<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. 21 [X]
------
AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 21
----
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) 255-2923
--------------
George M. Chamberlain, Jr., 1818 Market Street, Philadelphia, PA 19103
- --------------------------------------------------------------------------------
(Name and Address of Agent for Service)
Approximate Date of Public Offering: June 28, 1996
-------------
It is proposed that this filing will become effective:
________ immediately upon filing pursuant to paragraph (b)
___X____ on June 28, 1996 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 24, 1996.
<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. 21 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
- -------- ----------- ----------------------
<S> <C> <C>
1 Cover Page...................................................... Cover
2 Synopsis........................................................ Synopsis;
Summary of
Expenses
3 Condensed Financial Information................................. Financial
Highlights
4 General Description of Registrant............................... Investment
Objective and
Policies; Shares
5 Management of the Fund ......................................... Management of
the Fund
6 Capital Stock and Other Securities ............................. The Delaware Difference;
Dividends and
Distributions;
Taxes; Shares
7 Purchase of Securities Being Offered............................ Cover; Buying Shares;
Net Asset Value;
Management of the Fund
8 Redemption or Repurchase........................................ Buying Shares;
Redemption and
Exchange
9 Legal Proceedings............................................... 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., which
have a common Prospectus, Statement of Additional Information 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.......................... Plan under Rule 12b-1 for the
Tax-Free Money Fund Consultant
Class of Shares (under Purchasing
Shares); Officers and Directors;
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; Offering Price;
Redemption; 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 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.
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, LLP
One Commerce Square
Philadelphia, PA 19103
INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103
CUSTODIAN
Bankers Trust Company
One Bankers Trust Plaza
New York, NY 10006
<PAGE>
- ---------------------------------------------------------
TAX-FREE MONEY FUND
- ---------------------------------------------------------
A CLASS
- ---------------------------------------------------------
CONSULTANT CLASS
- ---------------------------------------------------------
No Sales Charge
P R O S P E C T U S
- ---------------------------------------------------------
JUNE 28, 1996
DELAWARE
GROUP
----------
DTX-A-CHT
<PAGE>
(DTX-A/CC)
TAX-FREE MONEY FUND
A CLASS PROSPECTUS
CONSULTANT CLASS JUNE 28, 1996
-----------------------------------------------------------------------------
1818 Market Street, Philadelphia, PA 19103
For Prospectus and Performance: Nationwide 800-523-4640
Information on Existing Accounts: Nationwide 800-523-1918
Representatives of Financial Institutions: Nationwide 800-659-2259
This Prospectus describes the Tax-Free Money Fund A Class ("Class A
Shares") and the Tax-Free Money Fund Consultant Class ("Consultant Class
Shares") (individually, a "Class" and collectively, the "Classes") 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. There are no front-end or contingent
deferred sales charges for either Class. Class A Shares are not subject to 12b-1
distribution expenses. Consultant Class Shares are offered for sale through
broker/dealers, financial institutions and other entities that have a dealer
agreement with the Fund's Distributor or a service agreement with the Fund's
Distributor or a service agreement with the Fund. Though Consultant Class Shares
are subject to a 12b-1 distribution plan, at the present time 12b-1 distribution
fees are not being charged to the Fund nor paid to financial professionals. The
shares of the Fund are neither insured nor guaranteed by the U.S. Government.
While the Fund will make every effort to maintain a stable net asset value of $1
per share, there is no assurance that the Fund will be able to do so.
This Prospectus relates only to the Classes and sets forth information
that you should read and consider before you invest. Please retain it for future
reference. Part B of the registration statement, dated June 28, 1996, 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.
-1-
<PAGE>
(DTX-A/CC)
TABLE OF CONTENTS
Cover Page The Delaware Difference
Synopsis Plans and Services
Summary of Expenses Buying Shares
Financial Highlights Redemption and Exchange
Investment Objective and Policies Dividends and Distributions
Suitability Taxes
Investment Strategy Net Asset Value Per Share
Management of the Fund
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.
-2-
<PAGE>
(DTX-A/CC)
SYNOPSIS
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. For further details, see
Investment Objective and Policies.
Investment Manager, Distributor and Service Agent
Delaware Management Company, Inc. (the "Manager") is the investment
manager for the Fund. 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.
The Manager also provides investment management services to certain of
the other funds in the Delaware Group. Delaware Distributors, L.P. (the
"Distributor") is the national distributor for 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
The Class A Shares offered by this Prospectus are available at net
asset value, without a sales charge, and are not subject to distribution fees
under a Rule 12b-1 distribution plan.
The Consultant Class Shares offered by this Prospectus are available at
net asset value, without a sales charge, but are subject to distribution fees
under a Rule 12b-1 distribution plan, although no fees are being charged under
the Plan at this time. See Buying Shares; and Distribution (12b-1) and Service
under Management of the Fund.
Minimum Investment
The minimum initial investment for each Class generally is $1,000.
Subsequent investments generally must be at least $100. See Buying Shares.
Redemption and Exchange
Shares of the Fund are redeemed or exchanged at the net asset value
calculated after receipt of the redemption or exchange request. See Redemption
and Exchange.
Open-End Investment Company
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 as defined by the Investment Company Act of 1940 (the "1940 Act")
and Rule 2a-7 under the 1940 Act. See Shares under Management of the Fund.
-3-
<PAGE>
(DTX-A/CC)
SUMMARY OF EXPENSES
<TABLE>
<CAPTION>
Consultant
Class A Class
Shareholder Transaction Expenses Shares Shares
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price)......................................... None None
Maximum Sales Charge Imposed on Reinvested Dividends
(as a percentage of offering price)......................................... None None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable)....................... None None
Redemption Fees............................................................. None* None*
Exchange Fees............................................................... None** None**
Consultant
Annual Operating Expenses Class A Class
(as a percentage of average daily net assets) Shares Shares
- ---------------------------------------------------------------------------------------------------------
Management Fees............................................................. 0.48% 0.48%
12b-1 Fees.................................................................. None None***
Other Operating Expenses.................................................... 0.42% 0.42%
----- -----
Total Operating Expenses............................................... 0.90% 0.90%
===== =====
</TABLE>
-4-
<PAGE>
(DTX-A/CC)
The purpose of the above tables is to assist the investor in
understanding the various costs and expenses that an investor in each Class will
bear directly or indirectly.
*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.
***Consultant Class Shares are subject to a Rule 12b-1 distribution
plan; however, the Board of Directors of the Fund suspended 12b-1 plan payments
from the Class effective June 1, 1990. See Distribution (12b-1) and Service
under Management of the Fund.
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.
Class A Shares 1 year 3 years 5 years 10 years
------ ------- ------- --------
$9 $29 $50 $111
Consultant
Class Shares 1 year 3 years 5 years 10 years
------ ------- ------- --------
$9 $29 $50 $111
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.
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The following financial highlights are derived from the financial statements of
Delaware Group Tax-Free Money Fund, Inc. and have been audited by Ernst & Young
LLP, independent auditors. The data should be read in conjunction with the
financial statements, related notes, and the report of Ernst & Young LLP, all of
which are incorporated by reference into Part B. Further information about the
Fund's performance is contained in its Annual Report to shareholders. A copy of
the Fund's Annual Report (including the report of Ernst & Young LLP) may be
obtained from the Fund upon request and at no charge.
- -------------------------------------------------------------------------------
-5-
<PAGE>
<TABLE>
<CAPTION>
Class A Shares
---------------------------------------------------------
Year Ended
---------------------------------------------------------
<S> <C> <C> <C> <C> <C>
4/30/96 4/30/95 4/30/94 4/30/93 4/30/92
------- ------- ------- ------- -------
Net Asset Value, Beginning of Period........................ $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Income From Investment Operations
- ---------------------------------
Net Investment Income....................................... 0.0293 0.0255 0.0158 0.0201 0.0347
Net Gains or Losses on Securities
(both realized and unrealized)..................... none none none none none
------- ------- ------- ------- -------
Total From Investment Operations........................ 0.0293 0.0255 0.0158 0.0201 0.0347
------- ------- ------- ------- -------
Less Distributions
- ------------------
Dividends (from net investment income)...................... (0.0293) (0.0255) (0.0158) (0.0201) (0.0347)
Distributions (from capital gains).......................... none none none none none
Returns of Capital.......................................... none none none none none
------- ------- ------- ------- -------
Total Distributions..................................... (0.0293) (0.0255) (0.0158) (0.0201) (0.0347)
------- ------- ------- ------- -------
Net Asset Value, End of Period.............................. $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= =======
- ---------------------------------------------------------------
Total Return ............................................. 2.97% 2.59% 1.59% 2.03% 3.52%
- ------------
- ---------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000's omitted)................... $35,479 $54,444 $44,707 $43,886 $53,210
Ratio of Expenses to Average Daily Net Assets............... 0.90% 0.96% 0.99% 0.94% 0.84%
Ratio of Net Investment Income to Average Daily Net Assets.. 2.95% 2.57% 1.58% 2.03% 3.43%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
4/25/91 4/26/90 4/27/89 4/28/88 4/30/87
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $1.0000(1) $1.0000(1) $1.0000(1) $1.0000(1) $1.0000(1)
Income From Investment Operations
- ---------------------------------
Net Investment Income....................................... 0.0476 0.0530 0.0503 0.0407 0.0390
Net Gains or Losses on Securities
(both realized and unrealized)..................... none none none none none
------- ------- ------- ------- -------
Total From Investment Operations........................ 0.0476 0.0530 0.0503 0.0407 0.0390
------- ------- ------- ------- -------
Less Distributions
- ------------------
Dividends (from net investment income)...................... (0.0476) (0.0530) (0.0503) (0.0407) (0.0390)
Distributions (from capital gains).......................... none none none none none
Returns of Capital.......................................... none none none none none
------- ------- ------- ------- -------
Total Distributions..................................... (0.0476) (0.0530) (0.0503) (0.0407) (0.0390)
------- ------- ------- ------- -------
Net Asset Value, End of Period.............................. $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= =======
- --------------------------------------------------------------
Total Return ............................................. 4.87% 5.43% 5.14% 4.15% 3.97%
- ------------
- ---------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000's omitted)................... $56,766 $61,860 $60,827 $79,662 $62,782
Ratio of Expenses to Average Daily Net Assets............... 0.83% 0.83% 0.79% 0.72% 0.76%
Ratio of Net Investment Income to Average Daily Net Assets.. 4.77% 5.30% 5.04% 4.05% 3.89%
</TABLE>
- ------------
(1) All share and per share figures have been restated to reflect a ten-to-one
stock split on January 1, 1991.
<PAGE>
DTX-CC-CHT
<TABLE>
<CAPTION>
Consultant Class Shares
-------------------------------------------------------------------
Year Ended
-----------------------------------------------------------------
4/30/96 4/30/95 4/30/94 4/30/93 4/30/92
------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period..................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Income From Investment Operations
- ---------------------------------
Net Investment Income.................................... 0.0293 0.0255 0.0158 0.0201 0.0347
Net Gains or Losses on Securities
(both realized and unrealized)................. none none none none none
------- ------- ------- ------- -------
Total From Investment Operations.................... 0.0293 0.0255 0.0158 0.0201 0.0347
------- ------- ------- ------- -------
Less Distributions
- ------------------
Dividends (from net investment income)................... (0.0293) (0.0255) (0.0158) (0.0201) (0.0347)
Distributions (from capital gains)....................... none none none none none
Returns of Capital....................................... none none none none none
------- ------- ------- ------- -------
Total Distributions................................. (0.0293) (0.0255) (0.0158) (0.0201) (0.0347)
------- ------- ------- ------- -------
Net Asset Value, End of Period........................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= =======
- --------------------------------------------------------------
Total Return............................................. 2.97% 2.59% 1.59% 2.03% 3.52%
- ------------
- ---------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000's omitted)................ $1,452 $1,614 $1,407 $1,846 $1,920
Ratio of Expenses to Average Daily Net Assets............ 0.90% 0.96% 0.99% 0.94% 0.84%
Ratio of Net Investment Income to
Average Daily Net Assets............................ 2.95% 2.57% 1.58% 2.03% 3.43%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Consultant Class Shares
----------------------------------------------------
Period
3/15/88(1)
Year Ended through
4/25/91 4/26/90 4/27/89 4/28/88
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period..................... $1.0000(2) $1.0000(2) $1.0000(2) $1.0000(2)
Income From Investment Operations
- ---------------------------------
Net Investment Income.................................... 0.0473 0.0505 0.0478 0.0044
Net Gains or Losses on Securities
(both realized and unrealized)................. none none none none
------- ------- ------- -------
Total From Investment Operations.................... 0.0473 0.0505 0.0478 0.0044
------- ------- ------- -------
Less Distributions
- ------------------
Dividends (from net investment income)................... (0.0473) (0.0505) (0.0478) (0.0044)
Distributions (from capital gains)....................... none none none none
Returns of Capital....................................... none none none none
------- ------- ------- -------
Total Distributions................................. (0.0473) (0.0505) (0.0478) (0.0044)
------- ------- ------- -------
Net Asset Value, End of Period........................... $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= =======
- ------------------------------------------------------------
Total Return............................................. 4.84% 5.17% 4.88% (1)
- ------------
- ------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000's omitted)................ $3,517 $3,556 $3,100 $39
Ratio of Expenses to Average Daily Net Assets............ 0.86% 1.08% 1.04% (1)
Ratio of Net Investment Income to
Average Daily Net Assets............................ 4.74% 5.05% 4.79% (1)
</TABLE>
- -----------
(1) March 15, 1988 was the date of the initial public sale of the Consultant
Class Shares; 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.
<PAGE>
(DTX-A/CC)
INVESTMENT OBJECTIVE AND POLICIES
The Fund is a money market fund with the objective of seeking a high
level of current income, exempt 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
per share value. While the Fund will make every effort to maintain a fixed net
asset value of $1 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.
Consultant Class Shares of the Fund are available through brokers,
financial planners, financial institutions and other entities to investors who
desire the investment and administrative services provided by such financial
professionals.
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 maturity, quality and diversification 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 Ratings Group ("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
-6-
<PAGE>
(DTX-A/CC)
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 in 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.
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.
As described above, the Fund invests in securities backed by banks and
other financial institutions. As a result, changes in the credit quality of
these institutions could cause losses to the Fund and affect its share price.
However, the Fund is managed in accordance with the diversification, quality and
other restrictions applicable under the 1940 Act to tax-exempt money market
funds. Such restrictions are designed to minimize the effect that any one
security in the Fund's portfolio may have on the Fund's performance and share
price.
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.
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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, obligations of the U.S. Government, its agencies or
instrumentalities, 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.
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). For a discussion concerning the risks of investing in such
asset-backed securities, see Part B.
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Rule 144A Securities
The Fund may invest in restricted securities, including securities
eligible for resale without registration pursuant to Rule 144A ("Rule 144A
Securities") under the Securities Act of 1933. Rule 144A permits many privately
placed and legally restricted securities to be freely traded among certain
institutional buyers such as the Fund. The Fund may invest no more than 10% of
the value of its net assets in illiquid securities.
While maintaining oversight, the Board of Directors has delegated to the
Manager the day-to-day function of determining whether or not individual Rule
144A Securities are liquid for purposes of the Fund's 10% limitation on
investments in illiquid assets. The Board has instructed the Manager to consider
the following factors in determining the liquidity of a Rule 144A Security: (i)
the frequency of trades and trading volume for the security; (ii) whether at
least three dealers are willing to purchase or sell the security and the number
of potential purchasers; (iii) whether at least two dealers are making a market
in the security; and (iv) the nature of the security and the nature of the
marketplace trades (e.g., the time needed to dispose of the security, the method
of soliciting offers, and the mechanics of transfer).
If the Manager determines that a Rule 144A Security which was previously
determined to be liquid is no longer liquid and, as a result, the Fund's
holdings of illiquid securities exceed the Fund's 10% limit on investments in
such securities, the Manager will determine what action to take to ensure that
the Fund continues to adhere to such limitation.
Part B provides more information on the Fund's investment policies and
restrictions.
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THE DELAWARE DIFFERENCE
PLANS AND SERVICES
The Delaware Difference is our commitment to provide you with superior
information and quality service on your investments in the Delaware Group of
funds.
SHAREHOLDER PHONE DIRECTORY
Investor Information Center
800-523-4640
Fund Information, Literature, Price, Yield and Performance Figures
Shareholder Service Center
800-523-1918
Information on Existing Investment Accounts, Wire Investments, Wire
Liquidations, Telephone Liquidations and Telephone Exchanges
Delaphone
800-362-FUND
(800-362-3863)
Performance Information
You can call the Investor Information Center at any time for current
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 Delaware Group'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. Delaphone also provides current performance
information on the Fund, as well as other funds in the Delaware Group. Delaphone
is available seven days a week, 24 hours a day.
Account Statements
You will receive quarterly statements of your account summarizing all
transactions during the period. Accounts in which there has been activity, other
than a reinvestment of dividends, will receive a monthly statement confirming
each transaction. You should examine statements immediately and promptly report
any discrepancy by calling the Shareholder Service Center.
Duplicate Statements
If your financial adviser or investment dealer is noted on your
investment application, we will send a duplicate statement to him or her. This
makes it easier for your adviser to help you manage your investments.
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Tax Information
Each year, the Fund will mail you information on the tax status of your
dividends and distributions.
Dividend Payments
Dividends and other distributions are automatically reinvested in your
account, unless you elect to receive them in cash. You may also elect to have
the dividends earned in one fund automatically invested in another Delaware
Group fund with a different investment objective, subject to certain exceptions
and limitations. For more information, see Dividend Reinvestment Plan under
Buying Shares - Additional Methods of Adding to Your Investment or call the
Shareholder Service Center.
Exchange Privilege
The Exchange Privilege permits shareholders to exchange all or part of
their shares into shares of the other funds in the Delaware Group, subject to
the eligibility and minimum purchase requirements set forth in each fund's
prospectus, including any applicable front-end sales charge. For additional
information on exchanges, see Investing by Exchange under Buying Shares and
Redemption and Exchange.
Wealth Builder Option
You may 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 Fund shares. See Redemption and Exchange.
Delaware Group Asset Planner
Delaware Group Asset Planner is an asset allocation service that gives
investors, working with a professional financial adviser, the ability to more
easily design and maintain investments in a diversified selection of Delaware
Group mutual funds. The Asset Planner service offers a choice of four
predesigned allocation strategies (each with a different risk/reward profile)
made up of separate investments in predetermined percentages of Delaware Group
funds. With the guidance of a financial adviser, investors may also tailor an
allocation strategy that meets their personal needs and goals. See Buying
Shares.
MoneyLine Direct Deposit Service
If you elect to have your dividends and distributions paid in cash and
such dividends and distributions are in an amount of $25 or more, you may choose
the MoneyLine Direct Deposit Service and have such payments transferred from
your Fund account to your predesignated bank account. See Dividends and
Distributions. In addition, you may elect to have your Systematic Withdrawal
Plan payments transferred from your Fund account to your predesignated bank
account through this service. Your funds will normally be credited to your bank
account two business days after the payment date. There are no fees for this
service. See Systematic Withdrawal Plan under Redemption and Exchange. You can
initiate the MoneyLine Direct Deposit Service by completing an Authorization
Agreement. If your name and address are not identical to the name and address on
your Fund account, you must have your signature guaranteed.
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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 Delaware Group's newsletters covering topics of interest
about your investment alternatives and services.
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BUYING SHARES
Shares of the Fund 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. Investors who do not wish to
receive the additional services that are typically offered by such financial
professionals may also purchase Class A Shares directly by contacting the Fund
or the Distributor.
Purchase Amounts
Generally, the minimum initial investment for each Class is $1,000.
Subsequent investments must generally be at least $100. For purchases under a
Uniform Gifts to Minors Act or Uniform Transfers to Minors Act or through an
Automatic Investment Plan, there is a minimum initial purchase of $250 and a
minimum subsequent purchase of $25. All purchases for each Class are at net
asset value. There is no 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 of shares of the Fund 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 or 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 the specific Class selected. Your check should be identified
with your name(s) and account number. An investment slip (similar to a deposit
slip) is provided at the bottom of account statements that you will receive from
the Fund. Use of this investment slip can help expedite processing of your check
when making additional purchases. Your investment may be delayed if you send
additional purchases by certified mail.
Investing by Wire
You may purchase shares by requesting your bank to transmit funds by wire
to CoreStates Bank, N.A., ABA #031000011, account number 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 the specific Class selected, 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
Shareholder Service Center by telephone of each wire you send.
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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 Fund. Shares of the Class B Shares or Class C Shares of other funds in the
Delaware Group may not be exchanged into either Class of the Fund. 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. 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 Fund
account. Shareholders should allow a reasonable amount of time for initial
purchases and changes to these plans to become effective.
2. Direct Deposit
You may have your employer or bank make regular investments directly to
your account for you (for example: payroll deduction, pay by phone, annuity
payments). 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.
* * *
Should investments through an automatic investing plan or by direct
deposit 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 account, you are obligated to reimburse the Fund.
3. Wealth Builder Option
You can use our Wealth Builder Option to invest in the Fund through
regular liquidations of shares in your accounts in other funds in the Delaware
Group, subject to the same conditions and limitations as other exchanges noted
above. You may also elect to invest in other mutual funds in the Delaware Group
through the Wealth Builder Option through regular liquidations of shares in your
Fund account.
Under this automatic exchange program, you can authorize regular monthly
amounts (minimum of $100 per fund) to be liquidated from your account in one or
more funds in the Delaware Group and invested automatically into such other
Delaware Group account that you may specify. If in connection with the election
of the Wealth Builder Option, you wish to open a new account to receive the
automatic investment, such new account must meet the minimum initial purchase
requirements described in the prospectus of the fund that you select.
Investments under this option are exchanges and are therefore subject to the
same conditions and limitations as other exchanges noted above. You can
terminate your participation at any time by written notice to the Fund. See
Redemption and Exchange.
4. Dividend Reinvestment Plan
You can elect to have your distributions (dividend income or other
distributions) paid to you by check or reinvested in your account without a
sales charge or you may be permitted to reinvest your distributions in certain
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 either Class
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may not be invested in the Class B Shares or Class C Shares that are offered by
certain other funds in the Delaware Group. For more information about
reinvestment in shares of other funds in the Delaware Group, call the
Shareholder Service Center.
Delaware Group Asset Planner
To invest in Delaware Group funds using the Delaware Group Asset Planner
asset allocation service, you should complete a Delaware Group Asset Planner
Account Registration Form, which is available only from a financial adviser or
investment dealer. As previously described, the Delaware Group Asset Planner
service offers a choice of four predesigned asset allocation strategies (each
with a difference risk/reward profile) in predetermined percentages in Delaware
Group funds or, with the help of a financial adviser, you may design a
customized asset allocation strategy.
The sales charge on an investment through the Asset Planner service is
determined by the individual sales charges of the underlying funds and their
percentage allocation in the selected Strategy. Exchanges from existing Delaware
Group accounts into the Asset Planner service may be made at net asset value
under the circumstances described under Investing by Exchange in the funds'
prospectuses. The minimum initial investment per Strategy is $2,000; subsequent
investments must be at least $100. Individual fund minimums do not apply to
investments made using the Asset Planner service. Each Class is available
through the Asset Planner service. Generally, only shares within the same class
may be used within the same Strategy. However, either Class A Shares or
Consultant Class Shares of the Fund may be used in the same Strategy with Class
A shares or consultant class shares of other Delaware Group funds.
An annual maintenance fee, currently $35 per Strategy, is due at the time
of initial investment and by September 30th of each subsequent year. The fee,
payable to Delaware Service Company, Inc. to defray extra costs associated with
administering the Asset Planner service, will be deducted automatically from one
of the funds within your Asset Planner account if not paid by September 30th.
See Part B.
Investors will receive a customized quarterly Strategy Report summarizing
all Delaware Group Asset Planner investment performance and account activity
during the prior period. Confirmation statements will be sent following all
transactions other than those involving a reinvestment of distributions.
Certain shareholder services are not available to investors using the
Asset Planner service, due to its special design. These include Delaphone,
Checkwriting, Wealth Builder Option and Letter of Intention. Systematic
Withdrawal Plans are available after the account has been open for two years.
Purchase Price and Effective Date
The offering price (net asset value) of each Class is determined as of
the close of regular trading on the New York Stock Exchange (ordinarily, 4 p.m.,
Eastern time) on days when the Exchange is open.
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).
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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 order. If a purchase
is canceled because your check is returned unpaid, you are responsible for any
loss incurred. The Fund can redeem shares from your account(s) to reimburse
itself for any loss, and you may be restricted from making future purchases in
any of the funds in the Delaware Group. The Fund reserves the right to reject
purchase orders paid by third-party checks or checks that are not drawn on a
domestic branch of a United States financial institution. If a check drawn on a
foreign financial institution is accepted, you may be subject to additional bank
charges for clearance and currency conversion.
The Fund also reserves the right, following shareholder notification, to
charge a service fee on non- retirement accounts 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 insufficient account balance
and advised that they have until the end of the current calendar quarter to
raise their balance to the stated minimum. If the account has not reached the
minimum balance requirement by that time, the Fund will charge a $9 fee for that
quarter and each subsequent quarter until the account is brought up to the
minimum balance. The service fee will be deducted from the account during the
first week of each calendar quarter for the previous quarter, and will be used
to help defray the cost of maintaining low-balance accounts.
The Fund also reserves the right, upon 60 days' written notice, to
involuntarily redeem accounts that remain under $1,000 as a result of
redemptions. An investor making the minimum initial investment may be subject to
involuntary redemption if he or she redeems any portion of his or her account.
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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 requirements of each fund
and all exchanges of shares constitute taxable events. All 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
this Fund or any other money market fund to other non-money market funds, except
for exchanges involving assets that were previously invested in a fund with a
front-end sales charge and/or transfers involving the reinvestment of dividends.
Shares of the Fund may not be exchanged for the Class B Shares or the Class C
Shares that are offered by certain other funds in the Delaware Group. 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.
All exchanges involve a purchase of shares of the fund into which the
exchange is made. As with any purchase, an investor should obtain and carefully
read that fund's prospectus before buying shares in an exchange. The prospectus
contains more complete information about the fund, including charges and
expenses.
Your shares will be redeemed or exchanged out of the Fund based on the
net asset value next determined after the Fund receives 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. The Fund does not issue
certificates for shares unless you submit a specific request. Any certificates
that have been issued for shares you wish to redeem or exchange must accompany
your order. The Fund may suspend, terminate or amend the terms of the exchange
privilege upon 60 days' written notice to shareholders.
The Fund will process written and telephone redemption requests to the
extent that the purchase orders for the shares being redeemed have already
settled. The Fund will honor redemption requests as to shares for which a check
was tendered as payment, but the Fund will not mail the proceeds until it is
reasonably satisfied that the check has cleared, which may take up to 15 days
from the purchase date. You can avoid this potential delay if you purchase
shares by wiring Federal Funds. 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.
Various 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.
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All authorizations given by shareholders, including selection of any of
the features described below, shall continue in effect until such time as a
written revocation or modification has been received by the Fund or its agent.
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
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 either Class of the Fund without the imposition of the
Limited CDSC at the time of the exchange. However, upon subsequent redemption
from the Fund 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 this Fund. Shareholders
will be given credit for the period during which the Fund 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 applicable 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 canceled. 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.
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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. 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--Check to Your Address of Record service and the
Telephone Exchange service, both of which are described below, are automatically
provided unless you notify the Fund in writing that you do not wish to have such
services available with respect to your account. The Fund reserves the right to
modify, terminate or suspend these procedures upon 60 days' written notice to
shareholders. It may be difficult to reach the Fund by telephone during periods
when market or economic conditions lead to an unusually large volume of
telephone requests.
Neither the Fund nor its 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 taped 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
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redemption 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 MoneyLine Direct Deposit
Service. See MoneyLine Direct Deposit Service under The Delaware Difference for
more information about this service. Please call the Shareholder Service Center
for additional information.
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(DTX-A/CC)
DIVIDENDS AND DISTRIBUTIONS
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.
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 declares a dividend to all 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.
Each Class of the Fund will share proportionately in the investment
income and expenses of the Fund, except that the Class A Shares will not incur
any distribution fee under the Distribution Plan under Rule 12b-1 for the
Consultant Class Shares. No distribution fee under the 12b-1 Plan for the
Consultant Class Shares is currently being paid.
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.
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 United States Post Office or
which remains uncashed for a period of more than one year may be reinvested in
the shareholder's account at the then-current net asset value and the dividend
option may be changed from cash to reinvest. 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 MoneyLine Direct Deposit Service to enable
such payments to be transferred from your Fund account to your predesignated
bank account. See MoneyLine Direct Deposit Service under The Delaware Difference
for more information about this service.
Information as to the tax status of dividends will be provided annually.
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(DTX-A/CC)
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 ended April 30, 1996, 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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(DTX-A/CC)
NET ASSET VALUE PER SHARE
The purchase and redemption price of the shares of each Class is equal to
the Class' net asset value ("NAV") per share 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 the
Exchange is open.
The NAV per share is computed by adding the value of all securities and
other assets in the portfolio, deducting any liabilities (expenses and fees are
accrued daily) and dividing by the number of shares outstanding.
