<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
File No. 2-70164
File No. 811-3120
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. / /
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Post-Effective Amendment No. 22 /X/
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AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 22
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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
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George M. Chamberlain, Jr., 1818 Market Street, Philadelphia, PA 19103
- --------------------------------------------------------------------------------
(Name and Address of Agent for Service)
Approximate Date of Public Offering: June 30, 1997
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It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
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X on June 30, 1997 pursuant to paragraph (b)
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60 days after filing pursuant to paragraph (a)(1)
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on (date) pursuant to paragraph (a)(1)
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75 days after filing pursuant to paragraph (a)(2)
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on (date) pursuant to paragraph (a)(2) of Rule 485
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Registrant has registered an indefinite amount of securities
under the Securities Act of 1933 pursuant to Section 24(f)
of the Investment Company Act of 1940. Registrant's 24f-2 Notice
for its most recent fiscal year will be filed on or about June 30, 1997.
<PAGE>
--- C O N T E N T S ---
This Post-Effective Amendment No. 22 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>
CROSS-REFERENCE SHEET*
PART A
Item No. Description Location in Prospectus
- -------- ----------- ----------------------
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
* 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>
CROSS-REFERENCE SHEET
PART B
Location in Statement of
Item No. Description Additional Information
- -------- ----------- ------------------------
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
<PAGE>
CROSS-REFERENCE SHEET
PART C
Item No. Description Location in Part C
- -------- ----------- ------------------
24 Financial Statements and Exhibits . . . Item 24
25 Persons Controlled by or under Common
Control with Registrant . . . . . . . . Item 25
26 Number of Holders of Securities . . . . Item 26
27 Indemnification . . . . . . . . . . . . Item 27
28 Business and Other Connections of
Investment Adviser. . . . . . . . . . . Item 28
29 Principal Underwriters. . . . . . . . . Item 29
30 Location of Accounts and Records. . . . Item 30
31 Management Services . . . . . . . . . . Item 31
32 Undertakings. . . . . . . . . . . . . . Item 32
<PAGE>
[LOGO]
A Class
Consultant Class
DELAWARE GROUP
TAX-FREE MONEY FUND
PROSPECTUS JUNE 30, 1997
NO SALES CHARGE
[PHOTO]
<PAGE>
Table of
Contents
COVER PAGE........................1
SYNOPSIS..........................2
SUMMARY OF EXPENSES...............3
FINANCIAL HIGHLIGHTS..............4
INVESTMENT OBJECTIVE AND
POLICIES.......................6
SUITABILITY.....................6
INVESTMENT STRATEGY.............6
THE DELAWARE DIFFERENCE...........9
PLANS AND SERVICES..............9
BUYING SHARES....................11
REDEMPTION AND EXCHANGE..........14
DIVIDENDS AND DISTRIBUTIONS......17
TAXES............................18
NET ASSET VALUE PER SHARE........19
MANAGEMENT OF THE FUND...........20
<PAGE>
Tax-Free Money Fund
A Class/Consultant Class
June 30, 1997
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 800-659-2265
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. The Fund's Statement of Additional Information ("PART B" of the
Fund's registration statement), dated June 30, 1997, 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.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
BE SURE TO CONSULT YOUR FINANCIAL ADVISER WHEN MAKING INVESTMENTS. MUTUAL FUNDS
CAN BE A VALUABLE PART OF YOUR FINANCIAL PLAN; HOWEVER, SHARES OF THE FUND ARE
NOT FDIC OR NCUSIF INSURED, ARE NOT GUARANTEED BY ANY BANK OR ANY CREDIT UNION,
ARE NOT OBLIGATIONS OF ANY BANK OR ANY CREDIT UNION, AND INVOLVE INVESTMENT
RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. SHARES OF THE FUND ARE NOT BANK
OR CREDIT UNION DEPOSITS.
1
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<PAGE>
Synopsis
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INVESTMENT OBJECTIVE
The investment 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") furnishes investment
management services to the Fund, subject to the supervision and direction of the
Fund's Board of Directors. The Manager also provides investment management
services to certain of the other funds in the Delaware Group. Delaware
Distributors, L.P. (the "Distributor") is the national distributor for 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, accounting services and transfer agent for the Fund and for all of
the other mutual funds in the Delaware Group.
See SUMMARY OF EXPENSES and MANAGEMENT OF THE FUND for further information
regarding the Manager and the fees payable under the Fund's Investment
Management Agreement.
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.
2
- ---
<PAGE>
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 **
<CAPTION>
Annual Operating Expenses Consultant
(as a percentage of average daily net Class A Class
assets) Shares Shares
- ---------------------------------------- -------- --------
<S> <C> <C>
Management Fees......................... 0.47% 0.47%
12b-1 Fees.............................. None None ***
Other Operating Expenses................ 0.35% 0.35%
-------- --------
Total Operating Expenses............ 0.82% 0.82%
-------- --------
-------- --------
</TABLE>
* 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.
Investors utilizing the Delaware Group Asset Planner asset allocation
service also typically incur an annual maintenance fee of $35 per Strategy.
However, effective November 1, 1996, the annual maintenance fee is waived until
further notice. See DELAWARE GROUP ASSET PLANNER under BUYING SHARES.
The following example illustrates the expenses that an investor would pay on
a $1,000 investment over various time periods, assuming (1) a 5% annual rate of
return and (2) redemption at the end of each time period. As noted in the table
above, the Fund charges no redemption fees.
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A Shares $ 8 $ 26 $ 45 $ 101
Consultant Class
Shares $ 8 $ 26 $ 45 $ 101
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN.
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.
3
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<PAGE>
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.
<TABLE>
<CAPTION>
Class A Shares
--------------------------------------------------------------------
Year Ended
4/30/97 4/30/96 4/30/95 4/30/94 4/30/93 4/30/92 4/25/91
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year............. $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000(1)
Income From Investment Operations
- -----------------------------------------------
Net Investment Income.......................... 0.0275 0.0293 0.0255 0.0158 0.0201 0.0347 0.0476
-------- -------- -------- -------- -------- -------- --------
Total From Investment Operations............. 0.0275 0.0293 0.0255 0.0158 0.0201 0.0347 0.0476
-------- -------- -------- -------- -------- -------- --------
Less Distributions
- -----------------------------------------------
Dividends (from net investment income)......... (0.0275) (0.0293) (0.0255) (0.0158) (0.0201) (0.0347) (0.0476)
-------- -------- -------- -------- -------- -------- --------
Total Distributions.......................... (0.0275) (0.0293) (0.0255) (0.0158) (0.0201) (0.0347) (0.0476)
-------- -------- -------- -------- -------- -------- --------
Net Asset Value, End of Year................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
-------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- --------
- ---------------------------------------------------------------------------------------------------------------------
Total Return................................... 2.79% 2.97% 2.59% 1.59% 2.03% 3.52% 4.87%
- -----------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------
Net Assets, End of Year (000's omitted)........ $32,659 $35,479 $54,444 $44,707 $43,886 $53,210 $56,766
Ratio of Expenses to Average Daily Net
Assets....................................... 0.82% 0.90% 0.96% 0.99% 0.94% 0.84% 0.83%
Ratio of Net Investment Income to Average Daily
Net Assets................................... 2.75% 2.95% 2.57% 1.58% 2.03% 3.43% 4.77%
<CAPTION>
4/26/90 4/27/89 4/28/88
<S> <C> <C> <C>
Net Asset Value, Beginning of Year............. $1.0000(1) $1.0000(1) $1.0000(1)
Income From Investment Operations
- -----------------------------------------------
Net Investment Income.......................... 0.0530 0.0503 0.0407
-------- -------- --------
Total From Investment Operations............. 0.0530 0.0503 0.0407
-------- -------- --------
Less Distributions
- -----------------------------------------------
Dividends (from net investment income)......... (0.0530) (0.0503) (0.0407)
-------- -------- --------
Total Distributions.......................... (0.0530) (0.0503) (0.0407)
-------- -------- --------
Net Asset Value, End of Year................... $1.0000 $1.0000 $1.0000
-------- -------- --------
-------- -------- --------
- --------------------------------------------------------------------------------------------------
Total Return................................... 5.43% 5.14% 4.15%
- -----------------------------------------
- -----------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------
Net Assets, End of Year (000's omitted)........ $61,860 $60,827 $79,662
Ratio of Expenses to Average Daily Net
Assets....................................... 0.83% 0.79% 0.72%
Ratio of Net Investment Income to Average Daily
Net Assets................................... 5.30% 5.04% 4.05%
</TABLE>
- --------------------
(1)All share and per share figures have been restated to reflect a ten-to-one
stock split on January 1, 1991.
4
- ---
<PAGE>
<TABLE>
<CAPTION>
Consultant Class Shares
--------------------------------------------------------------------------
Year Ended
4/30/97 4/30/96 4/30/95 4/30/94 4/30/93 4/30/92 4/25/91
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000(2)
Income From Investment Operations
- -----------------------------------------------
Net Investment Income.......................... 0.0275 0.0293 0.0255 0.0158 0.0201 0.0347 0.0473
-------- ---------- -------- ---------- -------- -------- --------
Total From Investment Operations............. 0.0275 0.0293 0.0255 0.0158 0.0201 0.0347 0.0473
-------- ---------- -------- ---------- -------- -------- --------
Less Distributions
- -----------------------------------------------
Dividends (from net investment income)......... (0.0275 ) (0.0293) (0.0255 ) (0.0158) (0.0201 ) (0.0347 ) (0.0473)
-------- ---------- -------- ---------- -------- -------- --------
Total Distributions.......................... (0.0275 ) (0.0293) (0.0255 ) (0.0158) (0.0201 ) (0.0347 ) (0.0473)
-------- ---------- -------- ---------- -------- -------- --------
Net Asset Value, End of Period................. $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
-------- ---------- -------- ---------- -------- -------- --------
-------- ---------- -------- ---------- -------- -------- --------
- ---------------------------------------------------------------------------------------------------------------------------
Total Return................................... 2.79% 2.97% 2.59% 1.59% 2.03% 3.52% 4.84%
- -----------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------
Net Assets, End of Period (000's omitted)...... $1,529 $1,452 $1,614 $1,407 $1,846 $1,920 $3,517
Ratio of Expenses to Average Daily Net
Assets....................................... 0.82% 0.90% 0.96% 0.99% 0.94% 0.84% 0.86%
Ratio of Net Investment Income to Average Daily
Net Assets................................... 2.75% 2.95% 2.57% 1.58% 2.03% 3.43% 4.74%
<CAPTION>
Period
3/15/88(1)
through
4/26/90 4/27/89 4/28/88
<S> <C> <C> <C>
Net Asset Value, Beginning of Period........... $1.0000 (2) $1.0000 (2) $1.0000(2)
Income From Investment Operations
- -----------------------------------------------
Net Investment Income.......................... 0.0505 0.0478 0.0044
-------- -------- ----------
Total From Investment Operations............. 0.0505 0.0478 0.0044
-------- -------- ----------
Less Distributions
- -----------------------------------------------
Dividends (from net investment income)......... (0.0505 ) (0.0478 ) (0.0044)
-------- -------- ----------
Total Distributions.......................... (0.0505 ) (0.0478 ) (0.0044)
-------- -------- ----------
Net Asset Value, End of Period................. $1.0000 $1.0000 $1.0000
-------- -------- ----------
-------- -------- ----------
- ------------------------------------------------------------------------------------------------------------
Total Return................................... 5.17% 4.88% (1)
- -----------------------------------------
- -----------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------
Net Assets, End of Period (000's omitted)...... $3,556 $3,100 $39
Ratio of Expenses to Average Daily Net
Assets....................................... 1.08% 1.04% (1)
Ratio of Net Investment Income to Average Daily
Net Assets................................... 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.
5
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<PAGE>
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 short-term rating categories (e.g. for tax-free
commercial paper and short-term tax-free notes, A-2 or better by Standard &
Poor's Ratings Group ("S&P") or P-2 or better by Moody's Investors Service, Inc.
("Moody's"); and for state or municipal notes, MIG-2 or better by Moody's or F-2
or better by Fitch Investors Service, Inc. ("Fitch")) 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 (including a security with no short-term
rating and (a) no long-term rating or (b) a long-term rating in one of the three
highest rating categories), the Manager must determine that the security is
comparable to securities that are rated in one of the two highest rating
categories in accordance with the conditions with which tax-exempt money market
funds must comply. The Fund may also invest in U.S. government securities (as
defined 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.
6
- ---
<PAGE>
Generally, a demand feature entitles the Fund to require the provider of the
demand feature to purchase the securities from the Fund at their principal
amount (usually with accrued interest) within a fixed period (generally seven
days, but the period may be longer) following a demand by the Fund. Certain
securities with a demand feature permit the Fund to tender the security only at
the time of an interest rate adjustment or at other fixed intervals. The demand
feature may be provided by the issuer of the underlying security, a bank, a
dealer in the securities or by another third party, and may not be transferred
separately from the underlying security. Certain demand features are conditional
which means that they may not be exercised or may terminate under certain
limited circumstances. The bankruptcy or receivership of, or default by, the
provider of the demand feature, or a default on the underlying security or other
event that terminates the demand feature before its exercise will adversely
affect the liquidity of the underlying security.
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, S&P's and Fitch's ratings.
MATURITY RESTRICTIONS
The Fund maintains an average maturity of not more than 90 days. Also, it
does not purchase any instruments with an effective remaining maturity of more
than 13 months.
INVESTMENT TECHNIQUES
The Fund intends to hold its investments until maturity, but may sell them
prior to maturity for a number of reasons. These reasons include: to shorten or
lengthen the average maturity, to increase the yield, to maintain the quality of
the portfolio or to maintain a stable share value.
Up to 20% of the Fund's portfolio may be invested in issues which are not
exempt from federal income tax such as commercial paper, corporate notes,
certificates of deposit, 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, Aaa by Moody's
or AAA by Fitch). For a discussion concerning the risks of investing in such
asset-backed securities, see PART B.
7
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<PAGE>
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.
8
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<PAGE>
The Delaware
Difference
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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-Registered Trademark- 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 CONFIRMATIONS
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.
TAX INFORMATION
Each year, the Fund will mail to 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 ADDITIONAL METHODS OF ADDING TO YOUR
INVESTMENT--DIVIDEND REINVESTMENT PLAN under BUYING SHARES or call the
Shareholder Service Center.
9
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<PAGE>
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. See SYSTEMATIC WITHDRAWAL PLAN
under REDEMPTION AND EXCHANGE. You can initiate the MoneyLine Direct Deposit
Service by completing an Authorization Agreement. If the name and address on
your predesignated bank account are not identical to the name and address on
your Fund account, you must have your signature guaranteed. There are no fees
for the MoneyLine Direct Deposit Service. Please call the Shareholder Service
Center for additional information about this service.
EXCHANGE PRIVILEGE
The Exchange Privilege permits you to exchange all or part of your 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 invest in the Fund through regular liquidations of shares
in your accounts in other funds in the Delaware Group. Investments under this
feature are exchanges and are therefore subject to the same conditions and
limitations as other exchanges of Fund shares. See ADDITIONAL METHODS OF ADDING
TO YOUR INVESTMENT--WEALTH BUILDER and INVESTING BY EXCHANGE under BUYING SHARES
and REDEMPTION AND EXCHANGE.
DELAWARE GROUP ASSET PLANNER
Delaware Group Asset Planner is an asset allocation service that gives you,
when 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, you may also tailor an allocation strategy
that meets your personal needs and goals. See DELAWARE GROUP ASSET PLANNER under
BUYING SHARES.
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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<PAGE>
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'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, the
Delaware Group 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 Tax-Free Money Fund A Class or Tax-Free Money Fund Consultant
Class. Your check should be identified with your name(s) and account number. An
investment slip (similar to a deposit slip) is provided at the bottom of 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 1412893401 (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, processing
your investment may be delayed. In addition, you must promptly send your
Investment Application to Tax-Free Money Fund A Class or Tax-Free Money Fund
Consultant Class, New Accounts, P.O. Box 7977, Philadelphia, PA 19101.
2. SUBSEQUENT PURCHASES--You may make additional investments anytime by wiring
funds to CoreStates Bank, N.A., as described above. You should advise the
Shareholder Service Center by telephone of each wire you send.
INVESTING BY EXCHANGE
If you have an investment in another mutual fund in the Delaware Group, you
may write and authorize an exchange of part or all of your investment into
shares of 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. All exchanges are subject to the eligibility and minimum
purchase requirements set forth in each fund's prospectus. See REDEMPTION AND
EXCHANGE for more complete information concerning your exchange privilege.
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.
