and special plans and accounts (e.g.
retirement plans, letters of intent, etc.) You will not receive from us a
dealer's concession or similar allowance out of the sales charge. In accordance
with interpretations by the Staff of the Securities and Exchange Commission (the
"Commission"), the agency fee will be your sole charge to your customers for
placing such orders. You may elect to make payments in either of two ways: (a)
you may send us the public offering price for the Fund shares purchased less the
amount of the agency fee due you or (b) you or your customer may send us the
entire public offering price for the Fund shares and we will, on a periodic
basis, remit to you the agency fee due. You will notify us in writing of which
method of payment you elect. If any shares sold to your customer under the terms
of this Agreement are repurchased by the Fund or by us, or are tendered to a
Fund for redemption or repurchase, within seven (7) business days after the date
of the confirmation of the original purchase order, you will promptly refund to
us full agency fee paid or allowed to you on such shares.
<PAGE>
PAYMENT AND ISSUANCE OF CERTIFICATES: Regardless of the payment method elected,
Fund shares purchased by you for your customers hereunder shall be paid for in
fully by check payable to the Fund at its office within five business days after
our acceptance of your order. If not so paid, the Fund reserves the right,
without notice, to cancel the sale and to hold you responsible for any loss,
including lost profit, sustained by us or the Fund in consequence. Certificates
representing Fund shares will not be issued unless a specific request is
received from you or your customer. Certificates, if requested, will be issued
in the names indicated by registration instructions accompanying payment.
REDEMPTION: The Prospectus describes the provisions whereby the Fund, under all
ordinary circumstances, will repurchase its shares from shareholders on demand.
You agree that you will not make any representations to shareholders relating to
the purchase of their Fund shares other than the statements contained in the
Prospectus and the underlying organizational documents of the Fund, to which it
refers, and that you will quote to your customers as the redemption price only
the price determined by the Fund.
12b-1 PLAN: With respect to any Fund that has a Distribution Plan under Rule
12b-1 (a "12b-1 Plan") of the Investment Company Act of 1940 (the "1940 Act"),
we expect you will provide shareholder and administrative services to your
customers, such as: answering inquiries regarding the Fund; assisting in
changing dividend options, account designations and addresses; performing
sub-accounting; establishing and maintaining shareholder accounts and records;
processing purchase and redemption transactions; providing periodic statements
and/or updates showing a customer's account balance and integrating such
statements with those of other transactions and balances in the customer's other
accounts serviced by you; and arranging for bank wires. You will transmit
promptly to customers all communications sent to you for transmittal to clients
by or on behalf of us, any Fund or such Fund's investment advisor, custodian or
transfer or dividend disbursing agent. You will promptly answer all written
complaints received by you relating to Fund accounts or promptly forward such
complaints to us and assist us in answering such complaints. For such services
we will pay you a fee as set by us from time to time, based on a portion of the
net asset value of the accounts of your clients in the Fund. We are permitted to
make this payment under the terms of the 12b-1 Plan adopted by certain of the
Funds, as such 12b-1 Plans may be in effect from time to time, provided,
however, that no payments shall be due and paid to you hereunder with respect to
a Fund unless and until the form of this Agreement shall have been approved by a
majority of the Board of Directors or Trustees of that Fund and by a majority of
the directors or trustees who are not "interested persons" of us, the Fund or
its investment manager, as such term is defined in the 1940 Act (i.e., non-
interested directors) by vote cast in person at a meeting called for the purpose
of voting on this form of Agreement. Each Fund reserves the right, at any time,
to suspend payments under its 12b-1 plan. You will furnish the Fund and us with
such information as may be reasonably requested by the Fund or its directors or
trustees or by us with respect to fees paid to you pursuant to this Agreement.
In accordance with interpretations and rulings to the Staff of the Commission,
you will not charge your customers any fees for services for which you are being
compensated under a 12b-1 Plan of a Fund.
SALE OF NO-LOAD - NON 12B-1 PLAN FUNDS: In connection with any orders placed by
you on behalf of your customers for shares of Funds that do not charge a sales
load and do not have a 12b-1 Plan, we understand that you may charge your
customers a limited service or transaction fee, in accordance with
interpretations and rulings of the Staff of the Commission.
<PAGE>
LEGAL COMPLIANCE: This Agreement and any transaction with or payment to you
pursuant to the terms hereof is conditioned on your representation to us that,
as of the date of this Agreement you are and at all times during its
effectiveness yo will be (a) a registered broker-dealer under the Securities
Exchange Act of 1934 and qualified under applicable state securities laws, if
any, to act as a broker or dealer in securities, and a member in good standing
of the National Association of Securities Dealers, Inc. (the "NASD"); or (b) a
"bank" as defined in Section 3(a)(6) of the Securities Exchange Act of 1934 (or
other financial institution) and not otherwise required to register as a broker
or dealer under such Act. You agree to notify us promptly in writing if this
representation ceases to be true. You also agree that you will comply with the
rules of the NASD including, in particular, Sections 2 and 26 of Article III
thereof, to the extent applicable, that you will maintain adequate records with
respect to your customers and their transactions, and that such transactions
will be without recourse against you by your customers. We recognize that, in
addition to applicable provisions of state and federal securities laws, you may
be subject to the provisions of the Glass-Steagall Act and other laws governing,
among other things, the conduct of activities by federal and state chartered and
supervised financial institutions and their affiliated organizations. Because
you will be the only one having a direct relationship with the customer, yo will
be responsible in that relationship for insuring compliance with all laws and
regulations, including those of all applicable federal and state regulatory
authorities and bodies having jurisdiction over you or your customers to the
extent applicable to securities purchases hereunder.
BLUE SKY MATTERS: We shall have no obligation or responsibility with respect to
your right to sell Fund shares in any state or jurisdiction. From time to time
we shall furnish you with information identifying the states under the
securities laws of which it is believed a Fund's shares may be sold. You will
not transact orders for Fund shares in states in which we indicate Fund shares
may not be sold.
LITERATURE: We will furnish you with copies of each Fund's Prospectus, sales
literature and other information made publicly available by the Fund, in
reasonable quantities upon your request. We shall file Fund sales literature and
promotional material with the NASD and SEC as required. You may not publish or
use any sales literature or promotional materials with respect to the Funds
without our prior review and written approval.
CUSTOMERS: The names of your customers will remain your sole property and will
not be used by us except for servicing or informational mailings and other
correspondence in the normal course of business.
NOTICES AND COMMUNICATIONS: All communications from you should be addressed to
us at 1818 Market Street, Philadelphia, PA 19103. Any notice from us to you
shall be deemed to have been duly given if mailed or telegraphed to you at the
address set forth above. Each of us may change the address to which notices
shall be sent by notice to the other in accordance with the terms hereof.
TERMINATION: This Agreement may be terminated by either party at any time by
written notice to that effect. Notwithstanding the termination of this
Agreement, you shall remain liable for any amounts otherwise owing to us or the
Fund and for your portion of any transfer tax or other liability which may be
asserted or assessed against the Fund, us or any one or more of our dealers,
based upon the claim that you and such dealers or any of them constitute a
partnership, an unincorporated business or other separate entity.
AMENDMENT: This Agreement may be amended or revised at any time by us upon
notice to you and, unless you promptly notify us in writing to the contrary, you
will be deemed to have accepted such modifications.
<PAGE>
GENERAL: Your acceptance hereof will constitute an obligation on your part to
observe all the terms and conditions hereof. In the event you breach any of the
terms and conditions of this Agreement, you will indemnify us, the Funds, and
our affiliates for any damages, losses, costs and expenses (including reasonable
attorneys' fees) arising out of or relating to such breach. Nothing contained
herein shall constitute you, us and any dealers an association or partnership.
All references in this Agreement to the "Prospectus" include the Statement of
Additional Information incorporated by reference therein and any stickers or
supplements thereto, provided that any requirement in this Agreement to deliver
a copy of the Prospectus shall not include the Statement of Additional
Information unless requested by the customer. This Agreement is to be construed
in accordance with the laws of the State of Delaware.
Please confirm this Agreement by executing one copy of this Agreement below and
returning it to us. Keep the enclosed duplicate copy for your records.
Date:________________ DELAWARE DISTRIBUTORS, L.P.
BY: DELAWARE DISTRIBUTORS, INC.,
General Partner
Accepted and Agreed to:
- ---------------------------
(Name of Firm)
BY:________________________
Name:
Title:
<PAGE>
PROFIT SHARING PLAN
OF
DELAWARE GROUP DELAWARE FUND, INC.
SECOND AMENDMENT AND RESTATEMENT
EFFECTIVE APRIL 1, 1989
<PAGE>
PROFIT SHARING PLAN
OF
DELAWARE GROUP DELAWARE FUND, INC.
SECOND AMENDMENT AND RESTATEMENT
EFFECTIVE APRIL 1, 1989
TABLE OF CONTENTS
-----------------
PAGE
----
ARTICLE I
PURPOSE CLAUSE . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE III
ELIGIBILITY OF EMPLOYEES
TO PARTICIPATE IN THE PLAN . . . . . . . . . . . . . . 6
ARTICLE IV
CONTRIBUTIONS TO PLAN . . . . . . . . . . . . . . . . . 7
ARTICLE V
ALLOCATION OF CONTRIBUTIONS . . . . . . . . . . . . . . 12
ARTICLE VI
RETIREMENT BENEFITS . . . . . . . . . . . . . . . . . . 14
ARTICLE VII
DISABILITY BENEFITS . . . . . . . . . . . . . . . . . . 14
ARTICLE VIII
DEATH BENEFITS . . . . . . . . . . . . . . . . . . . . 14
ARTICLE IX
OTHER SEPARATION FROM SERVICE . . . . . . . . . . . . . 16
ARTICLE X
METHOD OF PAYMENT . . . . . . . . . . . . . . . . . . . 18
ARTICLE XI
ADMINISTRATION OF PLAN . . . . . . . . . . . . . . . . 26
ARTICLE XII
AMENDMENT, CONSOLIDATION, MERGER
OR TERMINATION . . . . . . . . . . . . . . . . . . . . 29
(i)
<PAGE>
ARTICLE XIII
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE XIV
LOANS . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE XV
LIMITATIONS ON ALLOCATIONS . . . . . . . . . . . . . . 32
ARTICLE XVI
TOP HEAVY DEFINITIONS AND RULES . . . . . . . . . . . . 36
(ii)
<PAGE>
PROFIT SHARING PLAN
OF
DELAWARE GROUP DELAWARE FUND, INC.
SECOND AMENDMENT AND RESTATEMENT
EFFECTIVE APRIL 1, 1989
ARTICLE I
PURPOSE CLAUSE
--------------
This Profit Sharing Plan and the Trust Agreement forming a part hereof are
established for the benefit of the employees of Delaware Group Delaware Fund,
Inc. and the other investment companies of the Delaware Group of Funds to
promote in them a strong interest in the successful operation of the business
and to provide for them an opportunity for accumulation of funds for their
retirement benefit.
ARTICLE II
DEFINITIONS
-----------
When used herein, the following words shall have the following meanings
unless the context clearly indicates otherwise:
2.1 "Administrative Committee" or "Committee" shall mean the Administrative
Committee with authority and responsibility to manage and direct the operation
and administration of this Plan. "Administrative Committee" shall be deemed to
also mean "Administrator" and "Plan Administrator" as defined in ERISA.
2.2 "Anniversary Date" shall mean the first day of each Plan Year.
2.3 "Beneficiary" shall mean the person or persons designated by a
Participant to receive benefits upon the death of said Participant pursuant to
Article VIII.
2.4 "Board of Directors" shall mean the Board of Directors of the Employer.
2.5 "Code" shall mean the Internal Revenue Code of 1986, as amended.
2.6 "Effective Date" of the Plan shall mean October 1, 1983. The Effective
Date of this amended and restated Plan shall mean April 1, 1989, except where
indicated otherwise.
2.7 "Eligibility Computation Period" shall mean the period of twelve (12)
-4-
<PAGE>
consecutive months beginning on the date an Employee first performs an Hour of
Service upon hire or rehire after a One Year Break in Service, and any Plan Year
following such date of hire or date of rehire following a One Year Break in
Service.
2.8 "Eligibility Year of Service" shall mean the Eligibility Computation
Period during which the Employee performs one thousand (1,000) or more Hours of
Service. Eligibility Years of Service shall include an Employee's prior service
with Delaware Management Company, Inc. or any Entity required to be aggregated
with Delaware Management Company, Inc. under Sections 414(b) or(c) of the Code.
2.9 "Employee" shall mean any person employed by the Employer or by any
affiliated Entity which adopts this Plan; provided, however, no person covered
by a collective bargaining agreement under which the Employer has participated
in good faith bargaining concerning retirement benefits shall be considered an
Employee for the purposes of this Plan. Any Leased Employee shall not be
considered an Employee for purposes of the Plan.
2.10 "Employer" shall mean Delaware Group Delaware Fund, Inc. and any other
affiliated investment company which adopts this Plan. Effective October 1, 1987,
and solely for purposes of determining periods of service for eligibility for
participation and vesting, the term "Employer" shall include any corporation
which is a member of a controlled group of corporations (as defined in Section
414(b) of the Code) which includes the Employer; any trade or business (whether
or not incorporated) which is under common control (as defined in Section 414(c)
of the Code) with the Employer; any organization (whether or not incorporated)
which is a member of an affiliated service group (as defined in Section 414(m)
of the Code) which includes the Employer; and any other Entity required to be
aggregated with the Employer pursuant to regulations under Section 414(o) of the
Code.
2.11 "Employer Contribution Account" shall mean a Participant's account
derived from Employer contributions and the earnings thereon.
2.12 "Entity" shall mean an individual, partnership, corporation or
unincorporated organization.
2.13 "ERISA" shall mean the Employee Retirement Income Security Act of 1974
and the Regulations promulgated thereunder by either the Department of Labor or
Treasury.
2.14 "Hour of Service" shall mean:
-5-
<PAGE>
(a) Each hour for which an Employee is paid, or entitled to payment, for
the performance of duties for the Employer. These hours will be credited to the
Employee for the computation period in which the duties are performed; and
(b) Each hour for which an Employee is paid, or entitled to payment, by the
Employer on account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including disability), layoff, jury
duty, military service or leave of absence. No more than 501 Hours of Service
will be credited under this paragraph for any single continuous period (whether
or not such period occurs in a single computation period); and
(c) Each hour for which back pay, regardless of mitigation of damages, is
either awarded or agreed to by the Employer. The same Hours of Service will not
be credited both under paragraph (a) or paragraph (b), as the case may be, and
under this paragraph (c). These hours will be credited to the Employee for the
computation period or periods to which the award or agreement pertains rather
than the computation period in which the award, agreement or payment is made.
(d) Hours of Service will be calculated on the basis described in
Department of Labor Regulations Section 2530.200b-2(b) and (c).
(e) Solely for purposes of determining whether a Break in Service has
occurred, for participation and vesting purposes, an individual who is absent
from work for maternity or paternity reasons will receive credit for the Hours
of Service which would otherwise have been credited to such individual. In the
event these hours cannot be determined, eight (8) Hours of Service per day will
be used. For purposes of this paragraph, an absence from work for maternity or
paternity reasons means an absence (i) by reason of the pregnancy of the
individual, (ii) by reason of the birth of a child of the individual, (iii) by
reason of the placement of a child with the individual in connection with the
adoption of the child by such individual, or (iv) for purposes of caring for the
child for a period beginning immediately following such birth or placement.
However, in no event will the hours treated as Hours of Service under this
paragraph (e), by reason of any pregnancy or placement, exceed 501 hours. The
Hours of Service credited under this paragraph will be credited (i) in the Plan
Year in which the absence begins if the crediting is necessary to prevent a
Break in Service in that period, or (ii) in all other cases, in the following
Plan Year.
(f) Effective for Plan Years beginning on or after April 1, 1994, an
Employee shall be credited with 45 Hours of Service for each week for which he
would be required to be credited with at least one Hour of Service under
paragraphs (a)-(e) above.
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2.15 "Leased Employee" shall mean any person described in Section 414(n) of
the Code who is not an employee of the Employer who, pursuant to an agreement
between the Employer and any other person, has performed service for the
Employer (or for any related persons determined in accordance with Section
414(n)(6) of the Code) on a substantially full-time basis for a period of at
least one year and such services are of a type historically performed by
employees in the Employer's business field.
2.16 "Named Fiduciary" shall be the Administrative Committee and the
Trustee or Trustees serving from time to time and any other person who is
specifically so designated by the Board of Directors.
2.17 "Normal Retirement Date" shall mean the date on which a Participant
shall reach age 65.
2.18 "One Year Break in Service" or "Break in Service" shall mean a Plan
Year during which an Employee has or was separated from employment with Employer
and has completed 500 or less Hours of Service.
2.19 "Participant" shall mean any Employee who meets the eligibility
requirements under Article III or any Employee who is or may become eligible to
receive a benefit under the Plan or whose Beneficiaries may be eligible to
receive any such benefit.
2.20 "Participant Contribution Account" shall mean a Participant's account
derived from his voluntary contributions and the earnings thereon.
2.21 "Plan" shall mean the Employer's Profit Sharing Plan set forth in this
document and all subsequent amendments thereto.
2.22 "Plan Compensation" shall mean as of each Anniversary Date, the basic
compensation received by an Employee from the Employer during the preceding Plan
Year, including salary, draw, overtime and bonuses, but excluding contributions
to this or any other deferred compensation plan. Plan Compensation includes
salary reduction contributions paid by the Employer on the Employee's behalf to
a cafeteria plan, within the meaning of Section 125 of the Code, maintained by
the Employer. Effective for Plan Years beginning on or after April 1, 1994, Plan
Compensation shall mean the sum of (a) the total earnings which are received by
the Employee from the Employer for the preceding Plan Year and which are
required to be reported as wages on the Employee's Form W-2 (in the wages, tips
and other compensation box) and (b) the total amount contributed by the
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Employer on behalf of the Employee pursuant to a salary reduction agreement
which is not includable in the gross income of the Employee under Sections 125
or 402 (e)(3) of the Code, but excluding all of the following items (even if
includable in gross income): reimbursements or other expense allowances, fringe
benefits (cash and non-cash), moving expenses, deferred compensation and welfare
benefits.
For Plan Years beginning on or after April 1, 1989, the Plan Compensation
of each Participant taken into account under the Plan shall not exceed $200,000,
as adjusted by the Secretary of the Treasury. In determining the Plan
Compensation of a Participant for purposes of the limitations set forth in the
preceding sentence, the rules of Section 414(q)(6) of the Code shall apply,
except in applying such rules, the term "family" shall include only the spouse
of the Participant and any lineal descendants of the Participant who have not
attained age 19 before the close of the Plan Year. If, as a result of the
application of such rules, the adjusted $200,000 limitation is exceeded, then
the limitation shall be prorated among the affected individuals in proportion to
each such individual's Plan Compensation as determined under this Section 2.22
prior to the application of this limitation. Effective for Plan Years beginning
on or after January 1, 1994, the Plan Compensation of a Participant shall not
exceed $150,000, as adjusted at the time and manner prescribed by Section 401
(a)(17)(B) of the Code.
2.23 "Plan Year" shall mean a twelve-month period beginning on April 1st
and ending on March 31st. For the Plan Years beginning before April 1, 1989 and
after December 31, 1986, the term Plan Year means a twelve month period
beginning October 1st and ending September 30th, except that the Plan Year
beginning October 1, 1988 is a short year which ends March 31, 1989.
2.24 "Total and Permanent Disability" shall mean incapacity, resulting from
injury or disease, of a Participant to perform any work for Employer and shall
be presumed permanent after the same has continued uninterrupted for six months
as certified by a qualified physician selected by the Administrative Committee.
2.25 "Trustee" or "Trustees" shall mean the trustee or trustees named in
the Trust Agreement attached hereto and forming a part hereof, or any successor
thereto.
2.26 "Trust Fund" or "Fund" shall mean all property held pursuant to the
Trust Agreement.
2.27 "Valuation Date" means the last day of each Plan Year and such other
quarterly, monthly or daily dates as determined by the Administrative Committee.
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2.28 "Year of Service" shall mean a Plan Year during which an Employee
completes at least 1,000 Hours of Service; provided, however, that for the
period from October 1, 1988 through March 31, 1990, an Employee shall be given
credit for a Year of Service if he completes 1,000 Hours of Service during the
period October 1, 1988 to September 30, 1989 and shall be given credit for an
additional Year of Service if he completes 1,000 Hours of Service during the
period April 1, 1989 to March 31, 1990. For purposes of determining a
Participant's nonforfeitable right to his Employer Contribution Account, Years
of Service shall include an Employee's prior service with Delaware Management
Company, Inc. or any other Entity required to be aggregated with Delaware
Management Company, Inc. under Sections 414(b) or (c) of the Code. An Employee
shall also receive credit for a Year of Service if he completes 1000 or more
Hours of Service during his initial Eligibility Computation Period.
2.29 Whenever used herein, the masculine provision includes the feminine
and the singular includes the plural.
ARTICLE III
ELIGIBILITY OF EMPLOYEES
TO PARTICIPATE IN THE PLAN
--------------------------
3.1 Each Employee who was a Participant on March 31, 1989 shall continue as
a Participant. Each other Employee shall be eligible to participate in this Plan
on the first day of the Plan Year within which he completes one Eligibility Year
of Service.
3.2 Any Participant who returns to service after a Break in Service shall
be admitted to the Plan as a Participant on his date of re-employment.
3.3 Within 60 days of each Anniversary Date of this Plan, the Employer
shall furnish the Administrator a list showing all eligible Employees, the date
of employment, the Years of Service, the Plan Compensation of each eligible
Employee and the date of termination of any terminated Employees.
3.4 Notwithstanding the provisions of Section 3.1 to the contrary, if an
Employee is employed by the Employer on March 31, 1989 and has completed by such
date 1,000 or more Hours of Service during an Eligibility Computation Period
which began on or before October 1, 1988, such Employee shall be eligible to
participate in the Plan on October 1, 1988.
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ARTICLE IV
CONTRIBUTIONS TO PLAN
---------------------
4.1 Each participating Employer may contribute to the Plan's Trust Fund for
each taxable year an amount, if any, determined in accordance with a resolution
of the Board of Directors adopted before the date prescribed by law for filing
its Federal income tax return for such taxable year (including extensions
thereof); provided, however, that no contributions shall be made for any year in
excess of the amount deductible for such year under provisions of the Code and
regulations thereunder as then in effect. For Plan Years beginning on or after
April 1, 1989, the Employer may make contributions regardless of whether or not
it has Net Profits and Earnings for its tax year.
4.2 For Plan Years beginning before April 1, 1989, Net Profits and Earnings
in any one year of operations means the net income before provisions for Federal
and State income taxes as determined by the certified public accountants
employed by the Employer in accordance with generally accepted accounting
principles of open-end management investment companies.
4.3 For each taxable year, the contributions shall accrue on the
Anniversary Date thereof, but shall not be considered as accruing during the
said taxable year prior to the Anniversary Date thereof.
4.4 The Trust Fund shall not be diverted to any use other than the
exclusive benefit of eligible Employees and their Beneficiaries.
4.5 Effective August 1, 1991, a Participant may not make voluntary
contributions to his Participant Contribution Account. Prior to August 1, 1991,
a Participant may make voluntary contributions to his Participant Contribution
Account. Such contributions may be made by payroll deductions or in such other
manner and subject to such procedures as the Administrator may prescribe. No
Participant may contribute more than ten percent of his aggregate Plan
Compensation for all Plan Years during which he participated in the Plan.
4.6 Notwithstanding the provisions of Article IX, a Participant shall have
a nonforfeitable interest in all voluntary contributions made by him and in any
increase in his account attributable to such contributions.
4.7 A Participant shall have the right to withdraw the total amount of his
voluntary contributions at any time; provided, however, that such withdrawal
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shall be permissible only with respect to the amount of such Participant's
voluntary contributions and not to any increase in his account attributable to
such contributions. No Participant shall be permitted to make withdrawals of
his voluntary contributions more than four times in any one calendar year.
Effective as of the date of adoption of this amended and restated Plan, a
Participant shall be permitted to make withdrawals as frequently as monthly of
all or a portion of his voluntary contributions, including the earnings
thereon.
