<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
File No. 2-70164
File No. 811-3120
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No.
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Post-Effective Amendment No. 24 X
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AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 24
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DELAWARE GROUP TAX-FREE MONEY FUND
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(Exact Name of Registrant as Specified in Charter)
1818 Market Street, Philadelphia, Pennsylvania 19103
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (215) 255-2923
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Richard J. Flannery, Esquire, 1818 Market Street, Philadelphia, PA 19103
- --------------------------------------------------------------------------------
(Name and Address of Agent for Service)
Approximate Date of Public Offering: August 27, 1999
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
----
on (date) pursuant to paragraph (b)
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60 days after filing pursuant to paragraph (a)(1)
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X on August 27, 1999 pursuant to paragraph (a)(1)
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75 days after filing pursuant to paragraph (a)(2)
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on (date) pursuant to paragraph (a)(2) of Rule 485
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Title of Securities Being Registered
------------------------------------
Tax-Free Money Fund A Class
Tax-Free Money Fund Consultant Class
<PAGE>
This amendment is being filed pursuant to Rule 414 under the Securities Act of
1933. The successor issuer, Delaware Group Tax-Free Money Fund is filing the
amendment to the registration statement of Delaware Group Tax-Free Money Fund,
Inc., the predecessor issuer, and expressly adopting the registration statement
as its own for all purposes of the Securities Act of 1933 and the Investment
Company Act of 1940.
This filing is made in anticipation of the reorganization of Delaware Group
Tax-Free Money Fund, Inc., a Maryland Corporation, whereby the Corporation will
merge into Delaware Group Tax-Free Money Fund, a Delaware Business Trust.
Shareholders approved this reorganization at a meeting expressly called for that
purpose on March 17, 1999.
<PAGE>
--- C O N T E N T S ---
This Post-Effective Amendment No. 24 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
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PART A
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<TABLE>
<CAPTION>
<S> <C> <C>
Location in Prospectus
Item No. Description
- -------- -----------
1 Front and Back Cover Pages Same
2 Risk/Return Summary: Fund profile
Investments, Risks and Performance
3 Risk/Return Summary: Fund profile
Fee Table
4 Investment Objectives, Principal Investment How we manage the Fund
Strategies, and Related Risks
5 Management's Discussion of Performance N/A
6 Management, Organization, and Capital Who manages the Fund
Structure
7 Shareholder Information How to buy shares;
How to redeem shares;
Special services;
Dividends, distributions and
taxes all under About your
account
8 Distribution Arrangements Choosing a share class
9 Financial Highlights Information Financial Highlights
</TABLE>
<PAGE>
CROSS-REFERENCE SHEET
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PART B
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<TABLE>
<CAPTION>
Location in Statements
Item No. Description of Additional Information**
- -------- ----------- ---------------------------
<S> <C> <C>
10 Cover Page and Table of Contents Same
11 Fund History General Information
12 Description of the Fund and Its Investments and Risks Investment Objective and Policies
13 Management of the Fund Officers and Trustees;
Purchasing Shares
14 Control Persons and Principal Holders of Securities Officers and Trustees
15 Investment Advisory and Other Services Officers and Trustees;
Purchasing Shares; Investment
Management
Agreement;
General Information;
Financial Statements
16 Brokerage Allocation and Other Practices Trading Practices
17 Capital Stock and Other Securities General Information
18 Purchase, Redemption and Pricing of Shares Purchasing Shares; Redemption and
Exchange; Offering Price
19 Taxation of the Fund Taxes
20 Underwriters Purchasing Shares
21 Calculation of Performance Data Performance Information
22 Financial Statements Financial Statements
</TABLE>
<PAGE>
CROSS-REFERENCE SHEET
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PART C
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<TABLE>
<CAPTION>
Item No. Description Location in Part C
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<S> <C> <C>
23 Exhibits Item 23
24 Persons Controlled by or under Common
Control with Registrant Item 24
25 Indemnification Item 25
26 Business and Other Connections of the Investment Adviser Item 26
27 Principal Underwriters Item 27
28 Location of Accounts and Records Item 28
29 Management Services Item 29
30 Undertakings Item 30
</TABLE>
<PAGE>
DELAWARE
INVESTMENTS
Philadelphia * London
Tax-Free Money Fund
Class A
Consultant Class
Prospectus
August , 1999
Money Market Fund
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this prospectus, and any
representation to the contrary is a criminal offense.
<PAGE>
Table of Contents
Fund profile Page
Tax-Free Money Fund
How we manage the Fund
Our investment strategies
The risks of investing in the Fund
Who manages the Fund Page
Investment manager
Fund Administration (Who's who)
About your account Page
Investing in the Fund
How to buy shares
How to redeem shares
Account minimum
Special services
Dividends, distributions and taxes
Certain management considerations Page
Financial highlights Page
2
<PAGE>
Profile: Tax-Free Money Fund
What are the Fund's goals?
Tax-Free Money Fund seeks a high level of current income, exempt from federal
income tax, while preserving principal and maintaining liquidity. Although the
Fund will strive to achieve its goal, there is no assurance that it will.
What are the Fund's main investment strategies?
Tax-Free Money Fund invests primarily in short term municipal money market
securities.
Tax-Free Money Fund is a money market fund. A money market fund is designed for
stability of principal; consequently, the level of income fluctuates.
We maintain an average maturity of 90 days or less. Also, we do not purchase any
securities with an effective remaining maturity of more than 397 days
(approximately 13 months).
What are the main risks of investing in the Fund?
Tax-Free Money Fund will be affected primarily by declines in interest rates
that would reduce the income provided by the Fund. For a more complete
discussion of risk, please turn to "The risks of investing in the Fund."
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency. Although the Fund seeks to preserve the value of your
investment at $1 per share, it is possible to lose money by investing in the
Fund.
You should keep in mind that an investment in the Fund is not a complete
investment program; it should be considered just one part of your total
financial plan. Be sure to discuss this Fund with your financial adviser to
determine whether it is an appropriate choice for you.
Who should invest in the Fund
o Investors with short-term financial goals who seek current income.
o Investors in higher tax brackets who want income exempt from federal income
taxes.
o Investors who do not want an investment whose value may fluctuate, over
the short term.
o Investors who are looking for a short-term, relatively safe investment to
complement more long-term investments in their portfolio.
Who should not invest in the Fund
o Investors with long-term financial goals.
o Investors looking for relatively high current income.
3
<PAGE>
How has the Fund performed?
This bar chart can help you evaluate the potential risks of investing in the
Fund. We show how returns for the Fund's Class A shares have varied over the
past ten calendar years, as well as each Class' average annual returns for one,
five and ten year periods.
[GRAPHIC OMITTED: BAR CHART SHOWING YEAR BY YEAR TOTAL RETURN (CLASS A)]
Year-by-year total return (Class A)
<TABLE>
<CAPTION>
- ------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
- ------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- ---------- ---------
0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
- ------------ ---------- ---------- ---------- --------- ---------- ---------- ---------- ---------- ---------
</TABLE>
As of March 31, 1999, the Fund's Class A had a fiscal year-to-date return of
00.00%. During the periods illustrated in this bar chart, the Fund's Class A's
highest quarterly return was 00.00% for the quarter ended _________________ and
its lowest quarterly return was 00.00% for the quarter ended _____________.
Average annual returns for periods ending 12/31/98
<TABLE>
<CAPTION>
- ------------------------ ----------------------- -----------------------
A Class Consultant Class*
- ------------------------ ----------------------- -----------------------
<S> <C> <C>
1 year ended 12/31/98
00.00% 00.00%
- ------------------------ ----------------------- -----------------------
5 years ended 12/31/98
00.00% 00.00%
- ------------------------ ----------------------- -----------------------
10 years ended 12/31/98
00.00% 00.00%
- ------------------------ ----------------------- -----------------------
</TABLE>
* The Consultant Class commenced operations on March 15, 1998. Return
information for the period prior to the time the Class commenced operations is
based on the performance of the Class A shares. For periods prior to the
commencement of operations of the Consultant Class, the total return calculation
does not reflect the 12b-1 payments that were applicable to the Class during the
period March 15, 1988 through June 1, 1990. Performance would have been affected
if the 12b-1 payments were reflected in the calculations.
Investors interested in obtaining the 7-day yield for the classes can call
800.523.1918.
4
<PAGE>
What are the Fund's fees and expenses?
You do not pay sales charges directly from your investments when you buy or sell
Class A shares of the Fund.
<TABLE>
<CAPTION>
------------------------------------------------------ --------------- ---------------
Class A Consultant
Class
------------------------------------------------------ --------------- ---------------
<S> <C> <C>
Maximum sales charge (load) imposed on purchases as none none
a percentage of offering price
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Maximum sales charge (load) imposed on reinvested none none
dividends
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Redemption fees none none
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Exchange fees none(1) none(1)
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</TABLE>
Annual fund operating expenses are deducted from the Fund's assets. We will not
charge you separately for these expenses. These expenses are based on amounts
incurred during the Fund's most recent fiscal year.
<TABLE>
<CAPTION>
------------------------------------------------------ --------------- ---------------
Class A Consultant
Class
------------------------------------------------------ --------------- ---------------
<S> <C> <C>
Management fees 0.00% 0.00%
------------------------------------------------------ --------------- ---------------
Distribution and service (12b-1) fees none none(2)
------------------------------------------------------ --------------- ---------------
Other expenses 0.00% 0.00%
------------------------------------------------------ --------------- ---------------
Total operating expenses 0.00% 0.00%
------------------------------------------------------ --------------- ---------------
</TABLE>
This example is intended to help you compare the cost of investing in the Fund
to the cost of investing in other mutual funds with similar investment
objectives. We show the cumulative amount of Fund expenses on a hypothetical
investment of $10,000 with an annual 5% return over the time shown. (3) This is
an example only, and does not represent future expenses, which may be greater or
less than those shown here.
--------------- -------------- ---------------
Class A Consultant
Class
--------------- -------------- ---------------
1 year $000 $000
--------------- -------------- ---------------
3 years $000 $000
--------------- -------------- ---------------
5 years $0,000 $0,000
--------------- -------------- ---------------
10 years $0,000 $0,000
--------------- -------------- ---------------
(1) Exchanges are subject to the requirements of each fund in the Delaware
Investments family. A sales charge may apply if you exchange your
shares into a fund that has a sales charge.
(2) Consultant Class shares are subject to a Rule 12b-1 distribution plan;
however, the Board of Trustees of the Fund suspended 12b-1 plan
payments from the Class effective June 1, 1990.
(3) The Fund's actual rate of return may be greater or less than the
hypothetical 5% return we use here. Also, this example assumes that the
Fund's total operating expenses remain unchanged in each of the periods
we show.
5
<PAGE>
How we manage the Fund
Under normal circumstances, we invest at least 80% of the Fund's assets in
municipal money market securities issued by states, U.S. territories and
possessions, and the District of Columbia, as well as their political
subdivisions and other entities. We may hold the following types of securities:
municipal bonds and notes, tax-free commercial paper, short-term tax-free notes,
construction loan notes, project notes, tax anticipation notes, bond
anticipation notes, revenue anticipation notes and pre-refunded obligations.
Generally, interest from these securities is fully exempt from federal income
tax. The Fund may also invest in U.S. government securities and other taxable
securities, to a limited extent. Income from these is not exempt from federal
income tax. We may also hold a significant portion of the Fund's assets in
variable rate and demand notes. Please see "The securities we invest in" for
further information.
Credit Quality
When we purchase a security, the security or its issuer must be rated in one of
the two highest rating categories by at least two nationally recognized
statistical ratings organizations. (If a security is rated by only one agency,
it must receive one of the two highest ratings from that agency.) We may invest
in securities that have not been rated, if we determine that the security's
credit quality is comparable to one of the two highest rating categories. We
will not invest more than 5% of the Fund's assets in securities rated in the
second highest category.
Average Maturity
We maintain an average maturity of 90 days or less. Also, we do not purchase any
securities with an effective remaining maturity of more than 397 days
(approximately 13 months). We may shorten or lengthen Tax-Free Money Fund's
average maturity based on our analysis of interest rate trends.
We intend to hold our investments until maturity, but we may sell them prior to
maturity in order to shorten or lengthen the average maturity of the bonds in
the portfolio, increase the yield, maintain the quality of the portfolio or
maintain a stable share value.
6
<PAGE>
The securities we typically invest in
<TABLE>
<CAPTION>
- --------------------------------------------------------- ------------------------------------------------------------------
Securities How we use them
Tax-Free Money Fund
- --------------------------------------------------------- ------------------------------------------------------------------
<S> <C>
General obligation bonds: municipal bonds on which the We may invest in general obligation bonds rated in one of
payment of principal and interest is secured by the two highest rating categories, with a remaining maturity
the issuer's pledge of its full faith, credit and taxing of less than 397 days.
power.
- --------------------------------------------------------- ------------------------------------------------------------------
Revenue bonds: municipal bonds on which principal and We may invest in revenue obligation bonds rated in one of the
interest payments are made from revenues derived from a two highest rating categories, with a remaining maturity of less
particular facility or class of facilities. than 397 days.
- --------------------------------------------------------- ------------------------------------------------------------------
Private activity or private placement bonds: We may invest up to 20% of the Fund's assets in bonds whose
municipal bond issues whose proceeds are used to income is subject to the federal alternative minimum tax. This
finance certain non-government activities, including means that a portion of the Fund's distributions could be
some types of industrial revenue bonds such as subject to the federal alternative minimum tax that applies to
privately-owned sports and convention facilities. The certain taxpayers.
Tax Reform Act of 1986 subjects interest income from
these bonds to the federal alternative minimum tax and We may invest in private activity or private placement bonds
makes the tax-exempt status of certain bonds dependent rated in one of the two highest rating categories, with a
on the issuer's compliance with specific requirements remaining maturity of less than 397 days.
after the bonds are issued.
- --------------------------------------------------------- ------------------------------------------------------------------
Anticipation notes: short-term municipal obligations to We may invest without limit in anticipation notes rated in one
be repaid from an anticipated income source such as tax of the two highest rating categories, with a remaining
payments, revenue from a facility or money from an maturity of less than 397 days.
upcoming bond issue.
- --------------------------------------------------------- ------------------------------------------------------------------
Variable and floating rate demand notes: securities We may invest without limit in variable and floating rate demand
whose interest rate is tied to a money market rate, notes that meet the Fund's quality standards. In most cases,
usually the Prime Rate, and therefore changes each time these will be municipal securities. We may invest in variable
the base rate changes. and floating rate demand notes with a maturity longer than 397
days if the security has a demand feature that allows us to
tender it back to the issuer prior to stated maturity. If a
These securities may be backed by a letter of credit or security is guaranteed by another entity, we will generally
other guarantee. consider the rating of that entity when evaluating that security.
Please see the Fund's Statement of Additional Information
for further explanation of demand features.
- --------------------------------------------------------- ------------------------------------------------------------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------- ------------------------------------------------------------------
Securities How we use them
Tax-Free Money Fund
- --------------------------------------------------------- ------------------------------------------------------------------
<S> <C>
Tax-free commercial paper: short-term debt obligations We may invest without limit in tax-free commercial paper that
issued by companies. meet the Fund's quality and maturity standards.
- --------------------------------------------------------- ------------------------------------------------------------------
Taxable securities: may include commercial paper, We may invest up to 20% of the Fund's assets in issues that are
corporate notes, certificates of deposit and not exempt from federal income tax.
obligations of the U.S. government, its agencies or When issued securities and repurchase agreements are discussed
instrumentalities, asset-backed securities, when issued below.
securities and repurchase agreements.
- --------------------------------------------------------- ------------------------------------------------------------------
Repurchase agreements: an agreement between a buyer and We may use repurchase agreements as a short-term investment for
seller of securities in which the seller agrees to buy the Fund's cash position. In order to enter into these
the securities back within a specified time at the same repurchase agreements, the Fund must have collateral of at least
price the buyer paid for them, plus an amount equal to 102% of the repurchase price. Earnings on repurchase agreements
an agreed upon interest rate. Repurchase agreements are are not tax-exempt.
often viewed as equivalent to cash.
- --------------------------------------------------------- ------------------------------------------------------------------
Restricted securities: privately placed securities We may invest without limitation in privately placed securities
whose resale is restricted under securities law. that are eligible for resale only among certain institutional
buyers without registration. These are commonly known as "Rule
144A Securities."
- --------------------------------------------------------- ------------------------------------------------------------------
Illiquid securities: securities that do not have a We may not invest more than 10% of total assets in illiquid
ready market, and cannot be easily sold, if at all, at securities.
approximately the price that the Fund has valued them.
- --------------------------------------------------------- ------------------------------------------------------------------
</TABLE>
Please see the Statement of Additional Information for additional descriptions
on securities listed in the table above.
Purchasing securities on a when-issued basis
Tax-Free Money Fund may buy or sell securities on a when-issued basis; that is,
paying for securities before delivery and taking delivery up to 45 days later.
Between the purchase of the securities and our receipt of them, the securities
do not pay interest, but the market value may fluctuate, potentially affecting
the Fund's net asset value. If the Fund invests in when-issued securities, it
will maintain a separate account to pay for them and will value them at market
price on a daily basis
Borrowing from Banks
Tax-Free Money Fund may borrow money as a temporary measure for extraordinary
purposes or to facilitate redemptions. The Fund will not borrow money more than
5% of the value of its net assets.
8
<PAGE>
The risks of investing in the Fund
Investing in any mutual fund involves risk, including the risk that you may
receive little or no return on your investment, and the risk that you may lose
money. Before you invest in the Fund you should carefully evaluate the risks.
The following are the chief risks you assume when investing in the Fund. Please
see the Statement of Additional Information for further discussion of these
risks.
<TABLE>
<CAPTION>
- ------------------------------------------------------- ------------------------------------------------------------------
Risks How we strive to manage them
Tax-Free Money Fund
- ------------------------------------------------------- ------------------------------------------------------------------
<S> <C>
Interest rate risk is the risk that securities, Because Tax-Free Money Fund invests in exclusively in short-term
particularly bonds with longer maturities, will securities, interest rate changes are not a major risk to the
decrease in value if interest rates rise. value of its portfolio. However, a decline in interest rates
would reduce the level of income provided by the Fund.
- ------------------------------------------------------- ------------------------------------------------------------------
Inflation risk is the risk that the return from your Tax-Free Money Fund is designed for short-term investment goals
investments will be less than the increase in the and therefore may not outpace inflation over longer time
cost of living due to inflation, thus preventing you periods. For this reason, Tax-Free Money Fund is not
from reaching your financial goals. recommended as a primary investment for people with long-term
goals.
- ------------------------------------------------------- ------------------------------------------------------------------
Credit risk is the possibility that a bond's issuer We limit our investments to those that the Board of Trustees
(or an entity that insures the bond) will be unable considers to be of high quality with minimal credit risks
to make timely payments of interest and principal. typically those rated in the two highest categories by a
nationally recognized statistical ratings organization. All
investments must also meet the maturity, quality and
diversification standards that apply to tax-exempt money market
funds. Therefore, the Fund's investments are generally not subject
to significant credit risk.
We also maintain a diversified portfolio. We may not invest more
than 25% of the Fund's assets in one state, territory or U.S.
possession. (We may invest up to 25% of the Fund's assets in
short-term tax exempt project notes guaranteed by the U.S.
government, regardless of the location of the issuing
municipality.) Our goal is to minimize the effect that any one
security may have on the Fund's performance and share price.
If there were a national credit crisis or an issuer were to become
insolvent, the share value of the Fund could decline.
- ------------------------------------------------------- ------------------------------------------------------------------
Counter party risk is the risk that the Fund may We try to minimize this risk by considering the creditworthiness
lose money because a party that we contracted with to of all parties before we enter into transactions with them. The
either buy or sell securities fails to fulfill its Fund will hold collateral from counterparties consistent with
side of the agreement. applicable regulations.
- ------------------------------------------------------- ------------------------------------------------------------------
</TABLE>
9
<PAGE>
Who manages the Fund
Investment manager
The Fund is managed by Delaware Management Company, a series of Delaware
Management Business Trust, which is an indirect, wholly owned subsidiary of
Delaware Management Holdings, Inc. Delaware Management Company makes investment
decisions for the Fund, manages the Fund's business affairs and provides daily
administrative services. For its services to the Fund, the manager was paid
0.00% of average daily net assets for the last fiscal year.
Who's who?
This diagram shows the various organizations involved with managing,
administering, and servicing the Delaware Investments funds.
[GRAPHIC OMITTED]
Board of trustees
Investment manager The Fund Custodian
Delaware Management Company The Chase Manhattan Bank
One Commerce Square 4 Chase Metrotech Center
Philadelphia, PA 19103 Brooklyn, NY 11245
Portfolio managers Service agent Distributor
Delaware Service Company, Inc. Delaware Distributors, L.P.
1818 Market Street 1818 Market Street
Philadelphia, PA 19103 Philadelphia, PA 19103
Financial advisers
Shareholders
Board of trustees A mutual fund is governed by a board of trustees which has
oversight responsibility for the management of the fund's business affairs.
Trustees establish procedures and oversee and review the performance of the
investment manager, the distributor and others that perform services for the
fund. At least 40% of the board of trustees must be independent of the fund's
investment manager or distributor. These independent fund trustees, in
particular, are advocates for shareholder interests.
Investment manager An investment manager is a company responsible for selecting
portfolio investments consistent with objective and policies stated in the
mutual fund's prospectus. The investment manager places portfolio orders with
broker/dealers and is responsible for obtaining the best overall execution of
those orders. A written contract between a mutual fund and its investment
manager specifies the services the manager performs. Most management contracts
provide for the manager to receive an annual fee based on a percentage of the
fund's average daily net assets. The manager is subject to numerous legal
restrictions, especially regarding transactions between itself and the funds it
advises.
Portfolio managers Portfolio managers are employed by the investment manager to
make investment decisions for individual portfolios on a day-to-day basis.
Custodian Mutual funds are legally required to protect their portfolio
securities and typically place them with a qualified bank custodian who
segregates fund securities from other bank assets.
10
<PAGE>
Distributor Most mutual funds continuously offer new shares to the public
through distributors who are regulated as broker-dealers and are subject to
National Association of Securities Dealers, Inc. (NASD) rules governing mutual
fund sales practices.
Service agent Mutual fund companies employ service agents (sometimes called
transfer agents) to maintain records of shareholder accounts, calculate and
disburse dividends and capital gains and prepare and mail shareholder statements
and tax information, among other functions. Many service agents also provide
customer service to shareholders.
Financial advisers Financial advisers provide advice to their clients--analyzing
their financial objectives and recommending appropriate funds or other
investments. Financial advisers are compensated for their services, generally
through sales commissions, and through 12b-1 and/or service fees deducted from
the fund's assets.
Shareholders Like shareholders of other companies, mutual fund shareholders have
specific voting rights, including the right to elect trustees. Material changes
in the terms of a fund's management contract must be approved by a shareholder
vote, and funds seeking to change fundamental investment objectives or policies
must also seek shareholder approval.
11
<PAGE>
About your account
- ------------------
Investing in the Fund
Class A
o Class A shares are available for purchase at net asset value.
o Class A shares do not have an up-front sales charge.
o Class A shares are not subject to 12b-1 fees.
o Class A shares are not subject to any contingent deferred sales charge.
Consultant Class
o Consultant Class shares may be purchased through financial advisers,
including brokers, financial institutions and other entities that have a
dealer agreement with the Fund's distributor or a service agreement with
the Fund.
o Consultant Class shares do not have an up-front sales charge.
o Consultant Class shares are subject to an annual 12b-1 fee no greater than
0.30% (currently the 12b-1 fee is set at 0.25%) of average daily net
assets. The 12b-1 fee is typically used to compensate your financial
adviser for the ongoing guidance and service he or she provides to you. The
Board of Trustees of the Fund suspended 12b-1 plan payments from the Class
effective June 1, 1990.
o Consultant Class shares are not subject to a contingent deferred sales
charge.
12
<PAGE>
How to buy shares
[GRAPHIC OMITTED: ILLUSTRATION OF A PERSON]
Through your financial adviser
Your financial adviser can handle all the details of purchasing shares,
including opening an account. Your adviser may charge a separate fee for this
service.
[GRAPHIC OMITTED: ILLUSTRATION OF AN ENVELOPE]
By mail
Complete an investment slip and mail it with your check, made payable to the
fund and class of shares you wish to purchase, to Delaware Investments, P.O. Box
7577, Philadelphia, PA 19101. If you are making an initial purchase by mail, you
must include a completed investment application with your check.
[GRAPHIC OMITTED: ILLUSTRATION OF A JAGGED LINE]
By wire
Ask your bank to wire the amount you want to invest to First Union Bank, ABA
#031201467, Bank Account number 2014 12893 4013. Include your account number and
the name of the fund in which you want to invest. If you are making an initial
purchase by wire, you must call us so we can assign you an account number.
[GRAPHIC OMITTED: ILLUSTRATION OF AN EXCHANGE SYMBOL]
By exchange
You can exchange all or part of your investment in one or more funds in the
Delaware Investments family for shares of other funds in the family. Please keep
in mind, however, that you may not exchange Class B or Class C shares of the
Delaware Investments funds into Class A or Consultant Class shares. Also, you
may not exchange Class A or Consultant Class shares into Class B or Class C
shares. To open an account by exchange, call the Shareholder Service Center at
800.523.1918.
[GRAPHIC OMITTED: ILLUSTRATION OF A KEYPAD]
Through automated shareholder services
You can purchase or exchange shares through Delaphone, our automated telephone
service, or through our web site, www.delawareinvestments.com. For more
information about how to sign up for these services, call our Shareholder
Service Center at 800.523.1918.
Once you have completed an application, you can generally open an account with
an initial investment of $1,000--and make additional investments at any time for
as little as $100. If you are buying shares under the Uniform Gifts to Minors
Act or the Uniform Transfers to Minors Act; or through an Automatic Investing
Plan, the minimum purchase is $250, and you can make additional investments of
only $25.
13
<PAGE>
About your account (continued)
How to buy shares (continued)
We determine the Fund's net asset value (NAV) per share at the close of trading
of the New York Stock Exchange each business day that the Exchange is open. We
strive to manage the value of the Fund's securities to stabilize the Fund's net
asset value at $1.00 per share. Although we make every effort to maintain a
stable net asset value, there is no assurance that we will always be able to do
so. We calculate net asset value by adding the market value of all the
securities and assets in the Fund's portfolio, deducting all liabilities, and
dividing the resulting number by the number of shares outstanding. The result is
the net asset value per share. We value the Fund's portfolio securities at
amortized cost.
The price you pay for shares will depend on when we receive your purchase order.
If we or an authorized agent receive your order before the close of trading on
the New York Stock Exchange (normally 4:00 p.m. Eastern Time) on a business day,
you will pay that day's closing share price which is based on the Fund's net
asset value. If we receive your order after the close of trading, you will pay
the next business day's price. A business day is any day that the New York Stock
Exchange is open for business. We reserve the right to reject any purchase
order.
14
<PAGE>
About your account (continued)
How to redeem shares
[GRAPHIC OMITTED: ILLUSTRATION OF A PERSON]
Through your financial adviser
Your financial adviser can handle all the details of redeeming your shares. Your
adviser may charge a separate fee for this service.
[GRAPHIC OMITTED: ILLUSTRATION OF AN ENVELOPE]
By mail
You can redeem shares (sell them back to the fund) by mail by writing to:
Delaware Investments, 1818 Market Street, Philadelphia, PA 19103-3682. All
owners of the account must sign the request, and for redemptions of $50,000 or
more, you must include a signature guarantee for each owner. Signature
guarantees are also required when redemption proceeds are going to an address
other than the address of record on an account.
[GRAPHIC OMITTED: ILLUSTRATION OF A TELEPHONE]
By telephone
You can redeem up to $50,000 of your shares by telephone. You may have the
proceeds sent to you by check, or, if you redeem at least $1,000 of shares, you
may have the proceeds sent directly to your bank by wire. Bank information must
be on file before you request a wire redemption.
[GRAPHIC OMITTED: ILLUSTRATION OF A JAGGED LINE]
By wire
You can redeem $1,000 or more of your shares and have the proceeds deposited
directly to your bank account the next business day after we receive your
request. If you request a wire deposit, the First Union Bank fee (currently
$7.50) will be deducted from your proceeds. Bank information must be on file
before you request a wire redemption.
[GRAPHIC OMITTED: ILLUSTRATION OF A KEYPAD]
Through automated shareholder services
You can redeem shares through Delaphone, our automated telephone service, or
through our web site, www.delawareinvestments.com. For more information about
how to sign up for these services, call our Shareholder Service Center at
800.523.1918.
[GRAPHIC OMITTED: ILLUSTRATION OF A HAND HOLDING A PEN]
Through checkwriting
You may redeem shares by writing checks of $500 or more. Checks must be signed
by all owners of the account unless you indicate otherwise on your Investment
Application. The checkwriting feature is not available for retirement plans.
Also, because dividends are declared daily, you may not close your account by
writing a check. When you write checks you are subject to the regulations of
First Union Bank, N.A. and may be subject to a charge if the check amount
exceeds the value of your account.
15
<PAGE>
If you hold your shares in certificates, you must submit the certificates with
your request to sell the shares. We recommend that you send your certificates by
certified mail.
When you send us a properly completed request to redeem or exchange shares, you
will receive the net asset value as determined on the business day we receive
your request. We will send you a check, normally the next business day, but no
later than seven days after we receive your request to sell your shares. If you
purchased your shares by check, we will wait until your check has cleared, which
can take up to 15 days, before we send your redemption proceeds.
Account minimum
If you redeem shares and your account balance falls below the required account
minimum of $1,000 ($250 for Uniform Gift to Minors Act accounts or accounts with
automatic investing plans) for three or more consecutive months, you will have
until the end of the current calendar quarter to raise the balance to the
minimum. If your account is not at the minimum by the required time, you will be
charged a $9 fee for that quarter and each quarter after that until your account
reaches the minimum balance. If your account does not reach the minimum balance,
the Fund may redeem your account after 60 days' written notice to you.
16
<PAGE>
Special services
To help make investing with us as easy as possible, and to help you build your
investments, we offer the following special services.
Automatic Investing Plan
The Automatic Investing Plan allows you to make regular monthly investments
directly from your checking account.
Direct Deposit
With Direct Deposit you can make additional investments through payroll
deductions, recurring government or private payments such as Social Security or
direct transfers from your bank account.
Wealth Builder Option
With the Wealth Builder Option you can arrange automatic monthly exchanges
between your shares in one or more Delaware Investments funds. Wealth Builder
exchanges are subject to the same rules as regular exchanges (see below) and
require a minimum monthly exchange of $100 per fund.
Dividend Reinvestment Plan
Through our Dividend Reinvestment Plan, you can have your distributions
reinvested in your account or the same share class in another fund in the
Delaware Investments family. The shares that you purchase through the Dividend
Reinvestment Plan are not subject to a front-end sales charge or to a contingent
deferred sales charge. You may not reinvest distributions in Class B or Class C
shares of the funds in the Delaware Investments family.
Exchanges
You can exchange all or part of your shares for shares of the same class in
another Delaware Investments fund. If you exchange shares to a fund that has a
sales charge you will pay any applicable sales charges on your new shares. You
don't pay sales charges on shares that are acquired through the reinvestment of
dividends. You may have to pay taxes on your exchange. When you exchange shares,
you are purchasing shares in another fund so you should be sure to get a copy of
the fund's prospectus and read it carefully before buying shares through an
exchange.
In certain circumstances, Class A shares of funds other than Tax-Free Money Fund
may be subject to a contingent deferred sales charge for up to two years after
purchase. This would occur if the fund normally had a front-end sales charge,
but the shares were purchased without paying a sales charge and a financial
adviser was paid a commission on the purchase. If you purchase Class A shares of
another Fund in this manner, you may exchange them for shares of Tax-Free Money
Fund A or Consultant Class. You will not have to pay the contingent deferred
sales charge at the time of the exchange. However, you may have to pay the
contingent deferred sales if you later redeem your shares of Tax-Free Money Fund
A or Consultant Class or if you exchange them for shares of another fund and
then redeem those shares. The time that you are invested in Tax-Free Money Fund
will count toward the fulfillment of the two-year holding period.
17
<PAGE>
About your account (continued)
MoneyLine(SM) On Demand Service
Through our MoneyLine(SM) On Demand Service, you or your financial adviser may
transfer money between your Fund account and your predesignated bank account by
telephone request. MoneyLine has a minimum transfer of $25 and a maximum
transfer of $50,000.
Moneyline Direct Deposit Service
Through our MoneyLine Direct Deposit Service you can have $25 or more in
dividends and distributions deposited directly to your bank account. Delaware
Investments does not charge a fee for this service; however, your bank may
assess one.
Systematic Withdrawal Plan
Through our Systematic Withdrawal Plan you can arrange a regular monthly or
quarterly payment from your account made to you or someone you designate. If the
value of your account is $5,000 or more, you can make withdrawals of at least
$25 monthly, or $75 quarterly. You may also have your withdrawals deposited
directly to your bank account through our MoneyLine Direct Deposit Service.
Dividends, distributions and taxes
Dividends are declared daily and paid monthly. Short-term capital gains may be
paid with the daily dividend or distributed annually. We automatically reinvest
all dividends and capital, unless you tell us otherwise.
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, 1999, all of the Fund's net
income was exempt from federal income taxes.
We will send you a statement each year by January 31 detailing the amount and
nature of all dividends and capital gains that you were paid for the prior year.
18
<PAGE>
Certain management considerations
Year 2000
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
its major service providers are taking steps reasonably designed to address the
Year 2000 Problem on the computer systems that the service providers use.
However, there can be no assurance that these steps will be sufficient to avoid
any adverse impact on the business of the Fund. The Year 2000 Problem may also
adversely affect the issuers of securities in which the Fund invests. The
portfolio manager and investment professionals of the Fund consider Year 2000
compliance in the securities selection and investment process. However, there
can be no guarantee that, even with their due diligence efforts, they will be
able to predict the affect of Year 2000 on any company or the performance of its
securities.
19
<PAGE>
Financial highlights
The financial highlights table is intended to help you understand the Fund's
financial performance. All "per share" information reflects financial results
for a single Fund share. This information has been audited by Ernst & Young LLP,
whose report, along with the Fund's financial statements, is included in the
Fund's annual report, which is available upon request by calling 800.523.1918.
