<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
File No. 2-75526
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. ________ [_]
Post-Effective Amendment No. 42 [X]
--------
AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 42
------
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
(formerly Delaware Group Treasury Reserves, Inc.)
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
1818 Market Street, Philadelphia, Pennsylvania 19103
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (215) 751-2923
-------------
George M. Chamberlain, Jr., 1818 Market Street, Philadelphia, PA 19103
- --------------------------------------------------------------------------------
(Name and Address of Agent for Service)
Approximate Date of Public Offering: November 29,1995
----------------
It is proposed that this filing will become effective:
_________ immediately upon filing pursuant to paragraph (b)
X on November 29, 1995 pursuant to paragraph (b)
---------
_________ 60 days after filing pursuant to paragraph (a)(1)
_________ on (date) pursuant to paragraph (a)(1)
_________ 75 days after filing pursuant to paragraph (a)(2)
_________ on (date) pursuant to paragraph (a)(2) of Rule 485
Registrant has registered an indefinite amount of
securities under the Securities Act of 1933
pursuant to Section 24(f) of the Investment Company
Act of 1940. The Rule 24f-2 Notice for Registrant's
most recent fiscal year was filed on February 27, 1995.
<PAGE>
Form N-1A
File No. 2-75526
Delaware Group Limited-Term
Government Funds, Inc.
--- C O N T E N T S ---
This Post-Effective Amendment No. 42 to Registration File No. 2-75526
includes the following:
1. Facing Page.
2. Contents Page.
3. Cross-Reference Sheet.
4. Part A - Prospectuses and Supplement*.
5. Part B - Statements of Additional Information*.
6. Part C - Other Information*.
7. Signatures.
* This Post-Effective Amendment relates to the Registrant's Limited-Term
Government Fund (formerly Treasury Reserves Intermediate Series) --
Limited-Term Government Fund A Class (formerly Treasury Reserves
Intermediate Fund A Class), Limited-Term Government Fund B Class
(formerly Treasury Reserves Intermediate Fund B Class), Limited-Term
Government Fund C Class and Limited-Term Government Fund Institutional
Class (formerly Treasury Reserves Intermediate Fund Institutional Class),
and U.S. Government Money Series -- U.S. Government Money Fund A Class
and U.S. Government Money Fund Consultant Class. Each Series of the
Registrant uses its own Prospectuses and Statement of Additional
Information. The Limited-Term Government Fund Institutional Class'
Prospectus dated August 29, 1995 is incorporated into this filing by
reference to the electronic filing of that Prospectus made pursuant to
Rule 497(e) on August 29, 1995. The U.S. Government Money Fund A Class
Prospectus and the U.S. Government Money Fund Consultant Class Prospectus
are incorporated into this filing by reference to the electronic filing
of those Prospectuses made pursuant to Rule 497(e) on April 24, 1995 and
the Supplements thereto are incorporated into this filing by reference to
the electronic filings of those Supplements made pursuant to Rule 497(e)
on August 29, 1995. The Statement of Additional Information and the
Supplements thereto for the U.S. Government Money Series are also
incorporated into this filing by reference to the electronic filings made
pursuant to Rule 497(e) on August 29, 1995.
<PAGE>
Form N-1A
File No. 2-75526
Delaware Group Limited-Term
Government Funds, Inc.
CROSS-REFERENCE SHEET*
---------------------
PART A**
------
<TABLE>
<CAPTION>
Item No. Description Location in Prospectuses
- ------- ----------- ------------------------
Limited-Term
Government Fund
A Class/ Institutional
B Class/ Class
C Class
<C> <S> <C> <C>
1 Cover Page..................................... Cover Cover
2 Synopsis....................................... Synopsis, Synopsis,
Summary of Summary of
Expenses Expenses
3 Condensed Financial Information................ Financial Financial
Highlights Highlights
4 General Description of Registrant.............. Investment Investment
Objective and Objective and
Policies, Policies,
Shares Shares
5 Management of the Fund......................... Management Management
of the Fund of the Fund
6 Capital Stock and Other Securities............. Delaware Dividends and
Difference, Distributions,
Dividends and Taxes, Shares
Distributions,
Taxes, Shares
7 Purchase of Securities Being Offered .......... Cover, Cover,
Buying Shares, Buying Shares,
Calculation of Calculation of
Offering Price Net Asset Value
and Net Asset Per Share,
Value Per Share, Management
Management of of the Fund
the Fund
8 Redemption or Repurchase...................... Buying Shares, Buying Shares,
Redemption Redemption and
and Exchange Exchange
9 Pending Legal Proceedings..................... None None
</TABLE>
* The Limited-Term Government Fund A Class, Limited-Term Government Fund B
Class and Limited-Term Government Fund C Class are combined in one
Prospectus and the Limited-Term Government Fund Institutional Class has
its own Prospectus. All classes of Limited-Term Government Fund are
described in one Statement of Additional Information covering only that
Series. U.S. Government Money Fund A Class and U.S. Government Money
Fund Consultant Class have their own Prospectuses, but, both classes are
described in one Statement of Additional Information covering only that
Series.
** The Limited-Term Government Fund Institutional Class' Prospectus dated
August 29, 1995 is incorporated into this filing by reference to the
electronic filing of that Prospectus made pursuant to Rule 497(e) on
August 29, 1995.
<PAGE>
Form N-1A
File No. 2-75526
Delaware Group Limited-Term
Government Funds, Inc.
CROSS-REFERENCE SHEET
---------------------
PART A***
------
(Continued)
<TABLE>
<CAPTION>
Item No. Description Location in Prospectuses
- ------- ----------- ------------------------
U.S. Government U.S. Government
Money Fund Money Fund
A Class Consultant Class
<C> <S> <C> <C>
1 Cover Page..................................... Cover Cover
2 Synopsis....................................... Synopsis, Synopsis,
Summary of Summary of
Expenses Expenses
3 Condensed Financial Information................ Financial Financial
Highlights Highlights
4 General Description of Registrant.............. Investment Investment
Objective and Objective and
Policies, Shares Policies, Shares
5 Management of the Fund......................... Management of Management of
the Fund the Fund
6 Capital Stock and Other Securities............. Delaware Delaware
Difference, Difference,
Dividends and Dividends and
Distributions, Distributions,
Taxes, Shares Taxes, Shares
7 Purchase of Securities Being Offered........... Cover, Cover,
Buying Shares, Buying Shares,
Net Asset Value Net Asset Value
Per Share, Per Share,
Management of Management of
the Fund the Fund
8 Redemption or Repurchase....................... Buying Shares, Buying Shares,
Redemption Redemption
and Exchange and Exchange
9 Pending Legal Proceedings...................... None None
</TABLE>
*** The U.S. Government Money Fund A Class Prospectus and the U.S.
Government Money Fund Consultant Class Prospectus are incorporated
into this filing by reference to the electronic filing of those
Prospectuses made pursuant to Rule 497(e) on April 24, 1995 and the
Supplements thereto are incorporated into this filing by reference
to the electronic filings of those Supplements made pursuant to
Rule 497(e) on August 29, 1995.
<PAGE>
Form N-1A
File No. 2-75526
Delaware Group Limited-Term
Government Funds, Inc.
CROSS-REFERENCE SHEET
---------------------
PART B
------
<TABLE>
<CAPTION>
Location in Statements
Item No. Description of Additional Information
- ------- ----------- -------------------------
Limited-Term U.S. Government
Government Fund Money Series
<C> <S> <C> <C>
10 Cover Page............................. Cover Cover
11 Table of Contents...................... Table of Contents Table of Contents
12 General Information and History........ General Information General Information
13 Investment Objectives and Policies..... Investment Objective Investment Objective
and Policies and Policy
14 Management of the Registrant........... Officers and Directors Officers and Directors
15 Control Persons and Principal
Holders of Securities................. Officers and Directors Officers and Directors
16 Investment Advisory and
Other Services........................ Plans Under 12b-1 Plan Under Rule 12b-1
for the Fund Classes for the U.S. Government
(under Purchasing Money Fund Consultant
Shares), Investment Class (under Purchasing
Management Agreement, Shares), Investment
Officers and Directors, Management Agreement,
General Information, Officers and Directors,
Financial Statements General Information,
Financial Statements
17 Brokerage Allocation................... Trading Practices Trading Practices
and Brokerage
18 Capital Stock and Other Securities..... Capitalization and Capitalization and
Noncumulative Voting Noncumulative Voting
(under General (under General
Information) Information)
</TABLE>
<PAGE>
Form N-1A
File No. 2-75526
Delaware Group Limited-Term
Government Funds, Inc.
CROSS-REFERENCE SHEET
---------------------
PART B*
------
(Continued)
<TABLE>
<CAPTION>
Location in Statements
Item No. Description of Additional Information
- ------- ----------- -------------------------
Limited-Term U.S. Government
Government Fund Money Series
<C> <S> <C> <C>
19 Purchase, Redemption and Pricing of
Securities Being Offered............... Purchasing Shares, Purchasing Shares,
Determining Offering Offering Price,
Price and Net Asset Redemption, Exchange
Value, Redemption Privilege
and Repurchase,
Exchange Privilege
20 Tax Status.............................. Accounting and Taxes
Tax Issues
21 Underwriters............................ Purchasing Shares Purchasing Shares
22 Calculation of Performance Data ........ Performance Performance
Information Information
23 Financial Statements.................... Financial Financial
Statements Statements
</TABLE>
* The Statement of Additional Information and the Supplements thereto
for the U.S. Government Money Series are incorporated into this
filing by reference to the electronic filings made pursuant to Rule
497(e) on August 29, 1995.
<PAGE>
Form N-1A
File No. 2-75526
Delaware Group Limited-Term
Government Funds, Inc.
CROSS REFERENCE SHEET
---------------------
PART C
------
<TABLE>
<CAPTION>
Item No. Description Location in Part C
- -------- ----------- ------------------
<C> <S> <C>
24 Financial Statements and Exhibits........... Item 24
25 Persons Controlled by or under
Common Control with Registrant............. Item 25
26 Number of Holders of Securities............. Item 26
27 Indemnification............................. Item 27
28 Business and Other Connections of
Investment Adviser......................... Item 28
29 Principal Underwriters...................... Item 29
30 Location of Accounts and Records............ Item 30
31 Management Services......................... Item 31
32 Undertakings................................ Item 32
</TABLE>
<PAGE>
LIMITED-TERM GOVERNMENT FUND PROSPECTUS
(FORMERLY TREASURY RESERVES INTERMEDIATE FUND) NOVEMBER 29, 1995
A CLASS SHARES
B CLASS SHARES
C CLASS SHARES
-----------------------------------------------------------
1818 MARKET STREET, PHILADELPHIA, PA 19103
FOR PROSPECTUS AND PERFORMANCE: NATIONWIDE 800-523-4640,
PHILADELPHIA 215-988-1333
INFORMATION ON EXISTING ACCOUNTS: (SHAREHOLDERS ONLY)
NATIONWIDE 800-523-1918, PHILADELPHIA 215-988-1241
DEALER SERVICES: (BROKER/DEALERS ONLY)
NATIONWIDE 800-362-7500, PHILADELPHIA 215-988-1050
Delaware Group Limited-Term Government Funds, Inc. (formerly Delaware Group
Treasury Reserves, Inc.) (the "Fund") is a professionally-managed mutual fund of
the series type. This Prospectus describes the Limited-Term Government Fund A
Class ("Class A Shares"), the Limited-Term Government Fund B Class ("Class B
Shares") and the Limited-Term Government Fund C Class ("Class C Shares") (such
classes, will be referred to individually as a "Class" and collectively as the
"Classes") of the Fund's Limited-Term Government Fund series (the "Series").
The Class A Shares and the Class B Shares were formerly known as Treasury
Reserve Intermediate Fund A Class and the Treasury Reserve Intermediate Fund B
Class, respectively. The Series' objective is to seek a high, stable level of
current income while attempting to minimize fluctuations in principal and
provide maximum liquidity. The Series seeks to achieve its objective by
investing its assets in a diversified 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.
Class A Shares may be purchased at the public offering price, which is
equal to the next determined net asset value per share, plus a front-end sales
charge. Class B Shares and Class C Shares may be purchased at a price equal to
the next determined net asset value per share. Class A Shares are subject to a
maximum front-end sales charge of 3.00% and annual 12b-1 Plan expenses of up to
0.30% (currently, no more than .15% pursuant to Board action). Class B Shares
are subject to a contingent deferred sales charge ("CDSC") which may be imposed
on redemptions made within three years of purchase and annual 12b-1 Plan
expenses of 1.00%, which are assessed against Class B Shares for approximately
five years after purchase. See Automatic Conversion of Class B Shares under
Buying Shares. Class C Shares are subject to a CDSC which may be imposed on
redemptions made within twelve months of purchase and annual 12b-1 Plan expenses
of 1.00%, which are assessed against Class C Shares for the life of the
investment. See Summary of Expenses. These alternatives permit an investor to
choose the method of purchasing shares that is most suitable for his or her
needs. In choosing the most suitable Class, an investor should consider the
differences among the Classes, including the effect of sales charges and 12b-1
Plan expenses, given the amount of the purchase, the length of time the investor
expects to hold the shares and other circumstances. See Buying Shares.
1
<PAGE>
This Prospectus relates only to the Classes listed above and sets forth
information that you should read and consider before you invest. Please retain
it for future reference. Part B of the registration statement, dated November
29, 1995, as it may be amended from time to time, contains additional
information about the Series and has been filed with the Securities and Exchange
Commission. Part B is incorporated by reference into this Prospectus and is
available, without charge, by writing to Delaware Distributors, L.P. at the
above address or by calling the above numbers. The Fund's financial statements
appear in its Annual Report for the fiscal year ended December 31, 1994, and its
Semi-Annual Report for the six months ended June 30, 1995, which will accompany
any response to requests for Part B.
The Series also offers the Limited-Term Government Fund Institutional
Class. That class is available only to certain enumerated investors. A
prospectus for the Limited-Term Government Fund Institutional Class can be
obtained by writing to Delaware Distributors, L.P. at the above address or by
calling the above number.
TABLE OF CONTENTS
COVER PAGE RETIREMENT PLANNING
SYNOPSIS BUYING SHARES
SUMMARY OF EXPENSES REDEMPTION AND EXCHANGE
FINANCIAL HIGHLIGHTS DIVIDENDS AND DISTRIBUTIONS
INVESTMENT OBJECTIVE AND POLICIES TAXES
SUITABILITY CALCULATION OF OFFERING PRICE AND
INVESTMENT STRATEGY NET ASSET VALUE PER SHARE
THE DELAWARE DIFFERENCE MANAGEMENT OF THE FUND
PLANS AND SERVICES APPENDIX A - INVESTMENT ILLUSTRATIONS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
BE SURE TO CONSULT YOUR FINANCIAL ADVISER WHEN MAKING INVESTMENTS. MUTUAL FUNDS
CAN BE A VALUABLE PART OF YOUR FINANCIAL PLAN; HOWEVER, SHARES OF THE FUND ARE
NOT FDIC OR NCUSIF INSURED, ARE NOT GUARANTEED BY ANY BANK OR ANY CREDIT UNION,
ARE NOT OBLIGATIONS OF ANY BANK OR ANY CREDIT UNION, AND INVOLVE INVESTMENT
RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. SHARES OF THE FUND ARE NOT BANK
OR CREDIT UNION DEPOSITS.
2
<PAGE>
SYNOPSIS
CAPITALIZATION
The Series offers four classes of shares; Class A Shares, Class B Shares,
Class C Shares and the Limited-Term Government Fund Institutional Class. The
Fund has an authorized capital of three billion shares of capital stock with a
par value of $.001 per share, of which two billion shares have been allocated to
the Series. One billion four hundred million shares of such capital stock have
been allocated to these classes, as follows: nine hundred fifty million shares
have been allocated to Class A Shares, two hundred million shares have been
allocated to Class B Shares, fifty million shares have been allocated to Class C
Shares and two hundred million shares have been allocated to the Limited-Term
Government Fund Institutional Class. See Shares under Management of the Fund.
INVESTMENT MANAGER, DISTRIBUTOR AND SERVICE AGENT
Delaware Management Company, Inc. (the "Manager") is the investment manager
for the Fund. The Manager or its affiliate, Delaware International Advisers
Ltd., also manages the other funds in the Delaware Group. Delaware
Distributors, L.P. (the "Distributor") is the national distributor for the Fund
and for all of the other mutual funds in the Delaware Group. Delaware Service
Company, Inc. (the "Transfer Agent") is the shareholder servicing, dividend
disbursing and transfer agent for the Fund and for all of the other mutual funds
in the Delaware Group. See Management of the Fund.
SALES CHARGE
The price of Class A Shares includes a maximum front-end sales charge of
3.00% of the offering price, which, based on the net asset value of Class A
Shares as of the end of the Fund's most recent fiscal year, is equivalent to
3.10% of the amount invested. The sales charge is reduced on certain
transactions of at least $100,000 but under $1,000,000. For purchases of
$1,000,000 or more, the front-end sales charge is eliminated. Class A Shares
are subject to annual 12b-1 Plan expenses.
The price of Class B Shares is equal to the net asset value per share.
Class B Shares are subject to a CDSC of: (i) 2% if shares are redeemed within
two years of purchase; and (ii) 1% if shares are redeemed during the third year
following purchase. Class B Shares are subject to annual 12b-1 Plan expenses
for approximately five years after purchase. See Automatic Conversion of Class
B Shares under Buying Shares.
The price of the Class C Shares is equal to the net asset value per share.
Class C Shares are subject to a CDSC of 1% if shares are redeemed within twelve
months of purchase. Class C Shares are subject to annual 12b-1 Plan expenses
for the life of the investment.
See Buying Shares and Distribution (12b-1) and Service under Management of
the Fund.
PURCHASE AMOUNTS
Generally, the minimum initial investment is $1,000 for Class A Shares,
Class B Shares and Class C Shares. Subsequent investments generally must be at
least $100. Each purchase of Class B Shares is subject to a maximum purchase
limitation of $250,000. For Class C Shares, each purchase must be in an amount
that is less than $1,000,000. An investor may exceed these maximum purchase
limitations for Class B Shares and Class C Shares by making cumulative purchases
over a period of time. An investor should keep in mind, however, that reduced
front-end sales charges apply to investments of $100,000 or more of Class A
Shares, which are subject to lower annual 12b-1 Plan expenses than Class B
Shares and Class C Shares and generally are not subject to a CDSC. The minimum
and maximum purchase amounts for retirement plans may vary. See Buying Shares.
INVESTMENT OBJECTIVE
The objective of the Series is to seek high, stable income by investing 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. For further details, see Investment Objective and Policies.
3
<PAGE>
OPEN-END INVESTMENT COMPANY
The Fund, which was organized as a Pennsylvania business trust in 1981 and
reorganized as a Maryland corporation in 1990, is an open-end management
investment company. The Series' portfolio of assets is diversified as defined
by the Investment Company Act of 1940 (the "1940 Act"). See Shares under
Management of the Fund.
INVESTMENT MANAGEMENT FEES
The Manager furnishes investment management services to the Fund, subject
to the supervision and direction of the Board of Directors. Under the
Investment Management Agreement, the annual compensation paid to the Manager is
equal to 1/2 of 1% of the average daily net assets, less a proportionate share
of all directors' fees paid to the unaffiliated directors by the Series. See
Management of the Fund.
REDEMPTION AND EXCHANGE
Class A Shares of the Series may be redeemed or exchanged at the net asset
value calculated after receipt of the redemption or exchange request. Neither
the Series nor the Distributor assesses a charge for redemptions or exchanges of
Class A Shares, except for certain redemptions of shares purchased at net asset
value, which may be subject to a CDSC if such purchases triggered the payment of
a dealer's commission. See Front-End Sales Charge Alternative - Class A Shares
under Buying Shares. Class B and Class C Shares may be redeemed or exchanged at
the net asset value calculated after receipt of the redemption or exchange
request subject, in the case of redemptions, to any applicable CDSC. Neither
the Series nor the Distributor assesses any charges other than the CDSC for
redemptions or exchanges of Class B or Class C Shares. There are certain
limitations on an investor's ability to exchange shares between the various
classes of shares that are offered. See Redemption and Exchange.
4
<PAGE>
SUMMARY OF EXPENSES
A general comparison of the sales arrangements and other expenses
applicable to Class A, Class B and Class C Shares follows:
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS A SHARES CLASS B SHARES CLASS C SHARES
-------------------------------- -------------- -------------- --------------
<S> <C> <C> <C>
Maximum Sales Charge Imposed on
Purchases (as a percentage of offering 3.00% None None
price).........................................
Maximum Sales Charge Imposed on
Reinvested Dividends (as a percentage of
offering price)................................ None None None
Maximum Contingent Deferred Sales Charge
(as a percentage of original purchase
price or redemption proceeds, whichever is
lower)......................................... None* 2.00%* 1.00%*
Redemption Fees................................. None** None** None**
<CAPTION>
ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS) CLASS A SHARES CLASS B SHARES CLASS C SHARES
- --------------------------------------------- -------------- -------------- --------------
Management Fees................................. 0.50% 0.50% 0.50%
12b-1 Expenses (including service fees)......... 0.15%+/*** 1.00%+ 1.00%+
Other Operating Expenses........................ 0.26% 0.26%++ 0.26%++
---- ---- ----
Total Operating Expenses........................ 0.91%*** 1.76% 1.76%
==== ==== ====
</TABLE>
The purpose of this table is to assist the investor in understanding the
various costs and expenses that an investor in any of the Classes will bear
directly or indirectly.
*With respect to Class A Shares, purchases of $1 million or more may be
made at net asset value; however, if in connection with any such purchase
certain dealer commissions are paid to the financial adviser through whom such
purchase is effected, a CDSC of 1% will be imposed on certain redemptions within
twelve months of purchase ("Limited CDSC"). Class B Shares are subject to a
CDSC of: (i) 2% if shares are redeemed within the first two years of purchase;
(ii) 1% if shares are redeemed during the third year following purchase; and
(iii) 0% thereafter. Class C Shares are subject to a CDSC of 1% if the shares
are redeemed within twelve months of purchase. See Contingent Deferred Sales
Charge for Certain Purchases of Class A Shares Made at Net Asset Value under
Redemption and Exchange; Deferred Sales Charge Alternative - Class B Shares and
Level Sales Charge Alternative - Class C Shares under Buying Shares.
**CoreStates Bank, N.A. currently charges $7.50 per redemption for
redemptions payable by wire.
***The actual 12b-1 Plan expenses to be paid and, consequently, the "Total
Operating Expenses" of Class A Shares, may be somewhat more (but the 12b-1
expenses may be no more than .15%) or somewhat less (but the 12b-1 expenses may
be no less than .10%) because of the formula adopted by the Board of Directors
for use in calculating the 12b-1 Plan expenses beginning June 1, 1992. See
Distribution (12b-1) and Service under Management of the Fund.
+Class A Shares, Class B Shares and Class C Shares are subject to separate
12b-1 Plans. Long-term shareholders may pay more than the economic equivalent
of the maximum front-end sales charges permitted by the rules of the National
Association of Securities Dealers, Inc. ("NASD"). See Distribution (12b-1) and
Service.
5
<PAGE>
++"Other Operating Expenses" for Class B Shares and Class C Shares are
estimates based upon the actual expenses incurred by Class A Shares for its
fiscal year ended December 31, 1994. See Limited-Term Government Fund
Institutional Class under Buying Shares for expense information for that class.
The following example illustrates the expenses that an investor would pay
on a $1,000 investment over various time periods, assuming (1) a 5% annual rate
of return, (2) redemption at the end of each time period and (3) with respect to
Class B Shares and Class C Shares, payment of a CDSC at the time of redemption,
if applicable.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A Shares $39(1) $58 $79 $139
Class B Shares $38 $65 $95(2) $155(2)
Class C Shares $28 $55 $95 $207
</TABLE>
An investor would pay the following expenses on the same $1,000 investment,
assuming no redemption at the end of the period:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A Shares $39 $58 $79 $139
Class B Shares $18 $55 $95(2) $155(2)
Class C Shares $18 $55 $95 $207
</TABLE>
(1) Generally, the Series does not assess a redemption charge upon a redemption
of Class A Shares. Under certain circumstances, however, a Limited CDSC,
which has not been reflected in this calculation, may be imposed on certain
redemptions within twelve months of purchase. See Contingent Deferred Sales
Charge for Certain Purchases of Class A Shares Made at Net Asset Value under
Redemption and Exchange.
(2) At the end of approximately five years after purchase, Class B Shares will
be automatically converted into Class A Shares. The example above assumes
conversion of Class B Shares at the end of the fifth year. However, the
conversion may occur as late as three months after the fifth anniversary of
purchase, during which time the higher 12b-1 Plan fees payable by Class B
Shares will continue to be assessed. Information for the sixth through tenth
years reflects expenses of Class A Shares. See Automatic Conversion of Class
B Shares under Buying Shares for a description of the automatic conversion
feature.
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN.
FINANCIAL HIGHLIGHTS
The following financial highlights from November 24, 1985 through December 31,
1994 for Class A Shares and May 2, 1994 through December 31, 1994 for Class B
Shares are derived from the financial statements of Delaware Group Limited-Term
Government Funds, Inc.--Limited-Term Government Fund series and have been
audited by Ernst & Young LLP, independent auditors. The data should be read in
conjunction with the financial statements, related notes, and the report of
Ernst & Young LLP covering such financial information and highlights, all of
which are incorporated by reference into Part B. Unaudited financial highlights
for the six months ended June 30, 1995 are also provided below for Class A
Shares and Class B Shares. The data should be read in conjunction with the
financial statements and related notes for the six months ended June 30, 1995,
all of which are incorporated by reference into Part B. Further information
6
<PAGE>
about the Series' performance is contained in its Annual Report to shareholders
for the fiscal year ended December 31, 1994, and its Semi-Annual Report to
shareholders for the six months ended June 30, 1995. A copy of the Series'
Annual Report (including the report of Ernst & Young LLP) and its Semi-Annual
Report may be obtained from the Fund upon request at no charge. Information
regarding Class C Shares has not been included in these tables because such
shares were not offered to the public prior to the date of this Prospectus.
7
<PAGE>
<TABLE>
<CAPTION>
CLASS A SHARES
----------------------------------------------------------------------------------------------
PERIOD
1/1/95
THROUGH
6/30/95(5) YEAR ENDED
(UNAUDITED) 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/28/89
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period................... $ 8.990 $ 9.840 $ 10.000 $ 10.190 $ 9.770 $ 9.720 $ 9.700
INCOME FROM INVESTMENT
OPERATIONS
- -----------------------------
Net Investment Income........ 0.367 0.667 0.681 0.740 0.799 0.814 0.843
Net Gains or Losses on
Securities
(both realized and
unrealized)............... 0.140 (0.850) (0.160) (0.190) 0.420 0.050 0.020
-------- -------- ---------- -------- -------- -------- --------
Total From Investment
Operations................. 0.507 (0.183) 0.521 0.550 1.219 0.864 0.863
-------- -------- ---------- -------- -------- -------- --------
LESS DISTRIBUTIONS
- -----------------------------
Dividends (from net
investment income).......... (0.367) (0.667) (0.681) (0.740) (0.799) (0.814) (0.843)
Distributions (from capital
gains)...................... none none none none none none none
Returns of Capital........... none none none none none none none
-------- -------- ---------- -------- -------- -------- --------
Total Distributions......... (0.367) (0.667) (0.681) (0.740) (0.799) (0.814) (0.843)
-------- -------- ---------- -------- -------- -------- --------
Net Asset Value, End of
Period...................... $ 9.130 $ 8.990 $ 9.840 $ 10.000 $ 10.190 $ 9.770 $ 9.720
======== ======== ========== ======== ======== ======== ========
TOTAL RETURN(2).............. 5.73% (1.88%) 5.31% 5.62%(2) 13.04%(2) 9.32% 9.28%
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period
(000's omitted)............. $738,938 $789,525 $1,126,031 $861,829 $144,129 $107,739 $107,637
Ratio of Expenses to Average
Daily Net Assets............ 0.99% 0.91% 0.88% 0.87%(3) 0.90%(3) 0.99% 0.97%
Ratio of Net Investment
Income to Average Daily Net
Assets...................... 8.14% 7.10% 6.77% 7.03%(4) 7.96%(4) 8.41% 8.72%
Portfolio Turnover Rate...... 54% 148% 171% 77% 42% 175% 311%
<CAPTION>
CLASS A SHARES
----------------------------------------------------
PERIOD
11/24/85(1)
THROUGH
12/29/88 12/31/87 12/25/86 12/26/85
<S> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period................... $ 9.800 $ 9.980 $ 10.040 $10.000
INCOME FROM INVESTMENT
OPERATIONS
- -----------------------------
Net Investment Income........ 0.730 0.695 0.836 0.057
Net Gains or Losses on
Securities
(both realized and
unrealized)............... (0.100) (0.180) (0.060) 0.040
-------- -------- -------- -------
Total From Investment
Operations................. 0.630 0.515 0.776 0.097
-------- -------- -------- -------
LESS DISTRIBUTIONS
- -----------------------------
Dividends (from net
investment income).......... (0.730) (0.695) (0.836) (0.057)
Distributions (from capital
gains)...................... none none none none
Returns of Capital........... none none none none
-------- -------- -------- -------
Total Distributions......... (0.730) (0.695) (0.836) (0.057)
-------- -------- -------- -------
Net Asset Value, End of
Period...................... $ 9.700 $ 9.800 $ 9.980 $10.040
======== ======== ======== =======
TOTAL RETURN(2).............. 6.63% 5.46% 7.89%(2) (1)
RATIOS/SUPPLEMENTAL DATA
- -----------------------------
Net Assets, End of Period
(000's omitted)............. $132,859 $138,818 $182,727 $ 8,070
Ratio of Expenses to Average
Daily Net Assets............ 0.90% 1.06% 1.02%(3) (1)
Ratio of Net Investment
Income to Average Daily Net
Assets...................... 7.44% 6.86% 7.85%(4) (1)
Portfolio Turnover Rate...... 146% 304% 39% (1)
</TABLE>
- -----------------------
(1) November 24, 1985 was the date of the initial public offering of the
Limited-Term Government Fund A Class; this class was formerly known as
Treasury Reserves Intermediate Fund A Class. See Shares for additional
information. The ratios of expenses and net investment income to average
daily net assets, total return and portfolio turnover have been omitted as
management believes that such ratios for this relatively short period are
not meaningful.
(2) Does not reflect maximum front-end sales charge, currently, 3.00% nor the
1% Limited CDSC that would apply in the event of certain redemptions within
twelve months of purchase. See Contingent Deferred Sales Charge for
Certain Purchases of Class A Shares Made at Net Asset Value. Total return
for 1986, 1991 and 1992 reflects the expense limitations referenced in
Notes 3 and 4.
(3) Ratio of expenses to average daily net assets prior to expense limitation
was 0.90% for 1992, 0.99% for 1991 and 1.08% for 1986 for the Limited-Term
Government Fund A Class.
(4) Ratio of net investment income prior to expense limitation to average daily
net assets was 7.01% for 1992, 7.87% for 1991 and 7.79% for 1986 for the
Limited-Term Government Fund A Class.
(5) Ratios have been annualized, but total return for the limited period
January 1, 1995 through June 30, 1995 has not been annualized.
8
<PAGE>
<TABLE>
<CAPTION>
CLASS B SHARES
----------------------------
PERIOD
1/1/95 PERIOD
THROUGH 5/2/94(1)
6/30/95(2) THROUGH
(UNAUDITED) 12/31/94
<S> <C> <C>
Net Asset Value, Beginning of Period..... $ 8.990 $ 9.430
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net Investment Income.................... 0.328 0.399
Net Gains or Losses on Securities
(both realized and unrealized)........ 0.140 (0.440)
-------- ---------
Total From Investment Operations....... 0.468 (0.041)
-------- ---------
LESS DISTRIBUTIONS
- ------------------
Dividends (from net investment income)... (0.328) (0.399)
Distributions (from capital gains)....... none none
Returns of Capital....................... none none
----------
Total Distributions.................... (0.328) (0.399)
-------- ---------
Net Asset Value, End of Period........... $ 9.130 $ 8.990
======== =========
TOTAL RETURN(3).......................... 5.28% (0.44%)
- ------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period
(000's omitted)........................ $ 10,874 $ 6,282
Ratio of Expenses to Average Daily
Net Assets............................. 1.84% 1.76%
Ratio of Net Investment Income to
Average Daily Net Assets............... 7.29% 6.25%
Portfolio Turnover Rate.................. 54% 148%
</TABLE>
- -------------------------
(1) Date of initial public offering of Limited-Term Government Fund B Class;
this class was formerly known as Treasury Reserves Intermediate Fund B
Class. See Shares for additional information. Ratios have been
annualized, but total return for the limited period between May 2, 1994
through December 31, 1994 has not been annualized.
(2) Ratios have been annualized, but total return has not been annualized.
(3) Total return does not reflect any applicable CDSC.
9
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The Series seeks to provide a high stable level of income, while attempting
to minimize fluctuations in principal and provide maximum liquidity. It seeks
to do this 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. The Series may
also invest up to 20% of its assets in corporate notes and bonds, certificates
of deposit and obligations of both U.S. and foreign banks, commercial paper and
certain asset-back securities.
The Series is not a money market fund. A money market fund is designed for
stability of principal; consequently, the level of income fluctuates. The
Series is designed for greater stability of income at a relatively higher level;
consequently, the principal value will fluctuate over time.
The level of income will vary depending on interest rates and the
portfolio. However, since longer term rates are generally less volatile than
short-term rates, the level of income for the Series may be less volatile than,
for example, a money market fund.
Because the Series invests in longer term securities than a money market
fund, the value of shares will fluctuate. When interest rates rise, the share
value will tend to fall, and when interest rates fall, the share value will tend
to rise. See Investment Strategy.
SUITABILITY
The Series' objective of a high stable income stream is suited for longer
term investments, such as tax-deferred retirement plans (e.g., IRA, 401(k),
Profit Sharing, etc.), where the income stream can be left to compound on a tax-
deferred basis.
The Series' objective is also suitable for individuals who want a stable
and high income flow, the security associated with U.S. Government-backed
investments and the convenience and liquidity of mutual funds. Also, ownership
of Series shares reduces the bookkeeping and administrative inconveniences
connected with direct purchases of these instruments.
Investors should consider asset value fluctuation as well as yield in
making an investment decision. Therefore, the Series may not be suitable for
investors whose overriding objective is stability of principal. That is an
objective of the Delaware Group money market funds. Also, the Series is not
designed for the investor who is willing to assume the risks involved in
maximizing the yield or capital gain potential of a long-term bond portfolio.
These are objectives of other fixed income funds in the Delaware Group of funds
that are generally available through registered investment dealers.
INVESTMENT STRATEGY
The Series will attempt to provide you with yields higher than those
available in money market funds or bank money market accounts by extending its
portfolio maturities.
The yield curves, as shown in the chart below, reflect the additional
return that may be obtained by a moderate extension of maturities.
YIELD CURVE
Limited-Term
Government Fund
<TABLE>
<CAPTION>
Average Portfolio Maturity
--------------------------
12/31/93 12/31/94
-------- --------
<S> <C> <C>
3 Month 3.075 5.682
6 Month 3.287 6.495
1 Year 3.578 7.162
2 Year 4.234 7.690
3 Year 4.514 7.778
5 Year 5.197 7.827
7 Year 5.339 7.827
10 Year 5.792 7.827
30 Year 6.346 7.876
</TABLE>
10
<PAGE>
The Series expects to have an average portfolio maturity in the shaded area
indicated above. The yields to maturity in the curves are for unmanaged
Treasury securities with various remaining maturities. The black line shows the
yield curve at December 31, 1993. The blue line represents the yield curve as
of December 31, 1994. The data was obtained from Federal Reserve Statistical
Release H.15 (519). These are not necessarily indicative of future performance
or yield curves. The yield curve changes over time and short rates may
occasionally be higher than intermediate rates.
MATURITY RESTRICTIONS
The Series seeks to reduce the effects of interest rate volatility on
principal by limiting the average effective maturity (as that term is defined in
Part B) to no more than three to five years.
If in the judgment of the Manager rates are low, it will tend to shorten
the average effective maturity to three years or less. Conversely, if in its
judgment rates are high, it will tend to extend the average effective maturity
to five years or less. The Manager will increase the proportion of short-term
instruments when short-term yields are higher. The Manager also has the ability
to purchase individual securities with a remaining maturity of up to fifteen
years.
QUALITY RESTRICTIONS
The Series will invest primarily in securities issued or guaranteed by the
U.S. Government (e.g., Treasury Bills and Notes), its agencies (e.g., Federal
Housing Administration) or instrumentalities (e.g., Federal Home Loan Bank) or
government-sponsored corporations (e.g., Federal National Mortgage Association),
and repurchase agreements and publicly- and privately-issued mortgage-backed
securities collateralized by such securities. The Series may invest up to 20%
of its assets in: (1) corporate notes and bonds rated A or above; (2)
certificates of deposit and obligations of both U.S. and foreign banks if they
have assets of at least one billion dollars; (3) commercial paper rated P-1 by
Moody's Investors Service ("Moody's") and/or A-1 by Standard and Poor's Rating
Group ("S&P"); and (4) certain asset-backed securities rated Aaa by Moody's or
AAA by S&P.
The value of your shares will fluctuate in response to general interest
rate changes. When rates rise, the value of securities in the portfolio will
generally fall. Conversely, when rates fall, the value of securities in the
portfolio will generally rise.
INVESTMENT TECHNIQUES
To achieve its objective, the Series may use certain hedging techniques
which might not be conveniently available to individuals. These techniques will
be used at the Manager's discretion to protect the Series' principal value.
The Series may purchase put options, write secured put options, write
covered call options, purchase call options and enter into closing transactions.
A put option purchased by the Series gives it the right to sell one of its
securities for an agreed price up to an agreed date. The advantage is that the
Series can be protected should the market value of the security decline due to a
rise in interest rates. However, the Series must pay a premium for this right,
whether it exercises it or not. The Series will only purchase put options to
the extent that the premiums on all outstanding put options do not exceed 2% of
the Series' total assets.
A put option written by the Series obligates it to buy the security
underlying the option at the exercise price during the option period, and the
purchaser of the option has the right to sell the security to the Series.
During the option period, the Series, as writer of the put option, may be
assigned an exercise notice by the
11
<PAGE>
broker/dealer through whom the option was sold requiring the Series to make
payment of the exercise price against delivery of the underlying security. This
obligation terminates upon expiration of the put option or at such earlier time
at which the writer effects a closing purchase transaction. The Series will
only write put options on a secured basis. The advantage to the Series of
writing put options is that it receives premium income. The disadvantage is
that the Series may be required, when the put is exercised, to purchase
securities at higher prices than the current market price.
A covered call option written by the Series obligates it to sell one of its
securities for an agreed price up to an agreed date. The advantage is that the
Series receives premium income, which may offset the cost of purchasing put
options. However, the Series may lose the potential market appreciation of the
security if the Manager's judgment is wrong and interest rates fall.
When the Series purchases a call option, in return for a premium paid by
the Series to the writer of the option, the Series obtains the right to buy the
security underlying the option at a specified exercise price at any time during
the term of the option. The writer of the call option, who receives the premium
upon writing the option, has the obligation, upon exercise of the option, to
deliver the underlying security against payment of the exercise price. The
advantage is that the Series may hedge against an increase in the price of
securities which it ultimately wishes to buy. However, the premium paid for the
call option plus any transaction costs will reduce the benefit, if any, realized
by the Series upon exercise of the option. The Series will only purchase call
options to the extent that premiums paid on all outstanding call options do not
exceed 2% of the Series' total assets.
Closing transactions essentially let the Series offset put options or call
options prior to exercise or expiration. If the Series cannot effect closing
transactions, it may have to hold a security it would otherwise sell or deliver
a security it might want to hold.
The Series may use both Exchange-traded and over-the-counter options.
Certain over-the-counter options may be illiquid. The Series will not invest
more than 10% of its assets in illiquid securities.
The Series may invest in futures contracts and options on such futures
contracts subject to certain limitations.
Futures contracts are agreements for the purchase or sale for future
delivery of securities. When a futures contract is sold, the Series incurs a
contractual obligation to deliver the securities underlying the contract at a
specified price on a specified date during a specified future month. A purchase
of a futures contract means the acquisition of a contractual right to obtain
delivery to the Series of the securities called for by the contract at a
specified price during a specified future month. The Series will not enter into
futures contracts to the extent that more than 5% of the Series' assets are
required as futures contract margin deposits and will not engage in such
transactions to the extent that obligations relating to such transactions exceed
20% of the Series' assets.
The Series may also purchase and write options to buy or sell futures
contracts. Options on futures are similar to options on securities except that
options on futures give the purchaser the right, in return for the premium paid,
to assume a position in a futures contract, rather than actually to purchase or
sell the futures contract, at a specified exercise price at any time during the
period of the option.
The principal purpose of the purchase or sale of futures contracts for the
Series is to protect the Series against the adverse effects of fluctuations in
interest rates without actually buying or selling such securities. To the
extent that interest rates move in an unexpected
12
<PAGE>
direction, however, the Series may not achieve the anticipated benefits of
futures contracts or options on such futures contracts or may realize a loss.
To the extent that the Series purchases an option on a futures contract and
fails to exercise the option prior to the exercise date, it will suffer a loss
of the premium paid. Further, the possible lack of a secondary market would
prevent the Series from closing out its option positions relating to futures.
The Series may invest in mortgage-backed securities issued or guaranteed by
the U.S. Government, its agencies or instrumentalities. In addition, the Series
may invest up to 35% of its assets in securities issued by certain private,
nongovernment corporations, such as financial institutions, if the securities
are fully collateralized at the time of issuance by securities or certificates
issued or guaranteed by the U.S. Government, its agencies or instrumentalities.
Two principal types of mortgage-backed securities are collateralized mortgage
obligations (CMOs) and real estate mortgage investment conduits (REMICs).
CMOs and REMICs issued by private entities are not government securities
and are not directly guaranteed by any government securities and are not
directly guaranteed by any government agency. They are secured by the
underlying collateral of the private issuer. The Series will invest in such
private-backed securities only if they are 100% collateralized at the time of
issuance by securities issued or guaranteed by the U.S. Government, its agencies
or instrumentalities. The Series currently invests in privately-issued CMOs and
REMICs only if they are rated at the time of purchase in the two highest grades
by a nationally-recognized rating agency. Certain of the CMOs in which the
Series may invest may have variable or floating interest rates and others may be
stripped (securities which provide only the principal or interest feature of the
underlying security).
As noted and subject to the limitations set forth above, the Series may
also invest in securities which are backed by assets such as receivables on home
equity and credit card loans, and receivables on automobile, mobile home and
recreational vehicle loans, wholesale dealer floor plans and leases. All such
securities must be rated in the highest rating category by a reputable credit
rating agency (e.g., AAA by S&P or Aaa by Moody's). Such receivables are
securitized in either a pass-through or a pay-through structure. Pass-through
securities provide investors with an income stream consisting of both principal
and interest payments in respect of the receivables in the underlying pool. Pay-
through asset-backed securities are debt obligations issued usually by a special
purpose entity, which are collateralized by the various receivables and in which
the payments on the underlying receivables provide the funds to pay the debt
service on the debt obligations issued. The Series may invest in these and other
types of asset-backed securities that may be developed in the future. It is the
Series' 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. Due to the shorter maturity of the collateral
backing such securities, there is less of a risk of substantial prepayment than
with mortgage-backed securities. Such asset-backed securities do, however,
involve certain risks not associated with mortgage-backed securities, 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
13
<PAGE>
typical issuance and technical requirements under state laws. Therefore,
recoveries on repossessed collateral may not always be available to support
payments on the securities. For further discussion concerning the risks of
investing in such asset-backed securities, see Part B.
The Series may also use repurchase agreements which are at least 100%
collateralized by securities in which the Series can invest directly.
Repurchase agreements help the Series to invest cash on a temporary basis.
Under a repurchase agreement, the Series acquires ownership and possession of a
security, and the seller agrees to buy the security back at a specified time and
higher price. If the seller is unable to repurchase the security, the Series
could experience delays and losses in liquidating the securities. To minimize
this possibility, the Series considers the creditworthiness of banks and dealers
when entering into repurchase agreements.
PORTFOLIO LOAN TRANSACTIONS
The Series may loan up to 25% of its assets to qualified broker/dealers or
institutional investors for their use relating to short sales or other security
transactions.
The major risk to which the Series would be exposed on a loan transaction
is the risk that the borrower would go bankrupt at a time when the value of the
security goes up. Therefore, the Series will only enter into loan arrangements
after a review of all pertinent facts by the Manager, subject to overall
supervision by the Board of Directors, including the creditworthiness of the
borrowing broker, dealer or institution and then only if the consideration to be
received from such loans would justify the risk. Creditworthiness will be
monitored on an ongoing basis by the Manager.
* * *
The Series may invest in restricted securities, including securities
eligible for resale without registration pursuant to Rule 144A ("Rule 144A
Securities") under the Securities Act of 1933. Rule 144A permits many privately
placed and legally restricted securities to be freely traded among certain
institutional buyers such as the Series. The Series may invest no more than 10%
of the value of its net assets in illiquid securities.
While maintaining oversight, the Board of Directors has delegated to the
Manager the day-to-day functions of determining whether or not individual Rule
144A Securities are liquid for purposes of the Series' 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 Series'
holdings of illiquid securities exceed the Series' 10% limit on investment in
such securities, the Manager will determine what action to take to ensure that
the Series continues to adhere to such limitation.
* * *
Part B further clarifies the Series' investment policies as well as the
methods used to determine maturity. A brief discussion of those factors that
materially affected the Series' performance during its most recently completed
fiscal year appears in the Series' Annual Report.
14
<PAGE>
THE DELAWARE DIFFERENCE
PLANS AND SERVICES
The Delaware Difference is our commitment to provide you with superior
information and quality service on your investments in the Delaware Group of
funds.
SHAREHOLDER PHONE DIRECTORY
INVESTOR INFORMATION CENTER
800-523-4640 (PHILADELPHIA 215-988-1333)
FUND INFORMATION; LITERATURE; PRICE,
YIELD AND PERFORMANCE FIGURES
SHAREHOLDER SERVICE CENTER
800-523-1918 (PHILADELPHIA 215-988-1241)
INFORMATION ON EXISTING REGULAR
INVESTMENT ACCOUNTS AND
RETIREMENT PLAN ACCOUNTS; WIRE
INVESTMENTS; WIRE LIQUIDATIONS;
TELEPHONE LIQUIDATIONS; TELEPHONE
EXCHANGES
DELAPHONE
800-362-FUND
(800-362-3863)
SHAREHOLDER SERVICES
During business hours, you can call the Fund's Shareholder Service Center.
Our representatives can answer any questions about your account, the Series,
various service features and other funds in the Delaware Group.
PERFORMANCE INFORMATION
During business hours, you can call the Investor Information Center anytime
to get current yield information. Current yield and total return information
may also be included in advertisements and information given to shareholders.
Yield information is computed on an annual basis over a 30-day period.
DELAPHONE SERVICE
Delaphone is an account inquiry service for investors with Touch-Tone/(R)/
phone service. It enables you to get information on your account faster than
the mailed statements and confirmations. Delaphone is available seven days a
week, 24 hours a day.
STATEMENTS AND CONFIRMATIONS
You will receive quarterly statements of your account summarizing all
transactions during the period. A confirmation statement will be sent following
all transactions other than those involving a reinvestment of distributions.
You should examine statements and confirmations immediately and promptly report
any discrepancy by calling the Shareholder Service Center.
DUPLICATE CONFIRMATIONS
If your investment dealer is noted on your investment application, we will
send your dealer a duplicate confirmation. This makes it easier for your
investment dealer to help you manage your investments.
TAX INFORMATION
Each year, the Fund will mail you information on the tax status of your
dividends and distributions.
DIVIDEND REINVESTMENT PLAN
You can elect to have your distributions (capital gains and/or dividend
income) paid to you by check or reinvested in your account. Also, you may
invest your distributions in certain other funds in the Delaware Group, subject
to the exceptions noted below, as well as the eligibility and minimum purchase
requirements set forth in each fund's prospectus.
15
<PAGE>
Reinvestments of distributions into Class A Shares of the Series or of
other Delaware Group funds may be effected without a front-end sales charge.
Reinvestments of distributions into Class B Shares of the Series or of other
Delaware Group funds or into Class C Shares of the Series or of other Delaware
Group funds are also made without any sales charge and will not be subject to a
CDSC if later redeemed. See Automatic Conversion of Class B Shares under Buying
Shares for information concerning the automatic conversion of Class B Shares
acquired by reinvesting dividends.
Holders of Class A Shares of the Series may not reinvest their
distributions into Class B shares or Class C shares of any fund in the Delaware
Group, including the Series. Holders of Class B Shares of the Series may
reinvest their distributions only into Class B shares of the funds in the
Delaware Group which offer that class of shares (the "Class B Funds").
Similarly, holders of Class C Shares of the Series may reinvest their
distributions only into Class C shares of the funds in the Delaware Group which
offer that class of shares (the "Class C Funds"). See Class B Funds and Class C
Funds under Buying Shares for a list of the funds offering those classes of
shares. For more information about reinvestments, call the Shareholder Service
Center.
EXCHANGE PRIVILEGE
The Exchange Privilege permits shareholders to exchange all or part of
their shares into shares of the other funds in the Delaware Group, subject to
certain exceptions and limitations. For additional information on exchanges,
see Investing by Exchange under How to Buy Shares and Redemption and Exchange.
WEALTH BUILDER OPTION
You may elect to have amounts in your account automatically invested in
shares of other funds in the Delaware Group. Investments under this feature are
exchanges and are therefore subject to the same conditions and limitations as
other exchanges of Class A, Class B and Class C Shares. See Redemption and
Exchange.
RIGHT OF ACCUMULATION
With respect to Class A Shares, the Right of Accumulation feature allows
you to combine the value of your current holdings of Class A Shares, Class B
Shares and Class C Shares of the Series with the dollar amount of new purchases
of Class A Shares to qualify for a reduced front-end sales charge. Under the
COMBINED PURCHASES PRIVILEGE, you may also include certain shares that you own
in other funds in the Delaware Group. See Buying Shares.
LETTER OF INTENTION
The Letter of Intention feature permits you to obtain a reduced front-end
sales charge on purchases of Class A Shares by aggregating certain of your
purchases of Delaware Group fund shares over a 13-month period. See Buying
Shares and Part B.
DELAWARE GROUP ASSET PLANNER
Delaware Group Asset Planner is an asset allocation service that gives
investors, working with a professional financial adviser, the ability to more
easily design and maintain investments in a diversified selection of Delaware
Group mutual funds. The Asset Planner service offers a choice of four pre-
designed Allocation Strategies (each with a different risk/reward profile) made
up of separate investments in predetermined percentages of Delaware Group funds.
With the guidance of a financial adviser, investors may also tailor a Strategy
that meets their personal needs and goals. See How to Buy Shares under Buying
Shares.
12-MONTH REINVESTMENT PRIVILEGE
The 12-Month Reinvestment Privilege permits you to reinvest proceeds of
Class A Shares redeemed, within one year of the date of redemption, without a
front-end sales charge. See Part B.
16
<PAGE>
FINANCIAL INFORMATION ABOUT THE SERIES
Each fiscal year, you will receive an audited annual report and an
unaudited semi-annual report. These reports provide detailed information about
the Series' investments and performance. The Fund's fiscal year ends on
December 31.
THE DELAWARE DIGEST
You will receive newsletters covering topics of interest about your
investment alternatives and services from Delaware Group.
17
<PAGE>
RETIREMENT PLANNING
An investment in the Series may be suitable for tax-deferred retirement
plans. Among the retirement plans noted below, Class B Shares are available for
investment only by Individual Retirement Accounts, Simplified Employee Pension
Plans, 457 Deferred Compensation Plans and 403(b)(7) Deferred Compensation
Plans.
Retirement plans may be subject to plan establishment fees, annual
maintenance fees and/or other administrative or trustee fees. Fees are based
upon the number of participants in the plan as well as the services selected.
Additional information about fees is included in retirement plan materials. Fees
are quoted upon request.
Certain shareholder investment services available to non-retirement plan
shareholders may not be available to retirement plan shareholders. Certain
retirement plans may qualify to purchase the Limited-Term Government Fund
Institutional Class. For additional information on any of the plans and
Delaware's retirement services, call the Shareholder Service Center or see
Part B.
INDIVIDUAL RETIREMENT ACCOUNT ("IRA")
Individuals, even if they participate in an employer-sponsored retirement
plan, may establish their own retirement program for investments in each of the
Classes. Contributions to an IRA may be tax-deductible and earnings are tax-
deferred. Under the Tax Reform Act of 1986, the tax deductibility of IRA
contributions is restricted, and in some cases eliminated, for individuals who
participate in certain employer-sponsored retirement plans and whose annual
income exceeds certain limits. Existing IRAs and future contributions up to the
IRA maximums, whether deductible or not, still earn on a tax-deferred basis.
SIMPLIFIED EMPLOYEE PENSION PLAN ("SEP/IRA")
A SEP/IRA may be established by an employer who wishes to sponsor a tax-
sheltered retirement program by making contributions on behalf of all eligible
employees. Each of the Classes is available for investment by a SEP/IRA.
SALARY REDUCTION SIMPLIFIED EMPLOYEE PENSION PLAN ("SAR/SEP")
Offers employers with 25 or fewer eligible employees the ability to
establish a SEP/IRA that permits salary deferral contributions. An employer may
also elect to make additional contributions to this plan. Class B Shares are not
available for purchase by such plans.
403(B)(7) DEFERRED COMPENSATION PLAN
Permits employees of public school systems or of certain types of non-
profit organizations to enter into a deferred compensation arrangement for the
purchase of shares of each of the Classes.
457 DEFERRED COMPENSATION PLAN
Permits employees of state and local governments and certain other entities
to enter into a deferred compensation arrangement for the purchase of shares of
each of the Classes.
PROTOTYPE PROFIT SHARING OR MONEY PURCHASE PENSION PLAN
Offers self-employed individuals, partnerships and corporations a tax-
qualified plan which provides for the investment of contributions in Class A
Shares or Class C Shares. Class B Shares are not available for purchase by such
plans.
PROTOTYPE 401(K) DEFINED CONTRIBUTION PLAN
Permits employers to establish a tax-qualified plan based on salary
deferral contributions for investment in Class A Shares or Class C Shares. Class
B Shares are not available for purchase by such plans.
ALLIED PLANS
Class A Shares are available for purchase by participants in 401(k) Defined
Contribution Plans ("Allied Plans") which are made available under a joint
venture agreement between the Distributor and another institution through which
mutual funds are marketed and which allow investments in Class A Shares of
designated Delaware Group funds ("eligible Delaware Group fund shares"), as well
as shares of designated classes of non-Delaware Group funds ("eligible non-
Delaware Group fund shares"). Class B Shares and Class C Shares are not eligible
for purchase by Allied Plans.
18
<PAGE>
With respect to purchases made in connection with an Allied Plan, the value
of eligible Delaware Group and eligible non-Delaware Group fund shares held by a
participant under the Allied Plan may be combined with the dollar amount of new
purchases by that participant to obtain a reduced front-end sales charge on
additional purchases of eligible Delaware Group fund shares. See Front-End Sales
Charge Alternative - Class A Shares under Buying Shares.
Participants in Allied Plans may exchange all or part of their eligible
Delaware Group fund shares for other eligible Delaware Group fund shares or for
eligible non-Delaware Group fund shares at net asset value without payment of a
front-end sales charge. However, exchanges of eligible fund shares, both
Delaware Group and non-Delaware Group, which were not subject to a front-end
sales charge, will be subject to the applicable sales charge if exchanged for
eligible Delaware Group fund shares to which a sales charge applies. No sales
charge will apply if the eligible fund shares were previously acquired through
the exchange of eligible shares on which a sales charge was already paid or
through the reinvestment of dividends. See Investing by Exchange.
A dealer's commission may be payable on purchases of eligible Delaware
Group fund shares under an Allied Plan. In determining a financial adviser's
eligibility for a dealer's commission on net asset value purchases of eligible
Delaware Group fund shares in connection with Allied Plans, all participant
holdings in the Allied Plan will be aggregated. See Front-End Sales Charge
Alternative - Class A Shares under Buying Shares.
The Limited CDSC is applicable to redemptions of net asset value purchases
from an Allied Plan on which a dealer's commission has been paid. Waivers of the
Limited CDSC, as described below under Waiver of Limited CDSC -Class A Shares,
apply to redemptions by participants in Allied Plans, except in the case of
exchanges between eligible Delaware Group and non-Delaware Group fund shares.
When eligible Delaware Group fund shares are exchanged into eligible non-
Delaware Group fund shares, the Limited CDSC will be imposed at the time of the
exchange unless the joint venture agreement specifies that the amount of the
CDSC will be paid by the financial adviser or selling dealer. See Contingent
Deferred Sales Charge for Certain Purchases of Class A Shares Made at Net Asset
Value under Redemption and Exchange.
19
<PAGE>
BUYING SHARES
PURCHASE AMOUNTS
Generally, the minimum initial purchase is $1,000 for Class A Shares, Class
B Shares and Class C Shares. Subsequent purchases generally must be $100 or
more. In addition, there is a maximum purchase limitation of $250,000 on each
purchase of Class B Shares; for Class C Shares each purchase must be in an
amount that is less than $1,000,000. An investor may exceed these maximum
purchase limitations by making cumulative purchases over a period of time. In
doing so, an investor should keep in mind that reduced front-end sales charges
are available on investments of $100,000 or more in Class A Shares, and that
Class A Shares (i) are subject to lower annual 12b-1 Plan expenses than Class B
Shares and Class C Shares and (ii) generally are not subject to a CDSC.
For retirement plans, the maximum purchase limitations apply only to the
initial purchase of Class B Shares and Class C Shares by the plan. Minimum
purchase requirements do not apply to retirement plans other than IRAs for which
there is a minimum initial purchase of $250, and a minimum subsequent purchase
of $25, regardless of which Class is selected.
ALTERNATIVE PURCHASE ARRANGEMENTS
Shares may be purchased at a price equal to the next determined net asset
value per share, subject to a sales charge which may be imposed, at the election
of the purchaser, at the time of the purchase with respect to Class A Shares
("front-end sales charge alternative"), or on a contingent deferred basis with
respect to Class B Shares ("deferred sales charge alternative") or Class C
Shares ("level sales charge alternative").
Class A Shares. An investor who elects the front-end sales charge
alternative acquires Class A Shares. Class A Shares incur a sales charge when
they are purchased but generally are not subject to any sales charge when they
are redeemed. Class A Shares are subject to annual 12b-1 Plan expenses of up to
a maximum of .30% (currently, no more than .15% pursuant to Board action) of
average daily net assets of such shares. See Contingent Deferred Sales Charge
for Certain Purchases of Class A Shares Made at Net Asset Value and Distribution
(12b-1) and Service. Certain purchases of Class A Shares qualify for reduced
front-end sales charges. See Front-End Sales Charge Alternative - Class A
Shares, below.
Class B Shares. An investor who elects the deferred sales charge
alternative acquires Class B Shares. Class B Shares do not incur a front-end
sales charge when they are purchased, but they are subject to a sales charge if
they are redeemed within three years of purchase and are subject to annual 12b-1
Plan expenses of up to a maximum of 1% (.25% of which are service fees to be
paid to the Distributor, dealers or others for providing personal service and/or
maintaining shareholder accounts) of average daily net assets of such shares for
approximately five years after purchase. Class B Shares permit all of the
investor's dollars to work from the time the investment is made. The higher
12b-1 Plan expenses paid by Class B Shares will cause such shares to have a
higher expense ratio and to pay lower dividends than those related to Class A
Shares. At the end of approximately five years after purchase, Class B Shares
will automatically be converted into Class A Shares. See Automatic Conversion
of Class B Shares, below.
Class C Shares. An investor who elects the level sales charge alternative
acquires Class C Shares. Class C Shares do not incur a front-end sales charge
when they are purchased, but they are subject to a sales charge if they are
redeemed within twelve months of purchase and are subject to annual 12b-1 Plan
expenses of up to a maximum of 1% (.25% of which are service fees to be paid to
the Distributor, dealers or others for providing personal service and/or
maintaining shareholder accounts) of average daily net assets of such shares for
the life of the investment. The higher 12b-1 Plan expenses paid by Class C
Shares will cause such shares to have a higher expense ratio and to pay lower
dividends than those related to Class A Shares. Unlike Class B Shares, Class C
Shares do not convert to another class.
The alternative purchase arrangements described above permit investors in
the Series to choose the method of purchasing shares that is most suitable given
the amount of their purchase, the length of time they expect to hold their
shares and other relevant circumstances. Investors should determine whether,
given their particular circumstances, it is more advantageous to purchase Class
A Shares and incur a front-end
20
<PAGE>
sales charge, purchase Class B Shares and have the entire initial purchase
amount invested in the Series with their investment being subject to a CDSC if
they redeem shares within three years of purchase, or purchase Class C Shares
and have the entire initial purchase amount invested in the Series with their
investment being subject to a CDSC if they redeem shares within twelve months of
purchase. In addition, investors should consider the level of annual 12b-1 Plan
expenses to which each of the Classes is subject and, in comparing Class B
Shares to Class C Shares, the desirability of an automatic conversion feature,
which is available only for Class B Shares.
As an illustration, investors who qualify for significantly reduced front-
end sales charges on purchases of Class A Shares, as described below, might
elect the front-end sales charge alternative because similar sales charge
reductions are not available for purchases under either the deferred sales
charge alternative or the level sales charge alternative. Moreover, shares
acquired under the front-end sales charge alternative are subject to annual 12b-
1 Plan expenses of up to .30% (currently, no more than .15% pursuant to Board
action), whereas Class B Shares acquired under the deferred sales charge
alternative are subject to higher annual 12b-1 Plan expenses of up to 1% for
approximately five years after purchase (see Automatic Conversion of Class B
Shares) and Class C Shares acquired under the level sales charge alternative are
subject to annual 12b-1 Plan expenses of up to 1% for the life of the
investment. However, because front-end sales charges are deducted from the
purchase amount, investors who buy Class A Shares would not have their full
purchase amount invested in the Series.
Certain other investors might determine it to be more advantageous to
purchase Class B Shares and have all their funds invested initially, although
they would be subject to a CDSC for up to three years after purchase, as well as
annual 12b-1 Plan expenses of up to 1% until the shares are automatically
converted into Class A Shares. Still other investors might determine it to be
more advantageous to purchase Class C Shares and have all of their funds
invested initially, recognizing that they would be subject to a CDSC for just
twelve months after purchase, but that Class C Shares do not offer a conversion
feature, so their shares would be subject to annual 12b-1 Plan expenses of up to
1% for the life of the investment. The higher 12b-1 Plan expenses on Class B
Shares and Class C Shares will be offset to the extent a return is realized on
the additional money initially invested under the deferred sales charge
alternative or the level sales charge alternative. However, there can be no
assurance as to the return, if any, that will be realized on such additional
money.
Prospective investors should refer to Appendix A to this Prospectus for an
illustration of the potential impact on a long-term shareholder's investment in
the Series under each of the purchase options.
For the distribution and related services provided to, and the expenses
borne on behalf of, the Series, the Distributor and others will be paid, in the
case of Class A Shares, from the proceeds of the front-end sales charge and 12b-
1 Plan fees and, in the case of Class B Shares and Class C Shares, from the
proceeds of the 12b-1 Plan fees and, if applicable, the CDSC incurred upon
redemption. Sales personnel may receive different compensation for selling
Class A, Class B and Class C Shares. INVESTORS SHOULD UNDERSTAND THAT THE
PURPOSE AND FUNCTION OF THE RESPECTIVE 12b-1 PLANS AND CDSCs APPLICABLE TO CLASS
B SHARES AND CLASS C SHARES ARE THE SAME AS THOSE OF THE 12b-1 PLAN AND THE
FRONT-END SALES CHARGE APPLICABLE TO CLASS A SHARES IN THAT SUCH FEES AND
CHARGES PROVIDE FOR THE FINANCING OF THE DISTRIBUTION OF THE RESPECTIVE CLASSES.
See 12b-1 Distribution Plans - Class A, Class B and Class C Shares.
Dividends paid by the Series with respect to Class A, Class B and Class C
Shares, to the extent any dividends are paid, will be calculated in the same
manner, at the same time, on the same day and will be in the same amount, except
that the additional amount of 12b-1 Plan expenses relating to Class B Shares and
Class C Shares will be borne exclusively by such shares. See Calculation of
Offering Price and Net Asset Value Per Share.
The NASD has adopted certain rules relating to investment company sales
charges. The Fund and the Distributor intend to operate in compliance with
these rules.
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<PAGE>
FRONT-END SALES CHARGE ALTERNATIVE - CLASS A SHARES
Class A Shares may be purchased at the offering price which reflects a
maximum front-end sales charge of 3.00%. See Calculation of Offering Price and
Net Asset Value Per Share.
Purchases of $100,000 or more carry a reduced front-end sales charge as
shown in the following table.
<TABLE>
<CAPTION>
Limited-Term Government Fund A Class
- -------------------------------------------------------------------------------
Dealer's
Front-End Sales Charge as % of Concession***
Amount of Purchase Offering Amount as % of
Price Invested** Offering Price
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $100,000 3.00% 3.10% 2.50%
$100,000 but under $250,000 2.50 2.56 2.00
$250,000 but under $500,000 2.00 2.04 1.60
$500,000 but under $1,000,000* 1.50 1.52 1.20
</TABLE>
* There is no front-end sales charge on purchases of Class A Shares of $1
million or more but, under certain limited circumstances, a 1% Limited CDSC
may apply upon redemption of such shares.
** Based on the net asset value of Class A Shares as of the end of the Fund's
most recent fiscal year.
*** Financial institutions or their affiliated brokers may receive an agency
transaction fee in the percentages set forth above.
The Fund must be notified when a sale takes place which would qualify for
the reduced front-end sales charge on the basis of previous or current
purchases. The reduced front-end sales charge will be granted upon
confirmation of the shareholder's holdings by the Fund. Such reduced front-
end sales charges are not retroactive.
From time to time, upon written notice to all of its dealers, the
Distributor may hold special promotions for specified periods during which
the Distributor may reallow to dealers up to the full amount of the front-
end sales charge shown above. In addition, certain dealers who enter into an
agreement to provide extra training and information on Delaware Group
products and services and who increase sales of Delaware Group funds may
receive an additional concession of up to .15% of the offering price.
Dealers who receive 90% or more of the sales charge may be deemed to be
underwriters under the Securities Act of 1933.
22
<PAGE>
For initial purchases of Class A Shares of $1,000,000 or more, a dealer's
commission may be paid by the Distributor to financial advisers through whom
such purchases are effected in accordance with the following schedule:
DEALER'S
COMMISSION
---------------
(as a percent-
age of amount
AMOUNT OF PURCHASE purchased)
- ------------------
Up to $3 million .60%
Next $2 million up to $5 million .40
Amount over $5 million .20
In determining a financial adviser's eligibility for the dealer's
commission, purchases of Class A Shares of other Delaware Group funds as to
which a Limited CDSC applies may be aggregated with those of the Class A Shares
of the Series. Financial advisers also may be eligible for a dealer's
commission in connection with certain purchases made under a Letter of Intention
or pursuant to an investor's Right of Accumulation. Financial advisers should
contact the Distributor concerning the applicability and calculation of the
dealer's commission in the case of combined purchases.
An exchange from other Delaware Group funds will not qualify for payment of
the dealer's commission, unless such exchange is from a Delaware Group fund with
assets as to which a dealer's commission or similar payment has not been
previously paid. The schedule and program for payment of the dealer's
commission are subject to change or termination at any time by the Distributor
in its discretion.
Redemptions of Class A Shares purchased at net asset value may result in
the imposition of a Limited CDSC if the dealer's commission described above was
paid in connection with the purchase of those shares. See Contingent Deferred
Sales Charge for Certain Purchases of Class A Shares Made at Net Asset Value
under Redemption and Exchange.
COMBINED PURCHASES PRIVILEGE
By combining your holdings of Class A Shares with your holdings of Class B
Shares and/or Class C Shares of the Series and shares of the other funds in the
Delaware Group, except those noted below, you can reduce the front-end sales
charges on any additional purchases of Class A Shares. Shares of Delaware Group
Premium Fund, Inc. beneficially owned in connection with ownership of variable
insurance products may be combined with other Delaware Group fund holdings.
Shares of other funds that do not carry a front-end sales charge or CDSC may not
be included unless they were acquired through an exchange from a Delaware Group
fund that does carry a front-end sales charge or CDSC.
This privilege permits you to combine your purchases and holdings with
those of your spouse, your children under twenty-one years of age and any trust,
fiduciary or retirement account for the benefit of such family members.
It also permits you to use these combinations under a Letter of Intention.
A Letter of Intention allows you to make purchases over a thirteen-month period
and qualify the entire purchase for a reduction in front-end sales charges on
Class A Shares.
Combined purchases of $1,000,000 or more, including certain purchases made
at net asset value pursuant to a Right of Accumulation or under a Letter of
Intention, may trigger the payment of a dealer's commission and the
applicability of a Limited CDSC. Investors should consult their financial
advisers or the Shareholder Service Center about the operation of these
features. See Front-End Sales Charge Alternative - Class A Shares under Buying
Shares.
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<PAGE>
BUYING AT NET ASSET VALUE
Class A Shares of the Series may be purchased at net asset value under the
Delaware Group Dividend Reinvestment Plan and, under certain circumstances, the
12-Month Reinvestment Privilege and the Exchange Privilege. See The Delaware
Difference and Redemption and Exchange for additional information.
Purchases of Class A Shares may be made at net asset value by current and
former officers, directors and employees (and members of their immediate
families) of the Manager, any affiliate, any of the funds in the Delaware Group,
certain of their agents and registered representatives and employees of
authorized investment dealers and by employee benefit plans for such entities.
Individual purchases include retirement accounts and must be for accounts in the
name of the individual or a qualifying family member. Purchases of Class A
Shares may be made by clients of registered representatives of an authorized
investment dealer at net asset value within six months of a change of the
registered representative's employment, if the purchase is funded by proceeds
from an investment where a front-end sales charge has been assessed and the
redemption of the investment did not result in the imposition of a CDSC or other
redemption charge. Purchases of Class A Shares also may be made at net asset
value by bank employees who provide services in connection with agreements
between the bank and unaffiliated brokers or dealers concerning sales of Class A
Shares. Officers, directors and key employees of institutional clients of the
Manager or any of its affiliates may purchase Class A Shares at net asset value.
Moreover, purchases may be effected at net asset value for the benefit of the
clients of brokers, dealers and registered investment advisers affiliated with a
broker or dealer, if such broker, dealer or investment adviser has entered into
an agreement with the Distributor providing specifically for the purchase of
Class A Shares in connection with special investment products, such as wrap
accounts or similar fee based programs.
Investments of Class A Shares made by plan level and/or participant
retirement accounts that are for the purpose of repaying a loan taken from such
accounts, will be made at net asset value. Loan repayments made to a Delaware
Group account in connection with loans originated from accounts previously
maintained by another investment firm will also be invested at net asset value.
The Fund must be notified in advance that an investment qualifies for
purchase at net asset value.
GROUP INVESTMENT PLANS
Group Investment Plans (e.g., SEP/IRA, SAR/SEP, Prototype Profit Sharing,
Pension and 401(k) Defined Contribution Plans) may benefit from the reduced
front-end sales charges relating to the Class A Shares set forth in the table on
page _____, based on total plan assets. In addition, 403(b)(7) and 457
Retirement Plan Accounts may benefit from a reduced front-end sales charge on
Class A Shares based on the total amount invested by all participants in the
plan by satisfying the following criteria: (i) the employer for which the plan
was established has 250 or more eligible employees and the plan lists only one
broker of record, or (ii) the plan includes employer contributions and the plan
lists only one broker of record. If a company has more than one plan investing
in the Delaware Group of funds, then the total amount invested in all plans will
be aggregated to determine the applicable front-end sales charge reduction on
each purchase, both initial and subsequent, if, at the time of each such
purchase, the company notifies the Fund that it qualifies for the reduction.
Employees participating in such Group Investment Plans may also combine the
investments held in their plan account to determine the front-end sales charge
applicable to purchases in non-retirement Delaware Group investment accounts if,
at the time of each such purchase, they notify the Fund that they are eligible
to combine purchase amounts held in their plan account.
For additional information on these plans, including plan forms,
applications, minimum investments and any applicable account maintenance fees,
contact your investment dealer or the Distributor.
For other retirement plans and special services, see Retirement Planning.