4.8 The Fund may accept rollover contributions on behalf of an Employee
(including an Employee who has not satisfied the requirements to be eligible to
participate) from any other plan maintained for his benefit which satisfies the
requirements of a tax-qualified plan, or a rollover individual retirement
account; provided, however, that such rollovers are permitted by and effected in
accordance with the requirements of the Code. The Administrative Committee may
as a condition of acceptance of such rollovers demand such information, opinions
and statements as it deems necessary to assure that such rollovers conform to
the requirements of the federal tax laws.
4.9 An Employee for whom a rollover has been made shall be deemed a
Participant with respect to the amount contributed and shall have a
nonforfeitable interest in such amount and any increases attributable to it. Any
such rollovers shall be held in a special account for the Participant segregated
from other assets held by the fund. Such contributions will be administered and
distributed pursuant to the provisions of this Plan.
4.10 The following special non-discrimination rules pertaining to voluntary
contributions shall be applicable for Plan Years beginning on or after October
1, 1987 and before April 1, 1990.
(a) For any Plan Year, the Contribution Percentage for all Highly
Compensated Employees will not exceed the greater of (i) or (ii) as follows:
(i) The Contribution Percentage for all Non-Highly Compensated Employees,
times 1.25; or
(ii) The lesser of the Contribution Percentage for all Non-Highly
Compensated Employees, times 2.0, provided that the Contribution Percentage for
all Highly Compensated Employees may not exceed the Contribution Percentage for
all Non-Highly Compensated Employees by more than two (2) percentage points or
such lesser amount as the Secretary of Treasury will prescribe to prevent the
multiple use of this alternative limitation with respect to any Highly
Compensated Employee.
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(b) Distribution of Excess Aggregate Contributions.
(i) Excess Aggregate Contributions, plus any income and minus any loss
allocable thereto, will be distributed no later than the last day of each Plan
Year to Participants to whose accounts Excess Aggregate Contributions were
allocated for the preceding Plan Year.
(ii) For the Plan Year beginning on October 1, 1987, the income or loss
allocable to Excess Aggregate Contributions shall be determined under any
reasonable method, which method shall be applied on a consistent basis for all
Participants. For Plan Years beginning after 1987, the income or loss allocable
to Excess Aggregate Contributions shall be the sum of (A) and (B) below:
(A) The income or loss for the Plan Year allocable to the Participant's
voluntary contribution Account multiplied by a fraction, the numerator of which
is the Participant's Excess Aggregate Contributions for the year, and the
denominator of which is the balance of the Participant's voluntary contribution
account as of the end of the Plan Year, minus income (or plus losses) allocable
to such account.
(B) The income or loss for the period between the end of the Plan Year and
the date of the distribution allocable to the Participant's voluntary
contribution account multiplied by the fraction described in (A), above.
In lieu of using the formula described in (B), the income or loss for the
period between the end of the Plan Year and the date of the distribution
allocable to Excess Aggregate Contributions for the year may be calculated under
the following alternative method, provided such method is applied on a
consistent basis for all Participants: ten percent (10%) of the amount
determined under (A), above, multiplied by the number of whole calendar months
that have elapsed since the end of the Plan Year. For this purpose, if a
distribution of Excess Aggregate Contributions is made after the 15th day of a
month, that month will be counted as a whole month.
(c) The following definitions apply for purposes of this Section 4.10.:
(i) "Contribution Percentage" means, for a group of Participants, the
average of the following ratios (calculated separately) for each Participant in
the group:
(A) The sum of voluntary contributions made on behalf of each Participant
for the Plan Year; over
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(B) The Participant's Compensation for that Plan Year, whether or not the
Participant was a Participant for the entire Plan Year.
The Contribution Percentage for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have voluntary employee
contributions or employer matching contributions allocated to his account under
two or more plans described in Section 401(a) of the Code or arrangements
described in Section 401(k) of the Code that are maintained by the employer or
an entity that is required to be aggregated with the employer pursuant to
Sections 414(b), (c), (m), or (o) of the Code will be determined as if all such
contributions were made under a single plan. If a Highly Compensated Employee
participates in two or more arrangements described in Section 401(k) of the Code
that have different plan years, all such arrangements ending with or within the
same calendar year shall be treated as a single arrangement.
For purposes of determining the Contribution Percentage of a Participant
who is a five-percent owner or one of the ten most Highly Compensated Employees,
the Contribution Percentage and compensation of such Participant will include
the Contribution Percentage and Compensation of Family Members, and such Family
Members will be disregarded in determining the Contribution Percentage for
Participants who are Non-Highly Compensated Employees.
Voluntary contributions will be considered made for a Plan Year if made by
the date specified in the applicable regulations and allocated to a
Participant's account for the Plan Year.
The determination and treatment of the Contribution Percentage of any
Participant will satisfy such other requirements as may be prescribed by
Secretary of the Treasury.
In the event that this Plan satisfies the requirements of Sections 401(m),
401(a)(4) or 410(b) of the Code only if aggregated with one or more other plans,
or if one or more other plans satisfy the requirements of such Sections only if
aggregated with this Plan, then this Section 4.10 will be applied by determining
the Contribution Percentages of eligible Participants as if all such plans were
a single plan. For plan years beginning after December 31, 1989, plans may be
aggregated in order to satisfy Section 401(m) of the Code only if they have the
same plan year.
(ii) "Excess Aggregate Contributions" means, with respect to any Plan Year,
the excess of:
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(A) The aggregate Contribution Percentage amounts taken into account in
computing the numerator of the Contribution Percentage actually made on behalf
of Highly Compensated Employees for such Plan Year; over
(B) The maximum Contribution Percentage amounts permitted by the
Contribution Percentage limits set forth in this Section 4.10 (determined by
reducing contributions made on behalf of Highly Compensated Employees in order
of their Contribution Percentages beginning with the highest of such
percentages).
(iii) "Family Member" means an individual described in Section 414(q)(6)(B)
of the Code.
(iv) "Highly Compensated Employee" means a highly compensated active
employee or a highly compensated former employee, as described below.
A highly compensated active employee includes any employee who performs
service for the employer during the determination year and who, during the
look-back year: (i)received compensation from the employer in excess of $75,000
(as adjusted pursuant to Section 415(d) of the Code); (ii) received compensation
from the employer in excess of $50,000 (as adjusted pursuant to Section 415(d)
of the Code) and was a member of the top-paid group for such year; or (iii) was
an officer of the employer and received compensation during such year that is
greater than 50 percent of the dollar limitation in effect under Section
415(b)(1)(A) of the Code. The term Highly Compensated Employee also includes:
(i) employees who are both described in the preceding sentence if the term
"determination year" is substituted for the term "look-back year" and the
employee is one of the 100 employees who received the most compensation from the
Employer during the determination year; and (ii) employees who are five percent
owners at any time during the look-back year or determination year.
If no officer has satisfied the compensation requirement of (iii) above
during either a determination year or a look-back year, the highest paid officer
for such year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back shall be the twelve (12)-month period immediately preceding the
determination year.
A highly compensated former employee includes any employee who separated
from service (or was deemed to have separated) prior to the determination year,
performs no service for the employer during the determination year, and was a
highly compensated active employee for either the separation year or any
determination year ending on or after the employee's fifty-fifth (55th)
birthday.
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If an employee is, during a determination year or look-back year, a Family
Member of either a five percent owner who is an active or former employee or a
Highly Compensated Employee who is one of the ten (10) most Highly Compensated
Employees ranked on the basis of compensation paid by the Employer during such
year, then the Family Member and the five percent owner or top-ten (10) Highly
Compensated Employee shall be aggregated. In such case, the Family Member and
five percent owner or top-ten Highly Compensated Employee shall be treated as a
single employee receiving compensation and Plan contributions or benefits equal
to the sum of such compensation and contributions or benefits of the Family
Member and five percent owner or ten (10) most Highly Compensated Employee.
The determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of employees in the top-paid group,
the top one hundred (100) employees, a five percent owner, the number of
employees treated as officers and the compensation that is considered, will be
made in accordance with Section 414(q) of the Code and the regulations
thereunder.
(v) "Compensation" means all of an Employee's compensation, as that term is
defined in Article XV, Limitations on Allocations, and shall include elective
contributions that are made by the Employer on behalf of the Employee and which
are not includable in income under Section 125 of the Code. Compensation shall
be subject to the limitation of Section 401(a)(17) of the Code.
ARTICLE V
ALLOCATION OF CONTRIBUTIONS
---------------------------
5.1 A separate and complete accounting shall be maintained for each
Participant which shall set forth the amount credited to or forfeited from his
Employer Contribution Account and his Participant Contribution Account. Employer
contributions and Participant contributions shall be allocated among investment
companies managed by Delaware Management Company, Inc. Each Participant shall
file a written notice with the Committee thereby making an election as to what
proportion of his contributions, including both contributions made by the
Employer and voluntary contributions, shall be allocated to the eligible
investment company funds, as announced from time to time by the Committee. Each
Participant shall have the right to change the investment allocation of his
contributions and his accumulated account balance, in accordance with rules and
procedures as announced from time to time by the Committee, provided changes are
subject to any limitations imposed on the right of exchange by the investment
media.
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5.2 The Employer's contributions and any forfeitures for each Plan Year
shall be credited to the Employer Contribution Accounts of Participants who are
employed by the Employer on the Anniversary Date and allocated in the proportion
that the Plan Compensation of each Participant bears to the total Plan
Compensation of all Participants for such Plan Year. A Participant who
terminates employment on the Anniversary Date shall be treated as employed by
the Employer on the Anniversary Date. All voluntary contributions made by a
Participant prior to August 1, 1991 shall be credited to his Participant
Contribution Account.
5.3 As of the Anniversary Date, each Participant's Employer Contribution
Account and his Participant Contribution Account shall be valued at its fair
market value. For the purposes of paying benefits to a Participant, his accounts
shall be valued on the most recent Valuation Date as determined by the
Administrative Committee.
5.4 Income when earned less expenses, if any, when charged, shall be
credited to or charged against each Participant's account, in accordance with
the self-directed investments selected by the Participant.
5.5 The Committee shall, as of each Anniversary Date, determine the total
amount of forfeitures which accrued during the Plan Year and shall add the
forfeited amount to the Employer's annual contribution for the purposes of
reallocation to the remaining Participants as provided in Section 5.2.
5.6 Any allocation made and credited to the account of a Participant under
this Article shall not cause such Participant to have any right, title or
interest in or to any assets of the Trust Fund except at the time or times, and
under the terms and conditions, expressly provided for in this Plan.
5.7 (a) In the case of a contribution to the Plan which is made by the
Employer because of a mistake of fact, the Employer may, within one year after
the payment of such contribution, withdraw such contribution from the Trust
Fund.
(b) Employer contributions to the Plan are expressly conditioned on the
deductibility of such contributions under Section 404 of the Code. To the extent
such contributions are disallowed, the Employer may, within one year of the
disallowance of the deduction, withdraw such contribution from the Trust Fund.
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ARTICLE VI
RETIREMENT BENEFITS
-------------------
6.1 Upon attaining Normal Retirement Date, a Participant shall have a fully
vested and nonforfeitable right to his entire Employer Contribution Account and
shall be entitled to retire and upon so retiring shall be entitled to the
commencement of the payment of his benefits, consisting of the balance of his
accounts, in accordance with the method of payment elected pursuant to Article
X.
6.2 A Participant who retires after his Normal Retirement Date shall
continue to be a Participant in the Plan until his actual retirement and shall
be eligible to share in the allocation of Employer contributions as provided in
Section 5.2.
ARTICLE VII
DISABILITY BENEFITS
-------------------
7.1 If the employment of a Participant has been terminated prior to his
retirement date because of Total and Permanent Disability, such Participant
shall be entitled to receive his entire Participant Contribution Account and his
entire Employer Contribution Account in accordance with the manner elected under
Article X.
7.2 Upon a Participant's cessation of Total and Permanent Disability and
upon his return to work for Employer before all of his account has been
distributed, no further payments shall be made therefrom by reason of the
disability. A Participant shall have no right or obligation to repay any amount
distributed to him pursuant to Section 7.1.
ARTICLE VIII
DEATH BENEFITS
--------------
8.1 Notwithstanding anything stated in the Plan to the contrary, if a
Participant dies prior to receiving the entire nonforfeitable amount credited to
his accounts, all such undistributed nonforfeitable amounts shall be paid to the
Participant's surviving spouse, unless there is no surviving spouse or the
surviving spouse consents in writing to the payment of death benefits to another
Beneficiary. A spouse's consent must satisfy the following requirements:
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(a) the consent must be in writing;
(b) the consent must be witnessed by a member of the Administrative
Committee or a notary public;
(c) the consent must approve a designation of a specific Beneficiary,
including any class of Beneficiaries or any contingent Beneficiaries, which may
not be changed without spousal consent, or the spouse expressly permits
designations by the Participant without any further spousal consent; and
(d) the consent acknowledges the effect of the Participant's designation of
Beneficiary. If a consent permits designations by the Participant without any
requirement of further consent by such spouse, it must acknowledge that the
spouse has the right to limit consent to a specific Beneficiary and that the
spouse voluntarily elects to relinquish such right.
Written consent of a spouse need not be obtained if the Participant
establishes to the satisfaction of the Committee that there is no spouse or that
the spouse cannot be located. Any such designation may be changed from time to
time by the Participant by filing a new designation with the Committee, provided
the spousal consent requirements above are satisfied.
8.2 Each Participant may file with the Committee a designation of
Beneficiary to receive amounts payable under this Plan upon his death. The
designation may be changed from time to time by the Participant, except that a
married Participant may not name a Beneficiary other than his spouse without a
written consent which satisfies the requirements of Section 8.1. If no
designation has been filed, or all designated Beneficiaries have predeceased the
Participant, then any amounts payable shall be paid to his surviving spouse. If
there is no surviving spouse, any amounts payable shall be paid to his estate.
8.3 If at, after or during the time when a benefit is payable to any
Beneficiary, the Administrative Committee, upon request of the Trustee or at its
own instance, mails by registered or certified mail to the Beneficiary at the
Beneficiary's last known address a written demand for his then address, or for
satisfactory evidence of his continued life or both, and, if the Beneficiary
shall fail to furnish the information to the Committee within 3 years from the
mailing of the demand, then the Committee shall distribute the remaining
benefits to the Beneficiary next entitled thereto under Section 8.3 above as if
the Beneficiary designated by the Participant or Section 8.3 were then deceased.
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ARTICLE IX
OTHER SEPARATION FROM SERVICE
-----------------------------
9.1 (a) If a Participant separates from service other than under Articles
VI, VII or VIII, he shall be entitled to receive a lump sum distribution of his
entire Participant Contribution Account and his entire nonforfeitable Employer
Contribution Account. Such distribution shall be made upon the written request
of the Participant and shall be made as soon as practicable following the
Participant's separation from service, but not later than the close of the
second Plan which such separation occurs.
(b) If the non-forfeitable portion of the Participant's Employer
Contribution Account and his Participant Contribution Account exceeds $3500 (or
ever exceeded $3500 at the time of an earlier distribution), and the Participant
does not consent in writing to receive a lump sum distribution of his accounts
by the close of the second Plan Year following his separation from service, no
distribution shall be made to the Participant until he attains his Normal
Retirement Date. Regardless of whether the Participant consents in writing, if
the non-forfeitable portion of the Participant's Employer Contribution Account
and Participant Contribution Account does not exceed $3500 (or did not exceed
$3500 at the time of a prior distribution), a lump sum distribution shall be
made to the Participant of the entire value of the non-forfeitable portion of
his accounts not later than the end of the second Plan Year following his
separation from service.
(c) If a distribution is made to the Participant of the nonforfeitable
portion of his Employer Contribution Account upon his separation from service,
the non-vested portion of his Account, if any, will be treated as a forfeiture
and reallocated to remaining Participants as provided in Section 5.2. If the
Participant does not receive a distribution of his Employer Contribution Account
upon his separation from service, such Account shall be held for the Participant
until he attains Normal Retirement Date and the non-vested portion of the
Account shall be treated as a forfeiture when the Participant sustains five
consecutive One Year Breaks in Service.
(d) In the event a Participant who is less than fully vested in his
Employer Contribution Account receives a distribution of his vested interest in
such Account upon his separation from service, and such Participant subsequently
returns to employment of the Employer, the Participant's Employer Contribution
Account will be restored to the value of the Account on the date of the
distribution if the Participant repays to the Trustees the full amount of such
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distribution before the earlier of five consecutive One-Year Breaks in Service
or five years after the Participant's date of reemployment. Restoration of the
forfeited amount of a Participant's Account shall be made from forfeitures or
Employer contributions.
9.2 (a) In the event a Participant separates from service with the Employer
for reasons other than retirement, disability, death or a layoff by the
Employer, he shall have a nonforfeitable right to the amount credited to his
Employer Contribution Account in accordance with the following schedule:
Completed Years of Service Percentage
-------------------------- ----------
At least But less than
0 1 0%
1 2 20%
2 3 40%
3 4 60%
4 5 80%
5 or more 100%
(b) A Participant shall have a wholly vested and nonforfeitable right to
his Employer Contribution Account upon separation from service on account of
retirement on or after the Normal Retirement Date, Total and Permanent
Disability, death while in the employ of the Employer or layoff by the Employer.
For purposes of this Section 9.2, the term "layoff" shall mean any involuntary
separation from service other than separation due to cause. If a Participant
separates from service with the Employer, the non-vested portion of his Employer
Contribution Account, if any, shall be forfeited upon the death of the
Participant.
(c) If the Employer amends the Plan in a manner which directly or
indirectly affects the computation of a Participant's nonforfeitable percentage,
each Participant who completes an Hour of Service in any Plan Year beginning
after December 31, 1988 and who has at least three Years of Service may elect
after the adoption of such amendment to have his nonforfeitable interest
computed under the Plan without regard to such amendment. The period during
which the election may be made shall commence the day the amendment is adopted
and shall end on later of:
(i) sixty (60) days after the amendment is adopted;
(ii) sixty (60) days after the amendment becomes effective; or
(iii) sixty (60) days after the Participant is issued written notice of the
amendment by the Employer or the Committee.
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9.3 (a) In the case of a Participant who has a Break in Service, Years of
Service completed before such Break shall not be counted until the Participant
has completed a Year of Service for the purpose of determining his
nonforfeitable percentage of the amount credited to his Employer Contribution
Account after such Break in Service.
(b) Years of Service completed on reemployment and after separation from
service with the Employer in connection with which he has five consecutive One
Year Breaks in Service shall not be counted for purposes of determining such
Participant's nonforfeitable percentage right to amounts credited to his
Employer Contribution Account before such Break in Service.
ARTICLE X
METHOD OF PAYMENT
-----------------
10.1 At the request of a Participant, the form of benefit payments may be
one of the following in cash:
(a) in a lump sum payment; or
(b) in periodic, monthly, quarterly, semi-annual or annual installments
over a period certain not exceeding the Participant's life expectancy or the
joint life expectancy of the Participant and his designated Beneficiary. If
periodic installments are to be paid, a Participant's account shall be invested
in the investment company funds available under the Plan as designated by the
Participant.
If periodic installments are paid over the life expectancy of the
Participant or joint life expectancy of the Participant and a designated
Beneficiary, a Participant may elect, prior to the time distributions begin,
whether or not to have his life expectancy and his Beneficiary's life expectancy
(if the Beneficiary is his spouse) annually recalculated. In the absence of such
election, life expectancies will not be recalculated.
10.2 In no event shall payments of benefits under this Plan commence later
than sixty (60) days after the close of the Plan Year in which the latest of the
following events occur:
(a) the Participant attains age sixty-five (65); or
(b) the Participant completes ten years of participation in the Plan; or
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(c) the termination of the Participant's service with the Employer.
10.3 (a) Notwithstanding the other requirements of this Plan, distributions
on behalf of any Participant, including a five percent (5%) owner, may be made
in accordance with all of the following requirements (regardless of when such
distribution commences):
(i) The distribution by the Trust Fund is one which would not have
disqualified such Trust under Section 401(a)(9) of the Code as in effect prior
to amendment by the Deficit Reduction Act of 1984.
(ii) The distribution is in accordance with a method of distribution
designated by the Participant whose interest is being distributed or, if the
Participant is deceased, by a Beneficiary of such Participant.
(iii) Such designation was in writing, was signed by the Participant or the
Beneficiary, and was made before January 1, 1984.
(iv) The Participant had accrued a benefit under the Plan as of December
31, 1983.
(v) The method of distribution designated by the Participant or the
Beneficiary specifies the time at which distribution will commence, the period
over which distributions will be made, and in the case of any distribution upon
the Participant's death, the Beneficiaries of the Participant listed in order of
priority.
(b) A distribution upon death will not be covered by this Section unless
the information in the designation contains the required information described
above with the respect to the distributions to be made upon the death of the
Participant.
(c) For any distribution which commenced before January 1, 1984, but
continues after December 31, 1983, the Participant, or the Beneficiary, to whom
such distribution is being made, will be presumed to have designated the method
of distribution under which the distribution is being made if the method of
distribution was specified in writing and the distribution satisfies the
requirements in subsections (a)(i) and (v) above.
(d) If a designation is revoked, any subsequent distribution must satisfy
the requirements of Section 401(a)(9) of the Code. Any changes in the
designation will be considered to be revocation of the designation. However, the
mere substitution or addition of another Beneficiary (one not named in the
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designation) under the designation will not be considered to be revocation
of the designation, so long as such substitution or addition does not alter the
period over which distributions are to be made under the designation, either
directly or indirectly (for example, by altering the relevant measuring life).
10.4 Required Distributions. All distributions required under this Section
10.4 shall be determined and made in accordance with the proposed regulations
under Section 401(a)(9) of the Code, including the minimum distribution
incidental benefit requirement of Section 1.401(a)(9)-2 of the proposed
regulations.
(a) Required beginning date. The entire interest of a Participant must be
distributed or begin to be distributed no later than the Participant's required
beginning date.
(b) Limits on Distribution Periods. As of the first distribution calendar
year, distributions, if not made in a single-sum, may only be made over one of
the following periods (or a combination thereof):
(1) a period certain not extending beyond the life expectancy of the
Participant, or
(2) a period certain not extending beyond the joint and last survivor
expectancy of the Participant and a designated beneficiary.
(c) Determination of amount to be distributed each year. If the
Participant's interest is to be distributed in other than a single sum, the
following minimum distribution rules shall apply on or after the required
beginning date:
(1) If a Participant's benefit is to be distributed over (i) a period not
extending beyond the life expectancy of the Participant or the joint life and
last survivor expectancy of the Participant and the Participant's designated
beneficiary or (ii) a period not extending beyond the life expectancy of the
designated beneficiary, the amount required to be distributed for each calendar
year, beginning with distributions for the first distribution calendar year,
must at least equal the quotient obtained by dividing the Participant's benefit
by the applicable life expectancy.
(2) For calendar years beginning before January 1, 1989, if the
Participant's spouse is not the designated beneficiary, the method of
distribution selected must assure that at least fifty percent (50%) of the
present value of the amount available for distribution is paid within the life
expectancy of the Participant.
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(3) For calendar years beginning after December 31, 1988, the amount to be
distributed each year, beginning with distributions for the first distribution
calendar year, shall not be less than the quotient obtained by dividing the
Participant's benefit by the lesser of (1) the applicable life expectancy or (2)
if the Participant's spouse is not the designated beneficiary, the applicable
divisor determined from the table set forth in Q&A-4 of Section 1.401(a)(9)-2 of
the proposed regulations. Distributions after the death of the Participant shall
be distributed using the applicable life expectancy in (c)(i)(A) above as the
relevant divisor without regard to proposed regulations Section 1.401(a)(9)-2.
(4) The minimum distribution required for the Participant's first
distribution calendar year must be made on or before the Participant's required
beginning date. The minimum distribution for other calendar years, including the
minimum distribution for the distribution calendar year in which the
Participant's required beginning date occurs, must be made on or before December
31 of that distribution calendar year.
(d) Death Distribution Provisions.
(1) Distribution beginning before death. If the Participant dies after
distribution of his or her interest has begun, the remaining portion of such
interest will continue to be distributed at least as rapidly as under the method
of distribution being used prior to the Participant's death.