<TABLE>
<CAPTION>
- ------------------------------------------------------------ -------------------------------------------------------
Tax-Free Money Fund
A Class
-------------------------------------------------------
Year Ended 4/30
- ------------------------------------------------------------ ----------- ---------- ---------- ---------- ----------
1999 1998 1997 1996 1995
- ------------------------------------------------------------ ----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.000 $1.000 $1.000 $1.000 $1.000
- ------------------------------------------------------------ ----------- ---------- ---------- ---------- ----------
- ------------------------------------------------------------ ----------- ---------- ---------- ---------- ----------
Income from investment operations:
- ------------------------------------------------------------ ----------- ---------- ---------- ---------- ----------
Net investment income 0.028 0.028 0.029 0.026
----- ----- ----- -----
- ------------------------------------------------------------ ----------- ---------- ---------- ---------- ----------
Net increase in net assets 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 period $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ======
- ------------------------------------------------------------ ----------- ---------- ---------- ---------- ----------
- ------------------------------------------------------------ ----------- ---------- ---------- ---------- ----------
Total return(1) 2.78% 2.79% 2.97% 2.59%
- ------------------------------------------------------------ ----------- ---------- ---------- ---------- ----------
- ------------------------------------------------------------ ----------- ---------- ---------- ---------- ----------
Ratios and supplemental data:
- ------------------------------------------------------------ ----------- ---------- ---------- ---------- ----------
Net assets, end of period (000 omitted) $30,264 $32,659 $35,479 $54,444
- ------------------------------------------------------------ ----------- ---------- ---------- ---------- ----------
Ratio of expenses to average net assets 0.91% 0.82% 0.90% 0.96%
- ------------------------------------------------------------ ----------- ---------- ---------- ---------- ----------
Ratio of net investment income to average net assets 2.75% 2.75% 2.95% 2.57%
- ------------------------------------------------------------ ----------- ---------- ---------- ---------- ----------
</TABLE>
<PAGE>
[RESTUB TABLE]
<TABLE>
<CAPTION>
- ------------------------------------------------------------ -------------------------------------------------------
Tax-Free Money Fund
Consultant Class
-------------------------------------------------------
Year Ended 4/30
- ------------------------------------------------------------ ---------- ---------- ---------- ---------- -----------
1999 1998 1997 1996 1995
- ------------------------------------------------------------ ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.000 $1.000 $1.000 $1.000 $1.000
- ------------------------------------------------------------ ---------- ---------- ---------- ---------- -----------
- ------------------------------------------------------------ ---------- ---------- ---------- ---------- -----------
Income from investment operations:
- ------------------------------------------------------------ ---------- ---------- ---------- ---------- -----------
Net investment income 0.028 0.028 0.029 0.026
----- ----- ----- -----
- ------------------------------------------------------------ ---------- ---------- ---------- ---------- -----------
Net increase in net assets 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 period $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ======
- ------------------------------------------------------------ ---------- ---------- ---------- ---------- -----------
- ------------------------------------------------------------ ---------- ---------- ---------- ---------- -----------
Total return(1) 2.78% 2.79% 2.97% 2.59%
- ------------------------------------------------------------ ---------- ---------- ---------- ---------- -----------
- ------------------------------------------------------------ ---------- ---------- ---------- ---------- -----------
Ratios and supplemental data:
- ------------------------------------------------------------ ---------- ---------- ---------- ---------- -----------
Net assets, end of period (000 omitted) $4,573 $1,529 $1,452 $1,614
- ------------------------------------------------------------ ---------- ---------- ---------- ---------- -----------
Ratio of expenses to average net assets 0.91% 0.82% 0.90% 0.96%
- ------------------------------------------------------------ ---------- ---------- ---------- ---------- -----------
Ratio of net investment income to average net assets 2.75% 2.75% 2.95% 2.57%
- ------------------------------------------------------------ ---------- ---------- ---------- ---------- -----------
</TABLE>
(1) Total investment return assumes reinvestment of distributions at net asset
value.
20
<PAGE>
How to read the Financial highlights
Net investment income
Net investment income includes interest income earned from the Fund's
securities; it is after expenses have been deducted.
Net asset value (NAV)
This is the value of a mutual fund share, calculated by dividing the net assets
by the number of shares outstanding.
Total return
This represents the rate that an investor would have earned or lost on an
investment in the Fund. In calculating this figure for the financial highlights
table, we include applicable fee waivers, exclude applicable front-end and
contingent deferred sales charges, and assume the shareholder has reinvested all
dividends.
Net assets
Net assets represent the total value of all the assets in the Fund's portfolio,
minus any liabilities, that are attributable to that class of the Fund.
Ratio of expenses to average net assets
The expense ratio is the percentage of net assets that a fund pays annually for
operating expenses and management fees. These expenses include accounting and
administration expenses, services for shareholders, and similar expenses.
Ratio of net investment income to average net assets
We determine this ratio by dividing net investment income by average net assets.
21
<PAGE>
[begin glossary]
[This glossary runs along the bottom of pages in the document]
How to use this glossary
Alternative minimum tax
Amortized cost
Amortized cost is a method used to value a fixed-income security that starts
with the face value of the security and then adds or subtracts from that value
depending on whether the purchase price was greater or less than the value of
the security at maturity. The amount greater or less than the par value is
divided equally over the time remaining until maturity.
Average maturity
An average of when the individual bonds and other debt securities held in a
portfolio will mature.
Bond
A debt security, like an IOU, issued by a company, municipality or government
agency. In return for lending money to the issuer, a bond buyer generally
receives fixed periodic interest payments and repayment of the loan amount on a
specified maturity date. A bond's price changes prior to maturity and is
inversely related to current interest rates. When interest rates rise, bond
prices fall, and when interest rates fall, bond prices rise.
Bond ratings
Independent evaluations of creditworthiness, ranging from Aaa/AAA (highest
quality) to D (lowest quality). Bonds rated Baa/BBB or better are considered
investment grade. Bonds rated Ba/BB or lower are commonly known as junk bonds.
See also Nationally recognized statistical rating organization.
Capital
The amount of money you invest.
Capital appreciation
An increase in the value of an investment.
Commission
The fee an investor pays to a financial adviser for investment advice and help
in buying or selling mutual funds, stocks, bonds or other securities.
Compounding
Earnings on an investment's previous earnings.
Consumer Price Index (CPI)
Measurement of U.S. inflation; represents the price of a basket of commonly
purchased goods.
Contingent deferred sales charge (CDSC)
Fee charged by some mutual funds when shares are redeemed (sold back to the
fund) within a set number of years; an alternative method for investors to
compensate a financial adviser for advice and service, rather than an up-front
commission.
Corporate bond
A debt security issued by a corporation. See bond.
Cost basis
The original purchase price of an investment, used in determining capital gains
and losses.
22
<PAGE>
Diversification
The process of spreading investments among a number of different securities,
asset classes or investment styles to reduce the risks of investing.
Dividend distribution
Payments to mutual fund shareholders of dividends passed along from the fund's
portfolio of securities.
Expense ratio
A mutual fund's total operating expenses, expressed as a percentage of its total
net assets. Operating expenses are the costs of running a mutual fund, including
management fees, offices, staff, equipment and expenses related to maintaining
the fund's portfolio of securities and distributing its shares. They are paid
from the fund's assets before any earnings are distributed to shareholders.
Financial adviser
Financial professional (e.g., broker, banker, accountant, planner or insurance
agent) who analyzes clients' finances and prepares personalized programs to meet
objectives.
Fixed-income securities
With fixed-income securities, the money you originally invested is paid back at
a pre-specified maturity date. These securities, which include government,
corporate or municipal bonds, as well as money market securities, typically pay
a fixed rate of return (often referred to as interest). See bond.
Inflation
The increase in the cost of goods and services over time. U.S. inflation is
frequently measured by changes in the Consumer Price Index (CPI).
Investment goal
The objective, such as long-term capital growth or high current income, that a
mutual fund pursues.
Liquidity
The ease with which an investment can be converted into cash without a
significant loss of principal. Money markets funds are considered to be highly
liquid.
Management fee
The amount paid by a mutual fund to the investment adviser for management
services, expressed as an annual percentage of the fund's average daily net
assets.
Maturity
The length of time until a bond issuer must repay the underlying loan principal
to bondholders.
National Association of Securities Dealers (NASD)
A self-regulating organization, consisting of brokerage firms (including
distributors of mutual funds), that is responsible for overseeing the actions of
its members.
Nationally recognized statistical rating organization (NRSRO)
A company that assesses the credit quality of bonds, commercial paper, preferred
and common stocks and municipal short-term issues, rating the probability that
the issuer of the debt will meet the scheduled interest payments and repay the
principal. Ratings are published by such companies as Moody's Investors Service
(Moody's), Standard & Poor's Corporation (S&P), Duff & Phelps, Inc. (Duff), and
Fitch Investor Services, Inc. (Fitch).
Net asset value (NAV)
The daily dollar value of one mutual fund share. Equal to a fund's net assets
divided by the number of shares outstanding.
23
<PAGE>
Principal
Amount of money you invest (also called capital). Also refers to a bond's
original face value, due to be repaid at maturity.
Prospectus
The official offering document that describes a mutual fund, containing
information required by the SEC, such as investment objectives, policies,
services and fees.
Redeem
To cash in your shares by selling them back to the mutual fund.
Risk
Generally defined as variability of value; also credit risk, inflation risk,
currency and interest rate risk. Different investments involve different types
and degrees of risk.
Sales charge
Charge on the purchase or redemption of fund shares sold through financial
advisers. May vary with the amount invested. Typically used to compensate
advisers for advice and service provided.
SEC (Securities and Exchange Commission)
Federal agency established by Congress to administer the laws governing the
securities industry, including mutual fund companies.
Share Classes
Different classifications of shares; mutual fund share classes offer a variety
of sales charge choices.
Signature Guarantee
Certification by a bank, brokerage firm or other financial institution that a
customer's signature is valid; signature guarantees can be provided by members
of the STAMP program.
Statement of Additional Information (SAI)
The document serving as "Part B" of a fund's prospectus that provides more
detailed information about the fund's organization, investments, policies and
risks.
Stock
An investment that represents a share of ownership (equity) in a corporation.
Stocks are often referred to as "equities."
Total return
An investment performance measurement, expressed as a percentage, based on the
combined earnings from dividends, capital gains and change in price over a given
period.
Uniform Gift to Minors Act and Uniform Transfers to Minors Act
Federal and state laws that provide a simple way to transfer property to a minor
with special tax advantages.
Volatility
The tendency of an investment to go up or down in value by different magnitudes.
Investments that generally go up or down in value in relatively small amounts
are considered "low volatility" investments, whereas those investments that
generally go up or down in value in relatively large amounts are considered
"high volatility" investments.
[END GLOSSARY]
24
<PAGE>
Tax-free Money Fund
Additional information about the Fund's investments is available in the Fund's
annual and semi-annual reports to shareholders. In the Fund's shareholder
reports, you will find a discussion of the market conditions and investment
strategies that significantly affected the Fund's performance during the report
period. You can find more detailed information about the Fund in the current
Statement of Additional Information, which we have filed electronically with the
Securities and Exchange Commission (SEC) and which is legally a part of this
prospectus. If you want a free copy of the Statement of Additional Information,
the annual or semi-annual report, or if you have any questions about investing
in the Fund, you can write to us at 1818 Market Street, Philadelphia, PA 19103,
or call toll-free 800.523.1918. You may also obtain additional information about
the Fund from your financial adviser.
You can find reports and other information about the Fund on the SEC web site
(http://www.sec.gov), or you can get copies of this information, after payment
of a duplicating fee, by writing to the Public Reference Section of the SEC,
Washington, D.C. 20549-6009. Information about the Fund, including its Statement
of Additional Information, can be reviewed and copied at the Securities and
Exchange Commission's Public Reference Room in Washington, D.C. You can get
information on the public reference room by calling the SEC at 1.800.SEC.330.
WEB SITE
www.delawarefunds.com
- ---------------------
E-MAIL
[email protected]
SHAREHOLDER SERVICE CENTER
800.523.1918
Call the Shareholder Service Center Monday to Friday, 8 a.m. to 8 p.m. Eastern
time:
o For fund information; literature; price, yield and performance figures.
o For information on existing regular investment accounts and retirement plan
accounts including wire investments; wire redemptions; telephone
redemptions and telephone exchanges.
DELAPHONE SERVICE
800.362.FUND (800.362.3863)
o For convenient access to account information or current performance
information on all Delaware Investments Funds seven days a week, 24 hours a
day, use this Touch-Tone(R) service.
Investment Company Act file number: 811-3120
--------------------------------------------------------------
Cusip Number Nasdaq Symbol
--------------------------------------------------------------
Class A 245911102 DTFXX
--------------------------------------------------------------
Consultant Class 245911201 N/A
--------------------------------------------------------------
DELAWARE
INVESTMENTS
Philadelphia * London
P-___ [--] PP 8/99
25
<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
The Chase Manhattan Bank
4 Chase Metrotech Center
Brooklyn, NY 11245
TAX-FREE MONEY FUND A CLASS
- -----------------------------------------------
TAX-FREE MONEY FUND CONSULTANT CLASS
- -----------------------------------------------
CLASSES OF DELAWARE GROUP TAX-FREE MONEY FUND
- -----------------------------------------------
No Sales Charge
PART B
STATEMENT OF ADDITIONAL INFORMATION
- -----------------------------------------------
AUGUST , 1999
-----------------------------------
DELAWARE
INVESTMENTS
-----------------------------------
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
August 00, 1999
DELAWARE GROUP TAX-FREE MONEY FUND
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
Delaware Group Tax-Free Money Fund (the "Fund") is a
professionally-managed mutual fund.
The Fund offers Class A Shares and Consultant Class Shares
(individually, a "Class" and collectively, the "Classes").
This Statement of Additional Information ("Part B" of the registration
statement) supplements the information contained in the current Prospectus for
the Fund dated August 00, 1999, 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. A 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 the above address or by calling the above phone
numbers. The Fund's financial statements, the notes relating thereto, the
financial highlights and the report of independent auditors are incorporated by
reference from the Annual Report into this Part B. The Annual Report will
accompany any request for Part B. The Annual Report can be obtained, without
charge, by calling 800-523-1918.
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Cover Page
- --------------------------------------------------------------------------------
Investment Objective and Policies
- --------------------------------------------------------------------------------
Performance Information
- --------------------------------------------------------------------------------
Trading Practices
- --------------------------------------------------------------------------------
Purchasing Shares
- --------------------------------------------------------------------------------
Offering Price
- --------------------------------------------------------------------------------
Redemption and Exchange
- --------------------------------------------------------------------------------
Dividends and Distributions
- --------------------------------------------------------------------------------
Taxes
- --------------------------------------------------------------------------------
Investment Management Agreement
- --------------------------------------------------------------------------------
Officers and Trustees
- --------------------------------------------------------------------------------
General Information
- --------------------------------------------------------------------------------
Financial Statements
- --------------------------------------------------------------------------------
Appendix A - Description of Ratings
- --------------------------------------------------------------------------------
Appendix B - Investment Objectives of the Delaware Investments Funds
- --------------------------------------------------------------------------------
-1-
<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.
The Fund limits its investments to those which the Board of
Trustees 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.
The Fund invests primarily in 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. 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 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. 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.
-2-
<PAGE>
The Fund intends to seek to achieve a high level of tax-exempt income.
However, if the Fund invests in newly-issued private purpose bonds, a portion of
its distributions would be subject to the federal alternative minimum tax
applicable to certain shareholders.
The ratings of 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. 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 S&P or Aa
or better by 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).
See Appendix A for a description of municipal obligations ratings.
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.
-3-
<PAGE>
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.
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 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 Trustees 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
The Fund may invest in "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.
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. The Fund will set aside in
a segregated account liquid assets equal in value to commitments for such
when-issued securities to pay for them and mark it to market daily. 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
-4-
<PAGE>
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.
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
-5-
<PAGE>
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 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.
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 Trustees 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 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
-6-
<PAGE>
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 Fund's outstanding
shares, which is a vote by the holders of the lesser of a) 67% or more of the
voting securities present in person or by proxy at a meeting, if the holders of
more than 50% of the outstanding voting securities are present or
represented by proxy; or b) more than 50% of the outstanding voting securities.
The percentage limitations contained in the restrictions and policies set forth
herein apply at the time of purchase of securities.
The Fund shall not:
1. Make investments that will result in the concentration (as that term
may be defined in the 1940 Act, any rule or other thereunder, or U.S. Securities
and Exchange Commission ("SEC") staff interpretation thereof) of its investments
in the securities of issuers primarily engaged in the same industry, provided
that this restriction does not limit the Fund from investing in obligations
issued or guaranteed by the U.S. government, its agencies or instrumentalities,
or in certificates of deposit.
2. Borrow money or issue senior securities, except as the 1940 Act, any
rule or order thereunder, or SEC staff interpretation thereof, may permit.
3. Underwrite the securities of other issuers, except that the Fund may
engage in transactions involving the acquisition, disposition or resale of its
portfolio securities, under circumstances where it may be considered to be an
underwriter under the Securities Act of 1933.
4. Purchase or sell real estate, unless acquired as a result of
ownership of securities or other instruments and provided that this restriction
does not prevent the Fund from investing in issuers which invest, deal or
otherwise engage in transactions in real estate or interests therein, or
investing in securities that are secured by real estate or interests therein.
5. Purchase or sell physical commodities, unless acquired as a result
of ownership of securities or other instruments and provided that this
restriction does not prevent the Fund from engaging in transactions involving
futures contracts and options thereon or investing in securities that are
secured by physical commodities.
6. Make loans, provided that this restriction does not prevent the Fund
from purchasing debt obligations, entering into repurchase agreements, loaning
its assets to broker/dealers or institutional investors and investing in loans,
including assignments and participation interests.
In addition to the fundamental policies and investment restrictions
described above, and the various general investment policies described in the
prospectus, the Fund will be subject to the following investment restrictions,
which are considered non-fundamental and may be changed by the Board of Trustees
without shareholder approval.
1. The Fund is permitted to invest in other investment companies,
including open-end, closed-end or unregistered investment companies, either
within the percentage limits set forth in the 1940 Act, any rule or order
-7-
<PAGE>
thereunder, or SEC staff interpretation thereof, or without regard to percentage
limits in connection with a merger, reorganization, consolidation or other
similar transaction. However, the Fund may not operate as a "fund of funds"
which invests primarily in the shares of other investment companies as permitted
by Section 12(d)(1)(F) or (G) of the 1940 Act, if its own shares are utilized as
investments by such a "fund of funds."
2. The Fund may not invest more than 15% of its net assets in
securities which it cannot sell or dispose of in the ordinary course of business
within seven days at approximately the value at which the Fund has valued the
investment.
The following sets forth additional investment restrictions, which are
considered non-fundamental and may be changed by the Board of Trustees without
shareholder approval. The percentage limitations contained in the restrictions
and policies set forth herein apply at the time of purchase of securities.
The Fund shall not:
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.
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.
8
<PAGE>
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.
13. Retain in the portfolio of the Fund securities issued by an
issuer any of whose officers, trustees 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 trustees owns beneficially more than 1/2 of 1% of the shares or
securities or both of such issuer and such officers and trustees owning
more than 1/2 of 1% of such shares or securities together own beneficially more
than 5% of such shares or securities.
14. 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.
15. 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 SEC deems to constitute U.S. government securities as that term is
defined in the Investment Company Act of 1940 (the "1940 Act").
-9-
<PAGE>
PERFORMANCE INFORMATION
For the seven-day period ended April 30, 1999, the annualized
current yield of Class A Shares and Consultant Class Shares was 0.00% for
each Class and the compounded effective yield was 0.00% 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 00
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 Trustees 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
Trustees.
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, 1999, the tax-equivalent
yield of Class A Shares and Consultant Class Shares was 0.00%, 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.
-10-
<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, 1999 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..................... 1.00000000 1.00000000
========== ==========
Net change in account value............................................ .00000000(1) .00000000(1)
========== ==========
Base period return = net change in account
value/beginning account value................................... .00000000 .00000000
========== ==========
Current yield base period return x (365/7)........................... 0.00%(2) 0.00%(2)
========== ==========
Effective yield (1 + base period)365/7 - 1............................. 0.00%(3) 0.00%(3)
========== ==========
</TABLE>
Weighted average life to maturity of the portfolio on April 30, 1999 was
00 days.
(1) This represents the net income per share for the seven calendar days
ended April 30, 1999.
(2) This represents the average of annualized net investment income per share
for the seven calendar days ended April 30, 1999.
(3) This represents the current yield for the seven calendar days ended April
30, 1999 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.
-11-
<PAGE>
Other funds of the money market type may calculate their yield on a
different basis and the yield quoted by the Fund could vary upward or downward
if another method of calculation or base period were used. Shareholders and
prospective investors who wish to learn the current yield of the Fund may call
toll free, nationwide 800-523-1918.
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, 1999, 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.
-12-
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return
- --------------------------------------------------------------------------------------------------------------------------
1 year ended 3 years ended 5 years ended 10 years ended 15 years ended Life of Fund
4/30/99 4/30/99 4/30/99 4/30/99 4/30/99
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A
(inception
9/17/81)
- --------------------------------------------------------------------------------------------------------------------------
Consultant Class
(inception
3/15/88)
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
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.
-13-
<PAGE>
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 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.
-14-
<PAGE>
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 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, 1999. 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.
-15-
<PAGE>
<TABLE>
<CAPTION>
Cumulative Total Return
- ---------------------------------------------------------------------------------------------------------------------
3 months 6 months 9 months 1 year 3 years 5 years 10 years 15 years Life of Fund
ended ended ended ended ended ended ended ended
4/30/99 4/30/99 4/30/99 4/30/99 4/30/99 4/30/99 4/30/99 4/30/99
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A
(inception
9/17/81)
- ---------------------------------------------------------------------------------------------------------------------
Consultant
Class
(inception
3/15/88)
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
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 Delaware Investment Advisers, an
affiliate of the Manager, including the number of such clients serviced by
Delaware Investment Advisers.
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.
-16-
<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.
-17-
<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 execution.
Best 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 the Manager's 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 execution, commissions allocated to
brokers providing such pricing services may or may not be generated by the funds
receiving the pricing service.
The Manager may place a combined order for two or more accounts or
funds engaged in the purchase or sale of the same security if, in its judgment,
joint execution is in the best interest of each participant and will result in
best 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
-18-
<PAGE>
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 Trustees 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 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.
-19-
<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,
trustees 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. Selling
dealers are responsible for transmitting orders promptly. The Fund reserves the
right to reject any order for the purchase of its shares if, in the opinion of
management, such rejection is in the Fund's best interest. 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 accounts that, as a result of 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 calendar quarter until
the account is brought up to the minimum balance. The service fee will be
deducted from the account during the first week of each calendar quarter for the
previous quarter, and will be used to help defray the cost of maintaining
low-balance accounts. No fees will be charged without proper notice.
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.
-20-
<PAGE>
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 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.
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.
-21-
<PAGE>
Investing by Electronic Fund Transfer
Direct Deposit Purchase Plan--Investors may arrange for the Fund to
accept for investment, through an agent bank, preauthorized government or
private recurring payments by Electronic Fund Transfer. This method of
investment assures the timely credit to the shareholder's account of payments
such as social security, veterans' pension or compensation benefits, federal
salaries, Railroad Retirement benefits, private payroll checks, dividends, and
disability or pension fund benefits. It also eliminates lost, stolen and delayed
checks.
Automatic Investing Plan--The Automatic Investing Plan enables
shareholders to make regular monthly investments without writing checks.
Shareholders may authorize the Fund, in advance, to make arrangements for their
bank to withdraw a designated amount monthly directly from their checking
account for deposit into a Class. This type of investment will be handled in
either of the following two ways. (1) If the shareholder's bank is a member of
the National Automated Clearing House Association ("NACHA"), the amount of the
investment will be electronically deducted from his or her account by Electronic
Fund Transfer ("EFT"). The 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.
-22-
<PAGE>
If remitted in other than the foregoing manner, such as by money order
or personal check, purchase orders will be executed as of the close of regular
trading on the New York Stock Exchange (ordinarily, 4 p.m. Eastern time) on days
when the Exchange is open, on the day on which the payment is converted into
Federal Funds and is available for investment, normally one business day after
receipt of payment. Conversion into Federal Funds may be delayed when the Fund
receives (1) a check drawn on a nonmember bank of the Federal Reserve, (2) a
check drawn on a foreign bank, (3) a check payable in a foreign currency, or (4)
a check requiring special handling. With respect to investments made other than
by wire, the investor becomes a shareholder after declaration of the dividend on
the day on which the order is effective.
Information on how to procure a negotiable bank draft or to transmit
Federal Funds by wire is available at any national bank or any state bank which
is a member of the Federal Reserve System. Any commercial bank can transmit
Federal Funds by wire. The bank may charge the shareholder for these services.
If a shareholder has been credited with a purchase by a check which is
subsequently returned unpaid for insufficient funds or for any other reason, the
Fund will automatically redeem from the shareholder's account the amount
credited by the check plus any dividends earned thereon.
Plan Under Rule 12b-1 for 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 Trustees.
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 trustees may reduce these amounts
at any time. The Fund's Board of Trustees 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 Trustees 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
-23-
<PAGE>
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 Trustees.
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 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 Trustees of the Fund, including a majority of the trustees 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 Trustees in the same manner as specified
above.
Each year, the trustees 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 trustees 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
trustees who are not "interested persons." Also, any other material amendment
to the Plan must be approved by a majority vote of the trustees of the Fund
having no interest in the Plan. In addition, in order for the Plan to remain
effective, the selection and nomination of trustees who are not "interested
persons" of the Fund must be effected by the trustees 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 Trustees for their
review.
For the fiscal year ended April 30, 1999, 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
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account, will be treated like all other initial purchases of a fund's shares.
Consequently, an investor should obtain and read carefully the prospectus for
the fund in which the investment is intended to be made before investing or
sending money. The prospectus contains more complete information about the fund,
including charges and expenses.
Reinvestment of Dividends in Other Delaware 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.
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.
MoneyLine (SM) On Demand
You or your investment dealer may request purchases of Fund shares by
phone 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) 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 $50,000 maximum limit for MoneyLine (SM) On Demand transactions.
It may take up to four business days for the transactions to be
completed. You can initiate this service by completing an Account Services form.
If your name and address 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 this service; however, your bank may charge a fee.
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.
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.
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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 Redemption and Exchange 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.
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Account Statements
You will receive quarterly statements of your account summarizing all
transactions during the period. Accounts in which there has been activity other
than a reinvestment of dividends will receive a monthly statement confirming
each transaction.
Asset Planner
To invest in the funds in the Delaware Investments family using the
Asset Planner asset allocation service, you should complete a 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 Exchanges in the Prospectus
and 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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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 Trustees 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 Trustees believes would result in a material dilution to
shareholders or purchasers, the Board of Trustees will promptly consider
what action, if any, should be initiated, such as changing the price to more or
less than $1.00 per share.
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REDEMPTION AND EXCHANGE
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.
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.
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.
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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 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 or wire the proceeds until
it is reasonably satisfied that the purchase 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. 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. 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.
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 First Union Bank. 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.
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(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
the checks are presented for payment.
(3) If a shareholder who recently purchased shares by check seeks to
redeem all or a portion of those shares through the Checkwriting Feature, the
Fund will not honor the redemption request 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 First Union Bank's rules and
regulations governing similar accounts. This service may be terminated or
suspended at any time by First Union Bank, the Fund or the Transfer
Agent. The Fund and the Transfer Agent will not be responsible for the
inadvertent processing of post-dated checks or checks more than six months old.
Stop-Payment Requests--Investors may request a stop payment on checks
by providing the Fund with a written authorization to do so. Oral requests will
be accepted provided that the Fund promptly receives a written authorization.
Such requests will remain in effect for six months unless renewed or canceled.
The Fund will use its best efforts to effect stop-payment instructions but does
not promise or guarantee that such instructions will be effective.
Return of Checks--Checks used in redeeming shares from a shareholder's
account will be accumulated and returned semi-annually. Shareholders needing a
copy of a redemption check before the regular mailing should contact the
Transfer Agent nationwide at 800-523-1918.
* * *
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.
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
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<PAGE>
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.
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.
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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. First
Union Bank.'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.
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.
The telephone exchange privilege is intended as a convenience to
shareholders and is not intended to be a vehicle to speculate on short-term
swings in the securities market through frequent transactions in and out of the
funds in the Delaware 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.
MoneyLine (SM) On Demand
You or your investment dealer may request redemptions of Fund shares by
phone using MoneyLine (SM) On Demand. When you authorize the Fund to accept such
requests from you or your investment dealer, funds will be 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 $50,000 maximum limit for MoneyLine (SM) On Demand transactions.
It may take up to four business days for the transactions to be
completed. You can initiate this service by completing an Account Services form.
If your name and address 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 this service; however, your bank may charge a fee.
Right to Refuse Timing Accounts
With regard to accounts that are administered by market timing services
("Timing Firms") to purchase or redeem shares based on changing economic and
market conditions ("Timing Accounts"), the Fund will refuse any new timing
arrangements, as well as any new purchases (as opposed to exchanges) in Delaware
Investments funds from Timing Firms. The Fund reserves the right to temporarily
or permanently terminate the exchange privilege or reject any specific purchase
order for any person whose transactions seem to follow a timing pattern who: (i)
makes an exchange request out of the Fund within two weeks of an earlier
exchange request out of the Fund, or (ii) makes more than two exchanges out of
the Fund per calendar quarter, or (iii) exchanges shares equal in value to at
least $5 million, or more than 1/4 of 1% of the Fund's net assets. Accounts
under common ownership or control, including accounts administered so as to
redeem or purchase shares based upon certain predetermined market indicators,
will be aggregated for purposes of the exchange limits.
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Restrictions on Timed Exchanges
Timing Accounts operating under existing timing agreements may only
execute exchanges between the following eight Delaware Investments funds: (1)
Decatur Income Fund, (2) Decatur Total Return Fund, (3) Delaware Balanced Fund,
(4) Limited-Term Government Fund, (5) USA Fund, (6) Delaware Cash Reserve, (7)
Delchester Fund and (8) Tax-Free Pennsylvania Fund. No other Delaware
Investments funds are available for timed exchanges. Assets redeemed or
exchanged out of Timing Accounts in Delaware Investments funds not listed above
may not be reinvested back into that Timing Account. The Fund reserves the right
to apply these same restrictions to the account(s) of any person whose
transactions seem to follow a time pattern (as described above).
The Fund also reserves the right to refuse the purchase side of an
exchange request by any Timing Account, person, or group if, in the Manager's
judgment, the Fund would be unable to invest effectively in accordance with its
investment objectives and policies, or would otherwise potentially be adversely
affected. A shareholder's purchase exchanges may be restricted or refused if the
Fund receives or anticipates simultaneous orders affecting significant portions
of the Fund's assets. In particular, a pattern of exchanges that coincide with a
"market timing" strategy may be disruptive to the Fund and therefore may be
refused.
Except as noted above, only shareholders and their authorized brokers
of record will be permitted to make exchanges or redemptions.
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 weekend) 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 were a gain or loss, it would be long-term or short-term depending on
the holding period for the specific shares liquidated.
An investor wishing to start a Systematic Withdrawal Plan must complete
an authorization form. If the recipient of Systematic Withdrawal Plan payments
is other than the registered shareholder, the shareholder's signature on this
authorization must be guaranteed. Each signature guarantee must be supplied by
an eligible guarantor institution. The Fund reserves the right to reject a
signature guarantee supplied by an eligible institution based on its
creditworthiness. This plan may be terminated by the shareholder or the Transfer
Agent
-34-
<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.
Systematic Withdrawal Plan 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. Your funds will normally be credited to your bank account up to
four business days after the payment date. There are no separate fees for this
redemption method. It may take up to four business days for the transactions to
be completed. You can initiate this service by completing an Account Services
form. If your name and address 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 this service; however, your bank may charge a fee.
-35-
<PAGE>
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 Trustees 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 Trustees will consider temporarily reducing or suspending
payment of daily dividends, or making a distribution of realized securities
profits or other distributions at the time the net asset value per share has
changed.
Short-term realized securities profits or losses, if any, may be paid
with the daily dividend. Any such profits not so paid will be distributed
annually during the first quarter following the close of the fiscal year. See
Account Statements under Purchasing Shares. Information as to the tax status of
dividends will be provided annually.
-36-
<PAGE>
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. It may take up to four
business days for the transactions to be completed. You can initiate this
service by completing an Account Services form. If your name and address 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 this service; however,
your bank may charge a fee.
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 1997 Act, as revised by the 1998 Act and the Omnibus
Consolidated and Emergency Supplemental Appropriations 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:
-37-
<PAGE>
"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%. This category of gains applied
only to gains and distributions in 1997.
"1997 Act long-term capital gains" OR "20 Percent Rate Gain":
securities sold between May 7, 1997 and July 28, 1997 that were held
for more than 12 months, and securities sold by the Fund after July 28,
1997 that were held for more than 18 months. As revised by the 1998
Act, this rate applies to securities held for more than 12 months and
sold in tax years beginning after December 1, 1997. 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. The Omnibus Consolidated and Emergency Supplemental
Appropriations Act passed in October of 1998 included technical
corrections to the 1998 Act. The effect of this correction is that
essentially all capital gain distributions paid to shareholders during
1998 will be taxed at a maximum rate of 20%.
"Qualified 5-year gains": For individuals in the 15% bracket, qualified
five-year gains are net gains on securities held for more than 5
years which are sold after December 31, 2000. For individual who
are subject to tax at higher rate brackets, qualified five-year
gains are net gains on securities which are purchased after December
31, 2000 and are held for more than five years. Taxpayers subject
to tax at a higher rate brackets may also make an election for
shares held on January 1, 2001 to recognize gain on their shares in
order to qualify such shares as qualified five-year property .
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 five-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.
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 Trustees.
The Manager and its predecessors have been managing the funds in the
Delaware Investments family since 1938. On April 30, 1999, the Manager and
its affiliates within Delaware Investments, including Delaware International
Advisers Ltd., were managing in the aggregate more than $00 billion in
assets in various institutional or separately managed (approximately
$00,000,000,000) and investment company (approximately $00,000,000,000)
accounts.
Subject to the supervision and direction of the Board of Trustees,
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.
-38-
<PAGE>
The Fund's Investment Management Agreement with the Manager is dated
April 1, 1999, was approved by shareholders on March 17, 1999. The Agreement has
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 Trustees
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 trustees 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 trustees 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 0.45% on the first $500 million of average daily net
assets; 0.40% on the next $500 million; 0.35% on the next $1.5 billion; and
0.30% on assets in excess of $2.5 billion. The Manager pays the salaries of all
trustees, officers and employees of the Fund who are affiliated with the
Manager.
On April 30, 1999, the total net assets of the Fund were
$00,000,000. Investment management fees paid by the Fund during the past three
fiscal years were $167,125 for 1997 , $164,249 for 1998 and $000,000 for
1999.
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.
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.
-39-
<PAGE>
OFFICERS AND TRUSTEES
The business and affairs of the Fund are managed under the direction of
its Board of Trustees.
Certain officers and trustees of the Fund hold identical positions
in each of the other funds in the Delaware Investments family. On July 31,
1998, the Fund's officers and trustees, as a group, owned approximately
0.00% of the outstanding shares of Class A Shares and less than 1% of the
outstanding shares of Consultant Class Shares.
As of July 31, 1999, 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
37 Borton Road
Medford, NJ 08055
Consultant Class John K. Kaiser
Shares 499 Bair Road
Berwyn, PA 19312
Anthony C. Jaspers TTEE
Anthony C. Jaspers
232 North Main Street
Lake Crystal, MN 56055
Mary E. Gamble and Harvey R. Gamble
Rd 2 Box 112
Centre Hall, PA 16828
Marlene J. Overgaard
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 Retirement
Financial 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.
-40-
<PAGE>
Certain officers and trustees of the Fund hold identical positions
in each of the other funds in the Delaware Investments family. Trustees 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.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
<S> <C>
*Wayne A. Stork (62) Trustee and/or Director of the Fund and each of the other
33 investment companies in the Delaware Investments family.
Chairman and Director of Delaware Management Holdings, Inc.
Prior to January 1, 1999, Mr. Stork was Chairman and
Trustee and/or Director of the Fund and each of the other
33 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 Retirement Financial Services, Inc.
In addition, during the five years prior to January 1,
1999, Mr. Stork has served in various executive capacities
at different times within Delaware Investments.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
- ----------------------
*Director affiliated with the Fund's investment manager and considered an
"interested person" as defined in the 1940 Act.
-41-
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
<S> <C>
Richard G. Unruh, Jr. (59) Executive Vice President and Chief Investment Officer,
Equities of the Fund, each of the other 33 investment
companies in the Delaware Investments family and Delaware
Management Company (a series of Delaware Management
Business Trust)
Executive Vice President of Delaware Management Holdings,
Inc. and Delaware Capital Management, Inc. and Delaware
Management Business Trust
Executive Vice President/Chief Investment Officer,
Equities and Director of Delaware Management Company, Inc.
Chief Executive Officer/Chief Investment Officer, Equities
of Delaware Investment Advisers (a series of 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
Delaware Investments.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
-42-
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
<S> <C>
David K. Downes (59) Executive Vice President, Chief Operating Officer and
Chief Financial Officer of the Fund and each of the other
33 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 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
Retirement Financial Services, Inc.
Chairman and Director of Delaware Management Trust Company
Director of Delaware International Advisers Ltd.
During the past five years, Mr. Downes has served in
various executive capacities at different times within
Delaware Investments.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
-43-
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
<S> <C>
Richard J. Flannery (41) Executive Vice President of the Fund and each of the other
33 investment companies in the Delaware Investments family
Executive Vice President and General Counsel of Delaware
Management Holdings, 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 Founders CBO
Corporation
Executive Vice President/General Counsel and Director of
DMH Corp., Delaware Management Company, Inc., Delaware
Distributors, Inc., Delaware International Holdings Ltd.,
Founders Holdings, Inc., Delvoy, Inc. and Retirement
Financial Services, Inc.