DEFERRED SALES CHARGE ALTERNATIVE - CLASS B SHARES
Class B Shares may be purchased at net asset value without the imposition
of a front-end sales charge and, as a result, the Series will invest the full
amount of the investor's purchase
24
<PAGE>
payment. The Distributor currently anticipates compensating dealers or brokers
for selling Class B Shares at the time of purchase from its own assets in an
amount equal to no more than 2% of the dollar amount purchased. As discussed
below, however, Class B Shares are subject to annual 12b-1 Plan expenses and, if
redeemed within three years of purchase, a CDSC.
Proceeds from the CDSC and the annual 12b-1 Plan fees are paid to the
Distributor and others for providing distribution and related services, and
bearing related expenses, in connection with the sale of Class B Shares. These
payments support the compensation paid to dealers or brokers for selling Class B
Shares. Payments to the Distributor and others under the Class B 12b-1 Plan may
be in an amount equal to no more than 1% annually. The combination of the CDSC
and the proceeds of the 12b-1 Plan fees facilitates the ability of the Series to
sell Class B Shares without deducting a front-end sales charge at the time of
purchase.
Shareholders of the Series' Class B Shares exercising the exchange
privilege described below will continue to be subject to the CDSC schedule for
the Series' Class B Shares as described in this Prospectus, even after the
exchange. Such CDSC schedule may be higher than the CDSC schedule relating to
Class B shares acquired as a result of the exchange. See Redemption and
Exchange.
AUTOMATIC CONVERSION OF CLASS B SHARES
Except for shares acquired through a reinvestment of dividends, Class B
Shares held for five years after purchase are eligible for automatic conversion
into Class A Shares. The Fund will effect conversions of Class B Shares into
Class A Shares only four times in any calendar year, on the last business day of
the second full week of March, June, September and December (each, a "Conversion
Date"). If the fifth anniversary after a purchase of Class B Shares falls on a
Conversion Date, an investor's Class B Shares will be converted on that date. If
the fifth anniversary occurs between Conversion Dates, an investor's Class B
Shares will be converted on the next Conversion Date after such anniversary.
Consequently, if a shareholder's fifth anniversary falls on the day after a
Conversion Date, that shareholder will have to hold Class B Shares for as long
as three additional months after the fifth anniversary of purchase before the
shares will automatically convert into Class A Shares.
Class B Shares of a fund acquired through reinvestment of dividends will
convert to the corresponding Class A Shares of that fund (or, in the case of
Delaware Group Cash Reserve, Inc., the Delaware Cash Reserve Consultant Class)
pro-rata with Class B shares of that fund not acquired through dividend
reinvestment.
All such automatic conversions of Class B Shares will constitute tax-free
exchanges for federal income tax purposes. See Taxes.
LEVEL SALES CHARGE ALTERNATIVE - CLASS C SHARES
Class C Shares may be purchased at net asset value without the imposition
of a front-end sales charge and, as a result, the Series will invest the full
amount of the investor's purchase payment. The Distributor currently
anticipates compensating dealers or brokers for selling Class C Shares at the
time of purchase from its own assets in an amount equal to no more than 1% of
the dollar amount purchased. As discussed below, however, Class C Shares are
subject to annual 12b-1 Plan expenses and, if redeemed within twelve months of
purchase, a CDSC.
Proceeds from the CDSC and the annual 12b-1 Plan fees are paid to the
Distributor and others for providing distribution and related services and
bearing related expenses, in connection with the sale of Class C Shares. These
payments support the compensation paid to dealers or brokers for selling Class C
Shares. Payments to the Distributor and others under the Class C 12b-1 Plan may
be in an amount equal to no more than 1% annually.
Shareholders of the Series' Class C Shares who exercise the exchange
privilege described below will continue to be subject to the CDSC schedule for
the Series' Class C Shares as
25
<PAGE>
described in this Prospectus, even after exchange. See Redemption and Exchange.
CONTINGENT DEFERRED SALES CHARGE - CLASS B SHARES AND CLASS C SHARES
Class B Shares redeemed within three years of purchase may be subject to a
CDSC at the rates set forth below and Class C Shares redeemed within twelve
months of purchase may be subject to a CDSC of 1%. CDSCs are charged as a
percentage of the dollar amount subject to the CDSC. The charge will be
assessed on an amount equal to the lesser of the net asset value at the time of
purchase of the shares being redeemed or the net asset value of those shares at
redemption. No CDSC will be imposed on increases in net asset value above the
initial purchase price. In addition, no CDSC will be assessed on redemptions of
shares received through reinvestments of dividends or capital gains
distributions. For purposes of this formula, the "net asset value at the time
of purchase" will be the net asset value at purchase of Class B Shares or Class
C Shares of the Series, even if those shares are later exchanged for shares of
another Delaware Group fund. In the event of an exchange of the shares, the
"net asset value of such shares at the time of redemption" will be the net asset
value of the shares that were acquired in the exchange.
The following table sets forth the rates of the CDSC for Class B Shares of
the Series:
CONTINGENT DEFERRED
SALES CHARGE (AS A
PERCENTAGE OF
DOLLAR AMOUNT
YEAR AFTER PURCHASE MADE SUBJECT TO CHARGE)
- ------------------------ ------------------
0-2 2%
3 1%
4 and thereafter None
During the fourth year after purchase and, thereafter, until converted
automatically into Class A Shares of the Series, Class B Shares will still be
subject to the annual 12b-1 Plan expenses of up to 1% of average daily net
assets of those shares. See Automatic Conversion of Class B Shares, above.
Investors are reminded that Class A Shares into which Class B Shares will
convert are subject to ongoing annual 12b-1 Plan expenses of up to a maximum of
.30% (currently, no more than .15% pursuant to Board action) of average daily
net assets representing such shares.
In determining whether a CDSC is applicable to a redemption of Class B
Shares, it will be assumed that shares held for more than three years are
redeemed first, followed by shares acquired through the reinvestment of
dividends or distributions, and finally by shares held longest during the three-
year period. With respect to Class C Shares, it will be assumed that shares
held for more than twelve months are redeemed first, followed by shares acquired
through the reinvestment of dividends or distributions, and finally by shares
held for twelve months or less. All investments made during a calendar month,
regardless of what day of the month the investment occurred, will age one month
on the last day of that month and each subsequent month.
The CDSC is waived on certain redemptions of Class B Shares and Class C
Shares. See Waiver of CDSC - Class B and Class C Shares under Redemption and
Exchange.
12B-1 DISTRIBUTION PLANS - CLASS A, CLASS B AND CLASS C SHARES
Under the distribution plans adopted by the Fund in accordance with Rule
12b-1 under the 1940 Act, the Series is permitted to pay the Distributor annual
distribution fees of up to .30% (currently, no more than .15% pursuant to Board
action) of the average daily net assets of Class A Shares, 1% of the average
daily net assets of Class B Shares and 1% of the average daily net assets of
Class C Shares. These fees, which are payable monthly, compensate the
Distributor for providing distribution and related services and bearing certain
expenses of each of the Classes. The 12b-1 Plans applicable to the Class B
Shares and the Class C Shares are designed to permit an investor to purchase
Class B Shares or Class C Shares through dealers or brokers without the
assessment of a front-end sales charge while enabling the Distributor to
compensate dealers and brokers for the sale of such shares. For a more detailed
discussion of the 12b-1 Plans relating to Class A, Class B and Class C Shares,
see Distribution (12b-1) and Service under Management of the Fund.
26
<PAGE>
OTHER PAYMENTS TO DEALERS -- CLASS A, CLASS B AND CLASS C SHARES
In addition, from time to time at the discretion of the Distributor, all
registered broker/dealers whose aggregate sales of the Classes exceed certain
limits, as set by the Distributor, may receive from the Distributor an
additional payment of up to .25% of the dollar amount of such sales. The
Distributor may also provide additional promotional incentives or payments to
dealers that sell shares of the Delaware Group of funds. In some instances,
these incentives or payments may be offered only to certain dealers who
maintain, have sold or may sell certain amounts of shares.
Subject to pending amendments to the NASD's Rules of Fair Practice, in
connection with the promotion of Delaware Group fund shares, the Distributor
may, from time to time, pay to participate in dealer-sponsored seminars and
conferences, reimburse dealers for expenses incurred in connection with
preapproved seminars, conferences and advertising and may, from time to time,
pay or allow additional promotional incentives to dealers, which shall include
non-cash concessions, such as certain luxury merchandise or a trip to or
attendance at a business or investment seminar at a luxury resort, as part of
preapproved sales contests. Payment of non-cash compensation to dealers is
currently under review by the NASD and the Securities and Exchange Commission.
It is likely that the NASD's Rules of Fair Practice will be amended such that
the ability of the Distributor to pay non-cash compensation as described above
will be restricted in some fashion. The Distributor intends to comply with the
NASD's Rules of Fair Practice as they may be amended. In addition, as noted
above, the Distributor may pay dealers a commission in connection with net asset
value purchases.
CLASS B FUNDS AND CLASS C FUNDS
The following funds currently offer Class B Shares and Class C Shares:
Delaware Group Delchester High-Yield Bond Fund, Inc., Delaware Group Government
Fund, Inc., Delaware Group Value Fund, Inc., Delaware Group Cash Reserve, Inc.,
Tax-Free USA Fund, Tax-Free Insured Fund and Tax-Free USA Intermediate Fund of
Delaware Group Tax-Free Fund, Inc., Delaware Group DelCap Fund, Inc., Delaware
Fund and Devon Fund of Delaware Group Delaware Fund, Inc., Decatur Income Fund
and Decatur Total Return Fund of Delaware Group Decatur Fund, Inc., Delaware
Group Trend Fund, Inc., International Equity Series, Global Bond Series and
Global Assets Series of Delaware Group Global & International Funds, Inc., DMC
Tax-Free Income Trust-Pennsylvania and the Series.
LIMITED-TERM GOVERNMENT FUND INSTITUTIONAL CLASS
In addition to offering Class A, Class B and Class C Shares, the Series
also offers the Limited-Term Government Fund Institutional Class of shares,
which is described in a separate prospectus relating to that class of shares and
is available for purchase only by certain investors.
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Limited-Term Government Fund Institutional Class shares generally are
distributed directly by the Distributor and do not have a front-end sales
charge, a CDSC or a Limited CDSC, and are not subject to 12b-1 Plan distribution
expenses. To obtain a prospectus which describes the Limited-Term Government
Fund Institutional Class, contact the Distributor by writing to the address or
by calling the telephone number listed on the cover of this Prospectus.
DIVIDEND ORDERS
YOU MAY HAVE THE DIVIDENDS EARNED IN ONE FUND AUTOMATICALLY INVESTED IN
ANOTHER DELAWARE GROUP FUND WITH A DIFFERENT INVESTMENT OBJECTIVE. For more
information, see Dividend Reinvestment Plan under The Delaware Difference or
call the Shareholder Service Center.
HOW TO BUY SHARES
The Series makes it easy to invest by mail, by wire, by exchange and by
arrangement with your investment dealer.
INVESTING THROUGH YOUR INVESTMENT DEALER
You can make a purchase of shares of the Classes through most investment
dealers who, as part of the service they provide, must transmit orders promptly.
They may charge for this service. If you want a dealer but do not have one, we
can refer you to one.
INVESTING BY MAIL
1. Initial Purchases--An Investment Application or, in the case of a
retirement account, an appropriate retirement plan application, must be
completed, signed and sent with a check payable to Limited-Term Government Fund
A Class, Limited-Term Government Fund B Class or Limited-Term Government Fund C
Class at 1818 Market Street, Philadelphia, PA 19103.
2. Subsequent Purchases--Additional purchases may be made at any time by
mailing a check payable to Limited-Term Government Fund A Class, Limited-Term
Government Fund B Class or Limited-Term Government Fund C Class. Your check
should be identified with your name(s) and account number. An investment slip
(similar to a deposit slip) is provided at the bottom of transaction
confirmations and dividend statements that you will receive from the Fund. Use
of this investment slip can help expedite processing of your check when making
additional purchases. Your investment may be delayed if you send additional
purchases by certified mail.
INVESTING BY WIRE
You may purchase shares by requesting your bank to transmit funds by wire
to CoreStates Bank, N.A., ABA #031000011, account number 0114-2596 (include your
name(s) and your account number for the Class in which you are investing).
1. Initial Purchases--Before you invest, telephone the Fund's Shareholder
Service Center to get an account number. If you do not call first, processing
of your investment may be delayed. In addition, you must promptly send your
Investment Application or, in the case of a retirement account, an appropriate
retirement plan application, to Limited-Term Government Fund A Class, Limited-
Term Government Fund B Class or Limited-Term Government Fund C Class at 1818
Market Street, Philadelphia, PA 19103.
2. Subsequent Purchases--You may make additional investments anytime by wiring
funds to CoreStates Bank, N.A., as described above. You should advise the
Fund's Shareholder Service Center by telephone of each wire you send.
If you want to wire investments to a retirement plan account, call the
Shareholder Service Center for special wiring instructions.
DELAWARE GROUP ASSET PLANNER
To invest in Delaware Group funds using the Asset Planner service, you
should complete a Delaware Group Asset Planner Account Registration Form, which
is available only from a financial adviser. The sales charge on the investment
is determined by the individual sales charges of the underlying funds and their
percentage allocation in the selected Strategy. 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, Class B and Class C Shares are available for use
inside the Asset Planner service; however,
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only "like" class shares may be used within the same Strategy.
An annual maintenance fee, currently $35 per Strategy, is due at the time
of initial investment and by September 30th of each subsequent year. The fee,
payable to Delaware Service Company, Inc. to defray extra costs associated with
administering the Asset Planner service, will be deducted automatically from one
of your Fund accounts if not paid by September 30th. See the Statement of
Additional Information.
Investors will receive a customized quarterly Strategy Report summarizing
all Delaware Group Asset Planner investment performance and account activity
during the prior period. Confirmation statements will be sent following all
transactions other than those involving a reinvestment of distributions.
Certain shareholder services are not available to investors using the Asset
Planner service, due to its special design. These include Delaphone,
Checkwriting Wealth Builder Option and Letter of Intention. Systematic
Withdrawal Plans are available after the account has been open for two years.
INVESTING BY EXCHANGE
If you have an investment in another mutual fund in the Delaware Group, you
may write and authorize an exchange of part or all of your investment into
shares of the Series. 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.
Shareholders of Class A Shares may exchange all or part of their shares for
certain of the shares of other funds in the Delaware Group, including other
Class A shares, but may not exchange their shares for Class B Shares or Class C
Shares of the Series or for any Class B shares or Class C shares of any other
fund in the Delaware Group. Shareholders of Class B Shares of the Series are
permitted to exchange all or part of their Class B Shares only into the
corresponding class of shares of the Class B Funds. Similarly, shareholders of
Class C Shares of the Series are permitted to exchange all or part of their
Class C Shares only into the corresponding class of shares of the Class C
Funds. Class B Shares of the Series and Class C Shares of the Series acquired
by exchange will continue to carry the CDSC and, in the case of Class B Shares,
the automatic conversion schedule of the fund from which the exchange is made.
The holding period of Class B Shares of the Series acquired by exchange will be
added to that of the shares that were exchanged for purposes of determining the
time of the automatic conversion into Class A Shares of the Series.
Permissible exchanges into Class A Shares of the Series will be made
without a front-end sales charge imposed by the Series, except for exchanges
from funds not subject to a front-end sales charge (unless such shares were
acquired in an exchange from a fund subject to such a charge or such shares were
acquired through the reinvestment of dividends). Permissible exchanges into
Class B Shares or Class C Shares of the Series will be made without the
imposition of a CDSC by the fund from which the exchange is being made at the
time of the exchange.
See Allied Plans under Retirement Planning for information on exchanges by
participants in an Allied Plan.
ADDITIONAL METHODS OF ADDING TO YOUR INVESTMENT
Call the Shareholder Service Center for more information if you wish to use
the following services:
1. Direct Deposit
YOU MAY HAVE YOUR EMPLOYER OR BANK MAKE REGULAR INVESTMENTS DIRECTLY TO
YOUR ACCOUNT FOR YOU (for example: payroll deduction, pay by phone, annuity
payments). The Series also accepts preauthorized recurring government and
private payments by Electronic Fund Transfer, which avoids mail time and check
clearing holds on payments such as social security, federal salaries, Railroad
Retirement benefits, etc.
2. Automatic Investing Plan
THE AUTOMATIC INVESTING PLAN ENABLES YOU TO MAKE REGULAR MONTHLY
INVESTMENTS WITHOUT WRITING OR MAILING CHECKS. You may authorize the Fund to
transfer a designated amount monthly from your checking account to your Series
account. Many shareholders use this as an automatic savings plan. Shareholders
should allow a reasonable amount of time for
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initial purchases and changes to these plans to become effective.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, Profit Sharing and Money Purchase Pension Plans, 401(k)
Defined Contribution Plans, 403(b)(7) Deferred Compensation Plans or 457
Deferred Compensation Plans.
* * *
Should investments by these two methods be reclaimed or returned for some
reason, the Fund has the right to liquidate your shares to reimburse the
government or transmitting bank. If there are insufficient funds in your
account, you are obligated to reimburse the Series.
PURCHASE PRICE AND EFFECTIVE DATE
The offering price and net asset value of Class A, Class B and Class C
Shares are determined as of the close of regular trading on the New York Stock
Exchange (ordinarily, 4 p.m., Eastern time) on days when the Exchange is open.
The effective date of a purchase made through an investment dealer is the
date the order is received by the Series. The effective date of a direct
purchase is the day your wire, electronic transfer or check is received, unless
it is received after the time the offering price of shares is determined, as
noted above. Purchase orders received after such time will be effective the
next business day.
THE CONDITIONS OF YOUR PURCHASE
The Fund reserves the right to reject any purchase order. If a purchase is
canceled because your check is returned unpaid, you are responsible for any loss
incurred. The Fund can redeem shares from your account(s) to reimburse itself
for any loss, and you may be restricted from making future purchases in any of
the funds in the Delaware Group. The Fund reserves the right to reject purchase
orders paid by third-party checks or checks that are not drawn on a domestic
branch of a United States financial institution. If a check drawn on a foreign
financial institution is accepted, you may be subject to additional bank charges
for clearance and currency conversion.
The Fund also reserves the right, following shareholder notification, to
charge a service fee on non-retirement accounts that have remained below the
minimum stated account balance for a period of three or more consecutive months.
Holders of such accounts may be notified of their insufficient account balance
and advised that they have until the end of the current calendar quarter to
raise their balance to the stated minimum. If the account has not reached the
minimum balance requirement by that time, the Fund will charge a $9 fee for that
quarter and each subsequent 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 and no CDSC will apply to such assessments.
The Fund also reserves the right, upon sixty days' written notice, to
redeem accounts that remain under a Class' minimum initial purchase amount as a
result of redemptions. An investor making the minimum initial investment may be
subject to involuntary redemption without the imposition of a CDSC or Limited
CDSC if he or she redeems any portion of his or her account.
REDEMPTION AND EXCHANGE
YOU CAN REDEEM OR EXCHANGE YOUR SHARES IN A NUMBER OF DIFFERENT WAYS. The
exchange service is useful if your investment requirements change and you want
an easy way to invest in other bond funds, equity funds, tax-advantaged funds or
money market funds. Exchanges are subject to the requirements of each fund and
all exchanges of shares from one fund or class to another constitute taxable
events. See Taxes. Further, in order for an exchange to be processed, shares
of the fund being acquired 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 in the Delaware Group will best meet
your changing objectives, and the consequences of any exchange transaction. You
may also call the Delaware Group directly for fund information.
Your shares will be redeemed or exchanged at a price based on the net asset
value next determined after we receive your request in good
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order, subject in the case of a redemption, to any applicable CDSC or Limited
CDSC. Redemption or exchange requests received in good order after the time the
offering price and net asset value of shares are determined, as noted above,
will be processed on the next business day. See Purchase Price and Effective
Date under Buying Shares. A shareholder submitting a redemption request may
indicate that he or she wishes to receive redemption proceeds of a specific
dollar amount. In the case of such a request, and in the case of certain
redemptions from retirement plan accounts, the Fund will redeem the number of
shares necessary to deduct the applicable CDSC in the case of Class B Shares or
Class C Shares or, if applicable, the Limited CDSC in the case of Class A Shares
and tender to the shareholder the requested amount assuming the shareholder
holds enough shares in his or her account for the redemption to be processed in
this manner. Otherwise, the amount tendered to the shareholder upon redemption
will be reduced by the amount of the applicable CDSC or Limited CDSC.
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 you want to receive 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 Fund at 800-523-1918 (in Philadelphia, 215-988-1241).
The Fund may suspend, terminate, or amend the terms of, the exchange privilege
upon sixty days' written notice to shareholders.
The Fund will honor written redemption requests of shareholders who
recently purchased shares by check, but will not mail the proceeds until it is
reasonably satisfied that the purchase check has cleared, which may take up to
fifteen days from the purchase date. The Fund will not honor telephone
redemptions for shares recently purchased by check unless it is reasonably
satisfied that the purchase check has cleared. 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.
There is no front-end sales charge or fee for exchanges made between shares
of funds which both carry a front-end sales charge. Any applicable front-end
sales charge will apply to exchanges from shares of funds not subject to a
front-end sales charge, except for transfers involving assets that were
previously invested in a fund with a front-end sales charge and/or transfers
involving the reinvestment of dividends.
Holders of Class B Shares or Class C Shares that exchange their shares
("Original Shares") for Class B shares of other Class B Funds or Class C shares
of other Class C Funds, as applicable (in each case, "New Shares"), will not be
subject to a CDSC that might otherwise be due upon redemption of the Original
Shares. However, such shareholders will continue to be subject to the CDSC and,
in the case of Class B Shares, the automatic conversion schedule of the Original
Shares as described in this Prospectus and any CDSC assessed upon redemption
will be charged by the Series. In an exchange of Class B Shares, the Series'
CDSC schedule may be higher than the CDSC schedule relating to the New Shares
acquired as a result of the exchange. For purposes of computing the CDSC that
may be payable upon a disposition of the New Shares, the period of time that an
investor held the Original Shares is added to the period of time that an
investor held the New Shares. With respect to Class B Shares, the automatic
conversion schedule of the Original Shares may be longer than that of the New
Shares. Consequently, an investment in New Shares by exchange may subject an
investor to the higher 12b-1 fees applicable to Class B Shares of the Series for
a longer period of time than if the investment in New Shares were made directly.
Various redemption and exchange methods are outlined below. Except for the
CDSC applicable to certain redemptions of Class B and Class C Shares and the
Limited CDSC applicable to certain redemptions of Class A Shares purchased at
net asset value, there is no fee charged by the Series or the Distributor for
redeeming or exchanging your shares, but such fees could be charged in the
future. You may have your investment dealer arrange to have your shares
redeemed or exchanged. Your investment dealer may charge for this service.
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All authorizations given by shareholders, including selection of any of
the features described below, shall continue in effect until such time as a
written revocation or modification has been received by the Fund or its agent.
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.
CHECKWRITING FEATURE
PURCHASERS OF CLASS A SHARES CAN REQUEST SPECIAL CHECKS BY MARKING THE BOX
ON THE INVESTMENT APPLICATION.
The checks must be drawn for $500 or more and, unless otherwise indicated
on the Investment Application or your checkwriting authorization form, must be
signed by all owners of the account.
Because the value of shares fluctuates, you cannot use checks to close your
account. The Checkwriting Feature is not available with respect to the Class B
Shares or the Class C Shares and, for retirement plans, with respect to the
Class A Shares. See Part B for additional information.
WRITTEN REDEMPTION
You can write to the Fund at 1818 Market Street, Philadelphia, PA 19103 to
redeem some or all of your shares. The request must be signed by all owners of
the account or your investment dealer of record. For redemptions of more than
$50,000, or when the proceeds are not sent to the shareholder(s) at the address
of record, the Fund requires a signature by all owners of the account and a
signature guarantee for each owner. Each signature guarantee must be supplied
by an eligible guarantor institution. The Fund reserves the right to reject a
signature guarantee supplied by an eligible institution based on its
creditworthiness. The Fund may require further documentation from corporations,
executors, retirement plans, administrators, trustees or guardians.
Payment is normally mailed the next business day, but no later than seven
days, after receipt of your redemption request. If your Class A Shares are in
certificate form, the certificate must accompany your request and also be in
good order. The Fund issues certificates for Class A Shares only if a
shareholder submits a specific request. The Fund does not issue certificates for
Class B Shares or Class C Shares.
WRITTEN EXCHANGE
You may also write to the Fund (at 1818 Market Street, Philadelphia, PA
19103) to request an exchange of any or all of your shares into another mutual
fund in the Delaware Group, subject to the same conditions and limitations as
other exchanges noted above.
TELEPHONE REDEMPTION AND EXCHANGE
To get the added convenience of the telephone redemption and exchange
methods, you must have the Transfer Agent hold your shares (without charge) for
you. If you choose to have your Class A Shares in certificate form, you may
only redeem or exchange by written request and you must return your
certificates.
The Telephone Redemption - Check to Your Address of Record service and the
Telephone Exchange service, both of which are described below, are automatically
provided unless you notify the Fund in writing that you do not wish to have such
services available with respect to your account. The Fund reserves the right to
modify, terminate or suspend these procedures upon sixty 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 the Transfer Agent is responsible for any shareholder
loss incurred in acting upon written or telephone instructions for redemption or
exchange of Series shares which are reasonably believed to be genuine. With
respect to such telephone transactions, the Fund will follow reasonable
procedures to confirm that instructions communicated by telephone are genuine
(including verification of a form of personal identification) as, if it does
not, the Fund or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent transactions. Instructions received by telephone are
generally tape recorded, and a written confirmation will be provided for all
purchase, exchange and redemption transactions initiated by telephone. By
exchanging shares by telephone, you are acknowledging prior receipt of a
prospectus for
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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 address of record. Checks will be payable
to the shareholder(s) of record. Payment is normally mailed the next business
day, but no more than seven days, after receipt of the request. This service is
only available to individual, joint and individual fiduciary-type accounts.
TELEPHONE REDEMPTION - PROCEEDS TO YOUR BANK
Redemption proceeds of $1,000 or more can be transferred to your
predesignated bank account by wire or by check. You should authorize this
service when you open your account. If you change your predesignated bank
account, the Fund requires an Authorization Form with your signature guaranteed.
For your protection, your authorization must be on file. If you request a wire,
your funds will normally be sent the next business day. CoreStates Bank, N.A.'s
fee (currently $7.50) will be deducted from your redemption. If you ask for a
check, it will normally be mailed the next business day, but no later than seven
days, after receipt of your request to your predesignated bank account. Except
for any CDSC which may be applicable to Class B and Class C Shares and the
Limited CDSC which may be applicable to certain Class A Shares, 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 and net asset value are determined, as noted above.
If expedited payment by check or wire could adversely affect the Fund, the
Fund may take up to seven days to pay.
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 fund in the Delaware Group under the same registration, subject
to the same conditions and limitations as other exchanges noted above. As with
the written exchange service, telephone exchanges are subject to the
requirements of each fund, as described above. Telephone exchanges may be
subject to limitations as to amounts or frequency.
SYSTEMATIC WITHDRAWAL PLANS
1. Regular Plans
This plan provides shareholders with a consistent monthly (or quarterly)
payment. THIS IS PARTICULARLY USEFUL TO SHAREHOLDERS LIVING ON FIXED INCOMES,
SINCE IT CAN PROVIDE THEM WITH A STABLE SUPPLEMENTAL AMOUNT. With accounts of
at least $5,000, you may elect monthly withdrawals of $25 (quarterly $75) or
more. The Fund does not recommend any particular monthly amount, as each
shareholder's situation and needs vary. Payments are normally made by check.
You may elect to have your payments transferred from your Series account to your
predesignated bank account through the Delaware Group's MoneyLine service. Your
funds will normally be credited to your bank account two business days after the
payment date. Except for the Limited CDSC which may be applicable to Class A
Shares and the CDSC which may be applicable to Class B Shares and Class C Shares
as noted below, there are no fees for this redemption method. You can initiate
the MoneyLine service by completing an Authorization Agreement. If the name and
address on your bank account are not identical to the name and address on your
Fund account, you must have your signature guaranteed. Please call the
Shareholder Service Center for additional information.
2. Retirement Plans
For shareholders eligible under the applicable retirement plan to receive
benefits in periodic payments, the Fund's Systematic Withdrawal Plan provides
you with maximum flexibility. A number of formulas are available for
calculating your withdrawals, depending upon whether the distributions are
required or optional. Withdrawals must be for $25 or more; however, no minimum
account balance is required. The MoneyLine Service is not available for
retirement plans.
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* * *
Shareholders should not purchase Class A Shares while participating in a
Systematic Withdrawal Plan. Also, redemptions of Class A Shares pursuant to a
Systematic Withdrawal Plan may be subject to a Limited CDSC if the original
purchase was made at net asset value within the twelve months prior to the
withdrawal and a dealer's commission has been paid on that purchase. See
Contingent Deferred Sales Charge for Certain Purchases of Class A Shares Made at
Net Asset Value, below.
With respect to Class B Shares and Class C Shares redeemed via a Systematic
Withdrawal Plan, any applicable CDSC will be waived if, on the date that the
Plan is established, the annual amount selected to be withdrawn is less than 12%
of the account balance. If the annual amount selected to be withdrawn exceeds
12% of the account balance on the date that the Systematic Withdrawal Plan is
established, all redemptions under the Plan will be subject to the applicable
CDSC. Whether a waiver of the CDSC is available or not, the first shares to be
redeemed for each Systematic Withdrawal Plan payment will be those not subject
to a CDSC because they have either satisfied the required holding period or were
acquired through the reinvestment of distributions. The 12% annual limit will
be reset on the date that any Systematic Withdrawal Plan is modified (for
example, a change int he amount selected to be withdrawn or the frequency or
date of withdrawals), based on the balance in the account on that date. See
Waiver of CDSC -Class B and Class C Shares, below.
For more information on Systematic Withdrawal Plans, call the Shareholder
Service Center.
WEALTH BUILDER OPTION
Shareholders may elect to invest in other mutual funds in the Delaware
Group through our Wealth Builder Option. Under this automatic exchange program,
shareholders can authorize regular monthly amounts (minimum of $100 per fund) to
be liquidated from their Series account and invested automatically into an
account in one or more funds in the Delaware Group. If, in connection with the
Wealth Builder Option, a shareholder wishes to open a new account in such other
fund or funds to receive the automatic investment, such new account must meet
such other fund's minimum initial purchase requirement. Investments under this
option are exchanges and are therefore subject to the same conditions and
limitations as other exchanges noted above.
Shareholders can use the Wealth Builder Option to invest in the Series
through regular liquidations of shares in their accounts in other funds in the
Delaware Group, subject to the same conditions and limitations as other
exchanges noted above. Shareholders can terminate their participation at any
time by written notice to the Fund. See Redemption and Exchange.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, Profit Sharing and Money Purchase Pension Plans, 401(k)
Defined Contribution Plans, 403(b)(7) Deferred Compensation Plans or 457
Deferred Compensation Plans.
CONTINGENT DEFERRED SALES CHARGE FOR CERTAIN PURCHASES OF CLASS A SHARES MADE AT
NET ASSET VALUE
A Limited CDSC will be imposed by the Series upon certain redemptions of
Class A Shares (or shares into which such Class A Shares are exchanged) made
within twelve months of purchase, if such purchases were made at net asset value
and triggered the payment by the Distributor of the dealer's commission
described above. See Buying Shares.
The Limited CDSC will be paid to the Distributor and will be equal to the
lesser of 1% of (1) the net asset value at the time of purchase of the Class A
Shares being redeemed or (2) the net asset value of such Class A Shares at the
time of redemption. For purposes of this formula, the "net asset value at the
time of purchase" will be the net asset value at purchase of the Class A Shares
even if those shares are later exchanged for shares of another Delaware Group
fund and, in the event of an exchange of Class A Shares, the "net asset value of
such shares at the time of redemption" will be the net asset value of the shares
acquired in the exchange.
Redemptions of such Class A Shares held for more than twelve months will
not be subjected to the Limited CDSC and an exchange of such Class A Shares into
another Delaware Group fund
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will not trigger the imposition of the Limited CDSC at the time of such
exchange. The period a shareholder owns shares into which Class A Shares are
exchanged will count towards satisfying the twelve-month holding period. The
Fund assesses the Limited CDSC if such twelve-month period is not satisfied
irrespective of whether the redemption triggering its payment is of Class A
Shares of the Series or the Class A shares acquired in the exchange.
In determining whether a Limited CDSC is payable, it will be assumed that
shares not subject to the Limited CDSC are the first redeemed, followed by other
shares held for the longest period of time. The Limited CDSC will not be
imposed upon shares representing reinvested dividends or capital gains
distributions, or upon amounts representing share appreciation. All investments
made during a calendar month, regardless of what day of the month the investment
occurred, will age one month on the last day of that month and each subsequent
month.
WAIVER OF LIMITED CDSC - CLASS A SHARES
The Limited CDSC for Class A Shares on which a dealer's commission has been
paid will be waived in the following instances: (i) redemptions that result
from the Series' right to liquidate a shareholder's account if the aggregate net
asset value of the shares held in the account is less than the then-effective
minimum account size; (ii) distributions to participants from a retirement plan
qualified under section 401(a) or 401(k) of the Internal Revenue Code of 1986,
as amended ("the Code"), or due to death of a participant in such a plan; (iii)
redemptions pursuant to the direction of a participant or beneficiary of a
retirement plan qualified under section 401(a) or 401(k) of the Code with
respect to that retirement plan; (iv) distributions from a section 403(b)(7)
Plan or an IRA due to death, disability, or attainment of age 59 1/2; (v)
returns of excess contributions to an IRA; (vi) distributions by other employee
benefit plans to pay benefits; (vii) distributions described in (ii), (iv), and
(vi) above pursuant to a systematic withdrawal plan; and (viii) redemptions by
the classes of shareholders who are permitted to purchase shares at net asset
value, regardless of the size of the purchase (see Buying at Net Asset Value
under Buying Shares).
WAIVER OF CDSC - CLASS B AND CLASS C SHARES
The CDSC on certain redemptions of Class B Shares is waived in connection
with the following redemptions: (i) redemptions that result from the Fund's
right to liquidate a shareholder's account if the aggregate net asset value of
the shares held in the account is less than the then-effective minimum account
size; (ii) returns of excess contributions to an IRA or 403(b)(7) Deferred
Compensation Plan; (iii) required minimum distributions from an IRA, 403(b)(7)
Deferred Compensation Plan, or 457 Deferred Compensation Plan; and (iv)
distributions from an account if the redemption results from the death of all
registered owners of the account (in the case of accounts established under the
Uniform Gifts to Minors or Uniform Transfers to Minors Acts or trust accounts,
the waiver applies upon the death of all beneficial owners) or a total and
permanent disability (as defined in Section 72 of the Code) of all registered
owners occurring after the purchase of the shares being redeemed.
The CDSC on certain redemptions of Class C Shares is waived in connection
with the following redemptions: (i) redemptions that result from the Fund's
right to liquidate a shareholder's account if the aggregate net asset value of
the shares held in the account is less than the then-effective minimum account
size; (ii) returns of excess contributions to an IRA, 403(b)(7) Deferred
Compensation Plan, Profit Sharing Plan, Money Purchase Pension Plan or 401(k)
Defined Contribution Plan; (iii) required minimum distributions from an IRA,
403(b)(7) Deferred Compensation Plan, 457 Deferred Compensation Plan, Profit
Sharing Plan, Money Purchase Pension Plan, or 401(k) Defined Contribution Plan;
(iv) distributions from a 403(b)(7) Deferred Compensation Plan, 457 Deferred
Compensation Plan, Profit Sharing Plan, or 401(k) Defined Contribution Plan,
under hardship provisions of the plan; (v) distributions from a 403(b)(7)
Deferred Compensation Plan, 457 Deferred Compensation Plan, Profit Sharing Plan,
Money Purchase Pension Plan or a 401(k) Defined Contribution Plan upon
attainment of normal retirement age under the plan or upon separation from
service; (vi) distributions from an IRA on or after attainment of age 59 1/2;
and (vii) distributions from an account if the redemption results from the death
of all registered owners of the account (in the case of accounts established
35
<PAGE>
under the Uniform Gifts to Minors or Uniform Transfers to Minors Acts or trust
accounts, the waiver applies upon the death of all beneficial owners) or a total
and permanent disability (as defined in Section 72 of the Code) of all
registered owners occurring after the purchase of the shares being redeemed.
In addition, the CDSC will be waived on Class B and Class C Shares redeemed
in accordance with a Systematic Withdrawal Plan if the amount selected to be
withdrawn under the Plan does not exceed 12% of the value of the account on the
date that the Systematic Withdrawal Plan was established or modified.
DIVIDENDS AND DISTRIBUTIONS
The Fund declares a dividend to all shareholders of record of the Classes
at the time the offering price of shares is determined. See Purchase Price and
Effective Date under Buying Shares. Thus, when redeeming shares, dividends
continue to accrue up to and including the date of redemption.
Purchases of shares of each Class by wire begin earning dividends when
converted into Federal Funds and available for investment, normally the next
business day after receipt. Purchases by check earn dividends upon conversion
to Federal Funds, normally one business day after receipt.
Each of the Classes will share proportionately in the investment income and
expenses of the Series, except that the per share dividends from net investment
income on Class A Shares, Class B Shares and Class C Shares will vary due to the
expenses under the 12b-1 Plan applicable to each Class. Generally, the
dividends per share on Class B Shares and Class C Shares can be expected to be
lower than the dividends per share on Class A Shares because the expenses under
the 12b-1 Plans relating to Class B and Class C Shares will be higher than the
expenses under the 12b-1 Plan relating to Class A Shares. See Distribution
(12b-1) and Service under Management of the Fund.
Dividends are declared daily and paid monthly on the last business day of
each month. Payment by check of cash dividends will ordinarily be mailed within
three business days after the payable date. Short-term capital gains
distributions, if any, may be paid quarterly, but in the discretion of the
Fund's Board of Directors might be distributed less frequently. Long-term
capital gains, if any, will be distributed annually.
The Series can have two types of dividends: income and capital gains.
Normally both types are automatically reinvested in your account unless you
elect otherwise. Any check in payment of dividends or other distributions which
cannot be delivered by the United States Post Office or which remains uncashed
for a period of more than one year may be reinvested in the shareholder's
account at the then-current net asset value and the dividend option may be
changed from cash to reinvest. If you elect to have your dividends and
distributions in cash and such
36
<PAGE>
dividends and distributions are in an amount of $25 or more, you may choose the
Delaware Group's MoneyLine service and have such payments transferred from your
Series account to your predesignated bank account. Your funds will normally be
credited to your bank account two business days after the payment date. There
are no fees for the MoneyLine service. See Systematic Withdrawal Plan for Class
A Shares, Class B Shares and Class C Shares under Redemption and Exchange for
information regarding authorization of this service. This service is not
available for retirement plans. See The Delaware Difference for more
information on reinvestment options.
During the fiscal year ended December 31, 1994, dividends totaling $0.667
per Class A Share and $0.399 per Class B Share were paid from net investment
income. During the six months ended June 30, 1995, dividends totaling $0.367
per Class A Share and $0.328 per Class B Share were paid from net investment
income. Class C Shares were not offered prior to the date of this Prospectus.
TAXES
The Series has qualified, and intends to continue to qualify, as a
regulated investment company under Subchapter M of the Code. As such, the
Series will not be subject to federal income tax, or to any excise tax, to the
extent its earnings are distributed as provided in the Code.
The Series intends to distribute substantially all of its net investment
income and net capital gains, if any. Dividends from net investment income or
net short-term capital gains will be taxable to you as ordinary income, whether
received in cash or in additional shares. No portion of the Series'
distributions will be eligible for the dividends-received deduction for
corporations.
Distributions paid by the Series from long-term capital gains, whether
received in cash or in additional shares, are taxable to those investors who are
subject to income taxes as long-term capital gains, regardless of the length of
time an investor has owned shares in the Series. The Series does not seek to
realize any particular amount of capital gains during a year; rather, realized
gains are a byproduct of Series management activities. Consequently, capital
gains distributions may be expected to vary considerably from year to year.
Also, for those investors subject to tax, if purchases of shares in the Series
are made shortly before the record date for a dividend or capital gains
distribution, a portion of the investment will be returned as a taxable
distribution.
Dividends which are declared in October, November or December but which,
for operational reasons, may not be paid to the shareholder until the following
January, will be treated for tax purposes as if paid by the Series and received
by the shareholder on December 31 of the calendar year in which they are
declared.
The sale of shares of the Series is a taxable event and may result in a
capital gain or loss to shareholders subject to tax. Capital gain or loss may
be realized from an ordinary redemption of shares or an exchange of shares
between two mutual funds (or two series or portfolios of a mutual fund). Any
loss incurred on sale or exchange of a Series' shares held for six months or
less will be treated as a long-term capital loss to the extent of capital gain
dividends received with respect to such shares. All or a portion of
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<PAGE>
the sales charge incurred in acquiring Series shares will be excluded from the
federal tax basis of any of such shares sold or exchanged within ninety days of
their purchase (for purposes of determining gain or loss upon sale of such
shares) if the sale proceeds are reinvested in the Series or in another fund in
the Delaware Group of funds and a sales charge that would otherwise apply to the
reinvestment is reduced or eliminated. Any portion of such sales charge
excluded from the tax basis of the shares sold will be added to the tax basis of
the shares acquired in the reinvestment.
The automatic conversion of Class B Shares into Class A Shares at the end
of approximately five years after purchase will be tax-free for federal tax
purposes. See Automatic Conversion of Class B Shares under Buying Shares.
In addition to federal taxes, shareholders may be subject to state and
local taxes on distributions. Distributions of interest income and capital
gains realized from certain types of U.S. Government securities may be exempt
from state personal income taxes. Shares of the Series are exempt from
Pennsylvania county personal property taxes.
Each year, the Fund will mail to you information on the tax status of the
Series' dividends and distributions. Shareholders will also receive each year
information as to the portion of dividend income, if any, that is derived from
U.S. Government securities that are exempt from state income tax. Of course,
shareholders who are not subject to tax on their income would not be required to
pay tax on amounts distributed to them by the Series.
The Fund is required to withhold 31% of taxable dividends, capital gains
distributions, and redemptions paid to shareholders who have not complied with
IRS taxpayer identification regulations. You may avoid this withholding
requirement by certifying on your Account Registration Form your proper Taxpayer
Identification Number and by certifying that you are not subject to backup
withholding.
The tax discussion set forth above is included for general information
only. Investors should consult their own tax advisers concerning the federal,
state, local or foreign tax consequences of an investment in the Series.
See Accounting and Tax Issues in Part B for additional information on tax
matters relating to the Series and its shareholders.
38
<PAGE>
CALCULATION OF OFFERING PRICE AND NET ASSET VALUE PER SHARE
Class A Shares are purchased at the offering price per share, while Class B
Shares and Class C Shares are purchased at the net asset value ("NAV") per
share. The offering price per share of Class A Shares consists of the NAV per
share next computed after the order is received, plus any applicable front-end
sales charges. The offering price and NAV are computed as of the close of
regular trading on the New York Stock Exchange (ordinarily, 4 p.m., Eastern
time) on days when the Exchange is open.
The NAV per share is computed by adding the value of all securities and
other assets in the portfolio, deducting any liabilities (expenses and fees are
accrued daily) and dividing by the number of shares outstanding. Portfolio
securities for which market quotations are available are priced at market value.
Short-term investments having a maturity of less than sixty days are valued at
amortized cost, which approximates market value. All other securities are valued
at their fair value as determined in good faith and in a method approved by the
Fund's Board of Directors.
Each of the Series' four classes will bear, pro-rata, all of the common
expenses of the Series. The net asset values of all outstanding shares of each
class of the Series will be computed on a pro-rata basis for each outstanding
share based on the proportionate participation in the Series represented by the
value of shares of that class. All income earned and expenses incurred by the
Series will be borne on a pro-rata basis by each outstanding share of a class,
based on each class' percentage in the Series represented by the value of shares
of such classes, except the Limited-Term Government Fund Institutional Class
will not incur any of the expenses under the Series' 12b-1 Plans and the Class
A, Class B and Class C Shares alone will bear the 12b-1 Plan expenses payable
under their respective 12b-1 Plans. Due to the specific distribution expenses
and other costs that will be allocable to each class, the dividends paid to each
class of the Series may vary. However, the NAV per share of each class is
expected to be equivalent.
39
<PAGE>
MANAGEMENT OF THE FUND
DIRECTORS
The business and affairs of the Fund are managed under the direction of its
Board of Directors. Part B contains additional information regarding the
directors and officers.
INVESTMENT MANAGER
The Manager furnishes investment management services to the Series.
The Manager and its predecessors have been managing the funds in the
Delaware Group since 1938. On December 31, 1994, the Manager and its affiliate,
Delaware International Advisers Ltd., were supervising in the aggregate more
than $24 billion in assets in the various institutional (approximately
$15,456,416,000) and investment company (approximately $9,253,901,000) accounts.
The Manager is an indirect, wholly-owned subsidiary of Delaware Management
Holdings, Inc. ("DMH"). On April 3, 1995, a merger between DMH and a wholly-
owned subsidiary of Lincoln National Corporation ("Lincoln National") was
completed. DMH and the Manager are now wholly-owned subsidiaries and subject to
the ultimate control, of Lincoln National. Lincoln National, with headquarters
in Fort Wayne, Indiana, is a diversified organization with operations in many
aspects of the financial services industry, including insurance and investment
management. In connection with the merger, a new Investment Management
Agreement between the Fund on behalf of the Series and the Manager was executed
following shareholder approval.
The Manager manages the Series' portfolio, makes investment decisions and
implements them. The Manager also administers the Fund's affairs and pays the
salaries of all the directors, officers and employees of the Fund who are
affiliated with the Manager. For these services, the Manager is paid an annual
fee of 1/2 of 1% of the average daily net assets of the Series, less a
proportionate share of all directors' fees paid to the unaffiliated directors by
the Series. Investment management fees paid by the Series were 0.50% of average
daily net assets for the fiscal year ended December 31, 1994.
Roger A. Early assumed primary responsibility for making day-to-day
investment decisions for the Series as of July 18, 1994. Mr. Early has an
undergraduate degree in economics from the University of Pennsylvania's Wharton
School and an MBA in finance and accounting from the University of Pittsburgh.
He is also a CPA and a CFA. Prior to joining the Delaware Group, Mr. Early was a
portfolio manager for Federated Investment Counseling's fixed income group, with
over $1 billion in assets.
In making investment decisions for the Series, Mr. Early consults regularly
with Paul E. Suckow and Gary A. Reed. Mr. Suckow is the Chief Investment
Officer for fixed income. A Chartered Financial Analyst, he is a graduate of
Bradley University with an MBA from Western Illinois University. Mr. Suckow was
a fixed income portfolio manager at the Delaware Group from 1981 to 1985. He
returned to the Delaware Group in 1993 after eight years with Oppenheimer
Management Corporation. Mr. Reed, also a Chartered Financial Analyst, is a
graduate of the University of Chicago with an MA from Columbia University. He
joined the Delaware Group in 1989 as a vice president for fixed income.
PORTFOLIO TRADING PRACTICES
Portfolio trades are generally made on a net basis without brokerage
commissions. However, the price may include a mark-up or mark-down. Banks,
brokers or dealers are selected by the Manager to execute the Series' portfolio
transactions.
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<PAGE>
Although the Series trades principally to seek a high level of income and
stability of principal and not for profits, the portfolio turnover may be high,
particularly if interest rates are volatile. The degree of portfolio activity
may affect brokerage costs of the Series, if any, and taxes payable by
shareholders. During the fiscal years ended December 31, 1993 and 1994, the
Series' portfolio turnover rates were 171% and 148%, respectively. See
Portfolio Turnover under Trading Practices and Brokerage in Part B.
The Manager uses its best efforts to obtain the best available price and
most favorable execution for portfolio transactions. Orders may be placed with
brokers or dealers who provide brokerage and research services to the Manager or
its advisory clients. These services may be used by the Manager in servicing
any of its accounts. Subject to best price and execution, the Manager may
consider a broker/dealer's sales of Series shares in placing portfolio orders
and may place orders with broker/dealers that have agreed to defray certain
Series expenses such as custodian fees.
PERFORMANCE INFORMATION
From time to time, the Series may quote yield or total return performance
of the Classes in advertising and other types of literature.
The current yield for a Class will be calculated by dividing the annualized
net investment income earned by that Class during a recent 30-day period by the
maximum offering price per share on the last day of the period. The yield
formula provides for semi-annual compounding which assumes that net investment
income is earned and reinvested at a constant rate and annualized at the end of
a six-month period.
Total return will be based on a hypothetical $1,000 investment, reflecting
the reinvestment of all distributions at NAV and: (i) in the case of Class A
Shares, the impact of the maximum front-end sales charge at the beginning of
each specified period; and (ii) in the case of Class B Shares and Class C
Shares, the deduction of any applicable CDSC at the end of the relevant period.
Each presentation will include the average annual total return for a one-year
period and five- and ten-year periods, as relevant. The Series may also
advertise aggregate and average total return information concerning a Class over
additional periods of time. In addition, the Series may present total return
information that does not reflect the deduction of the maximum front-end sales
charge or any applicable CDSC. In this case, such total return information would
be more favorable than total return information which includes deductions of the
maximum front-end sales charge or any applicable CDSC.
Yield and net asset value fluctuate and are not guaranteed. Past
performance is not an indication of future results.
DISTRIBUTION (12B-1) AND SERVICE
The Distributor, Delaware Distributors, L.P. (which formerly conducted
business as Delaware Distributors, Inc.), serves as the national distributor for
the Series under a Distribution Agreement dated April 3, 1995, as amended on
November 29, 1995.
The Fund has adopted a separate distribution plan under Rule 12b-1 for each
of Class A Shares, Class B Shares and Class C Shares (the "Plans"). The Plans
permit the Series to pay the Distributor from the assets of the respective
Classes a monthly fee for its services and expenses in distributing and
promoting sales of shares. These expenses include, among other things,
preparing and distributing advertisements, sales literature, and prospectuses
and reports used for sales purposes, compensating sales and marketing personnel,
holding special promotions for specified periods of time, and paying
distribution and maintenance fees to brokers, dealers and others. In connection
with the promotion of Class A, Class B and Class C Shares, the Distributor may,
from time
41
<PAGE>
to time, pay to participate in dealer-sponsored seminars and conferences, and
reimburse dealers for expenses incurred in connection with preapproved seminars,
conferences and advertising. The Distributor may pay or allow additional
promotional incentives to dealers as part of preapproved sales contests and/or
to dealers who provide extra training and information concerning each Class and
increase sales of each Class. In addition, the Series may make payments from the
assets of the respective Class directly to others, such as banks, who aid in the
distribution of Class shares or provide services in respect of a Class, pursuant
to agreements with the Series.
The Plan expenses relating to each of the Class B Shares and the Class C
Shares are also used to pay the Distributor for advancing the commission costs
to dealers with respect to the initial sale of such shares.
The aggregate fees paid by the Series from the assets of the respective
Classes to the Distributor and others under the Plans may not exceed .30% of the
Class A Shares' average daily net assets in any year, and 1% (.25% of which are
service fees to be paid by the Series to the Distributor, dealers and others,
for providing personal service and/or maintaining shareholder accounts) of each
of the Class B Shares' and Class C Shares' average daily net assets in any year.
Class A, Class B and Class C Shares will not incur any distribution expenses
beyond these limits, which may not be increased without shareholder approval.
The Distributor may, however, incur additional expenses and make additional
payments to dealers from its own resources to promote the distribution of shares
of the Classes.
On May 21, 1987, the Board of Directors set the fee for Class A Shares,
pursuant to its Plan, at .15% of average daily net assets. This fee was
effective until May 31, 1992. Effective June 1, 1992, the Board of Directors has
determined that the annual fee payable on a monthly basis, under the Plan will
be equal to the sum of: (i) the amount obtained by multiplying .10% by the
average daily net assets represented by Class A Shares which were originally
purchased prior to June 1, 1992 in Investors Series I class (which was converted
into what is now referred to as Class A Shares) on June 1, 1992 pursuant to a
Plan of Recapitalization approved by the shareholders of Investors Series I
class), and (ii) the amount obtained by multiplying .15% by the average daily
net assets represented by all other Class A Shares. While this is the method to
be used to calculate the 12b-1 expenses to be paid by Class A Shares under its
Plan, the fee is a Class A Shares' expense so that all shareholders of Class A
Shares, regardless of whether they originally purchased or received shares in
Investors Series I class, or in one of the other classes that is now known as
Class A Shares, will bear 12b-1 expenses at the same rate. While this describes
the current formula for calculating the fees which will be payable under the
Class A Shares' Plan beginning June 1, 1992, such Plan permits a full .30% on
all Class A Shares' assets to be paid at any time following appropriate Board
approval. See Shares, below.
The Series' Plans do not apply to the Limited-Term Government Fund
Institutional Class of shares. Those shares are not included in calculating the
Plans' fees, and the Plans are not used to assist in the distribution and
marketing of Limited-Term Government Fund Institutional Class shares.
While payments pursuant to the Plans may not exceed .30% annually with
respect to Class A Shares and 1% annually with respect to Class B Shares and
Class C Shares, the Plans do not limit fees to amounts actually expended by the
Distributor. It is therefore possible that the Distributor may realize a profit
in any particular year. However, the Distributor currently expects that its
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<PAGE>
distribution expenses will likely equal or exceed payments to it under the
Plans. The monthly fees paid to the Distributor are subject to the review and
approval of the Fund's unaffiliated directors who may reduce the fees or
terminate the Plans at any time.
The Transfer Agent, Delaware Service Company, Inc., serves as the
shareholder servicing, dividend disbursing and transfer agent for the Series
under an Agreement dated December 20, 1990. The directors annually review
service fees paid to the Transfer Agent.
The Distributor and the Transfer Agent are also indirect, wholly-owned
subsidiaries of DMH.
EXPENSES
The Series is responsible for all of its own expenses other than those
borne by the Manager under the Investment Management Agreement and those borne
by the Distributor under the Distribution Agreement. The Class A Shares' ratio
of expenses to average daily net assets for the fiscal year ended December 31,
1994 was 0.91%. Based on expenses incurred by Class A Shares during its fiscal
year ended December 31, 1994, the expenses of Class B Shares are expected to be
1.76% for the fiscal year ending December 31, 1995. The Fund anticipates that
the expense ratio for Class C Shares will be identical to the expense ratio for
Class B Shares. The ratio of each Class reflects the impact of its Plan.
SHARES
The Limited-Term Government Fund series is the second series of Delaware
Group Limited-Term Government Funds, Inc., which is an open-end management
investment company, commonly known as a mutual fund. The Series' portfolio of
assets is diversified as defined by the 1940 Act. The Fund was organized as a
Pennsylvania business trust in 1981 and was reorganized as a Maryland
corporation in 1990. The authorized capital of the Fund consists of three
billion shares of common stock, of which two billion shares have been allocated
to the Limited-Term Government Fund series. Nine hundred fifty million shares
have been allocated to Class A Shares, two hundred million shares have been
allocated to each of Class B Shares and Limited-Term Government Fund
Institutional Class shares and fifty million shares have been allocated to Class
C Shares.
All Fund shares have noncumulative voting rights which means that the
holders of more than 50% of the Fund's shares voting for the election of
directors can elect 100% of the directors if they choose to do so. Under
Maryland law, the Fund is not required, and does not intend, to hold annual
meetings of shareholders unless, under certain circumstances, it is required to
do so under the 1940 Act. Shareholders of 10% or more of the Fund's shares may
request that a special meeting be called to consider the removal of a director.
Series' shares have a $.001 par value per share, equal voting rights,
except as noted below, and are equal in all other respects. Shares of the Series
will have a priority over shares of any other series of the Fund in the assets
and income of the Series and will vote separately on any matter that affects
only the Limited-Term Government Fund series.
In addition to Class A Shares, Class B Shares and Class C Shares, the
Series also offers the Limited-Term Government Fund Institutional Class shares.
Shares of each class represent proportionate interests in the assets of the
Series and have the same voting and other rights and preferences as the other
classes of shares of the Series, except that shares of the Limited-Term
Government Fund Institutional Class may not vote on matters affecting the
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<PAGE>
Plans. Similarly, as a general matter, shareholders of Class A Shares, Class B
Shares and Class C Shares may vote only on matters affecting the Plan that
relates to the Class of shares that they hold. However, Class B Shares may vote
on any proposal to increase materially the fees to be paid by the Series under
the Plan relating to Class A Shares.
Until May 31, 1992, the Fund offered two retail classes of shares,
Investors Series I and Investors Series II (now Class A Shares). Investors
Series I class offered shares with a front-end sales charge, but without the
imposition of a Rule 12b-1 fee. Effective June 1, 1992, following shareholder
approval of a plan of recapitalization on May 15, 1992, shareholders of the
Investors Series I class had their shares converted into shares of the Investors
Series II class and became subject to the latter class' Rule 12b-1 charges.
Effective at the same time, following approval by shareholders, the name
Investors Series was changed to Treasury Reserves Intermediate Series and the
name Investors Series II class was changed to Treasury Reserves Intermediate
Fund class. On May 2, 1994, Treasury Reserves Intermediate Fund class became
known as Treasury Reserves Intermediate Fund A Class. Effective as of the close
of business on August 28, 1995, the name Delaware Group Treasury Reserves, Inc.
was changed to Delaware Group Limited-Term Government Funds, Inc. and the name
Treasury Reserves Intermediate Series was changed to Limited-Term Government
Fund. At the same time, the names of Treasury Reserves Intermediate Fund A
Class, Treasury Reserves Intermediate Fund B Class and Treasury Reserves
Intermediate Fund Institutional Class were changed to, respectively, Limited-
Term Government Fund A Class, Limited-Term Government Fund B Class and Limited-
Term Government Fund Institutional Class.
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APPENDIX A
ILLUSTRATIONS OF POTENTIAL IMPACT ON INVESTMENT BASED ON PURCHASE OPTION
$10,000 PURCHASE
<TABLE>
<CAPTION>
Scenario 1 Scenario 2 Scenario 3 Scenario 4
No Redemption Redeem 1st Year Redeem 3rd Year Redeem 5th Year
---------------------------- --------------------------- --------------------------- ---------------------------
Year Class A Class B Class C Class A Class B Class C Class A Class B Class C Class A Class B Class C
- ------- ------- -------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 9,700 10,000 10,000 9,700 10,000 10,000 9,700 10,000 10,000 9,700 10,000 10,000
1 10,185 10,415 10,415 10,185 10,215 10,315+ 10,185 10,415 10,415 10,185 10,415 10,415
2 10,694 10,847 10,847 10,694 10,847 10,847 10,694 11,847 10,847
3 11,229 11,297 11,297 11,229 11,197 11,297+ 11,229 11,297 11,297
4 11,790+ 11,766 11,766 11,790+ 11,766 11,766
5 12,380 12,255 12,255 12,380 12,255 12,255
6 12,999 12,867* 12,763
7 13,649 13,511* 13,293
8 14,331 14,186* 13,844
9 15,048 14,895* 14,419
10 15,800 15,640* 15,017
*This assumes that Class B Shares were converted to Class A Shares at the end of the fifth year.
</TABLE>
$250,000 PURCHASE
<TABLE>
<CAPTION>
Scenario 1 Scenario 2 Scenario 3 Scenario 4
No Redemption Redeem 1st Year Redeem 3rd Year Redeem 5th Year
--------------------------- ---------------------------- ---------------------------- ----------------------------
Year Class A Class B Class C Class A Class B Class C Class A Class B Class C Class A Class B Class C
- ------- ------- ------- ------- ------- ------- -------- -------- ------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 245,000 250,000 250,000 245,000 250,000 250,000 245,000 250,000 250,000 245,000 250,000 250,000
1 257,250 260,375 260,375 257,250 255,375 257,875+ 257,250 260,375 260,375 257,250 260,375 260,375
2 270,113 271,181 271,181 270,113 271,181 271,181 270,113 271,181 271,181
3 283,618+ 282,435 282,435 283,618+ 279,935 282,435 283,618+ 282,435 282,435
4 297,799 294,156 294,156 297,799 294,156 294,156
5 312,689 306,363 306,363 312,689+ 306,363 306,363
6 328,323 321,681 319,077
7 344,740 337,765 332,319
8 361,977 354,654 346,110
9 380,075 372,386 360,474
10 399,079 391,006 375,433
*This assumes that Class B Shares were converted to Class A Shares at the end of the fifth year.
</TABLE>
Assumes a hypothetical return for Class A of 5% per year, a hypothetical return
for Class B of 4.15% for years 1-5 and 5% for years 6-10, and a hypothetical
return for Class C of 4.15% per year. Hypothetical returns vary due to
different expense structures for each Class.
Class A purchase subject to appropriate sales charge breakpoint (3.00% @
$10,000; 2.50% @ $100,000; 2.00% @ $250,000)
Class B purchase assessed appropriate CDSC upon redemption (schedule 2%-2%-1% in
years 1-2-3).
Class C purchase assessed 1% CDSC upon redemption in year 1.
Figures marked "+" identify which class offers the greater return potential
based on investment amount and holding period.
45
<PAGE>
The Delaware Group includes funds with a wide range of investment
objectives. Stock funds, income funds, tax-free funds, money market funds,
global and international funds and closed-end equity funds give investors the
ability to create a portfolio that fits their personal financial goals. For
more information, contact your financial adviser or call Delaware Group at 800-
523-4640.
INVESTMENT MANAGER
Delaware Management Company, Inc.
One Commerce Square
Philadelphia, PA 19103
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
1818 Market Street
Philadelphia, PA 19103
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING
AND TRANSFER AGENT
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young
One Commerce Square
Philadelphia, PA 19103
INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103
CUSTODIAN
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, NY 10260
- ----------------------------------
LIMITED-TERM GOVERNMENT FUND
- ----------------------------------
A CLASS
- ----------------------------------
B CLASS
- ----------------------------------
C CLASS
- ----------------------------------
- ----------------------------------
P R O S P E C T U S
- ----------------------------------
November 29, 1995
DELAWARE
GROUP
--------
46
<PAGE>
November 29, 1995
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
Limited-Term Government Fund Institutional Class
(Formerly Treasury Reserves Intermediate
Fund Institutional Class)
Supplement to Prospectus dated August 29, 1995
ADDITIONAL CLASSES
In addition to the Limited-Term Government Fund Institutional Class (the
"Institutional Class"), the Limited-Term Government Fund offers the Limited-Term
Government Fund A Class, the Limited-Term Government Fund B Class and the
Limited-Term Government Fund C Class of shares (together, the "Fund Classes"),
which are described in a separate prospectus relating to the Fund Classes. The
Fund Classes have sales charges and other expenses that are different from the
Institutional Class and that may affect the performance of the Fund Classes. For
a prospectus relating to the Fund Classes, write to Delaware Distributors, L.P.
at 1818 Market Street, Philadelphia, PA 19103, or call at the following
telephone number: 800-523-4640.
FINANCIAL HIGHLIGHTS
The following unaudited financial highlights for the Institutional Class
are derived from the unaudited financial statements of Delaware Group Limited-
Term Government Funds, Inc. - Limited-Term Government Fund Series for the six-
month period ended June 30, 1995. The data should be read in conjunction with
the financial statements and related notes which are incorporated into Part B by
reference to the Series' Semi-Annual Report for the six months ended June 30,
1995.
<PAGE>
<TABLE>
<CAPTION>
Limited-Term Government
Fund Institutional Class
------------------------
Six Months Ended June 30, 1995
(Unaudited)(1)
<S> <C>
Net Asset Value, Beginning of Period....... $8.990
Income From Investment Operations
- ---------------------------------
Net Investment Income...................... 0.373
Net Gains or Losses on Securities
(both realized and unrealized)............ 0.140
------
Total From Investment Operations.......... 0.513
Less Distributions
- ------------------
Dividends (from net investment income)..... (0.373)
Distributions (from capital gains)......... (0.000)
------
Total Distributions....................... (0.373)
------
Net Asset Value, End of Period............. $9.130
======
- -------------------------------------------
Total Return............................... 5.80%
- ------------
- -------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000's omitted).. $37,481
Ratio of Expenses to Average Daily Net
Assets..................................... 0.84%
Ratio of Net Investment Income to Average
Daily Net Assets........................... 8.29%
Portfolio Turnover Rate.................... 54%
</TABLE>
- -----------------------
(1) Ratios have been annualized, but total return has not been annualized.
-2-
<PAGE>
- --------------------------------------------------------------------------------
PART B--STATEMENT OF ADDITIONAL INFORMATION
November 29, 1995
- --------------------------------------------------------------------------------
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
- --------------------------------------------------------------------------------
1818 Market Street
Philadelphia, PA 19103
- --------------------------------------------------------------------------------
For more information about the
Limited-Term Government
Fund Institutional Class:
800-828-5052
For Prospectus and Performance of the
Limited-Term Government Fund A Class,
Limited-Term Government Fund B Class and the
Limited-Term Government Fund C Class:
Nationwide 800-523-4640
Philadelphia 215-988-1333
Information on Existing Accounts of the
Limited-Term Government Fund A Class,
Limited-Term Government Fund B Class and the
Limited-Term Government Fund C Class:
(SHAREHOLDERS ONLY)
Nationwide 800-523-1918
Philadelphia 215-988-1241
Dealer Services:
(BROKER/DEALERS ONLY)
Nationwide 800-362-7500
Philadelphia 215-988-1050
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Cover Page
- --------------------------------------------------------------------------------
Investment Objective and Policies
- --------------------------------------------------------------------------------
Accounting and Tax Issues
- --------------------------------------------------------------------------------
Performance Information
- --------------------------------------------------------------------------------
Trading Practices and Brokerage
- --------------------------------------------------------------------------------
Purchasing Shares
- --------------------------------------------------------------------------------
Investment Plans
- --------------------------------------------------------------------------------
Determining Offering Price and
Net Asset Value
- --------------------------------------------------------------------------------
Redemption and Repurchase
- --------------------------------------------------------------------------------
Income Dividends and Realized Securities
Profits Distributions
- --------------------------------------------------------------------------------
Investment Management Agreement
- --------------------------------------------------------------------------------
Officers and Directors
- --------------------------------------------------------------------------------
Exchange Privilege
- --------------------------------------------------------------------------------
General Information
- --------------------------------------------------------------------------------
Appendix A - IRA Information
- --------------------------------------------------------------------------------
Financial Statements
- --------------------------------------------------------------------------------
-1-
<PAGE>
Delaware Group Limited-Term Government Funds, Inc. (the "Fund") is a
professionally-managed mutual fund currently offering two Series: the Limited-
Term Government Fund and the U.S. Government Money Series. This Statement of
Additional Information ("Part B" of the Fund's registration statement) describes
the Limited-Term Government Fund series (the "Series") only, except where noted.
The Limited-Term Government Fund offers four classes (individually a "Class" and
collectively, the "Classes") of shares - Limited-Term Government Fund A Class
("Class A Shares"), Limited-Term Government Fund B Class ("Class B Shares"),
Limited-Term Government Fund C Class ("Class C Shares") (together the "Fund
Classes") and the Limited-Term Government Fund Institutional Class (the
"Institutional Class"). Until August 28, 1995, Delaware Group Limited-Term
Government Funds, Inc. was called Delaware Group Treasury Reserves, Inc. and
Limited-Term Government Fund was called Treasury Reserves Intermediate Series.
In addition, prior to that date Limited-Term Government Fund A Class, Limited-
Term Government Fund B Class and Limited-Term Government Fund Institutional
Class were called, respectively, Treasury Reserves Intermediate Fund A Class,
Treasury Reserves Intermediate Fund B Class and Treasury Reserves Intermediate
Fund Institutional Class.
Class B Shares, Class C Shares and Institutional Class shares may be
purchased at a price equal to the next determined net asset value per share.
Class A Shares may be purchased at the public offering price, which is equal to
the next determined net asset value per share, plus a front-end sales charge.
Class A Shares are subject to a maximum front-end sales charge of 3.00% and
annual 12b-1 Plan expenses of up to 0.30% (currently, 0.15% pursuant to Board
action). Class B Shares are subject to a contingent deferred sales charge
("CDSC") which may be imposed on redemptions made within three years of
purchase and annual 12b-1 Plan expenses of up to 1%, which are assessed against
Class B Shares for approximately five years after purchase. See Automatic
Conversion of Class B Shares under Buying Shares in the Fund Classes'
Prospectus. Class C Shares are subject to a CDSC which may be imposed on
redemptions made within twelve months of purchase and annual 12b-1 Plan
expenses of up to 1%, which are assessed against Class C Shares for the life of
the investment. All references to "shares" in this Part B refer to all Classes
of shares of the Series, except where noted.
This Part B supplements the information contained in the current
Prospectus for the Fund Classes dated November 29, 1995, and the current
Prospectus for the Institutional Class dated August 29, 1995, as they may be
amended from time to time. It should be read in conjunction with the respective
Class' Prospectus. Part B is no t itself a prospectus but is, in its entirety,
incorporated by reference into each Class' Prospectus. A Prospectus relating to
the Fund Classes and a Prospectus relating to the Institutional Class may be
obtained by writing or calling your investment dealer or by contacting the
Fund's national distributor, Delaware Distributors, L.P. (the "Distributor"),
1818 Market Street, Philadelphia, PA 19103.
-2-
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The Series will invest in securities for income earnings rather than
trading for profit. The Series will not vary portfolio investments, except to:
1. eliminate unsafe investments and investments not consistent with
the preservation of the capital or the tax status of the investments of the
Series;
2. honor redemption orders, meet anticipated redemption requirements,
and negate gains from discount purchases;
3. reinvest the earnings from securities in like securities; or
4. defray normal administrative expenses.
INVESTMENT RESTRICTIONS
The Fund has adopted the following restrictions for the Series which,
along with its investment objective, cannot be changed without approval by the
holders of a "majority" of the Series' outstanding shares, which is a vote by
the holders of the lesser of a) 67% or more of the voting securities of the
Series 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 Series' outstanding voting securities. The
percentage limitations contained in the restrictions and policies set forth
herein apply at the time of purchase of securities.
The Limited-Term Government Fund series shall not:
1. Invest more than 5% of the market or other fair value of its assets
in the securities of any one issuer (other than obligations of, or guaranteed
by, the U.S. Government, its agencies or instrumentalities).
2. Invest in securities of other investment companies except as part
of a merger, consolidation or other acquisition, and except to the extent that
an issuer of mortgage-backed securities may be deemed to be an investment
company, provided that any such investment in securities of an issuer of a
mortgage-backed security which is deemed to be an investment company will be
subject to the limits set forth in Section 12(d)(1)(A) of the Investment
Company Act of 1940 (the "1940 Act"), as amended.
The Series has been advised by the staff of the Securities and Exchange
Commission (the "Commission") that it is the staff's position that, under the
1940 Act, the Series may invest (a) no more than 10% of its assets in the
aggregate in certain CMOs and REMICs which are deemed to be investment
companies under the 1940 Act and issue their securities pursuant to an
exemptive order from the Commission, and (b) no more than 5% of its assets in
any single issue of such CMOs or REMICs.
3. Make loans, except to the extent that purchases of debt obligations
(including repurchase agreements) in accordance with the Series' investment
objective and policies are considered loans and except that the Series may loan
up to 25% of its assets to qualified broker/dealers or institutional investors
for their use relating to short sales or other security transactions.
4. Purchase or sell real estate but this shall not prevent the Series
from investing in securities secured by real estate or interests therein.
5. Purchase more than 10% of the outstanding voting or nonvoting
securities of any issuer, or invest in companies for the purpose of exercising
control or management.
6. Engage in the underwriting of securities of other issuers, except
that in connection with the disposition of a security, the Series may be deemed
to be an "underwriter" as that term is defined in the Securities Act of 1933.
7. Make any investment which would cause more than 25% of the market
or other fair value of its total assets to be invested in the securities of
issuers all of which conduct their
-3-
<PAGE>
principal business activities in the same industry. This restriction does not
apply to obligations issued or guaranteed by the U.S. Government, its agencies
or instrumentalities.
8. Write, purchase or sell options, puts, calls or combinations
thereof, except that the Series may: (a) write covered call options with
respect to any part or all of its portfolio securities; (b) purchase call
options to the extent that the premiums paid on all outstanding call options do
not exceed 2% of the Series' total assets; (c) write secured put options; (d)
purchase put options to the extent that the premiums on all outstanding put
options do not exceed 2% of the Series' total assets and only if the Series
owns the security covered by the put option at the time of purchase. The Series
may sell put options or call options previously purchased or enter into closing
transactions with respect to such options.
9. Enter into futures contracts or options thereon, except that the
Series may enter into futures contracts to the extent that not more than 5% of
the Series' assets are required as futures contract margin deposits and only to
the extent that obligations under such contracts or transactions represent not
more than 20% of the Series' assets.
