<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._____ [ ]
Post-Effective Amendment No._23_ [X]
AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No._23_
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
________________________________________________________________________________
(Exact Name of Registrant as Specified in Charter)
1818 Market Street, Philadelphia, Pennsylvania 19103
________________________________________________________________________________
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (215) 255-2923
--------------
George M. Chamberlain, Jr., 1818 Market Street, Philadelphia, PA 19103
________________________________________________________________________________
(Name and Address of Agent for Service)
Approximate Date of Public Offering: June 29, 1998
-------------
It is proposed that this filing will become effective:
_____ immediately upon filing pursuant to paragraph (b)
__X__ on June 29, 1998 pursuant to paragraph (b)
_____ 60 days after filing pursuant to paragraph (a)(1)
_____ on (date) pursuant to paragraph (a)(1)
_____ 75 days after filing pursuant to paragraph (a)(2)
_____ on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate:
_____ this post-effective amendment designates a new effective date for
a previously filed post-effectiv amendment
Title of Securities Being Registered
____________________________________
Tax-Free Money Fund A Class
Tax-Free Money Fund Consultant Class
<PAGE>
--- C O N T E N T S ---
This Post-Effective Amendment No. 23 to Registration File No. 2-70164 includes
the following:
1. Facing Page
2. Contents Page
3. Cross-Reference Sheets
4. Part A - Prospectus
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 Page
2 Synopsis................................ Synopsis;
Summary of
Expenses
3 Condensed Financial Information......... Financial Highlights
4 General Description of Registrant....... Investment Objective
and Policies; Shares (under
Management of the Fund)
5 Management of the Fund ................. Management of the Fund
6 Capital Stock and Other Securities ..... The Delaware Difference;
Dividends and Distributions;
Taxes; Shares (under
Management of the Fund)
7 Purchase of Securities Being Offered.... Cover Page; Buying Shares;
Net Asset Value Per Share;
Management of the Fund
8 Redemption or Repurchase................ Buying Shares;
Redemption and Exchange
9 Legal Proceedings....................... None
* This filing relates to 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.
<PAGE>
CROSS-REFERENCE SHEET
PART B
Location in Statement of
Item No. Description Additional Information
- -------- ----------- ------------------------
10 Cover Page.............................. Cover Page
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
Consultant Class 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
Location in
Item No. Description 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>
Table of
Contents
COVER PAGE..................................................................
SYNOPSIS....................................................................
SUMMARY OF EXPENSES.........................................................
FINANCIAL HIGHLIGHTS........................................................
INVESTMENT OBJECTIVE AND POLICIES
Suitability................................................................
Investment Strategy........................................................
THE DELAWARE DIFFERENCE
Plans and Services.........................................................
BUYING SHARES..............................................................
REDEMPTION AND EXCHANGE....................................................
DIVIDENDS AND DISTRIBUTIONS................................................
TAXES......................................................................
NET ASSET VALUE PER SHARE..................................................
MANAGEMENT OF THE FUND.....................................................
<PAGE>
Tax-Free Money Fund
A Class/Consultant Class
June 29, 1998
1818 Market Street, Philadelphia, PA 19103
For Prospectus and Performance:
Nationwide 800-523-1918
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 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 is a money market
fund. The Fund intends to achieve its investment 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.
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, 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 $1.00 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 29, 1998, 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 (the "SEC"). Part B is
incorporated by reference into this Prospectus and is available, without
charge, by writing to Delaware Distributors, L.P. at the above address or by
calling the above number. The Fund's financial statements appear in its Annual
Report, which will accompany any response to requests for Part B. The SEC also
maintains a Web site (http://www.sec.gov) that contains Part B, material we
incorporated by reference and other information regarding registrants that
electronically file with the SEC.
<PAGE>
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 THE PRINCIPAL AMOUNT INVESTED. SHARES OF
THE FUND ARE NOT BANK OR CREDIT UNION DEPOSITS.
1
<PAGE>
Synopsis
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 investment 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
Transfer Agent
Delaware Management Company (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 Investments family.
Delaware Distributors, L.P. (the "Distributor") is the national distributor for
the Fund and for all of the other mutual funds in the Delaware Investments
family. 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
Investments family.
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.
<PAGE>
Purchase Price
Class A Shares offered by this Prospectus are available at net asset
value, without a sales charge, and are not subject to distribution fees.
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 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. The Fund was organized
as a Maryland corporation in April 1980.
See Shares under Management of the Fund.
2
<PAGE>
Summary of
Expenses
<TABLE>
<CAPTION>
Class A Consultant
Shareholder Transaction Expenses Shares Class 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(1) None(1)
Exchange Fees ............................................................................ None(2) None(2)
</TABLE>
Annual Operating Expenses Class A Consultant
(as a percentage of average daily net assets) Shares Class Shares
- ----------------------------------------------- ------ ------------
Management Fees ............................... 0.50% 0.50%
12b-1 Fees .................................... None None(3)
Other Operating Expenses ...................... 0.41% 0.41%
---- -----
Total Operating Expenses .................... 0.91% 0.91%
==== =====
(1) CoreStates Bank, N.A. currently charges $7.50 per redemption for redemptions
payable by wire.
(2) Exchanges are subject to the requirements of each Class and a front-end
sales charge may apply. See Redemption and Exchange.
(3) 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 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 Asset Planner under Purchasing Shares in Part B.
The following example illustrates the expenses that an investor would pay
on a $1,000 investment over various time periods, assuming (1) a 5% annual rate
of return and (2) redemption at the end of each time period. As noted in the
table above, the Fund charges no redemption fees.
1 year 3 years 5 years 10 years
-------- --------- --------- ---------
Class A Shares .......... $9 $29 $50 $112
1 year 3 years 5 years 10 years
-------- --------- --------- ---------
Consultant Class Shares ... $9 $29 $50 $112
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 investors in understanding
the various costs and expenses they will bear directly or indirectly in owning
shares of the Fund.
3
<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
4/30/98 4/30/97 4/30/96 4/30/95
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year ..... $ 1.000 $ 1.000 $ 1.000 $ 1.000
Income From Investment
Operations
Net Investment Income .................. 0.028 0.028 0.029 0.026
--------- --------- --------- ---------
Total From Investment
Operations .......................... 0.028 0.028 0.029 0.026
--------- --------- --------- ---------
Less Dividends and
Distributions
Dividends From Net Investment
Income ................................ (0.028) (0.028) (0.029) (0.026)
--------- --------- --------- ---------
Total Dividends and
Distributions ....................... (0.028) (0.028) (0.029) (0.026)
--------- --------- --------- ---------
Net Asset Value, End of Year ........... $ 1.000 $ 1.000 $ 1.000 $ 1.000
========= ========= ========= =========
Total Return ........................... 2.78% 2.79% 2.97% 2.59%
Ratios and Supplemental
Data
Net Assets, End of Year
(000's omitted) ....................... $ 30,264 $ 32,659 $ 35,479 $ 54,444
Ratio of Expenses to Average
Daily Net Assets ...................... 0.91% 0.82% 0.90% 0.96%
Ratio of Net Investment Income
to Average Daily Net Assets ........... 2.75% 2.75% 2.95% 2.57%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Class A Shares
------------------------------------------------------------------------------------
Year Ended
4/30/94 4/30/93 4/30/92 4/25/91 4/26/90 4/27/89
------------- ------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year ..... $ 1.000 $ 1.000 $ 1.000 $ 1.000(1) $ 1.000(1) $ 1.000(1)
Income From Investment
Operations
Net Investment Income .................. 0.016 0.020 0.035 0.048 0.053 0.050
--------- --------- --------- --------- --------- ---------
Total From Investment
Operations .......................... 0.016 0.020 0.035 0.048 0.053 0.050
--------- --------- --------- --------- --------- ---------
Less Dividends and
Distributions
Dividends From Net Investment
Income ................................ (0.016) (0.020) (0.035) (0.048) (0.053) (0.050)
--------- --------- --------- --------- --------- ---------
Total Dividends and
Distributions ....................... (0.016) (0.020) (0.035) (0.048) (0.053) (0.050)
--------- --------- --------- --------- --------- ---------
Net Asset Value, End of Year ........... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========= ========= ========= ========= ========= =========
Total Return ........................... 1.59% 2.03% 3.52% 4.87% 5.43% 5.14%
Ratios and Supplemental
Data
Net Assets, End of Year
(000's omitted) ....................... $ 44,707 $ 43,886 $ 53,210 $ 56,766 $ 61,860 $ 60,827
Ratio of Expenses to Average
Daily Net Assets ...................... 0.99% 0.94% 0.84% 0.83% 0.83% 0.79%
Ratio of Net Investment Income
to Average Daily Net Assets ........... 1.58% 2.03% 3.43% 4.77% 5.30% 5.04%
</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
4/30/98 4/30/97 4/30/96 4/30/95
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year ..... $ 1.000 $ 1.000 $ 1.000 $ 1.000
Income From Investment
Operations
Net Investment Income .................. 0.028 0.028 0.029 0.026
--------- --------- --------- ---------
Total From Investment
Operations .......................... 0.028 0.028 0.029 0.026
--------- --------- --------- ---------
Less Dividends and
Distributions
Dividends From Net Investment
Income ................................ (0.028) (0.028) (0.029) (0.026)
--------- --------- --------- ---------
Total Dividends and
Distributions ....................... (0.028) (0.028) (0.029) (0.026)
--------- --------- --------- ---------
Net Asset Value, End of Year ........... $ 1.000 $ 1.000 $ 1.000 $ 1.000
========= ========= ========= =========
Total Return ........................... 2.78% 2.79% 2.97% 2.59%
Ratios and Supplemental
Data
Net Assets, End of Year
(000's omitted) ....................... $ 4,573 $ 1,529 $ 1,452 $ 1,614
Ratio of Expenses to Average
Daily Net Assets ...................... 0.91% 0.82% 0.90% 0.96%
Ratio of Net Investment Income
to Average Daily Net Assets ........... 2.75% 2.75% 2.95% 2.57%
<CAPTION>
Consultant Class Shares
-------------------------------------------------------------------------------------
Year Ended
4/30/94 4/30/93 4/30/92 4/25/91 4/26/90 4/27/89
------------- ------------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year ..... $ 1.000 $ 1.000 $ 1.000 $ 1.000(1) $ 1.000(1) $ 1.000(1)
Income From Investment
Operations
Net Investment Income .................. 0.016 0.020 0.035 0.047 0.051 0.048
--------- --------- --------- --------- --------- ---------
Total From Investment
Operations .......................... 0.016 0.020 0.035 0.047 0.051 0.048
--------- --------- --------- --------- --------- ---------
Less Dividends and
Distributions
Dividends From Net Investment
Income ................................ (0.016) (0.020) (0.035) (0.047) (0.051) (0.048)
--------- --------- --------- --------- --------- ---------
Total Dividends and
Distributions ....................... (0.016) (0.020) (0.035) (0.047) (0.051) (0.048)
--------- --------- --------- --------- --------- ---------
Net Asset Value, End of Year ........... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========= ========= ========= ========= ========= =========
- -------------------
Total Return ........................... 1.59% 2.03% 3.52% 4.84% 5.17% 4.88%
- -------------------
Ratios and Supplemental
Data
Net Assets, End of Year
(000's omitted) ....................... $ 1,407 $ 1,846 $ 1,920 $ 3,517 $ 3,556 $ 3,100
Ratio of Expenses to Average
Daily Net Assets ...................... 0.99% 0.94% 0.84% 0.86% 1.08% 1.04%
Ratio of Net Investment Income
to Average Daily Net Assets ........... 1.58% 2.03% 3.43% 4.74% 5.05% 4.79%
</TABLE>
- -----------
(1) All share and per share figures have been restated to reflect a ten-to-one
stock split on January 1, 1991.
5
<PAGE>
Investment Objective
and Policies
The Fund is a money market fund with the investment 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 Fund attempts to manage its portfolio to maintain a
constant net asset value of $1.00 per share. While the Fund will make every
effort to maintain a fixed net asset value of $1.00 per share, there can be no
assurance that this objective will be achieved.
SUITABILITY
The Fund is suited for investors seeking current income exempt from
federal income tax. Investors should be willing to accept the risk of
investments in municipal securities. Ownership of Fund shares can reduce the
bookkeeping and administrative inconvenience which is typically connected with
direct purchases of 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.
An investor should not consider a purchase of shares of the Fund as
equivalent to a complete investment program. Delaware Investments offers funds,
generally available through registered dealers, which may be used together to
create a more complete investment program.
INVESTMENT STRATEGY
The Fund seeks to attain its objective by investing its assets under
normal circumstances in a diversified portfolio of 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
investment objective can be achieved, the Fund must follow certain policies
that can only be changed by shareholder approval. The investment policies of
the Fund that are not identified in this Prospectus or in Part B as fundamental
are not fundamental and may be changed by the Board of Directors without a
shareholder vote.
<PAGE>
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 at the time of purchase, a security or, as relevant, its issuer is
rated in one of the two highest rating categories (e.g. for municipal bonds, AA
or better by Standard & Poor's Ratings Group ("S&P") or Aa or better by Moody's
Investors Service, Inc. ("Moody's"); for tax-free commercial paper and
short-term tax-free notes, A-2 or better by S&P or P-2 or better by Moody's;
and for state or municipal notes, MIG-2 or better by Moody's) by at least two
nationally-recognized statistical rating organizations (or if rated by only one
such organization, so rated by such organization). If the security or, as
relevant, its issuer has not been rated, the Manager 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 will not invest more than 5% of its total
assets in securities rated in the second highest category by a rating
organization. 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.
6
<PAGE>
The Fund may also invest in variable or floating rate demand obligation
instruments and other municipal securities with a maturity in excess of 397
days, but which have a demand feature whereby the Fund may tender the
instrument or security back to the issuer or to another entity as described
below, consistent with the conditions with which tax-exempt money market funds
must comply. Such obligations may be backed by a Letter of Credit or other
guarantee. The Fund will consider the rating of the guarantor and the nature of
the guarantee in evaluating the quality of the obligation.
Generally, a demand feature entitles the Fund to require the provider of
the demand feature to purchase the securities from the Fund at their principal
amount (usually with accrued interest) within a fixed period (generally seven
days, but the period may be longer) following a demand by the Fund. Certain
securities with a demand feature permit the Fund to tender the security only at
the time of an interest rate adjustment or at other fixed intervals. The demand
feature may be provided by the issuer of the underlying security, a bank, a
dealer in the securities or by another third party, and may not be transferred
separately from the underlying security. Certain demand features are
conditional which means that they may not be exercised or may terminate under
certain limited circumstances. The bankruptcy or receivership of, or default
by, the provider of the demand feature, or a default on the underlying security
or other event that terminates the demand feature before its exercise will
adversely affect the liquidity of the underlying security.
As described above, the Fund invests in securities backed by banks and
other financial institutions. As a result, changes in the credit quality of
these institutions could cause losses to the Fund and affect its share price.
However, the Fund is managed in accordance with the diversification, quality
and other restrictions applicable under the 1940 Act to tax-exempt money market
funds. Such restrictions are designed to minimize the effect that any one
security in the Fund's portfolio may have on the Fund's performance and share
price.
The Fund may not, at the time of purchase, invest more than 25% of its
assets in securities of governmental subdivisions located in any one state,
territory or U.S. possession. It may invest up to 25% of its assets in
short-term, tax-exempt project notes guaranteed by the U.S. government,
regardless of the location of the issuing municipality.
See Appendix A in Part B for a description of S&P and Moody's ratings.
<PAGE>
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
397 days.
The Fund intends to hold its investments until maturity, but may sell them
prior to maturity for a number of reasons, including 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.
Borrowing
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.
Investment Strategy
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 dependent on the issuer's compliance with
specific requirements after the bonds are issued. The Fund seeks 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.
7
<PAGE>
Restricted and Illiquid 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 (the "1933 Act"). 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,
including repurchase agreements maturing in more than seven days.
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.
Repurchase Agreements
The Fund may use repurchase agreements which are at least 102%
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.
Asset-Backed Securities
The Fund may also invest in securities which are backed by assets such as
receivables on home equity and credit card loans, and receivables regarding
automobile, mobile home and recreational vehicle loans, wholesale dealer floor
plans and leases. All such securities must be rated in the highest rating
category by a reputable credit rating agency (e.g., AAA by S&P or Aaa by
Moody's). For a discussion concerning the risks of investing in such
asset-backed securities, see Part B.
* * *
If there were a national credit crisis, an issuer became insolvent or
interest rates were to rise, principal values could be adversely affected.
Part B sets forth other more specific investment restrictions.
8
<PAGE>
The Delaware
Difference
PLANS AND SERVICES
The Delaware Difference is our commitment to provide you with superior
information and quality service on your investments in funds in the Delaware
Investments family.
SHAREHOLDER PHONE DIRECTORY
Shareholder Service Center and Investor Information Center
800-523-1918
Information on Existing Regular Investment
Accounts and Retirement Plan Accounts; Wire
Investments; Wire Liquidations; Telephone Liquidations and Telephone
Exchanges; Fund Information; Literature; Price; Yield and Performance
Figures
Delaphone
800-362-FUND
(800-362-3863)
Performance Information
During business hours, you can call the Investor Information Center 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 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 Investments
family.
Delaphone Service
Delaphone is an account inquiry service for investors with Touch-Tone(R)
phone service. It enables you to get information on your account faster than
the mailed statements and confirmations. Delaphone also provides current
performance information on the Fund, as well as other funds in the Delaware
Investments family. Delaphone is available seven days a week, 24 hours a day.
Statements and Confirmations
You will receive quarterly statements of your account summarizing all
transactions during the period. 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.
<PAGE>
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, if any, are automatically reinvested in
your account, unless you elect to receive them in cash. You may also elect to
have the dividends earned in one fund automatically invested in another fund in
the Delaware Investments family 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.
MoneyLine(SM) Services
The Delaware Investments family offers the following services for fast and
convenient transfer of funds between your personal bank account and your Fund
account:
1. MoneyLine(SM) Direct Deposit Service
If you elect to have your dividends and distributions paid in cash and such
dividends and distributions are in an amount of $25 or more, you may choose the
MoneyLineSM Direct Deposit Service and have such payments transferred from your
Fund account to your predesignated bank account. See Dividends and
Distributions. In addition, you may elect to have your Systematic Withdrawal
Plan payments transferred from your Fund account to your predesignated bank
account through this service. See Systematic Withdrawal Plan under Redemption
and Exchange.