Director of Delaware International Advisers Ltd.
Director, HYPPCO Finance Company Ltd.
During the past five years, Mr. Flannery has served in
various executive capacities at different times within
Delaware Investments organization.
- ----------------------------------------------------------------------------------------------------------
Walter P. Babich (71) Trustee and/or Director of the Fund and each of the other
33 investment companies in the Delaware 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.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
-44-
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
<S> <C>
John H. Durham (62) Trustee and/or Director of the Fund and 18 other investment
companies in the Delaware Investments family.
Partner, Complete Care Services.
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 (60) Trustee and/or Director of the Fund and each of the 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 (58) Trustee and/or Director of the Fund and each of the other 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.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
-45-
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
<S> <C>
Thomas F. Madison (63) Trustee and/or Director of the Fund and each of the other 33
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.
- ----------------------------------------------------------------------------------------------------------
Charles E. Peck (73) Trustee and/or Director of the Fund and each of the other 33
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.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
-46-
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
<S> <C>
Joseph H. Hastings (49) Senior Vice President/Corporate Controller of the Fund and
each of the other 33 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 Retirement Financial
Services, Inc.
Executive Vice President/Chief Financial Officer/Treasurer of
Delaware Management Trust Company
Senior Vice President/Assistant Treasurer of Founders CBO
Corporation
During the past five years, Mr. Hastings has served in various
executive capacities at different times within the Delaware
organization.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
-47-
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
<S> <C>
Michael P. Bishof (37) Senior Vice President and Treasurer of the Fund and each of
the other 33 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, Investment
Accounting of Delaware Distributors, L.P. and Delaware
Investment Advisers (a series of Delaware Management Business
Trust)
Senior Vice President and Assistant Treasurer of Founders CBO
Corporation
Senior Vice President and Manager of Investment Accounting of
Delaware International Holdings Ltd.
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.
- ----------------------------------------------------------------------------------------------------------
Patrick P. Coyne (36) Vice President/Senior Portfolio Manager of the Fund, of each
of the 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.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
-48-
<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, 1999 and an estimate of annual benefits
to be received upon retirement under the Delaware Group Retirement Plan for
Trustees/Directors as of April 30, 1999. Only the independent
trustees,directors 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>
Walter P. Babich $000 None $38,500 $00,000
John H. Durham $000 None $31,000 $00,000
Anthony D. Knerr $000 None $38,500 $00,000
W. Thacher Longstreth (3) $000 None $38,500 $00,000
Ann R. Leven $000 None $38,500 $00,000
Thomas F. Madison $000 None $38,500 $00,000
Charles E. Peck $000 None $38,500 $00,000
</TABLE>
(1) Under the terms of the Delaware Group Retirement Plan for
Trustees/Directors, 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 trustees/directors of each investment
company at the time of such person's retirement. If an eligible
director/trustee retired as of April 30, 1999, 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) W. Thacher Longstreth retired from the Board on [ ].
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GENERAL INFORMATION
The Fund is an open-end management investment company. The Fund's
portfolio of assets is diversified as defined by the 1940 Act and Rule 2a-7
under the 1940 Act. The Fund was organized as a Maryland corporation in April
1980 and reorganized as a Delaware Business Trust on __________, 1999.
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. Delaware Investment Advisers, an
affiliate of the Manager, 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.
Delaware or Delaware International also manages the investment
options for Delaware -Lincoln Choice Plus and Delaware Medallion (SM) III
Variable Annuities. Choice Plus is issued and distributed by Lincoln National
Life Insurance Company. choice Plus offers a variety of different investment
styles managed by leading money managers. 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
various investment series ranging from domestic equity funds, international
equity and bond funds and domestic fixed income funds. Each investment series
available through Choice Plus and Medallion utilizes an investment strategy
and discipline the same as or similar to one of the Delaware Investments
mutual funds available outside the annuity. See Delaware Group Premium Fund,
Inc., in Appendix B.
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 Trustees, including a majority of the
disinterested trustees. 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
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<PAGE>
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.
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.
The Chase Manhattan Bank ("Chase"), 4 Chase Metrotech Center,
Brooklyn, NY 11245 is custodian of the Fund's securities and cash. As custodian
for the Fund, Chase 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 present unlimited authorized number of shares of
beneficial interest with no par value allocated 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.
Effective ____________, 1999, the Fund changed its name to Delaware Group
Tax-Free Money Fund.
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
trustees can elect all the trustees if they choose to do so, and, in such
event, the holders of the remaining shares will not be able to elect any
trustees.
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, 1999, 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
in although more susceptible to changes 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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APPENDIX B--INVESTMENT OBJECTIVES OF THE DELAWARE INVESTMENTS FUNDS
Following is a summary of the investment objectives the funds in the
Delaware Investments family:
Delaware Balanced Fund seeks long-term growth by a balance of capital
appreciation, income and preservation of capital. It uses a dividend-oriented
valuation strategy to select securities issued by established companies that are
believed to demonstrate potential for income and capital growth. Devon Fund
seeks current income and capital appreciation by investing primarily in
income-producing common stocks, with a focus on common stocks the Manager
believes have the potential for above average dividend increases over time.
Trend Fund seeks long-term growth by investing in common stocks issued
by emerging growth companies exhibiting strong capital appreciation potential.
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 Equity 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. Growth and Income 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 high yield, high risk in 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 primarily in
long-term debt obligations issued or guaranteed by the U.S. government, its
agencies or instrumentalities.
Limited-Term Government Fund seeks high, stable income by investing
primarily in a portfolio of short- and intermediate-term securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities and
instruments secured by such securities.
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<PAGE>
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.
Tax-Free USA Fund seeks high current income exempt from federal income
tax by investing in municipal bonds of geographically-diverse issuers. Tax-Free
Insured Fund invests in these same types of securities but with an emphasis on
municipal bonds protected by insurance guaranteeing principal and interest are
paid when due. Tax-Free USA Intermediate Fund seeks a high level of current
interest income exempt from federal income tax, consistent with the preservation
of capital by investing primarily in municipal bonds.
Tax-Free Money Fund seeks high current income, exempt from federal
income tax, by investing in short-term municipal obligations, while maintaining
a stable net asset value.
Tax-Free 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 Equity 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
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<PAGE>
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 various funds available
exclusively as funding vehicles for certain insurance company separate accounts.
Growth and Income Series seeks the highest possible total rate of return by
selecting issues that exhibit the potential for capital appreciation while
providing higher than average dividend income. Delchester Series seeks as high a
current income as possible by investing in rated and unrated corporate bonds,
U.S. government securities and commercial paper. Capital Reserves Series seeks a
high stable level of current income while minimizing fluctuations in principal
by investing in a diversified portfolio of short- and intermediate-term
securities. Cash Reserve Series seeks the highest level of income consistent
with preservation of capital and liquidity through investments in short-term
money market instruments. DelCap Series seeks long-term capital appreciation by
investing its assets in a diversified portfolio of securities exhibiting the
potential for significant growth. Delaware Balanced 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 values appear 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. Trend 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. Emerging Markets 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. Aggressive Growth
Series seeks long-term capital appreciation. The Series attempts to achieve its
investment objective by investing primarily in equity securities of companies
which the manager believes have the potential for high earnings growth.
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.
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Delaware-Voyageur Tax-Free Arizona Insured Fund seeks to provide a high
level of current income exempt from federal income tax and the Arizona personal
income tax, consistent with the preservation of capital. Delaware-Voyageur
Minnesota Insured Fund seeks to provide a high level of current income exempt
from federal income tax and the Minnesota personal income tax, consistent with
the preservation of capital.
Delaware-Voyageur Tax-Free Minnesota Intermediate Fund seeks to provide a
high level of current income exempt from federal income tax and the Minnesota
personal income tax, consistent with preservation of capital. The Fund seeks to
reduce market risk by maintaining an average weighted maturity from five to ten
years.
Delaware-Voyageur Tax-Free California Insured Fund seeks to provide a high
level of current income exempt from federal income tax and the California
personal income tax, consistent with the preservation of capital.
Delaware-Voyageur Tax-Free Florida Insured Fund seeks to provide a high level of
current income exempt from federal income tax, consistent with the preservation
of capital. The Fund will seek to select investments that will enable its shares
to be exempt from the Florida intangible personal property tax.
Delaware-Voyageur Tax-Free Florida Fund seeks to provide a high level of current
income exempt from federal income tax, consistent with the preservation of
capital. The Fund will seek to select investments that will enable its shares to
be exempt from the Florida intangible personal property tax. Delaware-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 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. Delaware-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.
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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 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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<PAGE>
PART C
Other Information
Item 23. Exhibits
(a) Agreement and Declaration of Trust.
(1) Agreement and Declaration of Trust (December 17,
1998) attached as Exhibit.
(2) Certificate of Trust (December 17, 1998) attached
as Exhibit.
(b) By-Laws. By-Laws (December 17, 1998) attached as Exhibit.
(c) Instruments Defining the Rights of Security Holders.
(1) Agreement and Declaration of Trust. Article III,
IV, V and VI of the Agreement and Declaration of
Trust attached as Exhibit (a)(1).
(2) By-Laws. Article II of the By-Laws attached as
Exhibit (b)(1).
(d) Investment Management Agreement. Form of Investment
Management Agreement (August 1999) between Delaware
Management Company and the Registrant attached as Exhibit.
(e) (1) Distribution Agreement. Form of Distribution
Agreement incorporated into this filing by
reference to Post-Effective Amendment No. 21 filed
June 28, 1996.
(2) 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.
(3) 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.
(4) 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.
(f) Inapplicable.
(g) Custodian Agreement. Form of Custodian Agreement with
The Chase Manhattan Bank attached as Exhibit.
<PAGE>
(h) Other Material Contracts.
(1) Form of Shareholders Services Agreement
incorporated into this filing by reference to
Post-Effective Amendment No. 21 filed June 28,
1996.
(2) Form of Delaware Group of Funds Fund Accounting
Agreement with Delaware Service Company, Inc.
incorporated into this filing by reference to
Post-Effective Amendment No. 22 filed June 30,
1997.
(i) Opinion of Counsel. Attached as Exhibit.
(j) Consent of Auditors. To be filed by Amendment.
(k) Inapplicable.
(l) 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.
(m) Plans under Rule 12b-1. Form of Rule 12b-1 Plan
for the Consultant Class incorporated into this
filing by reference to Post-Effective Amendment
No. 21 filed June 28, 1996.
(n) Inapplicable.
Item 24. Persons Controlled by or under Common Control with
Registrant. None
Item 25. Indemnification. Incorporated into this filing by reference to
Pre-Effective Amendment No. 1 filed May 28, 1981 and Article VI
of the By-Laws attached as Exhibit (b)(1).
Item 26. Business and Other Connections of Investment Adviser.
Delaware Management Company (the "Manager"), a series of Delaware
Management Business Trust, 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 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, Voyageur Tax-Free Funds, Inc., Voyageur Intermediate Tax-Free
Funds, Inc., Voyageur Insured Funds, Inc., Voyageur 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 Delaware Investments
funds, and certain officers are also officers of these other funds. A company
indirectly owned by the Manager's parent company acts as principal underwriter
to the mutual funds in the Delaware Investments family (see Item 29 below) and
another such company acts as the shareholder
<PAGE>
services, dividend disbursing, accounting servicing and transfer agent for all
of the mutual funds in the Delaware Investments family.
The following persons serving as directors or officers of the
Manager have held the following positions during the past two years:
<TABLE>
<CAPTION>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Name and Positions and Offices with Delaware Management Company and its affiliates
Principal Business and other Positions and Offices Held
Address*
- -----------------------------------------------------------------------------------------------------------------------------
David K. Downes President of Delaware Management Company (a series of Delaware Management Business Trust);
Executive Vice President, Chief Operating Officer and Chief Financial Officer of Delaware
Management Holdings, Inc.; Executive Vice President, Chief Operating Officer, Chief Financial
Officer and Director of DMH Corp.; Executive Vice President, Chief Operating Officer, Chief
Financial Officer and Director of Delvoy, Inc.; President and Director of Delaware Management
Company, Inc.; Executive Vice President, Chief Operating Officer, Chief Financial Officer and
Trustee of Delaware Management Business Trust; Executive Vice President, Chief Operating
Officer and Chief Financial Officer of Delaware Investment Advisers (a series of Delaware
Management Business Trust); Chairman, President, Chief Executive Officer and Director of
Delaware Service Company, Inc.; President, Chief Executive Officer and Director of Delaware
Capital Management, Inc.; Chairman and Director of Retirement Financial Services, Inc.;
Chairman and Director of Delaware Management Trust Company; Executive Vice President, Chief
Operating Officer, Chief Financial Officer and Director of Delaware Distributors, Inc.; Executive
Vice President, Chief Operating Officer and Chief Financial Officer of Delaware Distributors, L.P.;
President, Chief Operating Officer, Chief Financial Officer and Director of Delaware International
Holdings Ltd.; Director of Delaware International Advisers Ltd.; Executive Vice President, Chief
Operating Officer, Chief Financial Officer and Director of Founders Holdings, Inc.; Executive Vice
President, Chief Operating Officer and Chief Financial Officer of Founders CBO Corporation;
Executive Vice President, Chief Operating Officer and Chief Financial Officer of each fund in the
Delaware Investments family.
Chief Executive Officer and Director of Forewarn, Inc. since 1993, 8 Clayton Place, Newtown Square, PA
- -----------------------------------------------------------------------------------------------------------------------------
Richard J. Flannery Executive Vice President and General Counsel of Delaware Management Company (a series of
Delaware Management Business Trust); Executive Vice President and General Counsel of
Delaware Management Holdings, Inc.; Executive Vice President, General Counsel and Director of
DMH Corp.; Executive Vice President, General Counsel and Director of Delvoy, Inc.; Executive
Vice President, General Counsel and Director of Delaware Management Company, Inc.; Executive
Vice President, General Counsel and Trustee of Delaware Management Business Trust; Executive
Vice President and General Counsel of Delaware Investment Advisers (a series of Delaware
Management Business Trust); Executive Vice President, General Counsel and Director of Delaware
Service Company, Inc.; Executive Vice President, General Counsel and Director of Delaware
Capital Management, Inc.; Executive Vice President, General Counsel and Director of Retirement
Financial Services, Inc.; Executive Vice President, General Counsel and Director of Delaware
Management Trust Company; Executive Vice President, General Counsel and Director of
Delaware Distributors, Inc.; Executive Vice President and General Counsel of Delaware
Distributors, L.P.; Executive Vice President, General Counsel and Director of Delaware
International Holdings Ltd.; Director of Delaware International Advisers Ltd.; Executive Vice
President, General Counsel and Director of Founders Holdings, Inc.; Executive Vice President and
General Counsel of Founders CBO Corporation; Executive Vice President of each fund in the
Delaware Investments family.
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>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Name and Positions and Offices with Delaware Management Company and its affiliates
Principal Business and other Positions and Offices Held
Address*
- -----------------------------------------------------------------------------------------------------------------------------
Richard G. Unruh Executive Vice President, Chief Investment Officer/ DMC Equity of Delaware Management Company (a
series of Delaware Management Business Trust); Executive Vice President of Delaware Management
Holdings, Inc.; Executive Vice President and Trustee of Delaware Management Business Trust; Chief
Executive Office, Chief Investment Officer/DIA Equity of Delaware Investment Advisers (a series of
Delaware Management Business Trust; Executive Vice President of Delaware Capital Management, Inc.;
Director of Delaware Investment Advisers Ltd.; Executive Vice President, Chief Investment
Officer/Equity of each fund in the Delaware Investments family.
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
- -----------------------------------------------------------------------------------------------------------------------------
Douglas L. Anderson Senior Vice President/Operations of Delaware Management Company (a series of Delaware Management
Business Trust; Senior Vice President/Operations of Delaware Service Company, Inc.; Senior Vice
President/Operations of Retirement Financial Services, Inc.; Senior Vice President/Operations of
Delaware Management Trust Company.
- -----------------------------------------------------------------------------------------------------------------------------
Michael P. Bishof Senior Vice President, Treasurer/Investment Accounting of Delaware Management Company (a
series of Delaware Management Business Trust); Senior Vice President, Treasurer/Investment
Accounting of Delaware Investment Advisers (a series of Delaware Management Business Trust);
Senior Vice President/Investment Accounting of Delaware Service Company, Inc.; Senior Vice
President/Investment Accounting of Delaware Capital Management, Inc.; Senior Vice President,
Treasurer/Investment Accounting of Delaware Distributors, L.P.; Senior Vice President, Manager
of Investment Accounting of Delaware International Holdings Ltd.; Senior Vice President,
Treasurer/Investment Accounting of Founders Holdings, Inc.; Senior Vice President and Assistant
Treasurer of Founders CBO Corporation; Senior Vice President and Treasurer of each fund in the
Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
Robert J. DiBraccio Senior Vice President/Head of Equity Trading of Delaware Management Company (a series of Delaware
Management Business Trust); Senior Vice President/Head of Equity Trading of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Senior Vice President/Head of Equity
Trading of Delaware Capital Management, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
John B. Fields Senior Vice President/Senior Portfolio Manager of Delaware Management Company (a series of
Delaware Management Business Trust); Trustee of Delaware Management Business Trust; Senior
Vice President/Senior Portfolio Manager of Delaware Investment Advisers (a series of Delaware
Management Business Trust); Senior Vice President/Senior Portfolio Manager of Delaware Capital
Mangement, Inc.; Senior Vice President/Senior Portfolio Manager of each fund in the Delaware
Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
Susan L. Hanson Senior Vice President/Global Marketing and Client Services of Delaware Management Company
(a series of Delaware Management Business Trust); Senior Vice President/Global Marketing and
Client Services of Delaware Investment Advisers (a series of Delaware Management Business
Trust)
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Name and Positions and Offices with Delaware Management Company and its affiliates
Principal Business and other Positions and Offices Held
Address*
- -----------------------------------------------------------------------------------------------------------------------------
Joseph H. Hastings Senior Vice President/Treasurer/Corporate Controller of Delaware Management Company (a series of
Delaware Management Business Trust); Senior Vice President/Treasurer/Corporate Controller of
Delaware Management Holdings, Inc.; Senior Vice President/Treasurer/Corporate Controller of DMH
Corp; Senior Vice President/Treasurer/Corporate Controller of Delvoy, Inc.; Senior Vice
President/Treasurer/Corporate Controller of Delaware Management Company, Inc.; Senior Vice
President/Treasurer/Corporate Controller of Delaware Management Business Trust; Senior Vice
President/Treasurer/Corporate Controller of Delaware Service Company, Inc.; Senior Vice
President/Treasurer/Corporate Controller of Delaware Capital Management, Inc.; Senior Vice
President/Treasurer/Corporate Controller of Retirement Financial Services, Inc.; Executive Vice
President/Corporate Controller/Treasurer of Delaware Management Trust Company; Senior Vice
President/Treasurer/Corporate Controller of Delaware Distributors, L.P.; Senior Vice
President/Treasurer/Corporate Controller of Delaware International Holdings; Senior Vice
President/Treasurer/Corporate Controller of Founders Holdings, Inc.; Senior Vice President/
Assistant Treasurer Founders CBO Corporation; Senior Vice President/Corporate Controller of each
fund in the Delaware Investments family
- -----------------------------------------------------------------------------------------------------------------------------
Joanne O. Hutcheson Senior Vice President/Human Resources of Delaware Management Company (a series of
Delaware Management Business Trust); Senior Vice President/Human Resources of Delaware
Management Holdings, Inc.; Senior Vice President/Human Resources of DMH Corp.; Senior Vice
President/Human Resources of Delvoy, Inc.; Senior Vice President/Human Resources of
Delaware Management Company, Inc.; Senior Vice President/Human Resources of Delaware
Management Business Trust; Senior Vice President/Human Resources of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Senior Vice President/Human
Resources of Delaware Service Company, Inc.; Senior Vice President/Human Resources of
Delaware Capital Management, Inc.; Senior Vice President/Human Resources of Delaware
Retirement Financial Services, Inc.; Senior Vice President/Human Resources of Delaware
Management Trust Company; Senior Vice President/Human Resources of Delaware Distributors,
Inc.; Senior Vice President/Human Resources of Delaware Distributors, L.P.; Senior Vice
President/Human Resources of each fund in the Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
Richelle S. Maestro Senior Vice President, Assistant Secretary and Deputy General Counsel of Delaware Management
Company (a series of Delaware Management Business Trust); Senior Vice President, Assistant
Secretary and Deputy General Counsel of Delaware Management Holdings, Inc.; Senior Vice
President, Assistant Secretary and Deputy General Counsel of DMH Corp.; Senior Vice President,
Assistant Secretary and Deputy General Counsel of Delvoy, Inc.; Senior Vice President, Assistant
Secretary and Deputy General Counsel of Delaware Management Company, Inc.; Senior Vice
President, Assistant Secretary and Deputy General Counsel of Delaware Management Business
Trust; Senior Vice President, Assistant Secretary and Deputy General Counsel of Delaware
Investment Advisers (a series of Delaware Management Business Trust); Senior Vice President,
Assistant Secretary and Deputy General Counsel of Delaware Service Company, Inc.; Senior Vice
President, Assistant Secretary and Deputy General Counsel of Delaware Capital Management, Inc.;
Senior Vice President, Assistant Secretary and Deputy General Counsel of Retirement Financial
Services, Inc.; Senior Vice President, Assistant Secretary and Deputy General Counsel of Delaware
Distributors, Inc.; Senior Vice President, Assistant Secretary and Deputy General Counsel of
Delaware Distributors, L.P.; Senior Vice President, Secretary and Deputy General Counsel of
Delaware International Holdings Ltd.; Senior Vice President, Assistant Secretary and Deputy
General Counsel of Founders Holdings, Inc.; Secretary of Founders CBO Corporation; Senior Vice
President, Assistant Secretary and Deputy General Counsel of each fund in the Delaware
Investments family.
General Partner of Tri-R Associates since 1989, 10001 Sandmeyer Lane, Philadelphia, PA.
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Name and Positions and Offices with Delaware Management Company and its affiliates
Principal Business and other Positions and Offices Held
Address*
- -----------------------------------------------------------------------------------------------------------------------------
Eric E. Miller Senior Vice President, Assistant Secretary and Deputy General Counsel of Delaware Management
Company (a series of Delaware Management Business Trust); Senior Vice President, Assistant
Secretary and Deputy General Counsel of Delaware Management Holdings, Inc.; Senior Vice President,
Assistant Secretary and Deputy General Counsel of DMH Corp.; Senior Vice President, Assistant
Secretary and Deputy General Counsel of Delvoy, Inc.; Senior Vice President, Assistant Secretary
and Deputy General Counsel of Delaware Management Company, Inc.; Senior Vice President, Assistant
Secretary and Deputy General Counsel of Delaware Management Business Trust; Senior Vice President,
Assistant Secretary and Deputy General Counsel of Delaware Investment Advisers (a series of
Delaware Management Business Trust); Senior Vice President, Assistant Secretary and Deputy General
Counsel of Delaware Service Company, Inc.; Senior Vice President, Assistant Secretary and Deputy
General Counsel of Delaware Capital Management, Inc.; Senior Vice President, Assistant Secretary
and Deputy General Counsel of Retirement Financial Services, Inc.; Senior Vice President,
Assistant Secretary and Deputy General Counsel of Delaware Distributors, Inc.; Senior Vice
President, Assistant Secretary and Deputy General Counsel of Delaware Distributors, L.P.; Senior
Vice President, Assistant Secretary and Deputy General Counsel of Founders Holdings, Inc.; Senior
Vice President, Assistant Secretary and Deputy General Counsel of each fund in the Delaware
Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
James L. Shields Senior Vice President, Chief Information Officer of Delaware Management Company (a series of
Delaware Management Business Trust); Senior Vice President, Chief Information Officer of
Delaware Investment Advisers (a series of Delaware Management Business Trust); Senior Vice
President, Chief Information Officer of Delaware Service Company, Inc.; Senior Vice President,
Chief Information Officer of Delaware Capital Management Company, Inc.; Senior Vice President,
Chief Information Officer of Retirement Financial Services, Inc.; Senior Vice President, Chief
Information Officer of Delaware Distributors, L.P.
- -----------------------------------------------------------------------------------------------------------------------------
Christopher S. Adams Vice President/Business Manager, Equity of Delaware Management Company (a series of
Delaware Management Business Trust); Vice President/Business Manager, Equity of Delaware
Investment Advisers (a series of Delaware Management Business Trust)
- -----------------------------------------------------------------------------------------------------------------------------
Robert L. Arnold Vice President/Portfolio Manager of Delaware Management Company (a series of Delaware Management
Business Trust); Vice President/Portfolio Manager of Delaware Investment Advisers (a series of
Delaware Management Business Trust); Vice President/Portfolio Manager of Delaware Capital
Management, Inc., Vice President/Portfolio Manager of each fund in the Delaware Investments
family.
- -----------------------------------------------------------------------------------------------------------------------------
Marshall T. Bassett(1) Vice President/Portfolio Manager of Delaware Management Company (a series of Delaware Management
Business Trust); Vice President/Portfolio Manager of Delaware Investment Advisers (a series of
Delaware Management Business Trust); Vice President/Portfolio Manager of each fund in the Delaware
Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
Christopher S. Beck(2) Vice President/Senior Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Senior Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Senior Portfolio Manager
of each fund in the Delaware Investments family.
Trustee of New Castle County Pension Board since October 1992, Wilmington DE.
- -----------------------------------------------------------------------------------------------------------------------------
Richard E. Beister Vice President/Trading Operations of Delaware Management Company (a series of Delaware
Management Business Trust)
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Name and Positions and Offices with Delaware Management Company and its affiliates
Principal Business and other Positions and Offices Held
Address*
- -----------------------------------------------------------------------------------------------------------------------------
Lisa O. Brinkley Vice President/Compliance Director of Delaware Management Company (a series of Delaware Management
Business Trust); Vice President/Compliance Director of Delaware Management Holdings, Inc.;Vice
President/Compliance Director of DMH Corp.;Vice President/Compliance Director of Delvoy, Inc.;Vice
President/Compliance Director of Delaware Management Company, Inc.;Vice President/Compliance
Director of Delaware Management Business Trust; Vice President/Compliance Director of Delaware
Investment Advisers (a series of Delaware Management Business Trust);Vice President/Compliance
Director of Delaware Service Company, Inc.;Vice President/Compliance Director of Delaware Capital
Management, Inc.;Vice President/Compliance Director of Retirement Financial Services, Inc.; Vice
President/Compliance Director/Assistant Secretary of Delaware Management Business Trust; Vice
President/Compliance Director of Delaware Distributors, Inc.;Vice President/Compliance Director of
Delaware Distributors, L.P.;Vice President/Compliance Director of each fund in the Delaware
Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
MaryEllen M. Carrozza Vice President/Client Services of Delaware Management Company (a series of Delaware Management
Business Trust);Vice President/Client Services of Delaware Investment Advisers (a series of
Delaware Management Business Trust);Vice President/Client Services of each fund in the Delaware
Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
Stephen R. Cianci Vice President/Portfolio Manager of Delaware Management Company (a series of Delaware Management
Business Trust); Vice President/Portfolio Manager of Delaware Investment Advisers (a series of
Delaware Management Business Trust); Vice President/Portfolio Manager of each fund in the Delaware
Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
Mitchell L. Conery(3) Vice President/Senior Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Senior Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Senior Portfolio Manager
of each fund in the Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
Timothy G. Connors Vice President/Senior Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Senior Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust).
- -----------------------------------------------------------------------------------------------------------------------------
Patrick P. Coyne Vice President/Senior Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Senior Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Senior Portfolio Manager
of Delaware Capital Management, Inc.; Vice President/Senior Portfolio Manager of each fund in the
Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
Nancy M. Crouse Vice President/Senior Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Senior Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Senior Portfolio Manager
of each fund in the Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
George E. Deming Vice President/Senior Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Senior Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Senior Portfolio Manager
of each fund in the Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
James P. Dokas(4) Vice President/Portfolio Manager of Delaware Management Company (a series of Delaware Management
Business Trust); Vice President/Portfolio Manager of Delaware Investment Advisers (a series of
Delaware Management Business Trust); Vice President/ Portfolio Manager of each fund in the
Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
Michael J. Dugan Vice President/Senior Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Senior Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Senior Portfolio Manager
of each fund in the Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Name and Positions and Offices with Delaware Management Company and its affiliates
Principal Business and other Positions and Offices Held
Address*
- -----------------------------------------------------------------------------------------------------------------------------
Roger A. Early Vice President/Senior Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Senior Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Senior Portfolio Manager
of each fund in the Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
Joel A. Ettinger(5) Vice President/Taxation of Delaware Management Company (a series of Delaware Management
Business Trust);Vice President/Taxation of Delaware Management Holdings, Inc.;Vice
President/Taxation of DMH Corp.;Vice President/Taxation of Delvoy, Inc.; Vice
President/Taxation of Delaware Management Company, Inc.;Vice President/Taxation of Delaware
Management Business Trust; Vice President/Taxation of Delaware Investment Advisers (a series of
Delaware Management Business Trust);Vice President/Taxation of Delaware Service Company,
Inc.;Vice President/Taxation of Delaware Capital Management, Inc.;Vice President/Taxation of
Retirement Financial Services, Inc.;Vice President/Taxation of Delaware Distributors, Inc.;Vice
President/Taxation of Delaware Distributors, L.P.;Vice President/Taxation of Founders Holdings,
Inc.; Vice President/Taxation of Founders CBO Corporation; Vice President/Taxation of each fund
in the Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
Gerald S. Frey Vice President/Senior Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Senior Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Senior Portfolio Manager
of each fund in the Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
James A. Furgele Vice President/Investment Accounting of Delaware Management Company (a series of Delaware
Management Business Trust);Vice President/Investment Accounting of Delaware Investment Advisers (a
series of Delaware Management Business Trust); Vice President/Investment Accounting of Delaware
Service Company, Inc.;Vice President/Investment Accounting of each fund in the Delaware
Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
Stuart M. George Vice President/Equity Trading of Delaware Management Company (a series of Delaware
Management Business Trust);Vice President/Equity Trading of Delaware Investment Advisers (a
series of Delaware Management Business Trust).
- -----------------------------------------------------------------------------------------------------------------------------
Paul Grillo Vice President/Portfolio Manager of Delaware Management Company (a series of Delaware Management
Business Trust); Vice President/Portfolio Manager of Delaware Investment Advisers (a series of
Delaware Management Business Trust); Vice President/Portfolio Manager of each fund in the Delaware
Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
Brian T. Hannon Vice President of Delaware Management Company (a series of Delaware Management Business Trust);
Vice President of Delaware Investment Advisers (a series of Delaware Management Business Trust);
Vice President/Senior Portfolio Manager of each fund in the Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
John A. Heffern(6) Vice President/Portfolio Manager of Delaware Management Company (a series of Delaware Management
Business Trust); Vice President/Portfolio Manager of Delaware Investment Advisers (a series of
Delaware Management Business Trust); Vice President/Portfolio Manager of each fund in the Delaware
Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
Elizabeth H. Howell(7) Vice President/Senior Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Senior Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Senior Portfolio Manager
of each fund in the Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
Jeffrey Hynoski Vice President/Analyst of Delaware Management Company (a series of Delaware Management Business
Trust);Vice President/Analyst of Delaware Investment Advisers (a series of Delaware Management
Business Trust);Vice President/Analyst of each fund in the Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Name and Positions and Offices with Delaware Management Company and its affiliates
Principal Business and other Positions and Offices Held
Address*
- -----------------------------------------------------------------------------------------------------------------------------
Cynthia Isom Vice President/Portfolio Manager of Delaware Management Company (a series of Delaware Management
Business Trust); Vice President/Portfolio Manager of Delaware Investment Advisers (a series of
Delaware Management Business Trust); Vice President/Portfolio Manager of each fund in the Delaware
Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
Karina J. Ivstan Vice President/Strategic Planning of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Strategic Planning of Delaware Management
Holdings, Inc.;Vice President/Strategic Planning of Delaware Management Business Trust; Senior
Vice President, Assistant Secretary and Deputy General Counsel of Delaware Investment Advisers
(a series of Delaware Management Business Trust); Vice President/Strategic Planning of Delaware
Service Company, Inc.;Vice President/Strategic Planning of Delaware Capital Management, Inc.;
Vice President/Strategic Planning of Retirement Financial Services, Inc.; Vice President/Strategic
Planning of Delaware Management Trust Company; Vice President/Strategic of Delaware
Distributors, L.P.; Vice President/Strategic Planning of each fund in the Delaware Investments
family.
- -----------------------------------------------------------------------------------------------------------------------------
Audrey E. Kohart Vice President/Assistant Controller/Corporate Accounting of Delaware Management Company (a
series of Delaware Management Business Trust)
- -----------------------------------------------------------------------------------------------------------------------------
Steven T. Lampe Vice President/Research Analyst of Delaware Management Company (a series of Delaware Management
Business Trust); Vice President/Portfolio Manager of Delaware Investment Advisers (a series of
Delaware Management Business Trust); Vice President/Portfolio Manager of each fund in the Delaware
Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
Philip Y. Lin Vice President, Assistant Secretary and Associate General Counsel of Delaware Management
Company (a series of Delaware Management Business Trust); Vice President, Assistant Secretary
and Associate General Counsel of Delaware Investment Advisers (a series of Delaware
Management Business Trust);Vice President, Assistant Secretary and Associate General Counsel of
Delaware Service Company, Inc.;Vice President, Assistant Secretary and Associate General
Counsel of Delaware Capital Management, Inc.;Vice President, Assistant Secretary and Associate
General Counsel of Retirement Financial Services, Inc.; Vice President, Assistant Secretary and
Associate General Counsel of Delaware Management Trust Company; Vice President, Assistant
Secretary and Associate General Counsel of Delaware Distributors, L.P.;Vice President, Assistant
Secretary and Associate General Counsel of each fund in the Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
Michael D. Mabry Vice President, Assistant Secretary and Associate General Counsel of Delaware Management
Company (a series of Delaware Management Business Trust); Vice President, Assistant Secretary
and Associate General Counsel of Delaware Investment Advisers (a series of Delaware
Management Business Trust);Vice President, Assistant Secretary and Associate General Counsel of
Delaware Service Company, Inc.;Vice President, Assistant Secretary and Associate General
Counsel of Delaware Capital Management, Inc.;Vice President, Assistant Secretary and Associate
General Counsel of Retirement Financial Services, Inc.; Vice President, Assistant Secretary and
Associate General Counsel of Delaware Distributors, L.P.; Vice President, Assistant Secretary and
Associate General Counsel of each fund in the Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
Paul A. Matlack Vice President/Senior Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Senior Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Senior Portfolio Manager
of Founders Holdings, Inc., President and Director of Founders CBO Corporation; Vice
President/Senior Portfolio Manager of each fund in the Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
Andrew M. McCullagh, Vice President/Senior Portfolio Manager of Delaware Management Company (a series of Delaware
Jr.(8) Management Business Trust); Vice President/Senior Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Senior Portfolio Manager of
each fund in the Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Name and Positions and Offices with Delaware Management Company and its affiliates
Principal Business and other Positions and Offices Held
Address*
- -----------------------------------------------------------------------------------------------------------------------------
Francis X. Morris Vice President/Senior Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Senior Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Senior Portfolio Manager
of each fund in the Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
Gerald T. Nichols Vice President/Senior Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Senior Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Senior Portfolio
Manager of Founders Holdings, Inc., Treasurer, Assistant Secretary and Director of Founders CBO
Corporation; Vice President/Senior Portfolio Manager of each fund in the Delaware Investments
family.
- -----------------------------------------------------------------------------------------------------------------------------
Robert A. Norton, Jr. Vice President/Research Analyst of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Portfolio Manager of Delaware Investment Advisers
(a series of Delaware Management Business Trust).