10. Purchase securities on margin or make short sales of securities.
11. Invest in warrants or rights except where acquired in units or
attached to other securities.
12. Purchase or retain the securities of any issuer any of whose
officers, directors or security holders is a director or officer of the Fund or
of its investment manager if or so long as the directors and officers of the
Fund and of its investment manager together own beneficially more than 5% of
any class of securities of such issuer.
13. Invest in interests in oil, gas or other mineral exploration or
development programs.
14. Invest more than 10% of the Series' total assets in repurchase
agreements maturing in more than seven days and other illiquid assets.
15. Borrow money in excess of one-third of the value of its net assets
and then only as a temporary measure for extraordinary purposes or to
facilitate redemptions. The Series has no intention of increasing its net
income through borrowing. Any borrowing will be done from a bank and to the
extent that such borrowing exceeds 5% of the value of the Series' net assets,
asset coverage of at least 300% is required. In the event that such asset
coverage shall at any time fall below 300%, the Series shall, within three days
thereafter (not including Sunday or holidays) or such longer period as the
Commission may prescribe by rules and regulations, reduce the amount of its
borrowings to such an extent that the asset coverage of such borrowings shall
be at least 300%. The Series will not pledge more than 10% of its net assets.
The Series will not issue senior securities as defined in the 1940 Act, except
for notes to banks. Securities will not be purchased while the Series has an
outstanding borrowing.
Although not a fundamental investment restriction, the Series currently
does not invest its assets in real estate limited partnerships.
AVERAGE EFFECTIVE MATURITY
The Series limits its average effective dollar weighted portfolio
maturity to no more than three to five years. However, many of the securities
in which the Series invests will have remaining maturities in excess of five
years.
Some of the securities in the Series' portfolio may have periodic
interest rate adjustments based upon an index such as the 91-day Treasury Bill
rate. This periodic interest rate adjustment tends to lessen the volatility of
the security's price. With respect to securities with an interest rate
adjustment period of one year or less, the Series will, when determining
average weighted maturity, treat such a security's maturity as the amount of
time remaining until the next interest rate adjustment.
Instruments such as GNMA, FNMA, FHLMC securities and similar securities
backed by amortizing loans generally have shorter effective
-4-
<PAGE>
maturities than their stated maturities. This is due to changes in amortization
caused by demographic and economic forces such as interest rate movements.
These effective maturities are calculated based upon historical payment
patterns. For purposes of determining the Series' average effective maturity,
the maturities of such securities will be calculated based upon the issuing
agency's payment factors using industry-accepted valuation models.
MORTGAGE-BACKED SECURITIES--In addition to mortgage-backed securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities, the Series
may also invest up to 35% of its assets in securities issued by certain private,
nongovernment corporations, such as financial institutions, if the securities
are fully collateralized at the time of issuance by securities or certificates
issued or guaranteed by the U.S. Government, its agencies or instrumentalities.
Two principal types of mortgage-backed securities are collateralized mortgage
obligations (CMOs) and real estate mortgage investment conduits (REMICs).
CMOs are debt securities issued by U.S. Government agencies or by
financial institutions and other mortgage lenders and collateralized by a pool
of mortgages held under an indenture. CMOs are issued in a number of classes or
series with different maturities. The classes or series are retired in sequence
as the underlying mortgages are repaid. Prepayment may shorten the stated
maturity of the obligation and can result in a loss of premium, if any has been
paid. Certain of these securities may have variable or floating interest rates
and others may be stripped (securities which provide only the principal or
interest feature of the underlying security).
Stripped mortgage securities are usually structured with two classes that
receive different proportions of the interest and principal distributions on a
pool of mortgage assets. A common type of stripped mortgage security will have
one class receiving some of the interest and most of the principal from the
mortgage assets, while the other class will receive most of the interest and the
remainder of the principal. In the most extreme case, one class will receive all
of the interest (the "interest-only" class), while the other class will receive
all of the principal (the "principal-only" class). The yield to maturity on an
interest-only class is extremely sensitive not only to changes in prevailing
interest rates but also to the rate of principal payments (including
prepayments) on the related underlying mortgage assets, and a rapid rate of
principal payments may have a material adverse effect on the Series' yield to
maturity. If the underlying mortgage assets experience greater than anticipated
prepayments of principal, the Series may fail to fully recoup its initial
investment in these securities even if the securities are rated in the highest
rating categories.
Although stripped mortgage securities are purchased and sold by
institutional investors through several investment banking firms acting as
brokers or dealers, these securities were only recently developed. As a result,
established trading markets have not yet been fully developed and, accordingly,
these securities are generally illiquid and to such extent, together with any
other illiquid investments, will not exceed 10% of the Series' net assets.
REMICs, which were authorized under the Tax Reform Act of 1986, are
private entities formed for the purpose of holding a fixed pool of mortgages
secured by an interest in real property. REMICs are similar to CMOs in that they
issue multiple classes of securities and certain REMICs also may be stripped.
CMOs and REMICs issued by private entities are not government securities
and are not directly guaranteed by any government agency. They are secured by
the underlying collateral of the private issuer. The Series will invest in such
private-backed securities only if they are 100% collateralized at the time of
issuance by securities
-5-
<PAGE>
issued or guaranteed by the U.S. Government, its agencies or instrumentalities.
The Series currently invests in privately-issued CMOs and REMICs only if they
are rated at the time of purchase in the two highest grades by a nationally-
recognized rating agency.
ASSET-BACKED SECURITIES--The Series may invest a portion of its assets in asset-
backed securities. The rate of principal payment on asset-backed securities
generally depends on 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. 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.
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 provisions of advances, generally by the
entity administering the pool of assets, to ensure that the receipt of payments
due on the underlying pool is timely. Protection against losses resulting from
ultimate default enhances the likelihood of payments of the obligations on at
least some of the assets in the pool. Such protection may be provided through
guarantees, insurance policies or letters of credit obtained by the issuer or
sponsor from third parties, through various means of structuring the transaction
or through a combination of such approaches. The Series will not pay any
additional fees for such credit support, although the existence of credit
support may increase the price of a security.
Examples of credit support arising out of the structure of the
transaction include "senior-subordinated securities" (multiple class securities
with one or more classes subordinate to other classes as to the payment of
principal thereof and interest thereon, with the result that defaults on the
underlying assets are borne first by the holders of the subordinated class),
creation of "reserve funds" (where cash or investments, sometimes funded from a
portion of the payments on the underlying assets, are held in reserve against
future losses) and "over-collateralization" (where the scheduled payments on, or
the principal amount of, the underlying assets exceeds that required to make
payments of the securities and pay any servicing or other fees). The degree of
credit support provided for each issue is generally based on historical
information respecting the level of credit information respecting the level of
credit risk associated with the underlying assets. Delinquencies or losses in
excess of those anticipated could adversely affect the return on an investment
in such issue.
OPTIONS--The Series may purchase call options, write call options on a covered
basis, write secured put options and purchase put options on a covered basis
only, and will not engage in option writing strategies for speculative purposes.
The Series may invest in options that are either Exchange listed or
traded over-the-counter. Certain over-the-counter options may be illiquid. Thus,
it may not be possible to close option positions and this may have an adverse
impact on the Series' ability to effectively hedge its securities. The Series
will not, however, invest more than 10% of its assets in illiquid securities.
A. COVERED CALL WRITING--The Series may write covered call options from
time to time on such portion of its portfolio, without limit, as
-6-
<PAGE>
Delaware Management Company, Inc. (the "Manager") determines is appropriate in
seeking to obtain the Series' investment objective. A call option gives the
purchaser of such option the right to buy, and the writer, in this case the
Series, has the obligation to sell the underlying security at the exercise price
during the option period. The advantage to the Series of writing covered calls
is that the Series receives a premium which is additional income. However, if
the security rises in value, the Series may not fully participate in the market
appreciation.
During the option period, a covered call option writer may be assigned an
exercise notice by the broker/dealer through whom such call option was sold,
requiring the writer to deliver the underlying security against payment of the
exercise price. This obligation is terminated upon the expiration of the option
period or at such earlier time in which the writer effects a closing purchase
transaction. A closing purchase transaction cannot be effected with respect to
an option once the option writer has received an exercise notice for such
option.
With respect to options on actual portfolio securities owned by the
Series, the Series may enter into closing purchase transactions. A closing
purchase transaction is one in which the Series, when obligated as a writer of
an option, terminates its obligation by purchasing an option of the same series
as the option previously written.
Closing purchase transactions will ordinarily be effected to realize a
profit on an outstanding call option, to prevent an underlying security from
being called, to permit the sale of the underlying security or to enable the
Series to write another call option on the underlying security with either a
different exercise price or expiration date or both. The Series may realize a
net gain or loss from a closing purchase transaction depending upon whether the
net amount of the original premium received on the call option is more or less
than the cost of effecting the closing purchase transaction. Any loss incurred
in a closing purchase transaction may be partially or entirety offset by the
premium received from a sale of a different call option on the same underlying
security. Such a loss may also be wholly or partially offset by unrealized
appreciation in the market value of the underlying security. Conversely, a gain
resulting from a closing purchase transaction could be offset in whole or in
part by a decline in the market value of the underlying security.
If a call option expires unexercised, the Series will realize a short-
term capital gain in the amount of the premium on the option less the commission
paid. Such a gain, however, may be offset by depreciation in the market value of
the underlying security during the option period. If a call option is exercised,
the Series will realize a gain or loss from the sale of the underlying security
equal to the difference between the cost of the underlying security and the
proceeds of the sale of the security plus the amount of the premium on the
option less the commission paid.
The market value of a call option generally reflects the market price of
an underlying security. Other principal factors affecting market value include
supply and demand, interest rates, the price volatility of the underlying
security and the time remaining until the expiration date.
The Series will write call options only on a covered basis, which means
that the Series will own the underlying security subject to a call option at all
times during the option period. Unless a closing purchase transaction is
effected, the Series would be required to continue to hold a security which it
might otherwise wish to sell or deliver a security it would want to hold.
Options written by the Series will normally have expiration dates between one
and nine months from the date written. The exercise price of a call option may
be below, equal to or above the current market value of the underlying security
at the time the option is written.
-7-
<PAGE>
B. PURCHASING CALL OPTIONS--The Series may purchase call options to the
extent that premiums paid by the Series do not aggregate more than 2% of the
Series' total assets. The advantage of purchasing call options is that the
Series may alter portfolio characteristics, and modify portfolio maturities
without incurring the cost associated with portfolio transactions.
The Series may, following the purchase of a call option, liquidate its
position by effecting a closing sale transaction. This is accomplished by
selling an option of the same Series as the option previously purchased. The
Series will realize a profit from a closing sale transaction if the price
received on the transaction is more than the premium paid to purchase the
original call option; the Series will realize a loss from a closing sale
transaction if the price received on the transaction is less than the premium
paid to purchase the original call option.
Although the Series will generally purchase only those call options for
which there appears to be an active secondary market, there is no assurance that
a liquid secondary market on an Exchange will exist for any particular option,
or at any particular time, and for some options no secondary market on a
Exchange may exist. In such event, it may not be possible to effect closing
transactions in particular options, with the results that the Series would have
to exercise its options in order to realize any profit and would incur brokerage
commissions upon the exercise of such options and upon the subsequent
disposition of the underlying securities acquired through the exercise of such
options. Further, unless the price of the underlying security changes
sufficiently, a call option purchased by the Series may expire without any value
to the Series.
C. PURCHASING PUT OPTIONS--The Series may invest up to 2% of its total
assets in the purchase of put options. The Series will, at all times during
which it holds a put option, own the security covered by such option.
The Series intends to purchase put options in order to protect against a
decline in the market value of the underlying security below the exercise price
less the premium paid for the option ("protective puts"). The ability to
purchase put options will allow the Series to protect an unrealized gain in an
appreciated security in its portfolio without actually selling the security. If
the security does not drop in value, the Series will lose the value of the
premium paid. The Series may sell a put option which it has previously purchased
prior to the sale of the securities underlying such option. Such sales will
result in a net gain or loss depending on whether the amount received on the
sale is more or less than the premium and other transaction costs paid on the
put option which is sold.
The Series may sell a put option purchased on individual portfolio
securities. Additionally, the Series may enter into closing sale transactions. A
closing sale transaction is one in which the Series, when it is the holder of an
outstanding option, liquidates its position by selling an option of the same
series as the option previously purchased.
D. WRITING PUT OPTIONS--The Series may also write put options on a
secured basis which means that the Series will maintain in a segregated account
with its custodian, cash or U.S. Government securities in an amount not less
than the exercise price of the option at all times during the option period. The
amount of cash or U.S. Government securities held in the segregated account will
be adjusted on a daily basis to reflect changes in the market value of the
securities covered by the put option written by the Series. Secured put options
will generally be written in circumstances where the Manager wishes to purchase
the underlying security for the Series' portfolio at a price lower than the
current market price of the security. In such event, the Series would write a
secured put option at an exercise price which, reduced by the premium received
on the option, reflects the lower price it is willing to pay.
-8-
<PAGE>
Following the writing of a put option, the Series may wish to terminate
the obligation to buy the security underlying the option by effecting a closing
purchase transaction. This is accomplished by buying an option of the same
series as the option previously written. The Series may not, however, effect
such a closing transaction after it has been notified of the exercise of the
option.
FUTURES--Futures contracts are agreements for the purchase or sale for future
delivery of securities. While futures contracts provide for the delivery of
securities, deliveries usually do not occur. Contracts are generally terminated
by entering into an offsetting transaction. When the Series enters into a
futures transaction, it must deliver to the futures commission merchant selected
by the Series an amount referred to as "initial margin." This amount is
maintained by the futures commission merchant in an account at the Series'
custodian bank. Thereafter, a "variation margin" may be paid by the Series to,
or drawn by the Series from, such account in accordance with controls set for
such account, depending upon changes in the price of the underlying securities
subject to the futures contract.
In addition, when the Series engages in futures transactions, to the
extent required by the Securities and Exchange Commission, it will maintain with
its custodian, assets in a segregated account to cover its obligations with
respect to such contracts, which assets will consist of cash, cash equivalents
or high quality debt securities from its portfolio in an amount equal to the
difference between the fluctuating market value of such futures contracts and
the aggregate value of the margin payments made by the Series with respect to
such futures contracts.
The Series may enter into such futures contracts to protect against the
adverse effects of fluctuations in interest rates without actually buying or
selling such securities. Similarly, when it is expected that interest rates may
decline, futures contracts may be purchased to hedge in anticipation of
subsequent purchases of government securities at higher prices.
With respect to options on futures contracts, when the Series is not
fully invested, it may purchase a call option on a futures contract to hedge
against a market advance due to declining interest rates. The writing of a call
option on a futures contract constitutes a partial hedge against declining
prices of the securities which are deliverable upon exercise of the futures
contract. If the futures price at the expiration of the option is below the
exercise price, the Series will retain the full amount of the option premium
which provides a partial hedge against any decline that may have occurred in the
portfolio holdings. The writing of a put option on a futures contract
constitutes a partial hedge against increasing prices of the securities which
are deliverable upon exercise of the futures contract. If the futures price at
expiration of the option is higher than the exercise price, the Series will
retain the full amount of the option premium which provides a partial hedge
against any increase in the price of government securities which the Series
intends to purchase.
If a put or call option the Series has written is exercised, the Series
will incur a loss which will be reduced by the amount of the premium it
receives. Depending on the degree of correlation between the value of its
portfolio securities and changes in the value of its futures positions, the
Series' losses from existing options on futures may, to some extent, be reduced
or increased by changes in the value of portfolio securities. The Series will
purchase a put option on a futures contract to hedge the Series' portfolio
against the risk of rising interest rates.
To the extent that interest rates move in an unexpected direction, the
Series may not achieve the anticipated benefits of futures contracts or options
on futures contracts or may realize a loss. For example, if the Series is hedged
against the possibility of an increase in interest rates which would adversely
affect the price of government securities held in its portfolio and interest
rates decrease instead, the Series will lose part or all of the benefit of the
increased value of its government securities which it has because it will have
offsetting losses in its futures position. In addition, in such situations, if
the Series had insufficient cash, it may be required to sell government
securities from its portfolio to meet daily variation margin requirements. Such
sales of government securities may, but will not necessarily, be at increased
prices which reflect the rising market. The Series may be required to sell
securities at a time when it may be disadvantageous to do so.
-9-
<PAGE>
Further, with respect to options on futures contracts, the Series may
seek to close out an option position by writing or buying an offsetting position
covering the same securities or contracts and have the same exercise price and
expiration date. The ability to establish and close out positions on options
will be subject to the maintenance of a liquid secondary market, which cannot be
assured.
CORPORATE DEBT--The Series may invest in corporate notes and bonds rated A or
above. Excerpts from Moody's Investors Service, Inc. ("Moody's") description of
those categories of bond ratings: Aaa--judged to be the best quality. They carry
the smallest degree of investment risk; Aa--judged to be of high quality by all
standards; A--possess favorable attributes and are considered "upper medium"
grade obligations.
Excerpts from Standard & Poor's Rating Group ("S&P") description of those
categories of bond ratings: AAA--highest grade obligations. They possess the
ultimate degree of protection as to principal and interest; AA--also qualify as
high grade obligations, and in the majority of instances differ from AAA issues
only in a small degree; A--strong ability to pay interest and repay principal
although more susceptible to changes in circumstances.
COMMERCIAL PAPER--The Series may invest in short-term promissory notes issued by
corporations which at the time of purchase are rated P-1 and/or A-1. Commercial
paper ratings P-1 by Moody's and A-1 by S&P are the highest investment grade
category.
BANK OBLIGATIONS--The Series may invest in certificates of deposit, bankers'
acceptances and other short-term obligations of U.S. commercial banks and their
overseas branches and foreign banks of comparable quality, provided each such
bank combined with its branches has total assets of at least one billion
dollars. Any obligations of foreign banks shall be denominated in U.S. dollars.
Obligations of foreign banks and obligations of overseas branches of U.S. banks
are subject to somewhat different regulations and risks than those of U.S.
domestic banks. In particular, a foreign country could impose exchange controls
which might delay the release of proceeds from that country. Such deposits are
not covered by the Federal Deposit Insurance Corporation. Because of conflicting
laws and regulations, an issuing bank could maintain that liability for an
investment is solely that of the overseas branch which could expose the Series
to a greater risk of loss. The Series will only buy short-term instruments in
nations where these risks are minimal. The Series will consider these factors
along with other appropriate factors in making an investment decision to acquire
such obligations and will only acquire those which, in the opinion of
management, are of an investment quality comparable to other debt securities
bought by the Series.
PORTFOLIO LOAN TRANSACTIONS
The Series may loan up to 25% of its assets to qualified broker/dealers
or institutional investors for their use relating to short sales or other
security transactions.
It is the understanding of the Manager that the staff of the Commission
permits portfolio lending by registered investment companies if certain
conditions are met. These conditions are as follows: 1) each transaction must
have 100% collateral in the form of cash, short-term U.S. Government securities,
or irrevocable letters of credit payable by banks acceptable to the Fund from
the borrower; 2) this collateral must be valued daily and should the market
value of the loaned securities increase, the borrower must furnish additional
collateral to the Series; 3) the Fund must be able to terminate the loan after
notice, at any time; 4) the Series must receive reasonable interest on any loan,
and any dividends, interest or other distributions on the lent securities, and
any increase
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<PAGE>
in the market value of such securities; 5) the Series may pay reasonable
custodian fees in connection with the loan; and 6) the voting rights on the lent
securities may pass to the borrower; however, if the directors of the Fund know
that a material event will occur affecting an investment loan, they must either
terminate the loan in order to vote the proxy or enter into an alternative
arrangement with the borrower to enable the directors to vote the proxy.
The major risk to which the Series would be exposed on a loan transaction
is the risk that the borrower would go bankrupt at a time when the value of the
security goes up. Therefore, the Series will only enter into loan arrangements
after a review of all pertinent facts by the Manager, under the supervision of
the Board of Directors, including the creditworthiness of the borrowing broker,
dealer or institution and then only if the consideration to be received from
such loans would justify the risk. Creditworthiness will be monitored on an
ongoing basis by the Manager.
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<PAGE>
ACCOUNTING AND TAX ISSUES
The following supplements the information in the Classes' Prospectuses
under the heading Taxes.
When the Series writes a call option, an amount equal to the premium
received by it is included in the Series' assets and liabilities as an asset and
as an equivalent liability. The amount of the liability is subsequently "marked
to market" to reflect the current market value of the option written. The
current market value of a written option is the last sale price on the principal
Exchange on which such option is traded or, in the absence of a sale, the mean
between the last bid and asked prices. If an option which the Series has written
expires on its stipulated expiration date, or if the Series enters into a
closing purchase transaction, the Series realizes a gain (or loss if the cost of
the closing transaction exceeds the premium received when the option was sold)
without regard to any unrealized gain or loss on the underlying security, and
the liability related to such option is extinguished. Any such gain or loss is a
short-term capital gain or loss for federal income tax purposes. If a call
option which the Series has written is exercised, the Series realizes a capital
gain or loss (long-term or short-term, depending on the holding period of the
underlying security) from the sale of the underlying security, and the proceeds
from such sale are increased by the premium originally received.
The premium paid by the Series for the purchase of a put option is
recorded in the section of the Series' assets and liabilities as an investment
and subsequently adjusted daily to the current market value of the option. For
example, if the current market value of the option exceeds the premium paid, the
excess would be unrealized appreciation and, conversely, if the premium exceeds
the current market value, such excess would be unrealized depreciation. If a put
option which the Series has purchased expires on the stipulated expiration date,
the Series realizes a long- or short-term capital loss for federal income tax
purposes in the amount of the cost of the option. If the Series sells the put
option, it realizes a long- or short-term capital gain or loss, depending on
whether the proceeds from the sale are greater or less than the cost of the
option. If the Series exercises a put option, it realizes a capital gain or loss
(long-term or short-term, depending on the holding period of the underlying
security) from the sale of the underlying security and the proceeds from such
sale will be decreased by the premium originally paid. However, since the
purchase of a put option is treated as a short sale for federal income tax
purposes, the holding period of the underlying security will be affected by such
a purchase.
The initial margin deposits made when entering into futures contracts are
recognized as assets due from the broker. During the period the futures contract
is open, changes in the value of the contract will be reflected at the end of
each day.
Regulated futures contracts held by the Series at the end of each fiscal
year will be required to be "marked to market" for federal income tax purposes.
Any unrealized gain or loss on futures contracts will therefore be recognized
and deemed to consist of 60% long-term capital gain or loss and 40% short-term
capital gain or loss. Therefore, adjustments are made to the tax basis in the
futures contract to reflect the gain or loss recognized at year end.
The Series has qualified and intends to continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code.
The Series must meet several requirements to maintain its status as a regulated
investment company. Among these requirements is that not more than 30% of the
Series' gross income be derived from gains from the sale or other disposition of
securities held for less than three months. This requirement may restrict the
Series in its ability to write covered call options on securities which it has
held less than three months, to write
-12-
<PAGE>
options which expire in less than three months, to sell securities which have
been held less than three months, and to effect closing purchase transactions
with respect to options which have been written less than three months prior to
such transactions. Consequently, in order to avoid realizing a gain within the
three-month period, the Series may be required to defer the closing out of a
contract beyond the time when it might otherwise be advantageous to do so. The
Series may also be restricted in the sale of purchased put options and the
purchase of put options for the purpose of hedging underlying securities because
of the application of the short sale holding period rules with respect to such
underlying securities.
-13-
<PAGE>
PERFORMANCE INFORMATION
From time to time, the Series may state total return for each Class in
advertisements and other types of literature. Any statements of total return
performance data for a Class will be accompanied by information on the average
annual compounded rate of return for that Class over, as relevant, the most
recent one-, five- and ten-year (or life of fund, if applicable) periods. The
Series may also advertise aggregate and average compounded return information of
each Class over additional periods of time.
The average annual total rate of return for 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 from which, in the
case only of Class A Shares, the maximum front-end sales charge,
if any, is deducted;
T = average annual total return;
n = number of years;
ERV = redeemable value of the hypothetical $1,000 purchase at the end of
the period after the deduction of the applicable CDSC, if any,
with respect to Class B Shares and Class C Shares.
Aggregate or cumulative total return is calculated in a similar manner,
except that the results are not annualized. Each calculation assumes the maximum
front-end sales charge, if any, is deducted from the initial $1,000 investment
at the time it is made with respect to Class A Shares and that all distributions
are reinvested at net asset value, and, with respect to Class B Shares and Class
C Shares, reflects the deduction of the CDSC that would be applicable upon
complete redemption of such shares. In addition, the Series may present total
return information that does not reflect the deduction of the maximum front-end
sales charge or any applicable CDSC.
The performance of Class A Shares and the Institutional Class, as shown
below, is the average annual total return quotations for the one-, three- and
five-year periods ended June 30, 1995 and for the life of these Classes,
computed as described above. The average annual total return for Class A Shares
at offer reflects the maximum front-end sales charges paid on the purchase of
shares. The average annual total return for Class A Shares at net asset value
(NAV) does not reflect the payment of the maximum front-end sales charge of
3.00%. Securities prices fluctuated during the periods covered and past results
should not be considered as representative of future performance. Pursuant to
applicable regulation, total return shown for the Institutional Class for the
periods prior to the commencement of operations of such Class is calculated by
taking the performance of Class A Shares and adjusting it to reflect the
elimination of all front-end sales charges. However, for those periods, no
adjustment has been made to eliminate the impact of 12b-1 payments, and
performance may have been affected had such an adjustment been made.
In the case of Class A Shares, the Limited CDSC, applicable only to
certain redemptions of those shares, will not be deducted from any computations
of total return. See the Prospectus for the Fund Classes for a description of
the Limited CDSC and the limited instances in which it applies. All references
to a CDSC will apply to Class B Shares or Class C Shares.
-14-
<PAGE>
AVERAGE ANNUAL TOTAL RETURN*
<TABLE>
<CAPTION>
CLASS A CLASS A
SHARES SHARES INSTITUTIONAL
(AT OFFER) (AT NAV) CLASS**
<S> <C> <C> <C>
1 year
ended
6/30/95 3.26% 6.49% 6.65%
3 years
ended
6/30/95 2.93% 3.98% 4.13%
5 years
ended
6/30/95 5.97% 6.62% 6.78%
Period
11/24/85***
to 6/30/95 6.63% 6.97% 7.08%
</TABLE>
* The Manager elected to waive voluntarily the portion of its annual
compensation under its Investment Management Agreement with the Fund on
behalf of the Series to limit operating expenses to 1.00% from the date of
the initial public offering through July 31, 1986 and of each class to .75%
(exclusive of 12b-1 payments with respect to Class A Shares) from February
25, 1991 until December 30, 1992. In the absence of such voluntary waivers,
performance would have been affected negatively.
** Date of initial public offering was June 1, 1992.
*** Date of initial public offering of Class A Shares.
The performance of the Class B Shares, as shown below, is the average
annual total return quotation for the one-year period ended June 30, 1995 and
for the period May 2, 1994 (date of initial public offering) through June 30,
1995. The average annual total return for Class B Shares including deferred
sales charge reflects the deduction of the applicable CDSC that would be paid if
the shares were redeemed at June 30, 1995. The average annual total return for
Class B Shares excluding deferred sales charge assumes the shares were not
redeemed at June 30, 1995 and therefore does not reflect the deduction of a
CDSC.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
CLASS B SHARES CLASS B SHARES
(INCLUDING (EXCLUDING
DEFERRED SALES DEFERRED SALES
CHARGE) CHARGE)
<S> <C> <C>
1 year
ended
6/30/95 3.62% 5.59%
Period 5/2/94*
through 6/30/95 2.47% 4.12%
</TABLE>
* Date of initial public offering of Class B Shares.
Information regarding the performance of Class C Shares is not shown
because such shares were not offered to the public prior to the date of this
Part B. As stated in the Prospectuses, the Series may also quote the current
yield for each Class in advertisements and investor communications. The yield
computation is determined by dividing the net investment income per share earned
during the period by the maximum offering price per share on the last day of the
period and annualizing the resulting figure, according to the following formula:
a -- b
------- 6
YIELD = 2[( cd + 1) -- 1]
Where: a = dividends and interest earned during the period;
b = expenses accrued for the period (net of reimbursements);
c = the average daily number of shares outstanding during the period that
were entitled to receive dividends;
d = the maximum offering price per share on the last day of the period.
-15-
<PAGE>
The above formula will be used in calculating quotations of yield of each
Class, based on specified 30-day periods identified in advertising by the
Series. The yields as of June 30, 1995 using this formula were 6.29%, 5.63% and
6.64% for Class A Shares, Class B Shares and Institutional Class, respectively.
Yield assumes the maximum front-end sales charge, if any, and does not reflect
the deduction of any CDSC or Limited CDSC. Actual yield may be affected by
variations in front-end sales charges on investments. Past performance, such as
is reflected in quoted yields, should not be considered as a representation of
the results which may be realized from an investment in any class of the Series
in the future.
Investors should note that the income earned and dividends paid by the
Series will vary with the fluctuation of interest rates and performance of the
portfolio. The net asset value of the fund may change. Unlike money market
funds, the Series invests in longer-term securities that fluctuate in value and
do so in a manner inversely correlated with changing interest rates. The Series'
net asset value will tend to rise when interest rates fall. Conversely, the
Series' net asset value will tend to fall as interest rates rise. Normally,
fluctuations in interest rates have a greater effect on the prices of longer-
term bonds. The value of the securities held in the Series will vary from day to
day and investors should consider the volatility of the Series' net asset value
as well as its yield before making a decision to invest.
On June 30, 1995, the average effective weighted average portfolio
maturity was 16 years for the Series.
From time to time, the Series may also quote actual total return and/or
yield performance for each Class in advertising and other types of literature
compared to indices or averages of alternative financial products available to
prospective investors. For example, the performance comparisons may include the
average return of various bank instruments, some of which may carry certain
return guarantees offered by leading banks and thrifts as monitored by Bank Rate
Monitor, and those of corporate bond and government security price indices of
various durations prepared by Lehman Brothers and Salomon Brothers, Inc. These
indices are not managed for any investment goal.
Comparative information on the Consumer Price Index may also be included.
The Consumer Price Index, as prepared by the U.S. Bureau of Labor Statistics, is
the most commonly used measure of inflation. It indicates the cost fluctuations
of a representative group of consumer goods. It does not represent a return from
investment.
Total return performance of each Class will reflect the appreciation or
depreciation of principal, reinvestment of income and any capital gains
distributions paid during any indicated period, and the impact of the maximum
front-end sales charge or CDSC, if any, paid on the illustrated investment
amount, annualized. The results will not reflect any income taxes, if
applicable, payable by shareholders on the reinvested distributions included in
the calculations. As securities prices fluctuate, an illustration of past
performance should not be considered as representative of future results.
Statistical and performance information and various indices compiled and
maintained by organizations such as the following may also be used in preparing
exhibits comparing certain industry trends and competitive mutual fund
performance to comparable Series activity and performance and in illustrating
general financial planning principles. From time to time, certain mutual fund
performance ranking information, calculated and provided by these organizations,
may also be used in the promotion of sales in the Series. Any indices used are
not managed for any investment goal.
-16-
<PAGE>
CDA Investment Technologies, Lipper Analytical Services, Inc. and
Morningstar, Inc. are performance evaluation services that maintain
statistical performance databases, as reported by a diverse universe of
independently-managed mutual funds.
Ibbotson Associates, Inc. is a consulting firm that provides a variety of
historical data including total return, capital appreciation and income
on the stock market as well as other investment asset classes, and
inflation. With their permission, this information will be used primarily
for comparative purposes and to illustrate general financial planning
principles.
Interactive Data Corporation is a statistical access service that
maintains a database of various international industry indicators, such
as historical and current price/earning information, individual equity
and fixed income price and return information.
Salomon Brothers and Lehman Brothers are statistical research firms that
maintain databases of international market, bond market, corporate and
government-issued securities of various maturities. This information, as
well as unmanaged indices compiled and maintained by these firms, will be
used in preparing comparative illustrations.
Current interest rate and yield information on government debt
obligations of various durations, as reported weekly by the Federal Reserve
(Bulletin H.15), may also be used. As well, 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.
The following table is an example, for purposes of illustration only, of
cumulative total return performance for (a) Class A Shares and the Institutional
Class for the three-, six- and nine-month periods ended June 30, 1995, for the
one-, three- and five-year periods ended June 30, 1995 and for the life of these
Classes and (b) Class B Shares for the three-, six- and nine-month periods ended
June 30, 1995, the one-year period ended June 30, 1995 and for the life of the
Class. For these purposes, the calculations assume the reinvestment of any
realized securities profits distributions and income dividends paid during the
indicated periods. Pursuant to applicable regulation, total return shown for the
Institutional Class for the periods prior to the commencement of operations of
such Class is calculated by taking the performance of Class A Shares and
adjusting it to reflect the elimination of all sales charges. However, for those
periods, no adjustment has been made to eliminate the impact of 12b-1 payments,
and performance may have been affected had such an adjustment been made.
Information regarding the performance of Class C Shares is not shown because
such shares were not offered to the public prior to the date of this Part B.
The performance of the Class A Shares, Class B Shares and the
Institutional Class, as shown below, reflects maximum sales charges, if any,
paid on the purchase or redemption of shares, as applicable, but not any income
taxes payable by shareholders on the reinvested distributions included in the
calculations. The performance of Class B Shares is calculated both with the
applicable CDSC included and excluded. The net asset value of a Class fluctuates
so shares, when redeemed, may be worth more or less than the original
investment, and a Class' results should not be considered as representative of
future performance.
-17-
<PAGE>
Because every investor's goals and risk threshold are different, the
Distributor, as distributor for the Fund and other mutual funds in the Delaware
Group, will provide general information about investment alternatives and
scenarios that will allow investors to assess their personal goals. This
information will include general material about investing as well as materials
reinforcing various industry-accepted principles of prudent and responsible
personal financial planning. One typical way of addressing these issues is to
compare an individual's goals and the length of time the individual has to
attain these goals to his or her risk threshold. In addition, the Distributor
will provide information that discusses the Manager's overriding investment
philosophy and how that philosophy impacts the Series', and other Delaware Group
funds', investment disciplines employed in seeking their objectives. The
Distributor may also from time to time cite general or specific information
about the institutional clients of the Manager, including the number of such
clients serviced by the Manager.
THE POWER OF COMPOUNDING
When you opt to reinvest your current income for additional Series
shares, your investment is given yet another opportunity to grow. It's called
the Power of Compounding and the following chart illustrates just how powerful
it can be.
COMPOUNDED RETURNS
Results at various assumed fixed rates of return on a $10,000 investment
compounded monthly for 10 years:
<TABLE>
<CAPTION>
7% RATE OF RETURN 8% RATE OF RETURN 9% RATE OF RETURN
<S> <C> <C> <C>
12/85 $10,723 $10,830 $10,938
12/86 $11,498 $11,729 $11,964
12/87 $12,330 $12,702 $13,086
12/88 $13,221 $13,757 $14,314
12/89 $14,177 $14,898 $15,657
12/90 $15,201 $16,135 $17,126
12/91 $16,300 $17,474 $18,732
12/92 $17,479 $18,924 $20,489
12/93 $18,743 $20,495 $22,411
12/94 $20,098 $22,196 $24,514
</TABLE>
These figures are calculated assuming a fixed constant investment return
and assume no fluctuation in the value of principal. These figures do not
reflect payment of applicable taxes or sales charges, are not intended to be a
projection of investment results and do not reflect the actual performance
results of any of the Classes.
-19-
<PAGE>
TRADING PRACTICES AND BROKERAGE
Portfolio transactions are executed by the Manager on behalf of the
Series in accordance with the standards described below.
Brokers, dealers and banks are selected to execute transactions for the
purchase or sale of portfolio securities on the basis of the Manager's judgment
of their professional capability to provide the service. The primary
consideration is to have brokers, dealers or banks execute transactions at best
price and execution. Best price and execution refers to many factors, including
the price paid or received for a security, the commission charged, the
promptness and reliability of execution, the confidentiality and placement
accorded the order and other factors affecting the overall benefit obtained by
the account on the transaction. Trades are generally made on a net basis where
securities are either bought or sold directly from or to a broker, dealer or
bank. In these instances, there is no direct commission charged, but there is a
spread (the difference between the buy and sell price) which is the equivalent
of a commission. When a commission is paid, the Fund pays reasonably competitive
brokerage commission rates based upon the professional knowledge of its trading
department as to rates paid and charged for similar transactions throughout the
securities industry. In some instances, the Fund pays a minimal share
transaction cost when the transaction presents no difficulty.
The Manager may allocate out of all commission business generated by all
of the funds and accounts under its management, brokerage business to brokers or
dealers who provide brokerage and research services. These services include
advice, either directly or through publications or writings, as to the value of
securities, the advisability of investing in, purchasing or selling securities,
and the availability of securities or purchasers or sellers of securities;
furnishing of analyses and reports concerning issuers, securities or industries;
providing information on economic factors and trends; assisting in determining
portfolio strategy; providing computer software and hardware used in security
analyses; and providing portfolio performance evaluation and technical market
analyses. Such services are used by the Manager in connection with its
investment decision-making process with respect to one or more funds and
accounts managed by it, and may not be used, or used exclusively, with respect
to the fund or account generating the brokerage.
As provided in the Securities Exchange Act of 1934 and the Investment
Management Agreement, higher commissions are permitted to be paid to
broker/dealers who provide brokerage and research services than to
broker/dealers who do not provide such services, if such higher commissions are
deemed reasonable in relation to the value of the brokerage and research
services provided. Although transactions are directed to broker/dealers who
provide such brokerage and research services, the Series 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
-20-
<PAGE>
broker/dealers who provide daily portfolio pricing services to the Series and to
other funds in the Delaware Group. Subject to best price and execution,
commissions allocated to brokers providing such pricing services may or may not
be generated by the funds receiving the pricing service.
The Manager may place a combined order for two or more accounts or funds
engaged in the purchase or sale of the same security if, in its judgment, joint
execution is in the best interest of each participant and will result in best
price and execution. Transactions involving commingled orders are allocated in a
manner deemed equitable to each account or fund. When a combined order is
executed in a series of transactions at different prices, each account
participating in the order may be allocated an average price obtained from the
executing broker. It is believed that the ability of the accounts to participate
in volume transactions will generally be beneficial to the accounts and funds.
Although it is recognized that, in some cases, the joint execution of orders
could adversely affect the price or volume of the security that a particular
account or fund may obtain, it is the opinion of the Manager and the Board of
Directors that the advantages of combined orders outweigh the possible
disadvantages of separate transactions.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. (the "NASD"), and subject to seeking best price and
execution, the Manager may place orders with broker/dealers that have agreed to
defray certain Series expenses such as custodian fees, and may, at the request
of the Distributor, give consideration to sales of shares of the Series as a
factor in the selection of brokers and dealers to execute portfolio
transactions.
PORTFOLIO TURNOVER
Portfolio trading will be undertaken principally to accomplish the
Series' objective in relation to anticipated movements in the general level of
interest rates, 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. The Series is free to
dispose of portfolio securities at any time, subject to complying with the
Internal Revenue Code and the 1940 Act, when changes in circumstances or
conditions make such a move desirable in light of the investment objective. The
Series will not attempt to achieve or be limited to a predetermined rate of
portfolio turnover, such a turnover always being incidental to transactions
undertaken with a view to achieving the Series' investment objective.
Although the Series trades principally to seek a high level of income and
stability of principal and not for profits, the portfolio turnover may be high,
particularly if interest rates are volatile. The portfolio turnover rate of the
Series is calculated by dividing the lesser of purchases or sales of portfolio
securities for the particular fiscal year by the monthly average of the value of
the portfolio securities owned by the Series during the particular fiscal year,
exclusive of securities whose maturities at the time of acquisition are one year
or less.
During the past two fiscal years ended December 31, 1993 and 1994, the
Series' portfolio turnover rates were 171% and 148%, respectively.
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<PAGE>
PURCHASING SHARES
The Distributor serves as the national distributor for the Series' four
classes of shares - Class A Shares, Class B Shares, Class C Shares and the
Institutional Class, and has agreed to use its best efforts to sell shares of
the Series. See the Prospectuses for additional information on how to invest.
Shares of the Series are offered on a continuous basis, and may be purchased
through authorized investment dealers or directly by contacting the Fund or its
agent. The minimum initial investment for each of the Classes generally is
$1,000. Subsequent purchases generally must be at least $100. The initial and
subsequent minimum investment with respect to Class A Shares will be waived for
purchases by officers, directors and employees of any Delaware Group fund, the
Manager or any of the Manager's affiliates if the purchases are made pursuant to
a payroll deduction program. Accounts opened under the Delaware Group Asset
Planner service are subject to a minimum initial investment of $2000 per Asset
Planner Strategy selected. There are no minimum purchase requirements for the
Institutional Class, but certain eligibility requirements must be satisfied.
There are no minimum purchase requirements for the Institutional Class, but
certain eligibility requirements must be satisfied.
Each purchase of Class B Shares is subject to a maximum purchase
limitation of $250,000. For Class C Shares each purchase must be in an amount
that is less than $1,000,000. See Investment Plans for purchase limitations
applicable to each of the Series' master retirement plans. The Fund will reject
any order for purchase of more than $250,000 of Class B Shares and $1,000,000 or
more of Class C Shares. An investor may exceed these limitations by making
cumulative purchases over a period of time. In doing so, an investor should keep
in mind, however, that reduced front-end sales charges apply to investments of
$100,000 or more in Class A Shares, which are subject to a lower annual 12b-1
Plan expense charge than Class B Shares and Class C Shares and generally are not
subject to a CDSC.
Selling dealers have the responsibility of transmitting orders promptly.
The Fund reserves the right to reject any order for the purchase of the Series'
shares if in the opinion of management such rejection is in the Series' best
interest.
The NASD has adopted amendments to its Rules of Fair Practice relating to
investment company sales charges. The Fund and the Distributor intend to operate
in compliance with these rules.
Class A Shares are purchased at the offering price which reflects a
maximum front-end sales charge of 3.00%; however, lower front-end sales charges
apply for larger purchases. See the table below. Class A Shares are also subject
to annual 12b-1 Plan expenses.
Class B Shares are purchased at net asset value and are subject to a CDSC
of: (i) 2% if shares are redeemed within two years of purchase; and (ii) 1% if
shares are redeemed during the third year following purchase. Class B Shares are
also subject to annual 12b-1 Plan expenses which are higher than those to which
Class A Shares are subject and are assessed against Class B Shares for
approximately five years after purchase.
Class C Shares are purchased at net asset value and are subject to a CDSC
of 1% if shares are redeemed within twelve months following purchase. Class C
Shares are also subject to annual 12b-1 Plan expenses for the life of the
investment which are equal to those to which Class B Shares are subject.
Institutional Class shares are purchased at the net asset value per share
without the imposition of a front-end or contingent deferred sales charge or
12b-1 Plan expenses.
Institutional Class shares, Class A Shares, Class B Shares and Class C
Shares represent a proportionate interest in the Series' assets and will receive
a proportionate interest in the Series' income, before application, as to Class
A, Class B and Class C Shares, of any expenses under the Series' 12b-1 Plans.
See Automatic Conversion of Class B Shares in the Fund Classes'
Prospectus, and Determining Offering Price and Net Asset Value and Plans Under
Rule 12b-1 for the Fund Classes in this Part B.
Certificates representing shares purchased are not ordinarily issued
unless a shareholder submits a specific request. Certificates are not issued in
the case of Class B Shares or Class C Shares. 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 that is
permitted to obtain a certificate may receive a certificate representing shares
purchased by sending a letter to the Transfer Agent requesting the certificate.
No charge is made for any certificate issued. Investors who hold
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<PAGE>
certificates representing any of their shares may only redeem those shares by
written request. The investor's certificate(s) must accompany such request.
-23-
<PAGE>
ALTERNATIVE PURCHASE ARRANGEMENTS
The alternative purchase arrangements of Class A Shares, Class B Shares
and the Class C Shares permit investors to choose the method of purchasing
shares that is most suitable for his or her needs given the amount of their
purchase, the length of time they expect to hold their shares and other relevant
circumstances. Investors should determine whether, given their particular
circumstances, it is more advantageous to purchase Class A Shares and incur a
front-end sales charge and annual 12b-1 Plan expenses of up to a maximum of .30%
(currently, no more than .15% pursuant to Board action) of the average daily net
assets of Class A Shares or to purchase either Class B or Class C Shares and
have the entire initial purchase amount invested in the Series with the
investment thereafter subject to a CDSC and annual 12b-1 Plan expenses. Class B
Shares are subject to a CDSC if the shares are redeemed within three years of
purchase, and Class C Shares are subject to a CDSC if the shares are redeemed
within twelve months of purchase. Class B and Class C Shares are each subject to
annual 12b-1 Plan expenses of up to a maximum of 1% (.25% of which are service
fees to be paid by the Series to the Distributor, dealers or others for
providing personal service and/or maintaining shareholder accounts) of average
daily net assets of the respective Class. Class B Shares will automatically
convert to Class A Shares at the end of approximately five years after purchase
and, thereafter, be subject to annual 12b-1 Plan expenses of up to a maximum of
.30% (currently no more than .15% pursuant to Board action) of average daily net
assets of such shares. Unlike Class B Shares, Class C Shares do not convert to
another class.
CLASS A SHARES
Purchases of $100,000 or more of Class A Shares at the offering price
carry reduced front-end sales charges as shown in the accompanying table, and
may include a series of purchases over a 13-month period under a Letter of
Intention signed by the purchaser. See Special Purchase Features - Class A
Shares, below, for more information on ways in which investors can avail
themselves of reduced front-end sales charges and other purchase features.
<TABLE>
<CAPTION>
LIMITED-TERM GOVERNMENT FUND A CLASS
- ---------------------------------------------------------------------------------
Dealer's
Front-End Sales Charge as % of Concession***
Amount of Purchase Offering Amount as % of
Price Invested** Offering Price
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $100,000 3.00% 3.10% 2.50%
$100,000 but under $250,000 2.50 2.56 2.00
$250,000 but under $500,000 2.00 2.04 1.60
$500,000 but under $1,000,000* 1.50 1.52 1.20
</TABLE>
* There is no front-end sales charge on purchases of $1 million or more of
Class A Shares but, under certain limited circumstances, a 1% CDSC (the
"Limited CDSC") may apply upon redemption of such shares. The Limited CDSC
that may be applicable arises only in the case of certain net asset value
purchases which have triggered the payment of a dealer's commission.
** Based upon the net asset value per share of Class A Shares as of the end of
the Fund's most recent fiscal year.
*** Financial institutions or their affiliated brokers may receive an agency
transaction fee in the percentages set forth above.
- --------------------------------------------------------------------------------
The Fund must be notified when a sale takes place which would qualify for
the reduced front-end sales charge on the basis of previous or current
purchases. The reduced front-end sales charge will be granted upon
confirmation of the shareholder's holdings by the Fund. Such reduced front-
end sales charges are not retroactive.
-24-
<PAGE>
From time to time, upon written notice to all of its dealers, the
Distributor may hold special promotions for specified periods during which
the Distributor may reallow to dealers up to the full amount of the front-
end sales charge shown above. Dealers who receive 90% or more of the sales
charge may be deemed to be underwriters under the Securities Act of 1933.
- --------------------------------------------------------------------------------
-25-
<PAGE>
Certain dealers who enter into an agreement to provide extra training and
information on Delaware Group products and services and who increase sales of
Delaware Group funds may receive an additional concession of up to .15% of the
offering price in connection with sales of Class A Shares. Such dealers must
meet certain requirements in terms of organization and distribution capabilities
and their ability to increase sales. The Distributor should be contacted for
further information on these requirements as well as the basis and circumstances
upon which the additional concession will be paid. Participating dealers may be
deemed to have additional responsibilities under the securities laws.
DEALER'S COMMISSION
For initial purchases of Class A Shares of $1,000,000 or more, a dealer's
commission may be paid by the Distributor to financial advisers through whom
such purchases are effected in accordance with the following schedule:
<TABLE>
<CAPTION>
DEALER'S COMMISSION
-------------------
(AS A PERCENTAGE OF
AMOUNT OF PURCHASE AMOUNT PURCHASED)
- ------------------
<S> <C>
Up to $3 million .60%
Next $2 million up to $5 million .40
Amount over $5 million .20
</TABLE>
In determining a financial adviser's eligibility for the dealer's
commission, purchases of Class A shares of other Delaware Group funds as to
which a Limited CDSC applies (see Redemption and Repurchase) may be aggregated
with those of Class A Shares of the Series. Financial advisers also may be
eligible for a dealer's commission in connection with certain purchases made
under a Letter of Intention or pursuant to an investor's Right of Accumulation.
Financial advisers should contact the Distributor concerning the applicability
and calculation of the dealer's commission in the case of combined purchases.
An exchange from other Delaware Group funds will not qualify for payment
of the dealer's commission, unless such exchange is from a Delaware Group fund
with assets as to which a dealer's commission or similar payment has not been
previously paid. The schedule and program for payment of the dealer's commission
are subject to change or termination at any time by the Distributor in its
discretion.
CONTINGENT DEFERRED SALES CHARGE - CLASS B SHARES AND CLASS C SHARES
Class B and Class C Shares are purchased without the imposition of a
front-end sales charge. Class B Shares redeemed within three years of purchase
may be subject to a CDSC at the rates set forth below and Class C Shares
redeemed within twelve months of purchase may be subject to a CDSC of 1%. CDSC
fees are charged as a percentage of the dollar amount subject to the CDSC. The
charge will be assessed on an amount equal to the lesser of the net asset value
at the time of purchase of the shares being redeemed or the net asset value of
those shares at the time of redemption. No CDSC will be imposed on increases in
net asset value above the initial purchase price. In addition, no CDSC will be
assessed on redemption of shares received through reinvestment of dividends or
capital gains distributions. See Waiver of CDSC - Class B and Class C Shares
under Redemption and Exchange in the Prospectus for the Fund Classes for a list
of the instances in which the CDSC is waived.
The following table sets forth the rates of the CDSC for the Class B
Shares of the Series:
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE (AS A
PERCENTAGE OF
DOLLAR AMOUNT
YEAR AFTER PURCHASE MADE SUBJECT TO CHARGE)
- ------------------------ -------------------
<S> <C>
0-2 2%
3 1%
4 and thereafter None
</TABLE>
-26-
<PAGE>
During the fourth year after purchase and, thereafter, until converted
automatically into Class A Shares of the Series, Class B Shares will still be
subject to the annual 12b-1 Plan expenses of up to 1% of average daily net
assets of those shares. At the end of approximately five years after purchase,
the investor's Class B Shares will be automatically converted into Class A
Shares of the Series. See Automatic Conversion of Class B Shares under Buying
Shares in the Fund Classes' Prospectus. Such conversion will constitute a tax-
free exchange for federal income tax purposes. See Taxes in the Prospectus for
the Fund Classes.
PLANS UNDER RULE 12B-1 FOR THE FUND CLASSES
Pursuant to Rule 12b-1 under the 1940 Act, the Fund has adopted a
separate plan for each of Class A Shares, Class B Shares and Class C Shares of
the Series (the "Plans"). Each Plan permits the Series to pay for certain
distribution, promotional and related expenses involved in the marketing of
only the Class to which the Plan applies. The Plans do not apply to the
Institutional Class of shares. Such shares are not included in calculating the
Plans' fees, and the Plans are not used to assist in the distribution and
marketing of the Institutional Class shares. Shareholders of the Institutional
Class may not vote on matters affecting the Plans.
The Plans permit the Series, pursuant to the Distribution Agreement, to
pay out of the assets of Class A Shares, Class B Shares and Class C Shares
monthly fees to the Distributor for its services and expenses in distributing
and promoting sales of shares of such classes. These expenses include, among
other things, preparing and distributing advertisements, sales literature and
prospectuses and reports used for sales purposes, compensating sales and
marketing personnel, and paying distribution and maintenance fees to securities
brokers and dealers who enter into agreements with the Distributor. The Plan
expenses relating to Class B and Class C Shares are also used to pay the
Distributor for advancing the commission costs to dealers with respect to the
initial sale of such shares.
In addition, the Series may make payments out of the assets of Class A,
Class B and Class C Shares directly to other unaffiliated parties, such as
banks, who either aid in the distribution of shares of, or provide services to,
such classes.
The maximum aggregate fee payable by the Series under the Plans, and the
Series' Distribution Agreement, is on an annual basis up to .30% of Class A
Shares' average daily net assets for the year, and up to 1% (.25% of which are
service fees to be paid to the Distributor, dealers and others for providing
personal service and/or maintaining shareholder accounts) of each of Class B
Shares' and Class C Shares' average daily net assets for the year. The Fund's
Board of Directors may reduce these amounts at any time. The Distributor has
agreed to waive these distribution fees to the extent such fees for any day
exceeds the net investment income realized by the Fund Classes for such day.
On May 21, 1987, the Board of Directors set the fee for Class A Shares,
pursuant to its Plan, at .15% of average daily net assets. This fee was
effective until May 31, 1992. Effective June 1, 1992, the Board of Directors has
determined that the annual fee, payable on a monthly basis, under the Plan, will
be equal to the sum of: (i) the amount obtained by multiplying .10% by the
average daily net assets represented by Class A Shares which were originally
purchased prior to June 1, 1992 in the Investors Series I class (which was
converted into what is now referred to as Class A Shares) on June 1, 1992
pursuant to a Plan of Recapitalization approved by shareholders of the Investors
Series I class), and (ii) the amount obtained by multiplying .15% by the average
daily
-27-
<PAGE>
net assets represented by all other Class A Shares. While this is the method to
be used to calculate the 12b-1 fees to be paid by Class A Shares, the fee is a
Class expense so that all shareholders regardless of whether they originally
purchased or received shares in the Investors Series I class, or in one of the
other classes that is now known as Class A Shares will bear 12b-1 expenses at
the same rate. While this describes the current formula for calculating the fees
which will be payable under the Class A Shares' Plan beginning June 1, 1992, the
Plan permits a full .30% on all assets of Class A Shares to be paid at any time
following appropriate Board approval.
All of the distribution expenses incurred by the Distributor and others,
such as broker/dealers, in excess of the amount paid on behalf of Class A, Class
B and Class C Shares would be borne by such persons without any reimbursement
from such classes. Subject to seeking best price and execution, the Series may,
from time to time, buy or sell portfolio securities from or to firms which
receive payments under the Plans.
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 Plans and the Distribution Agreement, as amended, have been approved
by the Board of Directors of the Fund, including a majority of the directors who
are not "interested persons" (as defined in the 1940 Act) of the Fund and who
have no direct or indirect financial interest in the Plans, by vote cast in
person at a meeting duly called for the purpose of voting on the Plans and such
Distribution Agreement. Continuation of the Plans and the Distribution
Agreement, as amended, must be approved annually by the Board of Directors in
the same manner as specified above.
Each year, the directors must determine whether continuation of the
Plans is in the best interest of shareholders of, respectively, Class A Shares,
Class B Shares and Class C Shares and that there is a reasonable likelihood of
the Plan relating to a Fund Class providing a benefit to that Class. The Plans
and the Distribution Agreement, as amended, may be terminated at any time
without penalty by a majority of those directors who are not "interested
persons" or by a majority vote of the outstanding voting securities of the
relevant Fund Class. Any amendment materially increasing the percentage payable
under the Plans must likewise be approved by a majority vote of the outstanding
voting securities of the relevant Fund Class, as well as by a majority vote of
those directors who are not "interested persons." With respect to the Class A
Shares' Plan, any material increase in the maximum percentage payable thereunder
must be approved by a majority of the outstanding voting Class B Shares. Also,
any other material amendment to the Plans must be approved by a majority vote of
the directors, including a majority of the noninterested directors of the Fund
having no interest in the Plans. In addition, in order for the Plans to remain
effective, the selection and nomination of directors who are not "interested
persons" of the Fund must be effected by the directors who themselves are not
"interested persons" and who have no direct or indirect financial interest in
the Plans. Persons authorized to make payments under the Plans must provide
written reports at least quarterly to the Board of Directors for their review.
For the fiscal year ended December 31, 1994, payments from Class A Shares
pursuant to its Plan amounted to $1,389,563 and such amount was used for the
following purposes: Advertising - $1,890; Annual and Semi-Annual Reports -
$18,255; Broker Trails -$1,279,416; Commission to Wholesalers - $64,436; Dealer
Service Expenses - $8,454; Promotional-Other -$5,873; and Promotional-Broker
Meetings - $11,239. For the period May 2, 1994 (date of initial public offering)
through December 31, 1994, payments from Class B Shares pursuant to its Plan
amounted to $21,445 and such amount was used for the following purposes: Broker
Sales Charges -
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<PAGE>
$11,428; Broker Trails - $3,185; Commission to Wholesalers -$3,249; and Interest
on Broker Sales Charges - $3,583.
The staff of the Securities and Exchange Commission ("SEC") has proposed
amendments to Rule 12b-1 and other related regulations that could impact Rule
12b-1 Distribution Plans. The Fund intends to amend the Plans, if necessary, to
comply with any new rules or regulations the SEC may adopt with respect to Rule
12b-1.
OTHER PAYMENTS TO DEALERS - CLASS A, CLASS B AND CLASS C SHARES
From time to time at the discretion of the Distributor, all registered
broker/dealers whose aggregate sales of the Fund Classes exceed certain limits
as set by the Distributor, may receive from the Distributor an additional
payment of up to .25% of the dollar amount of such sales. The Distributor may
also provide additional promotional incentives or payments to dealers that sell
shares of the Delaware Group of funds. In some instances, these incentives or
payments may be offered only to certain dealers who maintain, have sold or may
sell certain amounts of shares.
Payment to dealers made in connection with seminars, conferences or
contests relating to the promotion of fund shares may be in an amount up to 100%
of the expenses incurred or awards made. The Distributor may also pay a portion
of the expense of preapproved dealer advertisements promoting the sale of
Delaware Group fund shares.
SPECIAL PURCHASE FEATURES - CLASS A SHARES
BUYING AT NET ASSET VALUE
Class A Shares may be purchased without a front-end sales charge under
the Dividend Reinvestment Plan and, under certain circumstances, the 12-Month
Reinvestment Privilege and the Exchange Privilege.
Current and former officers, directors and employees of the Fund, any
other fund in the Delaware Group, the Manager or any of the Manager's affiliates
that may in the future be created, legal counsel to the funds and registered
representatives and employees of broker/dealers who have entered into Dealer's
Agreements with the Distributor may purchase Class A Shares and any such class
of shares of any of the funds in the Delaware Group, including any fund that may
be created, at the net asset value per share. Spouses, parents, brothers,
sisters and children (regardless of age) of such persons at their direction, and
any employee benefit plan established by any of the foregoing funds,
corporations, counsel or broker/dealers may also purchase shares at net asset
value. Purchases of Class A Shares may also be made by clients of registered
representatives of an authorized investment dealer at net asset value within six
months of a change of the registered representative's employment, if the
purchase is funded by proceeds from an investment where a front-end sales charge
has been assessed and the redemption of the investment did not result in the
imposition of a contingent deferred sales charge or other redemption charges.
Purchases of Class A Shares also may be made at net asset value by bank
employees that provide services in connection with agreements between the bank
and unaffiliated brokers or dealers concerning sales of Class A Shares.
Officers, directors and key employees of institutional clients of the Manager,
or any of its affiliates, may purchase Class A Shares at net asset value.
Moreover, purchases may be effected at net asset value for the benefit of the
clients of brokers, dealers and registered investment advisers affiliated with a
broker or dealer, if such broker, dealer or investment adviser has entered into
an agreement with the Distributor providing specifically for the purchase of
Class A Shares in connection with
-29-
<PAGE>
special investment products, such as wrap accounts or similar fee based
programs. Such purchasers are required to sign a letter stating that the
purchase is for investment only and that the securities may not be resold except
to the issuer. Such purchasers may also be required to sign or deliver such
other documents as the Fund may reasonably require to establish eligibility for
purchase at net asset value. The Fund must be notified in advance that the trade
qualifies for purchase at net asset value.
Investments in Class A Shares made by plan level and/or participant
retirement accounts that are for the purpose of repaying a loan taken from such
accounts will be made at net asset value. Loan repayments made to a Delaware
Group account in connection with loans originated from accounts previously
maintained by another investment firm will also be invested at net asset value.
LETTER OF INTENTION
The reduced front-end sales charges described above with respect to Class
A Shares are also applicable to the aggregate amount of purchases made by any
such purchaser previously enumerated within a 13-month period pursuant to a
written Letter of Intention provided by the Distributor and signed by the
purchaser, and not legally binding on the signer or the Fund, which provides for
the holding in escrow by the Transfer Agent of 5%, of the total amount of Class
A Shares intended to be purchased until such purchase is completed within the
13-month period. A Letter of Intention may be dated to include shares purchased
up to ninety days prior to the date the Letter is signed. The 13-month period
begins on the date of the earliest purchase. If the intended investment is not
completed, except as noted below, the purchaser will be asked to pay an amount
equal to the difference between the front-end sales charge on Class A Shares
purchased at the reduced rate and the front-end sales charge otherwise
applicable to the total shares purchased. If such payment is not made within
twenty days following the expiration of the 13-month period, the Transfer Agent
will surrender an appropriate number of the escrowed shares for redemption in
order to realize the difference. Such purchasers may include the value (at
offering price at the level designated in their Letter of Intention) of all
their shares of the Series and of any class of any of the other mutual funds in
the Delaware Group (except shares of any Delaware Group fund which do not carry
a front-end sales charge or CDSC or Limited CDSC, other than shares of Delaware
Group Premium Fund, Inc. beneficially owned in connection with the ownership of
variable insurance products, unless they were acquired through an exchange from
a Delaware Group fund which carried a front-end sales charge, CDSC or Limited
CDSC) previously purchased and still held as of the date of their Letter of
Intention toward the completion of such Letter. For purposes of satisfying an
investor's obligation under a Letter of Intention, Class B Shares and Class C
Shares of the Series and the corresponding classes of shares of other Delaware
Group funds which offer such shares may be aggregated with Class A Shares of the
Series and the corresponding class of shares of the other Delaware Group funds.
Employers offering a Delaware Group retirement plan may also complete a
Letter of Intention to obtain a reduced front-end sales charge on investments of
Class A Shares made by the plan. The aggregate investment level of the Letter of
Intention will be determined and accepted by the Transfer Agent at the point of
plan establishment. The level and any reduction in front-end sales charge will
be based on actual plan participation and the projected investments in Delaware
Group funds that are offered with a front-end sales charge, CDSC or Limited CDSC
for a 13-month period. The Transfer Agent reserves the right to adjust the
signed Letter of Intention based on this acceptance criteria. The 13-month
period will begin on the date this Letter of Intention is accepted by the
Transfer Agent. If actual investments exceed the anticipated level and equal an
amount that would qualify the plan for further
-30-
<PAGE>
discounts, any front-end sales charges will be automatically adjusted. In the
event this Letter of Intention is not fulfilled within the 13-month period, the
Plan level will be adjusted (without completing another Letter of Intention)
and the employer will be billed for the difference in front-end sales charges
due, based on the plan's assets under management at that time. Employers may
also include the value (at offering price at the level designated in their
Letter of Intention) of all their shares intended for purchase that are offered
with a front-end sales charge, CDSC or Limited CDSC of any class. Class B
Shares and Class C Shares of the Series and other Delaware Group funds which
offer corresponding classes of shares may also be aggregated for this purpose.
COMBINED PURCHASES PRIVILEGE
In determining the availability of the reduced front-end sales charge
previously set forth with respect to Class A Shares, purchasers may combine the
total amount of any combination of Class B Shares and/or Class C Shares of the
Series, as well as shares of any other class of any of the other Delaware Group
funds (except shares of any Delaware Group fund which do not carry a front-end
sales charge, CDSC or Limited CDSC, other than shares of Delaware Group Premium
Fund, Inc. beneficially owned in connection with the ownership of variable
insurance products, unless they were acquired through an exchange from a
Delaware Group fund which carried a front-end sales charge, CDSC or Limited
CDSC).
The privilege also extends to all purchases made at one time by an
individual; or an individual, his or her spouse and their children under the age
21; or a trustee or other fiduciary of trust estates or fiduciary accounts for
the benefit of such family members (including certain employee benefit
programs).
RIGHT OF ACCUMULATION
In determining the availability of the reduced front-end sales charge
with respect to Class A Shares, purchasers may also combine any subsequent
purchases of Class A Shares, Class B Shares and Class C Shares of the Series, as
well as shares of any other class of any of the other Delaware Group funds which
offer such classes (except shares of any Delaware Group fund which do not carry
a front-end sales charge, CDSC or Limited CDSC, other than shares of Delaware
Group Premium Fund, Inc. beneficially owned in connection with the ownership of
variable insurance products, unless they were acquired through an exchange from
shares from a Delaware Group fund which carried a front-end sales charge, CDSC
or Limited CDSC). If, for example, any such purchaser has previously purchased
and still holds Class A Shares and/or shares of any other of the classes
described in the previous sentence with a value of $40,000 and subsequently
purchases $60,000 at offering price of additional shares of Class A Shares, the
charge applicable to the $60,000 purchase would currently be 2.50%. For the
purpose of this calculation, the shares presently held shall be valued at the
public offering price that would have been in effect were the shares purchased
simultaneously with the current purchase. Investors should refer to the table of
sales charges for Class A Shares to determine the applicability of the Right of
Accumulation to their particular circumstances.
12-MONTH REINVESTMENT PRIVILEGE
Holders of Class A Shares (and of the Institutional Class holding shares
which were acquired through an exchange of one of the other mutual funds in the
Delaware Group offered with a front-end sales charge) who redeem such shares of
the Series have one year from the date of redemption to reinvest all or part of
their redemption proceeds in Class A Shares of the Series or in Class A shares
of any of the other funds in the Delaware Group, subject to applicable
eligibility and minimum purchase requirements, in states where shares of such
other funds may be sold, at net asset value without the payment of a front-end
sales charge. This privilege does not extend to Class A Shares where the
redemption of the shares triggered the payment of a Limited CDSC. Persons
investing redemption proceeds from direct investments in mutual funds in the
Delaware Group offered without a front-end sales charge will be required to pay
the applicable sales charge when purchasing Class A Shares. The reinvestment
privilege does not extend to a redemption of either Class B or Class C Shares.
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
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then have an account will be treated like all other initial purchases of a
fund's shares. Consequently, an investor should obtain and read carefully the
prospectus for the fund in which the investment is proposed to be made before
investing or sending money. The prospectus contains more complete information
about the fund, including charges and expenses.
Investors should consult their financial advisers or the Transfer Agent,
which also serves as the Fund's shareholder servicing agent, about the
applicability of the Limited CDSC (see Contingent Deferred Sales Charge for
Certain Purchases of Class A Shares Made at Net Asset Value under Redemption and
Exchange in the Fund Classes' Prospectus) in connection with the features
described above.
GROUP INVESTMENT PLANS
Group Investment Plans which are not eligible to purchase shares of the
Institutional Class may also benefit from the reduced front-end sales charges
for investments in Class A Shares set forth in the table on page , based on
total plan assets. If a company has more than one plan investing in the Delaware
Group of funds, then the total amount invested in all plans would be used in
determining the applicable front-end sales charge reduction upon each purchase,
both initial and subsequent, upon notification to the Fund at the time of each
such purchase. Employees participating in such Group Investment Plans may also
combine the investments made in their plan account when determining the
applicable front-end sales charge on purchases to non-retirement Delaware Group
investment accounts if they so notify the Fund in connection with each purchase.
For other retirement plans and special services, see Retirement Plans for
the Fund Classes under Investment Plans.
LIMITED-TERM GOVERNMENT FUND INSTITUTIONAL CLASS
The Institutional Class is available for purchase only by: (a) retirement
plans introduced by persons not associated with brokers or dealers that are
primarily engaged in the retail securities business and rollover individual
retirement accounts from such plans; (b) tax-exempt employee benefit plans of
the Manager or its affiliates and securities dealer firms with a selling
agreement with the Distributor; (c) institutional advisory accounts of the
Manager or its affiliates and those having client relationships with Delaware
Investment Advisers, a division of the Manager, or its affiliates and their
corporate sponsors, as well as subsidiaries and related employee benefit plans
and rollover individual retirement account from such institutional advisory
accounts; (d) banks, trust companies and similar financial institutions
investing for their own account or for the account of their trust customers for
whom such financial institution is exercising investment discretion in
purchasing shares of the class; and (e) registered investment advisers investing
on behalf of clients that consist solely of institutions and high net-worth
individuals having at least $1,000,000 entrusted to the adviser for investment
purposes, but only if the adviser is not affiliated or associated with a broker
or dealer and derives compensation for its services exclusively from its clients
for such advisory services.
Shares of the Institutional Class are available for purchase at net asset
value, without the imposition of a front-end or contingent deferred sales charge
and are not subject to Rule 12b-1 expenses.
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INVESTMENT PLANS
REINVESTMENT PLAN/OPEN ACCOUNT
Unless otherwise designated by shareholders in writing, dividends from
net investment income and distributions from realized securities profits, if
any, will be automatically reinvested in additional shares of the respective
Fund Class in which an investor has an account (based on the net asset value in
effect on the reinvestment date) and will be credited to the shareholder's
account on that date. All dividends and distributions of the Institutional Class
are reinvested in the account of the holders of such shares (based on the net
asset value of the Series in effect on the reinvestment date). Confirmations of
any distributions from realized securities profits will be mailed to
shareholders in the first quarter of each fiscal year.
Under the Reinvestment Plan/Open Account, shareholders may purchase and
add full and fractional shares to their plan accounts at any time either through
their investment dealers or by sending a check or money order to the Fund. Such
purchases, which must meet the minimum subsequent purchase requirements set
forth in the Prospectus and this Part B, are made for Class A Shares at the
public offering price, and for the Institutional Class, Class B and Class C
Shares at the net asset value, at the end of the day of receipt. A reinvestment
plan may be terminated at any time. This plan does not assure a profit nor
protect against depreciation in a declining market.
REINVESTMENT OF DIVIDENDS IN OTHER DELAWARE GROUP FUNDS
Subject to applicable eligibility and minimum initial purchase
requirements and the limitations set forth below, holders of Class A, Class B
and the Class C Shares may automatically reinvest dividends and/or distributions
from the Series in any of the other mutual funds in the Delaware Group,
including the Series, in states where their shares may be sold. Such investments
will be made at the net asset value per share at the close of business on the
reinvestment date without any front-end sales charge or service fee. The
shareholder must notify the Transfer Agent in writing and must have established
an account in the fund into which the dividends and/or distributions are to be
invested. Any reinvestment directed to a fund in which the investor does not
then have an account, will be treated like all other initial purchases of a
fund's shares. Consequently, an investor should obtain and read carefully the
prospectus for the fund in which the investment is proposed to be made before
investing or sending money. The prospectus contains more complete information
about the fund, including charges and expenses. See also Dividend Reinvestment
Plan in the Prospectus for the Fund Classes.
Subject to the following limitations, dividends and/or distributions from
other funds in the Delaware Group may be invested in shares of the Series at net
asset value, provided an account has been established. Dividends from Class A
Shares may not be directed to Class B shares or Class C shares of another fund
in the Delaware Group. Dividends from Class B Shares may only be directed to the
Class B shares of another fund in the Delaware Group that offers such a class of
shares. Dividends from Class C Shares may only be directed to Class C shares of
another fund in the Delaware Group that offers such class of shares. See Class B
Funds and Class C Funds under Buying Shares in the Fund Classes' Prospectus for
the funds in the Delaware Group that are eligible for investment by holders of
Series shares.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, Profit Sharing and Money Purchase Pension Plans, 401(k)
Defined Contribution Plans, 403(b)(7) Deferred Compensation Plans or 457
Deferred Compensation Plans.
INVESTING BY ELECTRONIC FUND TRANSFER
Direct Deposit Purchase Plan--Investors may arrange for the Series to
accept for investment in Class A, Class B or Class C Shares, through an agent
bank, preauthorized government or private recurring payments by Electronic Fund
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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--Shareholders of Class A, Class B and Class C
Shares may make automatic investments by authorizing, in advance, monthly
payments directly from their checking account for deposit into their Series
account. This type of investment will be handled in either of the two ways noted
below. (1) If the shareholder's bank is a member of the National Automated
Clearing House Association ("NACHA"), the amount of the investment will be
electronically deducted from his or her account by Electronic Fund Transfer
("EFT"). The shareholder's checking account will reflect a debit each month at a
specified date although no check is required to initiate the transaction. (2) If
the shareholder's bank is not a member of NACHA, deductions will be made by
preauthorized checks, known as Depository Transfer Checks. Should the
shareholder's bank become a member of NACHA in the future, his or her
investments would be handled electronically through EFT.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, Profit Sharing and Money Purchase Pension Plans, 401(k)
Defined Contribution Plans, 403(b)(7) Deferred Compensation Plans or 457
Deferred Compensation Plans.
