<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
File No. 2-70164
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. / /
-------
Post-Effective Amendment No. 20 /X/
---------
AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 20
----------
DELAWARE GROUP TAX-FREE MONEY 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: June 29, 1995
-------------
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
-----
X on June 29, 1995 pursuant to paragraph (b)
-----
60 days after filing pursuant to paragraph (a)(1)
-----
on (date) pursuant to paragraph (a)(1)
-----
75 days after filing pursuant to paragraph (a)(2)
-----
on (date) pursuant to paragraph (a)(2) of Rule 485.
-----
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 was filed on June 28, 1995.
<PAGE>
Form N-1A
File No. 2-70164
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
--- C O N T E N T S ---
This Post-Effective Amendment No. 20 to Registration File No. 2-70164
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. 2-70164
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
CROSS-REFERENCE SHEET*
----------------------
PART A
------
<TABLE>
<CAPTION>
Item No. Description Location in Prospectus
- -------- ----------- ----------------------
Tax-Free
Tax-Free Money Fund
Money Fund Consultant
A Class Class
<S> <C> <C>
1 Cover Page . . . . . . . . . . . . . Cover Cover
2 Synopsis . . . . . . . . . . . . . . Synopsis and Synopsis and
Summary of Summary of
Expenses Expenses
3 Condensed Financial Information. . . Financial Financial
Highlights Highlights
4 General Description of Registrant. . Investment Investment
Objective and Objective and
Policies, Shares Policies, Shares
5 Management of the Fund . . . . . . . Management of Management of
the Fund the Fund
6 Capital Stock and Other Securities . Shares, Shares,
Dividends and Dividends and
Distributions, Distributions,
Taxes, Delaware Taxes, Delaware
Difference Difference
7 Purchase of Securities Being
Offered . . . . . . . . . . . . . Buying Shares, Buying Shares,
Cover, Cover,
Management of Management of
the Fund, Net the Fund, Net
Asset Value Asset Value
8 Redemption or Repurchase . . . . . . Redemption and Redemption and
Exchange, Exchange
Buying Shares
9 Legal Proceedings. . . . . . . . . . None None
</TABLE>
* This filing relates to the Tax-Free Money Fund A Class and Tax-Free Money Fund
Consultant Class of Delaware Group Tax-Free Money Fund, Inc. for which there
are separate prospectuses with a common Part B and Part C covering both
classes of shares.
<PAGE>
Form N-1A
File No. 2-70164
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
CROSS-REFERENCE SHEET
---------------------
PART B
------
<TABLE>
<CAPTION>
Location in Statement of
Item No. Description 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 Objectives and Policy . . Investment Objective and Policy
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
Tax-Free Money Fund Consultant
Class of Shares (under Purchasing
Shares), Investment Management
Agreement, General Information,
Financial Statements
17 Brokerage Allocation . . . . . . . . Trading Practices
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,
Offering Price, 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. 2-70164
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
CROSS-REFERENCE SHEET
---------------------
PART C
------
<TABLE>
<CAPTION>
Item No. Description Location in Part C
- -------- ----------- ------------------
<S> <C> <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>
The Delaware Group includes funds Tax-Free
with a wide range of investment objectives. Money Fund
Stock funds, income funds, tax-free funds, ----------
money market funds, global and international A Class
funds and closed-end equity funds give NO SALES CHARGE
investors the ability to create a portfolio that
fits their personal financial goals. For more PROSPECTUS
information, contact your financial adviser or
call Delaware Group at 800-523-4640,
in Philadelphia call 215-988-1333.
JUNE 29, 1995
Investment Manager
Delaware Management Company, Inc.
One Commerce Square
Philadelphia, PA 19103
National Distributor
Delaware Distributors, L.P.
1818 Market Street
Philadelphia, PA 19103
(Photo of George Washington
Shareholder Servicing, crossing the Delaware River)
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 THE SHARES OF THE FUND ARE
NEITHER INSURED NOR GUARANTEED
Custodian BY THE U.S. GOVERNMENT. WHILE
Morgan Guaranty Trust Company of New York THE FUND WILL MAKE EVERY EFFORT
60 Wall Street TO MAINTAIN A STABLE NET ASSET
New York, NY 10260 VALUE OF $1 PER SHARE, THERE IS
NO ASSURANCE THAT THE FUND
WILL BE ABLE TO DO SO.
DELAWARE
GROUP
=========
P-006[6/95] PP695
Printed in the U.S.A.
<PAGE>
TAX-FREE MONEY FUND PROSPECTUS
A CLASS SHARES June 29, 1995
--------------------------------------------------------------
1818 Market Street, Philadelphia, PA 19103
For Prospectus and Performance: Nationwide 800-523-4640,
Philadelphia 215-988-1333
Information on Existing Accounts: Nationwide 800-523-1918,
Philadelphia 215-988-1241
This Prospectus describes the Tax-Free Money Fund A Class of shares (the
"Class") of Delaware Group Tax-Free Money Fund, Inc. (the "Fund"). The Fund
is a professionally-managed mutual fund of the series type, currently
offering two classes of shares of a single series. The Fund seeks a high
level of current income, exempt from federal income tax, while preserving
principal and maintaining liquidity. The Fund intends to achieve its
objective by investing its assets in a diversified portfolio of municipal
money market instruments, the interest from which is, in the opinion of bond
counsel for the issuer, exempt from federal income tax.
The Fund is a money market fund. The minimum initial investment is $1,000;
subsequent investments must be at least $25. There is no front-end or
contingent deferred sales charge.
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 registration statement, dated June 29, 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 Tax-Free Money Fund Consultant Class of shares.
Shares of that class are offered for sale through brokers, financial
institutions and other entities that have a dealer agreement with the Fund's
Distributor or a service agreement with the Fund, and shares of that class
may be subject to 12b-1 Plan distribution expenses. At the present time, no
distribution fees are being paid under the 12b-1 Plan for the Tax-Free Money
Fund Consultant Class. A prospectus for the Tax-Free Money Fund Consultant
Class can be obtained by writing to Delaware Distributors, L.P. at the above
address or by calling the above numbers. See Tax-Free Money Fund Consultant
Class.
TABLE OF CONTENTS
Cover Page............................... 1
Synopsis................................. 2
Summary of Expenses...................... 3
Financial Highlights..................... 4
Investment Objective and Policies
Suitability............................. 5
Investment Strategy..................... 5
The Delaware Difference
Plans and Services...................... 7
Buying Shares............................ 8
Redemption and Exchange.................. 10
Dividends and Distributions.............. 13
Taxes.................................... 13
Net Asset Value Per Share................ 14
Management of the Fund................... 14
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 two classes of shares: the Tax-Free Money Fund A Class and
the Tax-Free Money Fund Consultant Class. The Fund has a present authorized
capitalization of five hundred million shares of common stock with a $.001
par value per share. One hundred million shares of the Fund have been
allocated to each class of shares. 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.
Minimum Investment
The minimum initial investment is $1,000 and all subsequent investments
must be at least $25. See Buying Shares.
Investment Objective
The objective of the Fund is to seek a high level of current income, exempt
from federal income tax, while preserving principal and maintaining
liquidity. The Fund intends to achieve its objective by investing its assets
in a diversified portfolio of municipal money market instruments, the
interest from which is, in the opinion of bond counsel for the issuer, exempt
from federal income tax. Although exempt from regular federal income tax,
interest paid on certain types of municipal obligations is deemed to be a
preference item under federal tax law and is subject to the federal
alternative minimum tax. Up to 20% of the Fund's net assets may be invested
in bonds, the income from which is subject to the federal alternative minimum
tax. See Investment Objective and Policies.
Open-End Investment Company
The Fund, which was organized as a Maryland corporation in April 1980, is
an open-end management investment company. The Fund's portfolio of assets is
diversified for purposes of the Investment Company Act of 1940 (the "1940
Act"). 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 Fund's Board of Directors. Under the
Investment Management Agreement, the annual compensation paid to the Manager
is equal to 1/2 of 1% of average daily net assets of the Fund, less 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>
Annual Operating Expenses
Shareholder Transaction Expenses (as a percentage of average daily net assets)
- --------------------------------------------------------------------- ----------------------------------------------------
<S> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases Management Fees.............................. 0.47%
(as a percentage of offering price)........................ None 12b-1 Fees................................... None
Maximum Sales Charge Imposed on Reinvested Dividends Other Operating Expenses..................... 0.49%
(as a percentage of offering price)........................ None -----
Contingent Deferred Sales Charge (as a percentage of original Total Operating Expenses.................. 0.96%
purchase price or redemption proceeds, as applicable)...... None =====
Redemption Fees.............................................. None*
Exchange Fees................................................ None*
</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 Redemption and
Exchange. Also, see Tax-Free Money Consultant 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.
1 year 3 years 5 years 10 years
------ ------- ------- --------
$10 $31 $53 $118
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 Tax-Free Money Fund 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. A copy of the Fund's Annual Report
(including the report of Ernst & Young LLP) may be obtained from the Fund upon
request and at no charge.
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
4/30/95 4/30/94 4/30/93 4/30/92 4/25/91 4/26/90 4/27/89 4/28/88 4/30/87 4/24/86
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period(1)................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Income From Investment
Operations
- ----------------------
Net Investment Income........ 0.0255 0.0158 0.0201 0.0347 0.0476 0.0530 0.0503 0.0407 0.0390 0.0470
Net Gains or Losses on
Securities (both realized
and unrealized)............. none none none none none none none none none none
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total From Investment
Operations.................. 0.0255 0.0158 0.0201 0.0347 0.0476 0.0530 0.0503 0.0407 0.0390 0.0470
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Less Distributions
- ------------------
Dividends (from net
investment income).......... (0.0255) (0.0158) (0.0201) (0.0347) (0.0476) (0.0530) (0.0503) (0.0407) (0.0390) (0.0470)
Distributions (from capital
gains) ..................... none none none none none none none none none none
Returns of Capital........... none none none none none none none none none none
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total Distributions......... (0.0255) (0.0158) (0.0201) (0.0347) (0.0476) (0.0530) (0.0503) (0.0407) (0.0390) (0.0470)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net Asset Value,
End of Period............... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return................. 2.59% 1.59% 2.03% 3.52% 4.87% 5.43% 5.14% 4.15% 3.97% 4.80%
- ------------
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period
(000's omitted)............. $54,444 $44,707 $43,886 $53,210 $56,766 $61,860 $60,827 $79,662 $62,782 $66,762
Ratio of Expenses to Average
Daily Net Assets............ 0.96% 0.99% 0.94% 0.84% 0.83% 0.83% 0.79% 0.72% 0.76% 0.79%
Ratio of Net Investment
Income to Average Daily
Net Assets.................. 2.57% 1.58% 2.03% 3.43% 4.77% 5.30% 5.04% 4.05% 3.89% 4.71%
</TABLE>
- -------
(1)All share and per share figures have been restated to
reflect a ten-to-one stock split on January 1, 1991.
4
<PAGE>
INVESTMENT OBJECTIVE
AND POLICIES
The Fund is a money market fund with the objective of seeking a high level
of current income, free from federal income tax, while preserving principal
and maintaining liquidity. The Fund seeks to do this by investing in a
diversified portfolio of municipal money market instruments, the interest
from which is, in the opinion of bond counsel for the issuer, exempt from
federal income tax. The portfolio of the Fund will be managed to maintain a
constant $1.00 per share value. While the Fund will make every effort to
maintain a fixed net asset value of $1.00 per share, there can be no
assurance that this objective will be achieved.
SUITABILITY
The Fund is suited for investors seeking current income exempt from federal
income tax. Investors should be willing to accept the risk of investments in
municipal securities. Ownership of Fund shares also reduces the bookkeeping
and administrative inconveniences of directly purchasing money market
securities.
INVESTMENT STRATEGY
The Fund seeks to attain its objective by investing at least 80% of its
assets under normal circumstances in short-term municipal money market
instruments. The Fund may invest up to 20% of its net assets in securities
the income from which is subject to the federal alternative minimum tax.
Although exempt from regular federal income tax, interest paid on certain
municipal obligations (commonly referred to as "private activity" or "private
purpose" bonds) is deemed to be a preference item under federal tax law and
is subject to the federal alternative minimum tax. While there is no
assurance its objective can be achieved, the Fund must follow certain
policies that can only be changed by shareholder approval.
Quality Restrictions
The Fund limits its investments to those which the Board of Directors has
determined present minimal credit risk and which are of high quality and
otherwise will meet the conditions with which tax-exempt money market funds
must comply.
The Fund's investments may include municipal bonds and notes, tax-free
commercial paper and short-term tax-free notes. They may also include
construction loan notes, project notes, tax anticipation notes, bond
anticipation notes, revenue anticipation notes and pre-refunded obligations
issued by states, territories and possessions of the United States, the
District of Columbia, political subdivisions of the above and duly
constituted authorities and corporations, the interest from which is
wholly-exempt from federal income tax.
If a security or, as relevant, its issuer is considered to be rated at the
time of a proposed purchase it, or, as relevant, its issuer must be so rated
in one of the two highest rating categories (e.g. for municipal bonds, AA or
better by Standard & Poor's Corporation ("S&P") or Aa or better by Moody's
Investors Service, Inc. ("Moody's"); for tax-free commercial paper and
short-term tax-free notes, A-2 or better by S&P or P-2 or better by Moody's;
and for state or municipal notes, MIG-2 or better by Moody's) by at least two
nationally-recognized statistical rating organizations (or if rated by only
one such organization, so rated by such organization). If the security or, as
relevant, its issuer has not been rated, the Manager must determine that the
security is comparable to securities that are rated in one of the two highest
rating categories in accordance with the conditions with which tax-exempt
money market funds must comply. The Fund may also invest in U.S. Government
securities (as defined by the 1940 Act).
Consistent with the above, the Fund may invest in short-term municipal
obligations. "Municipal obligations" include "general obligation" and
"revenue" issues. General obligation issues are secured by the issuer's
pledge of its full faith, credit and taxing power for the payment of
principal and interest. Revenue issues are payable only from the revenues
derived from a particular facility or class of facilities.
The Fund may also invest in variable or floating rate demand obligation
instruments and other municipal securities with a maturity in excess of 13
months, but which have a demand feature whereby the Fund may tender the
instrument or security back to the issuer or to another entity as described
below, consistent with the conditions with which tax-exempt money market
funds must comply. Such obligations may be backed by a Letter of Credit or
other guarantee. The Fund will consider the rating of the guarantor and the
nature of the guarantee in evaluating the quality of the obligation.
5
<PAGE>
Generally, a demand feature entitles the Fund to require the provider of the
demand feature to purchase the securities from the Fund at their principal
amount (usually with accrued interest) within a fixed period (generally seven
days, but the period may be longer) following a demand by the Fund. Certain
securities with a demand feature permit the Fund to tender the security only
at the time of an interest rate adjustment or at other fixed intervals. The
demand feature may be provided by the issuer of the underlying security, a
bank, a dealer in the securities or by another third party, and may not be
transferred separately from the underlying security. Certain demand features
are conditional which means that they may not be exercised or may terminate
under certain limited circumstances. The bankruptcy or receivership of, or
default by, the provider of the demand feature, or a default on the
underlying security or other event that terminates the demand feature before
its exercise will adversely affect the liquidity of the underlying security.
The Fund may not, at the time of purchase, invest more than 25% of its
assets in securities of governmental subdivisions located in any one state,
territory or U.S. possession. It may invest up to 25% of its assets in
short-term, tax-exempt project notes guaranteed by the U.S. Government,
regardless of the location of the issuing municipality.
Appendix A of Part B describes Moody's and S&P's ratings.
Maturity Restrictions
The Fund maintains an average maturity of not more than 90 days. Also, it
does not purchase any instruments with an effective remaining maturity of
more than 13 months.
Investment Techniques
The Fund intends to hold its investments until maturity, but may sell them
prior to maturity for a number of reasons. These reasons include: to shorten
or lengthen the average maturity, to increase the yield, to maintain the
quality of the portfolio or to maintain a stable share value.
Up to 20% of the Fund's portfolio may be invested in issues which are not
exempt from federal income tax such as commercial paper, corporate notes,
certificates of deposit of U.S. commercial banks and domestic savings and
loan associations, obligations of the U.S. Government, its agencies or
instrumentalities, certificates of deposit, when-issued securities and
repurchase agreements of the above issuers. Any such investments will meet
the conditions with which tax-exempt money market funds must comply when
purchasing such instruments.
The Fund may invest in "when-issued securities." When-issued securities
involve commitments to buy a new issue with settlement up to 45 days later.
During the time between the commitment and settlement the Fund does not
accrue interest, but the market value of the securities may fluctuate. This
can result in the Fund's share value increasing or decreasing. If the Fund
invests in securities of this type, it will maintain a segregated account to
pay for them and mark it to market daily.
The Tax Reform Act of 1986 (the "Act") limits the amount of new "private
purpose" bonds that each state can issue and subjects interest income from
these bonds to the federal alternative minimum tax. "Private purpose" bonds
are issues the proceeds of which are used to finance certain nongovernment
activities, and could include some types of industrial revenue bonds such as
privately-owned sports and convention facilities. The Act also makes the
tax-exempt status of certain bonds depend on the issuer's compliance with
specific requirements after the bonds are issued. The Fund intends to seek to
achieve a high level of tax-exempt income. However, if the Fund invests in
newly-issued private purpose bonds, a portion of its distributions would be
subject to the federal alternative minimum tax. The Fund may invest up to 20%
of its assets in bonds the income from which is subject to the federal
alternative minimum tax.
The Fund may also use repurchase agreements which are at least 100%
collateralized by securities in which the Fund can invest directly.
Repurchase agreements help the Fund to invest cash on a temporary basis.
Under a repurchase agreement, the Fund acquires ownership and possession of a
security, and the seller agrees to buy the security back at a specified time
and higher price. If the seller is unable to repurchase the security, the
Fund could experience delays and losses in liquidating the securities. To
minimize this possibility, the Fund considers the creditworthiness of banks
and dealers when entering into repurchase agreements. Earnings on repurchase
agreements are not tax-exempt.
The Fund may borrow money as a temporary measure for extraordinary purposes
or to facilitate redemptions, but it does not presently intend to do so.
6
<PAGE>
Asset-Backed Securities
The Fund may also invest in securities which are backed by assets such as
receivables on home equity and credit card loans, and receivables regarding
automobile, mobile home and recreational vehicle loans, wholesale dealer
floor plans and leases. All such securities must be rated in the highest
rating category by a reputable credit rating agency (e.g., AAA by S&P or Aaa
by Moody's). Such receivables are securitized in either a pass-through or a
pay-through structure. Pass-through securities provide investors with an
income stream consisting of both principal and interest payments in respect
of the receivables in the underlying pool. Pay-through asset-backed
securities are debt obligations issued usually by a special purpose entity,
which are collateralized by the various receivables and in which the payments
on the underlying receivables provide the funds to pay the debt service on
the debt obligations issued. The Fund may invest in these and other types of
asset-backed securities that may be developed in the future. It is the Fund's
current policy to limit asset-backed investments to those represented by
interests in credit card receivables, wholesale dealer floor plans, home
equity loans and automobile loans.
The rate of principal payment on asset-backed securities generally depends
upon the rate of principal payments received on the underlying assets. Such
rate of payments may be affected by economic and various other factors such
as changes in interest rates. Therefore, the yield may be difficult to
predict and actual yield to maturity may be more or less than the anticipated
yield to maturity. Such asset-backed securities involve other risks,
including the risk that security interests cannot be adequately or in many
cases, ever, established. In addition, with respect to credit card
receivables, a number of state and federal consumer credit laws give debtors
the right to set off certain amounts owed on the credit cards, thereby
reducing the outstanding balance. In the case of automobile receivables,
there is a risk that the holders may not have either a proper or first
security interest in all of the obligations backing such receivables due to
the large number of vehicles involved in a typical issuance and technical
requirements under state laws. Therefore, recoveries on repossessed
collateral may not always be available to support payments on the securities.
For further discussion concerning the risks of investing in such asset-backed
securities, see Part B.
Part B provides more information on the Fund's investment policies and
restrictions.
THE DELAWARE DIFFERENCE
PLANS AND SERVICES
The Delaware Difference is our commitment to provide you with superior
information and quality service on your investments in the Delaware Group of
funds.
SHAREHOLDER PHONE DIRECTORY
Investor Information Center
800-523-4640
(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)
Performance Information
You can call the Investor Information Center anytime to get current yield
information. Yield information is updated each weekday and is based on the
annualized yield over the past seven-day or longer period.
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.
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.
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Account Statements
A statement of account will be mailed each quarter summarizing all
transactions during the period. Accounts in which there has been activity
will receive a monthly statement confirming transactions for that period. 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.
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 without a sales
charge or you may be permitted to reinvest your distributions in other funds
in the Delaware Group without a sales charge, subject to eligibility and
minimum purchase requirements set forth in each fund's prospectus. Dividends
on shares of the Class may not be invested in the Class B Shares that are
offered by certain other funds in the Delaware Group ("Class B Funds"). For
more information about reinvestments in shares of other funds in the Delaware
Group, call the Shareholder Service Center.
Exchange Privilege
The Exchange Privilege permits shareholders to exchange all or part of
their Class shares into shares of the other funds in the Delaware Group,
subject to the eligibility and minimum purchase requirements set forth in
each fund's prospectus, including any applicable front-end sales charges.
Exchanges are not permitted between Class shares and the Class B Shares of
the Class B Funds.
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 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 shares. See Redemption and Exchange.
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
April 30.
The Delaware Digest
You will receive newsletters covering topics of interest about your
investment alternatives and services available from Delaware Group.
BUYING SHARES
The Distributor serves as the national distributor for the Fund.
The minimum for initial investments is $1,000 and all subsequent
investments must be at least $25. All purchases of shares of the Class are
made at net asset value. There is no front-end or contingent deferred sales
charge.