- -----------------------------------------------------------------------------------------------------------------------------
David P. O'Connor Vice President, Assistant Secretary and Associate General Counsel of Delaware Management
Company (a series of Delaware Management Business Trust); Vice President, Assistant Secretary
and Associate General Counsel of Delaware Investment Advisers (a series of Delaware
Management Business Trust);Vice President, Assistant Secretary and Associate General Counsel of
Delaware Service Company, Inc.;Vice President, Assistant Secretary and Associate General
Counsel of Delaware Capital Management, Inc.;Vice President, Assistant Secretary and Associate
General Counsel of Retirement Financial Services, Inc.; Vice President, Assistant Secretary and
Associate General Counsel of Delaware Distributors, L.P.; Vice President, Assistant Secretary and
Associate General Counsel of each fund in the Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
Gary A. Reed Vice President/Senior Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Senior Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Senior Portfolio Manager
of each fund in the Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
Richard Salus Vice President/Assistant Controller of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Senior Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Assistant Controller of
Delaware Management Trust Company; Vice President/Assistant Controller of Delaware International
Holdings Ltd.
- -----------------------------------------------------------------------------------------------------------------------------
Richard D. Siedel Vice President/Assistant Controller/Manager Payroll of Delaware Management Company (a series
of Delaware Management Business Trust).
- -----------------------------------------------------------------------------------------------------------------------------
Alan R. Stuart Vice President/Trading of Delaware Management Company (a series of Delaware Management Business
Trust); Vice President/Trading of Delaware Investment Advisers (a series of Delaware Management
Business Trust).
- -----------------------------------------------------------------------------------------------------------------------------
Michael T. Taggart Vice President/Facilities and Administration Services of Delaware Management Company (a series of
Delaware Management Business Trust);Vice President/Facilities and Administration Services of
Delaware Investment Advisers (a series of Delaware Management Business Trust); Vice
President/Facilities and Administration Services of Delaware Service Company, Inc.;Vice
President/Facilities and Administration Services of Delaware Distributors, L.P.
- -----------------------------------------------------------------------------------------------------------------------------
Thomas J. Trottman Vice President/Senior Corporate Bond Analyst of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Senior Corporate Bond Analyst of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Senior Corporate Bond
Analyst of each fund in the Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Name and Positions and Offices with Delaware Management Company and its affiliates
Principal Business and other Positions and Offices Held
Address*
- -----------------------------------------------------------------------------------------------------------------------------
Bruce A. Ulmer Vice President/Year 2000 of Delaware Management Company (a series of Delaware Management Business
Trust); Vice President/Year 2000 of Delaware Management Holdings, Inc.; Vice President/Year 2000
of Delvoy, Inc.; Vice President/Year 2000 of Delaware Management Business Trust; Vice
President/Year 2000 of Delaware Investment Advisers (a series of Delaware Management Business
Trust); Vice President/Year 2000 of Delaware Capital Management, Inc.; Vice President/Year 2000 of
Retirement Financial Services, Inc.; Vice President/Year 2000 of Delaware Management Trust
Company; Vice President/Year 2000 of each fund in the Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
Lori P. Wachs Vice President/Assistant Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust);Vice President/Assistant Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust);Vice President/Assistant Portfolio
Manager of each fund in the Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Business Address is 1818 Market Street, Philadelphia, PA 19103.
- --------------------------------------------------------------------------------
1 VICE PRESIDENT, Morgan Stanley Asset Management prior to March 1997.
2 SENIOR PORTFOLIO MANAGER, Pitcairn Trust Company prior to May 1997.
3 INVESTMENT OFFICER, Travelers Insurance prior to January 1997.
4 DIRECTOR OF TRUST INVESTMENTS, Bell Atlantic Corporation prior to February
1997.
5 TAX PRINCIPAL, Ernst & Young LLP prior to April 1998.
6 SENIOR VICE PRESIDENT, EQUITY RESEARCH, NatWest Securities Corporation prior
to March 1997.
7 SENIOR PORTFOLIO MANAGER, Voyageur Fund Managers, Inc. prior to May 1997.
8 SENIOR VICE PRESIDENT, SENIOR PORTFOLIO MANAGER, Voyageur Asset Management
LLC prior to May 1997.
- --------------------------------------------------------------------------------
<PAGE>
Item 27. 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 Business Positions and Offices with Positions and Offices with
Address* Underwriter Registrant
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Delaware Distributors, Inc. General Partner None
- ----------------------------------------------------------------------------------------------------------------------------
Delaware Investment Advisers Limited Partner None
- ----------------------------------------------------------------------------------------------------------------------------
Delaware Capital Management, Inc. Limited Partner None
- ----------------------------------------------------------------------------------------------------------------------------
Bruce D. Barton President and Chief Executive Officer None
- ----------------------------------------------------------------------------------------------------------------------------
David K. Downes Executive Vice President/Chief Operating Executive Vice President/Chief Operating
Officer/Chief Financial Officer Officer/Chief Financial Officer
- ----------------------------------------------------------------------------------------------------------------------------
Richard J. Flannery Executive Vice President/General Counsel Executive Vice President
- ----------------------------------------------------------------------------------------------------------------------------
Diane M. Anderson Senior Vice President/Retirement None
Operations
- ----------------------------------------------------------------------------------------------------------------------------
Michael P. Bishof Senior Vice President/Treasurer/ Senior Vice President/Treasurer
Investment Accounting
- ----------------------------------------------------------------------------------------------------------------------------
Daniel J. Brooks III Senior Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Terrence P. Cunningham Senior Vice President/National Sales None
Director, Financial Institutions
- ----------------------------------------------------------------------------------------------------------------------------
Stephen J. Deangelis Senior Vice President/National Sales, None
Managed Account Services
- ----------------------------------------------------------------------------------------------------------------------------
Joseph H. Hastings Senior Vice President/Treasurer/ Senior Vice President/Corporate Controller
Corporate Controller
- ----------------------------------------------------------------------------------------------------------------------------
Joanne O. Hutcheson Senior Vice President/Human Resources Senior Vice President/Human Resources
- ----------------------------------------------------------------------------------------------------------------------------
William M. Kimbrough Senior Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Bradley L. Kolstoe Senior Vice President/Western Division None
Sales, IPI Channel
- ----------------------------------------------------------------------------------------------------------------------------
Richelle S. Maestro Senior Vice President/Deputy General Senior Vice President/Deputy General
Counsel/Assistant Secretary Counsel/Assistant Secretary
- ----------------------------------------------------------------------------------------------------------------------------
Mac Macaulliffe Senior Vice President/Divisional Sales None
Manager
- ----------------------------------------------------------------------------------------------------------------------------
J. Chris Meyer Senior Vice President/Director, Product None
Management
- ----------------------------------------------------------------------------------------------------------------------------
Eric E. Miller Senior Vice President/Deputy General Senior Vice President/Deputy General
Counsel/Assistant Secretary Counsel/Assistant Secretary
- ----------------------------------------------------------------------------------------------------------------------------
Stephen C. Nell Senior Vice President/National None
Retirement Sales
- ----------------------------------------------------------------------------------------------------------------------------
Henry W. Orvin Senior Vice President/Eastern Division None
Sales
- ----------------------------------------------------------------------------------------------------------------------------
Christopher H. Price Senior Vice President/Channel Manager None
- ----------------------------------------------------------------------------------------------------------------------------
Thomas E. Sawyer Senior Vice President/Director, National None
Sales
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Name and Principal Business Positions and Offices with Positions and Offices with
Address* Underwriter Registrant
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
James L. Shields Senior Vice President/Chief Information None
Officer
- ----------------------------------------------------------------------------------------------------------------------------
Richard P. Allen Vice President/Wholesaler, Midwest None
- ----------------------------------------------------------------------------------------------------------------------------
David P. Anderson, Jr. Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Jeffrey H. Arcy Vice President/Wholesaler, South East None
Region
- ----------------------------------------------------------------------------------------------------------------------------
Patrick A. Bearss Vice President/Wholesaler - Midwest None
- ----------------------------------------------------------------------------------------------------------------------------
Gabriella Bercze Vice President/Wholesaler, Financial None
Institution
- ----------------------------------------------------------------------------------------------------------------------------
Denise D. Bradley Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Larry Bridwell Vice President/Financial Institutions None
Wholesaler
- ----------------------------------------------------------------------------------------------------------------------------
Lisa O. Brinkley Vice President/Compliance Director Vice President/Compliance Director
- ----------------------------------------------------------------------------------------------------------------------------
Terrance L. Bussard Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Daniel H. Carlson Vice President/Marketing Services None
- ----------------------------------------------------------------------------------------------------------------------------
Larry Carr Vice President/VA Sales Manager None
- ----------------------------------------------------------------------------------------------------------------------------
William S. Carroll Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Thomas J. Chadie Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Matthew Coldren Vice President/National Accounts None
- ----------------------------------------------------------------------------------------------------------------------------
Patrick A. Connelly Vice President/RIA Sales None
- ----------------------------------------------------------------------------------------------------------------------------
Jessie V. Emery Vice President/Marketing Communications None
- ----------------------------------------------------------------------------------------------------------------------------
Joel A. Ettinger Vice President/Taxation Vice President/Taxation
- ----------------------------------------------------------------------------------------------------------------------------
Susan T. Friestedt Vice President/Retirement Services None
- ----------------------------------------------------------------------------------------------------------------------------
Douglan R. Glennon Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Darryl S. Grayson Vice President/Director, Internal Sales None
- ----------------------------------------------------------------------------------------------------------------------------
Rhonda J. Guido Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Ronald A. Haimowitz Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Edward J. Hecker Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
John R. Herron Vice President/VA Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Dinah J. Huntoon Vice President/Product Manager, Equities None
- ----------------------------------------------------------------------------------------------------------------------------
Karina J. Istvan Vice President/Strategic Planning None
- ----------------------------------------------------------------------------------------------------------------------------
Chirstopher L. Johnston Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Michael J. Jordan Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Carolyn Kelly Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Richard M. Koerner Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Ellen M. Krott Vice President/Marketing None
- ----------------------------------------------------------------------------------------------------------------------------
John Leboeuf Vice President/VA Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Name and Principal Business Positions and Offices with Positions and Offices with
Address* Underwriter Registrant
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SooHee Lee Vice President/Fixed Income & None
International Product Management
- ----------------------------------------------------------------------------------------------------------------------------
Philip Y. Lin Vice President/Associate General Vice President/Associate General
Counsel/Assistant Secretary Counsel/Assistant Secretary
- ----------------------------------------------------------------------------------------------------------------------------
John R. Logan Vice President/Wholesaler, Financial None
Institutions
- ----------------------------------------------------------------------------------------------------------------------------
Michael D. Mabry Vice President/Associate General Vice President/Associate General
Counsel/Assistant Secretary Counsel/Assistant Secretary
- ----------------------------------------------------------------------------------------------------------------------------
Thoedore T. Malone Vice President/IPI Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Debbie Marler Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Gregory J. McMillan Vice President/National Accounts None
- ----------------------------------------------------------------------------------------------------------------------------
Nathan W. Medin Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Scott L. Metzger Vice President/Business Development None
- ----------------------------------------------------------------------------------------------------------------------------
Roger J. Miller Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Christopher W. Moore Vice President/VA Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Andrew F. Morris Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Patrick L. Murphy Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Scott E. Naughton Vice President/IPI Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Julie Nusbaum Vice President/Wholesaler, Financial None
Institutions
- ----------------------------------------------------------------------------------------------------------------------------
Julie A. Nye Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Daniel J. O'Brien Vice President/Insurance Products None
- ----------------------------------------------------------------------------------------------------------------------------
David P. O'Connor Vice President/Associate General Vice President/Associate General
Counsel/Assistant Secretary Counsel/Assistant Secretary
- ----------------------------------------------------------------------------------------------------------------------------
Joseph T. Owczarek Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Otis S. Page 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
- ----------------------------------------------------------------------------------------------------------------------------
Rovert A. Rosso Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Linda D. Shulz Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Gordan E. Searles Vice President/Client Services None
- ----------------------------------------------------------------------------------------------------------------------------
James R. Searles Vice President/VA Sales Manager None
- ----------------------------------------------------------------------------------------------------------------------------
Catherine A. Seklecki Vice President/Retirement Sales None
- ----------------------------------------------------------------------------------------------------------------------------
John C. Shalloe Vice President/Wrap Fee Wholesaler, None
Western Region
- ----------------------------------------------------------------------------------------------------------------------------
Edward B. Sheridan Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Name and Principal Business Positions and Offices with Positions and Offices with
Address* Underwriter Registrant
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Robert E. Stansbury Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
Michael T. Taggart Vice President/Facilities and None
Administration Services
- ----------------------------------------------------------------------------------------------------------------------------
Bruce A. Ulmer Vice President/Year 2000 Vice President/Year 2000
- ----------------------------------------------------------------------------------------------------------------------------
Julia R. Vander-Els Vice President/Retirement Plan None
Communications
- ----------------------------------------------------------------------------------------------------------------------------
Wayne W. Wagner Vice President/Wholesaler None
- ----------------------------------------------------------------------------------------------------------------------------
John A. Wells Vice President/Marketing Technology None
- ----------------------------------------------------------------------------------------------------------------------------
Courtney S. West Vice President/Institutional Sales None
- ----------------------------------------------------------------------------------------------------------------------------
Andrew J. Wittaker Vice President/Wholesaler, Financial None
Institutions
- ----------------------------------------------------------------------------------------------------------------------------
Theordore V. Wood Vice President/Technical Systems Officer None
- ----------------------------------------------------------------------------------------------------------------------------
Michael J. Woods Vice President/National Sales None
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
(c) Inapplicable.
Item 28. 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 29. Management Services. None.
Item 30. 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 has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in
this City of Philadelphia, Commonwealth of Pennsylvania on this 16th day of
June, 1999.
DELAWARE GROUP TAX-FREE MONEY FUND
By /s/ David K. Downes
--------------------------
David K. Downes
Executive Vice President/
Chief Operating Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
- -------------------------------- ---------------------------------------- -------------
<S> <C> <C>
/s/David K. Downes Executive Vice President/Chief Operating June 16, 1999
- -------------------------------- Officer/Chief Financial Officer
David K. Downes (Principal Executive Officer/Principal
Financial Officer and Principal
Accounting Officer)
/s/Wayne A. Stork Trustee June 16, 1999
- --------------------------------
Wayne A. Stork
/s/John H. Durham Trustee June 17, 1999
- --------------------------------
John H. Durham
/s/ Anthony D. Knerr Trustee June 17, 1999
- --------------------------------
Anthony D. Knerr
/s/ Ann R. Leven Trustee June 17, 1999
- --------------------------------
Ann R. Leven
/s/Thomas F. Madison Trustee June 17, 1999
- --------------------------------
Thomas F. Madison
/s/Charles E. Peck Trustee June 17, 1999
- --------------------------------
Charles E. Peck
</TABLE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Exhibits
to
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Exhibit
EX-99.A1 Agreement and Declaration of Trust
EX-99.A2 Certificate of Trust
EX-99.B1 By-Laws
EX-99.D1 Form of Investment Management Agreement (August 1999) between
Delaware Management Company and the Registrant
EX-99.G Form of Custodian Agreement with The Chase Manahattan Bank
EX-99.I Opinion of Counsel
<PAGE>
Exhibit 99.A1
AGREEMENT AND DECLARATION OF TRUST
of
DELAWARE GROUP TAX-FREE MONEY FUND
a Delaware Business Trust
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I. Name and Definitions..................................................................................1
Section 1. Name.........................................................................................1
Section 2. Registered Agent and Registered Office; Principal Place of Business..........................2
(a) Registered Agent and Registered Office...................................................2
(b) Principal Place of Business..............................................................2
Section 3. Definitions..................................................................................2
(a) "1940 Act"...............................................................................2
(b) "Affiliate"..............................................................................2
(c) "Board of Trustees"......................................................................2
(d) "By-Laws"................................................................................2
(e) "Certificate of Trust"...................................................................2
(f) "Code"...................................................................................2
(g) "Commission".............................................................................2
(h) "DBTA"...................................................................................3
(i) "Declaration of Trust"...................................................................3
(j) "General Liabilities"....................................................................3
(k) "Interested Person"......................................................................3
(l) "Investment Adviser" or "Adviser"........................................................3
(m) "National Financial Emergency"...........................................................3
(n) "Person".................................................................................3
(o) "Principal Underwriter"..................................................................3
(p) "Series".................................................................................3
(q) "Shares".................................................................................3
(r) "Shareholder"............................................................................3
(s) "Trust"..................................................................................4
(t) "Trust Property".........................................................................4
(u) "Trustee" or "Trustees"..................................................................4
ARTICLE II. Purpose of Trust.....................................................................................4
ARTICLE III. Shares..............................................................................................8
Section 1. Division of Beneficial Interest..............................................................8
Section 2. Ownership of Shares..........................................................................9
Section 3. Investments in the Trust.....................................................................9
Section 4. Status of Shares and Limitation of Personal Liability.......................................10
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
Section 5. Power of Board of Trustees to Change Provisions Relating to Shares..........................10
Section 6. Establishment and Designation of Series.....................................................11
(a) Assets Held with Respect to a Particular Series.........................................11
(b) Liabilities Held with Respect to a Particular Series....................................12
(c) Dividends, Distributions, Redemptions and Repurchases...................................13
(d) Voting..................................................................................13
(e) Equality................................................................................13
(f) Fractions...............................................................................14
(g) Exchange Privilege......................................................................14
(h) Combination of Series...................................................................14
(i) Elimination of Series...................................................................14
Section 7. Indemnification of Shareholders.............................................................14
ARTICLE IV.......................................................................................................14
The Board of Trustees............................................................................................15
Section 1. Number, Election and Tenure.................................................................15
Section 2. Effect of Death, Resignation, Removal, etc. of a Trustee...................................15
Section 3. Powers......................................................................................16
Section 4. Payment of Expenses by the Trust............................................................17
Section 5. Payment of Expenses by Shareholders.........................................................18
Section 6. Ownership of Trust Property.................................................................18
Section 7. Service Contracts...........................................................................18
ARTICLE V. Shareholders' Voting Powers and Meetings.............................................................20
Section 1. Voting Powers...............................................................................20
Section 2. Meetings....................................................................................20
Section 3. Quorum and Required Vote....................................................................21
Section 4. Shareholder Action by Written Consent without a Meeting.....................................21
Section 5. Record Dates................................................................................21
Section 6. Additional Provisions.......................................................................22
ARTICLE VI. Net Asset Value, Distributions and Redemptions......................................................22
Section 1. Determination of Net Asset Value, Net Income and Distributions..............................22
Section 2. Redemptions at the Option of a Shareholder..................................................23
Section 3. Redemptions at the Option of the Trust......................................................24
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE VII. Compensation and Limitation of Liability of Officers and Trustees..................................24
Section 1. Compensation................................................................................24
Section 2. Indemnification and Limitation of Liability.................................................25
Section 3. Officers and Trustees' Good Faith Action, Expert Advice, No Bond or Surety..................25
Section 4. Insurance...................................................................................26
ARTICLE VIII. Miscellaneous.....................................................................................26
Section 1. Liability of Third Persons Dealing with Trustees............................................26
Section 2. Dissolution of Trust or Series..............................................................26
Section 3. Merger and Consolidation; Conversion........................................................27
(a) Merger and Consolidation................................................................27
(b) Conversion..............................................................................27
Section 4. Reorganization..............................................................................28
Section 5. Amendments..................................................................................29
Section 6. Filing of Copies, References, Headings......................................................29
Section 7. Applicable Law..............................................................................29
Section 8. Provisions in Conflict with Law or Regulations..............................................30
Section 9. Business Trust Only.........................................................................30
Section 10. Use of the Names "Delaware Group" and "Delaware Investments"...............................30
</TABLE>
iii
<PAGE>
AGREEMENT AND DECLARATION OF TRUST
OF
DELAWARE GROUP TAX-FREE MONEY FUND
AGREEMENT AND DECLARATION OF TRUST made as of this 17th day of
December, 1998, by the Trustees hereunder, and by the holders of shares of
beneficial interest to be issued hereunder as hereinafter provided. This
Declaration of Trust shall be effective upon the filing of the Certificate of
Trust in the office of the Secretary of State of the State of Delaware.
W I T N E S S E T H:
WHEREAS this Trust has been formed to carry on the business of an
investment company; and
WHEREAS this Trust is authorized to issue its shares of beneficial
interest in separate Series, and to issue classes of Shares of any Series or
divide Shares of any Series into two or more classes, all in accordance with the
provisions hereinafter set forth; and
WHEREAS the Trustees have agreed to manage all property coming into
their hands as trustees of a Delaware business trust in accordance with the
provisions of the Delaware Business Trust Act (12 Del. C. ss.3801, et seq.), as
from time to time amended and including any successor statute of similar import
(the "DBTA"), and the provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all
cash, securities and other assets which they may from time to time acquire in
any manner as Trustees hereunder IN TRUST to manage and dispose of the same upon
the following terms and conditions for the benefit of the holders from time to
time of shares of beneficial interest in this Trust and the Series created
hereunder as hereinafter set forth.
ARTICLE I.
Name and Definitions
Section 1. Name. This trust shall be known as "DELAWARE GROUP TAX-FREE
MONEY FUND" and the Trustees shall conduct the business of the Trust under that
name, or any other name as they may from time to time determine.
<PAGE>
Section 2. Registered Agent and Registered Office; Principal Place of
Business.
(a) Registered Agent and Registered Office. The name of the registered
agent of the Trust and the address of the registered office of the Trust are as
set forth on the Certificate of Trust.
(b) Principal Place of Business. The principal place of business of the
Trust is One Commerce Square, Philadelphia, Pennsylvania, 19103 or such other
location within or outside of the State of Delaware as the Board of Trustees may
determine from time to time.
Section 3. Definitions. Whenever used herein, unless otherwise required
by the context or specifically provided:
(a) "1940 Act" shall mean the Investment Company Act of 1940 and the
rules and regulations thereunder, all as adopted or amended from time to time;
(b) "Affiliate" shall have the meaning given to it in Section 2(a)(3)
of the 1940 Act when used with reference to a specified Person.
(c) "Board of Trustees" shall mean the governing body of the Trust,
which is comprised of the Trustees of the Trust;
(d) "By-Laws" shall mean the By-Laws of the Trust, as amended from time
to time in accordance with Article X of the By-Laws, and incorporated herein by
reference;
(e) "Certificate of Trust" shall mean the certificate of trust filed
with the Office of the Secretary of State of the State of Delaware as required
under the DBTA to form the Trust;
(f) "Code" shall mean the Internal Revenue Code of 1986, as amended,
and the rules and regulations thereunder;
(g) "Commission" shall have the meaning given it in Section 2(a)(7) of
the 1940 Act;
2
<PAGE>
(h) "DBTA" shall mean the Delaware Business Trust Act, (12 Del. C.
ss.3801, et seq.), as amended from time to time;
(i) "Declaration of Trust" shall mean this Agreement and Declaration of
Trust, as amended or restated from time to time;
(j) "General Liabilities" shall have the meaning given it in Article
III, Section 6(b) of this Declaration Trust;
(k) "Interested Person" shall have the meaning given it in Section
2(a)(19) of the 1940 Act;
(l) "Investment Adviser" or "Adviser" shall mean a party furnishing
services to the Trust pursuant to any contract described in Article IV, Section
7(a) hereof;
(m) "National Financial Emergency" shall mean the whole or any part of
any period set forth in Section 22(e) of the 1940 Act. The Board of Trustees
may, in its discretion, declare that the suspension relating to a national
financial emergency shall terminate, as the case may be, on the first business
day on which the New York Stock Exchange shall have reopened or the period
specified in Section 22(e) of the 1940 Act shall have expired (as to which, in
the absence of an official ruling by the Commission, the determination of the
Board of Trustees shall be conclusive);
(n) "Person" shall include a natural person, partnership, limited
partnership, trust, estate, association, corporation, custodian, nominee or any
other individual or entity in its own or any representative capacity;
(o) "Principal Underwriter" shall have the meaning given to it in
Section 2(a)(29) of the 1940 Act;
(p) "Series" shall refer to each Series of Shares established and
designated under or in accordance with the provisions of Article III and shall
mean an entity such as that described in Section 18(f)(2) of the 1940 Act, and
subject to Rule 18f-2 thereunder;
(q) "Shares" shall mean the outstanding shares of beneficial interest
into which the beneficial interest in the Trust shall be divided from time to
time, and shall include fractional and whole shares;
(r) "Shareholder" shall mean a record owner of Shares;
3
<PAGE>
(s) "Trust" shall refer to the Delaware business trust established by
this Declaration of Trust, as amended from time to time;
(t) "Trust Property" shall mean any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust or one or more of any Series, including, without limitation, the rights
referenced in Article VIII, Section 2 hereof;
(u) "Trustee" or "Trustees" shall refer to each signatory to this
Declaration of Trust as a trustee, so long as such signatory continues in office
in accordance with the terms hereof, and all other Persons who may, from time to
time, be duly elected or appointed, qualified and serving on the Board of
Trustees in accordance with the provisions hereof. Reference herein to a Trustee
or the Trustees shall refer to such Person or Persons in their capacity as
trustees hereunder.
ARTICLE II.
Purpose of Trust
The purpose of the Trust is to conduct, operate and carry on the
business of a registered management investment company registered under the 1940
Act through one or more Series investing primarily in securities and, in
addition to any authority given by law, to exercise all of the powers and to do
any and all of the things as fully and to the same extent as any private
corporation organized for profit under the general corporation law of the State
of Delaware, now or hereafter in force, including, without limitation, the
following powers:
(a) To invest and reinvest cash, to hold cash uninvested, and to
subscribe for, invest in, reinvest in, purchase or otherwise acquire, own, hold,
pledge, sell, assign, mortgage, transfer, exchange, distribute, write options
on, lend or otherwise deal in or dispose of contracts for the future acquisition
or delivery of fixed income or other securities, and securities or property of
every nature and kind, including, without limitation, all types of bonds,
debentures, stocks, preferred stocks, negotiable or non-negotiable instruments,
obligations, evidences of indebtedness, certificates of deposit or indebtedness,
commercial paper, repurchase agreements, bankers' acceptances, and other
securities of any kind, issued, created, guaranteed, or sponsored by any and all
Persons, including, without limitation, states, territories, and possessions of
the United States and the District of Columbia and any political subdivision,
agency, or instrumentality thereof, any foreign government or any political
subdivision of the U.S. Government or any foreign government, or any
international instrumentality, or by any bank or savings institution, or by any
corporation or
4
<PAGE>
organization organized under the laws of the United States or of any state,
territory, or possession thereof, or by any corporation or organization
organized under any foreign law, or in "when issued" contracts for any such
securities, to change the investments of the assets of the Trust;
(b) To exercise any and all rights, powers and privileges with
reference to or incident to ownership or interest, use and enjoyment of any of
such securities and other instruments or property of every kind and description,
including, but without limitation, the right, power and privilege to own, vote,
hold, purchase, sell, negotiate, assign, exchange, lend, transfer, mortgage,
hypothecate, lease, pledge or write options with respect to or otherwise deal
with, dispose of, use, exercise or enjoy any rights, title, interest, powers or
privileges under or with reference to any of such securities and other
instruments or property, the right to consent and otherwise act with respect
thereto, with power to designate one or more Persons, to exercise any of said
rights, powers, and privileges in respect of any of said instruments, and to do
any and all acts and things for the preservation, protection, improvement and
enhancement in value of any of such securities and other instruments or
property;
(c) To sell, exchange, lend, pledge, mortgage, hypothecate, lease or
write options with respect to or otherwise deal in any property rights relating
to any or all of the assets of the Trust or any Series, subject to any
requirements of the 1940 Act;
(d) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and deliver
proxies or powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power and discretion with
relation to securities or property as the Trustees shall deem proper;
(e) To exercise powers and right of subscription or otherwise which in
any manner arise out of ownership of securities;
(f) To hold any security or property in a form not indicating that it
is trust property, whether in bearer, unregistered or other negotiable form, or
in its own name or in the name of a custodian or subcustodian or a nominee or
nominees or otherwise or to authorize the custodian or a subcustodian or a
nominee or nominees to deposit the same in a securities depository, subject in
each case to proper safeguards according to the usual practice of investment
companies or any rules or regulations applicable thereto;
(g) To consent to, or participate in, any plan for the reorganization,
consolidation or merger of any corporation or issuer of any security which is
held
5
<PAGE>
in the Trust; to consent to any contract, lease, mortgage, purchase or sale
of property by such corporation or issuer; and to pay calls or subscriptions
with respect to any security held in the Trust;
(h) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit any
security with, or transfer any security to, any such committee, depositary or
trustee, and to delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the Trustees shall deem
proper, and to agree to pay, and to pay, such portion of the expenses and
compensation of such committee, depositary or trustee as the Trustees shall deem
proper;
(i) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including but not limited to
claims for taxes;
(j) To enter into joint ventures, general or limited partnerships and
any other combinations or associations;
(k) To endorse or guarantee the payment of any notes or other
obligations of any Person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof;
(l) To purchase and pay for entirely out of Trust Property such
insurance as the Trustees may deem necessary or appropriate for the conduct of
the business, including, without limitation, insurance policies insuring the
assets of the Trust or payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, Investment Advisers, Principal Underwriters, or
independent contractors of the Trust, individually against all claims and
liabilities of every nature arising by reason of holding Shares, holding, being
or having held any such office or position, or by reason of any action alleged
to have been taken or omitted by any such Person as Trustee, officer, employee,
agent, Investment Adviser, Principal Underwriter, or independent contractor, to
the fullest extent permitted by this Declaration of Trust, the Bylaws and by
applicable law; and
(m) To adopt, establish and carry out pension, profit-sharing, share
bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans, trusts and provisions, including the purchasing of life insurance
and annuity contracts as a means of providing such retirement and other
benefits, for any or all of the Trustees, officers, employees and agents of the
Trust.
6
<PAGE>
(n) To purchase or otherwise acquire, own, hold, sell, negotiate,
exchange, assign, transfer, mortgage, pledge or otherwise deal with, dispose of,
use, exercise or enjoy, property of all kinds.
(o) To buy, sell, mortgage, encumber, hold, own, exchange, rent or
otherwise acquire and dispose of, and to develop, improve, manage, subdivide,
and generally to deal and trade in real property, improved and unimproved, and
wheresoever situated; and to build, erect, construct, alter and maintain
buildings, structures, and other improvements on real property.
(p) To borrow or raise moneys for any of the purposes of the Trust, and
to mortgage or pledge the whole or any part of the property and franchises of
the Trust, real, personal, and mixed, tangible or intangible, and wheresoever
situated.
(q) To enter into, make and perform contracts and undertakings of every
kind for any lawful purpose, without limit as to amount.
(r) To issue, purchase, sell and transfer, reacquire, hold, trade and
deal in Shares, bonds, debentures and other securities, instruments or other
property of the Trust, from time to time, to such extent as the Board of
Trustees shall, consistent with the provisions of this Declaration of Trust,
determine; and to repurchase, re-acquire and redeem, from time to time, its
Shares or, if any, its bonds, debentures and other securities.
The Trust shall not be limited to investing in obligations maturing
before the possible dissolution of the Trust or one or more of its Series. The
Trust shall not in any way be bound or limited by any present or future law or
custom in regard to investment by fiduciaries. Neither the Trust nor the
Trustees shall be required to obtain any court order to deal with any assets of
the Trust or take any other action hereunder.
The foregoing clauses shall each be construed as purposes, objects and
powers, and it is hereby expressly provided that the foregoing enumeration of
specific purposes, objects and powers shall not be held to limit or restrict in
any manner the powers of the Trust, and that they are in furtherance of, and in
addition to, and not in limitation of, the general powers conferred upon the
Trust by the DBTA and the other laws of the State of Delaware or otherwise; nor
shall the enumeration of one thing be deemed to exclude another, although it be
of like nature, not expressed.
7
<PAGE>
ARTICLE III.
Shares
Section 1. Division of Beneficial Interest. The beneficial interest in
the Trust shall at all times be divided into Shares, all without par value. The
number of Shares authorized hereunder is unlimited. The Board of Trustees may
authorize the division of Shares into separate and distinct Series and the
division of any Series into separate classes of Shares. The different Series and
classes shall be established and designated, and the variations in the relative
rights and preferences as between the different Series and classes shall be
fixed and determined by the Board of Trustees without the requirement of
Shareholder approval. If no separate Series or classes shall be established, the
Shares shall have the rights and preferences provided for herein and in Article
III, Section 6 hereof to the extent relevant and not otherwise provided for
herein, and all references to Series and classes shall be construed (as the
context may require) to refer to the Trust. The fact that a Series shall have
initially been established and designated without any specific establishment or
designation of classes (i.e., that all Shares of such Series are initially of a
single class) shall not limit the authority of the Board of Trustees to
establish and designate separate classes of said Series. The fact that a Series
shall have more than one established and designated class, shall not limit the
authority of the Board of Trustees to establish and designate additional classes
of said Series, or to establish and designate separate classes of the previously
established and designated classes.
The Board of Trustees shall have the power to issue Shares of the
Trust, or any Series or class thereof, from time to time for such consideration
(but not less than the net asset value thereof) and in such form as may be fixed
from time to time pursuant to the direction of the Board of Trustees.
The Board of Trustees may hold as treasury shares, reissue for such
consideration and on such terms as they may determine, or cancel, at their
discretion from time to time, any Shares of any Series reacquired by the Trust.
The Board of Trustees may classify or reclassify any unissued Shares or any
Shares previously issued and reacquired of any Series or class into one or more
Series or classes that may be established and designated from time to time.
Notwithstanding the foregoing, the Trust and any Series thereof may acquire,
hold, sell and otherwise deal in, for purposes of investment or otherwise, the
Shares of any other Series of the Trust or Shares of the Trust, and such Shares
shall not be deemed treasury shares or cancelled.
Subject to the provisions of Section 6 of this Article III, each Share
shall have voting rights as provided in Article V hereof, and the Shareholders
of any
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Series shall be entitled to receive dividends and distributions, when, if and as
declared with respect thereto in the manner provided in Article IV, Section 3
hereof. No Share shall have any priority or preference over any other Share of
the same Series or class with respect to dividends or distributions paid in the
ordinary course of business or distributions upon dissolution of the Trust or of
such Series or class made pursuant to Article VIII, Section 2 hereof. All
dividends and distributions shall be made ratably among all Shareholders of a
particular class of Series from the Trust Property held with respect to such
Series according to the number of Shares of such class of such Series held of
record by such Shareholders on the record date for any dividend or distribution.
Shareholders shall have no preemptive or other right to subscribe to new or
additional Shares or other securities issued by the Trust or any Series. The
Trustees may from time to time divide or combine the Shares of any particular
Series into a greater or lesser number of Shares of that Series. Such division
or combination may not materially change the proportionate beneficial interests
of the Shares of that Series in the Trust Property held with respect to that
Series or materially affect the rights of Shares of any other Series.
Any Trustee, officer or other agent of the Trust, and any organization
in which any such Person is interested, may acquire, own, hold and dispose of
Shares of the Trust to the same extent as if such Person were not a Trustee,
officer or other agent of the Trust; and the Trust may issue and sell or cause
to be issued and sold and may purchase Shares from any such Person or any such
organization subject only to the general limitations, restrictions or other
provisions applicable to the sale or purchase of such Shares generally.
Section 2. Ownership of Shares. The ownership of Shares shall be
recorded on the books of the Trust kept by the Trust or by a transfer or similar
agent for the Trust, which books shall be maintained separately for the Shares
of each Series and class thereof that has been established and designated. No
certificates certifying the ownership of Shares shall be issued except as the
Board of Trustees may otherwise determine from time to time. The Board of
Trustees may make such rules not inconsistent with the provisions of the 1940
Act as they consider appropriate for the issuance of Share certificates, the
transfer of Shares of each Series or class and similar matters. The record books
of the Trust as kept by the Trust or any transfer or similar agent, as the case
may be, shall be conclusive as to who are the Shareholders of each Series or
class thereof and as to the number of Shares of each Series or class thereof
held from time to time by each such Shareholder.