* * *
Investments under the Direct Deposit Purchase Plan and the Automatic
Investing Plan must be for $25 or more for Class A Shares and $100 or more for
Class B and Class C Shares. An investor wishing to take advantage of either
option should contact the Shareholder Service Center at 800-523-1918 (in
Philadelphia, 215-988-1241) for the necessary authorization forms and
information. These services can be discontinued by the shareholder at any time
without penalty by giving written notice.
Payments to the Series 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 Series.
DIRECT DEPOSIT PURCHASES BY MAIL
Shareholders may authorize a third party, such as a bank or employer, to
make investments directly to their Series 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.
RETIREMENT PLANS FOR THE FUND CLASSES
An investment in the Series may be suitable for tax-deferred retirement
plans. Among the retirement plans noted below, Class B Shares are available for
investment only by Individual Retirement Accounts, Simplified Employee Pension
Plans, 403(b)(7) Deferred Compensation Plans and 457 Deferred Compensation
Plans. The CDSC may be waived on certain redemptions of Class B Shares and Class
C Shares. See Waiver of CDSC - Class B and Class C Shares under Redemption and
Exchange in the Prospectus for the Fund Classes for a list of the instances in
which the CDSC is waived.
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Each purchase of Class B Shares is subject to a maximum purchase
limitation of $250,000 for retirement plans. Each purchase of Class C Shares
must be in an amount that is less than $1,000,000 for such plans. The maximum
purchase limitations apply only to the initial purchase of shares by the
retirement plan.
Minimum investment limitations generally applicable to other investors do
not apply to retirement plans, other than Individual Retirement Accounts
("IRAs"), for which there is a minimum initial purchase of $250 and a minimum
subsequent purchase of $25 regardless of which class is selected. Retirement
plans may be subject to plan establishment fees, annual maintenance fees and/or
other administrative or trustee fees. Fees are based upon the number of
participants in the plan as well as the services selected. Additional
information about fees is included in retirement plan materials. Fees are quoted
upon request. Annual maintenance fees may be shared by Delaware Management Trust
Company, the Transfer Agent, other affiliates of the Manager and others that
provide services to such plans.
Certain shareholder investment services available to non-retirement plan
shareholders may not be available to retirement plan shareholders. Certain
retirement plans may qualify to purchase shares of the Institutional Class. See
Limited-Term Government Fund Institutional Class above. For additional
information on any of the Plans and Delaware's retirement services, call the
Shareholder Service Center telephone number.
It is advisable for an investor considering any one of the retirement
plans described below to consult with an attorney, accountant or a qualified
retirement plan consultant. For further details, including applications for any
of these Plans, contact your investment dealer or the Distributor.
Taxable distributions from the retirement plans described below may be
subject to withholding.
Please contact your investment dealer or the Distributor for the special
application forms required for the Plans described below.
PROTOTYPE PROFIT SHARING OR MONEY PURCHASE PENSION PLANS
Prototype Plans are available for self-employed individuals, partnerships
and corporations which replace the former Keogh and corporate retirement plans.
These Plans contain profit sharing or money purchase pension plan provisions.
Contributions may be invested only in Class A and Class C Shares.
INDIVIDUAL RETIREMENT ACCOUNT ("IRA")
A document is available for an individual who wants to establish an IRA
by making contributions which may be tax-deductible, even if the individual is
already participating in an employer-sponsored retirement plan. Even if
contributions are not deductible for tax purposes, as indicated below, earnings
will be tax-deferred. In addition, an individual may make contributions on
behalf of a spouse who has no compensation for the year or elects to be treated
as having no compensation for the year. Investments in each of the Fund Classes
are permissible.
The Tax Reform Act of 1986 (the "Act") restructured, and in some cases
eliminated, the tax deductibility of IRA contributions. Under the Act, the full
deduction for IRAs ($2,000 for each working spouse and $2,250 for one-income
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couples) was retained for all taxpayers who are not covered by an employer-
sponsored retirement plan. Even if a taxpayer (or his or her spouse) is covered
by an employer-sponsored retirement plan, the full deduction is still available
if the taxpayer's adjusted gross income is below $25,000 ($40,000 for taxpayers
filing joint returns). A partial deduction is allowed for married couples with
incomes between $40,000 and $50,000, and for single individuals with incomes
between $25,000 and $35,000. The Act does not permit deductions for
contributions to IRAs by taxpayers whose adjusted gross income before IRA
deductions exceeds $50,000 ($35,000 for singles) and who are active participants
in an employer-sponsored retirement plan. Taxpayers who are not allowed
deductions on IRA contributions still can make nondeductible IRA contributions
of as much as $2,000 for each working spouse ($2,250 for one-income couples),
and defer taxes on interest or other earnings from the IRAs. Special rules apply
for determining the deductibility of contributions made by married individuals
filing separate returns.
A company or association may establish a Group IRA for employees or
members who want to purchase shares of the Series. Purchases of $1 million or
more of the Class A Shares qualify for purchase at net asset value but may,
under certain circumstances, be subject to a Limited CDSC. See Purchasing Shares
concerning reduced front-end sales charges applicable to Class A Shares.
Investments generally must be held in the IRA until age 59 1/2 in order
to avoid premature distribution penalties, but distributions generally must
commence no later than April 1 of the calendar year following the year in which
the participant reaches age 70 1/2. Individuals are entitled to revoke the
account, for any reason and without penalty, by mailing written notice of
revocation to Delaware Management Trust Company within seven days after the
receipt of the IRA Disclosure Statement or within seven days after the
establishment of the IRA, except, if the IRA is established more than seven days
after receipt of the IRA Disclosure Statement, the account may not be revoked.
Distributions from the account (except for the pro-rata portion of any
nondeductible contributions) are fully taxable as ordinary income in the year
received. Excess contributions removed after the tax filing deadline, plus
extensions, for the year in which the excess contributions were made are subject
to a 6% excise tax on the amount of excess. Premature distributions
(distributions made before age 59 1/2, except for death, disability and certain
other limited circumstances) will be subject to a 10% excise tax on the amount
prematurely distributed, in addition to the income tax resulting from the
distribution. See Class B Shares and Class C Shares under Alternative Purchase
Arrangements in the Fund Classes' Prospectus concerning the applicability of a
CDSC upon redemption.
See Appendix A for additional IRA information.
SIMPLIFIED EMPLOYEE PENSION PLAN ("SEP/IRA")
A SEP/IRA may be established by an employer who wishes to sponsor a tax-
sheltered retirement program by making contributions on behalf of all eligible
employees. Each of the Fund Classes is available for investment by a SEP/IRA.
SALARY REDUCTION SIMPLIFIED EMPLOYEE PENSION PLAN ("SAR/SEP")
Employers with 25 or fewer eligible employees can establish this plan
which permits employer contributions and salary deferral contributions in Class
A Shares and Class C Shares only.
PROTOTYPE 401(K) DEFINED CONTRIBUTION PLAN
Section 401(k) of the Code permits employers to establish qualified plans
based on salary deferral contributions. Plan documents are available to enable
employers to establish a plan. An employer may also elect to make profit sharing
contributions and/or matching contributions with investments in only Class A
Shares and Class C Shares or certain other funds in the
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Delaware Group. Purchases under the Plan may be combined for purposes of
computing the reduced front-end sales charge applicable to Class A Shares as set
forth in the table on page.
DEFERRED COMPENSATION PLAN FOR PUBLIC SCHOOLS AND NON-PROFIT ORGANIZATIONS
("403(B)(7)")
Section 403(b)(7) of the Code permits public school systems and certain
non-profit organizations to use mutual fund shares held in a custodial account
to fund deferred compensation arrangements for their employees. A custodial
account agreement is available for those employers who wish to purchase any of
the Fund Classes in conjunction with such an arrangement. Applicable front-end
sales charges with respect to Class A Shares for such purchases are set forth in
the table on page.
DEFERRED COMPENSATION PLAN FOR STATE AND LOCAL GOVERNMENT EMPLOYEES ("457")
Section 457 of the Code permits state and local governments, their
agencies and certain other entities to establish a deferred compensation plan
for their employees who wish to participate. This enables employees to defer a
portion of their salaries and any federal (and possibly state) taxes thereon.
Such plans may invest in shares of any of the Fund Classes. Although investors
may use their own plan, there is available a Delaware Group 457 Deferred
Compensation Plan. Interested investors should contact the Distributor or their
investment dealers to obtain further information. Applicable front-end sales
charges for such purchases of Class A Shares are set forth in the table on
page____.
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DETERMINING OFFERING PRICE AND NET ASSET VALUE
Orders for purchases of Class A Shares are effected at the offering price
next calculated by the Series after receipt of the order by the Fund or its
agent. Orders for purchases of Class B Shares, Class C Shares and the
Institutional Class are effected at the net asset value per share next
calculated by the Series after receipt of the order by the Fund or its agent.
Selling dealers have the responsibility of transmitting orders promptly.
The offering price for Class A Shares consists of the net asset value per
share plus any applicable front-end sales charges. Offering price and net asset
value are computed as of the close of regular trading on the New York Stock
Exchange (ordinarily, 4 p.m., Eastern time) on days when the Exchange is open.
The New York Stock Exchange is scheduled to be open Monday through Friday
throughout the year except for New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas. When the
New York Stock Exchange is closed, the Fund will generally be closed, pricing
calculations will not be made and purchase and redemption orders will not be
processed.
An example showing how to calculate the net asset value per share and, in
the case of Class A Shares, the offering price per share, is included in the
Series' financial statements which are incorporated by reference into this Part
B.
The Series' net asset value per share is computed by adding the value of
all securities and other assets in the portfolio of the Series, deducting any
liabilities and dividing by the number of shares outstanding. Expenses and
income are accrued daily. U.S. Government and other debt securities are valued
at the mean between the last reported bid and asked prices. Options are valued
at the last reported sales price or, if no sales are reported, at the mean
between the last reported bid and asked prices. Short-term investments having
remaining maturities of sixty days or less are valued at amortized cost. All
other securities and assets, including non-Exchange-traded options, are valued
at fair value as determined in good faith by the Board of Directors of the Fund.
Each Class of the Series will bear, pro-rata, all of the common expenses
of the Series. The net asset values of all outstanding shares of each Class of
the Series will be computed on a pro-rata basis for each outstanding share based
on the proportionate participation in the Series represented by the value of
shares of that Class. All income earned and expenses incurred by the Series will
be borne on a pro-rata basis by each outstanding share of a Class, based on each
Class' percentage in the Series represented by the value of shares of such
Classes, except that the Institutional Class will not incur any of the expenses
under the Series' 12b-1 Plans and Class A, Class B and Class C Shares alone will
bear the 12b-1 Plan expenses payable under their respective Plans. Due to the
specific distribution expenses and other costs that would be allocable to each
Class, the dividends paid to each Class of the Series may vary. However, the net
asset value per share of each Class is expected to be equivalent.
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REDEMPTION AND REPURCHASE
Any shareholder may require the Fund to redeem Series shares by sending a
written request, signed by the record owner or owners exactly as the shares are
registered, to the Fund, 1818 Market Street, Philadelphia, PA 19103. In
addition, certain expedited redemption methods described below are available
when stock certificates have not been issued. The Fund does not issue
certificates for the Class A Shares or the Institutional Class shares, unless a
shareholder specifically requests them. The Fund does not issue certificates for
Class B Shares or Class C Shares. If stock certificates have been issued for
shares being redeemed, they must accompany the written request. For redemptions
of $50,000 or less paid to the shareholder at the address of record, the Fund
requires a request signed by all owners of the shares or the investment dealer
of record, but does not require signature guarantees. When the redemption is for
more than $50,000, or if payment is made to someone else or to another address,
signatures of all record owners are required and a signature guarantee may be
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, retirement plans, executors,
administrators, trustees or guardians.
In addition to redemption of Series shares by the Fund, the Distributor,
acting as agent of the Fund, offers to repurchase Series shares from
broker/dealers acting on behalf of shareholders. The redemption or repurchase
price, which may be more or less than the shareholder's cost, is the net asset
value per share next determined after receipt of the request in good order by
the Fund or its agent, less any applicable CDSC or Limited CDSC. This is
computed and effective at the time the offering price and net asset value are
determined. See Determining Offering Price and Net Asset Value. The Fund and the
Distributor end their business day at 5 p.m., Eastern time. This offer is
discretionary and may be completely withdrawn without further notice by the
Distributor.
Orders for the repurchase of Series shares which are submitted to the
Distributor prior to the close of its business day will be executed at the net
asset value per share computed that day (subject to the applicable CDSC or
Limited CDSC), if the repurchase order was received by the broker/dealer from
the shareholder prior to the time the offering price and net asset value are
determined on such day. The selling dealer has the responsibility of
transmitting orders to the Distributor promptly. Such repurchase is then settled
as an ordinary transaction with the broker/dealer (who may make a charge to the
shareholder for this service) delivering the shares repurchased.
Certain redemptions of Class A Shares purchased at net asset value may
result in the imposition of a Limited CDSC. See Contingent Deferred Sales Charge
for Certain Purchases of Class A Shares Made at Net Asset Value under Redemption
and Exchange in the Series' Prospectus for the Fund Classes. Redemptions of
Class B Shares made within three years of purchase are subject to a CDSC of 2%
during the first two years of purchase and 1% during the third year of purchase.
Class C Shares are subject to a CDSC of 1% if shares are redeemed within twelve
months following purchase. See Contingent Deferred Sales Charge under Buying
Shares in the Series' Prospectus for the Fund Classes. Except for the applicable
CDSC or Limited CDSC and, with respect to the expedited payment by wire
described below, for which there is currently a $7.50 bank wiring cost, neither
the Fund nor the Distributor charges a fee for redemptions or repurchases, but
such fees could be charged at any time in the future.
Payment for shares redeemed will ordinarily be mailed the next business
day, but in no case later than seven days, after receipt of a redemption request
in good order.
If a shareholder redeems an entire account, all dividends accrued to the
time of withdrawal will be paid by a separate check at the end of that
particular monthly dividend period.
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If a shareholder who recently purchased shares by check seeks to redeem
all or a portion of those shares in a written request, the Fund will honor the
redemption request but will not mail the proceeds until it is reasonably
satisfied of the collection of the investment check. Redemption requests by wire
or the Checkwriting Feature in this case will not be honored. This 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. This potential delay can be avoided by
making investments by wiring Federal Funds.
If a shareholder has been credited with a purchase by a check which is
subsequently returned unpaid for insufficient funds or for any other reason,
the Fund will automatically redeem from the shareholder's account the Series'
shares purchased by the check plus any dividends earned thereon. Shareholders
may be responsible for any losses to the Series 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 Series of securities owned by it is not reasonably
practical, or it is not reasonably practical for the Series fairly to value its
assets, or in the event that the Commission has provided for such suspension for
the protection of shareholders, the Series may postpone payment or suspend the
right of redemption or repurchase. In such case, the shareholder may withdraw
the 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.
Payment for shares redeemed or repurchased may be made either in cash or
in kind, or partly in cash and partly in kind. Any portfolio securities paid or
distributed in kind would be valued as described in Determining Offering Price
and Net Asset Value. Subsequent sale by an investor receiving a distribution in
kind could result in the payment of brokerage commissions. However, the Fund has
elected to be governed by Rule 18f-1 under the 1940 Act pursuant to which the
Fund is obligated to redeem Series shares solely in cash up to the lesser of
$250,000 or 1% of the net asset value of the Series during any 90-day period for
any one shareholder.
The value of the Series' investments is subject to changing market
prices. Thus, a shareholder reselling shares to the Series may sustain either a
gain or loss, depending upon the price paid and the price received for such
shares.
SMALL ACCOUNTS
Before the Fund involuntarily redeems shares from an account that, under
the circumstances noted in the relevant Prospectus, has remained below the
minimum amounts required by the Series' Prospectuses and sends the proceeds to
the shareholder, the shareholder will be notified in writing that the value of
the Series shares in the account is less than the minimum required and will be
allowed sixty days from the date of notice to make an additional investment to
meet the required minimum. See The Conditions of Your Purchase under Buying
Shares in the Series' Prospectuses. Any redemption in an inactive account
established with a minimum investment may trigger mandatory redemption. No CDSC
or Limited CDSC will apply to the redemptions described in this paragraph.
CHECKWRITING FEATURE
Shareholders of the Class A Shares and the Institutional Class 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
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redeem their shares by drawing on the Delaware Group Limited-Term Government
Funds, Inc.-Limited-Term Government Fund account with CoreStates Bank, N.A.
Normally, it takes two weeks from the date the shareholder's initial purchase
check clears to receive the ten-check book. The use of any form of check other
than the Series' check will not be permitted unless approved by the Fund. The
Checkwriting Feature is not available with respect to the Class B Shares, Class
C Shares or for retirement plans.
(1) 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. Through this procedure the shareholder will
continue to be entitled to distributions paid on these shares up to the time
the check is presented for payment.
(3) If a shareholder who recently purchased shares by check seeks to
redeem all or a portion of those shares through the Checkwriting Feature, the
Fund will not honor the redemption request unless it is reasonably satisfied of
the collection of the investment check. A hold period against a recent purchase
may be up to but not in excess of 15 days, depending upon the origin of the
investment check.
(4) If the amount of the check is greater than the value of the shares
held in the shareholder's account, the check will be returned and the
shareholder may be subject to extra charges.
(5) Checks may not be used to close accounts.
The Fund reserves the right to revoke the Checkwriting Feature of
shareholders who overdraw their accounts or if, in the opinion of management,
such revocation is in the Series' best interest.
Shareholders will be subject to CoreStates Bank, N.A.'s rules and
regulations governing similar accounts. This service may be terminated or
suspended at any time by CoreStates Bank, N.A., the Fund or the Transfer Agent.
The Fund and the Transfer Agent will not be responsible for the inadvertent
processing of post-dated checks or checks more than six months old.
Stop-Payment Requests--Investors may request a stop payment on checks by
providing the Fund with a written authorization to do so. Oral requests will be
accepted provided that the Fund promptly receives a written authorization. Such
requests will remain in effect for six months unless renewed or canceled. The
Fund will use its best efforts to effect stop-payment instructions, but does not
promise or guarantee that such instructions will be effective. Shareholders
requesting stop payment will be charged a $5 service fee per check for each six-
month period which will be deducted from their accounts.
* * *
The Fund has available certain special redemption privileges, as
described below. The Fund reserves the right to suspend or terminate these
expedited payment procedures upon 60 days' written notice to shareholders.
EXPEDITED TELEPHONE REDEMPTIONS
Shareholders of the Fund Classes or their investment dealers of record
wishing to redeem any amount of Series shares of $50,000 or less for which
certificates have not been issued may call the Fund at 800-523-1918 (in
Philadelphia, 215-988-1241) or, in the case of shareholders of the Institutional
Class, their Client Services Representative at 800-828-5052 prior to the time
the offering price and net asset value are determined, as noted above, and have
the proceeds
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<PAGE>
mailed to them at the record address. Checks payable to the shareholder(s) of
record will normally be mailed the next business day, but no later than seven
days, after the receipt of the redemption request. This option is only available
to individual, joint and individual fiduciary-type accounts.
In addition, redemption proceeds of $1,000 or more can be transferred to
your predesignated bank account by wire or by check by calling the Fund, as
described above. An authorization form must have been completed by the
shareholder and filed with the Fund before the request is received. Payment will
be made by wire or check to the bank account designated on the authorization
form as follows:
1. PAYMENT BY WIRE: Request that Federal Funds be wired to the bank
account designated on the authorization form. Redemption proceeds will normally
be wired on the next business day following receipt of the redemption request.
There is a $7.50 wiring fee (subject to change) charged by CoreStates Bank, N.A.
which will be deducted from the withdrawal proceeds each time the shareholder
requests a redemption. If the proceeds are wired to the shareholder's account at
a bank which is not a member of the Federal Reserve System, there could be a
delay in the crediting of the funds to the shareholder's bank account.
2. PAYMENT BY CHECK: Request a check be mailed to the bank account
designated on the authorization form. Redemption proceeds will normally be
mailed the next business day, but no later than seven days, from the date of the
telephone request. This procedure will take longer than the Payment by Wire
option (1 above) because of the extra time necessary for the mailing and
clearing of the check after the bank receives it.
REDEMPTION REQUIREMENTS: In order to change the name of the bank and the
account number it will be necessary to send a written request to the Fund and a
signature guarantee may be 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.
To reduce the shareholder's risk of attempted fraudulent use of the
telephone redemption procedure, payment will be made only to the bank account
designated on the authorization form. The Fund will not honor telephone
redemptions for Series shares recently purchased by check unless it is
reasonably satisfied that the purchase check has cleared.
If expedited payment under these procedures could adversely affect the
Series, the Fund may take up to seven days to pay the shareholder.
Neither the Fund nor the Transfer Agent is responsible for any
shareholder loss incurred in acting upon written or telephone instructions for
redemption or exchange of Series shares which are reasonably believed to be
genuine. With respect to such telephone transactions, the Fund will follow
reasonable procedures to confirm that instructions communicated by telephone are
genuine (including verification of a form of personal identification) as, if it
does not, the Fund or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent transactions. Telephone instructions received by
shareholders of the Fund Classes are generally tape recorded. A written
confirmation will be provided for all purchase, exchange and redemption
transactions initiated by telephone.
SYSTEMATIC WITHDRAWAL PLANS
Shareholders of Class A Shares, Class B Shares and Class C Shares who own
or purchase $5,000 or more of shares at the offering price, or net asset value,
as applicable, 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. This $5,000 minimum does not apply for the Fund's
prototype retirement plans. Shares purchased with the initial investment and
through
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<PAGE>
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 the Class at net asset value. This plan is not recommended
for all investors and should be started only after careful consideration of its
operation and effect upon the investor's savings and investment program. To the
extent that withdrawal payments from the plan exceed any dividends and/or
realized securities profits distributions paid on shares held under the plan,
the withdrawal payments will represent a return of capital and the share balance
may in time be depleted, particularly in a declining market.
The sale of shares for withdrawal payments constitutes a taxable event
and a shareholder may incur a capital gain or loss for federal income tax
purposes. This gain or loss may be long-term or short-term depending on the
holding period for the specific shares liquidated. Premature withdrawals from
retirement plans may have adverse tax consequences.
Withdrawals under this plan by the holders of Class A Shares or any
similar plan of any other investment company charging a front-end sales charge
made concurrently with the purchases of the Class A Shares of this or the shares
of any other investment company will ordinarily be disadvantageous to the
shareholder because of the payment of duplicative sales charges. Shareholders
should not purchase Class A Shares while participating in a Systematic
Withdrawal Plan and a periodic investment program in a fund managed by the
Manager must be terminated before a Systematic Withdrawal Plan can take effect,
except if the shareholder is a participant in one of our retirement plans or is
investing in funds of the Delaware Group which do not carry a sales charge.
Also, redemptions of Class A Shares pursuant to a Systematic Withdrawal Plan may
be subject to a Limited CDSC if the purchase was made at net asset value and a
dealer's commission has been paid on that purchase. Redemptions of Class B
Shares or Class C Shares pursuant to a Systematic Withdrawal Plan may be subject
to a CDSC, unless the annual amount selected to be withdrawn is less than 12% of
the account balance on the date that the Systematic Withdrawal Plan was
established. See Waiver of CDSC - Class B and Class C Shares and Waiver of
Limited CDSC - Class A Shares under Redemption and Exchange in the Prospectus
for the Fund Classes.
An investor wishing to start a Systematic Withdrawal Plan must complete
an authorization form. If the recipient of Systematic Withdrawal Plan payments
is other than the registered shareholder, the shareholder's signature on this
authorization must be guaranteed. Each signature guarantee must be supplied by
an eligible guarantor institution. The Fund reserves the right to reject a
signature guarantee supplied by an eligible institution based on its
creditworthiness. This plan may be terminated by the shareholder or the Transfer
Agent at any time by giving written notice.
The Systematic Withdrawal Plan is not available with respect to the Class
B Shares or the Institutional Class.
WEALTH BUILDER OPTION
Shareholders of the Fund Classes may elect to invest in one or more of
the other mutual funds in the Delaware Group through our Wealth Builder Option.
Under this automatic exchange program, shareholders can authorize regular
monthly investments (minimum of $100 per fund) to be liquidated from their
account and invested automatically into an account in one or more other funds in
the Delaware Group, subject to the conditions and limitations set forth in the
Fund Classes' Prospectus. See Wealth Builder Option and Redemption and Exchange
in the Prospectus for the Fund Classes.
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
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<PAGE>
the fund selected on the date of investment. No investment will be made for any
month if the value of the shareholder's account is less than the amount
specified for investment.
Periodic investment through the Wealth Builder Option does not insure
profits or protect against losses in a declining market. The price of the fund
into which investments are made could fluctuate. Since this program involves
continuous investment regardless of such fluctuating value, investors selecting
this option should consider their financial ability to continue to participate
in the program through periods of low fund share prices. This program involves
automatic exchanges between two or more fund accounts and is treated as a
purchase of shares of the fund into which investments are made through the
program. See Exchange Privilege for a brief summary of the tax consequences of
exchanges.
Shareholders can also use the Wealth Builder Option to invest in the Fund
Classes through regular liquidations of shares in their accounts in other mutual
funds in the Delaware Group, subject to the conditions and limitations described
in the Fund Classes' Prospectus. Shareholders can terminate their participation
at any time by written notice to the Fund.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, Profit Sharing and Money Purchase Pension Plans, 401(k)
Defined Contribution Plans, 403(b)(7) Deferred Compensation Plans or 457
Deferred Compensation Plans. This option also is not available to shareholders
of the Institutional Class.
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<PAGE>
INCOME DIVIDENDS AND REALIZED SECURITIES PROFITS DISTRIBUTIONS
It is the present policy of the Fund to declare dividends from net
investment income of the Series on a daily basis. Dividends are declared at the
time the offering price and net asset value are determined (see Determining
Offering Price and Net Asset Value) each day the Fund is open and are paid
monthly on the last business day of each month. Checks are normally mailed
within three business days of that date. 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 Series may deduct from
a shareholder's account the costs of the Series' effort to locate a shareholder
if a shareholder's mail is returned by the United States Post Office or the
Series 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.
Net investment income earned on days when the Fund is not open will be declared
as a dividend on the next business day. Purchases of Series shares by wire begin
earning dividends when converted into Federal Funds and available for
investment, normally the next business day after receipt. Purchases by check
earn dividends upon conversion to Federal Funds, normally one business day after
receipt.
Each class of the Series will share proportionately in the investment
income and expenses of the Series, except that the Class A Shares, Class B
Shares and the Class C Shares alone will incur distribution fees under their
respective 12b-1 Plans described on page _____.
Dividends and realized securities profits distributions are automatically
reinvested in additional shares of the Series at the net asset value in effect
on the payable date, and credited to the shareholder's account, unless an
election to receive distributions in cash has been made by the shareholder.
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.
The Fund anticipates distributing to its shareholders substantially all
of the Series' net investment income. Any net short-term capital gains after
deducting any net long-term capital losses (including carryforwards) would be
distributed quarterly but, in the discretion of the Fund's Board of Directors,
might be distributed less frequently. Distributions of net long-term gains, if
any, realized on sales of investments will be distributed annually during the
quarter following the close of the fiscal year.
During the fiscal year ended December 31, 1994, dividends totaling
$0.667, $0.399 and $0.681 per share of Class A Shares, Class B Shares and the
Institutional Class, respectively, were paid from net investment income.
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<PAGE>
INVESTMENT MANAGEMENT AGREEMENT
The Manager, located at One Commerce Square, Philadelphia, PA 19103,
furnishes investment management services to the Series, subject to the
supervision and direction of the Fund's Board of Directors.
The Manager and its predecessors have been managing the funds in the
Delaware Group since 1938. The aggregate assets of these funds on December 31,
1994 were approximately $9,253,901,000. Investment advisory services are also
provided to institutional accounts with assets on December 31, 1994 of
approximately $15,456,416,000.
The Investment Management Agreement for the Series is dated April 3, 1995
and was approved by shareholders on March 29, 1995.
The Agreement has an initial term of two years and may be further renewed
only so long as such renewal and continuance are specifically approved at least
annually by the Board of Directors or by vote of a majority of the outstanding
voting securities of the Series, and only if the terms and renewal thereof have
been approved by the vote of a majority of the directors of the Fund who are not
parties thereto or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval. The Agreement is
terminable without penalty on sixty days' notice by the directors of the Fund or
by the Manager. The Agreement will terminate automatically in the event of its
assignment.
The Investment Management Agreement provides that the Series shall pay
the Manager a management fee payable monthly and computed on the net asset value
of the Series as of each day at the annual rate of 1/2 of 1%, less all
directors' fees paid to the unaffiliated directors of the Series. The Manager
elected voluntarily to waive the portion, if any, of its annual compensation
necessary to limit the annual operating expenses of Class A Shares and the
Institutional Class to .75% (in the case of Class A Shares, before accrual of
12b-1 fees) during the period from February 25, 1991 to December 31, 1992. For
the Institutional Class, the waiver was in place from June 1, 1992, the date of
the initial public offering for those shares. On December 31, 1994, the Series'
total net assets were $833,045,284. Investment management fees earned for the
fiscal year ended December 31, 1992 amounted to $2,587,198, of which $2,436,147
was paid after consideration of the waiver described above. Investment
management fees paid by the Series for the fiscal years ended December 31, 1993
and 1994 amounted to $5,455,430 and $5,023,989, respectively.
Under the general supervision of the Board of Directors, the Manager
manages the Series' portfolio in accordance with the Series' stated investment
objective and policy and makes and implements all investment decisions on behalf
of the Series. The Manager pays the salaries of all directors, officers and
employees of the Fund who are affiliated with the Manager. The Series pays all
of its other expenses, including its proportionate share of rent and certain
other administrative expenses.
The ratio of expenses to average daily net assets for Class A Shares for
the fiscal year ended December 31, 1994 was 0.91%. The ratio of expenses to
average daily net assets for the Institutional Class for the fiscal year ended
December 31, 1994 was 0.76%. Based on expenses incurred by Class A Shares
during the Fund's fiscal year ended December 31, 1994, the expenses of Class B
Shares are expected to be 1.76% for the fiscal year ending December 31, 1995.
The ratios for Class A Shares and Class B Shares reflect the impact of their
respective 12b-1 Plans. The Fund anticipates that the ratio of expenses to
average daily net assets of Class C Shares will be identical to that of Class B
Shares.
By California regulation, the Manager is required to waive certain fees
and reimburse the Series for certain expenses to the extent that the
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<PAGE>
Series' annual operating expenses, exclusive of taxes, interest, brokerage
commissions and extraordinary expenses, exceed 2 1/2% of its first $30 million
of average daily net assets, 2% of the next $70 million of average daily net
assets and 1 1/2% of any additional average daily net assets. For the fiscal
year ended December 31, 1994, no such reimbursement was necessary or paid.
DISTRIBUTION AND SERVICE
The Distributor, Delaware Distributors, L.P. (which formerly conducted
business as Delaware Distributors, Inc.), located at 1818 Market Street,
Philadelphia, PA 19103, serves as the national distributor of Series shares
under a Distribution Agreement dated April 3, 1995, as amended on November 29,
1995. The Distributor is an affiliate of the Manager and bears all of the costs
of promotion and distribution, except for payments by Class A Shares, Class B
Shares and Class C Shares of the Series under their respective 12b-1 Plans.
Prior to January 3, 1995, Delaware Distributors, Inc. ("DDI") served as the
national distributor of the Series' shares. On that date, Delaware Distributors,
L.P., a newly formed limited partnership, succeeded to the business of DDI. All
officers and employees of DDI became officers and employees of Delaware
Distributors, L.P. DDI is the corporate general partner of Delaware
Distributors, L.P. and both DDI and Delaware Distributors, L.P. are indirect,
wholly-owned subsidiaries of Delaware Management Holdings, Inc.
The Transfer Agent, Delaware Service Company, Inc., another affiliate of
the Manager located at 1818 Market Street, Philadelphia, PA 19103, serves as the
Series' shareholder servicing, dividend disbursing and transfer agent pursuant
to a Shareholders Services Agreement dated December 20, 1990. The Transfer Agent
is also an indirect, wholly-owned subsidiary of Delaware Management Holdings,
Inc.
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OFFICERS AND DIRECTORS
The business and affairs of the Fund are managed under the direction of
its Board of Directors.
Certain officers and directors of the Fund hold identical positions in
each of the other funds in the Delaware Group. On January 31, 1995, the Series'
officers and directors, as a group, owned less than 1% of the Series'
outstanding shares.
As of January 31, 1995, the Fund believes Merrill Lynch, Pierce, Fenner &
Smith Inc., Mutual Fund Operations, P.O. Box 41621, Jacksonville, FL 32203 held
of record 9,144,539 shares (10.59%) of the outstanding shares of the Class A
Shares. These shares are believed to be beneficially owned by others.
The Fund believes the following shareholders held 5% or more of the
outstanding shares of the Institutional Class as of January 31, 1995: PWH
Savings, 1410 North Westshore Blvd., Tampa, FL 32203 - 1,941,902 shares
(46.68%); Merrill Lynch Trust Company, Trust Qualified Retirement Plans - 265
Davidson Ave, 3rd Fl., Somerset, NJ 08873 -596,461 shares (14.34%); National
Westminster Bank of NJ, FBO ITO Pension Plan, D/A Account 50-5029-18, 10
Exchange Place, Exchange Place Center, 2nd Fl., Jersey City, NJ 07302 - 313,880
shares (7.55%); and Delaware Management Company Employee Profit Sharing Trust,
1818 Market Street, Philadelphia, PA 19103 - 263,142 shares (6.33%). Shares held
by Delaware Management Company Employee Profit Sharing Trust are known to be
beneficially owned by others.
As of the same date, Merrill Lynch, Pierce, Fenner & Smith Inc., Mutual
Fund Operations, Attention: Book Entry, 4800 Deer Lake Drive East, 3rd Fl.,
Jacksonville, FL 32246 held of record 41,348 shares (5.62%) of the outstanding
shares of the Class B Shares. These shares are believed to be beneficially owned
by others.
DMH Corp., Delaware Management Company, Inc., Delaware Distributors,
L.P., Delaware Distributors, Inc., Delaware Service Company, Inc., Delaware
Management Trust Company, Delaware International Holdings Ltd., Founders
Holdings, Inc., Delaware International Advisers Ltd. and Delaware Investment
Counselors, Inc. are direct or indirect, wholly-owned subsidiaries of Delaware
Management Holdings, Inc. ("DMH"). On April 3, 1995, a merger between DMH and a
wholly-owned subsidiary of Lincoln National Corporation ("Lincoln National") was
completed. In connection with the merger, a new Investment Management Agreement
between the Fund on behalf of the Series and the Manager was executed following
shareholder approval. DMH and the Manager are now 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.
Directors and principal officers of the Fund are noted below along with
their ages and their business experience for the past five years. Unless
otherwise noted, the address of each officer and director is One Commerce
Square, Philadelphia, PA 19103.
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*WAYNE A. STORK (58)
Chairman, President, Chief Executive Officer, Director and/or Trustee of
the Fund, each of the other 16 funds in the Delaware Group, Delaware
Management Holdings, Inc. and Delaware Investment Counselors, Inc.
Chairman, Chief Executive Officer, Chief Investment Officer and Director
of Delaware Management Company, Inc.
Chairman, Chief Executive Officer and Director of DMH Corp., Delaware
International Advisers Ltd., Delaware International Holdings Ltd.
and Founders Holdings, Inc. Director of Delaware Distributors, Inc.
and Delaware Service Company, Inc.
During the past five years, Mr. Stork has served in various executive
capacities at different times within the Delaware organization.
WINTHROP S. JESSUP (50)
Executive Vice President of the Fund and 15 other funds in the Delaware
Group (which excludes Delaware Pooled Trust, Inc.) and Delaware
Management Holdings, Inc.
President and Chief Executive Officer of Delaware Pooled Trust, Inc.
President and Director of Delaware Investment Counselors, Inc.
Executive Vice President and Director of DMH Corp., Delaware Management
Company, Inc., Delaware International Holdings Ltd. and Founders
Holdings, Inc.
Vice Chairman and Director of Delaware Distributors, Inc.
Vice Chairman of Delaware Distributors, L.P. Director of Delaware Service
Company, Inc., Delaware International Advisers Ltd. and Delaware
Management Trust Company.
During the past five years, Mr. Jessup has served in various executive
capacities at different times within the Delaware organization.
RICHARD G. UNRUH, JR. (56)
Executive Vice President of the Fund and each of the other 16 funds in
the Delaware Group.
Executive Vice President and Director of Delaware Management Company,
Inc.
Senior Vice President of Delaware Management Holdings, Inc.
Director of Delaware International Advisers Ltd.
During the past five years, Mr. Unruh has served in various executive
capacities at different times within the Delaware organization.
WALTER P. BABICH (68)
Director and/or Trustee of the Fund and each of the other 16 funds in the
Delaware Group.
460 North Gulph Road, King of Prussia, PA 19406.
Board Chairman, Citadel Constructors, Inc.
From 1986 to 1988, Mr. Babich was a partner of Irwin & Leighton and from
1988 to 1991, he was a partner of I&L Investors.
__________________
*Director affiliated with the investment manager of the Fund and considered an
"interested person" as defined in the Investment Company Act of 1940.
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ANTHONY D. KNERR (56)
Director and/or Trustee of the Fund and each of the other 16 funds in the
Delaware Group.
500 Fifth Avenue, New York, NY 10110.
Consultant, Anthony Knerr & Associates.
From 1982 to 1988, Mr. Knerr was Executive Vice President/Finance and
Treasurer of Columbia University, New York. From 1987 to 1989, he was
also a lecturer in English at the University. In addition, Mr. Knerr
was Chairman of The Publishing Group, Inc., New York, from 1988 to
1990. Mr. Knerr founded The Publishing Group, Inc. in 1988.
ANN R. LEVEN (55)
Director and/or Trustee of the Fund and each of the other 16 funds in the
Delaware Group.
785 Park Avenue, New York, NY 10021.
Treasurer, National Gallery of Art.
From 1984 to 1990, Ms. Leven was Treasurer and Chief Fiscal Officer of
the Smithsonian Institution, Washington, DC, and from 1975 to 1994,
she was Adjunct Professor of Columbia Business School.
W. THACHER LONGSTRETH (75)
Director and/or Trustee of the Fund and each of the other 16 funds in the
Delaware Group.
1617 John F. Kennedy Boulevard, Philadelphia, PA 19103.
Vice Chairman, Packquisition Corp., a financial printing, commercial
printing and information processing firm.
Philadelphia City Councilman.
President, MLW, Associates.
Director, Tasty Baking Company.
Director, Healthcare Services Group.
CHARLES E. PECK (69)
Director and/or Trustee of the Fund and each of the other 16 funds in the
Delaware Group.
P.O. Box 1102, Columbia, MD 21044.
Secretary, Enterprise Homes, Inc.
From 1981 to 1990, Mr. Peck was Chairman and Chief Executive Officer of
The Ryland Group, Inc., Columbia, MD.
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DAVID K. DOWNES (55)
Senior Vice President/Chief Administrative Officer/Chief Financial
Officer of the Fund, each of the other 16 funds in the Delaware Group
and Delaware Management Company, Inc.
Chairman and Director of Delaware Management Trust Company.
Senior Vice President/Chief Administrative Officer/Chief Financial
Officer/Treasurer of Delaware Management Holdings, Inc.
Senior Vice President/Chief Financial Officer/Treasurer and Director of
DMH Corp.
Senior Vice President/Chief Administrative Officer and Director of
Delaware Distributors, Inc.
Senior Vice President/Chief Administrative Officer of Delaware
Distributors, L.P.
Senior Vice President/Chief Administrative Officer/Chief Financial
Officer and Director of Delaware Service Company, Inc.
Chief Financial Officer and Director of Delaware International Holdings
Ltd.
Senior Vice President/Chief Financial Officer/Treasurer of Delaware
Investment Counselors, Inc.
Senior Vice President and Director of Founders Holdings, Inc.
Director of Delaware International Advisers Ltd.
Before joining the Delaware Group in 1992, Mr. Downes was Chief
Administrative Officer, Chief Financial Officer and Treasurer of
Equitable Capital Management Corporation, New York, from December
1985 through August 1992, Executive Vice President from December 1985
through March 1992, and Vice Chairman from March 1992 through August
1992.
GEORGE M. CHAMBERLAIN, JR. (48)
Senior Vice President and Secretary of the Fund, each of the other 16
funds in the Delaware Group, Delaware Management Holdings, Inc.,
Delaware Distributors, L.P. and Delaware Investment Counselors, Inc.
Executive Vice President, Secretary and Director of Delaware Management
Trust Company.
Senior Vice President, Secretary and Director of DMH Corp., Delaware
Management Company, Inc., Delaware Distributors, Inc. and Delaware
Service Company, Inc.
Corporate Vice President, Secretary and Director of Founders Holdings,
Inc.
Secretary and Director of Delaware International Holdings Ltd.
Director of Delaware International Advisers Ltd.
Attorney.
During the past five years, Mr. Chamberlain has served in various
capacities at different times within the Delaware organization.
PAUL E. SUCKOW (48)
Senior Vice President/Chief Investment Officer, Fixed Income of the Fund,
each of the other 16 funds in the Delaware Group, Delaware Management
Holdings, Inc. and Delaware Management Company, Inc.
Senior Vice President and Director of Founders Holdings, Inc.
Director of Founders CBO Corporation.
Before returning to the Delaware Group in 1993, Mr. Suckow was Executive
Vice President and Director of Fixed Income for Oppenheimer
Management Corporation, New York, NY from 1985 to 1992. Prior to
that, Mr. Suckow was a fixed income portfolio manager for the
Delaware Group.
ROGER A. EARLY (41)
Vice President/Senior Portfolio Manager of the Fund, of nine other income
funds in the Delaware Group and of Delaware Management Company, Inc.
Before joining the Delaware Group in 1994, Mr. Early was Senior Vice
President/Portfolio Manager for Federated Investors, Pittsburgh, PA
from 1984 to 1994.
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JOSEPH H. HASTINGS (45)
Vice President/Corporate Controller of the Fund, each of the other 16
funds in the Delaware Group, Delaware Management Holdings, Inc., DMH
Corp., Delaware Management Company, Inc., Delaware Distributors,
L.P., Delaware Distributors, Inc., Delaware Service Company, Inc.,
Delaware Investment Counselors, Inc. and Founders Holdings, Inc.
Executive Vice President/Treasurer/Chief Financial Officer of Delaware
Management Trust Company.
Assistant Treasurer of Founders CBO Corporation.
1818 Market Street, Philadelphia, PA 19103.
Before joining the Delaware Group in 1992, Mr. Hastings was Chief
Financial Officer for Prudential Residential Services, L.P., New
York, NY from 1989 to 1992. Prior to that, Mr. Hastings served as
Controller and Treasurer for Fine Homes International, L.P.,
Stamford, CT from 1987 to 1989.
MICHAEL P. BISHOF (33)
Vice President/Treasurer of the Fund, each of the other 16 funds in the
Delaware Group, Delaware Management Company, Inc., Delaware
Distributors, Inc., Delaware Distributors, L.P., Delaware Service
Company, Inc., Founders Holdings, Inc. and Founders CBO Corporation.
Before joining the Delaware Group in 1995, Mr. Bishof was a Vice
President for Bankers Trust, New York, NY from 1994 to 1995, a Vice
President for CS First Boston Investment Management, New York, NY
from 1993 to 1994 and an Assistant Vice President for Equitable
Capital Management Corporation, New York, NY from 1987 to 1993.
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The following is a compensation table listing for each director entitled
to receive compensation, the aggregate compensation received from the Fund and
the total compensation received from all Delaware Group funds for the fiscal
year ended December 31, 1994 and an estimate of annual benefits to be received
upon retirement under the Delaware Group Retirement Plan for Directors/Trustees
as of December 31, 1994.
<TABLE>
<CAPTION>
PENSION OR
RETIREMENT ESTIMATE TOTAL
BENEFITS ANNUAL COMPENSATION
AGGREGATE ACCRUED BENEFITS FROM ALL 17
COMPENSATION AS PART OF UPON DELAWARE
NAME FROM FUND FUND EXPENSES RETIREMENT* GROUP FUNDS
<S> <C> <C> <C> <C>
W. Thacher Longstreth $1,648.08 None $18,100 $37,132.69
Ann R. Leven $2,004.30 None $18,100 $45,268.64
Walter P. Babich $1,964.66 None $18,100 $44,268.65
Anthony D. Knerr $1,970.00 None $18,100 $44,268.72
Charles E. Peck $1,648.08 None $18,100 $37,132.69
</TABLE>
* Under the terms of the Delaware Group Retirement Plan for
Directors/Trustees, each disinterested director who, at the time of his or
her retirement from the Board, has attained the age of 70 and served on the
Board for at least five continuous years, is entitled to receive payments
from each fund in the Delaware Group for a period equal to the lesser of
the number of years that such person served as a director or the remainder
of such person's life. The amount of such payments will be equal, on an
annual basis, to the amount of the annual retainer that is paid to
directors of each fund at the time of such person's retirement. If an
eligible director retired as of December 31, 1994, he or she would be
entitled to annual payments totaling $18,100, in the aggregate, from all of
the funds in the Delaware Group, based on the number of funds in the
Delaware Group as of that date.
-53-
<PAGE>
EXCHANGE PRIVILEGE
The exchange privileges available for shareholders of the Classes and for
shareholders of classes of other funds in the Delaware Group are set forth in
the relevant prospectuses for such classes. The following supplements that
information. The Fund reserves the right to reject exchange requests at any
time. The Fund may modify, terminate or suspend the exchange privilege upon 60
days' notice to shareholders.
All exchanges involve a purchase of shares of the fund into which the
exchange is made. As with any purchase, an investor should obtain and carefully
read that fund's prospectus before buying shares in an exchange. The prospectus
contains more complete information about the fund, including charges and
expenses. A shareholder requesting an exchange will be sent a current prospectus
and an authorization form for any of the other mutual funds in the Delaware
Group. Exchange instructions must be signed by the record owner(s) exactly as
the shares are registered.
An exchange constitutes, for tax purposes, the sale of one fund or series
and the purchase of another. The sale may involve either a capital gain or loss
to the shareholder for federal income tax purposes.
In addition, investment advisers and dealers may make exchanges between
funds in the Delaware Group on behalf of their clients by telephone or other
expedited means. This service may be discontinued or revised at any time by the
Transfer Agent. Such exchange requests may be rejected if it is determined that
a particular request or the total requests at any time could have an adverse
effect on any of the funds. Requests for expedited exchanges may be submitted
with a properly completed exchange authorization form, as described above.
TELEPHONE EXCHANGE PRIVILEGE
Shareholders owning shares for which certificates have not been issued or
their investment dealers of record may exchange shares by telephone for shares
in other mutual funds in the Delaware Group. This service is automatically
provided unless the Fund receives written notice from the shareholder to the
contrary.
Shareholders or their investment dealers of record may contact the
Transfer Agent at 800-523-1918 (in Philadelphia, 215-988-1241) or, in the case
of shareholders of the Institutional Class, their Client Services Representative
at 800-828-5052 to effect an exchange. The shareholder's current Series account
number must be identified, as well as the registration of the account, the share
or dollar amount to be exchanged and the fund into which the exchange is to be
made. Requests received on any day after the time the offering price and net
asset value are determined will be processed the following day. See Determining
Offering Price and Net Asset Value. Any new account established through the
exchange will automatically carry the same registration, shareholder information
and dividend option as the account from which the shares were exchanged. The
exchange requirements of the fund into which the exchange is being made, such as
sales charges, eligibility and investment minimums, must be met. (See the
prospectus of the fund desired or inquire by calling the Transfer Agent or, as
relevant, your Client Services Representative.) Certain funds are not available
for Retirement Plans.
The telephone exchange privilege is intended as a convenience to
shareholders and is not intended to be a vehicle to speculate on short-term
swings in the securities market through frequent transactions in and out of the
funds in the Delaware Group. Telephone exchanges may be subject to limitations
as to amounts or frequency. The Transfer Agent and the Fund reserve the right to
record exchange instructions received by telephone and to reject exchange
requests at any time in the future.
As described in the Series' Prospectuses, neither the Fund nor the
Transfer Agent is
-54-
<PAGE>
responsible for any shareholder loss incurred in acting upon
written or telephone instructions for redemption or exchange of Series shares
which are reasonably believed to be genuine.
RIGHT TO REFUSE TIMING ACCOUNTS
With regard to accounts that are administered by market timing services
("Timing Firms") to purchase or redeem shares based on changing economic and
market conditions ("Timing Accounts"), the Fund will refuse any new Timing
Arrangements, as well as any new purchases (as opposed to exchanges) in Delaware
Group funds from Timing Firms. The Fund reserves the right to temporarily or
permanently terminate the exchange privilege or reject any specific purchase
order for any person whose transactions seem to follow a timing pattern who: (i)
makes an exchange request out of the Fund within two weeks of an earlier
exchange request out of the Fund, or (ii) makes more than two exchanges out of
the Fund per calendar quarter, or (iii) exchanges shares equal in value to a
least $5 million, or more than 1/4 of 1% of the Fund's net assets. Accounts
under common ownership or control, including accounts administered so as to
redeem or purchase shares based upon certain predetermined market indicators,
will be aggregated for purposes of the exchange limits.
RESTRICTIONS ON TIMED EXCHANGES
Timing Accounts operating under existing Timing Agreements may only
execute exchanges between the following eight Delaware Group funds: (1) Decatur
Income Fund, (2) Decatur Total Return Fund, (3) Delaware Fund, (4) the Series,
(5) Tax-Free USA Fund, (6) Delaware Cash Reserve, (7) Delchester Fund and (8)
Tax-Free Pennsylvania Fund. No other Delaware Group funds are available for
Timed Exchanges. Assets redeemed or exchanged out of Timing Accounts in Delaware
Group funds not listed above may not be reinvested back into that Timing
Account. The Fund reserves the right to apply these same restrictions to the
account(s) of any person whose transactions seem to follow a time pattern (as
described above).
The Fund also reserves the right to refuse the purchase side of an
exchange request by any Timing Account, person, or group if, in the Manager's
judgment, the Fund would be unable to invest effectively in accordance with its
investment objectives and policies, or would otherwise potentially be adversely
affected. A shareholder's purchase exchanges may be restricted or refused if the
Fund receives or anticipates simultaneous orders affecting significant portions
of the Fund's assets. In particular, a pattern of exchanges that coincide with a
"market timing" strategy may be disruptive to the Fund and therefore may be
refused.
Except as noted above, only shareholders and their authorized brokers of
record will be permitted to make exchanges or redemptions.
Following is a summary of the investment objectives of the other Delaware
Group funds:
DELAWARE FUND seeks long-term growth by a balance of capital
appreciation, income and preservation of capital. It uses a dividend-oriented
valuation strategy to select securities issued by established companies that are
believed to demonstrate potential for income and capital growth.
DEVON FUND seeks current income and capital appreciation by investing
primarily in income-producing common stocks, with a focus on common stocks the
Manager believes have the potential for above average dividend increases over
time.
TREND FUND seeks long-term growth by investing in common stock issued by
emerging growth companies exhibiting strong capital appreciation potential.
VALUE FUND seeks capital appreciation by investing primarily in common
stocks whose market values appear low relative to their underlying value or
future potential.
DELCAP FUND seeks long-term capital growth by investing in common stocks
and securities convertible into common stocks of companies that have a
demonstrated history of growth and have the potential to support continued
growth.
DECATUR INCOME FUND seeks the highest possible current income by
investing primarily in common stocks that provide the potential for income and
capital appreciation without undue risk to principal.
DECATUR TOTAL RETURN FUND seeks long-term growth by investing primarily
in securities that provide the potential for income and capital appreciation
without undue risk to principal.
DELCHESTER FUND seeks as high a current income as possible by investing
principally in corporate bonds, and also in U.S. Government securities and
commercial paper.
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.
-55-
<PAGE>
U.S. GOVERNMENT MONEY FUND seeks maximum current income with preservation
of principal and maintenance of liquidity by investing only in short-term
securities issued or guaranteed as to principal and interest by the U.S.
Government, its agencies or instrumentalities, and repurchase agreements
collateralized by such securities, while maintaining a stable net asset value.
DELAWARE CASH RESERVE seeks the highest level of income consistent with
the preservation of capital and liquidity through investments in short-term
money market instruments, while maintaining a stable net asset value.
TAX-FREE USA FUND seeks high current income exempt from federal income
tax by investing in municipal bonds of geographically-diverse issuers. TAX-FREE
INSURED FUND invests in these same types of securities but with an emphasis on
municipal bonds protected by insurance guaranteeing principal and interest are
paid when due. TAX-FREE USA INTERMEDIATE FUND seeks a high level of current
interest income exempt from federal income tax, consistent with the preservation
of capital by investing primarily in municipal bonds.
TAX-FREE 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 PENNSYLVANIA FUND seeks a high level of current interest income
exempt from federal and, to the extent possible, certain Pennsylvania state and
local taxes, consistent with the preservation of capital.
INTERNATIONAL EQUITY FUND seeks to achieve long-term growth without undue
risk to principal by investing primarily in international securities that
provide the potential for capital appreciation and income. GLOBAL BOND FUND
seeks to achieve current income consistent with the preservation of principal by
investing primarily in global fixed income securities that may also provide the
potential for capital appreciation. GLOBAL ASSETS FUND seeks to achieve long-
term total return by investing in global securities which will provide higher
current income than a portfolio comprised exclusively of equity securities,
along with the potential for capital growth.
DELAWARE GROUP PREMIUM FUND offers nine series available exclusively as
funding vehicles for certain insurance company separate accounts. EQUITY/INCOME
SERIES seeks the highest possible total rate of return by selecting issues that
exhibit the potential for capital appreciation while providing higher than
average dividend income. HIGH YIELD SERIES seeks as high a current income as
possible by investing in rated and unrated corporate bonds, U.S. Government
securities and commercial paper. CAPITAL RESERVES SERIES seeks a high stable
level of current income while minimizing fluctuations in principal by investing
in a diversified portfolio of short- and intermediate-term securities. MONEY
MARKET SERIES seeks the highest level of income consistent with preservation of
capital and liquidity through investments in short-term money market
instruments. GROWTH SERIES seeks long-term capital appreciation by investing its
assets in a diversified portfolio of securities exhibiting the potential for
significant growth. MULTIPLE STRATEGY SERIES seeks a balance of capital
appreciation, income and preservation of capital. It uses a dividend-oriented
valuation strategy to select securities issued by established companies that are
believed to demonstrate potential for income and capital growth. INTERNATIONAL
EQUITY SERIES seeks long-term growth without undue risk to principal by
investing primarily in equity securities of foreign issuers that provide the
potential for capital appreciation and income. VALUE SERIES seeks capital
appreciation by investing in small- to mid-cap common stocks whose market 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.
EMERGING GROWTH SERIES seeks long-term capital appreciation by investing
primarily in small-cap common stocks and convertible securities of emerging and
other growth-oriented companies. These securities will have been judged to be
responsive to changes in the market place and to have fundamental
characteristics to support growth. Income is not an objective.
For more complete information about any of these funds, including charges
and expenses, you can obtain a prospectus from the Distributor. Read it
carefully before you invest or forward funds.
Each of the summaries above is qualified in its entirety by the
information contained in each fund's prospectus(es).
-56-
<PAGE>
GENERAL INFORMATION
The Manager is the investment manager of the Fund. The Manager or its
affiliate, Delaware International Advisers Ltd., also manages the other funds in
the Delaware Group. The Manager, through a separate division, also manages
private investment accounts. While investment decisions of the Series are made
independently from those of the other funds and accounts, they may make
investment decisions at the same time.
Access persons and advisory persons of the Delaware Group of funds, as
those terms are defined in SEC Rule 17j-1 under the 1940 Act, who provide
services to the Manager, 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 was received; (3) certain
persons are prohibited from investing in initial public offerings of securities
and other restrictions apply to investments in private placements of securities;
(4) opening positions may only be closed-out at a profit after a 60-day holding
period has elapsed; and (5) the Compliance Officer must be informed periodically
of all securities transactions and duplicate copies of brokerage confirmations
and account statements must be supplied to the Compliance Officer.
The Distributor acts as national distributor for the Fund and for the
other mutual funds in the Delaware Group. As previously described, prior to
January 3, 1995, DDI served as the national distributor for the Fund.
For the fiscal years ended December 31, 1993 and 1994, in its capacity as
the Fund's national distributor, DDI received Limited CDSC payments in the
amounts of $7,980.34 and $118,233.80 with respect to the Class A Shares.
For the period May 2, 1994 (date of initial public offering) through
December 31, 1994, DDI also received CDSC payments in the amount of $2,817 with
respect to the Class B Shares.
Effective as of January 3, 1995, all such payments described above have
been paid to the Distributor.
The Transfer Agent, an affiliate of the Manager, acts as shareholder
servicing, dividend disbursing and transfer agent for the Fund and for the other
mutual funds in the Delaware Group. The Transfer Agent is paid a fee by the
Series for providing these services consisting of an annual per account charge
of $11.00 plus transaction charges for particular services according to a
schedule. Compensation is fixed each year and approved by the Board of
Directors, including a majority of the disinterested directors.
The Manager and its affiliates own the name "Delaware Group." Under
certain circumstances, including the termination of the Fund's advisory
relationship with the Manager or its distribution relationship with the
Distributor, the Manager and its affiliates could cause the Fund to delete the
words "Delaware Group" from the Fund's name.
Morgan Guaranty Trust Company of New York ("Morgan"), 60 Wall Street, New
York, NY 10260, is custodian of the Fund's securities and cash. As custodian for
the Fund, Morgan maintains a separate account or accounts for the Fund;
receives, holds and releases portfolio securities on account of the Fund;
receives and disburses money on behalf of the Fund; and collects and receives
income and other payments and distributions on account of the Fund's portfolio
securities.
The legality of the issuance of the shares offered hereby, registered
pursuant to Rule 24f-2 under the 1940 Act, has been passed upon for the Fund by
Stradley, Ronon, Stevens & Young, Philadelphia, Pennsylvania.
-57-
<PAGE>
CAPITALIZATION
As a result of a ten-to-one stock split of the U.S. Government Money
Series shares, effective January 1, 1991 the authorized capital of the Fund
consists of three billion shares of $.001 par value common stock, of which two
billion shares constitutes the Series and one billion shares constitutes the
U.S. Government Money Series. Of the two billion shares allocated to the Series,
nine hundred fifty million shares have been allocated to Class A Shares, two
hundred million shares each have been allocated to Class B Shares and the
Institutional Class and fifty million shares have been allocated to Class C
Shares. Identifiable expenses to each Series will be paid by that Series.
General expenses of all Series will be allocated on a pro-rata basis according
to asset size. Where matters must be submitted to a vote of shareholders, the
holders of a majority of shares of each Series affected must vote affirmatively
for that class to be affected. The Class A Shares, Class B Shares and Class C
Shares represent a proportionate interest in the assets of the Series and have
the same voting and other rights and preferences as the Institutional Class of
shares, except that shares of the Institutional Class may not vote on matters
affecting the Series' Distribution Plans under Rule 12b-1. Similarly, as a
general matter, shareholders of Class A Shares, Class B Shares and Class C
Shares may vote only on matters affecting the 12b-1 Plan that relates to the
class of shares that they hold. However, Class B Shares may vote on a proposal
to increase materially the fees to be paid by the Series under the Plan relating
to Class A Shares. General expenses of the Series will be allocated on a pro-
rata basis to the classes according to asset size, except that expenses of the
Plans of Class A, Class B Shares and Class C Shares will be allocated solely to
those classes.
Until May 31, 1992, the Series offered shares of two retail classes of
shares, Investors Series II class (now Class A Shares) and the Investors Series
I class. Shares of Investors Series I class were offered with a sales charge,
but without the imposition of a Rule 12b-1 fee. Effective June 1, 1992,
following shareholder approval of a plan of recapitalization on May 15, 1992,
shareholders of the Investors Series I class had their shares converted into
shares of the Investors Series II class and became subject to the latter class'
Rule 12b-1 charges. Effective at the same time, following approval by
shareholders, the name Investors Series was changed to Treasury Reserves
Intermediate Series and the name Investors Series II class was changed to
Treasury Reserves Intermediate Fund class. Treasury Reserves Intermediate Fund
(Institutional) class was first offered on June 1, 1992 and beginning May 2,
1994 it became known as Treasury Reserves Intermediate Fund Institutional Class.
On May 2, 1994, the Treasury Reserves Intermediate Fund class became known as
the Treasury Reserves Intermediate Fund A Class. Effective as of close of
business on August 28, 1995, the name Delaware Group Treasury Reserves, Inc. was
changed to Delaware Group Limited-Term Government Funds, Inc. and the name
Treasury Reserves Intermediate Series was changed to Limited-Term Government
Fund. At the same time, the names of Treasury Reserves Intermediate Fund A
Class, Treasury Reserves Intermediate Fund B Class and Treasury Reserves
Intermediate Fund Institutional Class were changed to Limited-Term Government
Fund A Class, Limited-Term Government Fund B Class, and Limited-Term Government
Fund Institutional Class, respectively.
All shares have equal voting rights, no preemptive rights, are fully
transferable and, when issued, are fully paid. All shares of a Series
participate equally in dividends, and upon liquidation would share equally.
NONCUMULATIVE VOTING
THESE SHARES HAVE NONCUMULATIVE VOTING RIGHTS WHICH MEANS THAT THE
HOLDERS OF MORE THAN 50% OF THE SHARES OF THE FUND VOTING FOR THE ELECTION OF
DIRECTORS CAN ELECT ALL THE DIRECTORS IF THEY CHOOSE TO DO SO, AND, IN SUCH
EVENT, THE HOLDERS OF THE REMAINING SHARES WILL NOT BE ABLE TO ELECT ANY
DIRECTORS.
This Part B does not include all of the information contained in the
Registration Statement which is on file with the Securities and Exchange
Commission.
-58-
<PAGE>
APPENDIX A - IRA INFORMATION
The Tax Reform Act of 1986 restructured, and in some cases eliminated,
the tax deductibility of IRA contributions. Under the Act, the full deduction
for IRAs ($2,000 for each working spouse and $2,250 for one-income couples) was
retained for all taxpayers who are not covered by an employer-sponsored
retirement plan. Even if a taxpayer (or his or her spouse) is covered by an
employer-sponsored retirement plan, the full deduction is still available if the
taxpayer's adjusted gross income is below $25,000 ($40,000 for taxpayers filing
joint returns). A partial deduction is allowed for married couples with incomes
between $40,000 and $50,000, and for single individuals with incomes between
$25,000 and $35,000. The Act does not permit deductions for contributions to
IRAs by taxpayers whose adjusted gross income before IRA deductions exceeds
$50,000 ($35,000 for singles) and who are active participants in an employer-
sponsored retirement plan. Taxpayers who were not allowed deductions on IRA
contributions still can make nondeductible IRA contributions of as much as
$2,000 for each working spouse ($2,250 for one-income couples), and defer taxes
on interest or other earnings from the IRAs. Special rules apply for determining
the deductibility of contributions made by married individuals filing separate
returns.
As illustrated in the following tables, maintaining an Individual
Retirement Account remains a valuable opportunity.
For many, an IRA will continue to offer both an up-front tax break with
its tax deduction each year and the real benefit that comes with tax-deferred
compounding. For others, losing the tax deduction will impact their taxable
income status each year. Over the long term, however, being able to defer taxes
on earnings still provides an impressive investment opportunity--a way to have
money grow faster due to tax-deferred compounding.
-59-
<PAGE>
Even if your IRA contribution is no longer deductible, the benefits of saving on
a tax-deferred basis can be substantial. The following tables illustrate the
benefits of tax-deferred versus taxable compounding. Each reflects a constant 7%
rate of return, compounded annually, with the reinvestment of all proceeds. The
tables do not take into account any fees. Of course, earnings accumulated in
your IRA will be subject to tax upon withdrawal. If you choose a mutual fund
with a fluctuating net asset value, like the Limited-Term Government Fund
series, your bottom line at retirement could be lower--it could also be much
higher.
$2,000 INVESTED ANNUALLY ASSUMING A 7% ANNUALIZED RETURN
15% Tax Bracket Single - $0-$22,750
--------------- Joint - $0-$38,000
<TABLE>
<CAPTION>
HOW MUCH YOU
END OF CUMULATIVE HOW MUCH YOU HAVE WITH FULL
YEAR INVESTMENT AMOUNT HAVE WITHOUT IRA IRA DEDUCTION
<S> <C> <C> <C>
1 $ 2,000 $ 1,801 $ 2,140
5 10,000 10,143 12,307
10 20,000 23,685 29,567
15 30,000 41,764 53,776
20 40,000 65,901 87,730
25 50,000 98,126 135,353
30 60,000 141,149 202,146
35 70,000 198,587 295,827
40 80,000 275,271 427,219
</TABLE>
[Without IRA--investment of $1,700 ($2,000 less 15%) earning 5.95% (7% less
15%)]
28% Tax Bracket Single - $22,751-$55,100
--------------- Joint - $38,001-$91,850
<TABLE>
<CAPTION>
END OF CUMULATIVE HOW MUCH YOU HOW MUCH YOU HAVE WITH FULL
YEAR INVESTMENT AMOUNT HAVE WITHOUT IRA NO DEDUCTION IRA DEDUCTION
<S> <C> <C> <C> <C>
1 $ 2,000 $ 1,513 $ 1,541 $ 2,140
5 10,000 8,365 8,861 12,307
10 20,000 19,061 21,288 29,567
15 30,000 32,738 38,719 53,776
20 40,000 50,227 63,166 87,730
25 50,000 72,590 97,454 135,353
30 60,000 101,187 145,545 202,146
35 70,000 137,754 212,995 295,827
40 80,000 184,512 307,598 427,219
</TABLE>
[Without IRA--investment of $1,440 ($2,000 less 28%) earning 5.04% (7% less
28%)]
[With IRA--No Deduction--investment of $1,440 ($2,000 less 28%) earning 7%]
-60-
<PAGE>
31% Tax Bracket Single - $55,101 - $115,000
--------------- Joint - $91,851 - $140,000
<TABLE>
<CAPTION>
END OF CUMULATIVE HOW MUCH YOU HOW MUCH YOU HAVE WITH FULL IRA
YEAR INVESTMENT AMOUNT HAVE WITHOUT IRA NO DEDUCTION DEDUCTION
<S> <C> <C> <C> <C>
1 $ 2,000 $ 1,447 $ 1,477 $ 2,140
5 10,000 7,967 8,492 12,307
10 20,000 18,052 20,401 29,567
15 30,000 30,820 37,106 53,776
20 40,000 46,985 60,534 87,730
25 50,000 67,448 93,394 135,353
30 60,000 93,355 139,481 202,146
35 70,000 126,152 204,121 295,827
40 80,000 167,673 294,781 427,219
</TABLE>
[Without IRA--investment of $1,380 ($2,000 less 31%) earning 4.83% (7% less
31%)]
[With IRA--No Deduction--investment of $1,380 ($2,000 less 31%) earning 7%]
36% Tax Bracket* Single - $115,001-$250,000
--------------- Joint - $140,001-$250,000
<TABLE>
<CAPTION>
END OF CUMULATIVE HOW MUCH YOU HOW MUCH YOU HAVE WITH FULL IRA
YEAR INVESTMENT AMOUNT HAVE WITHOUT IRA NO DEDUCTION DEDUCTION
<S> <C> <C> <C> <C>
1 $ 2,000 $ 1,337 $ 1,370 $ 2,140
5 10,000 7,313 7,876 12,307
10 20,000 16,418 18,923 29,567
15 30,000 27,754 34,417 53,776
20 40,000 41,867 56,147 87,730
25 50,000 59,437 86,626 135,353
30 60,000 81,312 129,373 202,146
35 70,000 108,545 189,329 295,827
40 80,000 142,451 273,420 427,219
</TABLE>
[Without IRA--investment of $1,280 ($2,000 less 36%) earning 4.48% (7% less
36%)]
[With IRA--No Deduction--investment of $1,280 ($2,000 less 36%) earning 7%]
-61-
<PAGE>
39.6% Tax Bracket* Single - over $250,000
----------------- Joint - over $250,000
<TABLE>
<CAPTION>
END OF CUMULATIVE HOW MUCH YOU HOW MUCH YOU HAVE WITH FULL IRA
YEAR INVESTMENT AMOUNT HAVE WITHOUT IRA NO DEDUCTION DEDUCTION
<S> <C> <C> <C> <C>
1 $ 2,000 $ 1,259 $ 1,293 $ 2,140
5 10,000 6,851 7,433 12,307
10 20,000 15,277 17,859 29,567
15 30,000 25,643 32,481 53,776
20 40,000 38,392 52,989 87,730
25 50,000 54,075 81,753 135,353
30 60,000 73,366 122,096 202,146
35 70,000 97,094 178,679 295,827
40 80,000 126,281 258,040 427,219
</TABLE>
[Without IRA--investment of $1,208 ($2,000 less 39.6%) earning 4.23% (7% less
39.6%)]
[With IRA--No Deduction--investment of $1,208 ($2,000 less 39.6%) earning 7%]
* For tax years beginning after 1992, a 36% tax rate applies to all taxable
income in excess of the maximum dollar amounts subject to the 31% tax rate.
In addition, a 10% surtax (not applicable to capital gains) applies to
certain high-income taxpayers. It is computed by applying a 39.6% rate to
taxable income in excess of $250,000. The above tables do not reflect the
personal exemption phaseout nor the limitations of itemized deductions that
may apply.
-62-
<PAGE>
$2,000 SINGLE INVESTMENT AT A RETURN OF 7% COMPOUNDED MONTHLY
<TABLE>
<CAPTION>
TAXABLE - TAXABLE - TAXABLE - TAXABLE - TAXABLE - TAX
YEARS 39.6%* 36%* 31% 28% 15% DEFERRED
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10 $ 3,050 $ 3,128 $ 3,239 $ 3,307 $ 3,621 $ 4,019
15 3,767 3,911 4,121 4,253 4,872 5,698
20 4,652 4,891 5,245 5,469 6,555 8,077
30 7,094 7,650 8,493 9,043 11,867 16,233
40 10,820 11,963 13,753 14,953 21,483 32,623
</TABLE>
$2,000 INVESTED ANNUALLY AT A RETURN OF 7% COMPOUNDED MONTHLY
<TABLE>
<CAPTION>
TAXABLE - TAXABLE - TAXABLE - TAXABLE - TAXABLE - TAX
YEARS 39.6%* 36%* 31% 28% 15% DEFERRED
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10 $ 25,411 $ 25,788 $ 26,322 $ 26,649 $ 28,125 $ 29,953
15 42,752 43,708 45,079 45,927 49,833 54,851
20 64,166 66,117 68,947 70,716 79,042 90,148
30 123,271 129,187 137,973 143,581 171,220 211,120
40 213,412 227,820 249,750 264,078 338,096 454,233
</TABLE>
* For tax years beginning after 1992, a 36% tax rate applies to all taxable
income in excess of the maximum dollar amounts subject to the 31% tax rate.
In addition, a 10% surtax (not applicable to capital gains) applies to
certain high-income taxpayers. It is computed by applying a 39.6% rate to
taxable income in excess of $250,000. The above tables do not reflect the
personal exemption phaseout nor the limitations of itemized deductions that
may apply.
-63-
<PAGE>
THE VALUE OF STARTING YOUR IRA EARLY
The following illustrates how much more you would have contributing
$2,000 each January--the earliest opportunity--compared to contributing on April
15th of the following year--the latest, for each tax year.
After 5 years $3,528 more
10 years $6,113
20 years $17,228
30 years $47,295
Compounded returns for the longest period of time is the key. The above
illustration assumes a 10% rate of return and the reinvestment of all proceeds.
And it pays to shop around. If you get just 2% more per year, it can make
a big difference when you retire. A constant 8% versus 10% return, compounded
monthly, illustrates the point. This chart is based on a yearly investment of
$2,000 on January 1. After 30 years the difference can mean as much as 50% more!
The statistical exhibits above are for illustration purposes only and do
not reflect the actual performance for the Limited-Term Government Fund series
either in the past or in the future.
-64-
<PAGE>
FINANCIAL STATEMENTS
Ernst & Young LLP serves as the independent auditors for the Fund and, in
its capacity as such, audits the financial statements contained in the Series'
Annual Report. The Delaware Group Limited-Term Government Funds, Inc. - Limited-
Term Government Fund's Statement of Net Assets, Statement of Operations,
Statement of Changes in Net Assets and Notes to Financial Statements, as well as
the report of Ernst & Young LLP, independent auditors, for the fiscal year ended
December 31, 1994 are included in the Series' Annual Report to shareholders. The
financial statements, the notes relating thereto and the report of Ernst & Young
LLP listed above are incorporated by reference from the Annual Report into this
Part B. Unaudited financial statements and the notes relating thereto for the
six-month period ended June 30, 1995 are also incorporated by reference from the
Fund's Semi-Annual Report into this Part B.