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 net asset value per share at $1. 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 reduced the net asset value per share from $10
to $1 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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(DTX-A/CC)
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, 1996, the Manager and its affiliates in
the Delaware Group, including Delaware International Advisers Ltd., were
supervising in the aggregate more than $29 billion in assets in various
institutional or separately managed (approximately $18,400,975,000) and
investment company (approximately $10,861,646,000) accounts.
The Manager is an indirect, wholly-owned subsidiary of Delaware
Management Holdings, Inc. ("DMH"). On April 3, 1995, a merger between DMH and a
wholly-owned subsidiary of Lincoln National Corporation ("Lincoln National") was
completed. DMH and the Manager are now indirect, wholly-owned subsidiaries, and
subject to the ultimate control, of Lincoln National. Lincoln National, with
headquarters in Fort Wayne, Indiana, is a diversified organization with
operations in many aspects of the financial services industry, including
insurance and investment management. In connection with the merger, 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 0.48% of average daily net assets for the
fiscal year ended April 30, 1996.
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.
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(DTX-A/CC)
Performance Information
From time to time, the Fund may publish the "yield" and "effective yield"
for the Classes. Both yield figures are based on historical earnings and are not
intended to indicate future performance. The "yield" of a Class refers to the
income generated by an investment in that 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 a 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 a Class' yield. Yield fluctuates and is not guaranteed.
In addition, the Fund may publish aggregate and average annual total
return information concerning a Class, which will reflect the compounded rate of
return of an investment in that Class over a specified period of time and will
assume the reinvestment of all distributions at net asset value. Past
performance is not a guarantee of future results.
Distribution (12b-1) and Service
The Distributor, Delaware Distributors, L.P., serves as the national
distributor for 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 Consultant Class Shares, which permits the Fund to pay the Distributor
from the assets of this Class 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 Consultant Class Shares. In connection with the promotion of Consultant
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 Consultant Class Shares and increase sales of
shares of this Class. In addition, the Fund may make payments from Consultant
Class Shares 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 Consultant Class Shares 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 Consultant Class Shares 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. 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
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(DTX-A/CC)
distribution expenses will likely equal or exceed payments to it under the Plan.
The Distributor may incur such additional expenses and make additional payments
to dealers from its own resources to promote the distribution of Consultant
Class Shares. The monthly fee paid to the Distributor under the Plan 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. Prior to June 1, 1990, the Board of
Directors had set the fee for Consultant Class Shares at .25% of average daily
net assets. However, the Board of Directors suspended 12b-1 Plan payments
from the Consultant Class Shares to the Distributor effective June 1, 1990. Such
payments may be reinstituted in the future with prior approval of the Board of
Directors.
The Plan does not apply to the Class A 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 Class A Shares.
The National Association of Securities Dealers, Inc. has adopted 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.
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 each Class for the fiscal year ended April 30, 1996
was 0.90%.
Shares
The Fund is an open-end management investment company, and its portfolio
of assets is diversified as defined by 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.
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.
Each Class represents a proportionate interest in the assets of the Fund
and has the same voting and other rights and preferences, except that the Class
A Shares are not subject to, and may not vote on matters affecting, the
Distribution Plan under Rule 12b-1 relating to the Consultant Class Shares.
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.
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,
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(DTX-A/CC)
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.
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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.
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, LLP
One Commerce Square
Philadelphia, PA 19103
INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103
CUSTODIAN
Bankers Trust Company
One Bankers Trust Plaza
New York, NY 10006
- --------------------------------------------------------------------------------
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 28, 1996
DELAWARE
GROUP
--------
<PAGE>
- ------------------------------------------------------------------------------
PART B--STATEMENT OF ADDITIONAL INFORMATION
JUNE 28, 1996
- ------------------------------------------------------------------------------
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
- ------------------------------------------------------------------------------
1818 Market Street
Philadelphia, PA 19103
- ------------------------------------------------------------------------------
For Prospectus and Performance: Nationwide 800-523-4640
Information on Existing Accounts: (SHAREHOLDERS ONLY)
Nationwide 800-523-1918
Dealer Services: (BROKER/DEALERS ONLY)
Nationwide 800-362-7500
- ------------------------------------------------------------------------------
TABLE OF CONTENTS
- ------------------------------------------------------------------------------
Cover Page
- ------------------------------------------------------------------------------
Investment Objective and Policy
- ------------------------------------------------------------------------------
Performance Information
- ------------------------------------------------------------------------------
Trading Practices
- ------------------------------------------------------------------------------
Purchasing Shares
- ------------------------------------------------------------------------------
Offering Price
- ------------------------------------------------------------------------------
Redemption
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Dividends and Distributions
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Taxes
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Investment Management Agreement
- ------------------------------------------------------------------------------
Officers and Directors
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Exchange Privilege
- ------------------------------------------------------------------------------
General Information
- ------------------------------------------------------------------------------
Appendix A - Description of Ratings
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Appendix B - Equivalent Yields: Tax-Exempt Versus Taxable Securities
- ------------------------------------------------------------------------------
Financial Statements
- ------------------------------------------------------------------------------
<PAGE>
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 ("Class A Shares") and the Tax-Free
Money Fund Consultant Class ("Consultant Class Shares").
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 for the Classes dated June 28,
1996, as it may be amended from time to time. It should be read in conjunction
with the Prospectus. This Part B is not itself a prospectus but is, in its
entirety, incorporated by reference into the Prospectus. The Prospectus 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.
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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.
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 Ratings Group ("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.
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<PAGE>
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 Distributions and Taxes for the
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.
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 Prospectus. 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 (the "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, Delaware Management Company, Inc. (the "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.
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<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'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.
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
-5-
<PAGE>
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.
Although the Fund is permitted by its investment policies to invest up
to 20% of its assets in securities of this type, it does not presently intend to
invest more than 5% of its assets in such securities.
Repurchase Agreements
The Fund may also invest in repurchase agreements sold by banks or
brokers collateralized by securities in which the Fund can invest directly. 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.
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.
-6-
<PAGE>
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").
-7-
<PAGE>
PERFORMANCE INFORMATION
For the seven-day period ended April 30, 1996, the annualized current
yield of the Class A Shares and the Consultant Class Shares was 2.91% for each
Class and the compounded effective yield was 2.96% for each Class. These yields
will fluctuate daily as income earned fluctuates. On this date, the weighted
average portfolio maturity was 32 days for both Classes of shares. The current
yield of the Class A Shares is expected to be slightly higher than that of the
Consultant Class Shares during any period that the distribution fee under the
Fund's 12b-1 Plan for the Consultant Class Shares is being paid. The Board of
Directors of the Fund suspended 12b-1 Plan payments from the Consultant Class
Shares 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 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 366 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, 1996, the tax-equivalent yield of the Class A Shares and the
Consultant Class Shares was 4.22% 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.
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, 1996 for each Class:
-8-
<PAGE>
<TABLE>
<CAPTION>
Consultant
Class A Class
Shares Shares
<S> <C> <C>
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................................................ 1.00055715 1.00055715
=========== ===========
Net change in account value............................................... .00055715* .00055715*
Base period return = net change in account
value/beginning account value.................................... .00055715 .00055715
Current yield [base period return x (366/7)].............................. 2.91%** 2.91%**
366/7 ========= =========
Effective yield (1 + base period) - 1................................ 2.96%*** 2.96%***
========= =========
</TABLE>
Weighted average life to maturity of the portfolio on April 30, 1996 was 32
days.
* This represents the net income per share for the seven calendar days ended
April 30, 1996.
** This represents the average of annualized net investment income per share
for the seven calendar days ended April 30, 1996.
*** This represents the current yield for the seven calendar days ended April
30, 1996 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.
The following table, for purposes of illustration only, reflects the
average annual total return performance for each Class through April 30, 1996.
For this purpose, the calculations assume 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
Consultant Class Shares for the periods prior to the commencement of operations
of such Class is based on the performance of the Class A Shares. For periods
prior to the commencement of operations of the Consultant Class Shares, 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 calculations, performance would have been
affected.
-9-
<PAGE>
Average Annual Total Return
Consultant Class
Class A Shares Shares(1)
1 year
ended
4/30/96 2.97% 2.97%
3 years
ended
4/30/96 2.38% 2.38%
5 years
ended
4/30/96 2.54% 2.54%
10 years
ended
4/30/96 3.62% 3.56%
Period
9/17/81(2)
through
4/30/96 4.23% 4.19%
(1) Commenced operations on March 15, 1988.
(2) Date of initial public offering of Class A Shares.
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.
-10-
<PAGE>
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.
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 Class A Shares and the Consultant
Class Shares through April 30, 1996. 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
Consultant Class Shares 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 Consultant Class Shares, 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.
-11-
<PAGE>
Cumulative Total Return
Consultant Class
Class A Shares Shares(1)
3 months
ended
4/30/96 0.64% 0.64%
6 months
ended
4/30/96 1.40% 1.40%
9 months
ended
4/30/96 2.17% 2.17%
1 year
ended
4/30/96 2.97% 2.97%
3 years
ended
4/30/96 7.32% 7.32%
5 years
ended
4/30/96 13.35% 13.35%
10 years
ended
4/30/96 42.70% 41.92%
Period
9/17/81(2)
through
4/30/96 83.25% 82.26%
(1) Commenced operations on March 15, 1988.
(2) Date of initial public offering of Class A Shares.
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
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
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<PAGE>
information about the institutional clients of the Manager, including the number
of such clients serviced by the Manager.
Dollar-Cost Averaging
Money market funds, which are generally intended for your short-term
investment needs, can often be used as a basis for building a long-term
investment plan. For many people, deciding when to purchase long-term
investments, such as stock or longer-term bond funds, can be a difficult
decision. Unlike money market fund shares, prices of other securities, such as
stocks and bonds, tend to move up and down over various market cycles. Though
logic says to invest when prices are low, even experts can't always pick the
highs and the lows. By using a strategy known as dollar-cost averaging, you
schedule your investments ahead of time. If you invest a set amount on a regular
basis (perhaps using assets from your money market fund) that money will always
buy more shares when the price is low and fewer when the price is high. You can
choose to invest at any regular interval--for example, monthly or quarterly--as
long as you stick to your regular schedule.
Dollar-cost averaging looks simple and it is, but there are important
things to remember. Dollar-cost averaging works best over longer time periods,
and it doesn't guarantee a profit or protect against losses in declining
markets. If you need to sell your investment when prices are low, you may not
realize a profit no matter what investment strategy you utilize. That's why
dollar-cost averaging can make sense for long-term goals. Since the potential
success of a dollar-cost averaging program depends on continuous investing, even
through periods of fluctuating prices, you should consider your dollar-cost
averaging program a long-term commitment and invest an amount you can afford and
probably won't need to withdraw. Investors should also consider their financial
ability to continue to purchase shares during low fund share prices. Delaware
Group offers three services -- Automatic Investing Program, Direct Deposit
Program and the Wealth Builder Option -- that can help to keep your regular
investment program on track. See Investing by Electronic Fund Transfer -- Direct
Deposit Purchase Plan and Automatic Investing Plan under Purchasing Shares and
Wealth Builder Option under Redemption for a complete description of these
options including restrictions or limitations.
The example below illustrates how dollar-cost averaging can work. In a
fluctuating market, the average cost per share of a stock or bond fund over a
period of time will be lower than the average price per share of the fund for
the same time period.
Price Number of
Investment Per Shares
Amount Share Purchased
Month 1 $100 $10.00 10
Month 2 $100 $12.50 8
Month 3 $100 $5.00 20
Month 4 $100 $10.00 10
-------------------------------------------------
$400 $37.50 48
Total Amount Invested: $400
Total Number of Shares Purchased: 48
Average Price Per Share: $9.38 ($37.50/4)
Average Cost Per Share: $8.33 ($400/48 shares)
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<PAGE>
This example is for illustration purposes only. It is not intended to represent
the actual performance of the Fund. Dollar-cost averaging can be appropriate for
investments in shares of funds that tend to fluctuate in value. Please obtain
the prospectus of any Delaware Group fund which you plan to invest through a
dollar-cost averaging program. The prospectus contains additional information,
including charges and expenses. Please read it carefully before you invest or
send money.
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% 4% 5%
Rate of Rate of Rate of
Return Return Return
1 Year $10,304 $10,407 $10,512
2 Years $10,618 $10,831 $11,049
3 Years $10,940 $11,273 $11,615
4 Years $11,273 $11,732 $12,209
5 Years $11,616 $12,210 $12,833
6 Years $11,970 $12,707 $13,490
7 Years $12,334 $13,225 $14,180
8 Years $12,709 $13,764 $14,906
9 Years $13,095 $14,325 $15,668
10 Years $13,494 $14,908 $16,470
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 Prospectus 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.
-14-
<PAGE>
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.
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<PAGE>
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.
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.
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
-16-
<PAGE>
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.
-17-
<PAGE>
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 Fund 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. Investors who do not wish to
receive the additional services that are typically offered by such financial
professionals may also purchase Class A Shares directly by contacting the Fund
or the Distributor. In some states, banks and/or other institutions effecting
transactions in Consultant Class Shares may be required to register as dealers
pursuant to state laws. Generally, the minimum initial investment is $1,000 for
each Class. Subsequent purchases must generally be at least $100. The minimum
initial and subsequent investments with respect to the Class A Shares will be
waived for purchases by officers, directors and employees of any Delaware Group
fund, the Manager or any of the Manager's affiliates if the purchases are made
pursuant to a payroll deduction program. Shares purchased pursuant to the
Uniform Gifts to Minors Act or Uniform Transfers to Minors Act and shares
purchased in connection with an Automatic Investing Plan are subject to a
minimum initial purchase of $250 and a minimum subsequent purchase of $25.
Accounts opened under the Delaware Group Asset Planner service are subject to a
minimum initial investment of $2,000 per Asset Planner Strategy selected.
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 Prospectus 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.
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 assessed by the Fund 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 following two ways. (1) If the shareholder's bank is a member of
the National Automated Clearing House Association ("NACHA"), the amount of the
investment will be electronically deducted from his or her account by Electronic
Fund Transfer ("EFT"). The
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<PAGE>
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.
* * *
Initial investments under the Direct Deposit Purchase Plan and the
Automatic Investing Plan must be for $250 or more and subsequent investments
under such Plans must be for $25 or more. Investors wishing to take advantage of
these options should contact the Shareholder Service Center at 800-523-1918 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.
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 the 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.
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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.
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 Consultant Class Shares 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 Class A 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 Class A Shares. Shareholders of the Class A
Shares 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 Consultant Class Shares, 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 Consultant Class Shares 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
Consultant Class Shares, 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
Consultant Class Shares 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 Consultant Class Shares to
the Distributor effective June 1, 1990. Prior to that time, the Board of
Directors had set the fee for Consultant Class Shares 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 Consultant Class Shares 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 Consultant
Class Shares under the Plan.
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.
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Each year, the directors must determine whether continuation of the
Plan is in the best interest of shareholders of the Consultant Class Shares 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 Consultant Class
Shares. 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 Consultant Class Shares, 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, 1996, there were no payments on
behalf of the Consultant Class Shares 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 intended to be
made before investing or sending money. The prospectus contains more complete
information about the fund, including charges and expenses.
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
investments 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 intended 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 and Class
C Shares of funds in the Delaware Group that offer such classes of shares.
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<PAGE>
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, other than a
reinvestment of dividends, will receive a monthly statement confirming
transactions for that period.
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OFFERING PRICE
The offering price of shares of a Class is the net asset value ("NAV")
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 NAV 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 the Exchange is open. The New York Stock Exchange is scheduled to be
open Monday through Friday throughout the year except for New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas. When the New York Stock Exchange is closed, the Fund
will generally be closed, pricing calculations will not be made and purchase and
redemption orders will not be processed.
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 NAV 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.
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<PAGE>
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 at 1818 Market Street, Philadelphia, PA 19103. In
addition, certain expedited redemption methods described below are available
when stock certificates have not been issued. Certificates are issued for Fund
shares only if a shareholder specifically requests them. If stock certificates
have been issued for shares being redeemed, they must accompany the written
request. For redemptions of $50,000 or less paid to the shareholder at the
address of record, the request must be signed by all owners of the shares or the
investment dealer of record, but a signature guarantee is not required. When the
redemption is for more than $50,000, or if payment is made to someone else or to
another address, signatures of all record owners 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.
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.
The Fund will process written redemption requests to the extent that
the purchase orders for the shares being redeemed have already settled. The Fund
will honor redemption requests as to shares for which a check was tendered as
payment, but the Fund will not mail the proceeds until it is reasonably
satisfied that the check has cleared. 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.
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<PAGE>
Small Accounts
Before the Fund involuntarily redeems shares from an account that,
under the circumstances noted in the Prospectus, has remained below the minimum
amounts required by the Prospectus, the shareholder will be notified in writing
that the value of the shares in the account is less than the minimum amounts
required by the Fund's Prospectus and will be allowed 60 days from the date of
notice to make an additional investment to meet the required minimum. 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.
* * *
The Fund has made available certain redemption privileges, as described
below. The Fund reserves the right to suspend or terminate these expedited
payment procedures upon 60 days' written notice to shareholders.
Expedited Telephone Redemptions
Shareholders or their investment dealers of record wishing to redeem
any amount of shares of $50,000 or less for which certificates have not been
issued may call the Shareholder Service Center at 800-523-1918 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
later 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 phone
number listed 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.
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<PAGE>
If expedited payment under these procedures could adversely affect the
Fund, the Fund may take up to seven days to pay the shareholder.
The Fund will process telephone redemption requests to the extent that
the purchase orders for the shares being redeemed have already settled. The Fund
will honor redemption requests as to shares for which a check was tendered as
payment, but the Fund will not mail the proceeds until it is reasonably
satisfied that the check has cleared, which may take up to 15 days from the
purchase date.
Neither the Fund nor its 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.
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 honor the redemption request, but will not process the redemption
check until 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 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.
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<PAGE>
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 canceled.
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.
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 at 800-523-1918.
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 either the 1st or the 15th of the month, as selected
by the shareholder (unless such date falls on a holiday or a Sunday) and are
normally mailed within two business days. Both ordinary income dividends and
realized securities profits distributions will be automatically reinvested in
additional shares of the Class at net asset value. This plan is not recommended
for all investors and should be started only after careful consideration of its
operation and effect upon the investor's savings and investment program. To the
extent that withdrawal payments from the plan exceed any dividends and/or
realized securities profits distributions paid on shares held under the plan,
the withdrawal payments will represent a return of capital and the share balance
may in time be depleted, particularly in a declining market.
The sale of shares for withdrawal payments constitutes a taxable event.
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. Shareholders should consult their
financial advisers to determine whether a Systematic Withdrawal Plan would be
suitable for them.
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 Prospectus. See Wealth
Builder Option and Redemption and Exchange in the Prospectus.
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<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 Prospectus. 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 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 Offering 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
Consultant Class Shares 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 Consultant Class Shares to the Distributor effective June 1, 1990. See Plan
Under Rule 12b-1 for the Tax-Free Money Fund Consultant Class of Shares.
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, notwithstanding a shareholder's
election to receive dividends in cash. If such a shareholder's dividends
increase to greater than $1.00, the shareholder would have to file a new
election in order to begin receiving dividends in cash again. 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 United States Post Office or which remains uncashed for a period of more
than one year may be reinvested in the shareholder's account at the then-current
net asset value and the dividend option may be changed from cash to reinvest.
The Fund may deduct from a shareholder's account the costs of the Fund's effort
to locate a shareholder if a shareholder's mail is returned by the Post Office
or the Fund is otherwise unable to locate the shareholder or verify the
shareholder's mailing address. These costs may include a percentage of the
account when a search company charges a percentage fee in exchange for their
location services.
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<PAGE>
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.
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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 (the "Code"), 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 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, 1996, 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 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 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.
Shares of the Fund will be exempt from Pennsylvania county personal
property taxes.
-31-
<PAGE>
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. On April 30, 1996, the Manager and its affiliates
within the Delaware Group, including Delaware International Advisers Ltd., were
supervising in the aggregate more than $29 billion in assets in various
institutional or separately managed (approximately $18,400,975,000) and
investment company (approximately $10,861,646,000) accounts.
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
0.48% of average daily net assets for the fiscal year ended April 30, 1996.
On April 30, 1996, the total net assets of the Fund were $36,931,201.
Investment management fees paid by the Fund during the past three fiscal years
were $222,074 for 1994, $220,704 for 1995 and $222,243 for 1996.
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, 1996 was 0.90% for each Class of shares.
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, 1996.
-32-
<PAGE>
Distribution and Service
The Distributor, Delaware Distributors, L.P., 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 Consultant Class Shares.
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.
-33-
<PAGE>
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, 1996, the Fund's
officers and directors, as a group, owned approximately 1.35% of the outstanding
shares of the Class A Shares and less than 1% of the outstanding shares of the
Consultant Class Shares.
As of May 31, 1996, the management believes the following held of
record 5% or more of the outstanding shares of the Consultant Class Shares: John
K. Kaiser and Elaine E. Kaiser, 499 Bair Road, Berwyn, PA held 197,102 shares
(12.75%); Munn & Sons Inc., P.O. Box 12350, Philadelphia, PA 19119 held 106,583
shares (6.90%); and Mary E. Gamble and Harvey R. Gamble, Rd 2 Box 112, Centre
Hall, PA 16828 held 101,576 shares (6.57%).
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., Delaware Capital
Management, Inc. and Delaware Investment & Retirement Services, Inc. are direct
or indirect, wholly-owned subsidiaries of Delaware Management Holdings, Inc.
("DMH"). On April 3, 1995, a merger between DMH and a wholly-owned subsidiary of
Lincoln National Corporation ("Lincoln National") was completed. DMH and the
Manager are now indirect, wholly-owned subsidiaries, and subject to the ultimate
control, of Lincoln National. Lincoln National, with headquarters in Fort Wayne,
Indiana, is a diversified organization with operations in many aspects of the
financial services industry, including insurance and investment management. In
connection with the merger, 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 (58)
Chairman, President, Chief Executive Officer, Director and/or Trustee
of the Fund, 16 other investment companies in the Delaware
Group (which excludes Delaware Pooled Trust, Inc.), Delaware
Management Holdings, Inc., DMH Corp., Delaware International
Holdings Ltd. and Founders Holdings, Inc.
Chairman and Director of Delaware Pooled Trust, Inc., Delaware
Distributors, Inc., Delaware Capital Management, Inc. and
Delaware Investment & Retirement Services, Inc.
Chairman, President, Chief Executive Officer, Chief Investment Officer
and Director of Delaware Management Company, Inc.
Chairman, Chief Executive Officer and Director of Delaware
International Advisers Ltd.
Director of Delaware Service Company, 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 Fund's investment manager and considered an
"interested person" as defined in the 1940 Act.
-34-
<PAGE>
Winthrop S. Jessup (50)
Executive Vice President of the Fund and 16 other investment companies
in the Delaware Group (which excludes Delaware Pooled Trust,
Inc.) and Delaware Management Holdings, Inc.
President and Chief Executive Officer of Delaware Pooled Trust, Inc.
President and Director of Delaware Capital Management, Inc.
Executive Vice President and Director of DMH Corp., Delaware Management
Company, Inc., Delaware International Holdings Ltd. and
Founders Holdings, Inc.
Vice Chairman and Director of Delaware Distributors, Inc.
Vice Chairman of Delaware Distributors, L.P.
Director of Delaware Service Company, Inc., Delaware International
Advisers Ltd., Delaware Management Trust Company and Delaware
Investment & Retirement Services, Inc.
During the past five years, Mr. Jessup has served in various
executive capacities at different times within the Delaware
organization.
Richard G. Unruh, Jr. (56)
Executive Vice President of the Fund and each of the other 17
investment companies in the Delaware Group.
Executive Vice President and Director of Delaware Management Company,
Inc.
Senior Vice President of Delaware Management Holdings, Inc.
Director of Delaware International Advisers Ltd.
During the past five years, Mr. Unruh has served in various executive
capacities at different times within the Delaware
organization.
Paul E. Suckow (48)
Executive Vice President/Chief Investment Officer, Fixed Income of the
Fund, each of the other 17 investment companies in the
Delaware Group and Delaware Management Company, Inc.
Executive Vice President and Director of Founders Holdings, Inc.
Senior Vice President/Chief Investment Officer, Fixed Income of
Delaware Management Holdings, 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.
-35-
<PAGE>
Walter P. Babich (68)
Director and/or Trustee of the Fund and each of the other 17 investment
companies in the Delaware Group.
460 North Gulph Road, King of Prussia, PA 19406.
Board Chairman, Citadel Constructors, Inc.
From 1986 to 1988, Mr. Babich was a partner of Irwin & Leighton and
from 1988 to 1991, he was a partner of I&L Investors.
Anthony D. Knerr (57)
Director and/or Trustee of the Fund and each of the other 17 investment
companies in the Delaware Group.
500 Fifth Avenue, New York, NY 10110.
Founder and Managing Director, Anthony Knerr & Associates.
From 1982 to 1988, Mr. Knerr was Executive Vice President/Finance
and Treasurer of Columbia University, New York. From 1987 to
1989, he was also a lecturer in English at the University. In
addition, Mr. Knerr was Chairman of The Publishing Group,
Inc., New York, from 1988 to 1990. Mr. Knerr founded The
Publishing Group, Inc. in 1988.
Ann R. Leven (55)
Director and/or Trustee of the Fund and each of the other 17 investment
companies in the Delaware Group.
785 Park Avenue, New York, NY 10021.
Treasurer, National Gallery of Art.
From 1984 to 1990, Ms. Leven was Treasurer and Chief Fiscal Officer
of the Smithsonian Institution, Washington, DC, and from 1975
to 1992, she was Adjunct Professor of Columbia Business
School.
W. Thacher Longstreth (75)
Director and/or Trustee of the Fund and each of the other 17 investment
companies in the Delaware Group.
City Hall, Philadelphia, PA 19107.
Philadelphia City Councilman.
Charles E. Peck (70)
Director and/or Trustee of the Fund and each of the other 17 investment
companies in the Delaware Group.
P.O. Box 1102, Columbia, MD 21044.
Secretary/Treasurer, Enterprise Homes, Inc.
From 1981 to 1990, Mr. Peck was Chairman and Chief Executive
Officer of The Ryland Group, Inc., Columbia, MD.
-36-
<PAGE>
David K. Downes (56)
Senior Vice President/Chief Administrative Officer/Chief Financial
Officer of the Fund, each of the other 17 investment companies
in the Delaware Group and Delaware Management Company, Inc.
Chairman and Director of Delaware Management Trust Company.
Chief Executive Officer and Director of Delaware Investment &
Retirement Services, Inc.
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
Capital Management, 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.
George M. Chamberlain, Jr. (49)
Senior Vice President and Secretary of the Fund, each of the other 17
investment companies in the Delaware Group, Delaware
Management Holdings, Inc. and Delaware Distributors, L.P.
Executive Vice President, Secretary and Director of Delaware Management
Trust Company.
Senior Vice President, Secretary and Director of DMH Corp., Delaware
Management Company, Inc., Delaware Distributors, Inc.,
Delaware Service Company, Inc., Founders Holdings, Inc.,
Delaware Investment & Retirement Services, Inc. and Delaware
Capital Management, 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.
-37-
<PAGE>
Patrick P. Coyne (33)
Vice President/Senior Portfolio Manager of the Fund, of nine other
investment companies 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.
Joseph H. Hastings (46)
Vice President/Corporate Controller of the Fund, each of the other
17 investment companies 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
Capital Management, Inc., Founders Holdings, Inc. and Delaware
International Holdings Ltd.
Chief Financial Officer/Treasurer of Delaware Investment &
Retirement Services, Inc.
Executive Vice President/Chief Financial Officer/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.
Michael P. Bishof (33)
Vice President/Treasurer of the Fund, each of the other 17
investment companies in the Delaware Group, Delaware
Management Company, Inc., Delaware Distributors, Inc.,
Delaware Distributors, L.P., Delaware Service Company, Inc.
and Founders Holdings, Inc.
Vice President/Manager of Investment Accounting of Delaware
International Holdings Ltd.
Assistant Treasurer of Founders CBO Corporation.
Before joining the Delaware Group in 1995, Mr. Bishof was a Vice
President for Bankers Trust, New York, NY from 1994 to 1995, a
Vice President for CS First Boston Investment Management, New
York, NY from 1993 to 1994 and an Assistant Vice President for
Equitable Capital Management Corporation, New York, NY from
1987 to 1993.
-38-
<PAGE>
The following is a compensation table listing for each director
entitled to receive compensation, the aggregate compensation received from the
Fund and the total compensation received from all Delaware Group funds for the
fiscal year ended April 30, 1996 and an estimate of annual benefits to be
received upon retirement under the Delaware Group Retirement Plan for
Directors/Trustees as of April 30, 1996.