* * *
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<PAGE>
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 any other
account in a Delaware Group mutual fund that you may specify. If in connection
with the election of the Wealth Builder Option, you wish to open a new account
to receive the automatic investment, such new account must meet the minimum
initial purchase requirements described in the prospectus of the fund that you
select. All investments under this option are exchanges and are therefore
subject to the same conditions and limitations as other exchanges noted above.
You can terminate your participation in Wealth Builder at any time by giving
written notice to the fund from which the exchanges are made. See REDEMPTION AND
EXCHANGE.
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 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. With the help of a financial adviser, you may also design a
customized asset allocation strategy.
The sales charge on an investment through the Asset Planner service is
determined by the individual sales charges of the underlying funds and their
percentage allocation in the selected Strategy. Exchanges from existing Delaware
Group accounts into the Asset Planner service may be made at net asset value
under the circumstances described under INVESTING BY EXCHANGE in the 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 typically 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. However, effective November 1, 1996, the annual
maintenance fee is waived until further notice. 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).
Your purchase begins earning dividends the next business day after becoming
effective. See DIVIDENDS AND DISTRIBUTIONS for additional information.
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<PAGE>
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, as a result of a
redemption, have remained below the minimum stated account balance for a period
of three or more consecutive months. Holders of such accounts may be notified of
their insufficient account balance and advised that they have until the end of
the current calendar quarter to raise their balance to the stated minimum. If
the account has not reached the minimum balance requirement by that time, the
Fund will charge a $9 fee for that quarter and each subsequent quarter until the
account is brought up to the minimum balance. The service fee will be deducted
from the account during the first week of each calendar quarter for the previous
quarter, and will be used to help defray the cost of maintaining low-balance
accounts. No fees will be charged without proper notice.
The Fund also reserves the right, upon 60 days' written notice, to
involuntarily redeem accounts that remain under the minimum initial purchase
amount as a result of redemptions. An investor making the minimum initial
investment may be subject to involuntary redemption if he or she redeems any
portion of his or her account.
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<PAGE>
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 equity funds, tax-advantaged funds, bond funds or money
market 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 consult your financial
adviser or investment dealer to discuss which funds in the Delaware Group will
best meet your changing objectives and the consequences of any exchange
transaction. You may also call the Delaware Group directly for fund information.
All exchanges involve a purchase of shares of the fund into which the
exchange is made. As with any purchase, an investor should obtain and carefully
read that fund's prospectus before buying shares in an exchange. The prospectus
contains more complete information about the fund, including charges and
expenses.
Your shares will be redeemed or exchanged at a price based on the net asset
value next determined after the Fund receives your request in good order. For
example, 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 account number, account registration, and the
total number of shares or dollar amount of the transaction. For exchange
requests you must also provide the name of the fund in which you want to invest
the proceeds. Exchange instructions and redemption requests must be signed by
the record owner(s) exactly as the shares are registered. You may request a
redemption or an exchange by calling the Shareholder Service Center at
800-523-1918. 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 request. The Fund may suspend,
terminate or amend the terms of the exchange privilege upon 60 days' written
notice to shareholders. Redemption proceeds will be distributed promptly, as
described below, but not later than seven days, after the receipt of a
redemption request.
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.
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.
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<PAGE>
Except in certain limited instances, 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 a
dealer's commission was paid to a financial adviser. 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.
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.
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 shares. The request must be signed by all owners of
the account or your investment dealer of record. For redemptions of more than
$50,000, or when the proceeds are not sent to the shareholder(s) at the address
of record, the Fund requires a signature by all owners of the account and a
signature guarantee for each owner. Each signature guarantee must be supplied by
an eligible guarantor institution. The Fund reserves the right to reject a
signature guarantee supplied by an eligible institution based on its
creditworthiness. The Fund may require further documentation from corporations,
executors, retirement plans, administrators, trustees or guardians.
The redemption request is effective when it is received in good order.
Payment is normally mailed the next business day after receipt of the redemption
request. If your shares are in certificate form, the certificate(s) must
accompany your request and also be in good order. Certificates are issued for
shares only if a shareholder submits a specific request.
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 shares into another mutual
fund in the Delaware Group, subject to the same conditions and limitations as
other exchanges noted above.
TELEPHONE REDEMPTION AND EXCHANGE
To get the added convenience of the telephone redemption and exchange
methods, you must have the Transfer Agent hold your shares (without charge) for
you. If you choose to have your shares in certificate form, you can only redeem
or exchange by written request and you must return your certificates.
The Telephone Redemption--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.
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<PAGE>
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. 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. Payment is normally mailed the next business day
after receipt of the redemption request. This service is only available to
individual, joint and individual fiduciary-type accounts.
TELEPHONE REDEMPTION--PROCEEDS TO YOUR BANK
Redemption proceeds of $1,000 or more can be transferred to your
predesignated bank account by wire or by check. You should authorize this
service when you open your account. If you change your predesignated bank
account, 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 proceeds. If you ask
for a check, it will normally be mailed the next business day after receipt of
your redemption request to your predesignated bank account. There are no fees
for this 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 your shares into any
other funds in the Delaware Group under the same registration, 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. Your funds will normally be credited to your bank account two business
days after the payment date. There are no separate fees for this redemption
method. See MONEYLINE DIRECT DEPOSIT SERVICE under THE DELAWARE DIFFERENCE for
more information about this service. Please call the Shareholder Service Center
for additional information.
16
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<PAGE>
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, if any, 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
your account at the then-current net asset value and the dividend option may be
changed from cash to reinvest. If you elect to take your dividends and
distributions in cash and such dividends and distributions are in an amount of
$25 or more, you may choose the MoneyLine Direct Deposit Service and have such
payments 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.
17
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<PAGE>
Taxes
- ----
The Fund has qualified, and intends to continue to qualify, as a regulated
investment company under Subchapter M of the Internal Revenue Code (the "Code").
As such, the Fund will not be subject to federal income tax, or to any excise
tax, to the extent its earnings are distributed as provided in the Code.
The Fund intends to distribute substantially all of its net investment
income and net capital gains, if any.
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, 1997, 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.
18
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<PAGE>
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.
19
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<PAGE>
Management of
the Fund
- ----
DIRECTORS
The business and affairs of the Fund are managed under the direction of its
Board of Directors. PART B contains additional information regarding the
directors and officers.
INVESTMENT MANAGER
The Manager furnishes investment management services to the Fund.
The Manager and its predecessors have been managing the funds in the
Delaware Group since 1938. On April 30, 1997, the Manager and its affiliates
within the Delaware Group, including Delaware International Advisers Ltd., were
managing in the aggregate more than $32 billion in assets in various
institutional or separately managed (approximately $20,677,606,000) and
investment company (approximately $11,935,210,000) 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 0.47% of its average daily net assets for
the fiscal year ended April 30, 1997.
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 shares of funds in the Delaware Group of funds in
placing portfolio orders, and may place orders with broker/dealers that have
agreed to defray certain expenses of such funds, such as custodian fees.
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.
20
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<PAGE>
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 Consultant 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 0.25% 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 0.30% of that Class'
average daily net assets in any year. The Consultant Class will not incur any
distribution expenses beyond this limit, which may not be increased without
shareholder approval. While Plan payments may not exceed 0.30% annually, the
Plan does not limit fees to amounts actually expended by the Distributor. It is
therefore possible that if a distribution fee were to be paid, the Distributor
could realize a profit in any particular year. However, the Distributor
currently expects that its distribution expenses will likely equal or exceed
payments to it under the Plan. The 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 0.25% 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, as amended, 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 Transfer Agent also provides accounting
services to the Fund pursuant to terms of a separate Fund Accounting Agreement.
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, 1997 was
0.82%.
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.
21
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<PAGE>
Prior to January 1992, the Tax-Free Money Fund A Class was known as the
original class and between January 1992 and February 1994, it was known as the
Tax-Free Money Fund class. In addition, prior to January 1992, the Tax-Free
Money Fund Consultant Class was known as the consultant class, between January
1992 and November 1992, it was known as the Tax-Free Money Fund (Institutional)
class and between November 1992 and February 1994, it was known as the Tax-Free
Money Fund Consultant class.
22
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<PAGE>
The Delaware Group includes funds with a wide range of investment objectives.
Stock funds, income funds, national and state-specific 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,
ACCOUNTING SERVICES
AND TRANSFER AGENT
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
One Commerce Square
Philadelphia, PA 19103
INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103
CUSTODIAN
Bankers Trust Company
One Bankers Trust Plaza
New York, NY 10006
[LOGO]
Philadelphia - London
[LOGO]
Printed in the U.S.A. on recycled paper.
P-006[--] MP 6/97
<PAGE>
- --------------------------------------------------------------------------------
PART B--STATEMENT OF ADDITIONAL INFORMATION
JUNE 30, 1997
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
TAXES
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT AGREEMENT
- --------------------------------------------------------------------------------
OFFICERS AND DIRECTORS
- --------------------------------------------------------------------------------
EXCHANGE PRIVILEGE
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- --------------------------------------------------------------------------------
APPENDIX A - DESCRIPTION OF RATINGS
- --------------------------------------------------------------------------------
APPENDIX B - EQUIVALENT YIELDS: TAX-EXEMPT VERSUS TAXABLE SECURITIES
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
-1-
<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 30,
1997, 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.
-2-
<PAGE>
INVESTMENT OBJECTIVE AND POLICY
The objective of the Fund is to seek a high level of current income, exempt
from federal income tax, consistent with preservation of principal and
maintenance of liquidity. There is no assurance that this objective can be
achieved. This objective is a matter of fundamental policy and may not be
changed without approval by the holders of a majority of the outstanding voting
securities of the Fund, which is the lesser of more than 50% of the outstanding
voting securities or 67% of the voting securities present at a shareholder
meeting if 50% or more of the voting securities are present in person or
represented by proxy. See GENERAL INFORMATION.
The Fund invests primarily in municipal obligations. Municipal
obligations may be issued for various public purposes, including the
construction of a wide range of public facilities such as airports, bridges,
highways, housing, hospitals, mass transportation, schools, streets and water
and sewer works. Other public purposes for which municipal bonds may be
issued include refunding outstanding obligations, obtaining funds for general
operating expenses and obtaining funds to lend to other public institutions
and facilities. In addition, certain types of industrial development
obligations are issued by or on behalf of public authorities to obtain funds
to provide privately-operated housing facilities, sports facilities,
convention or trade show facilities, airport, mass transit, port or parking
facilities, air or water pollution control facilities and certain local
facilities for water supply, gas, electricity or sewage or solid waste
disposals. Such obligations are included within the term "municipal
obligations" provided that the interest paid thereon qualifies as exempt from
federal income tax in the opinion of bond counsel to the issuer. In
addition, the interest paid on industrial development obligations, the
proceeds from which are used for the construction, equipment, repair or
improvement of privately-operated industrial or commercial facilities, may be
exempt from federal income tax, although current federal tax laws place
substantial limitations on the size of such issues. Tax-exempt industrial
development obligations are in most cases revenue obligations and do not
generally carry the pledge of the credit of the issuing municipality.
The Fund may also purchase project notes issued by local agencies under a
program administered by the United States Department of Housing and Urban
Development. Project notes are secured by the full faith and credit of the
United States.
The Tax Reform Act of 1986 (the "Act") limits the amount of new "private
purpose" bonds that each state can issue and subjects interest income from these
bonds to the federal alternative minimum tax. "Private purpose" bonds are
issues whose proceeds are used to finance certain nongovernment activities, such
as privately-owned sports and convention facilities. The Act also makes the
tax-exempt status of certain bonds depend upon the issuer's compliance with
specific requirements after the bonds are issued.
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"), Standard &
Poor's Ratings Group ("S&P") and Fitch Investors Service, Inc. ("Fitch")
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.
-3-
<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
-4-
<PAGE>
portfolio in a manner designed to minimize any adverse impact from the tax rules
applicable to these investments.
ASSET-BACKED SECURITIES
The Fund may also invest in securities which are backed by assets such
as receivables on home equity and credit card loans, and receivables
regarding automobile, mobile home and recreational vehicle loans, wholesale
dealer floor plans and leases. All such securities must be rated in the
highest rating category by a reputable credit rating agency (e.g., AAA by
S&P's, Aaa by Moody's or AAA by Fitch). 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-
<PAGE>
6. Purchase or sell commodities or commodity contracts.
7. Purchase or sell real estate, but this shall not prevent the Fund from
investing in securities secured by real estate or interests therein, or
securities issued by companies which invest in real estate or interests therein.
8. Make loans to other persons except by the purchase of obligations in
which the Fund is authorized to invest and to enter into repurchase agreements.
Not more than 10% of the Fund's total assets will be invested in repurchase
agreements maturing in more than seven days and in other illiquid assets.
9. Purchase securities of any issuer (except the U.S. government, its
agencies or instrumentalities or securities which are backed by the full faith
and credit of the United States) if, as a result, more than 5% of its total
assets would be invested in the securities of such issuer.
10. Invest in issuers for the purpose of exercising control.
11. Invest in securities of other investment companies, except as they may
be acquired as part of a merger, consolidation or acquisition of assets.
12. Purchase securities if, as a result of such purchase, more than 25% of
the value of its assets would be invested in the securities of government
subdivisions located in any one state, territory or possession of the United
States. The Fund may invest more than 25% of the value of its assets in
short-term tax-exempt project notes which are guaranteed by the U.S. government,
regardless of the location of the issuing municipality.
In addition, the following investment restrictions may be changed by the
Board of Directors. The Fund may not:
(a) Retain in the portfolio of the Fund securities issued by an issuer any
of whose officers, directors or security holders is an officer or director of
the Fund or of the investment manager of the Fund if after the purchase of the
securities of such issuer by the Fund one or more of such officers or directors
owns beneficially more than 1/2 of 1% of the shares or securities or both of
such issuer and such officers and directors owning more than 1/2 of 1% of such
shares or securities together own beneficially more than 5% of such shares or
securities.
(b) Invest funds in securities whose issuers or guarantors of principal
and interest (including predecessors) have a record of less than three years'
continuous operation if such purchase at the time thereof would cause more than
5% of the total Fund assets to be invested in the securities of such issuers or
guarantors.
(c) Invest in direct interests in oil, gas or other mineral exploration or
development programs.
Although not a fundamental investment restriction, the Fund currently does
not invest its assets in real estate limited partnerships. In addition, the
Fund excludes from the 5% limitation set forth in investment restriction number
9 above, those municipal securities that are refunded with U.S. government
securities, commonly known as pre-refunded municipal securities, which the staff
of the U.S. Securities and Exchange Commission deems to constitute U.S.
government securities as that term is defined in the Investment Company Act of
1940 (the "1940 Act").
-7-
<PAGE>
PERFORMANCE INFORMATION
For the seven-day period ended April 30, 1997, the annualized current yield
of the Class A Shares and the Consultant Class Shares was 3.38% for each Class
and the compounded effective yield was 3.44% for each Class. These yields will
fluctuate daily as income earned fluctuates and is not guaranteed. On this
date, the weighted average portfolio maturity was 39 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. The current yield of the Fund's Classes of
shares is calculated as follows:
The calculation begins with the value of a hypothetical account of one
share at the beginning of a seven-day period; this is compared with the value of
that same account at the end of that seven-day period (including shares
purchased for the account with dividends earned during the period). The net
change in the account value is generally the net income earned per share during
the period, which consists of accrued interest income plus or minus amortized
purchase discount or premium, less all accrued expenses (excluding expenses
reimbursed by the investment manager) but does not include realized gains or
losses or unrealized appreciation or depreciation.
The current yield of the Classes represents the net change in this
hypothetical account annualized over 365 days. In addition, a shareholder may
achieve a compounding effect through reinvestment of dividends which is
reflected in the effective yield shown below. The Fund may also publish a
tax-equivalent yield for each Class based on federal and, if applicable, state
tax rates, which demonstrates the taxable yield necessary to produce an
after-tax yield equivalent to each such Class' yield. For the seven-day period
ended April 30, 1997, the tax-equivalent yield of the Class A Shares and the
Consultant Class Shares was 4.90% 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 table is an example, for purposes of illustration only, of
the current and effective yield calculations for the seven-day period ended
April 30, 1997 for each Class. Of course, past performance is not an indication
of future results.
-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. . . . . . . . . . . . . . . . . . . . . . 1.00064891 1.00064891
Net change in account value. . . . . . . . . . . . . . . . . . . .00064891* .00064891*
Base period return = net change in account
value/beginning account value. . . . . . . . . . . . . . . . . . .00064891 .00064891
Current yield [base period return x (365/7)] . . . . . . . . . . 3.38%** 3.38%**
365/7
Effective yield (1 + base period) - 1 . . . . . . . . . . 3.44%*** 3.44%***
Weighted average life to maturity of the portfolio on April 30, 1997 was 39 days.
</TABLE>
* This represents the net income per share for the seven calendar days ended
April 30, 1997.