-65-
<PAGE>
The Delaware Group includes funds with a wide range of investment
objectives. Stock funds, income funds, tax-free funds, money market funds,
global and international funds and closed-end equity funds give investors the
ability to create a portfolio that fits their personal financial goals. For more
information, shareholders of the Fund Classes should contact their financial
adviser or call Delaware Group at 800-523-4640, in Philadelphia call 215-988-
1333 and shareholders of the Institutional Class should contact Delaware Group
at 800-828-5052.
INVESTMENT MANAGER
Delaware Management Company, Inc.
One Commerce Square
Philadelphia, PA 19103
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
1818 Market Street
Philadelphia, PA 19103
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING
AND TRANSFER AGENT
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young
One Commerce Square
Philadelphia, PA 19103
INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103
CUSTODIAN
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, NY 10260
- ------------------------------------------------------------------------------
LIMITED-TERM GOVERNMENT FUND
(FORMERLY TREASURY RESERVES
INTERMEDIATE FUND)
- ------------------------------------------------------------------------------
A CLASS
- ------------------------------------------------------------------------------
B CLASS
- ------------------------------------------------------------------------------
C CLASS
- ------------------------------------------------------------------------------
INSTITUTIONAL CLASS
- ------------------------------------------------------------------------------
CLASSES OF LIMITED-TERM GOVERNMENT
FUND
(FORMERLY TREASURY RESERVES
INTERMEDIATE SERIES)
- ------------------------------------------------------------------------------
DELAWARE GROUP LIMITED-TERM
GOVERNMENT FUNDS, INC.
(FORMERLY DELAWARE GROUP TREASURY
RESERVES, INC.)
- ------------------------------------------------------------------------------
PART B
STATEMENT OF
ADDITIONAL INFORMATION
- ------------------------------------------------------------------------------
November 29, 1995
DELAWARE
GROUP
--------
-66-
<PAGE>
Form N-1A
File No. 2-75526
Delaware Group Limited-Term
Government Funds, Inc.
PART C
------
Other Information
-----------------
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements:
Part A - Financial Highlights
*Part B - Statement of Net Assets
Statement of Operations
Statement of Changes in Net Assets
Notes to Financial Statements
Accountant's Report
* The financial statements and Accountant's Report listed above
for each Series are incorporated by reference into Part B from
the Registrant's Annual Reports for the fiscal year ended
December 31, 1994 which are included herein as an Exhibit. In
addition, the unaudited financial statements for each Series
for the six-month period ended June 30, 1995 are incorporated
by reference into Part B from the Registrant's Semi-Annual
Reports. The Registrant's Semi-Annual Reports were
electronically filed with the Commission on August 31, 1995.
(b) Exhibits:
(1) Articles of Incorporation.
-------------------------
(a) Articles of Incorporation, as amended and
supplemented to date, attached as Exhibit.
(b) Form of Articles Supplementary (November 1995)
attached as Exhibit.
(2) By-Laws. By-Laws, as amended to date, attached as
-------
Exhibit.
(3) Voting Trust Agreement. Inapplicable.
----------------------
i
<PAGE>
Form N-1A
File No. 2-75526
Delaware Group Limited-Term
Government Funds, Inc.
(4) Copies of All Instruments Defining the Rights of Holders.
--------------------------------------------------------
(a) Articles of Incorporation and Articles Supplementary.
----------------------------------------------------
Articles Fifth and Ninth of the Articles of
Incorporation (September 12, 1990) and Article Second
to Articles Supplementary (June 1, 1992 and April 29,
1994) attached as Exhibit 24(b)(1)(a) and Form of
Articles Supplementary (November, 1995) attached as
Exhibit 24(b)(1)(b).
(b) By-Laws. Article II, Article III, as amended, and
-------
Article XIV attached as Exhibit 24(b)(2).
(5) Investment Management Agreements. Investment Management
--------------------------------
Agreement between Delaware Management Company, Inc. and
the Registrant on behalf of each Series dated April 3,
1995 attached as Exhibit.
(6) (a) Distribution Agreements.
-----------------------
(i) Form of Distribution Agreement (April, 1995) on
behalf of Limited-Term Government Fund included
as Module.
(ii) Form of Amendment No. 1 to Distribution
Agreement (November, 1995) on behalf of
Limited-Term Government Fund included as
Module.
(iii) Form of Distribution Agreement (April, 1995) on
behalf of U.S. Government Money Series included
as Module.
(b) Administration and Service Agreement. Form of
------------------------------------
Administration and Service Agreement (as amended
November, 1995) included as Module.
(c) Dealer's Agreement. Form of Dealer's Agreement (as
------------------
amended November, 1995) included as Module.
(d) Form of Mutual Fund Agreement for the Delaware Group
of Funds incorporated into this filing by reference
to Post-Effective Amendment No. 41 filed February
28, 1995.
(7) Bonus, Profit Sharing, Pension Contracts. Amended and
----------------------------------------
Restated Profit Sharing Plan included as Module.
(8) Custodian Agreements. Incorporated into this filing by
--------------------
reference to Post-Effective Amendment No. 28 filed
February 28, 1991 and Post-Effective Amendment No. 29
filed February 28, 1991.
ii
<PAGE>
Form N-1A
File No. 2-75526
Delaware Group Limited-Term
Government Funds, Inc.
(9) Other Material Contracts. Shareholders Services
------------------------
Agreements incorporated into this filing by reference to
Post-Effective Amendment No. 28 filed February 28, 1991
and Post-Effective Amendment No. 29 filed February 28,
1991.
(10) Opinions of Counsel. Filed with letter relating to Rule
-------------------
24f-2 on February 27, 1995.
(11) Consents of Auditors. Consents of Auditors attached as
--------------------
Exhibit.
(12) Inapplicable.
*(13) Investment Letter of Initial Shareholder. Incorporated
----------------------------------------
into this filing by reference to Pre-Effective Amendment
No. 1 filed February 20, 1985.
(14) Model Plans. Incorporated into this filing by reference
-----------
to Post-Effective Amendment No. 36 filed March 1, 1993,
Post-Effective Amendment No. 38 filed February 22, 1994
and Post-Effective Amendment No. 41 filed February 28,
1995.
**(15) Plans under Rule 12b-1.
----------------------
(a) Form of Plan under Rule 12b-1 for Class A of
Limited-Term Government Fund (November, 1995)
included as Module.
(b) Form of Plan under Rule 12b-1 for Class B of
Limited-Term Government Fund (November, 1995)
included as Module.
(c) Form of Plan under Rule 12b-1 for Class C of
Limited-Term Government Fund (November, 1995)
included as Module.
(d) Form of Plan under Rule 12b-1 for Consultant Class
of U.S. Government Money Series (November, 1995)
included as Module.
* Relates only to Registrant's U.S. Government Money Series.
** Relates only to the Class A Shares, Class B Shares and Class C
Shares of Registrant's Limited-Term Government Fund and the
Consultant Class of Registrant's U.S. Government Money Series.
iii
<PAGE>
Form N-1A
File No. 2-75526
Delaware Group Limited-Term
Government Funds, Inc.
(16) Schedules of Computation for each Performance Quotation.
-------------------------------------------------------
Incorporated into this filing by reference to Post-
Effective Amendment No. 41 filed February 28, 1995.
Schedules of Computation for each Performance Quotation
for the Limited-Term Government Fund attached as Exhibit.
(17) Financial Data Schedules. Attached as Exhibit.
------------------------
(18) Inapplicable.
(19) Other: Directors' Powers of Attorney. Attached as
-----------------------------
Exhibit.
(20) Other: Financial Statements. The Registrant's Annual
--------------------
Reports for the fiscal year ended December 31, 1994
attached as Exhibit.
Item 25. Persons Controlled by or under Common Control with Registrant.
-------------------------------------------------------------
None.
Item 26. Number of Holders of Securities.
-------------------------------
<TABLE>
<CAPTION>
(1) (2)
Number of
Title of Class Record Holders**
-------------- --------------
<S> <C>
Delaware Group Limited-Term Government
Funds, Inc.'s
Limited-Term Government Fund series:
Limited-Term Government Fund A Class
Common Stock Par Value 31,648 Accounts as of
$.001 Per Share October 31, 1995
Limited-Term Government Fund B Class
Common Stock Par Value 654 Accounts as of
$.001 Per Share October 31, 1995
Limited-Term Government Fund C Class
Common Stock Par Value 0 Accounts as of
$.001 Per Share October 31, 1995
</TABLE>
** Shares of the Limited-Term Government Fund C Class were not
offered prior to the effective date of this Registration
Statement.
iv
<PAGE>
Form N-1A
File No. 2-75526
Delaware Group Limited-Term
Government Funds, Inc.
<TABLE>
<CAPTION>
Number of
Title of Class Record Holders
-------------- --------------
<S> <C>
Limited-Term Government Fund
Institutional Class
Common Stock Par Value 32 Accounts as of
$.001 Per Share October 31, 1995
Delaware Group Limited-Term Government
Funds, Inc.'s
U.S. Government Money Series:
U.S. Government Money Fund A Class
Common Stock Par Value 1,042 Accounts as of
$.001 Per Share October 31, 1995
U.S. Government Money Fund
Consultant Class
Common Stock Par Value 72 Accounts as of
$.001 Per Share October 31, 1995
</TABLE>
Item 27. Indemnification. Incorporated into this filing by reference to
---------------
Post-Effective Amendment No. 7 filed September 25, 1985 and Article
III attached as Exhibit 24(b)(2).
Item 28. Business and Other Connections of Investment Adviser.
----------------------------------------------------
Delaware Management Company, Inc. (the "Manager") or its affiliate,
Delaware International Advisers Ltd., also serves as investment manager to the
other funds in the Delaware Group (Delaware Group Delaware Fund, Inc., Delaware
Group Trend Fund, Inc., Delaware Group Value Fund, Inc., Delaware Group DelCap
Fund, Inc., Delaware Group Decatur Fund, Inc., Delaware Group Delchester High-
Yield Bond Fund, Inc., Delaware Group Government Fund, Inc., Delaware Group Cash
Reserve, Inc., Delaware Group Tax-Free Fund, Inc., DMC Tax-Free Income Trust-
Pennsylvania, Delaware Group Tax-Free Money Fund, Inc., Delaware Group Premium
Fund, Inc., Delaware Group Global & International Funds, Inc., Delaware Pooled
Trust, Inc., Delaware Group Dividend and Income Fund, Inc., and Delaware Group
Global Dividend and Income Fund, Inc.) and provides investment advisory services
to institutional accounts, primarily retirement plans and endowment funds. In
addition, certain directors of the Manager also serve as directors/trustees of
the other Delaware Group funds, and certain officers are also officers of these
other funds. A company owned by the Manager's parent company acts as principal
underwriter to the mutual funds in the Delaware Group (see Item 29 below) and
another such company acts as the shareholder servicing, dividend disbursing and
transfer agent for all of the mutual funds in the Delaware Group.
v
<PAGE>
Form N-1A
File No. 2-75526
Delaware Group Limited-Term
Government Funds, Inc.
The following persons serving as directors or officers of the Manager
have held the following positions during the past two years:
Name and Principal Positions and Offices with the Manager and its
Business Address* Affiliates and Other Positions and Offices Held
----------------------- --------------------------------------------------
Wayne A. Stork Chairman of the Board, Chief Executive Officer,
Chief Investment Officer and Director of Delaware
Management Company, Inc.; President, Chief Executive
Officer, Chairman of the Board and Director of the
Registrant, and with the exception of Delaware
Pooled Trust, Inc., each of the other funds in the
Delaware Group and Delaware Management Holdings,
Inc.; Chairman of the Board and Director of Delaware
Pooled Trust, Inc. and Delaware Investment
Counselors, Inc.; Chairman, Chief Executive Officer
and Director of DMH Corp., Delaware International
Advisers Ltd., Delaware International Holdings Ltd.
and Founders Holdings, Inc.; and Director of
Delaware Distributors, Inc. and Delaware Service
Company, Inc.
Winthrop S. Jessup Executive Vice President and Director of Delaware
Management Company, Inc., DMH Corp., Delaware
International Holdings Ltd. and Founders Holdings,
Inc.; Executive Vice President of the Registrant
and, with the exception of Delaware Pooled Trust,
Inc., each of the other funds in the Delaware Group
and Delaware Management Holdings, Inc.; President
and Chief Executive Officer of Delaware Pooled
Trust, Inc.; Vice Chairman of Delaware Distributors,
L.P.; Vice Chairman and Director of Delaware
Distributors, Inc.; Director of Delaware Service
Company, Inc., Delaware Management Trust Company and
Delaware International Advisers Ltd.; and President
and Director of Delaware Investment Counselors, Inc.
Richard G. Unruh, Jr. Executive Vice President and Director of Delaware
Management Company, Inc.; Executive Vice President
of the Registrant and each of the other funds in the
Delaware Group; Senior Vice President of Delaware
Management Holdings, Inc.; and Director of Delaware
International Advisers Ltd.
Board of Directors, Chairman of Finance Committee,
Keystone Insurance Company since 1989, 2040 Market
Street, Philadelphia, PA; Board of Directors,
Chairman of Finance Committee, Mid Atlantic, Inc.,
since 1989, 2040 Market Street, Philadelphia, PA.
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
vi
<PAGE>
Form N-1A
File No. 2-75526
Delaware Group Limited-Term
Government Funds, Inc.
Name and Principal Positions and Offices with the Manager and its
Business Address* Affiliates and Other Positions and Offices Held
----------------------- --------------------------------------------------
Paul E. Suckow Senior Vice President/Chief Investment Officer,
Fixed Income of Delaware Management Company, Inc.,
the Registrant, each of the other funds in the
Delaware Group and Delaware Management Holdings,
Inc.; Senior Vice President and Director of Founders
Holdings, Inc.; and Director of Founders CBO
Corporation.
David K. Downes Senior Vice President, Chief Administrative Officer
and Chief Financial Officer of Delaware Management
Company, Inc., the Registrant and each of the other
funds in the Delaware Group; Chairman and Director
of Delaware Management Trust Company; Senior Vice
President, Chief Administrative Officer, Chief
Financial Officer and Treasurer of Delaware
Management Holdings, Inc.; Senior Vice President,
Chief Financial Officer, Treasurer and Director of
DMH Corp.; Senior Vice President, Chief
Administrative Officer and Director of Delaware
Distributors, Inc.; Senior Vice President and Chief
Administrative Officer of Delaware Distributors,
L.P.; Senior Vice President, Chief Administrative
Officer, Chief Financial Officer and Director of
Delaware Service Company, Inc.; Chief Financial
Officer and Director of Delaware International
Holdings Ltd.; Senior Vice President, Chief
Financial Officer and Treasurer of Delaware
Investment Counselors, Inc.; Senior Vice President
and Director of Founders Holdings, Inc.; and
Director of Delaware International Advisers Ltd.
George M. Chamberlain, Senior Vice President, Secretary and Director of
Jr. Delaware Management Company, Inc., DMH Corp.,
Delaware Distributors, Inc. and Delaware Service
Company, Inc.; Senior Vice President and Secretary
of the Registrant, each of the other funds in the
Delaware Group, Delaware Distributors, L.P.,
Delaware Investment Counselors, Inc. and Delaware
Management Holdings, Inc.; Executive Vice President,
Secretary and Director of Delaware Management Trust
Company; Corporate Vice President, Secretary and
Director of Founders Holdings, Inc.; Secretary and
Director of Delaware International Holdings Ltd.;
and Director of Delaware International Advisers Ltd.
Director of ICI Mutual Insurance Co. since 1992,
P.O. Box 730, Burlington, VT.
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
vii
<PAGE>
Form N-1A
File No. 2-75526
Delaware Group Limited-Term
Government Funds, Inc.
Name and Principal Positions and Offices with the Manager and its
Business Address* Affiliates and Other Positions and Offices Held
----------------------- --------------------------------------------------
Richard J. Flannery Managing Director/Corporate Tax & Affairs of
Delaware Management Company, Inc., Delaware
Management Holdings, Inc., DMH Corp., Delaware
Distributors, L.P., Delaware Distributors, Inc.,
Delaware Service Company, Inc., Delaware Management
Trust Company, Delaware International Holdings Ltd.,
Delaware Investment Counselors, Inc. and Founders
CBO Corporation; Vice President of the Registrant
and each of the other funds in the Delaware Group;
Managing Director/Corporate Tax & Affairs and
Director of Founders Holdings, Inc.; and Director of
Delaware International Advisers Ltd.
Limited Partner of Stonewall Links, L.P. since 1991,
Bulltown Rd., Elverton, PA; Director and Member of
Executive Committee of Stonewall Links, Inc. since
1991, Bulltown Rd., Elverton, PA.
Michael P. Bishof/1/ Vice President and Treasurer of Delaware Management
Company, Inc., the Registrant, each of the other
funds in the Delaware Group, Delaware Management
Holdings, Inc., DMH Corp., Delaware Distributors,
L.P., Delaware Distributors, Inc., Delaware Service
Company, Inc., Founders Holdings, Inc. and Founders
CBO Corporation.
Eric E. Miller Vice President and Assistant Secretary of Delaware
Management Company, Inc., the Registrant, each of
the other funds in the Delaware Group, Delaware
Management Holdings, Inc., DMH Corp., Delaware
Distributors, L.P., Delaware Distributors, Inc.,
Delaware Service Company, Inc., Delaware Management
Trust Company, Founders Holdings, Inc. and Delaware
Investment Counselors, Inc.
Richelle S. Maestro Vice President and Assistant Secretary of Delaware
Management Company, Inc., the Registrant, each of
the other funds in the Delaware Group, Delaware
Management Holdings, Inc., Delaware Distributors,
L.P., Delaware Distributors, Inc., Delaware Service
Company, Inc., DMH Corp., Delaware Management Trust
Company, Delaware Investment Counselors, Inc. and
Founders Holdings, Inc.; and Assistant Secretary of
Founders CBO Corporation.
General Partner of Tri-R Associates since 1989,
10001 Sandmeyer Ln., Philadelphia, PA.
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
viii
<PAGE>
Form N-1A
File No. 2-75526
Delaware Group Limited-Term
Government Funds, Inc.
Name and Principal Positions and Offices with the Manager and its
Business Address* Affiliates and Other Positions and Offices Held
----------------------- ---------------------------------------------------
Joseph H. Hastings Vice President/Corporate Controller of Delaware
Management Company, Inc., the Registrant and each of
the other funds in the Delaware Group, Delaware
Management Holdings, Inc., DMH Corp., Delaware
Distributors, L.P., Delaware Distributors, Inc.,
Delaware Service Company, Inc., Delaware Investment
Counselors, Inc. and Founders Holdings, Inc.;
Executive Vice President, Chief Financial Officer
and Treasurer of Delaware Management Trust Company;
and Assistant Treasurer of Founders CBO Corporation.
Bruce A. Ulmer Vice President/Director of Internal Audit of
Delaware Management Company, Inc., the Registrant,
each of the other funds in the Delaware Group,
Delaware Management Holdings, Inc., DMH Corp. and
Delaware Management Trust Company.
Lisa O. Brinkley/2/ Vice President/Compliance of Delaware Management
Company, Inc., the Registrant, each of the other
funds in the Delaware Group, DMH Corp., Delaware
Distributors, L.P., Delaware Distributors, Inc.,
Delaware Service Company, Inc., Delaware Management
Trust Company and Delaware Investment Counselors,
Inc.
Rosemary E. Milner Vice President/Legal of Delaware Management Company,
Inc., the Registrant, each of the other funds in the
Delaware Group, Delaware Distributors, L.P. and
Delaware Distributors, Inc.
Douglas L. Anderson/3/ Vice President/Operations of Delaware Management
Company, Inc. and Delaware Service Company, Inc.;
and Vice President/Operations and Director of
Delaware Management Trust Company.
Michael T. Taggart/4/ Vice President/Facilities Management and
Administrative Services of Delaware Management
Company, Inc.
Gerald T. Nichols Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., the Registrant, each of
the tax-exempt funds, the fixed income funds and the
closed-end funds in the Delaware Group; Vice
President of Founders Holdings, Inc.; and Treasurer
and Director of Founders CBO Corporation.
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
ix
<PAGE>
Form N-1A
File No. 2-75526
Delaware Group Limited-Term
Government Funds, Inc.
Name and Principal Positions and Offices with the Manager and its
Business Address* Affiliates and Other Positions and Offices Held
----------------------- ----------------------------------------------------
J. Michael Pokorny Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., the Registrant, each of
the tax-exempt funds and the fixed income funds in
the Delaware Group.
Gary A. Reed Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., the Registrant, each of
the tax-exempt funds and the fixed income funds in
the Delaware Group and Delaware Investment
Counselors, Inc.
Paul A. Matlack Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., the Registrant, each of
the tax-exempt funds, the fixed income funds and the
closed-end funds in the Delaware Group; Vice
President of Founders Holdings, Inc.; and Secretary
and Director of Founders CBO Corporation.
James R. Raith, Jr. Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., the Registrant, each of
the tax-exempt funds, the fixed income funds and the
closed-end funds in the Delaware Group; Vice
President of Founders Holdings, Inc.; and President
and Director of Founders CBO Corporation.
Patrick P. Coyne Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., the Registrant, each of
the tax-exempt funds and the fixed income funds in
the Delaware Group.
Roger A. Early/5/ Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., the Registrant, each of
the tax-exempt funds and the fixed income funds in
the Delaware Group.
Edward N. Antoian Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., and each of the equity
funds in the Delaware Group.
George H. Burwell Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., and each of the equity
funds in the Delaware Group.
John B. Fields Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., each of the equity funds
in the Delaware Group and Delaware Investment
Counselors, Inc.
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
x
<PAGE>
Form N-1A
File No. 2-75526
Delaware Group Limited-Term
Government Funds, Inc.
Name and Principal Positions and Offices with the Manager and its
Business Address* Affiliates and Other Positions and Offices Held
----------------------- --------------------------------------------------
Edward A. Trumpbour Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., and each of the equity
funds in the Delaware Group.
David C. Dalrymple Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., and each of the equity
funds in the Delaware Group.
/1/ VICE PRESIDENT/GLOBAL INVESTMENT MANAGEMENT OPERATIONS, Bankers
Trust and VICE PRESIDENT, CS First Boston Investment Management prior
to June, 1995.
/2/ VICE PRESIDENT AND COMPLIANCE OFFICER, Banc One Securities
Corporation prior to June, 1994 and ASSISTANT VICE PRESIDENT AND
COMPLIANCE OFFICER, Aetna Life and Casualty prior to March, 1993.
/3/ VICE PRESIDENT OF OPERATIONS, Supervised Service Company prior to
March, 1994.
/4/ ASSISTANT VICE PRESIDENT/ADMINISTRATIVE SERVICES, United Pacific
Life Insurance prior to January, 1994.
/5/ SENIOR VICE PRESIDENT AND PORTFOLIO MANAGER, Federated Investors
prior to July, 1994.
Item 29. Principal Underwriters.
----------------------
(a) Delaware Distributors, L.P. serves as principal underwriter
for all the mutual funds in the Delaware Group.
(b) Information with respect to each director, officer or
partner of principal underwriter:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
- -------------------- --------------------- ------------------------
<S> <C> <C>
Delaware Distributors, Inc. General Partner None
Delaware Management
Company, Inc. Limited Partner Investment Manager
Delaware Investment
Counselors, Inc. Limited Partner None
Winthrop S. Jessup Vice Chairman Executive Vice President
Keith E. Mitchell President and Chief None
Executive Officer
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xi
<PAGE>
Form N-1A
File No. 2-75526
Delaware Group Limited-Term
Government Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
- --------------------- ------------------------- ------------------------
<S> <C> <C>
David K. Downes Senior Vice President and Senior Vice President/Chief
Chief Administrative Administrative
Officer Officer/Chief
Financial Officer
George M. Chamberlain, Senior Vice President/ Senior Vice President/
Jr. Secretary Secretary
J. Lee Cook Senior Vice President/ None
National Sales Manager
Stephen H. Slack Senior Vice President/ None
Wholesaler
William F. Hostler Senior Vice President/ None
Marketing Services
Minette van Noppen Senior Vice President/ None
Retirement Services
Richard J. Flannery Managing Vice President
Director/Corporate
& Tax Affairs
Eric E. Miller Vice President/ Vice President/
Assistant Secretary Assistant Secretary
Richelle S. Maestro Vice President/ Vice President/
Assistant Secretary Assistant Secretary
Joseph H. Hastings Vice President/ Vice President/
Corporate Controller Corporate Controller
Michael P. Bishof Vice President/Treasurer Vice President/Treasurer
Lisa O. Brinkley Vice President/ Vice President/
Compliance Compliance
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xii
<PAGE>
Form N-1A
File No. 2-75526
Delaware Group Limited-Term
Government Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
- ---------------------- ---------------------- ---------------------
<S> <C> <C>
Rosemary E. Milner Vice President/Legal Vice President/Legal
Diane M. Anderson Vice President/ None
Retirement Services
Denise F. Guerriere Vice President/Client None
Services
Julia R. Vander Els Vice President/ None
Retirement Services
Jerome J. Alrutz Vice President/ None
Retirement Services
Martin J. Cole Vice President/ None
Retirement Services
Joanne A. Mettenheimer Vice President/ None
National Accounts
Christopher H. Price Vice President/Annuity None
Marketing & Administration
Thomas S. Butler Vice President/ None
DDI Administration
Frank Albanese Vice President/Wholesaler None
William S. Carroll Vice President/Wholesaler None
William S. Castetter Vice President/Wholesaler None
Thomas J. Chadie Vice President/Wholesaler None
Robert M. Frank Vice President/Wholesaler None
Douglas R. Glennon Vice President/Wholesaler None
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xiii
<PAGE>
Form N-1A
File No. 2-75526
Delaware Group Limited-Term
Government Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
- -------------------- ------------------------- ---------------------
<S> <C> <C>
Alan D. Kessler Vice President/Wholesaler None
William M. Kimbrough Vice President/Wholesaler None
Mac McAuliffe Vice President/Wholesaler None
Patrick L. Murphy Vice President/Wholesaler None
Henry W. Orvin Vice President/Wholesaler None
Philip G. Rickards Vice President/Wholesaler None
Dion D. Rooney Vice President/Wholesaler None
Michael W. Rose Vice President/Wholesaler None
Thomas E. Sawyer Vice President/Wholesaler None
Sanford G. Simmons, Jr. Vice President/Wholesaler None
Robert E. Stansbury Vice President/Wholesaler None
Larry D. Stone Vice President/Wholesaler None
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
(c) Not Applicable.
Item 30. Location of Accounts and Records.
--------------------------------
All accounts and records are maintained in Philadelphia at 1818 Market
Street, Philadelphia, PA 19103 or One Commerce Square, Philadelphia,
PA 19103.
Item 31. Management Services. None.
-------------------
Item 32. Undertakings.
------------
(a) Not Applicable.
(b) Not Applicable.
xiv
<PAGE>
Form N-1A
File No. 2-75526
Delaware Group Limited-Term
Government Funds, Inc.
(c) The Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
(d) The Registrant hereby undertakes to promptly call a meeting of
shareholders for the purpose of voting upon the question of
removal of any director when requested in writing to do so by the
record holders of not less than 10% of the outstanding shares.
xv
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, this Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in this City of Philadelphia and Commonwealth of Pennsylvania on
this 20th day of November, 1995.
DELAWARE GROUP LIMITED-TERM
GOVERNMENT FUNDS, INC.
By: /s/ Wayne A. Stork
-------------------------------------
Wayne A. Stork
Chairman of the Board, President,
Chief Executive Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
- --------------------------- ----------------------------------- ---------------
<S> <C> <C>
Chairman of the Board, President,
/s/Wayne A. Stork Chief Executive Officer and Director November 20, 1995
- --------------------------- --
Wayne A. Stork
Senior Vice President/Chief
Financial Officer/Chief
Administrative Officer
(Principal Financial
Officer and
/s/David K. Downes Principal Accounting November 20, 1995
- --------------------------- Officer) --
David K. Downes
/s/Walter P. Babich * Director November 20, 1995
- --------------------------- --
Walter P. Babich
/s/Anthony D. Knerr * Director November 20, 1995
- --------------------------- --
Anthony D. Knerr
/s/Ann R. Leven * Director November 20, 1995
- --------------------------- --
Ann R. Leven
/s/W. Thacher Longstreth * Director November 20, 1995
- --------------------------- --
W. Thacher Longstreth
/s/Charles E. Peck * Director November 20, 1995
- --------------------------- --
Charles E. Peck
</TABLE>
*By:/s/ Wayne A. Stork
--------------------------------------------
Wayne A. Stork
as Attorney-in-Fact for
each of the persons indicated
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Exhibit
- ----------- -------
EX-99.B1A Articles of Incorporation, as amended and supplemented to
date.
EX-99.B1B Form of Articles Supplementary (November, 1995).
EX-99.B2 By-Laws, as amended to date.
EX-99.B5 Investment Management Agreements (April, 3, 1995).
EX-99.B6AI Form of Distribution Agreement (April, 1995) on behalf of
(Module Name Limited-Term Government Fund.
DIS_AGR_NON_MON)
EX-99.B6AII Form of Amendment No. 1 to Distribution Agreement (April,
(Module Name 1995) on behalf of Limited-Term Government Fund.
AMD_DIS_AGR_NON)
EX-99.B6AIII Form of Distribution Agreement (April, 1995) on behalf of
(Module Name U.S. Government Money Series.
DIS_AGR_MON_MKT)
EX-99.B6B Form of Administration and Service Agreement (as amended
(Module Name November, 1995).
ADMIN_SER_AGREE)
EX-99.B6C Form of Dealer's Agreement (as amended November, 1995).
(Module Name
DEALERS_AGREE)
EX-99.B7 Amended and Restated Profit Sharing Plan.
(Module Name
PROF_SHARE_PLAN)
EX-99.B11 Consents of Auditors.
EX-99.B15A Form of Plan under Rule 12b-1 for Class A of Limited-Term
(Module Name Government Fund November, 1995).
CL_A_SHARE_NON)
EX-99.B15B Form of Plan under Rule 12b-1 for Class B of Limited-Term
(Module Name Government Fund (November, 1995).
CL_B_SHARE_ALL)
EX-99.B15C Form of Plan under Rule 12b-1 for Class C of Limited-Term
(Module Name Government Fund (November, 1995).
CL_C_SHARE_ALL)
<PAGE>
EX-99.B15D Form of Plan under Rule 12b-1 for Consultant Class of U.S.
(Module Name Government Money Series (November, 1995).
CON_CL_MON_MKT)
EX-99.B16 Schedules of Computation for each Performance Quotation
for Limited-Term Government Fund.
EX-27 Financial Data Schedules.
EX-99.B19 Directors' Powers of Attorney.
EX-99.B20 Financial Statements: The Registrant's Annual Reports for
the fiscal year ended December 31, 1994.
<PAGE>
DELAWARE GROUP TREASURY RESERVES, INC.
ARTICLES OF AMENDMENT
DELAWARE GROUP TREASURY RESERVES, INC., a Maryland corporation having its
principal office in Maryland in Baltimore City (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation that:
FIRST: The Corporation is registered as an open-end management company under
the Investment Company Act of 1940.
SECOND: (a) The Articles of Incorporation of the Corporation, as amended and
supplemented, are hereby amended by deleting the only paragraph of Article
SECOND in its entirety and inserting the following paragraph in lieu thereof:
The name of the corporation is Delaware Group Limited-Term Government
Funds, Inc.
(b) The Articles of Incorporation of the Corporation, as amended and
supplemented, are further amended by deleting the old corporate name from the
Articles of Incorporation, and inserting in lieu thereof the new corporate name
as changed hereby.
THIRD: The Articles of Incorporation of the Corporation, as amended and
supplemented, are further amended by changing the name of one series of the
Corporation's shares (the "Series") from the Treasury Reserves Intermediate
Series to the Limited-Term Government Fund series, and by deleting the old
series name from the Articles of Incorporation, and inserting in lieu thereof
the new series name as changed hereby.
FOURTH: The Articles of Incorporation of the Corporation, as amended and
supplemented, are further amended by changing the name of each of the following
classes (sub-series) of stock of the Series as hereinafter provided and by
deleting the old name of each such class from the Articles of Incorporation, and
inserting in lieu thereof the new name of such class as changed hereby:
(1) The Treasury Reserves Intermediate Fund class is hereby changed to
Limited-Term Government Fund A Class;
(2) The Treasury Reserves Intermediate Fund B Class is hereby changed to
Limited-
<PAGE>
Term Government Fund B Class; and
(3) The Treasury Reserves Intermediate Fund (Institutional) class is hereby
changed to Limited-Term Government Fund Institutional Class.
FIFTH: The amendments to the Articles of Incorporation of the Corporation as
set forth above have been duly approved by a majority of the entire Board of
Directors of the Corporation as required by law and are limited to changes
permitted by Section 2-605(a)(4) of the Maryland General Corporation Law to be
made without action by the stockholders of the Corporation.
SIXTH: The amendments to the Articles of Incorporation of the Corporation as
set forth above do not change the preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends, qualifications, or
terms or conditions of redemption of the shares that are the subject of the name
changes.
SEVENTH: The Articles of Amendment shall become effective at 5:00 P.M. on
August 28, 1995.
IN WITNESS WHEREOF, DELAWARE GROUP TREASURY RESERVES, INC. has caused these
Articles of Amendment to be signed in its name and on its behalf by its Senior
------
Vice President/Secretary and attested by its Assistant Secretary, on August 18,
- ------------------------ ---------
1995.
DELAWARE GROUP TREASURY RESERVES, INC.
By:/s/George M. Chamberlain, Jr.
-----------------------------
George M. Chamberlain, Jr.
Attest:
/s/Richelle S. Maestro
- ----------------------
Richelle S. Maestro
THE UNDERSIGNED, Senior Vice President/Secretary of DELAWARE GROUP TREASURY
-------------------------------
RESERVES, INC., who executed on behalf of said Corporation the foregoing
Articles of Amendment, of which this certificate is made a part, hereby
acknowledges, in the name and on behalf of said Corporation, the foregoing
Articles of Amendment to be the corporate act of said Corporation and further
certifies that, to the best of his knowledge, information and belief, the
matters and facts set forth therein with respect to the approval thereof are
true in all material respects, under the penalties of perjury.
<PAGE>
/s/George M. Chamberlain, Jr.
- -----------------------------
George M. Chamberlain, Jr.
<PAGE>
DELAWARE GROUP TREASURY RESERVES, INC.
ARTICLES SUPPLEMENTARY
TO
ARTICLES OF INCORPORATION
Delaware Group Treasury Reserves, Inc., a Maryland corporation having its
principal office in Baltimore, Maryland (the "Corporation"), hereby certifies,
in accordance with Section 2-208 of the Maryland General Corporation Law, to the
State Department of Assessments and Taxation of Maryland that:
FIRST: The Board of Directors of the Corporation has adopted resolutions
classifying a third class of shares of Common Stock of the Treasury Reserves
Intermediate Series as the Treasury Reserves Intermediate Fund B Class and
reclassifying 200,000,000 shares of authorized and unissued Common Stock, par
value $.001 per share, previously classified to the Treasury Reserves
Intermediate Series, to the Treasury Reserves Intermediate Fund B Class (the "B
Class").
SECOND: The shares of the B Class shall represent proportionate interests
in the same portfolio of investments as the shares of the Treasury Reserves
Intermediate Fund (Institutional) class and the Treasury Reserves Intermediate
Fund class of the Treasury Reserves Intermediate Series of the Corporation. The
shares of the B Class shall have the same preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, or terms or conditions of redemption as the shares of the
Treasury Reserves Intermediate (Institutional) Fund class and the Treasury
Reserves Intermediate Fund Class, all as set forth in the Articles of
Incorporation of the Corporation, except for the difference hereafter set forth:
1. The dividends and distributions of investment income and capital gains
with respect to the B Class of shares of Common Stock shall be in such amounts
as may be declared from time to time by the Board of Directors, and such
dividends and distributions may be declared from time to time by the Board of
Directors, and such dividends and distributions may vary with respect to such
class from the dividends and distributions of investment income and capital
gains with respect to the other classes of the Treasury Reserves Intermediate
Series to reflect differing allocations of the expenses of the Corporation among
the classes and any resultant difference among the net asset values per share of
the classes, to such extent and for such purposes as the Board of Directors may
deem appropriate. The allocation of investment income and capital gains and
expenses and liabilities of the Corporation among the three classes of the
<PAGE>
Treasury Reserves Intermediate Series shall be determined by the Board of
Directors in a manner that is consistent with the orders, as applicable, dated
April 10, 1987 and November 9, 1992 (Investment Company Act of 1940 Release Nos.
15675 and 19086) issued by the Securities and Exchange Commission, and any
existing or future amendment to such orders or any rule or interpretation under
the Investment Company Act of 1940, as amended, that modifies or supersedes such
orders;
2. Except as may otherwise be required by law pursuant to any applicable
order, rule or interpretation issued by the Securities and Exchange Commission,
or otherwise, the holders of the B Class shares shall have (i) exclusive voting
rights with respect to any matter submitted to a vote of stockholders that
affects only holders of the B Class shares, including without limitation, the
provisions of any Distribution Plan adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended, (a "Distribution Plan") applicable
to the B Class and (ii) no voting rights with respect to the provisions of any
Distribution Plan applicable to the existing classes of the Treasury Reserves
Intermediate Series or with regard to any other matter submitted to a vote of
stockholders which does not affect holders of the B Class shares.
3. (a) Each share of the B Class, other than shares described in paragraph
(3)(b) herein, shall be converted automatically, and without any action or
choice on the part of the holder thereof, into shares of the Treasury Reserves
Intermediate Fund class on the Conversion Date. The term "Conversion Date" when
used herein shall mean a date set forth in the Corporation's prospectus, as such
prospectus may be amended from time to time, that is no later than three months
after either (i) the date on which the eighth anniversary of the date of
issuance of the share occurs, or (ii) any such other anniversary date as may be
determined by the Board of Directors and set forth in the Corporation's
prospectus, as such prospectus may be amended from time to time; provided that
any such other anniversary date shall be a date that will occur prior to the
anniversary date set forth in clause (i) and any such other date theretofore
determined by the Board of Directors pursuant to this clause (ii); but further
provided that, subject to the provisions of the next sentence, for any shares of
the B Class acquired through an exchange, or through a series of exchanges, as
permitted by the Corporation as provided in the Corporation's prospectus, as
such prospectus may be amended from time to time, from another investment
company (an "eligible investment company"), the Conversion Date shall be the
conversion date applicable to the shares of stock of the eligible investment
company originally subscribed for in lieu of the Conversion Date of any stock
acquired through exchange if such eligible investment company issuing the stock
originally subscribed for had a conversion feature, but not
<PAGE>
later than the Conversion Date determined under (i) above. For the purpose of
calculating the holding period required for conversion, the date of issuance of
a share of the B Class shall mean (i) in the case of a share of the B Class
obtained by the holder thereof through an original subscription to the
Corporation, the date of the issuance of such share of the B Class, or (ii) in
the case of a share of the B Class obtained by the holder thereof through an
exchange, or through a series of exchanges, from an eligible investment company,
the date of issuance of the share of the eligible investment company to which
the holder originally subscribed.
(b) Each share of the B Class (i) purchased through the automatic
reinvestment of a dividend or distribution with respect to the B Class or the
corresponding B Class of any other investment company issuing such class of
shares or (ii) issued pursuant to an exchange or series of exchanges for shares
originally purchased through the automatic reinvestment of a dividend or
distribution with respect to shares of capital stock of an eligible investment
company shall be segregated in a separate sub-account on the stock records of
the Corporation for each of the holders of record thereof. On any Conversion
Date, a number of the shares held in the separate sub-account of the holder of
record of the share or shares being converted, calculated in accordance with the
next following sentence, shall be converted automatically, and without any
action or choice on the part of the holder, into shares of the Treasury Reserves
Intermediate Fund class. The number of shares in the holder's separate sub-
account so converted shall (i) bear the same ratio to the total number of shares
maintained in the separate sub-account on the Conversion Date (immediately prior
to conversion) as the number of shares of the holder converted on the Conversion
Date pursuant to paragraph (3)(a) hereof bears to the total number of B Class
shares of the holder on the Conversion Date (immediately prior to conversion)
after subtracting the shares then maintained in the holder's separate sub-
account, or (ii) be such other number as may be calculated in such other manner
as may be determined by the Board of Directors and set forth in the
Corporation's prospectus, as such prospectus may be amended from time to time.
(c) The number of shares of the Treasury Reserves Intermediate Fund class
into which a share of the B Class is converted pursuant to paragraphs 3(a) and
3(b) hereof shall equal the number (including for this purpose fractions of a
share) obtained by dividing the net asset value per share of the B Class for
purposes of sales and redemption thereof on the Conversion Date by the net asset
value per share of the Treasury Reserves Intermediate Fund class for purposes of
sales and redemption thereof on the Conversion Date.
<PAGE>
(d) On the Conversion Date, the shares of the B Class converted into shares
of the Treasury Reserves Intermediate Fund class will no longer be deemed
outstanding and the rights of the holders thereof (except the right to receive
(i) the number of shares of the Treasury Reserves Intermediate Fund class into
which the shares of the B Class have been converted and (ii) declared but unpaid
dividends to the Conversion Date or such other date set forth in the
Corporation's prospectus, as such prospectus may be amended from time to time
and (iii) the right to vote converting shares of the B Class held as of any
record date occurring on or before the Conversion Date and theretofore set with
respect to any meeting held after the Conversion Date) will cease. Certificates
representing shares of the Treasury Reserves Intermediate Fund class resulting
from the conversion need not be issued until certificates representing shares of
the B Class converted, if issued, have been received by the Corporation or its
agent duly endorsed for transfer.
(e) The automatic conversion of the B Class into the Treasury Reserves
Intermediate Fund class as set forth in paragraphs 3(a) and 3(b) of this Article
SECOND shall be suspended at any time that the Board of Directors determines (i)
that there is not available a reasonably satisfactory opinion of counsel to the
effect that (x) the assessment of the higher fee under the Distribution Plan
with respect to the B Class does not result in the Corporation's dividends or
distributions constituting a "preferential dividend" under the Internal Revenue
Code of 1986, as amended, and (y) the conversion of the B Class does not
constitute a taxable event under federal income tax law, or (ii) any other
condition to conversion set forth in the Corporation's prospectus, as such
prospectus may be amended from time to time, is not satisfied.
(f) The automatic conversion of the B Class into the Treasury Reserves
Intermediate Fund class as set forth in paragraphs 3(a) and 3(b) hereof may also
be suspended by action of the Board of Directors at any time that the Board of
Directors determines such suspension to be appropriate in order to comply with,
or satisfy the requirements of the Investment company Act of 1940, as amended,
and in effect from time to time, or any rule, regulation or order issued
thereunder relating to voting by the holders of the B Class on any Distribution
Plan with respect to the Treasury Reserves Intermediate Fund class and in effect
from time to time, and in connection with, or in lieu of, any such suspension,
the Board of Directors may provide holders of the B Class with alternative
conversion or exchange rights into other classes of stock of the Corporation in
a manner consistent with the law, rule, regulation or order giving rise to the
possible suspension of the conversion right.
<PAGE>
THIRD: The shares of the B Class have been classified by the Board of
Directors pursuant to authority contained in the Articles of Incorporation of
the Corporation.
IN WITNESS WHEREOF, Delaware Group Treasury Reserves, Inc. has caused these
Articles Supplementary to be signed in its name and on its behalf this 28th day
of April, 1994.
DELAWARE GROUP TREASURY RESERVES, INC.
By:/s/George M. Chamberlain, Jr.
-----------------------------
George M. Chamberlain, Jr.
Senior Vice President
ATTEST:
/s/Eric E. Miller
- -------------------
Eric E. Miller
Assistant Secretary
<PAGE>
DELAWARE GROUP TREASURY RESERVES, INC.
ARTICLES SUPPLEMENTARY
TO
ARTICLES OF INCORPORATION
Delaware Group Treasury Reserves, Inc., a Maryland corporation having its
principal office in Baltimore, Maryland (the "Corporation"), hereby certifies,
in accordance with Section 2-208 of the Maryland General Corporation Law, to the
State Department of Assessments and Taxation of Maryland that:
FIRST: The Board of Directors of the Corporation has adopted a resolution
designating the Treasury Reserves Intermediate Fund (Institutional) class of
shares of the Treasury Reserves Intermediate Series (as distinguished from the
existing Treasury Reserves Intermediate Fund class of shares) as the second
class of Common Stock of the Treasury Reserves Intermediate Series of the
Corporation and allocating Two Hundred Million (200,000,000) shares of
authorized, unissued and unclassified Common Stock, with a par value of $.001
per share, to the Treasury Reserves Intermediate Fund (Institutional) class.
SECOND: The shares of the Treasury Reserves Intermediate Fund
(Institutional) class and the Treasury Reserves Intermediate Fund class shall
represent proportionate interests in the same portfolio of investments of the
Treasury Reserves Intermediate Series. The shares of the Treasury Reserves
Intermediate Fund (Institutional) class of the Treasury Reserves Intermediate
Series of the Corporation shall have the same rights and privileges, and shall
be subject to the same limitations and priorities as the shares of the Treasury
Reserves Intermediate Fund Class of the Treasury Reserves Intermediate Series,
all as set forth in the Articles of Incorporation of the Corporation, provided
that dividends paid on the shares of the Treasury Reserves Intermediate Fund
(Institutional) class of shares shall not reflect any reduction for payment of
fees under the Distribution Plan of the Treasury Reserves Intermediate Fund
class adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940,
as amended, and provided further, that the shares of the Treasury Reserves
Intermediate Fund (Institutional) class shall not vote upon or with respect to
any matter relating to or arising from any such Distribution Plan.
THIRD: The shares of the Treasury Reserves Intermediate Fund
(Institutional) class and the Treasury Reserves Intermediate Fund class of the
Treasury Reserves Intermediate Series of the Corporation have been classified by
the Board of Directors pursuant to authority contained in the Articles
<PAGE>
of Incorporation of the Corporation.
THE UNDERSIGNED, Vice President of DELAWARE GROUP TREASURY RESERVES, INC.,
who executed on behalf of the said Corporation the foregoing Articles
Supplementary, of which this instrument is made a part, hereby acknowledges, in
the name of and on behalf of said Corporation, said Articles Supplementary to be
the corporate act of said Corporation and further certifies that, to the best of
his knowledge, information and belief, the matters and facts set forth therein
with respect to the approval thereof are true in all material respects, under
the penalties of perjury.
/s/George M. Chamberlain, Jr.
- -----------------------------
George M. Chamberlain, Jr.
IN WITNESS WHEREOF, Delaware Group Treasury Reserves, Inc. has caused these
Articles Supplementary to be signed in its name and on its behalf this 21st day
of May, 1992.
DELAWARE GROUP TREASURY RESERVES, INC.
By:/s/George M. Chamberlain, Jr.
-----------------------------
George M. Chamberlain, Jr.
Vice President
ATTEST:
/s/Eric E. Miller
- -----------------
Eric E. Miller
Assistant Secretary
<PAGE>
DELAWARE GROUP TREASURY RESERVES, INC.
ARTICLES OF AMENDMENT
DELAWARE GROUP TREASURY RESERVES, INC., a Maryland corporation having its
principal office in Baltimore City that:
FIRST: The Articles of Incorporation of the Corporation are hereby amended
by deleting the fourth paragraph of Article FIFTH in its entirety and inserting
the following paragraph in lieu thereof:
Subject to the aforesaid power of the Board of Directors, two series of
shares are hereby designated and classified as: the U.S. Government Money
Series and One Billion (1,000,000,000) shares of Common Stock (par value
$.001 per share) are hereby initially classified and allocated to such
series; and the Treasury Reserves Intermediate Series and Two Billion
(2,000,000,000) shares of Common Stock (par value $.001 per share) are
hereby initially classified and allocated to such series. Two sub-series of
the U.S. Government Money Series are hereby designated and classified as:
the U.S. Government Money Fund class, and Five Hundred Million
(500,000,000) shares of Common Stock (par value $.001 per share) are
classified and allocated to such sub-series; and the U.S. Government Money
Fund (Institutional) class, and Five Hundred Million (500,000,000) shares
of Common Stock (par value $.001 per share) are classified and allocated to
such sub-series. One sub-series of the Treasury Reserves Intermediate
Series is designated and classified as the Treasury Reserves Intermediate
Fund class, and One Billion (1,000,000,000) shares of Common Stock (par
value $.001 per share) are classified and allocated to such sub-series. One
Billion (1,000,000,000) shares of Common Stock of the Treasury Reserves
Intermediate Series shall be unclassified.
SECOND: This amendment has the effect of (i) changing the name of the
Investors Series to the "Treasury Reserves Intermediate Series" and
redesignating the "Investors Series II Class" as the "Treasury Reserves
Intermediate Fund" class; (ii) eliminating the Investors Series I Class and
converting all previously authorized issued or unissued shares of the Investors
Series I Class into shares of the Investors Series II Class (now known as the
Treasury Reserves Intermediate Fund class), and certificates representing shares
of the Investors Series I Class will be deemed to represent shares of the
Treasury Reserves Intermediate Fund class; and (iii) changing the name of the
Cashiers Series to the "U.S. Government Money Series" and redesignating the
Original and
<PAGE>
Consultant classes of the Cashiers Series as the "U.S. Government Money Fund"
and U.S. Government Money Fund (Institutional)" classes.
THIRD: (a) The total number of shares of stock which the Corporation was
authorized to issue prior to the amendment was Three Billion (3,000,000) shares
of common stock, with a par value of One-Tenth of One Cent ($0.001) per share
and with an aggregate par value of Three Million Dollars ($3,000,000). Two
series of shares were initially designated and classified as the Cashiers Series
and One Billion (1,000,000,000) shares of common stock ($0.001 par value per
share) were initially classified and allocated to such Series, with an aggregate
par value of One Million Dollars ($1,000,000) and the Investors Series, and Two
Billion (2,000,000,000) shares of common stock (par value $0.001 per share) were
allocated to such series, with an aggregate par value of Two Million Dollars
($2,000,000). Two classes of the Cashiers Series were initially designated and
classified as the Original Class, and Five Hundred Million (500,000,000) shares
(par value $0.001 per share) of the Cashiers Series were classified and
allocated to such class, with an aggregate par value of Five Hundred Thousand
Dollars ($500,000), and the Consultant Class, and Five Hundred Million
(500,000,000) shares (par value $0.001 per share) of the Cashiers Series were
classified and allocated to such class, with an aggregate par value of Five
Hundred Thousand Dollars ($500,000). Two classes of the Investors Series were
initially designated and classified as the Investors Series I Class and Five
Hundred Million (500,000,000) shares of the Investors Series (par value $0.001
per share) were classified and allocated to such class, with an aggregate par
value of Five Hundred Thousand Dollars ($500,000), and the Investors Series II
Class, and Five Hundred Million (500,000,000) shares of the Investors Series
(par value $0.001 per share) were classified and allocated to such class, with
an aggregate par value of Five Hundred Thousand Dollars ($500,000); and
(b) The total number of shares of stock which the Corporation is authorized
to issue, following the aforesaid amendment, is Three Billion (3,000,000,000)
shares, with a par value of One-Tenth of One Cent ($0.001) per share, with an
aggregate par value of Three Million Dollars ($3,000,000). Two series of shares
are designated as the U.S. Government Money Series and One Billion
(1,000,000,000) shares of common stock (par value $0.001 per share) are
classified and allocated to such series, with an aggregate par value of One
Million Dollars ($1,000,000) and the Treasury Reserves Intermediate Series, and
Two Billion (2,000,000,000) shares of common stock (par value $0.001 per share)
have been allocated to such series, with an aggregate par value of Two Million
Dollars ($2,000,000). Two classes of the U.S. Government Money Series have been
designated as the U.S.
<PAGE>
Government Money Fund class, and Five Hundred Million (500,000,000) shares of
Common Stock (par value $0.001 per share) have been classified and allocated to
the U.S. Government Money Fund class, with an aggregate par value of Five
Hundred Thousand Dollars ($500,000) and the U.S. Government Money Fund
(Institutional) class, and Five Hundred Million (500,000,000) shares (par value
$0.001 per share) of Common Stock were classified and allocated to such class,
with an aggregate par value of Five Hundred Thousand Dollars ($500,000). One
class of the Treasury Reserves Intermediate Series has been designated as the
Treasury Reserves Intermediate Fund class, and One Billion (1,000,000,000)
shares of Common Stock (par value $0.001 per share) have been classified and
allocated to the Treasury Reserves Intermediate Fund class, with an aggregate
par value of One Million Dollars ($1,000,000).
(c) The total number of shares of all classes and series of stock and the
individual and aggregate par value of such shares have not been changed by this
amendment.
FOURTH: The amendment was advised by the Board of Directors and approved by
the stockholders.
FIFTH: The Articles of Amendment shall become effective at 5:00 P.M. on the
date of filing.
THE UNDERSIGNED, Vice President of DELAWARE GROUP TREASURY RESERVES, INC.,
who executed on behalf of said Corporation the foregoing Articles of Amendment,
of which this certificate is made a part, hereby acknowledges, in the name and
on behalf of said Corporation, the foregoing Articles of Amendment to be the
corporate act of said Corporation and further certifies that, to the best of his
knowledge, information and belief, the matters and facts set forth therein with
respect to the approval thereof are true in all material respects, under the
penalties of perjury.
/s/Eric E. Miller
- -----------------
Eric E. Miller
Vice President
IN WITNESS WHEREOF, DELAWARE GROUP TREASURY RESERVES, INC. has caused these
Articles of Amendment to be signed in its name and on its behalf by its Vice
President and attested by its Assistant Secretary, on May 15, 1992.
DELAWARE GROUP TREASURY RESERVES, INC.
By:/s/Eric E. Miller
-----------------
<PAGE>
Eric E. Miller
Vice President
Attest:
/s/Richard J. Flannery
- ----------------------
Richard J. Flannery
Assistant Secretary
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DELAWARE GROUP TREASURY RESERVES, INC.
ARTICLES OF AMENDMENT
DELAWARE GROUP TREASURY RESERVES, INC., a Maryland corporation having is
principal office in Baltimore City, Maryland, and having its resident agent
located at Baltimore City, Maryland (hereinafter called the "Corporation"),
hereby certifies to the State Department of Assessments and Taxation of
Maryland, that:
FIRST: The Articles of Incorporation of the Corporation are hereby amended
by deleting the first seven paragraphs of Article Fifth in their entirety and
the following paragraphs shall be inserted in lieu thereof:
FIFTH: The total number of shares of stock which the Corporation shall
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have authority to issue is Three Billion (3,000,000,000) shares of stock,
with a par value of one tenth of One Cent ($.001) per share, to be known
and designated as Common Stock, such shares of Common Stock having an
aggregate par value of Three Million Dollars ($3,000,000).
Subject to the provisions of these Articles of Incorporation, the Board of
Directors shall have the power to issue shares of Common Stock of the
Corporation from time to time, at prices not less than the net asset value
or par value thereof, which ever is greater, for such consideration as may
be fixed from time to time pursuant to the direction of the Board of
Directors.
Pursuant to Section 2-105 of the Maryland General Corporation Law, the
Board of Directors of the Corporation shall have the power to designate one
or more series of shares of Common Stock and sub-series (classes) thereof,
and to classify or reclassify any unissued shares with respect to such
series or sub-series thereof, and such series and sub-series (subject to
any applicable rule, regulation or order of the Securities and Exchange
Commission or other applicable law or regulation) shall have such
preference, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, terms and conditions of
redemption and other characteristics as the Board may determine, unless
inconsistent with this Article FIFTH.
Subject to the aforesaid power of the Board of Directors, two series of
shares are hereby designated and classified as: The Cashiers Series and One
Billion (1,000,000,000) shares of Common Stock (par value $.001 per share)
are hereby initially classified and allocated
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to such series; and the Investors Series and Two Billion (2,000,000,000)
shares of Common Stock (par value $.001 per share) are hereby initially
classified and allocated to such series. Two sub-series of the Cashiers
Series are hereby designated and classified as: the Original Class, and
Five Hundred Million (500,000,000) shares of Common Stock (par value $.001
per share) are classified and allocated to such sub-series; and the
Consultant Class, and Five Hundred Million (500,000,000) shares of Common
Stock (par value $.001 per share) are classified and allocated to such sub-
series. Two sub-series of the Investors Series are designated and
classified as: the Investors Series II Class, and Five Hundred Million
(500,000,000) shares of Common Stock (par value $.001 per share) are
classified and allocated to such sub-series; and the Investors Series I
Class, and Five Hundred Million (500,000,000) shares of Common Stock (par
value $.001 per share) are classified and allocated to such sub-series. At
any time when there are no shares outstanding or subscribed for a
particular series or sub-series previously established and designated
herein or by the Board of Directors, the series or sub-series may be
eliminated by the Board of Directors by the same means.
SECOND: The amendment of the charter of the Corporation increases the
authorized stock of the Corporation:
1. Immediately before the amendment, the Corporation had the authority to
issue a total of Two Billion One Hundred Million (2,100,000,000) shares of
Common Stock divided into two Series:
The Cashiers Series and One Hundred Million (100,000,000) shares of Common
Stock, with a par value of $.01 per share and aggregate par value of One Million
Dollars ($1,000,000) were classified and allocated to the Series.
The Investors Series and Two Billion (2,000,000,000) shares of Common Stock
with a par value of $.001 and aggregate par value of Two Million Dollars
($2,000,000) were classified and allocated to the Series.
The aggregate par value of all the shares of all series of the Corporation
was Three Million Dollars ($3,000,000) before the amendment.
Prior to the amendment, two sub-series of the Cashiers Series were
designated and classified as: the Original Class, and Fifty Million (50,000,000)
shares of Common Stock (par value $.01 per share) were classified and allocated
to such sub-series; and the Consultant Class, and Fifty Million (50,000,000)
shares of Common Stock (par value $.01 per share) were classified and allocated
to such sub-series. Two
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sub-series of the Investors Series were designated and classified as: the
Original Class, and Five Hundred Million (500,000,000) shares of Common Stock
(par value $.001 per share) were classified and allocated to such sub-series;
and the Institutional Class, and Five Hundred Million (500,000,0000) shares of
Common Stock (par value $.001 per share) were classified and allocated to such
sub-series.
2. Immediately after the amendment, the total number of shares of stock
which the Corporation has authority to issue is Three Billion (3,000,000,000)
shares of stock, with a par value of one-tenth of One Cent ($.001) per share,
designated as Common Stock, such shares of Common Stock having an aggregate part
value of Three Million Dollars ($3,000,000).
After the amendment, two series of shares are designated and classified as:
the Cashiers Series and One Billion (1,000,000,000) shares of Common Stock (par
value $.001 per share) are classified and allocated to such series; and the
Investors Series and Two Billion (2,000,000,000) shares of Common Stock (par
value $.001 per share) are classified and allocated to such series. Two sub-
series of the Cashiers Series are designated and classified as: the Original
Class, and Five Hundred Million (500,000,000) shares of Common Stock (par value
$.001 per share) are classified and allocated to such sub-series; and the
Consultant Class, and Five Hundred Million (500,000,000) shares of Common Stock
(par value $.001 per share) are classified and allocated to such sub-series. Two
sub-series of the Investors Series are designated and classified as: the
Investors Series II Class, and Five Hundred Million (500,000,000) shares of
Common Stock (par value $.001 per share) are classified and allocated to such
sub-series; and the Investors Series I Class, and Five Hundred Million
(500,000,000) shares of Common Stock (par value $.001 per share) are classified
and allocated to such sub-series.
3. The description of each class of stock, including the preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption were not
changed by the amendment.
THIRD: The Board of Directors of the Corporation, at a meeting duly
convened and held on November 15, 1990, adopted a resolution in which was set
forth the foregoing amendment to the Articles of Incorporation, declaring that
the said amendment was advisable, and directing that it be submitted for action
thereon by the sole stockholder at a special or the net annual meeting of
stockholders, or in lieu thereof, that the required approval be obtained by
written consent which sets forth the action and is signed by the sole
stockholder entitled to vote on the matter.
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FOURTH: Notice setting forth a summary of the changes to be effected by
said amendment of the Articles of Incorporation and stating that an amendment o
the Articles of Incorporation was advisable and that a purpose of the meeting of
the sole stockholder would be to take action thereon, was given as required by
law, to the sole stockholder entitled to vote thereon.
FIFTH: The amendment of the Articles of Incorporation of the Corporation as
hereinabove set forth was approved by the sole stockholder of the Corporation at
said meeting by the affirmative vote of all the votes entitled to be cast
thereon.
SIXTH: The Articles of Amendment shall become effective on January 1, 1991.
IN WITNESS WHEREOF, DELAWARE GROUP TREASURY RESERVES, INC. has caused these
presents to be signed in its name and on its behalf by its President and
attested by its Secretary, on December 18, 1990.
DELAWARE GROUP TREASURY RESERVES, INC.
By:/s/Wayne A. Stork
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Wayne A. Stork
President
Attest:
/s/George M. Chamberlain, Jr.
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George M. Chamberlain, Jr.
Secretary
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ARTICLES OF INCORPORATION
OF
DELAWARE GROUP TREASURY RESERVES, INC.
FIRST: The undersigned, Eric E. Miller, whose post office address is One
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Commerce Square, Philadelphia, Pennsylvania 19103, and being at least eighteen
years of age, does hereby cause to be filed these Articles of Incorporation for
the purpose of forming a corporation under the General Corporation Law of the
State of Maryland.
SECOND: The name of the corporation is Delaware Group Treasury Reserves,
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Inc.
THIRD: The purpose for which the corporation is formed is to operate as an
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investment company and to exercise all of the powers and to do any and all of
the things as fully and to the same extent as any other corporation incorporated
under the laws of the State of Maryland, now or hereinafter in force, including,
without limitation, the following:
1. To purchase, hold, invest and reinvest in, sell, exchange, transfer,
mortgage, and otherwise acquire and dispose of securities of every kind,
character and description.
2. To exercise all rights, powers and privileges with reference to or
incident to ownership, use and enjoyment of any of such securities, including,
but without limitation, the right, power and privilege to own, vote, hold,
purchase, sell, negotiate, assign, exchange, transfer, mortgage, pledge, 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 to do any and all acts and things for the preservation,
protection, improvement and enhancement in value of any of such securities.
3. To purchase or otherwise acquire, own, hold, sell, exchange, assign,
transfer, mortgage, pledge or otherwise dispose of, property of all kinds.
4. 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 situate; and to build, erect, construct, alter and maintain
buildings, structures, and other improvements on real property.
5. To borrow or raise moneys for any of the purposes of the corporation,
and to mortgage or pledge the whole or any part of the property and franchises
of the corporation, real,
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personal, and mixed, tangible or intangible, and wheresoever situate.
6. To enter into, make and perform contracts and undertakings of every kind
for any lawful purpose, without limit as to amount.
7. To issue, purchase, sell and transfer, reacquire, hold, trade and deal
in, to the extent permitted under the General Corporation Law of the State of
Maryland, capital stock, bonds, debentures and other securities of the
corporation, from time to time, to such extent as the Board of Directors shall,
consistent with the provisions of these Articles of Incorporation, determine;
and to repurchase, re-acquire and redeem to the extent permitted under the
General Corporation Law of the State of Maryland, from time to time, the shares
of its own capital stock, bonds, debentures and other securities.
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 corporation, and that they are in furtherance of,
and in addition to, and not in limitation of, the general powers conferred upon
the corporation by the laws of the State of Maryland or otherwise; nor shall the
enumeration of one thing be deemed to exclude another, although it be of like
nature, not expressed.
FOURTH: The post office address of the principal office of the corporation
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in the State of Maryland is:
c/o The Corporation Trust, Incorporated
32 South Street
Baltimore, Maryland 21202
The name and post office address of the initial resident agent of the
corporation in the State of Maryland is:
The Corporation Trust, Incorporated
32 South Street
Baltimore, Maryland 21202
FIFTH: The total number of shares of stock which the corporation shall
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have authority to issue is Two Billion One Hundred Million (2,100,000,000)
shares of stock, to be known and designated as Common Stock, and to be divided
into two Series:
The Cashiers Series and One Hundred Million (100,000,000) shares of Common
Stock, with a par value of $.01 per share and aggregate par value of Two Million
Dollars ($2,000,000) are classified and allocated to such series; and
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The Investors Series and Two Billion (2,000,000,000) shares of Common Stock
with a par value of $.001 and aggregate par value of Two Million Dollars
($2,000,000) are classified and allocated to such series.
The aggregate par value of all the shares of all series of the corporation
is Three Million Dollars ($3,000,000).
Subject to the provisions of these Articles of Incorporation, the Board of
Directors shall have the power to issue shares of Common Stock of the
corporation from time to time, at prices not less than the net asset value or
par value thereof, whichever is greater, for such consideration as may be fixed
from time to time pursuant to the direction of the Board of Directors.
Pursuant to Section 2-105 of the Maryland General Corporation Law, the
Board of Directors of the corporation shall have the power to designate one or
more series of shares of Common Stock and sub-series (classes) thereof, and to
classify or reclassify any unissued shares with respect to such series or sub-
series thereof, and such series and sub-series (subject to any applicable rule,
regulation or order of the Securities and Exchange Commission or other
applicable law or regulation) shall have such preference, conversion or other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, terms and conditions of redemption and other characteristics as
the Board may determine, unless inconsistent with this Article FIFTH.
Subject to the aforesaid power of the Board of Directors, two sub-series of
the Cashiers Series are hereby designated and classified as: the Original Class,
and Fifty Million (50,000,000) shares of Common Stock (par value $.01 per share)
are classified and allocated to such sub-series; and the Consultant Class, and
Fifty Million (50,000,000) shares of Common Stock (par value $.01 per share) are
classified and allocated to such sub-series. Two sub-series of the Investors
Series are hereby designated and classified as: the Original Class, and Five
Hundred Million (500,000,000) shares of Common Stock (par value $.001 per share)
are classified and allocated to such sub-series; and the Institutional Class,
and Five Hundred Million (500,000,000) shares of Common Stock (par value $.001)
per share) are classified and allocated to such sub-series. At any time when
there are no shares outstanding or subscribed for a particular series or sub-
series previously established and designated herein or by the Board of
Directors, the series or sub-series may be eliminated by the Board of Directors
by the same means.
Each share of a series shall have equal rights with each other share of
that series with respect to the assets of the corporation pertaining to that
series. The dividends payable
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to the holders of any sub-series (subject to any applicable rules, regulation or
order of the Securities and Exchange Commission or any other applicable law or
regulation) may be charged with any pro-rata portion of distribution expenses
paid pursuant to a Plan of Distribution adopted by such sub-series in accordance
with Investment Company Act of 1940 Rule 12b-1 (or any successor thereto), which
dividend shall be determined as directed by the Board and need not be
individually declared, but may be declared and paid in accordance with a formula
adopted by the Board. Except as otherwise provided herein, all references in
these Articles of Incorporation to Common Stock or series of stock shall apply
without discrimination to the shares of each series of stock.
The holder of each share of stock of the corporation shall be entitled to
one vote for each full share, and a fractional vote for each fractional share of
stock then standing in his or her name in the books of the corporation. On any
matter submitted to a vote of shareholders, all shares of the corporation then
issued and outstanding and entitled to vote, irrespective of the series, shall
be voted in the aggregate and not by series except (1) when otherwise expressly
provided by the Maryland General Corporation Law, or (2) when required by the
Investment Company Act of 1940, as amended, shares shall be voted by individual
series, or sub-series; and (3) when the matter does not affect any interest of
the particular series or sub-series shall be entitled to vote thereon. Holders
of shares of stock of the corporation shall not be entitled to cumulative voting
in the election of directors or on any other matter.
Each series of stock of the corporation shall have the following powers,
preferences and participating, voting, or other special rights and the
qualifications, restrictions, and limitations thereof shall be as follows:
1. All consideration received by the corporation for the issue or sale of
stock of each series, together with all income, earnings, profits and proceeds
thereof, including any proceeds derived from the sale, exchange or liquidation
thereof, and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall irrevocably belong to the
series of shares of stock with respect to which such assets, payments or funds
were received by the corporation for all purposes, subject only to the rights of
creditors, and shall be so handled upon the books of account of the corporation.
Such assets, income, earnings, profit and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation thereof and any assets
derived from any reinvestment of such proceeds, in whatever form the same may
be, are herein referred to as "assets belonging to" such series.
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2. The Board of Directors may from time to time declare and pay dividends
or distributions, in stock or in cash, or any or all series of stock; provided,
such dividends or distributions on shares of any series of stock shall be paid
only out of earnings, surplus, or other lawfully available assets belonging to
such series.
3. The Board of Directors shall have the power in its discretion to
distribute to the shareholders of the corporation or to the shareholders of any
series thereof in any fiscal year as dividends, including dividends designated
in whole or in part as capital gain distributions, amounts sufficient, in the
opinion of the Board of Directors, to enable the corporation or any series
thereof to qualify as a "regulated investment company" under the Internal
Revenue Code of 1986, as amended, or any successor or comparable statute
thereof, and regulations promulgated thereunder (collectively, the "IRC"), and
to avoid liability of the corporation or any series thereof for Federal income
tax in respect of that year and to make other appropriate adjustments in
connection therewith.
4. The Board of Directors shall have the power, in its discretion, to make
such elections as to the tax status of the corporation or any series or class of
the corporation as may be permitted or required under the IRC as presently in
effect or as amended, without the vote of shareholders of the corporation or any
series thereof.
5. In the event of the liquidation or dissolution of the corporation,
shareholders of each series shall be entitled to receive, as a series, out of
the assets of the corporation available for distribution to shareholders, but
other than general assets not belonging to such series, and the assets so
distributable to the shareholders of any series shall be distributed among such
shareholders in proportion to the number of shares of such series held by them
and recorded on the books of the corporation. In the event that there are any
general assets not belonging to any particular series of stock and available for
distribution, such distribution shall be made to the holders of stock of all
series in proportion to the net asset value of the respective series determined
as hereinafter provided.
6. The assets belonging to any series of stock shall be charged with the
liabilities in respect to such series, and shall also be charged with its share
of the general liabilities of the corporation, in proportion to the net asset
value of the respective series determined as hereinafter provided. The
determination of the Board of Directors shall be conclusive as to the amount of
liabilities, including accrued expenses and reserves, as to the allocation of
the same as to a given series, and as to whether the same or general assets of
the corporation are
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allocable to one or more series.
7. The Board of Directors may provide for a holder of any series of stock
of the corporation, who surrenders his certificate in good form for transfer to
the corporation or, if the shares in question are not represented by
certificates, who delivers to the corporation a written request in good order
signed by the shareholder, to convert the shares in question on such basis as
the Board may provide, into shares of stock of any other series of the
corporation.
8. The holders of the shares of Common Stock or other securities of the
corporation shall have no preemptive rights to subscribe to new or additional
shares of its Common Stock or other securities.
SIXTH: The number of directors of the corporation shall be such number as
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may from time to time be fixed by the By-Laws of the corporation or pursuant to
authorization contained in such By-Laws; provided, notwithstanding anything
herein to the contrary, the board of directors shall initially consist of nine
directors until such time as the number of directors is fixed as stated above.
The names of the directors who shall act as such until successors are duly
chosen and qualify are: John H. Durham, Walter P. Babich, Dr. John J. Connolly,
William Buchanan Gold, Jr., Leonard M. Harlan, Ann R. Leven, W. Thacher
Longstreth, J. Permar Richards, and Anthony D. Knerr.
SEVENTH: The following provisions are inserted for the management of the
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business and for the conduct of the affairs of the corporation:
1. The Board of Directors shall have power to fix an initial offering price
for the shares of any series which shall yield to the corporation not less than
the par value thereof, at which price the shares of the Common Stock of the
corporation shall be offered for sale, and to determine from time to time
thereafter the offering price which shall yield to the corporation not less than
the par value thereof from sales of the shares of its Common Stock; provided,
however, that no shares of the Common Stock of the corporation shall be issued
or sold for a consideration which shall yield to the corporation less than the
net asset value of shares of such series determined as hereinafter provided, as
of the business day on which such shares are sold, or at such other times set by
the Board of Directors, except in the case of shares of such Common Stock issued
in payment of a dividend properly declared and payable.
Notwithstanding anything in these Articles of Incorporation to the
contrary, the Board of Directors shall have power to establish in its absolute
discretion the basis
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or method for determining the value of the assets belonging to any class or
series, and the net asset value of each share of any class or series of the
corporation for purposes of sales, redemptions, repurchases of shares or
otherwise.