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 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 Tax-Free Money Fund A Class, to P.O. Box 7977,
Philadelphia, PA 19101.
2. Subsequent Purchases--Additional purchases may be made at any time by
mailing a check payable to Tax-Free Money Fund A Class. 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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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 Tax-Free Money Fund A Class, New Accounts, P.O. Box
7977, Philadelphia, PA 19101.
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.
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
the Class. However, the Class B Shares of the Class B Funds may not be
exchanged into the Class. If you wish to open an account by exchange, call
the Shareholder Service Center for more information.
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 to your Class
account. Shareholders should allow a reasonable amount of time for initial
purchases and changes to these plans to become effective.
* * *
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.
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, call
the Shareholder Service Center.
Purchase Price and Effective Date
The offering price (net asset value) of the Class is determined as of the
close of regular trading on the New York Stock Exchange (ordinarily, 4 p.m.,
Eastern time) on days when such exchange is open.
Investments by Federal Funds wire will be effective upon receipt. If the
wire is received after the time the offering price of shares is determined,
as noted above, it will be effective the next business day. If the investment
is made by check, the check must be converted to Federal Funds before your
purchase can be effective (normally one business day after receipt).
Your purchase begins earning dividends the next business day after becoming
effective. See Dividends and Distributions for additional information.
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 purchases by check 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 reserves the right, following shareholder notification, to charge
a service fee on non-retirement accounts 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 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.
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The Fund also reserves the right, upon 60 days' written notice, to redeem
accounts that remain under $1,000 as a result of redemptions. An investor
making the minimum initial investment will be subject to involuntary
redemption if he or she redeems any portion of his or her account.
Tax-Free Money Fund Consultant Class
In addition to offering the Tax-Free Money Fund A Class shares, the Fund
offers Tax-Free Money Fund Consultant Class shares, which are described in a
separate prospectus. The Tax-Free Money Fund Consultant Class shares are
available for sale through brokers, financial institutions and other entities
which have a dealer agreement with the Fund's Distributor or a service
agreement with the Fund. The Tax-Free Money Fund Consultant Class shares have
no front-end or contingent deferred sales charge; such class has a 12b-1 Plan
whereby the Fund is permitted to pay the Distributor annual fees payable
monthly up to a maximum of .30% of the average daily net assets of such
shares in order to compensate the Distributor for providing distribution and
related services and bearing certain distribution-related expenses. There are
no payments under the 12b-1 Plan being made at this time. However, in the
event 12b-1 payments are reinstituted with respect to the Tax-Free Money Fund
Consultant Class, such payments may affect the performance of that class. In
addition, in the event such payments are reinstituted, sales or service
compensation available in respect of such class may differ from that
available to the Tax-Free Money Fund A Class shares. Both classes of the
Fund's shares have a proportionate interest in the underlying portfolio of
securities of the Fund. For the fiscal year ended April 30, 1995, the Total
Operating Expenses, as a percentage of average daily net assets, incurred by
the Tax-Free Money Fund Consultant Class shares were 0.96%. See Part B for
performance relating to this class. To obtain a prospectus which describes
the Tax-Free Money Fund Consultant Class, contact the Distributor.
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 tax-advantaged funds, equity funds or
more aggressive bond funds. Exchanges are subject to the eligibility and
minimum purchase requirements set forth in each fund's prospectus. Any
applicable front-end sales charge will apply to exchanges from money market
funds, like the Fund, to other funds, except for exchanges from money market
funds involving assets that were previously invested in a fund with a
front-end sales charge and exchanges from a money market fund involving the
reinvestment of dividends. Class shares may not be exchanged for the Class B
Shares of the Class B Funds. Shares acquired in an exchange must be
registered in the state where they are so purchased. 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 out of the Class based on the net
asset value next determined after we receive your request in good order.
Redemption or exchange requests received in good order after the time the
offering price 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. Exchange instructions and redemption requests must be signed by
the record owner(s) exactly as the shares are registered. With regard to
exchanges, you must also provide the name of the fund you want to receive the
proceeds. 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.
The Fund will not honor check, telephone or wire redemptions for Class
shares recently purchased by check unless it is reasonably satisfied that the
purchase check has cleared, which may take up to 15 days from the purchase
date. The Fund may honor written redemption requests, but will not mail the
proceeds until it is reasonably satisfied the purchase check has cleared. You
can avoid this potential delay if you purchase shares by wiring Federal
Funds. You may call the Shareholder Service Center to determine if your funds
are available for redemption. 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.
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, 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.
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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.
The Class A Shares of the Delaware Group funds that carry a front-end sales
charge will be subject to a contingent deferred sales charge ("Limited CDSC")
upon redemption if the shares were purchased at net asset value without the
payment of a front-end sales charge and if a dealer's commission was paid to
a financial adviser, except in certain limited instances. Such shares may be
exchanged for shares of the Class without the imposition of the Limited CDSC
at the time of the exchange. However, upon subsequent redemption from the
Class or after a subsequent exchange into a fund that is subject to the
Limited CDSC, such shares will be subject to the Limited CDSC imposed by the
original fund whose shares were initially exchanged into the Class.
Shareholders will be given credit for the period during which the Class
shares were held.
Checkwriting Feature
Checkwriting is a convenient access feature that allows you to earn
dividends until your check is presented to the Fund.
You can request special checks by marking the box on the Investment
Application. There is a one-time $5 charge for this service.
Checks must be drawn for $500 or more and, unless otherwise indicated on
the Investment Application or your checkwriting authorization form, must be
signed by all owners of the account.
You will be subject to CoreStates Bank, N.A.'s rules and regulations
governing similar accounts. If the amount of the check is greater than the
value of the shares in your account, the check will be returned and you may
be subject to a charge.
You may request a stop payment on checks by providing the Fund with a
written authorization (oral requests will be accepted only if followed
promptly with a written authorization). Such requests will remain in effect
for six months unless renewed or cancelled. There will be a $5 charge per
check for each six-month period.
Checks paid will be returned to you semi-annually (January and July). If
you need a copy of a check prior to the regular mailing you may call the
Shareholder Service Center.
Since dividends are declared daily, you may not use the Checkwriting
Feature to close your account. (See Part B for additional information.)
Written Redemption
You can write to the Fund at 1818 Market Street, Philadelphia, PA 19103 to
redeem some or all of your Class 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 when 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.
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 shares into another
mutual fund in the Delaware Group. Written exchanges are 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 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.
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<PAGE>
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. 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 and will normally be sent 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.
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. 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 of
shares is determined, as noted above.
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 shares into any fund
in the Delaware Group under the same registration. Any such exchange is
subject to the same conditions and limitations as other exchanges noted
above. Telephone exchanges may be subject to limitations as to amounts or
frequency.
Systematic Withdrawal Plan
This plan provides shareholders with a consistent monthly (or quarterly)
payment. This is particularly useful to shareholders living on fixed incomes,
since it provides 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. 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.
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, subject to the
same conditions and limitations as other exchanges noted above. Shareholders
can also use the Wealth Builder Option to invest in the Class 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. See Investing by Exchange under Buying Shares. Shareholders can
terminate their participation at any time by written notice to the Fund.
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DIVIDENDS AND DISTRIBUTIONS
The Fund declares a dividend to all Class shareholders of record at the time
the offering price of shares is determined. See Purchase Price and Effective
Date under Buying Shares. Thus, when redeeming shares, dividends continue to
accrue up to and including the date of redemption.
Purchases of Fund shares by wire begin earning dividends when converted
into Federal Funds and available for investment, normally the next business
day after receipt. However, if the Fund is given prior notice of Federal
Funds wire and an acceptable written guarantee of timely receipt from an
investor satisfying the Fund's credit policies, the purchase will start
earning dividends on the date the wire is received. Purchases by check earn
dividends upon conversion to Federal Funds, normally one business day after
receipt.
The Fund's dividends are declared daily and paid monthly on the last day of
each month. Payment by check of cash dividends will ordinarily be mailed
within three business days after the payable date. Short-term realized
securities profits, if any, may be paid with the daily dividend; otherwise,
they will be distributed annually during the first quarter following the
close of the fiscal year.
Each class of shares 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 Distribution Plan under Rule 12b-1 for
the Tax-Free Money Fund Consultant Class. No distribution fee under the 12b-1
Plan for the Tax-Free Money Fund Consultant Class is currently being paid.
Both dividends and distributions will be automatically reinvested in your
account 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 under Redemption and Exchange for
information regarding authorization of this service. Information as to the
tax status of dividends will be provided annually.
During the fiscal year ended April 30, 1995, dividends totaling $0.0255 per
share of the Class were paid from net investment income.
See The Delaware Difference for additional information.
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.
Federal Income Tax
Distributions of tax-exempt interest income are not includable in the
shareholder's gross income for federal income tax purposes. Distributions of
net investment income received by the Fund from investments in securities
other than municipal obligations, and any net short-term capital gains
realized by the Fund, will be taxable to the shareholder as ordinary income
whether received in cash or reinvested in additional shares. Distributions of
taxable net investment income, if any, will not qualify for the deduction for
dividends received by corporations. For the fiscal year 1995, all of the
Fund's net income was exempt from federal income taxes.
State and Local Taxes
The exemption of distributions for federal income tax purposes may not
result in similar exemptions under the laws of a particular state or local
taxing authority. It is recommended that shareholders consult their tax
advisers in this regard.
Shares of the Fund will be exempt from Pennsylvania county personal
property taxes. The Fund will report annually the percentage of interest
income earned on municipal obligations on a state-by-state basis during the
preceding calendar year.
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NET ASSET VALUE PER SHARE
The purchase and redemption price of shares is equal to the net asset value
("NAV") per share of the Class that is 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.
The Fund's total net assets are determined by valuing the portfolio
securities at amortized cost. Under the direction of the Board of Directors,
certain procedures have been adopted to monitor the value of the Fund's
securities and stabilize the price per share at $1.00. Prior to January 1,
1991, the portfolio of the Fund was managed to maintain a fixed net asset
value of $10 per share. The Fund accomplished this change by effecting a
ten-to-one stock split for shareholders of record on that date.
See Part B for additional information.
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 April 30, 1995, the Manager and its affiliate,
Delaware International Advisers Ltd., were supervising in the aggregate more
than $25 billion in assets in various institutional (approximately
$15,952,458,000) and investment company (approximately $9,688,552,000)
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.
The annual compensation paid by the Fund for investment management services
is equal to 1/2 of 1% of average daily net assets of the Fund, less all
directors' fees paid to the unaffiliated directors by the Fund. Investment
management fees paid by the Fund were 0.47% of average daily net assets for
the fiscal year ended April 30, 1995.
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Portfolio Trading Practices
Portfolio trades are generally made on a net basis without brokerage
commissions. However, the price may include a mark-up or mark-down.
Banks, brokers or dealers are selected to execute the Fund's portfolio
transactions.
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 publish the "yield" and "effective yield"
for the Class. Both yield figures are based on historical earnings and are
not intended to indicate future performance. The "yield" of the Class refers
to the income generated by an investment in the Class over a specified
seven-day period. This income is then "annualized," which means the amount of
income generated by the investment during that week is assumed to be
generated each week over a 52-week period and is shown as a percentage of the
investment. The "effective yield" is calculated in a similar manner but, when
annualized, the income earned by an investment in the Class is assumed to be
reinvested. The "effective yield" will be slightly higher than the "yield"
because of the compounding effect of this assumed reinvestment. The Fund may
also publish a tax-equivalent yield based on federal and, if applicable,
state tax rates, which demonstrates the taxable yield necessary to produce an
after-tax yield equivalent to the Class' yield. Yield fluctuates and is not
guaranteed. In addition, the Fund may publish aggregate and average annual
total return information concerning the Class, which will reflect the
compounded rate of return of an investment in the Class over a specified
period of time and will assume the investment of all distributions at net
asset value. Past performance is not an indication of future results.
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 these services.
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 expenses to
average daily net assets of the Class for the fiscal year ended April 30,
1995 was 0.96%.
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 in April 1980.
The Fund's shares have a par value of $.001, equal voting rights and are
equal in all other respects.
The Fund also offers the Tax-Free Money Fund Consultant Class of shares
which represents a proportionate interest in the assets of the Fund and has
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 Plan under Rule 12b-1 relating to the Tax-Free
Money Fund Consultant Class. While the Fund's Board of Directors has
authority to create additional series and classes of shares, there is currently
only one such series, which consists of two classes of shares.
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.
Prior to January 1992, the Tax-Free Money Fund A Class was known as the
original class and between January 1992 and February 1994, it was known as
the Tax-Free Money Fund class. In addition, prior to January 1992, the
Tax-Free Money Fund Consultant Class was known as the consultant class,
between January 1992 and November 1992, it was known as the Tax-Free Money
Fund (Institutional) class and between November 1992 and February 1994, it
was known as the Tax-Free Money Fund Consultant class.
15
<PAGE>
The Delaware Group includes funds Tax-Free
with a wide range of investment objectives. Money Fund
Stock funds, income funds, tax-free funds, ----------
money market funds, global and international CONSULTANT
funds and closed-end equity funds give CLASS
investors the ability to create a portfolio that
fits their personal financial goals. For more NO SALES CHARGE
information, contact your financial adviser or
call Delaware Group at 800-523-4640, PROSPECTUS
in Philadelphia call 215-988-1333.
JUNE 29, 1995
Investment Manager
Delaware Management Company, Inc.
One Commerce Square
Philadelphia, PA 19103
National Distributor (Photo of George Washington
Delaware Distributors, L.P. crossing the Delaware River)
1818 Market Street
Philadelphia, PA 19103
Shareholder Servicing,
Dividend Disbursing THE SHARES OF THE FUND ARE
and Transfer Agent NEITHER INSURED NOR GUARANTEED
Delaware Service Company, Inc. BY THE U.S. GOVERNMENT. WHILE
1818 Market Street THE FUND WILL MAKE EVER EFFORT
Philadelphia, PA 19103 TO MAINTAIN A STABLE NET ASSET
VALUE OF $1 PER SHARE, THERE IS
Legal Counsel NO ASSURANCE THAT THE FUND
Stradley, Ronon, Stevens & Young WILL BE ABLE TO DO SO.
One Commerce Square
Philadelphia, PA 19103
Independent Auditors
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103
Custodian
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, NY 10260
DELAWARE
P-026[6/95] PP695 GROUP
Printed in the U.S.A. ========
<PAGE>
TAX-FREE MONEY FUND PROSPECTUS
CONSULTANT CLASS June 29, 1995
-----------------------------------------------------------------------
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 Tax-Free Money Fund Consultant Class of
shares (the "Class") of Delaware Group Tax-Free Money Fund, Inc. (the
"Fund"). Shares of the Class are available for sale through brokers,
financial institutions and other entities which have a dealer agreement with
the Fund's Distributor or a service agreement with the Fund. The Fund is a
professionally-managed mutual fund of the series type, currently offering two
classes of shares of a single series. The Fund seeks a high level of current
income, exempt from federal income tax, while preserving principal and
maintaining liquidity. The Fund intends to achieve its objective by investing
its assets in a diversified portfolio of municipal money market instruments,
the interest from which is, in the opinion of bond counsel for the issuer,
exempt from federal income tax.
The Fund is a money market fund. The minimum initial investment is $1,000;
subsequent investments must be at least $25. The Fund has adopted for the
Class a 12b-1 Plan covering distribution expenses, but no fees are currently
being paid. There is no front-end or contingent deferred sales charge.
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 registration statement, dated June 29, 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 Tax-Free Money Fund A Class of shares. Shares of
that class can be purchased directly from the Fund or its Distributor, and
have no front-end or contingent deferred sales charge and are not subject to
annual 12b-1 Plan distribution expenses. A prospectus for that class can be
obtained by writing to Delaware Distributors, L.P. at the above address or by
calling the above numbers. See Tax-Free Money Fund A Class.
TABLE OF CONTENTS
Cover Page................................ 1
Synopsis.................................. 2
Summary of Expenses....................... 3
Financial Highlights...................... 4
Investment Objective and Policies
Suitability.............................. 5
Investment Strategy...................... 5
The Delaware Difference
Plans and Services....................... 7
Buying Shares............................. 8
Redemption and Exchange................... 10
Dividends and Distributions............... 13
Taxes..................................... 14
Net Asset Value Per Share................. 14
Management of the Fund.................... 15
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 two classes of shares: the Tax-Free Money Fund Consultant
Class and the Tax-Free Money Fund A Class. The Fund has a present authorized
capitalization of five hundred million shares of common stock with a $.001
par value per share. One hundred million shares of the Fund have been
allocated to each class of shares. 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
subject to distribution fees under a Rule 12b-1 distribution plan. There are
no payments being made under the Plan at this time. See Buying Shares; and
Distribution (12b-1) and Service under Management of the Fund.
Minimum Investment
Shares of the Class are available for sale through brokers, financial
institutions and other entities which have a dealer agreement with the Fund's
Distributor or a service agreement with the Fund. The minimum initial
investment is $1,000 and all subsequent investments must be at least $25. See
Buying Shares.
Investment Objective
The objective of the Fund is to seek a high level of current income, exempt
from federal income tax, while preserving principal and maintaining
liquidity. The Fund intends to achieve its objective by investing its assets
in a diversified portfolio of municipal money market instruments, the interest
from which is, in the opinion of bond counsel for the issuer, exempt from
federal income tax. Although exempt from regular federal income tax, interest
paid on certain types of municipal obligations is deemed to be a preference
item under federal tax law and is subject to the federal alternative minimum
tax. Up to 20% of the Fund's net assets may be invested in bonds, the income
from which is subject to the federal alternative minimum tax. See Investment
Objective and Policies.
Open-End Investment Company
The Fund, which was organized as a Maryland corporation in April 1980, is
an open-end management investment company. The Fund's portfolio of assets is
diversified for purposes of the Investment Company Act of 1940 (the "1940
Act"). 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 1/2 of 1% of average daily net assets of the Fund, less 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>
Annual Operating Expenses
Shareholder Transaction Expenses (as a percentage of average daily net assets)
- -------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases Management Fees............................ 0.47%
(as a percentage of offering price)................. None 12b-1 Fees................................. None***
Maximum Sales Charge Imposed on Reinvested Dividends Other Operating Expenses................... 0.49%
(as a percentage of offering price)................. None -----
Contingent Deferred Sales Charge Total Operating Expenses................. 0.96%
(as a percentage of the original purchase price or =====
redemption proceeds, as applicable)................. None
Redemption Fees....................................... None*
Exchange Fees......................................... None**
</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 Redemption and
Exchange. ***Shares of the Class are subject to a 12b-1 Plan; however, the
Board of Directors of the Fund has suspended 12b-1 Plan payments from the
Class to the Distributor effective June 1, 1990. (See Distribution (12b-1)
and Service.) Also, see Tax-Free Money Fund A 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.
1 year 3 years 5 years 10 years
-------- --------- --------- ----------
$10 $31 $53 $118
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 Tax-Free Money Fund 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. 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
3/15/88(1)
Year Ended through
4/30/95 4/30/94 4/30/93 4/30/92 4/25/91 4/26/90 4/27/89 4/28/88
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period(2).................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Income From Investment Operations
- ---------------------------------
Net Investment Income............. 0.0255 0.0158 0.0201 0.0347 0.0473 0.0505 0.0478 0.0044
Net Gains or Losses on Securities
(both realized and unrealized).... none none none none none none none none
------- ------- ------- ------- ------- ------- ------- -------
Total From Investment
Operations.................... 0.0255 0.0158 0.0201 0.0347 0.0473 0.0505 0.0478 0.0044
------- ------- ------- ------- ------- ------- ------- -------
Less Distributions
- ------------------
Dividends (from net investment
income)......................... (0.0255) (0.0158) (0.0201) (0.0347) (0.0473) (0.0505) (0.0478) (0.0044)
Distributions (from capital
gains).......................... none none none none none none none none
Returns of Capital................ none none none none none none none none
------- ------- ------- ------- ------- ------- ------- -------
Total Distributions............. (0.0255) (0.0158) (0.0201) (0.0347) (0.0473) (0.0505) (0.0478) (0.0044)
------- ------- ------- ------- ------- ------- ------- -------
Net Asset Value, End of Period.... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= ======= ======= ======= =======
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return...................... 2.59% 1.59% 2.03% 3.52% 4.84% 5.17% 4.88% (1)
- ------------
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000's
omitted)......................... $1,614 $1,407 $1,846 $1,920 $3,517 $3,556 $3,100 $39
Ratio of Expenses to Average Daily
Net Assets....................... 0.96% 0.99% 0.94% 0.84% 0.86% 1.08% 1.04% (1)
Ratio of Net Investment Income to
Average Daily Net Assets........ 2.57% 1.58% 2.03% 3.43% 4.74% 5.05% 4.79% (1)
</TABLE>
- --------
(1) March 15, 1988 was the date of the initial public sale of shares of the
Class; the total return and the ratios of expenses and net investment
income to average daily net assets have been omitted as management
believes that such ratios for this relatively short period are not
meaningful.
(2) All share and per share figures have been restated to reflect a ten-to-one
stock split on January 1, 1991.
4
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The Fund is a money market fund with the objective of seeking a high level
of current income, free from federal income tax, while preserving principal
and maintaining liquidity. The Fund seeks to do this by investing in a
diversified portfolio of municipal money market instruments, the interest from
which is, in the opinion of bond counsel for the issuer, exempt from federal
income tax. The portfolio of the Fund will be managed to maintain a constant
$1.00 per share value. While the Fund will make every effort to maintain a
fixed net asset value of $1.00 per share, there can be no assurance that this
objective will be achieved.
SUITABILITY
The Fund is suited for investors seeking current income exempt from federal
income tax. Investors should be willing to accept the risk of investments in
municipal securities. Ownership of Fund shares also reduces the bookkeeping
and administrative inconveniences of directly purchasing money market
securities.