(2) Distribution beginning after death. If the Participant dies before
distribution of his or her interest begins, distribution of the Participant's
entire interest shall be completed by December 31 of the calendar year
containing the fifth (5th) anniversary of the Participant's death except to the
extent that the Participant or his designated beneficiary elects to receive
distributions in accordance with (i) or (ii) below:
(i) if any portion of the Participant's interest is payable to a designated
beneficiary, distributions may be made over a period certain not greater than
the life expectancy of the designated beneficiary commencing on or before
December 31 of the calendar year immediately following the calendar year in
which the Participant died;
(ii) if the designated beneficiary is the Participant's surviving spouse,
the date distributions are required to begin in accordance with (i) above shall
not be earlier than the later of (1) December 31 of the calendar year
immediately following the calendar year in which the Participant died and (2)
December 31 of the calendar year in which the Participant would have attained
age 70 1/2.
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If the Participant has not made an election pursuant to Section 10.4(d)(2)
by the time of his or her death, the Participant's designated beneficiary must
elect the method of distribution no later than the earlier of (1) December 31 of
the calendar year in which distributions would be required to begin under this
Section 10.4(d), or (2) December 31 of the calendar year which contains the
fifth (5th) anniversary of the date of death of the Participant. If the
Participant has no designated beneficiary, or if the designated beneficiary does
not elect a method of distribution, distribution of the Participant's entire
interest must be completed by December 31 of the calendar year containing the
fifth (5th) anniversary of the Participant's death.
(3) For purposes of Section 10.4(d)(2) above, if the surviving spouse dies
after the Participant, but before payments to such spouse begin, the provisions
of Section 10.4(d)(2), with the exception of subparagraph (ii) therein, shall be
applied as if the surviving spouse were the Participant.
(4) For purposes of Section 10.4(d), distribution of a Participant's
interest is considered to begin on the Participant's required beginning date
(or, if Section 10.4(d)(3) above is applicable, the date distribution is
required to begin to the surviving spouse pursuant to Section 10.4(d)(3) above).
(e) Definitions.
(1) Applicable life expectancy. The life expectancy (or joint and last
survivor expectancy) calculated using the attained age of the Participant (or
designated beneficiary) as of the Participant's (or designated beneficiary's)
birthday in the applicable calendar year reduced by one for each calendar year
which has elapsed since the date life expectancy was first calculated. If life
expectancy is being recalculated, the applicable life expectancy will be the
life expectancy as so recalculated. The applicable calendar year shall be the
first distribution calendar year and if life expectancy is being recalculated,
such succeeding calendar year.
(2) Designated beneficiary. The individual who is designated as the
beneficiary under the Plan in accordance with Section 401(a)(9) and the proposed
regulations thereunder.
(3) Distribution calendar year. A calendar year for which a minimum
distribution is required. For distributions beginning before the Participant's
death, the first distribution calendar year is the calendar year immediately
preceding the calendar year which contains the Participant's required beginning
date. For distributions beginning after the Participant's death, the first
distribution calendar year is the calendar year in which distributions are
required to begin pursuant to Section 10.4(d) above.
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(4) Life expectancy. Life expectancy and joint and last survivor expectancy
are computed by use of the expected return multiples in Tables V and VI of
Section 1.72-9 of the income tax regulations. Unless otherwise elected by the
Participant by the time distributions are required to begin, life expectancies
shall not be recalculated annually. Such election shall be irrevocable as to the
Participant (or spouse) and shall apply to all subsequent years. The life
expectancy of a nonspouse designated beneficiary may not be recalculated. A
spousal designated beneficiary may not elect to have his or her life expectancy
recalculated with respect to any distribution paid pursuant to Section
10.4(d)(2).
(5) Participant's benefit.
(i) The Participant's account balance as of the last valuation date in the
calendar year immediately preceding the distribution calendar year (valuation
calendar year) increased by the amount of any contributions or forfeitures
allocated to the account balance as of dates in the valuation calendar year
after the valuation date and decreased by distributions made in the valuation
calendar year after the valuation date.
(ii) For purposes of paragraph (i) above, if any portion of the minimum
distribution for the first distribution calendar year is made in the second
distribution calendar year on or before the required beginning date, the amount
of the minimum distribution made in the second distribution calendar year shall
be treated as if it had been made in the immediately preceding distribution
calendar year.
(6) Required beginning date.
(i) General rule. The required beginning date of a Participant is the first
day of April of the calendar year following the calendar year in which the
Participant attains age 70 1/2.
(ii) Transitional rules. The required beginning date of a Participant who
attains age 70 1/2 before January 1, 1988, shall be determined in accordance
with (A) or (B) below:
(A) Non-five (5)-percent owners. The required beginning date of a
Participant who is not a five (5)-percent owner is the first day of April of the
calendar year following the calendar year in which the later of retirement or
attainment of age 70 1/2 occurs.
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(B) Five (5)-percent owners. The required beginning date of a Participant
who is a five (5)-percent owner during any year beginning after December 31,
1979, is the first day of April following the later of:
(I) the calendar year in which the Participant attains age 70 1/2, or
(II) the earlier of the calendar year with or within which ends the Plan
Year in which the Participant becomes a five (5)-percent owner, or the calendar
year in which the Participant retires.
The required beginning date of a Participant who is not a five (5)-percent
owner who attains age 70 1/2 during 1988 and who has not retired as of January
1, 1989, is April 1, 1990.
(iii) Five (5)-percent owner. A Participant is treated as a five
(5)-percent owner for purposes of this section if such Participant is a five
(5)-percent owner as defined in Section 416(i) of the Code (determined in
accordance with Section 416 but without regard to whether the Plan is top-heavy)
at any time during the Plan Year ending with or within the calendar year in
which such owner attains age 66 1/2 or any subsequent Plan Year.
(iv) Once distributions have begun to a five (5)-percent owner under this
section, they must continue to be distributed, even if the Participant ceases to
be a five (5)-percent owner in a subsequent year.
10.5 Restrictions on Distributions Prior to Normal Retirement Date. If the
value of a Participant's vested account balance exceeds (or at the time of any
prior distribution exceeded) $3,500, the Participant must consent to any
distribution made to him before he attains the Normal Retirement Date. The
consent of the Participant shall be obtained in writing within the 90-day period
ending on the date benefits are paid. The Committee shall notify the Participant
of his right to defer any distribution until the Participant attains the Normal
Retirement Date (or would have attained the Normal Retirement Date if not
deceased). Such notification shall include a general description of the material
features, and an explanation of the relative values of, the optional forms of
benefit available under the Plan in a manner that would satisfy the notice
requirements of Section 417(a)(3) of the Code below, and shall be provided no
less than 30 days and no more than 90 days prior to the date benefits are paid.
The consent of the Participant shall not be required to the extent that a
distribution is required to satisfy Sections 401(a)(9) or 415 of the Code. A
distribution may be paid to the Participant less than 30 days after the notice
described in this Section 10.5 is given to him, provided that the Administrative
Committee clearly informs the Participant that he has the right to a period of
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at least 30 days after receiving the notice to consider the decision of
whether or not to elect the distribution and the Participant, after receiving
the notice, affirmatively elects to receive a distribution. In addition, subject
to Section 10.7, upon termination of this Plan, the Participant's entire account
balance may be distributed without the Participant's consent to the Participant
or transferred to another defined contribution plan (other than an employee
stock ownership plan, as defined in Section 4975(e)(7) of the Code) within the
same controlled group as the Employer.
10.6 Withdrawals upon Attainment of Age 59-1/2. Upon the attainment of age
59-1/2, a Participant who is fully vested in his Employer Contribution Account
will be entitled to withdraw once a Plan Year all or any portion of his account
balance in a single sum. Any withdrawal by a Participant under this Section 10.6
will be made only after the Participant files a written request with the
Administrative Committee pursuant to such terms and conditions as the Committee
may prescribe.
10.7 Direct Rollovers
(a) This Section applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a distributee's election under this Section, a distributee may elect, at
the time and in the manner prescribed by the Administrative Committee to have
any portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover.
(b) Definitions.
(i) Eligible rollover distribution: An eligible rollover distribution is
any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and the portion of any
distribution that is not includable in gross income (determined without regard
to the exclusion for net unrealized appreciation with respect to employer
securities).
(ii) Eligible retirement plan: An eligible retirement plan is an individual
retirement account described in section 408(a) of the Code, an individual
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retirement annuity described in section 408(b) of the Code, an annuity plan
described in section 403(a) of the Code, or a qualified trust described in
section 401(a) of the Code, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
(iii) Distributee: A distributee includes an Employee or former Employee.
In addition, the Employee's or former Employee's surviving spouse or former
spouse who is the alternate payee under a qualified domestic relations order, as
defined in section 414(p) of the Code, are distributees with regard to the
interest of the spouse or former spouse.
(iv) Direct rollover: A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the distributee.
ARTICLE XI
ADMINISTRATION OF PLAN
----------------------
11.1 (a) This Plan shall be administered by a Committee which shall consist
of not less than two nor more than five members.
(b) The Committee shall serve without compensation from the Plan. Vacancies
may be filled by the Chief Executive Officer of Delaware Group Delaware Fund,
Inc. on an interim basis, until action to fill the vacancy is taken by the Board
of Directors of Delaware Group Delaware Fund, Inc.
(c) The Committee:
(1) shall act by affirmative vote of a majority of its members at a meeting
called with five days notice or in writing without a meeting;
(2) shall appoint a Secretary who may be but need not be one of its own
members. He shall keep complete records of the administration of the Plan;
(3) may authorize each and any one of its members to perform routine acts
and to sign documents on its behalf.
11.2 The Committee may appoint such persons or committees, employ such
attorneys, agents, accountants, investment managers, consultants, actuaries, and
other specialists as it deems necessary or desirable to advise or assist
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it in the performance of its duties hereunder and the Committee may rely upon
their respective written opinions or certificates. To the extent such persons
are empowered by written notification from the Committee to perform duties
defined in ERISA as fiduciary duties, such empowerment shall constitute a
delegation of fiduciary responsibility for purposes of determining the
co-fiduciary liability under ERISA. The Committee shall review the performance
of any such persons periodically.
11.3 Administration of the Plan shall consist of interpreting and carrying
out the provisions of this Plan. The Committee shall determine the eligibility
of Employees to participate in this Plan, their rights while Participants in
this Plan and the nature and amount of benefits to be received therefrom. The
Committee shall decide any disputes which may arise under this Plan and the
Trust Agreement. The Committee may provide rules and regulations for the
administration of the Plan consistent with its terms and provisions. Any
construction or interpretation of the Plan and any determination of fact in
administering the Plan made in good faith by the Committee shall be final and
conclusive for all Plan purposes. The Committee shall have the discretionary
authority to determine eligibility for benefits and to construe the terms of the
Plan.
11.4 (a) The Committee shall prescribe a form for the presentation of
claims under the terms of this Plan and/or Trust Agreement.
(b) Upon presentation to the Committee of a claim on the prescribed form,
the Committee shall make a determination of the validity thereof. If the
determination is adverse to the claimant, the Committee shall furnish to the
claimant within 90 days after the receipt of the claim a written notice setting
forth the following:
(1) The specific reason or reasons for the denial;
(2) Specific reference to pertinent provisions of the Plan on which the
denial is based;
(3) A description of any additional material or information necessary for
the claimant to perfect the claim and an explanation of why such material or
information is necessary; and
(4) Appropriate information as to the steps to be taken if the claimant
wishes to submit his or her claim for review.
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(c) In the event of a denial of a claim, the claimant or his duly
authorized representative may appeal such denial to the Committee for a full and
fair review of the adverse determination. Claimant's request for review must be
in writing and made to the Committee within 60 days after receipt by claimant of
the written notification required under Section 11.4(b); provided, however, such
60 day period shall be extended if circumstances so warrant. Claimant or his
duly authorized representative may submit issues and comments in writing which
shall be given full consideration by the Committee in his review.
(d) The Committee may, in its sole discretion, conduct a hearing. A request
for a hearing made by claimant will be given full consideration. At such
hearing, the claimant shall be entitled to appear and present evidence and be
represented by counsel.
(e) A decision on a request for review shall be made by the Committee not
later than 60 days after receipt of the request; provided, however, in the event
of a hearing or other special circumstances, such decision shall be made not
later than 120 days after receipt of such request. If it is necessary to extend
the period of time for making a decision beyond 60 days after the receipt of the
request, the claimant shall be notified in writing of the extension of time
prior to the beginning of such extension.
(f) The Committee's decision on review shall state in writing the specific
reasons and references to the Plan provisions on which it is based. Such
decision shall be promptly provided to the claimant. If the decision on review
is not furnished in accordance with the foregoing, the claim shall be deemed
denied on review.
11.5 The Committee shall have the power to allocate its responsibilities
among its several members, except that all matters involving the hearing of and
decision on the claims and the review of the determination of benefits shall be
made by the full Committee; provided, however, that no member of the Committee
shall participate in any matter relating solely to himself.
11.6 To the extent required by law, the Committee shall give notice in
writing to all interested parties of any amendment of this Plan and/or Trust
Agreement and of any application to any government agency for any determination
of the effect of any such amendment on the Plan within the jurisdiction of that
agency.
11.7 (a) The Committee shall administer the Plan and the Trust Agreement
forming a part thereof under uniform rules of general application.
(b) The Committee or any member thereof:
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(1) May serve under the Plan and/or the Trust Agreement in one or more
fiduciary capacities, as that term is defined in ERISA; and
(2) May resign by giving written notice thereof to the Chief Executive
Officer of Delaware Group Delaware Fund, Inc. not less than fifteen (15) days
before the effective date of such resignation; and
(3) May be removed at any time, without cause, by the Board of Directors of
Delaware Group Delaware Fund, Inc.
ARTICLE XII
AMENDMENT, CONSOLIDATION, MERGER OR TERMINATION
-----------------------------------------------
12.1 Delaware Group Delaware Fund, Inc. may amend the Plan and the Trust
Agreement in any manner and at any time by action of its Board of Directors;
provided, however, that no amendment shall deprive any Participant or his
Beneficiary of any vested interest he may have hereunder unless the amendment is
for the purpose of conforming the Plan to the requirements of the Code or any
other applicable law. No amendment which affects the rights, responsibilities or
duties of the Trustee may be made without the Trustee's written consent. No
amendment shall be made to the Plan which has the effect of eliminating or
reducing an early retirement benefit or a retirement-type subsidy, eliminating
an optional form of benefit or decreasing a Participant's account balance with
respect to benefits attributable to service before the amendment. Further, if
the vesting schedule of the Plan is amended, in the case of an Employee who is a
Participant as of the later of the date such amendment is adopted or the date it
becomes effective, the nonforfeitable percentage (determined as of such date) of
such Employee's right to his Employer derived account balance will not be less
than his percentage computed under the Plan without regard to such amendment.
12.2 Any Participant on the effective date of an amendment who is not
actively participating in the Plan on such effective date shall not benefit from
an amendment unless otherwise required by law or unless such amendment is
specifically made applicable to such Participant.
12.3 In the event of any merger or consolidation with, or transfer of
assets or liabilities to, any other plan, each Participant shall be entitled to
a benefit after the merger, consolidation or transfer (if the Plan then
terminated) which is not less than the benefits he would have been entitled to
receive immediately before the merger, consolidation or transfer (if the Plan
had then terminated).
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12.4 The Employer intends to continue the Plan indefinitely but reserves
the right to discontinue contributions, terminate or partially terminate the
Plan at any time. In the event of a complete discontinuance of contributions,
termination or partial termination of the Plan, the interests of all
Participants affected shall become nonforfeitable. Upon termination of the Plan,
the Employer shall in its complete discretion notify the Trustee to either hold
all assets of the Trust Fund and make payments in accordance with the terms of
the Plan or distribute to each Participant his net account balance in a lump sum
payment in cash or kind. The Employer's contribution to the Trust Fund or the
income thereof shall not be paid to, or shall not revert to Employer and shall
not be used for any purpose other than the exclusive benefit of the Participants
or their Beneficiaries.
ARTICLE XIII
MISCELLANEOUS
-------------
13.1 To the extent permitted by law, it is a condition of the Plan that the
benefits provided hereunder shall not be subject to assignment, anticipation,
alienation, attachment, levy or transfer, and any attempt to do so shall not be
recognized. The preceding sentence shall also apply to the creation, assignment
or recognition of a right to any benefit payable with respect to a Participant
pursuant to a domestic relations order, unless such order is determined to be a
qualified domestic relations order as defined in Section 414(p) of the Code. If
provided by the terms of a qualified domestic relations order, a distribution of
benefits may be made from the Plan to the alternate payee under such order in a
single lump sum as soon as practicable following the determination by the
Administrative Committee that the order constitutes a qualified domestic
relations order. Payment of benefits may be made to the alternate payee even
though the Participant identified in the order has not attained the earliest
retirement age under the Plan. For purposes of this Section 13.1, the "earliest
retirement age" means the earlier of (i) the date in which the Participant is
entitled to a distribution under the Plan or (ii) the later of the date the
Participant attains age 50 or the earliest date on which the Participant would
begin receiving benefits if the Participant separated from service.
13.2 Nothing herein contained shall be deemed to give any Employee the
right to be retained in the employ of Employer or to interfere with the right of
the Employer to discharge any Employee at any time, nor shall it be deemed to
give the Employer the right to require any Employee to remain in its employ, nor
shall it interfere with the Employee's right to terminate his employment at any
time.
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13.3 All expenses incurred by the Trustees in the administration of the
Fund, including but not limited to the compensation of counsel, accountants,
Trustees, other agents or fiduciaries, shall be charged against the Employer,
unless otherwise paid by the Fund.
13.4 This Plan shall be interpreted in accordance with the laws of the
Commonwealth of Pennsylvania, except to the extent superseded by ERISA as in
effect from time to time.
ARTICLE XIV
LOANS
-----
14.1 The Committee, in its sole discretion, may direct the Trustees to make
a loan to a Participant, who is a party-in-interest, as defined in Section 3(14)
of ERISA, from the Participant's account balance upon receipt of a written
request from the Participant. The total amount of any such loan (when added to
the outstanding balance of all other loans to the Participant under the Plan or
any other qualified plan of the Employer) shall not exceed the lesser of $50,000
or 50% of the Participant's vested account balance. The $50,000 limitation shall
be reduced by the excess, if any, of the highest outstanding balance of loans to
the Participant from the Plan during the one-year period ending on the day
before the date on which such loan was made over the outstanding balance of
loans from the Plan to the Participant on the date that such loan was made.
14.2 A request by a Participant for a loan shall be made in writing to the
Committee and shall specify the amount of the loan. The terms and conditions on
which the Committee shall approve loans under the Plan shall be applied on a
reasonably equivalent basis with respect to all Participants. If a Participant's
request for a loan is approved by the Committee, the Committee shall furnish the
Trustees with written instructions directing the Trustees to make the loan in a
lump sum payment of cash to the Participant. In making any loan payment under
this Article XIV, the Trustees shall be fully entitled to rely on the
instructions furnished by the Committee, and shall be under no duty to make any
inquiry or investigation with respect thereto.
14.3 Loans shall be made on such terms and subject to such limitations as
the Committee may prescribe from time to time, provided that any such loan shall
be evidenced by a written note, shall bear a reasonable rate of interest on the
unpaid principal thereof, shall be adequately secured, and shall be repaid by
the Participant over a period not to exceed five years.
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<PAGE>
14.4 Any loan to a Participant under the Plan shall be secured by the
pledge of not more than 50% percent of the Participant's right, title and
interest in his vested account balance. Such pledge shall be evidenced by the
execution of a promissory note by the Participant.
14.5 The Committee shall have the sole responsibility for insuring that a
Participant timely makes all loan repayments, and for notifying the Trustees in
the event of any default by the Participant on the loan. Each loan repayment
shall be paid to the Trustees, and shall be accompanied by written instructions
from the Committee that identifies the Participant on whose behalf the loan
repayment is being made. Repayment of loans shall be made solely by means of
payroll deductions, or such other manner approved by the Committee.
14.6 In the event of a default by a Participant on a loan repayment, all
remaining principal payments on the loan shall be immediately due and payable.
The Committee shall be authorized (to the extent permitted by law) to take any
and all actions necessary and appropriate to enforce collection of an unpaid
loan. However, in the event of a default, foreclosure on the note and attachment
of security will not occur until a distributable event occurs under the Plan.
14.7 Upon the occurrence of a Participant's retirement or death, or earlier
distribution of benefits, the unpaid balance of any loan, including any unpaid
interest, shall be deducted from any payment or distribution from the Trust Fund
to which such Participant or his Beneficiary may be entitled and his vested
interest in his account shall be reduced.
14.8 A loan to a Participant shall be considered an investment of the
separate account(s) of the Participant from which the loan is made. All loan
repayments shall be credited to such separate account(s) and reinvested in the
investment company fund designated by the Participant.
14.9 A loan may not be made to a Participant who owns (or is considered as
owning within the meaning of Section 318(a)(1) of the Internal Revenue Code)
more than 5% of the outstanding stock of the Employer.
14.10 For loans granted or renewed on or after the last day of first Plan
Year beginning on or after January 1, 1989, the Committee shall issue written
loan guidelines, which shall form part of the Plan, describing the procedures
and conditions for making loans, and may revise those guidelines at any time,
and for any reason.
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<PAGE>
ARTICLE XV
LIMITATIONS ON ALLOCATIONS
--------------------------
15.1 The provisions of this Article XV shall be effective for limitation
years beginning after December 31, 1986.
(a) Notwithstanding any provisions of this Plan to the contrary, the annual
additions which may be credited to a Participant's account for any limitation
year will not exceed the lesser of the maximum permissible amount or any other
limitation contained in this Plan.
(b) As soon as is administratively feasible after the end of the limitation
year, the maximum permissible amount for the limitation year will be determined
on the basis of the Participant's actual compensation for the limitation year.
(c) In the event that it is determined that because of the allocation of
forfeitures, a reasonable error in estimating a Participant's annual
compensation or under other limited facts and circumstances permitted by the
Commissioner of the Internal Revenue Service, if there is an excess amount the
excess will be disposed of as follows:
(1) If the Participant is covered by the Plan at the end of the limitation
year, the excess amount shall be used to reduce employer contributions
(including any allocation of forfeitures) for such Participant in the next
limitation year, and each succeeding limitation year if necessary;
(2) If the Participant is not covered by the Plan at the end of the
limitation year, the excess amount will be held unallocated in a suspense
account. The suspense account will be applied to reduce future employer
contributions (including allocation of any forfeitures) for all remaining
Participants in the next limitation year, and each succeeding limitation year if
necessary;
(3) If a suspense account is in existence at any time during the limitation
year pursuant to this Section, it will not participate in the allocation of
investment gains and losses. The entire amount allocated to Participants from a
suspense account, including any such gains or other income or less any losses is
considered an annual addition.
(d) For the purpose of applying the limitations under this Article, all
defined contribution plans maintained by the employer are to be considered as a
single plan.
15.2 Definitions. For purposes of this Article only, the following
definitions and rules of interpretation will apply:
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<PAGE>
(a) "annual additions" -- The sum of the following amounts credited to a
Participant's account for the limitation year:
(1) employer contributions;
(2) forfeitures;
(3) voluntary Employee contributions;
(4) amounts allocated after March 31, 1984, to an individual medical
account, as defined in Section 415(1)(1) of the Code, which is part of a pension
or annuity maintained by the employer;
(5) amounts derived from contributions paid or accrued after December 31,
1985, in taxable years ending after such date, which are attributable to
post-retirement medical benefits allocated to the separate account of a key
employee, as defined in Section 419A(d)(3) of the Code, under a welfare benefit
fund as defined in Section 419(e) of the Code, maintained by the employer; and
(6) excess amounts applied under this Article in the limitation year to
reduce employer contributions.
(b) "compensation" -- a Participant's earned income, wages, salaries, and
fees for professional services and other amounts received (without regard to
whether an amount is paid in cash) for personal services actually rendered in
the course of employment with the employer to the extent that the amounts are
includable in gross income (including, but not limited to, commissions paid
salesmen, compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips, bonuses, fringe benefits,
reimbursements and expense allowances), and excluding the following:
(1) Employer contributions to a plan of deferred compensation which are not
includable in the Employee's gross income for the taxable year in which
contributed, or Employer contributions under a simplified employee pension to
the extent such contributions are deductible by the Employee, or any
distributions from a plan of deferred compensation;
(2) Amounts realized from the exercise of a nonqualified stock option, or
when restricted stock (or property) held by the Employee either becomes freely
transferable or is no longer subject to a substantial risk of forfeiture;
(3) Amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified stock option; and
-37-
<PAGE>
(4) Other amounts which received special tax benefits, or contributions
made by the employer (whether or not under a salary reduction agreement) towards
the purchase of an annuity described in Section 403(b) of the Code (whether or
not the amounts are actually excludable from the gross income of the Employee);
and
(5) Any contribution for medical benefits (within the meaning of Section
419A(f)(2) of the Code) after separation from service which is otherwise treated
as an annual addition; and
(6) Any amount otherwise treated as an annual addition under Section
415(i)(1) of the Code.