The net asset value of the property and assets of any series of the
corporation shall be determined in accordance with the Investment Company Act of
1940, as amended, and with generally accepted accounting principles, and at such
times as the Board of Directors may direct, by deducting form the total market
or appraised value of all of the property and assets of the corporation, all
debts, obligations and liabilities of the Corporation (including, but without
limitation of the generality of any of the foregoing, any or all debts,
obligations, liabilities or claims of any and every kind and nature, whether
fixed, accrued, or unmatured, and any reserves or charges, determined in
accordance with generally accepted accounting principles, for any or all
thereof, whether for taxes, including estimated taxes or unrealized book
profits, expenses, contingencies or otherwise).
The net asset value per share of a Series of the Common Stock of the
corporation shall be determined by adding the total market or appraised value of
the property and assets of the relevant series of the corporation, subtracting
the liabilities determined by the Board of Directors to be applicable to that
series, allocating any general assets and general liabilities to that series,
and dividing the net result by the total number of shares of its Common Stock
then issued and outstanding for such series, including any shares sold by the
corporation up to and including the date as of which such net asset value is to
be determined whether or not certificates therefor have actually been issued. In
case the net asset value of each share so determined shall include a fraction of
one cent, such net asset value of each share shall be adjusted to the nearest
full cent.
2. To the extent permitted by law, and except in the case of a national
financial emergency, the corporation shall redeem shares of its Common Stock
from its stockholders upon request of the holder thereof received by the
corporation or its designated agent during business hours of any business day,
provided that such request must be accompanied by surrender of 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 in form for transfer, together with such proof of the authenticity
of signatures as may reasonably be required on such shares (or, on such request
in the event no certificate is outstanding) by, or pursuant to the direction of
the Board of Directors of the corporation, and accompanied by proper stock
transfer stamps. Shares redeemed upon any such request shall be purchased by the
corporation at the net
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asset value of such shares determined in the manner provided in Paragraph (1) of
this Article Seventh, and in accordance with the redemption procedures
prescribed in the then current Prospectus for the applicable series of shares of
the corporation.
Payment for shares of its Common Stock so redeemed by the corporation shall
be made from the assets of the applicable series in cash, except payment for
such shares may, at the option of the Board of Directors, or such officer or
officers as they may duly authorize for the purpose in their complete
discretion, be made from the assets of that series in kind or partially in cash
and partially in kind. In case of any payment in kind the Board of Directors, or
their delegate, shall have absolute discretion as to what security or securities
of such series 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 current net asset value of the series of
the corporation's shares, provided that any stockholder who cannot legally
acquire securities so distributed in kind by reason of the prohibitions of the
Investment Company Act of 1940 shall receive cash.
Payment for shares of its Common Stock so redeemed by the corporation shall
be made by the corporation as provided above within seven days after the date
which such shares are deposited; provided, however, that if payment shall be
made by delivery of assets of the corporation, as provided above, 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 may be made, but not necessarily within
such seven day period.
The right of any holder of shares of the Common Stock of the corporation to
receive dividends thereon and all other rights of such stockholder with respect
to the shares so redeemed by the corporation shall cease and determine from and
after the time as of which the purchase price of such shares shall be fixed, as
provided above, except the right of such stockholder to receive payment for such
shares as provided for herein.
For the purposes of these Articles of Incorporation, a "national financial
emergency" is defined as the whole or any part of any period (i) during which
the New York Stock Exchange is closed other than customary weekend and holiday
closings, (ii) during which trading on the New York Stock Exchange is
restricted, (iii) during which an emergency exists as a result of which disposal
by the corporation of securities owned by such series is not reasonably
practicable or it is not reasonably practicable for the corporation fairly to
determine the value of the net assets of such
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series, or (iv) during any other period when the Securities and Exchange
Commission (or any succeeding governmental authority) may for the protection of
security holders of the corporation by order permit suspension of the right of
redemption or postponement of the date of payment on redemption; provided that
applicable rules and regulations of the Securities and Exchange Commission (or
any succeeding governmental authority) shall govern as to whether the conditions
prescribed in (ii), (iii), or (iv) exist. The Board of Directors may, in its
discretion, declare the suspension described in (iv) above at an end, and such
other suspension relating to a national financial emergency shall terminate as
the case may be on the first business day on which said Stock Exchange shall
have reopened or the period specified in (ii) or (iii) shall have expired (as to
which in the absence of an official ruling by said Commission or succeeding
authority, the determination of the Board of Directors shall be conclusive).
3. The Board of Directors, may from time to time, without the vote or
consent of stockholders, establish uniform standards with respect to the minimum
net asset value of a stockholder account or a minimum investment which may be
made by a stockholder. The Board of Directors may authorize the closing of those
stockholder accounts not meeting the specified minimum standards of net asset
value by redeeming all of the shares in such accounts, provided there is mailed
to each affected stockholder account, at least thirty (30) days prior to the
planned redemption date, a notice setting forth the minimum account size
requirement and the date on which the account will be closed if the minimum size
requirement is not met prior to said closing date.
EIGHTH: (a) To the fullest extent that limitations on the liability of
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directors and officers are permitted by the Maryland General Corporation Law, no
director or officer of the corporation shall have any liability to the
corporation or its stockholders for damages. This limitation on liability
applies to events occurring at the time a person serves as a director or officer
of the corporation whether or not such person is a director or officer at the
time of any proceeding in which liability is asserted.
(b) No provision of this Article shall be effective to protect or purport
to protect any director or officer of the corporation against any liability to
the corporation or its security holders to which he would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office.
(c) References to the Maryland General Corporation Law in this Article are
to the law as from time to time amended. No amendment to the Articles
Incorporation of the corporation
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shall affect any right of any person under this Article based on any event,
omission or proceeding prior to such amendment.
NINTH: Subject to the Investment Company Act of 1940, as amended, each of
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the following actions, to the extent required to be approved by the shareholders
under Maryland General Corporation Law, shall be approved by a majority of all
votes entitled to be cast on the matter:
(i) Amendment or amendment and restatement of the Articles;
(ii) Reduction of stated capital;
(iii) Consolidation, merger, share exchange or transfer of assets;
(iv) Distribution in partial liquidation; or
(v) Voluntary dissolution.
TENTH: The corporation expressly reserves the right to amend, alter,
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change or repeal any provision contained in these Articles of Incorporation, and
all rights, contract and otherwise, conferred herein upon the stockholders are
granted subject to such reservation.
ELEVENTH: The corporation expressly agrees and acknowledges that the names
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"Delaware Group" and "Delaware Group Treasury Reserves" are the sole property of
Delaware Management Company, Inc. ("DMC"), that similar names are used by funds
in the investment business which are affiliated with DMC, and that the
corporation's use of such name is with permission of DMC. The corporation
further expressly agrees and acknowledges that its use of such name may be
terminated by DMC if the corporation ceases to use DMC as its investment advisor
or Delaware Distributors, Inc. ("DDI") as its principal underwriter (or to use
affiliates of DMC and DDI for such purposes). The corporation further expressly
agrees and acknowledges that in such event DMC may require the corporation to
present to its shareholders, at the next annual or special meeting of the
corporation held after such request, a proposal to change the name of the
corporation to delete reference to the name "Delaware Group". The corporation
further expressly agrees and acknowledges in such event to use its best efforts
to promptly comply with such request to change its name and that the Board of
Directors of the corporation shall recommend such a proposal to its
shareholders. The corporation further expressly acknowledges and agrees, upon
shareholder approval of such a proposal, to make and cause to be made such
filings to effect the change of name as may be necessary with the State of
Maryland, the United States Securities and Exchange Commission, or other
regulatory authorities.
<PAGE>
IN WITNESS WHEREOF, the undersigned incorporator of Delaware Group Treasury
Reserves, Inc. who executed the foregoing Articles of Incorporation hereby
acknowledges the same to be his act and further acknowledges that, to the best
of his knowledge the matters and facts set forth therein are true in all
material respects, under the penalties of perjury.
Dated the 10th day of September, 1990.
/s/Eric E. Miller
- -----------------
Eric E. Miller
<PAGE>
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
ARTICLES SUPPLEMENTARY
TO
ARTICLES OF INCORPORATION
Delaware Group Limited-Term Government Funds, Inc., a Maryland
corporation having its principal office in Baltimore, Maryland (the
"Corporation"), hereby certifies, in accordance with Section 2-208 of the
Maryland General Corporation Law, to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The Corporation has authority to issue a total of Three
Billion (3,000,000,000) shares of common stock with a par value of one-tenth of
One Cent ($.001) per share of the Corporation (the "Common Stock"), having an
aggregate par value of Three Million Dollars ($3,000,000). Of such Three
Billion (3,000,000,000) shares of Common Stock, One Billion (1,000,000,000)
shares have been allocated to the U.S. Government Money Series of the Common
Stock and Two Billion (2,000,000,000) shares have been allocated to the Limited-
Term Government Fund Series of the Common Stock. The One Billion
(1,000,000,000) shares of the U.S. Government Money Series of the Common Stock
have been allocated between two classes as follows: (1) Five Hundred Million
(500,000,000) shares have been allocated to the U.S. Government Money Fund class
and (2) Five Hundred Million (500,000,000) shares have been allocated to the
U.S. Government Money Fund (Institutional) class. Of the Two Billion
(2,000,000,000) shares of the Limited-Term Government Fund series of the Common
Stock, One Billion Four Hundred Million (1,400,000,000) shares have been
allocated among three classes as follows: (1) One Billion (1,000,000,000)
shares have been allocated to the Limited-Term Government Fund A Class and (2)
Two Hundred Million (200,000,000) shares have been allocated to each of the
Limited-Term Government Fund B Class and the Limited-Term Government Fund
Institutional Class.
SECOND: The Board of Directors of the Corporation, at a meeting held
on July 20, 1995, adopted a resolution classifying a fourth class of shares of
the Limited-Term Government Fund series of the Common Stock as the Limited-Term
Government Fund C Class (the "C Class") and reclassifying and allocating Fifty
Million (50,000,000) shares of authorized and unissued Common Stock, previously
classified and allocated to the Limited-Term Government Fund A Class of the
Limited-Term Government Fund series of the Common Stock, to the C Class.
-1-
<PAGE>
THIRD: The shares of the C Class shall represent proportionate
interests in the same portfolio of investments as the shares of the Limited-Term
Government Fund Institutional Class, Limited-Term Government Fund B Class and
Limited-Term Government Fund A Class of the Limited-Term Government Fund series
of the Common Stock. The shares of the C Class shall have the same preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends, qualifications, or terms or conditions of redemption as the shares of
the Limited-Term Government Fund Institutional Class, Limited-Term Government
Fund B Class and Limited-Term Government Fund A Class of the Limited-Term
Government Fund series of the Common Stock, all as set forth in the Articles of
Incorporation of the Corporation, except for the differences hereinafter set
forth:
1. The dividends and distributions of investment income and capital
gains with respect to shares of the C Class shall be in such amounts
as may be declared from time to time by the Board of Directors, and
such dividends and distributions may vary with respect to such class
from the dividends and distributions of investment income and capital
gains with respect to shares of the other classes of the Limited-Term
Government Fund series of the Common Stock to reflect differing
allocations of the expenses of the Corporation among the shares of
such classes and any resultant difference among the net asset values
per share of the shares of such classes, to such extent and for such
purposes as the Board of Directors may deem appropriate. The
allocation of investment income and capital gains and expenses and
liabilities of the Corporation among the four classes of the Limited-
Term Government Fund series of the Common Stock shall be determined by
the Board of Directors in a manner that is consistent with the order,
as applicable, dated September 6, 1994 (Investment Company Act of 1940
Release No. 20529) issued by the Securities and Exchange Commission,
and any amendments to such order, any future order or any Multiple
Class Plan adopted by the Corporation in accordance with Rule 18f-3
under the Investment Company Act of 1940, as amended, that modifies or
supersedes such order.
2. Except as may otherwise be required by law pursuant to any
applicable order, rule or interpretation issued by the Securities and
Exchange Commission, or otherwise, the holders of shares of the C
Class shall have (i) exclusive voting rights with respect to any
matter submitted to a vote of stockholders that affects only holders
of shares of the C Class, including without limitation the provisions
of any Distribution Plan adopted pursuant to Rule 12b-1
-2-
<PAGE>
under the Investment Company Act of 1940, as amended (a "Distribution
Plan") applicable to shares of the C Class, and (ii) no voting rights
with respect to the provisions of any Distribution Plan applicable to
any other class of Common Stock or with regard to any other matter
submitted to a vote of stockholders which does not affect holders of
shares of the C Class.
3. The shares of the C Class shall not automatically convert into
shares of the Limited-Term Government Fund A Class of the Limited-Term
Government Fund series of the Common Stock as do the shares of the
Limited-Term Government Fund B Class of the Limited-Term Government
Fund series of the Common Stock.
FOURTH: The shares of the Limited-Term Government Fund A Class of
the Limited-Term Government Fund series of the Common Stock reclassified as
shares of the C Class pursuant to these Articles Supplementary have been
reclassified by the Board of Directors pursuant to authority contained in the
Articles of Incorporation of the Corporation.
FIFTH: These Articles Supplementary shall become effective on
November 28, 1995.
IN WITNESS WHEREOF, Delaware Group Treasury Reserves, Inc. has caused
these Articles Supplementary to be signed in its name and on its behalf this
day of November, 1995.
- ----
DELAWARE GROUP LIMITED-TERM GOVERNMENT
FUNDS, INC.
By: /s/
----------------------------------
George M. Chamberlain, Jr.
Senior Vice President
ATTEST:
/s/
- ----------------------------
Richelle S. Maestro
Secretary
-3-
<PAGE>
THE UNDERSIGNED, Senior Vice President of DELAWARE GROUP LIMITED-TERM
GOVERNMENT FUNDS, INC., who executed on behalf of the said Corporation the
foregoing Articles Supplementary, of which this instrument is made a part,
hereby acknowledges, in the name of and on behalf of said Corporation, said
Articles Supplementary to be the corporate act of said Corporation and further
certifies that, to the best of his knowledge, information and belief, the
matters and facts set forth therein with respect to the authorization and
approval thereof are true in all material respects, under the penalties of
perjury.
/s/
----------------------------------
George M. Chamberlain, Jr.
Senior Vice President
-4-
<PAGE>
EX-99
EX-99.B2 BY-LAWS
DELAWARE GROUP TREASURY RESERVES, INC.
CERTIFICATION OF AMENDMENT TO BY-LAWS
AMENDING SECTION 7 OF ARTICLE III
JANUARY 28, 1995
The Undersigned Secretary of Delaware Group Treasury Reserves, Inc.
does hereby certify that at the Board of Directors of the Fund at a meeting duly
called and held on January 28, 1995 did adopt the following resolution amending
Section 7 of Article III of the Fund's by-laws:
RESOLVED, that Article III, Section 7, be amended
in its entirely to read as follows:
Section 7. At any meeting of the stockholders of
the Corporation every stockholder having the right
to vote shall be entitled, in person or by
proxy appointed by an instrument in writing subscribed
by such stockholder or by his duly authorized
attorney-in-fact and bearing a date not more than
eleven months prior to said meeting unless such
instrument provides for a longer period, to one vote
for each share of stock having voting power
registered in his name on the books of the Corporation.
IN WITNESS WHEREOF, I have hereto subscribed my name this 28th day
of January, 1995.
<PAGE>
/s/George M. Chamberlain, Jr.
- -----------------------------
George M. Chamberlain, Jr.
Secretary
<PAGE>
DELAWARE GROUP TREASURY RESERVES, INC.
CERTIFICATION OF AMENDMENT TO BY-LAWS
AMENDING SECTION 2 OF ARTICLE VI
NOVEMBER 21, 1991
The Undersigned Secretary of Delaware Group Treasury Reserves, Inc.
does hereby certify that at the Board of Directors of the Fund at a meeting duly
called and held on November 21, 1991 did adopt the following resolution amending
Section 2 of Article VI of the Fund's by-laws:
RESOLVED, that Article VI, Section 2 of the Fund's
by-laws be amended to read in its entirely as follows:
Section 2. The Chairman of the Board shall be
elected from the membership of the Board of Directors,
but other officers need not be members of the Board
of Directors. Any two or more offices may be held
by the same person except the offices of President
and Vice President. All officers of the Corporation
shall serve for one year and until their successors
shall have been duly elected and shall have qualified;
provided, however, that any officer may be removed
at any time, either with our without cause, by action
by the Board of Directors.
AND FURTHER RESOLVED, that the appropriate officers of
the Fund are hereby authorized to take such other steps
as may be necessary to implement the aforesaid amendment.
IN WITNESS WHEREOF, I have hereto subscribed my name
this 21st day of November, 1991.
<PAGE>
/s/George M. Chamberlain, Jr.
- -----------------------------
George M. Chamberlain, Jr.
<PAGE>
DELAWARE GROUP TREASURY RESERVES FUND, INC.
CERTIFICATION OF AMENDMENT TO BY-LAWS
AMENDING SECTION 8 OF ARTICLE IV
JULY 22, 1991
The Undersigned Secretary of Delaware Group Treasury Reserves Fund,
Inc. does hereby certify that at the Board of Directors of the Fund at a meeting
duly called and held on July 22, 1991 did adopt the following resolution
amending Section 8 of Article IV of the Fund's by-laws:
RESOLVED, that Article IV, Section 8, be amended
in its entirely to read as follows:
Section 8. The Board of Directors may hold
their meetings and keep the books of the Corporation
outside of the State of Maryland at such
place or places as it may from time to time determine.
AND FURTHER RESOLVED, that the Secretary of the
Fund is hereby authorized and directed to include
a certified copy of this Amendment with the corporate
records of the Fund; and further
RESOLVED, that the books and records of the Fund
shall be maintained at the offices of the Fund in
the City of Philadelphia.
IN WITNESS WHEREOF, I have hereto subscribed my name this 22nd day
of July, 1991.
/s/George M. Chamberlain, Jr.
- -----------------------------
George M. Chamberlain, Jr.
<PAGE>
DELAWARE GROUP TREASURY RESERVES, INC.
CERTIFICATION OF AMENDMENT TO BY-LAWS
AMENDING SECTION 2 OF ARTICLE III
JANUARY 15, 1991
The Undersigned Secretary of Delaware Group Treasury Reserves, Inc.
("Fund") does hereby certify that the Board of Directors of the Fund at a
meeting duly called and held on January 15, 1991 did adopt the following
resolution amending Section 2 of Article II of the Fund's By-Laws:
WHEREAS, the Board of Directors of the Fund deems it to be in the
best interests of the Fund to amend the By-Laws of the Fund to provide that
holders of at least 10% of the Fund's shares be permitted, at the Fund's cost,
to call a special stockholders meeting for any purpose, in order to enable the
Fund's shares to be qualified and sold in the State of California;
NOW THEREFORE, BE IT RESOLVED, that the By-Laws of the Fund are
hereby amended by inserting, as amended Section 2 of ARTICLE III, the
following:
Section 2. Special meetings of the stockholders
may be called at any time by the Chairman, President
or majority of the members of the Board of Directors
and shall be called by the secretary upon the written
request of the holders of at least ten percent of the
shares of the capital stock of the Corporation issued
and outstanding and entitled to vote at such meeting.
Upon receipt of a written request from such holders
entitled to call a special meeting, which shall state
the purpose of the meeting and the matter proposed
to be acted on at it, the Secretary shall issue notice
of such meeting. The cost of preparing and mailing
the notice of a special meeting
<PAGE>
of stockholders shall be borne by the Corporation.
Special meetings of the stockholders shall be held
at the principal office of the Corporation, or at
such other place within or without the State of Maryland
as the Board of Directors may from time to time direct,
or at such place within or without the State of Maryland
as shall be specified in the notice of such meeting.
IN WITNESS WHEREOF, I have hereto subscribed my name this 15th day
of January, 1991.
/s/George M. Chamberlain, Jr.
- -----------------------------
George M. Chamberlain, Jr.
Secretary
<PAGE>
DELAWARE GROUP TREASURY RESERVES, INC.
BY-LAWS
ARTICLE I
OFFICES
Section 1. The principal office of the Corporation shall be in
the City of Baltimore, State of Maryland. The Corporation shall also have
offices at such other places as the Board of Directors may from time to time
determine or the business of the Corporation may require.
ARTICLE II
STOCKHOLDERS AND STOCK CERTIFICATES
Section 1. Every stockholder of record shall be entitled to a
stock certificate representing the shares owned by him. Stock certificates shall
be in such form as may be required by law and as the Board of Directors shall
prescribe. Every stock certificate shall be signed by the Chairman or the
President or a Vice President and by the Treasurer or an Assistant Treasurer, or
the Secretary or an Assistant Secretary, and sealed with the corporate seal,
which may be a facsimile, either engraved or printed. Stock certificates may
bear the facsimile signatures of the officers authorized to sign such
certificates.
Section 2. Shares of the capital stock of the Corporation shall
be transferable only on the books of the Corporation by the person in whose name
such shares are registered, or by his duly authorized attorney or
representative. In all cases of transfer by an attorney-in-fact, the original
power of attorney, or an official copy thereof duly certified, shall be
deposited and remain with the Corporation or its duly authorized transfer agent.
In case of transfers by executors, administrators, guardians or other legal
representatives, duly authenticated evidence of their authority shall be
produced, and may be required to be deposited and remain with the Corporation or
its duly authorized transfer agent. No transfer shall be made unless and until
the certificate issued to the transferor shall be delivered to the Corporation
or its duly authorized transfer agent, properly endorsed.
Section 3. Any person desiring a certificate for shares of the
capital stock of the Corporation to be issued in lieu of one lost or destroyed
shall make an affidavit or affirmation setting forth the loss or destruction of
such stock certificate, and shall advertise such loss or destruction in such
manner as the Board of
<PAGE>
Directors may require, and shall, if the Board of Directors shall so require,
give the Corporation a bond or indemnity, in such form and with such security as
may be satisfactory to the Board, indemnifying the Corporation against any loss
that may result upon the issuance of a new stock certificate. Upon receipt of
such affidavit and proof of publication of the advertisement of such loss or
destruction, and the bond, if any, required by the Board of Directors, a new
stock certificate may be issued of the same tenor and for the number of shares
as the one alleged to have been lost or destroyed.
Section 4. The Corporation shall be entitled to treat the holder of
record of any share or shares of its capital stock as the owner thereof and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
the Corporation shall have express or other notice thereof.
ARTICLE III
MEETINGS OF STOCKHOLDERS
Section 1. (a) The Corporation is not required to hold an Annual
Meeting in any year in which the Corporation is not required to elect directors
under the Investment Company Act of 1940. If the Corporation is required under
the Investment Company Act of 1940 to hold a stockholder meeting to elect
directors, the meeting shall be designated an Annual Meeting of Stockholders for
that year for purposes of Maryland law.
(b) Annual Meetings, if any, shall be held at such place and time
as the Board of Directors may by resolution establish, and shall be held no
later than 120 days after the occurrence of the event requiring the meeting. In
the absence of any specific resolution, Annual Meetings of Stockholders shall be
held at the Corporation's principal office, or a such other place within or
without the State of Maryland as the Board of Directors may from time to time
prescribe. Meetings of stockholders for any other purpose may be held at such
place and time as shall be fixed by resolution of the Board of Directors and
stated in the Notice of the Meeting, or in a duly executed Waiver of Notice
thereof.
Section 2. Special meetings of the stockholders may be called at
any time by the Chairman, President or a majority of the members of the Board of
Directors and shall be called by the secretary upon the written request of the
holders of at least twenty-five percent of the shares of the capital stock of
the Corporation issued and outstanding and entitled
<PAGE>
to vote at such meeting; provided, if the matter proposed to be acted on is
substantially the same as a matter voted on at any special meeting held during
the preceding twelve months, such written request shall be made by holders of at
least a majority of the capital stock of the Corporation issued and outstanding
and entitled to vote at such meetings. A special meeting of the stockholders
shall also be called by the Secretary upon the written request of at least ten
percent of the shares of the capital stock of the Corporation issued and
outstanding and entitled to vote at such meeting, for the express purpose of
voting upon the question of removal of a director or directors. Upon receipt of
a written request from such holders entitled to call a special meeting, which
shall state the purpose of the meeting and the matter proposed to be acted on at
it, the Secretary shall inform the holders who made such request of the
reasonably estimated cost of preparing and mailing a notice of a meeting and,
upon payment of such costs to the Corporation, the Secretary shall issue notice
of such meeting. Special meetings of the stockholders shall be held at the
principal office of the Corporation, or at such other place within or without
the State of Maryland as the Board of Directors may from time to time direct, or
at such place within or without the State of Maryland as shall be specified in
the notice of such meeting.
Section 3. Notice of the time and place of the annual or any
special meeting of the stockholders shall be given to each stockholder entitled
to notice of such meeting not less than ten days nor more than ninety days prior
to the date of such meeting. In the case of special meetings of the
stockholders, the notice shall specify the object or objects of such meeting,
and no business shall be transacted at such meeting other than that mentioned in
the call.
Section 4. The Board of Director may close the stock transfer
books of the Corporation for a period not exceeding twenty days preceding the
date of any meeting of stockholders, or the date for payment of any dividend, or
the date for the allotment of rights, or the date when any change or conversion
or exchange of capital stock shall go into effect, or for a period of not
exceeding twenty days in connection with the obtaining of the consent of
stockholders for any purpose; provided, however, that in lieu of closing the
stock transfer books as aforesaid, the Board of Directors may fix in advance a
date, not exceeding ninety days preceding the date of nay meeting of
stockholders, or the date for payment of any dividend, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
capital stock shall go into effect, or a date in connection with obtaining such
consent, as a record date for the determination of the stockholders entitled to
notice of, and to vote at any such meeting and any adjournment thereof, or
entitled to receive payment of any such dividend, or to any such allotment of
rights, or to
<PAGE>
exercise the rights in respect of any such change, conversion or exchange of
capital stock or to give such consent, and in such case such stockholders and
any such stockholders as shall be stockholders of record on the date so fixed
shall be entitled to such notice of, and to vote at, such meeting and any
adjournment thereof, or to receive payment of such dividend or to receive such
allotment of rights or to exercise such rights, or to give such consent, as the
case may be, notwithstanding any transfer of any stock on the books of the
Corporation after any such record date fixed as aforesaid.
Section 5. At all meetings of the stockholders a quorum shall
consist of the holders of a majority of the outstanding shares of the capital
stock of the Corporation entitled to vote at such meeting. In the absence of a
quorum no business shall be transacted except that the stockholders present in
person or by proxy and entitled to vote at such meeting shall have power to
adjourn the meeting from time to time to a date not more than one hundred twenty
days after the original record date without further notice other than
announcement at the meeting. A any such adjourned meeting at which a quorum
shall be present any business may be transacted which might have been transacted
at the meeting on the date specified in the original notice. If a quorum is
present at any meeting, the holders of a majority of the shares of capital stock
of the Corporation issued and outstanding and entitled to vote at the meeting
who shall be present in person or by proxy at such meeting shall have power to
approve any matter properly before the meeting, except a plurality of all votes
cast at a meeting at which a quorum is present shall be sufficient for the
election of a director. The holders of such majority shall also have power to
adjourn the meeting to any specific time or times, and no notice of any such
adjourned meeting need be given to stockholders absent or otherwise.
Section 6. At all meetings of the stockholders the following
order of business shall be substantially observed, as far as it is consistent
with the purpose of the meeting:
Election of Directors;
Ratification of Selection of
Auditors;
New business.
Section 7. At any meeting of the stockholders of the Corporation
every stockholder having the right to vote shall be entitled, in person or by
proxy appointed by an instrument in writing subscribed by such stockholder and
bearing a date not more than eleven months prior to said meeting unless such
instrument provides for a longer period, to one vote for each share of stock
having voting power
<PAGE>
registered in his name on the books of the Corporation.
ARTICLE IV
DIRECTORS
Section 1. The Board of Directors shall consist of not less than
three nor more than twelve members. The Board of Directors may by a vote of the
entire board increase or decrease the number of directors without a vote of the
stockholders; provided, that any such decrease shall not affect the tenure of
office of any director. Directors need not hold any shares of the capital stock
of the Corporation.
Section 2. The directors shall be elected by the stockholders of
the Corporation at an annual meeting, if held, or at a special meeting called
for such purpose, and shall hold office until their successor shall be duly
elected and shall qualify.
Section 3. The Board of Directors shall have control and
management of the business of the Corporation, and in addition to the powers and
authority by these By-Laws expressly conferred upon them, may exercise, subject
to the provisions of the laws of the State of Maryland and of the Articles of
Incorporation of the Corporation, all such powers of the Corporation and do all
such acts and things as are not required by law or by the Articles of
Incorporation to be exercised or done by the stockholders.
Section 4. The Board of Directors shall have power to fill
vacancies occurring on the Board, whether by death, resignation or otherwise. A
vacancy on the Board of Directors resulting from any cause except an increase in
the number of directors may be filled by a vote of the majority of the remaining
members of the Board, though less than a quorum. A vacancy on the Board of
Directors resulting from an increase in the number of directors may be filled by
a majority of the entire Board of Directors. A director elected by the Board of
Directors to fill a vacancy shall serve until the next annual meeting, whenever
held, or special meeting called for that purpose, and until his successor is
elected and qualifies.
Section 5. The Board of Directors shall have power to appoint,
and at its discretion to remove or suspend, any officers, managers,
superintendents, subordinates, assistants, clerks, agents and employees,
permanently or temporarily, as the Board may think fit, and to determine their
duties and to fix, and from time to time to change, their salaries or
emoluments, and to require security in such instances and in such amounts as it
may deem proper.
<PAGE>
Section 6. In case of the absence of an officer of the
Corporation, or for any other reason which may seem sufficient to the Board of
Directors, the Board may delegate his powers and duties for the time being to
any other officer of the Corporation or to any director.
Section 7. The Board of Directors may, by resolution or
resolutions passed by a majority of the whole Board, designate one or more
committees, each committee to consist of two or more of the directors of the
Corporation which, to the extent provided in such resolution or resolutions and
by applicable law, shall have and may exercise the powers of the Board of
Directors in the management of the business and affairs of the Corporation. Such
committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the Board of Director. Any such committee
shall keep regular minutes of its proceedings, and shall report the same to the
Board when required.
Section 8. The Board of Directors may hold their meetings and
keep the books of the Corporation, except the original or a duplicate stock
ledger and the original or a certified copy of these By-laws, outside of the
State of Maryland, at such place or places as they may from time to time
determine.
Section 9. The Board of Directors shall have power to fix, and
from time to time to change the compensation, if any, of the directors of the
Corporation.
Section 10. Upon retirement of a Director, the Board may elect
him or her to the position of Director Emeritus. Said Director Emeritus shall
serve for one year and may be re-elected by the Board from year to year
thereafter. Said Director Emeritus shall not vote at meetings of Directors and
shall not be held responsible for actions of the Board but shall receive fees
paid to Board members for serving as such.
ARTICLE V
DIRECTORS MEETINGS
Section 1. The first regular meeting of the Board of Directors
shall be held each year within seven business days following the annual meeting
of stockholders at which the Directors are elected. Regular meetings of the
Board of Directors shall also be held without notice at such times and places as
may be from time to time prescribed by the Board.
Section 2. Special meetings of the Board of Directors may be
called at any time by the Chairman, and
<PAGE>
shall be called by the Chairman upon the written request of a majority of the
members of the Board of Directors. Unless notice is waived by all the members of
the Board of Directors, notice of any special meeting shall be given to each
director at least twenty-four hours prior to the date of such meeting, and such
notice shall provide the time and place of such special meeting.
Section 3. One-third of the entire Board of Directors shall
constitute a quorum for the transaction of business at any meeting; except that
if the number of directors on the Board is less than six, two members shall
constitute a quorum for the transaction of business at any meeting. The act of a
majority of the directors present at any meeting where there is a quorum shall
be the act of the Board of Directors except as may be otherwise required by
Maryland law or the Investment Company Act of 1940.
Section 4. The order of business at meetings of the Board of
Directors shall be prescribed from time to time by the Board.
ARTICLE VI
OFFICERS AND AGENTS
Section 1. At the first meeting of the Board of Directors after
the election of Directors in each year, the Board shall elect a Chairman, a
President and Chief Executive Officer, one or more Vice Presidents, a Secretary
and a Treasurer and may elect or appoint one or more Assistant Secretaries, one
or more Assistant Treasurers, and such other officers and agents as the Board
may deem necessary and as the business of the Corporation may require.
Section 2. The Chairman of the Board and the President shall be
elected from the membership of the Board of Directors, but other officers need
not be members of the Board of Directors. Any two or more offices may be held by
the same person except the offices of President and Vice President. All officers
of the Corporation shall serve for one year and until their successors shall
have been duly elected and shall have qualified; provided, however, that any
officer may be removed at any time, either with or without cause, by action of
the Board of Directors.
ARTICLE VII
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 1. The Corporation shall indemnify each officer and
director made party to a proceeding, by reason of service in such capacity, to
the fullest extent, and in the
<PAGE>
manner provided, under Section 2-418 of the Maryland General Corporation Law:
(i) unless it is proved that the person seeking indemnification did not meet the
standard of conduct set forth in subsection (b)(1) of such section; and (ii)
provided, that the Corporation shall not indemnify any officer or director for
any liability to the Corporation or its security holders arising from the wilful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such person's office.
Section 2. The provisions of clause (i) of Section 1 of this
Article VII notwithstanding, the Corporation shall indemnify each officer and
director against reasonable expenses incurred in connection with the successful
defense of any proceeding to which each such officer or director is a party by
reason of service in such capacity.
Section 3. The Corporation, in the manner and to the extent
provided by applicable law, shall advance to each officer and director who is
made party to a proceeding by reason of service in such capacity the reasonable
expenses incurred by such person in connection therewith.
ARTICLE VIII
DUTIES OF OFFICERS
CHAIRMAN OF THE BOARD
Section 1. The Chairman of the Board shall preside at all
meetings of the stockholders and the Board of Directors and shall be a member ex
officio of all standing committees. He shall have those duties and
responsibilities as shall be assigned to him by the Board of Directors. In the
absence, resignation, disability or death of the President, the Chairman shall
exercise all the powers and perform all the duties of the President until his
return, or until such disability shall be removed or until a new President shall
have been elected.
PRESIDENT
Section 2. The President shall be the Chief Executive Office and
head of the Corporation, and in the recess of the Board of Directors shall have
the general control and management of its business and affairs, subject, however
to the regulations of the Board of Directors.
The President shall, in the absence of the Chairman, preside at all
meetings of the stockholders and the Board of Directors. In the event of the
absence, resignation, disability or death of the Chairman, the President shall
exercise all powers and perform all duties of
<PAGE>
the Chairman until his return, or until such disability shall have been removed
or until a new Chairman shall have been elected.
VICE PRESIDENTS
Section 3. The Executive Vice President, and the Vice
Presidents, shall have those duties and responsibilities as shall be assigned to
them by the Chairman or the President. In the event of the absence, resignation,
disability or death of the Chairman and President, the Executive Vice President
shall exercise all the powers and perform all the duties of the President until
his return, or until such disability shall be removed or until a new President
shall have been elected.
THE SECRETARY AND ASSISTANT SECRETARIES
Section 4. The Secretary shall attend all meetings of the
stockholders and shall record all the proceedings thereof in a book to be kept
for that purpose, and he shall be the custodian of the corporate seal of the
Corporation. In the absence of the Secretary, an Assistant Secretary or any
other person appointed or elected by the Board of Directors, as is elsewhere in
these Bylaws provided, may exercise the rights and perform the duties of the
Secretary.
Section 5. The Assistant Secretary, or, if there be more than
one Assistant Secretary, then the Assistant Secretaries in the order of their
seniority, shall, in the absence or disability of the Secretary, perform the
duties and exercise the powers of the secretary. Any Assistant Secretary elected
by the Board shall also perform such other duties and exercise such other powers
as the Board of Director shall from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 6. The Treasurer shall keep full and correct accounts of
the receipts and expenditures of the Corporation in books belonging to the
Corporation, and shall deposit all monies and valuable effects in the name and
to the credit of the Corporation and in such depositories as may be designated
by the Board of Directors, and shall, if the Board shall so direct, give bond
with sufficient security and in such amount as may be required by the Board of
Directors for the faithful performance of his duties.
He shall disburse funds of the Corporation as may be ordered by the
Board of Directors, taking proper vouchers for such disbursements, and shall
render to the President and Board of Directors at the regular meetings of
<PAGE>
the Board, or whenever they may require it, an account of all his transactions
as the chief fiscal officer of the Corporation and of the financial condition of
the Corporation, and shall present each year before the annual meeting of the
stockholders a full financial report of the preceding fiscal year.
Section 7. The Assistant Treasurer, or, if there be more than
one Assistant Treasurer, the Assistant Treasurers in the order of their
seniority, shall, in the absence or disability of the Treasurer, perform all
duties and exercise the powers of the Treasurer. Any Assistant Treasurer elected
by the board shall also perform such duties and exercise such powers as the
Board of Directors shall from time to time prescribe.
ARTICLE IX
CHECKS, DRAFTS, NOTES, ETC.
Section 1. All checks shall bear the signature of such person or
persons as the Board of Directors may from time to time direct.
Section 2. All notes and other similar obligations and
acceptances of drafts by the Corporation shall be signed by such person or
persons as the Board of Directors may from time to time direct.
Section 3. Any officer of the Corporation or any other employee,
as the Board of Directors may from time to time direct, shall have full power to
endorse for deposit all checks and all negotiable paper drawn payable to his or
their order or to the order of the Corporation.
ARTICLE X
CORPORATE SEAL
Section 1. The corporate seal of the Corporation shall have
inscribed thereon the name of the Corporation, the year of its organization, and
the words "Corporate Seal, Maryland." Such seal may be used by causing it or a
facsimile thereof to be impressed or affixed or otherwise reproduced.
ARTICLE XI
DIVIDENDS
Section 1. Dividends upon the shares of the capital stock of the
Corporation may, subject to the provisions of the Articles of Incorporation of
the Corporation, if any, be declared by the Board of Directors at
<PAGE>
any regular or special meeting, pursuant to law. Dividends may be paid in cash,
in property, or in shares of the capital stock of the Corporation.
Section 2. Before payment of any dividend there may be set aside
out of any funds of the Corporation available for dividends such sum or sums as
the Board of Directors may, from time to time, in their absolute discretion,
think proper as a reserve fund to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation, or
for such other purpose as the Board of Directors shall deem to be for the best
interests of the Corporation, and the Board of Directors may abolish any such
reserve in the manner in which it was created.
ARTICLE XII
FISCAL YEAR
Section 1. The fiscal year of the Corporation shall end on the
last day in March of each year.
ARTICLE XIII
NOTICES
Section 1. Whenever under the provisions of these By-Laws notice
is required to be given to any director or stockholder, such notice is deemed
given when it is personally delivered, left at the residence or usual place of
business of the director or stockholder, or mailed to such director or
stockholder at such address as shall appear on the books of the Corporation and
such notice, if mailed, shall be deemed to be given at the time it shall be
deposited in the United States mail postage prepaid. In the case of directors,
such notice may also be given orally by telephone or by telegraph or cable.
Section 2. Any notice required to be given under these By-Laws
may be waived in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein.
ARTICLE XIV
AMENDMENTS
Section 1. These By-Laws may be amended, altered or repealed by
the affirmative vote of the holders of a majority of the shares of capital stock
of the Corporation issued and outstanding and entitled to vote thereon, or by a
majority of the Board of Directors, as the case may be.
<PAGE>
[THIS PAGE LEFT BLANK]
<PAGE>
EX-99
EX-99.B5 INVESTMENT MANAGEMENT AGREEMENT
DELAWARE GROUP TREASURY RESERVES, INC.
TREASURY RESERVES INTERMEDIATE SERIES
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, made by and between DELAWARE GROUP TREASURY RESERVES, INC., a
Maryland corporation (the "Fund"), for the TREASURY RESERVES INTERMEDIATE SERIES
(the "Series"), and DELAWARE MANAGEMENT COMPANY, INC., a Delaware Corporation
(the "Investment Manager").
W I T N E S S E T H:
WHEREAS, the Fund has been organized and operates as
an investment company registered under the Investment Company Act of 1940 and
engages in the business of investing and reinvesting its assets in securities;
and
WHEREAS, the Investment Manager is a registered
Investment Adviser under the Investment Advisers Act of 1940 and engages in the
business of providing investment management services; and
WHEREAS, the indirect parent company of the
<PAGE>
Investment Manager completed on the date of this Agreement a merger transaction
which resulted in a change of control of the Investment Manager and an automatic
termination of the previous Investment Management Agreement for the Series dated
as of the 20th day of December, 1990; and
WHEREAS, the Board of Directors of the Fund and
shareholders of the Series have determined to enter into a new Investment
Management Agreement with the Investment Manager to be effective as of the date
hereof.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and each of the parties hereto intending to be legally bound, it is
agreed as follows :
1. The Fund hereby employs the Investment Manager to manage the
investment and reinvestment of the Series' assets and to administer its affairs,
subject to the direction of the Board of Directors and officers of the Fund for
the period and on the terms hereinafter set forth. The Investment Manager hereby
accepts such employment and agrees during such period to render the services and
assume the obligations herein set forth for the compensation herein provided.
The Investment Manager shall, for all purposes herein, be deemed to be an
independent contractor, and shall, unless otherwise expressly provided and
authorized, have no authority to act for or represent the Fund in any way, or in
any way be deemed an agent of the Fund. The Investment Manager shall regularly
make decisions as to what securities to purchase and sell on behalf of the
Series, shall effect the purchase and sale of investments in furtherance of the
Series' objectives and policies, and shall furnish the Board of Directors of the
Fund with such information and reports regarding the Series'
<PAGE>
investments as the Investment Manager deems appropriate or as the Directors of
the Fund may reasonably request.
2. The Fund shall conduct its own business and affairs and shall bear
the expenses and salaries necessary and incidental thereto including, but not in
limitation of the foregoing, the costs incurred in: the maintenance of its
existence; the maintenance of its own books, records and procedures; dealing
with its own shareholders; the payment of dividends; transfer of stock, issue,
sale, redemption and repurchase of shares; preparation of share certificates;
reports and notices to shareholders; calling and holding of shareholders'
meetings; miscellaneous office expenses; brokerage commissions; custodian fees;
legal and accounting fees; and taxes. The Fund shall bear all of its own
organizational costs. Directors, officers and employees of the Investment
Manager may be directors, officers and employees of other funds which have the
same Investment Manager. Directors, officers and employees of the Investment
Manager who are directors, officers and/or employees of the funds shall not
receive any compensation from the funds for acting in such dual capacity.
In the conduct of the respective businesses of the parties hereto and in
the performance of this Agreement, the Fund and the Investment Manager may share
facilities common to each, with appropriate proration of expenses between them.
3. (a) Subject to the primary objective of obtaining the best available
prices and execution, the Investment Manager will place orders for the purchase
and sale of portfolio securities with such broker/dealers who provide
statistical, factual and financial information and services to the Fund, to the
Investment Manager, or to any other fund for which the Investment Manager
provides investment advisory services and with
<PAGE>
broker/dealers who sell shares of any of the funds for which the Investment
Manager provides investment advisory services. Broker/dealers who sell shares of
the funds of which Delaware Management Company, Inc. is manager shall only
receive orders for the purchase or sale of portfolio securities to the extent
that the placing of such orders is in compliance with the Rules of the
Securities and Exchange Commission and the National Association of Securities
Dealers, Inc.
(b) Notwithstanding the provisions of subparagraph (a) above and subject
to such policies and procedures as may be adopted by the Board of Directors and
officers of the Fund, the Investment Manager may ask the Fund, and the Fund may
agree, to pay a member of an exchange, broker or dealer an amount of commission
for effecting a securities transaction in excess of the amount of commission
another member of an exchange, broker or dealer would have charged for effecting
that transaction, in such instances where it and the Investment Manager have
determined in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by such
member, broker or dealer, viewed in terms of either that particular transaction
or the Investment Manager's overall responsibilities with respect to the Fund
and to other funds for which the Investment Manager exercises investment
discretion.
4. As compensation for the services to be rendered to the Fund by the
Investment Manager under the provisions of this Agreement, the Fund shall pay to
the Investment Manager a management fee from the Series' assets, payable monthly
and computed on asset value of the Series as of each day at the annual rate of
one-half of one percent per annum, less the Series' proportionate part of all
fees paid to members of
<PAGE>
the Board of Directors of the Fund during the same period based on the number of
publicly offered series of the Fund.
If this Agreement is terminated prior to the end of any calendar month,
the management fee shall be prorated for the portion of any month in which this
Agreement is in effect according to the proportion which the number of calendar
days during which the Agreement is in effect bears to the number of calendar
days in the month, and shall be payable within 10 days after the date of
termination.
5. The services to be rendered by the Investment Manager to the Fund
under the provisions of this Agreement are not to be deemed to be exclusive, and
the Investment Manager shall be free to render similar or different services to
others so long as its ability to render the services provided for in this
Agreement shall not be impaired thereby.
6. The Investment Manager, its directors, officers, employees, agents
and shareholders may engage in other businesses, may render investment advisory
services to other investment companies, or to any other corporation,
association, firm or individual, may render underwriting services to the Fund or
to any other investment company, corporation, association, firm or individual.
7. In the absence of willful misfeasance, bad faith, gross
negligence, or a reckless disregard of the performance of duties of the
Investment Manager to the Fund, the Investment Manager shall not be subject to
liabilities to the Fund or to any shareholder of the Fund for any action or
omission in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale of any
security, or otherwise.
<PAGE>
8. This Agreement shall be executed and become effective as of the
date written below if approved by the vote of a majority of the outstanding
voting securities of the Series. It shall continue in effect for a period of two
years, and may be renewed thereafter only so long as such renewal and
continuance is specifically approved at least annually by the Board of Directors
or by a vote of a majority of the outstanding voting securities of the Series
and only if the terms and the renewal hereof have been approved by the vote of
the majority of the Directors of the Fund who are not parties hereto or
interested persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval. No amendment to this Agreement shall be
effective unless the terms thereof have been approved by the vote of a majority
of the outstanding voting securities of the Series and by the vote of a majority
of the Directors of the Fund who are not parties to the Agreement or interested
persons of any such party, cast in person at a meeting called for the purpose of
voting on such approval. Notwithstanding the foregoing, this Agreement may be
terminated by the Fund at any time, without the payment of a penalty, on sixty
days' written notice to the Investment Manager of the Fund's intention to do so,
pursuant to action by the Board of Directors of the Fund or pursuant to vote of
a majority of the outstanding voting securities of the Series. The Investment
Manager may terminate this Agreement at any time, without the payment of
penalty, on sixty days' written notice to the Fund of its intention to do so.
Upon termination of this Agreement, the obligations of all the parties hereunder
shall cease and terminate as of the date of such termination, except for the
obligation to respond for a breach of this Agreement committed prior to such
termination, and except for the obligation of the Fund to pay to the Investment
Manager the fee provided in
<PAGE>
Paragraph 4 hereof, prorated to the date of termination. This Agreement shall
automatically terminate in the event of its assignment.
9. This Agreement shall extend to and bind the heirs, executors,
administrators and successors of the parties hereto.
10. For the purpose of this Agreement, the terms "vote of a majority
of the outstanding voting securities"; "interested persons"; and "assignment"
shall have the meanings defined in the Investment Company Act of 1940.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement by having it signed by their duly authorized officers as of the
3rd day of April, 1995.
DELAWARE GROUP TREASURY RESERVES,INC.
for the TREASURY RESERVES INTERMEDIATE SERIES
Attest:/s/Eric E. Miller By:/s/Brian F. Wruble
----------------------- ------------------------------
Eric E. Miller Brian F. Wruble
DELAWARE MANAGEMENT COMPANY, INC.
Attest:/s/Richelle S. Maestro By:/s/Wayne A. Stork
---------------------- ------------------------
Richelle S. Maestro Wayne A. Stork
<PAGE>
DELAWARE GROUP TREASURY RESERVES, INC.
U.S. GOVERNMENT MONEY SERIES
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, made by and between DELAWARE GROUP TREASURY RESERVES, INC., a
Maryland corporation (the "Fund"), for the U.S. GOVERNMENT MONEY SERIES (the
"Series"), and DELAWARE MANAGEMENT COMPANY, INC., a Delaware corporation (the
"Investment Manager").
W I T N E S S E T H:
WHEREAS, the Fund has been organized and operates as
an investment company registered under the Investment Company Act of 1940 and
engages in the business of investing and reinvesting its assets in securities;
and
WHEREAS, the Investment Manager is a registered
Investment Adviser under the Investment Advisers Act of 1940 and engages in the
business of providing investment management services; and
WHEREAS, the indirect parent company of the
Investment Manager completed on the date of this Agreement a merger transaction
which resulted in a change of control of the Investment Manager and an automatic
termination of the previous Investment Management Agreement for the Series dated
as of the 20th day of December, 1990; and
WHEREAS, the Board of Directors of the Fund and
shareholders of the Series have determined to enter into a new Investment
Management Agreement with the Investment Manager to be effective as of the date
hereof.
<PAGE>
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and each of the parties hereto intending to be legally bound, it is
agreed as follows :
1. The Fund hereby employs the Investment Manager to
manage the investment and reinvestment of the Series' assets and to administer
its affairs, subject to the direction of the Board of Directors and officers of
the Fund for the period and on the terms hereinafter set forth. The Investment
Manager hereby accepts such employment and agrees during such period to render
the services and assume the obligations herein set forth for the compensation
herein provided. The Investment Manager shall, for all purposes herein, be
deemed to be an independent contractor, and shall, unless otherwise expressly
provided and authorized, have no authority to act for or represent the Fund in
any way, or in any way be deemed an agent of the Fund. The Investment Manager
shall regularly make decisions as to what securities to purchase and sell on
behalf of the Series, shall effect the purchase and sale of investments in
furtherance of the Series' objectives and policies, and shall furnish the Board
of Directors of the Fund with such information and reports regarding the Series'
investments as the Investment Manager deems appropriate or as the Directors of
the Fund may reasonably request.
2. The Fund shall conduct its own business and affairs and
shall bear the expenses and salaries necessary and incidental thereto including,
but not in limitation of the foregoing, the costs incurred in: the maintenance
of its corporate existence; the maintenance of its own books, records and
procedures; dealing with its own shareholders; the payment of dividends;
transfer of stock, issue, sale, redemption and repurchase of shares; preparation
of share certificates; reports and notices to shareholders; calling and holding
of shareholders' meetings; miscellaneous office expenses; brokerage commissions;
custodian fees; legal and accounting fees; and taxes. The Fund shall bear all of
its own organizational costs. Directors, officers and employees of the
Investment Manager may be
<PAGE>
directors, officers and employees of other funds which have the same Investment
Manager. Directors, officers and employees of the Investment Manager who are
directors, officers and/or employees of the funds shall not receive any
compensation from the funds for acting in such dual capacity.
In the conduct of the respective businesses of the parties hereto and in
the performance of this Agreement, the Fund and the Investment Manager may share
facilities common to each, with appropriate proration of expenses between them.
3. (a) Subject to the primary objective of obtaining the best available
prices and execution, the Investment Manager will place orders for the purchase
and sale of portfolio securities with such broker/dealers who provide
statistical, factual and financial information and services to the Fund, to the
Investment Manager, or to any other fund for which the Investment Manager
provides investment advisory services and with broker/dealers who sell shares of
any of the funds for which the Investment Manager provides investment advisory
services. Broker/dealers who sell shares of the funds of which Delaware
Management Company, Inc. is manager shall only receive orders for the purchase
or sale of portfolio securities to the extent that the placing of such orders is
in compliance with the Rules of the Securities and Exchange Commission and the
National Association of Securities Dealers, Inc.
(b) Notwithstanding the provisions of subparagraph (a) above and subject
to such policies and procedures as may be adopted by the Board of Directors and
officers of the Fund, the Investment Manager may ask the Fund and the Fund may
agree to pay a member of an exchange, broker or dealer an amount of commission
for effecting a securities transaction in excess of the amount of commission
another member of an exchange, broker or dealer would have charged for effecting
that transaction, in such instances where it and the Investment Manager have
determined in good faith
<PAGE>
that such amount of commission was reasonable in relation to the value of the
brokerage and research services provided by such member, broker or dealer,
viewed in terms of either that particular transaction or the Investment
Manager's overall responsibilities with respect to the Fund and to other funds
for which the Investment Manager exercises investment discretion.
4. As compensation for the services to be rendered to the Fund by
the Investment Manager under the provisions of this Agreement, the Fund shall
pay to the Investment Manager from the Series' assets a management fee, payable
monthly and computed on the asset value of the Series as of each day at the
annual rate of one-half of one percent per annum, less the Series' proportionate
part of all fees paid to members of the Board of Directors of the Fund during
the same period based on the number of publicly offered series of the Fund.
If this Agreement is terminated prior to the end of any calendar month, the
management fee shall be prorated for the portion of any month in which this
Agreement is in effect according to the proportion which the number of calendar
days during which the Agreement is in effect bears to the number of calendar
days in the month, and shall be payable within 10 days after the date of
termination.
5. The services to be rendered by the Investment Manager to the Fund
under the provisions of this Agreement are not to be deemed to be exclusive, and
the Investment Manager shall be free to render similar or different services to
others so long as its ability to render the services provided for in this
Agreement shall not be impaired thereby.
6. The Investment Manager, its directors, officers, employees, agents
and shareholders may engage in other businesses, may render investment advisory
services to other investment companies, or to any other corporation,
association, firm or individual, may render underwriting services to the Fund or
to any other investment company, corporation, association, firm
<PAGE>
or individual.
7. In the absence of willful misfeasance, bad faith, gross
negligence, or a reckless disregard of the performance of duties of the
Investment Manager to the Fund, the Investment Manager shall not be subject to
liabilities to the Fund or to any shareholder of the Fund for any action or
omission in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale of any
security, or otherwise.
8. This Agreement shall be executed and become effective as of the
date written below if approved by the vote of a majority of the outstanding
voting securities of the Series. It shall continue in effect for a period of two
years, and may be renewed thereafter only so long as such renewal and
continuance is specifically approved at least annually by the Board of Directors
or by a vote of a majority of the outstanding voting securities of the Series
and only if the terms and the renewal hereof have been approved by the vote of a
majority of the Directors of the Fund, who are not parties hereto or interested
persons of any such party, cast in person at a meeting called for the purpose of
voting on such approval. No amendment to this Agreement shall be effective
unless the terms thereof have been approved by the vote of a majority of the
outstanding voting securities of the Series and by the vote of a majority of
Directors of the Fund who are not parties to the Agreement or interested persons
of any such party, cast in person at a meeting called for the purpose of voting
on such approval. Notwithstanding the foregoing, this Agreement may be
terminated by the Fund at any time, without the payment of a penalty, on sixty
days' written notice to the Investment Manager of the Fund's intention to do so,
pursuant to action by the Board of Directors of the Fund or pursuant to vote of
a majority of the outstanding voting securities of the Series. The Investment
Manager may terminate this Agreement at any time, without the payment of
penalty, on sixty days' written notice to the Fund of its intention to do so.
Upon termination of this Agreement, the obligations of all the
<PAGE>
parties hereunder shall cease and terminate as of the date of such termination,
except for the obligation to respond for a breach of this Agreement committed
prior to such termination, and except for the obligation of the Fund to pay to
the Investment Manager the fee provided in Paragraph 4 hereof, prorated to the
date of termination. This Agreement shall automatically terminate in the event
of its assignment.
9. The Agreement shall extend to and bind the heirs, executors,
administrators and successors of the parties hereto.
10. For the purpose of this Agreement, the terms "vote of a
majority of the outstanding voting securities"; "interested persons"; and
"assignment" shall have the meanings defined in the Investment Company Act of
1940.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement by having it signed by their duly authorized officers as of the 3rd
day of April, 1995.
DELAWARE GROUP TREASURY RESERVES
for the U.S. GOVERNMENT MONEY SERIES
Attest:/s/Eric E. Miller By:/s/Brian F. Wruble
----------------------- -------------------------------
Eric E. Miller Brian F. Wruble
DELAWARE MANAGEMENT COMPANY, INC.
Attest:/s/Richelle S. Maestro By:/s/Wayne A. Stork
----------------------- -------------------------------
Richelle S. Maestro Wayne A. Stork
<PAGE>
[FORM OF DISTRIBUTION AGREEMENT]
[FUND NAME]
[SERIES NAME, IF APPLICABLE]
DISTRIBUTION AGREEMENT
Distribution Agreement (the "Agreement") made as of this 3rd
day of April, 1995 by and between [FUND NAME], a [Maryland
corporation/Pennsylvania common law trust] (the "Fund")[, for the [SERIES NAME]
(the "Series")] and DELAWARE DISTRIBUTORS, L.P. (the "Distributor"), a Delaware
limited partnership.
WITNESSETH
WHEREAS, the Fund is an investment company regulated by
Federal and State regulatory bodies, and
WHEREAS, the Distributor is engaged in the business of
promoting the distribution of the securities of investment companies and, in
connection therewith and acting solely as agent for such investment companies
and not as principal, advertising, promoting, offering and selling their
securities to the public, and
WHEREAS, the Fund and the Distributor (or its predecessor)
were the parties to a contract under which the Distributor acted as the national
distributor of the shares of the [Fund/Series], which contract was amended and
restated as of the [date] and subsequently readopted as of January 3, 1995 (the
"Prior Distribution Agreement"), and
WHEREAS, Delaware Management Holdings, Inc. ("Holdings"),
the indirect parent company of the Distributor, completed on the
date of this Agreement a merger transaction with a newly-formed
subsidiary of Lincoln National Corporation, pursuant to which
Holdings became a wholly-owned subsidiary of Lincoln National
Corporation, and
<PAGE>
WHEREAS, the merger transaction resulted in a change of
control of the Distributor and an automatic termination of the Prior
Distribution Agreement, and
WHEREAS, the Board of [Directors/Trustees] of the Fund has
determined to enter into a new agreement with the Distributor as of the date
hereof, pursuant to which the Distributor shall continue to be the national
distributor of the [Fund's/Series'] ____________ class (now doing business as
___________ A Class and hereinafter referred to as the "Class A Shares"), the
Fund's ___________ B Class (the "Class B Shares") and the Fund's ______________
(Institutional) class (now doing business as _____________ Institutional Class
and hereinafter referred to as the "Institutional Class Shares"), which classes
may do business under these or such other names as the Board of
[Directors/Trustees] may designate from time to time, on the terms and
conditions set forth below,
NOW, THEREFORE, the parties hereto, intending to be
legally bound hereby, agree as follows:
1. The Fund hereby engages the Distributor to promote the distribution of
the [Fund's/Series'] shares and, in connection therewith and as agent
for the Fund and not as principal, to advertise, promote, offer and
sell the [Fund's/Series'] shares to the public.
<PAGE>
2. (a) The Distributor agrees to serve as distributor of the
[Fund's/Series'] shares and, as agent for the Fund and
not as principal, to advertise, promote and use its best
efforts to sell the [Fund's/Series'] shares wherever
their sale is legal, either through dealers or otherwise,
in such places and in such manner, not inconsistent with
the law and the provisions of this Agreement and the
Fund's Registration Statement under the Securities Act of
1933, including the Prospectus contained therein and the
Statement of Additional Information contained therein, as
may be mutually determined by the Fund and the
Distributor from time to time.
(b) For the Institutional Class Shares, the Distributor will bear
all costs of financing any activity which is primarily
intended to result in the sale of that class of shares,
including, but not necessarily limited to, advertising,
compensation of underwriters, dealers and sales personnel, the
printing and mailing of sales literature and distribution of
that class of shares.
(c) For its services as agent for the Class A Shares and Class B
Shares, the Distributor shall be entitled to compensation on
each sale or redemption, as appropriate, of shares of such
classes equal to any front-end or deferred sales charge
described in the Prospectus from time to time and may allow
concessions to dealers in such amounts and on such terms as
are therein set forth.
<PAGE>
(d) For the Class A Shares and Class B Shares, the Fund
shall, in addition, compensate the Distributor for its
services as provided in the Distribution Plan as adopted
on behalf of the Class A Shares and Class B Shares,
respectively, pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (the "Plans"), copies of
which as presently in force are attached hereto as,
respectively, Exhibit "A" and "B".
3. (a) The Fund agrees to make available for sale by the Fund
through the Distributor all or such part of the authorized but
unissued shares [of the Series] as the Distributor shall
require from time to time, and except as provided in Paragraph
3(b) hereof, the Fund will not sell [its/the Series'] shares
other than through the efforts of the Distributor.
(b) The Fund reserves the right from time to time (1) to sell
and issue shares other than for cash; (2) to issue shares
in exchange for substantially all of the assets of any
corporation or trust, or in exchange of shares of any
corporation or trust; (3) to pay stock dividends to its
shareholders, or to pay dividends in cash or stock at the
option of its stockholders, or to sell stock to existing
stockholders to the extent of dividends payable from time
to time in cash, or to split up or combine its
outstanding shares of common stock; (4) to offer shares
for cash to its stockholders as a whole, by the use of
transferable rights or otherwise, and to sell and issue shares
pursuant to such offers; and (5) to act as its own distributor
in any jurisdiction in which the Distributor is not registered
as a broker-dealer.
<PAGE>
4. The Fund warrants the following:
(a) The Fund is, or will be, a properly registered investment
company, and any and all [Series] shares which it will sell
through the Distributor are, or will be, properly registered
with the Securities and Exchange Commission ("SEC").
(b) The provisions of this Agreement do not violate the terms of
any instrument by which the Fund is bound, nor do they violate
any law or regulation of any body having jurisdiction over the
Fund or its property.
5. (a) The Fund will supply to the Distributor a conformed copy
of the Registration Statement, all amendments thereto,
all exhibits, and each Prospectus and Statement of
Additional Information.
(b) The Fund will register or qualify the shares for sale in
such states as is deemed desirable.
(c) The Fund, without expense to the Distributor,
(1) will give and continue to give such financial
statements and other information as may be required
by the SEC or the proper public bodies of the
states in which the [Fund's/Series'] shares may be
qualified;
(2) from time to time, will furnish the Distributor as
soon as reasonably practicable true copies of its
periodic reports to stockholders;
<PAGE>
(3) will promptly advise the Distributor in person or by
telephone or telegraph, and promptly confirm such
advice in writing, (a) when any amendment or
supplement to the Registration Statement becomes
effective, (b) of any request by the SEC for
amendments or supplements to the Registration
Statement or the Prospectus or for additional
information, and (c) of the issuance by the SEC of
any Stop Order suspending the effectiveness of the
Registration Statement, or the initiation of any
proceedings for that purpose;
(4) if at any time the SEC shall issue any Stop Order
suspending the effectiveness of the Registration
Statement, will make every reasonable effort to
obtain the lifting of such order at the earliest
possible moment;
(5) will from time to time, use its best effort to keep a
sufficient supply of [Series] shares authorized, any
increases being subject to approval of the Fund's
shareholders as may be required;
(6) before filing any further amendment to the
Registration Statement or to the Prospectus, will
furnish the Distributor copies of the proposed
amendment and will not, at any time, whether before
or after the effective date of the Registration
Statement, file any amendment to the Registration
Statement or supplement to the Prospectus of which
the Distributor shall not previously have been
advised or to which the Distributor shall reasonably
object (based upon the accuracy or completeness
thereof) in writing;
(7) will continue to make available to its stockholders
(and forward copies to the Distributor) of such
periodic, interim and any other reports as are now,
or as hereafter may be, required by the provisions of
the Investment Company Act of 1940; and
(8) will, for the purpose of computing the offering price
of [its/the Series'] shares, advise the Distributor
within one hour after the close of the New York Stock
Exchange (or as soon as practicable thereafter) on
each business day upon which the New York Stock
Exchange may be open of the net asset value per share
of [its/the Series'] shares of common stock outstand-
ing, determined in accordance with any applicable
provisions of law and the provisions of the Articles
of Incorporation, as amended, of the Fund as of the
close of business on such business day. In the event
that prices are to be calculated more than once
daily, the Fund will promptly advise the Distributor
of the time of each calculation and the price
computed at each such time.
<PAGE>
6. The Distributor agrees to submit to the Fund, prior to its
use, the form of all sales literature proposed to be generally
disseminated by or for the Distributor, all advertisements
proposed to be used by the Distributor, all sales literature
or advertisements prepared by or for the Distributor for such
dissemination or for use by others in connection with the sale
of the [Fund's/Series'] shares, and the form of dealers' sales
contract the Distributor intends to use in connection with
sales of the [Fund's/Series'] shares. The Distributor also
agrees that the Distributor will submit such sales literature
and advertisements to the NASD, SEC or other regulatory agency
as from time to time may be appropriate, considering practices
then current in the industry. The Distributor agrees not to
use such form of dealers' sales contract or to use or to
permit others to use such sales literature or advertisements
without the written consent of the Fund if any regulatory
agency expresses objection thereto or if the Fund delivers to
the Distributor a written objection thereto.
7. The purchase price of each share sold hereunder shall be the offering
price per share mutually agreed upon by the parties hereto, and as
described in the Fund's Prospectus, as amended from time to time,
determined in accordance with any applicable provision of law, the
provisions of its Articles of Incorporation and the Rules of Fair
Practice of the National Association of Securities Dealers, Inc.
<PAGE>
8. The responsibility of the Distributor hereunder shall be
limited to the promotion of sales of [Fund/Series] shares. The
Distributor shall undertake to promote such sales solely as
agent of the Fund, and shall not purchase or sell such shares
as principal. Orders for [Series] shares and payment for such
orders shall be directed to the Fund's agent, Delaware Service
Company, Inc. for acceptance on behalf of the Fund. The
Distributor is not empowered to approve orders for sales of
shares or accept payment for such orders. Sales of [Fund/
Series] shares shall be deemed to be made when and where
accepted by Delaware Service Company, Inc. on behalf of the
Fund.
9. With respect to the apportionment of costs between the Fund
and the Distributor of activities with which both are
concerned, the following will apply:
(a) The Fund and the Distributor will cooperate in preparing
the Registration Statements, the Prospectus, the
Statement of Additional Information, and all amendments,
supplements and replacements thereto. The Fund will pay
all costs incurred in the preparation of the Fund's
Registration Statement, including typesetting, the costs
incurred in printing and mailing Prospectuses and Annual,
Semi-Annual and other financial reports to its own
shareholders and fees and expenses of counsel and
accountants.
<PAGE>
(b) The Distributor will pay the costs incurred in printing
and mailing copies of Prospectuses to prospective
investors.
(c) The Distributor will pay advertising and promotional
expenses, including the costs of literature sent to
prospective investors.
(d) The Fund will pay the costs and fees incurred in
registering or qualifying the shares with the various
states and with the SEC.
(e) The Distributor will pay the costs of any additional copies of
Fund financial and other reports and other Fund literature
supplied to the Distributor by the Fund for sales promotion
purposes.
10. The Distributor may engage in other business, provided such other
business does not interfere with the performance by the Distributor of
its obligations under this Agreement.
11. The Fund agrees to indemnify, defend and hold harmless the
Distributor and each person, if any, who controls the
Distributor within the meaning of Section 15 of the Securities
Act of 1933, from and against any and all losses, damages, or
liabilities to which, jointly or severally, the Distributor or
such controlling person may become subject, insofar as the
losses, damages or liabilities arise out of the performance of
its duties hereunder except that the Fund shall not be liable
<PAGE>
for indemnification of the Distributor or any controlling person
thereof for any liability to the Fund or its security holders to which
they would otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence in the performance of their duties under
this Agreement.
12. Copies of financial reports, Registration Statements and
Prospectuses, as well as demands, notices, requests, consents,
waivers, and other communications in writing which it may be
necessary or desirable for either party to deliver or furnish
to the other will be duly delivered or furnished, if delivered
to such party at its address shown below during regular
business hours, or if sent to that party by registered mail or
by prepaid telegram filed with an office or with an agent of
Western Union or another nationally recognized telegraph
service, in all cases within the time or times herein
prescribed, addressed to the recipient at 1818 Market Street,
Philadelphia, Pennsylvania 19103, or at such other address as
the Fund or the Distributor may designate in writing and
furnish to the other.
13. This Agreement shall not be assigned, as that term is defined in the
Investment Company Act of 1940, by the Distributor and shall terminate
automatically in the event of its attempted assignment by the
Distributor. This Agreement shall not be assigned by the Fund without
the written consent of the Distributor signed by its duly authorized
officers and delivered to the Fund. Except as specifically provided in
<PAGE>
the indemnification provision contained in Paragraph 11 herein, this
Agreement and all conditions and provisions hereof are for the sole and
exclusive benefit of the parties hereto and their legal successors and
no express or implied provision of this Agreement is intended or shall
be construed to give any person other than the parties hereto and their
legal successors any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provisions herein contained.
14. (a) This Agreement shall remain in force for a period of two
years from the date hereof and from year to year
thereafter, but only so long as such continuance is
specifically approved at least annually by the Board of
[Directors/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 [Directors/Trustees] of the
Fund, who are not parties hereto or interested persons of
any such party, cast in person at a meeting called for
the purpose of voting on such approval.
(b) The Distributor may terminate this Agreement on written notice
to the Fund at any time in case the effectiveness of the
Registration Statement shall be suspended, or in case Stop
Order proceedings are initiated by the SEC in respect of the
Registration Statement and such proceedings are not withdrawn
or terminated within thirty days. The Distributor may also
<PAGE>
terminate this Agreement at any time by giving the Fund
written notice of its intention to terminate the Agreement at
the expiration of three months from the date of delivery of
such written notice of intention to the Fund.
(c) The Fund may terminate this Agreement at any time on at
least thirty days prior written notice to the Distributor
(1) if proceedings are commenced by the Distributor or
any of its stockholders for the Distributor's liquidation
or dissolution or the winding up of the Distributor's
affairs; (2) if a receiver or trustee of the Distributor
or any of its property is appointed and such appointment
is not vacated within thirty days thereafter; (3) if, due
to any action by or before any court or any federal or
state commission, regulatory body, or administrative
agency or other governmental body, the Distributor shall
be prevented from selling securities in the United States
or because of any action or conduct on the Distributor's
part, sales of the shares are not qualified for sale. The
Fund may also terminate this Agreement at any time upon
prior written notice to the Distributor of its intention
to so terminate at the expiration of three months from
the date of the delivery of such written notice to the
Distributor.
<PAGE>
15. The validity, interpretation and construction of this
Agreement, and of each part hereof, will be governed by the
laws of the Commonwealth of Pennsylvania.
16. In the event any provision of this Agreement is determined to
be void or unenforceable, such determination shall not affect
the remainder of the Agreement, which shall continue to be in
force.
DELAWARE DISTRIBUTORS, L.P.
By: DELAWARE DISTRIBUTORS, INC.,
----------------------------------------
General Partner
Attest:
By:
- -------------------------------- --------------------------------------
Name: Name:
Title: Title:
[FUND NAME]
[for the SERIES NAME]
Attest:
By:
- -------------------------------- --------------------------------------
Name: Name:
Title: Title:
<PAGE>
[FORM OF 12b-1 PLAN FOR CLASS A SHARES]
Exhibit A
12b-1 PLAN
----------
The following Distribution Plan (the "Plan") has been adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by [FUND NAME]
(the "Fund")[, for the [SERIES NAME] (the "Series")] on behalf of the _________
class [(now doing business as __________ A Class and] hereinafter referred to as
the "Class"), which Fund[, Series] and Class may do business under these or such
other names as the Board of [Directors/Trustees] of the Fund may designate from
time to time. The Plan has been approved by a majority of the Board of
[Directors/Trustees], including a majority of the [Directors/Trustees] who are
not interested persons of the Fund and who have no direct or indirect financial
interest in the operation of the Plan or in any agreements related thereto, cast
in person at a meeting called for the purpose of voting on such Plan. Such
approval by the [Directors/Trustees] included a determination that in the
exercise of reasonable business judgment and in light of their fiduciary duties,
there is a reasonable likelihood that the Plan will benefit the Class and its
shareholders. If the Plan has not yet been approved by a majority of the
outstanding voting securities as required in the Act, the Plan will be presented
to the public shareholders at the next regular annual or special meeting.
<PAGE>
The Fund is a [corporation/common law trust] organized under the laws of
the [State of Maryland/Commonwealth of Pennsylvania], is authorized to issue
different series and classes of securities and is an open-end management
investment company registered under the Act. [Delaware Management Company, Inc.
("DMC")/Delaware International Advisers Ltd. ("DIA Ltd.")] serves as the
[Fund's/Series'] investment adviser and manager pursuant to an Investment
Management Agreement. Delaware Service Company, Inc. serves as the
[Fund's/Series'] shareholder servicing, dividend disbursing and transfer agent.
Delaware Distributors, L.P. ("the Distributor") is the principal underwriter and
national distributor for the [Fund's/Series'] shares, including shares of the
Class, pursuant to the Distribution Agreement between the Distributor and the
[Fund/Series] ("Distribution Agreement").