<TABLE>
<CAPTION>
Pension or
Retirement Estimated Total
Benefits Annual Compensation
Aggregate Accrued Benefits from all 17
Compensation as Part of Upon Delaware
Name from Fund Fund Expenses Retirement* Group Funds
<S> <C> <C> <C>
W. Thacher Longstreth $1,752 None $30,000 $47,916
Ann R. Leven $2,048 None $30,000 $56,052
Walter P. Babich $1,868 None $30,000 $52,328
Anthony D. Knerr $2,020 None $30,000 $55,052
Charles E. Peck $1,752 None $30,000 $47,916
</TABLE>
* Under the terms of the Delaware Group Retirement Plan for
Directors/Trustees, each disinterested director who, at the time of his or
her retirement from the Board, has attained the age of 70 and served on the
Board for at least five continuous years, is entitled to receive payments
from each fund in the Delaware Group for a period equal to the lesser of
the number of years that such person served as a director or the remainder
of such person's life. The amount of such payments will be equal, on an
annual basis, to the amount of the annual retainer that is paid to
directors of each fund at the time of such person's retirement. If an
eligible director retired as of April 30, 1996, he or she would be entitled
to annual payments totaling $30,000, in the aggregate, from all of the
funds in the Delaware Group, based on the number of funds in the Delaware
Group as of that date.
-39-
<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 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 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
Shareholder Service Center at 800- 523-1918 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.)
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.
-40-
<PAGE>
As described in the Fund's Prospectus, 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.
Right to Refuse Timing Accounts
With regard to accounts that are administered by market timing services
("Timing Firms") to purchase or redeem shares based on changing economic and
market conditions ("Timing Accounts"), the Fund will refuse any new timing
arrangements, as well as any new purchases (as opposed to exchanges) in Delaware
Group funds from Timing Firms. The Fund reserves the right to temporarily or
permanently terminate the exchange privilege or reject any specific purchase
order for any person whose transactions seem to follow a timing pattern who: (i)
makes an exchange request out of the Fund within two weeks of an earlier
exchange request out of the Fund, or (ii) makes more than two exchanges out of
the Fund per calendar quarter, or (iii) exchanges shares equal in value to at
least $5 million, or more than 1/4 of 1% of the Fund's net assets. Accounts
under common ownership or control, including accounts administered so as to
redeem or purchase shares based upon certain predetermined market indicators,
will be aggregated for purposes of the exchange limits.
Restrictions on Timed Exchanges
Timing Accounts operating under existing timing agreements may only
execute exchanges between the following eight Delaware Group funds: (1) Decatur
Income Fund, (2) Decatur Total Return Fund, (3) Delaware Fund, (4) Limited-Term
Government Fund, (5) Tax-Free USA Fund, (6) Delchester Fund, (7) Tax- Free
Pennsylvania Fund and (8) Delaware Cash Reserve. No other Delaware Group funds
are available for timed exchanges. Assets redeemed or exchanged out of Timing
Accounts in Delaware Group funds not listed above may not be reinvested back
into that Timing Account. The Fund reserves the right to apply these same
restrictions to the account(s) of any person whose transactions seem to follow a
time pattern (as described above).
The Fund also reserves the right to refuse the purchase side of an
exchange request by any Timing Account, person, or group if, in the Manager's
judgment, the Fund would be unable to invest effectively in accordance with its
investment objectives and policies, or would otherwise potentially be adversely
affected. A shareholder's purchase exchanges may be restricted or refused if the
Fund receives or anticipates simultaneous orders affecting significant portions
of the Fund's assets. In particular, a pattern of exchanges that coincide with a
"market timing" strategy may be disruptive to the Fund and therefore may be
refused.
Except as noted above, only shareholders and their authorized brokers
of record will be permitted to make exchanges or redemptions.
* * *
Following is a summary of the investment objectives of the other
Delaware Group funds:
Delaware Fund seeks long-term growth by a balance of capital
appreciation, income and preservation of capital. It uses a dividend-oriented
valuation strategy to select securities issued by established companies that are
believed to demonstrate potential for income and capital growth. Devon Fund
seeks current income and capital 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.
-41-
<PAGE>
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 high yield, high risk corporate bonds, and also in U.S.
Government securities and commercial paper.
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.
Limited-Term Government Fund seeks high, stable income by investing
primarily in a portfolio of short- and intermediate-term securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities and
instruments secured by such securities. U.S. Government Money Fund seeks maximum
current income with preservation of principal and maintenance of liquidity by
investing only in short-term securities issued or guaranteed as to principal and
interest by the U.S. Government, its agencies or instrumentalities, and
repurchase agreements collateralized by such securities, while maintaining a
stable net asset value.
Delaware Cash Reserve seeks the highest level of income consistent with
the preservation of capital and liquidity through investments in short-term
money market instruments, while maintaining a stable net asset value.
Tax-Free USA Fund seeks high current income exempt from federal income
tax by investing in municipal bonds of geographically-diverse issuers. Tax-Free
Insured Fund invests in these same types of securities but with an emphasis on
municipal bonds protected by insurance guaranteeing principal and interest are
paid when due. Tax-Free USA Intermediate Fund seeks a high level of current
interest income exempt from federal income tax, consistent with the preservation
of capital by investing primarily in municipal bonds.
Tax-Free 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. Emerging Markets Fund
seeks long-term capital appreciation by investing primarily in equity securities
of issuers located or operating in emerging countries.
-42-
<PAGE>
Enterprise Fund seeks to provide maximum appreciation of capital by
investing in medium-sized companies which have a dominant position within their
industry, are undervalued, or have potential for growth in earnings. U.S. Growth
Fund seeks to maximize capital appreciation by investing in companies of all
sizes which have low dividend yields, strong balance sheets and high expected
earnings growth rates relative to their industry. World Growth Fund seeks to
maximize total return (capital appreciation and income), principally through
investments in an internationally diversified portfolio of equity securities.
New Pacific Fund seeks long-term capital appreciation by investing primarily in
companies which are domiciled in or have their principal business activities in
the Pacific Basin. Federal Bond Fund seeks to maximize current income consistent
with preservation of capital. The fund attempts to achieve this objective by
investing primarily in securities issued by the U.S. Government, its agencies
and instrumentalities. Corporate Income Fund seeks to provide high current
income consistent with preservation of capital. The fund attempts to achieve
this objective primarily by investing in a diversified portfolio of
investment-grade fixed income securities issued by U.S. corporations.
Delaware Group Premium Fund offers ten funds 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. Global Bond
Series seeks to achieve current income consistent with the preservation of
principal by investing primarily in global fixed income securities that may also
provide the potential for capital appreciation.
For more complete information about any of the Delaware Group funds,
including charges and expenses, you can obtain a prospectus from the
Distributor. Read it carefully before you invest or forward funds.
Each of the summaries above is qualified in its entirety by the
information contained in each fund's prospectus(es).
-43-
<PAGE>
GENERAL INFORMATION
The Manager is the investment manager of the Fund. The Manager also
provides investment management services to certain of the other funds in the
Delaware Group. The Manager, through a separate division, also manages private
investment accounts. While investment decisions of the Fund are made
independently from those of the other funds and accounts, investment decisions
for such other funds and accounts may be made at the same time as investment
decisions for the 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.
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.
Bankers Trust Company, One Bankers Trust Plaza, New York, NY 10006 is
custodian of the Fund's securities and cash. As custodian for the Fund, Bankers
Trust Company 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, registered
pursuant to Rule 24f-2 under the 1940 Act, has been passed upon for the Fund by
Stradley, Ronon, Stevens & Young, LLP, 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
-44-
<PAGE>
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 Class A
Shares may not vote on any matter affecting the Distribution Plan under Rule
12b-1 of Consultant Class Shares. 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 Consultant Class Shares will be allocated
solely to that Class. The Board of Directors has allocated one hundred million
shares of the Fund to each Class.
Shares have no preemptive rights, are fully transferable and, when
issued, are fully paid and nonassessable.
Noncumulative Voting
Fund 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.
-45-
<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.
-46-
<PAGE>
SAI-DTX-CHT
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
Single Return Joint Return Tax Rates Equivalent Equivalent Equivalent Equivalent
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$0-$24,000 $0-$40,100 15% 3.5% 4.7% 5.9% 7.1%
$24,001-$58,150 $40,101-$96,900 28% 4.2% 5.6% 6.9% 8.3%
$58,151-$121,300 $96,901-$147,700 31% 4.3% 5.8% 7.2% 8.7%
$121,301-$263,750 $147,701-$263,750 36%+ 4.7% 6.3% 7.8% 9.4%
Over $263,750 Over $263,750 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 $263,750. 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, 1996, 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.
-47-
<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 into this filing by reference into Part B
from the Registrant's Annual Report for the fiscal year ended
April 30, 1996.
(b) Exhibits:
(1) Articles of Incorporation. Articles of Incorporation, as
amended and supplemented to date, attached as Exhibit.
(2) By-Laws. By-Laws, as amended to date, incorporated into
this filing by reference to Post-Effective Amendment No.
20 filed June 29, 1995.
(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, incorporated into this filing by
reference to Post-Effective Amendment No. 20 filed
June 29, 1995.
(5) Investment Management Agreement. Investment Management
Agreement between Delaware Management Company, Inc. and
the Registrant dated April 3, 1995 incorporated into
this filing by reference to Post-Effective Amendment No.
20 filed June 29, 1995.
(6) (a) Distribution Agreement.
(i) Executed Distribution Agreement (April 3, 1995)
attached as Exhibit.
(b) Administration and Service Agreement. Form of
Administration and Service Agreement (as
amended November 1995) included as Module.
(c) Dealer's Agreement. Dealer's Agreement (as
amended November 1995) included as Module.
(d) Mutual Fund Agreement for the Delaware Group
of Funds (as amended November 1995) included
as Module.
ii
<PAGE>
Form N-1A
File No. 2-70164
Delaware Group
Tax-Free Money Fund, Inc.
(7) Bonus, Profit Sharing, Pension Contracts.
(a) Profit Sharing Plan (November 17, 1994)
incorporated into this filing by reference to
Post-Effective Amendment No. 20 filed June 29,
1995.
(b) Amendment to Profit Sharing Plan (December 21,
1995) included as Module.
(8) Custodian Agreement.
(a) Form of Custodian Agreement between the Registrant
and Bankers Trust Company (1996) attached as
Exhibit.
(9) Other Material Contracts.
(a) Shareholders Services Agreement (June 29, 1988)
attached as Exhibit.
(10) Opinion of Counsel. Filed with letter relating to Rule
24f-2 on June 24, 1996.
(11) Consent of Auditors. Attached as Exhibit.
(12) Inapplicable.
(13) Agreements in Connection with Initial Capital.
Incorporated into this filing by reference to
Pre-Effective Amendment No. 1 filed May 28, 1981.
(14) Inapplicable.
*(15) Plan under Rule 12b-1. Amended Rule 12b-1 Plan for the
Consultant Class (November 29, 1995).
(16) Schedules of Computation for each Performance Quotation.
(a) Incorporated into this filing by reference to
Post-Effective Amendment No. 20 filed June 29,
1995.
*Relates to Registrant's Tax-Free Money Fund Consultant Class of shares only.
iii
<PAGE>
Form N-1A
File No. 2-70164
Delaware Group
Tax-Free Money Fund, Inc.
(17) Financial Data Schedules. Attached as Exhibit.
(18) Inapplicable.
(19) Other: Directors' Power of Attorney. Incorporated into
this filing by reference to Post-Effective Amendment No.
20 filed June 29, 1995.
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 1,238 Accounts
$.001 Per Share as of May 31, 1996
Tax-Free Money Fund Consultant Class:
Common Stock Par Value 121 Accounts
$.001 Per Share as of May 31, 1996
Item 27. Indemnification. Incorporated into this filing by reference to
Pre-Effective Amendment No. 1 filed May 28, 1981 and Post-Effective
Amendment No. 20 filed June 29, 1995.
iv
<PAGE>
Form N-1A
File No. 2-70164
Delaware Group
Tax-Free Money Fund, Inc.
Item 28. Business and Other Connections of Investment Adviser.
Delaware Management Company, Inc. (the "Manager") also serves as
investment manager or sub-adviser to certain of 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 Limited-Term Government
Funds, 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 Adviser Funds, Inc., Delaware Group Dividend and Income Fund,
Inc. and Delaware Group Global Dividend and Income Fund, Inc.) and provides
investment advisory services to institutional accounts, primarily retirement
plans and endowment funds. In addition, certain directors of the Manager also
serve as directors/trustees of the other Delaware Group funds, and certain
officers are also officers of these other funds. A company indirectly 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:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address* Affiliates and Other Positions and Offices Held
- ----------------- -----------------------------------------------
<S> <C>
Wayne A. Stork Chairman of the Board, President, Chief Executive Officer, Chief Investment
Officer and Director of Delaware Management Company, Inc.; President,
Chief Executive Officer, Chairman of the Board and Director of the
Registrant and, with the exception of Delaware Pooled Trust, Inc., each of the
other funds in the Delaware Group, Delaware Management Holdings, Inc.,
DMH Corp., Delaware International Holdings Ltd. and Founders Holdings,
Inc.; Chairman of the Board and Director of Delaware Pooled Trust, Inc.,
Delaware Distributors, Inc., Delaware Capital Management, Inc. and Delaware
Investment & Retirement Services, Inc.; Chairman, Chief Executive Officer
and Director of Delaware International Advisers Ltd.; and Director of
Delaware Service Company, Inc.
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
v
<PAGE>
Form N-1A
File No. 2-70164
Delaware Group
Tax-Free Money Fund, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address* Affiliates and Other Positions and Offices Held
- ----------------- -----------------------------------------------
<S> <C>
Winthrop S. Jessup Executive Vice President and Director of Delaware Management Company,
Inc., DMH Corp., Delaware International Holdings Ltd. and Founders
Holdings, Inc.; Executive Vice President of the Registrant and, with the
exception of Delaware Pooled Trust, Inc., each of the other funds in the
Delaware Group and Delaware Management Holdings, Inc.; President and
Chief Executive Officer of Delaware Pooled Trust, Inc.; Vice Chairman of
Delaware Distributors, L.P.; Vice Chairman and Director of Delaware
Distributors, Inc.; Director of Delaware Management Trust Company,
Delaware Service Company, Inc., Delaware International Advisers Ltd. and
Delaware Investment & Retirement Services, Inc.; and President and Director
of Delaware Capital Management, 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.
Board of Directors, Chairman of Finance Committee, Keystone Insurance
Company since 1989, 2040 Market Street, Philadelphia, PA; Board of
Directors, Chairman of Finance Committee, Mid Atlantic, Inc. since
1989, 2040 Market Street, Philadelphia, PA
Paul E. Suckow Executive Vice President/Chief Investment Officer, Fixed Income of
Delaware Management Company, Inc., the Registrant and each of the other
funds in the Delaware Group; Executive Vice President and Director of
Founders Holdings, Inc.; Senior Vice President/Chief Investment
Officer, Fixed Income of Delaware Management Holdings, Inc.; and Director
of Founders CBO Corporation
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
vi
<PAGE>
Form N-1A
File No. 2-70164
Delaware Group
Tax-Free Money Fund, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address* Affiliates and Other Positions and Offices Held
- ----------------- -----------------------------------------------
<S> <C>
David K. Downes Senior Vice President, Chief Administrative Officer and Chief Financial
Officer of Delaware Management Company, Inc., the Registrant and each of
the other funds in the Delaware Group; Chairman and Director of Delaware
Management Trust Company; Senior Vice President, Chief Administrative
Officer, Chief Financial Officer and Treasurer of Delaware Management
Holdings, Inc.; Senior Vice President, Chief Financial Officer, Treasurer and
Director of DMH Corp.; Senior Vice President, Chief Administrative Officer
of Delaware Distributors, L.P.; Senior Vice President and Chief
Administrative Officer and Director of Delaware Distributors, Inc.; 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 Capital Management, Inc.;
Senior Vice President/Chief Financial Officer and Director of Founders
Holdings, Inc.; Chief Executive Officer and Director of Delaware Investment
& Retirement Services, 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., Founders Holdings, Inc., Delaware Capital Management, Inc.
and Delaware Investment & Retirement Services, Inc.; Senior Vice President
and Secretary of the Registrant, each of the other funds in the Delaware Group,
Delaware Distributors, L.P. and Delaware Management Holdings, Inc.; Executive Vice
President, Secretary and Director of Delaware Management Trust Company;
Secretary and Director of Delaware International Holdings Ltd.; and Director
of Delaware International Advisers Ltd.
Director of ICI Mutual Insurance Co. since 1992, P.O. Box 730, Burlington,
VT
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
vii
<PAGE>
Form N-1A
File No. 2-70164
Delaware Group
Tax-Free Money Fund, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address* Affiliates 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, Delaware Capital Management,
Inc., Founders CBO Corporation and Delaware Investment & Retirement
Services, Inc.; Vice President of the Registrant and each of the other funds in
the Delaware Group; Managing Director/Corporate Tax & Affairs and
Director of Founders Holdings, Inc.; Managing Director and Director of
Delaware International Holdings Ltd.; and Director of Delaware International
Advisers Ltd.
Limited Partner of Stonewall Links, L.P. since 1991, Bulltown Rd., Elverton,
PA; Director and Member of Executive Committee of Stonewall Links, Inc.
since 1991, Bulltown Rd., Elverton, PA
Michael P. Bishof(1) Vice President and Treasurer of Delaware Management Company, Inc., the
Registrant, each of the other funds in the Delaware Group, Delaware
Distributors, L.P., Delaware Distributors, Inc., Delaware Service Company,
Inc. and Founders Holdings, Inc.; and Vice President and Manager of Investment
Accounting of Delaware International Holdings Ltd.
Eric E. Miller Vice President and Assistant Secretary of Delaware Management Company,
Inc., the Registrant, each of the other funds in the Delaware Group, Delaware
Management Holdings, Inc., DMH Corp., Delaware Distributors, L.P.,
Delaware Distributors, Inc., Delaware Service Company, Inc., Delaware
Management Trust Company, Founders Holdings, Inc., Delaware Capital
Management, Inc. and Delaware Investment & Retirement Services, Inc.
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
viii
<PAGE>
Form N-1A
File No. 2-70164
Delaware Group
Tax-Free Money Fund, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address* Affiliates and Other Positions and Offices Held
- ----------------- -----------------------------------------------
<S> <C>
Richelle S. Maestro Vice President and Assistant Secretary of Delaware Management Company,
Inc., the Registrant, each of the other funds in the Delaware Group, Delaware
Management Holdings, Inc., DMH Corp., Delaware Distributors, L.P.,
Delaware Distributors, Inc., Delaware Service Company, Inc., Delaware
Management Trust Company, Delaware Capital Management, Inc., Founders
Holdings, Inc. and Delaware Investment & Retirement Services, Inc.; and
Assistant Secretary of Founders CBO Corporation and Delaware International
Holdings Ltd.
General Partner of Tri-R Associates since 1989, 10001 Sandmeyer Ln.,
Philadelphia, PA
John M. Zerr(2) Vice President and Assistant Secretary of Delaware Management Company,
Inc., the Registrant, each of the other funds in the Delaware Group, DMH
Corp., Delaware Distributors, L.P., Delaware Capital Management, Inc. and
Delaware Investment & Retirement Services, Inc.
Secretary and Counsel of Renovisions, Inc. since 1990, 4284 South Dixi
Road, Resaca, GA
Joseph H. Hastings Vice President/Corporate Controller of Delaware Management Company, Inc.,
the Registrant, each of the other funds in the Delaware Group, Delaware
Management Holdings, Inc., DMH Corp., Delaware Distributors, L.P.,
Delaware Distributors, Inc., Delaware Service Company, Inc., Delaware
Capital Management, Inc., Founders Holdings, Inc. and Delaware
International Holdings Ltd.; Executive Vice President, Chief Financial Officer
and Treasurer of Delaware Management Trust Company; Chief Financial
Officer and Treasurer of Delaware Investment & Retirement Services, Inc.;
and Assistant Treasurer of Founders CBO Corporation
Bruce A. Ulmer Vice President/Director of Internal Audit of Delaware Management Company,
Inc., the Registrant, each of the other funds in the Delaware Group, Delaware
Management Holdings, Inc., DMH Corp. and Delaware Management Trust
Company; and Vice President/Internal Audit of Delaware Investment &
Retirement Services, Inc.
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
ix
<PAGE>
Form N-1A
File No. 2-70164
Delaware Group
Tax-Free Money Fund, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address* Affiliates and Other Positions and Offices Held
- ----------------- -----------------------------------------------
<S> <C>
Steven T. Lampe(3) Vice President/Taxation of Delaware Management Company, Inc., the
Registrant, each of the other funds in the Delaware Group, Delaware
Management Holdings, Inc., DMH Corp., Delaware Distributors, L.P.,
Delaware Distributors, Inc., Delaware Service Company, Inc., Delaware
Management Trust Company, Founders Holdings, Inc., Founders CBO
Corporation, Delaware Investment & Retirement Services, Inc. and Delaware
Capital Management, Inc.
Lisa O. Brinkley Vice President/Compliance of Delaware Management Company, Inc., the
Registrant, each of the other funds in the Delaware Group, DMH Corp., Delaware
Distributors, L.P., Delaware Distributors, Inc., Delaware Service Company, Inc.,
Delaware Management Trust Company, Delaware Capital Management, Inc. and Delaware
Investment & Retirement Services, Inc. E. Milner Vice President/Legal of Delaware
Management Company, Inc., the Registrant, each of the other funds in the Delaware
Group, Delaware Distributors, L.P. and Delaware Distributors, Inc.
Douglas L. Anderson Vice President/Operations of Delaware Management Company, Inc. and
Delaware Service Company, Inc.; and Vice President/Operations and Director
of Delaware Management Trust Company
Michael T. Taggart 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 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 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 tax-exempt funds and the fixed income funds in the
Delaware Group and Delaware Capital Management, Inc.
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
x
<PAGE>
Form N-1A
File No. 2-70164
Delaware Group
Tax-Free Money Fund, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address* Affiliates and Other Positions and Offices Held
- ----------------- -----------------------------------------------
<S> <C>
Paul A. Matlack Vice President/Senior Portfolio Manager of Delaware Management Company,
Inc., the Registrant, each of the tax-exempt funds, the fixed income funds and the
closed-end funds in the Delaware Group; Vice President of Founders Holdings, Inc.; and
Secretary and Director of Founders CBO Corporation
Patrick P. Coyne Vice President/Senior Portfolio Manager of Delaware Management Company,
Inc., the Registrant, each of the tax-exempt funds and the fixed income funds in the
Delaware Group
Roger A. Early(4) Vice President/Senior Portfolio Manager of Delaware Management Company,
Inc., the Registrant, each of the tax-exempt funds and the fixed income funds in the
Delaware Group
Edward N. Antoian Vice President/Senior Portfolio Manager of Delaware Management Company,
Inc. and each of the equity funds in the Delaware Group
General Partner of Zeke Investment Partners since 1991, 569 Canterbury
Lane, Berwyn, PA
George H. Burwell Vice President/Senior Portfolio Manager of Delaware Management Company,
Inc. and each of the equity funds in the Delaware Group
John B. Fields Vice President/Senior Portfolio Manager of Delaware Management Company,
Inc., each of the equity funds in the Delaware Group and Delaware Capital
Management, Inc.
David C. Dalrymple Vice President/Senior Portfolio Manager of Delaware Management Company,
Inc. and each of the equity funds in the Delaware Group
Faye P. Staples(5) 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.
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xi
<PAGE>
Form N-1A
File No. 2-70164
Delaware Group
Tax-Free Money Fund, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address* Affiliates and Other Positions and Offices Held
- ----------------- -----------------------------------------------
<S> <C>
Daniel H. Carlson(6) Vice President/Marketing Manager of Delaware Management Company, Inc.
</TABLE>
1 VICE PRESIDENT/GLOBAL INVESTMENT MANAGEMENT OPERATIONS, Bankers Trust and
VICE PRESIDENT, CS First Boston Investment Management prior to June 1995.
2 ATTORNEY, Ballard, Spahr, Andrews and Ingersoll prior to July 1995.
3 TAX MANAGER, Price Waterhouse prior to October 1995.
4 SENIOR VICE PRESIDENT AND PORTFOLIO MANAGER, Federated Investors prior to
July 1994.
5 VICE PRESIDENT/HUMAN RESOURCES, Nova Care prior to September 1995.
6 PRINCIPAL AND CONSULTANT, Buck Consultants prior to October 1995.
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 Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
- ----------------- ---------------- ---------------
<S> <C> <C>
Delaware Distributors, Inc. General Partner None
Delaware Management
Company, Inc. Limited Partner Invesment Manager
Delaware Capital
Management, Inc. Limited Partner None
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
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xii
<PAGE>
Form N-1A
File No. 2-70164
Delaware Group
Tax-Free Money Fund, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
- ----------------- ---------------- ---------------
<S> <C> <C>
George M. Chamberlain, Jr. Senior Vice President/ Senior Vice President/
Secretary Secretary
J. Lee Cook Senior Vice President/ None
Eastern Sales Division
Thomas E. Sawyer Senior Vice President/ None
Western Sales Division
Stephen H. Slack Senior Vice President/ None
Wholesaler
William F. Hostler Senior Vice President/ None
Marketing Services
Dana B. Hall Senior Vice President/ None
Key Accounts
Minette van Noppen Senior Vice President/ None
Retirement Services
J. Chris Meyer Senior Vice President/ None
Product Development
Richard J. Flannery Managing Director/Corporate Vice President
& Tax Affairs
Eric E. Miller Vice President/ Vice President/
Assistant Secretary Assistant Secretary
Richelle S. Maestro Vice President/ Vice President/
Assistant Secretary Assistant Secretary
John M. Zerr Vice President/ Vice President/
Assistant Secretary Assistant Secretary
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xiii
<PAGE>
Form N-1A
File No. 2-70164
Delaware Group
Tax-Free Money Fund, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
- ----------------- ---------------- ---------------
<S> <C> <C>
Michael P. Bishof Vice President/Treasurer Vice President/Treasurer
Steven T. Lampe Vice President/Taxation Vice President/Taxation
Joseph H. Hastings Vice President/ Vice President/
Corporate Controller Corporate Controller
Rosemary E. Milner Vice President/Legal Vice President/Legal
Lisa O. Brinkley Vice President/ Vice President/
Compliance Compliance
Daniel H. Carlson Vice President/ None
Marketing
Diane M. Anderson Vice President/ None
Retirement Services
Denise F. Guerriere Vice President/Client Services None
Julia R. Vander Els Vice President/ None
Client Services
Jerome J. Alrutz Vice President/ None
Client Services
Joanne A. Mettenheimer Vice President/ None
National Accounts
Christopher H. Price Vice President/Annuity None
Marketing & Administration
Thomas S. Butler Vice President/ None
DDI Administration
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xiv
<PAGE>
Form N-1A
File No. 2-70164
Delaware Group
Tax-Free Money Fund, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
- ----------------- ---------------- ---------------
<S> <C> <C>
Steven J. DeAngelis Vice President/Product None
Development
Susan T. Friestedt Vice President/Customer None
Service
Dinah J. Huntoon Vice President/National None
Accounts
Ellen M. Krott Vice President/ None
Communications
Holly W. Riemel Vice President/ None
Telemarketing
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
William M. Kimbrough Vice President/Wholesaler None
Mac McAuliffe Vice President/Wholesaler None
Patrick L. Murphy Vice President/Wholesaler None
Henry W. Orvin Vice President/Wholesaler None
Philip G. Rickards Vice President/Wholesaler None
</TABLE>
xv
<PAGE>
Form N-1A
File No. 2-70164
Delaware Group
Tax-Free Money Fund, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
- ----------------- ---------------- ---------------
<S> <C> <C>
Michael W. Rose Vice President/Wholesaler None
Robert E. Stansbury Vice President/Wholesaler None
Larry D. Stone Vice President/Wholesaler None
Faye P. Staples Vice President/ None
Human Resources
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
(c) Not Applicable.
Item 30. Location of Accounts and Records.
All accounts and records are maintained in Philadelphia at 1818
Market Street, Philadelphia, PA 19103 or One Commerce Square,
Philadelphia, PA 19103.
Item 31. Management Services. None.
Item 32. Undertakings.
(a) Not Applicable.
(b) Not Applicable.
(c) The Registrant hereby undertakes to furnish each person to
whom a prospectus is delivered with a copy of the
Registrant's latest annual report to shareholders, upon
request and without charge.
(d) The Registrant hereby undertakes to promptly call a meeting
of shareholders for the purpose of voting upon the question
of removal of any director when requested in writing to do so
by the record holders of not less than 10% of the outstanding
shares.