2. MoneyLine(SM) On Demand
You or your investment dealer may request purchases and redemptions of
Fund shares by using MoneyLine(SM) On Demand. When you authorize the Fund to
accept such requests from you or your investment dealer, funds will be
withdrawn from (for share purchases) or deposited to (for share redemptions)
your predesignated bank account. Your request will be processed the same day if
you call prior to 4 p.m., Eastern time. There is a $25 minimum and a $50,000
maximum limit for MoneyLine(SM) On Demand transactions.
9
<PAGE>
For each MoneyLine(SM) Service, it may take up to four business days for
the transactions to be completed. You can initiate either service by completing
an Account Services form. If the name and address on your designated bank
account are not identical to the name and address on your Fund account, you must
have your signature guaranteed. The Fund does not charge a fee for any
MoneyLine(SM) Service; however, your bank may charge a fee. Please call the
Shareholder Service Center for additional information about these services.
Exchange Privilege
The Exchange Privilege permits you to exchange all or part of your shares
into shares of the other mutual funds available from the Delaware Investments
family, 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 Investments family. 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.
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.
10
<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
The minimum initial investment for each Class generally is $1,000.
Subsequent investments must generally be at least $100. For purchases under the
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 front-end or contingent deferred sales charge.
The Fund makes it easy to invest by mail, by wire, by exchange and by
arrangement with your investment dealer.
Investing through Your Investment Dealer
You can make a purchase 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, Delaware Investments 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 Delaware Investments at P.O. Box 7577, Philadelphia, PA
19101.
<PAGE>
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, to Delaware Investments at P.O. Box 7577, 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
Investments family, you may write and authorize an exchange of part or all of
your investment into shares of the Fund. Class B Shares or Class C Shares of a
fund 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.
11
<PAGE>
Additional Methods of Adding to Your Investment
Call the Shareholder Service Center for more information if you wish to
use the following services:
1. Automatic Investing Plan
The Automatic Investing Plan enables you to make regular monthly
investments without writing or mailing checks. You may authorize the Fund to
transfer a designated amount monthly from your checking account to your Fund
account. Shareholders should allow a reasonable amount of time for initial
purchases and changes to these plans to become effective.
2. Direct Deposit
You may have your employer or bank make regular investments directly to
your account for you (for example: payroll deduction, pay by phone, annuity
payments). The Fund also accepts preauthorized recurring government and private
payments by Electronic Fund Transfer, which avoids mail time and check clearing
holds on payments such as social security, federal salaries, Railroad
Retirement benefits, etc.
* * *
Should investments through an automatic investing plan or by direct
deposit be reclaimed or returned for some reason, the Fund has the right to
liquidate your shares to reimburse the government or transmitting bank. If
there are insufficient funds in your account, you are obligated to reimburse
the Fund.
3. MoneyLine(SM) On Demand
Through the MoneyLine(SM) On Demand service, you or your investment dealer
may call the Fund to request a transfer of funds from your predesignated bank
account to your Fund account. See MoneyLine(SM) Services under The Delaware
Difference for additional information about this service.
4. Wealth Builder Option
You can use the Wealth Builder Option to invest in the Fund through regular
liquidations of shares in your accounts in other funds in the Delaware
Investments family. You may also elect to invest in other mutual funds in the
Delaware Investments family through the Wealth Builder Option through
liquidations of shares in your Fund account.
<PAGE>
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 Investments family and invested automatically into
any other account in a mutual fund available from the Delaware Investments
family 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.
5. 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 Investments family 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 Class B
Shares or Class C Shares that are offered by certain other funds in the
Delaware Investments family. For more information about reinvestment in shares
of other funds in the Delaware Investments family, please call the Shareholder
Service Center.
12
<PAGE>
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.
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 Investments family. 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.
13
<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 other
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 Class B Shares or Class C Shares
that are offered by certain other funds in the Delaware Investments family.
Shares acquired in an exchange must be registered in the state where the
acquiring shareholder resides. You may want to consult your financial adviser or
investment dealer to discuss which funds available from the Delaware Investments
family will best meet your changing objectives and the consequences of any
exchange transaction. You may also call Delaware Investments 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.
<PAGE>
Except as noted below, for a redemption request to be in "good order," you
must provide your account number, account registration, and the total number of
shares or dollar amount of the transaction. For exchange requests you must also
provide the name of the fund in which you want to invest the proceeds. Exchange
instructions and redemption requests must be signed by the record owner(s)
exactly as the shares are registered. You may request a redemption or an
exchange by calling the Shareholder Service Center at 800-523-1918. 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.
14
<PAGE>
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.
Class A Shares of funds available from the Delaware Investments family
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, except in certain limited
instances. Such shares may be exchanged for shares of either Class of the Fund
without the imposition of the Limited CDSC at the time of the exchange.
However, upon subsequent redemption from the Fund or after a subsequent
exchange into a fund that is subject to the Limited CDSC, such shares will be
subject to the Limited CDSC imposed by the original fund whose shares were
initially exchanged into this Fund. Shareholders will be given credit for the
period during which the Fund shares were held.
Checkwriting Feature
Checkwriting is a convenient access feature that allows you to earn
dividends until your check is presented to the Fund.
You can request special checks by marking the applicable box on the
Investment Application.
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.
<PAGE>
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. A signature guarantee can be obtained from
a commercial bank, a trust company or a member of a securities transfer
association medallion program. A signature guarantee cannot be provided by a
notary public. A signature guarantee is designed to protect the shareholders,
the Fund and its agent from fraud. The Fund reserves the right to reject a
signature guarantee supplied by an 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.
15
<PAGE>
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 Investments family, 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 may redeem or
exchange only by written request and you must return your certificate(s).
The Telephone Redemption--Check to Your Address of Record service and the
Telephone Exchange service, both of which are described below, are automatically
provided unless you notify the Fund in writing that you do not wish to have such
services available with respect to your account. The Fund reserves the right to
modify, terminate or suspend these procedures upon 60 days' written notice to
shareholders. It may be difficult to reach the Fund by telephone during periods
when market or economic conditions lead to an unusually large volume of
telephone requests.
Neither the Fund nor its Transfer Agent is responsible for any shareholder
loss incurred in acting upon written or telephone instructions for redemption
or exchange of 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.
<PAGE>
Telephone Redemption--Proceeds to Your Bank
Redemption proceeds of $1,000 or more can be transferred to your
predesignated bank account by wire or by check. You should authorize this
service when you open your account. If you change your predesignated bank
account, you must complete an Authorization Form and have your signature
guaranteed. For your protection, your authorization must be on file. If you
request a wire, your funds will normally be sent the next business day.
CoreStates Bank, N.A.'s fee (currently $7.50) will be deducted from your
redemption. 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.
MoneyLine(SM) On Demand
Through the MoneyLine(SM) On Demand service, you or your investment dealer
may call the Fund to request a transfer of funds from your Fund account to your
predesignated bank account. See MoneyLine(SM) Services under The Delaware
Difference for additional information about this service.
Telephone Exchange
The Telephone Exchange feature is a convenient and efficient way to adjust
your investment holdings as your liquidity requirements and investment
objectives change. You or your investment dealer of record can exchange your
shares into any other funds available from the Delaware Investments family
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(SM) Direct
Deposit Service. Through the MoneyLine(SM) Direct Deposit Service, it may take
up to four business days for the transaction to be completed. There are no
separate fees for this redemption method. See MoneyLine(SM) Services under The
Delaware Difference for more information about this service.
For more information on Systematic Withdrawal Plans, please call the
Shareholder Service Center.
16
<PAGE>
Dividends and
Distributions
The Fund's dividends are declared daily and paid monthly. 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 shares of the Fund will share proportionately in the
investment income and expenses of the Fund, except for distribution fees. Class
A Shares are not subject to distribution fees and although the Consultant Class
has a 12b-1 Plan, no distribution fee under the 12b-1 Plan 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
in your account at the then-current net asset value and the dividend option may
be changed from cash to reinvest. If you elect to take your dividends and
distributions in cash and such dividends and distributions are in an amount of
$25 or more, you may choose the MoneyLine(SM) Direct Deposit Service and have
such payments transferred from your Fund account to your predesignated bank
account. See MoneyLine(SM) Services under The Delaware Difference for more
information about this service.
Information as to the tax status of dividends will be provided annually.
17
<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 of 1986, as
amended (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 and it satisfies certain other requirements relating to
the source of its income and diversification of its assets.
On August 5, 1997, President Clinton signed into law the Taxpayer Relief
Act of 1997 (the "1997 Act"). This new law makes sweeping changes in the Code.
Because many of these changes are complex, and only indirectly affect the Fund
and its distributions to you, they are discussed in Part B. Changes in the
treatment of capital gains, however, are discussed in this section.
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, 1998, all of the
Fund's net income was exempt from federal income taxes.
The Treatment of Capital Gain Distributions under the Taxpayer Relief Act
of 1997.
The 1997 Act creates a category of long-term capital gain for individuals
who will be taxed at new lower tax rates. For investors who are in the 28% or
higher federal income tax brackets, these gains will be taxed at a maximum rate
of 20%. For investors who are in the 15% federal income tax bracket, these gains
will be taxed at a maximum rate of 10%. Capital gain distributions will qualify
for these new maximum tax rates, depending on how long the Fund's securities
were held by the Fund before they were sold. Investors who want more information
on holding periods and other qualifying rules relating to these new rates should
review the expanded discussion in Part B or should contact their own tax
advisers.
The Fund will advise you in its annual information reporting at calendar
year end of the amount of its capital gain distributions which will qualify for
these maximum federal tax rates.
Dividends or capital gains which are declared in October, November or
December to shareholders of record on a specified date in one of those months
but which, for operational reasons, may not be paid to the shareholder until the
following January, will be treated for tax purposes as if paid by the Fund and
received by the shareholder on December 31 of the calendar year in which they
are declared.
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
<PAGE>
Net Asset Value
Per Share
The purchase and redemption price of the shares of each Class is equal to
a 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 $1.00.
See Part B for additional information.
19
<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
Fund's 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 Investments family since 1938. On April 30, 1998, the Manager and its
affiliates within Delaware Investments, including Delaware International
Advisers Ltd., were managing in the aggregate more than $45 billion in assets
in various institutional or separately managed (approximately $27,330,570,000)
and investment company (approximately $17,733,730,000) accounts.
The Manager is a series of Delaware Management Business Trust. The Manager
changed its form of organization from a corporation to a business trust on March
1, 1998. 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 0.50% of its average daily net assets for the fiscal year ended
April 30, 1998. The directors annually review fees paid to the Manager.
<PAGE>
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 Manager 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 Investments family
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.
20
<PAGE>
Distribution (12b-1) and Service
The Distributor, Delaware Distributors, L.P., serves as the national
distributor for the Fund under a Distribution Agreement dated April 3, 1995.
The Fund has adopted a distribution plan under Rule 12b-1 (the "Plan") for
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 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 shares of the
funds in the Delaware Investments family 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 that 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. Consultant Class Shares 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 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 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. (the "NASD") has
adopted Conduct Rules, 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.
21
<PAGE>
The directors annually review fees paid to the Distributor and the
Transfer Agent. The Distributor and the Transfer Agent are also indirect,
wholly owned subsidiaries of DMH.
* * *
As with other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by its service providers do not properly process and
calculate date-related information from and after January 1, 2000. This is
commonly known as the "Year 2000 Problem." The Fund is taking steps to obtain
satisfactory assurances that the Fund's major service providers are taking
steps reasonably designed to address the Year 2000 Problem with respect to the
computer systems that such service providers use. There can be no assurance
that these steps will be sufficient to avoid any adverse impact on the business
of the Fund.
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, 1998 was
0.91%.
Shares
The Fund is an open-end management investment company, and its portfolio of
assets is diversified as defined by the 1940 Act and Rule 2a-7 under 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, except as noted below, and are equal in all other respects.
Each Class represents a proportionate interest in the assets of the Fund
and has the same voting and other rights and preferences, except that Class A
Shares are not subject to, and may not vote on matters affecting, the
Distribution Plan under Rule 12b-1 relating to 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.
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.
22
<PAGE>
Delaware Investments includes funds with a wide range of investment objectives.
Stock funds, income funds, national and state-specific tax-exempt funds, money
market funds, global and international funds and closed-end funds give investors
the ability to create a portfolio that fits their personal financial goals. For
more information, contact your financial adviser or call Delaware Investments at
800-523-1918.
Investment Manager
Delaware Management Company
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
DELAWARE(SM)
INVESTMENTS
- -----------
Philadelphia * London
www.delawarefunds.com
<PAGE>
________________________________________________________________________________
PART B--STATEMENT OF ADDITIONAL INFORMATION
JUNE 29, 1998
________________________________________________________________________________
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
________________________________________________________________________________
1818 Market Street
Philadelphia, PA 19103
________________________________________________________________________________
For Prospectus and Performance: Nationwide 800-523-1918
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 Policies
________________________________________________________________________________
Performance Information
________________________________________________________________________________
Trading Practices
________________________________________________________________________________
Purchasing Shares
________________________________________________________________________________
Offering Price
________________________________________________________________________________
Redemption
________________________________________________________________________________
Dividends and Distributions
________________________________________________________________________________
Taxes
________________________________________________________________________________
Investment Management Agreement
________________________________________________________________________________
Officers and Directors
________________________________________________________________________________
Exchange Privilege
________________________________________________________________________________
General Information
________________________________________________________________________________
Financial Statements
________________________________________________________________________________
Appendix A - Description of Ratings
________________________________________________________________________________
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<PAGE>
Delaware Group Tax-Free Money Fund, Inc. (the "Fund") is a
professionally-managed mutual fund which currently offers two classes of shares
- -- Tax-Free Money Fund A Class ("Class A Shares") and Tax-Free Money Fund
Consultant Class ("Consultant Class Shares") (individually, a "Class" and
collectively, the "Classes").
This Statement of Additional Information ("Part B" of the Fund's
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 29, 1998, as it may be amended from time to time. Part B should be
read in conjunction with the Prospectus. 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"), at 1818 Market Street, Philadelphia, PA 19103.
All references to "shares" in this Part B refer to each Class of shares
of the Fund, except where noted.
-2-
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The investment 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 (i)
50% of the outstanding voting securities, or (ii) 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 non-government
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 Standard & Poor's Ratings Group ("S&P") and Moody's
Investors Service, Inc. ("Moody's") represent their opinions as to the quality
of the municipal issues which they undertake to rate. It should be emphasized,
however, that ratings are general and are not absolute standards of quality.
These ratings are the initial criteria for selection of portfolio investments,
but the Fund will further evaluate these securities. Additionally, the Fund may
purchase unrated instruments if it concludes that they are of high quality and
otherwise satisfy the requirements with which tax-exempt money market funds must
comply.
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<PAGE>
See Appendix A for a description of municipal obligations ratings.
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 397
days. 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 the
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 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, a 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 (the "Manager") intends to manage the
Fund's portfolio in a manner designed to minimize any adverse impact from the
tax rules applicable to these investments.
-4-
<PAGE>
Asset-Backed Securities
The Fund may also invest in securities which are backed by assets such
as receivables on home equity and credit card loans, and receivables regarding
automobile, mobile home and recreational vehicle loans, wholesale dealer floor
plans and leases. All such securities must be rated in the highest rating
category by a reputable credit rating agency (e.g., AAA by S&P's or Aaa by
Moody's). The credit quality of most asset-backed securities depends primarily
on the credit quality of the assets underlying such securities, how well the
entities issuing the securities are insulated from the credit risk of the
originator or affiliated entities, and the amount of credit support provided to
the securities. Such receivables typically 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), the
creation of "reserve funds" (where cash or investments, sometimes funded from a
portion of the payments on the underlying assets, are held in reserve against
future losses) and "over-collateralization" (where the scheduled payments on, or
the principal amount of, the underlying assets
-5-
<PAGE>
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 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 above, 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 options 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 (the "1933 Act"). Not more than 10%
of the value of the Fund's net assets at the time of acquisition will be
invested in such securities.
6. Purchase or sell commodities or commodity contracts.
-6-
<PAGE>
7. Purchase or sell real estate, but this shall not prevent the Fund
from investing in securities secured by real estate or interests therein, or
securities issued by companies which invest in real estate or interests therein.
8. Make loans to other persons except by the purchase of obligations
in which the Fund is authorized to invest and to enter into repurchase
agreements. Not more than 10% of the Fund's total assets will be invested in
repurchase agreements maturing in more than seven days and in other illiquid
assets.
9. Purchase securities of any issuer (except the U.S. government, its
agencies or instrumentalities or securities which are backed by the full faith
and credit of the United States) if, as a result, more than 5% of its total
assets would be invested in the securities of such issuer.
10. Invest in issuers for the purpose of exercising control.
11. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of assets.
12. Purchase securities if, as a result of such purchase, more than 25%
of the value of its assets would be invested in the securities of government
subdivisions located in any one state, territory or possession of the United
States. The Fund may invest more than 25% of the value of its assets in
short-term tax-exempt project notes which are guaranteed by the U.S. government,
regardless of the location of the issuing municipality.
In addition, the following investment restrictions may be changed by
the Board of Directors. The Fund may not:
(a) Retain in the portfolio of the Fund securities issued by an issuer
any of whose officers, directors or security holders is an officer or director
of the Fund or of the investment manager of the Fund if after the purchase of
the securities of such issuer by the Fund one or more of such officers or
directors owns beneficially more than 1/2 of 1% of the shares or securities or
both of such issuer and such officers and directors owning more than 1/2 of 1%
of such shares or securities together own beneficially more than 5% of such
shares or securities.
(b) Invest funds in securities whose issuers or guarantors of principal
and interest (including predecessors) have a record of less than three years'
continuous operation if such purchase at the time thereof would cause more than
5% of the total Fund assets to be invested in the securities of such issuers or
guarantors.
(c) Invest in direct interests in oil, gas or other mineral exploration
or development programs.
Although not a fundamental investment restriction, the Fund currently
does not invest its assets in real estate limited partnerships. In addition, the
Fund excludes from the 5% limitation set forth in investment restriction number
9 above, those municipal securities that are refunded with U.S. government
securities, commonly known as pre-refunded municipal securities, which the staff
of the U.S. Securities and Exchange Commission (the "SEC") 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, 1998, the annualized current
yield of Class A Shares and Consultant Class Shares was 2.95% for each Class and
the compounded effective yield was 3.00% 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 36 days for the Fund. The current
yield of Class A Shares is expected to be slightly higher than that of
Consultant Class Shares during any period that the distribution fee under the
Fund's 12b-1 Plan for Consultant Class Shares is being paid. The Board of
Directors of the Fund suspended 12b-1 Plan payments from 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 each Class' effective yield.