Section 3. Investments in the Trust. Investments may be accepted by the
Trust from such Persons, at such times, on such terms, and for such
consideration as the Board of Trustees may, from time to time, authorize. Each
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investment shall be credited to the individual Shareholder's account in the form
of full and fractional Shares of the Trust, in such Series or class as the
purchaser may select, at the net asset value per Share next determined for such
Series or class after receipt of the investment; provided, however, that the
Principal Underwriter may, in its sole discretion, impose a sales charge upon
investments in the Trust.
Section 4. Status of Shares and Limitation of Personal Liability.
Shares shall be deemed to be personal property giving to Shareholders only the
rights provided in this Declaration of Trust and under applicable law. Every
Shareholder by virtue of having become a Shareholder shall be held to have
expressly assented and agreed to the terms hereof and to have become a party
hereto. The death of a Shareholder during the existence of the Trust shall not
operate to dissolve the Trust or any Series, nor entitle the representative of
any deceased Shareholder to an accounting or to take any action in court or
elsewhere against the Trust or the Trustees or any Series, but entitles such
representative only to the rights of said deceased Shareholder under this
Declaration of Trust. Ownership of Shares shall not entitle the Shareholder to
any title in or to the whole or any part of the Trust Property or right to call
for a partition or division of the same or for an accounting, nor shall the
ownership of Shares constitute the Shareholders as partners. Neither the Trust
nor the Trustees, nor any officer, employee or agent of the Trust, shall have
any power to bind personally any Shareholder, nor, except as specifically
provided herein, to call upon any Shareholder for the payment of any sum of
money or assessment whatsoever other than such as the Shareholder may at any
time personally agree to pay. All Shares when issued on the terms determined by
the Board of Trustees, shall be fully paid and nonassessable. As provided in the
DBTA, Shareholders of the Trust shall be entitled to the same limitation of
personal liability extended to stockholders of a private corporation organized
for profit under the general corporation law of the State of Delaware.
Section 5. Power of Board of Trustees to Change Provisions Relating to
Shares. Notwithstanding any other provisions of this Declaration of Trust and
without limiting the power of the Board of Trustees to amend this Declaration of
Trust or the Certificate of Trust as provided elsewhere herein, the Board of
Trustees shall have the power to amend this Declaration of Trust, or the
Certificate of Trust, at any time and from time to time, in such manner as the
Board of Trustees may determine in its sole discretion, without the need for
Shareholder action, so as to add to, delete, replace or otherwise modify any
provisions relating to the Shares contained in this Declaration of Trust,
provided that before adopting any such amendment without Shareholder approval,
the Board of Trustees shall determine that it is consistent with the fair and
equitable treatment of all Shareholders and that Shareholder approval is not
otherwise
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required by the 1940 Act or other applicable law. If Shares have been issued,
Shareholder approval shall be required to adopt any amendments to this
Declaration of Trust which would adversely affect to a material degree the
rights and preferences of the Shares of any Series or class already issued;
provided, however, that in the event that the Board of Trustees determines that
the Trust shall no longer be operated as an investment company in accordance
with the provisions of the 1940 Act, the Board of Trustees may adopt such
amendments to this Declaration of Trust to delete those terms the Board of
Trustees identifies as being required by the 1940 Act.
Subject to the foregoing Paragraph, the Board of Trustees may amend the
Declaration of Trust to amend any of the provisions set forth in paragraphs (a)
through (i) of Section 6 of this Article III.
The Board of Trustees shall have the power, in its discretion, to make
such elections as to the tax status of the Trust as may be permitted or required
under the Code as presently in effect or as amended, without the vote of any
Shareholder.
Section 6. Establishment and Designation of Series. The establishment
and designation of any Series or class of Shares shall be effective upon the
resolution by a majority of the then Board of Trustees, adopting a resolution
which sets forth such establishment and designation and the relative rights and
preferences of such Series or class. Each such resolution shall be incorporated
herein by reference upon adoption.
Each Series shall be separate and distinct from any other Series and
shall maintain separate and distinct records on the books of the Trust, and the
assets and liabilities belonging to any such Series shall be held and accounted
for separately from the assets and liabilities of the Trust or any other Series.
Shares of each Series or class established pursuant to this Section 6,
unless otherwise provided in the resolution establishing such Series, shall have
the following relative rights and preferences:
(a) Assets Held with Respect to a Particular Series. All consideration
received by the Trust for the issue or sale of Shares of a particular Series,
together with all assets in which such consideration is invested or reinvested,
all income, earnings, profits, and proceeds thereof from whatever source
derived, including, without limitation, any proceeds derived from the sale,
exchange or liquidation of such assets, and any funds or payments derived from
any reinvestment of such proceeds in whatever form the same may be, shall
irrevocably be held with respect to that Series for all purposes, subject only
to
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the rights of creditors with respect to that Series, and shall be so recorded
upon the books of account of the Trust. Such consideration, assets, income,
earnings, profits and proceeds thereof, from whatever source derived, including,
without limitation, any proceeds derived from the sale, exchange or liquidation
of such assets, and any funds or payments derived from any reinvestment of such
proceeds, in whatever form the same may be, are herein referred to as "assets
held with respect to" that Series. In the event that there are any assets,
income, earnings, profits and proceeds thereof, funds or payments which are not
readily identifiable as assets held with respect to any particular Series
(collectively "General Assets"), the Board of Trustees shall allocate such
General Assets to, between or among any one or more of the Series in such manner
and on such basis as the Board of Trustees, in its sole discretion, deems fair
and equitable, and any General Asset so allocated to a particular Series shall
be held with respect to that Series. Each such allocation by the Board of
Trustees shall be conclusive and binding upon the Shareholders of all Series for
all purposes.
(b) Liabilities Held with Respect to a Particular Series. The assets of
the Trust held with respect to each particular Series shall be charged against
the liabilities of the Trust held with respect to that Series and all expenses,
costs, charges and reserves attributable to that Series, and any liabilities,
expenses, costs, charges and reserves of the Trust which are not readily
identifiable as being held with respect to any particular Series (collectively
"General Liabilities") shall be allocated and charged by the Board of Trustees
to and among any one or more of the Series in such manner and on such basis as
the Board of Trustees in its sole discretion deems fair and equitable. The
liabilities, expenses, costs, charges, and reserves so charged to a Series are
herein referred to as "liabilities held with respect to" that Series. Each
allocation of liabilities, expenses, costs, charges and reserves by the Board of
Trustees shall be conclusive and binding upon the Shareholders of all Series for
all purposes. All Persons who have extended credit which has been allocated to a
particular Series, or who have a claim or contract which has been allocated to
any particular Series, shall look, and shall be required by contract to look
exclusively, to the assets of that particular Series for payment of such credit,
claim, or contract. In the absence of an express contractual agreement so
limiting the claims of such creditors, claimants and contract providers, each
creditor, claimant and contract provider will be deemed nevertheless to have
impliedly agreed to such limitation unless an express provision to the contrary
has been incorporated in the written contract or other document establishing the
claimant relationship.
Subject to the right of the Board of Trustees in its discretion to
allocate General Liabilities as provided herein, the debts, liabilities,
obligations and expenses incurred, contracted for or otherwise existing with
respect to a particular Series, whether such Series is now authorized and
existing pursuant
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to this Declaration of Trust or is hereafter authorized and existing pursuant to
this Declaration of Trust, shall be enforceable against the assets held with
respect to that Series only, and not against the assets of any other Series or
the Trust generally and none of the debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to the Trust
generally or any other Series thereof shall be enforceable against the assets
held with respect to such Series. Notice of this limitation on liabilities
between and among Series shall be set forth in the Certificate of Trust of the
Trust (whether originally or by amendment) as filed or to be filed in the Office
of the Secretary of State of the State of Delaware pursuant to the DBTA, and
upon the giving of such notice in the Certificate of Trust, the statutory
provisions of Section 3804 of the DBTA relating to limitations on liabilities
between and among Series (and the statutory effect under Section 3804 of setting
forth such notice in the Certificate of Trust) shall become applicable to the
Trust and each Series.
(c) Dividends, Distributions, Redemptions and Repurchases.
Notwithstanding any other provisions of this Declaration of Trust, including,
without limitation, Article VI, no dividend or distribution including, without
limitation, any distribution paid upon dissolution of the Trust or of any Series
with respect to, nor any redemption or repurchase of, the Shares of any Series
or class shall be effected by the Trust other than from the assets held with
respect to such Series, nor, except as specifically provided in Section 7 of
this Article III, shall any Shareholder of any particular Series otherwise have
any right or claim against the assets held with respect to any other Series or
the Trust generally except to the extent that such Shareholder has such a right
or claim hereunder as a Shareholder of such other Series. The Board of Trustees
shall have full discretion, to the extent not inconsistent with the 1940 Act, to
determine which items shall be treated as income and which items as capital; and
each such determination and allocation shall be conclusive and binding upon the
Shareholders.
(d) Voting. All Shares of the Trust entitled to vote on a matter shall
vote on the matter, separately by Series and, if applicable, by class, subject
to: (1) where the 1940 Act requires all Shares of the Trust to be voted in the
aggregate without differentiation between the separate Series or classes, then
all of the Trust's Shares shall vote in the aggregate; and (2) if any matter
affects only the interests of some but not all Series or classes, then only the
Shareholders of such affected Series or classes shall be entitled to vote on the
matter.
(e) Equality. All Shares of each particular Series shall represent an
equal proportionate undivided beneficial interest in the assets held with
respect to that Series (subject to the liabilities held with respect to that
Series and such rights and preferences as may have been established and
designated with
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respect to classes of Shares within such Series), and each Share of any
particular Series shall be equal to each other Share of that Series (subject to
the rights and preferences with respect to separate classes of such Series).
(f) Fractions. Any fractional Share of a Series shall carry
proportionately all the rights and obligations of a whole Share of that Series,
including rights with respect to voting, receipt of dividends and distributions,
redemption of Shares and dissolution of the Trust or that Series.
(g) Exchange Privilege. The Board of Trustees shall have the authority
to provide that the holders of Shares of any Series shall have the right to
exchange said Shares for Shares of one or more other Series in accordance with
such requirements and procedures as may be established by the Board of Trustees,
and in accordance with the 1940 Act and the rules and regulations thereunder.
(h) Combination of Series. The Board of Trustees shall have the
authority, without the approval of the Shareholders of any Series unless
otherwise required by applicable law, to combine the assets and liabilities held
with respect to any two or more Series into assets and liabilities held with
respect to a single Series.
(i) Elimination of Series. At any time that there are no Shares
outstanding of any particular Series or class previously established and
designated, the Board of Trustees may by resolution of a majority of the then
Board of Trustees abolish that Series or class and rescind the establishment and
designation thereof.
Section 7. Indemnification of Shareholders. If any Shareholder or
former Shareholder shall be exposed to liability by reason of a claim or demand
relating solely to his or her being or having been a Shareholder of the Trust
(or by having been a Shareholder of a particular Series), and not because of
such Person's acts or omissions, the Shareholder or former Shareholder (or, in
the case of a natural person, his or her heirs, executors, administrators, or
other legal representatives or, in the case of a corporation or other entity,
its corporate or other general successor) shall be entitled to be held harmless
from and indemnified out of the assets of the Trust or out of the assets of the
applicable Series (as the case may be) against all loss and expense arising from
such claim or demand; provided, however, there shall be no liability or
obligation of the Trust (or any particular Series) arising hereunder to
reimburse any Shareholder for taxes paid by reason of such Shareholder's
ownership of any Shares.
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ARTICLE IV.
The Board of Trustees
Section 1. Number, Election and Tenure. The number of Trustees
constituting the Board of Trustees may be fixed from time to time by a written
instrument signed, or by resolution approved at a duly constituted meeting, by a
majority of the Board of Trustees, provided, however, that the number of
Trustees shall in no event be less than one (1) nor more than fifteen (15). The
Board of Trustees, by action of a majority of the then Trustees at a duly
constituted meeting, may fill vacancies in the Board of Trustees or remove any
Trustee with or without cause. The Shareholders may elect Trustees, including
filling any vacancies in the Board of Trustees, at any meeting of Shareholders
called by the Board of Trustees for that purpose. A meeting of Shareholders for
the purpose of electing one or more Trustees may be called by the Board of
Trustees or, to the extent provided by the 1940 Act and the rules and
regulations thereunder, by the Shareholders. Shareholders shall have the power
to remove a Trustee only to the extent provided by the 1940 Act and the rules
and regulations thereunder.
Each Trustee shall serve during the continued lifetime of the Trust
until he or she dies, resigns, is declared bankrupt or incompetent by a court of
appropriate jurisdiction, or is removed, or, if sooner than any of such events,
until the next meeting of Shareholders called for the purpose of electing
Trustees and until the election and qualification of his or her successor. Any
Trustee may resign at any time by written instrument signed by him or her and
delivered to any officer of the Trust or to a meeting of the Board of Trustees.
Such resignation shall be effective upon receipt unless specified to be
effective at some later time. Except to the extent expressly provided in a
written agreement with the Trust, no Trustee resigning and no Trustee removed
shall have any right to any compensation for any period following any such event
or any right to damages on account of such events or any actions taken in
connection therewith following his or her resignation or removal.
Section 2. Effect of Death, Resignation, Removal, etc. of a Trustee.
The death, declination, resignation, retirement, removal, declaration as
bankrupt or incapacity of one or more Trustees, or of all of them, shall not
operate to dissolve the Trust or any Series or to revoke any existing agency
created pursuant to the terms of this Declaration of Trust. Whenever a vacancy
in the Board of Trustees shall occur, until such vacancy is filled as provided
in this Article IV, Section 1, the Trustee(s) in office, regardless of the
number, shall have all the powers granted to the Board of Trustees and shall
discharge all the duties imposed upon the Board of Trustees by this Declaration
of Trust. In the event of the death, declination, resignation, retirement,
removal, declaration as bankrupt or
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incapacity of all of the then Trustees, the Trust's Investment Adviser(s) is
(are) empowered to appoint new Trustees subject to the provisions of
Section 16(a) of the 1940 Act.
Section 3. Powers. Subject to the provisions of this Declaration of
Trust, the business of the Trust shall be managed by the Board of Trustees, and
such Board of Trustees shall have all powers necessary or convenient to carry
out that responsibility, including, without limitation, the power to engage in
securities or other transactions of all kinds on behalf of the Trust. The Board
of Trustees shall have full power and authority to do any and all acts and to
make and execute any and all contracts and instruments that it may consider
necessary or appropriate in connection with the administration of the Trust. The
Trustees shall not be bound or limited by present or future laws or customs with
regard to investment by trustees or fiduciaries, but shall have full authority
and absolute power and control over the assets of the Trust and the business of
the Trust to the same extent as if the Trustees were the sole owners of the
assets of the Trust and the business in their own right, including such
authority, power and control to do all acts and things as they, in their sole
discretion, shall deem proper to accomplish the purposes of this Trust. Without
limiting the foregoing, the Trustees may: (1) adopt, amend and repeal By-Laws
not inconsistent with this Declaration of Trust providing for the regulation and
management of the affairs of the Trust; (2) fill vacancies in or remove from
their number in accordance with this Declaration of Trust or the By-Laws, and
may elect and remove such officers and appoint and terminate such agents as they
consider appropriate; (3) appoint from their own number and establish and
terminate one or more committees consisting of two or more Trustees which may
exercise the powers and authority of the Board of Trustees to the extent that
the Board of Trustees determine; (4) employ one or more custodians of the Trust
Property and may authorize such custodians to employ subcustodians and to
deposit all or any part of such Trust Property in a system or systems for the
central handling of securities or with a Federal Reserve Bank; (5) retain a
transfer agent, dividend disbursing agent, a shareholder servicing agent or
administrative services agent, or all of them; (6) provide for the issuance and
distribution of Shares by the Trust directly or through one or more Principal
Underwriters or otherwise; (7) retain one or more Investment Adviser(s); (8)
redeem, repurchase and transfer Shares pursuant to applicable law; (9) set
record dates for the determination of Shareholders with respect to various
matters, in the manner provided in Article V, Section 5 of this Declaration of
Trust; (10) declare and pay dividends and distributions to Shareholders from the
Trust Property; (11) establish from time to time, in accordance with the
provisions of Article III, Section 6 hereof, any Series or class of Shares, each
such Series to operate as a separate and distinct investment medium and with
separately defined investment objectives and policies and distinct investment
purposes; and (12) in general delegate such authority as they
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consider desirable to any officer of the Trust, to any committee of the Board of
Trustees and to any agent or employee of the Trust or to any such custodian,
transfer, dividend disbursing or shareholder servicing agent, Principal
Underwriter or Investment Adviser. Any determination as to what is in the best
interests of the Trust made by the Board of Trustees in good faith shall be
conclusive.
In construing the provisions of this Declaration of Trust, the
presumption shall be in favor of a grant of power to the Trustees. Unless
otherwise specified herein or required by law, any action by the Board of
Trustees shall be deemed effective if approved or taken by a majority of the
Trustees then in office.
Any action required or permitted to be taken by the Board of Trustees,
or a committee thereof, may be taken without a meeting if a majority of the
members of the Board of Trustees, or committee thereof, as the case may be,
shall individually or collectively consent in writing to that action. Such
action by written consent shall have the same force and effect as a majority
vote of the Board of Trustees, or committee thereof, as the case may be. Such
written consent or consents shall be filed with the minutes of the proceedings
of the Board of Trustees, or committee thereof, as the case may be.
The Trustees shall devote to the affairs of the Trust such time as may
be necessary for the proper performance of their duties hereunder, but neither
the Trustees nor the officers, directors, shareholders or partners of the
Trustees, shall be expected to devote their full time to the performance of such
duties. The Trustees, or any Affiliate shareholder, officer, director, partner
or employee thereof, or any Person owning a legal or beneficial interest
therein, may engage in or possess an interest in any other business or venture
of any nature and description, independently or with or for the account of
others.
Section 4. Payment of Expenses by the Trust. The Board of Trustees is
authorized to pay or cause to be paid out of the principal or income of the
Trust or any particular Series or class, or partly out of the principal and
partly out of the income of the Trust or any particular Series or class, and to
charge or allocate the same to, between or among such one or more of the Series
or classes that may be established or designated pursuant to Article III,
Section 6, as it deems fair, all expenses, fees, charges, taxes and liabilities
incurred by or arising in connection with the maintenance or operation of the
Trust or a particular Series or class, or in connection with the management
thereof, including, but not limited to, the Trustees' compensation and such
expenses, fees, charges, taxes and liabilities for the services of the Trust's
officers, employees, Investment Adviser, Principal Underwriter, auditors,
counsel, custodian, sub-custodian (if any), transfer agent, dividend disbursing
agent, shareholder servicing agent, and
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such other agents or independent contractors and such other expenses, fees,
charges, taxes and liabilities as the Board of Trustees may deem necessary or
proper to incur.
Section 5. Payment of Expenses by Shareholders. The Board of Trustees
shall have the power, as frequently as it may determine, to cause each
Shareholder of the Trust, or each Shareholder of any particular Series, to pay
directly, in advance or arrears, for charges of the Trust's custodian or
transfer, dividend disbursing, shareholder servicing or similar agent, an amount
fixed from time to time by the Board of Trustees, by setting off such charges
due from such Shareholder from declared but unpaid dividends or distributions
owed such Shareholder and/or by reducing the number of Shares in the account of
such Shareholder by that number of full and/or fractional Shares which
represents the outstanding amount of such charges due from such Shareholder.
Section 6. Ownership of Trust Property. Legal title to all of the Trust
Property shall at all times be considered to be vested in the Trust, except that
the Board of Trustees shall have the power to cause legal title to any Trust
Property to be held by or in the name of any Person as nominee, on such terms as
the Board of Trustees may determine, in accordance with applicable law.
Section 7. Service Contracts.
(a) Subject to such requirements and restrictions as may be set forth
in the By-Laws and/or the 1940 Act, the Board of Trustees may, at any time and
from time to time, contract for exclusive or nonexclusive advisory, management
and/or administrative services for the Trust or for any Series with any
corporation, trust, association or other organization, including any Affiliate;
and any such contract may contain such other terms as the Board of Trustees may
determine, including without limitation, authority for the Investment Adviser or
administrator to determine from time to time without prior consultation with the
Board of Trustees what securities and other instruments or property shall be
purchased or otherwise acquired, owned, held, invested or reinvested in, sold,
exchanged, transferred, mortgaged, pledged, assigned, negotiated, or otherwise
dealt with or disposed of, and what portion, if any, of the Trust Property shall
be held uninvested and to make changes in the Trust's or a particular Series'
investments, or such other activities as may specifically be delegated to such
party.
(b) The Board of Trustees may also, at any time and from time to time,
contract with any corporation, trust, association or other organization,
including any Affiliate, appointing it or them as the exclusive or nonexclusive
distributor or Principal Underwriter for the Shares of the Trust or one or more
of the Series or
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classes thereof or for other securities to be issued by the Trust, or appointing
it or them to act as the custodian, transfer agent, dividend disbursing agent
and/or shareholder servicing agent for the Trust or one or more of the Series or
classes thereof.
(c) The Board of Trustees is further empowered, at any time and from
time to time, to contract with any Persons to provide such other services to the
Trust or one or more of its Series, as the Board of Trustees determines to be in
the best interests of the Trust or one or more of its Series.
(d) The fact that:
(i) any of the Shareholders, Trustees, employees or officers
of the Trust is a shareholder, director, officer, partner, trustee,
employee, manager, Adviser, Principal Underwriter, distributor, or
Affiliate or agent of or for any corporation, trust, association,
or other organization, or for any parent or Affiliate of any
organization with which an Adviser's, management or administration
contract, or Principal Underwriter's or distributor's contract, or
custodian, transfer, dividend disbursing, shareholder servicing or
other type of service contract may have been or may hereafter be
made, or that any such organization, or any parent or Affiliate
thereof, is a Shareholder or has an interest in the Trust, or that
(ii) any corporation, trust, association or other organization
with which an Adviser's, management or administration contract or
Principal Underwriter's or distributor's contract, or custodian,
transfer, dividend disbursing, shareholder servicing or other type
of service contract may have been or may hereafter be made also has
an Adviser's, management or administration contract, or Principal
Underwriter's or distributor's contract, or custodian, transfer,
dividend disbursing, shareholder servicing or other service
contract with one or more other corporations, trusts, associations,
or other organizations, or has other business or interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee, employee or officer of the Trust from voting upon or
executing the same, or create any liability or accountability to the Trust or
its Shareholders, provided that the establishment of and performance under each
such contract is permissible under the provisions of the 1940 Act.
(e) Every contract referred to in this Section 7 shall comply with such
requirements and restrictions as may be set forth in the By-Laws, the 1940 Act
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or stipulated by resolution of the Board of Trustees; and any such contract may
contain such other terms as the Board of Trustees may determine.
ARTICLE V.
Shareholders' Voting Powers and Meetings
Section 1. Voting Powers. Subject to the provisions of Article III,
Section 6(d), the Shareholders shall have power to vote only (i) for the
election of Trustees, including the filling of any vacancies in the Board of
Trustees, as provided in Article IV, Section 1; (ii) with respect to such
additional matters relating to the Trust as may be required by this Declaration
of Trust, the By-Laws, the 1940 Act or any registration statement of the Trust
filed with the Commission; and (iii) on such other matters as the Board of
Trustees may consider necessary or desirable. The Shareholder of record (as of
the record date established pursuant to Section 5 of this Article V) of each
Share shall be entitled to one vote for each full Share, and a fractional vote
for each fractional Share. Shareholders shall not be entitled to cumulative
voting in the election of Trustees or on any other matter. Shares may be voted
in person or by proxy.
Section 2. Meetings. Meetings of the Shareholders may be called by the
Board of Trustees for the purpose of electing Trustees as provided in Article
IV, Section 1 and for such other purposes as may be prescribed by law, by this
Declaration of Trust or by the By-Laws. Meetings of the Shareholders may also be
called by the Board of Trustees from time to time for the purpose of taking
action upon any other matter deemed by the Board of Trustees to be necessary or
desirable.
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Section 3. Quorum and Required Vote. Except when a larger quorum is
required by applicable law, by the By-Laws or by this Declaration of Trust,
thirty-three and one-third percent (33-1/3%) of the Shares present in person or
represented by proxy and entitled to vote at a Shareholders' meeting shall
constitute a quorum at such meeting. When a separate vote by one or more Series
or classes is required, thirty-three and one-third percent (33-1/3%) of the
Shares of each such Series or class present in person or represented by proxy
and entitled to vote shall constitute a quorum at a Shareholders' meeting of
such Series or class. Subject to the provisions of Article III, Section 6(d),
Article VIII, Section 4 and any other provision of this Declaration of Trust,
the By-Laws or applicable law which requires a different vote: (1) in all
matters other than the election of Trustees, the affirmative vote of the
majority of votes cast at a Shareholders' meeting at which a quorum is present
shall be the act of the Shareholders; (2) Trustees shall be elected by a
plurality of the votes cast at a Shareholders' meeting at which a quorum is
present.
Section 4. Shareholder Action by Written Consent without a Meeting. Any
action which may be taken at any meeting of Shareholders may be taken without a
meeting and without prior notice if a consent in writing setting forth the
action so taken is signed by the holders of Shares having not less than the
minimum number of votes that would be necessary to authorize or take that action
at a meeting at which all Shares entitled to vote on that action were present
and voted. All such consents shall be filed with the secretary of the Trust and
shall be maintained in the Trust's records. Any Shareholder giving a written
consent or the Shareholder's proxy holders or a transferee of the Shares or a
personal representative of the Shareholder or its respective proxy-holder may
revoke the consent by a writing received by the secretary of the Trust before
written consents of the number of Shares required to authorize the proposed
action have been filed with the secretary.
If the consents of all Shareholders entitled to vote have not been
solicited in writing and if the unanimous written consent of all such
Shareholders shall not have been received, the secretary shall give prompt
notice of the action taken without a meeting to such Shareholders. This notice
shall be given in the manner specified in the By-Laws.
Section 5. Record Dates. For purposes of determining the Shareholders
entitled to notice of any meeting or to vote or entitled to give consent to
action without a meeting, the Board of Trustees may fix in advance a record date
which shall not be more than one hundred eighty (180) days nor less than seven
(7) days before the date of any such meeting.
If the Board of Trustees does not so fix a record date:
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(a) The record date for determining Shareholders entitled to notice of
or to vote at a meeting of Shareholders shall be at the close of business on the
business day next preceding the day on which notice is given or, if notice is
waived, at the close of business on the business day which is five (5) business
days next preceding to the day on which the meeting is held.
(b) The record date for determining Shareholders entitled to give
consent to action in writing without a meeting, (i) when no prior action by the
Board of Trustees has been taken, shall be the day on which the first written
consent is given, or (ii) when prior action of the Board of Trustees has been
taken, shall be at the close of business on the day on which the Board of
Trustees adopts the resolution taking such prior action or the seventy-fifth
(75th) day before the date of such other action, whichever is later.
For the purpose of determining the Shareholders of any Series or class
who are entitled to receive payment of any dividend or of any other
distribution, the Board of Trustees may from time to time fix a date, which
shall be before the date for the payment of such dividend or such other
distribution, as the record date for determining the Shareholders of such Series
or class having the right to receive such dividend or distribution. Nothing in
this Section shall be construed as precluding the Board of Trustees from setting
different record dates for different Series or classes.
Section 6. Additional Provisions. The By-Laws may include further
provisions for Shareholders' votes, meetings and related matters.
ARTICLE VI.
Net Asset Value, Distributions and Redemptions
Section 1. Determination of Net Asset Value, Net Income and
Distributions. Subject to Article III, Section 6 hereof, the Board of Trustees
shall have the power to fix an initial offering price for the Shares of any
Series or class thereof which shall yield to such Series or class not less than
the net asset value thereof, at which price the Shares of such Series or class
shall be offered initially for sale, and to determine from time to time
thereafter the offering price which shall yield to such Series or class not less
than the net asset value thereof from sales of the Shares of such Series or
class; provided, however, that no Shares of a Series or class thereof shall be
issued or sold for consideration which shall yield to such Series or class less
than the net asset value of the Shares of such Series or class next determined
after the receipt of the order (or at such other times set by the Board of
Trustees), except in the case of Shares of such Series or class issued in
payment of a dividend properly declared and payable.
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Subject to Article III, Section 6 hereof, the Board of Trustees, in
their absolute discretion, may prescribe and shall set forth in the By-laws or
in a duly adopted vote of the Board of Trustees such bases and time for
determining the per Share or net asset value of the Shares of any Series or net
income attributable to the Shares of any Series, or the declaration and payment
of dividends and distributions on the Shares of any Series, as they may deem
necessary or desirable.
Section 2. Redemptions at the Option of a Shareholder. Unless otherwise
provided in the prospectus of the Trust relating to the Shares, as such
prospectus may be amended from time to time ("Prospectus"):
(a) The Trust shall purchase such Shares as are offered by any
Shareholder for redemption, upon the presentation of a proper instrument of
transfer together with a request directed to the Trust or a Person designated by
the Trust that the Trust purchase such Shares or in accordance with such other
procedures for redemption as the Board of Trustees may from time to time
authorize; and the Trust will pay therefor the net asset value thereof, in
accordance with the By-Laws and applicable law. Payment for said Shares shall be
made by the Trust to the Shareholder within seven days after the date on which
the request is received in proper form. The obligation set forth in this Section
2 is subject to the provision that in the event that any time the New York Stock
Exchange (the "Exchange") is closed for other than weekends or holidays, or if
permitted by the Rules of the Commission during periods when trading on the
Exchange is restricted or during any National Financial Emergency which makes it
impracticable for the Trust to dispose of the investments of the applicable
Series or to determine fairly the value of the net assets held with respect to
such Series or during any other period permitted by order of the Commission for
the protection of investors, such obligations may be suspended or postponed by
the Board of Trustees. If certificates have been issued to a Shareholder, any
such request by such Shareholder must be accompanied by surrender of any
outstanding certificate or certificates for such Shares in form for transfer,
together with such proof of the authenticity of signatures as may reasonably be
required on such Shares and accompanied by proper stock transfer stamps, if
applicable.
(b) Payments for Shares so redeemed by the Trust shall be made in cash,
except payment for such Shares may, at the option of the Board of Trustees, or
such officer or officers as it may duly authorize in its complete discretion, be
made in kind or partially in cash and partially in kind. In case of any payment
in kind, the Board of Trustees, or its delegate, shall have absolute
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<PAGE>
discretion as to what security or securities of the Trust shall be distributed
in kind and the amount of the same; and the securities shall be valued for
purposes of distribution at the value at which they were appraised in computing
the then current net asset value of the Shares, provided that any Shareholder
who cannot legally acquire securities so distributed in kind by reason of the
prohibitions of the 1940 Act or the provisions of the Employee Retirement Income
Security Act ("ERISA") shall receive cash. Shareholders shall bear the expenses
of in-kind transactions, including, but not limited to, transfer agency fees,
custodian fees and costs of disposition of such securities.
(c) Payment for Shares so redeemed by the Trust shall be made by the
Trust as provided above within seven days after the date on which the redemption
request is received in good order; provided, however, that if payment shall be
made other than exclusively in cash, any securities to be delivered as part of
such payment shall be delivered as promptly as any necessary transfers of such
securities on the books of the several corporations whose securities are to be
delivered practicably can be made, which may not necessarily occur within such
seven day period. Moreover, redemptions may be suspended in the event of a
National Financial Emergency. In no case shall the Trust be liable for any delay
of any corporation or other Person in transferring securities selected for
delivery as all or part of any payment in kind.
(d) The right of Shareholders to receive dividends or other
distributions on Shares may be set forth in a Plan adopted by the Board of
Trustees and amended from time to time pursuant to Rule 18f-3 of the 1940 Act.
The right of any Shareholder of the Trust to receive dividends or other
distributions on Shares redeemed and all other rights of such Shareholder with
respect to the Shares so redeemed by the Trust, except the right of such
Shareholder to receive payment for such Shares, shall cease at the time as of
which the purchase price of such Shares shall have been fixed, as provided
above.
Section 3. Redemptions at the Option of the Trust. The Board of
Trustees may, from time to time, without the vote or consent of the
Shareholders, and subject to the 1940 Act, redeem Shares or authorize the
closing of any Shareholder account, subject to such conditions as may be
established by the Board of Trustees.
ARTICLE VII.
Compensation and Limitation of Liability of
Officers and Trustees
Section 1. Compensation. Except as set forth in the last sentence of
this
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Section 1, the Board of Trustees may, from time to time, fix a reasonable
amount of compensation to be paid by the Trust to the Trustees and officers of
the Trust. Nothing herein shall in any way prevent the employment of any Trustee
for advisory, management, legal, accounting, investment banking or other
services and payment for the same by the Trust.
Section 2. Indemnification and Limitation of Liability.
(a) To the fullest extent that limitations on the liability of Trustees
and officers are permitted by the DBTA, the officers and Trustees shall not be
responsible or liable in any event for any act or omission of: any agent or
employee of the Trust; any Investment Adviser or Principal Underwriter of the
Trust; or with respect to each Trustee and officer, the act or omission of any
other Trustee or officer, respectively. The Trust, out of the Trust Property,
shall indemnify and hold harmless each and every officer and Trustee from and
against any and all claims and demands whatsoever arising out of or related to
such officer's or Trustee's performance of his or her duties as an officer or
Trustee of the Trust. This limitation on liability applies to events occurring
at the time a Person serves as a Trustee or officer of the Trust whether or not
such Person is a Trustee or officer at the time of any proceeding in which
liability is asserted. Nothing herein contained shall indemnify, hold harmless
or protect any officer or Trustee from or against any liability to the Trust or
any Shareholder to which such Person would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Person's office.
(b) Every note, bond, contract, instrument, certificate or undertaking
and every other act or document whatsoever issued, executed or done by or on
behalf of the Trust, the officers or the Trustees or any of them in connection
with the Trust shall be conclusively deemed to have been issued, executed or
done only in such Person's capacity as Trustee and/or as officer, and such
Trustee or officer, as applicable, shall not be personally liable therefore,
except as described in the last sentence of the first paragraph of this Section
2 of this Article VII.
Section 3. Officers and Trustees' Good Faith Action, Expert Advice, No
Bond or Surety. The exercise by the Trustees of their powers and discretions
hereunder shall be binding upon everyone interested. An officer or Trustee shall
be liable to the Trust and to any Shareholder solely for such officer's or
Trustee's own willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of such officer or
Trustee, and for nothing else, and shall not be liable for errors of judgment or
mistakes of fact or law. The officers and Trustees may obtain the advice of
counsel or other experts with respect to the meaning and operation of this
Declaration of Trust and their
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duties as officers or Trustees. No such officer or Trustee shall be liable for
any act or omission in accordance with such advice and no inference concerning
liability shall arise from a failure to follow such advice. The officers and
Trustees shall not be required to give any bond as such, nor any surety if a
bond is required.
Section 4. Insurance. To the fullest extent permitted by applicable
law, the officers and Trustees shall be entitled and have the authority to
purchase with Trust Property, insurance for liability and for all expenses
reasonably incurred or paid or expected to be paid by a Trustee or officer in
connection with any claim, action, suit or proceeding in which such Person
becomes involved by virtue of such Person's capacity or former capacity with the
Trust, whether or not the Trust would have the power to indemnify such Person
against such liability under the provisions of this Article.
ARTICLE VIII.
Miscellaneous
Section 1. Liability of Third Persons Dealing with Trustees. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any actions made or to be made by the Trustees.
Section 2. Dissolution of Trust or Series. Unless dissolved as provided
herein, the Trust shall have perpetual existence. The Trust may be dissolved at
any time by vote of a majority of the Shares of the Trust entitled to vote or by
the Board of Trustees by written notice to the Shareholders. Any Series may be
dissolved at any time by vote of a majority of the Shares of that Series or by
the Board of Trustees by written notice to the Shareholders of that Series.