For purposes of applying the limitations of this Article, compensation for
a limitation year is the compensation actually paid or includable in gross
income during such year.
Notwithstanding the preceding sentence, compensation for a Participant who
is permanently and totally disabled (as defined in Section 37(e)(3) of the Code)
is the compensation such Participant would have received for the limitation year
if the Participant had been paid at the rate of compensation paid immediately
before becoming permanently and totally disabled; such imputed compensation for
the disabled Participant may be taken into account only if the Participant is
not an officer, an owner, or highly compensated, and contributions made on
behalf of such Participant are nonforfeitable when made.
(c) "employer" -- The Employer that adopts this Plan, and all members of a
controlled group of corporations (as defined in Section 414(b) of the Code as
modified by Section 415(h) of the Code), all commonly controlled trades or
businesses (as defined in Section 414(c) of the Code as modified by Section
415(h) of the Code), or affiliated service groups (as defined in Section 414(m)
of the Code) of which the adopting Employer is a part.
(d) "excess amount" -- The excess of the Participant's annual additions for
the limitation year over the maximum permissible amount.
(e) "limitation year" -- Effective April 2, 1989, the twelve-month period
beginning April 2 and ending April 1. Prior to April 2, 1989, the limitation
year is the twelve-month period from November 1 through the following October
31, except the limitation year beginning November 1, 1988 shall end April 1,
1989.
-38-
<PAGE>
(f) "maximum permissible amount" -- The lesser of $30,000 (or, if greater,
1/4 of the dollar limitation in effect under Section 415(b)(1)(A) of the Code)
or twenty-five percent (25%) of the Participant's compensation for the
limitation year.
ARTICLE XVI
TOP HEAVY DEFINITIONS AND RULES
-------------------------------
16.1 Key employee. An Employee or former Employee, (or the Beneficiary of
such an Employee or former Employee) who at any time during the determination
period was:
(a) An officer of the Employer having an annual compensation greater than
fifty percent (50%) of the amount in effect under Section 415(b)(1)(A) of the
Code for any such Plan Year;
(b) One of the ten Employees having annual compensation from the Employer
of more than the limitation in effect under Section 415(c)(1)(A) of the Code and
owning (or considered as owning within the meaning of Section 318 of the Code)
the largest interests in the Employer;
(c) A person owning (or considered as owning within the meaning of Section
318 of the Code) more than five percent (5%) of the outstanding stock of the
Employer or stock possessing more then five percent (5%) of the total combined
voting power of ail stock of the Employer, or
(d) A person who has annual compensation from the Employer of more than
$150,000 and who would be described in (c) hereof if one percent (1%) were
substituted for five percent (5%).
For purposes of (a) above, no more than fifty (50) Employees (or, if lesser, the
greater of three or ten percent of the Employees will be treated as officers.)
For purposes of (b), if two Employees have the same interest in the Employer,
the Employee having greater annual compensation from the Employer will be
treated as having a larger interest. For purposes of this Article the term
"compensation" shall have the same meaning as provided for in Article XV.
The determination period is the Plan Year containing the determination date
as defined in Section 16.8, and the four (4) preceding Plan Years. The
determination of who is a key employee will be made in accordance with the rules
and regulations under Section 416(i)(1) of the Code.
16.2 Non-key employee. Any Employee who is not a key employee. In addition,
any Beneficiary of a non-key employee will be treated as a non-key employee.
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<PAGE>
16.3 Permissive aggregation group. The required aggregation group of plans
plus any other plan or plans of the Employer, which considered as a group with
the required aggregation group, would continue to satisfy the requirements of
Sections 401(a)(4) and 410 of the Code.
16.4 Required aggregation group.
(a) Each qualified plan of the Employer in which at least one key employee
participates or participated at any time during the determination period
(regardless of whether the plan has terminated), and
(b) Any other qualified plan of the Employer which enables a plan described
in (a) to meet the requirements of Sections 401 (a)(4) and 410 of the Code.
16.5 Top-heavy plan. This Plan is top-heavy for any Plan Year if any of the
following conditions exist;
(a) If the top-heavy ratio for this Plan exceeds sixty percent (60%) and
this Plan is not part of any required aggregation group or permissive
aggregation group of plans.
(b) If this Plan is part of a required aggregation group of plans but not
part of a permissive aggregation group and the top-heavy ratio for the required
aggregation group of plans exceeds sixty percent (60%).
(c) If this Plan is a part of a permissive aggregation group of plans and
the top-heavy ratio for the required aggregation group exceeds sixty percent
(60%) and the top-heavy ratio for the permissive aggregation group exceeds sixty
percent (60%).
16.6 Super top-heavy plan. For any Plan Year in which this Plan would be a
Top-Heavy Plan pursuant to Section 16.5 above if "ninety percent (90%)" were
substituted for "sixty percent (60%)" at each place where "sixty percent (60%)"
appears therein.
16.7 Top-heavy ratio.
(a) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and has not maintained any
defined benefit plan which during the five (5) year period ending on the
determination date has or has had accrued benefits, the top-heavy ratio for this
Plan alone or for the required or permissive aggregation group as appropriate is
a fraction, the numerator of which is the sum of the account balances of all key
employees as of the determination date (including any part of any account
balance distributed in the five (5) year period ending on the determination
-40-
<PAGE>
date), and the denominator of which is the sum of all account balances
(including any part of any account balance distributed in the five (5) Year
period ending on the determination date), both computed in accordance with
Section 416 of the Code and the regulations thereunder. Both the numerator and
denominator of the top-heavy ratio are increased to reflect any contribution not
actually made as of the determination date, but which is required to be taken
into account on that date under Section 416 of the Code and the regulations
thereunder.
(b) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and maintains or has maintained
one or more defined benefit plans which during the five (5) year period ending
on the Determination Date has or has had any accrued benefits, the top-heavy
ratio for any required or permissive aggregation group as appropriate is a
fraction, the numerator of which is the sum of account balances under the
aggregated defined contribution plan or plans for all key employees determined
in accordance with (2) above, and the present value of accrued benefits under
the aggregated defined benefit plan or plans for all key employees as of the
determination date, and the denominator of which is the sum of the account
balances under the aggregated defined contribution plan or plans for all
Participants, determined in accordance with (a) above, and the present value of
accrued benefits under the aggregated defined benefit plan or plans for all
Participants as of the determination dates, all determined in accordance with
Section 416 of the Code and the regulations thereunder. The accrued benefits
under a defined benefit plan in both the numerator and denominator of the
top-heavy ratio are increased for any distribution of an accrued benefit made in
the five year period ending on the determination date.
(c) For the purposes of (a) and (b) above, the value of account balances
and the present value of accrued benefits will be determined as of the most
recent valuation date that falls within or ends with the twelve (12) month
period ending on the determination date, except as provided in Section 416 of
the Code and the regulations thereunder for the first and second plan years of a
defined benefit plan. The account balances and accrued benefits of a Participant
(1) who is a non-key employee but who was a key employee in a prior year, or (2)
who has not been credited with at least one Hour of Service with any Employer
maintaining the Plan at any time during the five (5) year period ending on the
determination date will be disregarded. The calculation of the top-heavy ratio,
and the extent to which distributions, rollovers, and transfers are taken into
account will be made in accordance with Section 416 of the Code and the
regulations thereunder. When aggregating plans the value of account balances and
accrued benefits will be calculated with reference to the determination dates
that fall within the same calendar year. If any individual has not received
-41-
<PAGE>
any compensation from any employer maintaining the plan (other than benefits
under the Plan) at any time during the five (5) year period ending on the
determination date, any accrued benefit for such individual (and the account
of such individual) will not be taken into account.
Effective for Plan Years beginning after December 31, 1986, the accrued
benefit of a Participant other than a key employee shall be determined under (i)
the method, if any, that uniformly applies for accrual purposes under all
defined benefit plans maintained by the Employer or (ii) if there is no such
method, as if such benefit accrued not more rapidly than the slowest accrual
rate permitted under the fractional rule of Section 411(b)(1)(C) of the Code.
16.8 Determination date. With respect to any Plan Year subsequent to the
first Plan Year, the last day of the preceding Plan Year. For the first Plan
Year of the Plan, the last day of that Plan Year.
16.9 Valuation date. The last day of the Plan Year.
16.10 Present value. Present value will be based upon the interest and
mortality rates specified in the Employer's defined benefit plan.
16.11 Minimum Allocation.
(a) If in any Plan Year the Plan is a Top Heavy Plan and the Employer does
not maintain any qualified defined benefit plan in addition to this Plan, except
as provided in (b) and (c) below, the Employer contributions and forfeitures
allocated on behalf of any Participant who is a non-key employee will not be
less than the lesser of three percent (3%) of such Participant's compensation or
the largest percentage of Employer contributions and forfeitures, as a
percentage of the first $200,000 of the key employee's compensation (as defined
in Section 15.2(b)), and as limited by Section 401(a)(17) of the Code, allocated
on behalf of any key employee for that year. The minimum allocation is
determined without regard to any Social Security contributions. This minimum
allocation will be made even though, under other Plan provisions, the
Participant would not otherwise be entitled to receive an allocation, or would
have received a lesser allocation for the year because of the Participant's
failure to complete 1,000 Hours of Service. The minimum allocation (if any)
required under this paragraph (a) shall be made to this Plan only to the extent
such allocation is not made for the Participant under any other defined
contribution plan(s) maintained by the Employer.
-42-
<PAGE>
(b) In the event the Employer maintains a qualified defined benefit plan(s)
in addition to this Plan, the Employer will provide a minimum allocation at
least equal to five percent (5%) of compensation (as defined in Section 15.2(b))
to each non-key employee, entitled under (a) above to receive a minimum
allocation, who is covered under this Plan and the qualified defined benefit
plan(s). If this Plan enables a defined benefit plan to meet the requirements of
Section 401(a) or 410 of the Code, the minimum allocation described in (a) above
must be at least three percent (3%) of a Participant's compensation, regardless
of the largest percentage of Employer contributions and forfeitures of a key
employee's compensation.
(c) The provisions in (a) and (b) above will not apply to any Participant
who was not employed by the Employer on the last day of the Plan Year.
(d) The minimum allocation required under this Section 16.11 (to the extent
required to be nonforfeitable under Section 416(b) of the Code) may not be
forfeited under Sections 411(a)(3)(B) or 411(a)(3)(D) of the Code.
IN WITNESS WHEREOF, Delaware Group Delaware Fund, Inc. has caused this
amended and restated Plan, effective April 1, 1989, to be executed by its duly
authorized officers and its corporate seal to be impressed hereon this 17th day
of November, 1994.
Attest: DELAWARE GROUP DELAWARE FUND, INC.
/s/ George M. Chamberlain, Jr. By: /s/Brian F. Wruble
- ------------------------------ -------------------------
George M. Chamberlain, Jr. Brian F. Wruble
Senior Vice President/Secretary President and Chief
Executive Officer
-43-
<PAGE>
Consent of Independent Auditors
-------------------------------
We consent to the references to our firm under the captions "Financial
Highlights" in the Prospectuses of Delaware Group Trend Fund, Inc. for the A
Class and B Class, and for the Institutional Class and "Financial Statements" in
the Statement of Additional Information of Delaware Group Trend Fund, Inc. and
to the incorporation by reference in this Post-Effective Amendment No. 53 to the
Registration Statement (Form N-1A No. 2-28871) of Delaware Group Trend Fund,
Inc. of our report dated July 28, 1995, included in the 1995 Annual Report to
Shareholders of the Delaware Group Trend Fund, Inc.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
August 29, 1995
<PAGE>
Report of Independent Auditors
------------------------------
To the Shareholders and Board of Directors
Delaware Group Trend Fund, Inc.
We have audited the accompanying statement of net assets of Delaware Group Trend
Fund, Inc. as of June 30, 1995, 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
five years in the period then ended. 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. Our procedures included confirmation of investments owned as of
June 30, 1995 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 Trend Fund, Inc. at June 30, 1995, 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 the financial highlights for each of the five
years in the period then ended, in conformity with generally accepted accounting
principles.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
July 28, 1995
<PAGE>
DELAWARE
GROUP
- ----------
IRA APPLICATION
AND TRANSFER FORM
|| PERSONAL IRA
|| SPOUSAL IRA
|| ROLLOVER IRA
(PHOTO OF LARGE KEY) || DIRECT ROLLOVER
|| PARTICIPANT'S SEP/IRA
|| PARTICIPANT'S SARSEP
||=======================================
RETIREMENT
LOGO PLANNING
IS THE KEY
<PAGE>
Welcome to the Delaware Group
DELAWARE Before completing your Individual Retirement Account (IRA)
GROUP Application, please review the following points so you can
========== take advantage of the many options available to you with
your Delaware Group Account.
________________________________________________________________________________
To Open Your Delaware Group IRA:
When opening both a Personal and Spousal IRA be sure to complete a separate
application for yourself and for your non-working spouse. The overall maximum
for both accounts is $2,250 per year with no more than $2,000 in either account.
When making Your Investment Selection, talk to your financial adviser to
determine whether Class A shares or Class B shares are more appropriate for you.
Please indicate which fund, or funds, you have selected for your IRA investments
by checking the appropriate selection box next to the fund(s). There is no limit
to the number of funds you may select as long as you meet the required minimum
investment of $25 per fund. And there is only one $15 annual maintenance fee,
regardless of the number of funds you select for your Delaware Group IRA. This
fee can either be prepaid by you, or debited from your IRA account. Your initial
contribution must total $250.
When making your contribution by check, make your check payable to: Delaware
Management Trust Company, the Custodian of your Delaware Group IRA.
If this is a Rollover IRA, and you received a distribution check made payable to
you, be sure to sign and endorse the back of the check, "Payable to Delaware
Management Trust Company."
For Direct Rollovers, in which he plan assets flow directly from the former
trustee/custodian to Delaware Management Trust Company, please be sure to
complete the separate "Direct Rollover" form included with this package.
Checks representing Direct Rollover assets should be made payable to Delaware
Management Trust Company.
Send your completed and signed Application, along with your contribution and/or
Transfer of Assets or Direct Rollover instructions to:
Delaware Service Company, Inc.
Attn: Retirement Plans Department
1818 Market Street
Philadelphia, PA 19103-3682
Additional IRA Services
To establish an Automatic Investing Plan, where regularly scheduled
contributions are taken directly from your personal checking account and
invested into your Delaware Group IRA, call our offices at the telephone number
listed below. Your Shareholder Services Representative will explain this
valuable program of automatic investing and send you the appropriate sign-up
materials.
If you wish to begin taking systematic withdrawals from your account, you will
also need to complete a Retirement Plan Systematic Withdrawal Plan Form. This
service is available for Class A shares only. Just call the telephone number
listed below to request the form.
If you are 70 1/2 or older and need to take Required Distributions from your
account, please ask for an IRA Required Distribution Election Form. Shareholders
cannot roll over or transfer the minimum amount they are required to receive
during a distribution calendar year.
For Simplified Employee Pension/IRA and
Salary Reduction SEP Participants:
SEP/IRA and SARSEP Participants can also arrange to open a personal Delaware
Group IRA at the same time they establish their plan participant account. No
matter how many different Delaware Group IRAs you open, you only pay one $15
annual maintenance fee.
If you are an Employer Participant in the plan, be sure to complete the
appropriate Employer Adoption Agreement as well as the Participant IRA
Application.
If you have any questions or would like assistance
in completing the Individual Retirement Account Application, please call us at
800-523-1918. In Philadelphia, call 215-988-1241.
Again, welcome to the Delaware Group.
<PAGE>
DELAWARE
GROUP
======== Individual Retirement Account Application =======
1 __________________________________ || || ||-|| ||-|| || || ||
Information Name Social Security Number
About You __________________________________ _____/______/_____
Address Date of Birth
Please __________________________________ ( )_____________( )__________
print. City State Zip Phone: Business Home
===============================================================================
2
Type of IRA
Check one.
| | Personal IRA ($2,000 annual limit)
| | Spousal IRA ($2,250 overall limit for you and your non-working spouse with
no more than $2,000 in either account. Separate applications required.)
| | Rollover IRA (No dollar limit; complete Rollover Information section below
and on page 4 of this Application)
| | Transfer of Assets (No dollar limit; complete the Transfer of Assets Form on
page 7 of this Application)
| | SEP/IRA -- Simplified Employee Pension/IRA Plan ($30,000 overall limit).
Must be accompanied by a Delaware Group SEP Plan Establishment Document
completed by the Employer.
| | Self-Directed SEP/IRA -- Simplified Employee Pension/IRA Plan ($30,000
overall limit). Must be accompanied by IRS Form 5305-SEP.
| | SARSEP -- Salary Reduction SEP/IRA Plan ($8,994 salary deferral limit in
1993, indexed each year). Must be accompanied by a Delaware Group SARSEP
Plan Establishment Document completed by the Employer.
| | Self-Directed SARSEP -- Salary Reduction SEP/IRA Plan ($8,994 salary
deferral limit in 1993, indexed each year). Must be accompanied by IRS Form
5305A-SEP.
For SEP/IRA & SARSEP plans, please complete the following:
________________________________________________________________________________
Company Name
________________________________________________________________________________
Address of Employer
________________________________________________________________________________
City State Zip
| | | | - | | | | | | | | | | | | | |
Employer Tax I.D. Number
| | Check here if you are a new participant in an existing
SEP/IRA or SARSEP plan.
<TABLE>
<CAPTION>
====================================================================================================================================
(Employer Contribution) (Salary
IRA SEP/IRA Reduction
Current Prior Rollover/ Current Prior Contribution)
3 Year Year Transfer Year Year SARSEP
------------------- --------- ------------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Your
Investment Initial Contribution $_____ $_____ $_____ $_____ $_____ $_____
Selections Delaware Group -- Equity Funds
| | Decatur Income || Class A
Minimum initial Fund || Class B _____% _____% _____% _____% _____% _____%
contribution: | | Decatur Total || Class A
$250. Minimum Return Fund || Class B _____% _____% _____% _____% _____% _____%
investment per | | DelCap Fund || Class A
fund: $25. || Class B _____% _____% _____% _____% _____% _____%
Remember to | | Trend Fund || Class A
check off your || Class B _____% _____% _____% _____% _____% _____%
fund(s) selection. | | Value Fund || Class A
|| Class B _____% _____% _____% _____% _____% _____%
Please do not | | International || Class A
use fractional Equity Fund || Class B _____% _____% _____% _____% _____% _____%
percentages, for | | Dividend || Class A
example 33 1/3, Growth Fund || Class B _____% _____% _____% _____% _____% _____%
and be sure | | Delaware Fund || Class A
percentages || Class B _____% _____% _____% _____% _____% _____%
total 100% Income Funds
| | Delchester Fund || Class A
Investing for || Class B _____% _____% _____% _____% _____% _____%
prior year can | | U.S. Govt. Fund || Class A
only be done || Class B _____% _____% _____% _____% _____% _____%
prior to the tax | | Treasury Reserves || Class A
filing deadline. Intermediate Fund || Class B _____% _____% _____% _____% _____% _____%
If no year is Money Market Funds
designated, | | Delaware || Class A
current year will Cash Reserve || Class B _____% _____% _____% _____% _____% _____%
be assumed. || Consultant Class
| | U.S. Govt. || Class A
Money Fund || Consultant Class_____% _____% _____% _____% _____% _____%
Other
| | __________ || Class A
|| Class B _____% _____% _____% _____% _____% _____%
| | __________ || Class A
|| Class B _____% _____% _____% _____% _____% _____%
TOTALS 100% 100% 100% 100% 100% 100%
</TABLE>
<PAGE>
================================================================================
4 Source of Your Contribution
| | Contribution by Check -- Total Dollar Amount of Initial Investment: $______
| | IRA to IRA Transfer of Assets -- Make sure you complete and sign the
attached Transfer of Assets Form on page 7.
| | Director Rollover -- Complete and sign the enclosed Direct Rollover Form.
| | Broker-Placed Phone Order
________________________________________________________________________________
Delaware Confirmation Number
________________________________________________________________________________
Order Date
________________________________________________________________________________
Number of Shares
________________________________________________________________________________
Name of Fund
| | Contributing from an Existing Delaware Group Account -- convert $__________
from my regular fund account #________________to this IRA account. If your
regular fund account is registered as a joint account, we require a
signature guarantee from the joint owner.
================================================================================
5 Rollover Information Complete all that apply. Includes Direct Rollovers from
Qualified plans or 403(b)s.
| | IRA Rollover -- I hereby elect to treat this contribution as a rollover
contribution. I understand that this is an irrevocable election. The source
of the rollover is from:
| | A Qualified Plan
| | A 403(b) Plan
| | Another IRA
| | A Qualified Plan or IRA or 403(b) by Beneficiary (spouse only)
| | Death Benefit IRA -- Surviving spouse does not elect to treat the death
benefit rollover as his or her own IRA
| | Rollover IRA -- Surviving Spouse does elect to treat the death benefit
rollover as his or her own IRA
| | Rollover after age 70 1/2 -- Pursuant to IRS Regulations, I hereby certify
that I am not rolling over any minimum amount required to be distributed to
me with respect to any applicable distribution calendar year. In order to
receive required minimum distributions in the future under your Delaware
Group IRA, please contact the Delaware Group and we will send you an IRA
Required Distribution Election Form.
================================================================================
6 Additional Services for Your Consideration
These optional services are available as special elections for your Delaware
Group IRA.
Consult the prospectus(es) of the fund(s) for more details on the terms of these
optional services.
If you have further questions, ask your financial adviser or call us at
800-523-1918. In Philadelphia call 215-988-1241.
| | Wealth Builder Option -- I authorize Delaware Group to transfer $__________
($100 or more) per month, through liquidation of shares in this fund, to one
or more other Delaware Group funds ($100 minimum per fund) under this IRA.
Note: For Class A accounts, Wealth Builder transactions must be directed to
another Class A account. For Class B accounts, Wealth Builder transactions
must be directed to another Class B account.
_______________________________________________________________________________
Name of Fund from Section 3
_______________________________________________________________________________
Name of Fund from Section 3
_______________________________________________________________________________
New Fund (new account will be established)
_______________________________________________________________________________
New Fund (new account will be established)
$_______________________________________________________________________________
Amount per month
$_______________________________________________________________________________
Amount per month
| | Dividend Maximizer -- Dividends and any capital gains are reinvested in the
same fund automatically unless otherwise indicated. I elect to have
dividends and any capital gains under this IRA invested in another IRA
account.
| | New Account -- Name of Fund ________________________________________________
| | Systematic Withdrawal Plan -- If you wish to begin receiving periodic
distributions (available for Class A accounts only) under the Terms and
Conditions of the IRA, please contact our office and we will send you a
Retirement Plan Systematic Withdrawal Plan Form. Please note, if you are age
70 1/2 or older, you should request an IRA Required Distribution Election
Form.
| | Combined Purchases Privilege -- This privilege allows the combining of
shares currently owned in other non-money market Delaware Group funds with
the dollar amount of this IRA Account to determine a reduced sales charge,
if applicable.
Name of Fund Account Number Number of Shares
_____________________ _________________________________________________
_____________________ _________________________________________________
| | Letter of Intention -- This option allows the aggregation of anticipated
purchases by an individual in non-money market Delaware Group funds during a
13-month period, along with any existing assets listed in the Combined
Purchase Privilege Section, to obtain a reduced sales charge. This option is
available for funds with front-end sales charges only, though Class B shares
can be used for purposes of filling Class A Letters of Intention. To learn
more, please see your Fund's current prospectus and sales charge breakpoint
schedule. I have read and agree to the terms of the prospectus(es) of the
fund(s) I have selected on this application, and wish to establish a Letter
Of Intent, although I am not obligated to do so, where my investments in
non-money market funds will aggregate or exceed:
| | $100,000 | | $250,000 | | $500,000 | | $1,000,000
I understand that if I do not satisfy the investment level selected above
that my account will be adjusted to reflect the applicable sales charge.