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 26th day of June, 1996.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
By /s/ Wayne A. Stork
---------------------------------------------
Wayne A. Stork
Chairman of the Board, President
Chief Executive Officer and Director
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, President
- -------------------------------------------------- Chief Executive Officer and Director June 26, 1996
Wayne A. Stork
Senior Vice President/Chief Administrative
Officer/Chief Financial Officer (Principal
/s/ David K. Downes Financial Officer and Principal
- -------------------------------------------------- Accounting Officer) June 26, 1996
David K. Downes
/s/Walter P. Babich * Director June 26, 1996
- --------------------------------------------------
Walter P. Babich
/s/Anthony D. Knerr * Director June 26, 1996
- --------------------------------------------------
Anthony D. Knerr
/s/Ann R. Leven * Director June 26, 1996
- --------------------------------------------------
Ann R. Leven
/s/W. Thacher Longstreth * Director June 26, 1996
- --------------------------------------------------
W. Thacher Longstreth
/s/Charles E. Peck * Director June 26, 1996
- --------------------------------------------------
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
<TABLE>
<CAPTION>
Exhibit No. Exhibit
- ----------- -------
<S> <C>
EX-99.B1 Articles of Incorporation, as amended and supplemented to date
EX-99.B6AI Executed Distribution Agreement (April 3, 1995)
EX-99.B6B Form of Administration and Service Agreement (as amended November 1995)
(Module Name
ADMIN_SER_AGREE)
EX-99.B6C Dealer's Agreement (as amended November 1995)
(Module Name
DEALERS_AGREE)
EX-99.B6D Mutual Fund Agreement for the Delaware Group of Funds (as amended November
(Module Name 1995)
MFAGMT95)
EX-99.B7B Amendment to Profit Sharing Plan (December 21, 1995)
(Module Name
AMEND_PROF_SHAR)
EX-99.B8A Form of Custodian Agreement between the Registrant and Bankers Trust Company
(1996)
EX-99.B9A Shareholders Services Agreement (June 29, 1988)
EX-99.B11 Consent of Auditors
EX-99.B15 Amended Rule 12b-1 Plan - Tax-Free Money Fund Consultant Class (November
29, 1995)
EX-27 Financial Data Schedules
</TABLE>
<PAGE>
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
ARTICLES OF AMENDMENT
DELAWARE GROUP TAX-FREE MONEY FUND, INC., a Maryland corporation having
its principal office in Baltimore City, Maryland, and having its resident agent
located at Baltimore City, Maryland (hereinafter called the "Corporation"),
hereby certifies to the State Department of Assessments and Taxation of
Maryland, that:
FIRST: The Articles of Incorporation of the Corporation are hereby
amended by deleting the first, second and third paragraphs of Article FIFTH in
their entirety and the following paragraphs shall be inserted in lieu thereof:
FIFTH: The total number of shares of stock which the
Corporation shall have authority to issue is Five Billion
(5,000,000,000) shares of stock, with a par value of one tenth of One
Cent ($.001) per share, to be known and designated as Common Stock,
such shares of Common Stock having an aggregate par value of Five
Million Dollars ($5,000,000).
Subject to the provisions of these
Articles of Incorporation, the Board of Directors shall have the power
to issue shares of Common Stock of the Corporation from time to time,
at prices not less than the net asset value or par value thereof,
whichever is greater, for such consideration as may be fixed from time
to time pursuant to the direction of the Board of Directors.
Pursuant to Section 2-105 of the
Maryland General Corporation Law, the Board of Directors of the
Corporation shall have the power to designate one or more series of
shares of Common Stock and sub-series (classes) thereof, and to
classify or reclassify any unissued shares with respect to such series
or sub-series thereof, and such series and sub-series (subject to any
applicable rule, regulation or order of the Securities and Exchange
Commission or other applicable law or regulation) shall have such
preference, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, terms and conditions of
redemption and other characteristics as the Board may determine in the
absence of contrary determination set forth herein. Subject to the
aforesaid power of the Board of Directors, the series of shares from
which shares are presently issued and outstanding is hereby designated
as the Prime Series, and Two Billion (2,000,000,000) shares of Common
Stock (par value $.001 per share) are hereby initially
<PAGE>
classified and allocated to such series. Two sub-series of the Prime
Series are hereby designated and classified as: the Original Class, and
One Billion (1,000,000,000) shares of Common Stock (par value $.001 per
share) are classified and allocated to such sub-series, and the
Consultant Class, and One Billion (1,000,000,000) shares of Common
Stock (par value $.001 per share) are classified and allocated to such
sub-series. At any time when there are no shares outstanding or
subscribed for a particular series or sub-series previously established
and designated herein or by the Board of Directors, the series or
sub-series may be liquidated by similar means.
SECOND: This amendment has the effect of increasing
the authorized stock of the Corporation.
(a) The total number of shares of stock which
the Corporation was authorized to issue prior to the amendment was Five Hundred
Million (500,000,000) shares, with a par value of One Cent ($.01) per share,
known and designated as Common Stock, with an aggregate par value of Five
Million Dollars ($5,000,000). The series of shares from which shares were
previously issued and outstanding was designated as the Prime Series, and Two
Hundred Million (200,000,000) shares of Common Stock (par value $.01 per share)
were classified and allocated to such series with an aggregate par value of Two
Million Dollars ($2,000,000). Two sub-series of the Prime Series were designated
and classified as the Original Class, and One Hundred Million (100,000,000)
shares (par value $.01 per share) of Common Stock were classified and allocated
to such sub-series, with an aggregate par value of One Million Dollars
($1,000,000), and the Consultant Class, and One Hundred Million (100,000,000)
shares (par value $.01 per share) of Common Stock were classified and allocated
to such sub-series, with an aggregate par value of One Million Dollars
($1,000,000).
(b) The total number of shares of stock which
the Corporation is authorized to issue, following the aforesaid amendment, is
Five Billion (5,000,000,000) shares, with a par value of one-tenth of one cent
($.001) per share, with an aggregate par value of Five Million Dollars
($5,000,000). Following the amendment, one series of shares is designated as the
Prime Series and will have classified and allocated to it Two Billion
(2,000,000,000) shares of Common Stock ($.001 per share), with an aggregate par
value of Two Million Dollars ($2,000,000). Two sub-series of the Prime Series
will be designated and classified as the Original Class, and One Billion
(1,000,000,000) shares of Common Stock ($.001 per share) will be allocated to
such sub-series with an aggregate par value of One Million Dollars
-2-
<PAGE>
($1,000,000), and as the Consultant Class, and One Billion (1,000,000,000)
shares of Common Stock ($.001 per share), will be allocated to such sub-series,
with an aggregate par value of One Million Dollars ($1,000,000).
(c) The amendment to the Articles of
Incorporation increasing the authorized shares, and reducing the par value per
share thereof, did not change the preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications and
terms and conditions of redemption of the shares.
THIRD: The Board of Directors of the Corporation, at a meeting duly
convened and held on July 19, 1990, adopted the foregoing action, finding that
the said amendment was advisable, and directing that it be submitted for action
thereon to the stockholders at the next annual meeting of stockholders.
FOURTH: Notice setting forth a summary of the changes to be effected by
said amendment of the Articles of Incorporation and stating that an amendment of
the Articles of Incorporation was advisable and that a purpose of the meeting of
the stockholders would be to take action thereon, was given as required by law,
to the stockholders entitled to vote thereon.
FIFTH: The amendment of the Articles of Incorporation of the
Corporation was approved by the stockholders of the Corporation at a meeting
held on December 7, 1990 by the affirmative vote of a majority of the votes
entitled to be cast thereon. Approval by a majority vote of all the votes
entitled to be cast on the matter is authorized pursuant to the Articles of
Incorporation of the Corporation.
SIXTH: The Articles of Amendment shall become
effective on January 1, 1991.
-3-
<PAGE>
IN WITNESS WHEREOF, DELAWARE GROUP TAX-FREE MONEY FUND, INC. has caused
these Articles of Amendment to be signed in its name and on its behalf by its
Vice President and attested by its Assistant Secretary, on December 26, 1990.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
By:/s/Eric E. Miller
------------------------
Eric E. Miller
Vice President
Attest:
/s/Richard J. Flannery
- -------------------------------
Richard J. Flannery
Assistant Secretary
THE UNDERSIGNED, Vice President of DELAWARE GROUP TAX-FREE
MONEY FUND, INC., who executed on behalf of said Corporation the foregoing
Articles of Amendment, of which this certificate is made a part, hereby
acknowledges, in the name and on behalf of said Corporation, the foregoing
Articles of Amendment to be the corporate act of said Corporation and further
certifies that, to the best of his knowledge, information and belief, the
matters and facts set forth therein with respect to the approval thereof are
true in all material respects, under the penalties of perjury.
/s/Eric E. Miller
----------------------
Eric E. Miller
Vice President
-4-
<PAGE>
COMMONWEALTH OF PENNSYLVANIA :
: SS
COUNTY OF PHILADELPHIA :
THIS IS TO CERTIFY that on this 26th day of December, 1990,
before me, the subscriber, a Notary Public in and for the Commonwealth of
Pennsylvania, personally appeared ERIC E. MILLER and RICHARD J. FLANNERY and
acknowledged the foregoing Articles of Amendment of Delaware Group Tax-Free
Money Fund, Inc. to be their act and deed and that the facts therein stated are
truly set forth.
WITNESS my hand and Notarial Seal the day and year last above
written.
/s/Kathleen Clements
-------------------------
Kathleen Clements
Notary Public
My Commission Expires: 7/8/91
-5-
<PAGE>
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC., a Maryland corporation having
its principal office in Baltimore, Maryland (the "Corporation") hereby certifies
to the State Department of Assessments and Taxation of Maryland, that:
ONE: ARTICLES EIGHTH, NINTH, TENTH and ELEVENTH of the Articles of
Incorporation of the Corporation are hereby re-numbered ARTICLES NINTH, TENTH,
ELEVENTH and TWELFTH, and the following shall be designated as ARTICLE EIGHTH:
"EIGHTH: (a) To the fullest extent that limitations on the
liability of directors and officers are permitted by the Maryland
General Corporation Law, no director or officer of the Corporation
shall have any liability to the Corporation or its stockholders for
damages. This limitation on liability applies to events occurring at
the time a person serves as a director or officer of the Corporation
whether or not such person is a director or officer at the time of any
proceeding in which liability is asserted.
(b) No provision of this Article shall
be effective to protect or purport to protect any director or officer
of the Corporation against any liability to the Corporation or its
security holders to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office.
(c) References to the Maryland General
Corporation Law in this Article are to the law as from time to time
amended. No further amendment to the Articles of Incorporation of the
Corporation shall affect any right of any person under this Article
based on any event, omission or proceeding prior to such amendment."
TWO: The Board of Directors of the Corporation on February 16, 1989
duly adopted a resolution setting forth the foregoing amendment to the Articles
of Incorporation, declaring said amendment to the Articles of Incorporation
advisable and directing that it be submitted for consideration by the
stockholders of the Corporation.
<PAGE>
THREE: The said amendment to the Articles of Incorporation was approved
by the shareholders of the Corporation at the Annual Meeting of Shareholders of
the Corporation on June 22, 1989.
IN WITNESS WHEREOF, DELAWARE GROUP TAX-FREE MONEY FUND, INC. has caused
these Articles of Amendment to be signed by its president or vice president and
attested by its secretary or assistant secretary on July 27, 1989.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
/s/George M. Chamberlain, Jr.
----------------------------------
George M. Chamberlain, Jr.
Vice President
Attest:
/s/Richard J. Flannery
- --------------------------
Richard J. Flannery
Assistant Secretary
THE UNDERSIGNED, VICE PRESIDENT of DELAWARE GROUP TAX-FREE
MONEY FUND, INC., who executed on behalf of said Corporation the foregoing
Articles of Amendment, of which this certificate is made a part, hereby
acknowledges, in the name and on behalf of said Corporation, the foregoing
Articles of Amendment to be the corporate act of said Corporation and further
certifies that, to the best of his knowledge, information and belief, the
matters and facts set forth therein with respect to the approval thereof are
true in all material respects, under the penalties of perjury.
/s/George M. Chamberlain, Jr.
----------------------------------
George M. Chamberlain, Jr.
Vice President
-2-
<PAGE>
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
DELAWARE TAX-FREE MONEY FUND, INC.
DELAWARE TAX-FREE MONEY FUND, INC., a Maryland corporation having its
principal office in Baltimore City, Maryland (the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation of Maryland, that:
ONE: ARTICLE SECOND of the Articles of Incorporation is hereby amended
in its entirety to read as follows:
SECOND: The name of the corporation is Delaware Group Tax-Free Money
Fund, Inc.
The Corporation expressly agrees and
acknowledges that the name "Delaware Group" is the sole property of
Delaware Management Company, Inc. ("DMC"), that similar names are used
by affiliated funds in the investment business with the permission of
DMC, and that the Corporation's use of such name is with the permission
of DMC. The Corporation further expressly agrees and acknowledges that
its use of "Delaware Group" in its name may be terminated by DMC if the
Corporation ceases to use Delaware Management Company, Inc. as its
investment adviser or Delaware Distributors, Inc. ("DDI") as its
principal underwriter (or to u se affiliates of DMC and DDI for such
purposes). The Corporation further expressly agrees and acknowledges
that in such event DMC may require the Corporation to present to its
shareholders, at the next annual or special meeting of the Corporation
held after such request, a proposal to change the name of the
Corporation to delete reference to the name "Delaware Group." The
Corporation further expressly agrees and acknowledges in such event to
use its best efforts to promptly comply with such request to change its
name and that the Board of Directors of the Corporation shall recommend
such a proposal to its shareholders. The Corporation further expressly
acknowledges and agrees, upon shareholder approval of such a proposal,
to make and cause to be made such filings to effect the change of name
as may be necessary with the State of Maryland, the United States
Securities and Exchange Commission, or other regulatory authorities.
TWO: Pursuant to Section 2-604(b) of the Maryland General Corporation
Law, the board of directors of the Corporation on April 7, 1988 duly adopted a
resolution setting forth the foregoing amendment to the Articles of
<PAGE>
Incorporation, declaring said amendment to the Articles of Incorporation
advisable and directing that it be submitted for consideration by the
shareholders of the Corporation at the annual meeting to be held on June 14,
1988.
THIRD: Notice setting forth said amendment to the Articles of
Incorporation and stating that a purpose of the meeting of the shareholders
would be to take action thereon was given, as required by law, to all
shareholders entitled to vote thereon. The amendment to the Articles of
Incorporation was approved by the shareholders of the Corporation at said
meeting by the affirmative vote of a majority of all the votes entitled to be
cast thereon. (Approval by a majority of all the votes entitled to be cast on
the matter is authorized pursuant to the Articles of Incorporation of the
Corporation.)
FOURTH: The amendment to the Articles of Incorporation as hereinabove
set forth has been duly advised by the board of directors and approved by the
shareholders of the Corporation.
FIFTH: The amendment to the Articles of Incorporation as hereinabove
set forth shall be duly filed with Maryland Department of Assessments and
Taxation on June 15, 1988, the effective time being 5:00 p.m. on that date.
IN WITNESS WHEREOF, Delaware Tax-Free Money Fund, has caused these
Articles of Amendment to be signed by its President and attested by its
Secretary on June 14, 1988.
DELAWARE TAX-FREE MONEY FUND, INC.
/s/John H. Durham
---------------------------
John H. Durham
President
Attest:
/s/George M. Chamberlain, Jr.
- ----------------------------------
George M. Chamberlain, Jr.
Secretary
-2-
<PAGE>
THE UNDERSIGNED, President of Delaware Tax-Free Money Fund, who
executed on behalf of said Corporation the foregoing Articles of Amendment, of
which this certificate is made a part, hereby acknowledges, in the name and on
behalf of said Corporation, the foregoing Articles of Amendment to be the
corporate act of said Corporation and further certifies that, to the best of his
knowledge, information and belief, the matters and facts set forth therein with
respect to the approval thereof are true in all material respects, under the
penalties of perjury.
/s/John H. Durham
-----------------------
John H. Durham
President
-3-
<PAGE>
DELAWARE TAX-FREE MONEY FUND, INC.
ARTICLES SUPPLEMENTARY
TO
ARTICLES OF INCORPORATION
Delaware Tax-Free Money Fund, Inc., a Maryland corporation having its
principal office in Baltimore, Maryland (the "Corporation") hereby certifies, in
accordance with Section 2-208 of the Maryland General Corporation Law, to the
State Department of Assessments and Taxation of Maryland that:
FIRST: The Board of Directors of the Corporation, at a meeting
held on September 24, 1987, adopted a resolution redesignating its Class B
common stock of its Prime Series as its "Consultant Class" (as distinguished
from the existing Class A shares of common stock of the Series which was
redesignated the "Original Class"), which Consultant Class of common stock has
previously been and continues to have allocated One Hundred Million
(100,000,000) shares of authorized and unissued common stock, with a par value
of One Cent ($.01) per share.
SECOND: The shares of the Consultant Class of the Corporation
shall have the same rights and privileges, and shall be subject to the same
limitations and priorities as the shares of the Original Class, all as set forth
in the Articles of Incorporation of the Corporation, provided, that dividends
paid on the Consultant Class of shares (but not those paid on the Original
Class) shall reflect a charge for the payment of fees under the Distribution
Plan of the Consultant class adopted pursuant to Rule 12b-1 under the Investment
Company Act of 1940, as amended, and provided further, that the shares of the
Consultant Class (but not those of the Original Class) shall vote upon or with
respect to any matter relating to or arising from any such Plan of Distribution.
THIRD: The shares of the Consultant Class of said Corporation
have been redesignated by the Board of Directors pursuant to authority contained
in the Articles of Incorporation of the Corporation.
<PAGE>
IN WITNESS WHEREOF, Delaware Tax-Free Money Fund, Inc. has
caused these Articles Supplementary to be signed in its name and on its behalf
this 24th day of September, 1987.
ATTEST: DELAWARE TAX-FREE MONEY FUND, INC.
/s/Carl A.Guarino By:/s/John H. Durham
- ------------------------ -------------------------
Carl A. Guarino John H. Durham
Assistant Secretary President
THE UNDERSIGNED, President of Delaware Tax-Free Money Fund, Inc., who
executed on behalf of the said Corporation the foregoing Articles Supplementary,
of which this instrument is made a part, hereby acknowledges, in the name of and
on behalf of said Corporation, said Articles Supplementary to be the corporate
act of said Corporation and further certifies that, to the best of his
knowledge, information and belief, the matters and facts set forth therein with
respect to the approval thereof are true in all material respects, under the
penalties of perjury.
/s/John H. Durham
--------------------------
John H. Durham
-2-
<PAGE>
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
DELAWARE TAX-FREE MONEY FUND, INC.
DELAWARE TAX-FREE MONEY FUND, INC., a Maryland corporation having its
principal office in Baltimore City, Maryland (the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation of Maryland, that:
ONE: ARTICLE FIFTH of the Articles of Incorporation
is hereby amended in its entirety to read as follows:
FIFTH: The total number of shares of stock which the
corporation shall have authority to issue is Five Hundred Million
(500,000,000) shares of stock, with a par value of One Cent
(500,000,000) shares of stock, with a par value of One Cent ($.01) per
share, to be known and designated as Common Stock, such shares of
Common Stock having an aggregate par value of Five Million Dollars
($5,000,000).
Subject to the provisions of these
Articles of Incorporation, the Board of Directors shall have the power
to issue shares of Common Stock of the corporation from time to time,
at prices not less than the net asset value or par value thereof,
whichever is greater, for such consideration as may be fixed from time
to time pursuant to the direction of the Board of Directors.
Pursuant to Section 2-105 of the Maryland
General Corporation Law, the Board of Directors of the corporation
shall have the power to designate one or more series of shares of
Common Stock and sub-series (classes) thereof, and to classify or
reclassify any unissued shares with respect to such series or sub-
series thereof, and such series and sub-series (subject to any
applicable rule, regulation or order of the Securities and Exchange
Commission or other applicable law or regulation) shall have such
preference, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, terms and conditions of
redemption and other characteristics as the Board may determine in the
absence of contrary aforesaid power of the Board of Directors, the
series of shares from which shares are presently issued and outstanding
is hereby designated as Class A Stock of the Prime Series, and One
Hundred Million (100,000,000) shares of Common Stock (par value $.01
per share) is hereby initially classified and allocated to such sub-
series, and One Hundred Million (100,000,000) shares of
Common Stock (par value $.01 per share) is classified and allocated to
Class B of such series. At any time when there are no shares
outstanding or subscribed for a particular series or sub-series
previously established and designated herein or by the Board of
Directors, the series or sub-series may be liquidated by similar means.
<PAGE>
Each share of a series shall have equal
rights with each other share of that series with respect to the assets
of the corporation pertaining to that series. The dividends payable to
the holders of any sub-series (subject to any applicable rules,
regulation or order of the Securities and Exchange Commission or any
other applicable law or regulation) may be charged with any pro rata
portion of distribution expenses paid pursuant to a Plan of
Distribution adopted by such sub-series in accordance with Investment
Company Act of 1940 Rule 12b-1 (or any successor thereto), which
dividend shall be determined as directed by the Board and need not be
individually declared, but may be declared and paid in accordance with
a formula adopted by the Board. Except as otherwise provided herein,
all references in these Articles of Incorporation to Common Stock or
series of stock shall apply without discrimination to the shares of
each series of stock.
The holder of each share of stock of the
corporation shall be entitled to one vote for each full share, and a
fractional vote for each fractional share of stock, irrespective of the
series then standing in his or her name in the books of the
corporation. On any matter submitted to a vote of shareholders, all
shares of the corporation then issued and outstanding and entitled to
vote, irrespective of the series, shall be voted in the aggregate and
not by series except (1) when otherwise expressly provided by the
Maryland General Corporation Law, or (2) when required by the
Investment Company Act of 1940, as amended, shares shall be voted by
individual series, or sub-series; and (3) when the matter does not
affect any interest of the particular series or sub-series, then only
shareholders of affected series or sub-series shall be entitled to vote
thereon. Holders of shares of stock of the corporation shall not be
entitled to cumulative voting in the election of directors or on any
other matter.
Each series of stock of the corporation
shall have the following powers, preferences and participating, voting,
or other special rights and the qualifications, restrictions, and
limitations thereof shall be as follows:
-2-
<PAGE>
1. All consideration received by the
corporation for the issue or sale of stock of each series, together
with all income, earnings, profits, and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation thereof, and
any funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to the series
of shares of stock with respect to which such assets, payments or funds
were received by the corporation for all purposes, subject only to the
rights of creditors, and shall be so handled upon the books of account
of the corporation. Such assets, income, earnings, profit and proceeds
thereof, including any proceeds derived from the sale, exchange or
liquidation thereof and any assets derived from any reinvestment of
such proceeds, in whatever form the same may be, are herein referred to
as "assets belonging to" such series.
2. The Board of Directors may from time
to time declare and pay dividends or distributions, in stock or in
cash, or any or all series of stock; provided, such dividends or
distributions on shares of any series of stock shall be paid only out
of earnings, surplus, or other lawfully available assets belonging to
such series.
3. The Board of Directors shall have
the power in its discretion to distribute to the shareholders of the
corporation or to the shareholders of any series thereof in any fiscal
year as dividends, including dividends designated in whole or in part
as capital gain distributions, amounts sufficient, in the opinion of
the Board of Directors, to enable the corporation or any series thereof
to qualify as a "regulated investment company" under the Internal
Revenue Code of 1986, as may be amended hereafter, or any successor or
comparable statute thereof to qualify as a "regulated investment
company" under the Internal Revenue Code of 1986, as may be amended
hereafter, or any successor or comparable statute thereof, and
regulations promulgated thereunder (collectively, the "IRC"), and to
avoid liability of the corporation or any series thereof for Federal
income tax in respect of that year and to make other appropriate
adjustments in connection therewith.
4. The Board of Directors shall have the
power, in its discretion, to make such elections as to the tax status
of the corporation as may be permitted or required under the IRC as
presently in effect or as amended, without the vote of shareholders of
the corporation or any series thereof.
-3-
<PAGE>
5. In the event of the liquidation or
dissolution of the corporation, shareholders of each series shall be
entitled to receive, as a series, out of the assets of the corporation
available for distribution to shareholders, but other than general
assets not belonging to any particular series of stock, the assets
belonging to such series, and the assets so distributable to the
shareholders of any series shall be distributed among such shareholders
in proportion to the number of shares of such series held by them and
recorded on the books of the corporation. In the event that there are
any general assets not belonging to any particular series of stock and
available for distribution, such distribution shall be made to the
holders of stock of all series in proportion to the net asset value of
the respective series determined as hereinafter provided.
6. The assets belonging to any series of
stock shall be charged with the liabilities in respect to such series,
and shall also be charged with its share of the general liabilities of
the corporation, in proportion to the net asset value of the respective
series, and as to whether the same or general assets of the corporation
are allocable to one or more series.
The net asset value per share of a series of
the corporation's common stock shall be determined in accordance with
the Investment Company Act of 1940, as amended, and with generally
accepted accounting principles, by adding the market or appraised value
of all securities, cash and other assets of the corporation pertaining
to that series, subtracting the liabilities determined by the Board of
Directors to be applicable to that series, allocating any general
assets and general liabilities to that series, and dividing the net
result by the number of shares of that series outstanding. Securities
and other investments and assets will be valued at the current market
value, and in the absence of a readily available market value, will be
valued at fair value as determined in good faith by the Board of
Directors.
7. The Board of Directors may provide
for a holder of any series of stock of the corporation, who surrenders
his certificate in good form for transfer to the corporation or, if the
shares in question are not represented by certificates, who delivers to
the corporation a written request in good order signed by
-4-
<PAGE>
the shareholder, to convert the shares in question or such basis as the
Board may provide, into shares of stock or any other series of the
corporation.
8. The holders of the shares of Commo
Stock or other securities of the corporation shall have no preemptive
rights to subscribe to new or additional shares of its Common Stock or
other securities.
TWO: The board of directors of the Corporation on February 19, 1987
duly adopted a resolution setting forth the foregoing amendment to the Articles
of Incorporation, declaring said amendment of the Articles of Incorporation
advisable and directing that it be submitted for consideration by the
stockholders of the Corporation at the annual meeting to be held on April 21,
1987.
THIRD: Notice setting forth said amendment to the Articles of
Incorporation and stating that a purpose of the meeting of the stockholders
would be to take action thereon, was given, as required by law, to all
stockholders entitled to vote thereon. The amendment to the Articles of
Incorporation was approved by the stockholders of the Corporation at said
meeting by the affirmative vote of a majority of all the votes entitled to be
cast thereon. (Approval by a majority of all the votes entitled to be cast on
the matter is authorized pursuant to the Articles of Incorporation of the
Corporation.)
FOURTH: The amendment to the Articles of Incorporation as hereinabove
set forth has been duly advised by the board of directors and approved by the
stockholders of the Corporation.
-5-
<PAGE>
IN WITNESS WHEREOF, Delaware Tax-Free Money Fund, Inc. has
caused these Articles of Amendment to be signed by its president or Vice
President and attested by its Secretary or Assistant Secretary on April 30,
1987.
DELAWARE TAX-FREE MONEY FUND, INC.
By:/s/William P. Brady
----------------------------
William P. Brady
Executive Vice President
Attest:
/s/George M. Chamberlain, Jr.
- --------------------------------
George M. Chamberlain, Jr.
Secretary
THE UNDERSIGNED, Executive Vice President of DELAWARE TAX-FREE
MONEY FUND, INC., who executed on behalf of said corporation the foregoing
Articles of Amendment, of which this certificate is made a part, hereby
acknowledges, in the name and on behalf of said corporation, the foregoing
Articles of Amendment to be the corporate act of said corporation and further
certifies that, to the best of his knowledge, information and belief, the
matters and facts set forth therein with respect to the approval thereof are
true in all material respects, under the penalties of perjury.
/s/William P. Brady
------------------------
William P. Brady
-6-
<PAGE>
RESOLUTIONS AMENDING ARTICLES OF INCORPORATION
OF DELAWARE TAX-FREE MONEY FUND, INC.
RESOLVED, that the ARTICLE FIFTH of the Articles of
Incorporation be amended to read as follows:
FIFTH: The total number of shares of stock which the
corporation shall have authority to issue is Five Hundred
Million (500,000,000) shares of stock, with a par value of One
Cent ($.01) per share, to be known and designated as Common
Stock, such shares of Common Stock having an aggregate par
value of Five Million Dollars ($5,000,000).
Subject to the provisions of
these Articles of Incorporation, the Board of Directors shall
have the power to issue shares of Common Stock of the
corporation from time to time, at prices not less than the net
asset value or par value thereof, whichever is greater, for
such consideration as may be fixed from time to time pursuant
to the direction of the Board of Directors.
Pursuant to Section 2-105 of the
Maryland General Corporation Law, the Board of Directors of
the corporation shall have the power to designate one or more
series of shares of Common Stock and sub-series (classes)
thereof, and to classify or reclassify any unissued shares
with respect to such series or sub-series thereof, and such
series and sub-series (subject to any applicable rule,
regulation or order of the Securities and Exchange Commission
or other applicable law or regulation) shall have such
preference, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications,
terms and conditions of redemption and other characteristics
as the Board may determine in the absence of contrary
determination set forth herein. Subject to the aforesaid power
of the Board of Directors, the series of shares from which
shares are presently issued and outstanding is hereby
designated as Class A Stock of the Prime Series, and One
Hundred Million (100,000,000) shares of Common Stock (par
value $.01 per share) is hereby initially classified and
allocated to such sub-series, and One Hundred Million
(100,000,000) shares of Common Stock (par value $.01 per
share) is classified and allocated to Class B of such series.
At any time when there are no shares outstanding or subscribed
for a particular series or sub-series previously established
and designated herein or by the Board of Directors, the series
or sub-series may be liquidated by similar means.
<PAGE>
Each share of a series shall have
equal rights with each other share of that series with respect
to the assets of the corporation pertaining to that series.