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, 1998, the tax-equivalent yield
of Class A Shares and Consultant Class Shares was 4.28%, 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.
-8-
<PAGE>
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, 1998 for each Class. Past performance is not an indication of future
results.
<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.................. 1.00056641 1.00056641
=========== ===========
Net change in account value......................................... .00056641(1) .00056641(1)
----------- -----------
Base period return = net change in account
value/beginning account value.................................... .00056641 .00056641
----------- -----------
Current yield [base period return x (365/7)]........................ 2.95%(2) 2.95%(2)
(365/7) ==== ====
Effective yield (1 + base period) - 1......................... 3.00%(3) 3.00%(3)
---------------- ==== ====
</TABLE>
Weighted average life to maturity of the portfolio on April 30, 1998 was 36
days.
(1) This represents the net income per share for the seven calendar days ended
April 30, 1998.
(2) This represents the average of annualized net investment income per share
for the seven calendar days ended April 30, 1998.
(3) This represents the current yield for the seven calendar days ended April
30, 1998 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 also should 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 use a different time
span from time to time.
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.
-9-
<PAGE>
Shareholders and prospective investors who wish to learn the current yield of
the Fund may call toll free, nationwide 800-523-1918.
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 performance, as shown below, is the average annual total return
quotations for each Class through April 30, 1998, calculated as an average
annual compounded rate of return for the periods indicated. For this purpose,
the calculations assume the reinvestment of all dividend distributions paid
during the indicated periods. Interest rates fluctuated during the period
covered by the table and the Fund's results should not be considered as
representative of future performance. Total return for Consultant Class Shares
for the periods prior to the commencement of operations of such Class is based
on the performance of Class A Shares. For periods prior to the commencement of
operations of 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.
-10-
<PAGE>
Average Annual Total Return
Consultant Class
Class A Shares Shares(1)
1 year
ended
4/30/98 2.78% 2.78%
3 years
ended
4/30/98 2.85% 2.85%
5 years
ended
4/30/98 2.54% 2.54%
10 years
ended
4/30/98 3.36% 3.31%
15 years
ended
4/30/98 3.80% 3.77%
Period
9/17/81(2)
through
4/30/98 4.06% 4.02%
(1) Commenced operations on March 15, 1988.
(2) Date of initial public offering of Class A Shares.
From time to time, the Fund may also quote current yield information of
the Classes with the sample average rates paid on bank money market deposit
accounts. The bank money market deposit averages are the stated rates of 100
large banks and thrifts in the top five standard metropolitan statistical areas
as determined by the Bank Rate Monitor. The Fund's figures for a Class will be
the annualized yields representing an average of that Class' after-expense per
share earnings divided by cost per share for each day of the fiscal month, or
period, noted. Yield fluctuates depending on portfolio type, quality, maturity
and operating expenses. Principal is not insured and the results shown should
not be considered as representative of the yield which may be realized from an
investment made in the Fund at any time in the future.
From time to time, the Fund may quote actual total return and/or yield
performance for its Classes in advertising and other types of literature . This
information may be compared to that of other mutual funds with similar
investment objectives and to stock, bond an other relevant indices or to
rankings prepared by independent services or other financial or industry
publications that monitor the performance of mutual funds. For example, the
performance comparisons of the Fund (or Class) may
-11-
<PAGE>
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 may be compared to data prepared by Lipper Analytical
Services, Inc., IBC/Donoghue or the performance of unmanaged indices compiled
or maintained by statistical research firms such as Lehman Brothers or Salomon
Brothers, Inc.
Lipper Analytical Services, Inc. and IBC/Donoghue maintain statistical
performance databases, as reported by a diverse universe of
independently-managed mutual funds. Rankings that compare the Fund's performance
to another fund in appropriate categories over specific time periods also may be
quoted in advertising and other types of literature. The total return
performance reported for these indices will reflect the reinvestment of all
distributions on a quarterly basis and market price fluctuations. The indices do
not take into account any fees. A direct investment in an unmanaged index is not
possible.
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 purposes. Generally, the indices
selected will be representative of the types of securities in which the Fund may
invest, and the assumptions that were used in calculating the blended
performance will be described.
Comparative information on the Consumer Price Index may also be
included in advertisements or other literature. The Consumer Price Index, as
prepared by the U.S. Bureau of Labor Statistics, is the most commonly used
measure of inflation. It indicates the cost fluctuations of a representative
group of consumer goods. It does not represent a return from an investment.
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. 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.
Ibbotson Associates of Chicago, Illinois ("Ibbotson") provides
historical returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury bills,
the U.S. rate of inflation (based on the Consumer Price Index), and combinations
of various capital markets. The performance of these capital markets is based on
the returns of different indices. The Fund may use the performance of these
capital markets in order to demonstrate general risk-versus-reward investment
scenarios. Performance comparisons may also include the value of a hypothetical
investment in any of these capital markets. The risks associated with the
security types in any capital market may or may not correspond directly to those
of the Fund. The Fund may also compare performance to that of other compilations
or indices that may be developed and made available in the future.
The Fund may include discussions or illustrations of the potential
investment goals of a prospective investor (including materials that describe
general principles of investing, such as asset allocation, diversification, risk
tolerance and goal setting, questionnaires designed to help create a personal
financial profile, worksheets used to project savings needs based on assumed
rates of inflation and hypothetical
-12-
<PAGE>
rates of return and action plans offering investment alternatives), investment
management techniques, policies or investment suitability of the Fund (such as
value investing, market timing, dollar cost averaging, asset allocation,
constant ratio transfer, automatic account rebalancing and the advantages and
disadvantages of investing in tax-deferred and taxable investments), economic
and political conditions, the relationship between sectors of the economy and
the economy as a whole, the effects of inflation and historical performance of
various asset classes, including but not limited to, stocks, bonds and
Treasury bills. From time to time advertisements, sales literature,
communications to shareholders or other materials may summarize the substance
of information contained in shareholder reports (including the investment
composition of the Fund), as well as the views as to current market, economic,
trade and interest rate trends, legislative, regulatory and monetary
developments, investment strategies and related matters believed to be of
relevance to the Fund. In addition, selected indices may be used to illustrate
historic performance of selected asset classes. The Fund may also include, in
advertisements, sales literature, communications to shareholders or other
materials, charts, graphs or drawings which illustrate the potential risks and
rewards of investment in various investment vehicles, including but not
limited to, domestic stocks, and/or bonds, treasury bills and shares of the
Fund. In addition, advertisements, sales literature, communications to
shareholders or other materials may include a discussion of certain attributes
or benefits to be derived by an investment in the Fund and/or other mutual
funds, shareholder profiles and hypothetical investor scenarios, timely
information on financial management, tax planning and investment alternatives
to certificates of deposit and other financial instruments. Such sales
literature, communications to shareholders or other materials may include
symbols, headlines or other material which highlight or summarize the
information discussed in more detail therein.
Materials may refer to the CUSIP numbers of the Fund and may illustrate
how to find the listings of the Fund in newspapers and periodicals. Materials
may also include discussions of other funds, products and services.
The Fund may quote various measures of volatility and benchmark
correlation in advertising. In addition, the Fund may compare these measures to
those of other funds. Measures of volatility seek to compare the historical
share price fluctuations or total returns to those of a benchmark. Measures of
benchmark correlation indicate how valid a comparative benchmark may be.
Measures of volatility and correlation may be calculated using averages of
historical data. The Fund may advertise its current interest rate sensitivity,
duration, weighted average maturity or similar maturity characteristics.
Advertisements and sales materials relating to the Fund may include information
regarding the background and experience of its portfolio managers.
The following table presents examples, for purposes of illustration
only, of cumulative total return performance for each Class of the Fund through
April 30, 1998. 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 Consultant Class Shares for the
periods prior to the commencement of operations of such Class is based on the
performance of Class A Shares. For periods prior to the commencement of
operations of 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.
-13-
<PAGE>
Cumulative Total Return
Consultant Class
Class A Shares Shares(1)
3 months
ended
4/30/98 0.58% 0.58%
------- ----- ----
6 months
ended
4/30/98 1.30% 1.30%
------- ----- ----
9 months
ended
4/30/98 2.03% 2.03%
------- ----- ----
1 year
ended
4/30/98 2.78% 2.78%
------- ----- ----
3 years
ended
4/30/98 8.79% 8.79%
------- ----- ----
5 years
ended
4/30/98 13.88% 13.38%
------- ------ -----
10 years
ended
4/30/98 39.22% 38.49%
------- ------ -----
15 years
ended
4/30/98 75.06% 74.10%
------- ------ -----
Period
9/17/81(2)
through
4/30/98 93.61% 92.55%
------- ------ -----
(1) Commenced operations on March 15, 1988.
(2) Date of initial public offering of Class A Shares.
-14-
<PAGE>
Because every investor's goals and risk threshold are different, the
Distributor, as distributor for the Fund and other mutual funds available from
the Delaware Investments family, will provide general information about
investment alternatives and scenarios that will allow investors to assess their
personal goals. This information will include general material about investing
as well as materials reinforcing various industry-accepted principles of prudent
and responsible personal financial planning. One typical way of addressing these
issues is to compare an individual's goals and the length of time the individual
has to attain these goals to his or her risk threshold. In addition, the
Distributor will provide information that discusses the overriding investment
philosophy of the Manager and how that philosophy impacts the Fund's, and other
Delaware Investments 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 . 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
Investments 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 Direct Deposit Purchase Plan, Automatic
Investing Plan and Wealth Builder Option under Purchasing Shares - Investing by
Electronic Fund Transfer for a complete description of these options including
restrictions or limitations.
-15-
<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 the Fund or any stock or bond fund in the
Delaware Investments family. Dollar-cost averaging can be appropriate for
investments in shares of funds that tend to fluctuate in value. Please obtain
the prospectus of any fund in the Delaware Investments family in 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. The Fund may include illustrations showing the power
of compounding in advertisements and other types of literature.
-16-
<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. 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. 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.
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 (the "1934 Act") and
the Fund's Investment Management Agreement, higher commissions are permitted to
be paid to broker/dealers who provide brokerage and research services than to
broker/dealers who do not provide such services, if such higher commissions are
deemed reasonable in relation to the value of the brokerage and research
services provided. Although transactions are directed to broker/dealers who
provide such brokerage and research services, the Fund believes that the
commissions paid to such broker/dealers are not, in general, higher than
commissions that would be paid to broker/dealers not providing such services and
that such commissions are reasonable in relation to the value of the brokerage
and research services provided. In some instances, services may be provided to
the Manager which constitute in some part brokerage and research services used
by the Manager in connection with its investment decision-making process and
constitute in some part services used by the Manager in connection with
administrative or other functions not related to its investment decision-making
process. In such cases, the Manager will make a good faith allocation of
brokerage and research services and will pay out 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
Investments family. 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.
-17-
<PAGE>
The Manager may place a combined order for two or more accounts or
funds engaged in the purchase or sale of the same security if, in its judgment,
joint execution is in the best interest of each participant and will result in
best price and execution. Transactions involving commingled orders are allocated
in a manner deemed equitable to each account or fund. When a combined order is
executed in a series of transactions at different prices, each account
participating in the order may be allocated an average price obtained from the
executing broker. It is believed that the ability of the accounts to participate
in volume transactions will generally be beneficial to the accounts and funds.
Although it is recognized that, in some cases, the joint execution of orders
could adversely affect the price or volume of the security that a particular
account or fund may obtain, it is the opinion of the Manager and the Fund's
Board of Directors that the advantages of combined orders outweigh the possible
disadvantages of separate transactions.
Portfolio trading will be undertaken principally to accomplish the
Fund's objective and not for the purpose of realizing capital gains, although
capital gains may be realized on certain portfolio transactions. For example,
capital gains may be realized when a security is sold (i) so that, provided
capital is preserved or enhanced, another security can be purchased to obtain a
higher yield, (ii) to take advantage of what the Manager believes to be a
temporary disparity in the normal yield relationship between the two securities
to increase income or improve the quality of the portfolio, (iii) to purchase a
security which the Manager believes is of higher quality than its rating or
current market value would indicate, or (iv) when the Manager anticipates a
decline in value due to market risk or credit risk. Since portfolio assets will
consist of short-term instruments, replacement of portfolio securities will
occur frequently. However, since the Manager expects to usually transact
purchases and sales of portfolio securities on a net basis, it is not
anticipated that the Fund will pay any significant brokerage commissions. The
Manager is free to dispose of portfolio securities at any time, subject to
complying with the Internal Revenue Code of 1986, as amended, (the "Code") and
the 1940 Act, when changes in circumstances or conditions make such a move
desirable in light of the investment objective.
Consistent with the Conduct Rules 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 Investments family, such as
custodian fees, and may, at the request of the Distributor, give consideration
to sales of shares of the funds in the Delaware Investments family as a factor
in the selection of brokers and dealers to execute Fund portfolio transactions.
-18-
<PAGE>
PURCHASING SHARES
The Distributor serves as the national distributor for the Fund's
shares - Class A Shares and Consultant Class 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. The minimum initial investment generally is $1,000 for
each Class. Subsequent purchases generally must be at least $100. The initial
and subsequent investment minimums for Class A Shares will be waived for
purchases by officers, directors and employees of any fund in the Delaware
Investments family, 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 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, purchases not
involving the issuance of certificates are confirmed to the investor and
credited to the shareholder's account on the books maintained by Delaware
Service Company, Inc. (the "Transfer Agent"). The investor will have the same
rights of ownership with respect to such shares as if certificates had been
issued. An investor 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 those 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
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Class. This type of investment will be handled in either of the following two
ways. (1) If the shareholder's bank is a member of the National Automated
Clearing House Association ("NACHA"), the amount of the investment will be
electronically deducted from his or her account by Electronic Fund Transfer
("EFT"). The 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. An investor wishing to take advantage
of either service should complete an authorization form. Either service can be
discontinued by the shareholder at any time without penalty by giving written
notice.
Payments to the Fund from the federal government or its agencies on
behalf of a shareholder may be credited to the shareholder's account after such
payments should have been terminated by reason of death or otherwise. Any such
payments are subject to reclamation by the federal government or its agencies.
Similarly, under certain circumstances, investments from private sources may be
subject to reclamation by the transmitting bank. In the event of a reclamation,
the Fund may liquidate sufficient shares from a shareholder's account to
reimburse the government or the private source. In the event there are
insufficient shares in the shareholder's account, the shareholder is expected to
reimburse the Fund.
Direct Deposit Purchases by Mail
Shareholders may authorize a third party, such as a bank or employer,
to make investments directly to their Fund accounts. The Fund will accept
these investments, such as bank-by-phone, annuity payments and payroll
allotments, by mail directly from the third party. Investors should contact
their employers or financial institutions who in turn should contact the Fund
for proper instructions.
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 or certain other authorized persons (see
Distribution and Service under Investment Management Agreement) 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
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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 Consultant Class Shares
Pursuant to Rule 12b-1 under the 1940 Act, the Fund has adopted a plan
(the "Plan") for Consultant Class Shares which permits the Fund to pay for
certain distribution and promotional expenses related to marketing Consultant
Class Shares.
The Plan does not apply to the Fund's Class A Shares. Such 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 Class A
Shares may not vote on matters affecting the Plan.
The Plan permits the Fund, pursuant to the Distribution Agreement, to
pay out of the assets of 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, among others, preparing and
distributing advertisements, sales literature , prospectuses and reports used
for sales purposes, compensating sales and marketing personnel, and paying
distribution and maintenance fees to securities brokers and dealers who enter
into Dealer's Agreements with the Distributor or service agreements with the
Fund. Registered representatives of brokers, dealers or other entities, who have
sold a specified level of funds in the Delaware Investments family 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 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 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 under the Plan and the
Fund's Distribution Agreement is, on an annual basis, up to 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 Board of Directors suspended 12b-1 Plan payments from the
assets of 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.
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<PAGE>
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 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 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 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 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 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 Consultant Class Shares, as well as a majority vote of those
directors who are not "interested persons." Also, any other material amendment
to the Plan must be approved by a majority vote of the directors of the Fund
having no interest in the Plan. In addition, in order for the Plan to remain
effective, the selection and nomination of directors who are not "interested
persons" of the Fund must be effected by the directors who themselves are not
"interested persons" and who have no direct or indirect financial interest in
the Plan. Persons authorized to make payments under the Plan must provide
written reports at least quarterly to the Board of Directors for their review.
For the fiscal year ended April 30, 1998, there were no payments on
behalf of Consultant Class Shares pursuant to its Plan.
The NASD has adopted amendments to its Conduct Rules 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 Investments family 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 Investments family, subject to
eligibility and minimum purchase requirements, in states where their shares 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
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<PAGE>
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 Investments Funds
Subject to applicable eligibility and minimum purchase requirements and
the limitations set forth below, shareholders may automatically reinvest
dividends and/or distributions in any of the mutual funds in the Delaware
Investments family, including the Fund, in states where their shares may be
sold. Such investments will be at net asset value at the close of business on
the reinvestment date without any front-end sales charge or 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. See Additional Methods of Adding
to Your Investment - Dividend Reinvestment Plan under Buying Shares in the
Prospectus.
Dividends from the shares of each Class may be reinvested in shares of
any other mutual fund in the Delaware Investments family, other than Class B
Shares and Class C Shares of funds in the Delaware Investments family that offer
such classes of shares.
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
available from the Delaware Investments family. Shareholders of the Fund may
also elect to invest in one or more of the other mutual funds available from the
Delaware Investments family 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 available from
the Delaware Investments family, subject to the conditions and limitations set
forth in the Prospectus. The investment will be made on the 20th day of each
month (or, if the fund selected is not open that day, the next business day) at
the public offering price or net asset value, as applicable, of the fund
selected on the date of investment. No investment will be made for any month if
the value of the shareholder's account is less than the amount specified for
investment.