Note to SEP/IRA SARSEP Participants: A separate Letter Of Intent Form must be
completed by your employer, on behalf of all participants in the Plan, to obtain
a reduced sales charge.
<PAGE>
If this is not a Personal or Spousal IRA, please contact Your financial adviser
or Delaware Group before completing this section.
| | Automatic Investing Plan -- Please transfer $____ ($25 or more for A Shares,
$100 or more for B Shares) from my bank account each month to invest in
_________________________________________. Date of Transfer each month:
Fund Name
| | 1st | | 5th | | 10th | | 15th | | 20th | | 25th
________________________________________________________________________________
Bank Name Bank Account #
________________________________________________________________________________
Name(s) on Bank Account
While we cannot guarantee that your bank will accept this offer, we will ask for
its cooperation. If you discontinue this plan at any time, and your banking
registration has not changed, we can reinstate it immediately via written or
telephone request.
Attach a voided check or deposit slip to avoid delays in processing.
================================================================================
7 Agreement And Beneficiary Designation
Your signature is required.
You can change your Beneficiary Designation at any time by completing a Change
of Beneficiary Designation Form and returning it to Delaware Service Company,
Inc. 1818 Market St. Philadelphia, PA 19103-3682.
Contact Delaware Group for the appropriate Change of Beneficiary Form.
By signing below, I designate the following person(s) to receive any benefit
from my Individual Retirement Account which may become due upon or after my
death according to the terms and conditions of the Plan. I understand that this
Beneficiary Designation will remain in full force and effect unless and until I
revoke this designation by completing a Change of Beneficiary Designation Form
for the Delaware Group Individual Retirement Custodial Account at a later date
and returning it to the Custodian.
Pay to: Primary Beneficiary ___________________________%
_______________________________________________________________________________
Name
_______________________________________________________________________________
Address
_______________________________________________________________________________
City State Zip
____________________________________________________ ____/_____/____________
Relationship Date of Birth
| | | | | | - | | | | - | | | | | | | |
Social Security Number
If more than one Primary Beneficiary is selected and no percentage of plan
benefits is indicated, the assets will be divided equally between the Primary
Beneficiaries.
If no Beneficiary is designated, assets will be paid to your estate.
If the Custodian receives satisfactory proof that the Primary Beneficiary is
deceased, or if more than one Primary Beneficiary is selected and both are
deceased, the assets will be paid to the Contingent Beneficiary as indicated.
Pay to: Primary Beneficiary ___________________________%
_______________________________________________________________________________
Name
_______________________________________________________________________________
Address
_______________________________________________________________________________
City State Zip
____________________________________________________ ____/_____/____________
Relationship Date of Birth
| | | | | | - | | | | - | | | | | | | |
Social Security Number
<PAGE>
Pay to: Contingent Beneficiary ___________________________%
_______________________________________________________________________________
Name
_______________________________________________________________________________
Address
_______________________________________________________________________________
City State Zip
____________________________________________________ ____/_____/____________
Relationship Date of Birth
| | | | | | - | | | | - | | | | | | | |
Social Security Number
If you are married and you do not designate your spouse as your sole Primary
Beneficiary, you should consult with an attorney as to whether applicable law
may require your spouse to sign a written consent to your designation or a
written declaration to give up community or marital property interests in your
IRA. The Custodian shall have no responsibility for determining whether your
Beneficiary Designation is valid under applicable law and shall have no
liability to any person for acting in accordance with your Beneficiary
Designation.
===============================================================================
By signing below, I hereby establish an Individual Retirement Account under
Section 408(a) of the Internal Revenue Code of 1986, as amended, ("the
Code") to provide for my retirement and for the support of my beneficiaries
after my death. I hereby acknowledge receipt of the Terms and Conditions and
Disclosure Statement for the Individual Retirement Account required under the
Income Tax Regulations under Section 408(i) of the Code and am in receipt of an
effective prospectus(es) for the Fund(s) I am investing in. I hereby appoint
Delaware Management Trust Company as Custodian and agree to pay the annual
maintenance fee, currently $15. (If this fee is not included or is not paid by
April 30th annually, it will be debited from your account each May.)
X ___________________________________________ _______________________________
Investor's Signature Date
===============================================================================
Please send your completed and signed application, along with your contribution,
to Delaware Service Company, Inc., Attn: Retirement Plan Department, 1818 Market
Street, Philadelphia, PA 19103-3682. Be sure to make your check payable to
Delaware Management Trust Company.
<PAGE>
================================================================================
Broker Information
To be completed by Investment Dealer.
________________________________________________________________________________
Name of Brokerage Firm
________________________________________________________________________________
Home Office Address
________________________________________________________________________________
Authorized Firm Signature
________________________________________________________________________________
Representative's Name/Number
________________________________________________________________________________
Branch Office Address
________________________________________________________________________________
Representative's Phone Number
================================================================================
Custodian Acceptance
For use by Custodian only.
/s/ Diane Anderson
________________________________________________________________________________
Authorized Officer of Delaware Management Trust Company
================================================================================
DELAWARE
GROUP
=======
The Delaware Group Of Funds
Delaware's family of funds enables investors to match their needs with a broad
range of investment objectives covering the risk-reward spectrum. The following
are available as investment vehicles for any Delaware Group retirement program.
| | Trend Fund
Seeks long-term capital appreciation by investing in securities issued by
small, growth-oriented companies exhibiting a strong potential for capital
appreciation.
| | DelCap Fund
Seeks long-term growth by investing in common stocks and securities
convertible into common stocks of mid-sized companies that have demonstrated
their ability to grow and demonstrate a potential for continued growth.
| | Value Fund
Seeks long-term growth by investing primarily in common stocks of small and
mid-size companies whose market values appear low relative to their
underlying value or potential value.
| | International Equity Fund
Seeks long-term growth without undue risk to principal by investing
primarily in a range of foreign equity securities that have potential for
capital appreciation and income.
| | Decatur Income Fund
Seeks highest possible current income by investing primarily in common
stocks of established companies with strong dividend histories that provide
the potential for income and capital appreciation without undue risk to
principal.
| | Decatur Total Return Fund
Seeks long-term total return by investing primarily in securities that
provide the potential for income and capital appreciation without undue risk
to principal.
| | Dividend Growth Fund
Seeks current income and capital appreciation by investing primarily in
income-producing common stocks. Focuses on common stocks believed to have
the potential for above-average dividend increases over time.
| | Delaware Fund
Seeks long-term growth through a balance of capital appreciation, income and
preservation of capital. Invests in common stock and investment grade bonds.
| | U.S. Government Fund
Seeks high current income consistent with safety of principal through
investment in securities issued by the U.S. government, its agencies or
instrumentalities.
| | Delchester Fund
Seeks high current income as is consistent with reasonable safety by
investing primarily in high-yielding, lower rated corporate bonds, U.S.
government securities and commercial paper issued by companies with the
ability to pay interest and repay principal.
| | Treasury Reserves Intermediate Fund
Seeks to provide a high, stable level of income with a high degree of
principal stability through investments in short- and intermediate-term
securities issued or guaranteed by the U.S. government, its agencies and
instrumentalities.
| | U.S. Government Money Fund
Seeks a high current income with a goal of maintaining a constant share
price by investing in short-term securities issued and/or guaranteed by the
U.S. government, its agencies and instrumentalities.
| | Delaware Cash Reserve
Seeks high current income with a goal of maintaining a constant share price
by investing in high-quality money market instruments with maturities of no
more than one year.
All funds, except U.S. Government Money Fund, currently offer Class A and B
shares. Please consult your financial adviser about which class is more
appropriate for you.
===============================================================================
The Delaware Group investor can seek total return through equity-oriented
investments, stability and current income through fixed-income investments, or
combine these styles to achieve the desired investment balance. As the
investor's needs or objectives change, the exchange privilege enables
investments to be transferred from one fund to another within the Delaware Group
without losing their tax-advantaged status.
<PAGE>
DELAWARE
GROUP
========
IRA Transfer of Assets Form
Use this form to transfer your IRA assets to a Delaware Group IRA. If you don't
have an existing Delaware Group IRA, please fill out an application. If you are
transferring IRA assets from more than one custodial account, please complete a
separate Transfer Form for each transfer. Please note, you must complete a
separate Transfer of Assets Form for each plan trustee/ custodian and/or for
each CD maturity date, if applicable. If you wish to make a direct rollover of
assets from a qualified plan or 403(b), please complete a Direct Rollover form.
================================================================================
Information About Your Delaware Group IRA
_______________________________________________________________________________
Individual's Name
_______________________________________________________________________________
Address
_______________________________________________________________________________
City State Zip
(__________)___________________________________________________________________
Telephone: Home
(__________)___________________________________________________________________
Business
| | | | | | - | | | | - | | | | | | | |
Social Security Number
Select One
| | 1. This is a transfer to a new Delaware Group IRA. My investment choices are
on page 3 of this IRA application.
| | 2. Invest the amount to be transferred into my existing Delaware Group IRA
as follows:
Fund:________ | | Class A | | Class B Percent:_____ Account#:
Fund:________ | | Class A | | Class B Percent:_____ Account#:
Fund:________ | | Class A | | Class B Percent:_____ Account#:
================================================================================
Information About Your IRA to Be Transferred
_______________________________________________________________________________
Name of Present Custodian
_______________________________________________________________________________
Address
_______________________________________________________________________________
City State Zip
___________________________________ (____________)_________________________
Contact Person Phone Number
IRA Account # _________________________________________________________________
Investment Fund # _____________________________________________________________
Investment Fund # _____________________________________________________________
For Certificates of Deposit:
_______________________________________________________________________________
Maturity Date
| | Please do not transfer until my CD matures.
| | Please roll over immediately. I am aware of the early withdrawal penalty.
Type of account you are transferring: | | Personal | | Rollover IRA (With
Qualified Plan or 403(b) assets) | | SEP or SARSEP Please note, you must
complete a separate Transfer of Assets Form for each plan trustee/custodian
and/or for each maturity date, if applicable. If you wish to make a direct
rollover of assets from a qualified plan of 403(b), please complete a Direct
Rollover form.
================================================================================
Your Authorization to Transfer
Your present Custodian may require additional documentation such as a
signature guarantee. Please check with them for their requirements.
<PAGE>
I have established an IRA with Delaware Management Trust Company as the
Custodian. Please roll over the amount listed below to them as successor
Custodian.
| | Complete -- Liquidate ALL of the above referenced account(s)
transfer IN CASH.
| | Partial -- Liquidate assets totaling $ ________________and transfer IN CASH.
| | Re-registration (Transfer in Kind) -- My IRA includes the Delaware Group
fund(s) listed below. Please re-register with Delaware Management Trust
Company as the Custodian. Send Delaware Group any outstanding Delaware Group
Fund certificates and proper documentation to re-register these shares.
Note, the Delaware Management Trust Company can accept only Delaware Group
funds for re-registration.
_____________________________________ _______________________________________
Fund Name Account Number
| | Transfer on or after age 70 1/2 -- Pursuant to IRS Regulations, I hereby
certify that this Transfer will not included any minimum amount required to
be distributed to me with respect to any applicable distribution calendar
year. In order to receive required minimum distributions in the future under
your Delaware Group IRA, please contact the Delaware Group and we will send
you an IRA Required Distribution Election Form.
SIGN HERE
X ____________________________________ _________________________
Your Signature - must be in ink Date
===============================================================================
Custodian Acceptance
For use by Custodian only.
Please be advised that the Delaware Management Trust Company is acting as
Custodian and is willing to accept the proceeds from the above referenced
Custodial Account.
Please make check payable to: Delaware Management Trust
Company, For the Benefit Of: (Participant), and mail to Delaware Management
Trust Company, Transfer of Assets Department, 1818 Market Street, Suite 1604,
Philadelphia, PA 19103-3682.
________________________________________________________ _________________
Authorized Officer of Delaware Management Trust Company Date
<PAGE>
DELAWARE
GROUP
========
IRA Transfer of Assets Form
Use this form to transfer your IRA assets to a Delaware Group IRA. If you don't
have an existing Delaware Group IRA, please fill out an application. If you are
transferring IRA assets from more than one custodial account, please complete a
separate Transfer Form for each transfer. Please note, you must complete a
separate Transfer of Assets Form for each plan trustee/ custodian and/or for
each CD maturity date, if applicable. If you wish to make a direct rollover of
assets from a qualified plan or 403(b), please complete a Direct Rollover form.
================================================================================
Information About Your Delaware Group IRA
_______________________________________________________________________________
Individual's Name
_______________________________________________________________________________
Address
_______________________________________________________________________________
City State Zip
(__________)___________________________________________________________________
Telephone: Home
(__________)___________________________________________________________________
Business
| | | | | | - | | | | - | | | | | | | |
Social Security Number
Select One
| | 1. This is a transfer to a new Delaware Group IRA. My investment choices
are on page 3 of this IRA application.
| | 2. Invest the amount to be transferred into my existing Delaware Group IRA
as follows:
Fund:________ | | Class A | | Class B Percent:_____ Account#:
Fund:________ | | Class A | | Class B Percent:_____ Account#:
Fund:________ | | Class A | | Class B Percent:_____ Account#:
================================================================================
Information About Your IRA to Be Transferred
_______________________________________________________________________________
Name of Present Custodian
_______________________________________________________________________________
Address
_______________________________________________________________________________
City State Zip
___________________________________ (____________)_________________________
Contact Person Phone Number
IRA Account # _________________________________________________________________
Investment Fund # _____________________________________________________________
Investment Fund # _____________________________________________________________
For Certificates of Deposit:
_______________________________________________________________________________
Maturity Date
| | Please do not transfer until my CD matures.
| | Please roll over immediately. I am aware of the early withdrawal penalty.
Type of account you are transferring: | | Personal | | Rollover IRA (With
Qualified Plan or 403(b) assets) | | SEP or SARSEP Please note, you must
complete a separate Transfer of Assets Form for each plan trustee/custodian
and/or for each maturity date, if applicable. If you wish to make a direct
rollover of assets from a qualified plan of 403(b), please complete a Direct
Rollover form.
================================================================================
Your Authorization to Transfer
Your present Custodian may require additional documentation such as a signature
guarantee. Please check with them for their requirements.
<PAGE>
I have established an IRA with Delaware Management Trust Company as the
Custodian. Please roll over the amount listed below to them as successor
Custodian.
| | Complete -- Liquidate ALL of the above referenced account(s)
transfer IN CASH.
| | Partial -- Liquidate assets totaling $________________ and transfer IN CASH.
| | Re-registration (Transfer in Kind) -- My IRA includes the Delaware Group
fund(s) listed below. Please re-register with Delaware Management Trust Company
as the Custodian. Send Delaware Group any outstanding Delaware Group Fund
certificates and proper documentation to re-register these shares. Note, the
Delaware Management Trust Company can accept only Delaware Group funds for
re-registration.
______________________________________ ________________________________________
Fund Name Account Number
| | Transfer on or after age 70 1/2 -- Pursuant to IRS Regulations, I hereby
certify that this Transfer will not included any minimum amount required to be
distributed to me with respect to any applicable distribution calendar year. In
order to receive required minimum distributions in the future under your
Delaware Group IRA, please contact the Delaware Group and we will send you an
IRA Required Distribution Election Form.
SIGN HERE
X ________________________________________ ____________________________
Your Signature - must be in ink Date
===============================================================================
Custodian Acceptance
For use by Custodian only.
Please be advised that the Delaware Management Trust Company is acting as
Custodian and is willing to accept the proceeds from the above referenced
Custodial Account.
Please make check payable to: Delaware Management Trust Company, For the Benefit
Of: (Participant), and mail to Delaware Management Trust Company, Transfer of
Assets Department, 1818 Market Street, Suite 1604, Philadelphia, PA 19103-3682.
_______________________________________________________ _____________________
Authorized Officer of Delaware Management Trust Company Date
<PAGE>
DELAWARE GROUP
| | Delaware Management Company, Inc.
Investment Manager
| | Delaware Distributors, L.P.
National Distributor
| | Delaware Service Company, Inc.
Shareholder Servicing, Dividend
Disbursing and Transfer Agent
| | Delaware Management Trust Company
Custodian
DELAWARE
GROUP
========
1818 Market Street
Philadelphia, PA 19103-3682
800-523-1918 Nationwide
215-988-1241 in Philadelphia
Use of this material with the public, either in written or oral form, can only
be made in conjunction with the prospectuses of the funds in the Delaware Group
being offered. The prospectus contains further information, including sales
charges and expenses.
Be sure to consult your financial adviser when making investments. Mutual funds
can be a valuable part of your financial plan; however, they are not obligations
of or guaranteed by any bank and are not FDIC or government insured. In
addition, they involve risk, including possible loss of principal.
RL-102-10/94
<PAGE>
DELAWARE
GROUP
========
IRA Direct Rollover Form
Use this form to roll over the assets in your Qualified Plan or 403(b) plan to a
Delaware Group IRA. Please note, you must complete a separate IRA Direct
Rollover Form for each plan trustee/custodian and/or for each CD maturity date,
if applicable.
Information About Your Delaware Group IRA
________________________________________________________________________________
Name
________________________________________________________________________________
Address
________________________________________________________________________________
City State Zip
| | | | | | - | | | | - | | | | | | | |
Social Security Number
(__________)____________________________________________________________________
Phone: Home
(__________)____________________________________________________________________
Phone: Business
| | This is a rollover to a new Delaware Group IRA. My investment choices are
on page 3 of the enclosed IRA application.
| | Invest the amount to be rolled over into my existing Delaware Group IRA
as follows:
Fund Name: _________ Percent/Amt: _________ Account #: __________
Fund Name: _________ Percent/Amt: _________ Account #: __________
Fund Name: _________ Percent/Amt: _________ Account #: __________
================================================================================
Information About Your Qualified Plan or 403(b) to be Rolled Over
________________________________________________________________________________
Name of Employer
________________________________________________________________________________
Address
________________________________________________________________________________
City State Zip
____________________________________(________)__________________________________
Contact Person Phone Number
Account Number: ________________________________________________________________
Account Number: ________________________________________________________________
Account Number: ________________________________________________________________
Account Number: ________________________________________________________________
Type of account: | | Qualified Plan | | 403(b)
For Certificates of Deposit:
________________________________________________________________________________
Maturity Date
| | Please do not roll over until my CD matures.
| | Please roll over immediately. I am aware of the early withdrawal penalty.
Name of Financial Institution:
________________________________________________________________________________
<PAGE>
================================================================================
Your Authorization to Roll Over
Your present Custodian may require additional documentation such as a signature
guarantee. Please check with them for their requirements.
I have established an IRA with Delaware Management Trust Company as the
Custodian. Please roll over the amount listed below to them as IRA Custodian.
| | Partial -- Liquidate assets totaling $___________ and directly roll over
IN CASH.
| | Complete -- Liquidate ALL of the above referenced account(s) and directly
roll over IN CASH.
| | Check here if you are age 70 1/2 or older.
Pursuant to IRS Regulations, I hereby certify that I am not rolling over any
minimum amount required to be distributed to me with respect to any
applicable distribution calendar year. In order to receive required minimum
distributions in the future under your Delaware Group IRA, please contact
the Delaware Group and we will send you an IRA Required Distribution
Election Form.
X ______________________________ __________________
Your Signature - must be in ink Date
================================================================================
Custodian Acceptance
For use by Delaware Management Trust Company only.
Please be advised that the Delaware Management Trust Company, as Custodian, is
willing to accept the proceeds from the above-referenced plan as an IRA account
pursuant to Internal Revenue Code Section 408.
Please make check payable to: Delaware Management Trust Company, For the Benefit
Of: (Participant), Direct Rollover; and mail to Delaware Management Trust Co.,
1818 Market Street, Philadelphia, PA 19103-3682.
________________________________________________________ _______________
Authorized Officer of Delaware Management Trust Company Date
RL-102B - 10/93
<PAGE>
INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT
TABLE OF CONTENTS
Terms and Conditions
Article I. Contributions ....................... 2
Article II. Nonforfeitability .................. 2
Article III. Prohibited Investments ............ 2
Article IV. Required Distributions ............. 2
1. Required Beginning Date ................... 2
2. Changing Method of Payment ................ 2
3. Lifetime Distributions .................... 3
4. Death Distributions ....................... 3
5. Multiple individual Retirement Accounts ... 4
Article V. Reporting ........................... 4
Article VI. Amendment of Plan .................. 4
Article VII. The Custodian ..................... 4
1. Appointment of Agents ..................... 4
2. No Investment Responsibility .............. 4
3. Entire Contract ........................... 4
4. Delaware Service Company, Inc. ............ 5
5. Designation of Beneficiary ................ 5
6. Taxes and Expenses ........................ 5
7. Termination of Account .................... 5
8. Resignation or Removal of Custodian ....... 5
9. Custodian's Fees .......................... 5
10. Agreements with Investment Advisers ....... 5
11. Applicable Law ............................ 5
Disclosure Statement
Revocation ..................................... 6
Requirements of an Individual Retirement Account 6
Eligibility .................................... 6
Contributions .................................. 7
(A) Deductible Contributions .................. 7
(B) Non-deductible Contributions .............. 8
(C) Spousal IRA Contributions ................. 8
(D) Excess Contributions ...................... 8
(E) Rollover Contributions .................... 9
Distributions .................................. 10
(A) Normal Distributions ...................... 10
(B) Required Distributions .................... 10
(C) Distributions After Death ................. 10
Tax Treatment of Distributions ................. 11
(A) Income Tax ................................ 11
(B) Federal Income Tax Withholding ............ 11
(C) Early Withdrawal Tax ...................... 11
(D) Gift Tax .................................. 12
(E) Estate Tax ................................ 12
Borrowing/Prohibited Transactions .............. 12
Reporting to the IRS ........................... 12
(A) Form 5329 ................................. 12
(B) Form 8606 ................................. 12
IRS Approval ................................... 12
IRA Account Balance ............................ 12
Fees and Charges ............................... 13
(A) IRA Fees .................................. 13
(B) Mutual Fund Sales Charges ................. 13
(C) Redemption and Repurchase Charges ......... 13
(D) Further Details ........................... 13
Qualified Tax Advice ........................... 13
1
<PAGE>
DELAWARE MANAGEMENT COMPANY, INC.
Individual Retirement Custodial Account
The Delaware Management Company, Inc. Individual Retirement Custodial
Account (the "Plan"), including the Application which is a part thereof, is
established for the exclusive benefit of the individual ("Applicant") designated
in the Application, or his/her beneficiaries.
W I T N E S S E T H:
WHEREAS, the Applicant desires to provide for retirement and for the
support of his/her beneficiaries upon death; and
WHEREAS, to accomplish this purpose, the Applicant desires to establish an
individual Retirement Account (the "Account") as described in Section 408(a) of
the Internal Revenue Code of 1986, as amended, or any successor statute
(hereinafter referred to as "the Code").
NOW, THEREFORE, for the purposes aforesaid, the Account is established,
effective as of the date of the Application, as follows:
ARTICLE I. CONTRIBUTIONS
Except in the case of a rollover contribution described in Sections 402(c),
403(a)(4), 403(b)(8), 408(d)(3) of the Code, or an employer contribution to a
simplified employee pension plan as described in Section 408(k), the Custodian
will only accept cash and will not accept contributions on behalf of the
Applicant in excess of $2,000 for any taxable year. In no event shall the
Custodian accept a rollover of property other than shares of the Delaware Group
of Funds. Rollover contributions before January 1, 1993 include rollovers
described in Sections 402(a)(5), 402(a)(6), 402(a)(7), 403(a)(4), 403(b)(8), or
408(d)(3).
ARTICLE II. NONFORFEITABILITY
The Applicant's interest in the balance in the Account is nonforfeitable.
ARTICLE III. PROHIBITED INVESTMENTS
1. No part of the Account shall be invested in life insurance contracts; nor may
assets of the Account be commingled with other property except in a common trust
fund or common investment fund (within the meaning of Section 408(a)(5) Code).
2. No part of the Account shall be invested incollectibles as defined in
Section 408(m) of the Code.
ARTICLE IV. REQUIRED DISTRIBUTIONS
1. Required Beginning Date. The Applicant's interest in the Account will be
distributed to him/her upon his/her providing Delaware Service Company, Inc.
with instructions as to the method of distribution. The entire interest of the
Applicant in the Account must be or commence to be distributed no later than the
first day of April following the calendar year in which the Applicant attains
age 70 1/2 (the "Required Beginning Date"). Not later than the Required
Beginning Date, the Applicant may elect to have the balance in the Account
distributed:
(a) In a lump sum;
(b) In monthly, quarterly or annual payments or over a period certain not
extending beyond the life expectancy of such Applicant or the joint life
and last survivor expectancy of the Applicant and his/her designated
beneficiary.