Shares of the Class are offered for sale through brokers, financial
institutions and other entities that have a dealer agreement with the Fund's
Distributor or a service agreement with the Fund. The Class may be suitable
for investors who desire the additional investment and administrative
services offered by such brokers and other entities.
INVESTMENT STRATEGY
The Fund seeks to attain its objective by investing at least 80% of its
assets under normal circumstances in short-term municipal money market
instruments. The Fund may invest up to 20% of its net assets in securities
the income from which is subject to the federal alternative minimum tax.
Although exempt from regular federal income tax, interest paid on certain
municipal obligations (commonly referred to as "private activity" or "private
purpose" bonds) is deemed to be a preference item under federal tax law and
is subject to the federal alternative minimum tax. While there is no
assurance its objective can be achieved, the Fund must follow certain
policies that can only be changed by shareholder approval.
Quality Restrictions
The Fund limits its investments to those which the Board of Directors has
determined present minimal credit risk and which are of high quality and
otherwise will meet the conditions with which tax-exempt money market funds
must comply.
The Fund's investments may include municipal bonds and notes, tax-free
commercial paper and short-term tax-free notes. They may also include
construction loan notes, project notes, tax anticipation notes, bond
anticipation notes, revenue anticipation notes and pre-refunded obligations
issued by states, territories and possessions of the United States, the
District of Columbia, political subdivisions of the above and duly
constituted authorities and corporations, the interest from which is
wholly-exempt from federal income tax.
If a security or, as relevant, its issuer is considered to be rated at the
time of a proposed purchase it, or, as relevant, its issuer must be so rated
in one of the two highest rating categories (e.g. for municipal bonds, AA or
better by Standard & Poor's Corporation ("S&P") or Aa or better by Moody's
Investors Service, Inc. ("Moody's"); for tax-free commercial paper and
short-term tax-free notes, A-2 or better by S&P or P-2 or better by Moody's;
and for state or municipal notes, MIG-2 or better by Moody's) by at least two
nationally-recognized statistical rating organizations (or if rated by only
one such organization, so rated by such organization). If the security or, as
relevant, its issuer has not been rated, the Manager must determine that the
security is comparable to securities that are rated in one of the two highest
rating categories in accordance with the conditions with which tax-exempt
money market funds must comply. The Fund may also invest in U.S. Government
securities (as defined by the 1940 Act).
Consistent with the above, the Fund may invest in short-term municipal
obligations. "Municipal obligations" include "general obligation" and
"revenue" issues. General obligation issues are secured by the issuer's
pledge of its full faith, credit and taxing power for the payment of
principal and interest. Revenue issues are payable only from the revenues
derived from a particular facility or class of facilities.
The Fund may also invest in variable or floating rate demand obligation
instruments and other municipal securities with a maturity in excess of 13
months, but which have a demand feature whereby the Fund may tender the
instrument or security back to the issuer or to another entity as described
below, consistent with the conditions with which tax-exempt money market
funds must comply. Such obligations may be backed by a Letter of Credit or
other guarantee. The Fund will consider the rating of the guarantor and the
nature of the guarantee in evaluating the quality of the obligation.
5
<PAGE>
Generally, a demand feature entitles the Fund to require the provider of
the demand feature to purchase the securities from the Fund at their
principal amount (usually with accrued interest) within a fixed period
(generally seven days, but the period may be longer) following a demand by
the Fund. Certain securities with a demand feature permit the Fund to tender
the security only at the time of an interest rate adjustment or at other
fixed intervals. The demand feature may be provided by the issuer of the
underlying security, a bank, a dealer in the securities or by another third
party, and may not be transferred separately from the underlying security.
Certain demand features are conditional which means that they may not be
exercised or may terminate under certain limited circumstances. The
bankruptcy or receivership of, or default by, the provider of the demand
feature, or a default on the underlying security or other event that
terminates the demand feature before its exercise will adversely affect the
liquidity of the underlying security.
The Fund may not, at the time of purchase, invest more than 25% of its
assets in securities of governmental subdivisions located in any one state,
territory or U.S. possession. It may invest up to 25% of its assets in
short-term, tax-exempt project notes guaranteed by the U.S. Government,
regardless of the location of the issuing municipality.
Appendix A of Part B describes Moody's and S&P's ratings.
Maturity Restrictions
The Fund maintains an average maturity of not more than 90 days. Also, it
does not purchase any instruments with an effective remaining maturity of
more than 13 months.
Investment Techniques
The Fund intends to hold its investments until maturity, but may sell them
prior to maturity for a number of reasons. These reasons include: to shorten
or lengthen the average maturity, to increase the yield, to maintain the
quality of the portfolio or to maintain a stable share value.
Up to 20% of the Fund's portfolio may be invested in issues which are not
exempt from federal income tax such as commercial paper, corporate notes,
certificates of deposit of U.S. commercial banks and domestic savings and
loan associations, obligations of the U.S. Government, its agencies or
instrumentalities, certificates of deposit, when-issued securities and
repurchase agreements of the above issuers. Any such investments will meet
the conditions with which tax-exempt money market funds must comply when
purchasing such instruments.
The Fund may invest in "when-issued securities." When-issued securities
involve commitments to buy a new issue with settlement up to 45 days later.
During the time between the commitment and settlement the Fund does not
accrue interest, but the market value of the securities may fluctuate. This
can result in the Fund's share value increasing or decreasing. If the Fund
invests in securities of this type, it will maintain a segregated account to
pay for them and mark it to market daily.
The Tax Reform Act of 1986 (the "Act") limits the amount of new "private
purpose" bonds that each state can issue and subjects interest income from
these bonds to the federal alternative minimum tax. "Private purpose" bonds
are issues the proceeds of which are used to finance certain nongovernment
activities, and could include some types of industrial revenue bonds such as
privately-owned sports and convention facilities. The Act also makes the
tax-exempt status of certain bonds depend on the issuer's compliance with
specific requirements after the bonds are issued. The Fund intends to seek to
achieve a high level of tax-exempt income. However, if the Fund invests in
newly-issued private purpose bonds, a portion of its distributions would be
subject to the federal alternative minimum tax. The Fund may invest up to 20%
of its assets in bonds the income from which is subject to the federal
alternative minimum tax.
The Fund may also use repurchase agreements which are at least 100%
collateralized by securities in which the Fund can invest directly.
Repurchase agreements help the Fund to invest cash on a temporary basis.
Under a repurchase agreement, the Fund acquires ownership and possession of a
security, and the seller agrees to buy the security back at a specified time
and higher price. If the seller is unable to repurchase the security, the
Fund could experience delays and losses in liquidating the securities. To
minimize this possibility, the Fund considers the creditworthiness of banks
and dealers when entering into repurchase agreements. Earnings on repurchase
agreements are not tax-exempt.
The Fund may borrow money as a temporary measure for extraordinary purposes
or to facilitate redemptions, but it does not presently intend to do so.
6
<PAGE>
Asset-Backed Securities
The Fund may also invest in securities which are backed by assets such as
receivables on home equity and credit card loans, and receivables regarding
automobile, mobile home and recreational vehicle loans, wholesale dealer
floor plans and leases. All such securities must be rated in the highest
rating category by a reputable credit rating agency (e.g., AAA by S&P or Aaa
by Moody's). Such receivables are securitized in either a pass-through or a
pay-through structure. Pass-through securities provide investors with an
income stream consisting of both principal and interest payments in respect
of the receivables in the underlying pool. Pay-through asset-backed
securities are debt obligations issued usually by a special purpose entity,
which are collateralized by the various receivables and in which the payments
on the underlying receivables provide the funds to pay the debt service on
the debt obligations issued. The Fund may invest in these and other types of
asset-backed securities that may be developed in the future. It is the Fund's
current policy to limit asset-backed investments to those represented by
interests in credit card receivables, wholesale dealer floor plans, home equity
loans and automobile loans.
The rate of principal payment on asset-backed securities generally depends
upon the rate of principal payments received on the underlying assets. Such
rate of payments may be affected by economic and various other factors such
as changes in interest rates. Therefore, the yield may be difficult to
predict and actual yield to maturity may be more or less than the anticipated
yield to maturity. Such asset-backed securities involve other risks,
including the risk that security interests cannot be adequately or in many
cases, ever, established. In addition, with respect to credit card
receivables, a number of state and federal consumer credit laws give debtors
the right to set off certain amounts owed on the credit cards, thereby
reducing the outstanding balance. In the case of automobile receivables,
there is a risk that the holders may not have either a proper or first
security interest in all of the obligations backing such receivables due to
the large number of vehicles involved in a typical issuance and technical
requirements under state laws. Therefore, recoveries on repossessed
collateral may not always be available to support payments on the securities.
For further discussion concerning the risks of investing in such asset-backed
securities, see Part B.
Part B provides more information on the Fund's investment policies and
restrictions.
THE DELAWARE DIFFERENCE
PLANS AND SERVICES
The Delaware Difference is our commitment to provide you with superior
information and quality service on your investments in the Delaware Group of
funds.
SHAREHOLDER PHONE DIRECTORY
Investor Information Center
800-523-4640
(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)
Performance Information
You can call the Investor Information Center anytime to get current yield
information. Yield information is updated each weekday and is based on the
annualized yield over the past seven-day or longer period.
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.
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.
Account Statements
A statement of account will be mailed each quarter summarizing all
transactions during the period. Accounts in which there has been activity
will receive a monthly statement confirming transactions for that period. You
should examine statements and confirmations immediately and promptly report
any discrepancy by calling the Shareholder Service Center.
7
<PAGE>
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.
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 without a sales
charge or you may be permitted to reinvest your distributions in other funds
in the Delaware Group without a sales charge, subject to eligibility and
minimum purchase requirements set forth in each fund's prospectus. Dividends
on shares of the Class may not be invested in the Class B Shares that are
offered by certain other funds in the Delaware Group ("Class B Funds"). For
more information about reinvestments in shares of other funds in the Delaware
Group, call the Shareholder Service Center.
Exchange Privilege
The Exchange Privilege permits shareholders to exchange all or part of
their Class shares into shares of the other funds in the Delaware Group,
subject to the eligibility and minimum purchase requirements set forth in
each fund's prospectus, including any applicable front-end sales charges.
Exchanges are not permitted between Class shares and the Class B Shares of
the Class B Funds.
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 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 shares. See Redemption and Exchange.
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
April 30.
The Delaware Digest
You will receive newsletters covering topics of interest about your
investment alternatives and services available from Delaware Group.
BUYING SHARES
The Distributor serves as the national distributor for the Fund.
Shares of the Class may be purchased through brokers, financial
institutions and other entities that have a dealer agreement with the Fund's
Distributor or a service agreement with the Fund. The minimum for initial
investments is $1,000 and all subsequent investments must be at least $25.
All purchases of shares of the Class are made at net asset value. There is no
front-end or contingent deferred sales charge.
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 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 Tax-Free Money Fund Consultant Class, to
P.O. Box 7977, Philadelphia, PA 19101.
2. Subsequent Purchases--Additional purchases may be made at any time by
mailing a check payable to Tax-Free Money Fund Consultant Class. 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.
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 Tax-Free Money Fund Consultant Class, New Accounts,
P.O. Box 7977, Philadelphia, PA 19101.
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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.
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
the Class. However, the Class B Shares of the Class B Funds may not be
exchanged into the Class. If you wish to open an account by exchange, call
the Shareholder Service Center for more information.
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 to your Class
account. Shareholders should allow a reasonable amount of time for initial
purchases and changes to these plans to become effective.
* * *
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.
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,
please call the Shareholder Service Center.
Purchase Price and Effective Date
The offering price (net asset value) of the Class is determined as of the
close of regular trading on the New York Stock Exchange (ordinarily, 4 p.m.,
Eastern time) on days when such exchange is open.
Investments by Federal Funds wire will be effective upon receipt. If the
wire is received after the time the offering price of shares is determined,
as noted above, it will be effective the next business day. If the investment
is made by check, the check must be converted to Federal Funds before your
purchase can be effective (normally one business day after receipt).
Your purchase begins earning dividends the next business day after becoming
effective. See Dividends and Distributions for additional information.
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 purchases by check 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 reserves the right, following shareholder notification, to charge
a service fee on non-retirement accounts 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 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 $1,000 as a result of redemptions. An investor
making the minimum initial investment will be subject to involuntary
redemption if he or she redeems any portion of his or her account.
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Tax-Free Money Fund A Class
In addition to offering the Tax-Free Money Fund Consultant Class shares,
the Fund offers the Tax-Free Money Fund A Class shares, which are described
in a separate prospectus. The Tax-Free Money Fund A Class shares can be
purchased directly from the Fund or its Distributor, and have no front-end or
contingent deferred sales charge or annual 12b-1 Plan expenses. In the event
12b-1 Plan payments are reinstituted under the Tax-Free Money Fund Consultant
Class' Plan, such payments may affect the performance of the Class. In
addition, in the event such payments are reinstituted, sales or service
compensation available in respect of the Class may differ from that available
to the Tax-Free Money Fund A Class shares. Both classes of the Fund's shares
have a proportionate interest in the underlying portfolio of securities of
the Fund. For the fiscal year ended April 30, 1995, the Total Operating
Expenses, as a percentage of average daily net assets, incurred by the
Tax-Free Money Fund A Class shares were 0.96%. See Part B for performance
relating to that class. To obtain a prospectus which describes the Tax-Free
Money Fund A Class, contact the Distributor.
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 tax-advantaged funds, equity funds or
more aggressive bond funds. Exchanges are subject to the eligibility and
minimum purchase requirements set forth in each fund's prospectus. Any
applicable front-end sales charge will apply to exchanges from money market
funds, like the Fund, to other funds, except for exchanges from money market
funds involving assets that were previously invested in a fund with a
front-end sales charge and exchanges from a money market fund involving the
reinvestment of dividends. Class shares may not be exchanged for Class B
Shares of any Class B Fund. Shares acquired in an exchange must be registered
in the state where they are so purchased. 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 out of the Class based on the net
asset value next determined after we receive your request in good order.
Redemption or exchange requests received in good order after the time the
offering price 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. Exchange instructions and redemption requests must be signed by
the record owner(s) exactly as the shares are registered. With regard to
exchanges, you must also provide the name of the fund you want to receive the
proceeds. 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.
The Fund will not honor check, telephone or wire redemptions for Class
shares recently purchased by check unless it is reasonably satisfied that the
purchase check has cleared, which may take up to 15 days from the purchase
date. The Fund may honor written redemption requests, but will not mail the
proceeds until it is reasonably satisfied the purchase check has cleared. You
can avoid this potential delay if you purchase shares by wiring Federal
Funds. You may call the Shareholder Service Center to determine if your funds
are available for redemption. 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.
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, 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.
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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.
Class A Shares of the Delaware Group funds that carry a front-end sales
charge will be subject to a contingent deferred sales charge ("Limited CDSC")
upon redemption if the shares were purchased at net asset value without the
payment of a front-end sales charge and if a dealer's commission was paid to
a financial adviser, except in certain limited instances. Such shares may be
exchanged for shares of the Class without the imposition of the Limited CDSC
at the time of the exchange. However, upon subsequent redemption from the
Class or after a subsequent exchange into a fund that is subject to the
Limited CDSC, such shares will be subject to the Limited CDSC imposed by the
original fund whose shares were initially exchanged into the Class.
Shareholders will be given credit for the period during which the Class
shares were held.
Checkwriting Feature
Checkwriting is a convenient access feature that allows you to earn
dividends until your check is presented to the Fund.
You can request special checks by marking the box on the Investment
Application. There is a one-time $5 charge for this service.
Checks must be drawn for $500 or more and, unless otherwise indicated on
the Investment Application or checkwriting authorization form, must be signed
by all owners of the account.
You will be subject to CoreStates Bank, N.A.'s rules and regulations
governing similar accounts. If the amount of the check is greater than the
value of the shares in your account, the check will be returned and you may
be subject to a charge.
You may request a stop payment on checks by providing the Fund with a
written authorization (oral requests will be accepted only if followed
promptly with a written authorization). Such requests will remain in effect
for six months unless renewed or cancelled. There will be a $5 charge per
check for each six-month period.
Checks paid will be returned to you semi-annually (January and July). If
you need a copy of a check prior to the regular mailing you may call the
Shareholder Service Center.
Since dividends are declared daily, you may not use the Checkwriting
Feature to close your account. (See Part B for additional information.)
Written Redemption
You can write to the Fund at 1818 Market Street, Philadelphia, PA 19103 to
redeem some or all of your Class 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 when 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.
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 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 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.
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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. 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 and will normally be sent 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.
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. 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 of
shares is determined, as noted above.
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 shares into any fund
in the Delaware Group under the same registration. Any such exchange is
subject to the same conditions and limitations as other exchanges noted
above. Telephone exchanges may be subject to limitations as to amounts or
frequency.
Systematic Withdrawal Plan
This plan provides shareholders with a consistent monthly (or quarterly)
payment. This is particularly useful to shareholders living on fixed incomes,
since it provides 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. 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.
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, subject to the
same conditions and limitations as other exchanges noted above. Shareholders
can also use the Wealth Builder Option to invest in the Class 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. See Investing by Exchange under Buying Shares. Shareholders can
terminate their participation at any time by written notice to the Fund.
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DIVIDENDS AND DISTRIBUTIONS
The Fund declares a dividend to all Class shareholders of record at the time
the offering price of shares is determined. See Purchase Price and Effective
Date under Buying Shares. Thus, when redeeming shares, dividends continue to
accrue up to and including the date of redemption.
Purchases of Fund shares by wire begin earning dividends when converted
into Federal Funds and available for investment, normally the next business
day after receipt. However, if the Fund is given prior notice of Federal
Funds wire and an acceptable written guarantee of timely receipt from an
investor satisfying the Fund's credit policies, the purchase will start
earning dividends on the date the wire is received. Purchases by check earn
dividends upon conversion to Federal Funds, normally one business day after
receipt.
The Fund's dividends are declared daily and paid monthly on the last day of
each month. Payment by check of cash dividends will ordinarily be mailed
within three business days after the payable date. Short-term realized
securities profits, if any, may be paid with the daily dividend; otherwise,
they will be distributed annually during the first quarter following the
close of the fiscal year.
Each class of shares of the Fund will share proportionately in the
investment income and expenses of the Fund, except that until June 1, 1990
the Class incurred distribution fees under the 12b-1 Plan. The Board of
Directors of the Fund has suspended 12b-1 Plan payments from the Class to the
Distributor effective June 1, 1990. See Distribution (12b-1) and Service.
Both dividends and distributions will be automatically reinvested in your
account 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 under Redemption and Exchange for
information regarding authorization of this service. Information as to the
tax status of dividends will be provided annually.
During the fiscal year ended April 30, 1995, dividends totaling $0.0255 per
share of the Class were paid from net investment income.
See The Delaware Difference for additional information.
13
<PAGE>
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.
Federal Income Tax
Distributions of tax-exempt interest income are not includable in the
shareholder's gross income for federal income tax purposes. Distributions of
net investment income received by the Fund from investments in securities
other than municipal obligations, and any net short-term capital gains
realized by the Fund, will be taxable to the shareholder as ordinary income
whether received in cash or reinvested in additional shares. Distributions of
taxable net investment income, if any, will not qualify for the deduction for
dividends received by corporations. For the fiscal year 1995, all of the
Fund's net income was exempt from federal income taxes.
State and Local Taxes
The exemption of distributions for federal income tax purposes may not
result in similar exemptions under the laws of a particular state or local
taxing authority. It is recommended that shareholders consult their tax
advisers in this regard.
Shares of the Fund will be exempt from Pennsylvania county personal
property taxes. The Fund will report annually the percentage of interest
income earned on municipal obligations on a state-by-state basis during the
preceding calendar year.
NET ASSET VALUE PER SHARE
The purchase and redemption price of shares is equal to the net asset value
("NAV") per share of the Class that is 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.
The Fund's total net assets are determined by valuing the portfolio
securities at amortized cost. Under the direction of the Board of Directors,
certain procedures have been adopted to monitor the value of the Fund's
securities and stabilize the price per share at $1.00. Prior to January 1,
1991, the portfolio of the Fund was managed to maintain a fixed net asset
value of $10 per share. The Fund accomplished this change by effecting a
ten-to-one stock split for shareholders of record on that date.
See Part B for additional information.
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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 April 30, 1995, the Manager and its affiliate,
Delaware International Advisers Ltd., were supervising in the aggregate more
than $25 billion in assets in various institutional (approximately
$15,952,458,000) and investment company (approximately $9,688,552,000)
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.
The annual compensation paid by the Fund for investment management services
is equal to 1/2 of 1% of average daily net assets of the Fund, less all
directors' fees paid to the unaffiliated directors by the Fund. Investment
management fees paid by the Fund were 0.47% of average daily net assets for
the fiscal year ended April 30, 1995.
Portfolio Trading Practices
Portfolio trades are generally made on a net basis without brokerage
commissions. However, the price may include a mark-up or mark-down.
Banks, brokers or dealers are selected to execute the Fund's portfolio
transactions.
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 publish the "yield" and "effective yield"
for the Class. Both yield figures are based on historical earnings and are
not intended to indicate future performance. The "yield" of the Class refers
to the income generated by an investment in the Class over a specified
seven-day period. This income is then "annualized," which means the amount of
income generated by the investment during that week is assumed to be
generated each week over a 52-week period and is shown as a percentage of the
investment. The "effective yield" is calculated in a similar manner but, when
annualized, the income earned by an investment in the Class is assumed to be
reinvested. The "effective yield" will be slightly higher than the "yield"
because of the compounding effect of this assumed reinvestment. The Fund may
also publish a tax-equivalent yield based on federal and, if applicable,
state tax rates, which demonstrates the taxable yield necessary to produce an
after-tax yield equivalent to the Class' yield. Yield fluctuates and is not
guaranteed. In addition, the Fund may publish aggregate and average annual
total return information concerning the Class which will reflect the
compounded rate of return of an investment in the Class over a specified
period of time and will assume the investment of all distributions at net
asset value. Past performance is not an indication of future results.