Periodic investment through the Wealth Builder Option does not insure
profits or protect against losses in a declining market. The price of the fund
into which investments are made could fluctuate. Since this program involves
continuous investment regardless of such fluctuating value, investors selecting
this option should consider their financial ability to continue to participate
in the program through periods of low fund share prices. This program involves
automatic exchanges between two or more fund accounts and is treated as a
purchase of shares of the fund into which investments are made through the
program. See Exchange Privilege for a brief summary of the tax consequences of
exchanges. Shareholders can terminate their participation in Wealth Builder at
any time by giving written notice to the fund from which exchanges are made.
Account Statements
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<PAGE>
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.
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<PAGE>
Asset Planner
To invest in the funds in the Delaware Investments family using the
Asset Planner asset allocation service, you should complete an Asset Planner
Account Registration Form, which is available only from a financial adviser or
investment dealer. Effective September 1, 1997, the Asset Planner Service is
only available to financial advisers or investment dealers who have previously
used this service. The Asset Planner service offers a choice of four
predesigned asset allocation strategies (each with a different risk/reward
profile) in predetermined percentages in Delaware Investments 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 Investments accounts into the Asset Planner service may be made at
net asset value under the circumstances described under Investing by Exchange
in the Prospectus amd the prospectus of each fund in the Delaware Investments
family. The minimum initial investment per Strategy is $2,000; subsequent
investments must be at least $100. Individual fund minimums do not apply to
investments made using the Asset Planner service. Class A Shares and
Consultant Class Shares are available through the Asset Planner service.
Generally, only shares within the same class may be used within the same
Strategy. However, Class A Shares of the Fund and of other funds available
from Delaware Investments may be used in the same Strategy with the Fund's
Consultant Class Shares and consultant class shares that are offered by
certain other funds in the Delaware Investments family.
An annual maintenance fee, currently $35 per Strategy, is due at the
time of initial investment and by September 30 of each subsequent year. The
fee, payable to Delaware Service Company, Inc. to defray extra costs
associated with administering the Asset Planner service, will be deducted
automatically from one of the funds within your Asset Planner account if not
paid by September 30. However, effective November 1, 1996, the annual
maintenance fee is waived until further notice. Investors who utilize the
Asset Planner for an IRA will continue to pay an annual IRA fee of $15 per
Social Security number. Investors will receive a customized quarterly Strategy
Report summarizing all 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.
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<PAGE>
OFFERING PRICE
The offering price of shares is the net asset value per share next to
be determined after an order is received and becomes effective. There is no
sales charge.
The purchase will be effected at the net asset value next computed
after the receipt of Federal Funds provided they are received by the close of
regular trading on the New York Stock Exchange (ordinarily, 4 p.m., Eastern
time) on days when the Exchange is open. The New York Stock Exchange is
scheduled to be open Monday through Friday throughout the year except for days
on which the following holidays are observed: New Year's Day, Martin Luther
King, Jr.'s Birthday, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas. When the New York Stock Exchange is
closed, the Fund will generally be closed, pricing calculations will not be made
and purchase and redemption orders will not be processed.
An example showing how to calculate the net asset value per share is
included in the Fund's financial statements which are incorporated by reference
into this Part B.
The investor becomes a shareholder at the close of and after
declaration of the dividend on the day on which the order is effective. See
Purchasing Shares. Dividends begin to accrue on the next business day. In the
event of changes in SEC 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 Fund's net asset value per share of a Class is computed by adding
the value of all securities and other assets in the portfolio attributable to
that Class, deducting any liabilities of the Fund attributable to that Class and
dividing by the number of shares of the Class outstanding. Expenses and fees are
accrued daily. In determining the Fund's total net assets , portfolio securities
are valued at amortized cost.
The Board of Directors has adopted certain procedures to monitor and
stabilize the Fund's price per share. Calculations are made each day to compare
part of the Fund's value with the market value of instruments of similar
character. At regular intervals all issues in the portfolio are valued at market
value. Securities maturing in more than 60 days are valued more frequently by
obtaining market quotations from market makers. The portfolio will also be
valued by market makers at such other times as is felt appropriate. In the event
that a deviation of more than 1/2 of 1% exists between the Fund's $1.00 per
share offering and redemption prices and the net asset value calculated by
reference to market quotations, or if there is any other deviation which the
Board of Directors believes would result in a material dilution to shareholders
or purchasers, the Board of Directors will promptly consider what action, if
any, should be initiated, such as changing the price to more or less than $1.00
per share.
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<PAGE>
REDEMPTION
Any shareholder may require the Fund to redeem shares by sending a
written request, signed by the record owner or owners exactly as the shares are
registered, to the Fund at 1818 Market Street, Philadelphia, PA 19103. In
addition, certain expedited redemption methods described below are available
when stock certificates have not been issued. If stock certificates have been
issued for shares being redeemed, they must accompany the written request. For
redemptions of $50,000 or less paid to the shareholder at the address of record,
the request must be signed by all owners of the shares or the investment dealer
of record, but a signature guarantee is not required. When the redemption is for
more than $50,000, or if payment is made to someone else or to another address,
signatures of all record owners and a signature guarantee are required. Each
signature guarantee must be supplied by an eligible guarantor institution. The
Fund reserves the right to reject a signature guarantee supplied by an eligible
institution based on its creditworthiness. The Fund may request further
documentation from corporations, executors, retirement plans, administrators,
trustees or guardians. The redemption price is the net asset value next
calculated after receipt of the redemption request in good order. See Offering
Price for time of calculation of net asset value.
Payment for shares redeemed will ordinarily be mailed the next business
day, but no later than seven days, after receipt of a redemption request in good
order by the Fund, or certain other authorized persons (see Distribution and
Service under Investment Management Agreement); 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.
The Fund will process written redemption requests to the extent that
the purchase orders for the shares being redeemed have already settled. The Fund
will honor redemption requests as to shares for which a check was tendered as
payment, but the Fund will not mail the proceeds until it is reasonably
satisfied that the check has cleared. The hold period against a recent purchase
may be up to but not in excess of 15 days, depending upon the origin of the
investment check. Dividends will continue to be earned until the redemption is
processed. This potential delay can be avoided by making investments by wiring
Federal Funds. If a shareholder 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.
If a shareholder has been credited with a purchase by a check which is
subsequently returned unpaid for insufficient funds or for any other reason, the
Fund will automatically redeem from the shareholder's account the shares
purchased by the check plus any dividends earned thereon. Shareholders may be
responsible for any losses to the Fund or to the Distributor.
In case of a suspension of the determination of the net asset value
because the New York Stock Exchange is closed for other than weekends or
holidays, or trading thereon is restricted or an emergency exists as a result of
which disposal by the Fund of securities owned by it is not reasonably practical
or it is not reasonably practical for the Fund fairly to value its assets, or in
the event that the SEC 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.
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<PAGE>
See Account Statements under Purchasing Shares for information relating
to the mailing of confirmations of redemptions.
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 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.
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. Throughout this procedure, the
shareholder will continue to be entitled to distributions paid on those shares
up to the time such checks are presented for payment.
(3) If a shareholder who recently purchased shares by check seeks to
redeem all or a portion of those shares through the Checkwriting Feature, the
Fund will honor the redemption request, but will not process the redemption
check until it is reasonably satisfied of the collection of the investment
check. The hold period against a recent purchase may be up to but not in
excess of 15 days, depending upon the origin of the investment check.
(4) If the amount of the check is greater than the value of the
shares held in the shareholder's account, the check will be returned and the
shareholder'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 for
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
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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.
* * *
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.
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.
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 a Class at net asset value. This plan is not recommended
for all investors and should be started only after careful consideration of its
operation and effect upon the investor's savings and investment program. To the
extent that withdrawal payments from the plan exceed any dividends and/or
realized securities profits distributions paid on shares held under the plan,
the withdrawal payments will represent a return of capital and the share balance
may in time be depleted, particularly in a declining market.
The sale of shares for withdrawal payments constitutes a taxable event,
and a shareholder may incur a capital gain or loss for federal income tax
purposes, although the Fund expects to maintain a fixed net asset value. If
there was a gain or loss, it would be long-term or short-term depending on the
holding period for the specific shares liquidated.
An investor wishing to start a Systematic Withdrawal Plan must complete
an authorization form. If the recipient of Systematic Withdrawal Plan payments
is other than the registered shareholder, the shareholder's signature on this
authorization must be guaranteed. Each signature guarantee must be supplied by
an eligible guarantor institution. The Fund reserves the right to reject a
signature guarantee supplied by an eligible institution based on its
creditworthiness. This plan may be terminated by the shareholder or the Transfer
Agent
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<PAGE>
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.
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 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 Consultant Class Shares
may incur distribution fees under its 12b-1 Plan. The Board of Directors of the
Fund suspended 12b-1 Plan payments from the assets of Consultant Class Shares to
the Distributor effective June 1, 1990. See Plan Under Rule 12b-1 for Consultant
Class 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 . 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.
Payment by check of cash dividends will ordinarily be mailed within three
business days after the payable date. 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
-31-
<PAGE>
suspending payment of daily dividends, or making a distribution of realized
securities profits or other distributions at the time the net asset value per
share has changed.
Short-term realized securities profits or losses, if any, may be paid
with the daily dividend. Any such profits not so paid will be distributed
annually during the first quarter following the close of the fiscal year. See
Account Statements under Purchasing Shares. Information as to the tax status of
dividends will be provided annually.
-32-
<PAGE>
TAXES
Federal Income Tax
The Fund has qualified, and intends to continue to qualify, as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended, (the "Code"). 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, 1998, 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.
Under the Taxpayer Relief Act of 1997 (the "1997 Act"), the Fund is
required to track its sales of portfolio securities and to report its capital
gain distributions to you according to the following categories of holding
periods:
"Pre-Act long-term capital gains" or "28 percent rate gain": securities
sold by the Fund before May 7, 1997, that were held for more than 12
months. These gains will be taxable to individual investors at a
maximum rate of 28%.
"Mid-term capital gains" or "28 percent rate gain": securities sold by
the Fund after July 28, 1997 that were held more than one year but not
more than 18 months. These gains will be taxable to individual
investors at a maximum rate of 28%.
"1997 Act long-term capital gains" or "20 percent rate gain":
securities sold by the Fund between May 7, 1997 and July 28, 1997 that
were held for more than 12 months, and
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<PAGE>
securities sold by the Fund after July 28, 1997 that were held for more
than 18 months. These gains will be taxable to individual investors at
a maximum rate of 20% for investors in the 28% or higher federal income
tax brackets, and at a maximum rate of 10% for investors in the 15%
federal income tax bracket.
"Qualified 5-year gains": For individuals in the 15% bracket, qualified
5-year gains are net gains on securities held for more than 5 years
which are sold after December 31, 2000. For individuals who are subject
to tax at higher rate brackets, qualified 5-year gains are net gains on
securities which are purchased after December 31, 2000 and are held for
more than 5 years. Taxpayers subject to tax at a higher rate bracket
may also make an election for shares held on January 1, 2001 to
recognize gain on their shares (any loss is disallowed) in order to
qualify such shares as qualified 5-year property as though purchased
after December 31, 2000. These gains will be taxable to individual
investors at a maximum rate of 18% for investors in the 28% or higher
federal income tax brackets, and at a maximum rate of 8% for investors
in the 15% federal income tax bracket when sold after the 5 year
holding period.
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.
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<PAGE>
INVESTMENT MANAGEMENT AGREEMENT
The Manager, located at One Commerce Square, Philadelphia, PA 19103,
furnishes investment management services to the Fund, subject to the supervision
and direction of the Fund's Board of Directors.
The Manager and its predecessors have been managing the funds in the
Delaware Investments family since 1938. On April 30, 1998, the Manager and its
affiliates within Delaware Investments, including Delaware International
Advisers Ltd., were managing in the aggregate more than $45 billion in assets in
various institutional or separately managed (approximately $27,330,570,000) and
investment company (approximately $17,733,730,000) accounts.
Subject to the supervision and direction of the Board of Directors, the
Manager manages the Fund's portfolio in accordance with the Fund's stated
investment objective and policies and 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. The Agreement
had an initial term of two years and may be renewed only so long as such
renewal and continuance are specifically approved at least annually by the
Board of Directors or by vote of a majority of the outstanding voting
securities of the Fund, and only if the terms and the renewal thereof have
been approved by the vote of a majority of the directors of the Fund, who are
not parties thereto or interested persons of any such party, cast in person at
a meeting called for the purpose of voting on such approval. The Agreement is
terminable without penalty on 60 days' notice by the directors of the Fund or
by the Manager. The Agreement will terminate automatically in the event of its
assignment.
The annual compensation paid by the Fund for investment management
services is equal to 1/2 of 1% of the Fund's average daily net assets, less all
directors' fees paid to the unaffiliated directors by the Fund. The Manager pays
the salaries of all directors, officers and employees of the Fund who are
affiliated with the Manager. Investment management fees paid by the Fund were
0.48% of average daily net assets for the fiscal year ended April 30, 1998.
On April 30, 1998, the total net assets of the Fund were $34,836,827.
Investment management fees paid by the Fund during the past three fiscal years
were $222,243 for 1996, $167,125 for 1997 and $164,249 for 1998.
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.
Distribution and Service
The Distributor, Delaware Distributors, L.P., located at 1818 Market
Street, Philadelphia, PA 19103, serves as the national distributor of Fund
shares under a Distribution Agreement dated April 3, 1995. The Distributor is an
affiliate of the Manager and bears all of the costs of promotion and
distribution, except for any payments which may be made under the 12b-1 Plan for
Consultant Class Shares. Delaware Distributors, L.P. is an indirect, wholly
owned subsidiary of Delaware Management Holdings, Inc.
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<PAGE>
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.
The Fund has authorized one or more brokers to accept on its behalf
purchase and redemption orders in addition to the Transfer Agent. Such brokers
are authorized to designate other intermediaries to accept purchase and
redemption orders on the behalf of the Fund. For purposes of pricing, the Fund
will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts the
order. Investors may be charged a fee when effecting transactions through a
broker or agent.
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<PAGE>
OFFICERS AND DIRECTORS
The business and affairs of the Fund are managed under the direction
of its Board of Directors.
Certain officers and directors of the Fund hold identical positions in
each of the other funds in the Delaware Investments family. On May 31, 1998, the
Fund's officers and directors, as a group, owned approximatley 2.72% of the
outstanding shares of Class A Shares and less than 1% of the outstanding shares
of Consultant Class Shares.
As of May 31, 1998, the Fund believes the following accounts held 5% or
more of Class A Shares and Consultant Class Shares of the Fund. The Fund has no
knowledge of beneficial ownership.
<TABLE>
<CAPTION>
Class Name and Address of Account Share Amount Percentage
- ----- --------------------------- ------------ ----------
<S> <C> <C> <C>
Class A Shares Mary Louise DeSimone 1,598,086 5.32%
37 Borton Road
Medford, NJ 08055
Consultant Class John K. Kaiser 194,633 14.51%
Shares 499 Bair Road
Berwyn, PA 19312
Anthony C. Jaspers TTEE 108,683 8.10%
Anthony C. Jaspers
232 North Main Street
Lake Crystal, MN 56055
Mary E. Gamble and Harvey R. Gamble 107,226 7.99%
Rd 2 Box 112
Centre Hall, PA 16828
Marlene J. Overgaard 105,591 7.87%
2017 Highland Avenue
Albert Lea, MN 56007
</TABLE>
DMH Corp., Delvoy, Inc., Delaware Management Business Trust, Delaware
Management Company, Inc., Delaware Management Company (a series of Delaware
Management Business Trust), Delaware Investment Advisers (a series of Delaware
Management Business Trust), 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.
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<PAGE>
Certain officers and directors of the Fund hold identical positions in
each of the other funds in the Delaware Investments family. Directors and
principal officers of the Fund are noted below along with their ages and their
business experience for the past five years. Unless otherwise noted, the address
of each officer and director is One Commerce Square, Philadelphia, PA 19103.
*Wayne A. Stork (60)
Chairman and Director and/or Trustee of the Fund, 33 other investment
companies in the Delaware Investments family and Delaware
Capital Management, Inc.
Chairman, President, Chief Executive Officer and Director of DMH Corp.,
Delaware Distributors, Inc. and Founders Holdings, Inc.
Chairman, President, Chief Executive Officer, Chief Investment Officer
and Director/Trustee of Delaware Management Company, Inc. and
Delaware Management Business Trust
Chairman, President, Chief Executive Officer and Chief Investment
Officer of Delaware Management Company (a series of Delaware
Management Business Trust)
Chairman, Chief Executive Officer and Chief Investment Officer of
Delaware Investment Advisers (a series of Delaware Management
Business Trust)
Chairman, Chief Executive Officer and Director of Delaware
International Advisers Ltd., Delaware International Holdings
Ltd. and Delaware Management Holdings, Inc.
President and Chief Executive Officer of Delvoy, Inc.
Chairman of Delaware Distributors, L.P.
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.
*Jeffrey J. Nick (45)
President, Chief Executive Officer and Director of the Fund and 33
other investment companies in the Delaware Investments family
President and Director of Delaware Management Holdings, Inc.
President, Chief Executive Officer and Director of Lincoln National
Investment Companies, Inc.
President of Lincoln Funds Corporation
Director of Delaware International Advisers Ltd.
From 1992 to 1996, Mr. Nick was Managing Director of Lincoln National
UK plc and from 1989 to 1992, he was Senior Vice President
responsible for corporate planning and development for Lincoln
National Corporation.
Richard G. Unruh, Jr. (58)
Executive Vice President of the Fund , 33 other investment companies in
the Delaware Investments family, Delaware Management Holdings,
Inc., Delaware Management Company (a series of Delaware
Management Business Trust) and Delaware Capital Management,
Inc.
President of Delaware Investment Advisers (a series of Delaware
Management Business Trust)
Executive Vice President and Director/Trustee of Delaware Management
Company, Inc. and Delaware Management Business Trust
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.
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<PAGE>
- ---------------------
*Director affiliated with the Fund's investment manager and considered an
"interested person" as defined in the 1940 Act.
-39-
<PAGE>
Paul E. Suckow (50)
Executive Vice President/Chief Investment Officer, Fixed Income of the
Fund, 33 other investment companies in the Delaware
Investments family, Delaware Management Company, Inc.,
Delaware Management Company (a series of Delaware Management
Business Trust), Delaware Investment Advisers (a series of
Delaware Management Business Trust) and Delaware Management
Holdings, Inc.
Executive Vice President and Director of Founders Holdings, Inc.