Upon dissolution of the Trust (or a particular Series, as the case may
be), the Trustees shall (in accordance with ss. 3808 of the DBTA) pay or make
reasonable provision to pay all claims and obligations of each Series (or the
particular Series, as the case may be), including all contingent, conditional or
unmatured claims and obligations known to the Trust, and all claims and
obligations which are known to the Trust but for which the identity of the
claimant is unknown. If there are sufficient assets held with respect to each
Series of the Trust (or the particular Series, as the case may be), such claims
and obligations shall be paid in full and any such provisions for payment shall
be made in full. If there are insufficient assets held with respect to each
Series of the Trust (or the particular Series, as the case may be), such claims
and obligations shall be paid or provided for according to their priority and,
among claims and obligations of equal priority, ratably to the extent of assets
available
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therefor. Any remaining assets (including without limitation, cash, securities
or any combination thereof) held with respect to each Series of the Trust (or
the particular Series, as the case may be) shall be distributed to the
Shareholders of such Series, ratably according to the number of Shares of such
Series held by the several Shareholders on the record date for such dissolution
distribution.
Section 3. Merger and Consolidation; Conversion.
(a) Merger and Consolidation. Pursuant to an agreement of merger or
consolidation, the Trust, or any one or more Series, may, by act of a majority
of the Board of Trustees, merge or consolidate with or into one or more business
trusts or other business entities formed or organized or existing under the laws
of the State of Delaware or any other state or the United States or any foreign
country or other foreign jurisdiction. Any such merger or consolidation shall
not require the vote of the Shareholders affected thereby, unless such vote is
required by the 1940 Act, or unless such merger or consolidation would result in
an amendment of this Declaration of Trust which would otherwise require the
approval of such Shareholders. In accordance with Section 3815(f) of the DBTA,
an agreement of merger or consolidation may effect any amendment to this
Declaration of Trust or the By-Laws or effect the adoption of a new declaration
of trust or by-laws of the Trust if the Trust is the surviving or resulting
business trust. Upon completion of the merger or consolidation, the Trustees
shall file a certificate of merger or consolidation in accordance with Section
3810 of the DBTA.
(b) Conversion. A majority of the Board of Trustees may, without the
vote or consent of the Shareholders, cause (i) the Trust to convert to a
common-law trust, a general partnership, limited partnership or a limited
liability company organized, formed or created under the laws of the State of
Delaware as permitted pursuant to Section 3821 of the DBTA; (ii) the Shares of
the Trust or any Series to be converted into beneficial interests in another
business trust (or series thereof) created pursuant to this Section 3 of this
Article VIII, or (iii) the Shares to be exchanged under or pursuant to any state
or federal statute to the extent permitted by law; provided, however, that if
required by the 1940 Act, no such statutory conversion, Share conversion or
Share exchange shall be effective unless the terms of such transaction shall
first have been approved at a meeting called for that purpose by the "vote of a
majority of the outstanding voting securities," as such phrase is defined in the
1940 Act, of the Trust or Series, as applicable; provided, further, that in all
respects not governed by statute or applicable law, the Board of Trustees shall
have the power to prescribe the procedure necessary or appropriate to accomplish
a sale of assets, merger or consolidation including the power to create one or
more separate business trusts to which all or any part of the assets,
liabilities, profits or losses of the Trust may
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be transferred and to provide for the conversion of Shares of the Trust or any
Series into beneficial interests in such separate business trust or trusts
(or series thereof).
Section 4. Reorganization.
A majority of the Board of Trustees may cause the Trust to sell, convey
and transfer all or substantially all of the assets of the Trust, or all or
substantially all of the assets associated with any one or more Series, to
another trust, business trust, partnership, limited partnership, limited
liability company, association or corporation organized under the laws of any
state, or to one or more separate series thereof, or to the Trust to be held as
assets associated with one or more other Series of the Trust, in exchange for
cash, shares or other securities (including, without limitation, in the case of
a transfer to another Series of the Trust, Shares of such other Series) with
such transfer either (a) being made subject to, or with the assumption by the
transferee of, the liabilities associated with each Series the assets of which
are so transferred, or (b) not being made subject to, or not with the assumption
of, such liabilities; provided, however, that, if required by the 1940 Act, no
assets associated with any particular Series shall be so sold, conveyed or
transferred unless the terms of such transaction shall first have been approved
at a meeting called for that purpose by the "vote of a majority of the
outstanding voting securities," as such phrase is defined in the 1940 Act, of
that Series. Following such sale, conveyance and transfer, the Board of Trustees
shall distribute such cash, shares or other securities (giving due effect to the
assets and liabilities associated with and any other differences among the
various Series the assets associated with which have so been sold, conveyed and
transferred) ratably among the Shareholders of the Series the assets associated
with which have been so sold, conveyed and transferred (giving due effect to the
differences among the various classes within each such Series); and if all of
the assets of the Trust have been so sold, conveyed and transferred, the Trust
shall be dissolved.
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Section 5. Amendments.
Subject to the provisions of the second paragraph of this Section 5 of
this Article VIII, this Declaration of Trust may be restated and/or amended at
any time by an instrument in writing signed by a majority of the then Board of
Trustees and, if required, by approval of such amendment by Shareholders in
accordance with Article V, Section 3 hereof. Any such restatement and/or
amendment hereto shall be effective immediately upon execution and approval or
upon such future date and time as may be stated therein. The Certificate of
Trust of the Trust may be restated and/or amended by a similar procedure, and
any such restatement and/or amendment shall be effective immediately upon filing
with the Office of the Secretary of State of the State of Delaware or upon such
future date as may be stated therein.
Notwithstanding the above, the Board of Trustees expressly reserves the
right to amend or repeal any provisions contained in this Declaration of Trust
or the Certificate of Trust, in accordance with the provisions of Section 5 of
Article III hereof, and all rights, contractual and otherwise, conferred upon
Shareholders are granted subject to such reservation. The Board of Trustees
further expressly reserves the right to amend or repeal any provision of the
By-Laws pursuant to Article X of the By-Laws.
Section 6. Filing of Copies, References, Headings. The original or a
copy of this Declaration of Trust and of each restatement and/or amendment
hereto shall be kept at the principal executive office of the Trust where it may
be inspected by any Shareholder. Anyone dealing with the Trust may rely on a
certificate by an officer of the Trust as to whether or not any such
restatements and/or amendments have been made and as to any matters in
connection with the Trust hereunder; and, with the same effect as if it were the
original, may rely on a copy certified by an officer of the Trust to be a copy
of this instrument or of any such restatements and/or amendments. In this
Declaration of Trust and in any such restatements and/or amendments, references
to this instrument, and all expressions of similar effect to "herein," "hereof"
and "hereunder," shall be deemed to refer to this instrument as amended or
affected by any such restatements and/or amendments. Headings are placed herein
for convenience of reference only and shall not be taken as a part hereof or
control or affect the meaning, construction or effect of this instrument.
Whenever the singular number is used herein, the same shall include the plural;
and the neuter, masculine and feminine genders shall include each other, as
applicable. This instrument may be executed in any number of counterparts, each
of which shall be deemed an original.
Section 7. Applicable Law. This Declaration of Trust is created under
and
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is to be governed by and construed and administered according to the laws of
the State of Delaware and the applicable provisions of the 1940 Act and the
Code. The Trust shall be a Delaware business trust pursuant to the DBTA, and
without limiting the provisions hereof, the Trust may exercise all powers which
are ordinarily exercised by such a business trust.
Section 8. Provisions in Conflict with Law or Regulations.
(a) The provisions of this Declaration of Trust are severable, and if
the Board of Trustees shall determine, with the advice of counsel, that any of
such provisions is in conflict with the 1940 Act, the Code, the DBTA, or with
other applicable laws and regulations, the conflicting provision shall be deemed
not to have constituted a part of this Declaration of Trust from the time when
such provisions became inconsistent with such laws or regulations; provided,
however, that such determination shall not affect any of the remaining
provisions of this Declaration of Trust or render invalid or improper any action
taken or omitted prior to such determination.
(b) If any provision of this Declaration of Trust shall be held invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Declaration of Trust in any jurisdiction.
Section 9. Business Trust Only. It is the intention of the Trustees to
create a business trust pursuant to the DBTA, and thereby to create the
relationship of trustee and beneficial owners within the meaning of the DBTA
between the Trustees and each Shareholder. It is not the intention of the
Trustees to create a general or limited partnership, limited liability company,
joint stock association, corporation, bailment, or any form of legal
relationship other than a business trust pursuant to the DBTA. Nothing in this
Declaration of Trust shall be construed to make the Shareholders, either by
themselves or with the Trustees, partners or members of a joint stock
association.
Section 10. Use of the Names "Delaware Group" and "Delaware
Investments". The Trust expressly agrees and acknowledges that the names
"Delaware Group" and "Delaware Investments" are the sole property of Delaware
Management Holdings, Inc. ("DMH"), and, with respect to such names, that similar
names are used by funds in the investment business which are affiliated with
DMH. DMH has consented to the use by the Trust of the identifying words
"Delaware Group" and "Delaware Investments" and has granted to the Trust a
nonexclusive license to use the names "Delaware Group" and "Delaware
Investments" as part of the name of the Trust and the name of any Series of
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Shares. The Trust further expressly agrees and acknowledges that the
non-exclusive license granted herein may be terminated by DMH if the Trust
ceases to use an Affiliate of DMH as Investment Adviser or Delaware
Distributors, L.P. ("DDLP") as Principal Underwriter (or to use other Affiliates
or successors of DMH and DDLP for such purposes). In such event, the
non-exclusive license granted herein may be revoked by DMH and the Trust shall
cease using the names "Delaware Group" and "Delaware Investments" as part of its
name or the name of any Series of Shares, unless otherwise consented to by DMH
or any successor to its interests in such names.
The Trust further understands and agrees that so long as DMH and/or its
advisory Affiliates shall continue to serve as the Trust's Investment Adviser,
other mutual funds as may be sponsored or advised by DMH or its Affiliates shall
have the right permanently to adopt and to use the words "Delaware" in their
names and in the names of any Series or class of Shares of such funds.
IN WITNESS WHEREOF, the Trustees named below do hereby make and enter
into this Declaration of Trust as of the 17th day of December, 1998.
/s/ Wayne A. Stork /s/ Jeffrey J. Nick
- ------------------------------- ------------------------------------
Wayne A. Stork Jeffrey J. Nick
Trustee Trustee
/s/Walter P. Babich /s/John H. Durham
- ------------------------------- ------------------------------------
Walter P. Babich John H. Durham
Trustee Trustee
/s/Anthony D. Knerr /s/Ann R. Leven
- ------------------------------- ------------------------------------
Anthony D. Knerr Ann R. Leven
Trustee Trustee
/s/W. Thacher Longstreth /s/Thomas F. Madison
- ------------------------------- ------------------------------------
W. Thacher Longstreth Thomas F. Madison
Trustee Trustee
/s/Charles E. Peck
- -------------------------------
Charles E. Peck
Trustee
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CERTIFICATE OF TRUST OF
DELAWARE GROUP TAX-FREE MONEY FUND
This Certificate of Trust of DELAWARE GROUP TAX-FREE MONEY FUND, a
business trust (the "Trust"), executed by the undersigned trustees, and filed
under and in accordance with the provisions of the Delaware Business Trust Act
(12 Del. C. ss. 3801 et seq.) (the "Act"), sets forth the following:
FIRST: The name of the business trust formed hereby is DELAWARE GROUP
TAX-FREE MONEY FUND.
SECOND: The address of the registered office of the Trust in the State
of Delaware is at 1209 Orange Street, Wilmington, Delaware 19801 and
the name and address of the registered agent for service of process on
the Trust in the State of Delaware is The Corporation Trust Company,
1209 Orange Street, Wilmington, Delaware 19801.
THIRD: The Trust formed hereby is or will become an investment company
registered under the Investment Company Act of 1940, as amended (15
U.S.C. ss.ss.80a-1 et seq.).
FOURTH: Pursuant to Section 3804 of the Act, the debts, liabilities,
obligations and expenses incurred, contracted for or otherwise existing
with respect to a particular series, whether such series is now
authorized and existing pursuant to the governing instrument of the
Trust or is hereafter authorized and existing pursuant to said
governing instrument, shall be enforceable against the assets
associated with such series only, and not against the assets of the
Trust generally or any other series thereof, and, except as otherwise
provided in the governing instrument of the Trust, none of the debts,
liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to the Trust generally or any other
series thereof shall be enforceable against the assets of such series.
In witness whereof, the undersigned, being all of the trustees of
Delaware Group Tax-Free Money Fund, have duly executed this Certificate of Trust
as of the 17th day of December, 1998.
By: /s/Wayne A. Stork By: /s/Jeffrey J. Nick
--------------------------------- ----------------------------
Wayne A. Stork Jeffrey J. Nick
Trustee Trustee
By: /s/Walter P. Babich By: /s/John H. Durham
--------------------------------- ----------------------------
Walter P. Babich John H. Durham
Trustee Trustee
By: /s/Anthony D. Knerr By: /s/Ann R. Leven
--------------------------------- ----------------------------
Anthony D. Knerr Ann R. Leven
Trustee Trustee
By: /s/W. Thacher Longstreth By: /s/Thomas F. Madison
--------------------------------- ----------------------------
W. Thacher Longstreth Thomas F. Madison
Trustee Trustee
By: /s/Charles E. Peck
---------------------------------
Charles E. Peck
Trustee
<PAGE>
BY-LAWS
OF
DELAWARE GROUP TAX-FREE MONEY FUND
A Delaware Business Trust
ARTICLE I
OFFICES
-------
Section 1. PRINCIPAL OFFICE. The principal executive office of Delaware
Group Tax-Free Money Fund (the "Trust") shall be One Commerce Square,
Philadelphia, Pennsylvania, 19103. The board of trustees (the "Board of
Trustees") may, from time to time, change the location of the principal
executive office of the Trust to any place within or outside the State of
Delaware.
Section 2. OTHER OFFICES. The Board of Trustees may at any time
establish branch or subordinate offices at any place or places where the Trust
intends to do business.
ARTICLE II
MEETINGS OF SHAREHOLDERS
------------------------
Section 1. PLACE OF MEETINGS. Meetings of shareholders shall be held at
any place within or outside the State of Delaware designated by the Board of
Trustees. In the absence of any such designation by the Board of Trustees,
shareholders' meetings shall be held at the principal executive office of the
Trust. For purposes of these By-Laws, the term "shareholder" shall mean a record
owner of shares of the Trust.
Section 2. CALL OF MEETING. A meeting of the shareholders may be called
at any time by the Board of Trustees or by the chairperson of the board or by
the president. If the Trust is required under the Investment Company Act of
1940, as amended (the "1940 Act"), to hold a shareholders' meeting to elect
trustees, the meeting shall be deemed an "annual meeting" for that year for
purposes of the 1940 Act.
Section 3. NOTICE OF SHAREHOLDERS' MEETING. All notices of meetings of
shareholders shall be sent or otherwise given in accordance with Section 4 of
this Article II not less than seven (7) nor more than ninety-three (93) days
before the date of the meeting. The notice shall specify (i) the place, date and
hour of the meeting, and (ii) the general nature of the business to be
transacted. The notice of any meeting at which trustees are to be elected also
shall include the name of any nominee or nominees whom at the time of the notice
are intended to be presented for election. Except with respect to adjournments
as provided herein, no business shall be transacted at such meeting other than
that specified in the notice.
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Section 4. MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE. Notice of any
meeting of shareholders shall be given either personally or by first-class mail,
courier or telegraphic, facsimile, electronic mail or other written
communication, charges prepaid, addressed to the shareholder at the address of
that shareholder appearing on the books of the Trust or its transfer agent or
given by the shareholder to the Trust for the purpose of notice. If no such
address appears on the Trust's books or is given, notice shall be deemed to have
been given if sent to that shareholder by first-class mail, courier, or
telegraphic, facsimile, electronic mail or other written communication to the
Trust's principal executive office. Notice shall be deemed to have been given at
the time when delivered personally or deposited in the mail, with a courier or
sent by telegram, facsimile, electronic mail or other means of written
communication.
If any notice addressed to a shareholder at the address of that
shareholder appearing on the books of the Trust is returned to the Trust marked
to indicate that the notice to the shareholder cannot be delivered at that
address, all future notices or reports shall be deemed to have been duly given
without further mailing, or substantial equivalent thereof, if such notices
shall be available to the shareholder on written demand of the shareholder at
the principal executive office of the Trust for a period of one year from the
date of the giving of the notice.
An affidavit of the mailing or other means of giving any notice of any
shareholders' meeting shall be executed by the secretary, assistant secretary or
any transfer agent of the Trust giving the notice and shall be filed and
maintained in the records of the Trust. Such affidavit shall, in the absence of
fraud, be prima facie evidence of the facts stated therein.
Section 5. ADJOURNED MEETING; NOTICE. Any shareholders' meeting,
whether or not a quorum is present, may be adjourned from time to time (and at
any time during the course of the meeting) by a majority of the votes cast by
those shareholders present in person or by proxy, or by the chairperson of the
meeting. Any adjournment may be with respect to one or more proposals, but not
necessarily all proposals, to be voted or acted upon at such meeting and any
adjournment will not delay or otherwise affect the effectiveness and validity of
a vote or other action taken at a shareholders' meeting prior to adjournment.
When any shareholders' meeting is adjourned to another time or place,
notice need not be given of the adjourned meeting at which the adjournment is
taken, unless a new record date of the adjourned meeting is fixed or unless the
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adjournment is for more than one hundred eighty (180) days from the record date
set for the original meeting, in which case the Board of Trustees shall set a
new record date. If notice of any such adjourned meeting is required pursuant to
the preceding sentence, it shall be given to each shareholder of record entitled
to vote at the adjourned meeting in accordance with the provisions of Sections 3
and 4 of this Article II. At any adjourned meeting, the Trust may transact any
business which might have been transacted at the original meeting.
Section 6. VOTING. The shareholders entitled to vote at any meeting of
shareholders shall be determined in accordance with the provisions of the
Declaration of Trust, as in effect at such time. The shareholders' vote may be
by voice vote or by ballot, provided, however, that any election for trustees
must be by ballot if demanded by any shareholder before the voting has begun. On
any matter other than elections of trustees, any shareholder may vote part of
the shares in favor of the proposal and refrain from voting the remaining shares
or vote them against the proposal, but if the shareholder fails to specify the
number of shares which the shareholder is voting affirmatively, it will be
conclusively presumed that the shareholder's approving vote is with respect to
the total shares that the shareholder is entitled to vote on such proposal.
Abstentions and broker non-votes will be included for purposes of
determining whether a quorum is present at a shareholders' meeting. Abstentions
and broker non-votes will be treated as votes present at a shareholders'
meeting, but will not be treated as votes cast. Abstentions and broker
non-votes, therefore, will have no effect on proposals which require a plurality
or majority of votes cast for approval, but will have the same effect as a vote
"against" on proposals requiring a majority of outstanding voting securities for
approval.
Section 7. WAIVER OF NOTICE BY CONSENT OF ABSENT SHAREHOLDERS. The
transactions of a meeting of shareholders, however called and noticed and
wherever held, shall be valid as though transacted at a meeting duly held after
regular call and notice if a quorum be present either in person or by proxy.
Attendance by a person at a meeting shall also constitute a waiver of notice
with respect to that person of that meeting, except when the person objects at
the beginning of the meeting to the transaction of any business because the
meeting is not lawfully called or convened and except that such attendance is
not a waiver of any right to object to the consideration of matters not included
in the notice of the meeting if that objection is expressly made at the
beginning of the meeting. Whenever notice of a meeting is required to be given
to a shareholder under the Declaration of Trust or these By-Laws, a written
waiver thereof, executed before or after the meeting by such shareholder or his
or her attorney thereunto authorized and filed with the records of the meeting,
shall be deemed equivalent to such notice.
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Section 8. PROXIES. Every shareholder entitled to vote for trustees or
on any other matter shall have the right to do so either in person or by one or
more agents authorized by a written proxy signed by the shareholder and filed
with the secretary of the Trust. A proxy shall be deemed signed if the
shareholder's name is placed on the proxy (whether by manual signature,
typewriting, telegraphic transmission or otherwise) by the shareholder or the
shareholder's attorney-in-fact. A validly executed proxy which does not state
that it is irrevocable shall continue in full force and effect unless (i)
revoked by the shareholder executing it by a written notice delivered to the
Trust prior to the exercise of the proxy or by the shareholder's execution of a
subsequent proxy or attendance and vote in person at the meeting; or (ii)
written notice of the death or incapacity of the shareholder is received by the
Trust before the proxy's vote is counted; provided, however, that no proxy shall
be valid after the expiration of eleven (11) months from the date of the proxy
unless otherwise provided in the proxy. The revocability of a proxy that states
on its face that it is irrevocable shall be governed by the provisions of the
General Corporation Law of the State of Delaware.
With respect to any shareholders' meeting, the Board of Trustees may
act to permit the Trust to accept proxies by any electronic, telephonic,
computerized, telecommunications or other reasonable alternative to the
execution of a written instrument authorizing the proxy to act, provided the
shareholder's authorization is received within eleven (11) months before the
meeting. A proxy with respect to shares held in the name of two or more Persons
shall be valid if executed by any one of them unless at or prior to exercise of
the proxy the Trust receives a specific written notice to the contrary from any
one of them. A proxy purporting to be executed by or on behalf of a shareholder
shall be deemed valid unless challenged at or prior to its exercise and the
burden of proving invalidity shall rest with the challenger.
Section 9. INSPECTORS OF ELECTION. Before any meeting of shareholders,
the Board of Trustees may appoint any person other than nominees for office to
act as inspector of election at the meeting or its adjournment. If no inspector
of election is so appointed, the chairperson of the meeting may, and on the
request of any shareholder or a shareholder's proxy shall, appoint an inspector
of election at the meeting. If any person appointed as inspector fails to appear
or fails or refuses to act, the chairperson of the meeting may, and on the
request of any shareholder or a shareholder's proxy shall, appoint a person to
fill the vacancy.
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The inspector shall:
(a) determine the number of shares outstanding and the voting
power of each, the shares represented at the meeting, the existence of a quorum
and the authenticity, validity and effect of proxies;
(b) receive votes, ballots or consents;
(c) hear and determine all challenges and questions in any way
arising in connection with the right to vote;
(d) count and tabulate all votes or consents;
(e) determine when the polls shall close;
(f) determine the result; and
(g) do any other acts that may be proper to conduct the election
or vote with fairness to all shareholders.
ARTICLE III
TRUSTEES
--------
Section 1. POWERS. Subject to the applicable provisions of the
Declaration of Trust and these By-Laws relating to action required to be
approved by the shareholders, the business and affairs of the Trust shall be
managed and all powers shall be exercised by or under the direction of the Board
of Trustees.
Section 2. NUMBER OF TRUSTEES. The number of trustees constituting the
Board of Trustees shall be determined as set forth in the Declaration of Trust.
Section 3. VACANCIES. Vacancies in the Board of Trustees may be filled
by a majority of the remaining trustees, though less than a quorum, or by a sole
remaining trustee, unless the Board of Trustees calls a meeting of shareholders
for the purpose of filling such vacancies. Notwithstanding the above, whenever
and for so long as the Trust is a participant in or otherwise has in effect a
plan under which the Trust may be deemed to bear expenses of distributing its
shares as that practice is described in Rule 12b- 1 under the 1940 Act, then the
selection and nomination of the trustees who are not "interested persons" of the
Trust (as that term is defined in the 1940 Act) shall be, and is, committed to
the discretion of such disinterested trustees.
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Section 4. PLACE OF MEETINGS AND MEETINGS BY TELEPHONE. All meetings of
the Board of Trustees may be held at any place within or outside the State of
Delaware that has been designated from time to time by resolution of the Board
of Trustees. In the absence of such a designation, regular meetings shall be
held at the principal executive office of the Trust. Any meeting, regular or
special, may be held by conference telephone or similar communication equipment,
so long as all trustees participating in the meeting can hear one another, and
all such trustees shall be deemed to be present in person at the meeting.
Section 5. REGULAR MEETINGS. Regular meetings of the Board of Trustees
shall be held without call at such time as shall from time to time be fixed by
the Board of Trustees. Such regular meetings may be held without notice.
Section 6. SPECIAL MEETINGS. Special meetings of the Board of Trustees
for any purpose or purposes may be called at any time by the chairperson of the
board or the president or any vice president or the secretary or any two (2)
trustees.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each trustee or sent by first-class mail, courier
or telegram, charges prepaid, or by facsimile or electronic mail, addressed to
each trustee at that trustee's address as it is shown on the records of the
Trust. In case the notice is mailed, it shall be deposited in the United States
mail at least seven (7) days before the time of the holding of the meeting. In
case the notice is delivered personally, by telephone, by courier, to the
telegraph company, or by express mail, facsimile, electronic mail or similar
service, it shall be delivered at least forty-eight (48) hours before the time
of the holding of the meeting. Any oral notice given personally or by telephone
may be communicated either to the trustee or to a person at the office of the
trustee who the person giving the notice has reason to believe will promptly
communicate it to the trustee. The notice need not specify the purpose of the
meeting or the place if the meeting is to be held at the principal executive
office of the Trust.
Section 7. QUORUM. A majority of the authorized number of trustees
shall constitute a quorum for the transaction of business, except to adjourn as
provided in Section 10 of this Article III. Every act or decision done or made
by a majority of the trustees present at a meeting duly held at which a quorum
is present shall be regarded as the act of the Board of Trustees, subject to the
provisions of the Declaration of Trust. A meeting at which a quorum is initially
present may continue to transact business notwithstanding the withdrawal of
trustees if any action taken is approved by at least a majority of the required
quorum for that meeting.
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Section 8. WAIVER OF NOTICE. Notice of any meeting need not be given to
any trustee who either before or after the meeting signs a written waiver of
notice, a consent to holding the meeting, or an approval of the minutes. The
waiver of notice or consent need not specify the purpose of the meeting. All
such waivers, consents, and approvals shall be filed with the records of the
Trust or made a part of the minutes of the meeting. Notice of a meeting shall
also be deemed given to any trustee who attends the meeting without protesting
before or at its commencement about the lack of notice to that trustee.
Section 9. ADJOURNMENT. A majority of the trustees present, whether or
not constituting a quorum, may adjourn any matter at any meeting to another time
and place.
Section 10. NOTICE OF ADJOURNMENT. Notice of the time and place of
holding an adjourned meeting need not be given unless the meeting is adjourned
for more than seven (7) days, in which case notice of the time and place shall
be given before the time of the adjourned meeting to the trustees who were
present at the time of the adjournment.
Section 11. FEES AND COMPENSATION OF TRUSTEES. Trustees and members of
committees may receive such compensation, if any, for their services and such
reimbursement of expenses as may be fixed or determined by resolution of the
Board of Trustees. This Section 11 shall not be construed to preclude any
trustee from serving the Trust in any other capacity as an officer, agent,
employee, or otherwise and receiving compensation for those services.
Section 12. TRUSTEE EMERITUS. Upon retirement of a trustee, the Board
of Trustees may elect him or her to the position of Trustee Emeritus. Said
Trustee Emeritus shall serve for one year and may be reelected by the Board of
Trustees from year to year thereafter. Said Trustee Emeritus shall not vote at
meetings of trustees and shall not be held responsible for actions of the Board
of Trustees but shall receive fees paid to trustees for serving as such.
ARTICLE IV
COMMITTEES
----------
Section 1. COMMITTEES OF TRUSTEES. The Board of Trustees may, by
resolution adopted by a majority of the authorized number of trustees, designate
one or more committees, each consisting of two (2) or more trustees, to serve at
the pleasure of the Board of Trustees. The Board of Trustees may designate one
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or more trustees as alternate members of any committee who may replace any
absent member at any meeting of the committee. Any committee to the extent
provided in the resolution of the Board of Trustees, shall have the authority of
the Board of Trustees, except with respect to:
(a) the approval of any action which under the Declaration of Trust or
applicable law also requires shareholders' approval or requires approval by a
majority of the entire Board of Trustees or certain members of said Board of
Trustees;
(b) the filling of vacancies on the Board of Trustees or in any
committee;
(c) the fixing of compensation of the trustees for serving on the Board
of Trustees or on any committee;
(d) the amendment or repeal of the Declaration of Trust or of the
By-Laws or the adoption of new By-Laws;
(e) the amendment or repeal of any resolution of the Board of Trustees
which by its express terms is not so amendable or repealable; or
(f) the appointment of any other committees of the Board of Trustees or
the members of these committees.
Section 2. MEETINGS AND ACTION OF COMMITTEES. Meetings and action of
any committee shall be governed by and held and taken in accordance with the
provisions of Article III of these By-Laws, with such changes in the context
thereof as are necessary to substitute the committee and its members for the
Board of Trustees and its members, except that the time of regular meetings of
any committee may be determined either by resolution of the Board of Trustees or
by resolution of the committee. Special meetings of any committee may also be
called by resolution of the Board of Trustees, and notice of special meetings of
any committee shall also be given to all alternate members who shall have the
right to attend all meetings of the committee. The Board of Trustees may adopt
rules for the government of any committee not inconsistent with the provisions
of these By-Laws.
ARTICLE V
OFFICERS
--------
Section 1. OFFICERS. The officers of the Trust shall be a chairperson
of the board, a president and chief executive officer, a secretary, and a
treasurer. The Trust may also have, at the discretion of the Board of Trustees,
one or more
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vice presidents, one or more assistant vice presidents, one or more assistant
secretaries, one or more assistant treasurers, and such other officers as may be
appointed in accordance with the provisions of Section 3 of this Article V. Any
number of offices may be held by the same person, except the offices of
president and vice president.
Section 2. ELECTION OF OFFICERS. The officers of the Trust shall be
chosen by the Board of Trustees, and each shall serve at the pleasure of the
Board of Trustees, subject to the rights, if any, of an officer under any
contract of employment.
Section 3. SUBORDINATE OFFICERS. The Board of Trustees may appoint and
may empower the president to appoint such other officers as the business of the
Trust may require, each of whom shall hold office for such period, have such
authority and perform such duties as are provided in these By-Laws or as the
Board of Trustees may from time to time determine.
Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to the rights,
if any, of an officer under any contract of employment, any officer may be
removed, either with or without cause, by the Board of Trustees at any regular
or special meeting of the Board of Trustees, or by an officer upon whom such
power of removal may be conferred by the Board of Trustees.
Any officer may resign at any time by giving written notice to the
Trust. Any resignation shall take effect at the date of the receipt of that
notice or at any later time specified in that notice; and unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the Trust under any contract to which the officer is a party.
Section 5. VACANCIES IN OFFICES. A vacancy in any office because of
death, resignation, removal, disqualification or other cause shall be filled in
the manner prescribed in these By-Laws for regular appointment to that office.
Section 6. CHAIRPERSON OF THE BOARD. The chairperson of the board
shall, if present, preside at meetings of the Board of Trustees and exercise and
perform such other powers and duties as may be from time to time assigned to the
chairperson by the Board of Trustees or prescribed by the By-Laws. The
chairperson of the board shall be a member ex officio of all standing
committees. In the absence, resignation, disability or death of the president,
the chairperson shall exercise all the powers and perform all the duties of the
president until his or her return, or until such disability shall be removed or
until a new president shall have been elected.
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Section 7. PRESIDENT. Subject to such supervisory powers, if any, as
may be given by the Board of Trustees to the chairperson of the board, the
president shall be the chief executive officer of the Trust and shall, subject
to the control of the Board of Trustees, have general supervision, direction and
control of the business and the officers of the Trust. In the absence of the
chairperson of the board, he shall preside at all meetings of the shareholders
and at all meetings of the Board of Trustees. He shall have the general powers
and duties of management usually vested in the office of president of a
corporation and shall have such other powers and duties as may be prescribed by
the Board of Trustees or these By-Laws.
Section 8. VICE PRESIDENTS. In the absence or disability of the
president, the vice presidents, if any, in order of their rank as fixed by the
Board of Trustees or if not ranked, a vice president designated by the Board of
Trustees, shall perform all the duties of the president and when so acting shall
have all powers of and be subject to all the restrictions upon the president.
The vice presidents shall have such other powers and perform such other duties
as from time to time may be prescribed for them respectively by the Board of
Trustees or by these By-Laws and the president or the chairperson of the board.
Section 9. SECRETARY. The secretary shall keep or cause to be kept at
the principal executive office of the Trust or such other place as the Board of
Trustees may direct a book of minutes of all meetings and actions of trustees,
committees of trustees and shareholders with the time and place of holding,
whether regular or special, and if special, how authorized, the notice given,
the names of those present at trustees' meetings or committee meetings, the
number of shares present or represented at shareholders' meetings, and the
proceedings.
The secretary shall cause to be kept at the principal executive office
of the Trust or at the office of the Trust's transfer agent or registrar, as
determined by resolution of the Board of Trustees, a share register or a
duplicate share register showing the names of all shareholders and their
addresses, the number, series and classes of shares held by each, the number and
date of certificates issued for the same and the number and date of cancellation
of every certificate surrendered for cancellation.
The secretary shall give or cause to be given notice of all meetings of
the shareholders and of the Board of Trustees required by these By-Laws or by
applicable law to be given and shall have such other powers and perform such
other duties as may be prescribed by the Board of Trustees or by these By-Laws.
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Section 10. TREASURER. The treasurer shall keep and maintain or cause
to be kept and maintained adequate and correct books and records of accounts of
the properties and business transactions of the Trust, including accounts of its
assets, liabilities, receipts, disbursements, gains, losses, capital, retained
earnings and shares. The books of account shall at all reasonable times be open
to inspection by any trustee.
The treasurer shall deposit all monies and other valuables in the name
and to the credit of the Trust with such depositories as may be designated by
the Board of Trustees. He shall disburse the funds of the Trust as may be
ordered by the Board of Trustees, shall render to the president and trustees,
whenever they request it, an account of all of his transactions and of the
financial condition of the Trust and shall have other powers and perform such
other duties as may be prescribed by the Board of Trustees or these By-Laws.
ARTICLE VI
INDEMNIFICATION OF TRUSTEES, OFFICERS,
--------------------------------------
EMPLOYEES AND OTHER AGENTS
--------------------------
Section 1. AGENTS, PROCEEDINGS AND EXPENSES. For the purpose of this
Article, "agent" means any person who is or was a trustee, officer, employee or
other agent of this Trust or is or was serving at the request of the Trust as a
trustee, director, officer, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust or other enterprise or was a
trustee, director, officer, employee or agent of a foreign or domestic
corporation which was a predecessor of another enterprise at the request of such
predecessor entity; "proceeding" means any threatened, pending or completed
action or proceeding, whether civil, criminal, administrative or investigative;
and "expenses" includes without limitation attorneys' fees and any expenses of
establishing a right to indemnification under this Article.
Section 2. ACTIONS OTHER THAN BY TRUST. The Trust shall indemnify any
person who was or is a party or is threatened to be made a party to any
proceeding (other than an action by or in the right of the Trust) by reason of
the fact that such person is or was an agent of the Trust, against expenses,
judgments, fines, settlements and other amounts actually and reasonably incurred
in connection with such proceeding if such person acted in good faith and in a
manner that such person reasonably believed to be in the best interests of the
Trust and in the case of a criminal proceeding, had no reasonable cause to
believe the conduct of such person was unlawful. The termination of any
proceeding by judgment, order, settlement, conviction or plea of nolo contendere
or its equivalent shall not of itself create a presumption that the person did
not
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act in good faith or in a manner which the person reasonably believed to be in
the best interests of the Trust or that the person had reasonable cause to
believe that the person's conduct was unlawful.
Section 3. ACTIONS BY TRUST. The Trust shall indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action by or in the right of the Trust to procure a judgment in its
favor by reason of the fact that the person is or was an agent of the Trust,
against expenses actually and reasonably incurred by that person in connection
with the defense or settlement of that action if that person acted in good
faith, in a manner that person believed to be in the best interests of the Trust
and with such care, including reasonable inquiry, as an ordinarily prudent
person in a like position would use under similar circumstances.
Section 4. EXCLUSION OF INDEMNIFICATION. Notwithstanding any provision
to the contrary contained herein, there shall be no right to indemnification for
any liability arising by reason of willful misfeasance, bad faith, gross
negligence, or the reckless disregard of the duties involved in the conduct of
the agent's office with the Trust.