** This represents the average of annualized net investment income per share
for the seven calendar days ended April 30, 1997.
*** This represents the current yield for the seven calendar days ended
April 30, 1997 compounded daily.
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.
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.
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, 1997.
Of course, past performance is not an indication of future results. For this
purpose, the calculations assume the reinvestment of all dividenddistributions
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
4/30/97 2.79% 2.79%
3 years
ended
4/30/97 2.78% 2.78%
5 years
ended
4/30/97 2.39% 2.39%
10 years
ended
4/30/97 3.50% 3.44%
15 years
ended
4/30/97 4.00% 3.96%
Period
9/17/81(2)
through
4/30/97 4.14% 4.10%
(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.
-10-
<PAGE>
CDA TECHNOLOGIES, INC., LIPPER ANALYTICAL SERVICES, INC. and MORNINGSTAR,
INC. are performance evaluation services that maintain statistical
performance databases, as reported by a diverse universe of
independently-managed mutual funds.
INTERACTIVE DATA CORPORATION is a statistical access service that maintains
a database of various international industry indicators, such as historical
and current price/earning information, individual equity and fixed-income
price and return information.
SALOMON BROTHERS and LEHMAN BROTHERS are statistical research firms that
maintain databases of international market, bond market, corporate and
government-issued securities of various maturities. This information, as
well as unmanaged indices compiled and maintained by these firms, will be
used in preparing comparative illustrations. In addition, the performance
of multiple indices compiled and maintained by these firms may be combined
to create a blended performance result for comparative performances.
Generally, the indices selected will be representative of the types of
securities in which the Funds may invest and the assumptions that were used
in calculating the blended performance will be described.
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, 1997. 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
4/30/97 0.67% 0.67%
6 months
ended
4/30/97 1.64% 1.64%
9 months
ended
4/30/97 2.10% 2.10%
1 year
ended
4/30/97 2.79% 2.79%
3 years
ended
4/30/97 8.58% 8.58%
5 years
ended
4/30/97 12.55% 12.55%
10 years
ended
4/30/97 41.08% 40.31%
15 years
ended
4/30/97 80.12% 79.14%
Period
9/17/81(2)
through
4/30/97 88.36% 87.34%
(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
-12-
<PAGE>
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
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 through a strategy known as dollar-cost averaging. 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 high fund share prices. Delaware
Group offers three services -- Automatic Investing Program, Direct Deposit
Program and the Wealth Builder Option -- that can help to keep your regular
investment program on track. See INVESTING BY ELECTRONIC FUND TRANSFER - DIRECT
DEPOSIT PURCHASE PLAN, AUTOMATIC INVESTING PLAN and WEALTH BUILDER OPTION under
PURCHASING SHARES for a complete description of these
options including restrictions or limitations.
-13-
<PAGE>
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)
This example is for illustration purposes only. It is not intended to represent
the actual performance of any stock or bond fund in the Delaware Group of funds.
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.
-14-
<PAGE>
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.
-15-
<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
-16-
<PAGE>
result in best price and execution. Transactions involving commingled orders
are allocated in a manner deemed equitable to each account or fund. When a
combined order is executed in a series of transactions at different prices, each
account participating in the order may be allocated an average price obtained
from the executing broker. It is believed that the ability of the accounts to
participate in volume transactions will generally be beneficial to the accounts
and funds. Although it is recognized that, in some cases, the joint execution
of orders could adversely affect the price or volume of the security that a
particular account or fund may obtain, it is the opinion of the Manager and the
Board of Directors that the advantages of combined orders outweigh the possible
disadvantages of separate transactions.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. (the "NASD"), and subject to seeking best price and
execution, the Fund may place orders with broker/dealers that have agreed to
defray certain expenses of the funds in the Delaware Group of funds, such as
custodian fees, and may, at the request of the Distributor, give consideration
to sales of such funds' shares 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 full share denominations purchased by sending a letter signed by
each owner of the account to the Transfer Agent requesting the certificate. No
charge is assessed by the Fund for any certificate issued. A shareholder may be
subject to fees for replacement of a lost or stolen certificate under certain
conditions, including the cost of obtaining a bond covering the lost or stolen
certificate. Please contact the Fund for further information. 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
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bank is a member of the National Automated Clearing House Association ("NACHA"),
the amount of the investment will be electronically deducted from his or her
account by Electronic Fund Transfer ("EFT"). The shareholder's checking account
will reflect a debit each month at a specified date although no check is
required to initiate the transaction. (2) If the shareholder's bank is not a
member of NACHA, deductions will be made by preauthorized checks, known as
Depository Transfer Checks. Should the shareholder's bank become a member of
NACHA in the future, his or her investments would be handled electronically
through EFT.
* * *
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.
WEALTH BUILDER OPTION
Shareholders can use the Wealth Builder Option to invest in the Fund
through regular liquidations of shares in their accounts in other mutual funds
in the Delaware Group. Shareholders of the Fund may also elect to invest in one
or more of the other mutual funds in the Delaware Group through the Wealth
Builder Option. See WEALTH BUILDER OPTION and REDEMPTION AND EXCHANGE in the
PROSPECTUS.
Under this automatic exchange program, shareholders can authorize regular
monthly investments (minimum of $100 per fund) to be liquidated from their
account and invested automatically into other mutual funds in the Delaware
Group, subject to the conditions and limitations set forth in the Fund's
PROSPECTUS. The investment will be made on the 20th day of each month (or, if
the fund selected is not open that day, the next business day) at the public
offering price or net asset value, as applicable, of the fund selected on the
date of investment. No investment will be made for any month if the value of
the shareholder's account is less than the amount specified for investment.
Periodic investment through the Wealth Builder Option does not insure
profits or protect against losses in a declining market. The price of the fund
into which investments are made could fluctuate. Since this program involves
continuous investment regardless of such fluctuating value, investors
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selecting this option should consider their financial ability to continue to
participate in the program through periods of low fund share prices. This
program involves automatic exchanges between two or more fund accounts and is
treated as a purchase of shares of the fund into which investments are made
through the program. See EXCHANGE PRIVILEGE for a brief summary of the tax
consequences of exchanges. Shareholders can terminate their participation at
any time by giving written notice to the fund from which exchanges are made.
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.
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
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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 0.25% 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, 0.30% 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 0.25% 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.
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.
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For the fiscal year ended April 30, 1997, there were no payments on behalf
of the Consultant Class Shares pursuant to its Plan.
The NASD has Rules of Fair Practice, as amended, 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.
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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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.
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.
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; provided, however, that each commitment to mail or wire redemption
proceeds by a certain time, as described below, is modified by the
qualifications described in the next paragraph. 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.
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.
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<PAGE>
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.
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.
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REDEMPTION REQUIREMENTS: In order to change the name of the bank and the
account number it will be necessary to send a written request to the Fund with a
signature guarantee. Each signature guarantee must be supplied by an eligible
guarantor institution. The Fund reserves the right to reject a signature
guarantee supplied by an eligible institution based on its creditworthiness.
To reduce the shareholder's risk of attempted fraudulent use of the
telephone redemption procedure, payment will be made only to the bank account
designated on the authorization form.
If expedited payment under these procedures could adversely affect the
Fund, the Fund may take up to seven days to pay the shareholder.
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.
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<PAGE>
(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's bank may charge a fee.
(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. This service may be terminated or
suspended at any time by CoreStates Bank, N.A., the Fund or the Transfer Agent.
The Fund and the Transfer Agent will not be responsible for the inadvertent
processing of post-dated checks or checks more than six months old.
STOP-PAYMENT REQUESTS--Investors may request a stop payment on checks by
providing the Fund with a written authorization to do so. Oral requests will be
accepted provided that the Fund promptly receives a written authorization. Such
requests will remain in effect for six months unless renewed or 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.
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
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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.
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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.
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.
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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, 1997, 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.
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.
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The Manager and its predecessors have been managing the funds in the
Delaware Group since 1938. On April 30, 1997, the Manager and its affiliates
within the Delaware Group, including Delaware International Advisers Ltd., were
managing in the aggregate more than $32 billion in assets in various
institutional or separately managed (approximately $20,677,606,000) and
investment company (approximately $11,935,210,000) 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 remained in effect for
an initial two-year period. The Agreement may be further renewed each year only
so long as such renewal and continuance are specifically approved at least
annually by the directors or by vote of a majority of the outstanding voting
securities of the Fund, and only if the terms and the renewal thereof have been
approved by the vote of a majority of the directors of the Fund, who are not
parties thereto or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval. The Agreement is
terminable without penalty on 60 days' notice by the directors of the Fund or by
the Manager. The Agreement will terminate automatically in the event of its
assignment.
The annual compensation paid by the Fund for investment management services
is equal to 1/2 of 1% of the Fund's average daily net assets, less all
directors' fees paid to the unaffiliated directors by the Fund. The Manager
pays the salaries of all directors, officers and employees of the Fund who are
affiliated with the Manager. Investment management fees paid by the Fund were
0.47% of average daily net assets for the fiscal year ended April 30, 1997.
On April 30, 1997, the total net assets of the Fund were $34,188,481.
Investment management fees paid by the Fund during the past three fiscal years
were $220,704 for 1995, $222,243 for 1996 and $167,125 for 1997.
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, 1997 was 0.82% for each Class of shares.
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
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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 also
provides accounting services to the Fund pursuant to the terms of a separate
Fund Accounting Agreement. The Transfer Agent is also an indirect, wholly owned
subsidiary of Delaware Management Holdings, Inc.
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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, 1997, the Fund's officers
and directors, as a group, owned less than 1% of the outstanding shares of the
Class A Shares and Consultant Class Shares.
As of May 31, 1997, management believes the following held 5% or more of the
outstanding shares of the Consultant Class Shares: Munn & Sons, Inc., P.O. Box
12350, Philadelphia , PA 19119 held 241,676 shares (16.51%) and Mary E. Gamble
and Harvey R. Gamble, Rd 2 Box 112, Centre Hall, PA 16828 held 104,149 shares
(7.15%).
DMH Corp., Delaware Voyageur Holdings, Inc., Delaware Management Company,
Inc., Delaware Distributors, L.P., Delaware Distributors, Inc., Delaware Service
Company, Inc., Delaware Management Trust Company, Delaware International
Holdings Ltd., Founders Holdings, Inc., Delaware International Advisers Ltd.,
Delaware Capital Management, Inc. and Delaware Investment & Retirement Services,
Inc. are direct or indirect, wholly owned subsidiaries of Delaware Management
Holdings, Inc. ("DMH"). On April 3, 1995, a merger between DMH and a wholly
owned subsidiary of Lincoln National Corporation ("Lincoln National") was
completed. 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.
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*WAYNE A. STORK (59)
CHAIRMAN, PRESIDENT, CHIEF EXECUTIVE OFFICER, DIRECTOR AND/OR TRUSTEE of
the Fund, 32 other investment companies in the Delaware Group,
Delaware Management Holdings, Inc., DMH Corp., Delaware International
Holdings Ltd. and Founders Holdings, Inc.
CHAIRMAN AND DIRECTOR of Delaware Distributors, Inc. and
Delaware Capital Management, 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. and Delaware Investment &
Retirement Services, Inc.
During the past five years, Mr. Stork has served in various executive
capacities at different times within the Delaware organization.
RICHARD G. UNRUH, JR. (57)
EXECUTIVE VICE PRESIDENT of the Fund and each of the other 32 investment
companies in the Delaware Group.
EXECUTIVE VICE PRESIDENT AND DIRECTOR of Delaware Management Company, Inc.
SENIOR VICE PRESIDENT of Delaware Management Holdings, Inc. and Delaware
Capital Management, 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 (49)
EXECUTIVE VICE PRESIDENT/CHIEF INVESTMENT OFFICER, FIXED INCOME of the
Fund, each of the other 32 investment companies in the Delaware Group
and Delaware Management Company, Inc.
EXECUTIVE VICE PRESIDENT/CHIEF INVESTMENT OFFICER, FIXED INCOME AND
DIRECTOR of Founders Holdings, Inc.
SENIOR VICE PRESIDENT/CHIEF INVESTMENT OFFICER, FIXED INCOME of Delaware
Management Holdings, Inc.
SENIOR VICE PRESIDENT of Delaware Capital Management, Inc.
DIRECTOR of Founders CBO Corporation.
DIRECTOR of HYPPCO Finance Company Ltd.
Before returning to the Delaware Group in 1993, Mr. Suckow was
Executive Vice President and Director of Fixed Income for Oppenheimer
Management Corporation, New York, NY from 1985 to 1992. Prior to
that, Mr. Suckow was a fixed-income portfolio manager for the Delaware
Group.
- ------------------------------
*Director affiliated with the Fund's investment manager and considered an
"interested person" as defined in the 1940 Act.
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WALTER P. BABICH (69)
DIRECTOR AND/OR TRUSTEE of the Fund and each of the other 32 investment
companies in the Delaware Group.
460 North Gulph Road, King of Prussia, PA 19406.
BOARD CHAIRMAN, Citadel Constructors, Inc.
From 1986 to 1988, Mr. Babich was a partner of Irwin & Leighton and from
1988 to 1991, he was a partner of I&L Investors.
ANTHONY D. KNERR (58)
DIRECTOR AND/OR TRUSTEE of the Fund and each of the other 32 investment
companies in the Delaware Group.
500 Fifth Avenue, New York, NY 10110.
FOUNDER AND MANAGING DIRECTOR, Anthony Knerr & Associates.
From 1982 to 1988, Mr. Knerr was Executive Vice President/Finance and
Treasurer of Columbia University, New York. From 1987 to 1989, he was
also a lecturer in English at the University. In addition, Mr. Knerr
was Chairman of The Publishing Group, Inc., New York, from 1988 to
1990. Mr. Knerr founded The Publishing Group, Inc. in 1988.
ANN R. LEVEN (56)
DIRECTOR AND/OR TRUSTEE of the Fund and each of the other 32 investment
companies in the Delaware Group.
785 Park Avenue, New York, NY 10021.
TREASURER, National Gallery of Art.
From 1984 to 1990, Ms. Leven was Treasurer and Chief Fiscal Officer of the
Smithsonian Institution, Washington, DC, and from 1975 to 1992, she
was Adjunct Professor of Columbia Business School.
W. THACHER LONGSTRETH (76)
DIRECTOR AND/OR TRUSTEE of the Fund and each of the other 32 investment
companies in the Delaware Group.
City Hall, Philadelphia, PA 19107.
PHILADELPHIA CITY COUNCILMAN.
THOMAS F. MADISON (61)
DIRECTOR AND/OR TRUSTEE of thE Fund and each of the other 32 investment
companies in the Delaware Group.
PRESIDENT AND CHIEF EXECUTIVE OFFICER, MLM Partners, Inc.
200 South Fifth Street, Suite 2100, Minneapolis, Minnesota 55402.
Mr. Madison has also been Chairman of the Board of Communications Holdings,
Inc. since 1996. From February to September 1994, Mr. Madison served
as Vice Chairman--Office of the CEO of The Minnesota Mutual Life
Insurance Company and from 1988 to 1993, he was President of U.S. WEST
Communications--Markets.
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<PAGE>
* JEFFREY J. NICK (44)
DIRECTOR AND/OR TRUSTEE of the Fund and 32 other investment companies in
the Delaware Group.
PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR of Lincoln National
Investment Companies, Inc. From 1992 to 1996, Mr. Nick was Managing
Director of Lincoln National UK plc and from 1989 to 1992, he was
Senior Vice President responsible for corporate planning and
development for Lincoln National Corporation.
CHARLES E. PECK (71)
DIRECTOR AND/OR TRUSTEE of the Fund and each of the other 32 investment
companies in the Delaware Group.
P.O. Box 1102, Columbia, MD 21044.
SECRETARY/TREASURER, Enterprise Homes, Inc.
From 1981 to 1990, Mr. Peck was Chairman and Chief Executive Officer of The
Ryland Group, Inc., Columbia, MD.
DAVID K. DOWNES (57)
EXECUTIVE VICE PRESIDENT/CHIEF OPERATING OFFICER/CHIEF FINANCIAL OFFICER of
the Fund, each of the other 32 investment companies in the Delaware
Group, Delaware Management Holdings, Inc. and Delaware Capital
Management, Inc.
EXECUTIVE VICE PRESIDENT, CHIEF OPERATING OFFICER, CHIEF FINANCIAL OFFICER
AND DIRECTOR of Delaware Management Company, Inc., DMH Corp.,
Delaware Distributors, Inc. and Founders Holdings, Inc., Delaware
International Holdings Ltd.
CHAIRMAN AND DIRECTOR of Delaware Management Trust Company.
CHAIRMAN AND DIRECTOR of Delaware Investment & Retirement Services, Inc.