Executive Vice President of Delaware Capital Management, Inc.
and Delaware Management Business Trust
Director of Founders CBO Corporation
Director of HYPPCO Finance Company Ltd.
Before returning to Delaware Investments 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 Delaware Investments.
David K. Downes (58)
Executive Vice President, Chief Operating Officer, Chief Financial
Officer of the Fund, 33 other investment companies in the
Delaware Investments family, Delaware Management Holdings,
Inc., Founders CBO Corporation, Delaware Capital Management,
Inc., Delaware Management Company (a series of Delaware
Management Business Trust), Delaware Investment Advisers (a
series of Delaware Management Business Trust) and Delaware
Distributors, L.P.
Executive Vice President, Chief Financial Officer, Chief Administrative
Officer and Trustee of Delaware Management Business Trust
Executive Vice President, Chief Operating Officer, Chief Financial
Officer and Director of Delaware Management Company, Inc., DMH
Corp., Delaware Distributors, Inc., Founders Holdings, Inc.
and Delvoy, Inc.
President, Chief Executive Officer, Chief Financial Officer and
Director of Delaware Service Company, Inc.
President, Chief Operating Officer, Chief Financial Officer and
Director of Delaware International Holdings Ltd.
Chairman, Chief Executive Officer and Director of Delaware Management
Trust Company and Delaware Investment & Retirement Services,
Inc.
Director of Delaware International Advisers Ltd.
Vice President of Lincoln Funds Corporation
During the past five years, Mr. Downes has served in various
executive capacities at different times within the Delaware
organization.
Walter P. Babich (70)
Director and/or Trustee of the Fund and 33 other investment companies
in theDelaware Investments family
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.
-40-
<PAGE>
John H. Durham (60)
Director and/or Trustee of the Fund and 18 other investment companies
in the Delaware Investments family
Partner, Complete Care Services
120 Gibraltar Road, Horsham, PA 19044
Mr. Durham served as Chairman of the Board of each fund in the Delaware
Investments family from 1986 to 1991; President of each fund
from 1977 to 1990; and Chief Executive Officer of each fund
from 1984 to 1990. Prior to 1992, with respect to Delaware
Management Holdings, Inc., Delaware Management Company,
Delaware Distributors, Inc. and Delaware Service Company,
Inc., Mr. Durham served as a director and in various executive
capacities at different times.
Anthony D. Knerr (59)
Director and/or Trustee of the Fund and 33 other investment companies
in the Delaware Investments family
500 Fifth Avenue, New York, NY 10110
Founder and Managing Director, Anthony Knerr & Associates
From 1982 to 1988, Mr. Knerr was Executive Vice President/Finance and
Treasurer of Columbia University, New York. From 1987 to
1989, he was also a lecturer in English at the University. In
addition, Mr. Knerr was Chairman of The Publishing Group,
Inc., New York, from 1988 to 1990. Mr. Knerr founded The
Publishing Group, Inc. in 1988.
Ann R. Leven (57)
Director and/or Trustee of the Fund and 33 other investment companies
in the Delaware Investments family
785 Park Avenue, New York, NY 10021
Treasurer, National Gallery of Art
From 1984 to 1990, Ms. Leven was Treasurer and Chief Fiscal Officer
of the Smithsonian Institution, Washington, DC, and from 1975
to 1992, she was Adjunct Professor of Columbia Business
School.
W. Thacher Longstreth (77)
Director and/or Trustee of the Fund and 33 other investment companies
in the Delaware Investments family
City Hall, Philadelphia, PA 19107
Philadelphia City Councilman.
Thomas F. Madison (62)
Director and/or Trustee of the Fund and 33 other investment companies
in the Delaware Investments family
200 South Fifth Street, Suite 2100, Minneapolis, Minnesota 55402
President and Chief Executive Officer, MLM Partners, Inc.
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.
-41-
<PAGE>
Charles E. Peck (72)
Director and/or Trustee of the Fund and 33 other investment companies
in the Delaware Investments family
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.
George M. Chamberlain, Jr. (51)
Senior Vice President, Secretary and General Counsel of the Fund, 33
other investment companies in the Delaware Investments family,
Delaware Distributors, L.P., Delaware Management Company (a
series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business
Trust) and Delaware Management Holdings, Inc.
Senior Vice President, Secretary, General Counsel and Director/Trustee
of DMH Corp., Delaware Management Company, Inc., Delaware
Distributors, Inc., Delaware Service Company, Inc., Founders
Holdings, Inc., Delaware Investment & Retirement Services,
Inc., Delaware Capital Management, Inc., Delvoy, Inc. and
Delaware Management Business Trust
Executive Vice President, Secretary, General Counsel and Director of
Delaware Management Trust Company
Senior Vice President and Director of Delaware International Holdings
Ltd.
Director of Delaware International Advisers Ltd.
Secretary of Lincoln Funds Corporation Attorney.
During the past five years, Mr. Chamberlain has served in various
executive capacities at different times within the Delaware
organization.
Patrick P. Coyne (35)
Vice President/Senior Portfolio Manager of the Fund, of 19 other funds
in the Delaware Investments family, Delaware Capital
Management, Inc., Delaware Management Company, Inc., Delaware
Management Company (a series of Delaware Management Business
Trust) and Delaware Investment Advisers (a series of Delaware
Management Business Trust)
During the past five years, Mr. Coyne has served in various capacities
at different times within the Delaware organization.
-42-
<PAGE>
Joseph H. Hastings (48)
Senior Vice President/Corporate Controller of the Fund, 33 other
investment companies in the Delaware Investments family and
Founders Holdings, Inc.
Senior Vice President/Corporate Controller and Treasurer of Delaware
Management Holdings, Inc., DMH Corp., Delaware Management
Company, Inc., Delaware Management Company (a series of
Delaware Management Business Trust), Delaware Distributors,
L.P., Delaware Distributors, Inc., Delaware Service Company,
Inc., Delaware Capital Management, Inc., Delaware
International Holdings Ltd., Delvoy, Inc. and Delaware
Management Business Trust
Chief Financial Officer/Treasurer of Delaware Investment & Retirement
Services, Inc. Executive Vice President/Chief Financial
Officer/Treasurer of Delaware Management Trust Company
Senior Vice President/Assistant Treasurer of Founders CBO Corporation
Treasurer of Lincoln Funds Corporation
During the past five years, Mr. Hastings has served in various
executive capacities at different times within the Delaware
organization.
Michael P. Bishof (35)
Senior Vice President/Treasurer of the the Fund, 33 other investment
companies in the Delaware Investments family and Founders
Holdings, Inc.
Senior Vice President/Investment Accounting of Delaware Management
Company, Inc., Delaware Management Company (a series of
Delaware Management Business Trust) and Delaware Service
Company, Inc.
Senior Vice President and Treasurer/Manager of Investment Accounting
of Delaware Distributors, L.P. and Delaware Investment
Advisers (a series of Delaware Management Business Trust)
Senior Vice President and Manager of Investment Accounting of Delaware
International Holdings Ltd.
Assistant Treasurer of Founders CBO Corporation
Before joining Delaware Investments 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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<PAGE>
The following is a compensation table listing for each director/trustee
entitled to receive compensation, the aggregate compensation received from the
Fund and the total compensation received from all investment companies in the
Delaware Investments family for which he or she serves as a director or trustee
for the fiscal year ended April 30, 1998 and an estimate of annual benefits to
be received upon retirement under the Delaware Group Retirement Plan for
Directors/Trustees as of April 30, 1998. Only the independent directors/trustees
of the Fund receive compensation from the Fund.
<TABLE>
<CAPTION>
Pension or Total Compensation
Retirement Estimated from the
Benefits Annual Investment
Aggregate Accrued as Benefits Companies in
Compensation Part of Fund Upon Delaware
Name from the Fund Expenses Retirement(1) Investments(2)
<S> <C> <C> <C> <C>
W. Thacher Longstreth $840 None $38,500 $62,618
Ann R. Leven $852 None $38,500 $68,561
Walter P. Babich $850 None $38,500 $67,285
Anthony D. Knerr $850 None $38,500 $67,285
Charles E. Peck $745 None $38,500 $59,473
Thomas F. Madison(3) $840 None $38,500 $62,618
John H. Durham (4) $ 50 None $31,000 $ 3,177
</TABLE>
(1) Under the terms of the Delaware Group Retirement Plan for Directors/
Trustees, each disinterested director/trustee 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 investment company in the Delaware Investments family
for which he or she serves as a director or trustee for a period equal to
the lesser of the number of years that such person served as a director or
trustee 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/trustees of each investment company at
the time of such person's retirement. If an eligible director/trustee
retired as of April 30, 1998, he or she would be entitled to annual
payments totaling the amount noted above, in the aggregate, from all of
the investment companies in the Delaware Investments family for which he
or she served as director or trustee, based on the number of investment
companies in the Delaware Investments family as of that date.
(2) Each independent director/trustee (other than John H. Durham) currently
receives a total annual retainer fee of $38,500 for serving as a director
or trustee for all 34 investment companies in Delaware Investments, plus
$3,145 for each Board Meeting attended. John H. Durham currently receives
a total annual retainer fee of $31,000 for serving as a director or
trustee for 19 investment companies in Delaware Investments, plus
$1,757.50 for each Board Meeting attended. Ann R. Leven, Walter P. Babich,
and Anthony D. Knerr serve on the Fund's audit committee; Ms. Leven is the
chairperson. Members of the audit committee currently receive additional
annual compensation of $5,000 from all investment companies, in the
aggregate, with the exception of the chairperson, who receives $6,000.
(3) Thomas F. Madison joined the Board of Directors on April 30, 1997.
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(4) John H. Durham joined the Board of Directors of the Fund and 18 other
investment companies in Delaware Investments on April 16, 1998.
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EXCHANGE PRIVILEGE
The exchange privileges available for shareholders of each Class and
the shareholders of other classes of other funds available from the Delaware
Investments family 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 authorization form for any of the other mutual funds
available from the Delaware Investments family. 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 available from the Delaware Investments family 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 available from the Delaware Investments family.
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 available from the Delaware Investments family. 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 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 funds in
the Delaware Investments family 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; (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 funds in the Delaware Investments
family: (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
funds in the Delaware Investments family are available for timed exchanges.
Assets redeemed or exchanged out of Timing Accounts in funds in the Delaware
Investments family 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 funds
in the Delaware Investments family:
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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Trend Fund seeks long-term growth by investing in common stocks issued
by emerging growth companies exhibiting strong capital appreciation potential.
Small Cap Value Fund seeks capital appreciation by investing primarily
in common stocks whose market values appear low relative to their underlying
value or future potential.
DelCap Fund seeks long-term capital growth by investing in common
stocks and securities convertible into common stocks of companies that have a
demonstrated history of growth and have the potential to support continued
growth.
Decatur Income Fund seeks the highest possible current income by
investing primarily in common stocks that provide the potential for income and
capital appreciation without undue risk to principal. Decatur Total Return Fund
seeks long-term growth by investing primarily in securities that provide the
potential for income and capital appreciation without undue risk to principal.
Blue Chip Fund seeks to achieve long-term capital appreciation. Current income
is a secondary objective. It seeks to achieve these objectives by investing
primarily in equity securities and any securities that are convertible into
equity securities. Social Awareness 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.
REIT Fund seeks to achieve maximum long-term total return with capital
appreciation as a secondary objective. It seeks to achieve its objectives by
investing in securities of companies primarily engaged in the real estate
industry.
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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 New Jersey Fund seeks a high level of current interest income
exempt from federal income tax and New Jersey state and local taxes, consistent
with preservation of capital. Tax-Free Ohio Fund seeks a high level of current
interest income exempt from federal income tax and Ohio state and local taxes,
consistent with preservation of capital. Tax-Free Pennsylvania Fund seeks a high
level of current interest income exempt from federal income tax and Pennsylvania
state and local taxes, consistent with the preservation of capital.
Foundation Funds are "fund of funds" which invest in other funds in the
Delaware Investments family (referred to as "Underlying Funds"). Foundation
Funds Income Portfolio seeks a combination of current income and preservation of
capital with capital appreciation by investing in primarily a mix of fixed
income and domestic equity securities, including fixed income and domestic
equity Underlying Funds. Foundation Funds Balanced Portfolio seeks capital
appreciation with current income as a secondary objective by investing primarily
in domestic equity and fixed income securities, including domestic equity and
fixed income Underlying Funds. Foundation Funds Growth Portfolio seeks long term
capital growth by investing primarily in equity securities, including equity
Underlying Funds, and, to a lesser extent, in fixed income securities, including
fixed-income Underlying Funds.
International Equity Fund seeks to achieve long-term growth without
undue risk to principal by investing primarily in international securities that
provide the potential for capital appreciation and income. Global Bond Fund
seeks to achieve current income consistent with the preservation of principal by
investing primarily in global fixed-income securities that may also provide the
potential for capital appreciation. Global Assets Fund seeks to achieve
long-term total return by investing in global securities which will provide
higher current income than a portfolio comprised exclusively of equity
securities, along with the potential for capital growth. Emerging Markets Fund
seeks long-term capital appreciation by investing primarily in equity securities
of issuers located or operating in emerging countries.
U.S. Growth Fund seeks to maximize capital appreciation by investing in
companies of all sizes which have low dividend yields, strong balance sheets and
high expected earnings growth rates relative to their industry. Overseas Equity
Fund seeks to maximize total return (capital appreciation and income),
principally through investments in an internationally diversified portfolio of
equity securities. New Pacific Fund seeks long-term capital appreciation by
investing primarily in companies which are domiciled in or have their principal
business activities in the Pacific Basin.
Delaware Group Premium Fund, Inc. offers 16 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
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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. Small Cap Value Series seeks capital
appreciation by investing primarily in small- cap common stocks whose market
value appears low relative to their underlying value or future earnings and
growth potential. Emphasis will also be placed on securities of companies that
may be temporarily out of favor or whose value is not yet recognized by the
market. Emerging Markets 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. Social Awareness 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. REIT Series seeks to achieve maximum long-term total
return, with capital appreciation as a secondary objective, by investing in
securities of companies primarily engaged in the real estate industry.
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.
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Delaware-Voyageur Tax-Free Florida Fund seeks to provide a high level of current
income exempt from federal income tax, consistent with the preservation of
capital. The Fund will seek to select investments that will enable its shares to
be exempt from the Florida intangible personal property tax. Delaware-Voyageur
Tax-Free Kansas Fund seeks to provide a high level of current income exempt from
federal income tax, the Kansas personal income tax and the Kansas intangible
personal property tax, consistent with the preservation of capital.
Delaware-Voyageur Tax-Free Missouri Insured Fund seeks to provide a high level
of current income exempt from federal income tax and the Missouri personal
income tax, consistent with the preservation of capital. Delaware-Voyageur
Tax-Free New Mexico Fund seeks to provide a high level of current income exempt
from federal income tax and the New Mexico personal income tax, consistent with
the preservation of capital. Delaware-Voyageur Tax-Free Oregon Insured Fund
seeks to provide a high level of current income exempt from federal income tax
and the Oregon personal income tax, consistent with the preservation of capital.
Delaware-Voyageur Tax-Free Utah Fund seeks to provide a high level of current
income exempt from federal income tax, consistent with the preservation of
capital. Delaware-Voyageur Tax-Free Washington Insured Fund seeks to provide a
high level of current income exempt from federal income tax, consistent with the
preservation of capital.
Delaware-Voyageur Tax-Free Florida Intermediate Fund seeks to provide a
high level of current income exempt from federal income tax, consistent with the
preservation of capital. The Fund will seek to select investments that will
enable its shares to be exempt from the Florida intangible personal property
tax. The Fund seeks to reduce market risk by maintaining an average weighted
maturity from five to ten years.
Delaware-Voyageur Tax-Free Arizona Fund seeks to provide a high level
of current income exempt from federal income tax and the Arizona personal income
tax, consistent with the preservation of capital. Delaware-Voyageur Tax-Free
California Fund seeks to provide a high level of current income exempt from
federal income tax and the California personal income tax, consistent with the
preservation of capital. Delaware-Voyageur Tax-Free Iowa Fund seeks to provide a
high level of current income exempt from federal income tax and the Iowa
personal income tax, consistent with the preservation of capital.
Delaware-Voyageur Tax-Free Idaho Fund seeks to provide a high level of current
income exempt from federal income tax and the Idaho personal income tax,
consistent with the preservation of capital. Voyageur Minnesota High Yield
Municipal Bond Fund seeks to provide a high level of current income exempt from
federal income tax and the Minnesota personal income tax primarily through
investment in medium and lower grade municipal obligations. National High Yield
Municipal Fund seeks to provide a high level of income exempt from federal
income tax, primarily through investment in medium and lower grade municipal
obligations. Delaware-Voyageur Tax-Free New York Fund seeks to provide a high
level of current income exempt from federal income tax and the personal income
tax of the state of New York and the city of New York, consistent with the
preservation of capital. Delaware-Voyageur Tax-Free Wisconsin Fund seeks to
provide a high level of current income exempt from federal income tax and the
Wisconsin personal income tax, consistent with the preservation of capital.
Delaware-Voyageur Tax-Free Colorado Fund seeks to provide a high level
of current income exempt from federal income tax and the Colorado personal
income tax, consistent with the preservation of capital.
Aggressive Growth Fund seeks long-term capital appreciation, which the
Fund attempts to achieve by investing primarily in equity securities believed to
have the potential for high earnings growth. Although the Fund, in seeking its
objective, may receive current income from dividends and interest, income is
only an incidental consideration in the selection of the Fund's investments.
Growth Stock Fund has an objective of long-term capital appreciation. The Fund
seeks to achieve its objective from equity securities diversified among
individual companies and industries. Tax-Efficient Equity Fund seeks to obtain
for taxable investors a high
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total return on an after-tax basis. The Fund will attempt to achieve this
objective by seeking to provide a high long-term after-tax total return
through managing its portfolio in a manner that will defer the realization of
accrued capital gains and minimize dividend income.
Delaware-Voyageur Tax-Free Minnesota Fund seeks to provide a high level
of current income exempt from federal income tax and the Minnesota personal
income tax, consistent with the preservation of capital. Delaware-Voyageur
Tax-Free North Dakota Fund seeks to provide a high level of current income
exempt from federal income tax and the North Dakota personal income tax,
consistent with the preservation of capital.
For more complete information about any of the funds in the Delaware
Investments family, 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).