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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 (the "Plan") for
the Class which permits the Fund to pay the Distributor from Class assets a
monthly fee for its services and expenses in distributing and promoting sales
of Class shares. These expenses include 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 other entities which sell Class
shares. In connection with the promotion of Class 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 the Class and increase sales of shares of the Class. In addition,
the Fund may make payments from Class assets directly to others, such as
banks, who aid in the distribution of Class shares or provide services to the
Class, pursuant to service agreements with the Fund. Registered
representatives of brokers, dealers or other entities who have sold a
specified level of Delaware Group funds having a 12b-1 Plan were, prior to
June 1, 1990, paid a .25% continuing trail fee by the Distributor from 12b-1
Plan payments of the Class for assets maintained in the Class. Payment of
such fees has been suspended but may be reinstituted in the future with prior
approval of the Board of Directors.
The aggregate fees paid by the Fund from Class assets to the Distributor
and others under the Plan may not exceed .30% of the Class' average daily net
assets in any year. The Class will not incur any distribution expenses beyond
this limit, which may not be increased without shareholder approval. The
Board of Directors previously had set the fee for the Class at .25% of
average daily net assets. The Distributor may, however, incur additional
expenses and make additional payments to dealers from its own resources to
promote the distribution of Class shares.
The Plan does not apply to the Tax-Free Money Fund A Class of shares. Those
shares are not included in calculating the Plan's fees, and the Plan is not
used to assist in the distribution and marketing of Tax-Free Money Fund A
Class shares.
While Plan payments may not exceed .30% annually, the Plan does not limit
fees to amounts actually expended by the Distributor. It is therefore
possible that if a distribution fee were to be paid, the Distributor could
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 Plan. The monthly fee paid to the Distributor is subject to
the review and approval of the Fund's unaffiliated directors who may reduce
the fee or terminate the Plan at any time. The Board of Directors has
suspended 12b-1 Plan payments from the Class to the Distributor effective
June 1, 1990. Such payments may be reinstituted in the future with prior
approval of the Board of Directors.
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 Plan, if necessary,
to comply with any new rules or regulations the SEC may adopt with respect to
Rule 12b-1.
The National Association of Securities Dealers, Inc. 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.
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.
16
<PAGE>
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 expenses to
average daily net assets of the Class was 0.96% for the fiscal year ended
April 30, 1995.
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 in April 1980.
The Fund's shares have a par value of $.001, equal voting rights and are
equal in all other respects.
The Fund also offers the Tax-Free Money Fund A Class of shares which
represents a proportionate interest in the assets of the Fund and has the
same voting and other rights and preferences as the Class, except that shares
of the Tax-Free Money Fund A Class are not subject to, and may not vote on
matters affecting, the Distribution Plan under Rule 12b-1 relating to the
Class. While the Fund's Board of Directors has authority to create additional
series and classes of shares, there is currently only one such series, which
consists of two classes of shares.
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.
Prior to January 1992, the Tax-Free Money Fund Consultant Class was known as
the consultant class, between January 1992 and November 1992, it was known as
the Tax-Free Money Fund (Institutional) class and between November 1992 and
February 1994, it was known as the Tax-Free Money Fund Consultant class. In
addition, prior to January 1992, the Tax-Free Money Fund A Class was known as
the original class and between January 1992 and February 1994, it was known as
the Tax-Free Money Fund class.
17
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
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
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, NY 10260
_____________________________
TAX-FREE MONEY FUND
- -----------------------------
A CLASS
- -----------------------------
TAX-FREE MONEY FUND
- -----------------------------
CONSULTANT CLASS
- -----------------------------
CLASSES OF DELAWARE GROUP
- -----------------------------
TAX-FREE MONEY FUND, INC.
- -----------------------------
No Sales Charge
PART B
Statement of
Additional Information
- -----------------------------
JUNE 29, 1995
DELAWARE
GROUP
==========
<PAGE>
______________________________________________________
PART B--STATEMENT OF ADDITIONAL INFORMATION
JUNE 29, 1995
- ------------------------------------------------------
DELAWARE GROUP
- ------------------------------------------------------
TAX-FREE MONEY FUND, INC.
- ------------------------------------------------------
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
- ------------------------------------------------------
TABLE OF CONTENTS
- ------------------------------------------------------
Cover Page 1
- ------------------------------------------------------
Investment Objective and Policy 2
- ------------------------------------------------------
Performance Information 5
- ------------------------------------------------------
Trading Practices 7
- ------------------------------------------------------
Purchasing Shares 8
- ------------------------------------------------------
Offering Price 11
- ------------------------------------------------------
Redemption 11
- ------------------------------------------------------
Dividends and Realized Securities
Profits Distributions 14
- ------------------------------------------------------
Taxes 15
- ------------------------------------------------------
Investment Management Agreement 15
- ------------------------------------------------------
Officers and Directors 16
- ------------------------------------------------------
Exchange Privilege 19
- ------------------------------------------------------
General Information 21
- ------------------------------------------------------
Appendix A--Description of Ratings 23
- ------------------------------------------------------
Appendix B--Equivalent Yields: Tax-Exempt
Versus Taxable Securities 24
- ------------------------------------------------------
Financial Statements 25
- ------------------------------------------------------
Delaware Group Tax-Free Money Fund, Inc. (the "Fund") currently offers two
classes of shares (individually, a "Class" and collectively, the
"Classes")--the Tax-Free Money Fund A Class and the Tax-Free Money Fund
Consultant Class.
This Statement of Additional Information ("Part B" of the registration
statement) relates to both Classes of shares of the Fund and supplements the
information contained in the current Prospectus of each Class dated June 29,
1995, as may be amended from time to time. It should be read in conjunction
with the respective Class' Prospectus. This Part B is not itself a prospectus
but is, in its entirety, incorporated by reference into each Class'
Prospectus. A prospectus for each 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 POLICY
The objective of the Fund is to seek a high level of current income, exempt
from federal income tax, consistent with preservation of principal and
maintenance of liquidity. There is no assurance that this objective can be
achieved. This objective is a matter of fundamental policy and may not be
changed without approval by the holders of a majority of the outstanding
voting securities of the Fund, which is the lesser of more than 50% of the
outstanding voting securities or 67% of the voting securities present at a
shareholder meeting if 50% or more of the voting securities are present in
person or represented by proxy. See General Information.
The Fund invests primarily in municipal obligations. Municipal obligations
may be issued for various public purposes, including the construction of a
wide range of public facilities such as airports, bridges, highways, housing,
hospitals, mass transportation, schools, streets and water and sewer works.
Other public purposes for which municipal bonds may be issued include
refunding outstanding obligations, obtaining funds for general operating
expenses and obtaining funds to lend to other public institutions and
facilities. In addition, certain types of industrial development obligations
are issued by or on behalf of public authorities to obtain funds to provide
privately-operated housing facilities, sports facilities, convention or trade
show facilities, airport, mass transit, port or parking facilities, air or
water pollution control facilities and certain local facilities for water
supply, gas, electricity or sewage or solid waste disposals. Such obligations
are included within the term "municipal obligations" provided that the
interest paid thereon qualifies as exempt from federal income tax in the
opinion of bond counsel to the issuer. In addition, the interest paid on
industrial development obligations, the proceeds from which are used for the
construction, equipment, repair or improvement of privately-operated
industrial or commercial facilities, may be exempt from federal income tax,
although current federal tax laws place substantial limitations on the size
of such issues. Tax-exempt industrial development obligations are in most
cases revenue obligations and do not generally carry the pledge of the credit
of the issuing municipality.
The Fund may also purchase project notes issued by local agencies under a
program administered by the United States Department of Housing and Urban
Development. Project notes are secured by the full faith and credit of the
United States.
The Tax Reform Act of 1986 (the "Act") limits the amount of new "private
purpose" bonds that each state can issue and subjects interest income from
these bonds to the federal alternative minimum tax. "Private purpose" bonds
are issues whose proceeds are used to finance certain nongovernment
activities, such as privately-owned sports and convention facilities. The Act
also makes the tax-exempt status of certain bonds depend upon the issuer's
compliance with specific requirements after the bonds are issued.
<PAGE>
The Fund intends to seek to achieve a high level of tax-exempt income.
However, if the Fund invests in newly-issued private purpose bonds, a portion
of its distributions would be subject to the federal alternative minimum tax
applicable to certain shareholders.
The ratings of Moody's Investors Service, Inc. ("Moody's") and Standard &
Poor's Corporation ("S&P") represent their opinions as to the quality of the
municipal issues which they undertake to rate. It should be emphasized,
however, that ratings are general and are not absolute standards of quality.
These ratings are the initial criteria for selection of portfolio
investments, but the Fund will further evaluate these securities.
Additionally, the Fund may purchase unrated instruments if it concludes that
they are of high quality and otherwise satisfy the requirements with which
tax-exempt money market funds must comply.
Appendix A contains excerpts describing ratings of municipal obligations
from Moody's and S&P. A table of equivalent yields of taxable and tax-exempt
securities is set forth as Appendix B.
The Fund maintains its net asset value at $1.00 per share by valuing its
securities on an amortized cost basis. See Offering Price. The Fund maintains
a dollar weighted average portfolio maturity of not more than 90 days and
does not purchase any issue having a remaining maturity of more than 13
months. In addition, the Fund limits its investments, including repurchase
agreements, to those instruments which the Board of Directors determines
present minimal credit risks and which are of high quality and otherwise
satisfy the requirements with which tax-exempt money market funds must
comply. In the event of a marked increase in current interest rates or of a
national credit crisis, principal values could be adversely affected. While
the Fund will make every effort to maintain a fixed net asset value of $1.00
per share, there can be no assurance that this objective will be achieved.
While the Fund intends to hold its investments until maturity when they
will be redeemable at their full principal value plus accrued interest,
attempts may be made, from time to time, to increase its yield by trading to
take advantage of market variations. Also, revised evaluations of the issuer
or redemptions may cause sales of portfolio investments prior to maturity or
at times when such sales might otherwise not be desirable. The Fund's right
to borrow to facilitate redemptions may reduce but does not guarantee a
reduction in the need for such sales. The Fund will not purchase new
securities while any borrowings are outstanding. See Dividends and Realized
Securities Profits Distributions and Taxes for effect of any capital gains
distributions.
A shareholder's rate of return will vary with the general interest rate
levels applicable to the instruments in which the Fund invests. The rate of
return and the net asset value will be affected by such other factors as
sales of portfolio securities prior to maturity and the Fund's operating
expenses.
2
<PAGE>
When-Issued Securities
New issues of municipal obligations are frequently offered on a when-issued
basis; that is, delivery and payment for the municipal obligations normally
take place from five to not more than 45 days after the date of the
commitment to purchase. The payment obligation and the interest rate that
will be received on the municipal obligations are each fixed at the time the
buyer enters into the commitment. Thus, it is possible that the market value
at time of settlement could be higher or lower than the purchase price if
interest rates have changed. The Fund will set aside in a segregated account
high-grade liquid assets equal in value to commitments for such when-issued
securities. Delayed delivery agreements will not be used in a speculative
manner.
Demand Features
The Fund may invest in certain municipal securities that have a demand
feature provided by a bank, dealer in the securities or another third party
which enables the Fund to sell the securities to the provider of the demand
feature as described in the Prospectuses. Such investments may require the
Fund to pay "tender fees" or other fees for the various features provided.
The Fund intends to take the position that it is the owner of any municipal
securities that have a demand feature provided by a third party and that
tax-exempt interest earned with respect to such municipal securities will be
tax-exempt in its hands. However, the Internal Revenue Service ("Service")
ordinarily does not issue advance ruling letters relating to the identity of
the true owner of property in cases involving the sale of securities if the
purchaser has the right to cause the security to be purchased by a third
party, and there can be no assurance that the Service will agree with the
Fund's position in any particular case. Additionally, the federal income tax
treatment of certain other aspects of these investments, including the
treatment of tender fees, in relation to various regulated investment company
tax provisions is unclear. However, the Fund's investment manager intends to
manage the Fund's portfolio in a manner designed to minimize any adverse
impact from the tax rules applicable to these investments.
Asset-Backed Securities
The Fund may also invest in securities which are backed by assets such as
receivables on home equity and credit card loans, and receivables regarding
automobile, mobile home and recreational vehicle loans, wholesale dealer
floor plans and leases. All such securities must be rated in the highest
rating category by a reputable credit rating agency (e.g., AAA by S&P's or
Aaa by Moody's). The credit quality of most asset-backed securities depends
primarily on the credit quality of the assets underlying such securities, how
well the entities issuing the securities are insulated from the credit risk
of the originator or affiliated entities, and the amount of credit support
provided to the securities. Such receivables are securitized in either a
pass-through or a pay-through structure. Pass-through securities provide
investors with an income stream consisting of both principal and interest
payments in respect of the receivables in the underlying pool. Pay-through
asset-backed securities are debt obligations issued usually by a special
purpose entity, which are collateralized by the various receivables and in
which the payments on the underlying receivables provide the funds to pay the
debt service on the debt obligations issued. The Fund may invest in these and
other types of asset-backed securities that may be developed in the future.
It is the Fund's current policy to limit asset-backed investments to those
represented by interests in credit card receivables, wholesale dealer floor
plans, home equity loans and automobile loans.
<PAGE>
The rate of principal payment on asset-backed securities generally depends
upon the rate of principal payments received on the underlying assets. Such
rate of payments may be affected by economic and various other factors such
as changes in interest rates. Therefore, the yield may be difficult to
predict and actual yield to maturity may be more or less than the anticipated
yield to maturity. Such asset-backed securities also involve certain other
risks, including the risk that security interests cannot be adequately or in
many cases, ever, established. In addition, with respect to credit card
receivables, a number of state and federal consumer credit laws give debtors the
right to set off certain amounts owed on the credit cards, thereby reducing
the outstanding balance. In the case of automobile receivables, there is a
risk that the holders may not have either a proper or first security interest
in all of the obligations backing such receivables due to the large number of
vehicles involved in a typical issuance and technical requirements under
state laws. Therefore, recoveries on repossessed collateral may not always be
available to support payments on the securities.
Asset-backed securities are often backed by a pool of assets representing
the obligations of a number of different parties. To lessen the effect of
failures by obligors on underlying assets to make payments, such securities
may contain elements of credit support. Such credit support falls into two
categories: (i) liquidity protection, and (ii) protection against losses
resulting from ultimate default by an obligor on the underlying assets.
Liquidity protection refers to the provision of advances, generally by the
entity administering the pool of assets, to ensure that the receipt of
payments due on the underlying pool is timely. Protection against losses
resulting from ultimate default enhances the likelihood of payments of the
obligations on at least some of the assets in the pool. Such protection may
be provided through guarantees, insurance policies or letters of credit
obtained by the issuer or sponsor from third parties, through various means
of structuring the transaction or through a combination of such approaches.
The Fund will not pay any additional fees for such credit support, although
the existence of credit support may increase the price of a security.
Examples of credit support arising out of the structure of the transaction
include "senior-subordinated securities" (multiple class securities with one
or more classes subordinate to other classes as to the payment of principal
thereof and interest thereon, with the result that defaults on the underlying
assets are borne first by the holders of the subordinated class), creation of
"reserve funds" (where cash or investments, sometimes funded from a portion
of the payments on the underlying assets, are held in reserve against future
losses) and "over-collateralization" (where the scheduled payments on, or the
principal amount of, the underlying assets exceed that required to make
payments of the securities and pay any servicing or other fees). The degree
of credit support provided for each issue is generally based on historical
information respecting the level of credit information respecting the level
of credit risk associated with the underlying assets. Delinquencies or losses
in excess of those anticipated could adversely affect the return on an
investment in such issue.
3
<PAGE>
Repurchase Agreements
The Fund may also invest in repurchase agreements sold by banks or brokers
secured by the foregoing securities. A repurchase agreement is an instrument
under which securities are purchased from a bank or securities dealer with an
agreement by the seller to repurchase the securities. Under a repurchase
agreement, the purchaser acquires ownership of the security but the seller
agrees, at the time of sale, to repurchase it at a mutually agreed-upon time
and price. The Fund will take custody of the collateral under repurchase
agreements. Repurchase agreements may be construed to be collateralized loans
by the purchaser to the seller secured by the securities transferred. The
resale price is in excess of the purchase price and reflects an agreed-upon
market rate unrelated to the coupon rate or maturity of the purchased
security. Such transactions afford an opportunity for the Fund to invest
temporarily available cash on a short-term basis. The Fund's risk is limited
to the seller's ability to buy the security back at the agreed-upon sum at
the agreed-upon time, since the repurchase agreement is secured by the
underlying government obligation.
Investment Restrictions
The Fund has adopted the following restrictions which cannot be changed
without approval by the holders of a majority of the outstanding voting
securities of the Fund, as described above. The percentage limitations
contained in the restrictions and policies set forth herein apply at the time
of purchase of securities. The Fund may not under any circumstances:
1. Invest more than 20% of its assets in securities other than tax-free
money market instruments as defined under Investment Objective and Policy,
unless extraordinary circumstances dictate a more defensive posture.
2. Borrow an amount in excess of 5% of the value of its net assets and then
only as a temporary measure for extraordinary purposes or to facilitate
redemptions. Any outstanding borrowings shall be repaid before additional
securities are purchased.
3. Sell securities short or purchase securities on margin.
<PAGE>
4. Write or purchase put or call options.
5. Underwrite the securities of other issuers, except that the Fund may
acquire portfolio securities under circumstances where, if the securities are
later publicly offered or sold by the Fund, it might be deemed an underwriter
for purposes of the Securities Act of 1933. Not more than 10% of the value of
the Fund's net assets at the time of acquisition will be invested in such
securities.
6. Purchase or sell commodities or commodity contracts.
7. Purchase or sell real estate, but this shall not prevent the Fund from
investing in securities secured by real estate or interests therein, or
securities issued by companies which invest in real estate or interests
therein.
8. Make loans to other persons except by the purchase of obligations in
which the Fund is authorized to invest and to enter into repurchase
agreements. Not more than 10% of the Fund's total assets will be invested in
repurchase agreements maturing in more than seven days and in other illiquid
assets.
9. Purchase securities of any issuer (except the U.S. Government, its
agencies or instrumentalities or securities which are backed by the full
faith and credit of the United States) if, as a result, more than 5% of its
total assets would be invested in the securities of such issuer.
10. Invest in issuers for the purpose of exercising control.
11. Invest in securities of other investment companies, except as they may
be acquired as part of a merger, consolidation or acquisition of assets.
12. Purchase securities if, as a result of such purchase, more than 25% of
the value of its assets would be invested in the securities of government
subdivisions located in any one state, territory or possession of the United
States. The Fund may invest more than 25% of the value of its assets in
short-term tax-exempt project notes which are guaranteed by the U.S.
Government, regardless of the location of the issuing municipality.
In addition, the following investment restrictions may be changed by the
Board of Directors. The Fund may not:
(a) Retain in the portfolio of the Fund securities issued by an issuer any
of whose officers, directors or security holders is an officer or director of
the Fund or of the investment manager of the Fund if after the purchase of
the securities of such issuer by the Fund one or more of such officers or
directors owns beneficially more than 1/2 of 1% of the shares or securities
or both of such issuer and such officers and directors owning more than 1/2
of 1% of such shares or securities together own beneficially more than 5% of
such shares or securities.
(b) Invest funds in securities whose issuers or guarantors of principal and
interest (including predecessors) have a record of less than three years'
continuous operation if such purchase at the time thereof would cause more
than 5% of the total Fund assets to be invested in the securities of such
issuers or guarantors.
(c) Invest in direct interests in oil, gas or other mineral exploration or
development programs.
Although not a fundamental investment restriction, the Fund currently does
not invest its assets in real estate limited partnerships. In addition, the
Fund excludes from the 5% limitation set forth in investment restriction
number 9 above, those municipal securities that are refunded with U.S.
Government securities, commonly known as pre-refunded municipal securities,
which the staff of the U.S. Securities and Exchange Commission deems to
constitute U.S.Government securities as that term is defined in the
Investment Company Act of 1940 (the "1940 Act").
4
<PAGE>
PERFORMANCE INFORMATION
For the seven-day period ended April 30, 1995, the annualized current yield
of the Tax-Free Money Fund A Class and the Tax-Free Money Fund Consultant
Class was 3.54% for each Class and the compounded effective yield was 3.60%
for each Class. These yields will fluctuate daily as income earned
fluctuates. On this date the weighted average portfolio maturity was 38 days
for both Classes of shares. The current yield of the Tax-Free Money Fund A
Class is expected to be slightly higher than that of the Tax-Free Money Fund
Consultant Class during any period that the distribution fee under the Fund's
12b-1 Plan for the Tax-Free Money Fund Consultant Class is being paid. The
Board of Directors of the Fund suspended 12b-1 Plan payments from the
Tax-Free Money Fund Consultant Class to the Distributor, effective June 1,
1990. Such payments may be reinstituted in the future with prior approval of
the Board of Directors.
Shareholders and prospective investors will be interested in learning from
time to time the current and the effective compounded yield of a Class of
shares. As explained under Dividends and Realized Securities Profits
Distributions, dividends are declared daily from net investment income. In
order to determine the current return of the Fund's Classes of shares, yield
is calculated as follows:
The calculation begins with the value of a hypothetical account of one
share at the beginning of a seven-day period; this is compared with the value
of that same account at the end of that seven-day period (including shares
purchased for the account with dividends earned during the period). The net
change in the account value is generally the net income earned per share
during the period, which consists of accrued interest income plus or minus
amortized purchase discount or premium, less all accrued expenses (excluding
expenses reimbursed by the investment manager) but does not include realized
gains or losses or unrealized appreciation or depreciation.