PRESIDENT/CHIEF EXECUTIVE OFFICER/CHIEF FINANCIAL OFFICER AND DIRECTOR of
Delaware Service Company, Inc.
SENIOR VICE PRESIDENT/CHIEF ADMINISTRATIVE OFFICER/ CHIEF FINANCIAL OFFICER
of Delaware Distributors, L.P.
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.
- ------------------------------
*Director affiliated with the Fund's investment manager and considered an
"interested person" as defined in the 1940 Act.
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GEORGE M. CHAMBERLAIN, JR. (50)
SENIOR VICE PRESIDENT AND SECRETARY of the Fund, each of the other 32
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.
PATRICK P. COYNE (34)
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 (47)
VICE PRESIDENT/CORPORATE CONTROLLER of the Fund, each of the other 32
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 (34)
VICE PRESIDENT/TREASURER of the Fund, each of the other 32 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.
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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, 1997 and an estimate of annual benefits to be received upon
retirement under the Delaware Group Retirement Plan for Directors/Trustees as of
April 30, 1997.
PENSION OR
RETIREMENT ESTIMATED TOTAL
BENEFITS ANNUAL COMPENSATION
AGGREGATE ACCRUED BENEFITS FROM ALL 33
COMPENSATION AS PART OF UPON DELAWARE
NAME FROM FUND FUND EXPENSES RETIREMENT* GROUP FUNDS
W. Thacher Longstreth $1,311 None $30,000 $53,307
Ann R. Leven $1,327 None $30,000 $58,307
Walter P. Babich $1,324 None $30,000 $57,307
Anthony D. Knerr $1,324 None $30,000 $57,307
Charles E. Peck $1,311 None $30,000 $53,307
* 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, 1997, 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.
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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.
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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.
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<PAGE>
TREND FUND seeks long-term growth by investing in common stocks issued by
emerging growth companies exhibiting strong capital appreciation potential.
VALUE FUND seeks capital appreciation by investing primarily in common
stocks whose market values appear low relative to their underlying value or
future potential. Retirement Income Fund seeks to provide investors with high
current income and an investment that has the potential for capital
appreciation.
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. Capital Appreciation Fund seeks capital appreciation by investing
primarily in equity securities of small to medium-sized companies expected to
grow over time and, to a lesser extent, in equity securities of larger, more
well established companies presenting growth potential.
DECATUR INCOME FUND seeks the highest possible current income by investing
primarily in common stocks that provide the potential for income and capital
appreciation without undue risk to principal. DECATUR TOTAL RETURN FUND seeks
long-term growth by investing primarily in securities that provide the potential
for income and capital appreciation without undue risk to principal. Blue Chip
Fund seeks to achieve long-term capital appreciation. Current income is a
secondary objective. It seeks to achieve these objectives by investing
primarily in equity securities and any securities that are convertible into
equity securitieS. Quantum Fund seeks to achieve long-term capital
appreciation. It seeks to achieve this objective by investing primarily in
equity securities of medium- to large-sized companies expected to grow over
time that meet the fund's "Social Criteria" strategy.
DELCHESTER FUND seeks as high a current income as possible by investing
principally in high yield, high risk corporate bonds, and also in U.S.
government securities and commercial paper. Strategic Income Fund seeks to
provide investors with high current income and total return by using a
multi-sector investment approach, investing principally in three sectors of the
fixed-income securities markets: high yield, higher risk securities, investment
grade fixed-income securities and foreign government and other foreign
fixed-income securities. High-Yield Opportunities Fund seeks to provide
investors with total return and, as a secondary objective, high current income.
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.
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<PAGE>
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.
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, INC. offers 15 funds available exclusively as
funding vehicles for certain insurance company separate accounts. DECATUR TOTAL
RETURN SERIES seeks the highest possible total rate of return by selecting
issues that exhibit the potential for capital appreciation while providing
higher than average dividend income. DELCHESTER SERIES seeks as high a current
income as possible by investing in rated and unrated corporate bonds, U.S.
government securities and commercial paper. CAPITAL RESERVES SERIES seeks a
high stable level of current income while minimizing fluctuations in principal
by investing in a diversified portfolio of short- and intermediate-term
securities. CASH RESERVE SERIES seeks the highest level of income consistent
with preservation of capital and liquidity through investments in short-term
money market instruments. DELCAP SERIES seeks long-term capital appreciation by
investing its assets in a diversified portfolio of securities exhibiting the
potential for significant growth. DELAWARE SERIES seeks a balance of capital
appreciation, income and preservation of capital. It uses a dividend-oriented
valuation strategy to select securities issued by established companies that are
believed to demonstrate potential for income and capital growth. INTERNATIONAL
EQUITY SERIES seeks long-term growth without undue risk to principal by
investing primarily in equity securities of foreign issuers that provide the
potential for capital appreciation and income. VALUE SERIES seeks capital
appreciation by investing in small- to mid-cap common stocks whose market value
-43-
<PAGE>
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. Strategic Income Series seeks
high current income and total return by using a multi-sector investment
approach, investing primarily in three sectors of the fixed-income securities
markets: high-yield, higher risk securities; investment grade fixed-
income securities; and foreign government and other foreign fixed-income
securities. Devon Series seeks current income and capital appreciation by
investing primarily in income-producing common stocks, with a focus on common
stocks that the investment manager believes have the potential for above-average
dividend increases over time. Trend Series seeks to achieve long-term capital
appreciation by investing primarily in equity securities of issuers located or
operating in emerging countries. Convertible Securities Series seeks a high
level of total return on its assets through a combination of capital
appreciation and current income by investing primarily in convertible
securities. Quantum Series seeks to achieve long-term capital appreciation by
investing primarily in equity securities of medium to large-sized companies
expected to grow over time that meet the Series' "Social Criteria" strategy.
Delaware-Voyageur US Government Securities Fund seeks to provide a high
level of current income consistent with the prudent investment risk by investing
in U.S. Treasury bills, notes, bonds, and other obligations issued or
unconditionally guaranteed by the full faith and credit of the U.S. Treasury,
and repurchase agreements fully secured by such obligations.
Delaware-Voyageur Tax-Free Arizona Insured Fund seeks to provide a high
level of current income exempt from federal income tax and the Arizona personal
income tax, consistent with the preservation of capital. Delaware-Voyageur
Minnesota Insured Fund seeks to provide a high level of current income exempt
from federal income tax and the Minnesota personal income tax, consistent with
the preservation of capital.
Delaware-Voyageur Tax-Free Minnesota Intermediate Fund seeks to provide a
high level of current income exempt from federal income tax and the Minnesota
personal income tax, consistent with preservation of capital. The Fund seeks to
reduce market risk by maintaining an average weighted maturity from five to ten
years.
Delaware-Voyageur Tax-Free California Insured Fund seeks to provide a high
level of current income exempt from federal income tax and the California
personal income tax, consistent with the preservation of capital.
Delaware-Voyageur Tax-Free Florida Insured Fund seeks to provide a high level
of current income exempt from federal income tax, consistent with the
preservation of capital. The Fund will seek to select investments that will
enable its shares to be exempt from the Florida intangible personal property
tax. Delaware-Voyageur Tax-Free Florida Fund seeks to provide a high level of
current income exempt from federal income tax, consistent with the preservation
of capital. The Fund will seek to select investments that will enable its
shares to be exempt from the Florida Intangible personal property tax.
Delaware-
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<PAGE>
Voyageur Tax-Free Kansas Fund seeks to provide a high level of current income
exempt from federal income tax, the Kansas personal income tax and the Kansas
Intangible personal property tax, consistent with the preservation of capital.
Delaware-Voyageur Tax-Free Missouri Insured Fund seeks to provide a high level
of current income exempt from federal income tax and the Missouri personal
income tax, consistent with the preservation of capital. Delaware-Voyageur
Tax-Free New Mexico Fund seeks to provide a high level of current income exempt
from federal income tax and the New Mexico personal income tax, consistent with
the preservation of capital. Delaware-Voyageur Tax-Free Oregon Insured Fund
seeks to provide a high level of current income exempt from federal income tax
and the Oregon personal income tax, consistent with the preservation of capital.
Delaware-Voyageur Tax-Free Utah Fund seeks to provide a high level of current
income exempt from federal income tax, consistent with the preservation of
capital. Delaware-Voyageur Tax-Free Washington Insured Fund seeks to provide a
high level of current income exempt from federal income tax, consistent with the
preservation of capital.
Delaware-Voyageur Tax-Free Florida Intermediate Fund seeks to provide a
high level of current income exempt from federal income tax, consistent with the
preservation of capital. The Fund will seek to select investments that will
enable its shares to be exempt from the Florida intangible personal property
tax. The Fund seeks to reduce market risk by maintaining an average weighted
maturity from five to ten years.
Delaware-Voyageur Tax-Free Arizona Fund seeks to provide a high level of
current income exempt from federal income tax and the Arizona personal income
tax, consistent with the preservation of capital. Delaware-Voyageur Tax-Free
California Fund seeks to provide a high level of current income exempt from
federal income tax and the California personal income tax, consistent with the
preservation of capital. Delaware-Voyageur Tax-Free Iowa Fund seeks to provide
a high level of current income exempt from federal income tax and the Iowa
personal income tax, consistent with the preservation of capital.
Delaware-Voyageur Tax-Free Idaho Fund seeks to provide a high level of current
income exempt from federal income tax and the Idaho personal income tax,
consistent with the preservation of capital. Voyageur Minnesota High Yield
Municipal Bond Fund seeks to provide a high level of current income exempt from
federal income tax and the Minnesota personal income tax primarily through
investment in medium and lower grade municipal obligations. National High
Yield Municipal Fund seeks to provide a high level of income exempt from
federal income tax, primarily through investment in medium and lower grade
municipal obligations. Delaware-Voyageur Tax-Free New York Fund seeks to
provide a high level of current income exempt from federal income tax and the
personal income tax of the state of New York and the city of New York,
consistent with the preservation of capital. Delaware-Voyageur Tax-Free
Wisconsin Fund seeks to provide a high level of current income exempt from
federal income tax and the wisconsin personal income tax, consistent with the
preservation of capital.
Delaware-Voyageur Tax-Free Colorado Fund seeks to provide a high level of
current income exempt from federal income tax and the Colorado personal income
tax, consistent with the preservation of capital.
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<PAGE>
Aggressive Growth Fund seeks long-term capital appreciation, which the Fund
attempts to achieve by investing primarily in equity securities believed to have
the potential for high earnings growth. Although the Fund, in seeking its
objective, may receive current income from dividends and interest, income is
only an incidental consideration in the selection of the Fund's investments.
Growth Stock Fund has an objective of long-term capital appreciation. The Fund
seeks to achieve its objective from equity securities diversified among
individual companies and industries. Tax-Efficient Equity Fund seeks to obtain
for taxable investors a high total return on an after-tax basis.
Delaware-Voyageur Tax-Free Minnesota Fund seeks to provide a high level of
current income exempt from federal income tax and the Minnesota personal income
tax, consistent with the preservation of capital. Delaware-Voyageur Tax-Free
North Dakota Fund seeks to provide a high level of current income exempt from
federal income tax and the North Dakota personal income tax, consistent with the
preservation of capital.
For more complete information about any of the Delaware Group funds,
including charges and expenses, you can obtain a prospectus from the
Distributor. Read it carefully before you invest or forward funds.
Each of the summaries above is qualified in its entirety by the information
contained in each fund's prospectus(es).
-46-
<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.
The Manager, or its affiliate Delaware International Advisers Ltd., also
manages the investment options for Delaware Medallion[sm] III Variable Annuity.
Medallion is issued by Allmerica Financial Life Insurance and Annuity Company
(First Allmerica Financial Life Insurance Company in New York and Hawaii).
Delaware Medallion offers 15 different investment series ranging from domestic
equity funds, international equity and bond funds and domestic fixed income
funds. Each investment series available through Medallion utilizes an
investment strategy and discipline the same as or similar to one of the Delaware
Group mutual funds available outside the annuity. See DELAWARE GROUP PREMIUM
FUND, INC., above.
Access persons and advisory persons of the Delaware Group of funds, as
those terms are defined in SEC Rule 17j-1 under the 1940 Act, who provide
services to 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. Compensation is fixed each year and approved
by the Board of Directors, including a majority of the disinterested directors.
The Transfer Agent also provides accounting services to the Fund. Those
services include performing all functions related to calculating the Fund's net
asset value and providing all financial reporting services, regulatory
compliance testing and other related accounting services. For it's services,
the Transfer Agent is paid a fee based on total assets of all funds in the
Delaware Group for which it provides such accounting services. Such fee is
equal to 0.25% multiplied by the total amount of assets in the complex for which
the Transfer Agent furnishes accounting services, where such aggregate complex
assets are $10 billion or less, and 0.20% of assets if such aggregate complex
assets exceed $10 billion. The fees are charged to each fund, including the
Fund, on an aggregate pro-rata basis. The asset-based fee payable to the
Transfer Agent is subject to a minimum fee calculated by determining the total
number of investment portfolios and associated classes.
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<PAGE>
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 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.
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<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.
Excerpts from Fitch's description of its three highest bond ratings:
AAA--highest credit quality, obligor has exceptionally strong ability to pay
interest and repay principal; AA--very high credit quality, obligor's ability
to pay interest and repay principal is very strong; A--high credit quality,
obligor's ability to repay interest and repay principal is strong but more
vulnerable to adverse economic conditions than higher rated bonds.
COMMERCIAL PAPER
Excerpts from S&P's description of its two highest commercial paper
ratings: A-1+/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.
Excerpts from Fitch's descriptions of its two highest commercial paper
ratings: F-1+/F-1--judged to have very strong credit quality, strongest
degree of assurance for timely payment. F-2--judged to be good credit
quality with satisfactory degree of assurance of timely payment.
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.
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<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, FINANCIAL HIGHLIGHTS and NOTES TO FINANCIAL
STATEMENTS, as well as the report of Ernst & Young LLP, independent auditors for
the fiscal year ended April 30, 1997, are included in the Fund's ANNUAL REPORT
to shareholders. The financial statements, financial highlights, 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.
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<PAGE>
DELAWARE
GROUP
--------
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-$24,650 $0-$41,200 15% 3.5% 4.7% 5.9% 7.1%
$24,651-$59,750 $41,201-$99,600 28% 4.2% 5.6% 6.9% 8.3%
$59,751-$124,650 $99,601-$151,750 31% 4.3% 5.8% 7.2% 8.7%
$124,651-$271,050 $151,751-$271,050 36%+ 4.7% 6.3% 7.8% 9.4%
Over $271,050 Over $271,050 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 $271,050. The above tables do not reflect the
personal exemption phaseout nor the limitations of itemized deductions that
may apply.
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<PAGE>
The Delaware Group includes funds with a wide range of investment
objectives. Stock funds, income funds, national and state-specific 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,
ACCOUNTING SERVICES,
AND TRANSFER AGENT
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
One Commerce Square
Philadelphia, PA 19103
INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103
CUSTODIAN
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 30, 1997
<PAGE>
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, 1997.
(b) Exhibits:
(1) ARTICLES OF INCORPORATION. Articles of Incorporation, as amended
and supplemented to date, incorporated into this filing by
reference to Post-Effective Amendment No. 21 filed June 28, 1996.
(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.
(4) COPIES OF ALL INSTRUMENTS DEFINING THE RIGHTS OF HOLDERS.
(a) ARTICLES OF INCORPORATION AND ARTICLES SUPPLEMENTARY.
Article Second of Articles Supplementary, Article Fifth
of Articles of Amendment and Article Eighth of Articles
of Amendment, which was subsequently redesignated as
Article Ninth of Articles of Amendment, incorporated by
reference to Post-Effective Amendment No. 21 filed
June 28, 1996.
<PAGE>
(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. Executed Distribution Agreement
(April 3, 1995) incorporated into this filing by reference
to Post-Effective Amendment No. 21 filed June 28, 1996.
(b) ADMINISTRATION AND SERVICE AGREEMENT. Form of
Administration and Service Agreement (as amended November
1995) (Module) incorporated into this filing by reference to
Post-Effective Amendment No. 21 filed June 28, 1996.
(c) DEALER'S AGREEMENT. Dealer's Agreement (as amended November
1995) (Module) incorporated into this filing by reference to
Post-Effective Amendment No. 21 filed June 28, 1996.
(d) Mutual Fund Agreement for the Delaware Group of Funds (as
amended November 1995) (Module) incorporated into this
filing by reference to Post-Effective Amendment No. 21 filed
June 28, 1996.
(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)
(Module) incorporated into this filing by reference to
Post-Effective Amendment No. 21 filed June 28, 1996.
(8) CUSTODIAN AGREEMENT.