The Distributor may enter into agreements with other registered
broker-dealers substantially in the form of the Dealer Agreement approved by the
Fund in the implementation of this Plan and of the Distribution Agreement
between it and the [Fund/Series]. The [Fund/Series] may, in addition, enter into
arrangements with persons other than broker-dealers which are not "affiliated
persons" or "interested persons" of the Fund, [DMC/DIA Ltd.] or the Distributor
to provide to the [Fund/Series] services in the [Fund's/Series'] marketing of
the shares of the Class, such arrangements to be reflected by Service
Agreements.
<PAGE>
The Plan provides that:
l. The Fund shall pay a monthly fee not to exceed 0.3% (3/10
of 1%) per annum of the [Fund's/Series'] average daily net assets represented by
shares of the Class (the "Maximum Amount") as may be determined by the Fund's
Board of [Directors/Trustees] from time to time. Such monthly fee shall be
reduced by the aggregate sums paid by the Fund to persons other than
broker-dealers (the "Service Providers") pursuant to Service Agreements referred
to above.
2. (a) The Distributor shall use the monies paid to it
pursuant to paragraph l above to furnish, or cause or encourage others to
furnish, services and incentives in connection with the promotion, offering and
sale of Class shares and, where suitable and appropriate, the retention of Class
shares by shareholders.
(b) The Service Providers shall use the monies paid
respectively to them to reimburse themselves for the actual costs they have
incurred in confirming that their customers have received the Prospectus and
Statement of Additional Information, if applicable, and as a fee for (l)
assisting such customers in maintaining proper records with the Fund (2)
answering questions relating to their respective accounts and (3) aiding in
maintaining the investment of their respective customers in the Class.
3. The Distributor shall report to the Fund at least monthly
on the amount and the use of the monies paid to it under the Plan. The Service
Providers shall inform the Fund monthly and in writing of the amounts each
claims under the Service Agreements and the Plan; both the Distributor and the
<PAGE>
Service Providers shall furnish the Board of [Directors/Trustees] of the Fund
with such other information as the Board may reasonably request in connection
with the payments made under the Plan and the use thereof by the Distributor and
the Service Providers, respectively, in order to enable the Board to make an
informed determination of the amount of the Fund's payments and whether the Plan
should be continued.
4. The officers of the Fund shall furnish to the Board of
[Directors/Trustees] of the Fund, for their review, on a quarterly basis, a
written report of the amounts expended under the Plan and the purposes for which
such expenditures were made.
5. This Plan shall take effect at such time as the Distributor
shall notify the Fund in writing of the commencement of the Plan, which time
shall not be before the first annual or special meeting of the public
shareholders at which the Plan is or was approved by the vote of a majority of
the outstanding voting securities as required in the Act (the "Commencement
Date"); thereafter, the Plan shall continue in effect for a period of more than
one year from the Commencement Date only so long as such continuance is
specifically approved at least annually by a vote of the Board of
[Directors/Trustees] of the Fund, and of the [Directors/Trustees] who are not
interested persons of the Fund and have no direct or indirect financial interest
in the operation of the Plan or in any agreements related to the Plan
("non-interested [Directors/Trustees]"), cast in person at a meeting called for
the purpose of voting on such Plan.
<PAGE>
6. (a) The Plan may be terminated at any time by vote
of a majority of the non-interested [Directors/Trustees] or by vote
of a majority of the outstanding voting securities of the Class.
(b) The Plan may not be amended to increase
materially the amount to be spent for distribution pursuant to paragraph l
thereof without approval by the shareholders of the Class.
7. The Distribution Agreement between the [Fund/Series] and
the Distributor, and the Service Agreements between the [Fund/ Series] and the
Service Providers, shall specifically have a copy of this Plan attached to, and
its terms and provisions incorporated respectively by reference in, such
agreements.
8. All material amendments to this Plan shall be approved by
the non-interested [Directors/Trustees] in the manner described in paragraph 5
above.
9. So long as the Plan is in effect, the selection and
nomination of the Fund's non-interested [Directors/Trustees] shall be committed
to the discretion of such non-interested [Directors/Trustees].
10. The definitions contained in Sections 2(a)(3), 2(a)(4),
2(a)(l9) and 2(a)(42) of the Act shall govern the meaning of "affiliated
person," "assignment," "interested person(s)" and "vote of a majority of the
outstanding voting securities," respectively, for the purposes of this Plan.
This Plan shall take effect on the Commencement Date, as
previously defined.
<PAGE>
[FORM OF 12b-1 PLAN FOR CLASS B SHARES]
Exhibit B
12b-1 Plan
----------
The following Distribution Plan (the "Plan") has been adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by [FUND NAME]
(the "Fund"), [for the [SERIES NAME] (the "Series")] on behalf of the _________
B Class (the "Class"), which Fund[, Series] and Class may do business under
these or such other names as the Board of [Directors/Trustees] of the Fund may
designate from time to time. The Plan has been approved by a majority of the
Board of [Directors/Trustees], including a majority of the [Directors/Trustees]
who are not interested persons of the Fund and who have no direct or indirect
financial interest in the operation of the Plan or in any agreements related
thereto, cast in person at a meeting called for the purpose of voting on such
Plan. Such approval by the [Directors/Trustees] included a determination that in
the exercise of reasonable business judgment and in light of their fiduciary
duties, there is a reasonable likelihood that the Plan will benefit the Class
and its shareholders. The Plan has been approved by a vote of the holders of a
majority of the outstanding voting securities of the Class, as defined in the
Act.
The Fund is a [corporation/common law trust] organized under the laws of
the [State of Maryland/Commonwealth of Pennsylvania], is authorized to issue
different series and classes of securities and is an open-end management
investment company registered under the Act. [Delaware Management Company,
Inc./Delaware International Advisers Ltd.] serves as the [Fund's/Series']
investment adviser and manager pursuant to an Investment Management Agreement.
Delaware Service Company, Inc. serves as the [Fund's/Series'] shareholder
servicing, dividend disbursing and transfer agent. Delaware Distributors, L.P.
(the "Distributor") is the principal underwriter and national distributor for
the [Fund's/Series'] shares, including shares of the Class, pursuant to the
Distribution Agreement between the Distributor and the [Fund/Series]
("Distribution Agreement").
<PAGE>
The Plan provides that:
1. (a) The Fund shall pay to the Distributor a monthly fee not
to exceed 0.75% (3/4 of 1%) per annum of the [Fund's/ Series'] average daily net
assets represented by shares of the Class as may be determined by the Fund's
Board of [Directors/Trustees] from time to time.
(b) In addition to the amounts described in (a) above, the
Fund shall pay (i) to the Distributor for payment to dealers or others, or (ii)
directly to others, an amount not to exceed 0.25% (1/4 of 1%) per annum of the
[Fund's/Series'] average daily net assets represented by shares of the Class, as
a service fee pursuant to dealer or servicing agreements, the forms of which
have been approved from time to time by the Fund's Board of
[Directors/Trustees].
2. (a) The Distributor shall use the monies paid to it
pursuant to paragraph 1(a) above to assist in the distribution and
promotion of shares of the Class. Payments made to the Distributor under the
Plan may be used for, among other things, preparation and distribution of
advertisements, sales literature and prospectuses and reports used for sales
purposes, as well as compensation related to sales and marketing personnel, and
holding special promotions. In addition, such fees may be used to pay for
advancing the commission costs to dealers with respect to the sale of Class
shares.
<PAGE>
(b) The monies to be paid pursuant to paragraph 1(b) above
shall be used to pay dealers or others for, among other things, furnishing
personal services and maintaining shareholder accounts, which services include
confirming that customers have received the Prospectus and Statement of
Additional Information, if applicable; assisting such customers in maintaining
proper records with the Fund; answering questions relating to their respective
accounts; and aiding in maintaining the investment of their respective customers
in the Class.
3. The Distributor shall report to the Fund at least monthly
on the amount and the use of the monies paid to it under paragraph 1(a) above.
In addition, the Distributor and others shall inform the Fund monthly and in
writing of the amounts paid under paragraph 1(b) above; both the Distributor and
any others receiving fees under the Plan shall furnish the Board of
[Directors/Trustees] of the Fund with such other information as the Board may
reasonably request in connection with the payments made under the Plan and the
use thereof by the Distributor and others in order to enable the Board to make
an informed determination of the amount of the Fund's payments and whether the
Plan should be continued.
<PAGE>
4. The officers of the Fund shall furnish to the Board of
[Directors/Trustees] of the Fund, for their review, on a quarterly basis, a
written report of the amounts expended under the Plan and the purposes for which
such expenditures were made.
5. This Plan shall take effect at such time as the Distributor
shall notify the Fund of the commencement of the Plan (the "Commencement Date");
thereafter, the Plan shall continue in effect for a period of more than one year
from the Commencement Date only so long as such continuance is specifically
approved at least annually by a vote of the Board of [Directors/Trustees] of the
Fund, and of the [Directors/Trustees] who are not interested persons of the Fund
and have no direct or indirect financial interest in the operation of the Plan
or in any agreements related to the Plan ("non-interested
[Directors/Trustees]"), cast in person at a meeting called for the purpose of
voting on such Plan.
6. (a) The Plan may be terminated at any time by vote of a
majority of the non-interested [Directors/Trustees] or by vote of a majority of
the outstanding voting securities of the Class.
(b) The Plan may not be amended to increase materially the
amount to be spent for distribution pursuant to paragraph 1 thereof without
approval by the shareholders of the Class.
<PAGE>
7. The Distribution Agreement between the [Fund/Series] and
the Distributor, and any dealers or servicing agreements between the Distributor
and brokers or others or between the [Fund/Series] and others receiving a
servicing fee, shall specifically have a copy of this Plan attached to, and its
terms and provisions incorporated respectively by reference in, such agreements.
8. All material amendments to this Plan shall be approved by
the non-interested [Directors/Trustees] in the manner described in paragraph 5
above.
9. So long as the Plan is in effect, the selection and
nomination of the Fund's non-interested [Directors/Trustees] shall be committed
to the discretion of such non-interested [Directors/Trustees].
10. The definitions contained in Sections 2(a)(3), 2(a)(4),
2(a)(19) and 2(a)(42) of the Act shall govern the meaning of "affiliated
person," "assignment," "interested person(s)" and "vote of a majority of the
outstanding voting securities," respectively, for the purposes of this Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
<PAGE>
[Form of Amendment to Distribution Agreement]
[FUND NAME]
[SERIES NAME, IF APPLICABLE]
AMENDMENT NO. 1 TO DISTRIBUTION AGREEMENT
This Amendment No. 1 to Distribution Agreement (this "Agreement") is
made as of the_____day of___________, 1995, by and between____________(the
"Fund"),[for the____________(the "Series"),] and DELAWARE DISTRIBUTORS, L.P.
(the "Distributor").
WITNESSETH
WHEREAS, the Fund[, for the Series,] and the Distributor are parties to
that certain Distribution Agreement made as of the 3rd day of April, 1995 (the
"Distribution Agreement"); and
WHEREAS, the Board of Directors of the Fund has established [CLASS C
SHARES NAME] (the "Class C Shares") as an additional class of [the Series]
[shares of the Fund] and the Fund and the Distributor desire to amend the
Distribution Agreement to provide that the Distributor shall act as the national
distributor of the Class C Shares pursuant thereto;
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. The Class C Shares are hereby included among the shares to which the
Distribution Agreement relates and the Distributor shall act as distributor for
the Class C Shares pursuant to and in accordance with the Distribution
Agreement, as amended hereby.
2. Hereafter, each reference to "Class A Shares and Class B Shares" in
Section 2 (c) and (d) of the Distribution Agreement [compensation of the
Distributor] shall be deemed to include the Class C Shares, provided that the
<PAGE>
Distribution Plan adopted pursuant to Rule 12b-1 under the Investment Company
Act of 1940 for the Class C Shares and presently in force is attached hereto as
Exhibit "A."
DELAWARE DISTRIBUTORS, L.P.
By: Delaware Distributors, Inc.,
General Partner
ATTEST:
By:
- ------------------------------ --------------------------------
Name: Name:
Title: Title:
[FUND NAME][,for the [SERIES NAME]]
ATTEST:
By:
- ------------------------------ ---------------------------------
Name: Name:
Title: Title:
<PAGE>
EXHIBIT A
[FORM OF 12b-1 PLAN
C CLASS SHARES]
DISTRIBUTION PLAN
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by the Fund
(the "Fund"), on behalf of the Fund's C Class (the "Class"). The Plan has been
approved by a majority of the Board of Directors, including a majority of the
Directors who are not interested persons of the Fund and who have no direct or
indirect financial interest in the operation of the Plan or in any agreements
related thereto, cast in person at a meeting called for the purpose of voting on
such Plan. Such approval by the Directors included a determination that in the
exercise of reasonable business judgment and in light of their fiduciary duties,
there is a reasonable likelihood that the Plan will benefit the Fund and its
shareholders. The Plan has been approved by a vote of the holders of a majority
of the outstanding voting securities of the Class, as defined in the Act.
The Fund is a [corporation/business trust] organized under the laws of
the [State of Maryland/Commonwealth of Pennsylvania], is authorized to issue
different series and classes of securities and is an open-end management
investment company registered under the Act. [Delaware Management Company, Inc.
A-1
<PAGE>
("DMC") or Delaware International Advisers Ltd. ("Delaware International"), an
affiliate of DMC,] serves as the Fund's investment adviser and manager pursuant
to an Investment Management Agreement. Delaware Service Company, Inc. serves as
the Fund's shareholder servicing, dividend disbursing and transfer agent.
Delaware Distributors, L.P. (the "Distributor") is the principal underwriter and
national distributor for the Fund's shares, including shares of the Class,
pursuant to the Distribution Agreement between the Distributor and the Fund
("Distribution Agreement").
The Plan provides that:
1.(a) The Fund shall pay to the Distributor a monthly fee not to exceed
0.75% (3/4 of 1%) per annum of the Fund's average daily net assets represented
by shares of the Class as may be determined by the Fund's Board of Directors
from time to time.
(b) In addition to the amounts described in paragraph 1(a) above, the
Fund shall pay: (i) to the Distributor for payment to dealers or others; or (ii)
directly to others, an amount not to exceed 0.25% (1/4 of 1%) per annum of the
Fund's average daily net assets represented by shares of the Class, as a service
fee pursuant to dealer or servicing agreements.
2.(a) The Distributor shall use the monies paid to it pursuant to
paragraph 1(a) above to assist in the distribution and promotion of shares of
the Class. Payments made to the Distributor under the Plan may be used for,
among other things, preparation and distribution of advertisements, sales
literature and prospectuses and reports used for sales purposes, as well as
compensation related to sales and marketing personnel, and holding special
A-2
<PAGE>
promotions. In addition, such fees may be used to pay for advancing the
commission costs to dealers with respect to the sale of Class shares.
(b) The monies to be paid pursuant to paragraph 1(b) above shall be
used to pay dealers or others for, among other things, furnishing personal
services and maintaining shareholder accounts, which services include confirming
that customers have received the Prospectus and Statement of Additional
Information, if applicable; assisting such customers in maintaining proper
records with the Fund; answering questions relating to their respective
accounts; and aiding in maintaining the investment of their respective customers
in the Fund.
3. The Distributor shall report to the Fund at least monthly on the
amount and the use of the monies paid to it under paragraph 1(a) above. In
addition, the Distributor and others shall inform the Fund monthly and in
writing of the amounts paid under paragraph 1(b) above; both the Distributor and
any others receiving fees under the Plan shall furnish the Board of Directors of
the Fund with such other information as the Board may reasonably request in
connection with the payments made under the Plan and the use thereof by the
Distributor and others in order to enable the Board to make an informed
determination of the amount of the Fund's payments and whether the Plan should
be continued.
A-3
<PAGE>
4. The officers of the Fund shall furnish to the Board of Directors of
the Fund, and the Directors shall review, on a quarterly basis, a written report
of the amounts expended under the Plan and the purposes for which such
expenditures were made.
5. This Plan shall take effect at such time as the Distributor shall
notify the fund in writing of the commencement of the Plan (the "Commencement
Date"); thereafter, the Plan shall continue in effect for a period of more than
one year from the Commencement Date only so long as such continuance is
specifically approved at least annually by a vote of the Board of Directors of
the Fund, and of the Directors who are not interested persons of the Fund and
have no direct or indirect financial interest in the operation of the Plan or in
any agreements related to the Plan ("non-interested Directors"), cast in person
at a meeting called for the purpose of voting on such Plan.
6.(a) The Plan may be terminated at any time by vote of a majority of
the non-interested Directors or by vote of a majority of the outstanding voting
securities of the Class.
(b) The Plan may not be amended to increase materially the amount to
be spent for distribution pursuant to paragraph 1 thereof without approval by
the shareholders of the Class.
7. All material amendments to this Plan shall be approved by the
non-interested Directors in the manner described in paragraph 5 above.
A-4
<PAGE>
8. So long as the Plan is in effect, the selection and nomination of
the Fund's non-interested Directors shall be committed to the discretion of such
non-interested Directors.
9. The definitions contained in Sections 2(a)(3), 2(a)(19) and
2(a)(42) of the Act shall govern the meaning of "affiliated person,"
"interested person(s)" and "vote of a majority of the outstanding voting
securities," respectively, for the purposes of this Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
November 29, 1995
A-5
[FORM OF DISTRIBUTION AGREEMENT
FOR MONEY MARKET FUNDS]
[FUND NAME]
[SERIES NAME, IF APPLICABLE]
DISTRIBUTION AGREEMENT
Distribution Agreement (the "Agreement") made as of this 3rd
day of April, 1995 by and between [FUND NAME], a Maryland corporation (the
"Fund"), [for the [SERIES NAME] (the "Series")] and DELAWARE DISTRIBUTORS, L.P.
(the "Distributor"), a Delaware limited partnership.
WITNESSETH
WHEREAS, the Fund is an investment company regulated by
Federal and State regulatory bodies, and
WHEREAS, the Distributor is engaged in the business of
promoting the distribution of the securities of investment companies and, in
connection therewith and acting solely as agent for such investment companies
and not as principal, advertising, promoting, offering and selling their
securities to the public, and
WHEREAS, the Fund and the Distributor (or its predecessor)
were the parties to a contract under which the Distributor acted as the national
distributor of the shares of the [Fund/Series], which contract was amended and
restated as of the [date] and subsequently readopted as of January 3, 1995 (the
"Prior Distribution Agreement"), and
WHEREAS, Delaware Management Holdings, Inc. ("Holdings"),
the indirect parent company of the Distributor, completed on the
date of this Agreement a merger transaction with a newly-formed
subsidiary of Lincoln National Corporation, pursuant to which Holdings became
a wholly-owned subsidiary of Lincoln National Corporation, and
<PAGE>
WHEREAS, the merger transaction resulted in a change of
control of the Distributor and an automatic termination of the Prior
Distribution Agreement, and
WHEREAS, the Board of Directors of the Fund has determined to
enter into a new agreement with the Distributor as of the date hereof, pursuant
to which the Distributor shall continue to be the national distributor of the
[Fund's/Series'] ____________ class (now doing business as ___________ A Class
and hereinafter referred to as the "Class A Shares")[, the Fund's ___________ B
Class (the "Class B Shares")] and the Fund's ______________ Class (now doing
business as _____________ Consultant Class and hereinafter referred to as the
"Consultant Class Shares"), which classes may do business under these or such
other names as the Board of Directors may designate from time to time, on the
terms and conditions set forth below,
NOW, THEREFORE, the parties hereto, intending to be
legally bound hereby, agree as follows:
1. The Fund hereby engages the Distributor to promote the distribution of
the [Fund's/Series'] shares and, in connection therewith and as agent
for the Fund and not as principal, to advertise, promote, offer and
sell the [Series'] shares to the public.
-2-
<PAGE>
2. (a) The Distributor agrees to serve as distributor of the
[Fund's/Series'] shares and, as agent for the Fund and
not as principal, to advertise, promote and use its best
efforts to sell the [Fund's/Series'] shares wherever
their sale is legal, either through dealers or otherwise,
in such places and in such manner, not inconsistent with
the law and the provisions of this Agreement and the
Fund's Registration Statement under the Securities Act of
1933, including the Prospectus contained therein and the
Statement of Additional Information contained therein, as
may be mutually determined by the Fund and the
Distributor from time to time.
(b) For the Class A Shares, the Distributor will bear all costs of
financing any activity which is primarily intended to result
in the sale of that class of shares, including, but not
necessarily limited to, advertising, compensation of
underwriters, dealers and sales personnel, the printing and
mailing of sales literature and distribution of that class of
shares.
[(c) For its services as agent for the Class B Shares, the
Distributor shall be entitled to compensation on each
redemption of shares equal to any deferred sales charge
described in the Prospectus for the Class B Shares from time
to time.]
[(d)] For the [Class B Shares and the] Consultant Class Shares,
the Fund shall[, in addition,] compensate the Distributor
-3-
<PAGE>
for its services as provided in the Distribution Plan as
adopted on behalf of the [Class B Shares and the] Consultant
Class Shares[, respectively,] pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (the "Plans"), [a] cop[y/ies]
of which as presently in force [is/are] attached hereto as[,
respectively,] Exhibit "A" [and "B"].
3. (a) The Fund agrees to make available for sale by the Fund
through the Distributor all or such part of the authorized but
unissued shares [of the Series] as the Distributor shall
require from time to time, and except as provided in Paragraph
3(b) hereof, the Fund will not sell [the Series'] shares other
than through the efforts of the Distributor.
(b) The Fund reserves the right from time to time (1) to sell
and issue shares other than for cash; (2) to issue shares
in exchange for substantially all of the assets of any
corporation or trust, or in exchange of shares of any
corporation or trust; (3) to pay stock dividends to its
shareholders, or to pay dividends in cash or stock at the
option of its stockholders, or to sell stock to existing
stockholders to the extent of dividends payable from time
to time in cash, or to split up or combine its
outstanding shares of common stock; (4) to offer shares
for cash to its stockholders as a whole, by the use of
transferable rights or otherwise, and to sell and issue
-4-
<PAGE>
shares pursuant to such offers; and (5) to act as its own
distributor in any jurisdiction in which the Distributor is
not registered as a broker-dealer.
4. The Fund warrants the following:
(a) The Fund is, or will be, a properly registered investment
company, and any and all [Series] shares which it will sell
through the Distributor are, or will be, properly registered
with the Securities and Exchange Commission ("SEC").
(b) The provisions of this Agreement do not violate the terms of
any instrument by which the Fund is bound, nor do they violate
any law or regulation of any body having jurisdiction over the
Fund or its property.
5. (a) The Fund will supply to the Distributor a conformed copy
of the Registration Statement, all amendments thereto,
all exhibits, and each Prospectus and Statement of
Additional Information.
(b) The Fund will register or qualify the shares for sale in
such states as is deemed desirable.
(c) The Fund, without expense to the Distributor,
(1) will give and continue to give such financial
statements and other information as may be required
by the SEC or the proper public bodies of the
states in which the [Series'] shares may be
qualified;
(2) from time to time, will furnish the Distributor as
soon as reasonably practicable true copies of its
periodic reports to stockholders;
(3) will promptly advise the Distributor in person or
by telephone or telegraph, and promptly confirm
-5-
<PAGE>
such advice in writing, (a) when any amendment or
supplement to the Registration Statement becomes
effective, (b) of any request by the SEC for
amendments or supplements to the Registration
Statement or the Prospectus or for additional
information, and (c) of the issuance by the SEC of
any Stop Order suspending the effectiveness of the
Registration Statement, or the initiation of any
proceedings for that purpose;
(4) if at any time the SEC shall issue any Stop Order
suspending the effectiveness of the Registration
Statement, will make every reasonable effort to
obtain the lifting of such order at the earliest
possible moment;
(5) will from time to time, use its best effort to keep a
sufficient supply of [Series] shares authorized, any
increases being subject to approval of the Fund's
shareholders as may be required;
(6) before filing any further amendment to the
Registration Statement or to the Prospectus, will
furnish the Distributor copies of the proposed
amendment and will not, at any time, whether before
or after the effective date of the Registration
Statement, file any amendment to the Registration
Statement or supplement to the Prospectus of which
the Distributor shall not previously have been
advised or to which the Distributor shall reasonably
object (based upon the accuracy or completeness
thereof) in writing;
(7) will continue to make available to its stockholders
(and forward copies to the Distributor) of such
periodic, interim and any other reports as are now,
or as hereafter may be, required by the provisions of
the Investment Company Act of 1940; and
(8) will, for the purpose of computing the offering price
of [its/the Series'] shares, advise the Distributor
within one hour after the close of the New York Stock
Exchange (or as soon as practicable thereafter) on
each business day upon which the New York Stock
Exchange may be open of the net asset value per share
of the [Series'] shares of common stock outstanding,
determined in accordance with any applicable
provisions of law and the provisions of the Articles
of Incorporation, as amended, of the Fund as of the
close of business on such business day. In the event
that prices are to be calculated more than once
-6-
<PAGE>
daily, the Fund will promptly advise the Distributor
of the time of each calculation and the price
computed at each such time.
6. The Distributor agrees to submit to the Fund, prior to its
use, the form of all sales literature proposed to be generally
disseminated by or for the Distributor, all advertisements
proposed to be used by the Distributor, all sales literature
or advertisements prepared by or for the Distributor for such
dissemination or for use by others in connection with the sale
of the [Series'] shares, and the form of dealers' sales
contract the Distributor intends to use in connection with
sales of the [Fund's/Series'] shares. The Distributor also
agrees that the Distributor will submit such sales literature
and advertisements to the NASD, SEC or other regulatory agency
as from time to time may be appropriate, considering practices
then current in the industry. The Distributor agrees not to
use such form of dealers' sales contract or to use or to
permit others to use such sales literature or advertisements
without the written consent of the Fund if any regulatory
agency expresses objection thereto or if the Fund delivers to
the Distributor a written objection thereto.
7. The purchase price of each share sold hereunder shall be the offering
price per share mutually agreed upon by the parties hereto, and as
described in the Fund's Prospectus, as amended from time to time,
determined in accordance with any applicable provision of law, the
-7-
<PAGE>
provisions of its Articles of Incorporation and the Rules of Fair
Practice of the National Association of Securities Dealers, Inc.
8. The responsibility of the Distributor hereunder shall be
limited to the promotion of sales of [Series] shares. The
Distributor shall undertake to promote such sales solely as
agent of the Fund, and shall not purchase or sell such shares
as principal. Orders for [Series] shares and payment for such
orders shall be directed to the Fund's agent, Delaware Service
Company, Inc. for acceptance on behalf of the Fund. The
Distributor is not empowered to approve orders for sales of
shares or accept payment for such orders. Sales of [Fund/
Series] shares shall be deemed to be made when and where
accepted by Delaware Service Company, Inc. on behalf of the
Fund.
9. With respect to the apportionment of costs between the Fund
and the Distributor of activities with which both are concerned, the
following will apply:
(a) The Fund and the Distributor will cooperate in preparing
the Registration Statements, the Prospectus, the
Statement of Additional Information, and all amendments,
supplements and replacements thereto. The Fund will pay
all costs incurred in the preparation of the Fund's
Registration Statement, including typesetting, the costs
incurred in printing and mailing Prospectuses and Annual,
Semi-Annual and other financial reports to its own
-8-
<PAGE>
shareholders and fees and expenses of counsel and
accountants.
(b) The Distributor will pay the costs incurred in printing
and mailing copies of Prospectuses to prospective
investors.
(c) The Distributor will pay advertising and promotional
expenses, including the costs of literature sent to
prospective investors.
(d) The Fund will pay the costs and fees incurred in
registering or qualifying the shares with the various
states and with the SEC.
(e) The Distributor will pay the costs of any additional copies of
Fund financial and other reports and other Fund literature
supplied to the Distributor by the Fund for sales promotion
purposes.
10. The Distributor may engage in other business, provided such other
business does not interfere with the performance by the Distributor of
its obligations under this Agreement.
11. The Fund agrees to indemnify, defend and hold harmless [from
the assets of the Series] the Distributor and each person, if
any, who controls the Distributor within the meaning of
Section 15 of the Securities Act of 1933, from and against any
and all losses, damages, or liabilities to which, jointly or
severally, the Distributor or such controlling person may
become subject, insofar as the losses, damages or liabilities
arise out of the performance of its duties hereunder except
-9-
<PAGE>
that the Fund shall not be liable for indemnification of the
Distributor or any controlling person thereof for any liability to the
Fund or its security holders to which they would otherwise be subject
by reason of willful misfeasance, bad faith, or gross negligence in the
performance of their duties under this Agreement.
12. Copies of financial reports, Registration Statements and
Prospectuses, as well as demands, notices, requests, consents,
waivers, and other communications in writing which it may be
necessary or desirable for either party to deliver or furnish
to the other will be duly delivered or furnished, if delivered
to such party at its address shown below during regular
business hours, or if sent to that party by registered mail or
by prepaid telegram filed with an office or with an agent of
Western Union or another nationally recognized telegraph
service, in all cases within the time or times herein
prescribed, addressed to the recipient at 1818 Market Street,
Philadelphia, Pennsylvania 19103, or at such other address as
the Fund or the Distributor may designate in writing and
furnish to the other.
13. This Agreement shall not be assigned, as that term is defined in the
Investment Company Act of 1940, by the Distributor and shall terminate
automatically in the event of its attempted assignment by the
Distributor. This Agreement shall not be assigned by the Fund without
the written consent of the Distributor signed by its duly authorized
officers and delivered to the Fund. Except as specifically provided
-10-
<PAGE>
in the indemnification provision contained in Paragraph 11 herein, this
Agreement and all conditions and provisions hereof are for the sole and
exclusive benefit of the parties hereto and their legal successors and
no express or implied provision of this Agreement is intended or shall
be construed to give any person other than the parties hereto and their
legal successors any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provisions herein contained.
14. (a) This Agreement shall remain in force for a period of two
years from the date hereof and from year to year
thereafter, but only so long as such continuance is
specifically approved at least annually by the Board of
Directors or by vote of a majority of the outstanding
voting securities of the Fund and only if the terms and
the renewal thereof have been approved by the vote of a
majority of the Directors of the Fund, who are not
parties hereto or interested persons of any such party,
cast in person at a meeting called for the purpose of
voting on such approval.
(b) The Distributor may terminate this Agreement on written notice
to the Fund at any time in case the effectiveness of the
Registration Statement shall be suspended, or in case Stop
Order proceedings are initiated by the SEC in respect of the
Registration Statement and such proceedings are not withdrawn
-11-
<PAGE>
or terminated within thirty days. The Distributor may also
terminate this Agreement at any time by giving the Fund
written notice of its intention to terminate the Agreement at
the expiration of three months from the date of delivery of
such written notice of intention to the Fund.
(c) The Fund may terminate this Agreement at any time on at
least thirty days prior written notice to the Distributor
(1) if proceedings are commenced by the Distributor or
any of its stockholders for the Distributor's liquidation
or dissolution or the winding up of the Distributor's
affairs; (2) if a receiver or trustee of the Distributor
or any of its property is appointed and such appointment
is not vacated within thirty days thereafter; (3) if, due
to any action by or before any court or any federal or
state commission, regulatory body, or administrative
agency or other governmental body, the Distributor shall
be prevented from selling securities in the United States
or because of any action or conduct on the Distributor's
part, sales of the shares are not qualified for sale. The
Fund may also terminate this Agreement at any time upon
prior written notice to the Distributor of its intention
to so terminate at the expiration of three months from
the date of the delivery of such written notice to the
Distributor.
-12-
<PAGE>
15. The validity, interpretation and construction of this
Agreement, and of each part hereof, will be governed by the
laws of the Commonwealth of Pennsylvania.
16. In the event any provision of this Agreement is determined to be void
or unenforceable, such determination shall not affect the remainder of
the Agreement, which shall continue to be in force.
DELAWARE DISTRIBUTORS, L.P.
By: DELAWARE DISTRIBUTORS, INC.,
General Partner
Attest:
By:
- ------------------------------- -------------------------------------
Name: Name:
Title: Title:
[FUND NAME]
[for the SERIES NAME]
Attest:
By:
- ------------------------------- ------------------------------------
Name: Name:
Title: Title:
-13-
<PAGE>
[FORM OF 12b-1 PLAN FOR CLASS B SHARES, IF APPLICABLE]
Exhibit A
12b-1 Plan
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by [FUND
NAME] (the "Fund"), [for the [SERIES NAME] (the "Series")] on behalf of the
_________ B Class (the "Class"), which Fund[, Series] and Class may do business
under these or such other names as the Board of Directors of the Fund may
designate from time to time. The Plan has been approved by a majority of the
Board of Directors, including a majority of the Directors who are not interested
persons of the Fund and who have no direct or indirect financial interest in the
operation of the Plan or in any agreements related thereto, cast in person at a
meeting called for the purpose of voting on such Plan. Such approval by the
Directors included a determination that in the exercise of reasonable business
judgment and in light of their fiduciary duties, there is a reasonable
likelihood that the Plan will benefit the Class and its shareholders. The Plan
has been approved by a vote of the holders of a majority of the outstanding
voting securities of the Class, as defined in the Act.
The Fund is a corporation organized under the laws of the State of
Maryland, is authorized to issue different series and classes of securities and
is an open-end management investment company registered under the Act. Delaware
Management Company, Inc. serves as the [Fund's/Series'] investment adviser and
A-1
<PAGE>
manager pursuant to an Investment Management Agreement. Delaware Service
Company, Inc. serves as the [Fund's/Series'] shareholder servicing, dividend
disbursing and transfer agent. Delaware Distributors, L.P. (the "Distributor")
is the principal underwriter and national distributor for the [Fund's/Series']
shares, including shares of the Class, pursuant to the Distribution Agreement
between the Distributor and the [Fund/Series] ("Distribution Agreement").
The Plan provides that:
1. (a) The Fund shall pay to the Distributor a monthly fee not
to exceed 0.75% (3/4 of 1%) per annum of the [Fund's/ Series'] average daily net
assets represented by shares of the Class as may be determined by the Fund's
Board of Directors from time to time.
(b) In addition to the amounts described in (a) above, the
Fund shall pay (i) to the Distributor for payment to dealers or others, or (ii)
directly to others, an amount not to exceed 0.25% (1/4 of 1%) per annum of the
[Fund's/Series'] average daily net assets represented by shares of the Class, as
a service fee pursuant to dealer or servicing agreements, the forms of which
have been approved from time to time by the Fund's Board of Directors.
2. (a) The Distributor shall use the monies paid to it
pursuant to paragraph 1(a) above to assist in the distribution and
promotion of shares of the Class. Payments made to the Distributor
under the Plan may be used for, among other things, preparation and
A-2
<PAGE>
distribution of advertisements, sales literature and prospectuses and reports
used for sales purposes, as well as compensation related to sales and marketing
personnel, and holding special promotions. In addition, such fees may be used to
pay for advancing the commission costs to dealers with respect to the sale of
Class shares.
(b) The monies to be paid pursuant to paragraph 1(b) above
shall be used to pay dealers or others for, among other things, furnishing
personal services and maintaining shareholder accounts, which services include
confirming that customers have received the Prospectus and Statement of
Additional Information, if applicable; assisting such customers in maintaining
proper records with the Fund; answering questions relating to their respective
accounts; and aiding in maintaining the investment of their respective customers
in the Class.
3. The Distributor shall report to the Fund at least monthly
on the amount and the use of the monies paid to it under paragraph 1(a) above.
In addition, the Distributor and others shall inform the Fund monthly and in
writing of the amounts paid under paragraph 1(b) above; both the Distributor and
any others receiving fees under the Plan shall furnish the Board of Directors of
the Fund with such other information as the Board may reasonably request in
connection with the payments made under the Plan and the use thereof by the
Distributor and others in order to enable the Board to make an informed
determination of the amount of the Fund's payments and whether the Plan should
be continued.
A-3
<PAGE>
4. The officers of the Fund shall furnish to the Board of
Directors of the Fund, for their review, on a quarterly basis, a written report
of the amounts expended under the Plan and the purposes for which such
expenditures were made.
5. This Plan shall take effect at such time as the Distributor
shall notify the Fund of the commencement of the Plan (the "Commencement Date");
thereafter, the Plan shall continue in effect for a period of more than one year
from the Commencement Date only so long as such continuance is specifically
approved at least annually by a vote of the Board of Directors of the Fund, and
of the Directors who are not interested persons of the Fund and have no direct
or indirect financial interest in the operation of the Plan or in any agreements
related to the Plan ("non-interested Directors"), cast in person at a meeting
called for the purpose of voting on such Plan.
6. (a) The Plan may be terminated at any time by vote
of a majority of the non-interested Directors or by vote of a
majority of the outstanding voting securities of the Class.
(b) The Plan may not be amended to increase materially the
amount to be spent for distribution pursuant to paragraph 1 thereof without
approval by the shareholders of the Class.
7. The Distribution Agreement between the [Fund/Series]
and the Distributor, and any dealers or servicing agreements
between the Distributor and brokers or others or between the [Fund/
Series] and others receiving a servicing fee, shall specifically
A-4
<PAGE>
have a copy of this Plan attached to, and its terms and provisions incorporated
respectively by reference in, such agreements.
8. All material amendments to this Plan shall be approved by
the non-interested Directors in the manner described in paragraph 5 above.
9. So long as the Plan is in effect, the selection and
nomination of the Fund's non-interested Directors shall be committed to the
discretion of such non-interested Directors.
10. The definitions contained in Sections 2(a)(3), 2(a)(4),
2(a)(19) and 2(a)(42) of the Act shall govern the meaning of "affiliated
person," "assignment," "interested person(s)" and "vote of a majority of the
outstanding voting securities," respectively, for the purposes of this Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
A-5
<PAGE>
[FORM OF 12b-1 PLAN FOR CONSULTANT CLASS SHARES]
Exhibit [A/B]
12b-1 PLAN
The following Distribution Plan (the "Plan") has been adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by [FUND NAME]
(the "Fund")[, for the [SERIES NAME] (the "Series")] on behalf of the _________
class [(now doing business as __________ Consultant Class and] hereinafter
referred to as the "Class"), which Fund[, Series] and Class may do business
under these or such other names as the Board of Directors of the Fund may
designate from time to time. The Plan has been approved by a majority of the
Board of Directors, including a majority of the Directors who are not interested
persons of the Fund and who have no direct or indirect financial interest in the
operation of the Plan or in any agreements related thereto, cast in person at a
meeting called for the purpose of voting on such Plan. Such approval by the
Directors included a determination that in the exercise of reasonable business
judgment and in light of their fiduciary duties, there is a reasonable
likelihood that the Plan will benefit the Class and its shareholders. If the
Plan has not yet been approved by a majority of the outstanding voting
securities as required in the Act, the Plan will be presented to the public
shareholders at the next regular annual or special meeting.
[A/B]-1
<PAGE>
The Fund is a corporation organized under the laws of the
State of Maryland, is authorized to issue different series and
classes of securities and is an open-end management investment
company registered under the Act. Delaware Management Company,
Inc. ("DMC")serves as the [Fund's/Series'] investment adviser and
manager pursuant to an Investment Management Agreement. Delaware
Service Company, Inc. serves as the [Fund's/Series'] shareholder
servicing, dividend disbursing and transfer agent. Delaware
Distributors, L.P. ("the Distributor") is the principal underwriter
and national distributor for the [Fund's/Series'] shares,
including shares of the Class, pursuant to the Distribution
Agreement between the Distributor and the [Fund/Series]
("Distribution Agreement").
The Distributor may enter into agreements with other registered
broker-dealers substantially in the form of the Dealer Agreement approved by the
Fund in the implementation of this Plan and of the Distribution Agreement
between it and the [Fund/Series]. The [Fund/Series] may, in addition, enter into
arrangements with persons other than broker-dealers which are not "affiliated
persons" or "interested persons" of the Fund, DMC or the Distributor to provide
to the [Fund/Series] services in the [Fund's/Series'] marketing of the shares of
the Class, such arrangements to be reflected by Service Agreements.
The Plan provides that:
l. The Fund shall pay a monthly fee not to exceed 0.3%
(3/10 of 1%) per annum of the [Fund's/Series'] average daily net
[A/B]-2
<PAGE>
assets represented by shares of the Class (the "Maximum Amount") as may be
determined by the Fund's Board of Directors from time to time. Such monthly fee
shall be reduced by the aggregate sums paid by the Fund to persons other than
broker-dealers (the "Service Providers") pursuant to Service Agreements referred
to above.
2. (a) The Distributor shall use the monies paid to it
pursuant to paragraph l above to furnish, or cause or encourage others to
furnish, services and incentives in connection with the promotion, offering and
sale of Class shares and, where suitable and appropriate, the retention of Class
shares by shareholders.
(b) The Service Providers shall use the monies paid
respectively to them to reimburse themselves for the actual costs they have
incurred in confirming that their customers have received the Prospectus and
Statement of Additional Information, if applicable, and as a fee for (l)
assisting such customers in maintaining proper records with the Fund (2)
answering questions relating to their respective accounts and (3) aiding in
maintaining the investment of their respective customers in the Class.
3. The Distributor shall report to the Fund at least monthly
on the amount and the use of the monies paid to it under the Plan. The Service
Providers shall inform the Fund monthly and in writing of the amounts each
claims under the Service Agreement and the Plan; both the Distributor and the
Service Providers shall furnish the Board of Directors of the Fund with such
other information as the Board may reasonably request in connection with the
payments made under the Plan and the use thereof by the Distributor and the
[A/B]-3
<PAGE>
Service Providers, respectively, in order to enable the Board to make an
informed determination of the amount of the Fund's payments and whether the Plan
should be continued.
4. The officers of the Fund shall furnish to the Board of
Directors of the Fund, for their review, on a quarterly basis, a written report
of the amounts expended under the Plan and the purposes for which such
expenditures were made.
5. This Plan shall take effect at such time as the Distributor
shall notify the Fund in writing of the commencement of the Plan, which time
shall not be before the first annual or special meeting of the public
shareholders at which the Plan is or was approved by the vote of a majority of
the outstanding voting securities as required in the Act (the "Commencement
Date"); thereafter, the Plan shall continue in effect for a period of more than
one year from the Commencement Date only so long as such continuance is
specifically approved at least annually by a vote of the Board of Directors of
the Fund, and of the Directors who are not interested persons of the Fund and
have no direct or indirect financial interest in the operation of the Plan or in
any agreements related to the Plan ("non-interested Directors"), cast in person
at a meeting called for the purpose of voting on such Plan.
6. (a) The Plan may be terminated at any time by vote
of a majority of the non-interested Directors or by vote of a
majority of the outstanding voting securities of the Class.
[A/B]-4
<PAGE>
(b) The Plan may not be amended to increase materially the
amount to be spent for distribution pursuant to paragraph l thereof without
approval by the shareholders of the Class.
7. The Distribution Agreement between the [Fund/Series] and
the Distributor, and the Service Agreements between the [Fund/ Series] and the
Service Providers, shall specifically have a copy of this Plan attached to, and
its terms and provisions incorporated respectively by reference in, such
agreements.
8. All material amendments to this Plan shall be approved by
the non-interested Directors in the manner described in paragraph 5 above.
9. So long as the Plan is in effect, the selection and
nomination of the Fund's non-interested Directors shall be committed to the
discretion of such non-interested Directors.
10. The definitions contained in Sections 2(a)(3), 2(a)(4),
2(a)(l9) and 2(a)(42) of the Act shall govern the meaning of "affiliated
person," "assignment," "interested person(s)" and "vote of a majority of the
outstanding voting securities," respectively, for the purposes of this Plan.
This Plan shall take effect on the Commencement Date, as
previously defined.
[A/B]-5
<PAGE>
DELAWARE GROUP
Administration and Service Agreement
Gentlemen:
We are the national distributor of the shares of all of the classes
(now existing or hereafter added) of all of the Funds in the Delaware Group of
Funds. The term "Fund" as used in this Agreement refers to each fund in the
Delaware Group which retains the Distributor to promote and sell its shares, and
any fund which may hereafter be added to the Delaware Group and retain us as
national distributor. You have indicated that you wish to provide certain
services to your customers relating to their ownership of Fund shares, in
accordance with the terms of this Agreement.
TERMS
1. With respect to any Fund that offers shares of classes for which
Distribution Plans have been adopted under Rule 12b-1 (individually a "12b-1
Plan") of the Investment Company Act of 1940 (the "1940 Act"), which 12b-1 Plans
provide for the payment of service fees, we expect you to provide administrative
and other services, including, but not limited to, furnishing personal and other
services and assistance to your customers who own Fund shares, answering routine
inquiries regarding a Fund, assisting in changing dividend options, account
designations and addresses, maintaining such accounts, or such other services as
a Fund may require, to the extent permitted by applicable statutes, rules, or
regulations. For such services, we shall pay you a fee, as established by us
from time to time, based on the value of the shares of each class of each Fund
which are attributable to customers of your firm. We are permitted to make this
payment under the terms of the 12b-1 Plans adopted by certain of the Funds, as
such Plans may be in effect from time to time.
2. You shall furnish us and each Fund with such information as shall
reasonably be requested by the Board of Directors or Trustees with respect to
the fees paid to you pursuant to this Agreement.
3. We shall furnish to the Board of Directors or Trustees, for their
review, on a quarterly basis, a written report of the amounts expended under
<PAGE>
the Plan by us with respect to the relevant Fund and the purposes for which
such expenditures were made.
4. This Agreement may be terminated by either party at any time by
written notice to that effect and will terminate without notice upon any act of
insolvency by you. Notwithstanding the termination of this Agreement, you shall
remain liable for any amounts otherwise owing to the Distributor or the Funds
and for your portion of any transfer tax or other liability which may be
asserted or assessed against the Distributor or the Fund, or upon any one or
more of the Distributor's dealers, based upon a claim that you and such dealers
or any of them constitute a partnership, an unincorporated business or other
separate entity.
5. Any obligation assumed by a Fund pursuant to this Agreement shall be
limited in all cases to the assets of such Fund and no person shall seek
satisfaction thereof from shareholders of a Fund.
6. The 12b-1 Plans in effect on the date of this Agreement are
described in the Funds' Prospectuses. Each Fund reserves the right to terminate
or suspend its 12b-1 Plan(s) at any time as specified in such Plan(s) and we
reserve the right, at any time, without notice, to modify, suspend or terminate
payments hereunder in connection with such 12b-1 Plan(s).
7. This Agreement shall take effect on the date set forth below.
8. The terms and provisions of the current Prospectus and Statement of
Additional Information for each relevant Fund are hereby accepted and agreed to
by the parties hereto as evidenced by our execution hereof.
GENERAL
9. Governing Law. This Agreement will be governed by and construed in
accordance with the law of the State of Pennsylvania, without reference to that
state's choice of law doctrine.
10. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one Agreement.
11. Severability. In the event that any provision of this Agreement,
or the application of any such provision to any person or set of circumstances,
shall be determined to be invalid, unlawful, void or unenforceable to any
extent, the remainder of this Agreement, and the application of such provision
<PAGE>
to persons or circumstances other than those as to which it is determined to be
invalid, unlawful, void or unenforceable, shall not be impaired or otherwise
affected and shall continue to be valid and enforceable to the fullest extent
permitted by law.
12. Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto and supersedes all prior agreements and
understandings between the parties hereto relating to the subject matter hereof.
13. Headings. The underlined headings contained herein are for
convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the interpretation
hereof.
DELAWARE DISTRIBUTORS, L.P.
By: DELAWARE DISTRIBUTORS, INC.,
General Partner
By:
--------------------------------
Agreed and Accepted:
- ------------------------------
(Name)
By:
---------------------------
(Authorized Officer)
Date:
-------------------------
<PAGE>
DEALER'S AGREEMENT
We invite you, as a selected dealer, to participate as principal in the
distribution of the shares of all of the classes (now existing or hereafter
added) of all of the Funds in the Delaware Group of Investment Companies which
retain us, Delaware Distributors, L.P., to act as exclusive national
distributor. The term "Fund" as used in this Agreement, refers to each Fund in
the Delaware Group which retains us to promote and sell its shares, and any Fund
which may hereafter be added to the Delaware Group and retain us as national
distributor. Such additional Funds will be included in this Agreement upon our
providing you with written notice of such inclusion.
OFFERING PRICE TO PUBLIC: Orders for shares received from you and accepted by a
Fund or its agent, Delaware Service Company, Inc., will be at the public
offering price applicable to each order as set forth in that Fund's Prospectus.
The manner of computing the net asset value of shares, the public offering price
and the effective time of orders received from you are described in the
Prospectus for each Fund. We reserve the right, at any time and without notice,
to suspend the sale of Fund shares.
CONCESSIONS TO YOU: You will be entitled to deduct the applicable concession as
set forth in the then current Prospectus of a Fund from the purchase price of
certain purchase orders placed by you for shares of a Fund having a sales
charge. We reserve the right from time to time, without prior notice, to modify,
suspend or eliminate such concessions by amendment, sticker or supplement to the
Prospectus for the Fund. If any shares confirmed to you under the terms of this
Agreement are redeemed or repurchased by the Fund or by us as agent for the
Fund, or are tendered for redemption or repurchase, within seven business days
after the date of our confirmation of the original purchase order, you shall
promptly refund to us the concession allowed to you on such shares.
PURCHASE PLANS: The purchase price on all orders placed by you and any
concessions or other fees otherwise due to you under this Agreement will be
subject to the then current terms and provisions of any applicable special plans
and accounts (e.g., volume purchases, letters of intent, rights of accumulation,
combined purchases privilege, exchange and reinvestment privileges and
<PAGE>
retirement plan accounts) as set forth from time to time in the Prospectus. We
must be notified when an order is placed if it qualifies for a reduced sales
charge under any of these plans. We reserve the right, at any time, without
prior notice, to modify, suspend or eliminate any such plans or accounts by
amendment, sticker or supplement to the Prospectus for the Fund.
SALES, ORDERS AND CONFIRMATIONS: In offering Fund shares to the public or
otherwise, you shall act as dealer for your own account, and in no transaction
shall you have any authority to act as agent for the Fund, for any other
selected dealer or for us. No person is authorized to make any representations
concerning the shares to the Fund except those contained in the Prospectus and
in written information issued by the Fund or by us as a supplement to such
Prospectus. In purchasing Fund shares, you shall rely only on such
representations.
All sales must be made subject to confirmation and orders are subject
to acceptance or rejection by the Fund in its sole discretion. Your orders must
be wired, telephoned or written to the Fund or its agent. You agree to place
orders for the same number of shares sold by you at the price at which such
shares are sold. You agree that you will not purchase Fund shares except for
investment or for the purpose of covering purchase orders already received and
that you will not, as principal, sell Fund shares unless purchased by you from
the Fund under the terms hereof. You also agree that you will not withhold
placing with us orders received from your customers so as to profit yourself
from such withholding. Each of your orders shall be confirmed by you in writing
on the same day.
PAYMENT AND ISSUANCE OF CERTIFICATES: The shares purchased by you hereunder
shall be paid for in full at the public offering price, less any concession to
you as set forth above, by check payable to the Fund, at its office, within
three business days after our acceptance of your order. If not so paid, we
reserve the right to cancel the sale and to hold you responsible for any loss
sustained by us or the Fund (including lost profit) in consequence. Certificates
representing the Fund's shares will not be issued unless (i) the Fund's
Prospectus indicates that certificates may be issued for the class of shares
being purchased, and (ii) a specific request is received from the purchaser.
Certificates, if requested, will be issued in the names indicated by
registration instructions accompanying your payment.
-2-
<PAGE>
REDEMPTION: The Prospectus describes the provisions whereby the Fund, under all
ordinary circumstances, will redeem shares held by shareholders on demand. You
agree that you will not make any representations to shareholders relating to the
redemption of their shares other than the statements contained in the Prospectus
and the underlying organizational documents of the Fund, to which it refers, and
that you will quote as the redemption price only the price determined by the
Fund. You shall not repurchase any shares from your customers at a price below
that next quoted by the Fund for redemption. You may charge a reasonable fee for
services in connection with the repurchase by you from your customers of shares.
You may hold such repurchased shares only for investment purposes or submit such
shares to the Fund for redemption.
12b-1 PLAN: With respect to any Fund that offers shares of classes for which
Distribution Plans have been adopted under Rule 12b-1 (individually a "12b-1
Plan") of the Investment Company Act of 1940 (the "1940 Act"), we expect you to
provide distribution and marketing services in the promotion of the Fund's
shares. In connection with the receipt of distribution fees and/or the receipt
of service fees as set forth under the 12b-1 Plan(s) applicable to the class or
classes of Fund shares purchased by your customers, we expect you to provide
administrative and other services to your customers who own Fund shares,
including, but not limited to, furnishing personal and other services and
assistance, answering routine inquiries regarding a Fund, assisting in changing
dividend options, account designations and addresses, maintaining such accounts,
or such other services as the Fund may require, to the extent permitted by
applicable statutes, rules, or regulations. For such services we will pay you a
fee, as established by us from time to time, based on a portion of the net asset
value of the accounts of your clients in the Fund. We are permitted to make this
payment under the terms of the 12b-1 Plans adopted by certain of the Funds, as
such Plans may be in effect from time to time. The 12b-1 Plans in effect on the
date of this Agreement are described in the Funds' Prospectuses. Each Fund
reserves the right to terminate or suspend its 12b-1 Plan at any time as
specified in the Plan and we reserve the right, at any time, without notice, to
modify, suspend or terminate payments hereunder in connection with such 12b-1
Plan. You will furnish the Fund and us with such information as may be
-3-
<PAGE>
reasonably requested by the Fund or its directors or trustees or by us with
respect to such fees paid to you pursuant to this Agreement.
LEGAL COMPLIANCE: This Agreement and any transaction with, or payment to, you
pursuant to the terms hereof is conditioned on your representation to us that,
as of the date of this Agreement you are, and at all times during its
effectiveness you will be: (a) a registered broker/dealer under the Securities
Exchange Act of 1934 and qualified under applicable state securities laws in
each jurisdiction in which you are required to be qualified to act as a
broker/dealer in securities, and a member in good standing of the National
Association of Securities Dealers, Inc. (the "NASD"); or (b) a foreign
broker/dealer not eligible for membership in the NASD and otherwise in
compliance with applicable U.S. federal and state securities laws. You agree to
notify us promptly in writing and immediately suspend sales of Fund shares if
this representation ceases to be true. You also agree that, whether you are a
member of the NASD or a foreign broker/dealer not eligible for such membership,
you will comply with the rules of the NASD including, in particular, Sections 2
and 26 of Article III thereof, and that you will maintain adequate records with
respect to your transactions with the Funds.
BLUE SKY MATTERS: We shall have no obligation or responsibility with respect to
your right to sell Fund shares in any state or jurisdiction. From time to time
we may furnish you with information identifying the states and jurisdictions
under the securities laws of which it is believed a Fund's shares may be sold.
You will not transact orders for Fund shares in states or jurisdictions in which
we indicate Fund shares may not be sold. You agree to offer and sell Fund shares
outside the United States only in compliance with all applicable laws, rules and
regulations of any foreign government having jurisdiction over such transactions
in addition to any applicable laws, rules and regulations of the United States.
LITERATURE: We will furnish you with copies of each Fund's Prospectus, sales
literature and other information made publicity available by the Fund, in
reasonable quantities upon your request. You agree to deliver a copy of the
current Prospectus in accordance with the provisions of the Securities Act of
1933 to each purchaser of Fund shares for whom you act as broker. We shall file
Fund sales literature and promotional material with the NASD and SEC as
required.
-4-
<PAGE>
You may not publish or use any sales literature or promotional materials with
respect to the Funds without our prior review and written approval.
NOTICES AND COMMUNICATIONS: All communications from you should be addressed to
us at One Commerce Square, 2005 Market Street, Philadelphia, PA 19103. Any
notice from us to you shall be deemed to have been duly given if mailed or
telegraphed to you at the address set forth below. Each of us may change the
address to which notices shall be sent by notice to the other in accordance with
the terms hereof.
TERMINATION: This Agreement may be terminated by either party at any time by
written notice to that effect and will terminate without notice upon the
appointment of a trustee for you under the Securities Investor Protection Act,
or any other act of insolvency by you. Notwithstanding the termination of this
Agreement, you shall remain liable for any amounts otherwise owing to us or the
Funds and for your portion of any transfer tax or other liability which may be
asserted or assessed against the Fund, or us, or upon any one or more of the
selected dealers based upon the claim that the selected dealers or any of them
constitute a partnership, an unincorporated business or other separate entity.
AMENDMENT: This Agreement may be amended or revised at any time by us upon
notice to you and, unless you notify us in writing to the contrary, you will be
deemed to have accepted such modifications.
GENERAL: Your acceptance hereof will constitute an obligation on your part to
observe all the terms and conditions hereof. In the event you breach any of the
terms and conditions of this Agreement, you will indemnify us, the Funds, and
our affiliates for any damages, losses, costs and expenses (including reasonable
attorneys' fees) arising out of or relating to such breach and we may offset any
such damages, losses, costs and expenses against any amounts due to you
hereunder. Nothing contained herein shall constitute you, us and any dealers an
association or partnership. All references in this Agreement to the "Prospectus"
refer to the then current version of the Prospectus and include the Statement of
Additional Information incorporated by reference therein and any stickers or
supplements thereto. This Agreement supercedes and replaces any prior agreement
-5-
<PAGE>
between us and you with respect to your purchase and sale of Fund shares and is
to be construed in accordance with the laws of the State of Delaware.
Please confirm this Agreement by executing one copy of this Agreement
below and returning it to us. Keep the enclosed duplicate copy for your records.
DELAWARE DISTRIBUTORS, L.P.
By: Delaware Distributors, Inc.,
General Partner
By:/s/Keith E. Mitchell
----------------------
Name: Keith E. Mitchell
Title: President/Chief Executive Officer
-6-
<PAGE>
DEALER'S AGREEMENT ACCEPTANCE
DELAWARE DISTRIBUTORS, L.P.
The undersigned hereby confirms the Dealer's Agreement and acknowledges
that any purchase of Fund shares made during the effectiveness of this Agreement
is subject to all the applicable terms and conditions set forth in this
Agreement, and agrees to pay for the shares at the price and upon the terms and
conditions stated in the Agreement. The undersigned hereby acknowledges receipt
of Prospectuses relating to the Fund shares and confirms that, in executing the
Dealer's Agreement, it has relied on such Prospectuses and not on any other
statement whatsoever, written or oral.
INVESTMENT DEALER PLEASE SIGN HERE AND COMPLETE BELOW
By: DATE
------------------------------- ----------------------------
Name:
-----------------------------
Title:
----------------------------
- ----------------------------------
FIRM
- ----------------------------------
FIRM'S TAX IDENTIFICATION NUMBER
- ----------------------------------
STREET ADDRESS
- ----------------------------------
CITY/STATE/ZIP
<PAGE>
PROFIT SHARING PLAN
OF
DELAWARE GROUP DELAWARE FUND, INC.
SECOND AMENDMENT AND RESTATEMENT
EFFECTIVE APRIL 1, 1989
<PAGE>
PROFIT SHARING PLAN
OF
DELAWARE GROUP DELAWARE FUND, INC.
SECOND AMENDMENT AND RESTATEMENT
EFFECTIVE APRIL 1, 1989
TABLE OF CONTENTS
-----------------
PAGE
----
ARTICLE I
PURPOSE CLAUSE . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE III
ELIGIBILITY OF EMPLOYEES
TO PARTICIPATE IN THE PLAN . . . . . . . . . . . . . . 6
ARTICLE IV
CONTRIBUTIONS TO PLAN . . . . . . . . . . . . . . . . . 7
ARTICLE V
ALLOCATION OF CONTRIBUTIONS . . . . . . . . . . . . . . 12
ARTICLE VI
RETIREMENT BENEFITS . . . . . . . . . . . . . . . . . . 14
ARTICLE VII
DISABILITY BENEFITS . . . . . . . . . . . . . . . . . . 14
ARTICLE VIII
DEATH BENEFITS . . . . . . . . . . . . . . . . . . . . 14
ARTICLE IX
OTHER SEPARATION FROM SERVICE . . . . . . . . . . . . . 16
ARTICLE X
METHOD OF PAYMENT . . . . . . . . . . . . . . . . . . . 18
ARTICLE XI
ADMINISTRATION OF PLAN . . . . . . . . . . . . . . . . 26
ARTICLE XII
AMENDMENT, CONSOLIDATION, MERGER
OR TERMINATION . . . . . . . . . . . . . . . . . . . . 29
(i)
<PAGE>
ARTICLE XIII
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE XIV
LOANS . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE XV
LIMITATIONS ON ALLOCATIONS . . . . . . . . . . . . . . 32
ARTICLE XVI
TOP HEAVY DEFINITIONS AND RULES . . . . . . . . . . . . 36
(ii)
<PAGE>
PROFIT SHARING PLAN
OF
DELAWARE GROUP DELAWARE FUND, INC.
SECOND AMENDMENT AND RESTATEMENT
EFFECTIVE APRIL 1, 1989
ARTICLE I
PURPOSE CLAUSE
--------------
This Profit Sharing Plan and the Trust Agreement forming a part hereof are
established for the benefit of the employees of Delaware Group Delaware Fund,
Inc. and the other investment companies of the Delaware Group of Funds to
promote in them a strong interest in the successful operation of the business
and to provide for them an opportunity for accumulation of funds for their
retirement benefit.
ARTICLE II
DEFINITIONS
-----------
When used herein, the following words shall have the following meanings
unless the context clearly indicates otherwise:
2.1 "Administrative Committee" or "Committee" shall mean the Administrative
Committee with authority and responsibility to manage and direct the operation
and administration of this Plan. "Administrative Committee" shall be deemed to
also mean "Administrator" and "Plan Administrator" as defined in ERISA.
2.2 "Anniversary Date" shall mean the first day of each Plan Year.
2.3 "Beneficiary" shall mean the person or persons designated by a
Participant to receive benefits upon the death of said Participant pursuant to
Article VIII.
2.4 "Board of Directors" shall mean the Board of Directors of the Employer.
2.5 "Code" shall mean the Internal Revenue Code of 1986, as amended.
2.6 "Effective Date" of the Plan shall mean October 1, 1983. The Effective
Date of this amended and restated Plan shall mean April 1, 1989, except where
indicated otherwise.
2.7 "Eligibility Computation Period" shall mean the period of twelve (12)
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<PAGE>
consecutive months beginning on the date an Employee first performs an Hour of
Service upon hire or rehire after a One Year Break in Service, and any Plan Year
following such date of hire or date of rehire following a One Year Break in
Service.
2.8 "Eligibility Year of Service" shall mean the Eligibility Computation
Period during which the Employee performs one thousand (1,000) or more Hours of
Service. Eligibility Years of Service shall include an Employee's prior service
with Delaware Management Company, Inc. or any Entity required to be aggregated
with Delaware Management Company, Inc. under Sections 414(b) or(c) of the Code.
2.9 "Employee" shall mean any person employed by the Employer or by any
affiliated Entity which adopts this Plan; provided, however, no person covered
by a collective bargaining agreement under which the Employer has participated
in good faith bargaining concerning retirement benefits shall be considered an
Employee for the purposes of this Plan. Any Leased Employee shall not be
considered an Employee for purposes of the Plan.
2.10 "Employer" shall mean Delaware Group Delaware Fund, Inc. and any other
affiliated investment company which adopts this Plan. Effective October 1, 1987,
and solely for purposes of determining periods of service for eligibility for
participation and vesting, the term "Employer" shall include any corporation
which is a member of a controlled group of corporations (as defined in Section
414(b) of the Code) which includes the Employer; any trade or business (whether
or not incorporated) which is under common control (as defined in Section 414(c)
of the Code) with the Employer; any organization (whether or not incorporated)
which is a member of an affiliated service group (as defined in Section 414(m)
of the Code) which includes the Employer; and any other Entity required to be
aggregated with the Employer pursuant to regulations under Section 414(o) of the
Code.
2.11 "Employer Contribution Account" shall mean a Participant's account
derived from Employer contributions and the earnings thereon.
2.12 "Entity" shall mean an individual, partnership, corporation or
unincorporated organization.
2.13 "ERISA" shall mean the Employee Retirement Income Security Act of 1974
and the Regulations promulgated thereunder by either the Department of Labor or
Treasury.
2.14 "Hour of Service" shall mean:
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<PAGE>
(a) Each hour for which an Employee is paid, or entitled to payment, for
the performance of duties for the Employer. These hours will be credited to the
Employee for the computation period in which the duties are performed; and
(b) Each hour for which an Employee is paid, or entitled to payment, by the
Employer on account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including disability), layoff, jury
duty, military service or leave of absence. No more than 501 Hours of Service
will be credited under this paragraph for any single continuous period (whether
or not such period occurs in a single computation period); and
(c) Each hour for which back pay, regardless of mitigation of damages, is
either awarded or agreed to by the Employer. The same Hours of Service will not
be credited both under paragraph (a) or paragraph (b), as the case may be, and
under this paragraph (c). These hours will be credited to the Employee for the
computation period or periods to which the award or agreement pertains rather
than the computation period in which the award, agreement or payment is made.
(d) Hours of Service will be calculated on the basis described in
Department of Labor Regulations Section 2530.200b-2(b) and (c).
(e) Solely for purposes of determining whether a Break in Service has
occurred, for participation and vesting purposes, an individual who is absent
from work for maternity or paternity reasons will receive credit for the Hours
of Service which would otherwise have been credited to such individual. In the
event these hours cannot be determined, eight (8) Hours of Service per day will
be used. For purposes of this paragraph, an absence from work for maternity or
paternity reasons means an absence (i) by reason of the pregnancy of the
individual, (ii) by reason of the birth of a child of the individual, (iii) by
reason of the placement of a child with the individual in connection with the
adoption of the child by such individual, or (iv) for purposes of caring for the
child for a period beginning immediately following such birth or placement.
However, in no event will the hours treated as Hours of Service under this
paragraph (e), by reason of any pregnancy or placement, exceed 501 hours. The
Hours of Service credited under this paragraph will be credited (i) in the Plan
Year in which the absence begins if the crediting is necessary to prevent a
Break in Service in that period, or (ii) in all other cases, in the following
Plan Year.
(f) Effective for Plan Years beginning on or after April 1, 1994, an
Employee shall be credited with 45 Hours of Service for each week for which he
would be required to be credited with at least one Hour of Service under
paragraphs (a)-(e) above.
-6-
<PAGE>
2.15 "Leased Employee" shall mean any person described in Section 414(n) of
the Code who is not an employee of the Employer who, pursuant to an agreement
between the Employer and any other person, has performed service for the
Employer (or for any related persons determined in accordance with Section
414(n)(6) of the Code) on a substantially full-time basis for a period of at
least one year and such services are of a type historically performed by
employees in the Employer's business field.
2.16 "Named Fiduciary" shall be the Administrative Committee and the
Trustee or Trustees serving from time to time and any other person who is
specifically so designated by the Board of Directors.
2.17 "Normal Retirement Date" shall mean the date on which a Participant
shall reach age 65.
2.18 "One Year Break in Service" or "Break in Service" shall mean a Plan
Year during which an Employee has or was separated from employment with Employer
and has completed 500 or less Hours of Service.
2.19 "Participant" shall mean any Employee who meets the eligibility
requirements under Article III or any Employee who is or may become eligible to
receive a benefit under the Plan or whose Beneficiaries may be eligible to
receive any such benefit.
2.20 "Participant Contribution Account" shall mean a Participant's account
derived from his voluntary contributions and the earnings thereon.
2.21 "Plan" shall mean the Employer's Profit Sharing Plan set forth in this
document and all subsequent amendments thereto.
2.22 "Plan Compensation" shall mean as of each Anniversary Date, the basic
compensation received by an Employee from the Employer during the preceding Plan
Year, including salary, draw, overtime and bonuses, but excluding contributions
to this or any other deferred compensation plan. Plan Compensation includes
salary reduction contributions paid by the Employer on the Employee's behalf to
a cafeteria plan, within the meaning of Section 125 of the Code, maintained by
the Employer. Effective for Plan Years beginning on or after April 1, 1994, Plan
Compensation shall mean the sum of (a) the total earnings which are received by
the Employee from the Employer for the preceding Plan Year and which are
required to be reported as wages on the Employee's Form W-2 (in the wages, tips
and other compensation box) and (b) the total amount contributed by the
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Employer on behalf of the Employee pursuant to a salary reduction agreement
which is not includable in the gross income of the Employee under Sections 125
or 402 (e)(3) of the Code, but excluding all of the following items (even if
includable in gross income): reimbursements or other expense allowances, fringe
benefits (cash and non-cash), moving expenses, deferred compensation and welfare
benefits.
For Plan Years beginning on or after April 1, 1989, the Plan Compensation
of each Participant taken into account under the Plan shall not exceed $200,000,
as adjusted by the Secretary of the Treasury. In determining the Plan
Compensation of a Participant for purposes of the limitations set forth in the
preceding sentence, the rules of Section 414(q)(6) of the Code shall apply,
except in applying such rules, the term "family" shall include only the spouse
of the Participant and any lineal descendants of the Participant who have not
attained age 19 before the close of the Plan Year. If, as a result of the
application of such rules, the adjusted $200,000 limitation is exceeded, then
the limitation shall be prorated among the affected individuals in proportion to
each such individual's Plan Compensation as determined under this Section 2.22
prior to the application of this limitation. Effective for Plan Years beginning
on or after January 1, 1994, the Plan Compensation of a Participant shall not
exceed $150,000, as adjusted at the time and manner prescribed by Section 401
(a)(17)(B) of the Code.
2.23 "Plan Year" shall mean a twelve-month period beginning on April 1st
and ending on March 31st. For the Plan Years beginning before April 1, 1989 and
after December 31, 1986, the term Plan Year means a twelve month period
beginning October 1st and ending September 30th, except that the Plan Year
beginning October 1, 1988 is a short year which ends March 31, 1989.
2.24 "Total and Permanent Disability" shall mean incapacity, resulting from
injury or disease, of a Participant to perform any work for Employer and shall
be presumed permanent after the same has continued uninterrupted for six months
as certified by a qualified physician selected by the Administrative Committee.
2.25 "Trustee" or "Trustees" shall mean the trustee or trustees named in
the Trust Agreement attached hereto and forming a part hereof, or any successor
thereto.
2.26 "Trust Fund" or "Fund" shall mean all property held pursuant to the
Trust Agreement.
2.27 "Valuation Date" means the last day of each Plan Year and such other
quarterly, monthly or daily dates as determined by the Administrative Committee.
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2.28 "Year of Service" shall mean a Plan Year during which an Employee
completes at least 1,000 Hours of Service; provided, however, that for the
period from October 1, 1988 through March 31, 1990, an Employee shall be given
credit for a Year of Service if he completes 1,000 Hours of Service during the
period October 1, 1988 to September 30, 1989 and shall be given credit for an
additional Year of Service if he completes 1,000 Hours of Service during the
period April 1, 1989 to March 31, 1990. For purposes of determining a
Participant's nonforfeitable right to his Employer Contribution Account, Years
of Service shall include an Employee's prior service with Delaware Management
Company, Inc. or any other Entity required to be aggregated with Delaware
Management Company, Inc. under Sections 414(b) or (c) of the Code. An Employee
shall also receive credit for a Year of Service if he completes 1000 or more
Hours of Service during his initial Eligibility Computation Period.
2.29 Whenever used herein, the masculine provision includes the feminine
and the singular includes the plural.
ARTICLE III
ELIGIBILITY OF EMPLOYEES
TO PARTICIPATE IN THE PLAN
--------------------------
3.1 Each Employee who was a Participant on March 31, 1989 shall continue as
a Participant. Each other Employee shall be eligible to participate in this Plan
on the first day of the Plan Year within which he completes one Eligibility Year
of Service.
3.2 Any Participant who returns to service after a Break in Service shall
be admitted to the Plan as a Participant on his date of re-employment.
3.3 Within 60 days of each Anniversary Date of this Plan, the Employer
shall furnish the Administrator a list showing all eligible Employees, the date
of employment, the Years of Service, the Plan Compensation of each eligible
Employee and the date of termination of any terminated Employees.
3.4 Notwithstanding the provisions of Section 3.1 to the contrary, if an
Employee is employed by the Employer on March 31, 1989 and has completed by such
date 1,000 or more Hours of Service during an Eligibility Computation Period
which began on or before October 1, 1988, such Employee shall be eligible to
participate in the Plan on October 1, 1988.
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ARTICLE IV
CONTRIBUTIONS TO PLAN
---------------------
4.1 Each participating Employer may contribute to the Plan's Trust Fund for
each taxable year an amount, if any, determined in accordance with a resolution
of the Board of Directors adopted before the date prescribed by law for filing
its Federal income tax return for such taxable year (including extensions
thereof); provided, however, that no contributions shall be made for any year in
excess of the amount deductible for such year under provisions of the Code and
regulations thereunder as then in effect. For Plan Years beginning on or after
April 1, 1989, the Employer may make contributions regardless of whether or not
it has Net Profits and Earnings for its tax year.