No indemnification shall be made under Sections 2 or 3 of this Article:
(a) In respect of any claim, issue or matter as to which that person
shall have been adjudged to be liable in the performance of that person's duty
to the Trust, unless and only to the extent that the court in which that action
was brought shall determine upon application that in view of all the
circumstances of the case, that person was not liable by reason of the disabling
conduct set forth in the preceding paragraph and is fairly and reasonably
entitled to indemnity for the expenses which the court shall determine; or
(b) In respect of any claim, issue, or matter as to which that person
shall have been adjudged to be liable on the basis that personal benefit was
improperly received by him, whether or not the benefit resulted from an action
taken in the person's official capacity; or
(c) Of amounts paid in settling or otherwise disposing of a threatened
or pending action, with or without court approval, or of expenses incurred in
defending a threatened or pending action which is settled or otherwise disposed
of without court approval, unless the required approval set forth in Section 6
of this Article is obtained.
Section 5. SUCCESSFUL DEFENSE BY AGENT. To the extent that an agent of
the Trust has been successful on the merits in defense of any
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proceeding referred to in Sections 2 or 3 of this Article or in defense of any
claim, issue or matter therein, before the court or other body before whom the
proceeding was brought, the agent shall be indemnified against expenses actually
and reasonably incurred by the agent in connection therewith, provided that the
Board of Trustees, including a majority who are disinterested, non-party
trustees, also determines that based upon a review of the facts, the agent was
not liable by reason of the disabling conduct referred to in Section 4 of this
Article.
Section 6. REQUIRED APPROVAL. Except as provided in Section 5 of this
Article, any indemnification under this Article shall be made by the Trust only
if authorized in the specific case on a determination that indemnification of
the agent is proper in the circumstances because the agent has met the
applicable standard of conduct set forth in Sections 2 or 3 of this Article and
is not prohibited from indemnification because of the disabling conduct set
forth in Section 4 of this Article, by:
(a) A majority vote of a quorum consisting of trustees who are not
parties to the proceeding and are not "interested persons" of the Trust (as
defined in the 1940 Act); or
(b) A written opinion by an independent legal counsel.
Section 7. ADVANCEMENT OF EXPENSES. Expenses incurred in defending any
proceeding may be advanced by the Trust before the final disposition of the
proceeding on receipt of an undertaking by or on behalf of the agent to repay
the amount of the advance unless it shall be determined ultimately that the
agent is entitled to be indemnified as authorized in this Article, provided the
agent provides a security for his undertaking, or a majority of a quorum of the
disinterested, non-party trustees, or an independent legal counsel in a written
opinion, determine that based on a review of readily available facts, there is
reason to believe that said agent ultimately will be found entitled to
indemnification.
Section 8. OTHER CONTRACTUAL RIGHTS. Nothing contained in this Article
shall affect any right to indemnification to which persons other than trustees
and officers of the Trust or any subsidiary thereof may be entitled by contract
or otherwise.
Section 9. LIMITATIONS. No indemnification or advance shall be made
under this Article, except as provided in Sections 5 or 6, in any circumstances
where it appears:
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(a) That it would be inconsistent with a provision of the Declaration
of Trust, a resolution of the shareholders, or an agreement which prohibits or
otherwise limits indemnification which was in effect at the time of accrual of
the alleged cause of action asserted in the proceeding in which the expenses
were incurred or other amounts were paid; or
(b) That it would be inconsistent with any condition expressly imposed
by a court in approving a settlement.
Section 10. INSURANCE. Upon and in the event of a determination by the
Board of Trustees to purchase such insurance, the Trust shall purchase and
maintain insurance on behalf of any agent of the Trust against any liability
asserted against or incurred by the agent in such capacity or arising out of the
agent's status as such, but only to the extent that the Trust would have the
power to indemnify the agent against that liability under the provisions of this
Article.
Section 11. FIDUCIARIES OF EMPLOYEE BENEFIT PLAN. This Article does not
apply to any proceeding against any trustee, investment manager or other
fiduciary of an employee benefit plan in that person's capacity as such, even
though that person may also be an agent of the Trust as defined in Section 1 of
this Article. Nothing contained in this Article shall limit any right to
indemnification to which such a trustee, investment manager, or other fiduciary
may be entitled by contract or otherwise which shall be enforceable to the
extent permitted by applicable law other than this Article.
ARTICLE VII
RECORDS AND REPORTS
-------------------
Section 1. MAINTENANCE AND INSPECTION OF SHARE REGISTER. The Trust
shall keep at its principal executive office or at the office of its transfer
agent or registrar a record of its shareholders, providing the names and
addresses of all shareholders and the number, series and classes of shares held
by each shareholder.
Section 2. MAINTENANCE AND INSPECTION OF BY-LAWS. The Trust shall keep
at its principal executive office the original or a copy of these By-Laws as
amended to date, which shall be open to inspection by the shareholders at all
reasonable times during office hours.
Section 3. MAINTENANCE AND INSPECTION OF OTHER RECORDS. The accounting
books and records and minutes of proceedings of the shareholders and the Board
of Trustees and any committee or committees of the Board of
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Trustees shall be kept at such place or places designated by the Board of
Trustees or in the absence of such designation, at the principal executive
office of the Trust. The minutes shall be kept in written form and the
accounting books and records shall be kept either in written form or in any
other form capable of being converted into written form. The minutes and
accounting books and records shall be open to inspection upon the written demand
of any shareholder or holder of a voting trust certificate at any reasonable
time during usual business hours for a purpose reasonably related to the
holder's interests as a shareholder or as the holder of a voting trust
certificate. The inspection may be made in person or by an agent or attorney and
shall include the right to copy and make extracts.
Section 4. INSPECTION BY TRUSTEES. Every trustee shall have the
absolute right at any reasonable time to inspect all books, records, and
documents of every kind and the physical properties of the Trust. This
inspection by a trustee may be made in person or by an agent or attorney and the
right of inspection includes the right to copy and make extracts of documents.
ARTICLE VIII
DIVIDENDS
---------
Section 1. DECLARATION OF DIVIDENDS. Dividends upon the shares of
beneficial interest of the Trust may, subject to the provisions of the
Declaration of Trust, if any, be declared by the Board of Trustees at any
regular or special meeting, pursuant to applicable law. Dividends may be paid in
cash, in property, or in shares of the Trust.
Section 2. RESERVES. Before payment of any dividend there may be set
aside out of any funds of the Trust available for dividends such sum or sums as
the Board of Trustees may, from time to time, in its absolute discretion, think
proper as a reserve fund to meet contingencies, or for equalizing dividends, or
for repairing or maintaining any property of the Trust, or for such other
purpose as the Board of Trustees shall deem to be in the best interests of the
Trust, and the Board of Trustees may abolish any such reserve in the manner in
which it was created.
ARTICLE IX
GENERAL MATTERS
---------------
Section 1. CHECKS, DRAFTS, EVIDENCE OF INDEBTEDNESS. All checks,
drafts, or other orders for payment of money, notes or other evidences of
indebtedness issued in the name of or payable to the Trust shall be signed or
endorsed by such person or persons and in such manner as from time to time shall
be determined by resolution of the Board of Trustees.
15
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Section 2. CONTRACTS AND INSTRUMENTS; HOW EXECUTED. The Board of
Trustees, except as otherwise provided in these By-Laws, may authorize any
officer or officers, agent or agents, to enter into any contract or execute any
instrument in the name of and on behalf of the Trust and this authority may be
general or confined to specific instances; and unless so authorized or ratified
by the Board of Trustees or within the agency power of an officer, no officer,
agent, or employee shall have any power or authority to bind the Trust by any
contract or engagement or to pledge its credit or to render it liable for any
purpose or for any amount.
Section 3. CERTIFICATES FOR SHARES. A certificate or certificates for
shares of beneficial interest in any series of the Trust may be issued to a
shareholder upon his request when such shares are fully paid. All certificates
shall be signed in the name of the Trust by the chairperson of the board or the
president or vice president and by the treasurer or an assistant treasurer or
the secretary or any assistant secretary, certifying the number of shares and
the series and class of shares owned by the shareholders. Any or all of the
signatures on the certificate may be facsimile. In case any officer, transfer
agent, or registrar who has signed or whose facsimile signature has been placed
on a certificate shall have ceased to be such officer, transfer agent, or
registrar before such certificate is issued, it may be issued by the Trust with
the same effect as if such person were an officer, transfer agent or registrar
at the date of issue. Notwithstanding the foregoing, the Trust may adopt and use
a system of issuance, recordation and transfer of its shares by electronic or
other means.
Section 4. LOST CERTIFICATES. Except as provided in this Section 4, no
new certificates for shares shall be issued to replace an old certificate unless
the latter is surrendered to the Trust and cancelled at the same time. The Board
of Trustees may in case any share certificate or certificate for any other
security is lost, stolen, or destroyed, authorize the issuance of a replacement
certificate on such terms and conditions as the Board of Trustees may require,
including a provision for indemnification of the Trust secured by a bond or
other adequate security sufficient to protect the Trust against any claim that
may be made against it, including any expense or liability on account of the
alleged loss, theft, or destruction of the certificate or the issuance of the
replacement certificate.
Section 5. REPRESENTATION OF SHARES OF OTHER ENTITIES HELD BY TRUST.
The chairperson of the board, the president or any vice president or any other
person authorized by resolution of the Board of Trustees or by any of the
foregoing designated officers, is authorized to vote or represent on behalf of
the Trust any and all shares of any corporation, partnership, trust, or other
16
<PAGE>
entity, foreign or domestic, standing in the name of the Trust. The authority
granted may be exercised in person or by a proxy duly executed by such
designated person.
Section 6. TRANSFER OF SHARES. Shares of the Trust shall be
transferable only on the record books of the Trust by the Person in whose name
such Shares are registered, or by his or her duly authorized attorney or
representative. In all cases of transfer by an attorney-in-fact, the original
power of attorney, or an official copy thereof duly certified, shall be
deposited and remain with the Trust, its transfer agent or other duly authorized
agent. In case of transfers by executors, administrators, guardians or other
legal representatives, duly authenticated evidence of their authority shall be
produced, and may be required to be deposited and remain with the Trust, its
transfer agent or other duly authorized agent. No transfer shall be made unless
and until the certificate issued to the transferor, if any, shall be delivered
to the Trust, its transfer agent or other duly authorized agent, properly
endorsed.
Section 7. HOLDERS OF RECORD. The Trust shall be entitled to treat the
holder of record of any share or shares as the owner thereof and, accordingly,
shall not be bound to recognize any equitable or other claim to or interest in
such share or shares on the part of any other person, whether or not the Trust
shall have express or other notice thereof.
Section 8. FISCAL YEAR. The fiscal year of the Trust and each series
thereof shall end on the last day of April each year. The fiscal year of the
Trust or any series thereof may be refixed or changed from time to time by
resolution of the Board of Trustees. The fiscal year of the Trust shall be the
taxable year of each series of the Trust.
ARTICLE X
AMENDMENTS
----------
Section 1. AMENDMENT. These By-laws may be restated and/or amended at
any time, without the approval of the shareholders, by an instrument in writing
signed by, or a resolution of, a majority of the then Board of Trustees.
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INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, made by and between DELAWARE GROUP TAX-FREE MONEY FUND, a
Delaware Business Trust (the "Trust") severally on behalf of each series of
shares of beneficial interest of the Trust that is listed on Exhibit A to this
Agreement, as that Exhibit may be amended from time to time (each such series of
shares is hereinafter referred to as a "Fund" and, together with other series of
shares listed on such Exhibit, the "Funds"), and DELAWARE MANAGEMENT COMPANY, a
series of Delaware Management Business Trust, a Delaware business trust (the
"Investment Manager").
W I T N E S S E T H:
WHEREAS, the Trust has been organized and operates as an investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act") ;
WHEREAS, each Fund engages in the business of investing and reinvesting
its assets in securities; and
WHEREAS, the Investment Manager is registered under the Investment
Advisers Act of 1940 as an investment adviser and engages in the business of
providing investment management services; and
WHEREAS, the Trust, severally on behalf of each Fund, and the
Investment Manager desire to enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and each of the parties hereto intending to be legally bound, it is
agreed as follows:
1. The Trust hereby employs the Investment Manager to manage the
investment and reinvestment of each Fund's assets and to administer the Trust's
affairs, subject to the direction of the Trust's Board of Trustees and officers
for the period and on the terms hereinafter set forth. The Investment Manager
hereby accepts such employment and agrees during such period to render the
services and assume the obligations herein set forth for the compensation herein
provided. The Investment Manager shall for all purposes herein be deemed to be
an independent contractor, and shall, unless otherwise expressly provided and
authorized, have no authority to act for or represent the Trust in any way, or
in any way be deemed an agent of the Trust. The Investment Manager shall
regularly make decisions as to what securities and other instruments to purchase
and sell on behalf of each Fund and shall effect the purchase and sale of such
investments in furtherance of each Fund's objectives and policies and shall
furnish the Board of Trustees of the Trust with such information and reports
regarding each Fund's investments as the Investment Manager deems appropriate or
as the Trustees of the Trust may reasonably request.
2. The Trust shall conduct its own business and affairs and shall bear
the expenses and salaries necessary and incidental thereto, including, but not
in limitation of the foregoing, the costs incurred in: the maintenance of its
corporate existence; the maintenance of its own books, records and procedures;
dealing with its own shareholders; the payment of dividends; transfer of shares,
including issuance, redemption and repurchase of shares; preparation of share
certificates; reports and notices to shareholders; calling and holding of
shareholders' and Trustees' meetings; miscellaneous office expenses; brokerage
commissions; custodian fees; legal and accounting fees; taxes; and federal and
state registration fees. Directors, trustees, officers and employees of the
Investment Manager may be directors, trustees, officers and employees of any of
the investment companies within the Delaware Investments family (including the
Trust). Directors, trustees, officers and employees of the Investment Manager
who are
<PAGE>
directors, trustees, officers and/or employees of these investment companies
shall not receive any compensation from such companies for acting in such dual
capacity.
In the conduct of the respective businesses of the parties hereto and
in the performance of this Agreement, the Trust and Investment Manager may share
facilities common to each, which may include legal and accounting personnel,
with appropriate proration of expenses between them.
3. (a) Subject to the primary objective of obtaining the best
execution, the Investment Manager will place orders for the purchase and sale of
portfolio securities and other instruments with such broker/dealers selected who
provide statistical, factual and financial information and services to the
Trust, to the Investment Manager, to any sub-adviser (as defined in Paragraph 5
hereof, a "Sub-Adviser") or to any other fund for which the Investment Manager
or any Sub-Adviser provides investment advisory services and/or with
broker/dealers who sell shares of the Trust or who sell shares of any other
investment company (or series thereof) for which the Investment Manager or any
Sub-Adviser provides investment advisory services. Broker/dealers who sell
shares of any investment companies or series thereof for which the Investment
Manager or Sub-Adviser provide investment advisory services shall only receive
orders for the purchase or sale of portfolio securities to the extent that the
placing of such orders is in compliance with the Rules of the Securities and
Exchange Commission and NASD Regulation, Inc.
(b) Notwithstanding the provisions of subparagraph (a) above
and subject to such policies and procedures as may be adopted by the Board of
Trustees and officers of the Trust, the Investment Manager may cause a Fund to
pay a member of an exchange, broker or dealer an amount of commission for
effecting a securities transaction in excess of the amount of commission another
member of an exchange, broker or dealer would have charged for effecting that
transaction, in such instances where the Investment Manager has determined in
good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such member, broker or
dealer, viewed in terms of either that particular transaction or the Investment
Manager's overall responsibilities with respect to the Trust on behalf of the
Funds and to other investment companies (or series thereof) and other advisory
accounts for which the Investment Manager or any Sub-Adviser exercises
investment discretion.
4. As compensation for the services to be rendered to a particular Fund
by the Investment Manager under the provisions of this Agreement, that Fund
shall pay monthly to the Investment Manager exclusively from that Fund's assets,
a fee based on the average daily net assets of that Fund during the month. Such
fee shall be calculated in accordance with the fee schedule applicable to that
Fund as set forth in Exhibit A hereto, which Exhibit may be amended from time to
time as provided in Paragraphs 10(b) and (c) of this Agreement.
If this Agreement is terminated prior to the end of any calendar month
with respect to a particular Fund, the management fee for such Fund shall be
prorated for the portion of any month in which this Agreement is in effect with
respect to such Fund according to the proportion which the number of calendar
days during which the Agreement is in effect bears to the number of calendar
days in the month, and shall be payable within 10 calendar days after the date
of termination.
5. The Investment Manager may, at its expense, select and contract with
one or more investment advisers registered under the Investment Advisers Act of
1940 ("Sub-Advisers") to perform some or all of the services for a Fund for
which it is responsible under this Agreement. The Investment Manager will
compensate any Sub-Adviser for its services to the Fund. The Investment Manager
may terminate the services of any Sub-Adviser at any time in its sole
discretion, and shall at such time assume the responsibilities of such
Sub-Adviser unless and until a successor Sub-Adviser is selected and the
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<PAGE>
requisite approval of the Fund's shareholders is obtained. The Investment
Manager will continue to have responsibility for all advisory services furnished
by any Sub-Adviser.
6. The services to be rendered by the Investment Manager to the Trust
on behalf of each Fund under the provisions of this Agreement are not to be
deemed to be exclusive, and the Investment Manager shall be free to render
similar or different services to others so long as its ability to render the
services provided for in this Agreement shall not be impaired thereby.
7. The Investment Manager, its directors, officers, employees, agents
and shareholders may engage in other businesses, may render investment advisory
services to other investment companies, or to any other corporation,
association, firm or individual, and may render underwriting services to the
Trust or to any other investment company, corporation, association, firm or
individual.
8. It is understood and agreed that so long as the Investment Manager
and/or its advisory affiliates shall continue to serve as the investment adviser
to any of the Trust's Funds, other investment companies as may be sponsored or
advised by the Investment Manager or its affiliates shall have the right
permanently to adopt and to use the words "Delaware," "Delaware Investments" or
"Delaware Group" in their names and in the names of any series or class of
shares of such funds.
9. In the absence of willful misfeasance, bad faith, gross negligence,
or a reckless disregard of the performance of its duties as the Investment
Manager to the Trust on behalf of any Fund, the Investment Manager shall not be
subject to liability to the Trust or to any Fund or to any shareholder of the
Trust for any action or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the purchase,
holding or sale of any security, or otherwise.
10. (a) This Agreement shall be executed and become effective as of the
date written below, and shall become effective with respect to a particular Fund
as of the effective date set forth in Exhibit A for that Fund, only if approved
by the vote of a majority of the outstanding voting securities of that Fund. It
shall continue in effect for an initial period of two years for each Fund and
may be renewed thereafter only so long as such renewal and continuance is
specifically approved at least annually by the Board of Trustees or by the vote
of a majority of the outstanding voting securities of that Fund and only if the
terms and the renewal hereof have been approved by the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons of any
such party ("Independent Trustees"), cast in person at a meeting called for the
purpose of voting on such approval.
(b) Except as provided in Paragraph 10(c) below, no amendment to
this Agreement (or to Exhibit A hereto) shall be effective with respect to any
Fund unless approved by: (i) a majority of the Trustees of the Trust, including
a majority of Independent Trustees; and (ii) a majority of the outstanding
voting securities of the particular Fund. Any such amendment that pertains to a
Fund will not change, or otherwise affect the applicability of, this Agreement
with respect to other Funds.
(c) The Agreement (and Exhibit A hereto) may be amended with
respect to a Fund without the approval of a majority of the outstanding voting
securities of that Fund if the amendment relates solely to a management fee
reduction or other change that is permitted or not prohibited under federal law,
rule, regulation or SEC staff interpretation thereof to be made without
shareholder approval. This Agreement may be amended from time to time to add or
remove one or more Funds, or to reflect changes in management fees, by an
amendment to Exhibit A hereto executed by the Trust and the Investment Manager.
Any such amendment that pertains to a Fund will not change, or otherwise affect
the applicability of, this Agreement with respect to other Funds.
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<PAGE>
(d) This Agreement may be terminated as to any Fund by the Trust at
any time, without the payment of a penalty, on sixty days' written notice to the
Investment Manager of the Trust's intention to do so, pursuant to action by the
Board of Trustees of the Trust or pursuant to the vote of a majority of the
outstanding voting securities of the affected Fund. The Investment Manager may
terminate this Agreement at any time, without the payment of a penalty, on sixty
days' written notice to the Fund of its intention to do so. Upon termination of
this Agreement, the obligations of all the parties hereunder shall cease and
terminate as of the date of such termination, except for any obligation to
respond for a breach of this Agreement committed prior to such termination, and
except for the obligation of the Trust on behalf of a Fund to pay to the
Investment Manager the fee provided in Paragraph 4 hereof, prorated to the date
of termination. This Agreement shall automatically terminate in the event of its
assignment.
11. This Agreement shall extend to and bind the heirs, executors,
administrators and successors of the parties hereto.
12. For the purposes of this Agreement, the terms "vote of a majority
of the outstanding voting securities"; "interested persons"; and "assignment"
shall havemeaning defined in the 1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed by their duly authorized officers and duly attested as of
the _____ day of ___________, ___.
DELAWARE MANAGEMENT COMPANY, DELAWARE GROUP TAX-FREE
a series of Delaware Management Business Trust MONEY FUND on behalf of
Funds listed on Exhibit A
By:_____________________________ By:______________________
Name:___________________________ Name:____________________
Title:__________________________ Title:___________________
Attest:_________________________ Attest:__________________
Name:___________________________ Name:____________________
Title:__________________________ Title:___________________
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<PAGE>
EXHIBIT A
THIS EXHIBIT to the Investment Management Agreement between DELAWARE
GROUP TAX-FREE MONEY FUND and DELAWARE MANAGEMENT COMPANY, a series of Delaware
Management Business Trust, entered into as of the _____________ day of ________,
__________________________ (the "Agreement") lists the Funds for which the
Investment Manager provides investment management services pursuant to this
Agreement, along with the management fee rate schedule for each Fund and the
date on which the Agreement became effective for each Fund.
Management Fee Schedule
(as a percentage of
average daily net assets)
Fund Name Effective Date Annual Rate
- --------- -------------- -----------
Delaware Group 0.45% on first $500 million
Tax-Free Money Fund ________, 1999 0.40% on next $500 million
0.35% on next $1,500 million
0.30% on assets in excess of
$2,500 million
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<PAGE>
CHASE FORM OF AGREEMENT
GLOBAL CUSTODY AGREEMENT
AGREEMENT, effective May 1, 1996, between THE CHASE MANHATTAN BANK,
N.A. (the "Bank") and those registered investment companies listed on Schedule A
hereto (each a "Customer") on behalf of certain of their respective series, as
listed on Schedule A (individually and collectively the "Series").
1. CUSTOMER ACCOUNTS.
The Bank agrees to establish and maintain the following accounts
("Accounts"):
(a) A custody account in the name of the Customer on behalf of each
Series ("Custody Account") for any and all stocks, shares, bonds, debentures,
notes, mortgages or other obligations for the payment of money, bullion, coin
and any certificates, receipts, warrants or other instruments representing
rights to receive, purchase or subscribe for the same or evidencing or
representing any other rights or interests therein and other similar property
whether certificated or uncertificated as may be received by the Bank or its
Subcustodian (as defined in Section 3) for the account of the Customer
("Securities"); and
(b) A deposit account in the name of the Customer on behalf of each
Series ("Deposit Account") for any and all cash in any currency received by the
Bank or its Subcustodian for the account of the Customer, which cash shall not
be subject to withdrawal by draft or check.
The Customer warrants its authority to: 1) deposit the cash and
Securities ("Assets") received in the Accounts and 2) give Instructions (as
defined in Section 11) concerning the Accounts. Such Instructions shall
specifically indicate to which Series such Assets belong or, if such Assets
belong to more than one Series, shall allocate such Assets to the appropriate
Series. The Bank may deliver securities of the same class in place of those
deposited in the Custody Account.
Upon written agreement between the Bank and the Customer, additional
Accounts may be established and separately accounted for as additional Accounts
under the terms of this Agreement.
2. MAINTENANCE OF SECURITIES AND CASH AT BANK AND SUBCUSTODIAN LOCATIONS.
Unless Instructions specifically require another location acceptable to
the Bank:
(a) Securities will be held in the country or other jurisdiction in
<PAGE>
which the principal trading market for such Securities is located, where such
Securities are to be presented for payment or where such Securities are
acquired; and
(b) Cash will be credited to an account in a country or other
jurisdiction in which such cash may be legally deposited or is the legal
currency for the payment of public or private debts.
To the extent available and permissible under applicable law and
regulation, Cash held pursuant to Instructions shall be held in interest bearing
accounts. If interest bearing accounts are not available, such cash may be held
in non-interest bearing accounts. The Bank is authorized to maintain cash
balances on deposit for the Customer with itself or one of its affiliates.
Interest bearing accounts shall bear interest at such reasonable rates of
interest as may from time to time be paid on such accounts by the Bank or its
affiliates.
(iii) For each Series that is exclusively a domestic Series, the following
additional provisions shall apply:
(x) In the event that during a given calendar month a Series has maintained an
average daily cash balance greater than zero, the Bank shall provide an earnings
credit against custody fees otherwise owing hereunder by such Series during such
calendar month in an amount equal to the product of (A) 75% of the 90 day U.S.
government Treasury bill rate as quoted in the Wall Street Journal for the last
"Business Day" (being a day on which the Bank is open for the transaction of all
its ordinary business) of such calendar month, (B) the average daily cash
balance for such month, and (C) the number of days in such calendar month
divided by 365.
(y) In the event that during a given calendar month a Series has maintained an
average daily cash balance less than or equal to zero, the Bank shall be paid
interest on such amount by such Series in an amount equal to the product of (A)
the "Overnight Fed Funds Rate" (as defined below) plus 25 basis points for the
last Business Day of such calendar month, (B) the average daily cash balance for
such month, and (C) the number of days in such calendar month divided by 365.
(z) For purposes of (y) above, the term "Overnight Fed Funds Rate" shall mean
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published by the Federal Reserve Bank of New York (with the rate for the last
Business Day of a given calendar month being the rate so published on the
Business Day immediately following such Day), or, if such rate is note so
published, the average quotations, for the last Business Day of a given calendar
month, of such transactions received by the Bank from three Federal funds
brokers of recognized standing selected by the Bank.
<PAGE>
If the Customer wishes to have any of its Assets held in the custody of
an institution other than the established Subcustodians as defined in Section 3
(or their securities depositories), such arrangement must be authorized by a
written agreement, signed by the Bank and the Customer.
3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES.
The Bank may act under this Agreement through the subcustodians listed
in Schedule B of this Agreement with which the Bank has entered into
subcustodial agreements ("Subcustodians"). The Customer authorizes the Bank to
hold Assets in the Accounts in accounts which the Bank has established with one
or more of its branches or Subcustodians. The Bank and Subcustodians are
authorized to hold any of the Securities in their account with any securities
depository in which they participate.
The Bank reserves the right to add new, replace or remove
Subcustodians. The Customer will be given reasonable notice by the Bank of any
amendment to Schedule B. Upon request by the Customer, the Bank will identify
the name, address and principal place of business of any Subcustodian of the
Customer's Assets and the name and address of the governmental agency or other
regulatory authority that supervises or regulates such Subcustodian.
Upon receipt of Instructions, the Bank shall cease using any
Subcustodian with respect to the customer, and arrange for delivery of
Securities held with such Subcustodian to another entity as designated by the
Customer; provided that, the Bank shall have no responsibility for the
performance of such other entity.
4. USE OF SUBCUSTODIAN.
(a) The Bank will identify the Assets on its books as belonging to the
Customer.
(b) A Subcustodian will hold such Assets together with assets belonging
to other customers of the Bank in accounts identified on such Subcustodian's
books as special custody accounts for the exclusive benefit of customers of the
Bank.
(c) Any Assets in the Accounts held by a Subcustodian will be subject
only to the instructions of the Bank or its agent. Any Securities held in a
securities depository for the account of a Subcustodian will be subject only to
the instructions of such Subcustodian.
(d) Any agreement the Bank enters into with a Subcustodian for holding
its customer's assets shall provide that: (i) such
<PAGE>
assets will not be subject to any right, charge, security interest, lien or
claim of any kind in favor of such Subcustodian except for safe custody or
administration, (ii) the beneficial ownership of such assets will be freely
transferable without the payment of money or value other than for safe custody
or administration; (iii) adequate records will be maintained identifying the
assets held pursuant to such agreement as belonging to the customers of the
Bank; (iv) subject to applicable law, Subcustodian shall permit independent
public accountants for Bank and customers of the Bank reasonable access to
Subcustodian's books and records as they pertain to the subcustody account in
connection with such accountants' examination of the books and records of such
account; and (v) the Bank will receive periodic reports with respect to the
safekeeping of assets in the subcustody account, including advices and/or
notifications of any transfers to or from such subcustody account. The foregoing
shall not apply to the extent of any special agreement or arrangement made by
the Customer with any particular Subcustodian.
(e) Upon request of the Customer, the Bank shall deliver to the
Customer annually a report stating: (i) the identity of each Subcustodian then
acting on behalf of the Bank and the name and address of the governmental agency
or other regulatory authority that supervises or regulates such Subcustodian;
(ii) the countries in which each Subcustodian is located; and (iii) as long as
Securities and Exchange Commission ("SEC") Rule 17f-5 under the Investment
Company Act of 1940, as amended ("1940 Act"), requires the Customer's Board of
Directors/Trustees directly to approve its foreign custody arrangements, such
other information relating to such Subcustodians as may reasonably be requested
by the Customer to ensure compliance with Rule 17f-5. As long as Rule 17f-5
requires the Customer's Board of Directors/Trustees directly to approve its
foreign custody arrangements, the Bank shall also furnish annually to the
Customer information concerning such Subcustodians similar in kind and scope as
that furnished to the Customer in connection with the initial approval hereof.
The Bank shall timely advise the Customer of any material adverse change in the
facts or circumstances upon which such information is based where such changes
would affect the eligibility of the Subcustodian under Rule 17f-5 as soon as
practicable after it becomes aware of any such material adverse change in the
normal course of its custodial activities.
5. DEPOSIT ACCOUNT TRANSACTIONS
(a) The Bank or its Subcustodians will make payments from the Deposit
Account upon receipt of Instructions which include all information required by
the Bank.
(b) In the event that any payment to be made under this Section 5
exceeds the funds available in the Deposit Account, the Bank, in its discretion,
may advance the Customer such excess amount which shall be deemed a loan payable
on demand, bearing interest at the rate customarily charged by the Bank on
similar loans.
<PAGE>
(c) If the Bank credits the Deposit Account on a payable date, or at
any time prior to actual collection and reconciliation to the Deposit Account,
with interest, dividends, redemptions or any other amount due, the Customer will
promptly return any such amount upon oral or written notification: (i) that such
amount has not been received in the ordinary course of business or (ii) that
such amount was incorrectly credited. If the Customer does not promptly return
any amount upon such notification, the Bank shall be entitled, upon oral or
written notification to the Customer, to reverse such credit by debiting the
Deposit Account for the amount previously credited. The Bank or its Subcustodian
shall have no duty or obligation to institute legal proceedings, file a claim or
a proof of claim in any insolvency proceeding or take any other action with
respect to the collection of such amount, but may act for the Customer upon
Instructions after consultation with the Customer.
6. CUSTODY ACCOUNT TRANSACTIONS.
(a) Securities will be transferred, exchanged or delivered by the Bank
or its Subcustodian upon receipt by the Bank of Instructions which include all
information required by the Bank. Settlement and payment for Securities received
for, and delivery of Securities out of, the Custody Account may be made in
accordance with the customary or established securities trading or securities
processing practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivery of Securities to a
purchaser, dealer or their agents against a receipt with the expectation of
receiving later payment and free delivery. Delivery of Securities out of the
Custody Account may also be made in any manner specifically required by
Instructions acceptable to the Bank.
(b) The Bank shall credit or debit the Accounts on a contractual
settlement date with cash or Securities with respect to any sale, exchange or
purchase of Securities in those countries set forth in Appendix A hereto;
provided that, the Bank may amend Appendix A from time to time in its sole
discretion and shall advise the Customer of such amendments. Otherwise,
transactions will be credited or debited to the Accounts on the date cash or
Securities are actually received by the Bank and reconciled to the Account.
(i) The Bank may reverse credits or debits made to the Accounts in its
discretion if the related transaction fails to settle within a reasonable
period, determined by the Bank in its discretion, after the contractual
settlement date for the related transaction; provided that, the Bank shall give
Customer prior notification of any such reversal. Where the foregoing
notification is oral, the Bank shall promptly provide written confirmation of
the same (which confirmation may be electronic).
<PAGE>
(ii) If any Securities delivered pursuant to this Section 6 are
returned by the recipient thereof, the Bank may reverse the credits and debits
of the particular transaction at any time.
7. ACTIONS OF THE BANK.
The Bank shall follow Instructions received regarding assets held in
the Accounts. However, until it receives Instructions to the contrary, the Bank
will:
(a) Present for payment any Securities which are called, redeemed or
retired or otherwise become payable and all coupons and other income items which
call for payment upon presentation, to the extent that the Bank or Subcustodian
is actually aware of such opportunities.
(b) Execute in the name of the Customer such ownership and other
certificates as may be required to obtain payments in respect of Securities.
(c) Exchange interim receipts or temporary Securities for definitive
Securities.
(d) Appoint brokers and agents for any transaction involving the
Securities, including, without limitation, affiliates of the Bank or any
Subcustodian, subject to applicable SEC rules and regulations under the Act.
(e) Issue statements to the Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.
The Bank will send the Customer an advice or notification of any
transfers of Assets to or from the Accounts. Such statements, advices or
notifications shall indicate the identity of the entity having custody of the
Assets. Unless the Customer advises the Bank orally and then promptly sends the
Bank a written exception or objection to any Bank statement within 180 days of
receipt, the Customer shall be deemed to have approved such statement.
All collections of funds or other property paid or distributed in
respect of Securities in the Custody Account shall be made at the risk of the
Customer. Subject to the standard of care in Section 12 hereof, the Bank shall
have no liability for any loss occasioned by delay in the actual receipt of
notice by the Bank or by its Subcustodians of any payment, redemption or other
transaction regarding Securities in the Custody Account in respect of which the
Bank has agreed to take any action under this Agreement.
<PAGE>
8. CORPORATE ACTIONS; PROXIES; TAX RECLAIMS.
a. Corporate Actions. Whenever the Bank receives information concerning
the Securities which requires discretionary action by the beneficial owner of
the Securities (other than a proxy), such as subscription rights, bonus issues,
stock repurchase plans and rights offerings, or legal notices or other material
intended to be transmitted to securities holders ("Corporate Actions"), the Bank
will give the Customer written notice (which may be electronic) of such
Corporate Actions to the extent that the Bank's central corporate actions
department has actual knowledge of a Corporate Action in time to notify its
customers.
When a rights entitlement or a fractional interest resulting from a
rights issue, stock dividend, stock split or similar Corporate Action is
received which bears an expiration date, the Bank will endeavor to obtain
Instructions from the Customer or its Authorized Person (as defined in ss.10
hereof), but if Instructions are not received in time for the Bank to take
timely action, or actual notice of such Corporate Action was received too late
to seek Instructions, the Bank is authorized to sell such rights entitlement or
fractional interest and to credit the Deposit Account with the proceeds or take
any other action it deems, in good faith, to be appropriate in which case it
shall be held harmless for any such action.
b. Proxy Voting. With respect to domestic U.S. and Canadian Securities
(the latter if held in DTC), the Bank will send to the Customer or the
Authorized Person (as defined in Section 10) for a Custody Account, such proxies
(signed in blank, if issued in the name of the Bank's nominee or the nominee of
a central depository) and communications with respect to Securities in the
Custody Account as call for voting or relate to legal proceedings within a
reasonable time after sufficient copies are received by the Bank for forwarding
to its customers. In addition, the Bank will follow coupon payments,
redemptions, exchanges or similar matters with respect to Securities in the
Custody Account and advise the Customer or the Authorized Person for such
Account of rights issued, tender offers or any other discretionary rights with
respect to such Securities, in each case, of which the Bank has received notice
from the issuer of the Securities, or as to which notice is published in
publications routinely utilized by the Bank for this purpose.