(a) Form of Custodian Agreement between the Registrant and
Bankers Trust Company (1996) incorporated into this filing
by reference to Post-Effective Amendment No. 21 filed June
28, 1996.
<PAGE>
(9) OTHER MATERIAL CONTRACTS.
(a) Shareholders Services Agreement (June 29, 1988) incorporated
into this filing by reference to Post-Effective Amendment
No. 21 filed June 28, 1996.
(b) Executed Delaware Group of Funds Fund Accounting Agreement
between Delaware Service Company, Inc. and the Registrant
(August 19, 1996) attached as Exhibit.
(i) Executed Amendment No. 1 to (September 30, 1996)
to Schedule A to Delaware Group of Funds Fund
Accounting Agreement attached as Exhibit.
(ii) Executed Amendment No. 2 (November 29, 1996) to
Schedule A to Delaware Group of Funds Fund
Accounting Agreement attached as Exhibit.
(iii)Executed Amendment No. 3 (December 27, 1996) to
Schedule A to Delaware Group of Funds Fund
Accounting Agreement attached as Exhibit.
(iv) Executed Amendment No. 4 (February 24, 1997) to
Schedule A to Delaware Group of Funds Fund
Accounting Agreement attached as Exhibit.
(v) Executed Amendment No. 5 (May 1, 1997) to Schedule
A to Delaware Group of Funds Fund Accounting
Agreement attached as Exhibit.
(10) OPINION OF COUNSEL. To be filed with letter relating to Rule
24f-2 on or about June 30, 1997.
(11) CONSENT OF AUDITORS. Attached as Exhibit.
(12) Inapplicable.
(13) AGREEMENTS IN CONNECTION WITH INITIAL CAPITAL. Investment
Letter of Initial Shareholder originally filed with
Pre-Effective Amendment No. 1 on May 28, 1981, attached as
Exhibit.
(14) Inapplicable.
<PAGE>
*(15) PLAN UNDER RULE 12b-1. Amended Rule 12b-1 Plan for the
Consultant Class (November 29, 1995) incorporated into this
filing by reference to Post-Effective Amendment No. 21 filed June
28, 1996.
(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.
(b) Schedules of Computation for each Performance Quotation for
periods not previously electronically filed attached as
Exhibit.
(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.
DIRECTOR'S POWER OF ATTORNEY. Power of Attorney for
Thomas F. Madison and Jeffrey J. Nick attached as
Exhibit.
*Relates to Registrant's Tax-Free Money Fund Consultant Class of shares only.
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT. None.
Item 26. NUMBER OF HOLDERS OF SECURITIES.
(1) (2)
NUMBER OF
TITLE OF CLASS RECORD HOLDERS
Delaware Group Tax-Free Money Fund, Inc.'s
Tax-Free Money Fund A Class:
Common Stock Par Value 1129 Accounts
$.001 Per Share as of May 31, 1997
Tax-Free Money Fund Consultant Class:
Common Stock Par Value 106 Accounts
$.001 Per Share as of May 31, 1997
<PAGE>
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.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
Delaware Management Company, Inc. (the "Manager") serves as investment
manager to the Registrant and also serves as investment manager or sub-adviser
to certain of the other funds in the Delaware Group (Delaware Group Trend Fund,
Inc., Delaware Group Equity Funds I, Inc., Delaware Group Equity Funds II, Inc.,
Delaware Group Equity Funds IV, Inc., Delaware Group Equity Funds V, Inc.,
Delaware Group Income Funds, 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., Delaware Group
Global Dividend and Income Fund, Inc., Voyageur Funds, Inc., Voyageur Insured
Funds, Inc., Voyageur Intermediate Tax Free Funds, Inc., Voyageur Investment
Trust, Voyageur Investment Trust II, Voyageur Mutual Funds, Inc., Voyageur
Mutual Funds II, Inc., Voyageur Mutual Funds III, Inc., Voyageur Tax Free Funds,
Inc., Voyageur Arizona Municipal Income Fund, Inc., Voyageur Colorado Insured
Municipal Income Fund, Inc., Voyageur Florida Insured Municipal Income Fund,
Voyageur Minnesota Municipal Income Fund, Inc., Voyageur Minnesota Municipal
Income Fund II, Inc. and Voyageur Minnesota Municipal Income Fund III, Inc.) and
provides investment advisory services to institutional accounts, primarily
retirement plans and endowment funds and to certain other investment companies.
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, accounting services and transfer agent for all of the
mutual funds in the Delaware Group.
<PAGE>
The following persons serving as directors or officers of the Manager have
held the following positions during the past two years:
Name and Principle Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
Wayne A. Stork Chairman of the Board, President, Chief Executive
Officer, Chief Investment Officer and Director of
Delaware Management Company, Inc.; President, Chief
Executive Officer, Chairman of the Board and Director
of the Registrant, 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 Distributors, Inc. and Delaware
Capital Management, Inc.; Chairman, Chief Executive
Officer and Director of Delaware International Advisers
Ltd.; and Director of Delaware Service Company, Inc.
and Delaware Investment & Retirement Services, Inc.
Richard G. Unruh, Jr. Executive Vice President and Director of Delaware
Management Company, Inc.; Executive Vice President of
the Registrant and each of the other funds in the
Delaware Group; Senior Vice President of Delaware
Management Holdings, Inc. and Delaware Capital
Management, Inc; and Director of Delaware International
Advisers Ltd.
Board of Directors, Chairman of Finance Committee,
Keystone Insurance Company since 1989, 2040 Market
Street, Philadelphia, PA; Board of Directors, Chairman
of Finance Committee, AAA Mid Atlantic, Inc. since
1989, 2040 Market Street, Philadelphia, PA; Board of
Directors, Metron, Inc. since 1995, 11911 Freedom
Drive, Reston, VA
Paul E. Suckow Executive Vice President/Chief Investment Officer,
Fixed Income of Delaware Management Company, Inc., the
Registrant 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.; Senior Vice President of Delaware
Capital Management, Inc.; and Director of Founders CBO
Corporation
Director, HYPPCO Finance Company Ltd.
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
Name and Principle Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
David K. Downes Executive Vice President, Chief Operating Officer,
Chief Financial Officer and Director of Delaware
Management Company, Inc., DMH Corp, Delaware
Distributors, Inc., Founders Holdings, Inc. and
Delaware International Holdings Ltd.; Executive Vice
President, Chief Operating Officer and Chief Financial
Officer of the Registrant and each of the other funds
in the Delaware Group, Delaware Management Holdings,
Inc., Founders CBO Corporation and Delaware Capital
Management, Inc.; Chairman and Director of Delaware
Management Trust Company; President, Chief Executive
Officer, Chief Financial Officer and Director of
Delaware Service Company, Inc.; Chairman and Director
of Delaware Investment & Retirement Services, Inc.;
Director of Delaware International Advisers Ltd.; and
Senior Vice President, Chief Administrative Officer and
Chief Financial Officer of Delaware Distributors, L.P.
Chief Executive Officer and Director of Forewarn, Inc.
since 1993, 8 Clayton Place, Newtown Square, PA
George M. Senior Vice President, Secretary and Director of
Chamberlain, Jr. 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.
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
Name and Principle Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
Richard J. Flannery Senior Vice President/Corporate and International
Affairs of Delaware Management Holdings, Inc., DMH
Corp., Delaware Management Company, Inc., Delaware
Distributors, Inc., Delaware Distributors, L.P.,
Delaware Management Trust Company and Delaware Capital
Management, Inc.; Managing Director/Corporate & Tax
Affairs of Delaware Service Company, Inc. and Delaware
Investment & Retirement Services, Inc.; Vice President
of the Registrant and each of the other funds in the
Delaware Group; Senior Vice President/ Corporate and
International Affairs and Director of Founders
Holdings, Inc. and Delaware International Holdings
Ltd.; Senior Vice President of Founders CBO
Corporation; and Director of Delaware International
Advisers Ltd.
Director, HYPPCO Finance Company Ltd.
Limited Partner of Stonewall Links, L.P. since 1991,
Bulltown Rd., Elverton, PA; Director and Member of
Executive Committee of Stonewall Links, Inc. since
1991, Bulltown Rd., Elverton, PA
Michael P. Bishof1 Senior Vice President of Delaware Management Company,
Inc. and Delaware Distributors, Inc.; Vice President
and Treasurer of the Registrant, each of the other
funds in the Delaware Group, Delaware Distributors,
L.P., Delaware Service Company, Inc. and Founders
Holdings, Inc.; Assistant Treasurer of Founders CBO
Corporation; 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.
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
Name and Principle Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
Richelle S. Maestro Vice President and Assistant Secretary of Delaware
Management Company, Inc., the Registrant, each of the
other funds in the Delaware Group, Delaware Management
Holdings, Inc., Delaware Distributors, L.P., Delaware
Distributors, Inc., Delaware Service Company, Inc., DMH
Corp., Delaware Management Trust Company, Delaware
Capital Management, Inc., Delaware Investment &
Retirement Services, Inc. and Founders Holdings, Inc.;
Secretary of Founders CBO Corporation; and Assistant
Secretary of Delaware International Holdings Ltd.
Partner of Tri-R Associates since 1989, 10001 Sandmeyer
Lane, Philadelphia, PA
Joseph H. Hastings Senior Vice President/Corporate Controller and
Treasurer of Delaware Management Holdings, Inc., DMH
Corp. and Delaware Management Company, Inc.; Senior
Vice President and Treasurer of Delaware Distributors,
Inc.; Senior Vice President/Corporate Controller of
Founders Holdings, Inc.; Vice President and Treasurer
of Delaware Capital Management, Inc.; Vice
President/Corporate Controller of the Registrant, each
of the other funds in the Delaware Group, Delaware
Distributors, L.P., Delaware Service Company, 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
Richard Salus2 Vice President/Assistant Controller of Delaware
Management Company, Inc.; and Vice President of Delaware
Management Trust Company
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.
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
Name and Principle Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
Steven T. Lampe3 Vice President/Taxation of Delaware Management Company,
Inc., the Registrant, each of the other funds in the
Delaware Group, Delaware Management Holdings, Inc., DMH
Corp., Delaware Distributors, L.P., Delaware
Distributors, Inc., Delaware Service Company, Inc.,
Delaware Management Trust Company, Founders Holdings,
Inc., Founders CBO Corporation, Delaware Capital
Management, Inc. and Delaware Investment & Retirement
Services, 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.
Rosemary E. Milner Vice President/Legal of Delaware Management Company,
Inc., the Registrant, each of the other funds in the
Delaware Group, Delaware Distributors, L.P. and
Delaware Distributors, Inc.
Douglas L. Anderson Vice President/Operations of Delaware Management
Company, Inc., Delaware Investment and Retirement
Services, Inc. and Delaware Service Company, Inc.; and
Vice President/Operations and Director of Delaware
Management Trust Company
Michael T. Taggart Senior 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, Assistant
Secretary and Director of Founders CBO Corporation
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Name and Principle Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
Gary A. Reed Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., each of the tax-exempt funds
and the fixed income funds in the Delaware Group and
Delaware Capital Management, Inc.
Paul A. Matlack Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., each of the tax-exempt funds,
the fixed income funds and the closed-end funds in the
Delaware Group; Vice President of Founders Holdings,
Inc.; and President and Director of Founders CBO
Corporation.
Patrick P. Coyne Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., each of the tax-exempt funds
and the fixed income funds in the Delaware Group and
Delaware Capital Management, Inc.
Roger A. Early Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., each of the tax-exempt funds
and the fixed income funds in the Delaware Group
Mitchell L. Conery3 Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc. and each of the tax-exempt
and fixed income funds in the Delaware Group
George H. Burwell Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., the Registrant and each of
the equity funds in the Delaware Group
John B. Fields Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., the Registrant, each of the
equity funds in the Delaware Group and Delaware Capital
Management, Inc.
1 SENIOR MANAGER, Ernst & Young LLP prior to December 1996.
2 TAX MANAGER, Price Waterhouse prior to October 1995.
3 INVESTMENT OFFICER, Travelers Insurance prior to January 1997 and RESEARCH
ANALYST, CS First Boston Investment Management prior to March 1995.
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Item 29. PRINCIPAL UNDERWRITERS.
(a) Delaware Distributors, L.P. serves as principal underwriter for all
the mutual funds in the Delaware Group.
(b) Information with respect to each director, officer or partner of
principal underwriter:
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
- ----------------------------- --------------------- -----------------------
Delaware Distributors, Inc. General Partner None
Delaware Management
Company, Inc. Limited Partner Investment Manager
Delaware Capital
Management, Inc. Limited Partner None
Bruce D. Barton President and CEO None
David K. Downes Senior Vice President, Executive Vice
Chief Administrative President/Chief
Officer Operating Officer/
and Chief Financial Chief Financial Officer
Officer
George M. Chamberlain, Jr. Senior Vice President/ Senior Vice President/
Secretary Secretary
Thomas E. Sawyer Senior Vice President/ None
National Sales Director
William F. Hostler Senior Vice President/ None
Marketing Services
Dana B. Hall Senior Vice President/ None
Key Accounts
J. Chris Meyer Senior Vice President/ None
Product Development
Stephen H. Slack Senior Vice President/Wholesaler
None
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
- ----------------------------- --------------------- -----------------------
Henry W. Orvin Senior Vice President/ None
Eastern Divisional
Sales Manager ,
Wire/Regional
Channel
Richard J. Flannery Managing Director/ Vice President
Corporate
& Tax Affairs
Eric E. Miller Vice President/ Vice President/
Assistant Secretary Assistant Secretary
Richelle S. Maestro Vice President/ Vice President/
Assistant Secretary Assistant Secretary
Michael P. Bishof Vice President/ Vice President/
Treasurer Treasurer
Steven T. Lampe Vice President/ Vice President/
Taxation Taxation
Joseph H. Hastings Vice President/ Vice President/
Corporate Controller Corporate Controller
Lisa O. Brinkley Vice President/ Vice President/
Compliance Compliance
Rosemary E. Milner Vice President/Legal Vice President/Legal
Daniel H. Carlson Vice President/ None
Marketing
Diane M. Anderson Vice President/ None
Retirement Services
Denise F. Guerriere Vice President/ None
Client Services
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
Gregory J. McMillan Vice President/ None
National Accounts
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
- ----------------------------- --------------------- -----------------------
Christopher H. Price Vice President/ None
Annuity Marketing
& Administration
Stephen J. DeAngelis Vice President/Product None
Development
Thomas P. Kennett Vice President/ None
Wholesaler
Susan T. Friestedt Vice President / None
Customer Service
Dinah J. Huntoon Vice President/ None
Product Management
Soohee Lee Vice President/ None
Fixed Income
Product Management
Ellen M. Krott Vice President/ None
Communications
Holly W. Reimel Vice President/ None
Telemarketing
Terrence L. Bussard Vice President/ None
Wholesaler
William S. Carroll Vice President/ None
Wholesaler
William L. Castetter Vice President/ None
Wholesaler
Thomas J. Chadie Vice President/ None
Wholesaler
Thomas C. Gallagher Vice President/ None
Wholesaler
Douglas R. Glennon Vice President/ None
Wholesaler
Christopher L. Johnston Vice President/ None
Wholesaler
William M. Kimbrough Vice President/ None
Wholesaler
Debra Afra Marler Vice President/ None
Wholesaler
Mac McAuliffe Vice President/ None
Wholesaler
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
- ----------------------------- --------------------- -----------------------
Patrick L. Murphy Vice President/ None
Wholesaler
Philip G. Rickards Vice President/ None
Wholesaler
Laura E. Roman Vice President/ None
Wholesaler
Michael W. Rose Vice President/ None
Wholesaler
Thomas E. Sawyer Vice President/ None
Wholesaler
Linda Schulz Vice President/ None
Wholesaler
Edward B. Sheridan Vice President/ None
Wholesaler
Robert E. Stansbury Vice President/ None
Wholesaler
Larry D. Stone Vice President/ None
Wholesaler
John A. Wells Vice President/ None
Marketing Technology
(c) Not Applicable.
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
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.
<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 27th day of June, 1997.