The dividends payable to the holders of any sub-series
(subject to any applicable rules, regulation or order of the
Securities and Exchange Commission or any other applicable law
or regulation) may be charged with any pro rata portion of
distribution expenses paid pursuant to a Plan of Distribution
adopted by such sub-series in accordance with Investment
Company Act of 1940 Rule 12b-1 (or any successor thereto),
which dividend shall be determined as directed by the Board
and need not be individually declared, but may be declared and
paid in accordance with a formula adopted by the Board. Except
as otherwise provided herein, all references in these Articles
of Incorporation to Common Stock or series of stock shall
apply without discrimination to the shares of each series of
stock.
The holder of each share of stock of
the corporation shall be entitled to one vote for each full
share, and a fractional vote for each fractional share of
stock, irrespective of the series then standing in his or her
name in the books of the corporation. On any matter submitted
to a vote of shareholders, all shares of the corporation then
issued and outstanding and entitled to vote, irrespective of
the series, shall be voted in the aggregate and not by series
except (1) when otherwise expressly provided by the Maryland
General Corporation Law, or (2) when required by the
Investment Company Act of 1940, as amended, shares shall be
voted by individual series, or sub-series; and (3) when the
matter does not affect any interest of the particular series
or sub-series, then only shareholders of affected series or
sub-series shall be entitled to vote thereon. Holders of
shares of stock of the corporation shall not be entitled to
cumulative voting in the election of directors or on any other
matter.
-2-
<PAGE>
Each series of stock of the
corporation shall have the following powers, preferences and
participating, voting, or other special rights and the
qualifications, restrictions, and limitations thereof shall be
as follows:
1. All consideration received by the
corporation for the issue or sale of stock of each series,
together with all income, earnings, profits, and proceeds
thereof, including any proceeds derived from the sale,
exchange or liquidation thereof, and any funds or payments
derived from any reinvestment of such proceeds in whatever
form the same may be, shall irrevocably belong to the series
of shares of stock with respect to which such assets, payments
or funds were received by the corporation for all purposes,
subject only to the rights of creditors, and shall be so
handled upon the books of account of the corporation. Such
assets, income, earnings, profit and proceeds thereof,
including any proceeds derived from the sale, exchange or
liquidation thereof and any assets derived from any
reinvestment of such proceeds, in whatever form the same may
be, are herein referred to as "assets belonging to" such
series.
2. The Board of Directors may from
time to time declare and pay dividends or distributions, in
stock or in cash, on any or all series of stock; provided,
such dividends or distributions on shares of any series of
stock shall be paid only out of earnings, surplus, or other
lawfully available assets belonging to such series.
3. The Board of Directors shall have
the power in its discretion to distribute to the shareholders
of the corporation or to the shareholders of any series
thereof in any fiscal year as dividends, including dividends
designated in whole or in part as capital gain distributions,
amounts sufficient, in the opinion of the Board of Directors,
to enable the corporation or any series thereof to qualify as
a "regulated investment company" under the Internal Revenue
Code of 1986, as may be amended hereafter, or any successor or
comparable statute thereof, and regulations promulgated
thereunder (collectively, the "IRC"), and to avoid liability
of the corporation or any series thereof for federal income
tax in respect of that year and to make other appropriate
adjustments in connection therewith.
-3-
<PAGE>
4. The Board of Directors shall have
the power, in its discretion, to make sure elections as to the
tax status of the corporation or any series or class of the
corporation as may be permitted or required under the IRC as
presently in effect or as amended, without the vote of
shareholders of the corporation or any series thereof.
5. In the event of the liquidation
or dissolution of the corporation, shareholders of each series
shall be entitled to receive, as a series, out of the assets
of the corporation available for distribution to shareholders,
but other than general assets not belonging to any particular
series of stock, the assets belonging to such series, and the
assets so distributable to the shareholders of any series
shall be distributed among such shareholders in proportion to
the number of shares of such series held by them and recorded
on the books of the corporation. In the event that there are
any general assets not belonging to any particular series of
stock and available for distribution, such distribution shall
be made to the holders of stock of all series in proportion to
the net asset value of the respective series determined as
hereinafter provided.
6. The assets belonging to any
series of stock shall be charged with the liabilities in
respect to such series, and shall also be charged with its
share of the general liabilities of the corporation, in
proportion to the net asset value of the respective series
determined as hereinafter provided. The determination of the
Board of Directors shall be conclusive as to the amount of
liabilities, including accrued expenses and reserves, as to
the allocation of the same as to a given series, and as to
whether the same or general assets of the corporation are
allocable to one or more series.
The net asset value per share of a
series of the corporation's common stock shall be determined in
accordance with the Investment Company Act of 1940, as amended, and
with generally accepted accounting principles, by adding the market or
appraised value of all securities, cash and other assets of the
corporation pertaining to that series, subtracting the liabilities
determined by the Board of Directors to be applicable to that series,
allocating any general assets and general liabilities to that series,
and dividing the net result by the number of shares of that series
outstanding. Securities and other investments and assets will be valued
at the current market value, and in the absence of a readily available
market value, will be valued at fair value as determined in good faith
by the Board of Directors.
-4-
<PAGE>
7. The Board of Directors may
provide for a holder of any series of stock of the corporation, who
surrenders his certificate in good form for transfer to the
corporation, or, if the shares in question are not represented by
certificates, who delivers to the corporation a written request in good
order signed by the shareholder, to convert the shares in question or
such basis as the Board may provide, into shares of stock or any other
series of the corporation.
8. The holders of the shares of
Common Stock or other securities of the corporation shall have no
preemptive rights to subscribe to new or additional shares of its
Common Stock or other securities.
And further
RESOLVED, that the Board of Directors of the Corporation
declares the adoption of said amendment advisable and recommends that
it be submitted to the shareholders for their consideration at the
annual meeting of the shareholders to be held on April 21, 1987;
And further
RESOLVED, that the proper officers of the Corporation are
hereby directed and empowered to prepare, execute and file Articles of
Amendment to the Articles of Incorporation as may be necessary to
effect the aforesaid change following approval by the shareholders.
-5-
<PAGE>
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
DELAWARE TAX-FREE MONEY FUND, INC.
DELAWARE TAX-FREE MONEY FUND, INC., a Maryland corporation having its
principal office in Baltimore City, Maryland (the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation of Maryland, that:
ONE: ARTICLE EIGHTH of the Articles of Incorporation is hereby
amended in its entirety to read as follows:
EIGHTH: Subject to the Investment Company Act of
1940, as amended, each of the following actions, to
the extent required to be approved by the
shareholders under the Maryland General Corporation
Law, shall be approved by a majority of all votes
entitled to be cast on the matter:
(i) Amendment or amendment and restatement of the
Articles;
(ii) Reduction of stated capital;
(iii) Consolidation, merger, share exchange or
transfer of assets;
(iv) Distribution in partial liquidation; or
(v) Voluntary dissolution.
TWO: The board of directors of the Corporation on February 21, 1985
duly adopted a resolution setting forth the foregoing amendment to the Articles
of Incorporation, declaring said amendment of the Articles of Incorporation
advisable and directing that it be submitted for consideration by the
stockholders of the Corporation at the annual meeting to be held on April 16,
1985.
THIRD: Notice setting forth said amendment to the Articles of
Incorporation and stating that a purpose of the meeting of the stockholders
would be to take action thereon, was given, as required by law, to all
stockholders entitled to vote thereon. The amendment to the Articles of
Incorporation was approved by the stockholders of the Corporation at said
meeting by the affirmative vote of a majority of all the votes entitled to be
cast thereon. (Approval by a majority of all of the votes entitled to be cast on
the matter is authorized pursuant to the Articles of Incorporation of the
Corporation).
<PAGE>
FOURTH: The amendment to the Articles of Incorporation as hereinabove
set forth has been duly advised by the board of directors and approved by the
stockholders of the Corporation.
IN WITNESS WHEREOF, Delaware Tax-Free Money Fund, Inc. has caused these
Articles of Amendment to be signed by its President or Vice President and
attested by its Secretary or Assistant Secretary on April 26, 1985.
Attest: DELAWARE TAX-FREE MONEY FUND, INC.
/s/Donald M. Allen By:/s/William P. Brady
- --------------------- ----------------------------
Donald M. Allen William P. Brady
Secretary Executive Vice President
THE UNDERSIGNED, Executive Vice President of DELAWARE TAX-FREE
MONEY FUND, INC., who executed on behalf of said corporation the foregoing
Articles of Amendment, of which this certificate is made a part, hereby
acknowledges, in the name and on behalf of said corporation, the foregoing
Articles of Amendment to be the corporate act of said corporation and further
certifies that, to the best of his knowledge, information and belief, the
matters and facts set forth therein with respect to the approval thereof are
true in all material respects, under the penalties of perjury.
/s/William P. Brady
----------------------
William P. Brady
-2-
<PAGE>
NOTICE OF CHANGE OF RESIDENT AGENT'S ADDRESS
AND PRINCIPAL OFFICE
OF
ABC DEMOLITION CORPORATION, etal
received for record August 16, 1982, at 8:30 A.M. and
recorded on File No. 2570 Frame No. 0001 one of the charter
records of the State Department of Assessments and Taxation
of Maryland. To the clerk of the Superior court of Baltimore
City.
AA No. 21596
Special Fee Paid $5790.00
Recording Fee Paid 129.00
--------
5919.00
<PAGE>
DOMESTIC CORPORATIONS
STATEMENT OF CHANGE OF THE POST OFFICE ADDRESS OF
THE RESIDENT AGENT AND OF PRINCIPAL OFFICE
State Department of Assessments and Taxation
301 West Preston Street
Baltimore, Maryland 21201
Pursuant to the provisions of the Annotated Code of Maryland, Section
2-108(c), Corporations and Associations Article, THE CORPORATION TRUST
INCORPORATED hereby gives notice to the State Department of Assessments and
Taxation:
That the address of THE CORPORATION TRUST INCORPORATED, the resident
agent for each of the domestic corporations named in the list attached hereto
and made a part hereof, has been changed
FROM: First Maryland Building
25 South Charles Street
Baltimore, Maryland 21201
TO: 32 South Street
Baltimore, Maryland 21202
For those domestic corporations on the attached list having an asterisk
following their name, THE CORPORATION TRUST INCORPORATED is furnishing only the
resident agent, and not the principal office. Therefore, for such corporations,
this document is changing only the post office address of the resident agent.
That the principal office of each of such corporations not having their
name followed by an asterisk has been changed
FROM: c/o THE CORPORATION TRUST INCORPORATED
First Maryland Building
25 South Charles Street
Baltimore, Maryland 21201
TO: c/o THE CORPORATION TRUST INCORPORATED
32 South Street
Baltimore, Maryland 21202
That the post office address of the principal office of each of said
corporations not having their name followed by an asterisk is the same as post
office address of the resident agent.
<PAGE>
Written notice of the above change in principal office and/or address
resident agent has been sent to each of the named corporations by THE
CORPORATION TRUST INCORPORATED, as resident agent of each of the said
corporations.
The change of the post office address of the resident agent and/or of
the principal office of each of the corporations named shall become effective
upon the date of filing of this certificate in the Office of the State
Department of Assessments and Taxation.
Dated: August 12, 1982
THE CORPORATION TRUST INCORPORATED
----------------------------------
(Resident Agent)
By/s/James D. Grigsby
-----------------------------
James D. Grigsby
Vice President
<PAGE>
DAY AND ZIMMERMANN INCORPORATED
DE VEGH MUTUAL FUND INC.
JOHN L. DEATON MEDICAL CENTER INC.
DECOSTER EGG FARMS OF MARYLAND INC.
DEL RIO STORES INC.
DELAWARE CASH RESERVE INC.
DELAWARE TAX-FREE MONEY FUND INC.
DELMARVA DIVISION-COUNTRY PRIDE FOODS LTD
THE DEMOLAY FOUNDATION INCORPORATED
DENVER HARDWOOD CO INCORPORATED
DEPENDABLE CONTAINER & CHASIS SERS INC OF BALTIMORE
DIAKONIA HOUSING INC.
DIFCO LABORATORIES INCORPORATED
DILLON READ OVERSEAS CORPORATION
DIMENSION INC.
DIPLOMAT ELECTRONICS INC -MD-
DISTCO INC
DISTRIBUTION HOLDINGS INC.
DIVERSIFIED FUND OF STATE BOND AND MORTGAGE COMPANY
DOLE INC.
THE DOMINION FUND
DOMINOS PIZZA OF MARYLAND INC.
DORMAN ASSOCIATES INC.
DOUBLE EAGLE RANCH CORPORATION
DREYFUS A BONDS PLUS INC.
DREYFUS FINANCIAL INSTITUTION SECURITIES FUND INC
THE DREYFUS FUND INCORPORATED
<PAGE>
DELAWARE HIGH YIELD RESERVE FUND, INC.
ARTICLES OF AMENDMENT
DELAWARE HIGH YIELD RESERVE FUND, INC., a Maryland corporation having
its principal office in Baltimore City, Maryland (hereinafter called the
Corporation), hereby certifies to the State Department of Assessments and
Taxation of Maryland, that:
FIRST: The charter of the Corporation is hereby
further amended by striking out ARTICLE SECOND of the
Articles of Incorporation as heretofore amended and inserting
in lieu thereof the following:
SECOND: NAME
The name of the Corporation is: Delaware
Tax-Free Money Fund, Inc.
SECOND: The amendment to the charter of the Corporation herein made was
duly approved by vote of a majority of the entire board of directors at a
meeting duly convened and held on October 28, 1980; and that at the time of the
approval by the directors there were no shares of the Corporation entitled to
vote on the matter either outstanding or subscribed for.
IN WITNESS WHEREOF, DELAWARE HIGH YIELD RESERVE FUND,
INC. has caused these articles to be signed in its name and
on its behalf by its Vice President and attested by its
Assistant Secretary on October 29, 1980.
DELAWARE HIGH YIELD RESERVE FUND, INC.
By:/s/Donald M. Allen
-------------------------------------
Donald M. Allen
Vice President
ATTEST:
/s/George M. Chamberlain, Jr.
- ------------------------------
George M. Chamberlain, Jr.
Assistant Secretary
<PAGE>
THE UNDERSIGNED, Vice President of DELAWARE HIGH YIELD RESERVE
FUND, INC., who executed on behalf of said corporation the foregoing Articles of
Amendment, of which this certificate is made a part, hereby acknowledges, in the
name and on behalf of said corporation, the foregoing Articles of Amendment to
be the corporate act of said corporation and further certifies that, to the best
of his knowledge, information and belief, the matters and facts set forth
therein with respect to the approval thereof are true in all material respects,
under the penalties of perjury.
/s/Donald M. Allen
--------------------------
Donald M. Allen
-2-
<PAGE>
DELAWARE TAX-FREE RESERVE, INC.
ARTICLES OF AMENDMENT
DELAWARE TAX-FREE RESERVE, INC., a Maryland corporation having its
principal office in Baltimore City, Maryland (hereinafter called the
Corporation), hereby certifies to the State Department of Assessments and
Taxation of Maryland, that:
FIRST: The charter of the Corporation is hereby
amended by striking out ARTICLE SECOND of the Articles of
Incorporation and inserting in lieu thereof the following:
SECOND: NAME
The name of the Corporation is: Delaware High
Yield Reserve Fund, Inc.
SECOND: The amendment to the charter of the Corporation herein made was
duly approved by vote of a majority of the entire board of directors at a
meeting duly convened and held on July 8, 1980; and that at the time of the
approval by the directors there were no shares of stock of the Corporation
entitled to vote on the matter either outstanding or subscribed for.
IN WITNESS WHEREOF, DELAWARE TAX-FREE RESERVE, INC.
has caused these articles to be signed in its name and on its
behalf by its Vice President and attested by its Assistant
Secretary on July 16, 1980.
DELAWARE TAX-FREE RESERVE, INC.
By:/s/Donald M. Allen
--------------------------------
Donald M. Allen
Vice President
ATTEST:
/s/George M. Chamberlain, Jr.
- -----------------------------
George M. Chamberlain, Jr.
Assistant Secretary
<PAGE>
THE UNDERSIGNED, Vice President of DELAWARE TAX- FREE RESERVE,
INC., who executed on behalf of said corporation the foregoing Articles of
Amendment, of which this certificate is made a part, hereby acknowledges, in the
name and on behalf of said corporation, the foregoing Articles of Amendment to
be the corporate act of said corporation and further certifies that, to the best
of his knowledge, information and belief, the matters and facts set forth
therein with respect to the approval thereof are true in all material respects,
under the penalties of perjury.
/s/Donald M. Allen
--------------------------
Donald M. Allen
-2-
<PAGE>
ARTICLES OF INCORPORATION
OF
DELAWARE TAX-FREE RESERVE, INC.
FIRST: The undersigned, Donald M. Allen, whose post office
address is 7 Penn Center Plaza, Philadelphia, Pennsylvania 19103, and being at
least eighteen years of age, does hereby form a corporation under the General
Corporation Law of the State of Maryland.
SECOND: NAME
The Name of the Corporation is: Delaware Tax-Free
Reserve, Inc.
THIRD: CORPORATE PURPOSES
(1) To operate as a carry on the business of an investment
company, and exercise all powers necessary and appropriate to
the conduct of such operations:
(2) To purchase, become interested in, receive, own, hold,
invest and reinvest in, sell, negotiate, exchange, transfer,
assign, mortgage, pledge, turn to account, realize upon, and
otherwise acquire and dispose of securities of every kind,
character and description, issued or created by, or secured
upon the property, income or revenues, of individuals,
associations, public and private corporations, the United
States of America, its agencies and instrumentalities, or any
territory, state, county, city, town, district or other
political subdivision, agency or instrumentality thereof, or
any foreign government or any political subdivision thereof;
and to acquire or become interested in any such securities by
original subscription, underwriting, participation in
syndicates, purchase, exchange, or otherwise. The term
"securities", whenever used herein, and for purposes only of
these Articles shall, consistent with the context, and without
limiting the generality of the foregoing, include shares of
stock (preferred, common and debenture), script, purchase or
subscription warrants or other rights, voting trust
certificates, certificates of interest or participation in any
profit sharing agreement, pre-organization certificates or
subscriptions, fractional or undivided interests in oil, gas
or other mineral rights, investment contracts, evidences of
interest, ownership, or indebtedness, call or time loans,
notes bills of exchange, chosen in action, bonds, debentures,
mortgages, collateral
<PAGE>
trust certificates, money market instruments including bank
certificates of deposit, finance paper, commercial paper,
bankers acceptances and all kinds of repurchase agreements,
and in general any interests or instruments commonly known as
securities, or any certificate of interest or participation
in, any temporary or interim certificate for, or receipt for,
any of the foregoing, and any securities, negotiable or
non-negotiable, secured or unsecured, and however described.
(3) To exercise all rights, powers and privileges which
reference to or incident to ownership, use and enjoyment of
any of such securities, including, but without limitation, the
right, power, and privilege to own, vote, hold, purchase,
sell, negotiate, assign, exchange, transfer, mortgage, pledge,
lend or otherwise deal with, dispose of, use, exercise or
enjoy and rights, title, interest, powers or privileges under
or with reference to any of such securities; and to do any and
all acts and things for the preservation, protection,
improvement and enhancement in value of any of such
securities, or designed to accomplish any such purpose;
(4) To purchase or otherwise acquire, own, hold, sell,
exchange, assign, transfer, mortgage, pledge, lend or
otherwise dispose of, property of all kinds including, but
without limitation, specie, money, and foreign exchange, to
the extent permitted by law, except that the Corporation shall
not purchase, own, or sell commodities or future contracts for
the delivery of commodities;
(5) To buy, sell, mortgage, encumber, hold, own, exchange,
rent or otherwise acquire and dispose of, and to develop,
improve, manage, subdivide, build, erect, construct, alter and
maintain buildings, structures, and other improvements on real
property for its own use for business offices exclusively and
may acquire real estate as a result of the foreclosure of
mortgages securing the payment of securities then owned by the
Corporation, or as a result of any reorganization or other
readjustment in connection with any securities then owned by
the Corporation, or otherwise for the purpose of the proper
administration of the investments of the Corporation in
securities. Nothing contained in this paragraph shall be
construed to restrict the power of the Corporation, subject to
all other
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<PAGE>
restrictions and limitations contained in these Articles of
Incorporation, to invest in securities, as defined in
paragraph (2) of Article Third of these Articles of
Incorporation, whether or not any such security shall be
deemed to be an interest in real estate;
(6) To borrow or raise moneys for any of the purposes of the
Corporation, and from time to time, to draw, make, accept,
endorse, execute and issue bonds, debentures, notes, drafts,
acceptances, bills of exchange, warrants and other negotiable
or non-negotiable instruments and evidences of indebtedness
and other securities; and to secure the payment thereof and of
the interest thereon by mortgage upon or pledge of, or by
conveyance or assignment in trust of, the whole or any part of
the property and franchises of the Corporation, real,
personal, and mixed, tangible or intangible, and wheresoever
situate, whether at the time owned or thereafter acquired, and
to issue, sell, negotiate, pledge, or otherwise dispose of
such bonds or other obligations of the Corporation for its
corporate purposes;
(7) To acquire all or any part of the good will, rights,
property and business of any individual, partnership,
association or corporation; to pay for the same in cash or in
shares of stock, bonds, notes or other obligations of the
corporation, or otherwise. To hold, utilize, operate,
reorganize, liquidate, and in any manner dispose of the whole
or any part of the good will, rights, property and business so
acquired; to assume in connection therewith the whole or any
part of the liabilities and obligations of any such person,
association or corporation; and to conduct in any lawful
manner the whole or any part of the business thus acquired;
(8) To enter into, make, perform and carry out contracts and
undertakings of every kind for any lawful purpose, without
limit as to amount, with any person, firm, association,
corporation, municipality, county, state, body, political or
government or colony or dependency thereof relating to our
useful in connection with the business of the Corporation;
(9) To purchase, sell and transfer, re-acquire,
hold, trade and deal in the bonds, debentures and
other securities of the Corporation, from time to
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<PAGE>
time, to such extent and in such manner and upon such terms as
the Board of Directors shall, consistent with the provisions
of these Articles of Incorporation, determine; and to purchase
and re-acquire, from time to time, the shares of its own
capital stock.
(10) To conduct its business and maintain offices both within
and without the State of Maryland, and in all other states and
territories and the District of Columbia, in all dependencies,
colonies or possessions of the United States and any foreign
countries, and places, and to purchase or otherwise acquire,
hold, possess, convey, transfer, or otherwise dispose of real
and personal property in all thereof to the extent that the
same may be permissible under their respective laws;
(11) In general, to carry on any other business in connection
with or incidental to any of the foregoing objects and
purposes, to have and exercise all the powers conferred upon
corporations by the laws of the State of Maryland as in force
from time to time, to do everything necessary, suitable or
proper for the accomplishment of any purpose or the attainment
of any object or the furtherance of any power hereinbefore set
forth, either alone or in association with others, and to take
any action incidental or appurtenant to or growing out of or
connected with the aforesaid business or purposes, objects or
powers.
The foregoing clauses shall be construed both as purposes,
objects and powers, and the foregoing enumeration of specific purposes, objects
and powers shall not be held to limit or restrict in any manner the general
powers of the Corporation under the laws of the State of Maryland or otherwise;
nor shall the enumeration of one be deemed to exclude another, although it be of
like nature, not expressed.
FOURTH: ADDRESS AND RESIDENT AGENT
The post office address of the principal office of the
Corporation in the State of Maryland is:
c/o The Corporation Trust, Incorporated
First Maryland Building
25 South Charles Street
Baltimore, Maryland 21201
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<PAGE>
The name and post office address of the initial resident agent
of the Corporation in the State of Maryland is:
The Corporation Trust, Incorporated
First Maryland Building
25 South Charles Street
Baltimore, Maryland 21201
FIFTH: COMMON STOCK
The total number of shares of stock which the Corporation has
authority to issue is Two Hundred Million (200,000,000) shares of a single class
called Common Stock of the par value of One Cent ($.01) per share, such shares
having an aggregate par value of Two Million Dollars ($2,000,000), each of which
shall have full and equal voting rights. Each full share of stock shall entitle
the holder thereof to one vote on each matter submitted to a vote at a meeting
of stockholders and no share or fractional shall will entitle the holder thereof
to cumulative voting in the election of directors or on any other matter. Each
fractional share of stock shall entitle the holder thereof to voting rights,
participation in dividends, distributions and in the assets of the corporation
upon redemption or dissolution, in such proportion as such fractional share
bears to one full share.
SIXTH: ISSUANCE OF CAPITAL STOCK
The shares of the Common Stock of the Corporation may be
issued to such persons and at such prices no less than the par value thereof as
from time to time the Board of Directors may determine. Such issuance shall be
on a non-assessable basis. No holder of shares of Common Stock or of any other
securities issued by the Corporation shall have preemptive rights, and the
Corporation shall have the right to issue and sell to any person or persons any
shares of its Common Stock or any securities convertible into shares of its
Common Stock or any option rights exercisable for shares of its Common Stock or
any other securities it is authorized to issue without first offering such
shares, rights or securities to the holders of any shares of its Common Stock or
of any other securities of which it may be the issuer.
SEVENTH: BOARD OF DIRECTORS
The number of directors of the Corporation shall be three, or
such other number as may from time to time by fixed by the By-Laws of the
Corporation or pursuant to authorization contained in such By-Laws, but the
number of directors shall never be less than three. The names of the
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<PAGE>
directors who shall act as such until the first meeting of stockholders and
until their successors are duly chosen and qualify are as follows:
W. Linton Nelson
James P. Schellenger
John H. Durham
EIGHTH: VOTING
The Corporation may take or authorize any action upon the
concurrence of a majority of the aggregate number of votes entitled to be cast
thereon notwithstanding any provision of law requiring a greater proportion,
provided that such provision of law allows a corporation to act by a lesser
proportion if its articles or by-laws so permit.
NINTH: REDEMPTION AND REPURCHASE
The Corporation shall redeem or repurchase from its
stockholders, upon the request of such holders, shares of its own stock as
provided in the By-Laws of the Corporation. In addition, if, as evidenced by the
stockholder accounts of the Corporation, shares of Common Stock of the
Corporation are owned of record by any holder all of whose shares of record have
an aggregate net asset value of less than $1,000, then the Corporation, upon at
least 30 days prior written notice to such holder at his last address shown on
the stockholder accounts of the Corporation, shall have the right to request
such holder to purchase as many additional shares of stock as may be required in
order that net asset value of such holder's aggregate shares shall, after such
purchase, equal $1,000, or, in absence of such purchase, to require redemption
of such holder's shares at an amount equal to the net asset value thereof on the
date designated for such redemption. The right of the Corporation to require
redemption of any stockholder's shares as provided hereinabove may be exercised
upon the adoption of a resolution by the Board of Directors which specifically
so provides.
If, with respect to any redemption of Common Stock required by
the Corporation as provided hereinabove, certificates for shares to be redeemed
have been issued, the holder thereof shall be required to surrender such
certificates to the Corporation by the date designated for redemption in the
aforesaid notice. If such certificates are not duly tendered by the holder
thereof by the time so designated therefor, the Corporation shall nevertheless
redeem the shares represented by such certificates and hold the proceeds of
redemption against appropriate tender of such certificates and no dividends or
distributions on shares
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<PAGE>
redeemed shall thereafter be declared, paid or accrued thereon. After the date
upon which such shares are redeemed, no transfer of such shares shall be
effected on the records of the Corporation and, upon such redemption, the
stockholder will thereby forfeit all rights as such and become merely a creditor
of the Corporation with respect to the proceeds of redemption of such shares
subject to applicable escheat so long as such proceeds remain in the custody of
the Corporation.
The Corporation shall, in any case, not pay for shares of
Common Stock redeemed or repurchased in an amount greater than the proportionate
interest in the Corporation represented by such shares of Common Stock.
TENTH: AMENDMENTS
The Corporation reserves the right from time to time to make
any amendment of its Articles of Incorporation, now or hereafter authorized by
law, including any amendment which alters the contract rights, as expressly set
forth in its Articles, of any outstanding stock, and all rights of any kind
conferred upon the stockholders of the Corporation by these Articles of
Incorporation are granted subject to the provisions of this Article Tenth.
ELEVENTH: DURATION
The duration of the Corporation shall be perpetual.
IN WITNESS WHEREOF, I have signed these Articles of
Incorporation and acknowledge the same to be my act on this 2nd day of April,
1980.
/s/Donald M. Allen
-----------------------
Donald M. Allen
COMMONWEALTH OF PENNSYLVANIA )
: TO WIT
CITY OF PHILADELPHIA )
I hereby certify that on this 2nd day of April, 1980, before
me, the subscriber, a Notary Public of the Commonwealth of Pennsylvania in and
for the City of Philadelphia, personally appeared Donald M. Allen and
acknowledged the foregoing Articles of Incorporation to be his act.
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<PAGE>
WITNESS my hand and notarial seal 2nd day of April, 1980.
/s/Rita P. Maguire
--------------------------
Rita P. Maguire
Notary Public
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<PAGE>
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
DISTRIBUTION AGREEMENT
Distribution Agreement (the "Agreement") made as of this 3rd
day of April, 1995 by and between DELAWARE GROUP TAX-FREE MONEY FUND, INC., a
Maryland corporation (the "Fund"), and DELAWARE DISTRIBUTORS, L.P. (the
"Distributor"), a Delaware limited partnership.