2. Changing Method of Payment. Even though distributions may have commenced
pursuant to 1(b) above, the Applicant may receive a distribution of the balance
in the Account in a lump sum or receive distributions under another method of
payment available in 1(b), by providing written notice to Delaware Service
Company, Inc. The Applicant may change the method of payment in 1(b) once a
year, provided: (i) written notice is given to Delaware Service Company, Inc. no
later than December 15 preceding the year in which the method of payment will be
changed and (ii) that distributions are made in accordance with the requirements
of Section 408(a)(6) of the Code and the regulations thereunder.
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3. Lifetime Distributions. If the Applicant is living on his/her Required
Beginning Date, the following distribution provisions shall apply:
(a) Required Minimum Distributions. If the Applicant's entire interest in the
account is to be distributed in a manner other than a lump sum, then the
amount to be distributed each year, commencing with the Required Beginning
Date and each year thereafter, must be at least equal to the quotient
obtained by dividing the Applicant's entire interest in the Account on the
December 31 of the preceding year by the applicable life expectancy.
(b) Minimum Distributions before 1989. For calendar years beginning before
January 1, 1989, if the Applicant's spouse is not the designated
beneficiary, the method of distribution selected must ensure that at least
50% of the present value of the amount available for distribution is paid
within the life expectancy of the Applicant.
(c) Minimum Distributions after 1988. For calendar years beginning after
December 31, 1988, the amount to be distributed each year, beginning with
the first calendar year for which distributions are required and then for
each succeeding calendar year, shall not be less than the quotient obtained
by dividing the balance in the Account as of the preceding December 31 by
the lesser of (1) the applicable life expectancy or (2) if the Applicant's
spouse is not the designated beneficiary, the applicable divisor determined
from the table set forth in Q & A-4 of Section 1.401 (a)(9)-2 of the
Proposed Income Tax Regulations. Distributions after the death of the
Applicant shall be calculated using the applicable life expectancy as the
relevant divisor without regard to Section 1401 (a)(9)-2 of the proposed
regulations.
(d) Computation of Life Expectancy. Life expectancy is computed by use of the
expected return multiples in Tables V and VI of Section 1.72-9 of the
Income Tax Regulations. Unless otherwise elected by the Applicant by the
time distributions are required to begin, life expectancies shall not be
recalculated annually. Such election shall be irrevocable as to the
Applicant and will apply to all subsequent years. The life expectancy of a
non-spouse beneficiary may not be recalculated; rather, life expectancy
shall be calculated using the attained age of the beneficiary during the
calendar year in which distributions are required to begin pursuant to this
Section 3, and payments for subsequent years shall be calculated based on
such life expectancy reduced by one for each calendar year which has
elapsed since the calendar year life expectancy was first calculated.
4. Death Distributions. If the Applicant dies before the entire interest is
distributed, the following distribution provisions shall apply:
(a) Distributions beginning before death. If the Applicant dies after
distribution of his/her interest in the Account has begun, the remaining
portion of such interest will continue to be distributed at least as
rapidly as under the method of distribution being used prior to the
Applicant's death. However, if the designated beneficiary is the
Applicant's surviving spouse, the spouse may elect to treat the Account as
his/her own individual retirement account. This election will be deemed to
have been made if such surviving spouse makes a regular contribution to the
Account, makes a rollover to or from the Account, or fails to elect any of
the provisions in paragraph (b) below. Distributions under this Section 4
are considered to have begun if the distributions are made on account of
the individual reaching his or her required beginning date. If the
individual receives distributions prior to the required beginning date and
the individual dies, distributions will not be considered to begin.
(b) Distributions beginning after death. If the Applicant dies before the
distribution of his/her interest in the Account begins, the Applicant's
entire interest will be distributed by December 31 of the calendar year
containing the fifth anniversary of the applicant's death unless the
applicant elects or, if the Applicant has not so elected, the designated
beneficiary or beneficiaries elect that the entire interest be distributed
in accordance with one of the following three provisions:
(i) The Applicant's entire interest will be distributed over a period
certain not greater than the life expectancy of the Applicant's
designated beneficiary commencing on or before December 31 of the
calendar year immediately following the calendar year in which the
Applicant died. The designated beneficiary may elect at any time to
receive greater payments.
(ii) If the designated beneficiary of the Applicant is the Applicant's
surviving spouse, payments may be made to the surviving spouse over
his/her life expectancy commencing on any date prior to the later of (1)
the December 31 of the calendar year immediately following the calendar
year in which the Applicant died and (2) the December 31
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of the calendar year in which the Applicant would have attained age
70 1/2. The surviving spouse may accelerate these payments at any time
(i.e., increase the frequency or amount of such payments).
(iii) If the designated beneficiary is the Applicant's surviving spouse, the
spouse may elect to treat the Account as his/her own individual
retirement account. This election will be deemed to have been made if
the surviving spouse makes a regular contribution to the Account, makes
a rollover to or from the Account, or fails to elect any of the above
two provisions.
(c) Computation of Life Expectancy. Life expectancy is computed by use of the
expected return multiples in Tables V and VI of Section 1.72-9 of the
Income Tax Regulations. For purposes of distributions beginning after the
Applicant's death, unless otherwise elected by the surviving spouse by the
time distributions are required to begin, life expectancy shall not be
recalculated annually. Such election shall be irrevocable as to the
surviving spouse and shall apply to all subsequent years. In the case of
any other designated beneficiary, life expectancy shall be calculated using
the attained age of the beneficiary during the calendar year in which
distributions are required to begin in accordance with this Section 4, and
payments for any subsequent calendar year shall be calculated based on such
life expectancy reduced by one for each calendar year which has elapsed
since the calendar year life expectancy was first calculated.
5. Multiple individual Retirement Accounts. An individual may satisfy the
minimum distribution requirements described above by receiving a distribution
from one IRA that is equal to the amount required to satisfy the minimum
distribution requirements for two or more IRAs. For this purpose, the owner
of two or more IRAs may use the "alternative method" described in Notice
88-38, 1988-1 C.B. 524, to satisfy the minimum distribution requirements
described above.
ARTICLE V. REPORTING
1. The Applicant agrees to provide the Custodian with information necessary for
the Custodian to prepare any reports required under Section 408(i) of the Code
and related regulations.
2. The Custodian agrees to submit reports to the Internal Revenue Service and
the Applicant as prescribed by the Internal Revenue Service. The Custodian shall
furnish the Applicant with an annual calendar year report concerning the value
of the Account.
ARTICLE VI. AMENDMENT OF PLAN
Delaware Management Company, Inc. may amend this Plan from time to time to
comply with the applicable provisions of the Code and related regulations and
to make any other changes determined by Delaware Management Company, Inc. to
be necessary and desirable.
ARTICLE VII. THE CUSTODIAN
1. Appointment of Agents. The Custodian appoints Delaware Service Company, Inc.
as its agent to receive the Applicant's contributions under this Plan. Delaware
Service Company, Inc., as the Custodian's agent, will deliver the Applicant's
contributions to the Custodian to be invested as provided in the Application.
The Custodian may also appoint one or more broker-dealers as its agent(s),
pursuant to a legally binding agency agreement with such broker-dealer(s), for
purposes of receiving the Applicant's contributions hereunder and receiving
contributions made on behalf of the Applicant pursuant to a simplified employee
pension plan (including a salary reduction SEP).
2. No Investment Responsibility. The Custodian shall have no investment
responsibility or discretion with respect to this Account. The Custodian shall
vote the regulated investment company shares held therein as directed by the
Applicant. If the Applicant does not provide voting instructions to the
Custodian, the Custodian shall vote Account shares in direct proportion to those
voting instructions, on an issue by issue basis, received by the Custodian from
other Individual Retirement Account shareholders of the fund.
3. Entire Contract. This Plan and Application constitute the entire contract
between Applicant and Custodian and, except as provided herein, no
representative of Delaware Management Company, Inc., Delaware Service Company,
Inc., Delaware Distributors, Inc., the Delaware Group of Funds nor any
broker-dealer shall be deemed to be a representative of or acting on
behalf of Custodian, nor shall any such representative have any
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authority to make representations or to bind the Custodian beyond the terms of
this document. The Custodian, Delaware Management Company, Inc., Delaware
Service Company, Inc., Delaware Distributors, Inc., the Delaware Group of Funds
and their affiliates shall not be responsible for any liability arising out of
this Plan and Application except such liability as is occasioned by their own
negligence or wilful misconduct. The Custodian and Delaware Service Company,
Inc. shall not be responsible for any action or omission taken in accordance
with any notice, request, instruction, certificate, beneficiary designation or
other instrument reasonably believed by Custodian or Delaware Service Company,
Inc. to be genuine.
4. Delaware Service Company, Inc. The Custodian may employ Delaware Service
Company, Inc. to carry out certain of the Custodian's administrative
functions hereunder in accordance with an agreement between Custodian and
Delaware Service Company, Inc.
5. Designation of Beneficiary. The Applicant shall have the right, by written
notice to Delaware Service Company, Inc., to designate or to change a
beneficiary to receive any benefit to which the Applicant may be entitled in the
event of death prior to the complete distribution of such benefits. If no such
designation is in effect upon the Applicant's death, the beneficiary shall be
the Applicant's estate. The Custodian and Delaware Service Company, Inc. shall
have no responsibility to determine whether any person or persons other than the
Applicant's designated beneficiary may be entitled, under applicable law, to
receive amounts from the Account on account of the death of the Applicant and
shall have no liability to any person for acting in accordance with Applicant's
beneficiary designation.
6. Taxes and Expenses. Any income taxes or other taxes of any kind whatsoever
that may be levied or assessed upon or in respect to the Account, any transfer
taxes incurred in connection with the investment and reinvestment of the assets
of the Account, other administrative expenses incurred by the Custodian in the
performance of its duties, including fees for legal services rendered to the
Custodian, and the compensation to the Custodian shall be paid from the assets
of the Account, unless paid by the Applicant.
7. Termination of Account. This Account shall terminate upon the complete
distribution of the Account to the Applicant or his/her beneficiaries or to
successor individual retirement accounts or annuities.
8. Resignation or Removal of Custodian. The Custodian may resign at any time
upon ninety (90) days notice in writing to the Applicant and to Delaware
Management Company, Inc. or may be removed by Delaware Management Company,
Inc. at any time upon ninety (90) days notice in writing to the Custodian.
Upon such resignation or removal, Delaware Management Company, Inc. will
appoint a successor Custodian. If within sixty (60) days after the
Custodian's resignation or removal, Delaware Management Company, Inc. has not
appointed a successor Custodian which has accepted such appointment, the
Custodian may appoint such successor itself.
9. Custodian's Fees. The Custodian's fees shall be as published or amended
from time to time.
10. Agreements with Investment Advisers. The Custodian, in its discretion, may
enter into an agreement with an investment adviser, registered under the
Investment Adviser's Act of 1940, for the purpose of redeeming investment
company shares held hereunder to pay for market timer services rendered by the
adviser with respect to the Applicant's Account.
11. Applicable Law. This Plan shall be construed under the laws of the
Commonwealth of Pennsylvania, without giving effect to conflict of laws
principles, and shall become effective only upon execution by Custodian at its
offices in Philadelphia, Pennsylvania. The Custodian shall not be called upon to
take any action outside the Commonwealth of Pennsylvania.
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DISCLOSURE STATEMENT
REVOCATION
You are entitled to revoke your individual retirement account ("IRA"), for
any reason and without penalty, by mailing or delivering written notice of
revocation to Delaware Service Company, Inc. within seven days after your
receipt of the IRA Disclosure Statement or within seven days after you establish
your IRA; however, if your IRA is established more than seven days after receipt
of the IRA Disclosure Statement, you may not revoke your IRA. If you wish to
revoke your IRA, mail or deliver your written notice to Delaware Service Co.,
Inc., Retirement Plans Department, 1818 Market Street, Philadelphia, PA 19103.
If mailed, the revocation notice will be considered mailed on the date of
postmark (or if sent by certified or registered mail, the date of certification
or registration) if it is deposited in the mail in the United States in an
envelope or other appropriate wrapper, first class postage prepaid, properly
addressed. While oral revocations are not accepted, you may contact us at (800)
523-1918 (In Philadelphia call 988-1241) if you have any questions with respect
to this procedure. If you should choose to revoke your IRA, the entire amount of
your contribution will be refunded without adjustment for administrative
expenses or any other amount.
REQUIREMENTS OF AN INDIVIDUAL
RETIREMENT ACCOUNT
An Individual Retirement Account investing contributions in any of the Funds
in the Delaware Group is a Custodial Account created in the United States for
the exclusive benefit of an individual or his/her beneficiaries. The written
instrument creating the Custodial Account must satisfy the following
requirements:
1. Except in the case of a rollover contribution (explained below),
contributions must be in cash and may not exceed $2,000, or $2,250 if a
spousal IRA, for any taxable year;
2. The Custodian must be a bank or other person approved by the Secretary of
the Treasury;
3. No part of the IRA funds may be invested in life insurance contracts;
4. The interest of an individual in the IRA must be nonforfeitable;
5. The assets of the IRA may not be commingled with other property except in
a common trust fund or common investment fund; and
6. The entire interest of an individual must be distributed in accordance with
certain rules (explained below under "Distributions").
ELIGIBILITY
You are eligible to establish and contribute to an IRA for any year in which
you work and receive compensation for such work, provided that you have not
attained age 70 1/2 in the year in question. If eligible, both a husband and
wife may each have their own separate IRA. If either spouse is ineligible to
establish an IRA, because the spouse has no "compensation," the other spouse may
be permitted to establish a Spousal IRA.
"Compensation" includes wages, salaries, professional fees, and other
amounts received for personal services, including such items as commissions paid
to salesmen, compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips and bonuses. Compensation also includes
earned income of a self-employed person and any amount includable in an
individual's income as alimony or separate maintenance payments. Compensation
does not include amounts derived from or received as earnings or profits from
property, such as interest, dividends and rent, or any amount not includable in
gross income.
If you satisfy certain requirements, you may also establish an IRA for the
purpose of transferring retirement savings distributed from another individual
retirement account, individual retirement annuity, tax-sheltered annuity or
qualified retirement plan maintained by your employer.
You may have an IRA whether or not you are a participant in any other
retirement plan. However, if you or your spouse are an active participant in
another retirement plan, the amount of your annual contribution which is tax
deductible may be reduced (explained below under "Contributions").
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CONTRIBUTIONS
(A) Deductible Contributions
You may make an annual contribution to your IRA up to a maximum of $2,000(1)
or 100% of your compensation, whichever is less. If neither you nor your spouse
is an "active participant" in an employer maintained retirement plan at any time
during the year, the entire amount of your contribution (within the above
limits) will be tax deductible.
As explained below, if either you or your spouse is an active participant in
an employer maintained retirement plan, but you have adjusted gross income (AGI)
below the "applicable dollar amount," your entire contribution will still be tax
deductible. However, if either you or your spouse is an active participant and
your AGI is above the applicable dollar amount, the amount of your contribution
which is tax deductible will be reduced or eliminated as illustrated by the
chart below:
Tax Deductible Contributions:
Who Qualifies:
If you are not an active participant in
an employer-sponsored retirement plan:
100% deductible at any income level
If you are an active participant in
an employer-sponsored retirement plan:
Adjusted Gross Income Contribution
Married Single Deductibility
--------------- --------------- ---------------
below $40,000 below $25,000 Full
$40,000-$50,000 $25,000-$35,000 Partial
over $50,000 over $35,000 No
In order to be deductible for a taxable year, annual contributions must be
made not later than the due date (without regard to extensions) of your tax
return for the year for which the deduction is claimed.
Definition of Active Participant
You are an "active participant" for a year if you are "covered" by any of the
following retirement plans:
1. A qualified plan described in Section 401(a) of the Internal Revenue Code
(hereinafter the "Code");
2. An annuity plan described in Section 403(a) of the Code;
- ------------
(1) An additional $250 may be contributed to a Spousal IRA for a total of $2,250
for a working and non-working spouse.
3. A plan established for its employees by the United States, by a state or
local government or by an agency or instrumentality thereof (other than an
eligible deferred compensation plan as defined in Section 457(b) of the Code);
4. An annuity contract or custodial account described in Section 403(b) of
the Code;
5. A simplified employee pension (SEP) and salary reduction SEP described in
Section 408(k) of the Code;
6. A trust described in Section 501(c)(18) of the code.
You are considered "covered" by a retirement plan for a year if your employer
or union has a retirement plan of a type described above under which money is
added to your account or you are eligible to earn retirement credits. You are an
active participant for a year even if you are not yet vested in your retirement
benefit. Also, if you make required contributions or voluntary employee
contributions to a retirement plan, you are an active participant. In certain
plans, you may be an active participant even if you were only with the employer
for part of the year. Your active participant status should be indicated on your
Form W-2.
You are not considered an active participant if you are covered by a plan
only because of your service as (1) an Armed Forces Reservist, for less than
ninety (90) days of active service; or (2) a volunteer fire fighter covered for
fire fighting service by a government plan. Of course, if you are covered under
any other plan, these exceptions do not apply.
If you would like specific advice as to whether you are an active participant
in a retirement plan, you should consult with your attorney or a qualified tax
adviser.
AGI Threshold Level
If you or your spouse are an active participant, you must calculate your
adjusted gross income (AGI) for the year (if you and your spouse file a joint
tax return, you must use your combined AGI) to determine whether your IRA
contribution will be deductible. The instructions to your tax return will show
you how to calculate your AGI for this purpose. If you are at or below a certain
AGI level, called the "Threshold Level," you are treated as if you were not an
active participant and can make a deductible contribution under the same rules
as a person who is not an active participant.
If you are single, your AGI Threshold Level is $25,000. If you are married
and file a joint tax return, the Threshold Level is $40,000. If you are married
but file a separate tax return, the Threshold Level is $0. If you and your
spouse file separate tax returns and you live apart at all times during the
year, both you and your spouse will be treated as single in determining the
deductibility of your IRA contributions and your spouse's IRA contributions.
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Calculation of Deduction Limit
If your AGI is less than $10,000 above your Threshold Level, you will still
be able to make a deductible contribution, but it will be limited in amount. The
amount by which your AGI exceeds your Threshold Level (AGI minus Threshold
Level) is called your Excess AGI. The maximum allowable deduction is $2,000 (or
a total of $2,250 for a Spousal IRA). You may calculate your deduction limit by
using the following formula:
$10,000 -- Excess AGI x Maximum Allowable = Deduction
- ---------------------
$10,000 Deduction Limit
You must round up the result to the next highest $10 level. For example, if
the result is $1,525, you must round it up to $1,530. If the final result is
below $200 but above $0, your deduction limit is $200. Your deduction limit
cannot, in any event, exceed 100% of your compensation.
The following examples illustrate the above formula.
Example One: Bob, a single individual, is an active participant in his
employer's retirement plan and has AGI of $28,000. Bob has contributed $2,000 to
his IRA for the current year. Bob will calculate the deductible portion of his
IRA contribution as follows:
1. Bob must first determine the amount of his Excess AGI. His Excess AGI is
equal to his AGI minus his Threshold Level. Because Bob is a single
individual his Threshold Level is $25,000. Thus, his Excess AGI is $3,000
($28,000 -- $25,000).
2. Bob will now determine his deduction limit as follows:
$10,000 -- $3,000 x $2,000 = $1,400
----------------
$10,000
Example Two: Jack and Jane are a married couple who file a joint income tax
return and have a combined AGI of $45,000. Jack is not covered by his employer's
retirement plan. Jane is an active participant in her employer's retirement
plan. Jack and Jane have each contributed $2,000 to their separate IRAs. Jack
and Jane will calculate the deductible portion of their contributions as
follows:
1. Jack and Jane must first determine the amount of their Excess AGI. Since they
are a married couple filing a joint return their Threshold Level is $40,000.
Thus, their Excess AGI is $5,000 ($45,000 -- $40,000).
2. Jack and Jane will each determine their individual deduction limit as
follows:
$10,000 -- $5,000 x $2,000 = $1,000
----------------
$10,000
(B) Non-deductible Contributions
Even if your deduction limit is less than $2,000 ($2,250 for a Spousal IRA),
you may still contribute to your IRA up to the lesser of 100% of your
compensation or $2,000 ($2,250 for a Spousal IRA). The amount of your
contribution which is not deductible will be treated as a non-deductible
contribution to your IRA. You may also choose to treat a contribution as
non-deductible even if you could have deducted part or all of the contribution.
Interest or other earnings on your contribution, whether from deductible or non-
deductible contributions, will not be taxed until distributed to you from the
IRA.
You may make your $2,000 contribution at any time during the year, if your
compensation for the year will be at least $2,000, without having to designate
at such time how much of your contribution will be deductible. When you complete
your tax return, you must then determine how much of your contribution is
deductible. If you determine that all or a portion of your contribution is
non-deductible, you must report such amount to the Internal Revenue Service on
your tax return for the year.
(C) Spousal IRA Contributions
If you and your spouse file a joint income tax return and your spouse either
has no compensation for the taxable year or elects to be treated as having no
compensation for the taxable year, you may establish an IRA for the benefit of
your spouse. If you make contributions on behalf of yourself and your spouse for
a given tax year, the aggregate amount of the contributions to both your IRA and
your spouse's IRA may not exceed the lesser of $2,250 or the amount of your
compensation for such year. The contribution does not have to be split equally
between the IRAs belonging to you and your spouse. However, the total
contributions to either of your IRAs may not exceed $2,000.
You are not permitted to make contributions to your IRA in the year in which
you attain age 70 1/2 and subsequent years; however, you may continue to deduct
contributions to your non-working spouse's IRA until the year in which your
spouse reaches age 70 1/2.
(D) Excess Contributions
If you make a contribution to your IRA in excess of the deductible and
non-deductible limits, whichever is applicable, such amount is an "excess
contribution." A non-deductible 6% excise tax is imposed upon the excess
contribution for the year in which it is made and also for each following year
until it is eliminated. However, the amount of the tax for any year cannot
exceed 6% of the value of your IRA as of the close of the tax year.
You may avoid the imposition of such 6% tax if you withdraw any excess
contributions from your IRA before the due date for filing your federal
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tax return (not including extensions) for the year for which the excess
contribution is made. The earnings attributable to the excess contribution also
must be withdrawn by that date and must be included in your gross income in the
year for which the excess contribution was made. A timely withdrawal of the
excess contributions will permit you to avoid not only the 6% excise tax but
also the 10% penalty tax on premature distributions.
A withdrawal of an excess contribution after the tax return filing date will
avoid the 10% penalty tax on premature distributions, provided that the total
contribution for the year did not exceed $2,250 and no deduction was allowed for
the excess contribution.
As an alternative to withdrawing such excess contribution, you may eliminate
the excess by reducing your future annual contributions below the maximum
allowable amount. However, you will continue to be subject to the 6% excise tax
for each year until the excess contribution is completely eliminated.
(E) Rollover Contributions
A rollover contribution must consist of cash or other assets distributed from
one retirement program and "rolled over" tax free to another. There are two
types of rollover contributions to an IRA. The first type involves the
distribution of cash or other assets from one IRA which is "rolled over" to
another IRA. For this purpose, the term "IRA" includes individual retirement
accounts and individual retirement annuities. The second type involves the
distribution of cash or other assets from a tax-sheltered annuity or custodial
account or from a qualified retirement plan which is "rolled over" to an IRA. A
rollover contribution is neither includable in your income nor deductible.
Unlike annual contributions, rollover contributions are not subject to the
annual $2,000 limitation (or $2,250 in the case of the Spousal IRA) or 100% of
compensation limitation. A rollover contribution may not include any minimum
amounts required to be distributed to you during the calendar year in which you
attain age 70 1/2 or during any subsequent year. A rollover contribution must be
in cash or in shares of the Delaware Group of Funds.