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GENERAL INFORMATION
The Manager is the investment manager of the Fund. The Manager also
provides investment management services to certain of the other funds available
from the Delaware Investments family. 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 16 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 mutual
funds in the Delaware Investments family available outside the annuity. See
Delaware Group Premium Fund, Inc., above.
Access persons and advisory persons of the funds in the Delaware
Investments family, as those terms are defined in SEC Rule 17j-1 under the 1940
Act, who provide services to Delaware Management Company, 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 Investments family.
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 Investments family. Compensation is fixed each year
and approved by the Board of Directors, including a majority of the
disinterested directors. The Transfer Agent is paid a fee by the Fund for
providing these services consisting of an annual per account charge of $11.00
plus transaction charges for particular services according to a schedule. 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 its services, the Transfer
Agent is paid a fee based on total assets of all funds in the Delaware
Investments family 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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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 ("Bankers Trust"), One Bankers Trust Plaza, New
York, NY 10006 is custodian of the Fund's securities and cash. As custodian for
the Fund, Bankers Trust maintains a separate account or accounts for the Fund;
receives, holds and releases portfolio securities on account of the Fund;
receives and disburses money on behalf of the Fund; and collects and receives
income and other payments and distributions on account of the Fund's portfolio
securities.
Capitalization
The Fund has a total authorized capitalization of five hundred million
shares of capital stock with a $.001 par value per share. The Board of Directors
has allocated one hundred million shares of the Fund to each Class. The Fund
offers two classes of shares, Tax-Free Money Fund A Class and 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.
Shares have no preemptive rights, are fully transferable and, when
issued, are fully paid and nonassessable.
Prior to January 1, 1991, the portfolio of the Fund was managed to
maintain a fixed net asset value of $10.00 per share. The Fund reduced the net
asset value per share from $10.00 to $1.00 by effecting a ten-to-one stock split
for shareholders of record on that date.
Prior to January 1992, Class A Shares were known as the original class
and between January 1992 and February 1994 were known as Tax-Free Money Fund
class. Prior to January 1992, Consultant Class Shares were known as the
consultant class, between January 1992 and November 1992 was known as Tax-Free
Money Fund (Institutional) class and between November 1992 and February 1994 was
known as Tax-Free Money Fund Consultant class.
Noncumulative Voting
The Fund's 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 SEC.
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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,
Statements 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, 1998, are included in the Fund's Annual Report
to shareholders. The financial statements and 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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APPENDIX A--DESCRIPTION OF RATINGS
Bonds
Moody's Investors Service, Inc.
Aaa Highest quality; smallest degree of investment risk.
Aa High quality; together with Aaa bonds, they compose the high-grade bond
group.
A Possess favorable attributes; considered "upper medium" grade
obligations.
Standard & Poor's Ratings Group
AAA Highest rating; extremely strong capacity to pay principal and interest.
AA High quality; very strong capacity to pay principal and interest.
A Good quality; strong capacity to pay principal and interest although more
susceptible to changes in circumstances.
Commercial Paper
Moody's Investors Service, Inc. Standard & Poor's Ratings Group
P-1 Superior quality A-1+ Extremely strong quality
P-2 Strong quality A-1 Strong quality
A-2 Satisfactory quality
State and Municipal Notes
Moody's Investors Service, Inc.
MIG-1 Highest quality; enjoy strong protection from established cash flow
of funds for their servicing or from established and broad-based
access to the market for refinancing, or both.
MIG-2 High quality; possess ample margins of protection although not so
large as in the preceding group.
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________________________________
Delaware Investments includes
funds with a wide range of investment TAX-FREE MONEY FUND A CLASS
objectives. Stock funds, income funds, ________________________________
national and state-specific tax-exempt
funds, money market funds, global and TAX-FREE MONEY FUND CONSULTANT
international funds and closed-end funds CLASS
give investors the ability to create a ________________________________
portfolio that fits their personal
financial goals. For more information, CLASSES OF DELAWARE GROUP
contact your financial adviser or call TAX-FREE MONEY FUND, INC.
Delaware Investments at 800-523-1918. ________________________________
No Sales Charge
INVESTMENT MANAGER
Delaware Management Company
One Commerce Square
Philadelphia, PA 19103
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
1818 Market Street
Philadelphia, PA 19103 PART B
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING,
ACCOUNTING SERVICES, STATEMENT OF ADDITIONAL
AND TRANSFER AGENT INFORMATION
Delaware Service Company, Inc. ________________________________
1818 Market Street
Philadelphia, PA 19103 JUNE 29, 1998
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
One Commerce Square
Philadelphia, PA 19103
INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103
LOGO
CUSTODIAN
Bankers Trust Company
One Bankers Trust Plaza
New York, NY 10006
<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
Financial Highlights
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,
1998.
(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 into this filing by reference to
Post-Effective Amendment No. 21 filed June 28,
1996.
(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.
<PAGE>
Part C - Other Information
(continued)
(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.
(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)
incorporated into this filing by
reference to Post-Effective Amendment
No. 22 filed June 30, 1997.
(i) Executed Amendment No. 8 (December 18, 1997)
to Schedule A to Delaware Group of Funds Fund
Accounting Agreement attached as Exhibit.
<PAGE>
Part C - Other Information
(continued)
(ii) Form of Amendment No. 9 (March 31, 1998) to
Schedule A to Delaware Group of Funds Fund
Accounting Agreement attached as Exhibit.
(iii) Form of Amendment No. 10 (August 1998) to
Schedule A to Delaware Group of Funds Fund
Accounting Agreement attached as Exhibit.
(10) Opinion of Counsel. Attached as Exhibit.
(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, incorporated
into this filing by reference to Post-Effective Amendment
No. 22 filed June 30, 1997.
(14) Inapplicable.
*(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
and Post-Effective Amendment No. 22 filed June 30,
1997.
(17) Financial Data Schedules. Attached as Exhibit.
(18) Inapplicable.
(19) Other: Directors' Power of Attorney. Attached as Exhibit.
Item 25. Persons Controlled by or under Common Control with Registrant. None.
* Relates to Registrant's Tax-Free Money Fund Consultant Class Shares only.
<PAGE>
Part C - Other Information
(continued)
Item 26. Number of Holders of Securities.
(1) (2)
Number of
Title of Class Record Holders
-------------- ---------------
Delaware Group Tax-Free Money Fund, Inc.'s
Tax-Free Money Fund A Class:
Common Stock Par Value 1,045 Accounts
$.001 Per Share as of May 31, 1998
Tax-Free Money Fund Consultant Class:
Common Stock Par Value 118 Accounts
$.001 Per Share as of May 31, 1998
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, a series of Delaware Management
Business Trust, (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 Investments family (Delaware Group Equity Funds I, Inc.,
Delaware Group Equity Funds II, Inc., Delaware Group Equity Funds III, Inc.,
Delaware Group Equity Funds IV, Inc., Delaware Group Equity Funds V, Inc.,
Delaware Group Government Fund, Inc., Delaware Group Income Funds, Inc.,
Delaware Group Limited-Term Government Funds, Inc., Delaware Group Cash
Reserve, Inc., Delaware Group Tax-Free Fund, Inc., Delaware Group State
Tax-Free Income Trust, Delaware Group 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., Delaware Group
Foundation Funds, Inc., Voyageur Intermediate Tax-Free Funds, Inc., Voyageur
Tax-Free Funds, Inc., Voyageur Funds, Inc., Voyageur Insured Funds, Inc.,
Voyageur Investment Trust, Voyageur Investment Trust II, Voyageur Mutual
Funds, Inc., Voyageur Mutual Funds II, Inc., Voyageur Mutual Funds III, Inc.,
Voyageur Arizona Municipal Income Fund, Inc., Voyageur Colorado Insured
Municipal Income Fund, Inc., Voyageur Florida Insured Municipal Income Fund,
Voyageur Minnesota Municipal Fund, Inc., Voyageur Minnesota Municipal Fund II,
Inc. and Voyageur Minnesota Municipal Fund III, Inc.). In addition, certain
officers of the Manager also serve as directors/trustees of the other funds in
the Delaware Investments family, and certain officers are also officers of
these other funds. A company indirectly owned by the Manager's indirect parent
company acts as principal underwriter to the mutual funds in the Delaware
Investments family (see Item 29 below) and another such company acts as the
shareholder services, dividend disbursing, accounting servicing and transfer
agent for all of the mutual funds in the Delaware Investments family.
<PAGE>
Part C - Other Information
(continued)
The following persons serving as officers of the Manager have held
the following positions during the past two years:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ ------------------------------------------------
<S> <C>
Wayne A. Stork Chairman of the Board, President, Chief Executive Officer, Chief
Investment Officer of Delaware Management Company (a series of
Delaware Management Business Trust); Chairman of the Board, President,
Chief Executive Officer, Chief Investment Officer and Director/Trustee of
Delaware Management Company, Inc. and Delaware Management
Business Trust; Chairman of the Board, President, Chief Executive Officer
and Director of DMH Corp., Delaware Distributors, Inc. and Founders
Holdings, Inc.; Chairman, Chief Executive Officer and Chief Investment
Officer of Dealware Investment Advisers (a series of Delaware
Management Business Trust); Chairman, Chief Executive Officer and
Director of Delaware International Holdings Ltd. and Delaware
International Advisers Ltd.; Chairman of the Board and Director of the
Registrant, each of the other funds in the Delaware Investments family,
Delaware Management Holdings, Inc., and Delaware Capital
Management, Inc.; Chairman of Delaware Distributors, L.P.; President
and Chief Executive Officer of Delvoy, Inc.; and Director and/or Trustee
of Delaware Service Company, Inc. and Delaware Investment &
Retirement Services, Inc.
Richard G. Unruh, Jr. Executive Vice President of the Registrant, each of the other funds in the
Delaware Investments family, Delaware Management Holdings, Inc.,
Delaware Capital Management, Inc. and Delaware Management Company
(a series of Delaware Management Business Trust); Executive Vice
President and Director/Trustee of Delaware Management Company, Inc.
and Delaware Management Business Trust; President of Delaware
Investment Advisers (a series of Delaware Management Business Trust);
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
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Part C - Other Information
(continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ ------------------------------------------------
<S> <C>
Paul E. Suckow Executive Vice President/Chief Investment Officer, Fixed Income of
Delaware Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust), Delaware Investment
Advisers (a series of Delaware Management Business Trust), the
Registrant, each of the other funds in the Delaware Investments family and
Delaware Management Holdings, Inc.; Executive Vice President and
Director of Founders Holdings, Inc.; Executive Vice President of
Delaware Capital Management, Inc. and Delaware Management Business
Trust; and Director of Founders CBO Corporation
Director, HYPPCO Finance Company Ltd.
David K. Downes Executive Vice President, Chief Operating Officer and Chief Financial
Officer of the Registrant and each of the other funds in the Delaware
Investments family, Delaware Management Holdings, Inc., Founders CBO
Corporation, Delaware Capital Management, Inc., Delaware Management
Company (a series of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management Business Trust)
and Delaware Distributors, L.P.; Executive Vice President, Chief
Operating Officer, Chief Financial Officer and Director of Delaware
Management Company, Inc., DMH Corp, Delaware Distributors, Inc.,
Founders Holdings, Inc. and Delvoy, Inc.; Executive Vice President, Chief
Financial Officer, Chief Administrative Officer and Trustee of Delaware
Management Business Trust; President, Chief Executive Officer, Chief
Financial Officer and Director of Delaware Service Company, Inc.;
President, Chief Operating Officer, Chief Financial Officer and Director of
Delaware International Holdings Ltd.; Chairman, Chief Executive Officer
and Director of Delaware Investment & Retirement Services, Inc.;
Chairman and Director of Delaware Management Trust Company;
Director of Delaware International Advisers Ltd.; and Vice President of
Lincoln Funds Corporation
Chief Executive Officer and Director of Forewarn, Inc. since 1993, 8
Clayton Place, Newtown Square, PA
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Part C - Other Information
(continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ ------------------------------------------------
<S> <C>
George M. Senior Vice President, Secretary and General Counsel of the Registrant,
Chamberlain, Jr. each of the other funds in the Delaware Investments family, Delaware
Distributors, L.P., Delaware Management Company (a series of Delaware
Management Business Trust), Delaware Investment Advisers (a series of
Delaware Management Business Trust) and Delaware Management Holdings, Inc.;
Senior Vice President, General Counsel, Secretary and Director/Trustee of
Delaware Management Company, Inc., DMH Corp., Delaware Distributors, Inc.,
Delaware Service Company, Inc., Founders Holdings, Inc., Delaware Capital
Management, Inc., Delaware Investment & Retirement Services, Inc., Delvoy,
Inc. and Delaware Management Business Trust; Senior Vice President and
Director of Delaware International Holdings Ltd.; Executive Vice President,
Secretary, General Counsel and Director of Delaware Management Trust
Company; Director of Delaware International Advisers Ltd.; Secretary of
Lincoln Funds Corporation
Richard J. Flannery Senior Vice President/Corporate and International Affairs of the
Registrant, each of the other funds in the Delaware Investments family,
Delaware Management Holdings, Inc., DMH Corp., Delaware
Management Company, Inc., Delaware Distributors, Inc., Delaware
Distributors, L.P., Delaware Management Trust Company, Delaware
Capital Management, Inc., Delaware Service Company, Inc., Delaware
Management Company (a series of Delaware Management Business
Trust), Delaware Investment Advisers (a series of Delaware Management
Business Trust) and Delaware Investment & Retirement Services, Inc.;
Executive Vice President/Corporate & International Affairs and Director
of Delaware International Holdings Ltd.; Senior Vice President/
Corporate and International Affairs and Director of Founders Holdings,
Inc. and Delvoy, Inc.; Senior Vice President of Founders CBO
Corporation; and Director of Delaware International Advisers Ltd.
Director, HYPPCO Finance Company Ltd.
Limited Partner of Stonewall Links, L.P. since 1991, Bulltown Rd.,
Elverton, PA; Director and Member of Executive Committee of Stonewall
Links, Inc. since 1991, Bulltown Rd., Elverton, PA
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Part C - Other Information
(continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------- -----------------------------------------------
<S> <C>
Michael P. Bishof Senior Vice President/Investment Accounting of Delaware Management
Company, Inc., Delaware Management Company (a series of Delaware
Management Business Trust) and Delaware Service Company, Inc.; Senior
Vice President and Treasurer of the Registrant, each of the other funds in
the Delaware Investments family and Founders Holdings, Inc.; Senior
Vice President and Treasurer/ Manager, Investment Accounting of
Delaware Distributors, L.P. and Delaware Investment Advisers (a series of
Delaware Management Business Trust); Assistant Treasurer of Founders
CBO Corporation; and Senior Vice President and Manager of Investment
Accounting of Delaware International Holdings Ltd.
Joseph H. Hastings Senior Vice President/Corporate Controller and Treasurer of Delaware
Management Holdings, Inc., DMH Corp., Delaware Management
Company, Inc., Delaware Distributors, Inc., Delaware Capital
Management, Inc., Delaware Distributors, L.P., Delaware Service
Company, Inc., Delaware International Holdings Ltd., Delaware
Management Company (a series of Delaware Management Business
Trust), Delvoy, Inc. and Delaware Management Business Trust; Senior
Vice President/Corporate Controller of the Registrant, each of the other
funds in the Delaware Investments family and Founders Holdings, Inc.;
Executive Vice President, Chief Financial Officer and Treasurer of
Delaware Management Trust Company; Chief Financial Officer and
Treasurer of Delaware Investment & Retirement Services, Inc.; Senior
Vice President/Assistant Treasurer of Founders CBO Corporation; and
Treasurer of Lincoln Funds Corporation.
Michael T. Taggart Senior Vice President/Facilities Management and Administrative Services
of Delaware Management Company, Inc. and Delaware Management
Company (a series of Delaware Management Business Trust)
Douglas L. Anderson Senior Vice President/Operations of Delaware Management Company,
Inc., Delaware Management Company (a series of Delaware Management
Business Trust), Delaware Investment and Retirement Services, Inc. and
Delaware Service Company, Inc.; Senior Vice President/ Operations and
Director of Delaware Management Trust Company
James L. Shields Senior Vice President/Chief Information Officer of Delaware Management
Company, Inc., Delaware Management Company (a series of Delaware
Management Business Trust), Delaware Service Company, Inc. and
Delaware Investment & Retirement Services, Inc.
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Part C - Other Information
(continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
<S> <C>
Eric E. Miller Vice President, Assistant Secretary and Deputy General Counsel of the
Registrant and each of the other funds in the Delaware Investments family,
Delaware Management Company, Inc., Delaware Management Company (a series of
Delaware Management Business Trust), Delaware Investment Advisers (a series
of Delaware Management Business Trust), 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.; Assistant Secretary of Delaware Management
Business Trust; and Vice President and Assistant Secretary of Delvoy, Inc.
Richelle S. Maestro Vice President and Assistant Secretary of the Registrant, each of the other
funds in the Delaware Investments family, Delaware Management Company,
Inc., Delaware Management Company (a series of Delaware Management Business
Trust), Delaware Investment Advisers (a series of Delaware Management
Business Trust), Delaware Management Holdings, Inc., Delaware Distributors,
L.P., Delaware Distributors, Inc., Delaware Service Company, Inc., DMH
Corp., Delaware Management Trust Company, Delaware Capital Management,
Inc., Delaware Investment & Retirement Services, Inc., Founders Holdings,
Inc. and Delvoy, Inc.; Vice President and Secretary of Delaware
International Holdings Ltd.; and Secretary of Founders CBO Corporation
Partner of Tri-R Associates since 1989, 10001 Sandmeyer Lane,
Philadelphia, PA
Richard Salus(1) Vice President/Assistant Controller of Delaware Management Company,
Inc., Delaware Management Company (a series of Delaware Management
Business Trust) and Delaware Management Trust Company
Bruce A. Ulmer Vice President/Director, LNC Internal Audit of the Registrant, each of the
other funds in the Delaware Investments family, Delaware Management
Company, Inc., Delaware Management Company (a series of Delaware
Management Business Trust), Delaware Management Holdings, Inc.,
DMH Corp., Delaware Management Trust Company and Delaware
Investment & Retirement Services, Inc.; Vice President/Director of
Internal Audit of Delvoy, Inc.