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:
SIGNATURE TITLE DATE
- ---------------------------- ----------------- -------------
Chairman of the Board,
PresidentChief
/S/ WAYNE A. STORK Executive Officer and June 27, 1997
Wayne A. Stork Director
Executive Vice President/
Chief Operating
Officer/Chief Financial
Officer (Principal
Financial Officer
and Principal
/S/ DAVID K. DOWNES Accounting Officer) June 27, 1997
- ---------------------------
David K. Downes
/s/Walter P. Babich * Director June 27, 1997
- ---------------------------
Walter P. Babich
/s/Anthony D. Knerr * Director June 27, 1997
- ---------------------------
Anthony D. Knerr
/s/Ann R. Leven * Director June 27, 1997
- ---------------------------
Ann R. Leven
/s/W. Thacher Longstreth * Director June 27, 1997
- ---------------------------
W. Thacher Longstreth
/s/Charles E. Peck * Director June 27, 1997
- ---------------------------
Charles E. Peck
/S/THOMAS A. MADISON * Director June 27, 1997
- ---------------------------
Thomas A. Madison
/S/ JEFFREY J. NICK * Director June 27, 1997
- ---------------------------
Jeffrey J. Nick
*By /S/ WAYNE A. STORK
--------------------------------
Wayne A. Stork
as Attorney-in-Fact for
each of the persons indicated
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Exhibits
to
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Exhibit
- ----------- -------
EX-99.B9B Executed Delaware Group of Funds Fund Accounting
Agreement between Delaware Service Company, Inc.
and the Registrant (August 19, 1996)
EX-99.B9BI
Executed Amendment No. 1 to (September 30, 1996)
to Schedule A to Delaware Group of Funds Fund
Accounting Agreement
EX-99.B9BII Executed Amendment No. 2 (November 29, 1996) to
Schedule A to Delaware Group of Funds Fund
Accounting Agreement
EX-99.B9BIII Executed Amendment No. 3 (December 27, 1996) to
Schedule A to Delaware Group of Funds Fund
Accounting Agreement
EX-99.B9BIV Executed Amendment No. 4 (February 24, 1997) to
Schedule A to Delaware Group of Funds Fund
Accounting Agreement
EX-99.B9BV Executed Amendment No.5 (May 1, 1997) to Schedule
A to Delaware Group of Funds Fund Accounting
Agreement .
EX-99.B11 Consent and Report of Auditors
EX-99.B13 Investment Letter of Initial Shareholder
EX-99.B16B Schedules of Computation for each Performance
Quotation for periods not previously
electronically filed
EX-99.B19 Power of Attorney for Thomas F. Madison and
Jeffrey J. Nick
EX-27 Financial Data Schedules
<PAGE>
DELAWARE GROUP OF FUNDS
FUND ACCOUNTING AGREEMENT
THIS AGREEMENT, made as of this 19th day of August, 1996 by and between the
registered investment companies in the Delaware Group listed on Schedule A,
which Schedule may be amended from time to time as provided in Section 8 hereof
(each corporation or common law or business trust, hereinafter referred to as a
"Company," and all such entities collectively hereinafter referred to as, the
"Companies"), on behalf of the portfolio(s) of securities of such Companies
listed on Schedule A, which Schedule may be amended from time to time (when used
in this Agreement in the context of a Company that offers only a single
portfolio/series of shares, the term "Portfolio" shall be a reference to such
Company, and when used in the context of a Company that offers multiple
portfolios/series of shares, shall be a reference to each portfolio/series of
such Company) and DELAWARE SERVICE COMPANY, INC. ("DSC"), a Delaware
corporation, having its principal office and place of business at 1818 Market
Street, Philadelphia, Pennsylvania 19103.
W I T N E S S E T H:
WHEREAS, the Investment Management Agreements between the Companies with
respect to each Portfolio and either Delaware Management Company, Inc. or its
U.K. affiliate, Delaware
<PAGE>
International Advisers Ltd., provide, in part, that each Portfolio shall conduct
its business and affairs and shall bear the expenses necessary and incidental
thereto including, but not in limitation of the foregoing, the costs incurred
with respect to accounting services; and
WHEREAS, the services to be provided under this agreement previously were
provided by employees of the Companies; and
WHEREAS, the Companies and DSC desire to have a written agreement
concerning the performance of accounting services for each Portfolio 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 11 The Companies hereby appoint DSC the accounting agent
("Accounting Agent") for all of the classes of each Portfolio, to provide such
accounting services as are set forth herein and DSC hereby accepts such
appointment and agrees to provide the Companies, as their agent, the services
described herein.
Section 12 The Companies shall pay DSC and DSC shall accept, for
the services provided hereunder, the compensation provided for in Section VI
hereof. The Companies
-2-
<PAGE>
also shall reimburse DSC for expenses incurred or advanced by it for the
Companies in connection with its services hereunder.
II. DOCUMENTATION
Section 21 Each Company 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 the Companies (or is otherwise familiar
with), the following documents:
A. The Articles of Incorporation or Agreement and
Declaration of Trust or other document, as relevant, evidencing each Company's
form of organization and any current amendments thereto;
B. The By-Laws or Procedural Guidelines of each
Company;
C. Any resolution or other action of each Company or
the Board of Directors or Trustees of each Company establishing or affecting the
rights, privileges or other status of any class of shares of a Portfolio, or
altering or abolishing any such class;
D. A certified copy of a resolution of the Board of
Directors or Trustees of each Company appointing DSC as Accounting Agent for
each Portfolio and authorizing the execution of this Agreement or an amendment
to Schedule A of this Agreement;
-3-
<PAGE>
E. A copy of each Company's currently effective
prospectus[es] and Statement[s] of Additional Information under the Securities
Act of 1933, if effective;
F. A certified copy of any resolution of the Board of
Directors or Trustees of each Company 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
G. Any amendment, revocation or other document
altering, adding, qualifying or repealing any document or authority called for
under this Section 2.1.
Section 22 Each Company and DSC may consult as to forms or
documents that may be required in performing services hereunder.
Section 23 Each Company warrants the following:
A. The Company is, or will be, a properly registered
investment company under the Investment Company Act of 1940 (the "1940 Act") and
any and all shares of a Portfolio which it issues will be properly registered
and lawfully issued under applicable federal and state laws.
B. The provisions of this contract do not violate the
terms of any instrument by which the Company or the Company on behalf of a
Portfolio is bound; nor do they violate any law or regulation of any body having
jurisdiction over the Company or its property.
Section 24 DSC warrants the following:
-4-
<PAGE>
A. The provisions of this contract do not violate the
terms of any instrument by which DSC is bound; nor do they violate any law or
regulation of any body having jurisdiction over DSC or its property.
III. SERVICES TO BE PROVIDED BY DSC
Section 31 DAILY NET ASSET VALUE ("NAV") CALCULATION. As
Accounting Agent for each Portfolio of the Companies, DSC will perform all
functions necessary to provide daily Portfolio NAV calculations, including:
A. Maintaining each Portfolio's securities portfolio
history by:
1. recording portfolio purchases and sales;
2. recording corporate actions and capital
changes relating to portfolio securities;
3. accruing interest, dividends and expenses;
and
4. maintaining the income history for securities
purchased by a Portfolio.
B. Determining distributions to Portfolio
shareholders;
C. Recording and reconciling shareholder activity
including:
-5-
<PAGE>
1. recording subscription, liquidations and
dividend reinvestments;
2. recording settlements of shareholder
activity; and
3. reconciling Portfolio shares outstanding to
the records maintained by DSC, as transfer agent of the Portfolio.
D. Valuing a Portfolio's securities portfolio which
includes determining the NAVs for all classes of the Portfolio;
E. Disseminating Portfolio NAVs and dividends to
interested parties (including the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"), the Investment Company Institute ("ICI"),
Morningstar, and Lipper Analytical Services, Inc. ("Lipper")); and
F. Resolving pricing and/or custody discrepancies.
Section 32 FINANCIAL REPORTING. As Accounting Agent, DSC shall
perform financial reporting services for each Portfolio, which shall include:
A. The preparation of semi-annual and annual reports
for shareholders which involves the performance of the following functions:
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<PAGE>
1. preparing all statements of net assets,
statements of operations and statements of changes in net assets for the
Portfolio;
2. preparing footnotes to financial statements
for the Portfolio;
3. preparing workpapers for each Company's
annual audit by its independent public accountants; and
4. coordinating the annual audit by each
Company's independent public accountants.
B. Reporting to the ICI in response to requests for
monthly and other periodic information;
C. Performing statistical reporting, which includes
daily, monthly, quarterly and annual reports for Lipper, Weisenberger and other
third party reporting agencies; and
D. Furnishing financial information for any additional
required SEC reporting, such as the preparation of financial information for
each Company's reporting on Form N-SAR, the furnishing of financial information
for each Company's prospectus[es] and statement[s] of additional information,
and the financial information required for each Company's annual Rule 24f-2
notice filing;
Section 33 COMPLIANCE TESTING. DSC will monitor, test and prepare
and maintain supporting schedules which evidence compliance with the
definitional and distribution requirements
-7-
<PAGE>
under the Internal Revenue Code of 1986, as amended ("IRC"), including the
following:
A. The requirement to be registered at all times
during the taxable year under the 1940 Act (IRC Section 851(a));
B. The annual ninety percent gross income test (IRC
Section 851(b)(2));
C. The short/short (thirty percent) gross income test
(IRC Section 851(b)(3));
D. The quarterly IRC industry diversification tests
(IRC Sections 851(b)(4) and 817(h)); and
E. The 90% distribution requirements (IRC Section
852(a)).
Section 34 OTHER SERVICES. In addition to the above, DSC, in its
capacity as Accounting Agent for the Company, will perform the following
services:
A. The calculation of required Portfolio monthly yields
and total return calculations in accordance with the prescribed rules of the
U.S. Securities and Exchange Commission;
B. Providing the financial information necessary for
the preparation of all federal and state tax returns and ancillary schedules,
including:
1. year-end excise tax distributions; and
-8-
<PAGE>
2. compliance with Subchapter M and Section 4982
of the IRC;
C. Performing special tax reporting to shareholders,
including the preparation of reports which reflect income earned by each
Portfolio by state, exempt income and distributions that qualify for the
corporate dividends received deduction;
D. The preparation of expense and budget figures for
each Portfolio, including the maintenance of detailed records pertaining to
expense accruals and payments and adjusting reports to reflect accrual
adjustments;
E. The preparation of reports for Board of Directors'
or Trustees' meetings;
F. Coordination of the custody relationships;
G. Facilitating security settlements;
H. Performance of required foreign security accounting
functions;
I. Performance of daily cash reconciliations for each
Portfolio;
J. Providing identified reports to portfolio managers
including:
1. providing portfolio holdings and security
valuation reports;
2. preparing cash forecasts and reconciliations
as mutually agreed upon; and
-9-
<PAGE>
3. preparing income projections.
IV. PERFORMANCE OF DUTIES
Section 41 DSC may request or receive instructions from a Company
and may, at a Portfolio's expense, consult with counsel for the Company 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 42 DSC shall maintain reasonable insurance coverage for
errors and omissions and reasonable bond coverage for fraud.
Section 43 Upon notice thereof to a Company, DSC may employ others
to provide services to DSC in its performance of this Agreement.
Section 44 Personnel and facilities of DSC used to perform
services hereunder may be used to perform similar services to all Companies of
the Delaware Group and their Portfolios and to others, and may be used to
perform other services for all of the Companies of the Delaware Group and
others.
Section 45 The Companies and DSC may, from time to time, set forth
in writing at the Companies' expense certain guidelines to be applicable to the
services hereunder.
-10-
<PAGE>
V. ACCOUNTS AND RECORDS
Section 51 The parties hereto agree and acknowledge that the
accounts and records maintained by DSC with respect to a Portfolio shall be the
property of such Portfolio, and shall be made available to the relevant Company
promptly upon request and shall be maintained for the periods prescribed in Rule
31a-2 under the Investment Company Act of 1940 or such longer period as shall be
agreed to by the parties hereto, at such Portfolio's expense.
VI. COMPENSATION
Section 61 The Companies and DSC acknowledge that the compensation
to be paid hereunder to DSC is intended to induce DSC to provide services under
this Agreement of a nature and quality which the Boards of Directors or Trustees
of the Companies, including a majority who are not parties to this Agreement or
interested person of the parties hereto, have determined after due consideration
to be necessary for the conduct of the business of a Portfolio in the best
interests of a Portfolio and its shareholders.
Section 62 Compensation by a Portfolio hereunder shall be
determined in accordance with Schedule B hereto as it shall be amended from time
to time as provided for herein and which is incorporated herein as a part
hereof.
Section 63 Compensation as provided in Schedule B shall be
reviewed and approved for each Portfolio in the manner
-11-
<PAGE>
set forth in Section 8.1 hereof by the Boards of Directors or Trustees of the
Companies at least annually and may be reviewed and approved more frequently at
the request of either party. The Boards may request and DSC shall provide such
information as the Boards may reasonably require to evaluate the basis of and
approve the compensation.
VII. STANDARD OF CARE
Section 71 The Companies on behalf of each Portfolio acknowledge
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, agree 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 acknowledge that any risk of loss
or damage arising from the conduct of a Portfolio's affairs in accordance
herewith or in accordance with guidelines or instructions given hereunder, shall
be borne by the Portfolio. The indemnification provided for in this Section 7.1
shall be made Portfolio by Portfolio so that DSC is only entitled to
indemnification from a Company on behalf of a Portfolio for actions arising from
the performance of DSC's duties as to that Portfolio.
-12-
<PAGE>
VIII. CONTRACTUAL STATUS
Section 81 This Agreement shall be executed and become effective
as to a Company with regard to a Portfolio listed on Schedule A as of the date
first written above if approved by a vote of such Company's Board of Directors
or Trustees, including an affirmative vote of a majority of the non-interested
members of the Board of such Company, 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 as to a Company on behalf of
a Portfolio or DSC, as the case may be, on sixty (60) days notice by either that
Company or DSC, unless earlier terminated or amended by agreement among the
parties. A Company shall be permitted to terminate this Agreement as to a
Portfolio on sixty (60) days notice to DSC. Compensation under this Agreement
by a Portfolio shall require approval by a majority vote of the Board of
Directors or Trustees of such Portfolio's Company, including an affirmative vote
of the majority of the non-interested members of such Board cast in person at a
meeting called for the purpose of voting such approval.
Section 82 This Agreement shall become effective as to any Company
or Portfolio not included on Schedule A as of the date first written above, but
desiring to participate in this Agreement, on such date as an amended Schedule A
adding such new Company or Portfolio to such Schedule is executed by DSC and
such new Company or a Company on behalf of a new Portfolio following
-13-
<PAGE>
approval by the Company or by the Company on behalf of a new Portfolio desiring
to be included in this Agreement in accordance with the method specified in
Section 8.1. Any such amended Schedule A shall not affect the validity of this
Agreement as between DSC and the other Companies which have executed this
Agreement or any subsequent amendment to Schedule A of this Agreement.
Section 83 This Agreement may not be assigned by DSC without the
approval of all of the Companies.
Section 84 This Agreement shall be governed by the laws of the
Commonwealth of Pennsylvania.
DELAWARE SERVICE COMPANY, INC.
By: /s/ David K. Downes
---------------------------
David K. Downes
Senior Vice President/Chief
Administrative Officer/Chief
Financial Officer
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP DECATUR FUND, INC.
DELAWARE GROUP DELAWARE FUND, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT
FUNDS, INC.
DELAWARE GROUP TREND FUND, INC.
DELAWARE GROUP DELCHESTER HIGH-YIELD
BOND FUND, INC.
DMC TAX-FREE INCOME TRUST - PENNSYLVANIA
DELAWARE GROUP VALUE FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL
FUNDS, INC.
-14-
<PAGE>
DELAWARE GROUP DELCAP FUND, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP ADVISER FUNDS, INC.
By: /s/Wayne A. Stork
---------------------------
Wayne A. Stork
Chairman, President and
Chief Executive Officer
DELAWARE POOLED TRUST, INC.
By: /s/ Wayne A. Stork
---------------------------
Wayne A. Stork, Chairman
-15-
<PAGE>
SCHEDULE A
COMPANIES AND PORTFOLIOS COMPRISING THE DELAWARE GROUP
Delaware Group Cash Reserve, Inc.
Delaware Group Decatur Fund, Inc.
Decatur Income Fund
Decatur Total Return Fund
Delaware Group Delaware Fund, Inc.
Delaware Fund
Devon Fund
Delaware Group Tax-Free Fund, Inc.
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U.S. Government Money Fund
Delaware Group Trend Fund, Inc.
- -------------------
* EXCEPT AS OTHERWISE NOTED, ALL PORTFOLIOS INCLUDED ON THIS SCHEDULE A ARE
EXISTING PORTFOLIOS FOR PURPOSES OF THE COMPENSATION DESCRIBED ON SCHEDULE B TO
THAT FUND ACCOUNTING AGREEMENT BETWEEN DELAWARE SERVICE COMPANY, INC. AND THE
DELAWARE GROUP OF FUNDS DATED AS OF AUGUST 19, 1996 ("AGREEMENT"). ALL
PORTFOLIOS ADDED TO THIS SCHEDULE A BY AMENDMENT EXECUTED BY A COMPANY ON BEHALF
OF SUCH PORTFOLIO HEREOF SHALL BE A NEW PORTFOLIO FOR PURPOSES OF SCHEDULE B TO
THE AGREEMENT.