The current yield of the Classes represents the net change in this
hypothetical account annualized over 365 days. In addition, a shareholder may
achieve a compounding effect through reinvestment of dividends which is
reflected in the effective yield shown below. The Fund may also publish a
tax-equivalent yield for each Class based on federal and, if applicable,
state tax rates, which demonstrates the taxable yield necessary to produce an
after-tax yield equivalent to each such Class' yield. For the seven-day
period ended April 30, 1995, the tax-equivalent yield of the Tax-Free Money
Fund A Class and the Tax-Free Money Fund Consultant Class was 5.13% for each
Class, assuming a federal income tax rate of 31%. These yields were computed
by dividing that portion of a Class' yield which is tax-exempt by one minus a
stated income tax rate (in this case, a federal income tax rate of 31%) and
adding the product to that portion, if any, of the yield that is not
tax-exempt. In addition, the Fund may advertise a tax-equivalent yield
assuming other income tax rates, when applicable. Yield fluctuates and is not
guaranteed. The tax-equivalent yield does not consider the effect of
applicable deductions or state income taxes. Past performance is not an
indication of future results.
<PAGE>
The following is an example, for purposes of illustration only, of the
current and effective yield calculations for the seven-day period ended April
30, 1995 for each Class:
Tax-Free Tax-Free
Money Fund Money Fund
A Class Consultant Class
Value of a hypothetical account
with one share at the beginning
of the period.................... $1.00000000 $1.00000000
Value of the same account at the
end of the period................ $1.00067822 $1.00067822
=========== ===========
Net change in account value....... .00067822* .00067822*
Base period return = net change
in account value / beginning
account value.................... .00067822 .00067822
Current yield
[base period return x
(365 / 7)]....................... 3.54%** 3.54%**
=========== ===========
Effective yield
365/7
(1 + base period) - 1...... 3.60%*** 3.60%***
=========== ===========
Weighted average life to maturity of the portfolio on April 30, 1995 was 38
days.
*This represents the net income per share for the seven calendar days
ended April 30, 1995.
**This represents the average of annualized net investment income
per share for the seven calendar days ended April 30, 1995.
***This represents the current yield for the seven calendar days ended
April 30, 1995 compounded daily.
The average annual total compounded rate of return of each Class is based on
a hypothetical $1,000 investment that includes capital appreciation and
depreciation during the stated periods. The following formula will be used
for the actual computations:
n
P(1+T) = ERV
Where: P = a hypothetical initial purchase order
of $1,000;
T = average annual total return;
n = number of years;
ERV = redeemable value of the hypothetical
$1,000 purchase at the end of the period.
5
<PAGE>
The following table, for purposes of illustration only, reflects the average
annual total return performance for each Class for one-, three-, five- and
ten-year periods ending April 30, 1995 and for the life of the Fund. For this
purpose, the calculation assumes the reinvestment of all dividend
distributions paid during the indicated periods. Interest rates fluctuated
during the period covered by the table and the Fund's results should not be
considered as representative of future performance. Total return for the
Tax-Free Money Fund Consultant Class for the periods prior to the
commencement of operations of such Class is based on the performance of the
Tax-Free Money Fund A Class. For periods prior to the commencement of
operations of the Tax-Free Money Fund Consultant Class, the total return
calculation does not reflect the 12b-1 payments that were applicable to such
Class during the period March 15, 1988 through June 1, 1990. If such payments
were reflected in the calculation, performance would have been affected.
Average Annual Total Return
Tax-Free
Tax-Free Money Fund
Money Fund Consultant
A Class Class*
1 year ended 4/30/95 2.59% 2.59%
3 years ended 4/30/95 2.07% 2.07%
5 years ended 4/30/95 2.91% 2.91%
10 years ended 4/30/95 3.80% 3.74%
Period 9/17/81** through 4/30/95 4.32% 4.28%
*Commenced operations on March 15, 1988.
**Date of initial public offering.
The Fund may quote actual total return and yield 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 the Bank Rate Monitor,
and those of corporate 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.
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. 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.
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.
<PAGE>
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.
Current interest rate and yield information on government debt obligations
of various durations, as reported weekly by the Federal Reserve (Bulletin
H.15), may also be used. Also, current rate information on municipal debt
obligations of various durations, as reported daily by the Bond Buyer, may
also be used. The Bond Buyer is published daily and is an industry-accepted
source for current municipal bond market information.
Comparative information on the Consumer Price 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 on an investment.
Total return performance of each Class will reflect the reinvestment of all
dividends and capital gains, if any, during the indicated period. Shares of
the Fund are sold without a sales charge. The results will not reflect any
state or local taxes payable by shareholders on the reinvested distributions
included in the calculations. As bond prices fluctuate, an illustration of
past Fund performance should not be considered as representative of future
results.
The following table is an example, for purposes of illustration only, of
cumulative total return performance of the Tax-Free Money Fund A Class and
the Tax-Free Money Fund Consultant Class for the three-, six- and nine-month
periods ended April 30, 1995, for the one-, three-, five- and ten-year
periods ended April 30, 1995 and for the life of the Fund. For these
purposes, the calculations assume the reinvestment of any realized securities
profits distributions and income dividends paid during the indicated periods.
Total return shown for the Tax-Free Money Fund Consultant Class for the
periods prior to the commencement of operations of such Class is based on the
performance of the Class A Shares. For the periods prior to the commencement
of operations of the Tax-Free Money Fund Consultant Class, the total return
does not reflect the 12b-1 payments applicable to such Class during the
period March 15, 1988 through June 1, 1990. If such payments were reflected
in the calculations, performance would have been affected.
6
<PAGE>
Cumulative Total Return
Tax-Free
Tax-Free Money Fund
Money Fund Consultant
A Class Class*
3 months ended 4/30/95 0.77% 0.77%
6 months ended 4/30/95 1.49% 1.49%
9 months ended 4/30/95 2.09% 2.09%
1 year ended 4/30/95 2.59% 2.59%
3 years ended 4/30/95 6.33% 6.33%
5 years ended 4/30/95 15.44% 15.41%
10 years ended 4/30/95 45.22% 44.43%
Period 9/17/81** through 4/30/95 77.96% 76.99%
*Commenced operations on March 15, 1988.
**Date of initial public offering.
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
overriding investment philosophy of Delaware Management Company, Inc. (the
"Manager") 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.
COMPOUNDED RETURNS
Results of various assumed fixed rates of return on a $10,000 investment
compounded monthly for 10 years:
3% Rate 4% Rate 5% Rate
of Return of Return of Return
12-'85 $10,304 $10,407 $10,512
12-'86 $10,618 $10,831 $11,049
12-'87 $10,940 $11,273 $11,615
12-'88 $11,273 $11,732 $12,209
12-'89 $11,616 $12,210 $12,833
12-'90 $11,970 $12,707 $13,490
12-'91 $12,334 $13,225 $14,180
12-'92 $12,709 $13,764 $14,906
12-'93 $13,095 $14,325 $15,668
12-'94 $13,494 $14,908 $16,470
<PAGE>
These figures are calculated on a fixed interest rate and assume no
fluctuation in the value of principal. These results are not intended to be a
projection of investment results and do not reflect the actual performance
results of either of the Classes.
The Prospectuses and this Part B may be in use for a full year and,
accordingly, it can be expected that yields will fluctuate substantially from
the example shown above.
The yield quoted at any time represents the amount being earned on a
current basis and is a function of the types of instruments in the Fund's
portfolio, their quality and length of maturity and the Fund's operating
expenses. The length of maturity for the portfolio is the average dollar
weighted maturity of the portfolio. This means that the portfolio has an
average maturity of a stated number of days for its issues. The calculation
is weighted by the relative value of the investment.
The yield will fluctuate daily as the income earned on the investments of
the Fund fluctuates. Accordingly, there is no assurance that the yield quoted
on any given occasion will remain in effect for any period of time. The
current yield may include income which is not exempt from federal income tax
since the Fund is permitted to invest a portion of its investments in
non-tax-exempt securities. It should also be emphasized that the Fund is an
open-end investment company and that there is no guarantee that the net asset
value or any stated rate of return will remain constant. A shareholder's
investment in the Fund is not insured. Investors comparing results of the
Fund with investment results and yields from other sources such as banks or
savings and loan associations should understand these distinctions.
Historical and comparative yield information may, from time to time, be
presented by the Fund. Although the Fund determines the yield on the basis of
a seven-calendar-day period, it may from time to time use a different time
span.
Other funds of the money market type may calculate their yield on a
different basis and the yield quoted by the Fund could vary upward or
downward if another method of calculation or base period were used.
Shareholders and prospective investors who wish to learn the current yield of
the Fund may call toll free, nationwide 800-523-4640 (in Philadelphia,
215-988-1333).
TRADING PRACTICES
The Fund selects brokers, dealers and banks 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, dealers or banks 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. Trades are generally 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.
7
<PAGE>
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.
As provided in the Securities Exchange Act of 1934 and the 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 of
its own resources for services used by the Manager in connection with
administrative or other functions not related to its investment
decision-making process. In addition, so long as no fund is disadvantaged,
portfolio transactions which generate commissions or their equivalent are
allocated to broker/dealers who provide daily portfolio pricing services to
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.
<PAGE>
The Manager may place a combined order for two or more accounts or funds
engaged in the purchase or sale of the same security if, in its judgment,
joint execution is in the best interest of each participant and will result
in best price and execution. Transactions involving commingled orders are
allocated in a manner deemed equitable to each account or fund. When a
combined order is executed in a series of transactions at different prices,
each account participating in the order may be allocated an average price
obtained from the executing broker. It is believed that the ability of the
accounts to participate in volume transactions will generally be beneficial
to the accounts and funds. Although it is recognized that, in some cases, the
joint execution of orders could adversely affect the price or volume of the
security that a particular account or fund may obtain, it is the opinion of
the Manager and the 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.
PURCHASING SHARES
The Distributor serves as the national distributor for the Fund's shares,
and has agreed to use its best efforts to sell shares of the Fund.
Shares of the Tax-Free Money Fund Consultant Class are offered through
brokers, financial institutions and other entities which have a dealer
agreement with the Fund's Distributor or a service agreement with the Fund.
In some states, banks and/or other institutions effecting transactions in
Tax-Free Money Fund Consultant Class shares may be required to register as
dealers pursuant to state laws. Tax-Free Money Fund A Class shares may also
be purchased directly by contacting the Fund or its agent. The minimum initial
investment is $1,000 and all subsequent investments must be at least $25. The
minimum initial and subsequent investments with respect to the Tax-Free Money
Fund A Class will be waived for purchases by officers, directors and
employees of any Delaware Group fund, the Manager or any of the Manager's
affiliates if the purchases are made pursuant to a payroll deduction program.
Shares of the Fund are offered on a continuous basis, and are sold without
a front-end or contingent deferred sales charge at the net asset value next
determined after the receipt and effectiveness of a purchase order, as
described below. See the Prospectuses for information on how to invest. 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.
8
<PAGE>
Certificates representing shares purchased are not ordinarily issued unless
a shareholder submits a specific request. However, such purchases 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 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 their shares may only
redeem these shares by written request. The investor's certificate(s) must
accompany such request.
Investing by Electronic Fund Transfer
Direct Deposit Purchase Plan--Investors may arrange for the Fund to accept
for investment, through an agent bank, preauthorized government or private
recurring payments by Electronic Fund Transfer. 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--The Automatic Investing Plan enables shareholders
to make regular monthly investments without writing checks. Shareholders may
authorize the Fund, in advance, to make arrangements for their bank to
withdraw a designated amount monthly directly from their checking account for
deposit into a 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 in
the future, his or her investments would be handled electronically through
EFT.
* * *
Investments under the Direct Deposit Purchase Plan and the Automatic
Investing Plan must be for $25 or more. Investors wishing to take advantage
of these options should contact the Shareholder Service Center at
800-523-1918 (in Philadelphia, 215-988-1241) for the necessary authorization
forms and information. These services 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.
<PAGE>
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.
When Orders Are Effective
Transactions in money market instruments in which the Fund invests normally
require same day settlement in Federal Funds. The Fund intends at all times
to be as fully invested as possible in order to maximize its earnings. Thus,
purchase orders will be executed at the net asset value next determined after
their receipt by the Fund only if the Fund has received payment in Federal
Funds by wire. Dividends begin to accrue on the next business day. Thus,
investments effective the day before a weekend or holiday will not accrue for
that period but will earn dividends on the next business day. If, however,
the Fund is given prior notice of Federal Funds wire and an acceptable
written guarantee of timely receipt from an investor satisfying the Fund's
credit policies, the purchase will start earning dividends on the date the
wire is received.
If remitted in other than the foregoing manner, such as by money order or
personal check, purchase orders will be executed 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, on the day on which the payment is converted
into Federal Funds and is available for investment, normally one business day
after receipt of payment. Conversion into Federal Funds may be delayed when
the Fund receives: (1) a check drawn on a nonmember bank of the Federal
Reserve; (2) a check drawn on a foreign bank; (3) a check payable in a
foreign currency; or (4) a check requiring special handling. With respect to
investments made other than by wire, the investor becomes a shareholder after
declaration of the dividend on the day on which the order is effective.
Information on how to procure a negotiable bank draft or to transmit
Federal Funds by wire is available at any national bank or any state bank
which is a member of the Federal Reserve System. Any commercial bank can
transmit Federal Funds by wire. The bank may charge the shareholder for these
services.
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 amount
credited by the check plus any dividends earned thereon.
9
<PAGE>
Plan Under Rule 12b-1 for the Tax-Free Money Fund Consultant Class of Shares
Pursuant to Rule 12b-1 under the 1940 Act, the Fund has adopted a plan (the
"Plan") for the Tax-Free Money Fund Consultant Class which permits that Class
to pay for certain distribution and promotional expenses related to marketing
its shares.
The Plan does not apply to the Fund's Tax-Free Money Fund A Class of
shares. Those shares are not included in calculating the Plan's fees, and the
Plan is not used to assist in the distribution and marketing of Tax-Free
Money Fund A Class shares. Shareholders of the Tax-Free Money Fund A Class
may not vote on matters affecting the Plan.
The Plan permits the Fund, pursuant to the Distribution Agreement, to pay
from the assets of the Tax-Free Money Consultant Class, a monthly fee to the
Distributor for its services and expenses in distributing and promoting sales
of the shares of such Class. These expenses include 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 Dealer's Agreements with the Distributor or service agreements
with the Fund. Registered representatives of brokers, dealers or other
entities, who have sold a specified level of Delaware Group funds having a
12b-1 Plan were, prior to June 1, 1990, paid a .25% continuing trail fee by
the Distributor from 12b-1 payments relating to the Tax-Free Money Fund
Consultant Class for assets maintained in that Class. As noted below, payment
of these fees has been suspended but may be reinstituted in the future with
prior approval of the Board of Directors.
In addition, the Fund may make payments from the assets of the Tax-Free
Money Fund Consultant Class, directly to other unaffiliated parties, such as
banks, who either aid in the distribution of shares of such Class or provide
services to that Class.
The maximum aggregate fee payable by the Fund on behalf of the Tax-Free
Money Fund Consultant Class under the Plan and the Fund's Distribution
Agreement is, on an annual basis, .30% of its average daily net assets for the
year. The Fund's directors may reduce these amounts at any time. The Fund's
directors suspended 12b-1 Plan payments from the assets of the Tax-Free Money
Fund Consultant Class to the Distributor effective June 1, 1990. Prior to
that time, the Board of Directors had set the fee for Tax-Free Money Fund
Consultant Class at .25% of average daily net assets and the Distributor had
agreed to waive this distribution fee to the extent such fee for any day
exceeded the net investment income realized by that Class for such day.
Payments under the Plan may be reinstituted in the future with prior approval
of the Board of Directors. All of the distribution expenses incurred by the
Distributor and others, such as broker/dealers, in excess of the amount, if
any, paid on behalf of the Tax-Free Money Fund Consultant Class will be borne
by such persons without any reimbursement from that Class. 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 on behalf of the
Tax-Free Money Fund Consultant Class under the Plan.
<PAGE>
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 Plan and the Fund's Distribution Agreement have 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 Plan or the Agreement,
by vote cast in person at a meeting duly called for the purpose of voting on
the Plan and such Agreement. Continuation of the Plan and the Distribution
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 Plan is
in the best interest of shareholders of the Tax-Free Money Fund Consultant
Class and that there is a reasonable likelihood of its providing a benefit to
them. The Plan and the Distribution Agreement 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
Tax-Free Money Fund Consultant Class. Any amendment materially increasing the
maximum percentage payable under the Plan must likewise be approved by a
majority vote of the outstanding voting securities of the Tax-Free Money Fund
Consultant Class, as well as a majority vote of those directors who are not
"interested persons." Also, any other material amendment to the Plan must be
approved by a majority vote of the directors of the Fund having no interest
in the Plan. In addition, in order for the Plan 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 Plan.
Persons authorized to make payments under the Plan must provide written
reports at least quarterly to the Board of Directors for their review.
For the fiscal year ended April 30, 1995, there were no payments on behalf
of the Tax-Free Money Fund Consultant Class pursuant to its Plan.
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.
Reinvestment Privilege
Shareholders who have acquired Fund shares through an exchange of one of
the other mutual funds in the Delaware Group offered with a sales charge and
who have redeemed such shares of the Fund have one year from the date of
redemption to reinvest all or part of their redemption proceeds in shares of
any of the other funds in the Delaware Group, subject to eligibility and
minimum purchase requirements, in states where shares of such other funds may
be sold, at net asset value without payment of a sales charge. 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.
10
<PAGE>
Reinvestment of Dividends in Other Delaware Group Funds
Subject to applicable eligibility and minimum purchase requirements,
shareholders may automatically reinvest dividends and/or distributions from
the Fund into certain of the other mutual funds in the Delaware Group. Such in-
vestments will be at net asset value at the close of business on the
reinvestment date without any front-end sales charge or exchange 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.
Dividends from the shares of each class may be reinvested in shares of any
other mutual fund in the Delaware Group, other than Class B Shares of funds
in the Delaware Group that offer such class of shares.
Account Statements
A Statement of Account will be mailed quarterly summarizing all
transactions during that period and will include the regular dividend
information. However, accounts in which there has been activity will receive
a monthly statement confirming transactions for that period.
OFFERING PRICE
The offering price of shares of a Class is the net asset value per share
next to be determined after an order is received and becomes effective. There
is no sales charge.
The purchase will be effected at the net asset value next computed after
the receipt of Federal Funds provided they are received by 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, President's 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.
<PAGE>
An example showing how to calculate the net asset value per share is
included in the Fund's financial statements which are incorporated by
reference into this Part B.
The investor becomes a shareholder at the close of and after declaration of
the dividend on the day on which the order is effective. See Purchasing
Shares. Dividends begin to accrue on the next business day. In the event of
changes in Securities and Exchange Commission requirements or the Fund's
change in time of closing, the Fund reserves the right to price at a
different time, to price more often than once daily or to make the offering
price effective at a different time.
The net asset value per share of a Class is computed by adding the value of
all securities and other assets in the portfolio, deducting any liabilities
and dividing by the number of shares outstanding. Expenses and fees are
accrued daily. The Fund's total net assets are determined by valuing the
portfolio securities at amortized cost.
The Board of Directors has adopted certain procedures to monitor and
stabilize the price per share. Calculations are made each day to compare part
of the Fund's value with the market value of instruments of similar
character. At regular intervals all issues in the portfolio are valued at
market value. Securities maturing in more than 60 days are valued more
frequently by obtaining market quotations from market makers. The portfolio
will also be valued by market makers at such other times as is felt
appropriate. In the event that a deviation of more than 1/2 of 1% exists
between the Fund's $1.00 per share offering and redemption prices and the net
asset value calculated by reference to market quotations, or if there is any
other deviation which the Board of Directors believes would result in a
material dilution to shareholders or purchasers, the Board of Directors will
promptly consider what action, if any, should be initiated, such as changing
the price to more or less than $1.00 per share.
REDEMPTION
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. 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 and a signature
guarantee are 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, executors, retirement plans, administrators, trustees or
guardians. The redemption price is the net asset value next calculated after
receipt of the redemption request in good order. See Offering Price for time
of calculation of net asset value.
11
<PAGE>
Payment for shares redeemed will ordinarily be mailed the next business
day, but no later than seven days, after receipt of a redemption request in
good order. If a shareholder redeems an entire account, all dividends accrued
to the time of the withdrawal will be paid by separate check at the end of
that particular monthly dividend period. Except with respect to the expedited
payment by wire, for which there is currently a $7.50 bank wiring cost, there
is no fee charged for redemptions, but such fees could be charged at any time
in the future.
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. In such case, the shareholder may
withdraw a 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.
See Account Statements under Purchasing Shares for information relating to
the mailing of confirmations of redemptions.
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. Redemption requests by
wire or the Checkwriting Feature in this case will not be honored. The hold
period against a recent purchase may be up to but not in excess of 15 days,
depending upon the origin of the investment check. Dividends will continue to
be earned until the redemption is processed. 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.
While the Fund reserves the right to redeem accounts at the then-current
net asset value if as a result of redemption or transfer the total investment
has a value of less than $1,000, before it does so, the shareholder will be
notified in writing that the value of the shares in the account is less than
$1,000 and will be allowed 60 days from the date of notice to make an
additional investment to meet the required minimum of $1,000. If no such
action is taken by the shareholder, the proceeds will be sent to the
shareholder. Any redemption in an inactive account established with a minimum
investment may trigger mandatory redemption.
<PAGE>
Expedited Telephone Redemptions
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.
Shareholders 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)
prior to the time the offering price (net asset value) is 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 more than seven days, after receipt of the
redemption request. This option is only available to individual, joint and
individual fiduciary-type accounts.
In addition, redemption proceeds of $1,000 or more can be transferred to
your predesignated bank account by wire or by check by calling the 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 that 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
with 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.
To reduce the shareholder's risk of attempted fraudulent use of the
telephone redemption procedure, payment will be made only to the bank account
designated on the authorization form.