WITNESSETH
WHEREAS, the Fund is an investment company regulated by
Federal and State regulatory bodies, and
WHEREAS, the Distributor is engaged in the business of
promoting the distribution of the securities of investment companies and, in
connection therewith and acting solely as agent for such investment companies
and not as principal, advertising, promoting, offering and selling their
securities to the public, and
WHEREAS, the Fund and the Distributor (or its predecessor)
were the parties to a contract under which the Distributor acted as the national
distributor of the Fund, which contract was amended and restated as of the 1st
day of June, 1992 and subsequently readopted as of January 3, 1995 (the "Prior
Distribution Agreement"), and
WHEREAS, Delaware Management Holdings, Inc. ("Holdings"),
the indirect parent company of the Distributor, completed on the
date of this Agreement a merger transaction with a newly-formed
subsidiary of Lincoln National Corporation, pursuant to which
<PAGE>
Holdings became a wholly-owned subsidiary of Lincoln National
Corporation, and
WHEREAS, the merger transaction resulted in a change of
control of the Distributor and an automatic termination of the Prior
Distribution Agreement, and
WHEREAS, the Board of Directors of the Fund has determined to
enter into a new agreement with the Distributor as of the date hereof, pursuant
to which the Distributor shall continue to be the national distributor of the
Fund's Original class (now doing business as Tax-Free Money Fund A Class and
hereinafter referred to as the "Class A Shares") and the Fund's Consultant class
(now doing business as Tax-Free Money Fund Consultant Class and hereinafter
referred to as the "Consultant Class"), which Fund and classes may do business
under these or such other names as the Board of Directors of the Fund may
designate from time to time, on the terms and conditions set forth below,
NOW, THEREFORE, the parties hereto, intending to be
legally bound hereby, agree as follows:
1. The Fund hereby engages the Distributor to promote the
distribution of the Fund's shares and, in connection therewith and as
agent for the Fund and not as principal, to advertise, promote, offer
and sell the shares to the public.
2. (a) The Distributor agrees to serve as distributor of the
Fund's shares and, as agent for the Fund and not as
principal, to advertise, promote and use its best efforts
to sell the Fund's shares wherever their sale is legal,
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<PAGE>
either through dealers or otherwise, in such places and in
such manner, not inconsistent with the law and the provisions
of this Agreement and the Fund's Registration Statement under
the Securities Act of 1933, including the Prospectus contained
therein and the Statement of Additional Information contained
therein, as may be mutually determined by the Fund and the
Distributor from time to time.
(b) For the Class A Shares, the Distributor will bear all costs of
financing any activity which is primarily intended to result
in the sale of the class shares, including, but not
necessarily limited to, advertising, compensation of
underwriters, dealers and sales personnel, the printing and
mailing of sales literature and distribution of the class
shares.
(c) For the Consultant class, the Fund shall compensate the
Distributor for its services as such is provided in the
Distribution Plan as adopted by the Fund pursuant to
Investment Company Act Rule 12b-1 (the "Plan"), a copy of
which as presently in force is attached hereto as Exhibit "A".
3. (a) The Fund agrees to make available for sale by the Fund
through the Distributor all or such part of the
authorized but unissued shares as the Distributor shall
require from time to time, and except as provided in
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<PAGE>
Paragraph 3(b) hereof, the Fund will not sell shares other
than through the efforts of the Distributor.
(b) The Fund reserves the right from time to time (1) to sell
and issue shares other than for cash; (2) to issue shares
in exchange for substantially all of the assets of any
corporation or trust, or in exchange of shares of any
corporation or trust; (3) to pay stock dividends to its
shareholders, or to pay dividends in cash or stock at the
option of its stockholders, or to sell stock to existing
stockholders to the extent of dividends payable from time
to time in cash, or to split up or combine its
outstanding shares of common stock; (4) to offer shares
for cash to its stockholders as a whole, by the use of
transferable rights or otherwise, and to sell and issue
shares pursuant to such offers; and (5) to act as its own
distributor in any jurisdiction in which the Distributor
is not registered as a broker-dealer.
4. The Fund warrants the following:
(a) The Fund is, or will be, a properly registered investment
company, and any and all shares which it will sell through the
Distributor are, or will be, properly registered with the
Securities and Exchange Commission ("SEC").
(b) The provisions of this Agreement do not violate the terms
of any instrument by which the Fund is bound, nor do they
-4-
<PAGE>
violate any law or regulation of any body having
jurisdiction over the Fund or its property.
5. (a) The Fund will supply to the Distributor a conformed copy
of the Registration Statement, all amendments thereto,
all exhibits, and each Prospectus and Statement of
Additional Information.
(b) The Fund will register or qualify the shares for sale in
such states as is deemed desirable.
(c) The Fund, without expense to the Distributor,
(1) will give and continue to give such financial
statements and other information as may be required
by the SEC or the proper public bodies of the
states in which the shares may be qualified;
(2) from time to time, will furnish the Distributor as
soon as reasonably practicable true copies of its
periodic reports to stockholders;
(3) will promptly advise the Distributor in person or by
telephone or telegraph, and promptly confirm such
advice in writing, (a) when any amendment or
supplement to the Registration Statement becomes
effective, (b) of any request by the SEC for
amendments or supplements to the Registration
Statement or the Prospectus or for additional
information, and (c) of the issuance by the SEC of
any Stop Order suspending the effectiveness of the
Registration Statement, or the initiation of any
proceedings for that purpose;
(4) if at any time the SEC shall issue any Stop Order
suspending the effectiveness of the Registration
Statement, will make every reasonable effort to
obtain the lifting of such order at the earliest
possible moment;
(5) will from time to time, use its best effort to keep a
sufficient supply of shares authorized, any increases
being subject to approval of the Fund's shareholders
as may be required;
(6) before filing any further amendment to the
Registration Statement or to the Prospectus, will
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<PAGE>
furnish the Distributor copies of the proposed
amendment and will not, at any time, whether before
or after the effective date of the Registration
Statement, file any amendment to the Registration
Statement or supplement to the Prospectus of which
the Distributor shall not previously have been
advised or to which the Distributor shall reasonably
object (based upon the accuracy or completeness
thereof) in writing;
(7) will continue to make available to its stockholders
(and forward copies to the Distributor) of such
periodic, interim and any other reports as are now,
or as hereafter may be, required by the provisions of
the Investment Company Act of 1940; and
(8) will, for the purpose of computing the offering price
of its shares, advise the Distributor within one hour
after the close of the New York Stock Exchange (or as
soon as practicable thereafter) on each business day
upon which the New York Stock Exchange may be open of
the net asset value per share of the shares of common
stock outstanding, determined in accordance with any
applicable provisions of law and the provisions of
the Articles of Incorporation, as amended, of the
Fund as of the close of business on such business
day. In the event that prices are to be calculated
more than once daily, the Fund will promptly advise
the Distributor of the time of each calculation and
the price computed at each such time.
6. The Distributor agrees to submit to the Fund, prior to its
use, the form of all sales literature proposed to be generally
disseminated by or for the Distributor, all advertisements
proposed to be used by the Distributor, all sales literature
or advertisements prepared by or for the Distributor for such
dissemination or for use by others in connection with the sale
of the shares, and the form of dealers' sales contract the
Distributor intends to use in connection with sales of the
Fund's shares. The Distributor also agrees that the Distri-
butor will submit such sales literature and advertisements to
-6-
<PAGE>
the NASD, SEC or other regulatory agency as from time to time may be
appropriate, considering practices then current in the industry. The
Distributor agrees not to use such form of dealers' sales contract or
to use or to permit others to use such sales literature or
advertisements without the written consent of the Fund if any
regulatory agency expresses objection thereto or if the Fund delivers
to the Distributor a written objection thereto.
7. The purchase price of each share sold hereunder shall be the offering
price per share mutually agreed upon by the parties hereto, and as
described in the Fund's Prospectus, as amended from time to time,
determined in accordance with any applicable provision of law, the
provisions of its Articles of Incorporation and the Rules of Fair
Practice of the National Association of Securities Dealers, Inc.
8. The responsibility of the Distributor hereunder shall be
limited to the promotion of sales of shares. The Distributor
shall undertake to promote such sales solely as agent of the
Fund, and shall not purchase or sell such shares as principal.
Orders for shares and payment for such orders shall be
directed to the Fund's agent, Delaware Service Company, Inc.
for acceptance on behalf of the Fund. The Distributor is not
empowered to approve orders for sales of shares or accept
payment for such orders. Sales of Fund shares shall be deemed
to be made when and where accepted by Delaware Service
Company, Inc. on behalf of the Fund.
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<PAGE>
9. With respect to the apportionment of costs between the Fund
and the Distributor of activities with which both are
concerned, the following will apply:
(a) The Fund and the Distributor will cooperate in preparing
the Registration Statements, the Prospectus, the
Statement of Additional Information, and all amendments,
supplements and replacements thereto. The Fund will pay
all costs incurred in the preparation of the Fund's
Registration Statement, including typesetting, the costs
incurred in printing and mailing Prospectuses and Annual,
Semi-Annual and other financial reports to its own
shareholders and fees and expenses of counsel and
accountants.
(b) The Distributor will pay the costs incurred in printing
and mailing copies of Prospectuses to prospective
investors.
(c) The Distributor will pay advertising and promotional
expenses, including the costs of literature sent to
prospective investors.
(d) The Fund will pay the costs and fees incurred in
registering or qualifying the shares with the various
states and with the SEC.
(e) The Distributor will pay the costs of any additional copies of
Fund financial and other reports and other Fund literature
supplied to the Distributor by the Fund for sales promotion
purposes.
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<PAGE>
10. The Distributor may engage in other business, provided such other
business does not interfere with the performance by the Distributor of
its obligations under this Agreement.
11. The Fund agrees to indemnify, defend and hold harmless the
Distributor and each person, if any, who controls the
Distributor within the meaning of Section 15 of the Securities
Act of 1933, from and against any and all losses, damages, or
liabilities to which, jointly or severally, the Distributor or
such controlling person may become subject, insofar as the
losses, damages or liabilities arise out of the performance of
its duties hereunder except that the Fund shall not be liable
for indemnification of the Distributor or any controlling
person thereof for any liability to the Fund or its security
holders to which they would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the
performance of their duties under this Agreement.
12. Copies of financial reports, Registration Statements and
Prospectuses, as well as demands, notices, requests, consents,
waivers, and other communications in writing which it may be
necessary or desirable for either party to deliver or furnish
to the other will be duly delivered or furnished, if delivered
to such party at its address shown below during regular
business hours, or if sent to that party by registered mail or
by prepaid telegram filed with an office or with an agent of
Western Union or another nationally recognized telegraph
service, in all cases within the time or times herein
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<PAGE>
prescribed, addressed to the recipient at 1818 Market Street,
Philadelphia, Pennsylvania 19103, or at such other address as the Fund
or the Distributor may designate in writing and furnish to the other.
13. This Agreement shall not be assigned, as that term is defined
in the Investment Company Act of 1940, by the Distributor and
shall terminate automatically in the event of its attempted
assignment by the Distributor. This Agreement shall not be
assigned by the Fund without the written consent of the Dis-
tributor signed by its duly authorized officers and delivered
to the Fund. Except as specifically provided in the indem-
nification provision contained in Paragraph 11 herein, this
Agreement and all conditions and provisions hereof are for the
sole and exclusive benefit of the parties hereto and their
legal successors and no express or implied provision of this
Agreement is intended or shall be construed to give any person
other than the parties hereto and their legal successors any
legal or equitable right, remedy or claim under or in respect
of this Agreement or any provisions herein contained.
14. (a) This Agreement shall remain in force for a period of two
years from the date hereof and from year to year thereafter,
but only so long as such 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 thereof have been approved
by the vote of a
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<PAGE>
majority of the Directors of the Fund, who are not parties
hereto or interested persons of any such party, cast in person
at a meeting called for the purpose of voting on such
approval.
(b) The Distributor may terminate this Agreement on written
notice to the Fund at any time in case the effectiveness
of the Registration Statement shall be suspended, or in
case Stop Order proceedings are initiated by the SEC in
respect of the Registration Statement and such
proceedings are not withdrawn or terminated within thirty
days. The Distributor may also terminate this Agreement
at any time by giving the Fund written notice of its
intention to terminate the Agreement at the expiration of
three months from the date of delivery of such written
notice of intention to the Fund.
(c) The Fund may terminate this Agreement at any time on at
least thirty days prior written notice to the Distributor
(1) if proceedings are commenced by the Distributor or
any of its partners for the Distributor's liquidation or
dissolution or the winding up of the Distributor's
affairs; (2) if a receiver or trustee of the Distributor
or any of its property is appointed and such appointment
is not vacated within thirty days thereafter; (3) if, due
to any action by or before any court or any federal or
state commission, regulatory body, or administrative
agency or other governmental body, the Distributor shall
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<PAGE>
be prevented from selling securities in the United States or
because of any action or conduct on the Distributor's part,
sales of the shares are not qualified for sale. The Fund may
also terminate this Agreement at any time upon prior written
notice to the Distributor of its intention to so terminate at
the expiration of three months from the date of the delivery
of such written notice to the Distributor.
15. The validity, interpretation and construction of this
Agreement, and of each part hereof, will be governed by the
laws of the Commonwealth of Pennsylvania.
16. In the event any provision of this Agreement is determined to be void
or unenforceable, such determination shall not affect the remainder of
the Agreement, which shall continue to be in force.
DELAWARE DISTRIBUTORS, L.P.
By: DELAWARE DISTRIBUTORS, INC.,
General Partner
Attest:
/s/ Eric E. Miller By:/s/ Keith E. Mitchell
- ------------------------------- ------------------------------
Name: Eric E. Miller Name: Keith E. Mitchell
Title: Assistant Secretary Title: President
DELAWARE GROUP TAX-FREE MONEY
FUND, INC.
Attest:
/s/ Richelle S. Maestro By:/s/ Wayne A. Stork
- ------------------------------- ------------------------------
Name: Richelle S. Maestro Name: Wayne A. Stork
Title: Assistant Secretary Title: Chairman
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<PAGE>
Exhibit A
12b-1 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 Delaware
Group Tax-Free Money Fund, Inc. (the "Fund"), on behalf of the Consultant class
(now doing business as Tax-Free Money Fund Consultant Class and hereinafter
referred to as the "Class"), which Fund and Class may do business under these or
such other names as the Board of Directors may designate. 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. If the Plan has not yet been approved by a majority of the
outstanding voting securities as required in the Act, the Plan will be presented
to the public shareholders at the next regular annual or special meeting.
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,
A-1
<PAGE>
Inc. ("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 approved by the
Fund 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
persons other than broker-dealers which are not "affiliated persons" or
"interested persons" of the Fund, DMC or the Distributor to provide to the Fund
services in the Fund's marketing of the 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 persons other than broker-dealers (the "Service
Providers") pursuant to Service Agreements referred to above.
A-2
<PAGE>
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 (l)
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 Fund.
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.
A-3
<PAGE>
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 at such time as the Distributor
shall notify the Fund in writing of the commencement of the Plan, which time
shall not be before the first annual or special meeting of the public
shareholders at which the Plan is or was approved by the vote of a majority of
the outstanding voting securities as required in the Act (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 l
thereof without approval by the shareholders of the Class.
A-4
<PAGE>
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 the purposes of this Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
A-5
<PAGE>
DELAWARE GROUP
Administration and Service Agreement
Gentlemen:
We are the national distributor of the shares of all of the classes
(now existing or hereafter added) of all of the Funds in the Delaware Group of
Funds. The term "Fund" as used in this Agreement refers to each fund in the
Delaware Group which retains the Distributor to promote and sell its shares, and
any fund which may hereafter be added to the Delaware Group and retain us as
national distributor. You have indicated that you wish to provide certain
services to your customers relating to their ownership of Fund shares, in
accordance with the terms of this Agreement.
TERMS
1. With respect to any Fund that offers shares of classes for which
Distribution Plans have been adopted under Rule 12b-1 (individually a "12b-1
Plan") of the Investment Company Act of 1940 (the "1940 Act"), which 12b-1 Plans
provide for the payment of service fees, we expect you to 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 dividend options, account
designations and addresses, maintaining such accounts, or such other services as
a Fund may require, to the extent permitted by applicable statutes, rules, or
regulations. For such services, we shall pay you a fee, as established by us
from time to time, based on the value of the shares of each class of each Fund
which are attributable to customers of your firm. 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.
2. 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 this Agreement.
3. 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
<PAGE>
the Plan by us with respect to the relevant Fund and the purposes for which
such expenditures were made.
4. This Agreement may be terminated by either party at any time by
written notice to that effect and will terminate without notice upon any act of
insolvency by you. Notwithstanding the termination of this Agreement, you shall
remain liable for any amounts otherwise owing to the Distributor or the Funds
and for your portion of any transfer tax or other liability which may be
asserted or assessed against the Distributor or the Fund, or upon any one or
more of the Distributor's dealers, based upon a claim that you and such dealers
or any of them constitute a partnership, an unincorporated business or other
separate entity.
5. 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.
6. The 12b-1 Plans in effect on the date of this Agreement are
described in the Funds' Prospectuses. Each Fund reserves the right to terminate
or suspend its 12b-1 Plan(s) at any time as specified in such Plan(s) and we
reserve the right, at any time, without notice, to modify, suspend or terminate
payments hereunder in connection with such 12b-1 Plan(s).
7. This Agreement shall take effect on the date set forth below.
8. 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
9. Governing Law. This Agreement will be governed by and construed in
accordance with the law of the State of Pennsylvania, without reference to that
state's choice of law doctrine.
10. 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.
11. 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
<PAGE>
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.
12. 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.
13. 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.
DELAWARE DISTRIBUTORS, L.P.
By: DELAWARE DISTRIBUTORS, INC.,
General Partner
By:
--------------------------------
Agreed and Accepted:
- ------------------------------
(Name)
By:
---------------------------
(Authorized Officer)
Date:
-------------------------
<PAGE>
DEALER'S AGREEMENT
We invite you, as a selected dealer, to participate as principal in the
distribution of the shares of all of the classes (now existing or hereafter
added) 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, rights of accumulation,
combined purchases privilege, exchange and reinvestment privileges and
<PAGE>
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 to 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.
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
three 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 (i) the Fund's
Prospectus indicates that certificates may be issued for the class of shares
being purchased, and (ii) a specific request is received from the purchaser.
Certificates, if requested, will be issued in the names indicated by
registration instructions accompanying your payment.
-2-
<PAGE>
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 offers shares of classes for which
Distribution Plans have been adopted under Rule 12b-1 (individually 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. In connection with the receipt of distribution fees and/or the receipt
of service fees as set forth under the 12b-1 Plan(s) applicable to the class or
classes of Fund shares purchased by your customers, we expect you to provide
administrative and other services to your customers who own Fund shares,
including, but not limited to, furnishing personal and other services and
assistance, answering routine inquiries regarding a Fund, assisting in changing
dividend options, account designations and addresses, maintaining such accounts,
or such other services as the Fund may require, to the extent permitted by
applicable statutes, rules, or regulations. 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. The 12b-1 Plans in effect on the
date of this Agreement are described in the Funds' Prospectuses. 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
-3-
<PAGE>
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.
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 publicity 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 the NASD and SEC as
required.
-4-
<PAGE>
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 termination 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.
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
-5-
<PAGE>
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
-6-
<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>
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 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
<PAGE>
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.
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
full by check payable to the Fund at its office within three 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-1Plan") of the Investment Company Act of 1940 (the "1940 Act"), we
expect you will provide shareholder and administrative services to your
customers who own Fund shares, such as: answering inquiries regarding the Fund;
assisting in changing dividend options, account designations and addresses;
establishing and maintaining shareholder accounts and records; arranging for
bank wires; or such other services as the Fund may require to the extent
permitted by applicable statutes, rules or regulations. 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
2
<PAGE>
certain of the Funds, as such 12b-1 Plans may be in effect from time to time.
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.
SALES 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.
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, 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 and 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, you
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 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
3
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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 material with respect to the Funds
without our prior review and written approval.
CUSTOMERS: The name 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.
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.
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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
BY:
--------------------------------
Accepted and Agreed to:
- ---------------------------------
(Name of Firm)
BY:
------------------------------
Name:
Title:
5
AMENDMENT NO. 1
TO THE
SECOND AMENDMENT AND RESTATEMENT OF THE
PROFIT SHARING PLAN OF
DELAWARE GROUP DELAWARE FUND, INC.
EFFECTIVE APRIL 1, 1989
This Amendment is made this 21st day of December, 1995, by Delaware
Group Delaware fund, Inc. (the "Employer").
WITNESSETH:
-----------
WHEREAS, the Employer adopted the second amendment and restatement of
the Profit Sharing Plan of Delaware Management Company, Inc. (the "Plan"),
effective April 1, 1989; and
WHEREAS, the Employer desires to clarify the provisions of the Plan
pertaining to the crediting of service for vesting purposes.
NOW THEREFORE, Section 2.28 of the Plan is hereby amended as follows:
"2.28 "Year of Service" shall mean the completion by an Employee of
1,000 or more Hours of Service during his initial Eligibility
Computation Period and during any Plan Year, beginning with the Plan
Year which commences after the Employee first performs an Hour of
Service. However, 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."
IN WITNESS WHEREOF, the Employer has caused this Amendment to be
executed by its duly authorized officers and its corporate seal to be impressed
hereon the date first written above.
ATTEST: DELAWARE GROUP DELAWARE FUND, INC.
/s/ George M. Chamberlain, Jr. By: /s/ Wayne A. Stork
- ------------------------------- -------------------------
Senior Vice President/Secretary Chairman
<PAGE>
Mutual Fund/Business Trust/Series
CUSTODIAN AGREEMENT
AGREEMENT dated as of _____________, 199_ between BANKERS TRUST COMPANY
(the "Custodian") and [name of customer] (the "Customer").
WHEREAS, the Customer may be organized with one or more series of
shares, each of which shall represent an interest in a separate portfolio of
Securities and Cash (each as hereinafter defined) (all such existing and
additional series now or hereafter listed on Exhibit A being hereafter referred
to individually as a "Portfolio" and collectively, as the "Portfolios"); and
WHEREAS, the Customer desires to appoint the Custodian as custodian on
behalf of the Portfolios under the terms and conditions set forth in this
Agreement, and the Custodian has agreed to so act as custodian.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
1. Employment of Custodian. The Customer hereby employs the Custodian
as custodian of all assets of each Portfolio which are delivered to and accepted
by the Custodian or any Subcustodian (as that term is defined in Section 4) (the
"Property") pursuant to the terms and conditions set forth herein. Without
limitation, such Property shall include stocks and other equity interests of
every type, evidences of indebtedness, other instruments representing same or
rights or obligations to receive, purchase, deliver or sell same and other
non-cash investment property of a Portfolio which is acceptable for deposit
("Securities") and cash from any source and in any currency ("Cash"). The
Custodian shall not be responsible for any property of a Portfolio held or
received by the Customer or others and not delivered to the Custodian or any
Subcustodian.
2. Maintenance of Securities and Cash at Custodian and Subcustodian
Locations. Pursuant to Instructions, the Customer shall direct the Custodian to
(a) settle Securities transactions and maintain cash in the country or other
jurisdiction in which the principal trading market for such Securities is
located, where such Securities are to be presented for payment or where such
Securities are acquired and (b) maintain cash and cash equivalents in such
countries in amounts reasonably necessary to effect the Customer's transactions
in such Securities. Instructions to settle Securities transactions in any
country shall be deemed to authorize the holding of such Securities and Cash in
that country.
3. Custody Account. The Custodian agrees to establish and maintain one
or more custody accounts on its books each in the name of a Portfolio (each, an
"Account") for any and all Property from
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time to time received and accepted by the Custodian or any Subcustodian for the
account of such Portfolio. Upon delivery by the Customer to the Custodian of any
Property belonging to a Portfolio, the Customer shall, by Instructions (as
hereinafter defined in Section 14), specifically indicate which Portfolio such
Property belongs or if such Property belongs to more than one Portfolio shall
allocate such Property to the appropriate Portfolio. The Custodian shall
allocate such Property to the Accounts in accordance with the Instructions;
provided that the Custodian shall have the right, in its sole discretion, to
refuse to accept any Property that is not in proper form for deposit for any
reason. The Customer on behalf of each Portfolio, acknowledges its
responsibility as a principal for all of its obligations to the Custodian
arising under or in connection with this Agreement, warrants its authority to
deposit in the appropriate Account any Property received therefor by the
Custodian or a Subcustodian and to give, and authorize others to give,
instructions relative thereto. The Custodian may deliver securities of the same
class in place of those deposited in the Account.
The Custodian shall hold, keep safe and protect as custodian for each
Account, on behalf of the Customer, all Property in such Account. All
transactions, including, but not limited to, foreign exchange transactions,
involving the Property shall be executed or settled solely in accordance with
Instructions (which shall specifically reference the Account for which such
transaction is being settled), except that until the Custodian receives
Instructions to the contrary, the Custodian will:
(a) collect all interest and dividends and all other income and
payments, whether paid in cash or in kind, on the Property, as the same become
payable and credit the same to the appropriate Account;
(b) present for payment all Securities held in an Account which are
called, redeemed or retired or otherwise become payable and all coupons and
other income items which call for payment upon presentation to the extent that
the Custodian or Subcustodian is actually aware of such opportunities and hold
the cash received in such Account pursuant to this Agreement;
(c) (i) exchange Securities where the exchange is purely ministerial
(including, without limitation, the exchange of temporary securities for those
in definitive form and the exchange of warrants, or other documents of
entitlement to securities, for the Securities themselves) and (ii) when
notification of a tender or exchange offer (other than ministerial exchanges
described in (i) above) is received for an Account, endeavor to receive
Instructions, provided that if such Instructions are not received in time for
the Custodian to take timely action, no action shall be taken with respect
thereto;
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(d) whenever notification of a rights entitlement or a fractional
interest resulting from a rights issue, stock dividend or stock split is
received for an Account and such rights entitlement or fractional interest bears
an expiration date, if after endeavoring to obtain Instructions such
Instructions are not received in time for the Custodian to take timely action or
if actual notice of such actions was received too late to seek Instructions,
sell in the discretion of the Custodian (which sale the Customer hereby
authorizes the Custodian to make) such rights entitlement or fractional interest
and credit the Account with the net proceeds of such sale;
(e) execute in the Customer's name for an Account, whenever the
Custodian deems it appropriate, such ownership and other certificates as may be
required to obtain the payment of income from the Property in such Account;
(f) pay for each Account, any and all taxes and levies in the nature of
taxes imposed on interest, dividends or other similar income on the Property in
such Account by any governmental authority. In the event there is insufficient
Cash available in such Account to pay such taxes and levies, the Custodian shall
notify the Customer of the amount of the shortfall and the Customer, at its
option, may deposit additional Cash in such Account or take steps to have
sufficient Cash available. The Customer agrees, when and if requested by the
Custodian and required in connection with the payment of any such taxes to
cooperate with the Custodian in furnishing information, executing documents or
otherwise; and
(g) appoint brokers and agents for any of the ministerial transactions
involving the Securities described in (a) - (f), including, without limitation,
affiliates of the Custodian or any Subcustodian.
4. Subcustodians and Securities Systems. The Customer authorizes and
instructs the Custodian to hold the Property in each Account in custody accounts
which have been established by the Custodian with (a) one of its U.S. branches
or another U.S. bank or trust company or branch thereof located in the U.S.
which is itself qualified under the Investment Company Act of 1940, as amended
("1940 Act"), to act as custodian (individually, a "U.S. Subcustodian"), or a
U.S. securities depository or clearing agency or system in which the Custodian
or a U.S. Subcustodian participates (individually, a "U.S. Securities System")
or (b) one of its non-U.S. branches or majority-owned non-U.S. subsidiaries, a
non-U.S. branch or majority-owned subsidiary of a U.S. bank or a non-U.S. bank
or trust company, acting as custodian (individually, a "non-U.S. Subcustodian";
U.S. Subcustodians and non-U.S. Subcustodians, collectively, "Subcustodians"),
or a non-U.S. depository or clearing agency or system in which the Custodian or
any Subcustodian participates (individually, a "non-U.S. Securities System";
U.S.
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<PAGE>
Securities System and non-U.S. Securities System, collectively, Securities
System"), provided that in each case in which a U.S. Subcustodian or U.S.
Securities System is employed, each such Subcustodian or Securities System shall
have been approved by Instructions; provided further that in each case in which
a non-U.S. Subcustodian or non-U.S. Securities System is employed, (a) such
Subcustodian or Securities System either is (i) a "qualified U.S. bank" as
defined by Rule 17f-5 under the 1940 Act ("Rule 17f-5") or (ii) an "eligible
foreign custodian" within the meaning of Rule 17f-5 or such Subcustodian or
Securities System is the subject of an order granted by the U.S. Securities and
Exchange Commission ("SEC") exempting such agent or the subcustody arrangements
thereto from all or part of the provisions of Rule 17f-5 and (b) the agreement
between the Custodian and such non-U.S. Subcustodian has been approved by
Instructions; it being understood that the Custodian shall have no liability or
responsibility for determining whether the approval of any Subcustodian or
Securities System has been proper under the 1940 Act or any rule or regulation
thereunder.