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<PAGE>
Delaware Group Delchester High-Yield Bond Fund, Inc.
DMC Tax-Free Income Trust - Pennsylvania
Delaware Group Value Fund, Inc.
Delaware Group Global & International Funds, Inc.
International Equity Fund
Global Bond Fund
Global Assets Fund
Emerging Markets Fund (New)
Delaware Group DelCap Fund, Inc.
Delaware Pooled Trust, Inc.
The Defensive Equity Portfolio
The Aggressive Growth Portfolio
The International Equity Portfolio
The Defensive Equity Small/Mid-Cap Portfolio (New)
The Defensive Equity Utility Portfolio (New)
The Labor Select International Equity Portfolio
The Real Estate Investment Trust Portfolio
The Fixed Income Portfolio
The Limited-Term Maturity Portfolio (New)
The Global Fixed Income Portfolio
The International Fixed Income Portfolio (New)
The High-Yield Bond Portfolio (New)
Delaware Group Premium Fund, Inc.
Equity/Income Series
High Yield Series
Capital Reserves Series
Money Market Series
Growth Series
Multiple Strategy Series
International Equity Series
Value Series
Emerging Growth Series
Global Bond Series (New)
Delaware Group Government Fund, Inc.
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<PAGE>
Delaware Group Adviser Funds, Inc.
Enterprise Fund
U.S. Growth Fund
World Growth Fund
New Pacific Fund
Federal Bond Fund
Corporate Income Fund
Dated as of: August 19, 1996
-18-
<PAGE>
SCHEDULE B
COMPENSATION
FEE SCHEDULE FOR THE DELAWARE GROUP OF FUNDS
PART 1 -- FEES FOR EXISTING PORTFOLIOS
Existing Portfolios are those so designated on Schedule A to the Fund Accounting
Agreement between Delaware Service Company, Inc. and the Delaware Group of Funds
dated as of August 19, 1996 ("Agreement").
ANNUAL ASSET BASED FEES
First $10 Billion of Aggregate
Complex Net Assets 2.5 Basis Points
Aggregate Complex Net Assets
over $10 Billion 2.0 Basis Points
Annual asset based fees will be charged at a rate of 2.5 basis points for the
first $10 Billion of Aggregate Complex Net Assets. Aggregate Complex Net Assets
over $10 Billion will be charged at a rate of 2.0 basis points. These fees will
be charged to a Portfolio on an aggregated pro rated basis.
ANNUAL MINIMUM FEES
Domestic Equity Portfolio $35,000
Domestic Fixed Income Portfolio $45,000
International Series Portfolio $70,000
Per Class of Share Fee $ 4,000
There is an annual minimum fee that will be charged only if the annual asset
based fee is less than the calculation for the minimum fee. This fee is based
on the type and the number of classes per Portfolio. For an equity Portfolio
$35,000 will be charged; for a fixed income Portfolio $45,000 will be charged,
and for an international Portfolio $70,000 will be charged. For each class of
shares, $4,000 will be charged, such amount to be prorated over a period of less
than a year for any classes added after April 30, 1996. A total of all minimum
fees will be compared to the total asset based fee to determine which fee is
higher and, subsequently, will be used to bill the Companies.
PART 2 -- FEES FOR NEW PORTFOLIOS
-19-
<PAGE>
For each Portfolio designated as a New Portfolio on Schedule A to the Agreement,
there will be a fee of 2.0 basis points, providing that the Delaware complex net
assets are above $10 Billion (the rate would be 2.5 basis points if under $10
Billion and then 2.0 basis points once the net assets cross $10 Billion), or an
annual minimum fee calculated in the manner described above, whichever is
higher. This new fee would be added to the total of Existing Portfolio fees and
then pro rated. Fees shall not be charged for New Portfolios included on
Schedule A until such Portfolios shall have commenced operations.
Dated as of: August 19, 1996
-20-
<PAGE>
AMENDMENT NO. 1 TO
SCHEDULE A
TO DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT
Delaware Group Cash Reserve, Inc.
Delaware Group Decatur Fund, Inc.
Decatur Income Fund
Decatur Total Return Fund
Delaware Group Delaware Fund, Inc.
Delaware Fund
Devon Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group Tax-Free Fund, Inc.
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U.S. Government Money Fund
Delaware Group Trend Fund, Inc.
Delaware Group Income Funds, Inc.
Delchester Fund
Strategic Income Fund (New)
DMC Tax-Free Income Trust - Pennsylvania
*Except as otherwise noted, all Portfolios included on this Schedule A are
Existing Portfolios for purposes of the compensation described on Schedule B to
that Fund Accounting Agreement between Delaware Service Company, Inc. and the
Delaware Group of Funds dated as of August 19, 1996 ("Agreement"). All
portfolios added to this Schedule A by amendment executed by a Company on behalf
of such Portfolio hereof shall be a New Portfolio for purposes of Schedule B to
the Agreement.
<PAGE>
Delaware Group Value Fund, Inc.
Delaware Group Global & International Funds, Inc.
International Equity Fund
Global Bond Fund
Global Assets Fund
Emerging Markets Fund (New)
Delaware Group DelCap Fund, Inc.
Delaware Pooled Trust, Inc.
The Defensive Equity Portfolio
The Aggressive Growth Portfolio
The International Equity Portfolio
The Defensive Equity Small/Mid-Cap Portfolio (New)
The Defensive Equity Utility Portfolio (New)
The Labor Select International Equity Portfolio
The Real Estate Investment Trust Portfolio
The Fixed Income Portfolio
The Limited-Term Maturity Portfolio (New)
The Global Fixed Income Portfolio
The International Fixed Income Portfolio (New)
The High-Yield Bond Portfolio (New)
Delaware Group Premium Fund, Inc.
Equity/Income Series
High Yield Series
Capital Reserves Series
Money Market Series
Growth Series
Multiple Strategy Series
International Equity Series
Value Series
Emerging Growth Series
Global Bond Series (New)
Delaware Group Government Fund, Inc.
-2-
<PAGE>
Delaware Group Adviser Funds, Inc.
Enterprise Fund
U.S. Growth Fund
World Growth Fund
New Pacific Fund
Federal Bond Fund
Corporate Income Fund
Dated as of: September 30, 1996
--------------------
DELAWARE SERVICE COMPANY, INC.
By:/S/ David K. Downes
------------------------------
David K. Downes
Senior Vice President/Chief
Administrative Officer/Chief
Financial Officer
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP DECATUR FUND, INC.
DELAWARE GROUP DELAWARE FUND, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY
FUND,INC.
DELAWARE GROUP LIMITED-TERM
GOVERNMENT FUNDS, INC.
DELAWARE GROUP TREND FUND, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DMC TAX-FREE INCOME TRUST -
PENNSYLVANIA
DELAWARE GROUP VALUE FUND, INC.
DELAWARE GROUP GLOBAL &
INTERNATIONAL FUNDS, INC.
DELAWARE GROUP DELCAP FUND, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP ADVISER FUNDS, INC.
By:/S/ Wayne A. Stork
------------------------------------------
Wayne A. Stork
Chairman, President and
Chief Executive Officer
DELAWARE POOLED TRUST, INC.
By:/S/Wayne A. Stork
------------------------------------------
Wayne A. Stork
Chairman
-3-
<PAGE>
AMENDMENT NO. 2 TO
SCHEDULE A
TO DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT
Delaware Group Adviser Funds, Inc.
Corporate Income Fund
Enterprise Fund
Federal Bond Fund
New Pacific Fund
U.S. Growth Fund
World Growth Fund
Delaware Group Cash Reserve, Inc.
Delaware Group Decatur Fund, Inc.
Decatur Income Fund
Decatur Total Return Fund
Delaware Group Delaware Fund, Inc.
Delaware Fund
Devon Fund
Delaware Group Equity Funds IV, Inc.
Capital Appreciation Fund (New)
DelCap Fund
Delaware Group Equity Funds V, Inc.
Retirement Income Fund (New)
Value Fund
*Except as otherwise noted, all Portfolios included on this Schedule A are
Existing Portfolios for purposes of the compensation described on Schedule B to
that Fund Accounting Agreement between Delaware Service Company, Inc. and the
Delaware Group of Funds dated as of August 19, 1996 ("Agreement"). All
portfolios added to this Schedule A by amendment executed by a Company on behalf
of such Portfolio hereof shall be a New Portfolio for purposes of Schedule B to
the Agreement.
1
<PAGE>
Delaware Group Global & International Funds, Inc.
Emerging Markets Fund (New)
Global Assets Fund
Global Bond Fund
International Equity Fund
Delaware Group Government Fund, Inc.
Delaware Group Income Funds, Inc.
Delchester Fund
Strategic Income Fund (New)
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U.S. Government Money Fund
Delaware Group Premium Fund, Inc.
Capital Reserves Series
Emerging Growth Series
Equity/Income Series
Global Bond Series (New)
Growth Series
High Yield Series
International Equity Series
Money Market Series
Multiple Strategy Series
Value Series
Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group Trend Fund, Inc.
2
<PAGE>
Delaware Pooled Trust, Inc.
The Aggressive Growth Portfolio
The Defensive Equity Portfolio
The Defensive Equity Small/Mid-Cap Portfolio (New)
The Fixed Income Portfolio
The Global Fixed Income Portfolio
The High-Yield Bond Portfolio (New)
The International Equity Portfolio
The International Fixed Income Portfolio (New)
The Labor Select International Equity Portfolio
The Limited-Term Maturity Portfolio (New)
The Real Estate Investment Trust Portfolio
DMC Tax-Free Income Trust - Pennsylvania
Dated as of: November 29, 1996
-----------------------
DELAWARE SERVICE COMPANY, INC.
By: /s/David K. Downes
------------------------------
David K. Downes
Senior Vice President/
Chief Administrative Officer/
Chief Financial Officer
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP DECATUR FUND, INC.
DELAWARE GROUP DELAWARE FUND, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL
FUNDS, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT
FUNDS, INC.
DELAWARE GROUP PREMIUM FUND, INC.
3
<PAGE>
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
DELAWARE GROUP TREND FUND, INC.
DMC TAX-FREE INCOME TRUST-PENNSYLVANIA
By: /s/ Wayne A. Stork
-----------------------------------------
Wayne A. Stork
Chairman, President and
Chief Executive Officer
DELAWARE POOLED TRUST, INC.
By: /s/ Wayne A. Stork
-----------------------------------------
Wayne A. Stork
Chairman
4
<PAGE>
AMENDMENT NO.3 TO
SCHEDULE A
TO DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT
Delaware Group Cash Reserve, Inc.
Delaware Group Decatur Fund, Inc.
Decatur Income Fund
Decatur Total Return Fund
Delaware Group Delaware Fund, Inc.
Delaware Fund
Devon Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group Tax-Free Fund, Inc.
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U.S. Government Money Fund
Delaware Group Trend Fund, Inc.
Delaware Group Income Funds, Inc.
Delchester Fund
Strategic Income Fund (New)
*Except as otherwise noted, all Portfolios included on this Schedule A are
Existing Portfolios for purposes of the compensation described on Schedule B to
that Fund Accounting Agreement between Delaware Service Company, Inc. and the
Delaware Group of Funds dated as of August 19, 1996 ("Agreement"). All
portfolios added to this Schedule A by amendment executed by a Company on behalf
of such Portfolio hereof shall be a New Portfolio for purposes of Schedule B to
the Agreement.
1
<PAGE>
DMC Tax-Free Income Trust - Pennsylvania
Delaware Group Value Fund, Inc.
Value Fund
Retirement Income Fund (New)
Delaware Group Global & International Funds, Inc.
International Equity Fund
Global Bond Fund
Global Assets Fund
Emerging Markets Fund (New)
Delaware Group Equity Funds IV, Inc.
DelCap Fund
Multi-Cap Equity Fund (New)
Delaware Pooled Trust, Inc.
The Defensive Equity Portfolio
The Aggressive Growth Portfolio
The International Equity Portfolio
The Defensive Equity Small/Mid-Cap Portfolio (New)
The Defensive Equity Utility Portfolio (New)
The Labor Select International Equity Portfolio
The Real Estate Investment Trust Portfolio
The Fixed Income Portfolio
The Limited-Term Maturity Portfolio (New)
The Global Fixed Income Portfolio
The International Fixed Income Portfolio (New)
The High-Yield Bond Portfolio (New)
Delaware Group Premium Fund, Inc.
Equity/Income Series
High Yield Series
Capital Reserves Series
Money Market Series
Growth Series
Multiple Strategy Series
International Equity Series
Value Series
Emerging Growth Series
Global Bond Series (New)
Delaware Group Government Fund, Inc.
2
<PAGE>
Delaware Group Adviser Funds, Inc.
Enterprise Fund
U.S. Growth Fund
World Growth Fund
New Pacific Fund
Federal Bond Fund
Corporate Income Fund
Dated as of: December 27, 1996
DELAWARE SERVICE COMPANY, INC.
By: /s/David K. Downes
------------------------------
David K. Downes
Senior Vice President/Chief
Administrative Officer/Chief
Financial Officer
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP DECATUR FUND, INC.
DELAWARE GROUP DELAWARE FUND, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND,INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT
FUNDS, INC.
DELAWARE GROUP TREND FUND, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DMC TAX-FREE INCOME TRUST - PENNSYLVANIA
DELAWARE GROUP VALUE FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL
FUNDS, INC.
DELAWARE GROUP DELCAP FUND, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP ADVISER FUNDS, INC.
By: /s/Wayne A. Stork
-----------------------------------------
Wayne A. Stork
Chairman, President and
Chief Executive Officer
DELAWARE POOLED TRUST, INC.
By: /s/Wayne A. Stork
-----------------------------------------
Wayne A. Stork
Chairman
3
[caad 214]<PAGE>
AMENDMENT NO. 4 TO
SCHEDULE A
TO DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT
Delaware Group Cash Reserve, Inc.
Delaware Group Equity Funds II, Inc.
Decatur Income Fund
Decatur Total Return Fund
Blue Chip Fund (New)
Quantum Fund (New)
Delaware Group Equity Funds I, Inc.
Delaware Fund
Devon Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group Tax-Free Fund, Inc.
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U.S. Government Money Fund
Delaware Group Trend Fund, Inc.
Delaware Group Income Funds, Inc.
Delchester Fund
Strategic Income Fund
High-Yield Opportunities Fund (New)
*Except as otherwise noted, all Portfolios included on this Schedule A are
Existing Portfolios for purposes of the compensation described on Schedule B to
that Fund Accounting Agreement between Delaware Service Company, Inc. and the
Delaware
1
<PAGE>
Group of Funds dated as of August 19, 1996 ("Agreement"). All portfolios added
to this Schedule A by amendment executed by a Company on behalf of such
Portfolio hereof shall be a New Portfolio for purposes of Schedule B to the
Agreement.
DMC Tax-Free Income Trust - Pennsylvania
Delaware Group Equity Funds V, Inc.
Value Fund
Retirement Income Fund
Delaware Group Global & International Funds, Inc.
International Equity Fund
Global Bond Fund
Global Assets Fund
Emerging Markets Fund
Delaware Group Equity Funds IV, Inc.
DelCap Fund
Capital Appreciation Fund
Delaware Pooled Trust, Inc.
The Defensive Equity Portfolio
The Aggressive Growth Portfolio
The International Equity Portfolio
The Defensive Equity Small/Mid-Cap Portfolio
The Defensive Equity Utility Portfolio
The Labor Select International Equity Portfolio
The Real Estate Investment Trust Portfolio
The Fixed Income Portfolio
The Limited-Term Maturity Portfolio
The Global Fixed Income Portfolio
The International Fixed Income Portfolio
The High-Yield Bond Portfolio
Delaware Group Premium Fund, Inc.
Equity/Income Series
High Yield Series
Capital Reserves Series
Money Market Series
Growth Series
Multiple Strategy Series
International Equity Series
Value Series
2
<PAGE>
Emerging Growth Series
Global Bond Series
Delaware Group Government Fund, Inc.
Delaware Group Adviser Funds, Inc.
Enterprise Fund
U.S. Growth Fund
World Growth Fund
New Pacific Fund
Federal Bond Fund
Corporate Income Fund
Dated as of: FEBRUARY 24, 1997
-----------------------
DELAWARE SERVICE COMPANY, INC.
By: /S/ DAVID K. DOWNES
--------------------------------
David K. Downes
Senior Vice President/Chief
Administrative Officer/Chief
Financial Officer
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND,INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT
FUNDS, INC.
DELAWARE GROUP TREND FUND, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DMC TAX-FREE INCOME TRUST - PENNSYLVANIA
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL
FUNDS, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP ADVISER FUNDS, INC.