If expedited payment under these procedures could adversely affect 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 from
shareholders are generally tape recorded, and a written confirmation will be
provided for all purchase, exchange and redemption transactions initiated by
telephone.
12
<PAGE>
Checkwriting Feature
Shareholders holding shares for which certificates have not been issued may
request on the investment application that they be provided with special
forms of checks which may be issued to redeem their shares by drawing on the
Fund's account with CoreStates Bank, N.A. Normally, it takes two weeks from
the date the shareholder's initial purchase check clears to receive the first
order of checks. The use of any form of check other than the Fund's check
will not be permitted unless approved by the Fund.
(1) These redemption checks must be made payable in an amount of $500 or
more.
(2) Checks must be signed by the shareholder(s) of record or, in the case
of an organization, by the authorized person(s). If registration is in more
than one name, unless otherwise indicated on the investment application or
your checkwriting authorization form, these checks must be signed by all
owners before the Fund will honor them. Shareholders using redemption checks
will continue to be entitled to distributions paid on those shares up to the
time such checks are presented for payment.
(3) If a shareholder who recently purchased shares by check seeks to redeem
all or a portion of those shares through the Checkwriting Feature, the Fund
will not honor the redemption request unless it is reasonably satisfied of
the collection of the investment check. The hold period against a recent
purchase may be up to but not in excess of 15 days, depending upon the origin
of the investment check.
(4) If the amount of the check is greater than the value of the shares held
in the shareholder's account, the check will be returned and the shareholder
may be subject to extra charges.
(5) Checks may not be used to close accounts.
The Fund reserves the right to revoke the Checkwriting Feature of
shareholders who overdraw their accounts or if, in the opinion of management,
such revocation is in the Fund's best interest.
Shareholders will be subject to CoreStates Bank, N.A.'s rules and
regulations governing similar accounts. There is a one-time $5 charge by the
Fund to shareholders for this service. This service may be terminated or
suspended at any time by CoreStates Bank, N.A., the Fund or the Transfer
Agent. The Fund and the Transfer Agent will not be responsible for the
inadvertent processing of post-dated checks or checks more than six months
old.
Stop-Payment Requests--Investors may request a stop payment on checks by
providing the Fund with a written authorization to do so. Oral requests will
be accepted provided that the Fund promptly receives a written authorization.
Such requests will remain in effect for six months unless renewed or
cancelled. The Fund will use its best efforts to effect stop-payment
instructions, but does not promise or guarantee that such instructions will
be effective. Shareholders requesting a stop payment will be charged a $5
service fee per check for each six-month period, which will be deducted from
their accounts.
<PAGE>
Return of Checks--Checks used in redeeming shares from a shareholder's
account will be accumulated and returned semi-annually. Shareholders needing
a copy of a redemption check before the regular mailing should contact the
Transfer Agent nationwide 800-523-1918 (in Philadelphia, 215-988-1241).
Systematic Withdrawal Plan
Shareholders who own or purchase $5,000 or more of shares 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.
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 20th of the month (unless such date falls on a holiday
or a Sunday) and mailed on or about the 19th of every month. 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.
Although the Fund expects to maintain a fixed net asset value, a shareholder
participating in the withdrawal plan could incur a capital gain or loss for
federal income tax purposes if the Fund were not able to do so. If there were
a gain or loss, it would be long-term or short-term depending on the holding
period for the specific shares liquidated.
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 supplied by an eligible institution based on its
creditworthiness. This plan may be terminated by the shareholder or the
Transfer Agent at any time by giving written notice.
Wealth Builder Option
Shareholders 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
same conditions and limitations set forth in the Prospectuses. See Wealth
Builder Option under Redemption and Exchange in the Prospectuses.
13
<PAGE>
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 applicable
public offering price of the fund selected on the date of investment. No
investment will be made in any month in which 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 either
Class through regular liquidations of shares in their accounts in other
mutual funds in the Delaware Group, subject to the same conditions and
limitations set forth in the Prospectuses. Shareholders can terminate their
participation at any time by written notice to the Fund.
DIVIDENDS AND
REALIZED SECURITIES
PROFITS DISTRIBUTIONS
The Fund declares a dividend of its net investment income on a daily basis
to shareholders of record of each Class of Fund shares at the time of the
previous calculation of the Fund's net asset value each day that the Fund is
open for business. The amount of net investment income will be determined at
the time the offering price (net asset value) is determined (see Offering
Price), and shall include investment income accrued, less the estimated
expenses of the Fund incurred since the last determination of net asset
value. Gross investment income consists principally of interest accrued and,
where applicable, net pro-rata amortization of premiums and discounts since
the last determination. The dividend declared, as noted above, will be
deducted immediately before the net asset value calculation is made. See Offer
ing Price. Net investment income earned on days when the Fund is not open
will be declared as a dividend on the next business day.
Each class of shares of the Fund will share proportionately in the
investment income and expenses of the Fund, except that until June 1, 1990,
the Tax-Free Money Fund Consultant Class incurred distribution fees under its
12b-1 Plan. The Board of Directors of the Fund suspended 12b-1 Plan payments
from the assets of the Tax-Free Money Fund Consultant Class to the
Distributor effective June 1, 1990. See Plan Under Rule 12b-1 for the
Tax-Free Money Fund Consultant Class of Shares.
<PAGE>
Purchases of Fund shares by wire begin earning dividends when converted
into Federal Funds and available for investment, normally the next business
day after receipt. However, if the Fund is given prior notice of Federal
Funds wire and an acceptable written guarantee of timely receipt from an
investor satisfying the Fund's credit policies, the purchase will start
earning dividends on the date the wire is received. Investors desiring to
guarantee wire payments must have an acceptable financial condition and
credit history in the sole discretion of the Fund. The Fund reserves the
right to terminate this option at any time. Purchases by check earn dividends
upon conversion to Federal Funds, normally one business day after receipt.
Payment of dividends will be made monthly on the last day of each month.
Payment by check of cash dividends will ordinarily be mailed within three
business days after the payable date. Dividends are automatically reinvested
in additional shares of the same Class of the Fund at the net asset value in
effect on the payable date, which provides the effect of compounding
dividends, unless the election to receive dividends in cash has been made.
Dividend payments of $1.00 or less will be automatically reinvested, notwith-
standing 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. If a shareholder redeems an entire account, all dividends accrued to
the time of the withdrawal will be paid by separate check at the end of that
particular monthly dividend period, consistent with the payment and mailing
schedule described above. 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.
To the extent necessary to maintain a $1.00 per share net asset value, the
Fund's Board of Directors will consider temporarily reducing or suspending
payment of daily dividends, or making a distribution of realized securities
profits or other distributions at the time the net asset value per share has
changed.
Short-term realized securities profits or losses, if any, may be paid with
the daily dividend. Any such profits not so paid will be distributed annually
during the first quarter following the close of the fiscal year. See Account
Statements under Purchasing Shares for the statement mailing of dividend
information. Information as to the tax status of dividends will be provided
annually.
14
<PAGE>
During the fiscal year ended April 30, 1995, dividends totaling $0.0255 per
share of each Class were paid from net investment income.
TAXES
Federal Income Tax
The Fund has qualified, and intends to continue to qualify, as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986,
as amended, and intends to be so qualified for the current year. By so
qualifying, the Fund is not subject to federal income taxes to the extent
that it distributes its net investment income and realized capital gains. The
Fund also intends to meet the calendar year distribution requirements imposed
by the Internal Revenue Code to avoid the imposition of any excise tax. The
term "regulated investment company" does not imply the supervision of
management or investment practices or policies by any government agency.
Distributions of tax-exempt interest income are not includable in the
shareholder's gross income for federal income tax purposes. For the fiscal
year ended April 30, 1995, all of the Fund's net income was exempt from
federal taxes. Distributions of net investment income received by the Fund
from investments in securities other than municipal obligations, and any
short-term capital gains realized by the Fund, will be taxable to the
shareholder as ordinary income whether received in cash or reinvested in
additional shares. Distributions of taxable net interest income, if any, will
not qualify for the deduction for dividends received by corporations.
Section 265 of the Internal Revenue Code provides that interest paid on
indebtedness incurred or continued to purchase or carry obligations the
interest on which is tax-exempt, and certain expenses associated with
tax-exempt income, are not deductible. It is probable that interest on
indebtedness incurred or continued to purchase or carry shares of the Fund is
not deductible.
The Fund may not be an appropriate investment for persons who are
"substantial users" of facilities financed by "industrial development bonds"
or for investors who are "related persons" thereof within the meaning of
Section 103 of the Internal Revenue Code. Persons who are or may be
considered "substantial users" should consult their tax advisers in this
matter before purchasing shares of the Fund.
The Fund intends to use the "average annual" method of allocation in the
event the Fund realizes any taxable interest income. Under this approach, the
percentage of interest income earned that is deemed to be taxable in any year
will be the same for each shareholder who held shares of the Fund at any time
during the year.
State and Local Taxes
The exemption of distributions for federal income tax purposes may not
result in similar exemptions under the laws of a particular state or local
taxing authority. It is recommended that shareholders consult their tax
advisers in this regard. The Fund will report annually the percentage of
interest income earned on municipal obligations on a state-by-state basis
during the preceding calendar year.
<PAGE>
Shares of the Fund will be exempt from Pennsylvania county personal
property taxes.
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 April 30,
1995 were approximately $9,688,552,000. Investment advisory services are also
provided to institutional accounts with assets on April 30, 1995 of
approximately $15,952,458,000.
Subject to the supervision and direction of the Board of Directors, the
Manager makes all investment decisions which are implemented by the Fund's
Trading Department.
The Fund's Investment Management Agreement with the Manager, dated April 3,
1995, was approved by shareholders on March 29, 1995, and will remain in
effect for an initial two year period.
The Agreement may be further renewed each year only so long as such renewal
and continuance are specifically approved at least annually by the 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 annual compensation paid by the Fund for investment management services
is equal to 1/2 of 1% of the Fund's average daily net assets, less all
directors' fees paid to the unaffiliated directors by the Fund. The Manager
pays the salaries of all directors, officers and employees of the Fund who
are affiliated with the Manager. Investment management fees paid by the Fund
were 0.47% of average daily net assets for the fiscal year ended April 30,
1995.
On April 30, 1995, the total net assets of the Fund were $56,058,210.
Investment management fees paid by the Fund during the past three fiscal
years were $241,926 for 1993, $222,074 for 1994 and $220,704 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 investment management fees; shareholder servicing, dividend
disbursing and transfer agent fees and costs; custodian expenses; federal and
state securities registration fees; proxy costs; the costs of preparing
prospectuses and reports sent to shareholders; and the Fund's proportionate
share of rent and other administrative expenses. The ratio of expenses to
average daily net assets for the fiscal year ended April 30, 1995 was 0.96%
for each Class of shares.
15
<PAGE>
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 average daily net
assets. At present, the most restrictive limit is 2 1/2% of its 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. No
waivers or reimbursements were required pursuant to this regulation for the
fiscal year ended April 30, 1995.
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 any payments which may be made under the 12b-1 Plan
for the Tax-Free Money Fund Consultant Class. 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 May 31, 1995, the Fund's
officers and directors, as a group, owned approximately 7.9% of the
outstanding shares of the Tax-Free Money Fund A Class.
<PAGE>
As of May 31, 1995, the Fund believes the following held of record 5% or
more of the outstanding shares of the Tax-Free Money Fund A Class: John S.
Connors, 128 Kynlyn Rd., Radnor, PA 19087--3,464,237 shares (6.91%); and
Winthrop S. Jessup, Delaware Investment Advisers, One Commerce Square,
Philadelphia, PA 19103--3,137,740 shares (6.26%).
As of the same date, the Fund believes the following held of record 5% or
more of the outstanding shares of the Tax-Free Money Fund Consultant Class:
Brent A. Genlsler and Ellen M. Genlsler, 2267 Newville Rd., Carlisle, PA
17013--127,604 shares (7.64%); John K. Kaiser and Elaine E. Kaiser, 499 Bair
Rd., Berwyn, PA 19312--107,014 shares (6.40%); Mary E. Gamble and Harvey R.
Gamble, Rd 2 Box 112, Centre Hall, PA 16828--98,686 shares (5.91%); and Susan
R. Martinelli and Carolyn M. Martinelli, 179 D Salmon Brook Dr., Glastonbury,
CT 06033--85,157 shares (5.10%).
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. 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.
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.
*Wayne A. Stork (57)
Chairman, Director and/or Trustee of the Fund and each
of the other 16 funds in the Delaware Group.
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.
Chairman and Director of Delaware Management
Trust Company.
Director of Delaware Distributors, Inc., Delaware Service
Company, Inc. and Delaware Investment
Counselors, Inc.
During the past five years, Mr. Stork has served in various
executive capacities at different times within the
Delaware organization.
- --------------------
*Director affiliated with the investment manager of the Fund and considered
an "interested person" as defined in the Investment Company Act of 1940.
16
<PAGE>
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.
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.
Winthrop S. Jessup (49)
Executive Vice President of the Fund and 15 other funds
in the Delaware Group (which excludes Delaware
Pooled Trust, 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 Delaware Manage-
ment Holdings, Inc., DMH Corp., Delaware Manage-
ment Company, Inc., Delaware Management Trust
Company, 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 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.
<PAGE>
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 Manage-
ment Company, Inc.
Senior Vice President of Delaware Management Hold-
ings, 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.
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.
17
<PAGE>
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.
Chief Executive Officer and Director of Delaware Manage-
ment 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 and
Director of Delaware Distributors, Inc.
Senior Vice President/Chief Administrative Officer of
Delaware Distributors, L.P.
Senior Vice President/Chief Administrative Officer/Chief
Financial Officer and Director of Delaware Service
Company, Inc.
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/Chief Financial Officer 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.
<PAGE>
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.
Senior Vice President, Secretary and Director of DMH
Corp., Delaware Management Company, Inc.,
Delaware Distributors, Inc., Delaware Service
Company, Inc., Delaware Management Trust
Company and 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.
Paul E. Suckow (47)
Senior Vice President/Chief Investment Officer, Fixed
Income of the Fund, each of the other 16 funds in
the Delaware Group, Delaware Management Holdings,
Inc. and Delaware Management Company, Inc.
Senior Vice President and Director of Founders Hold-
ings, Inc.
Director of Founders CBO Corporation.
Before returning to the Delaware Group in 1993,
Mr. Suckow was Executive Vice President and
Director of Fixed Income for Oppenheimer
Management Corporation, New York, NY from 1985
to 1992. Prior to that, Mr. Suckow was a fixed income
portfolio manager for the Delaware Group.
Patrick P. Coyne (32)
Vice President/Senior Portfolio Manager of the Fund, of nine
other funds in the Delaware Group and Delaware
Management Company, Inc.
From 1986 to 1990, Mr. Coyne was Vice President/
Municipal Trading with Kidder Peabody & Co., Inc.
Mr. Coyne joined the Delaware Group in 1990.
18
<PAGE>
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 International Holdings
Ltd., Delaware Investment Counselors,Inc. and
Founders Holdings, Inc.
Vice President/Corporate Controller/Treasurer 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.
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 April 30, 1995 and an estimate of annual benefits to be received
upon retirement under the Delaware Group Retirement Plan for
Directors/Trustees as of April 30, 1995.
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
W. Thacher Longstreth $1,874.54 None $18,100 $47,187.95
Ann R. Leven $2,171.28 None $18,100 $55,323.93
Walter P. Babich $2,171.17 None $18,100 $55,323.87
Anthony D. Knerr $945.98 None $18,100 $26,177.23
Charles E. Peck $1,874.54 None $18,100 $47,187.95
*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 April 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.
<PAGE>
EXCHANGE PRIVILEGE
The exchange privileges available for shareholders of each Class and the
shareholders of other 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 or purchase will be sent a current
prospectus and an exchange 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. This feature is
available only in states where the fund into which the exchange is being made
is registered.
An exchange constitutes, for tax purposes, the sale of one fund or series
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) 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 (net asset value) is determined will be
processed the following day. See Offering Price. 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 eligibility and investment minimums, must be
met and may entail the payment of a front-end sales charge which will be
deducted from the investment. (See the prospectus of the fund desired or
inquire by calling the Transfer Agent.)
19
<PAGE>
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. Dividend
Growth Fund Series seeks current income and capital appreciation 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.
Trend Fund seeks long-term growth by investing in common stocks issued by
emerging growth companies exhibiting strong capital appreciation potential.
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.
<PAGE>
U.S. Government Fund seeks high current income by investing in primarily
long-term debt obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities.
Treasury Reserves Intermediate 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 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 market place and to have
fundamental characteristics to support growth. Income is not an objective.
20
<PAGE>
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.
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 as the Fund.
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 Delaware Management Company, Inc., 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.
<PAGE>
The Distributor acts as national distributor for the Fund and for the other
mutual funds in the Delaware Group.
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 $11.00 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.
Morgan Guaranty Trust Company of New York ("Morgan"), 60 Wall Street, New
York, NY 10260, is custodian of the Fund's securities and cash. As custodian
for the Fund, Morgan 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 five hundred million
shares of capital stock with a $.001 par value per share. The Fund offers two
classes of shares, the Tax-Free Money Fund A Class (which prior to January
1992 was known as the original class and between January 1992 and February
1994 was known as Tax-Free Money Fund class), and the Tax-Free Money Fund
Consultant Class (which prior to January 1992 was known as the consultant
class, between January 1992 and November 1992 was known as the Tax-Free Money
Fund (Institutional) class and between November 1992 and February 1994 was
known as Tax-Free Money Fund Consultant class), 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 class, except that
shares of Tax-Free Money Fund A Class may not vote on any matter affecting
the Distribution Plan under Rule 12b-1 of Tax-Free Money Fund Consultant
Class. General expenses of the Fund will be allocated on a pro-rata basis to
the classes according to asset size, except that any expenses of the Rule
12b-1 Plan of Tax-Free Money Fund Consultant Class will be allocated solely
to that class. The Board of Directors has allocated one hundred million
shares of the Fund to each Class.
21
<PAGE>
Shares have no preemptive rights, are fully transferable and, when issued,
are fully paid and nonassessable.
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.
Shareholders Inquiries
Shareholders who have questions concerning their accounts or wish to obtain
additional information may call the Transfer Agent nationwide at 800-523-1918
(in Philadelphia, 215-988-1241).
<PAGE>
APPENDIX A--DESCRIPTION OF RATINGS
Bonds
Excerpts from Moody's description of its three highest bond ratings:
Aaa--judged to be the best quality. They carry the smallest degree of
investment risk; Aa--judged to be of high quality by all standards.
A--possess favorable attributes and are considered "upper medium" grade
obligations.
Excerpts from S&P's description of its three highest bond ratings:
AAA--highest grade obligations. They possess the ultimate degree of
protection as to principal and interest; AA--also qualify as high grade
obligations, and in the majority of instances differ from AAA issues only in
a small degree; A--strong ability to pay interest and repay principal
although more susceptible to changes in circumstances.
Commercial Paper
Excerpts from S&P's description of its two highest commercial paper
ratings: A-1--judged to be the highest investment grade category possessing
the highest relative strength; A-2--investment grade category possessing less
relative strength than the highest rating.
Excerpts from Moody's description of its two highest commercial paper
ratings: P-1--the highest grade possessing greatest relative strength;
P-2--second highest grade possessing less relative strength than the highest
grade.
State and Municipal Notes
MIG-1--Notes bearing this designation are of the best quality, enjoying
strong protection from established cash flows of funds for their servicing or
from established and broad-based access to the market for refinancing, or
both.
MIG-2--Notes bearing this designation are of high quality, with margins of
protection ample although not so large as in the preceding group.
<PAGE>
APPENDIX B--EQUIVALENT YIELDS: TAX-EXEMPT VERSUS TAXABLE SECURITIES
The table below shows the effect of the tax status of bonds on the effective
yield received by their holders under federal tax laws. It gives the
approximate yield a taxable security must earn at various income brackets to
produce an after-tax yield equivalent to those of tax-exempt bonds yielding
3%, 4%, 5% and 6%.
<TABLE>
<CAPTION>
--------------------------------------------------
3.0%* 4.0%* 5.0%* 6.0%*
Federal Federal Federal Federal
Taxable Income Federal Taxable Taxable Taxable Taxable
Joint Return Single Return Tax Rates Equivalent Equivalent Equivalent Equivalent
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$0-38,000 $0-22,750 15% 3.5% 4.7% 5.9% 7.1%
$38,001-91,850 $22,751-55,100 28% 4.2% 5.6% 6.9% 8.3%
$91,851-140,000 $55,101-115,000 31% 4.3% 5.8% 7.2% 8.7%
$140,001-250,000 $115,101-250,000 36%+ 4.7% 6.3% 7.8% 9.4%
Over $250,000 Over $250,000 39.6%+ 5.0% 6.6% 8.3% 9.9%
- ------------------------------------------------------------------------------------------------
</TABLE>
Figures are based on federal tax rates that were in effect as of the date of
this Part B. The equivalent yields are calculated on 3%, 4%, 5% and 6% yields
on a $1,000 investment. While it is expected that the Fund will invest
principally in obligations generating interest exempt from federal income
tax, other income received by the Fund may be taxable.
*This should not be considered representative of the Fund's yield at any
specific time.
+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.
<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 April 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.
<PAGE>
Form N-1A
File No. 2-70164
DELAWARE GROUP TAX-FREE MONEY 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 April 30, 1995 into Part B.
(b) Exhibits:
(1) Articles of Incorporation. Incorporated by reference to
--------------------------
initial Registration Statement filed December 5, 1980,
Post-Effective Amendment No. 7 filed June 20, 1986,
Post-Effective Amendment No. 9 filed June 29, 1987,
Post-Effective Amendment No. 11 filed October 29, 1987,
Post-Effective Amendment No. 12 filed June 29, 1988,
Post-Effective Amendment No. 15 filed June 22, 1990 and
Post-Effective Amendment No. 16 filed June 27, 1991.