IRA to IRA
If you receive a distribution from another individual retirement account or
individual retirement annuity, you may redeposit all or part of the amount you
receive into your IRA. You must roll over such amount within the sixty (60)-day
period following your receipt of the distribution in order for such amount to
qualify for rollover treatment and in order for such amount to avoid being
treated as a taxable distribution. Amounts not rolled over may also be subject
to the 10% penalty tax on premature distributions. A surviving spouse
beneficiary of an IRA may roll over a distribution from the IRA to the spouse's
own IRA; a non-spouse beneficiary is not eligible to roll over such a
distribution.
A rollover from each separate individual retirement account or individual
retirement annuity is allowed only once a year. The one-year period begins on
the date that you receive the distribution and not on the date it is rolled over
into another IRA. A rollover from one IRA to another should not be confused with
a direct transfer of your IRA assets from one IRA custodian or trustee to
another IRA custodian or trustee. A transfer from one IRA custodian to another
is not considered a rollover and, consequently, is not affected by the
once-a-year limitation on rollovers.
Qualified Retirement Plan to IRA
You may also be eligible for tax-free rollover treatment when you receive a
distribution from your employer's qualified retirement plan or from a
tax-sheltered annuity or custodial account.
In order to qualify for tax-free rollover treatment, a distribution from a
qualified retirement plan must constitute an "eligible rollover distribution."
Any distribution from an employer-sponsored tax-qualified retirement plan or
tax-sheltered annuity or custodial account will qualify as an eligible rollover
distribution unless it is one of the following:
(i) A distribution which is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the employee or the lives (or joint life expectancies) of
the employee and the employee's designated beneficiary, or for a specified
period of 10 years or more.
(ii) The portion of a distribution representing the minimum annual distribution
required after an employee attains age 70 1/2 or dies.
(iii) The non-taxable portion of a distribution representing after-tax
contributions to the plan.
(iv) Certain corrective distributions of elective deferrals, after-tax
contributions and matching contributions.
(v) A distribution to a non-spouse beneficiary of a deceased participant.
(vi) A distribution pursuant to a qualified domestic relations order to an
alternate payee who is neither the participant's spouse or former spouse.
(vii) A distribution to a surviving spouse to the extent the distribution is
subject to the Death Benefit Exclusion under Code section 101(b).
9
<PAGE>
If an eligible rollover distribution is paid to you, it wiII be subject to
mandatory 20% federal income tax withholding. You cannot elect to waive this
withholding tax, even if you intend to take advantage of tax-free rollover
treatment. If cash is available from some other source equal to the amount
withheld and you transfer that amount plus the net amount of the distribution to
your IRA within sixty (60) days after the distribution, no portion of the
eligible rollover distribution will be taxable to you. You may be entitled to a
full refund of the 20% withheld, depending upon your tax situation for the year.
If you roll over only the amount of the distribution actually received by you
and do not roll over an amount equal to the 20% withheld, you will be taxed on
the 20% withheld, and may be subject to a 10% additional tax on premature
distributions if you are younger than age 59 1/2.
However, the 20% withholding can be avoided by making a "direct rollover" to
your IRA. A direct rollover is a direct payment by the distributing
tax-qualified retirement plan or tax-sheltered annuity or custodial account to
your IRA rather than to you. If your eligible rollover distribution is at least
$200, your employer's plan must give you the option to make a direct rollover of
your eligible rollover distribution to an IRA.
The eligible rollover distribution rules also apply to distributions to a
surviving spouse who is a beneficiary of a deceased participant. These rules
also apply to distributions to a spouse or former spouse who is an alternate
payee with respect to a participant's benefits under a qualified domestic
relations order.
DISTRIBUTIONS
The IRA distribution rules are similar to the rules for distributions from
qualified retirement plans, in accordance with proposed regulations issued by
the Secretary of the Treasury. As of the date of issuance of this Disclosure
Statement, the regulations have not been finalized. Accordingly, the description
below of the distribution rules will be subject to modification upon issuance of
final regulations.
(A) Normal Distributions
Your IRA is intended to provide a source of income to you upon your
retirement on or after age 59 1/2 or if you become disabled. Distributions other
than amounts rolled over into another IRA or qualified plan are taxed as
ordinary income in the year received by you. With certain exceptions,
distributions which occur prior to age 59 1/2 will be subject to a 10%
additional tax on premature distributions (explained below).
(B) Required Distributions
While distributions from your IRA may commence any time, such distributions
must commence on or before the first day of April of the year following the year
in which you attain age 70 1/2 (known as the "Required Beginning Date").
Distributions must be paid to you in accordance with one of the following
methods:
(i) A single lump sum payment; or
(ii) In monthly, quarterly or annual payments over a period certain not
extending beyond your life expectancy or the joint and last survivor
expectancy of you and your designated beneficiary.
Even though distributions may have commenced in the method explained in
option (ii) above, you may receive a distribution of the balance in your IRA at
any time. Distributions may be received in a single payment or in installment
payments (but distributions which will be rolled over must exclude any minimum
amount required to be distributed during that calendar year).
If you elect to have your IRA distributed in other than a single payment, the
amount to be distributed each year, beginning with the first calendar year for
which distributions are required and for each succeeding year, must be at
least equal to the amount determined by dividing the entire amount of your IRA
as of the preceding December 31 by your life expectancy or by the joint and last
survivor life expectancies of you and your designated beneficiary. If your
designated benficiary is not your spouse and is more than 10 years younger than
you, your beneficiary will be treated as if he/she were only 10 years younger
than you for purposes of determining the joint life expectancy of you and your
beneficiary. In order to enforce such minimum distribution requirements, a 50%
tax is imposed on the amount, if any, by which the minimum required distribution
exceeds the actual amount distributed. If the failure to make the minimum
distribution is due to a reasonable error and steps are taken to remedy such
error, the 50% tax may be waived by the Internal Revenue Service.
If you have more than one IRA, you can satisfy the minimum distribution
requirements by taking from one IRA the amount required to satisfy the
requirement for all other IRAs.
(C) Distributions After Death
At the time that you establish your IRA, you have the right to select a
beneficiary who will be entitled to receive the balance in your IRA if you
should die prior to the complete distribution of your IRA. You have the right,
prior to the complete distribution of your IRA, to change your designation of
beneficiary. If you fail to properly designate a beneficiary, your estate will
be treated as your designated beneficiary.
10
<PAGE>
If you should die after the distribution of your IRA has commenced, the
remaining portion of your IRA will continue to be distributed at least as
rapidly as under the method of distribution being used prior to your death. If
you should die before the distribution of your IRA has commenced, the entire
interest in your IRA must be distributed in accordance with one of the following
provisions:
(i) The entire balance of your IRA is distributed by the December 31 of the
year containing the fifth anniversary of your death;
(ii) If the balance of your IRA is payable to a designated beneficiary, such
amount may be distributed in substantially equal periodic installments
over the life expectancy of the beneficiary commencing no later than the
December 31 of the year after your death;
(iii) If the designated beneficiary is your surviving spouse, your spouse may
elect to receive periodic payments over his/her life expectancy,
commencing at any date prior to the later of (1) the December 31 of the
year following your death or (2) the December 31 of the year in which you
would have attained age 70 1/2;
(iv) If the designated beneficiary is your surviving spouse, your spouse may
elect to treat your IRA as his/her own IRA and receive distributions under
the general distribution rules discussed above.
TAX TREATMENT OF DISTRIBUTIONS
(A) Income Tax
As a general rule, distributions from your IRA are taxable to you as ordinary
income. However, if non-deductible contributions have been made to your IRA,
the portion of your IRA distribution consisting of non-deductible contributions
will not be taxed again when received by you. If you make any non-deductible IRA
contributions, each distribution from your IRA will consist of a non-taxable
portion (return of non-deductible contributions) and a taxable portion (return
of deductible contributions, if any, and earnings). Thus, you may not take a
distribution which is entirely tax-free. The following formula is used to
determine the non-taxable portion of your distributions for a tax year:
Non-deductible Non-taxable
Contributions x Total Distribution = Distributions
---------------------- (for the year) (for the year)
Year-end IRA Balance
In determining your year-end IRA balance, you add back all distributions
taken during the year.
The following example illustrates how you will determine the non-taxable
portion of your distributions for a taxable year.
Example: Mary has made the following contributions to her IRA:
YEAR DEDUCTIBLE NON-DEDUCTIBLE
1985 $2,000 $0
1986 $2,000 $0
1987 $2,000 $0
1988 $1,000 $1,000
1989 $0 $2,000
------ ------
$7,000 $3,000
During 1990, Mary receives a $1,000 distribution from her IRA. On December
31, 1990 the total value of Mary's IRA is $11,000. The non-taxable portion of
the distribution she received during 1990 is determined as follows:
$3,000 x $1,000 = $250
--------------
11,000 + 1,000
To determine your year end balance you treat all of your IRAs as a single
IRA. This includes all regular IRAs, as well as simplified employee pension
(SEP) IRAs, salary reduction SEPs, and rollover IRAs.
A single lump sum distribution from your IRA is not entitled to special
10-year averaging, five-year averaging or capital gains treatment.
(B) Federal Income Tax Withholding
Distributions from your IRA are subject to Federal income tax withholding
unless the recipient elects in writing that no taxes be withheld. If the total
account balance or a portion of the account balance is distributed, then the
withheld amount will equal 10% of the distribution. If the distribution is part
of a series of periodic payments, the withheld amount will be calculated as if
the distribution were wages, and Form W-4P must be completed.
(C) Early Withdrawal Tax
In general, distributions from your IRA which occur prior to age 59 1/2 will
be subject to adverse tax consequences. Not only will such distributions be
fully taxable to you as ordinary income (subject to the formula described above
for determining the non-taxable portion of your distribution), such
distributions will also be subject to a 10% additional premature distribution
tax.
In addition to the exceptions for rollovers and the return of excess
contributions discussed above, distributions on account of your death or
disability will be exempt from the 10% additional tax. You are considered
11
<PAGE>
disabled if you are unable to engage in any substantial gainful activity because
of a medically determinable physical or mental impairment which can be expected
to result in death or to be of long, continued and indefinite duration. In
addition, distributions before age 59 1/2 are not subject to the 10% tax if made
in the form of substantially equal periodic payments and are made for your life
(or life expectancy) or the joint lives (or joint life expectancies) of you and
your designated beneficiary.
A transfer of amounts held in your IRA to your spouse's or former spouse's
IRA pursuant to a divorce or separation instrument will not be taxable as
ordinary income or subject to the 10% additional tax.
(D) Gift Tax
Your designation of a beneficiary for your IRA will not be treated as a gift
and will not subject you to Federal gift taxes.
(E) Estate Tax
Any amounts remaining in your IRA after your death will be included in your
gross estate and may be subject to Federal estate tax.
BORROWING/PROHIBITED TRANSACTIONS
You may not use the IRA or any portion of the IRA as security for a loan. If
you do, the portion pledged as security will be treated as distributed to you,
and will thus be includable in your taxable income for that year. Certain other
transactions (called "prohibited transactions" in the Code) may also result in
the disqualification of your IRA and the inclusion in income of the fair market
value of the IRA. Neither you, nor your beneficiary, may engage in any of the
following prohibited transactions with the IRA:
(a) a sale, exchange, or leasing of any property;
(b) lending of money or other extension of credit;
(c) furnishing of goods, services or facilities;
(d) the transfer or use of income or assets of the IRA by you or your
beneficiary.
If such transactions are engaged in, your IRA will be disqualified and will
lose its tax-exempt status. Under such circumstances, your IRA will be
considered to have been distributed to you and will be subject to the income and
additional taxes discussed above.
REPORTING TO THE IRS
(A) FORM 5329
If a transaction has occurred upon which a special penalty tax is imposed,
such as an excess contribution, a premature distribution or a failure to make a
timely distribution, you are required to file Form 5329 with your income tax
return for the year of the transaction. Form 5329 need not be filed if the only
activity for the year is the making of contributions or the distribution of
permissible benefits.
(B) FORM 8606
You are required to file Form 8606 if you make a non-deductible IRA
contribution.
IRS APPROVAL
The Delaware Group Prototype IRA has previously been approved by the Internal
Revenue Service as to its written form. Since that time, it has been amended to
conform to changes in the law and has been resubmitted to the Internal Revenue
Service for approval. At the time this Disclosure Statement was prepared, the
Internal Revenue Service had not reviewed the amendments.
Please be aware that the Internal Revenue Service's approval is a
determination only as to the form of the IRA and does not represent a
determination as to the merits of your particular IRA.
IRA ACCOUNT BALANCE
Each of the mutual fund shares held in your IRA has an equal interest in the
assets, net investment income and capital gains of the mutual fund selected. The
value of the shares is dependent upon, among other things, the market values of
the securities in the mutual fund's investment portfolio, which are subject to
fluctuation; therefore, growth in the value of your IRA cannot be projected or
guaranteed. Dividends from net investment income and any capital gains
distributions paid by the mutual fund selected will be reinvested in fund shares
at the net asset value thereof as of the respective ex-dividend dates, and such
additional shares will be credited to your IRA.
12
<PAGE>
FEES AND CHARGES
(A) IRA Fees
In general, there is an annual maintenance fee (currently $15 per year) for
your IRA. If an investor owns more than one Delaware Group IRA or opens a
Delaware Group IRA and invests in multiple funds within the Delaware Group,
however, only one fee per Social Security number will be charged. IRA fees are
deducted from the IRA during May of each year, unless paid directly by the
shareholder to the Custodian prior to May of each calendar year. The IRA fees
are subject to change.
(B) Mutual Fund Sales Charges
A sales charge will be made against your investment except for Delaware Group
Cash Reserve and Delaware Group U.S. Government Money Fund. For investments
under $1 million, sales charge rates range from a maximum of 8.50% to 1.5% of
the offering price of the fund shares. Depending on the Delaware Group fund
selected, the maximum rate applicable to an initial $1,000 contribution would be
8.50%, 5.75%, 4.75% or 3.00%. The maximum rate is applicable to subsequent
contributions of $1,000 until the value of the fund shares meets or exceeds a
level that qualifies the shareholder to receive a reduced sales charge. An
account value of $10,000 reduces the sales charge for funds at the maximum 8.50%
level to 7.75%. The sales charge for funds with a maximum of 5.75% is reduced to
4.75% when the account reaches $100,000.
The sales charge for funds with a maximum of 4.75% is reduced to 3.75% when
the account reaches $100,000. The sales charge for funds with a maximum of 3.00%
is reduced to 2.50% when the account reaches $100,000. Further sales charge
reductions at lower rates are applicable on larger purchases and on purchases
under the fund's Right of Accumulation and Letter of Intention. Group purchases
that meet our minimum standard may be subject to a different sales charge.
Reduced sales charges also apply to the combination of shares of any of the
funds in the Delaware Group (except Delaware Group Cash Reserve and Delaware
Group U.S. Government Money Fund, unless they were acquired through an exchange
or unless the inclusion of such shares brings your total account balance to $1
million) held by you and those held in your IRA.
(C) Redemption and Repurchase Charges
Neither the fund nor the national distributor makes a charge for redemptions
or repurchases.
(D) Further Details
Please refer to the prospectus of the fund or funds selected as your
investment for further details, including current charges and expenses.
QUALIFIED TAX ADVICE
The above is only a general description of taxation of IRAs. Because of the
unfavorable tax consequences which could result from the improper establishment
or use of an IRA, you may wish to consult with an attorney or qualified tax
adviser. Neither Delaware Management Company, Inc., Delaware Service Co., Inc.,
the Delaware Group of Funds nor the Custodian assumes any liability for tax
consequences to investors or beneficiaries arising from IRAs.
13
<PAGE>
DELAWARE
GROUP
========
IRA
(PHOTO OF LARGE KEY)
|| PLAN DOCUMENT
|| TERMS AND CONDITIONS
|| DISCLOSURE STATEMENT
||=========================
THE DELAWARE ORGANIZATION
| | Delaware Management Company, Inc.
Investment Manager
| | Delaware Distributors, L.P.
National Distributor
| | Delaware Service Company, Inc.
Shareholder Servicing, Dividend
Disbursing and Transfer Agent
| | Delaware Management Trust Company
Custodian
RETIREMENT
1818 Market Street PLANNING (LOGO)
Philadelphia, PA 19103-3682 IS THE KEY
800-523-4640
In Philadelphia 215-988-1333
RL-101-150M-12/93-U
Printed in the U.S.A.
<PAGE>
CLAIMS PROCEDURE
The Employer shall establish a claims procedure in accordance with the
requirements of the Employee Retirement Income Security Act of 1974, as amended,
if applicable, for the presentation of claims under the terms of the SEP
Document. A claim is a request for a plan benefit, including participation and
contributions, by an Employee or Beneficiary. The Employer shall make all
determinations as to the eligibility of any Employee for plan participation or
Employer contribution. In the event the claim is denied, the Employer shall
provide written notice of its determination to the Employee or Beneficiary
within ninety (90) days after receipt of the claim unless special circumstances
require an extension of time for processing the claim. If such an extension of
time for processing is required, written notice of the extension shall be
furnished to the claimant prior to the termination of the initial 90-day
period. The written notice will be set forth in a manner that may be understood
by the claimant and shall include:
1) The reason for the denial.
2) Specific reference to pertinent plan provisions on which the denial is
based.
3) Additional information necessary for the claimant to perfect the claim and
why the information is necessary.
4) Information about the procedures for submitting the denied claim for
review.