By: /S/ WAYNE A. STORK
------------------------------------------
Wayne A. Stork
Chairman, President and
Chief Executive Officer
3
<PAGE>
DELAWARE POOLED TRUST, INC.
By: /S/ WAYNE A. STORK
------------------------------------------
Wayne A. Stork
Chairman
4
<PAGE>
AMENDMENT NO. 5
TO
SCHEDULE A
OF
DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT
Delaware Group Adviser Funds, Inc.
Corporate Income Fund
Enterprise Fund
Federal Bond Fund
New Pacific Fund
U.S. Growth Fund
World Growth Fund
Delaware Group Cash Reserve, Inc.
Delaware Group Equity Funds I, Inc. (formerly Delaware)
Delaware Fund
Devon Fund
Delaware Group Equity Funds II, Inc. (formerly Decatur)
Blue Chip Fund (New)
Decatur Income Fund
Decatur Total Return Fund
Quantum Fund (New)
Delaware Group Equity Funds IV, Inc. (formerly DelCap)
Capital Appreciation Fund (New)
DelCap Fund
Delaware Group Equity Funds V, Inc. (formerly Value)
Value Fund
Retirement Income Fund (New)
Delaware Group Government Fund, Inc.
Government Income Series (U.S. Government Fund )
- ------------------
*Except as otherwise noted, all Portfolios included on this Schedule A are
Existing Portfolios for purposes of the compensation described on Schedule B to
that Fund Accounting Agreement between Delaware Service Company, Inc. and the
Delaware Group of Funds dated as of August 19, 1996 ("Agreement"). All
portfolios added to this Schedule A by amendment executed by a Company on behalf
of such Portfolio hereof shall be a New Portfolio for purposes of Schedule B to
the Agreement.
<PAGE>
Delaware Group Global & International Funds, Inc.
Emerging Markets Fund (New)
Global Assets Fund
Global Bond Fund
International Equity Fund
Delaware Group Income Funds, Inc. (formerly Delchester)
Delchester Fund
High-Yield Opportunities Fund (New)
Strategic Income Fund (New)
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U. S. Government Money Fund
Delaware Pooled Trust, Inc.
The Aggressive Growth Portfolio
The Defensive Equity Portfolio
The Defensive Equity Small/Mid-Cap Portfolio (New)
The Defensive Equity Utility Portfolio (New)
The Emerging Markets Portfolio (New)
The Fixed Income Portfolio
The Global Fixed Income Portfolio
The High-Yield Bond Portfolio (New)
The International Equity Portfolio
The International Fixed Income Portfolio (New)
The Labor Select International Equity Portfolio
The Limited-Term Maturity Portfolio (New)
The Real Estate Investment Trust Portfolio
Delaware Group Premium Fund, Inc.
Capital Reserves Series
Cash Reserve Series
Convertible Securities Series (New)
Decatur Total Return Series
Delaware Series
Delchester Series
Devon Series (New)
Emerging Markets Series (New)
DelCap Series
Global Bond Series (New)
International Equity Series
Quantum Series (New)
Strategic Income Series (New)
Trend Series
Value Series
2
<PAGE>
Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group Trend Fund, Inc.
DMC Tax-Free Income Trust-Pennsylvania (doing business as Tax-Free Pennsylvania
Fund)
Voyageur Funds, Inc.
Voyageur U.S. Government Securities Fund (New)
Voyageur Insured Funds, Inc.
Arizona Insured Tax Free Fund (New)
Colorado Insured Fund (New)
Minnesota Insured Fund (New)
National Insured Tax Free Fund (New)
Voyageur Intermediate Tax Free Funds, Inc.
Arizona Limited Term Tax Free Fund (New)
California Limited Term Tax Free Fund (New)
Colorado Limited Term Tax Free Fund (New)
Minnesota Limited Term Tax Free Fund (New)
National Limited Term Tax Free Fund (New)
Voyageur Investment Trust
California Insured Tax Free Fund (New)
Florida Insured Tax Free Fund (New)
Florida Tax Free Fund (New)
Kansas Tax Free Fund (New)
Missouri Insured Tax Free Fund (New)
New Mexico Tax Free Fund (New)
Oregon Insured Tax Free Fund (New)
Utah Tax Free Fund (New)
Washington Insured Tax Free Fund (New)
3
<PAGE>
Voyageur Investment Trust II
Florida Limited Term Tax Free Fund (New)
Voyageur Mutual Funds, Inc.
Arizona Tax Free Fund (New)
California Tax Free Fund (New)
Iowa Tax Free Fund (New)
Idaho Tax Free Fund (New)
Minnesota High Yield Municipal Bond Fund (New)
National High Yield Municipal Bond Fund (New)
National Tax Free Fund (New)
New York Tax Free Fund (New)
Wisconsin Tax Free Fund (New)
Voyageur Mutual Funds II, Inc.
Colorado Tax Free Fund (New)
Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund (New)
Growth Stock Fund (New)
International Equity Fund (New)
Tax Efficient Equity Fund (New)
Voyageur Tax Free Funds, Inc.
Minnesota Tax Free Fund (New)
North Dakota Tax Free Fund (New)
Dated as of May 1, 1997
4
<PAGE>
DELAWARE SERVICE COMPANY, INC.
By: /s/ David K. Downes
-------------------------------------------------
David K. Downes
President, Chief Executive Officer and Chief Financial Officer
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP LIMITED -TERM GOVERNMENT FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX FREE MONEY FUND, INC.
DELAWARE GROUP TREND FUND, INC.
DMC TAX-FREE INCOME TRUST-PENNSYLVANIA
VOYAGEUR FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.
By: /s/ Wayne A. Stork
-------------------------
Wayne A. Stork
Chairman, President and
Chief Executive Officer
5
<PAGE>
EX-99.B11
Consent of Ernst & Young LLP, Independent Auditors
We consent to the references to our firm under the captions "Financial
Highlights" in the Prospectuses and "Financial Statements" in the Statement of
Additional Information and to the incorporation by reference in this
Post-Effective Amendment No. 22 to the Registration Statement (Form N-1A) (No.
2-70164) of Delaware Group Tax-Free Money Fund, Inc. of our report dated June 5,
1997, included in the 1997 Annual Report to Shareholders of Delaware Group
Tax-Free Money Fund, Inc.
Philadelphia, Pennsylvania /s/ Ernst & Young LLP
June 25, 1997
<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, 1997, and the related
statement of operations for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended and the financial
highlights for each of the 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 and financial highlights. Our procedures included confirmation of
investments owned as of April 30, 1997 by correspondence with the custodian. 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, 1997, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles.
June 5, 1997 /s/ Ernst & Young LLP
<PAGE>
EX-99.B13
DELAWARE MANAGEMENT COMPANY, INC.
May 18, 1981
Delaware Tax-Free Money Fund, Inc.
7 Penn Center Plaza
Philadelphia, Pennsylvania 19103
Gentlemen:
As the initial shareholder of Delaware Tax-Free Money Fund, Inc., we hereby
represent that we are making the investment for investment reasons only and not
for the purpose of resale.
Yours very truly,
DELAWARE MANAGEMENT COMPANY, INC.
/s/ Thomas F. Glancey
Executive Vice President
lmj
<PAGE>
DELAWARE TAX FREE MONEY FUND A CLASS
TOTAL RETURN PERFORMANCE
FIFTEEN YEARS
- --------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $1.00
Initial Shares 1000.000
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------------------------
1983 1000.000 $0.056 57.594 1,057.594
- --------------------------------------------------------------------------------
1984 1057.594 $0.050 53.557 1,111.151
- --------------------------------------------------------------------------------
1985 1111.151 $0.053 60.655 1,171.806
- --------------------------------------------------------------------------------
1986 1171.806 $0.047 56.242 1,228.048
- --------------------------------------------------------------------------------
1987 1228.048 $0.039 48.743 1,276.791
- --------------------------------------------------------------------------------
1988 1276.791 $0.041 53.016 1,329.807
- --------------------------------------------------------------------------------
1989 1329.807 $0.050 68.397 1,398.204
- --------------------------------------------------------------------------------
1990 1398.204 $0.053 75.911 1,474.115
- --------------------------------------------------------------------------------
1991 1474.115 $0.048 71.794 1,545.909
- --------------------------------------------------------------------------------
1992 1545.909 $0.035 54.474 1,600.383
- --------------------------------------------------------------------------------
1993 1600.383 $0.020 32.521 1,632.904
- --------------------------------------------------------------------------------
1994 1632.904 $0.016 25.962 1,658.866
- --------------------------------------------------------------------------------
1995 1658.866 $0.026 42.879 1,701.745
- --------------------------------------------------------------------------------
1996 1701.745 $0.029 50.618 1,752.363
- --------------------------------------------------------------------------------
1997 1752.363 $0.028 48.860 1,801.223
- --------------------------------------------------------------------------------
Ending Shares 1801.223
Ending NAV x $1.00
----------
$1,801.22
Investment Return $1,801.22
Total Return Performance
- --------------------
Investment Return $1,801.22
Less Initial Investment $1,000.00
----------
$801.22/$1,000.00 x 100
Total Return: 80.12%
<PAGE>
DELAWARE TAX FREE MONEY FUND CONSULTANT CLASS
TOTAL RETURN PERFORMANCE
FIFTEEN YEARS
- --------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $1.00
Initial Shares 1000.000
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------------------------
1983 1000.000 $0.056 57.594 1,057.594
- --------------------------------------------------------------------------------
1984 1057.594 $0.050 53.557 1,111.151
- --------------------------------------------------------------------------------
1985 1111.151 $0.053 60.655 1,171.806
- --------------------------------------------------------------------------------
1986 1171.806 $0.047 56.242 1,228.048
- --------------------------------------------------------------------------------
1987 1228.048 $0.039 48.743 1,276.791
- --------------------------------------------------------------------------------
1988 1276.791 $0.041 52.761 1,329.552
- --------------------------------------------------------------------------------
1989 1329.552 $0.048 64.921 1,394.473
- --------------------------------------------------------------------------------
1990 1394.473 $0.050 72.063 1,466.536
- --------------------------------------------------------------------------------
1991 1466.536 $0.047 70.952 1,537.488
- --------------------------------------------------------------------------------
1992 1537.488 $0.035 54.177 1,591.665
- --------------------------------------------------------------------------------
1993 1591.665 $0.020 32.344 1,624.009
- --------------------------------------------------------------------------------
1994 1624.009 $0.016 25.821 1,649.830
- --------------------------------------------------------------------------------
1995 1649.830 $0.026 42.645 1,692.475
- --------------------------------------------------------------------------------
1996 1692.475 $0.029 50.342 1,742.817
- --------------------------------------------------------------------------------
1997 1742.817 $0.028 48.594 1,791.411
- --------------------------------------------------------------------------------
Ending Shares 1791.411
Ending NAV x $1.00
-----------
Investment Return $1,791.41
Total Return Performance
- ------------------------
Investment Return $1,791.41
Less Initial Investment $1,000.00
-----------
$791.41/$1,000.00 x 100
Total Return: 79.14%
<PAGE>
DELAWARE TAX FREE MONEY FUND CONSULTANT CLASS
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
--------------------------------------------------------------------------
AVERAGE ANNUAL COMPOUNDED RATE OF RETURN:
n
P(1 + T) = ERV
FIFTEEN
YEARS
---------
1
$1000(1 - T) = $1,791.411
T = 3.96%
<PAGE>
DELAWARE TAX FREE MONEY FUND A CLASS
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
--------------------------------------------------------------------------
AVERAGE ANNUAL COMPOUNDED RATE OF RETURN:
n
P(1 + T) = ERV
FIFTEEN
YEARS
----------
1
$1000(1 - T) = $1,801.22
T = 4.00%
<PAGE>
POWER OF ATTORNEY
The undersigned, a member of the Boards of Directors/Trustees of the
Delaware Group Funds listed on Exhibit A to this Power of Attorney, hereby
constitutes and appoints Wayne A. Stork, W. Thacher Longstreth and Walter P.
Babich and any one of them acting singly, his true and lawful attorneys-in-fact,
in his name, place, and stead, to execute and cause to be filed with the
Securities and Exchange Commission and other federal or state government agency
or body, such registration statements, and any and all amendments thereto as
either of such designees may deem to be appropriate under the Securities Act of
1933, as amended, the Investment Company Act of 1940, as amended, and all other
applicable federal and state securities laws.
IN WITNESS WHEREOF, the undersigned has executed this instrument as of this
1st day of May, 1997.
/s/Thomas F. Madison
- ------------------------------
Thomas F. Madison
<PAGE>
POWER OF ATTORNEY
EXHIBIT A
DELAWARE GROUP FUNDS
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP TREND FUND, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DMC TAX-FREE INCOME TRUST-PENNSYLVANIA
DELAWARE GROUP DIVIDEND AND INCOME FUND, INC.
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC.
VOYAGEUR FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.
VOYAGEUR TAX FREE FUNDS, INC.
VOYAGEUR ARIZONA MUNICIPAL INCOME FUND, INC.
VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUND, INC.
VOYAGEUR FLORIDA INSURED MUNICIPAL INCOME FUND
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND, INC.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND II, INC.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND III, INC.
<PAGE>
POWER OF ATTORNEY
The undersigned, a member of the Boards of Directors/Trustees of the
Delaware Group Funds listed on Exhibit A to this Power of Attorney, hereby
constitutes and appoints Wayne A. Stork, W. Thacher Longstreth and Walter P.
Babich and any one of them acting singly, his true and lawful attorneys-in-fact,
in his name, place, and stead, to execute and cause to be filed with the
Securities and Exchange Commission and other federal or state government agency
or body, such registration statements, and any and all amendments thereto as
either of such designees may deem to be appropriate under the Securities Act of
1933, as amended, the Investment Company Act of 1940, as amended, and all other
applicable federal and state securities laws.
IN WITNESS WHEREOF, the undersigned has executed this instrument as of this
1st day of May, 1997.
/s/Jeffrey J. Nick
- ------------------------------
Jeffrey J. Nick
<PAGE>
POWER OF ATTORNEY
EXHIBIT A
DELAWARE GROUP FUNDS
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP TREND FUND, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DMC TAX-FREE INCOME TRUST-PENNSYLVANIA
DELAWARE GROUP DIVIDEND AND INCOME FUND, INC.
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC.
VOYAGEUR FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.
VOYAGEUR TAX FREE FUNDS, INC.
VOYAGEUR ARIZONA MUNICIPAL INCOME FUND, INC.
VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUND, INC.
VOYAGEUR FLORIDA INSURED MUNICIPAL INCOME FUND
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND, INC.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND II, INC.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND III, INC.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000320572
<NAME> DELAWARE GROUP TAX-FREE MONEY FUND, INC.
<SERIES>
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<NAME> TAX-FREE MONEY FUND A CLASS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-END> APR-30-1997
<INVESTMENTS-AT-COST> 33,877,712
<INVESTMENTS-AT-VALUE> 33,877,712
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<ASSETS-OTHER> 1,405
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<EXPENSES-NET> 291,588
<NET-INVESTMENT-INCOME> 976,478
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<DISTRIBUTIONS-OF-INCOME> 935,545
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<NUMBER-OF-SHARES-SOLD> 33,819,386
<NUMBER-OF-SHARES-REDEEMED> 37,537,625
<SHARES-REINVESTED> 898,384
<NET-CHANGE-IN-ASSETS> (2,742,720)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 291,588
<AVERAGE-NET-ASSETS> 34,020,442
<PER-SHARE-NAV-BEGIN> 1
<PER-SHARE-NII> 0.028
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<PER-SHARE-DIVIDEND> 0.028
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<PAGE>
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<CIK> 0000320572
<NAME> DELAWARE GROUP TAX-FREE MONEY FUND, INC.
<SERIES>
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<NAME> TAX-FREE MONEY FUND CONSULTANT CLASS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-END> APR-30-1997
<INVESTMENTS-AT-COST> 33,877,712
<INVESTMENTS-AT-VALUE> 33,877,712
<RECEIVABLES> 359,681
<ASSETS-OTHER> 1,405
<OTHER-ITEMS-ASSETS> 1,798
<TOTAL-ASSETS> 34,240,596
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<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 52,115
<TOTAL-LIABILITIES> 52,115
<SENIOR-EQUITY> 34,188,481
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,529,331
<SHARES-COMMON-PRIOR> 1,452,196
<ACCUMULATED-NII-CURRENT> 0
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<OVERDISTRIBUTION-GAINS> 0
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<DIVIDEND-INCOME> 0
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<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 976,478
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<DISTRIBUTIONS-OF-INCOME> 40,933
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,911,756
<NUMBER-OF-SHARES-REDEEMED> 1,875,259
<SHARES-REINVESTED> 40,638
<NET-CHANGE-IN-ASSETS> (2,742,720)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
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