(2) By-Laws. Attached as Exhibit.
--------
(3) Voting Trust Agreement. Inapplicable.
-----------------------
i
<PAGE>
Form N-1A
File No. 2-70164
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
(4) Copies of All Instruments Defining the Rights of Holders.
---------------------------------------------------------
(a) Articles of Incorporation and Articles Supplementary.
-----------------------------------------------------
Article Second of Articles Supplementary incorporated by
reference to Post-Effective Amendment No. 11 filed
October 29, 1987, Article Fifth of Articles of Amendment
incorporated by reference to Post-Effective Amendment No.
9 filed June 29, 1987 and Article Eighth of Articles of
Amendment incorporated by reference to Post-Effective
Amendment No. 7 filed June 20, 1987, which was
subsequently redesignated as Article Ninth of Articles of
Amendment incorporated by reference to Post-Effective
Amendment No. 15 filed June 22, 1990.
(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).
(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. 17 filed June 29, 1992.
(b) Administration and Service Agreement. Form of
-------------------------------------
Administration and Service Agreement included as Module
Name ADMIN_SER_AGREE.
(c) Dealer's Agreement. Form of 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. Profit Sharing Plan
-----------------------------------------
included as Module Name PROF_SHARE_PLAN.
(8) Custodian Agreement. Incorporated by reference to
--------------------
Post-Effective Amendment No. 13 filed June 23, 1989 and
Post-Effective Amendment No. 15 filed June 22, 1990.
(9) Other Material Contracts. Incorporated by reference to
-------------------------
Post-Effective Amendment No. 12 filed June 29, 1988.
ii
<PAGE>
Form N-1A
File No. 2-70164
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
(10) Opinion of Counsel. Filed with letter relating to Rule 24f-2
-------------------
on June 28, 1995.
(11) Consent of Auditors. Attached as Exhibit.
--------------------
(12) Inapplicable.
(13) Agreements in Connection with Initial Capital. Incorporated by
----------------------------------------------
reference to Pre-Effective Amendment No. 1 filed May 28, 1981.
(14) Inapplicable.
*(15) Plan under Rule 12b-1. Incorporated by reference to
----------------------
Post-Effective Amendment No. 17 filed June 29, 1992.
(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.
-----------------------------
*Relates to Registrant's Tax-Free Money Fund Consultant Class of shares only.
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 Tax-Free Money Fund, Inc.'s
Tax-Free Money Fund A Class:
Common Stock Par Value 1,406 Accounts
$.001 Per Share as of May 31, 1995
iii
<PAGE>
Form N-1A
File No. 2-70164
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
Number of
Title of Class Record Holders
-------------- --------------
Delaware Group Tax-Free Money Fund, Inc.'s
Tax-Free Money Fund Consultant Class:
Common Stock Par Value 143 Accounts
$.001 Per Share as of May 31, 1995
Item 27. Indemnification. Incorporated by reference to Pre-Effective Amendment
No. 1 filed May 28, 1981 and Article VII of the By-Laws, as amended,
attached in Exhibit 24(b)(2).
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 Trend 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
Treasury Reserves, Inc., Delaware Group Cash Reserve, Inc., Delaware Group
Tax-Free Fund, Inc., DMC Tax-Free Income Trust-Pennsylvania, 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 Delaware Group funds, and certain officers are also
officers of these 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 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:
iv
<PAGE>
Form N-1A
File No. 2-70164
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
<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 and each of the other funds
in the Delaware Group and Delaware Management Trust Company; 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., Delaware Service Company, Inc. and
Delaware Investment Counselors, Inc.
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.; and President of Founders Holdings, Inc.
Winthrop S. Jessup Executive Vice President and Director of Delaware Management Company,
Inc. Delaware Management Holdings, 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;
President and Chief Executive Officer of Delaware Pooled Trust, Inc.;
Director of Delaware Service Company, Inc., Delaware Management Trust
Company and Delaware International Advisers Ltd.; Vice Chairman of
Delaware Distributors, L.P.; Vice Chairman and Director of Delaware
Distributors, Inc.; 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.
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
</TABLE>
v
<PAGE>
Form N-1A
File No. 2-70164
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
<TABLE>
<CAPTION>
Name and Principal
Business Address* Positions and Offices with Manager and Other Positions and Offices Held
- ----------------- -----------------------------------------------------------------------
<S> <C>
Paul E. Suckow Senior Vice President/Chief Investment Officer, Fixed Income of
Delaware Management Company, Inc., the Registrant and 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
David K. Downes Senior Vice President, Chief Administrative Officer and Chief
Financial Officer of Delaware Management Company, Inc., the Registrant
and each of the other funds in the Delaware Group; Chief Executive
Officer 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 and
Director of Delaware Distributors, Inc.; Senior Vice President and
Chief Administrative Officer of Delaware Distributors, L.P.; Senior
Vice President, Chief Administrative Officer, Chief Financial Officer
and Director of 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, Chief Financial
Officer 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., Delaware
Service Company, Inc., Delaware Management Trust Company and Founders
Holdings, Inc.; Senior Vice President and Secretary of the Registrant
and each of the other funds in the Delaware Group, Delaware Management
Holdings, Inc., Delaware Distributors, L.P. and Delaware Investment
Counselors, Inc.; Secretary and Director of Delaware International
Holdings Ltd.; and Director of Delaware International Advisers Ltd.
*Business address of each is 1818 Market Street, Philadelphia, PA 19103
</TABLE>
vi
<PAGE>
Form N-1A
File No. 2-70164
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
<TABLE>
<CAPTION>
Name and Principal
Business Address* Positions and Offices with Manager and Other Positions and Offices Held
- ------------------ -----------------------------------------------------------------------
<S> <C>
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 and Founders CBO
Corporation; Vice President of the Registrant and each of the other
funds in the Delaware Group; Vice President and Assistant Secretary of
Delaware International Holdings Ltd.; Managing Director/Corporate Tax
& Affairs and Director of Founders Holdings, Inc.; and Director of
Delaware International Advisers Ltd.
Eric E. Miller Vice President and Assistant Secretary of Delaware Management Company,
Inc., the Registrant and 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 and Founders
Holdings, Inc.
Joseph H. Hastings Vice President/Corporate Controller of Delaware Management Company,
Inc., the Registrant and 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 International Holdings Ltd., Delaware
Investment Counselors, Inc. and Founders Holdings, Inc.; Vice
President, Corporate Controller and Treasurer of Delaware Management
Trust Company; and Assistant Treasurer of Founders CBO Corporation
Bruce A. Ulmer(1) Vice President/Director of Internal Audit of Delaware Management
Company, Inc., Delaware Management Holdings, Inc., DMH Corp. and
Delaware Management Trust Company
Lisa O. Brinkley(2) Vice President/Compliance of Delaware Management Company, Inc., the
Registrant and each of the other funds in the Delaware Group, DMH
Corp., Delaware Distributors, L.P., Delaware Distributors, Inc.,
Delaware Service Company, Inc. and Delaware Management Trust Company
Joseph A. Finelli Vice President/Client Services of Delaware Management Company, Inc.;
Vice President of the Registrant and each of the other funds in the
Delaware Group; Chief Financial Officer of Delaware Distributors, L.P.
and Delaware Distributors, Inc.; Vice President and Assistant
Treasurer of Founders Holdings, Inc.; and Assistant Treasurer of
Founders CBO Corporation
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
</TABLE>
vii
<PAGE>
Form N-1A
File No. 2-70164
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
<TABLE>
<CAPTION>
Name and Principal
Business Address* Positions and Offices with Manager and Other Positions and Offices Held
- ------------------ -----------------------------------------------------------------------
<S> <C>
Rosemary E. Milner Vice President/Legal of Delaware Management Company, Inc., the
Registrant and each of the other funds in the Delaware Group, Delaware
Distributors, L.P. and Delaware Distributors, Inc.
Douglas L. Anderson(3) 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(4) 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., the Registrant, each of the other 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., the Registrant, each of the other 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., the Registrant, each of the other 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., the Registrant, each of the other 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
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
</TABLE>
viii
<PAGE>
Form N-1A
File No. 2-70164
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
<TABLE>
<CAPTION>
Name and Principal
Business Address* Positions and Offices with Manager and Other Positions and Offices Held
- ------------------ -----------------------------------------------------------------------
<S> <C>
James R. Raith, Jr. Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc., the Registrant, each of the other 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
Patrick P. Coyne Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc., the Registrant, each of the other tax-exempt funds and
the fixed income funds in the Delaware Group
Roger A. Early(5) Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc., the Registrant, each of the other 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. and of the equity funds in the Delaware Group
George H. Burwell Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc. and of the equity funds in the Delaware Group
John B. Fields Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc. and of the equity funds in the Delaware Group and
Delaware Investment Counselors, Inc.
Edward A. Trumpbour Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc. and of the equity funds in the Delaware Group
David C. Dalrymple Vice President/Assistant Portfolio Manager of Delaware Management
Company, Inc. and of the equity funds in the Delaware Group
William H. Miller(6) Vice President/Assistant Portfolio Manager of Delaware Management
Company, Inc. and of the equity funds in the Delaware Group
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
</TABLE>
ix
<PAGE>
Form N-1A
File No. 2-70164
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
<TABLE>
<CAPTION>
Name and Principal
Business Address* Positions and Offices with Manager and Other Positions and Offices Held
- ------------------ -----------------------------------------------------------------------
<S> <C>
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 and each of the other funds in the Delaware Group, DMH
Corp. 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 the
Registrant and each of the other tax-exempt funds, the fixed income
funds and the closed-end funds in the Delaware Group
Robert C. Fett Assistant Vice President/Fixed Income Research of Delaware Management
Company, Inc.; and Assistant Vice President/Municipal Credit Research
of the Registrant and each of the other 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., the Registrant and each of the other 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 Vice President/Fixed Income Trading of the
Registrant and each of the other 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 the Registrant
and each of the other tax-exempt funds and the fixed income funds in
the Delaware Group
Lorraine Warren Assistant Vice President/Trading of Delaware Management Company, Inc.,
the Registrant and each of the other 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.
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
</TABLE>
x
<PAGE>
Form N-1A
File No. 2-70164
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
<TABLE>
<CAPTION>
Name and Principal
Business Address* Positions and Offices with Manager and Other Positions and Offices Held
- ------------------ -----------------------------------------------------------------------
<S> <C>
Richard W. Buckmaster(7) Assistant Vice President/Internal Audit of Delaware Management
Company, Inc., the Registrant and each of the funds in the Delaware
Group
Miriam C. Mayerson Assistant Vice President/Planning of Delaware Management Company, Inc.
Susan L. Hanson(8) Assistant Vice President/Assistant Controller 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) Assistant Vice President and Director of Internal Audit, Vanguard Group
prior to June 1993 and Senior Vice President and Director of Internal Audit,
Thomson McKinnon Securities prior to December 1989.
(2) Vice President and Compliance Officer, Banc One Securities Corporation prior
to June 1993 and Assistant Vice President and Compliance Officer, Aetna Life
and Casualty prior to March 1993.
(3) Vice President of Operations, Supervised Service Company prior to March
1994.
(4) Assistant Vice President/Administrative Services, United Pacific Life
Insurance prior to January 1994.
(5) Senior Vice President and Portfolio Manager, Federated Investors prior to
July 1994.
(6) Vice President/Analyst, Janney Montgomery Scott prior to February 1995 and
Analyst, Rutherford Brown and Catherwood prior to October 1994.
(7) Senior EDP Audit Manager, The Vanguard Group prior to November 1993.
(8) Manager of Financial Advisory Services, Coopers & Lybrand prior to March
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
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
</TABLE>
xi
<PAGE>
Form N-1A
File No. 2-70164
DELAWARE GROUP TAX-FREE MONEY 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 and Senior Vice President/Chief
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
Richard J. Flannery Managing Director/Corporate Vice President
and Tax Affairs
Joseph A. Finelli Chief Financial Officer Vice President
Eric E. Miller Vice President/ Vice President/
Assistant Secretary Assistant Secretary
Richelle S. Maestro Vice President/ Vice President/
Assistant Secretary Assistant Secretary
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
</TABLE>
xii
<PAGE>
Form N-1A
File No. 2-70164
DELAWARE GROUP TAX-FREE MONEY 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
Lisa O. Brinkley Vice President/ Vice President/
Compliance Compliance
Rosemary E. Milner Vice President/Legal Vice President/Legal
Diane M. Anderson Vice President/Institutional None
Qualified Plans
Diane Z. Frustaci Vice President/Human Resources None
Denise F. Guerriere Vice President/Client Services None
Minette van Noppen Vice President/Marketing/ None
Defined Contribution Plans
Julia R. Vander Els Vice President/ None
Institutional Retirement
Jerome J. Alrutz Vice President/ None
Institutional Retirement
Michael J. Cole Vice President/ None
Institutional Retirement
Joanne A. Mettenheimer Vice President/ None
Bank Sales
Christopher H. Price Vice President/Annuity None
Marketing & Administration
Jennifer B. Streitweiser Vice President/ None
Fixed Income Coordinator
Thomas S. Butler Vice President/ None
DDI Administration
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
</TABLE>
xiii
<PAGE>
Form N-1A
File No. 2-70164
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Offices
Business Address* with Underwriter with Registrant
- ------------------ --------------------- --------------------
<S> <C> <C>
Frank Albanese Vice President/Wholesaler None
William S. Carroll Vice President/Wholesaler None
William S. Castetter Vice President/Wholesaler None
Thomas J. Chadie Vice President/Wholesaler None
Douglas R. Glennon Vice President/Wholesaler None
Paul D. Graffy Vice President/Wholesaler None
Alan D. Kessler Vice President/Wholesaler None
William M. Kimbrough Vice President/Bank Sales 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. Richards 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
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
</TABLE>
xiv
<PAGE>
Form N-1A
File No. 2-70164
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Offices
Business Address* with Underwriter with Registrant
- ------------------ --------------------- --------------------
<S> <C> <C>
Larry D. Stone Vice President/Wholesaler None
Carl E. Sundgren Vice President/Bank Sales None
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 Plans
Jodie L. Johnson Assistant Vice President/ None
Retirement Plans
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
Bank Sales
John P. Haydu Assistant Vice President None
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
</TABLE>
xv
<PAGE>
Form N-1A
File No. 2-70164
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Offices
Business Address* with Underwriter with Registrant
- ------------------ --------------------- --------------------
<S> <C> <C>
John A. Cionci Marketing Officer/ None
Bank Sales
Zina DeVassal Marketing Officer/ None
Bank Sales
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
</TABLE>
(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 certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in this City of Philadelphia and Commonwealth of Pennsylvania on
this 20th day of June, 1995.
DELAWARE GROUP TAX-FREE MONEY 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 June 20, 1995
- --------------------------
Wayne A. Stork
/s/Brian F. Wruble President and Chief Executive Officer June 20, 1995
- --------------------------
Brian F. Wruble
/s/David K. Downes Senior Vice President/Chief Administrative
- -------------------------- Officer/Chief Financial Officer (Principal
David K. Downes Financial Officer and Principal
Accounting Officer) June 20, 1995
/s/Walter P. Babich * Director June 20, 1995
- --------------------------
Walter P. Babich
/s/Anthony D. Knerr * Director June 20, 1995
- --------------------------
Anthony D. Knerr
/s/Ann R. Leven * Director June 20, 1995
- --------------------------
Ann R. Leven
/s/W. Thacher Longstreth * Director June 20, 1995
- --------------------------
W. Thacher Longstreth
/s/Charles E. Peck * Director June 20, 1995
- --------------------------
Charles E. Peck
*By /s/Wayne A. Stork
-----------------
Wayne A. Stork
as Attorney-in-Fact for
each of the persons indicated
</TABLE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Exhibits
to
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Exhibit
- ----------- -------
EX-99.B2 By-Laws
EX-99.B5 Investment Management Agreement
EX-99.B6B Form of Administration
(Module Name and Service Agreement
ADMIN_SER_AGREE)
EX-99.B6C Form of Dealer's Agreement
(Module Name
DEALERS_AGR)
EX-99.B6D Form of Mutual Fund Agreement
(Module Name for the Delaware Group of Funds
MUTUAL_FUND_AGR)
EX-99.B7 Profit Sharing Plan
(Module Name
PROF_SHARE_PLAN)
EX-99.B11 Consent of Auditors
EX-99.B16 Schedules of Computation for
each Performance Quotation
EX-27 Financial Data Schedules
EX-99.B19 Directors' Power of Attorney
<PAGE>
DELAWARE GROUP TAX-FREE MONEY 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
<PAGE>
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 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
MEETINGS 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 am. 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
<PAGE>
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 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
<PAGE>
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, 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
<PAGE>
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 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
<PAGE>
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 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
<PAGE>
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 VII
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.
<PAGE>
PRESIDENT
Section 2. 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
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.
<PAGE>
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
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.
<PAGE>
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 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 end on the last Thursday
in April of each year and the new fiscal year shall begin the next day.
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.
<PAGE>
Section 2. Any notice required to be given under these ByLaws 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>
DELAWARE GROUP TAX-FREE MONEY 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 Tax-Free Money 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.
<PAGE>
* * *
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, whenever held, or special
meeting called for that purpose, and until his successor is elected and
qualifies.
IN WITNESS WHEREOF, I have hereto subscribed name this 14th day of June
1988.
/s/George M. Chamberlain, Jr.
-----------------------------
George M. Chamberlain, Jr.
Secretary
<PAGE>
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
CERTIFICATION OF AMENDMENT TO BY-LAWS
ARTICLE 3, SECTION 2
JUNE 16, 1988
The Undersigned Secretary of Delaware Group Tax-Free Money 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 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 TAX-FREE MONEY 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 Tax-Free Money 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 TAX-FREE MONEY FUND, INC.
CERTIFICATION OF AMENDMENT TO BY-LAWS
AMENDING SECTION 2 OF ARTICLE III
JANUARY 17, 1991
The Undersigned Secretary of Delaware Group Tax-Free Money 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 by 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 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 hereto subscribed my name this 17th day of
January, 1991.
/s/George M. Chamberlain, Jr.
-----------------------------
George M. Chamberlain, Jr.
<PAGE>
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
CERTIFICATION OF AMENDMENT TO BY-LAWS
AMENDING SECTION 8 OF ARTICLE IV
JULY 22, 1991
The Undersigned Secretary of Delaware Group Tax-Free Money 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 TAX-FREE MONEY FUND, INC.
CERTIFICATION OF AMENDMENT TO BY-LAWS
AMENDING SECTION 2 OF ARTICLE VI
NOVEMBER 21, 1991
The Undersigned Secretary of Delaware Group Tax-Free Money 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 TAX-FREE MONEY FUND, INC.
CERTIFICATION OF AMENDMENT TO BY-LAWS
AMENDING SECTION 7 OF ARTICLE III
JANUARY 28, 1995
The Undersigned Secretary of Delaware Group Tax-Free Money 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 TAX-FREE MONEY FUND, INC.
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, made by and between DELAWARE GROUP TAX-FREE MONEY 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 of this Agreement 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.
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.
<PAGE>
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, issue, sale, 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.
The Fund shall bear all of its own organizational costs.
Directors, officers and employees of the Investment Manager may be
directors, officers and employees of other funds which have the same
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 with broker/dealers who sell shares of any of the funds for which
the Investment Manager provides investment advisory services. Broker/dealers
who sell shares of the funds of which Delaware Management Company, Inc. is the
Manager shall only 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
<PAGE>
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 a management fee payable monthly and computed on
the asset value of the Fund as of each day at the annual rate of one-half of
one percent per annum, less all fees paid to members of the Board of Directors
of the Fund during the same period.
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 a majority of the outstanding voting
securities of the Fund. It will 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 the vote of a majority of
the Directors of the Fund, who are not parties hereto or interested persons of
<PAGE>
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 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 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.
<PAGE>
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 TAX-FREE MONEY 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
IMATXFR.MNY
<PAGE>
__________________________________
Administration and Service Agreement
Gentlemen:
This Administration and Service Agreement ("Agreement") has been adopted
pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by
each fund in the _____________________ listed on Exhibit A hereto (each
individually a "Fund" and collectively the "Funds"), as part of a plan pursuant
to said rule (each individually a "Plan" and collectively the "Plans"). Each
Plan has been approved by a majority of the Directors or Trustees, as relevant,
who are not interested persons of the Fund and who have no direct or indirect
financial interest in the operation of the Plan (the "non-interested
Directors"), cast in person at a meeting called for the purpose of voting on
such Plan. Such approval included a determination that in the exercise of the
reasonable business judgment of each Board of Directors or Trustees and in light
of the Directors' or Trustees' fiduciary duties, there is a reasonable
likelihood that the Plan will benefit each Fund and its shareholders. Each Plan
and the compensation to be paid under such Plan has also been approved by a vote
of at least a majority of the outstanding voting securities of such Fund, as
defined in the Act.
The Plan(s) and this Agreement shall continue in effect for a period of
more than one year from the date of execution or adoption only so long as such
continuance is approved at least annually by the non-interested Directors or
Trustees in the manner described in the preceding paragraph. In voting to
continue a Plan, Directors and Trustees have a duty to request and evaluate, and
any contra party hereto has a duty to furnish, such information as may
reasonably be necessary to an informed determination of whether the Plan should
be continued. Similarly, in voting to continue a Plan, Directors or Trustees
must conclude, in the exercise of their reasonable business judgment and in
light of their fiduciary duties, that there is a reasonable likelihood that the
Plan will benefit the Fund and its shareholders.