With respect to Securities other than the foregoing, proxy voting
services shall be provided in accordance with separate proxy voting agreement
annexed hereto a Appendix B.
The foregoing proxy voting services may be provided by Bank, in whole
or in part, by one or more third parties appointed by the Bank (which may be
affiliates of the Bank), provided that the Bank shall be liable for the
performance of any such third parties to the same extent as the Bank would have
been if it performed such services itself.
<PAGE>
c. Tax Reclaims. (i) Subject to the provisions hereof, the Bank will
apply for a reduction of withholding tax and any refund of any tax paid or tax
credits which apply in each applicable market in respect of income payments on
Securities for the benefit of the Customer which the Bank believes may be
available to such Customer. Where such reports are available, the Bank shall
periodically report to Customer concerning the making of applications for a
reduction of withholding tax and refund of any tax paid or tax credits which
apply in each applicable market in respect of income payments on Securities for
the benefit of the Customer.
(ii) The provision of tax reclaim services by the Bank is conditional
upon the Bank receiving from the beneficial owner of Securities (A) a
declaration of its identity and place of residence and (B) certain other
documentation (pro forma copies of which are available from the Bank). The Bank
shall use reasonable means to advise the Customer of the declarations,
documentation and information which the Customer is to provide to the Bank in
order for the Bank to provide the tax reclaim services described herein. The
Customer acknowledges that, if the Bank does not receive such declarations,
documentation and information, additional United Kingdom taxation will be
deducted from all income received in respect of Securities issued outside the
United Kingdom and that U.S. non-resident alien tax or U.S. backup withholding
tax will be deducted from U.S. source income. The Customer shall provide to the
Bank such documentation and information as it may require in connection with
taxation, and warrants that, when given, this information shall be true and
correct in every respect, not misleading in any way, and contain all material
information. The Customer undertakes to notify the Bank immediately if any such
information requires updating or amendment.
(iii) Subject to subsection (vii) hereof, the Bank shall not be liable
to the Customer or any third party for any tax, fines or penalties payable by
the Bank or the Customer, and shall be indemnified accordingly, whether these
result from the inaccurate completion of documents by the Customer or any third
party, or as a result of the provision to the Bank or any third party of
inaccurate or misleading information or the withholding of material information
by the Customer or any other third party, or as a result of any delay of any
revenue authority or any other matter beyond the control of the Bank.
(iv) The Customer confirms that the Bank is authorized to deduct from
any cash received or credited to the Cash Account any taxes or levies required
by any revenue or governmental authority for whatever reason in respect of the
Securities or Cash Accounts.
(v) The Bank shall perform tax reclaim services only with respect to
taxation levied by the revenue authorities of the countries notified to the
Customer from time to time and the Bank may, by notification in writing, at its
absolute discretion,
<PAGE>
supplement or amend the markets in which the tax reclaim services are offered.
Other than as expressly provided in this sub-clause, the Bank shall have no
responsibility with regard to the Customer's tax position or status in any
jurisdiction. Except as provided in Section 8(c)(ii) and pursuant to
Instructions, the Bank shall take no action in the servicing of the Customer's
Securities which, in and of itself, creates a taxable nexus for the Customer in
any jurisdiction other than with respect to interest, dividends and capital
gains that may otherwise be subject to tax by such jurisdiction with respect to
a foreign investor not otherwise engaged in a trade or business in such
jurisdiction in a given taxable year. Bank shall not be liable for any tax
liability caused, directly or indirectly, by Customer's actions or status in any
jurisdiction.
(vi) In connection with obtaining tax relief, the Customer confirms
that the Bank is authorized to disclose any information requested by any revenue
authority or any governmental body in relation to the Customer or the Securities
and/or Cash held for the Customer. This provision does not authorize any other
voluntary disclosure to any revenue authority or any governmental body without
the prior written consent of Customer.
(vii) Tax reclaim services may be provided by the Bank or, in whole or
in part, by one or more third parties appointed by the Bank (which may be
affiliates of the Bank); provided that the Bank shall be liable for the
performance of any such third party to the same extent as the Bank would have
been if it performed such services itself.
9. NOMINEES.
Securities which are ordinarily held in registered form may be
registered in a nominee name of the Bank, Subcustodian or securities depository,
as the case may be. The Bank may without notice to the Customer cause any such
Securities to cease to be registered in the name of any such nominee and to be
registered in the name of the Customer. In the event that any Securities
registered in a nominee name are called for partial redemption by the issuer,
the Bank may allot the called portion to the respective beneficial holders of
such class of security in any manner the Bank deems to be fair and equitable.
The Customer agrees to hold the Bank, Subcustodians, and their respective
nominees harmless from any liability arising directly or indirectly from their
status as a mere record holder of Securities in the Custody Account.
10. AUTHORIZED PERSONS.
As used in this Agreement, the term "Authorized Person" means employees
or agents including investment managers as have been designated by written
notice from the Customer or its designated
<PAGE>
agent to act on behalf of the Customer under this Agreement. Such persons shall
continue to be Authorized Persons until such time as the Bank receives
Instructions from the Customer or its designated agent that any such employee or
agent is no longer an Authorized Person.
11. INSTRUCTIONS.
The term "Instructions" means instructions of any Authorized Person
received by the Bank, via telephone, telex, TWX, facsimile transmission, bank
wire or other teleprocess or electronic instruction or trade information system
acceptable to the Bank which the Bank reasonably believes in good faith to have
been given by Authorized Persons or which are transmitted with proper testing or
authentication pursuant to terms and conditions which the Bank may specify.
Unless otherwise expressly provided, all Instructions shall continue in full
force and effect until canceled or superseded. For purposes hereof,
reasonableness shall mean compliance with applicable procedures.
Any Instructions delivered to the Bank by telephone (including cash
transfer instructions as described below) shall promptly thereafter be confirmed
in writing by any two Authorized Persons (which confirmation may bear the
facsimile signature of such Persons), but the Customer will hold the Bank
harmless for the failure of such Authorized Persons to send such confirmation in
writing, the failure of such confirmation to conform to the telephone
instructions received or the Bank's failure to produce such confirmation at any
subsequent time; provided that, where the Bank receives a telephone Instruction
from an Authorized Person requiring the transfer of cash, prior to executing
such Instruction the Bank will, to confirm such Instruction, call back any one
of the individuals on a list of persons authorized to confirm such oral transfer
Instructions (which Person shall be a person other than the initiator of the
transfer Instruction) and the Bank shall not execute the Instruction until it
has received such confirmation. Either party may electronically record any
Instructions given by telephone, and any other telephone discussions with
respect to the Custody Account. The Customer shall be responsible for
safeguarding any testkeys, identification codes or other security devices which
the Bank shall make available to the Customer or its Authorized Persons.
12. STANDARD OF CARE; LIABILITIES.
(a) The Bank shall be responsible for the performance of only such
duties as are set forth in this Agreement or expressly contained in Instructions
which are consistent with the provisions of this Agreement as follows:
(i) The Bank will use reasonable care with respect to its obligations
under this Agreement and the safekeeping of Assets.
<PAGE>
The Bank shall be liable to the Customer for any loss which shall occur as the
result of the failure of a Subcustodian to exercise reasonable care with respect
to the safekeeping of such Assets to the same extent that the Bank would be
liable to the Customer if the Bank were holding such Assets in New York. In the
event that Securities are lost by reason of the failure of the Bank or its
Subcustodian to use reasonable care, the Bank shall be liable to the Customer
based on the market value of the property which is the subject of the loss on
the date it is replaced by the Bank and without reference to any special
conditions or circumstances, it being understood that for purposes of measuring
damages hereunder, the value of Securities which are sold by the Customer prior
to the replacement thereof shall be equal to the sale price thereof less the
expenses of such sale incurred by the Customer. The Bank shall act with
reasonable promptness in making such replacements. In no event shall the Bank be
liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Bank has
been advised of the likelihood of such loss or damage and regardless of the form
of action. Subject to the Bank's obligations pursuant to ss.4(e) hereof, the
Bank will not be responsible for the insolvency of any Subcustodian which is not
a branch or affiliate of Bank.
(ii) The Bank will not be responsible for any act, omission, default or
the solvency of any broker or agent which it or a Subcustodian appoints unless
such appointment was made negligently or in bad faith.
(iii) (a) The Bank shall be indemnified by, and without liability to
the Customer for any action taken or omitted by the Bank whether pursuant to
Instructions or otherwise pursuant to this Agreement if such act or omission was
in good faith, without negligence. In performing its obligations under this
Agreement, the Bank may rely on the genuineness of any Customer document which
it reasonably believes in good faith to have been validly executed. (b) The Bank
shall hold Customer harmless from, and shall indemnify Customer for, any loss,
liability, claim or expense incurred by Customer (including, but not limited to,
Customer's reasonable legal fees) to the extent that such loss, liability, claim
or expense arises from the negligence or willful misconduct on the part of the
Bank or a Subcustodian; provided that, in no event shall the Bank be liable for
special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Bank has been advised
of the likelihood of such loss or damage and regardless of the form of action.
Subject to the Bank's obligations pursuant to ss.4(e) hereof, the Bank will not
be responsible for the insolvency of any Subcustodian which is not a branch or
affiliate of Bank.
(iv) The Customer agrees to pay for and hold the Bank harmless from any
liability or loss resulting from the imposition or assessment of any taxes or
other governmental charges, and any related expenses with respect to income from
or Assets in the Accounts.
<PAGE>
(v) The Bank shall be entitled to rely, and may act, upon the advice of
counsel (who may be counsel for the Customer) on all matters and shall be
without liability for any action reasonably taken or omitted pursuant to such
advice.
(vi) The Bank need not maintain any insurance for the benefit of the
Customer.
(vii) Without limiting the foregoing, the Bank shall not be liable for
any loss which results from: 1) the general risk of investing, or 2) investing
or holding Assets in a particular country including, but not limited to, losses
resulting from nationalization, expropriation or other governmental actions;
regulation of the banking or securities industry; currency restrictions,
devaluations or fluctuations; and market conditions which prevent the orderly
execution of securities transactions or affect the value of Assets.
(viii) Neither party shall be liable to the other for any loss due to
forces beyond their control including, but not limited to strikes or work
stoppages, acts of war or terrorism, insurrection, revolution, nuclear fusion,
fission or radiation, or acts of God.
(b) Consistent with and without limiting the first paragraph of this
Section 12, it is specifically acknowledged that the Bank shall have no duty or
responsibility to:
(i) question Instructions or make any suggestions to the Customer or an
Authorized Person regarding such Instructions;
(ii) supervise or make recommendations with respect to investments or
the retention of Securities;
(iii) advise the Customer or an Authorized Person regarding any default
in the payment of principal or income of any security other than a Security.
(iv) except as may be otherwise provided in any securities lending
agreement between the Customer and the Bank, evaluate or report to the Customer
or an Authorized Person regarding the financial condition of any broker, agent
or other party to which Securities are delivered or payments are made pursuant
to this Agreement;
(v) except for trades settled at DTC where the broker provides to the
Bank the trade confirmation and the Customer provides for the Bank to receive
the trade instruction, review or reconcile trade confirmations received from
brokers. The Customer or its Authorized Persons (as defined in Section 10)
issuing Instructions shall bear any responsibility to review such confirmations
against Instructions issued to and statements issued by the Bank.
<PAGE>
(c) The Customer authorizes the Bank to act, hereunder, in its capacity
as a custodian notwithstanding that the Bank or any of its divisions or
affiliates may have a material interest in a transaction, or circumstances are
such that the Bank may have a potential conflict of duty or interest including
the fact that the Bank or any of its affiliates may provide brokerage services
to other customers, act as financial advisor to the issuer of Securities, act as
a lender to the issuer of Securities, act in the same transaction as agent for
more than one customer, have a material interest in the issue of Securities, or
earn profits from any of the activities listed herein.
13. FEES AND EXPENSES.
The Customer agrees to pay the Bank for its services under this
Agreement such amount as may be agreed upon in writing ("Fee Schedule"),
together with the Bank's reasonable out-of-pocket or incidental expenses (as
further defined in the Fee Schedule), including, but not limited to, legal fees.
The Bank shall have a lien on and is authorized to charge any Accounts of the
Customer for any amount owing to the Bank under any provision of this Agreement.
14. MISCELLANEOUS.
(a) Foreign Exchange Transactions. To facilitate the administration of
the Customer's trading and investment activity, the Bank is authorized to enter
into spot or forward foreign exchange contracts with the Customer or an
Authorized Person for the Customer and may also provide foreign exchange through
its subsidiaries, affiliates or Subcustodians. Instructions, including standing
instructions, may be issued with respect to such contracts but the Bank may
establish rules or limitations concerning any foreign exchange facility made
available. In all cases where the Bank, its subsidiaries, affiliates or
Subcustodians enter into a foreign exchange contract related to Accounts, the
terms and conditions of the then current foreign exchange contract of the Bank,
its subsidiary, affiliate or Subcustodian and, to the extent not inconsistent,
this Agreement shall apply to such transaction.
(b) Certification of Residency, etc. The Customer certifies that it is
a resident of the United States and agrees to notify the Bank of any changes in
residency. The Bank may rely upon this certification or the certification of
such other facts as may be required to administer the Bank's obligations under
this Agreement. The Customer will indemnify the Bank against all losses,
liability, claims or demands arising directly or indirectly from any such
certifications.
<PAGE>
(c) Access to Records. Applicable accounts, books and records of the
Bank shall be open to inspection and audit at all reasonable times during normal
business hours upon reasonable advance notice by Customer's independent public
accountants and by employees of Customer designated to the Bank. All such
materials shall, to the extent applicable, be maintained and preserved in
conformity with the Act and the rules and regulations thereunder, including
without limitation, SEC Rules 31a-1 and 31a-2. Subject to restrictions under
applicable law, the Bank shall also obtain an undertaking to permit the
Customer's independent public accountants reasonable access to the records of
any Subcustodian which has physical possession of any Assets as may be required
in connection with the examination of the Customer's books and records.
(d) Governing Law; Successors and Assigns. This Agreement shall be
governed by the laws of the State of New York and shall not be assignable by
either party, but shall bind the successors in interest of the Customer and the
Bank.
(e) Entire Agreement; Applicable Riders. Customer represents that the
Assets deposited in the Accounts are Mutual Fund assets subject to certain
Securities and Exchange Commission ("SEC") rules and regulations.
This Agreement consists exclusively of this document together with
Schedules A and B, Appendices 1 and 2, Exhibits I - _______ and the following
Rider(s) [Check applicable rider(s)]:
X MUTUAL FUND
----
X SPECIAL TERMS AND CONDITIONS
----
There are no other provisions of this Agreement, and this Agreement
supersedes any other agreements, whether written or oral, between the parties.
Any amendment to this Agreement must be in writing, executed by both parties.
(f) Severability. In the event that one or more provisions of this
Agreement are held invalid, illegal or unenforceable in any respect on the basis
of any particular circumstances or in any jurisdiction, the validity, legality
and enforceability of such provision or provisions under other circumstances or
in other jurisdictions and of the remaining provisions will not in any way be
affected or impaired.
(g) Waiver. Except as otherwise provided in this Agreement, no failure
or delay on the part of either party in exercising any power or right under this
Agreement operates as a waiver, nor does any single or partial exercise of any
power or
<PAGE>
right preclude any other or further exercise, or the exercise of any other power
or right. No waiver by a party of any provision of this Agreement, or waiver of
any breach or default, is effective unless in writing and signed by the party
against whom the waiver is to be enforced.
(h) Notices. All notices under this Agreement shall be effective when
actually received. Any notices or other communications which may be required
under this Agreement are to be sent to the parties at the following addresses or
such other addresses as may subsequently be given to the other party in writing:
Bank: The Chase Manhattan Bank, N.A.
4 Chase MetroTech Center
Brooklyn, NY 11245
Attention: Global Custody Division
or telex:
--------------------------------------------
Customer: Delaware Group of Funds
1818 Market St.
Philadelphia, PA 19103
att: Messrs. Bishof and O'Conner
or telex:
--------------------------------------------
(i) Termination. This Agreement may be terminated by the Customer or
the Bank by giving sixty (60) days written notice to the other, provided that
such notice to the Bank shall specify the names of the persons to whom the Bank
shall deliver the Assets in the Accounts. If notice of termination is given by
the Bank, the Customer shall, within sixty (60) days following receipt of the
notice, deliver to the Bank Instructions specifying the names of the persons to
whom the Bank shall deliver the Assets. In either case the Bank will deliver the
Assets to the persons so specified, after deducting any amounts which the Bank
determines in good faith to be owed to it under Section 13. If within sixty (60)
days following receipt of a notice of termination by the Bank, the Bank does not
receive Instructions from the Customer specifying the names of the persons to
whom the Bank shall deliver the Assets, the Bank, at its election, may deliver
the Assets to a bank or trust company doing business in the State of New York to
be held and disposed of pursuant to the provisions of this Agreement, or to
Authorized Persons, or may continue to hold the Assets until Instructions are
provided to the Bank; provided that, where the Bank is the terminating party and
the Bank had not notified the Customer that termination was for breach of this
Agreement by the Customer, such 60 day period shall be extended for an
additional period as requested by Customer of up to 120 days.
<PAGE>
Termination as to One or More Series. This Agreement may be terminated
as to one or more Series (but less than all the Series) by delivery of an
amended Schedule A deleting such Series, in which case termination as to the
deleted Series shall take effect sixty (60) days after the date of such
delivery. The execution and delivery of an amended Schedule A which deletes one
or more Series, shall constitute a termination hereof only with respect to such
deleted Series, shall be governed by the preceding provisions of Section 14 as
to the identification of a successor custodian and the delivery of the Assets of
the Series so deleted to such successor custodian, and shall not affect the
obligations of the Bank and the Customer hereunder with respect to the other
Series set forth in Schedule A, as amended from time to time.
(j) Several Obligations of the Series. With respect to any obligations
of the Customer on behalf of the Series and their related Accounts arising
hereunder, the Custodian shall look for payment or satisfaction of any such
obligation solely to the assets and property of the Series and such Accounts to
which such obligation relates as though the Customer had separately contracted
with the Custodian by separate written instrument with respect to each Series
and its Accounts.
CUSTOMER
By:
----------------------------------------
Title Vice President and Treasurer
THE CHASE MANHATTAN BANK, N.A.
By:
----------------------------------------
Title Vice President
STATE OF )
: ss.
COUNTY OF )
On this day of , , before me personally came ,
to me known, who being by me duly sworn, did depose and say that he/she resides
in New Providence, NJ at 31 Sagamore Drive; that he/she is Vice President of THE
CHASE MANHATTAN BANK, the entity described in and which executed the foregoing
instrument; that she knows the seal of said entity, that the seal affixed to
said instrument is such seal, that it was so affixed by order of said entity,
and that she signed his/her name thereto by like order.
<PAGE>
Sworn to before me this
day of .
- --------------
Notary
STATE OF NEW YORK )
: ss.
COUNTY OF NEW YORK )
On this day of
, 19 , before me personally came , to me
known, who being by me duly sworn, did depose and say that he/she resides
in at
; that he/she is a
Vice President of THE CHASE MANHATTAN BANK, (National Association), the
corporation described in and which executed the foregoing instrument; that
he/she knows the seal of said corporation, that the seal affixed to said
instrument is such corporate seal, that it was so affixed by order of the Board
of Directors of said corporation, and that he/she signed his/her name thereto by
like order.
Sworn to before me this _______________________
day of ________________, 19_____.
_______________________________________________
Notary
<PAGE>
Schedule A
Delaware Pooled Trust, Inc. - Global Fixed Income Portfolio
Delaware Pooled Trust, Inc. - International Equity Portfolio
Delaware Pooled Trust, Inc. - Labor Select International Equity Portfolio
Delaware Pooled Trust, Inc. - Real Estate Investment Trust Portfolio
Delaware Pooled Trust, Inc. - High Yield Portfolio
Delaware Pooled Trust, Inc. - International Fixed Income Portfolio
Delaware Pooled Trust, Inc. - Defensive Equity Utility Portfolio
Delaware Group Global & International Funds, Inc. - International Equity Fund
Delaware Group Global & International Funds, Inc. - Global Assets Fund
Delaware Group Global & International Funds, Inc. - Global Bond Fund
Delaware Group Global & International Funds, Inc. - Emerging Markets Fund
Delaware Group Premium Fund, Inc. - International Equity Series
Delaware Group Premium Fund, Inc. - Equity Income Series
Delaware Group Premium Fund, Inc. - High Yield Series
Delaware Group Premium Fund, Inc. - Capital Reserves Series
Delaware Group Premium Fund, Inc. - Money Market Series
Delaware Group Premium Fund, Inc. - Growth Series
Delaware Group Premium Fund, Inc. - Multiple Strategy Series
Delaware Group Premium Fund, Inc. - Value Series
Delaware Group Premium Fund, Inc. - Emerging Growth Series
Delaware Group Premium Fund, Inc. - Global Bond Series
Delaware Group Income Funds, Inc. - Delchester Fund
Delaware Group Income Funds, Inc. - High-Yield Opportunitites Fund
Delaware Group Delaware Fund, Inc. - Delaware Fund
Delaware Group Delaware Fund, Inc. - Devon Fund
Delaware Group Value Fund, Inc.
Delaware Group DelCap Fund, Inc.
Delaware Group Dividend & Income Fund, Inc.
Delaware Group Advisor Funds, Inc. - Enterprise Fund
Delaware Group Advisor Funds, Inc. - U.S. Growth Fund
Delaware Group Advisor Funds, Inc. - World Growth Fund
Delaware Group Advisor Funds, Inc. - New Pacific Fund
Delaware Group Advisor Funds, Inc. - Federal Bond Fund
Delaware Group Advisor Funds, Inc. - Corporate Income Fund
<PAGE>
March, 1996 Schedule B
SUB-CUSTODIANS EMPLOYED BY
--------------------------
THE CHASE MANHATTAN BANK, N.A. LONDON, GLOBAL CUSTODY
-----------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
COUNTRY SUB-CUSTODIAN CORRESPONDENT BANK
ARGENTINA The Chase Manhattan Bank, N.A. The Chase Manhattan Bank, N.A.
Arenales 707, 5th Floor Buenos Aires
De Mayo 130/140
1061Buenos Aires
ARGENTINA
AUSTRALIA The Chase Manhattan Bank The Chase Manhattan Bank
Australia Limited Australia Limited
36th Floor Sydney
World Trade Centre
Jamison Street
Sydney
New South Wales 2000
AUSTRALIA
AUSTRIA Creditanstalt - Bankverein Credit Lyonnais
Schottengasse 6 Vienna
A - 1011, Vienna
AUSTRIA
BANGLADESH Standard Chartered Bank Standard Chartered Bank
18-20 Motijheel C.A. Dhaka
Box 536,
Dhaka-1000
BANGLADESH
BELGIUM Generale Bank Credit Lyonnais Bank
3 Montagne Du Parc Brussels
1000 Bruxelles
BELGIUM
BOTSWANA Barclays Bank of Botswana Limited Barclays Bank of Botswana
Barclays House Gaborone
Khama Crescent
Gaborone
BOTSWANA
BRAZIL Banco Chase Manhattan, S.A. Banco Chase Manhattan S.A.
Chase Manhattan Center Sao Paulo
Rua Verbo Divino, 1400
Sao Paulo, SP 04719-002
BRAZIL
CANADA The Royal Bank of Canada Royal Bank of Canada
Royal Bank Plaza Toronto
Toronto
Ontario M5J 2J5
CANADA
Canada Trust Royal Bank of Canada
Canada Trust Tower Toronto
BCE Place
161 Bay at Front
Toronto
Ontario M5J 2T2
CANADA
CHILE The Chase Manhattan Bank, N.A. The Chase Manhattan Bank, N.A.
Agustinas 1235 Santiago
Casilla 9192
Santiago
CHILE
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
COLOMBIA Cititrust Colombia S.A. Cititrust Colombia S.A.
Sociedad Fiduciaria Sociedad Fiduciaria
Carrera 9a No 99-02 Santafe de Bogota
Santafe de Bogota, DC
COLOMBIA
CZECH REPUBLIC Ceskoslovenska Obchodni Banka, A.S. Komercni Banka, A.S.,
Na Prikope 14 Praha
115 20 Praha 1
CZECH REPUBLIC
DENMARK Den Danske Bank Den Danske Bank
2 Holmens Kanala DK 1091 Copenhagen
Copenhagen
DENMARK
EGYPT National Bank of Egypt National Bank of Egypt
24 Sherif Street Cairo
Cairo
EGYPT
EUROBONDS Cedel S.A. ECU:Lloyds Bank PLC
67 Boulevard Grande Duchesse Charlotte International Banking Division
LUXEMBOURG London
A/c The Chase Manhattan Bank, N.A. For all other currencies: see
London relevant country
A/c No. 17817
EURO CDS First Chicago Clearing Centre ECU:Lloyds Bank PLC
27 Leadenhall Street Banking Division London
London EC3A 1AA For all other currencies: see
UNITED KINGDOM relevant country
FINLAND Merita Bank KOP Merita Bank KOP
Aleksis Kiven 3-5 Helsinki
00500 Helsinki
FINLAND
FRANCE Banque Paribas Societe Generale
Ref 256 Paris
BP 141
3, Rue D'Antin
75078 Paris
Cedex 02
FRANCE
GERMANY Chase Bank A.G. Chase Bank A.G.
Alexanderstrasse 59 Frankfurt
Postfach 90 01 09
60441 Frankfurt/Main
GERMANY
GHANA Barclays Bank of Ghana Barclays Bank
Barclays House Accra
High Street
Accra
GHANA
GREECE Barclays Bank Plc National Bank of Greece S.A.
1 Kolokotroni Street Athens
10562 Athens A/c Chase Manhattan Bank, N.A.,
GREECE London
A/c No. 040/7/921578-68
HONG KONG The Chase Manhattan Bank, N.A. The Chase Manhattan Bank, N.A.
40/F One Exchange Square Hong Kong
8, Connaught Place
Central, Hong Kong
HONG KONG
</TABLE>
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<CAPTION>
<S> <C> <C>
HUNGARY Citibank Budapest Rt. Citibank Budapest Rt.
Vaci Utca 19-21 Budapest
1052 Budapest V
HUNGARY
INDIA The Hongkong and Shanghai The Hongkong and Shanghai
Banking Corporation Limited Banking Corporation Limited
52/60 Mahatma Gandhi Road Bombay
Bombay 400 001
INDIA
Deutsche Bank AG, Bombay Branch Deutsche Bank
Securities & Custody Services Bombay
Kodak House
222 D.N. Road, Fort
Bombay 400 001
INDIA
INDONESIA The Hongkong and Shanghai The Chase Manhattan Bank, N.A.
Banking Corporation Limited Jakarta
World Trade Center
J1. Jend Sudirman Kav. 29-31
Jakarta 10023
INDONESIA
IRELAND Bank of Ireland Allied Irish Bank
International Financial Services Centre Dublin
1 Harbourmaster Place
Dublin 1
IRELAND
ISRAEL Bank Leumi Le-Israel B.M. Bank Leumi Le-Israel B.M.
19 Herzl Street Tel Aviv
61000 Tel Aviv
ISRAEL
ITALY The Chase Manhattan Bank, N.A. The Chase Manhattan Bank, N.A.
Piazza Meda 1 Milan
20121 Milan
ITALY
JAPAN The Chase Manhattan Bank, N.A. The Chase Manhattan Bank, N.A.
1-3 Marunouchi 1-Chome Tokyo
Chiyoda-Ku
Tokyo 100
JAPAN
JORDAN Arab Bank Limited Arab Bank Limited
P O Box 950544-5 Amman
Amman
Shmeisani
JORDAN
KENYA Barclays Bank of Kenya Barclays Bank of Kenya
Third Floor Nairobi
Queensway House
Nairobi
Kenya
LUXEMBOURG Banque Generale du Luxembourg S.A. Banque Generale du Luxembourg
50 Avenue J.F. Kennedy S.A.
L-2951 LUXEMBOURG Luxembourg
MALAYSIA The Chase Manhattan Bank, N.A. The Chase Manhattan Bank, N.A.
Pernas International Kuala Lumpur
Jalan Sultan Ismail
50250, Kuala Lumpur
MALAYSIA
MAURITIUS Hongkong and Shanghai Banking The Hongkong and Shanghai Banking
Corporation Ltd Corporation Ltd.
Curepipe Road Curepipe
Curepipe
MAURITIUS
</TABLE>
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<CAPTION>
<S> <C> <C>
MEXICO The Chase Manhattan Bank, S.A. No correspondent Bank
(Equities) Montes Urales no. 470, 4th Floor
Col. Lomas de Chapultepec
11000 Mexico D.F.
(Government Banco Nacional de Mexico, No correspondent Bank
Bonds) Avenida Juarez No. 104 - 11 Piso
06040 Mexico D.F.
MEXICO
MOROCCO Banque Commerciale du Maroc Banque Commerciale du Maroc
2 Boulevard Moulay Youssef Casablanca
Casablanca 20000
MOROCCO
NETHERLANDS ABN AMRO N.V. Generale Bank
Securities Centre Nederland N.V.
P O Box 3200 Rotterdam
4800 De Breda
NETHERLANDS
NEW ZEALAND National Nominees Limited National Bank of New Zealand
Level 2 BNZ Tower Wellington
125 Queen Street
Auckland
NEW ZEALAND
NORWAY Den Norske Bank Den Norske Bank
Kirkegaten 21 Oslo
Oslo 1
NORWAY
PAKISTAN Citibank N.A. Citibank N.A.
I.I. Chundrigar Road Karachi
AWT Plaza
Karachi
PAKISTAN
Deutsche Bank Deutsche Bank
Unitowers Karachi
I.I. Chundrigar Road
Karachi
PAKISTAN
PERU Citibank, N.A. Citibank N.A.
Camino Real 457 Lima
CC Torre Real - 5th Floor
San Isidro, Lima 27
PERU
PHILIPPINES The Hongkong and Shanghai The Hongkong and Shanghai
Banking Corporation Limited Banking Corporation Limited
Hong Kong Bank Centre 3/F Manila
San Miguel Avenue
Ortigas Commercial Centre
Pasig Metro Manila
PHILIPPINES
POLAND Bank Polska Kasa Opieki S.A. Bank Polska Kasa Opieki S.A.
Curtis Plaza Warsaw
Woloska 18
02-675 Warsaw
POLAND
</TABLE>
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<CAPTION>
<S> <C> <C>
For Mutual Funds:
Bank Handlowy W. Warsawie. S.A. Bank Polska Kasa Opieki S.A.
Custody Dept. Warsaw
Capital Markets Centre
Ul, Nowy Swiat 6/12
00-920 Warsaw
POLAND
PORTUGAL Banco Espirito Santo & Comercial de Lisboa Banco Nacional Ultra Marino
Servico de Gestaode Titulos Lisbon
R. Mouzinho da Silveira, 36 r/c
1200 Lisbon
PORTUGAL
SHANGHAI The Hongkong and Shanghai Citibank
(CHINA) Banking Corporation Limited New York
Shanghai Branch
Corporate Banking Centre
Unit 504, 5/F Shanghai Centre
1376 Nanjing Xi Lu
Shanghai
THE PEOPLE'S REPUBLIC OF CHINA
SHENZHEN The Hongkong and Shanghai The Chase Manhattan Bank, N.A.
(CHINA) Banking Corporation Limited Hong Kong
1st Floor
Central Plaza Hotel
No.1 Chun Feng Lu
Shenzhen
THE PEOPLE'S REPUBLIC OF CHINA
SINGAPORE The Chase Manhattan Bank, N.A. The Chase Manhattan Bank, N.A.
Shell Tower Singapore
50 Raffles Place
Singapore 0104
SINGAPORE
SLOVAK REPUBLIC Ceskoslovenska Obchodni Banka, A.S. Ceskoslovenska Obchodni Banka
Michalska 18 Slovak Republic
815 63 Bratislava
SLOVAK REPUBLIC
SOUTH AFRICA Standard Bank of South Africa Standard Bank of South Africa
Standard Bank Chambers South Africa
46 Marshall Street
Johannesburg 2001
SOUTH AFRICA
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
SOUTH KOREA The Hongkong & Shanghai The Hongkong & Shanghai
Banking Corporation Limited Banking Corporation Limited
6/F Kyobo Building Seoul
#1 Chongro, 1-ka Chongro-Ku,
Seoul
SOUTH KOREA
SPAIN The Chase Manhattan Bank, N.A. Banco Bilbao Vizcaya,
Calle Peonias 2 Madrid
7th Floor
La Piovera
28042 Madrid
SPAIN
SRI LANKA The Hongkong & Shanghai The Hongkong & Shangai
Banking Corporation Limited Banking Corporation Limited
Unit #02-02 West Block, Colombo
World Trade Center
Colombo 1,
SRI LANKA
SWEDEN Skandinaviska Enskilda Banken Svenska Handelsbanken
Kungstradgardsgatan 8 Stockholm
Stockholm S-106 40
SWEDEN
SWITZERLAND Union Bank of Switzerland Union Bank of Switzerland
45 Bahnhofstrasse Zurich
8021 Zurich
SWITZERLAND
TAIWAN The Chase Manhattan Bank, N.A. No correspondent Bank
115 Min Sheng East Road - Sec 3,
9th Floor
Taipei
TAIWAN
Republic of China
THAILAND The Chase Manhattan Bank, N.A. The Chase Manhattan Bank, N.A.
Bubhajit Building Bangkok
20 North Sathorn Road
Silom, Bangrak
Bangkok 10500
THAILAND
TUNISIA Banque Internationale Arabe de Tunisie Banque Internationale Arabe de
70-72 Avenue Habib Bourguiba Tunisie, Tunisia
P.O. Box 520
1080 Tunis Cedex
Tunisia
</TABLE>
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<CAPTION>
<S> <C> <C>
TURKEY The Chase Manhattan Bank, N.A. The Chase Manhattan Bank, N.A.
Emirhan Cad. No: 145 Istanbul
Atakule, A Blok Kat:11
80700-Dikilitas/Besiktas
Istanbul
Turkey
U.K. The Chase Manhattan Bank, N.A. The Chase Manhattan Bank, N.A.
Woolgate House London
Coleman Street
London EC2P 2HD
UNITED KINGDOM
URUGUAY The First National Bank of Boston The First National Bank of Boston
Zabala 1463 Montevideo
Montevideo
URUGUAY
U.S.A. The Chase Manhattan Bank, N.A. The Chase Manhattan Bank, N.A.
1 Chase Manhattan Plaza New York
New York
NY 10081
U.S.A.
VENEZUELA Citibank N.A. Citibank N.A.
Carmelitas a Altagracia Caracas
Edificio Citibank
Caracas 1010
VENEZUELA
ZAMBIA Barclays Bank of Zambia Barclays Bank of Zambia
Kafue House Lusaka
Cairo Road
P.O.Box 31936
Lusaka
ZAMBIA
ZIMBABWE Barclays Bank of Zimbabwe Barclays Bank of Zimbabwe
Ground Floor Harare
Tanganyika House
Corner of 3rd Street & Union Avenue
Harare
ZIMBABWE
</TABLE>
<PAGE>
Law Office
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, Pennsylvania 19103-7098
(215) 564-8000
Direct Dial: (215) 564-8115
June 17, 1999
Delaware Group Tax-Free Money Fund
1818 Market Street
Philadelphia, PA 19103
Re: Legal Opinion-Securities Act of 1933
------------------------------------
Ladies and Gentlemen:
We have examined the Agreement and Declaration of Trust, (the
"Agreement"), of Delaware Group Tax-Free Money Fund (the "Fund"), a business
trust organized under Delaware law, the By-Laws of the Fund, and its proposed
form of Share Certificates (if any), 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 as amended, (the "Investment Company Act") and the Securities Act of
1933 as amended, (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 Agreement to issue an unlimited
number of shares with no par value. The Agreement also empowers 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, and/or its predecessor 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 and/or
its predecessor 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>
Delaware Group Tax-Free Money Fund
June 17, 1999
Page 2
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 Trustees pursuant to the Agreement, 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 Agreement and the laws
of the State of Delaware.
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