Upon receipt of Instructions, the Custodian agrees to cease the
employment of any Subcustodian or Securities System with respect to the
Customer, and if desirable and practicable, appoint a replacement subcustodian
or securities system in accordance with the provisions of this Section. In
addition, the Custodian may, at any time in its discretion, upon written
notification to the Customer, terminate the employment of any Subcustodian or
Securities System.
Upon request of the Customer, the Custodian shall deliver to the
Customer annually a certificate stating: (a) the identity of each non-U.S.
Subcustodian and non-U.S. Securities System then acting on behalf of the
Custodian and the name and address of the governmental agency or other
regulatory authority that supervises or regulates such non-U.S Subcustodian and
non-U.S. Securities System; (b) the countries in which each non-U.S.
Subcustodian or non-U.S. Securities System is located; and (c) so long as Rule
17f-5 requires the Customer's Board of Trustees to directly approve its foreign
custody arrangements, such other information relating to such non-U.S.
Subcustodians and non-U.S. Securities Systems as may reasonably be requested by
the Customer to ensure compliance with Rule 17f-5. So long as Rule 17f-5
requires the Customer's Board of Trustees to directly approve its foreign
custody arrangements, the Custodian also shall furnish annually to the Customer
information concerning such non-U.S. Subcustodians and non-U.S. Securities
Systems similar in kind and scope as that furnished to the Customer in
connection with the initial approval of this Agreement. Custodian agrees to
promptly notify the Customer if, in the normal course of its custodial
activities, the Custodian has reason to believe that any non-U.S. Subcustodian
or non-U.S. Securities System has ceased to be a qualified U.S. bank or an
eligible foreign custodian each within the meaning of Rule 17f-5 or has ceased
to be subject to an exemptive order from the SEC.
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<PAGE>
5. Use of Subcustodian. With respect to Property in an Account which is
maintained by the Custodian in the custody of a Subcustodian employed pursuant
to Section 4:
(a) The Custodian will identify on its books as belonging to the
Customer on behalf of a Portfolio, any Property held by such Subcustodian.
(b) Any Property in the Account held by a Subcustodian will
be subject only to the instructions of the Custodian or its agents.
(c) Property deposited with a Subcustodian will be maintained
in an account holding only assets for customers of the Custodian.
(d) Any agreement the Custodian shall enter into with a non-U.S.
Subcustodian with respect to the holding of Property shall require that (i) the
Account will be adequately indemnified or its losses adequately insured; (ii)
the Securities are not subject to any right, charge, security interest, lien or
claim of any kind in favor of such Subcustodian or its creditors except a claim
for payment in accordance with such agreement for their safe custody or
administration and expenses related thereto, (iii) beneficial ownership of such
Securities be freely transferable without the payment of money or value other
than for safe custody or administration and expenses related thereto, (iv)
adequate records will be maintained identifying the Property held pursuant to
such Agreement as belonging to the Custodian, on behalf of its customers and (v)
to the extent permitted by applicable law, officers of or auditors employed by,
or other representatives of or designated by, the Custodian, including the
independent public accountants of or designated by, the Customer be given access
to the books and records of such Subcustodian relating to its actions under its
agreement pertaining to any Property held by it thereunder or confirmation of or
pertinent information contained in such books and records be furnished to such
persons designated by the Custodian.
6. Use of Securities System. With respect to Property in the Account(s)
which are maintained by the Custodian or any Subcustodian in the custody of a
Securities System employed pursuant to Section 4:
(a) The Custodian shall, and the Subcustodian will be required by its
agreement with the Custodian to, identify on its books such Property as being
held for the account of the Custodian or Subcustodian for its customers.
(b) Any Property held in a Securities System for the account of the
Custodian or a Subcustodian will be subject only to the instructions of the
Custodian or such Subcustodian, as the case may be.
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<PAGE>
(c) Property deposited with a Securities System will be maintained in
an account holding only assets for customers of the Custodian or Subcustodian,
as the case may be, unless precluded by applicable law, rule, or regulation.
(d) The Custodian shall provide the Customer with any report obtained
by the Custodian on the Securities System's accounting system, internal
accounting control and procedures for safeguarding securities deposited in the
Securities System.
7. Agents. The Custodian may at any time or times in its sole
discretion appoint (or remove) any other U.S. bank or trust company which is
itself qualified under the 1940 Act to act as custodian, as its agent to carry
out such of the provisions of this Agreement as the Custodian may from time to
time direct; provided, however, that the appointment of any agent shall not
relieve the Custodian of its responsibilities or liabilities hereunder.
8. Records, Ownership of Property, Statements, Opinions of
Independent Certified Public Accountants.
(a) The ownership of the Property whether Securities, Cash and/or other
property, and whether held by the Custodian or a Subcustodian or in a Securities
System as authorized herein, shall be clearly recorded on the Custodian's books
as belonging to the appropriate Account and not for the Custodian's own
interest. The Custodian shall keep accurate and detailed accounts of all
investments, receipts, disbursements and other transactions for each Account.
All accounts, books and records of the Custodian relating thereto shall be open
to inspection and audit at all reasonable times during normal business hours by
any person designated by the Customer. All such accounts shall be maintained and
preserved in the form reasonably requested by the Customer. The Custodian will
supply to the Customer from time to time, as mutually agreed upon, a statement
in respect to any Property in an Account held by the Custodian or by a
Subcustodian. In the absence of the filing in writing with the Custodian by the
Customer of exceptions or objections to any such statement within sixty (60)
days of the mailing thereof, the Customer shall be deemed to have approved such
statement and in such case or upon written approval of the Customer of any such
statement, such statement shall be presumed to be for all purposes correct with
respect to all information set forth therein.
(b) The Custodian shall take all reasonable action as the Customer may
request to obtain from year to year favorable opinions from the Customer's
independent certified public accountants with respect to the Custodian's
activities hereunder in connection with the preparation of the Customer's Form
N-1A and the Customer's Form N-SAR or other periodic reports to the SEC and with
respect to any other requirements of the SEC.
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(c) At the request of the Customer, the Custodian shall deliver to the
Customer a written report prepared by the Custodian's independent certified
public accountants with respect to the services provided by the Custodian under
this Agreement, including, without limitation, the Custodian's accounting
system, internal accounting control and procedures for safeguarding Cash and
Securities, including Cash and Securities deposited and/or maintained in a
securities system or with a Subcustodian. Such report shall be of sufficient
scope and in sufficient detail as may reasonably be required by the Customer and
as may reasonably be obtained by the Custodian.
(d) The Customer may elect to participate in any of the electronic
on-line service and communications systems offered by the Custodian which can
provide the Customer, on a daily basis, with the ability to view on-line or to
print on hard copy various reports of Account activity and of Securities and/or
Cash being held in any Account. To the extent that such service shall include
market values of Securities in an Account, the Customer hereby acknowledges that
the Custodian now obtains and may in the future obtain information on such
values from outside sources that the Custodian considers to be reliable and the
Customer agrees that the Custodian (i) does not verify or represent or warrant
either the reliability of such service nor the accuracy or completeness of any
such information furnished or obtained by or through such service and (ii) shall
be without liability in selecting and utilizing such service or furnishing any
information derived therefrom.
9. Holding of Securities, Nominees, etc. Securities in an Account which
are held by the Custodian or any Subcustodian may be held by such entity in the
name of the Customer, on behalf of a Portfolio, in the Custodian's or
Subcustodian's name, in the name of the Custodian's or Subcustodian's nominee,
or in bearer form. Securities that are held by a Subcustodian or which are
eligible for deposit in a Securities System as provided above may be maintained
with the Subcustodian or the Securities System in an account for the Custodian's
or Subcustodian's customers, unless prohibited by law, rule, or regulation. The
Custodian or Subcustodian, as the case may be, may combine certificates
representing Securities held in an Account with certificates of the same issue
held by it as fiduciary or as a custodian. In the event that any Securities in
the name of the Custodian or its nominee or held by a Subcustodian and
registered in the name of such Subcustodian or its nominee are called for
partial redemption by the issuer of such Security, the Custodian may, subject to
the rules or regulations pertaining to allocation of any Securities System in
which such Securities have been deposited, allot, or cause to be allotted, the
called portion of the respective beneficial holders of such class of security in
any manner the Custodian deems to be fair and equitable.
10. Proxies, etc. With respect to any proxies, notices,
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reports or other communications relative to any of the Securities in any
Account, the Custodian shall perform such services and only such services
relative thereto as are (i) set forth in Section 3 of this Agreement, (ii)
described in Exhibit B attached hereto (as such service therein described may be
in effect from time to time) (the "Proxy Service") and (iii) as may otherwise be
agreed upon between the Custodian and the Customer. The liability and
responsibility of the Custodian in connection with the Proxy Service referred to
in (ii) of the immediately preceding sentence and in connection with any
additional services which the Custodian and the Customer may agree upon as
provided in (iii) of the immediately preceding sentence shall be as set forth in
the description of the Proxy Service and as may be agreed upon by the Custodian
and the Customer in connection with the furnishing of any such additional
service and shall not be affected by any other term of this Agreement. Neither
the Custodian nor its nominees or agents shall vote upon or in respect of any of
the Securities in an Account, execute any form of proxy to vote thereon, or give
any consent or take any action (except as provided in Section 3) with respect
thereto except upon the receipt of Instructions relative thereto.
11. Segregated Account. To assist the Customer in complying with the
requirements of the 1940 Act and the rules and regulations thereunder, the
Custodian shall, upon receipt of Instructions, establish and maintain a
segregated account or accounts on its books for and on behalf of a Portfolio.
12. Settlement Procedures. Securities will be transferred, exchanged or
delivered by the Custodian or a Subcustodian upon receipt by the Custodian of
Instructions which include all information required by the Custodian. Settlement
and payment for Securities received for an Account and delivery of Securities
out of such Account may be effected in accordance with the customary or
established securities trading or securities processing practices and procedures
in the jurisdiction or market in which the transaction occurs, including,
without limitation, delivering Securities to the purchaser thereof or to a
dealer therefor (or an agent for such purchaser or dealer) against a receipt
with the expectation of receiving later payment for such Securities from such
purchaser or dealer, as such practices and procedures may be modified or
supplemented in accordance with the standard operating procedures of the
Custodian in effect from time to time for that jurisdiction or market. The
Custodian shall not be liable for any loss which results from effecting
transactions in accordance with the customary or established securities trading
or securities processing practices and procedures in the applicable jurisdiction
or market.
Notwithstanding that the Custodian may settle purchases and sales
against, or credit income to, an Account, on a contractual basis, as outlined in
the Investment Manager User Guide provided to
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the Customer by the Custodian, the Custodian may, at its sole option, reverse
such credits or debits to the appropriate Account in the event that the
transaction does not settle, or the income is not received in a timely manner,
and the Customer agrees to hold the Custodian harmless from any losses which may
result therefrom.
Except as otherwise may be agreed upon by the parties hereto, the
Custodian shall not be required to comply with Instructions to settle the
purchase of any Securities for an Account unless there is sufficient Cash in
such Account at the time or to settle the sale of any Securities in such Account
unless such Securities are in deliverable form. Notwithstanding the foregoing,
if the purchase price of such securities exceeds the amount of Cash in an
Account at the time of settlement of such purchase, the Custodian may, in its
sole discretion, but in no way shall have any obligation to, permit an overdraft
in such Account in the amount of the difference solely for the purpose of
facilitating the settlement of such purchase of securities for prompt delivery
for such Account. The Customer agrees to immediately repay the amount of any
such overdraft in the ordinary course of business and further agrees to
indemnify and hold the Custodian harmless from and against any and all losses,
costs, including, without limitation the cost of funds, and expenses incurred in
connection with such overdraft. The Customer agrees that it will not use the
Account to facilitate the purchase of securities without sufficient funds in the
Account (which funds shall not include the proceeds of the sale of the purchased
securities).
13. Permitted Transactions. The Customer agrees that it will cause
transactions to be made pursuant to this Agreement only upon Instructions in
accordance Section 14 and only for the purposes listed below.
(a) In connection with the purchase or sale of Securities at prices as
confirmed by Instructions.
(b) When Securities are called, redeemed or retired, or otherwise
become payable.
(c) In exchange for or upon conversion into other securities alone or
other securities and cash pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment.
(d) Upon conversion of Securities pursuant to their terms into other
securities.
(e) Upon exercise of subscription, purchase or other similar rights
represented by Securities.
(f) For the payment of interest, taxes, management or
supervisory fees, distributions or operating expenses.
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(g) In connection with any borrowings by the Customer requiring a
pledge of Securities, but only against receipt of amounts borrowed.
(h) In connection with any loans, but only against receipt of
collateral as specified in Instructions which shall reflect any restrictions
applicable to the Customer.
(i) For the purpose of redeeming shares of the capital stock of the
Customer against delivery of the shares to be redeemed to the Custodian, a
Subcustodian or the Customer's transfer agent.
(j) For the purpose of redeeming in kind shares of the Customer against
delivery of the shares to be redeemed to the Custodian, a Subcustodian or the
Customer's transfer agent.
(k) For delivery in accordance with the provisions of any agreement
among the Customer, on behalf of a Portfolio, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 1934 and a member of the
National Association of Securities Dealers, Inc., relating to compliance with
the rules of The Options Clearing Corporation, the Commodities Futures Trading
Commission and of any registered national securities exchange, or of any similar
organization or organizations, regarding escrow or other arrangements in
connection with transactions by the Customer.
(l) For release of Securities to designated brokers under covered call
options, provided, however, that such Securities shall be released only upon
payment to the Custodian of monies for the premium due and a receipt for the
Securities which are to be held in escrow. Upon exercise of the option, or at
expiration, the Custodian will receive the Securities previously deposited from
broker. The Custodian will act strictly in accordance with Instructions in the
delivery of Securities to be held in escrow and will have no responsibility or
liability for any such Securities which are not returned promptly when due other
than to make proper request for such return.
(m) For spot or forward foreign exchange transactions to facilitate
security trading or receipt of income from Securities related transactions.
(n) Upon the termination of this Agreement as set forth in Section 20.
(o) For other proper purposes.
The Customer agrees that the Custodian shall have no obligation to
verify the purpose for which a transaction is being effected.
14. Instructions. The term "Instructions" means instructions
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<PAGE>
from the Customer in respect of any of the Custodian's duties hereunder which
have been received by the Custodian at its address set forth in Section 21 below
(i) in writing (including, without limitation, facsimile transmission) or by
tested telex signed or given by such one or more person or persons as the
Customer shall have from time to time authorized in writing to give the
particular class of Instructions in question and whose name and (if applicable)
signature and office address have been filed with the Custodian, or (ii) which
have been transmitted electronically through an electronic on-line service and
communications system offered by the Custodian or other electronic instruction
system acceptable to the Custodian, or (iii) a telephonic or oral communication
by one or more persons as the Customer shall have from time to time authorized
to give the particular class of Instructions in question and whose name has been
filed with the Custodian; or (iv) upon receipt of such other form of
instructions as the Customer may from time to time authorize in writing and
which the Custodian has agreed in writing to accept. Instructions in the form of
oral communications shall be confirmed by the Customer by tested telex or
writing in the manner set forth in clause (i) above, but the lack of such
confirmation shall in no way affect any action taken by the Custodian in
reliance upon such oral instructions prior to the Custodian's receipt of such
confirmation. Instructions may relate to specific transactions or to types or
classes of transactions, and may be in the form of standing instructions.
The Custodian shall have the right to assume in the absence of notice
to the contrary from the Customer that any person whose name is on file with the
Custodian pursuant to this Section has been authorized by the Customer to give
the Instructions in question and that such authorization has not been revoked.
The Custodian may act upon and conclusively rely on, without any liability to
the Customer or any other person or entity for any losses resulting therefrom,
any Instructions reasonably believed by it to be furnished by the proper person
or persons as provided above.
15. Standard of Care. The Custodian shall be responsible for the
performance of only such duties as are set forth herein or contained in
Instructions given to the Custodian which are not contrary to the provisions of
this Agreement. The Custodian will use reasonable care with respect to the
safekeeping of Property in each Account and, except as otherwise expressly
provided herein, in carrying out its obligations under this Agreement. So long
as and to the extent that it has exercised reasonable care, the Custodian shall
not be responsible for the title, validity or genuineness of any Property or
other property or evidence of title thereto received by it or delivered by it
pursuant to this Agreement and shall be held harmless in acting upon, and may
conclusively rely on, without liability for any loss resulting therefrom, any
notice, request, consent, certificate or other instrument reasonably believed by
it to be genuine and to be signed or furnished by the proper party or
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<PAGE>
parties, including, without limitation, Instructions, and shall be indemnified
by the Customer for any losses, damages, costs and expenses (including, without
limitation, the fees and expenses of counsel) incurred by the Custodian and
arising out of action taken or omitted with reasonable care by the Custodian
hereunder or under any Instructions. The Custodian shall be liable to the
Customer for any act or omission to act of any Subcustodian to the same extent
as if the Custodian committed such act itself. With respect to a Securities
System, the Custodian shall only be responsible or liable for losses arising
from employment of such Securities System caused by the Custodian's own failure
to exercise reasonable care. In the event of any loss to the Customer by reason
of the failure of the Custodian or a Subcustodian to utilize reasonable care,
the Custodian shall be liable to the Customer to the extent of the Customer's
actual damages at the time such loss was discovered without reference to any
special conditions or circumstances. In no event shall the Custodian be liable
for any consequential or special damages. The Custodian shall be entitled to
rely, and may act, on advice of counsel (who may be counsel for the Customer) on
all matters and shall be without liability for any action reasonably taken or
omitted pursuant to such advice.
In the event the Customer subscribes to an electronic on-line service
and communications system offered by the Custodian, the Customer shall be fully
responsible for the security of the Customer's connecting terminal, access
thereto and the proper and authorized use thereof and the initiation and
application of continuing effective safeguards with respect thereto and agree to
defend and indemnify the Custodian and hold the Custodian harmless from and
against any and all losses, damages, costs and expenses (including the fees and
expenses of counsel) incurred by the Custodian as a result of any improper or
unauthorized use of such terminal by the Customer or by any others.
All collections of funds or other property paid or distributed in
respect of Securities in an Account, including funds involved in third-party
foreign exchange transactions, shall be made at the risk of the Customer.
Subject to the exercise of reasonable care, the Custodian shall have no
liability for any loss occasioned by delay in the actual receipt of notice by
the Custodian or by a Subcustodian of any payment, redemption or other
transaction regarding Securities in each Account in respect of which the
Custodian has agreed to take action as provided in Section 3 hereof. The
Custodian shall not be liable for any loss resulting from, or caused by, or
resulting from acts of governmental authorities (whether de jure or de facto),
including, without limitation, nationalization, expropriation, and the
imposition of currency restrictions; devaluations of or fluctuations in the
value of currencies; changes in laws and regulations applicable to the banking
or securities industry; market
- 12 -
<PAGE>
conditions that prevent the orderly execution of securities transactions or
affect the value of Property; acts of war, terrorism, insurrection or
revolution; strikes or work stoppages; the inability of a local clearing and
settlement system to settle transactions for reasons beyond the control of the
Custodian; hurricane, cyclone, earthquake, volcanic eruption, nuclear fusion,
fission or radioactivity, or other acts of God.
The Custodian shall have no liability in respect of any loss, damage or
expense suffered by the Customer, insofar as such loss, damage or expense arises
from the performance of the Custodian's duties hereunder by reason of the
Custodian's reliance upon records that were maintained for the Customer by
entities other than the Custodian prior to the Custodian's employment under this
Agreement.
The provisions of this Section shall survive termination of this
Agreement.
16. Investment Limitations and Legal or Contractual Restrictions or
Regulations. The Custodian shall not be liable to the Customer and the Customer
agrees to indemnify the Custodian and its nominees, for any loss, damage or
expense suffered or incurred by the Custodian or its nominees arising out of any
violation of any investment restriction or other restriction or limitation
applicable to the Customer or any Portfolio pursuant to any contract or any law
or regulation. The provisions of this Section shall survive termination of this
Agreement.
17. Fees and Expenses. The Customer agrees to pay to the Custodian such
compensation for its services pursuant to this Agreement as may be mutually
agreed upon in writing from time to time and the Custodian's reasonable
out-of-pocket or incidental expenses in connection with the performance of this
Agreement, including (but without limitation) legal fees as described herein
and/or deemed necessary in the judgment of the Custodian to keep safe or protect
the Property in the Account. The initial fee schedule is attached hereto as
Exhibit C. The Customer hereby agrees to hold the Custodian harmless from any
liability or loss resulting from any taxes or other governmental charges, and
any expense related thereto, which may be imposed, or assessed with respect to
any Property in an Account and also agrees to hold the Custodian, its
Subcustodians, and their respective nominees harmless from any liability as a
record holder of Property in such Account. The Custodian is authorized to charge
the applicable Account for such items and the Custodian shall have a lien on the
Property in the applicable Account for any amount payable to the Custodian under
this Agreement, including but not limited to amounts payable pursuant to the
last paragraph of Section 12 and pursuant to indemnities granted by the Customer
under this Agreement. The provisions of this Section shall survive the
termination of this Agreement.
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<PAGE>
18. Tax Reclaims. With respect to withholding taxes deducted and which
may be deducted from any income received from any Property in an Account, the
Custodian shall perform such services with respect thereto as are described in
Exhibit D attached hereto and shall in connection therewith be subject to the
standard of care set forth in such Exhibit D. Such standard of care shall not be
affected by any other term of this Agreement.
19. Amendment, Modifications, etc. No provision of this Agreement may
be amended, modified or waived except in a writing signed by the parties hereto.
No waiver of any provision hereto shall be deemed a continuing waiver unless it
is so designated. No failure or delay on the part of either party in exercising
any power or right under this Agreement operates as a waiver, nor does any
single or partial exercise of any power or right preclude any other or further
exercise thereof or the exercise of any other power or right.
20. Termination. (a) Termination of Entire Agreement. This Agreement
may be terminated by the Customer or the Custodian by ninety (90) days' written
notice to the other; provided that notice by the Customer shall specify the
names of the persons to whom the Custodian shall deliver the Securities in each
Account and to whom the Cash in such Account shall be paid. If notice of
termination is given by the Custodian, the Customer shall, within ninety (90)
days following the giving of such notice, deliver to the Custodian a written
notice specifying the names of the persons to whom the Custodian shall deliver
the Securities in each Account and to whom the Cash in such Account shall be
paid. In either case, the Custodian will deliver such Securities and Cash to the
persons so specified, after deducting therefrom any amounts which the Custodian
determines to be owed to it under Sections 12, 17, and 23. In addition, the
Custodian may in its discretion withhold from such delivery such Cash and
Securities as may be necessary to settle transactions pending at the time of
such delivery. The Customer grants to the Custodian a lien and right of setoff
against the Account and all Property held therein from time to time in the full
amount of the foregoing obligations. If within ninety (90) days following the
giving of a notice of termination by the Custodian, the Custodian does not
receive from the Customer a written notice specifying the names of the persons
to whom the Custodian shall deliver the Securities in each Account and to whom
the Cash in such Account shall be paid, the Custodian, at its election, may
deliver such Securities and pay such Cash to a bank or trust company doing
business in the State of New York to be held and disposed of pursuant to the
provisions of this Agreement, or may continue to hold such Securities and Cash
until a written notice as aforesaid is delivered to the Custodian, provided that
the Custodian's obligations shall be limited to safekeeping.
(b) Termination as to One or More Portfolios. This Agreement
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<PAGE>
may be terminated by the Customer or the Custodian as to one or more Portfolios
(but less than all of the Portfolios) by delivery of an amended Exhibit A
deleting such Portfolios, in which case termination as to such deleted
Portfolios shall take effect ninety (90) days after the date of such delivery,
or such earlier time as mutually agreed. The execution and delivery of an
amended Exhibit A which deletes one or more Portfolios shall constitute a
termination of this Agreement only with respect to such deleted Portfolio(s),
shall be governed by the preceding provisions of Section 20 as to the
identification of a successor custodian and the delivery of Cash and Securities
of the Portfolio(s) so deleted to such successor custodian, and shall not affect
the obligations of the Custodian and the Customer hereunder with respect to the
other Portfolios set forth in Exhibit A, as amended from time to time.
21. Notices. Except as otherwise provided in this Agreement, all
requests, demands or other communications between the parties or notices in
connection herewith (a) shall be in writing, hand delivered or sent by telex,
telegram, cable, facsimile or other means of electronic communication agreed
upon by the parties hereto addressed, if to the Customer, to:
if to the Custodian, to:
or in either case to such other address as shall have been furnished to the
receiving party pursuant to the provisions hereof and (b) shall be deemed
effective when received, or, in the case of a telex, when sent to the proper
number and acknowledged by a proper answerback.
22. Several Obligations of the Portfolios. With respect to any
obligations of the Customer on behalf of each Portfolio and each of its related
Accounts arising out of this Agreement, the Custodian shall look for payment or
satisfaction of any obligation solely to the assets and property of the
Portfolio and such Accounts to which such obligation relates as though the
Customer had separately contracted with the Custodian by separate written
instrument with respect to each Portfolio and its related Accounts.
23. Security for Payment. To secure payment of all obligations due
hereunder, the Customer hereby grants to Custodian a continuing security
interest in and right of setoff against each Account and all Property held
therein from time to time in the full amount of such obligations; provided that,
if there is more than one
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<PAGE>
Account and the obligations secured pursuant to this Section can be allocated to
a specific Account or the Portfolio related to such Account, such security
interest and right of setoff will be limited to Property held for that Account
only and its related Portfolio. Should the Customer fail to pay promptly any
amounts owed hereunder, Custodian shall be entitled to use available Cash in the
Account or applicable Account, as the case may be, and to dispose of Securities
in the Account or such applicable Account as is necessary. In any such case and
without limiting the foregoing, Custodian shall be entitled to take such other
action(s) or exercise such other options, powers and rights as Custodian now or
hereafter has as a secured creditor under the New York Uniform Commercial Code
or any other applicable law.
24. Representations and Warranties.
(a) The Customer hereby represents and warrants to the Custodian that:
(i) the employment of the Custodian and the allocation of
fees, expenses and other charges to any Account as herein provided, is not
prohibited by law or any governing documents or contracts to which the Customer
is subject;
(ii) the terms of this Agreement do not violate any obligation
by which the Customer is bound, whether arising by contract, operation of law or
otherwise;
(iii) this Agreement has been duly authorized by appropriate
action and when executed and delivered will be binding upon the Customer and
each Portfolio in accordance with its terms; and
(iv) the Customer will deliver to the Custodian such evidence
of such authorization as the Custodian may reasonably require, whether by way of
a certified resolution or otherwise.
(b) The Custodian hereby represents and warrants to the Customer that:
(i) the terms of this Agreement do not violate any
obligation by which the Custodian is bound, whether arising by
contract, operation of law or otherwise;
(ii) this Agreement has been duly authorized by appropriate
action and when executed and delivered will be binding upon the Custodian in
accordance with its terms;
(iii) the Custodian will deliver to the Customer such evidence
of such authorization as the Customer may reasonably require, whether by way of
a certified resolution or otherwise; and
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<PAGE>
(iv) Custodian is qualified as a custodian under Section 26(a)
of the 1940 Act and warrants that it will remain so qualified or upon ceasing to
be so qualified shall promptly notify the Customer in writing.
25. Governing Law and Successors and Assigns. This Agreement shall be
governed by the law of the State of New York and shall not be assignable by
either party, but shall bind the successors in interest of the Customer and the
Custodian.
26. Publicity. Customer shall furnish to Custodian at its office
referred to in Section 21 above, prior to any distribution thereof, copies of
any material prepared for distribution to any persons who are not parties hereto
that refer in any way to the Custodian. Customer shall not distribute or permit
the distribution of such materials if Custodian reasonably objects in writing
within ten (10) business days of receipt thereof (or such other time as may be
mutually agreed) after receipt thereof. The provisions of this Section shall
survive the termination of this Agreement.
27. Representative Capacity and Binding Obligation. A copy of the
[Declaration of Trust/Trust Instrument] of the Customer is on file with The
Secretary of the [Commonwealth of Massachusetts/ State of Delaware], and notice
is hereby given that this Agreement is not executed on behalf of the Trustees of
the Customer as individuals, and the obligations of this Agreement are not
binding upon any of the Trustees, officers or shareholders of the Customer
individually but are binding only upon the assets and property of the
Portfolios.
The Custodian agrees that no shareholder, trustee or officer of the
Customer may be held personally liable or responsible for any obligations of the
Customer arising out of this Agreement.
28. Submission to Jurisdiction. Any suit, action or proceeding arising
out of this Agreement may be instituted in any State or Federal court sitting in
the City of New York, State of New York, United States of America, and the
Customer irrevocably submits to the non-exclusive jurisdiction of any such court
in any such suit, action or proceeding and waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of venue of any such suit, action or proceeding brought in such a court and any
claim that such suit, action or proceeding was brought in an inconvenient forum.
29. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered by
each of the parties hereto.