RL-210-1/93-5M-U
<PAGE>
EXHIBIT 99.B16
DELAWARE GROUP TREND FUND A
TOTAL RETURN PERFORMANCE
THREE MONTHS
- --------------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $13.56
Initial Shares 73.746
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------------
<S> <C> <C> <C> <C>
1995 73.746 $0.000 -0.000 73.746
- --------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 73.746
Ending NAV $14.21
----------
Investment Return $1,047.93
Total Return Performance
- -----------------
Investment Return $1,047.93
Less Initial Investment $1,000.00
----------
$47.93 / $1,000.00 x 100
Total Return: 4.7931%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND A
TOTAL RETURN PERFORMANCE
SIX MONTHS
- --------------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $12.47
Initial Shares 80.192
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------------
<S> <C> <C> <C> <C>
1995 80.192 $0.000 -0.000 80.192
- --------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 80.192
Ending NAV $14.21
----------
Investment Return $1,139.53
Total Return Performance
- -----------------
Investment Return $1,139.53
Less Initial Investment $1,000.00
----------
$139.53 / $1,000.00 x 100
Total Return: 13.9528%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND A
TOTAL RETURN PERFORMANCE
NINE MONTHS
- ----------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $12.92
Initial Shares 77.399
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
1995 77.399 $0.000 -0.000 77.399
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 77.399
Ending NAV $14.21
----------
Investment Return $1,099.84
Total Return Performance
- -----------------
Investment Return $1,099.84
Less Initial Investment $1,000.00
----------
$99.84 / $1,000.00 x 100
Total Return: 9.9840%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND A
TOTAL RETURN PERFORMANCE
ONE YEAR
- -------- - ------------ ------------- ----------- --------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $12.95
Initial Shares 77.220
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------- - ------------ ------------- ----------- --------------
<S> <C> <C> <C> <C>
1995 77.220 $0.790 5.319 82.539
- -------- - ------------ ------------- ----------- --------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 82.539
Ending NAV x $14.21
-----------
Investment Return $1,172.88
Total Return Performance
- ------------------------
Investment Return $1,172.88
Less Initial Investment $1,000.00
-----------
$172.88 / $1,000.00 x 100
Total Return: 17.29%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND A
TOTAL RETURN PERFORMANCE
THREE YEARS
- ------------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $12.07
Initial Shares 82.850
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
1993 82.850 $1.150 8.361 91.211
- ------------------------------------------------------------------
1994 91.211 $1.640 13.840 105.051
- ------------------------------------------------------------------
1995 105.051 $0.790 7.235 112.286
- ------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 112.286
Ending NAV x $14.21
----------
Investment Return $1,595.58
Total Return Performance
- ------------------
Investment Return $1,595.58
Less Initial Investment $1,000.00
----------
$595.58 / $1,000.00 x 100
Total Return: 59.56%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND A
TOTAL RETURN PERFORMANCE
FIVE YEARS
- ------------------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $10.58
Initial Shares 94.518
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1991 94.518 $0.570 6.033 100.551
- ------------------------------------------------------------------------
1992 100.551 $0.160 1.363 101.914
- ------------------------------------------------------------------------
1993 101.914 $1.150 10.285 112.199
- ------------------------------------------------------------------------
1994 112.199 $1.940 17.024 129.223
- ------------------------------------------------------------------------
1995 129.223 $0.790 8.900 138.123
- ------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 138.123
Ending NAV x $14.21
----------
Investment Return $1,962.73
- -----------------
Investment Return $1,962.73
Less Initial Investment $1,000.00
----------
$962.73 / $1,000.00 x 100
Total Return: 96.27%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND A
TOTAL RETURN PERFORMANCE
TEN YEARS
- -------------------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $6.82
Initial Shares 146.628
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1986 146.628 $0.128 2.963 149.591
- ------------------------------------------------------------------------
1987 149.591 $0.000 0.000 149.591
- ------------------------------------------------------------------------
1988 149.591 $0.000 0.000 149.591
- ------------------------------------------------------------------------
1989 149.591 $0.320 6.233 155.824
- ------------------------------------------------------------------------
1990 155.824 $2.270 38.396 194.220
- ------------------------------------------------------------------------
1991 194.220 $0.570 12.397 206.617
- ------------------------------------------------------------------------
1992 206.617 $0.160 2.802 209.419
- ------------------------------------------------------------------------
1993 209.419 $1.150 21.134 230.553
- ------------------------------------------------------------------------
1994 230.553 $1.940 34.982 265.535
- ------------------------------------------------------------------------
1995 265.535 $0.790 18.289 283.824
- ------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 283.824
Ending NAV $14.21
---------
Investment Return $4,033.14
Total Return Performance
- -----------------
Investment Return $4,033.14
Less Initial Investment $1,000.00
---------
$3,033.14 /$1,000.00 x 100
Total Return: 303.31%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND A
TOTAL RETURN PERFORMANCE
FIFTEEN YEARS
- ---------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $3.80
Initial Shares 263.158
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
1981 263.158 $0.143 10.331 273.489
- ---------------------------------------------------------------
1982 273.489 $0.200 11.278 284.767
- ---------------------------------------------------------------
1983 284.767 $1.755 64.552 349.319
- ---------------------------------------------------------------
1984 349.319 $0.000 0.000 349.319
- ---------------------------------------------------------------
1985 349.319 $0.081 5.246 354.565
- ---------------------------------------------------------------
1986 354.565 $0.128 7.164 361.729
- ---------------------------------------------------------------
1987 361.729 $0.000 0.000 361.729
- ---------------------------------------------------------------
1988 361.729 $0.000 0.000 361.729
- ---------------------------------------------------------------
1989 361.729 $0.320 15.072 376.801
- ---------------------------------------------------------------
1990 376.801 $2.270 92.847 469.648
- ---------------------------------------------------------------
1991 469.648 $0.570 29.978 499.626
- ---------------------------------------------------------------
1992 499.626 $0.160 6.775 506.401
- ---------------------------------------------------------------
1993 506.401 $1.150 51.104 557.505
- ---------------------------------------------------------------
1994 557.505 $1.940 84.591 642.096
- ---------------------------------------------------------------
1995 642.096 $0.790 44.225 686.321
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 686.321
Ending NAV $14.21
----------
Investment Return $9,752.62
Total Return Performance
- -----------------
Investment Return $9,752.62
Less Initial Investment $1,000.00
----------
$8,752.62 / $1,000.00 x 100
Total Return: 875.26%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND A
TOTAL RETURN PERFORMANCE
LIFE OF FUND
- -----------------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $4.86
Initial Shares 205.761
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------
<S> <C> <C> <C> <C>
1969 205.761 $0.000 -0.000 205.761
- --------------------------------------------------------------------
1970 205.761 $0.028 1.470 207.231
- --------------------------------------------------------------------
1971 207.231 $0.103 7.453 214.684
- --------------------------------------------------------------------
1972 214.684 $0.055 3.067 217.751
- --------------------------------------------------------------------
1973 217.751 $0.000 3.279 221.030
- --------------------------------------------------------------------
1974 221.030 $0.000 0.000 221.030
- --------------------------------------------------------------------
1975 221.030 $0.025 0.000 221.030
- --------------------------------------------------------------------
1976 221.030 $0.025 2.669 223.699
- --------------------------------------------------------------------
1977 223.699 $0.015 1.428 225.127
- --------------------------------------------------------------------
1978 225.127 $0.030 2.691 227.818
- --------------------------------------------------------------------
1979 227.818 $0.068 5.178 232.996
- --------------------------------------------------------------------
1980 232.996 $0.065 5.204 238.200
- --------------------------------------------------------------------
1981 238.200 $0.143 9.351 247.551
- --------------------------------------------------------------------
1982 247.551 $0.200 10.208 257.759
- --------------------------------------------------------------------
1983 257.759 $1.755 58.430 316.189
- --------------------------------------------------------------------
1984 316.189 $0.000 0.000 316.189
- --------------------------------------------------------------------
1985 316.189 $0.081 4.749 320.938
- --------------------------------------------------------------------
1986 320.938 $0.128 6.485 327.423
- --------------------------------------------------------------------
1987 327.423 $0.000 0.000 327.423
- --------------------------------------------------------------------
1988 327.423 $0.000 0.000 327.423
- --------------------------------------------------------------------
1989 327.423 $0.320 13.643 341.066
- --------------------------------------------------------------------
1990 341.066 $2.270 84.041 425.107
- --------------------------------------------------------------------
1991 425.107 $0.570 27.134 452.241
- --------------------------------------------------------------------
1992 452.241 $0.160 6.132 458.373
- --------------------------------------------------------------------
1993 458.373 $1.150 46.257 504.630
- --------------------------------------------------------------------
1994 504.630 $1.940 76.569 581.199
- --------------------------------------------------------------------
1995 581.199 $0.790 40.030 621.229
- --------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 621.229
Ending NAV x $14.21
----------
Investment Return $8,827.66
Total Return Performance
- -----------------
Investment Return $8,827.66
Less Initial Investment $1,000.00
----------
$7,827.66 / $1,000.00 x 100
Total Return: 782.77%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND A
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1995
- ----------- ----------------------------------- --------------------
Average Annual Compounded Rate of Return:
n
P(1 + T) = ERV
ONE
YEAR
- -----------
1
$1000(1 - T) = $1,172.88
T = 17.29%
THREE
YEARS
- -----------
3
$1000(1 - T) = $1,595.58
T = 16.85%
FIVE
YEARS
- -----------
5
$1000(1 - T) = $1,962.73
T = 14.44%
TEN
YEARS
- -----------
10
$1000(1 - T) = $4,033.14
T = 14.96%
FIFTEEN
YEARS
- -----------
15
$1000(1 - T) = $9,752.62
T = 16.40%
LIFE OF
FUND
- -----------
26.74179205
$1000(1 - T) = $8,827.66
T = 8.49%
<PAGE>
DELAWARE GROUP TREND FUND A
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1995
- ---------------------------------------------
Average Annual Compounded Rate of Return:
n
P(1 + T) = ERV
ONE
YEAR
- -----------
1
$1000(1 - T) = $1,243.96
T = 24.40%
THREE
YEARS
- -----------
3
$1000(1 - T) = $1,692.3
T = 19.17%
FIVE
YEARS
- -----------
5
$1000(1 - T) = $2,082.8
T = 15.81%
TEN
YEARS
- -----------
10
$1000(1 - T) = $4,277.7
T = 15.64%
FIFTEEN
YEARS
- -----------
15
$1000(1 - T) = $10,351
T = 16.86%
LIFE
OF FUND
- -----------
26.74179205
$1000(1 - T) = $9,367.40
T = 8.73%
<PAGE>
DELAWARE GROUP TREND FUND B
TOTAL RETURN PERFORMANCE
THREE MONTHS (INCLUDING CDSC)
- ----------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $12.74
Initial Shares 78.493
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------
<S> <C> <C> <C> <C>
1994 78.493 $0.000 0.000 78.493
- -------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 78.493
Ending NAV x $14.13
-----------
$1,109.11
Less CDSC $40.00
-----------
Investment Return $1,069.11
Total Return Performance
- -----------------
Investment Return $1,069.11
Less Initial Investment $1,000.00
-----------
$69.11 / $1,000.00 x 100
Total Return: 6.91%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND B
TOTAL RETURN PERFORMANCE
THREE MONTHS (EXCLUDING CDSC)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $12.74
Initial Shares 78.493
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------
<S> <C> <C> <C> <C>
1994 78.493 $0.000 0.000 78.493
- --------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 78.493
Ending NAV x $14.13
-----------
Investment Return $1,109.11
Total Return Performance
- -----------------
Investment Return $1,109.11
Less Initial Investment $1,000.00
-----------
$109.11 / $1,000.00 x 100
Total Return: 10.91%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND B
TOTAL RETURN PERFORMANCE
SIX MONTHS (INCLUDING CDSC)
- -------- - ------------ ------------- ----------- --------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $11.73
Initial Shares 85.251
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------- - ------------ ------------- ----------- --------------
<S> <C> <C> <C> <C>
1994 85.251 $0.000 -0.000 85.251
- -------- - ------------ ------------- ----------- --------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 85.251
Ending NAV x $14.13
-----------
$1,204.60
Less CDSC $40.00
-----------
Investment Return $1,164.60
Total Return Performance
- ------------------------
Investment Return $1,164.60
Less Initial Investment $1,000.00
-----------
$164.60 / $1,000.00 x 100
Total Return: 16.46%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND B
TOTAL RETURN PERFORMANCE
SIX MONTHS (EXCLUDING CDSC)
- -------- - ----------- - ------------ - ---------- - ---------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $11.73
Initial Shares 85.251
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------- - ----------- - ------------ - ---------- - --------------
<S> <C> <C> <C> <C>
1994 85.251 $0.000 -0.000 85.251
- -------- - ----------- - ------------ - ---------- - --------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 85.251
Ending NAV $14.13
----------
Investment Return $1,204.60
Total Return Performance
- ------------------------
Investment Return $1,204.60
Less Initial Investment $1,000.00
----------
$204.60 / $1,000.00 x 100
Total Return: 20.4597%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND B
TOTAL RETURN PERFORMANCE
NINE MONTHS (INCLUDING CDSC)
- ------------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $12.17
Initial Shares 82.169
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ------------------------------------------------------------------
<S> <C> <C> <C> <C>
1994 82.169 $0.000 -0.000 82.169
- ------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 82.169
Ending NAV $14.13
----------
$1,161.05
Less CDSC $40.00
----------
Investment Return $1,121.05
Total Return Performance
- -----------------
Investment Return $1,121.05
Less Initial Investment $1,000.00
----------
$121.05 / $1,000.00 x 100
Total Return: 12.11%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND B
TOTAL RETURN PERFORMANCE
NINE MONTHS (EXCLUDING CDSC)
- -------------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $12.17
Initial Shares 82.169
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
1994 82.169 $0.000 -0.000 82.169
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 82.169
Ending NAV $14.13
----------
Investment Return $1,161.05
Total Return Performance
- -----------------
Investment Return $1,161.05
Less Initial Investment $1,000.00
----------
$161.05 / $1,000.00 x 100
Total Return: 16.11%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND B
TOTAL RETURN PERFORMANCE
LIFE OF FUND(INCLUDING CDSC)
- -----------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $12.11
Initial Shares 82.576
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -----------------------------------------------------------------
<S> <C> <C> <C> <C>
1994 82.576 $0.000 -0.000 82.576
- -----------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 82.576
Ending NAV $14.13
----------
$1,166.80
Less CDSC $40.00
----------
Investment Return $1,126.80
Total Return Performance
- -----------------
Investment Return $1,126.80
Less Initial Investment $1,000.00
----------
$126.80 / $1,000.00 x 100
Total Return: 12.68%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND B
TOTAL RETURN PERFORMANCE
LIFE OF FUND (EXCLUDING CDSC)
- ---------------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $12.11
Initial Shares 82.576
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
1994 82.576 $0.000 -0.000 82.576
- ---------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 82.576
Ending NAV $14.13
----------
Investment Return $1,166.80
Total Return Performance
- -----------------
Investment Return $1,166.80
Less Initial Investment $1,000.00
----------
$166.80 / $1,000.00 x 100
Total Return: 16.68%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND INSTITUITONAL
TOTAL RETURN PERFORMANCE
THREE MONTHS
- -----------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $12.86
Initial Shares 77.760
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -----------------------------------------------------------------
<S> <C> <C> <C> <C>
1995 77.760 $0.000 -0.000 77.760
- -----------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 77.760
Ending NAV $14.30
----------
Investment Return $1,111.97
Total Return Performance
- ------------------
Investment Return $1,111.97
Less Initial Investment $1,000.00
----------
$111.97 / $1,000.00 x 100
Total Return: 11.1968%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND INSTITUITIONAL
TOTAL RETURN PERFORMANCE
SIX MONTHS
- ------------------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $11.81
Initial Shares 84.674
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1995 84.674 $0.000 -0.000 84.674
- ------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 84.674
Ending NAV $14.30
----------
Investment Return $1,210.84
Total Return Performance
- -----------------
Investment Return $1,210.84
Less Initial Investment $1,000.00
----------
$210.84 / $1,000.00 x 100
Total Return: 21.0838%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND INSTITUITIONAL
TOTAL RETURN PERFORMANCE
NINE MONTHS
- -----------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $12.23
Initial Shares 81.766
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -----------------------------------------------------------------
<S> <C> <C> <C> <C>
1995 81.766 $0.000 -0.000 81.766
- -----------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 81.766
Ending NAV $14.30
----------
Investment Return $1,169.25
Total Return Performance
- -----------------
Investment Return $1,169.25
Less Initial Investment $1,000.00
----------
$169.25 / $1,000.00 x 100
Total Return: 16.9254%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND INSTITUITONAL
TOTAL RETURN PERFORMANCE
ONE YEAR
- ----------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $12.25
Initial Shares 81.633
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
1995 81.633 $0.790 5.598 87.231
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 87.231
Ending NAV x $14.30
-----------
Investment Return $1,247.40
Total Return Performance
- -----------------
Investment Return $1,247.40
Less Initial Investment $1,000.00
-----------
$247.40 / $1,000.00 x 100
Total Return: 24.74%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND INSTITUITONAL
TOTAL RETURN PERFORMANCE
THREE YEARS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $11.38
Initial Shares 87.873
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
1993 87.873 $1.150 8.868 96.741
- ----------------------------------------------------------------
1994 96.741 $1.640 14.657 111.398
- ----------------------------------------------------------------
1995 111.398 $0.790 7.639 119.037
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 119.037
Ending NAV x $14.30
-----------
Investment Return $1,702,23
Total Return Performance
- -----------------
Investment Return $1,702,23
Less Initial Investment $1,000.00
-----------
$702,23 / $1,000.00 x 100
Total Return: 70.22%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND INSTITUTIONAL
TOTAL RETURN PERFORMANCE
FIVE YEARS
- ------------------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $9.97
Initial Shares 100.301
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1991 100.301 $0.570 6.402 106.703
- ------------------------------------------------------------------------
1992 106.703 $0.160 1.447 108.150
- ------------------------------------------------------------------------
1993 108.150 $1.150 10.914 119.064
- ------------------------------------------------------------------------
1994 119.064 $1.940 18.038 137.102
- ------------------------------------------------------------------------
1995 137.102 $0.790 9.402 146.504
- ------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 146.504
Ending NAV x $14.30
-------------
Investment Return $2,095.01
- -----------------
Investment Return $2,095.01
Less Initial Investment $1,000.00
-------------
$1,095.01 / $1,000.00 x 100
Total Return: 109.50%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND INSTITUTIONAL
TOTAL RETURN PERFORMANCE
TEN YEARS
- -------------------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $6.43
Initial Shares 155.521
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1986 155.521 $0.128 12.364 158.663
- ------------------------------------------------------------------------
1987 158.663 $0.000 12.364 158.663
- ------------------------------------------------------------------------
1988 158.663 $0.000 12.364 158.663
- ------------------------------------------------------------------------
1989 158.663 $0.320 12.364 165.274
- ------------------------------------------------------------------------
1990 165.274 $2.270 12.364 205.998
- ------------------------------------------------------------------------
1991 205.998 $0.570 12.364 219.147
- ------------------------------------------------------------------------
1992 219.147 $0.160 12.364 222.118
- ------------------------------------------------------------------------
1993 222.118 $1.150 12.364 244.533
- ------------------------------------------------------------------------
1994 244.533 $1.940 12.364 281.581
- ------------------------------------------------------------------------
1995 281.581 $0.790 12.364 300.891
- ------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 300.891
Ending NAV $14.30
-----------
Investment Return $4,302.74
Total Return Performance
- -----------------
Investment Return $4,302.74
Less Initial Investment $1,000.00
-----------
$3,302.74 / $1,000.00 x 100
Total Return: 330.27%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND INSTITUTIONAL
TOTAL RETURN PERFORMANCE
FIFTEEN YEARS
- ---------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $3.58
Initial Shares 279.330
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
1981 279.330 $0.143 10.965 290.295
- ---------------------------------------------------------------
1982 290.295 $0.200 11.971 302.266
- ---------------------------------------------------------------
1983 302.266 $1.755 68.520 370.786
- ---------------------------------------------------------------
1984 370.786 $0.000 0.000 370.786
- ---------------------------------------------------------------
1985 370.786 $0.081 5.569 376.355
- ---------------------------------------------------------------
1986 376.355 $0.128 7.605 383.960
- ---------------------------------------------------------------
1987 383.960 $0.000 0.000 383.960
- ---------------------------------------------------------------
1988 383.960 $0.000 0.000 383.960
- ---------------------------------------------------------------
1989 383.960 $0.320 15.998 399.958
- ---------------------------------------------------------------
1990 399.958 $2.270 98.553 498.511
- ---------------------------------------------------------------
1991 498.511 $0.570 31.820 530.331
- ---------------------------------------------------------------
1992 530.331 $0.160 7.191 537.522
- ---------------------------------------------------------------
1993 537.522 $1.150 54.245 591.767
- ---------------------------------------------------------------
1994 591.767 $1.940 89.656 681.423
- ---------------------------------------------------------------
1995 681.423 $0.790 46.730 728.153
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 728.153
Ending NAV $14.30
-----------
Investment Return $10,412.59
Total Return Performance
- -----------------
Investment Return $10,412.59
Less Initial Investment $1,000.00
-----------
$9,412.59 / $1,000.00 x 100
Total Return: 941.26%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND INSTITUTIONAL
TOTAL RETURN PERFORMANCE
LIFE OF FUND
- ----------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $4.58
Initial Shares 218.341
</TABLE>
<TABLE>
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
1969 218.341 $0.000 0.000 218.341
- ----------------------------------------------------------------
1970 218.341 $0.028 1.560 219.901
- ----------------------------------------------------------------
1971 219.901 $0.103 7.909 227.810
- ----------------------------------------------------------------
1972 227.810 $0.055 3.254 231.064
- ----------------------------------------------------------------
1973 231.064 $0.000 0.000 231.064
- ----------------------------------------------------------------
1974 231.064 $0.000 0.000 231.064
- ----------------------------------------------------------------
1975 231.064 $0.025 3.480 234.544
- ----------------------------------------------------------------
1976 234.544 $0.025 2.833 237.377
- ----------------------------------------------------------------
1977 237.377 $0.015 1.515 238.892
- ----------------------------------------------------------------
1978 238.892 $0.030 2.855 241.747
- ----------------------------------------------------------------
1979 241.747 $0.068 5.494 247.241
- ----------------------------------------------------------------
1980 247.241 $0.065 5.523 252.764
- ----------------------------------------------------------------
1981 252.764 $0.143 9.923 262.687
- ----------------------------------------------------------------
1982 262.687 $0.200 10.832 273.519
- ----------------------------------------------------------------
1983 273.519 $1.755 62.003 335.522
- ----------------------------------------------------------------
1984 335.522 $0.000 0.000 335.522
- ----------------------------------------------------------------
1985 335.522 $0.081 5.039 340.561
- ----------------------------------------------------------------
1986 340.561 $0.128 6.881 347.442
- ----------------------------------------------------------------
1987 347.442 $0.000 0.000 347.442
- ----------------------------------------------------------------
1988 347.442 $0.000 0.000 347.442
- ----------------------------------------------------------------
1989 347.442 $0.320 14.477 361.919
- ----------------------------------------------------------------
1990 361.919 $2.270 89.179 451.098
- ----------------------------------------------------------------
1991 451.098 $0.570 28.793 479.891
- ----------------------------------------------------------------
1992 479.891 $0.160 6.507 486.398
- ----------------------------------------------------------------
1993 486.398 $1.150 49.086 535.484
- ----------------------------------------------------------------
1994 535.484 $1.940 81.129 616.613
- ----------------------------------------------------------------
1995 616.613 $0.790 42.285 658.898
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Ending Shares 658.898
Ending NAV x $14.30
-----------
Investment Return $9,422.24
Total Return Performance
- -----------------
Investment Return $9,422.24
Less Initial Investment $1,000.00
-----------
$8,422.24 / $1,000.00 x 100
Total Return: 842.22%
</TABLE>
<PAGE>
DELAWARE GROUP TREND FUND INSTITUTIONAL
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1995
- -------------------------------------------------
Average Annual Compounded Rate of Return:
n
P(1 + T) = ERV
ONE
YEAR
- -----------
1
$1000(1 - T) = $1,247.40
T = 24.74%
THREE
YEARS
- -----------
3
$1000(1 - T) = $1,702.23
T = 19.40%
FIVE
YEARS
- -----------
5
$1000(1 - T) = $2,095
T = 15.94%
TEN
YEARS
- -----------
10
$1000(1 - T) = $4,302
T = 15.71%
FIFTEEN
YEARS
- -----------
15
$1000(1 - T) = $10,412.59
T = 16.91%
LIFE OF
FUND
- -----------
26.74179205
$1000(1 - T) = $9,422,24
T = 8.75%
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000027937
<NAME> DELAWARE GROUP TREND FUND, INC.
<SERIES>
<NUMBER> 001
<NAME> TREND FUND A CLASS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> JUN-30-1995
<INVESTMENTS-AT-COST> 307,174,585
<INVESTMENTS-AT-VALUE> 378,378,553
<RECEIVABLES> 6,089,472
<ASSETS-OTHER> 1,873,121
<OTHER-ITEMS-ASSETS> 17,559
<TOTAL-ASSETS> 386,358,705
<PAYABLE-FOR-SECURITIES> 6,250,190
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 564,001
<TOTAL-LIABILITIES> 6,814,191
<SENIOR-EQUITY> 13,342,876
<PAID-IN-CAPITAL-COMMON> 290,677,003
<SHARES-COMMON-STOCK> 22,443,507
<SHARES-COMMON-PRIOR> 20,806,371
<ACCUMULATED-NII-CURRENT> (6,865,026)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 11,185,693
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 71,203,968
<NET-ASSETS> 318,932,305
<DIVIDEND-INCOME> 743,262
<INTEREST-INCOME> 1,652,710
<OTHER-INCOME> 0
<EXPENSES-NET> 4,181,217
<NET-INVESTMENT-INCOME> (1,785,245)
<REALIZED-GAINS-CURRENT> 15,008,174
<APPREC-INCREASE-CURRENT> 57,806,727
<NET-CHANGE-FROM-OPS> 71,029,656
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 16,739,040
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10,667,330
<NUMBER-OF-SHARES-REDEEMED> 10,385,998
<SHARES-REINVESTED> 1,355,804
<NET-CHANGE-IN-ASSETS> 112,081,476
<ACCUMULATED-NII-PRIOR> (5,079,781)
<ACCUMULATED-GAINS-PRIOR> 14,061,445
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,314,197
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,181,217
<AVERAGE-NET-ASSETS> 277,289,258
<PER-SHARE-NAV-BEGIN> 12.210
<PER-SHARE-NII> (0.074)
<PER-SHARE-GAIN-APPREC> 2.864
<PER-SHARE-DIVIDEND> 0.000
<PER-SHARE-DISTRIBUTIONS> 0.790
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.210
<EXPENSE-RATIO> 1.36
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000027937
<NAME> DELAWARE GROUP TREND FUND, INC.
<SERIES>
<NUMBER> 002
<NAME> TREND FUND B CLASS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> JUN-30-1995
<INVESTMENTS-AT-COST> 307,174,585
<INVESTMENTS-AT-VALUE> 378,378,553
<RECEIVABLES> 6,089,472
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<OTHER-ITEMS-ASSETS> 17,559
<TOTAL-ASSETS> 386,358,705
<PAYABLE-FOR-SECURITIES> 6,250,190
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 564,001
<TOTAL-LIABILITIES> 6,814,191
<SENIOR-EQUITY> 13,342,876
<PAID-IN-CAPITAL-COMMON> 290,677,003
<SHARES-COMMON-STOCK> 366,139
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (6,865,026)
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<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 5,175,095
<DIVIDEND-INCOME> 743,262
<INTEREST-INCOME> 1,652,710
<OTHER-INCOME> 0
<EXPENSES-NET> 4,181,217
<NET-INVESTMENT-INCOME> (1,785,245)
<REALIZED-GAINS-CURRENT> 15,008,174
<APPREC-INCREASE-CURRENT> 57,806,727
<NET-CHANGE-FROM-OPS> 71,029,656
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 377,619
<NUMBER-OF-SHARES-REDEEMED> 11,480
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 112,081,476
<ACCUMULATED-NII-PRIOR> (5,079,781)
<ACCUMULATED-GAINS-PRIOR> 14,061,445
<OVERDISTRIB-NII-PRIOR> 0
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,181,217
<AVERAGE-NET-ASSETS> 2,033,274
<PER-SHARE-NAV-BEGIN> 12.110
<PER-SHARE-NII> (0.142)
<PER-SHARE-GAIN-APPREC> 2.162
<PER-SHARE-DIVIDEND> 0.000
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.130
<EXPENSE-RATIO> 2.12
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000027937
<NAME> DELAWARE GROUP TREND FUND, INC.
<SERIES>
<NUMBER> 003
<NAME> TREND FUND INSTITUTIONAL CLASS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> JUN-30-1995
<INVESTMENTS-AT-COST> 307,174,585
<INVESTMENTS-AT-VALUE> 378,378,553
<RECEIVABLES> 6,089,472
<ASSETS-OTHER> 1,873,121
<OTHER-ITEMS-ASSETS> 17,559
<TOTAL-ASSETS> 386,358,705
<PAYABLE-FOR-SECURITIES> 6,250,190
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 564,001
<TOTAL-LIABILITIES> 6,814,191
<SENIOR-EQUITY> 13,342,876
<PAID-IN-CAPITAL-COMMON> 290,677,003
<SHARES-COMMON-STOCK> 3,876,105
<SHARES-COMMON-PRIOR> 1,102,013
<ACCUMULATED-NII-CURRENT> (6,865,026)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 11,185,693
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 71,203,968
<NET-ASSETS> 55,437,114
<DIVIDEND-INCOME> 743,262
<INTEREST-INCOME> 1,652,710
<OTHER-INCOME> 0
<EXPENSES-NET> 4,181,217
<NET-INVESTMENT-INCOME> (1,785,245)
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<APPREC-INCREASE-CURRENT> 57,806,727
<NET-CHANGE-FROM-OPS> 71,029,656
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 1,144,886
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,363,517
<NUMBER-OF-SHARES-REDEEMED> 658,987
<SHARES-REINVESTED> 69,562
<NET-CHANGE-IN-ASSETS> 112,081,476
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<ACCUMULATED-GAINS-PRIOR> 14,061,445
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<OVERDIST-NET-GAINS-PRIOR> 0
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<AVERAGE-NET-ASSETS> 29,445,917
<PER-SHARE-NAV-BEGIN> 12.250
<PER-SHARE-NII> (0.044)
<PER-SHARE-GAIN-APPREC> 2.884
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0.790
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.300
<EXPENSE-RATIO> 1.12
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
Exhibit 99.B19
POWER OF ATTORNEY
Each of the undersigned, a member of the Board of Directors of DELAWARE
GROUP TREND FUND, INC., 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 have executed this instrument as of
this 20th day of April, 1995.
/s/Walter P. Babich /s/W. Thacher Longstreth
- ------------------- ------------------------
Walter P. Babich W. Thacher Longstreth
/s/Anthony D. Knerr /s/Charles E. Peck
- ------------------------ ------------------------
Anthony D. Knerr Charles E. Peck
/s/Ann R. Leven /s/Wayne A. Stork
- ------------------------ ------------------------
Ann R. Leven Wayne A. Stork