TERMS
1. To the extent you provide administrative and other services, including,
but not limited to, furnishing personal and other services and assistance to
your customers who own Fund shares, answering routine inquiries regarding a
Fund, assisting in changing account designations and addresses, maintaining such
<PAGE>
accounts or such other services as a Fund may require, to the extent permitted
by applicable statutes, rules, or regulations, we shall pay you a fee based on
the value of the shares of each Fund which are attributable to customers of your
firm (all such shares being hereinafter referred to as "qualified assets")
calculated on the basis and at the rate set forth in the Schedule attached
hereto and made a part of this Agreement (the "Schedule").
2. Without prior approval by a majority of the outstanding shares of a
Fund, the aggregate annual fees paid to you pursuant to the Schedule attached
hereto shall not exceed the amount stated as the "annual maximum" on the
Schedule, which amount shall be a specified percent of the value of the Fund's
net assets held in your customers' accounts which are eligible for payment
pursuant to this Agreement (determined in the same manner as each Fund uses to
compute its net assets as set forth in its effective Prospectus).
3. You shall furnish us and each Fund with such information as shall
reasonably be requested by the Board of Directors or Trustees with respect to
the fees paid to you pursuant to the Schedule.
4. We shall furnish to the Board of Directors or Trustees, for their
review, on a quarterly basis, a written report of the amounts expended under the
Plan by us with respect to the relevant Fund and the purposes for which such
expenditures were made.
5. As to a Fund, this Agreement may be terminated by us or by you, by the
vote of a majority of the Directors or Trustees with responsibility for such
Fund who are non-interested Directors, or by a vote of a majority of the
outstanding voting securities of such Fund, on sixty (60) days' written notice
all without payment of any penalty. This Agreement shall also be terminated
automatically by any act that terminates a Fund's Underwriting Agreement with
its Underwriter or a Fund's Management Agreement with its manager.
6. Any obligation assumed by a Fund pursuant to this Agreement shall be
limited in all cases to the assets of such Fund and no person shall seek
satisfaction thereof from shareholders of a Fund.
7. The provisions of the Plan between each Fund and us, insofar as they
relate to you, are incorporated herein by reference.
8. This Agreement shall take effect on the date set forth on the attached
Schedule.
<PAGE>
9. The terms and provisions of the current Prospectus and Statement of
Additional Information for each relevant Fund are hereby accepted and agreed to
by the parties hereto as evidenced by our execution hereof.
GENERAL
10. Governing Law. This Agreement will be governed by and construed in
accordance with the law of the State of ____________, without reference to that
state's choice of law doctrine.
11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one Agreement.
12. Severability. In the event that any provision of this Agreement, or the
application of any such provision to any person or set of circumstances, shall
be determined to be invalid, unlawful, void or unenforceable to any extent, the
remainder of this Agreement, and the application of such provision to persons or
circumstances other than those as to which it is determined to be invalid,
unlawful, void or unenforceable, shall not be impaired or otherwise affected and
shall continue to be valid and enforceable to the fullest extent permitted by
law.
13. Entire Agreement. This Agreement sets forth the entire understanding of
the parties hereto and supersedes all prior agreements and understandings
between the parties hereto relating to the subject matter hereof.
14. Headings. The underlined headings contained herein are for convenience
of reference only, shall not be deemed to be a part of this Agreement and shall
not be referred to in connection with the interpretation hereof.
________________________________________________
By: ______________________________
Agreed and Accepted:
______________________________
(Name)
By: __________________________
(Authorized Officer)
<PAGE>
________________________________________
SCHEDULE TO ADMINISTRATION AND SERVICE AGREEMENT
________________________________________
AND
Pursuant to the provisions of the Administration and Service Agreement
between the above parties, each Fund listed below shall pay a fee to the
above-named party based on the net asset value of each Fund's shares during the
period indicated which are attributable to the above-named party calculated as
follows:
Frequency of
Name of Fund Amount Reimbursement
------------ ------ -------------
______________________________ _____________________________________
(Name)
By:___________________________ By:__________________________________
(Authorized Officer)
Dated:________________________
<PAGE>
DELAWARE
GROUP Dealer's Agreement
========
- ---------------------------------------------------------------------------
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.
-6-
<PAGE>
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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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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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:
-36-
<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.
-39-
<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 Tax-Free Money Fund, Inc. for
the A Class and for the Consultant Class and Financial Statements in the
Statement of Additional Information of Delaware Group Tax-Free Money Fund,
Inc. and to the incorporation by reference in this Post-Effective Amendment
No. 20 to the Registration Statement (Form N-1A No. 2-70164) of Delaware Group
Tax-Free Money Fund, Inc. of our report dated June 1, 1995, included in the
1995 Annual Report to Shareholders of Delaware Group Tax-Free Money Fund, Inc.
/s/ERNST & YOUNG LLP
---------------------
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
June 23, 1995
<PAGE>
Report of Independent Auditors
To the Shareholders and Board of Directors
Delaware Group Tax-Free Money Fund, Inc.
We have audited the accompanying statement of net assets of Delaware Group
Tax-Free Money Fund, Inc. (the Fund ) as of April 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 ten 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 securities
owned as of April 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 Tax-Free Money Fund, Inc. at April 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 ten years in the period then ended, in conformity with generally
accepted accounting principles.
/s/ERNST & YOUNG LLP
-----------------------
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
June 1, 1995
<PAGE>
DELAWARE TAX-FREE MONEY CONSULTANT CLASS
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) = $1,025.85
T = 2.59%
THREE
YEARS
-----
3
$1000(1 - T) = $1,063.34
T = 2.07%
FIVE
YEARS
-----
5
$1000(1 - T) = $1,154.06
T = 2.91%
TEN
YEARS
-----
10
$1000(1 - T) = $1,444.33
T = 3.74%
LIFE OF
FUND
-------
13.619178
$1000(1 - T) = $1,769.90
T = 4.28%
<PAGE>
DELAWARE TAX-FREE MONEY CONSULTANT CLASS
TOTAL RETURN PERFORMANCE
THREE MONTHS
- ---------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $1.00
Initial Shares 1000.000
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1995 1000.000 $0.0077 40.070 1,007.671
- -------------------------------------------------------------------------------
Ending Shares 1007.671
Ending NAV $1.00
---------
Investment Return $1,007.67
Total Return Performance
- ------------------------
Investment Return $1,007.67
Less Initial Investment $1,000.00
---------
$7.67 / $1,000.00 x 100
Total Return: 0.7670%
<PAGE>
DELAWARE TAX-FREE MONEY CONSULTANT CLASS
TOTAL RETURN PERFORMANCE
SIX MONTHS
- ---------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $1.00
Initial Shares 1000.000
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ------------------------------------------------------------------------------
1995 1000.000 $0.0148 40.070 1,014.877
- ------------------------------------------------------------------------------
Ending Shares 1014.877
Ending NAV $1.00
---------
Investment Return $1,014.88
Total Return Performance
- ------------------------
Investment Return $1,014.88
Less Initial Investment $1,000.00
---------
$14.88 / $1,000.00 x 100
Total Return: 1.4877%
<PAGE>
DELAWARE TAX-FREE MONEY CONSULTANT CLASS
TOTAL RETURN PERFORMANCE
NINE MONTHS
- ---------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $1.00
Initial Shares 1000.000
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ------------------------------------------------------------------------------
1995 1000.000 $0.0207 40.070 1,020.927
- ------------------------------------------------------------------------------
Ending Shares 1020.927
Ending NAV $1.00
--------
Investment Return $1,020.93
Total Return Performance
- ------------------------
Investment Return $1,020.93
Less Initial Investment $1,000.00
---------
$20.93 / $1,000.00 x 100
Total Return: 2.0927%
<PAGE>
DELAWARE TAX-FREE MONEY CONSULTANT CLASS
TOTAL RETURN PERFORMANCE
ONE YEAR
- ---------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $1.00
Initial Shares 1000.000
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ------------------------------------------------------------------------------
1995 1000.000 $0.0255 40.070 1,025.850
- ------------------------------------------------------------------------------
Ending Shares 1025.850
Ending NAV x $1.00
---------
Investment Return $1,025.85
Total Return Performance
- ------------------------
Investment Return $1,025.85
Less Initial Investment $1,000.00
---------
$25.85 / $1,000.00 x 100
Total Return: 2.5850%
<PAGE>
DELAWARE TAX-FREE MONEY CONSULTANT CLASS
TOTAL RETURN PERFORMANCE
THREE YEARS
- ---------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $1.00
Initial Shares 1000.000
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ------------------------------------------------------------------------------
1993 | 1,000.000 | $0.0201 | 20.321 | 1,020.321
- ------------------------------------------------------------------------------
1994 | 1,020.321 | $0.0158 | 16.223 | 1,036.544
- ------------------------------------------------------------------------------
1995 | 1,036.544 | $0.0255 | 26.793 | 1,063.337
- ------------------------------------------------------------------------------
Ending Shares 1,063.337
Ending NAV x $1.00
---------
Investment Return $1,063.34
Total Return Performance
- ------------------------
Investment Return $1,063.34
Less Initial Investment $1,000.00
---------
$63.34 / $1,000.00 x 100
Total Return: 6.3337%
<PAGE>
DELAWARE TAX-FREE MONEY CONSULTANT CLASS
TOTAL RETURN PERFORMANCE
FIVE YEARS
- ---------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $1.00
Initial Shares 1000.000
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ------------------------------------------------------------------------------
1991 | 1000.000 | $0.0473 48.380 | 1,048.380
- ------------------------------------------------------------------------------
1992 | 1048.380 | $0.0347 36.943 | 1,085.323
- -----------------------------------------------------------------------------
1993 | 1085.323 | $0.0201 22.056 | 1,107.379
- -----------------------------------------------------------------------------
1994 | 1107.379 | $0.0158 17.606 | 1,124.985
- ------------------------------------------------------------------------------
1995 | 1124.985 | $0.0255 29.077 | 1,154.062
- ------------------------------------------------------------------------------
Ending Shares 1154.062
Ending NAV x $1.00
---------
Investment Return $1,154.06
- ------------------------
Investment Return $1,154.06
Less Initial $1,000.00
---------
$154.06 / $1,000.00 x 100
Total Return: 15.4062%
<PAGE>
DELAWARE TAX-FREE MONEY CONSULTANT CLASS
TOTAL RETURN PERFORMANCE
TEN YEARS
- ---------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $1.00
Initial Shares 1000.000
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1986 | 1000.000 | $0.0470 47.995 | 1,047.995
- -------------------------------------------------------------------------------
1987 | 1047.995 | $0.0390 41.596 | 1,089.591
- -------------------------------------------------------------------------------
1988 | 1089.591 | $0.0406 45.023 | 1,134.614
- -------------------------------------------------------------------------------
1989 | 1134.614 | $0.0478 55.402 | 1,190.016
- -------------------------------------------------------------------------------
1990 | 1190.016 | $0.0505 61.499 | 1,251.515
- -------------------------------------------------------------------------------
1991 | 1251.515 | $0.0473 60.551 | 1,312.066
- -------------------------------------------------------------------------------
1992 | 1312.066 | $0.0347 46.232 | 1,358.298
- ------------------------------------------------------------------------------
1993 | 1358.298 | $0.0201 27.600 | 1,385.898
- ------------------------------------------------------------------------------
1994 | 1385.898 | $0.0158 22.036 | 1,407.934
- -------------------------------------------------------------------------------
1995 | 1407.934 | $0.0255 36.393 | 1,444.327
- -------------------------------------------------------------------------------
Ending Shares 1444.327
Ending NAV x $1.00
--------
Investment Return $1,444.33
Total Return Performance
- ------------------------
Investment Return $1,444.33
Less Initial Investment $1,000.00
---------
$444.33 / $1,000.00 x 100
Total Return: 44.4327%
<PAGE>
DELAWARE TAX-FREE MONEY CONSULTANT CLASS
TOTAL RETURN PERFORMANCE
LIFE OF FUND
- ---------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $1.00
Initial Shares 1000.000
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1982 | 1000.000 | $0.0449 45.748 | 1,045.748
- -------------------------------------------------------------------------------
1983 | 1045.748 | $0.0561 60.228 | 1,105.976
- ------------------------------------------------------------------------------
1984 | 1105.976 | $0.0495 56.006 | 1,161.982
- -------------------------------------------------------------------------------
1985 | 1161.982 | $0.0533 63.430 | 1,225.412
- -------------------------------------------------------------------------------
1986 | 1225.412 | $0.0470 58.814 | 1,284.226
- -------------------------------------------------------------------------------
1987 | 1284.226 | $0.0390 50.972 | 1,335.198
- -------------------------------------------------------------------------------
1988 | 1335.198 | $0.0406 55.174 | 1,390.372
- -------------------------------------------------------------------------------
1989 | 1390.372 | $0.0478 67.894 | 1,458.266
- -------------------------------------------------------------------------------
1990 | 1458.266 | $0.0505 75.360 | 1,533.626
- -------------------------------------------------------------------------------
1991 | 1533.626 | $0.0473 74.200 | 1,607.826
- -------------------------------------------------------------------------------
1992 | 1607.826 | $0.0347 56.655 | 1,664.481
- -------------------------------------------------------------------------------
1993 | 1664.481 | $0.0201 33.824 | 1,698.305
- -------------------------------------------------------------------------------
1994 | 1698.305 | $0.0158 5427.002 | 7,125.307
- -------------------------------------------------------------------------------
1995 | 7125.307 | $0.0255 -5355.403 | 1,769.904
- -------------------------------------------------------------------------------
Ending Shares 1769.904
Ending NAV x $1.00
--------
Investment Return $1,769.90
Total Return Performance
- ------------------------
Investment Return $1,769.90
Less Initial Investment $1,000.00
---------
$769.90 / $1,000.00 x 100
Total Return: 76.9904%
<PAGE>
DELAWARE TAX-FREE MONEY A CLASS
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) = $1,025.85
T = 2.59%
THREE
YEARS
-----
3
$1000(1 - T) = $1,063.34
T = 2.07%
FIVE
YEARS
-----
5
$1000(1 - T) = $1,154.42
T = 2.91%
TEN
YEARS
-----
10
$1000(1 - T) = $1,452.23
T = 3.80%
LIFE OF
FUND
-------
13.619178
$1000(1 - T) = $1,779.588
T = 4.32%
<PAGE>
DELAWARE TAX-FREE MONEY A CLASS
TOTAL RETURN PERFORMANCE
THREE MONTHS
- ---------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $1.00
Initial Shares 1000.000
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1995 | 1000.000 | $0.0077 40.070 | 1,007.671
- -------------------------------------------------------------------------------
Ending Shares 1007.671
Ending NAV x $1.00
--------
Investment Return $1,007.67
Total Return Performance
- ------------------------
Investment Return $1,007.67
Less Initial Investment $1,000.00
---------
$7.67 / $1,000.00 x 100
Total Return: 0.7670%
<PAGE>
DELAWARE TAX-FREE MONEY A CLASS
TOTAL RETURN PERFORMANCE
SIX MONTHS
- ---------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $1.00
Initial Shares 1000.000
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1995 | 1000.000 | $0.0148 40.070 | 1,014.877
- -------------------------------------------------------------------------------
Ending Shares 1014.877
Ending NAV x $1.00
--------
Investment Return $1,014.88
Total Return Performance
- ------------------------
Investment Return $1,014.88
Less Initial Investment $1,000.00
---------
$14.88 / $1,000.00 x 100
Total Return: 1.4877%
<PAGE>
DELAWARE TAX-FREE MONEY A CLASS
TOTAL RETURN PERFORMANCE
NINE MONTHS
- ---------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $1.00
Initial Shares 1000.000
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ------------------------------------------------------------------------------
1995 | 1000.000 | $0.0207 40.070 | 1,020.927
------------------------------------------------------------------------------
Ending Shares 1020.927
Ending NAV x $1.00
--------
Investment Return $1,020.93
Total Return Performance
- ------------------------
Investment Return $1,020.93
Less Initial Investment $1,000.00
---------
$20.93 / $1,000.00 x 100
Total Return: 2.0927%
<PAGE>
DELAWARE TAX-FREE MONEY A CLASS
TOTAL RETURN PERFORMANCE
ONE YEAR
- --------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $1.00
Initial Shares 1000.000
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1995 | 1000.000 | $0.0255 40.070 | 1,025.850
- -------------------------------------------------------------------------------
Ending Shares 1025.850
Ending NAV x $1.00
---------
Investment Return $1,025.85
Total Return Performance
- ------------------------
Investment Return $1,025.85
Less Initial Investment $1,000.00
---------
$25.85 / $1,000.00 x 100
Total Return: 2.5850%
<PAGE>
DELAWARE TAX-FREE MONEY A CLASS
TOTAL RETURN PERFORMANCE
THREE YEARS
- ---------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $1.00
Initial Shares 1000.000
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1993 | 1,000.000 | $0.0201 | 20.321 | 1,020.321
- -------------------------------------------------------------------------------
1994 | 1,020.321 | $0.0158 | 16.223 | 1,036.544
- -------------------------------------------------------------------------------
1995 | 1,036.544 | $0.0255 | 26.793 | 1,063.337
- -------------------------------------------------------------------------------
Ending Shares 1,063.337
Ending NAV x $1.00
---------
Investment Return $1,063.34
Total Return Performance
- ------------------------
Investment Return $1,063.34
Less Initial Investment $1,000.00
---------
$63.34 / $1,000.00 x 100
Total Return: 6.3337%
<PAGE>
DELAWARE TAX-FREE MONEY A CLASS
TOTAL RETURN PERFORMANCE
FIVE YEARS
---------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $1.00
Initial Shares 1000.000
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1991 | 1000.000 | $0.0476 48.704 | 1,048.704
-------------------------------------------------------------------------------
1992 | 1048.704 | $0.0347 36.953 | 1,085.657
- -------------------------------------------------------------------------------
1993 | 1085.657 | $0.0201 22.060 | 1,107.717
- -------------------------------------------------------------------------------
1994 | 1107.717 | $0.0158 17.612 | 1,125.329
- -------------------------------------------------------------------------------
1995 | 1125.329 | $0.0255 29.086 | 1,154.415
- -------------------------------------------------------------------------------
Ending Shares 1154.415
Ending NAV x $1.00
--------
Investment Return $1,154.42
- ------------------------
Investment Return $1,154.42
Less Initial Investment $1,000.00
---------
$154.42 / $1,000.00 x 100
Total Return: 15.4415%
<PAGE>
DELAWARE TAX-FREE MONEY A CLASS
TOTAL RETURN PERFORMANCE
TEN YEARS
- ---------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $1.00
Initial Shares 1000.000
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1986 | 1000.000 | $0.0470 47.995 | 1,047.995
- -------------------------------------------------------------------------------
1987 | 1047.995 | $0.0390 41.596 | 1,089.591
- -------------------------------------------------------------------------------
1988 | 1089.591 | $0.0407 45.241 | 1,134.832
- ------------------------------------------------------------------------------
1989 | 1134.832 | $0.0503 58.368 | 1,193.200
- -------------------------------------------------------------------------------
1990 | 1193.200 | $0.0530 64.781 | 1,257.981
- -------------------------------------------------------------------------------
1991 | 1257.981 | $0.0476 61.266 | 1,319.247
- -------------------------------------------------------------------------------
1992 | 1319.247 | $0.0347 46.487 | 1,365.734
- -------------------------------------------------------------------------------
1993 | 1365.734 | $0.0201 27.752 | 1,393.486
- -------------------------------------------------------------------------------
1994 | 1393.486 | $0.0158 22.155 | 1,415.641
- -------------------------------------------------------------------------------
1995 | 1415.641 | $0.0255 36.591 | 1,452.232
- -------------------------------------------------------------------------------
Ending Shares 1452.232
Ending NAV x $1.00
--------
Investment Return $1,452.23
Total Return Performance
- ------------------------
Investment Return $1,452.23
Less Initial Investment $1,000.00
---------
$452.23 / $1,000.00 x 100
Total Return: 45.2232%
<PAGE>
DELAWARE TAX-FREE MONEY A CLASS
TOTAL RETURN PERFORMANCE
LIFE OF FUND
- ---------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $1.00
Initial Shares 1000.000
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1982 | 1000.000 | $0.0449 45.748 | 1,045.748
- -------------------------------------------------------------------------------
1983 | 1045.748 | $0.0561 60.228 | 1,105.976
- -------------------------------------------------------------------------------
1984 | 1105.976 | $0.0495 56.006 | 1,161.982
- -------------------------------------------------------------------------------
1985 | 1161.982 | $0.0533 63.430 | 1,225.412
- -------------------------------------------------------------------------------
1986 | 1225.412 | $0.0470 58.814 | 1,284.226
- -------------------------------------------------------------------------------
1987 | 1284.226 | $0.0390 50.972 | 1,335.198
- -------------------------------------------------------------------------------
1988 | 1335.198 | $0.0407 55.441 | 1,390.639
- -------------------------------------------------------------------------------
1989 | 1390.639 | $0.0503 71.525 | 1,462.164
- -------------------------------------------------------------------------------
1990 | 1462.164 | $0.0530 79.383 | 1,541.547
- -------------------------------------------------------------------------------
1991 | 1541.547 | $0.0476 75.079 | 1,616.626
- -------------------------------------------------------------------------------
1992 | 1616.626 | $0.0347 56.965 | 1,673.591
- -------------------------------------------------------------------------------
1993 | 1673.591 | $0.0201 34.007 | 1,707.598
- -------------------------------------------------------------------------------
1994 | 1707.598 | $0.0158 27.151 | 1,734.749
- -------------------------------------------------------------------------------
1995 | 1734.749 | $0.0255 44.839 | 1,779.588
- -------------------------------------------------------------------------------
Ending Shares 1779.588
Ending NAV x $1.00
--------
Investment Return $1,779.59
Total Return Performance
- ------------------------
Investment Return $1,779.59
Less Initial Investment $1,000.00
---------
$779.59 / $1,000.00 x 100
Total Return: 77.9588%
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<PAGE>
POWER OF ATTORNEY
Each of the undersigned, a member of the Board of Directors of DELAWARE
GROUP TAX-FREE MONEY 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