Joel A. Ettinger(2) Vice President/Director of Taxation of the Registrant, each of the
other funds in the Delaware Investments family, Delaware Management
Company, Inc., Delaware Management Company (a series of Delaware Management
Business Trust) and Delaware Management Holdings, Inc.
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Part C - Other Information
(continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
<S> <C>
Christopher Adams Vice President/Strategic Planning of Delaware Management Company, Inc.,
Delaware Management Company (a series of Delaware Management Business
Trust) and Delaware Service Company, Inc.
Susan L. Hanson Vice President/Strategic Planning of Delaware Management Company, Inc.,
Delaware Management Company (a series of Delaware Management Business
Trust) and Delaware Service Company, Inc.
Dennis J. Mara(3) Vice President/Acquisitions of Delaware Management Company, Inc. and
Delaware Management Company (a series of Delaware Management
Business Trust)
Scott Metzger Vice President/Business Development of Delaware Management Company, Inc.,
Delaware Management Company (a series of Delaware Management Business
Trust) and Delaware Service Company, Inc.
Lisa O. Brinkley Vice President/Compliance of the Registrant, Delaware Management Company,
Inc., each of the other funds in the Delaware Investments family, Delaware
Management Company (a series of Delaware Management Business Trust), DMH
Corp., Delaware Distributors, L.P., Delaware Distributors, Inc., Delaware
Service Company, Inc., Delaware Management Trust Company, Delaware Capital
Management, Inc. and Delaware Investment & Retirement Services, Inc.; Vice
President/Compliance Officer of Delaware Management Business Trust; and
Vice President of Delvoy, Inc.
Mary Ellen Carrozza Vice President/Client Services of Delaware Management Company, Inc.,
Delaware Management Company (a series of Delaware Management
Business Trust), Delaware Investment Advisers (a series of Delaware
Management Business Trust) and the Registrant
Gerald T. Nichols Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc., Delaware Management Company (a series of Delaware
Management Business Trust), Delaware Investment Advisers (a series of
Delaware Management Business Trust), the Registrant, 20 other
investment companies in the Delaware Investments family; Vice President
of Founders Holdings, Inc.; and Treasurer, Assistant Secretary and
Director of Founders CBO Corporation
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Part C - Other Information
(continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
<S> <C>
Paul A. Matlack Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc., Delaware Management Company (a series of Delaware
Management Business Trust), Delaware Investment Advisers (a series of
Delaware Management Business Trust), the Registrant, 18 other
investment companies in the Delaware Investments family; Vice President
of Founders Holdings, Inc.; and President and Director of Founders CBO
Corporation
Gary A. Reed Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc., Delaware Management Company (a series of Delaware
Management Business Trust), Delaware Investment Advisers (a series of
Delaware Management Business Trust), the Registrant, 17 investment
companies in the Delaware Investments family and Delaware Capital
Management, Inc.
Patrick P. Coyne Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc., Delaware Management Company (a series of Delaware
Management Business Trust), Delaware Investment Advisers (a series of
Delaware Management Business Trust), the Registrant, 17 other
investment companies in the Delaware Investments family and Delaware
Capital Management, Inc.
Roger A. Early Vice President/Senior Portfolio Manager of Delaware Management Company,
Inc., Delaware Management Company (a series of Delaware Management Business
Trust), Delaware Investment Advisers (a series of Delaware Management
Business Trust), the Registrant, 17 other investment companies in the
Delaware Investments family
Mitchell L. Conery(4) Vice President/Senior Portfolio Manager of Delaware Management Company,
Inc., Delaware Management Company (a series of Delaware Management Business
Trust), Delaware Investment Advisers (a series of Delaware Management
Business Trust), the Registrant, 17 other investment companies in the
Delaware Investments family and Delaware Capital Management, Inc.
George H. Burwell Vice President/Senior Portfolio Manager of Delaware Management Company,
Inc., Delaware Management Company (a series of Delaware Management Business
Trust) and 10 investment companies in the Delaware Investments family
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Part C - Other Information
(continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ ---------------------------------------------------
<S> <C>
John B. Fields Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.,
Delaware Management Company (a series of Delaware Management Business
Trust), Delaware Investment Advisers (a series of Delaware Management Business
Trust), 10 investment companies in the Delaware Investments family, Delaware
Capital Management, Inc. and Trustee of Delaware Management Business Trust
Gerald S. Frey Vice President/Senior Portfolio Manager of Delaware Management Company,
Inc., Delaware Management Company (a series of Delaware Management Business
Trust), Delaware Investment Advisers (a series of Delaware Management
Business Trust) and 10 investment companies in the Delaware Investments
family
Christopher Beck(5) Vice President/Senior Portfolio Manager of Delaware Management Company,
Inc., Delaware Management Company (a series of Delaware Management Business
Trust), Delaware Investment Advisers (a series of Delaware Management Business
Trust) and 10 investment companies in the Delaware Investments family
Elizabeth H. Howell(6) Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.,
Delaware Management Company (a series of Delaware Management Business
Trust), the Registrant and seven other investment companies in the Delaware
Investments family
Andrew M. McCullagh, Jr.(7) Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.,
Delaware Management Company (a series of Delaware Management Business Trust)
the Registrant and eight other investment companies in the Delaware Investments
family
Babak Zenouzi Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.,
Delaware Management Company (a series of Delaware Management Business Trust)
and 13 investment companies in the Delaware Investments family
J. Paul Dokas(8) Vice President/Portfolio Manager of Delaware Management Company, Inc., Delaware
Management Company (a series of Delaware Management Business Trust) and two
investment companies in the Delaware Investments family
Cynthia I. Isom Vice President/Portfolio Manager of Delaware Management Company, Inc.,
Delaware Management Company (a series of Delaware Management Business
Trust), the Registrant and 17 other investment companies in the Delaware
Investments family
Paul Grillo, Jr. Vice President/Portfolio Manager of Delaware Management Company, Inc.,
Delaware Management Company (a series of Delaware Management Business
Trust), Delaware Investment Advisers (a series of DelawareManagement
Business Trust), the Registrant and 19 other investment companies in the
Delaware Investments family
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Part C - Other Information
(continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ ------------------------------------------------
<S> <C>
Marshall T. Bassett Vice President/Portfolio Manager of Delaware Management Company, Inc.,
Delaware Management Company (a series of Delaware Management Business
Trust), Delaware Investment Advisers (a series of Delaware Management
Business Trust), the Registrant and each of the other funds in the Delaware
Investments family
John Heffern Vice President/Portfolio Manager of Delaware Management Company, Inc.,
Delaware Management Company (a series of Delaware Management Business
Trust), the Registrant and each of the other funds in the Delaware
Investments family
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
1 SENIOR MANAGER, Ernst & Young LLP prior to December 1996.
2 TAX PRINCIPAL, Ernst & Young LLP prior to April 1998.
3 CORPORATE CONTROLLER, IIS prior to July 1997.
4 INVESTMENT OFFICER, Travelers Insurance prior to January 1997.
5 SENIOR PORTFOLIO MANAGER, Pitcairn Trust Company prior to May 1997.
6 SENIOR PORTFOLIO MANAGER, Voyageur Fund Managers, Inc. prior to May 1997.
7 SENIOR VICE PRESIDENT, SENIOR PORTFOLIO MANAGER, Voyageur Asset Management
LLC prior to May 1997.
8 DIRECTOR OF TRUST INVESTMENTS, Bell Atlantic Corporation prior to February
1997.
Item 29. Principal Underwriters.
(a) Delaware Distributors, L.P. serves as principal underwriter for
all the mutual funds in the Delaware Investments family.
(b) Information with respect to each director, officer or partner of
principal underwriter:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------- ---------------------- ----------------------
<S> <C> <C>
Delaware Distributors, Inc. General Partner None
Delaware Investment Advisers Limited Partner None
Delaware Capital
Management, Inc. Limited Partner None
Wayne A. Stork Chairman Chairman
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Part C - Other Information
(continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------- ---------------------- ----------------------
<S> <C> <C>
Bruce D. Barton President and Chief Executive None
Officer
David K. Downes Executive Vice President, Executive VicePresident, Chief
Chief Operating Officer Operating Officer and Chief
and Chief Financial Officer Financial Officer
George M. Chamberlain, Jr. Senior Vice President/Secretary/ Senior Vice President/
General Counsel Secretary/General Counsel
Richard J. Flannery Senior Vice President/Corporate Senior Vice President/
and International Affairs Corporate and International Affairs
Joseph H. Hastings Senior Vice President/Corporate Senior Vice President/
Controller & Treasurer Corporate Controller
Terrence P. Cunningham Senior Vice President/Financial None
Institutions
Thomas E. Sawyer Senior Vice President/ None
National Sales Director
Mac McAuliffe Senior Vice President/Sales None
Manager, Western Division
J. Chris Meyer Senior Vice President/ None
Director Product Management
William M. Kimbrough Senior Vice President/Wholesaler None
Daniel J. Brooks Senior Vice President/Wholesaler None
Bradley L. Kolstoe Senior Vice President/Western None
Division Sales Manager
Henry W. Orvin Senior Vice President/Eastern None
Division Sales Manager
Michael P. Bishof Senior Vice President and Treasurer/ Senior Vice
Manager, Investment Accounting President/Treasurer
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Part C - Other Information
(continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------- ---------------------- ----------------------
<S> <C> <C>
Eric E. Miller Vice President/Assistant Secretary/ Vice President/Assistant Secretary/
Deputy General Counsel Deputy General Counsel
Richelle S. Maestro Vice President/ Vice President/
Assistant Secretary Assistant Secretary
Lisa O. Brinkley Vice President/Compliance Vice President/Compliance
Daniel H. Carlson Vice President/Strategic Marketing None
Diane M. Anderson Vice President/Plan Record Keeping None
and Administration
Anthony J. Scalia Vice President/Defined Contribution None
Sales, SW Territory
Courtney S. West Vice President/Defined Contribution None
Sales, NE Territory
Denise F. Guerriere Vice President/Client Services None
Gordon E. Searles Vice President/Client Services None
Lori M. Burgess Vice President/Client Services None
Julia R. Vander Els Vice President/Participant Services None
Jerome J. Alrutz Vice President/Retail Sales None
Scott Metzger Vice President/Business Vice President/Business
Development Development
Stephen C. Hall Vice President/Institutional Sales None
Gregory J. McMillan Vice President/ National Accounts None
Holly W. Reimel Vice President/Manager, National None
Accounts
Christopher H. Price Vice President/Manager, None
Insurance
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Part C - Other Information
(continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------- ---------------------- ----------------------
<S> <C> <C>
Stephen J. DeAngelis Vice President/Product None
Development
Andrew W. Whitaker Vice President/Financial Institutions None
Jesse Emery Vice President/ Marketing None
Communications
Darryl S. Grayson Vice President, Broker/Dealer None
Internal Sales
Dinah J. Huntoon Vice President/Product None
Manager Equity
Soohee Lee Vice President/Fixed Income None
Product Management
Michael J. Woods Vice President/UIT Product None
Management
Ellen M. Krott Vice President/Marketing None
Dale L. Kurtz Vice President/Marketing Support None
David P. Anderson Vice President/Wholesaler None
Lee D. Beck Vice President/Wholesaler None
Gabriella Bercze Vice President/Wholesaler None
Terrence L. Bussard Vice President/Wholesaler None
William S. Carroll Vice President/Wholesaler None
William L. Castetter Vice President/Wholesaler None
Thomas J. Chadie Vice President/Wholesaler None
Thomas C. Gallagher Vice President/Wholesaler None
Douglas R. Glennon Vice President/Wholesaler None
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Part C - Other Information
(continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------- ---------------------- ----------------------
<S> <C> <C>
Ronald A. Haimowitz Vice President/Wholesaler None
Christopher L. Johnston Vice President/Wholesaler None
Michael P. Jordan Vice President/Wholesaler None
Jeffrey A. Keinert Vice President/Wholesaler None
Thomas P. Kennett Vice President/ Wholesaler None
Debbie A. Marler Vice President/Wholesaler None
Nathan W. Medin Vice President/Wholesaler None
Roger J. Miller Vice President/Wholesaler None
Patrick L. Murphy Vice President/Wholesaler None
Stephen C. Nell Vice President/Wholesaler None
Julia A. Nye Vice President/Wholesaler None
Joseph T. Owczarek Vice President/Wholesaler None
Mary Ellen Pernice-Fadden Vice President/Wholesaler None
Mark A. Pletts Vice President/Wholesaler None
Philip G. Rickards Vice President/Wholesaler None
Laura E. Roman Vice President/Wholesaler None
Linda Schulz Vice President/Wholesaler None
Edward B. Sheridan Vice President/Wholesaler None
Robert E. Stansbury Vice President/Wholesaler None
Julia A. Stanton Vice President/Wholesaler None
Larry D. Stone Vice President/Wholesaler None
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
Part C - Other Information
(continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------- ---------------------- ----------------------
<S> <C> <C>
Edward J. Wagner Vice President/Wholesaler None
Wayne W. Wagner Vice President/Wholesaler None
John A. Wells Vice President/Marketing None
Technology
Scott Whitehouse Vice President/Wholesaler None
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
(c) Inapplicable.
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) Not Applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, this Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in this City of Philadelphia and Commonwealth of Pennsylvania on
this 26th day of June, 1998.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
By /s/ Wayne A. Stork
----------------------
Wayne A. Stork
Chairman
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Wayne A. Stork Chairman of the Board and Director June 26, 1998
- ----------------------------------------
Wayne A. Stork
Executive Vice President/Chief Operating
Officer/Chief Financial Officer
(Principal Financial Officer and Principal
/s/ David K. Downes Accounting Officer) June 26, 1998
- ----------------------------------------
David K. Downes
/s/ Walter P. Babich * Director June 26, 1998
- ----------------------------------------
Walter P. Babich
/s/ John H. Durham * Director June 26, 1998
- ----------------------------------------
John H. Durham
/s/ Anthony D. Knerr * Director June 26, 1998
- ----------------------------------------
Anthony D. Knerr
/s/ Ann R. Leven * Director June 26, 1998
- ----------------------------------------
Ann R. Leven
/s/ W. Thacher Longstreth * Director June 26, 1998
- ----------------------------------------
W. Thacher Longstreth
/s/ Thomas F. Madison * Director June 26, 1998
- ----------------------------------------
Thomas F. Madison
/s/ Jeffrey J. Nick * Director June 26, 1998
- ----------------------------------------
Jeffrey J. Nick
/s/ Charles E. Peck * Director June 26, 1998
- ----------------------------------------
Charles E. Peck
</TABLE>
*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.B9BI Executed Amendment No. 8 (December 18, 1997) to Schedule A to
Delaware Group of Funds Fund Accounting Agreement
EX-99.B9BII Form of Amendment No. 9 (March 31, 1998) to Schedule A to
Delaware Group of Funds Fund Accounting Agreement
EX-99.B9BIII Form of Amendment No. 10 (August 1998) to Schedule A to
Delaware Group of Funds Fund Accounting Agreement
EX-99.B10 Opinion of Counsel
EX-99.B11 Consent of Auditors
EX-27 Financial Data Schedules
EX-99.B19 Power of Attorney
<PAGE>
EX-99.B9BI
Exhibit 24(b)(9)(b)(i)
AMENDMENT NO. 8
to
SCHEDULE A
of
DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT
Delaware Group Adviser Funds, Inc.
Corporate Income Fund (liquidated September 19, 1997)
Enterprise Fund (liquidated September 19, 1997)
Federal Bond Fund (liquidated September 19, 1997)
New Pacific Fund
U.S. Growth Fund
Overseas Equity Fund (formerly 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 III, Inc. (formerly Trend)
Trend Fund
Delaware Group Equity Funds IV, Inc. (formerly DelCap)
Capital Appreciation Fund (New)
DelCap Fund
Delaware Group Equity Funds V, Inc. (formerly Value)
Small Cap Value Fund (formerly Value Fund)
Retirement 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>
Delaware Group Foundation Funds (New)
Balanced Portfolio (New)
Growth Portfolio (New)
Income Portfolio (New)
Delaware Group Government Fund, Inc.
Government Income Series (U.S. Government Fund)
Delaware Group Global & International Funds, Inc.
Emerging Markets Fund (New)
Global Assets Fund
Global Bond Fund
International Equity Fund
Global Equity Fund (New)
International Small Cap Fund (New)
Delaware Group Income Funds, Inc. (formerly Delchester)
Delchester Fund
High-Yield Opportunities Fund (New)
Strategic Income Fund (New)
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U. S. Government Money Fund
Delaware Pooled Trust, Inc.
The Aggressive Growth Portfolio
The Large-Cap Value Equity Portfolio
(formerly The Defensive Equity Portfolio)
The Small/Mid-Cap Value Equity Portfolio (New)
(formerly The Defensive Equity Small/Mid-Cap Portfolio)
The Defensive Equity Utility Portfolio (deregistered January 14, 1997)
The Emerging Markets Portfolio (New)
The Intermediate Fixed Income Portfolio
(formerly 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
The Global Equity Portfolio (New)
The Real Estate Investment Trust Portfolio II (New)
The Diversified Core Fixed Income Portfolio (New)
The Aggregate Fixed Income Portfolio (New)
2
<PAGE>
Delaware Group Premium Fund, Inc.
Capital Reserves Series
Cash Reserve Series
Convertible Securities Series (New)
Decatur Total Return Series
Delaware Series
Delchester Series
Devon Series (New)
Emerging Markets Series (New)
DelCap Series
Global Bond Series (New)
International Equity Series
Quantum Series (New)
Strategic Income Series (New)
Trend Series
Value Series
Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group State Tax-Free Income Trust (formerly DMCT Tax-Free Income
Trust-Pennsylvania)
Tax-Free Pennsylvania Fund
Tax-Free New Jersey Fund (New)
Tax-Free Ohio Fund (New)
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)
3
<PAGE>
Voyageur Investment Trust
California Insured Tax Free Fund (New)
Florida Insured Tax Free Fund (New)
Florida Tax Free Fund (New)
Kansas Tax Free Fund (New)
Missouri Insured Tax Free Fund (New)
New Mexico Tax Free Fund (New)
Oregon Insured Tax Free Fund (New)
Utah Tax Free Fund (New)
Washington Insured Tax Free Fund (New)
Voyageur Investment Trust II
Florida Limited Term Tax Free Fund (New)
Voyageur Mutual Funds, Inc.