30. Confidentiality. The parties hereto agree that each shall treat
confidentially the terms and conditions of this Agreement and
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<PAGE>
all information provided by each party to the other regarding its business and
operations. All confidential information provided by a party hereto shall be
used by any other party hereto solely for the purpose of rendering services
pursuant to this Agreement and, except as may be required in carrying out this
Agreement, shall not be disclosed to any third party without the prior consent
of such providing party. The foregoing shall not be applicable to any
information that is publicly available when provided or thereafter becomes
publicly available other than through a breach of this Agreement, or that is
required or requested to be disclosed by any bank or other regulatory examiner
of the Custodian, Customer, or any Subcustodian, any auditor of the parties
hereto, by judicial or administrative process or otherwise by applicable law or
regulation.
31. Severability. If any provision of this Agreement is determined to
be invalid or unenforceable, such determination shall not affect the validity or
enforceability of any other provision of this Agreement.
32. Headings. The headings of the paragraphs hereof are included for
convenience of reference only and do not form a part of this Agreement.
[NAME OF CUSTOMER]
By: __________________________
Name: _______________________
Title: _______________________
BANKERS TRUST COMPANY
By: __________________________
Name: ________________________
Title: _______________________
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<PAGE>
EXHIBIT A
To Custodian Agreement dated as of ______________, 199_ between Bankers
Trust Company and ____________________.
LIST OF PORTFOLIOS
------------------
The following is a list of Portfolios referred to in the first WHEREAS
clause of the above-referred to Custodian Agreement. Terms used herein as
defined terms unless otherwise defined shall have the meanings ascribed to them
in the above-referred to Custodian Agreement.
Dated as of: [NAME OF CUSTOMER]
By: __________________________
Name: ________________________
Title: _______________________
BANKERS TRUST COMPANY
By: __________________________
Name: ________________________
Title: _______________________
<PAGE>
EXHIBIT B
To Custodian Agreement dated as of _____________, 199_ between Bankers
Trust Company and ___________________.
PROXY SERVICE
-------------
The following is a description of the Proxy Service referred to in
Section 10 of the above referred to Custodian Agreement. Terms used herein as
defined terms shall have the meanings ascribed to them therein unless otherwise
defined below.
The Custodian provides a service, described below, for the transmission
of corporate communications in connection with shareholder meetings relating to
Securities held in Argentina, Australia, Austria, Canada, Denmark, Finland,
France, Germany, Greece, Hong Kong, Indonesia, Ireland, Italy, Japan, Korea,
Malaysia, Mexico, Netherlands, New Zealand, Pakistan, Poland, Singapore, South
Africa, Spain, Sri Lanka, Sweden, United Kingdom, United States, and Venezuela.
For the United States and Canada, the term "corporate communications" means the
proxy statements or meeting agenda, proxy cards, annual reports and any other
meeting materials received by the Custodian. For countries other than the United
States and Canada, the term "corporate communications" means the meeting agenda
only and does not include any meeting circulars, proxy statements or any other
corporate communications furnished by the issuer in connection with such
meeting. Non-meeting related corporate communications are not included in the
transmission service to be provided by the Custodian except upon request as
provided below.
The Custodian's process for transmitting and translating meeting
agendas will be as follows:
1) If the meeting agenda is not provided by the issuer in the English
language, and if the language of such agenda is in the official language of the
country in which the related security is held, the Custodian will as soon as
practicable after receipt of the original meeting agenda by a Subcustodian
provide an English translation prepared by that Subcustodian.
2) If an English translation of the meeting agenda is furnished, the
local language agenda will not be furnished unless requested.
Translations will be free translations and neither the Custodian nor
any Subcustodian will be liable or held responsible for the accuracy thereof or
any direct or indirect consequences arising therefrom, including without
limitation arising out of any
<PAGE>
- 2 -
action taken or omitted to be taken based thereon.
If requested, the Custodian will, on a reasonable efforts basis,
endeavor to obtain any additional corporate communication such as annual or
interim reports, proxy statements, meeting circulars, or local language agendas,
and provide them in the form obtained.
Timing in the voting process is important and, in that regard, upon
receipt by the Custodian of notice from a Subcustodian, the Custodian will
provide a notice to the Customer indicating the deadline for receipt of its
instructions to enable the voting process to take place effectively and
efficiently. As voting procedures will vary from market to market, attention to
any required procedures will be very important. Upon timely receipt of voting
instructions, the Custodian will promptly forward such instructions to the
applicable Subcustodian. If voting instructions are not timely received, the
Custodian shall have no liability or obligation to take any action.
For Securities held in markets other than those set forth in the first
paragraph, the Custodian will not furnish the material described above or seek
voting instructions. However, if requested to exercise voting rights at a
specific meeting, the Custodian will endeavor to do so on a reasonable efforts
basis without any assurance that such rights will be so exercised at such
meeting.
If the Custodian or any Subcustodian incurs extraordinary expenses in
exercising voting rights related to any Securities pursuant to appropriate
instructions or direction (e.g., by way of illustration only and not by way of
limitation, physical presence is required at a meeting and/or travel expenses
are incurred), such expenses will be reimbursed out of the Account containing
such Securities unless other arrangements have been made for such reimbursement.
It is the intent of the Custodian to expand the Proxy Service to
include jurisdictions which are not currently included as set forth in the
second paragraph hereof. The Custodian will notify the Customer as to the
inclusion of additional countries or deletion of existing countries after their
inclusion or deletion and this Exhibit B will be deemed to be automatically
amended to include or delete such countries as the case may be.
Dated as of: [NAME OF CUSTOMER]
By: __________________________
Name: ________________________
<PAGE>
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Title: _______________________
BANKERS TRUST COMPANY
By: __________________________
Name: ________________________
Title: _______________________
<PAGE>
EXHIBIT C
To Custodian Agreement dated as of ______________, 199_ between Bankers
Trust Company and ____________________.
CUSTODY FEE SCHEDULE
--------------------
This Exhibit C shall be amended upon delivery by the Custodian of a new Exhibit
C to the Customer and acceptance thereof by the Customer and shall be effective
as of the date of acceptance by the Customer or a date agreed upon between the
Custodian and the Customer.
<PAGE>
EXHIBIT D
To Custodian Agreement dated as of ______________, 199_ between Bankers
Trust Company and ____________________.
TAX RECLAIMS
------------
Pursuant to Section 18 of the above referred to Custodian Agreement,
the Custodian shall perform the following services with respect to withholding
taxes imposed or which may be imposed on income from Property in any Account.
Terms used herein as defined terms shall unless otherwise defined have the
meanings ascribed to them in the above referred to Custodian Agreement.
When withholding tax has been deducted with respect to income from any
Property in an Account, the Custodian will actively pursue on a reasonable
efforts basis the reclaim process, provided that the Custodian shall not be
required to institute any legal or administrative proceeding against any
Subcustodian or other person. The Custodian will provide fully detailed
advices/vouchers to support reclaims submitted to the local authorities by the
Custodian or its designee. In all cases of withholding, the Custodian will
provide full details to the Customer. If exemption from withholding at the
source can be obtained in the future, the Custodian will notify the Customer and
advise what documentation, if any, is required to obtain the exemption. Upon
receipt of such documentation from the Customer, the Custodian will file for
exemption on the Customer's behalf and notify the Customer when it has been
obtained.
In connection with providing the foregoing service, the Custodian shall
be entitled to apply categorical treatment of the Customer according to the
Customer's nationality, the particulars of its organization and other relevant
details that shall be supplied by the Customer. It shall be the duty of the
Customer to inform the Custodian of any change in the organization, domicile or
other relevant fact concerning tax treatment of the Customer and further to
inform the Custodian if the Customer is or becomes the beneficiary of any
special ruling or treatment not applicable to the general nationality and
category or entity of which the Customer is a part under general laws and treaty
provisions. The Custodian may rely on any such information provided by the
Customer.
In connection with providing the foregoing service, the
<PAGE>
Custodian may also rely on professional tax services published by a major
international accounting firm and/or advice received from a Subcustodian in the
jurisdictions in question. In addition, the Custodian may seek the advice of
counsel or other professional tax advisers in such jurisdictions. The Custodian
is entitled to rely, and may act, on information set forth in such services and
on advice received from a Subcustodian, counsel or other professional tax
advisers and shall be without liability to the Customer for any action
reasonably taken or omitted pursuant to information contained in such services
or such advice.
<PAGE>
Dated as of: [NAME OF CUSTOMER]
By: __________________________
Name: ________________________
Title: _______________________
BANKERS TRUST COMPANY
By: __________________________
Name: _________________________
Title: _______________________
<PAGE>
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
SHAREHOLDERS SERVICES AGREEMENT
THIS AGREEMENT, made as of this 29th day of June, 1988 by and between
DELAWARE GROUP TAX-FREE MONEY FUND, INC. ("Fund"), a Maryland Corporation and
DELAWARE SERVICE COMPANY, INC. ("DSC"), a Delaware Corporation, each having its
principal office and place of business at Ten Penn Center Plaza, Philadelphia,
Pennsylvania 19103.
W I T N E S S E T H:
WHEREAS, the Investment Management Agreement between Fund and Delaware
Management Company, Inc. provides that 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, including issuance and redemption of shares;
reports and notices to shareholders; calling and holding of shareholder
meetings; miscellaneous office expenses; brokerage commissions; legal and
accounting fees; taxes; and federal and state registration fees; and
WHEREAS, the predecessor to DSC previously served as the Shareholder
Services Agent for the Fund and the Fund has designated DSC to act as
Shareholder Services Agent for the Fund as of the date of this Agreement; and
WHEREAS, Fund and DSC desire to have a written agreement concerning the
performance of the foregoing services and providing compensation therefor;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth, and intending legally to be bound, it is agreed:
I. APPOINTMENT AS AGENT
Section 1.1 Fund hereby appoints DSC its Shareholder Services Agent to
provide as agent for the Funds services as Transfer Agent, Dividend Disbursing
Agent and Shareholder Servicing Agent and DSC hereby accepts such appointment
and agrees to provide Fund, as its agent, the services described herein.
<PAGE>
Section 1.2 Fund shall pay DSC and DSC shall accept, for the services
provided hereunder, the compensation provided for in Section VIII hereof. Fund
also shall reimburse DSC for expenses incurred or advanced by it for the Fund in
connection with its services hereunder.
II. DOCUMENTATION
Section 2.1 Fund represents that it has provided or made available to
DSC (or has given DSC an opportunity to examine) copies of, and, DSC represents
that it has received from Fund (or is otherwise familiar with), the following
documents:
A. The Articles of Incorporation or
other document evidencing Fund's form of organization andd any current
amendments thereto.
B. The By-Laws of Fund;
C. Any resolution or other action of
Fund or the Board of Directors of Fund establishing or affecting the rights,
privileges or other status of any class or series of shares of Fund, or altering
or abolishing any such class or series;
D. A certified copy of a resolution of
the Board of Directors of Fund appointing DSC as Shareholder
Services Agent and authorizing the execution of this
Agreement;
E. The form of share certificates of
Fund in the form approved by the Board of Directors of Fund;
F. A copy of Fund's currently effective
prospectus and Statement of Additional Information under the
Securities act of 1933;
G. Copies of all account application
forms and other documents relating to shareholder accounts in
Fund.
H. Copies of documents relating to
Plans of Fund for the purchase, sale or repurchase of its shares, including
periodic payment or withdrawal plans, reinvestment plans or retirement plans;
-2-
<PAGE>
I. Any opinion of counsel to Fund
relating to the authorization and validity of the shares of Fund issued or
proposed to be issued under the law of the State of Fund's organization,
including the status thereof under any applicable securities laws;
J. A certified copy of any resolution
of the Board of Directors of Fund authorizing any person to give instructions to
DSC under this Agreement, (with a specimen signature of such person if not
already provided), setting forth the scope of such authority; and
K. Any amendment, revocation or other
document altering, adding, qualifying or repealing any document or authority
called for under this Section 2.1.
Section 2.2 Fund and DSC may consult as to forms or documents that may
be required in performing services hereunder.
Section 2.3 Fund shall provide or make available to DSC a certified
copy of any resolution of the shareholders or the Board of Directors of Fund
providing for a dividend, capital gains distribution, distribution of capital,
stock dividend, stock split or other similar action affecting the authorization
or issuance of shares of Fund or the payment of dividends.
Section 2.4 In the case of any recapitalization or other capital
adjustment requiring a change in the form of stock or share certificate or the
books recording the same, Fund shall deliver or make available to DSC:
A. A certified copy of any document
authorizing or effecting such change;
B. Written instructions from an
authorized officer implementing such change; and
C. An opinion of counsel to Fund as to
the validity of such action, if requested by DSC.
Section 2.5 Fund warrants the following:
A. Fund is, or will be, a properly
registered investment company under the Investment Company Act of 1940 and any
and all shares which it issues will be properly registered and lawfully issued
under applicable federal and state laws.
-3-
<PAGE>
B. The provisions of this contract do
not violate the terms of any instrument by which the Fund is bound; nor do they
violate any law or regulation of any body having jurisdiction over the Fund or
its property.
Section 2.6 DSC warrants the following:
A. DSC is and will be properly
registered as a transfer agent under the Securities Exchange Act of 1934 and is
duly authorized to serve, and may lawfully serve as such.
B. The provisions of this contract do
not violate the terms of any instrument by which the Fund is bound; nor do they
violate any law or regulation of any body having jurisdiction over DSC or its
property.
III. SHARE CERTIFICATES
Section 3.1 Fund shall furnish or authorize DSC to obtain, at Fund's
expense a sufficient supply of blank stock certificates, and from time to time
will replenish such supply upon the request of DSC. Fund agrees to indemnify and
exonerate, save and hold DSC harmless, from and against any and all claims or
demands that may be asserted against DSC concerning the genuineness of any stock
certificate supplied to DSC pursuant to this section.
Section 3.2 DSC shall safeguard, and shall account to Fund, upon its
demand for, all such share certificates: (A) as issued, showing to whom issued,
or (B) as unissued, establishing the safekeeping, cancellation or destruction
thereof.
Section 3.3 Fund shall promptly inform DSC in writing of any change in
the officers authorized to sign share certificates or in the form thereof. If an
officer whose manual or fascimile signature is affixed to any blank share
certificate shall die, resign or be removed prior to the issuance of such
certificate, DSC may nevertheless issue such certificate notwithstanding such
death, resignation or removal, and the Fund shall with respect thereto, promptly
provide to DSC any approval, adoption or ratification as may be required by DSC.
-4-
<PAGE>
IV. TRANSFER AGENT
Section 4.1 As Transfer Agent, DSC shall issue, redeem and transfer
Fund shares, and, in connection therewith but not in limitation thereof, it
shall:
A. Upon receipt of authority to issue
shares, determine the total shares to be issued and issue such shares by
crediting shares to accounts created and maintained in the registration forms
provided; as applicable, prepare, issue and deliver stock certificates.
B. Upon proper transfer authorization,
transfer shares by debiting transferor-shareholder accounts and crediting such
shares to accounts created and/or maintained for transferee-shareholders; if
applicable, issue and/or cancel stock certificates.
C. Upon proper redemption
authorization, determine the total shares to be redeemed and redeemed; determine
the total redemption payments to be made and made; redeem shares by debting
shareholder accounts; as applicable receive and cancel stock certificates for
shares redeemed; and remit or cause to be remitted the redemption proceeds to
shareholders.
D. Create and maintain accounts;
reconcile and control cash due and paid, shares issued and to be issued, cash to
be remitted and remitted and shares debted and credited to accounts; provide
such notices, instructions or authorizations as Fund may require.
Section 4.2 DSC shall not be required to issue, transfer or redeem Fund
shares upon receipt of it from Fund, or from any federal or state regulatory
agency or authority, written notice that the issuance, transfer or redemption of
Fund shares has been suspended or discontinued.
V. DIVIDEND DISBURSING AGENT
Section 5.1 As Dividend Disbursing Agent, DSC shall disburse and cause
to be disbursed to Fund shareholders Fund dividends, capital gains distributions
or any payments from other sources as directed by Fund. In connection therewith,
but not in limitation thereof, DSC shall:
-5-
<PAGE>
A. Calculate the total disbursement due
and payable and the disbursement to each shareholder as to shares owned, in
accordance with Fund's authorization.
B. Calculate the total disbursements
for each shareholder, as aforesaid, to be disbursed in cash;
prepare and mail check therefor.
C. Calculate the total disbursement for
each shareholder, as aforesaid, for which Fund shares are to be issued, and
authorized and instruct the issuance of Fund shares therefor in accordance with
Section IV hereof.
D. Prepare and mail or deliver such
forms and notices pertaining to disbursements as required by
the federal or state authority.
E. Create and maintain records,
reconcile and control disbursements to be made and made, both as to cash and
shares, as aforesaid; provide such notices, instruction or authorization as Fund
may require.
Section 5.2 DSC shall not be required to make any disbursement upon the
receipt from Fund, or from any federal or state agency or authority, written
notice that such disbursement shall not be made.
VI. SHAREHOLDER SERVICING AGENT
Section 6.1 As Shareholder Servicing Agent, DSC shall provide those
services ancillary to but in implementation of the services provided under
Sections I through V hereof, and those generally defined and accepted as
Shareholder Services. In connection therewith, but not in limitation thereof,
DSC shall:
A. Except where instructed in writing
by the Fund not to do so, and where in compliance with applicable law, accept
orders on behalf of the Fund; receive and process investments and applications;
remit to Fund or its custodian payments for shares acquired and to be issued;
and direct the issuance of shares in accordance with Section IV hereof.
B. Receive, record and respond to
communications of shareholders and their agents.
-6-
<PAGE>
C. As instructed by Fund, prepare and
mail shareholder account information, mail Fund shareholder reports and Fund
prospectuses.
D. Prepare and mail Fund proxies and
material for Fund shareholder meetings, receive and process proxies from
shareholders, and deliver such proxies as directed by Fund.
E. Administer investment plans offered
by Fund to investors and Fund shareholders, including Retirement Plans,
including activities not otherwise provided in Section I through V of this
Agreement.
VII. PERFORMANCE OF DUTIES
Section 7.1 The parties hereto intend that Fund shareholders and their
shareholdings shall be confidential, and any information relating thereto shall
be released by DSC only to those persons or authorities who DSC has reason to
believe are authorized to receive such information; or, as instructed by Fund.
Section 7.2 DSC may, in performing this Agreement, require Fund or
Fund's distributor to provide it with an adequate number of copies of
prospectuses, reports or other documents required to be furnished to investors
or shareholders.
Section 7.3 DSC may request or receive instructions from Fund and may
at Fund's expense, consult. with counsel for the Fund or its own counsel, with
respect to any matter arising in connection with the performance of its duties
hereunder, and shall not be liable for any action taken or omitted by it in good
faith in accordance with such instructions or opinions of counsel.
Section 7.4 DSC shall maintain reasonable insurance coverage for errors
and omissions and reasonable bond coverage for fraud.
Section 7.5 Upon notice thereof to Fund DSC may employ others to
provide services to DSC in its performance of this Agreement.
-7-
<PAGE>
Section 7.6 Personnel and facilities of DSC used to perform services
hereunder may be used to perform similar services to other Funds of the Delaware
Group and to others, and, may be used to perform other services for Fund, the
other Funds of the Delaware Group and others.
Section 7.7 DSC shall provide its services as transfer agent hereunder
in accordance with Section 17 of the Securities Exchange Act of 1934, and the
rules and regulations thereunder. Further, the parties intend that the
processes, procedures, safeguards and controls employed should be those
generally applied and accepted for the type services provided hereunder by other
institutions providing the same or similar services, and, those which should
provide efficient, safe and economical services so as to promote promptness and
accuracy and to maintain the integrity of Fund's records.
Section 7.8 Fund and DSC may, from time to time, set forth in writing
Guidelines For Selective Procedures to be applicable to the services hereunder.
VIII. COMPENSATION
Section 8.1 Fund and DSC acknowledge that because DSC has common
ownership and close management ties with Fund's investment advisor and Fund's
distributor and serves the other Funds of the Delaware Group, DSC having been
originally established to provide the services hereunder for Fund and the other
Funds of the Delaware Group, advantages and benefits to Fund in the employment
of DSC hereunder can be available which may not generally be available to it
from others providing similar services.
Section 8.2 Fund and DSC further acknowledge that the compensation by
Fund to DSC is intended to induce DSC to provide services under this agreement
of a nature and quality which the Board of Directors of Fund, including a
majority who are not parties to this agreement or interested person of the
parties hereto, has determined after due consideration to be necessary for the
conduct of the business of the Fund in the best interests of Fund and its
shareholders.
-8-
<PAGE>
Section 8.3 Compensation by Fund to DSC hereunder shall be determined
in accordance with Schedule A hereto as it shall be amended from time to time as
provided for herein and which is incorporated herein as a part hereof.
Section 8.4 Compensation as provided in Schedule A shall be reviewed
and approved in the manner set forth in Section 10.1 hereof by the Board of
Directors of Fund at least annually and may be reviewed and approved more
frequently at the request of either party. The Board may request and DSC shall
provide such information as the Board may reasonably require to evaluate the
basis of and approve the compensation.
IX. STANDARD OF CARE
Section 9.1 Fund acknowledges that DSC shall not be liable for, and in
the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of the performance of its duties under this contract, agrees to
indemnify DSC against, any claim, or deficiency arising from the performance of
DSC's duties hereunder, including DSC's costs, counsel fees and expenses
incurred in investigating or defending any such claim or any administrative or
other proceeding, and acknowledges that any risk of loss or damage arising from
the conduct of the Fund's affairs in accordance herewith or in accordance with
Guidelines or instructions given hereunder, shall be borne by Fund.
X. CONTRACTUAL STATUS
Section 10.1 This Agreement shall be executed and become effective on
the date first written above if approved by a vote of the Board of Directors,
including an affirmative vote of a majority of the non-interested members of the
Board, cast in person at a meeting called for the purpose of voting on such
approval. It shall continue in effect for an indeterminate period, and is
subject to termination on sixty (60) days notice by either party unless earlier
terminated or amended by agreement among the parties. Compensation under this
Agreement shall require approval by a majority vote of the Board of Directors of
Fund, including an affirmative vote of the majority of the non-interested
members of the Board cast in person at a meeting called for the purpose of
voting such approval.
-10-
<PAGE>
Section 10.2 This Agreement may not be assigned without the approval of
Fund.
Section 10.3 This Agreement shall be governed by the laws of the
Commonwealth of Pennsylvania.
DELAWARE SERVICE COMPANY, INC.
/s/Joseph J. Daniero
--------------------
Joseph J. Daniero
ATTEST:/s/George M. Chamberlain
------------------------
George M. Chamberlain
DELAWARE GROUP TAX-FREE
MONEY FUND, INC.
/s/Wayne A. Stork
-----------------
Wayne A. Stork
ATTEST:/s/Stephen C. Beach
-------------------
Stephen C. Beach
-11-
<PAGE>
SCHEDULE A
COMPENSATION
------------
1. DSC will determine and report to the Fund, at least annually, the
compensation for services to be provided to the Fund for DSC's
forthcoming fiscal year or period.
2. In determining such compensation, DSC will fix and report a fee to be
charged per account and/or per transaction, as may be applicable, for
services provided. DSC will bill, and the Fund will pay, such
compensation monthly.
3. For the period commencing October 1, 1984, the charge
will be at the annual rate of $9.50 per account.
<PAGE>
SCHEDULE A
COMPENSATION
------------
1. DSC will determine and report to the Fund, at least annually, the
compensation for services to be Provided to the Fund for DSC's
forthcoming fiscal year or period.
2. In determining such compensation, DSC will fix and report a fee to be
charged per account and/or per transaction, as may be applicable, for
services provided. DSC will bill, and the Fund will pay, such
compensation monthly.
3. The fee will consist of an annual per account charge
coupled with a series of transaction charges. These are
as follows:
A. ANNUAL CHARGE
-------------
Daily Dividend Funds $9.00 per annum
Other Funds $4.20 per annum
B. TRANSACTION CHARGE
------------------
TRANSACTION CHARGE
----------- ------
1. Dividend Payment $ 0.35
2. New Account 5.75
3. Purchase:
a. Wire 6.00
b. Money Market Automated 1.50
c. Other 2.25
4. Transfer 2.25
5. Certificate Issuance 2.00
6. Liquidation:
a. Wire 12.25
b. Draft .50
c. Money Market Regular 2.50
d. Daily Dividend Regular 6.00
7. Exchanges 7.00
<PAGE>
Consent of Independent Auditors
We consent to the references to our firm under the captions "Financial
Highlights" in the Prospectus of Delaware Group Tax-Free Money Fund, Inc. 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. 21 to the Registration Statement (Form N-1A No.
2-70164) of Delaware Group Tax-Free Money Fund, Inc. of our report dated June 4,
1996, included in the 1996 Annual Report to Shareholders of Delaware Group
Tax-Free Money Fund, Inc.
/s/ Ernst & Young LLP
---------------------
Ernst & Young LLP
Philadelphia, Pennsylvania
June 25, 1996
<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, 1996, and the related
statement of operations for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended, and the financial
highlights for each of the five years in the period then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of April
30, 1996, 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, 1996, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles.
/s/ Ernst & Young LLP
---------------------
Ernst & Young LLP
Philadelphia, Pennsylvania
June 4, 1996
<PAGE>
DISTRIBUTION PLAN
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
TAX-FREE MONEY FUND CONSULTANT CLASS
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by Delaware
Group Tax-Free Money Fund, Inc. (the "Fund") on behalf of the Consultant class,
now doing business as the Tax-Free Money Fund Consultant Class (hereinafter
referred to as the "Class"), which Fund and Class may do business under these or
such other names as the Board of Directors of the Fund may designate from time
to time. 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 ("non-interested Directors"), 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 shareholders of the Class. If
the Plan has not yet been approved by a majority of the outstanding voting
securities as required in the Act, the Plan will be presented to the public
shareholders at the next regular annual or special meeting.
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. 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. The Fund shall pay to the Distributor a monthly fee not to exceed
0.3% (3/10 of 1%) per annum of the Fund's average daily net assets
<PAGE>
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 persons other than
broker-dealers (the "Service Providers") who may, pursuant to servicing
agreements, provide the Fund services in the Fund's marketing of shares of the
Class.
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 (l) 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.
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 at such time as the Distributor shall
notify the Fund in writing of the commencement of the Plan, which time shall not
be before the first annual or special meeting of the public shareholders at
which the Plan is or was approved by the vote of a majority of the outstanding
voting securities as required in the Act (the "Commencement Date");
<PAGE>
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 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 l thereof without approval by
the shareholders of the Class.
7. All material amendments to this Plan shall be approved by the
non-interested Directors in the manner described in paragraph 5 above.
8. 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.
9. The definitions contained in Sections 2(a)(19) and 2(a)(42) of the
Act shall govern the meaning of "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.
November 29, 1995
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000320572
<NAME> DELAWARE GROUP TAX-FREE MONEY FUND, INC.
<SERIES>
<NUMBER> 001
<NAME> TAX-FREE MONEY FUND A CLASS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-END> APR-30-1996
<INVESTMENTS-AT-COST> 36,854,435
<INVESTMENTS-AT-VALUE> 36,854,435
<RECEIVABLES> 414,350
<ASSETS-OTHER> 11,905
<OTHER-ITEMS-ASSETS> 163,880
<TOTAL-ASSETS> 37,444,570
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 513,369
<TOTAL-LIABILITIES> 513,369
<SENIOR-EQUITY> 36,931,201
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 35,479,005
<SHARES-COMMON-PRIOR> 54,443,666
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 35,479,005
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,797,107
<OTHER-INCOME> 0
<EXPENSES-NET> 419,135
<NET-INVESTMENT-INCOME> 1,377,972
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,324,068
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 45,058,526
<NUMBER-OF-SHARES-REDEEMED> 65,295,936
<SHARES-REINVESTED> 1,272,749
<NET-CHANGE-IN-ASSETS> (19,127,009)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 222,243
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 419,134
<AVERAGE-NET-ASSETS> 44,928,916
<PER-SHARE-NAV-BEGIN> 1
<PER-SHARE-NII> 0.029
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0.029
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1
<EXPENSE-RATIO> 0.9
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000320572
<NAME> DELAWARE GROUP TAX-FREE MONEY FUND, INC
<SERIES>
<NUMBER> 002
<NAME> TAX-FREE MONEY FUND CONSULTANT CLASS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-END> APR-30-1996
<INVESTMENTS-AT-COST> 36,854,435
<INVESTMENTS-AT-VALUE> 36,854,435
<RECEIVABLES> 414,350
<ASSETS-OTHER> 11,905
<OTHER-ITEMS-ASSETS> 163,880
<TOTAL-ASSETS> 37,444,570
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 513,369
<TOTAL-LIABILITIES> 513,369
<SENIOR-EQUITY> 36,931,201
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,452,196
<SHARES-COMMON-PRIOR> 1,614,544
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,452,196
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,797,107
<OTHER-INCOME> 0
<EXPENSES-NET> 419,135
<NET-INVESTMENT-INCOME> 1,377,972
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 53,904
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,587,979
<NUMBER-OF-SHARES-REDEEMED> 2,804,135
<SHARES-REINVESTED> 53,808
<NET-CHANGE-IN-ASSETS> (19,127,009)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 222,243
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 419,134
<AVERAGE-NET-ASSETS> 1,826,858
<PER-SHARE-NAV-BEGIN> 1
<PER-SHARE-NII> 0.029
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0.029
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1
<EXPENSE-RATIO> 0.9
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