Arizona Tax Free Fund (New)
California Tax Free Fund (New)
Iowa Tax Free Fund (New)
Idaho Tax Free Fund (New)
Minnesota High Yield Municipal Bond Fund (New)
National High Yield Municipal Bond Fund (New)
National Tax Free Fund (New)
New York Tax Free Fund (New)
Wisconsin Tax Free Fund (New)
Voyageur Mutual Funds II, Inc.
Colorado Tax Free Fund (New)
Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund (New)
Growth Stock Fund (New)
International Equity Fund (New)
Tax Efficient Equity Fund (New)
Voyageur Tax Free Funds, Inc.
Minnesota Tax Free Fund (New)
North Dakota Tax Free Fund (New)
4
<PAGE>
Dated as of December 18, 1997
DELAWARE SERVICE COMPANY, INC.
By: /s/ David K. Downes
---------------------------------------------------------------
David K. Downes
President, Chief Executive Officer and Chief Financial Officer
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS III, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP FOUNDATION FUNDS
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 STATE TAX-FREE INCOME TRUST
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY 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.
By: /s/ Wayne A. Stork
---------------------------------------------------------------
Wayne A. Stork
Chairman
5
<PAGE>
EX-99.B9BII
Exhibit 24(b)(9)(b)(ii)
AMENDMENT NO. 9
to
SCHEDULE A
of
DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT
Delaware Group Adviser Funds, Inc.
Corporate Income Fund (liquidated September 19, 1997)
Enterprise Fund (liquidated September 19, 1997)
Federal Bond Fund (liquidated September 19, 1997)
New Pacific Fund
U.S. Growth Fund
Overseas Equity Fund (formerly 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 III, Inc. (formerly Trend)
Trend Fund
Delaware Group Equity Funds IV, Inc. (formerly DelCap)
Capital Appreciation Fund (New)
DelCap Fund
Delaware Group Equity Funds V, Inc. (formerly Value)
Small Cap Value Fund (formerly Value Fund)
Retirement 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.
<PAGE>
Delaware Group Foundation Funds (New)
Balanced Portfolio (New)
Growth Portfolio (New)
Income Portfolio (New)
Delaware Group Government Fund, Inc.
Government Income Series (U.S. Government Fund )
Delaware Group Global & International Funds, Inc.
Emerging Markets Fund (New)
Global Assets Fund
Global Bond Fund
International Equity Fund
Global Equity Fund (New)
International Small Cap Fund (New)
Delaware Group Income Funds, Inc. (formerly Delchester)
Delchester Fund
High-Yield Opportunities Fund (New)
Strategic Income Fund (New)
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U. S. Government Money Fund
Delaware Pooled Trust, Inc.
The Aggressive Growth Portfolio
The Large-Cap Value Equity Portfolio
(formerly The Defensive Equity Portfolio)
The Small/Mid-Cap Value Equity Portfolio (New)
(formerly The Defensive Equity Small/Mid-Cap Portfolio)
The Defensive Equity Utility Portfolio (deregistered January 14, 1997)
The Emerging Markets Portfolio (New)
The Intermediate Fixed Income Portfolio
(formerly 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
The Global Equity Portfolio (New)
The Real Estate Investment Trust Portfolio II (New)
The Diversified Core Fixed Income Portfolio (New)
The Aggregate Fixed Income Portfolio (New)
2
<PAGE>
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)
REIT Series (New)
Strategic Income Series (New)
Trend Series
Value Series
Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group State Tax-Free Income Trust (formerly DMCT Tax-Free Income
Trust-Pennsylvania)
Tax-Free Pennsylvania Fund
Tax-Free New Jersey Fund (New)
Tax-Free Ohio Fund (New)
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)
3
<PAGE>
Voyageur Investment Trust
California Insured Tax Free Fund (New)
Florida Insured Tax Free Fund (New)
Florida Tax Free Fund (New)
Kansas Tax Free Fund (New)
Missouri Insured Tax Free Fund (New)
New Mexico Tax Free Fund (New)
Oregon Insured Tax Free Fund (New)
Utah Tax Free Fund (New)
Washington Insured Tax Free Fund (New)
Voyageur Investment Trust II
Florida Limited Term Tax Free Fund (New)
Voyageur Mutual Funds, Inc.
Arizona Tax Free Fund (New)
California Tax Free Fund (New)
Iowa Tax Free Fund (New)
Idaho Tax Free Fund (New)
Minnesota High Yield Municipal Bond Fund (New)
National High Yield Municipal Bond Fund (New)
National Tax Free Fund (New)
New York Tax Free Fund (New)
Wisconsin Tax Free Fund (New)
Voyageur Mutual Funds II, Inc.
Colorado Tax Free Fund (New)
Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund (New)
Growth Stock Fund (New)
International Equity Fund (New)
Tax Efficient Equity Fund (New)
Voyageur Tax Free Funds, Inc.
Minnesota Tax Free Fund (New)
North Dakota Tax Free Fund (New)
4
<PAGE>
Dated as of March 31, 1998
DELAWARE SERVICE COMPANY, INC.
By:
--------------------------------------------------------------------
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 III, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP FOUNDATION FUNDS
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 STATE TAX-FREE INCOME TRUST
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY 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.
By:
----------------------------------------------------------------------
Wayne A. Stork
Chairman
5
<PAGE>
EX-99.B9BIII
Exhibit 24(b)(9)(b)(iii)
AMENDMENT NO. 10
to
SCHEDULE A
of
DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT
Delaware Group Adviser Funds, Inc.
Corporate Income Fund (liquidated September 19, 1997)
Enterprise Fund (liquidated September 19, 1997)
Federal Bond Fund (liquidated September 19, 1997)
New Pacific Fund
U.S. Growth Fund
Overseas Equity Fund (formerly 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
Social Awareness Fund (formerly Quantum Fund) (New)
Delaware Group Equity Funds III, Inc. (formerly Trend)
Trend Fund
Delaware Group Equity Funds IV, Inc. (formerly DelCap)
Capital Appreciation Fund (New)
DelCap Fund
Delaware Group Equity Funds V, Inc. (formerly Value)
Small Cap Value Fund (formerly Value Fund)
Retirement 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.
<PAGE>
Delaware Group Foundation Funds (New)
Balanced Portfolio (New)
Growth Portfolio (New)
Income Portfolio (New)
The Asset Allocation Portfolio (New)
Delaware Group Government Fund, Inc.
Government Income Series (U.S. Government Fund)
Delaware Group Global & International Funds, Inc.
Emerging Markets Fund (New)
Global Assets Fund
Global Bond Fund
International Equity Fund
Global Equity Fund (New)
International Small Cap Fund (New)
Delaware Group Income Funds, Inc. (formerly Delchester)
Delchester Fund
High-Yield Opportunities Fund (New)
Strategic Income Fund (New)
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U. S. Government Money Fund
Delaware Pooled Trust, Inc.
The Aggressive Growth Portfolio
The Large-Cap Value Equity Portfolio
(formerly The Defensive Equity Portfolio)
The Small/Mid-Cap Value Equity Portfolio (New)
(formerly The Defensive Equity Small/Mid-Cap Portfolio)
The Defensive Equity Utility Portfolio (deregistered January 14, 1997)
The Emerging Markets Portfolio (New)
The Intermediate Fixed Income Portfolio
(formerly 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
The Global Equity Portfolio (New)
The Real Estate Investment Trust Portfolio II (New)
The Diversified Core Fixed Income Portfolio (New)
The Aggregate Fixed Income Portfolio (New)
The Small-Cap Growth Equity Portfolio (New)
The Growth and Income Portfolio (New)
2
<PAGE>
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
Social Awareness Series (formerly Quantum Series) (New)
REIT Series (New)
Strategic Income Series (New)
Trend Series
Small Cap Value Series (formerly 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 State Tax-Free Income Trust (formerly DMCT Tax-Free Income
Trust-Pennsylvania)
Tax-Free Pennsylvania Fund
Tax-Free New Jersey Fund (New)
Tax-Free Ohio Fund (New)
Voyageur Funds, Inc.
Voyageur US 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)
3
<PAGE>
Voyageur Investment Trust
California Insured Tax Free Fund (New)
Florida Insured Tax Free Fund (New)
Florida Tax Free Fund (New)
Kansas Tax Free Fund (New)
Missouri Insured Tax Free Fund (New)
New Mexico Tax Free Fund (New)
Oregon Insured Tax Free Fund (New)
Utah Tax Free Fund (New)
Washington Insured Tax Free Fund (New)
Voyageur Investment Trust II
Florida Limited Term Tax Free Fund (New)
Voyageur Mutual Funds, Inc.
Arizona Tax Free Fund (New)
California Tax Free Fund (New)
Iowa Tax Free Fund (New)
Idaho Tax Free Fund (New)
Minnesota High Yield Municipal Bond Fund (New)
National High Yield Municipal Bond Fund (New)
National Tax Free Fund (New)
New York Tax Free Fund (New)
Wisconsin Tax Free Fund (New)
Voyageur Mutual Funds II, Inc.
Colorado Tax Free Fund (New)
Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund (New)
Growth Stock Fund (New)
International Equity Fund (New)
Tax Efficient Equity Fund (New)
Voyageur Tax Free Funds, Inc.
Minnesota Tax Free Fund (New)
North Dakota Tax Free Fund (New)
4
<PAGE>
Dated as of August , 1998
DELAWARE SERVICE COMPANY, INC.
By:
--------------------------------------------------------------------
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 III, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP FOUNDATION FUNDS
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 STATE TAX-FREE INCOME TRUST
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY 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.
By:
--------------------------------------------------------------------
Wayne A. Stork
Chairman
5
<PAGE>
EX-99.B10
Exhibit 24(b)(10)
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, Pennsylvania 19103-7098
(215) 564-8000
Direct Dial: (215) 564-8115
Delaware Group Tax-Free Money Fund, Inc.
1818 Market Street
Philadelphia, PA 19103
Re: Legal Opinion-Securities Act of 1933
Ladies and Gentlemen:
We have examined the Articles of Incorporation, as amended and supplemented (the
"Articles") of Delaware Group Tax-Free Money Fund, Inc. (the "Fund"), a series
corporation organized under Maryland law on April 7, 1980, the By-Laws of the
Fund, all as amended to date, and the various pertinent corporate proceedings we
deem material. We have also examined the Notification of Registration and the
Registration Statements filed under the Investment Company Act of 1940 (the
"Investment Company Act") and the Securities Act of 1933 (the "Securities Act"),
all as amended to date, as well as other items we deem material to this opinion.
The Fund is authorized by the Articles to issue five billion (5,000,000,000)
shares of common stock at a par value of $.001 and currently offers two classes
of shares. The Articles also empower the Board to designate any additional
series or classes and allocate shares to such series or classes. The Fund has
filed with the U.S. Securities and Exchange Commission, a registration statement
under the Securities Act, which registration statement is deemed to register an
indefinite number of shares of the Fund pursuant to the provisions of Section
24(f) of the Investment Company Act. You have further advised us that the Fund
has filed, and each year hereafter will timely file, a Notice pursuant to Rule
24f-2 under the Investment Company Act perfecting the registration of the shares
sold by the Fund during each fiscal year during which such registration of an
indefinite number of shares remains in effect. You have also informed us that
the shares of the Fund have been, and will continue to be, sold in accordance
with the Fund's usual method of distributing its registered shares, under which
prospectuses are made available for delivery to offerees and purchasers of such
shares in accordance with Section 5(b) of the Securities Act.
<PAGE>
Based upon the foregoing information and examination, so long as the Fund
remains a valid and subsisting entity under the laws of its state of
organization, and the registration of an indefinite number of shares of the Fund
remains effective, the authorized shares of the Fund when issued for the
consideration set by the Board of Directors pursuant to the Articles, and
subject to compliance with Rule 24f-2, will be legally outstanding, fully-paid,
and non-assessable shares, and the holders of such shares will have all the
rights provided for with respect to such holding by the Articles and the laws of
the State of Maryland. We hereby consent to the use of this opinion, in lieu of
any other, as an exhibit to the Registration Statement of the Fund, along with
any amendments thereto, covering the registration of the shares of the Fund
under the Securities Act and the applications, registration statements or notice
filings, and amendments thereto, filed in accordance with the securities laws of
the several states in which shares of the Fund are offered, and we further
consent to reference in the registration statement of the Fund to the fact that
this opinion concerning the legality of the issue has been rendered by us.
Very truly yours,
STRADLEY, RONON, STEVENS & YOUNG, LLP
BY: /s/ Bruce G. Leto
-----------------------------------
Bruce G. Leto
<PAGE>
EX-99.B11
Exhibit 24(b)(11)
Consent of Ernst & Young LLP, Independent Auditors
We consent to the references to our firm under the captions "Financial
Highlights" in the Prospectus and "Financial Statements" in the Statement of
Additional Information and to the incorporation by reference in this
Post-Effective Amendment No. 23 to the Registration Statement (Form N-1A) (No.
2-70164) of Delaware Group Tax-Free Money Fund, Inc. of our report dated May 29,
1998, included in the 1998 Annual Report to shareholders.
/s/ Ernst & Young LLP
--------------------------
Ernst & Young LLP
Philadelphia, Pennsylvania
June 24, 1998
<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, 1998, and the related
statement of operations for the year then ended, the statements 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
securities owned as of April 30, 1998, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Delaware Group Tax-Free Money Fund, Inc. at April 30, 1998, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and its financial highlights for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles.
/s/ Ernst & Young LLP
----------------------------
Ernst & Young LLP
Philadelphia, Pennsylvania
May 29, 1998
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000320572
<NAME> DELAWARE GROUP TAX-FREE MONEY FUND, INC.
<SERIES>
<NUMBER> 01
<NAME> RETAIL CLASS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> APR-30-1998
<PERIOD-END> APR-30-1998
<INVESTMENTS-AT-COST> 34,275,613
<INVESTMENTS-AT-VALUE> 34,275,613
<RECEIVABLES> 678,259
<ASSETS-OTHER> 1,405
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 34,955,277
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 118,450
<TOTAL-LIABILITIES> 118,450
<SENIOR-EQUITY> 34,837
<PAID-IN-CAPITAL-COMMON> 34,801,990
<SHARES-COMMON-STOCK> 30,264,275
<SHARES-COMMON-PRIOR> 32,659,150
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 30,264,275
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,246,744
<OTHER-INCOME> 0
<EXPENSES-NET> 309,525
<NET-INVESTMENT-INCOME> 937,219
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 937,219
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 865,335
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 32,198,458
<NUMBER-OF-SHARES-REDEEMED> 35,402,936
<SHARES-REINVESTED> 809,603
<NET-CHANGE-IN-ASSETS> 648,346
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 164,249
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 309,525
<AVERAGE-NET-ASSETS> 31,484,649
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.028
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.028
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 0.910
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000320572
<NAME> DELAWARE GROUP TAX-FREE MONEY FUND, INC.
<SERIES>
<NUMBER> 02
<NAME> CONSULTANT CLASS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> APR-30-1998
<PERIOD-END> APR-30-1998
<INVESTMENTS-AT-COST> 34,275,613
<INVESTMENTS-AT-VALUE> 34,275,613
<RECEIVABLES> 678,259
<ASSETS-OTHER> 1,405
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 34,955,277
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 118,450
<TOTAL-LIABILITIES> 118,450
<SENIOR-EQUITY> 34,837
<PAID-IN-CAPITAL-COMMON> 34,801,990
<SHARES-COMMON-STOCK> 4,572,552
<SHARES-COMMON-PRIOR> 1,529,331
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 4,572,552
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,246,744
<OTHER-INCOME> 0
<EXPENSES-NET> 309,525
<NET-INVESTMENT-INCOME> 937,219
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 937,219
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 71,884
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10,201,793
<NUMBER-OF-SHARES-REDEEMED> 7,227,205
<SHARES-REINVESTED> 68,633
<NET-CHANGE-IN-ASSETS> 648,346
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 164,249
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 309,525
<AVERAGE-NET-ASSETS> 31,484,649
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.028
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.028
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 0.910
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
EX-99.B19
Exhibit 24(b)(19)
POWER OF ATTORNEY
Each of 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 on behalf of each of the Funds listed on
Exhibit A, Wayne A. Stork, Jeffrey J. Nick and Walter P. Babich and any one of
them acting singly, his true and lawful attorneys-in-fact, in his name, place,
and stead, to execute and cause to be filed with the Securities and Exchange
Commission and other federal or state government agency or body, such
registration statements, and any and all amendments thereto as either of such
designees may deem to be appropriate under the Securities Act of 1933, as
amended, the Investment Company Act of 1940, as amended, and all other
applicable federal and state securities laws.
IN WITNESS WHEREOF, the undersigned have executed this instrument as
of this 18th day of December, 1997.
/s/ Walter P. Babich /s/ Thomas F. Madison
- -------------------------- ---------------------------
Walter P. Babich Thomas F. Madison
/s/ Anthony D. Knerr /s/ Jeffrey J. Nick
- -------------------------- ---------------------------
Anthony D. Knerr Jeffrey J. Nick
/s/ Ann R. Leven /s/ Charles E. Peck
- -------------------------- ---------------------------
Ann R. Leven Charles E. Peck
/s/ W. Thacher Longstreth /s/ Wayne A. Stork
- -------------------------- ---------------------------
W. Thacher Longstreth Wayne A. Stork
<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 III, 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 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.
DELAWARE GROUP STATE TAX-FREE INCOME TRUST
DELAWARE GROUP DIVIDEND AND INCOME FUND, INC.
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC.
DELAWARE GROUP FOUNDATION FUNDS
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 on behalf of each of the Funds listed on Exhibit A,
Wayne A. Stork, Jeffrey J. Nick and Walter P. Babich and any one of them
acting singly, his true and lawful attorneys-in-fact, in his name, place, and
stead, to execute and cause to be filed with the Securities and Exchange
Commission and other federal or state government agency or body, such
registration statements, and any and all amendments thereto as either of such
designees may deem to be appropriate under the Securities Act of 1933, as
amended, the Investment Company Act of 1940, as amended, and all other
applicable federal and state securities laws.
IN WITNESS WHEREOF, the undersigned have executed this instrument as of
this 16th day of April, 1998.
/s/ John H. Durham
- ---------------------
John H. Durham
<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 III, 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 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.
DELAWARE GROUP STATE TAX-FREE INCOME TRUST
DELAWARE GROUP DIVIDEND AND INCOME FUND, INC.
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC.
DELAWARE GROUP FOUNDATION FUNDS