4.2 For Plan Years beginning before April 1, 1989, Net Profits and Earnings
in any one year of operations means the net income before provisions for Federal
and State income taxes as determined by the certified public accountants
employed by the Employer in accordance with generally accepted accounting
principles of open-end management investment companies.
4.3 For each taxable year, the contributions shall accrue on the
Anniversary Date thereof, but shall not be considered as accruing during the
said taxable year prior to the Anniversary Date thereof.
4.4 The Trust Fund shall not be diverted to any use other than the
exclusive benefit of eligible Employees and their Beneficiaries.
4.5 Effective August 1, 1991, a Participant may not make voluntary
contributions to his Participant Contribution Account. Prior to August 1, 1991,
a Participant may make voluntary contributions to his Participant Contribution
Account. Such contributions may be made by payroll deductions or in such other
manner and subject to such procedures as the Administrator may prescribe. No
Participant may contribute more than ten percent of his aggregate Plan
Compensation for all Plan Years during which he participated in the Plan.
4.6 Notwithstanding the provisions of Article IX, a Participant shall have
a nonforfeitable interest in all voluntary contributions made by him and in any
increase in his account attributable to such contributions.
4.7 A Participant shall have the right to withdraw the total amount of his
voluntary contributions at any time; provided, however, that such withdrawal
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shall be permissible only with respect to the amount of such Participant's
voluntary contributions and not to any increase in his account attributable to
such contributions. No Participant shall be permitted to make withdrawals of
his voluntary contributions more than four times in any one calendar year.
Effective as of the date of adoption of this amended and restated Plan, a
Participant shall be permitted to make withdrawals as frequently as monthly of
all or a portion of his voluntary contributions, including the earnings
thereon.
4.8 The Fund may accept rollover contributions on behalf of an Employee
(including an Employee who has not satisfied the requirements to be eligible to
participate) from any other plan maintained for his benefit which satisfies the
requirements of a tax-qualified plan, or a rollover individual retirement
account; provided, however, that such rollovers are permitted by and effected in
accordance with the requirements of the Code. The Administrative Committee may
as a condition of acceptance of such rollovers demand such information, opinions
and statements as it deems necessary to assure that such rollovers conform to
the requirements of the federal tax laws.
4.9 An Employee for whom a rollover has been made shall be deemed a
Participant with respect to the amount contributed and shall have a
nonforfeitable interest in such amount and any increases attributable to it. Any
such rollovers shall be held in a special account for the Participant segregated
from other assets held by the fund. Such contributions will be administered and
distributed pursuant to the provisions of this Plan.
4.10 The following special non-discrimination rules pertaining to voluntary
contributions shall be applicable for Plan Years beginning on or after October
1, 1987 and before April 1, 1990.
(a) For any Plan Year, the Contribution Percentage for all Highly
Compensated Employees will not exceed the greater of (i) or (ii) as follows:
(i) The Contribution Percentage for all Non-Highly Compensated Employees,
times 1.25; or
(ii) The lesser of the Contribution Percentage for all Non-Highly
Compensated Employees, times 2.0, provided that the Contribution Percentage for
all Highly Compensated Employees may not exceed the Contribution Percentage for
all Non-Highly Compensated Employees by more than two (2) percentage points or
such lesser amount as the Secretary of Treasury will prescribe to prevent the
multiple use of this alternative limitation with respect to any Highly
Compensated Employee.
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(b) Distribution of Excess Aggregate Contributions.
(i) Excess Aggregate Contributions, plus any income and minus any loss
allocable thereto, will be distributed no later than the last day of each Plan
Year to Participants to whose accounts Excess Aggregate Contributions were
allocated for the preceding Plan Year.
(ii) For the Plan Year beginning on October 1, 1987, the income or loss
allocable to Excess Aggregate Contributions shall be determined under any
reasonable method, which method shall be applied on a consistent basis for all
Participants. For Plan Years beginning after 1987, the income or loss allocable
to Excess Aggregate Contributions shall be the sum of (A) and (B) below:
(A) The income or loss for the Plan Year allocable to the Participant's
voluntary contribution Account multiplied by a fraction, the numerator of which
is the Participant's Excess Aggregate Contributions for the year, and the
denominator of which is the balance of the Participant's voluntary contribution
account as of the end of the Plan Year, minus income (or plus losses) allocable
to such account.
(B) The income or loss for the period between the end of the Plan Year and
the date of the distribution allocable to the Participant's voluntary
contribution account multiplied by the fraction described in (A), above.
In lieu of using the formula described in (B), the income or loss for the
period between the end of the Plan Year and the date of the distribution
allocable to Excess Aggregate Contributions for the year may be calculated under
the following alternative method, provided such method is applied on a
consistent basis for all Participants: ten percent (10%) of the amount
determined under (A), above, multiplied by the number of whole calendar months
that have elapsed since the end of the Plan Year. For this purpose, if a
distribution of Excess Aggregate Contributions is made after the 15th day of a
month, that month will be counted as a whole month.
(c) The following definitions apply for purposes of this Section 4.10.:
(i) "Contribution Percentage" means, for a group of Participants, the
average of the following ratios (calculated separately) for each Participant in
the group:
(A) The sum of voluntary contributions made on behalf of each Participant
for the Plan Year; over
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(B) The Participant's Compensation for that Plan Year, whether or not the
Participant was a Participant for the entire Plan Year.
The Contribution Percentage for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have voluntary employee
contributions or employer matching contributions allocated to his account under
two or more plans described in Section 401(a) of the Code or arrangements
described in Section 401(k) of the Code that are maintained by the employer or
an entity that is required to be aggregated with the employer pursuant to
Sections 414(b), (c), (m), or (o) of the Code will be determined as if all such
contributions were made under a single plan. If a Highly Compensated Employee
participates in two or more arrangements described in Section 401(k) of the Code
that have different plan years, all such arrangements ending with or within the
same calendar year shall be treated as a single arrangement.
For purposes of determining the Contribution Percentage of a Participant
who is a five-percent owner or one of the ten most Highly Compensated Employees,
the Contribution Percentage and compensation of such Participant will include
the Contribution Percentage and Compensation of Family Members, and such Family
Members will be disregarded in determining the Contribution Percentage for
Participants who are Non-Highly Compensated Employees.
Voluntary contributions will be considered made for a Plan Year if made by
the date specified in the applicable regulations and allocated to a
Participant's account for the Plan Year.
The determination and treatment of the Contribution Percentage of any
Participant will satisfy such other requirements as may be prescribed by
Secretary of the Treasury.
In the event that this Plan satisfies the requirements of Sections 401(m),
401(a)(4) or 410(b) of the Code only if aggregated with one or more other plans,
or if one or more other plans satisfy the requirements of such Sections only if
aggregated with this Plan, then this Section 4.10 will be applied by determining
the Contribution Percentages of eligible Participants as if all such plans were
a single plan. For plan years beginning after December 31, 1989, plans may be
aggregated in order to satisfy Section 401(m) of the Code only if they have the
same plan year.
(ii) "Excess Aggregate Contributions" means, with respect to any Plan Year,
the excess of:
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(A) The aggregate Contribution Percentage amounts taken into account in
computing the numerator of the Contribution Percentage actually made on behalf
of Highly Compensated Employees for such Plan Year; over
(B) The maximum Contribution Percentage amounts permitted by the
Contribution Percentage limits set forth in this Section 4.10 (determined by
reducing contributions made on behalf of Highly Compensated Employees in order
of their Contribution Percentages beginning with the highest of such
percentages).
(iii) "Family Member" means an individual described in Section 414(q)(6)(B)
of the Code.
(iv) "Highly Compensated Employee" means a highly compensated active
employee or a highly compensated former employee, as described below.
A highly compensated active employee includes any employee who performs
service for the employer during the determination year and who, during the
look-back year: (i)received compensation from the employer in excess of $75,000
(as adjusted pursuant to Section 415(d) of the Code); (ii) received compensation
from the employer in excess of $50,000 (as adjusted pursuant to Section 415(d)
of the Code) and was a member of the top-paid group for such year; or (iii) was
an officer of the employer and received compensation during such year that is
greater than 50 percent of the dollar limitation in effect under Section
415(b)(1)(A) of the Code. The term Highly Compensated Employee also includes:
(i) employees who are both described in the preceding sentence if the term
"determination year" is substituted for the term "look-back year" and the
employee is one of the 100 employees who received the most compensation from the
Employer during the determination year; and (ii) employees who are five percent
owners at any time during the look-back year or determination year.
If no officer has satisfied the compensation requirement of (iii) above
during either a determination year or a look-back year, the highest paid officer
for such year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back shall be the twelve (12)-month period immediately preceding the
determination year.
A highly compensated former employee includes any employee who separated
from service (or was deemed to have separated) prior to the determination year,
performs no service for the employer during the determination year, and was a
highly compensated active employee for either the separation year or any
determination year ending on or after the employee's fifty-fifth (55th)
birthday.
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If an employee is, during a determination year or look-back year, a Family
Member of either a five percent owner who is an active or former employee or a
Highly Compensated Employee who is one of the ten (10) most Highly Compensated
Employees ranked on the basis of compensation paid by the Employer during such
year, then the Family Member and the five percent owner or top-ten (10) Highly
Compensated Employee shall be aggregated. In such case, the Family Member and
five percent owner or top-ten Highly Compensated Employee shall be treated as a
single employee receiving compensation and Plan contributions or benefits equal
to the sum of such compensation and contributions or benefits of the Family
Member and five percent owner or ten (10) most Highly Compensated Employee.
The determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of employees in the top-paid group,
the top one hundred (100) employees, a five percent owner, the number of
employees treated as officers and the compensation that is considered, will be
made in accordance with Section 414(q) of the Code and the regulations
thereunder.
(v) "Compensation" means all of an Employee's compensation, as that term is
defined in Article XV, Limitations on Allocations, and shall include elective
contributions that are made by the Employer on behalf of the Employee and which
are not includable in income under Section 125 of the Code. Compensation shall
be subject to the limitation of Section 401(a)(17) of the Code.
ARTICLE V
ALLOCATION OF CONTRIBUTIONS
---------------------------
5.1 A separate and complete accounting shall be maintained for each
Participant which shall set forth the amount credited to or forfeited from his
Employer Contribution Account and his Participant Contribution Account. Employer
contributions and Participant contributions shall be allocated among investment
companies managed by Delaware Management Company, Inc. Each Participant shall
file a written notice with the Committee thereby making an election as to what
proportion of his contributions, including both contributions made by the
Employer and voluntary contributions, shall be allocated to the eligible
investment company funds, as announced from time to time by the Committee. Each
Participant shall have the right to change the investment allocation of his
contributions and his accumulated account balance, in accordance with rules and
procedures as announced from time to time by the Committee, provided changes are
subject to any limitations imposed on the right of exchange by the investment
media.
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5.2 The Employer's contributions and any forfeitures for each Plan Year
shall be credited to the Employer Contribution Accounts of Participants who are
employed by the Employer on the Anniversary Date and allocated in the proportion
that the Plan Compensation of each Participant bears to the total Plan
Compensation of all Participants for such Plan Year. A Participant who
terminates employment on the Anniversary Date shall be treated as employed by
the Employer on the Anniversary Date. All voluntary contributions made by a
Participant prior to August 1, 1991 shall be credited to his Participant
Contribution Account.
5.3 As of the Anniversary Date, each Participant's Employer Contribution
Account and his Participant Contribution Account shall be valued at its fair
market value. For the purposes of paying benefits to a Participant, his accounts
shall be valued on the most recent Valuation Date as determined by the
Administrative Committee.
5.4 Income when earned less expenses, if any, when charged, shall be
credited to or charged against each Participant's account, in accordance with
the self-directed investments selected by the Participant.
5.5 The Committee shall, as of each Anniversary Date, determine the total
amount of forfeitures which accrued during the Plan Year and shall add the
forfeited amount to the Employer's annual contribution for the purposes of
reallocation to the remaining Participants as provided in Section 5.2.
5.6 Any allocation made and credited to the account of a Participant under
this Article shall not cause such Participant to have any right, title or
interest in or to any assets of the Trust Fund except at the time or times, and
under the terms and conditions, expressly provided for in this Plan.
5.7 (a) In the case of a contribution to the Plan which is made by the
Employer because of a mistake of fact, the Employer may, within one year after
the payment of such contribution, withdraw such contribution from the Trust
Fund.
(b) Employer contributions to the Plan are expressly conditioned on the
deductibility of such contributions under Section 404 of the Code. To the extent
such contributions are disallowed, the Employer may, within one year of the
disallowance of the deduction, withdraw such contribution from the Trust Fund.
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ARTICLE VI
RETIREMENT BENEFITS
-------------------
6.1 Upon attaining Normal Retirement Date, a Participant shall have a fully
vested and nonforfeitable right to his entire Employer Contribution Account and
shall be entitled to retire and upon so retiring shall be entitled to the
commencement of the payment of his benefits, consisting of the balance of his
accounts, in accordance with the method of payment elected pursuant to Article
X.
6.2 A Participant who retires after his Normal Retirement Date shall
continue to be a Participant in the Plan until his actual retirement and shall
be eligible to share in the allocation of Employer contributions as provided in
Section 5.2.
ARTICLE VII
DISABILITY BENEFITS
-------------------
7.1 If the employment of a Participant has been terminated prior to his
retirement date because of Total and Permanent Disability, such Participant
shall be entitled to receive his entire Participant Contribution Account and his
entire Employer Contribution Account in accordance with the manner elected under
Article X.
7.2 Upon a Participant's cessation of Total and Permanent Disability and
upon his return to work for Employer before all of his account has been
distributed, no further payments shall be made therefrom by reason of the
disability. A Participant shall have no right or obligation to repay any amount
distributed to him pursuant to Section 7.1.
ARTICLE VIII
DEATH BENEFITS
--------------
8.1 Notwithstanding anything stated in the Plan to the contrary, if a
Participant dies prior to receiving the entire nonforfeitable amount credited to
his accounts, all such undistributed nonforfeitable amounts shall be paid to the
Participant's surviving spouse, unless there is no surviving spouse or the
surviving spouse consents in writing to the payment of death benefits to another
Beneficiary. A spouse's consent must satisfy the following requirements:
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(a) the consent must be in writing;
(b) the consent must be witnessed by a member of the Administrative
Committee or a notary public;
(c) the consent must approve a designation of a specific Beneficiary,
including any class of Beneficiaries or any contingent Beneficiaries, which may
not be changed without spousal consent, or the spouse expressly permits
designations by the Participant without any further spousal consent; and
(d) the consent acknowledges the effect of the Participant's designation of
Beneficiary. If a consent permits designations by the Participant without any
requirement of further consent by such spouse, it must acknowledge that the
spouse has the right to limit consent to a specific Beneficiary and that the
spouse voluntarily elects to relinquish such right.
Written consent of a spouse need not be obtained if the Participant
establishes to the satisfaction of the Committee that there is no spouse or that
the spouse cannot be located. Any such designation may be changed from time to
time by the Participant by filing a new designation with the Committee, provided
the spousal consent requirements above are satisfied.
8.2 Each Participant may file with the Committee a designation of
Beneficiary to receive amounts payable under this Plan upon his death. The
designation may be changed from time to time by the Participant, except that a
married Participant may not name a Beneficiary other than his spouse without a
written consent which satisfies the requirements of Section 8.1. If no
designation has been filed, or all designated Beneficiaries have predeceased the
Participant, then any amounts payable shall be paid to his surviving spouse. If
there is no surviving spouse, any amounts payable shall be paid to his estate.
8.3 If at, after or during the time when a benefit is payable to any
Beneficiary, the Administrative Committee, upon request of the Trustee or at its
own instance, mails by registered or certified mail to the Beneficiary at the
Beneficiary's last known address a written demand for his then address, or for
satisfactory evidence of his continued life or both, and, if the Beneficiary
shall fail to furnish the information to the Committee within 3 years from the
mailing of the demand, then the Committee shall distribute the remaining
benefits to the Beneficiary next entitled thereto under Section 8.3 above as if
the Beneficiary designated by the Participant or Section 8.3 were then deceased.
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ARTICLE IX
OTHER SEPARATION FROM SERVICE
-----------------------------
9.1 (a) If a Participant separates from service other than under Articles
VI, VII or VIII, he shall be entitled to receive a lump sum distribution of his
entire Participant Contribution Account and his entire nonforfeitable Employer
Contribution Account. Such distribution shall be made upon the written request
of the Participant and shall be made as soon as practicable following the
Participant's separation from service, but not later than the close of the
second Plan which such separation occurs.
(b) If the non-forfeitable portion of the Participant's Employer
Contribution Account and his Participant Contribution Account exceeds $3500 (or
ever exceeded $3500 at the time of an earlier distribution), and the Participant
does not consent in writing to receive a lump sum distribution of his accounts
by the close of the second Plan Year following his separation from service, no
distribution shall be made to the Participant until he attains his Normal
Retirement Date. Regardless of whether the Participant consents in writing, if
the non-forfeitable portion of the Participant's Employer Contribution Account
and Participant Contribution Account does not exceed $3500 (or did not exceed
$3500 at the time of a prior distribution), a lump sum distribution shall be
made to the Participant of the entire value of the non-forfeitable portion of
his accounts not later than the end of the second Plan Year following his
separation from service.
(c) If a distribution is made to the Participant of the nonforfeitable
portion of his Employer Contribution Account upon his separation from service,
the non-vested portion of his Account, if any, will be treated as a forfeiture
and reallocated to remaining Participants as provided in Section 5.2. If the
Participant does not receive a distribution of his Employer Contribution Account
upon his separation from service, such Account shall be held for the Participant
until he attains Normal Retirement Date and the non-vested portion of the
Account shall be treated as a forfeiture when the Participant sustains five
consecutive One Year Breaks in Service.
(d) In the event a Participant who is less than fully vested in his
Employer Contribution Account receives a distribution of his vested interest in
such Account upon his separation from service, and such Participant subsequently
returns to employment of the Employer, the Participant's Employer Contribution
Account will be restored to the value of the Account on the date of the
distribution if the Participant repays to the Trustees the full amount of such
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distribution before the earlier of five consecutive One-Year Breaks in Service
or five years after the Participant's date of reemployment. Restoration of the
forfeited amount of a Participant's Account shall be made from forfeitures or
Employer contributions.
9.2 (a) In the event a Participant separates from service with the Employer
for reasons other than retirement, disability, death or a layoff by the
Employer, he shall have a nonforfeitable right to the amount credited to his
Employer Contribution Account in accordance with the following schedule:
Completed Years of Service Percentage
-------------------------- ----------
At least But less than
0 1 0%
1 2 20%
2 3 40%
3 4 60%
4 5 80%
5 or more 100%
(b) A Participant shall have a wholly vested and nonforfeitable right to
his Employer Contribution Account upon separation from service on account of
retirement on or after the Normal Retirement Date, Total and Permanent
Disability, death while in the employ of the Employer or layoff by the Employer.
For purposes of this Section 9.2, the term "layoff" shall mean any involuntary
separation from service other than separation due to cause. If a Participant
separates from service with the Employer, the non-vested portion of his Employer
Contribution Account, if any, shall be forfeited upon the death of the
Participant.
(c) If the Employer amends the Plan in a manner which directly or
indirectly affects the computation of a Participant's nonforfeitable percentage,
each Participant who completes an Hour of Service in any Plan Year beginning
after December 31, 1988 and who has at least three Years of Service may elect
after the adoption of such amendment to have his nonforfeitable interest
computed under the Plan without regard to such amendment. The period during
which the election may be made shall commence the day the amendment is adopted
and shall end on later of:
(i) sixty (60) days after the amendment is adopted;
(ii) sixty (60) days after the amendment becomes effective; or
(iii) sixty (60) days after the Participant is issued written notice of the
amendment by the Employer or the Committee.
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9.3 (a) In the case of a Participant who has a Break in Service, Years of
Service completed before such Break shall not be counted until the Participant
has completed a Year of Service for the purpose of determining his
nonforfeitable percentage of the amount credited to his Employer Contribution
Account after such Break in Service.
(b) Years of Service completed on reemployment and after separation from
service with the Employer in connection with which he has five consecutive One
Year Breaks in Service shall not be counted for purposes of determining such
Participant's nonforfeitable percentage right to amounts credited to his
Employer Contribution Account before such Break in Service.
ARTICLE X
METHOD OF PAYMENT
-----------------
10.1 At the request of a Participant, the form of benefit payments may be
one of the following in cash:
(a) in a lump sum payment; or
(b) in periodic, monthly, quarterly, semi-annual or annual installments
over a period certain not exceeding the Participant's life expectancy or the
joint life expectancy of the Participant and his designated Beneficiary. If
periodic installments are to be paid, a Participant's account shall be invested
in the investment company funds available under the Plan as designated by the
Participant.
If periodic installments are paid over the life expectancy of the
Participant or joint life expectancy of the Participant and a designated
Beneficiary, a Participant may elect, prior to the time distributions begin,
whether or not to have his life expectancy and his Beneficiary's life expectancy
(if the Beneficiary is his spouse) annually recalculated. In the absence of such
election, life expectancies will not be recalculated.
10.2 In no event shall payments of benefits under this Plan commence later
than sixty (60) days after the close of the Plan Year in which the latest of the
following events occur:
(a) the Participant attains age sixty-five (65); or
(b) the Participant completes ten years of participation in the Plan; or
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(c) the termination of the Participant's service with the Employer.
10.3 (a) Notwithstanding the other requirements of this Plan, distributions
on behalf of any Participant, including a five percent (5%) owner, may be made
in accordance with all of the following requirements (regardless of when such
distribution commences):
(i) The distribution by the Trust Fund is one which would not have
disqualified such Trust under Section 401(a)(9) of the Code as in effect prior
to amendment by the Deficit Reduction Act of 1984.
(ii) The distribution is in accordance with a method of distribution
designated by the Participant whose interest is being distributed or, if the
Participant is deceased, by a Beneficiary of such Participant.
(iii) Such designation was in writing, was signed by the Participant or the
Beneficiary, and was made before January 1, 1984.
(iv) The Participant had accrued a benefit under the Plan as of December
31, 1983.
(v) The method of distribution designated by the Participant or the
Beneficiary specifies the time at which distribution will commence, the period
over which distributions will be made, and in the case of any distribution upon
the Participant's death, the Beneficiaries of the Participant listed in order of
priority.
(b) A distribution upon death will not be covered by this Section unless
the information in the designation contains the required information described
above with the respect to the distributions to be made upon the death of the
Participant.
(c) For any distribution which commenced before January 1, 1984, but
continues after December 31, 1983, the Participant, or the Beneficiary, to whom
such distribution is being made, will be presumed to have designated the method
of distribution under which the distribution is being made if the method of
distribution was specified in writing and the distribution satisfies the
requirements in subsections (a)(i) and (v) above.
(d) If a designation is revoked, any subsequent distribution must satisfy
the requirements of Section 401(a)(9) of the Code. Any changes in the
designation will be considered to be revocation of the designation. However, the
mere substitution or addition of another Beneficiary (one not named in the
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designation) under the designation will not be considered to be revocation
of the designation, so long as such substitution or addition does not alter the
period over which distributions are to be made under the designation, either
directly or indirectly (for example, by altering the relevant measuring life).
10.4 Required Distributions. All distributions required under this Section
10.4 shall be determined and made in accordance with the proposed regulations
under Section 401(a)(9) of the Code, including the minimum distribution
incidental benefit requirement of Section 1.401(a)(9)-2 of the proposed
regulations.
(a) Required beginning date. The entire interest of a Participant must be
distributed or begin to be distributed no later than the Participant's required
beginning date.
(b) Limits on Distribution Periods. As of the first distribution calendar
year, distributions, if not made in a single-sum, may only be made over one of
the following periods (or a combination thereof):
(1) a period certain not extending beyond the life expectancy of the
Participant, or
(2) a period certain not extending beyond the joint and last survivor
expectancy of the Participant and a designated beneficiary.
(c) Determination of amount to be distributed each year. If the
Participant's interest is to be distributed in other than a single sum, the
following minimum distribution rules shall apply on or after the required
beginning date:
(1) If a Participant's benefit is to be distributed over (i) a period not
extending beyond the life expectancy of the Participant or the joint life and
last survivor expectancy of the Participant and the Participant's designated
beneficiary or (ii) a period not extending beyond the life expectancy of the
designated beneficiary, the amount required to be distributed for each calendar
year, beginning with distributions for the first distribution calendar year,
must at least equal the quotient obtained by dividing the Participant's benefit
by the applicable life expectancy.
(2) For calendar years beginning before January 1, 1989, if the
Participant's spouse is not the designated beneficiary, the method of
distribution selected must assure that at least fifty percent (50%) of the
present value of the amount available for distribution is paid within the life
expectancy of the Participant.
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(3) For calendar years beginning after December 31, 1988, the amount to be
distributed each year, beginning with distributions for the first distribution
calendar year, shall not be less than the quotient obtained by dividing the
Participant's benefit by the lesser of (1) the applicable life expectancy or (2)
if the Participant's spouse is not the designated beneficiary, the applicable
divisor determined from the table set forth in Q&A-4 of Section 1.401(a)(9)-2 of
the proposed regulations. Distributions after the death of the Participant shall
be distributed using the applicable life expectancy in (c)(i)(A) above as the
relevant divisor without regard to proposed regulations Section 1.401(a)(9)-2.
(4) The minimum distribution required for the Participant's first
distribution calendar year must be made on or before the Participant's required
beginning date. The minimum distribution for other calendar years, including the
minimum distribution for the distribution calendar year in which the
Participant's required beginning date occurs, must be made on or before December
31 of that distribution calendar year.
(d) Death Distribution Provisions.
(1) Distribution beginning before death. If the Participant dies after
distribution of his or her interest has begun, the remaining portion of such
interest will continue to be distributed at least as rapidly as under the method
of distribution being used prior to the Participant's death.
(2) Distribution beginning after death. If the Participant dies before
distribution of his or her interest begins, distribution of the Participant's
entire interest shall be completed by December 31 of the calendar year
containing the fifth (5th) anniversary of the Participant's death except to the
extent that the Participant or his designated beneficiary elects to receive
distributions in accordance with (i) or (ii) below:
(i) if any portion of the Participant's interest is payable to a designated
beneficiary, distributions may be made over a period certain not greater than
the life expectancy of the designated beneficiary commencing on or before
December 31 of the calendar year immediately following the calendar year in
which the Participant died;
(ii) if the designated beneficiary is the Participant's surviving spouse,
the date distributions are required to begin in accordance with (i) above shall
not be earlier than the later of (1) December 31 of the calendar year
immediately following the calendar year in which the Participant died and (2)
December 31 of the calendar year in which the Participant would have attained
age 70 1/2.
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If the Participant has not made an election pursuant to Section 10.4(d)(2)
by the time of his or her death, the Participant's designated beneficiary must
elect the method of distribution no later than the earlier of (1) December 31 of
the calendar year in which distributions would be required to begin under this
Section 10.4(d), or (2) December 31 of the calendar year which contains the
fifth (5th) anniversary of the date of death of the Participant. If the
Participant has no designated beneficiary, or if the designated beneficiary does
not elect a method of distribution, distribution of the Participant's entire
interest must be completed by December 31 of the calendar year containing the
fifth (5th) anniversary of the Participant's death.
(3) For purposes of Section 10.4(d)(2) above, if the surviving spouse dies
after the Participant, but before payments to such spouse begin, the provisions
of Section 10.4(d)(2), with the exception of subparagraph (ii) therein, shall be
applied as if the surviving spouse were the Participant.
(4) For purposes of Section 10.4(d), distribution of a Participant's
interest is considered to begin on the Participant's required beginning date
(or, if Section 10.4(d)(3) above is applicable, the date distribution is
required to begin to the surviving spouse pursuant to Section 10.4(d)(3) above).
(e) Definitions.
(1) Applicable life expectancy. The life expectancy (or joint and last
survivor expectancy) calculated using the attained age of the Participant (or
designated beneficiary) as of the Participant's (or designated beneficiary's)
birthday in the applicable calendar year reduced by one for each calendar year
which has elapsed since the date life expectancy was first calculated. If life
expectancy is being recalculated, the applicable life expectancy will be the
life expectancy as so recalculated. The applicable calendar year shall be the
first distribution calendar year and if life expectancy is being recalculated,
such succeeding calendar year.
(2) Designated beneficiary. The individual who is designated as the
beneficiary under the Plan in accordance with Section 401(a)(9) and the proposed
regulations thereunder.
(3) Distribution calendar year. A calendar year for which a minimum
distribution is required. For distributions beginning before the Participant's
death, the first distribution calendar year is the calendar year immediately
preceding the calendar year which contains the Participant's required beginning
date. For distributions beginning after the Participant's death, the first
distribution calendar year is the calendar year in which distributions are
required to begin pursuant to Section 10.4(d) above.
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(4) Life expectancy. Life expectancy and joint and last survivor expectancy
are computed by use of the expected return multiples in Tables V and VI of
Section 1.72-9 of the income tax regulations. Unless otherwise elected by the
Participant by the time distributions are required to begin, life expectancies
shall not be recalculated annually. Such election shall be irrevocable as to the
Participant (or spouse) and shall apply to all subsequent years. The life
expectancy of a nonspouse designated beneficiary may not be recalculated. A
spousal designated beneficiary may not elect to have his or her life expectancy
recalculated with respect to any distribution paid pursuant to Section
10.4(d)(2).
(5) Participant's benefit.
(i) The Participant's account balance as of the last valuation date in the
calendar year immediately preceding the distribution calendar year (valuation
calendar year) increased by the amount of any contributions or forfeitures
allocated to the account balance as of dates in the valuation calendar year
after the valuation date and decreased by distributions made in the valuation
calendar year after the valuation date.
(ii) For purposes of paragraph (i) above, if any portion of the minimum
distribution for the first distribution calendar year is made in the second
distribution calendar year on or before the required beginning date, the amount
of the minimum distribution made in the second distribution calendar year shall
be treated as if it had been made in the immediately preceding distribution
calendar year.
(6) Required beginning date.
(i) General rule. The required beginning date of a Participant is the first
day of April of the calendar year following the calendar year in which the
Participant attains age 70 1/2.
(ii) Transitional rules. The required beginning date of a Participant who
attains age 70 1/2 before January 1, 1988, shall be determined in accordance
with (A) or (B) below:
(A) Non-five (5)-percent owners. The required beginning date of a
Participant who is not a five (5)-percent owner is the first day of April of the
calendar year following the calendar year in which the later of retirement or
attainment of age 70 1/2 occurs.
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(B) Five (5)-percent owners. The required beginning date of a Participant
who is a five (5)-percent owner during any year beginning after December 31,
1979, is the first day of April following the later of:
(I) the calendar year in which the Participant attains age 70 1/2, or
(II) the earlier of the calendar year with or within which ends the Plan
Year in which the Participant becomes a five (5)-percent owner, or the calendar
year in which the Participant retires.
The required beginning date of a Participant who is not a five (5)-percent
owner who attains age 70 1/2 during 1988 and who has not retired as of January
1, 1989, is April 1, 1990.
(iii) Five (5)-percent owner. A Participant is treated as a five
(5)-percent owner for purposes of this section if such Participant is a five
(5)-percent owner as defined in Section 416(i) of the Code (determined in
accordance with Section 416 but without regard to whether the Plan is top-heavy)
at any time during the Plan Year ending with or within the calendar year in
which such owner attains age 66 1/2 or any subsequent Plan Year.
(iv) Once distributions have begun to a five (5)-percent owner under this
section, they must continue to be distributed, even if the Participant ceases to
be a five (5)-percent owner in a subsequent year.
10.5 Restrictions on Distributions Prior to Normal Retirement Date. If the
value of a Participant's vested account balance exceeds (or at the time of any
prior distribution exceeded) $3,500, the Participant must consent to any
distribution made to him before he attains the Normal Retirement Date. The
consent of the Participant shall be obtained in writing within the 90-day period
ending on the date benefits are paid. The Committee shall notify the Participant
of his right to defer any distribution until the Participant attains the Normal
Retirement Date (or would have attained the Normal Retirement Date if not
deceased). Such notification shall include a general description of the material
features, and an explanation of the relative values of, the optional forms of
benefit available under the Plan in a manner that would satisfy the notice
requirements of Section 417(a)(3) of the Code below, and shall be provided no
less than 30 days and no more than 90 days prior to the date benefits are paid.
The consent of the Participant shall not be required to the extent that a
distribution is required to satisfy Sections 401(a)(9) or 415 of the Code. A
distribution may be paid to the Participant less than 30 days after the notice
described in this Section 10.5 is given to him, provided that the Administrative
Committee clearly informs the Participant that he has the right to a period of
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at least 30 days after receiving the notice to consider the decision of
whether or not to elect the distribution and the Participant, after receiving
the notice, affirmatively elects to receive a distribution. In addition, subject
to Section 10.7, upon termination of this Plan, the Participant's entire account
balance may be distributed without the Participant's consent to the Participant
or transferred to another defined contribution plan (other than an employee
stock ownership plan, as defined in Section 4975(e)(7) of the Code) within the
same controlled group as the Employer.
10.6 Withdrawals upon Attainment of Age 59-1/2. Upon the attainment of age
59-1/2, a Participant who is fully vested in his Employer Contribution Account
will be entitled to withdraw once a Plan Year all or any portion of his account
balance in a single sum. Any withdrawal by a Participant under this Section 10.6
will be made only after the Participant files a written request with the
Administrative Committee pursuant to such terms and conditions as the Committee
may prescribe.
10.7 Direct Rollovers
(a) This Section applies to distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a distributee's election under this Section, a distributee may elect, at
the time and in the manner prescribed by the Administrative Committee to have
any portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover.
(b) Definitions.
(i) Eligible rollover distribution: An eligible rollover distribution is
any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and the portion of any
distribution that is not includable in gross income (determined without regard
to the exclusion for net unrealized appreciation with respect to employer
securities).
(ii) Eligible retirement plan: An eligible retirement plan is an individual
retirement account described in section 408(a) of the Code, an individual
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retirement annuity described in section 408(b) of the Code, an annuity plan
described in section 403(a) of the Code, or a qualified trust described in
section 401(a) of the Code, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
(iii) Distributee: A distributee includes an Employee or former Employee.
In addition, the Employee's or former Employee's surviving spouse or former
spouse who is the alternate payee under a qualified domestic relations order, as
defined in section 414(p) of the Code, are distributees with regard to the
interest of the spouse or former spouse.
(iv) Direct rollover: A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the distributee.
ARTICLE XI
ADMINISTRATION OF PLAN
----------------------
11.1 (a) This Plan shall be administered by a Committee which shall consist
of not less than two nor more than five members.
(b) The Committee shall serve without compensation from the Plan. Vacancies
may be filled by the Chief Executive Officer of Delaware Group Delaware Fund,
Inc. on an interim basis, until action to fill the vacancy is taken by the Board
of Directors of Delaware Group Delaware Fund, Inc.
(c) The Committee:
(1) shall act by affirmative vote of a majority of its members at a meeting
called with five days notice or in writing without a meeting;
(2) shall appoint a Secretary who may be but need not be one of its own
members. He shall keep complete records of the administration of the Plan;
(3) may authorize each and any one of its members to perform routine acts
and to sign documents on its behalf.
11.2 The Committee may appoint such persons or committees, employ such
attorneys, agents, accountants, investment managers, consultants, actuaries, and
other specialists as it deems necessary or desirable to advise or assist
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it in the performance of its duties hereunder and the Committee may rely upon
their respective written opinions or certificates. To the extent such persons
are empowered by written notification from the Committee to perform duties
defined in ERISA as fiduciary duties, such empowerment shall constitute a
delegation of fiduciary responsibility for purposes of determining the
co-fiduciary liability under ERISA. The Committee shall review the performance
of any such persons periodically.
11.3 Administration of the Plan shall consist of interpreting and carrying
out the provisions of this Plan. The Committee shall determine the eligibility
of Employees to participate in this Plan, their rights while Participants in
this Plan and the nature and amount of benefits to be received therefrom. The
Committee shall decide any disputes which may arise under this Plan and the
Trust Agreement. The Committee may provide rules and regulations for the
administration of the Plan consistent with its terms and provisions. Any
construction or interpretation of the Plan and any determination of fact in
administering the Plan made in good faith by the Committee shall be final and
conclusive for all Plan purposes. The Committee shall have the discretionary
authority to determine eligibility for benefits and to construe the terms of the
Plan.
11.4 (a) The Committee shall prescribe a form for the presentation of
claims under the terms of this Plan and/or Trust Agreement.
(b) Upon presentation to the Committee of a claim on the prescribed form,
the Committee shall make a determination of the validity thereof. If the
determination is adverse to the claimant, the Committee shall furnish to the
claimant within 90 days after the receipt of the claim a written notice setting
forth the following:
(1) The specific reason or reasons for the denial;
(2) Specific reference to pertinent provisions of the Plan on which the
denial is based;
(3) A description of any additional material or information necessary for
the claimant to perfect the claim and an explanation of why such material or
information is necessary; and
(4) Appropriate information as to the steps to be taken if the claimant
wishes to submit his or her claim for review.
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(c) In the event of a denial of a claim, the claimant or his duly
authorized representative may appeal such denial to the Committee for a full and
fair review of the adverse determination. Claimant's request for review must be
in writing and made to the Committee within 60 days after receipt by claimant of
the written notification required under Section 11.4(b); provided, however, such
60 day period shall be extended if circumstances so warrant. Claimant or his
duly authorized representative may submit issues and comments in writing which
shall be given full consideration by the Committee in his review.
(d) The Committee may, in its sole discretion, conduct a hearing. A request
for a hearing made by claimant will be given full consideration. At such
hearing, the claimant shall be entitled to appear and present evidence and be
represented by counsel.
(e) A decision on a request for review shall be made by the Committee not
later than 60 days after receipt of the request; provided, however, in the event
of a hearing or other special circumstances, such decision shall be made not
later than 120 days after receipt of such request. If it is necessary to extend
the period of time for making a decision beyond 60 days after the receipt of the
request, the claimant shall be notified in writing of the extension of time
prior to the beginning of such extension.
(f) The Committee's decision on review shall state in writing the specific
reasons and references to the Plan provisions on which it is based. Such
decision shall be promptly provided to the claimant. If the decision on review
is not furnished in accordance with the foregoing, the claim shall be deemed
denied on review.
11.5 The Committee shall have the power to allocate its responsibilities
among its several members, except that all matters involving the hearing of and
decision on the claims and the review of the determination of benefits shall be
made by the full Committee; provided, however, that no member of the Committee
shall participate in any matter relating solely to himself.
11.6 To the extent required by law, the Committee shall give notice in
writing to all interested parties of any amendment of this Plan and/or Trust
Agreement and of any application to any government agency for any determination
of the effect of any such amendment on the Plan within the jurisdiction of that
agency.
11.7 (a) The Committee shall administer the Plan and the Trust Agreement
forming a part thereof under uniform rules of general application.
(b) The Committee or any member thereof:
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(1) May serve under the Plan and/or the Trust Agreement in one or more
fiduciary capacities, as that term is defined in ERISA; and
(2) May resign by giving written notice thereof to the Chief Executive
Officer of Delaware Group Delaware Fund, Inc. not less than fifteen (15) days
before the effective date of such resignation; and
(3) May be removed at any time, without cause, by the Board of Directors of
Delaware Group Delaware Fund, Inc.
ARTICLE XII
AMENDMENT, CONSOLIDATION, MERGER OR TERMINATION
-----------------------------------------------
12.1 Delaware Group Delaware Fund, Inc. may amend the Plan and the Trust
Agreement in any manner and at any time by action of its Board of Directors;
provided, however, that no amendment shall deprive any Participant or his
Beneficiary of any vested interest he may have hereunder unless the amendment is
for the purpose of conforming the Plan to the requirements of the Code or any
other applicable law. No amendment which affects the rights, responsibilities or
duties of the Trustee may be made without the Trustee's written consent. No
amendment shall be made to the Plan which has the effect of eliminating or
reducing an early retirement benefit or a retirement-type subsidy, eliminating
an optional form of benefit or decreasing a Participant's account balance with
respect to benefits attributable to service before the amendment. Further, if
the vesting schedule of the Plan is amended, in the case of an Employee who is a
Participant as of the later of the date such amendment is adopted or the date it
becomes effective, the nonforfeitable percentage (determined as of such date) of
such Employee's right to his Employer derived account balance will not be less
than his percentage computed under the Plan without regard to such amendment.
12.2 Any Participant on the effective date of an amendment who is not
actively participating in the Plan on such effective date shall not benefit from
an amendment unless otherwise required by law or unless such amendment is
specifically made applicable to such Participant.
12.3 In the event of any merger or consolidation with, or transfer of
assets or liabilities to, any other plan, each Participant shall be entitled to
a benefit after the merger, consolidation or transfer (if the Plan then
terminated) which is not less than the benefits he would have been entitled to
receive immediately before the merger, consolidation or transfer (if the Plan
had then terminated).
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12.4 The Employer intends to continue the Plan indefinitely but reserves
the right to discontinue contributions, terminate or partially terminate the
Plan at any time. In the event of a complete discontinuance of contributions,
termination or partial termination of the Plan, the interests of all
Participants affected shall become nonforfeitable. Upon termination of the Plan,
the Employer shall in its complete discretion notify the Trustee to either hold
all assets of the Trust Fund and make payments in accordance with the terms of
the Plan or distribute to each Participant his net account balance in a lump sum
payment in cash or kind. The Employer's contribution to the Trust Fund or the
income thereof shall not be paid to, or shall not revert to Employer and shall
not be used for any purpose other than the exclusive benefit of the Participants
or their Beneficiaries.
ARTICLE XIII
MISCELLANEOUS
-------------
13.1 To the extent permitted by law, it is a condition of the Plan that the
benefits provided hereunder shall not be subject to assignment, anticipation,
alienation, attachment, levy or transfer, and any attempt to do so shall not be
recognized. The preceding sentence shall also apply to the creation, assignment
or recognition of a right to any benefit payable with respect to a Participant
pursuant to a domestic relations order, unless such order is determined to be a
qualified domestic relations order as defined in Section 414(p) of the Code. If
provided by the terms of a qualified domestic relations order, a distribution of
benefits may be made from the Plan to the alternate payee under such order in a
single lump sum as soon as practicable following the determination by the
Administrative Committee that the order constitutes a qualified domestic
relations order. Payment of benefits may be made to the alternate payee even
though the Participant identified in the order has not attained the earliest
retirement age under the Plan. For purposes of this Section 13.1, the "earliest
retirement age" means the earlier of (i) the date in which the Participant is
entitled to a distribution under the Plan or (ii) the later of the date the
Participant attains age 50 or the earliest date on which the Participant would
begin receiving benefits if the Participant separated from service.
13.2 Nothing herein contained shall be deemed to give any Employee the
right to be retained in the employ of Employer or to interfere with the right of
the Employer to discharge any Employee at any time, nor shall it be deemed to
give the Employer the right to require any Employee to remain in its employ, nor
shall it interfere with the Employee's right to terminate his employment at any
time.
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13.3 All expenses incurred by the Trustees in the administration of the
Fund, including but not limited to the compensation of counsel, accountants,
Trustees, other agents or fiduciaries, shall be charged against the Employer,
unless otherwise paid by the Fund.
13.4 This Plan shall be interpreted in accordance with the laws of the
Commonwealth of Pennsylvania, except to the extent superseded by ERISA as in
effect from time to time.
ARTICLE XIV
LOANS
-----
14.1 The Committee, in its sole discretion, may direct the Trustees to make
a loan to a Participant, who is a party-in-interest, as defined in Section 3(14)
of ERISA, from the Participant's account balance upon receipt of a written
request from the Participant. The total amount of any such loan (when added to
the outstanding balance of all other loans to the Participant under the Plan or
any other qualified plan of the Employer) shall not exceed the lesser of $50,000
or 50% of the Participant's vested account balance. The $50,000 limitation shall
be reduced by the excess, if any, of the highest outstanding balance of loans to
the Participant from the Plan during the one-year period ending on the day
before the date on which such loan was made over the outstanding balance of
loans from the Plan to the Participant on the date that such loan was made.
14.2 A request by a Participant for a loan shall be made in writing to the
Committee and shall specify the amount of the loan. The terms and conditions on
which the Committee shall approve loans under the Plan shall be applied on a
reasonably equivalent basis with respect to all Participants. If a Participant's
request for a loan is approved by the Committee, the Committee shall furnish the
Trustees with written instructions directing the Trustees to make the loan in a
lump sum payment of cash to the Participant. In making any loan payment under
this Article XIV, the Trustees shall be fully entitled to rely on the
instructions furnished by the Committee, and shall be under no duty to make any
inquiry or investigation with respect thereto.
14.3 Loans shall be made on such terms and subject to such limitations as
the Committee may prescribe from time to time, provided that any such loan shall
be evidenced by a written note, shall bear a reasonable rate of interest on the
unpaid principal thereof, shall be adequately secured, and shall be repaid by
the Participant over a period not to exceed five years.
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14.4 Any loan to a Participant under the Plan shall be secured by the
pledge of not more than 50% percent of the Participant's right, title and
interest in his vested account balance. Such pledge shall be evidenced by the
execution of a promissory note by the Participant.
14.5 The Committee shall have the sole responsibility for insuring that a
Participant timely makes all loan repayments, and for notifying the Trustees in
the event of any default by the Participant on the loan. Each loan repayment
shall be paid to the Trustees, and shall be accompanied by written instructions
from the Committee that identifies the Participant on whose behalf the loan
repayment is being made. Repayment of loans shall be made solely by means of
payroll deductions, or such other manner approved by the Committee.
14.6 In the event of a default by a Participant on a loan repayment, all
remaining principal payments on the loan shall be immediately due and payable.
The Committee shall be authorized (to the extent permitted by law) to take any
and all actions necessary and appropriate to enforce collection of an unpaid
loan. However, in the event of a default, foreclosure on the note and attachment
of security will not occur until a distributable event occurs under the Plan.
14.7 Upon the occurrence of a Participant's retirement or death, or earlier
distribution of benefits, the unpaid balance of any loan, including any unpaid
interest, shall be deducted from any payment or distribution from the Trust Fund
to which such Participant or his Beneficiary may be entitled and his vested
interest in his account shall be reduced.
14.8 A loan to a Participant shall be considered an investment of the
separate account(s) of the Participant from which the loan is made. All loan
repayments shall be credited to such separate account(s) and reinvested in the
investment company fund designated by the Participant.
14.9 A loan may not be made to a Participant who owns (or is considered as
owning within the meaning of Section 318(a)(1) of the Internal Revenue Code)
more than 5% of the outstanding stock of the Employer.
14.10 For loans granted or renewed on or after the last day of first Plan
Year beginning on or after January 1, 1989, the Committee shall issue written
loan guidelines, which shall form part of the Plan, describing the procedures
and conditions for making loans, and may revise those guidelines at any time,
and for any reason.
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ARTICLE XV
LIMITATIONS ON ALLOCATIONS
--------------------------
15.1 The provisions of this Article XV shall be effective for limitation
years beginning after December 31, 1986.
(a) Notwithstanding any provisions of this Plan to the contrary, the annual
additions which may be credited to a Participant's account for any limitation
year will not exceed the lesser of the maximum permissible amount or any other
limitation contained in this Plan.
(b) As soon as is administratively feasible after the end of the limitation
year, the maximum permissible amount for the limitation year will be determined
on the basis of the Participant's actual compensation for the limitation year.
(c) In the event that it is determined that because of the allocation of
forfeitures, a reasonable error in estimating a Participant's annual
compensation or under other limited facts and circumstances permitted by the
Commissioner of the Internal Revenue Service, if there is an excess amount the
excess will be disposed of as follows:
(1) If the Participant is covered by the Plan at the end of the limitation
year, the excess amount shall be used to reduce employer contributions
(including any allocation of forfeitures) for such Participant in the next
limitation year, and each succeeding limitation year if necessary;
(2) If the Participant is not covered by the Plan at the end of the
limitation year, the excess amount will be held unallocated in a suspense
account. The suspense account will be applied to reduce future employer
contributions (including allocation of any forfeitures) for all remaining
Participants in the next limitation year, and each succeeding limitation year if
necessary;
(3) If a suspense account is in existence at any time during the limitation
year pursuant to this Section, it will not participate in the allocation of
investment gains and losses. The entire amount allocated to Participants from a
suspense account, including any such gains or other income or less any losses is
considered an annual addition.
(d) For the purpose of applying the limitations under this Article, all
defined contribution plans maintained by the employer are to be considered as a
single plan.
15.2 Definitions. For purposes of this Article only, the following
definitions and rules of interpretation will apply:
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(a) "annual additions" -- The sum of the following amounts credited to a
Participant's account for the limitation year:
(1) employer contributions;
(2) forfeitures;
(3) voluntary Employee contributions;
(4) amounts allocated after March 31, 1984, to an individual medical
account, as defined in Section 415(1)(1) of the Code, which is part of a pension
or annuity maintained by the employer;
(5) amounts derived from contributions paid or accrued after December 31,
1985, in taxable years ending after such date, which are attributable to
post-retirement medical benefits allocated to the separate account of a key
employee, as defined in Section 419A(d)(3) of the Code, under a welfare benefit
fund as defined in Section 419(e) of the Code, maintained by the employer; and
(6) excess amounts applied under this Article in the limitation year to
reduce employer contributions.
(b) "compensation" -- a Participant's earned income, wages, salaries, and
fees for professional services and other amounts received (without regard to
whether an amount is paid in cash) for personal services actually rendered in
the course of employment with the employer to the extent that the amounts are
includable in gross income (including, but not limited to, commissions paid
salesmen, compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips, bonuses, fringe benefits,
reimbursements and expense allowances), and excluding the following:
(1) Employer contributions to a plan of deferred compensation which are not
includable in the Employee's gross income for the taxable year in which
contributed, or Employer contributions under a simplified employee pension to
the extent such contributions are deductible by the Employee, or any
distributions from a plan of deferred compensation;
(2) Amounts realized from the exercise of a nonqualified stock option, or
when restricted stock (or property) held by the Employee either becomes freely
transferable or is no longer subject to a substantial risk of forfeiture;
(3) Amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified stock option; and
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<PAGE>
(4) Other amounts which received special tax benefits, or contributions
made by the employer (whether or not under a salary reduction agreement) towards
the purchase of an annuity described in Section 403(b) of the Code (whether or
not the amounts are actually excludable from the gross income of the Employee);
and
(5) Any contribution for medical benefits (within the meaning of Section
419A(f)(2) of the Code) after separation from service which is otherwise treated
as an annual addition; and
(6) Any amount otherwise treated as an annual addition under Section
415(i)(1) of the Code.
For purposes of applying the limitations of this Article, compensation for
a limitation year is the compensation actually paid or includable in gross
income during such year.
Notwithstanding the preceding sentence, compensation for a Participant who
is permanently and totally disabled (as defined in Section 37(e)(3) of the Code)
is the compensation such Participant would have received for the limitation year
if the Participant had been paid at the rate of compensation paid immediately
before becoming permanently and totally disabled; such imputed compensation for
the disabled Participant may be taken into account only if the Participant is
not an officer, an owner, or highly compensated, and contributions made on
behalf of such Participant are nonforfeitable when made.
(c) "employer" -- The Employer that adopts this Plan, and all members of a
controlled group of corporations (as defined in Section 414(b) of the Code as
modified by Section 415(h) of the Code), all commonly controlled trades or
businesses (as defined in Section 414(c) of the Code as modified by Section
415(h) of the Code), or affiliated service groups (as defined in Section 414(m)
of the Code) of which the adopting Employer is a part.
(d) "excess amount" -- The excess of the Participant's annual additions for
the limitation year over the maximum permissible amount.
(e) "limitation year" -- Effective April 2, 1989, the twelve-month period
beginning April 2 and ending April 1. Prior to April 2, 1989, the limitation
year is the twelve-month period from November 1 through the following October
31, except the limitation year beginning November 1, 1988 shall end April 1,
1989.
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<PAGE>
(f) "maximum permissible amount" -- The lesser of $30,000 (or, if greater,
1/4 of the dollar limitation in effect under Section 415(b)(1)(A) of the Code)
or twenty-five percent (25%) of the Participant's compensation for the
limitation year.
ARTICLE XVI
TOP HEAVY DEFINITIONS AND RULES
-------------------------------
16.1 Key employee. An Employee or former Employee, (or the Beneficiary of
such an Employee or former Employee) who at any time during the determination
period was:
(a) An officer of the Employer having an annual compensation greater than
fifty percent (50%) of the amount in effect under Section 415(b)(1)(A) of the
Code for any such Plan Year;
(b) One of the ten Employees having annual compensation from the Employer
of more than the limitation in effect under Section 415(c)(1)(A) of the Code and
owning (or considered as owning within the meaning of Section 318 of the Code)
the largest interests in the Employer;
(c) A person owning (or considered as owning within the meaning of Section
318 of the Code) more than five percent (5%) of the outstanding stock of the
Employer or stock possessing more then five percent (5%) of the total combined
voting power of ail stock of the Employer, or
(d) A person who has annual compensation from the Employer of more than
$150,000 and who would be described in (c) hereof if one percent (1%) were
substituted for five percent (5%).
For purposes of (a) above, no more than fifty (50) Employees (or, if lesser, the
greater of three or ten percent of the Employees will be treated as officers.)
For purposes of (b), if two Employees have the same interest in the Employer,
the Employee having greater annual compensation from the Employer will be
treated as having a larger interest. For purposes of this Article the term
"compensation" shall have the same meaning as provided for in Article XV.
The determination period is the Plan Year containing the determination date
as defined in Section 16.8, and the four (4) preceding Plan Years. The
determination of who is a key employee will be made in accordance with the rules
and regulations under Section 416(i)(1) of the Code.
16.2 Non-key employee. Any Employee who is not a key employee. In addition,
any Beneficiary of a non-key employee will be treated as a non-key employee.
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<PAGE>
16.3 Permissive aggregation group. The required aggregation group of plans
plus any other plan or plans of the Employer, which considered as a group with
the required aggregation group, would continue to satisfy the requirements of
Sections 401(a)(4) and 410 of the Code.
16.4 Required aggregation group.
(a) Each qualified plan of the Employer in which at least one key employee
participates or participated at any time during the determination period
(regardless of whether the plan has terminated), and
(b) Any other qualified plan of the Employer which enables a plan described
in (a) to meet the requirements of Sections 401 (a)(4) and 410 of the Code.
16.5 Top-heavy plan. This Plan is top-heavy for any Plan Year if any of the
following conditions exist;
(a) If the top-heavy ratio for this Plan exceeds sixty percent (60%) and
this Plan is not part of any required aggregation group or permissive
aggregation group of plans.
(b) If this Plan is part of a required aggregation group of plans but not
part of a permissive aggregation group and the top-heavy ratio for the required
aggregation group of plans exceeds sixty percent (60%).
(c) If this Plan is a part of a permissive aggregation group of plans and
the top-heavy ratio for the required aggregation group exceeds sixty percent
(60%) and the top-heavy ratio for the permissive aggregation group exceeds sixty
percent (60%).
16.6 Super top-heavy plan. For any Plan Year in which this Plan would be a
Top-Heavy Plan pursuant to Section 16.5 above if "ninety percent (90%)" were
substituted for "sixty percent (60%)" at each place where "sixty percent (60%)"
appears therein.
16.7 Top-heavy ratio.
(a) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and has not maintained any
defined benefit plan which during the five (5) year period ending on the
determination date has or has had accrued benefits, the top-heavy ratio for this
Plan alone or for the required or permissive aggregation group as appropriate is
a fraction, the numerator of which is the sum of the account balances of all key
employees as of the determination date (including any part of any account
balance distributed in the five (5) year period ending on the determination
-40-
<PAGE>
date), and the denominator of which is the sum of all account balances
(including any part of any account balance distributed in the five (5) Year
period ending on the determination date), both computed in accordance with
Section 416 of the Code and the regulations thereunder. Both the numerator and
denominator of the top-heavy ratio are increased to reflect any contribution not
actually made as of the determination date, but which is required to be taken
into account on that date under Section 416 of the Code and the regulations
thereunder.
(b) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and maintains or has maintained
one or more defined benefit plans which during the five (5) year period ending
on the Determination Date has or has had any accrued benefits, the top-heavy
ratio for any required or permissive aggregation group as appropriate is a
fraction, the numerator of which is the sum of account balances under the
aggregated defined contribution plan or plans for all key employees determined
in accordance with (2) above, and the present value of accrued benefits under
the aggregated defined benefit plan or plans for all key employees as of the
determination date, and the denominator of which is the sum of the account
balances under the aggregated defined contribution plan or plans for all
Participants, determined in accordance with (a) above, and the present value of
accrued benefits under the aggregated defined benefit plan or plans for all
Participants as of the determination dates, all determined in accordance with
Section 416 of the Code and the regulations thereunder. The accrued benefits
under a defined benefit plan in both the numerator and denominator of the
top-heavy ratio are increased for any distribution of an accrued benefit made in
the five year period ending on the determination date.
(c) For the purposes of (a) and (b) above, the value of account balances
and the present value of accrued benefits will be determined as of the most
recent valuation date that falls within or ends with the twelve (12) month
period ending on the determination date, except as provided in Section 416 of
the Code and the regulations thereunder for the first and second plan years of a
defined benefit plan. The account balances and accrued benefits of a Participant
(1) who is a non-key employee but who was a key employee in a prior year, or (2)
who has not been credited with at least one Hour of Service with any Employer
maintaining the Plan at any time during the five (5) year period ending on the
determination date will be disregarded. The calculation of the top-heavy ratio,
and the extent to which distributions, rollovers, and transfers are taken into
account will be made in accordance with Section 416 of the Code and the
regulations thereunder. When aggregating plans the value of account balances and
accrued benefits will be calculated with reference to the determination dates
that fall within the same calendar year. If any individual has not received
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<PAGE>
any compensation from any employer maintaining the plan (other than benefits
under the Plan) at any time during the five (5) year period ending on the
determination date, any accrued benefit for such individual (and the account
of such individual) will not be taken into account.
Effective for Plan Years beginning after December 31, 1986, the accrued
benefit of a Participant other than a key employee shall be determined under (i)
the method, if any, that uniformly applies for accrual purposes under all
defined benefit plans maintained by the Employer or (ii) if there is no such
method, as if such benefit accrued not more rapidly than the slowest accrual
rate permitted under the fractional rule of Section 411(b)(1)(C) of the Code.
16.8 Determination date. With respect to any Plan Year subsequent to the
first Plan Year, the last day of the preceding Plan Year. For the first Plan
Year of the Plan, the last day of that Plan Year.
16.9 Valuation date. The last day of the Plan Year.
16.10 Present value. Present value will be based upon the interest and
mortality rates specified in the Employer's defined benefit plan.
16.11 Minimum Allocation.
(a) If in any Plan Year the Plan is a Top Heavy Plan and the Employer does
not maintain any qualified defined benefit plan in addition to this Plan, except
as provided in (b) and (c) below, the Employer contributions and forfeitures
allocated on behalf of any Participant who is a non-key employee will not be
less than the lesser of three percent (3%) of such Participant's compensation or
the largest percentage of Employer contributions and forfeitures, as a
percentage of the first $200,000 of the key employee's compensation (as defined
in Section 15.2(b)), and as limited by Section 401(a)(17) of the Code, allocated
on behalf of any key employee for that year. The minimum allocation is
determined without regard to any Social Security contributions. This minimum
allocation will be made even though, under other Plan provisions, the
Participant would not otherwise be entitled to receive an allocation, or would
have received a lesser allocation for the year because of the Participant's
failure to complete 1,000 Hours of Service. The minimum allocation (if any)
required under this paragraph (a) shall be made to this Plan only to the extent
such allocation is not made for the Participant under any other defined
contribution plan(s) maintained by the Employer.
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<PAGE>
(b) In the event the Employer maintains a qualified defined benefit plan(s)
in addition to this Plan, the Employer will provide a minimum allocation at
least equal to five percent (5%) of compensation (as defined in Section 15.2(b))
to each non-key employee, entitled under (a) above to receive a minimum
allocation, who is covered under this Plan and the qualified defined benefit
plan(s). If this Plan enables a defined benefit plan to meet the requirements of
Section 401(a) or 410 of the Code, the minimum allocation described in (a) above
must be at least three percent (3%) of a Participant's compensation, regardless
of the largest percentage of Employer contributions and forfeitures of a key
employee's compensation.
(c) The provisions in (a) and (b) above will not apply to any Participant
who was not employed by the Employer on the last day of the Plan Year.
(d) The minimum allocation required under this Section 16.11 (to the extent
required to be nonforfeitable under Section 416(b) of the Code) may not be
forfeited under Sections 411(a)(3)(B) or 411(a)(3)(D) of the Code.
IN WITNESS WHEREOF, Delaware Group Delaware Fund, Inc. has caused this
amended and restated Plan, effective April 1, 1989, to be executed by its duly
authorized officers and its corporate seal to be impressed hereon this 17th day
of November, 1994.
Attest: DELAWARE GROUP DELAWARE FUND, INC.
/s/ George M. Chamberlain, Jr. By: /s/Brian F. Wruble
- ------------------------------ -------------------------
George M. Chamberlain, Jr. Brian F. Wruble
Senior Vice President/Secretary President and Chief
Executive Officer
-43-
<PAGE>
EX-99
EX-99.B11 CONSENT OF AUDITORS
Consent of Independent Auditors
We consent to the references to our firm under the captions "Financial
Highlights" in the Prospectus and "Financial Statements" in the Statement of
Additional Information and to the incorporation by reference in this
Post-Effective Amendment No. 42 to the Registration Statement (Form N-1A)
(No. 2-75526) of Delaware Group Limited-Term Government Funds, Inc. -
Limited-Term Government Fund (formerly Delaware Group Treasury Reserves, Inc. -
Treasury Reserves Intermediate Series) of our report dated February 7, 1995,
included in the 1994 Annual Report to Shareholders of Delaware Group
Limited-Term Government Funds, Inc. - Limited-Term Government Fund (formerly
Delaware Group Treasury Reserves, Inc. - Treasury Reserves Intermediate Series).
Ernst & Young LLP
Philadelphia, Pennsylvania
November 20, 1995
[FORM OF 12b-1 PLAN FOR CLASS A SHARES]
12b-1 Plan
Class A
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule l2b-l under the Investment Company Act of l940 (the "Act") by [FUND
NAME] (the "Fund")[, now for the [SERIES NAME] (the "Series")] on behalf of the
_____________ class [now doing business as the _____________ A Class]
(hereinafter referred to as the "Class"), which Fund[, Series] and Class may do
business under these or such other names as the Board of [Directors/Trustees] of
the Fund may designate from time to time. The Plan has been approved by a
majority of the Board of [Directors/Trustees], including a majority of the
[Directors/Trustees] who are not interested persons of the Fund and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreements related thereto ("non-interested [Directors/Trustees]"), cast in
person at a meeting called for the purpose of voting on such Plan. Such approval
by the [Directors/Trustees] included a determination that in the exercise of
reasonable business judgment and in light of their fiduciary duties, there is a
reasonable likelihood that the Plan will benefit the Class and its shareholders.
If the Plan has not yet been approved by a majority of the outstanding voting
securities as required in the Act, the Plan will be presented to the public
shareholders at the next regular annual or special meeting.
<PAGE>
The Fund is a [corporation/common law trust] organized under the laws
of the [State of Maryland/Commonwealth of Pennsylvania], is authorized to issue
different series and classes of securities and is an open-end management
investment company registered under the Act. [Delaware Management Company,
Inc./Delaware International Advisers Ltd.] serves as the [Fund's/Series']
investment adviser and manager pursuant to an Investment Management Agreement.
Delaware Service Company, Inc. serves as the [Fund's/Series'] shareholder
servicing, dividend disbursing and transfer agent. Delaware Distributors, L.P.
(the "Distributor") is the principal underwriter and national distributor for
the [Fund's/Series'] shares, including shares of the Class pursuant to the
Distribution Agreement between the Distributor and the [Fund/Series]
("Distribution Agreement").
The Plan provides that:
l. The Fund shall pay to the Distributor a monthly fee not to exceed
0.3% (3/10 of l%) per annum of the [Fund's/Series'] average daily net assets
represented by shares of the Class (the "Maximum Amount") as may be determined
by the Fund's Board of [Directors/Trustees] from time to time. Such monthly fee
shall be reduced by the aggregate sums paid by the Fund [on behalf of the
Series] to persons other than broker-dealers (the "Service Providers") who may,
pursuant to servicing agreements, provide to the [Fund/Series] services in the
[Fund's/Series'] marketing of shares of the Class.
2. (a) The Distributor shall use the monies paid to it pursuant to
paragraph l above to furnish, or cause or encourage others to furnish, services
and incentives in connection with the promotion, offering and sale of Class
shares and, where suitable and appropriate, the retention of Class shares by
shareholders.
(b) The Service Providers shall use the monies paid respectively to
them to reimburse themselves for the actual costs they have incurred in
confirming that their customers have received the Prospectus and Statement of
Additional Information, if applicable, and as a fee for (l) assisting such
customers in maintaining proper records with the Fund (2) answering questions
relating to their respective accounts and (3) aiding in maintaining the
investment of their respective customers in the Class.
<PAGE>
3. The Distributor shall report to the Fund at least monthly on the
amount and the use of the monies paid to it under the Plan. The Service
Providers shall inform the Fund monthly and in writing of the amounts each
claims under the Plan; both the Distributor and the Service Providers shall
furnish the Board of [Directors/Trustees] of the Fund with such other
information as the Board may reasonably request in connection with the payments
made under the Plan and the use thereof by the Distributor and the Service
Providers, respectively, in order to enable the Board to make an informed
determination of the amount of the Fund's payments and whether the Plan should
be continued.
4. The officers of the Fund shall furnish to the Board of
[Directors/Trustees] of the Fund, for their review, on a quarterly basis, a
written report of the amounts expended under the Plan and the purposes for which
such expenditures were made.
5. This Plan shall take effect at such time as the Distributor shall
notify the Fund in writing of the commencement of the Plan, which time shall not
be before the first annual or special meeting of the public shareholders at
which the Plan is or was approved by the vote of a majority of the outstanding
voting securities as required in the Act (the "Commencement Date"); thereafter,
the Plan shall continue in effect for a period of more than one year from the
Commencement Date only so long as such continuance is specifically approved at
least annually by a vote of the Board of [Directors/Trustees] of the Fund, and
of the non-interested [Directors/Trustees], cast in person at a meeting called
for the purpose of voting on such Plan.
6. (a) The Plan may be terminated at any time by vote of a majority of
the non-interested [Directors/Trustees] or by vote of a majority of the
outstanding voting securities of the Class.
(b) The Plan may not be amended to increase materially the amount to
be spent for distribution pursuant to paragraph l thereof without approval by
the shareholders of the Class.
7. All material amendments to this Plan shall be approved by the
non-interested [Directors/Trustees] in the manner described in paragraph 5
above.
<PAGE>
8. So long as the Plan is in effect, the selection and nomination of
the Fund's non-interested [Directors/Trustees] shall be committed to the
discretion of such non-interested [Directors/Trustees].
9. The definitions contained in Sections 2(a)(19) and 2(a)(42) of the
Act shall govern the meaning of "interested person(s)" and "vote of a majority
of the outstanding voting securities," respectively, for the purposes of this
Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
November 29, 1995
[FORM OF 12b-1 PLAN FOR CLASS B SHARES]
12b-1 Plan
Class B
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by [FUND
NAME] (the "Fund") [,for the [SERIES NAME] (the "Series")] on behalf of the
_______________________ B Class (the "Class"), which Fund[, Series] and Class
may do business under these or such other names as the Board of
[Directors/Trustees] of the Fund may designate from time to time. The Plan has
been approved by a majority of the Board of [Directors/Trustees], including a
majority of the [Directors/Trustees] who are not interested persons of the Fund
and who have no direct or indirect financial interest in the operation of the
Plan or in any agreements related thereto ("non-interested
[Directors/Trustees]"), cast in person at a meeting called for the purpose of
voting on such Plan. Such approval by the [Directors/Trustees] included a
determination that in the exercise of reasonable business judgment and in light
of their fiduciary duties, there is a reasonable likelihood that the Plan will
benefit the Class and its shareholders. The Plan has been approved by a vote of
the holders of a majority of the outstanding voting securities of the Class, as
defined in the Act.
The Fund is a [corporation/common law trust] organized under the laws
of the [State of Maryland/Commonwealth of Pennsylvania], is authorized to issue
different series and classes of securities and is an open-end management
investment company registered under the Act. [Delaware Management Company,
Inc./Delaware International Advisers Ltd.] serves as the [Fund's/Series']
investment adviser and manager pursuant to an Investment Management Agreement.
Delaware Service Company, Inc. serves as the [Fund's/Series'] shareholder
servicing, dividend disbursing and transfer agent. Delaware Distributors, L.P.
(the "Distributor") is the principal underwriter and national distributor for
the [Fund's/Series'] shares, including shares of the Class, pursuant to the
Distribution Agreement between the Distributor and the [Fund/Series]
("Distribution Agreement").
<PAGE>
The Plan provides that:
1. (a) The Fund shall pay to the Distributor a monthly fee not to
exceed 0.75% (3/4 of 1%) per annum of the [Fund's/Series'] average daily net
assets represented by shares of the Class as may be determined by the Fund's
Board of [Directors/Trustees] from time to time.
(b) In addition to the amounts described in (a) above, the Fund
shall pay (i) to the Distributor for payment to dealers or others, or (ii)
directly to others, an amount not to exceed 0.25% (1/4 of 1%) per annum of the
[Fund's/Series'] average daily net assets represented by shares of the Class, as
a service fee pursuant to dealer or servicing agreements.
2. (a) The Distributor shall use the monies paid to it pursuant to
paragraph 1(a) above to assist in the distribution and promotion of shares of
the Class. Payments made to the Distributor under the Plan may be used for,
among other things, preparation and distribution of advertisements, sales
literature and prospectuses and reports used for sales purposes, as well as
compensation related to sales and marketing personnel, and holding special
promotions. In addition, such fees may be used to pay for advancing the
commission costs to dealers with respect to the sale of Class shares.
(b) The monies to be paid pursuant to paragraph 1(b) above shall be
used to pay dealers or others for, among other things, furnishing personal
services and maintaining shareholder accounts, which services include confirming
that customers have received the Prospectus and Statement of Additional
Information, if applicable; assisting such customers in maintaining proper
records with the Fund; answering questions relating to their respective
accounts; and aiding in maintaining the investment of their respective customers
in the Class.
3. The Distributor shall report to the Fund at least monthly on the
amount and the use of the monies paid to it under paragraph 1(a) above. In
addition, the Distributor and others shall inform the Fund monthly and in
writing of the amounts paid under paragraph 1(b) above; both the Distributor and
any others receiving fees under the Plan shall furnish the Board of
[Directors/Trustees] of the Fund with such other information as the Board may
reasonably request in connection with the payments made under the Plan and the
use thereof by the Distributor and others in order to enable the Board to make
an informed determination of the amount of the Fund's payments and whether the
Plan should be continued.
<PAGE>
4. The officers of the Fund shall furnish to the Board of
[Directors/Trustees] of the Fund, for their review, on a quarterly basis, a
written report of the amounts expended under the Plan and the purposes for which
such expenditures were made.
5. This Plan shall take effect at such time as the Distributor shall
notify the Fund of the commencement of the Plan (the "Commencement Date");
thereafter, the Plan shall continue in effect for a period of more than one year
from the Commencement Date only so long as such continuance is specifically
approved at least annually by a vote of the Board of [Directors/Trustees] of the
Fund, and of the non-interested [Directors/Trustees], cast in person at a
meeting called for the purpose of voting on such Plan.
6.(a) The Plan may be terminated at any time by vote of a majority
of the non-interested [Directors/Trustees] or by vote of a majority of the
outstanding voting securities of the Class.
(b) The Plan may not be amended to increase materially the amount to
be spent for distribution pursuant to paragraph 1 thereof without approval by
the shareholders of the Class.
7. All material amendments to this Plan shall be approved by the
non-interested [Directors/Trustees] in the manner described in paragraph 5
above.
8. So long as the Plan is in effect, the selection and nomination of
the Fund's non-interested [Directors/Trustees] shall be committed to the
discretion of such non-interested [Directors/Trustees].
9. The definitions contained in Sections 2(a)(19) and 2(a)(42) of the
Act shall govern the meaning of "interested person(s)" and "vote of a majority
of the outstanding voting securities," respectively, for the purposes of this
Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
November 29, 1995
<PAGE>
[FORM OF 12b-1 PLAN
C CLASS SHARES]
DISTRIBUTION PLAN
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by the Fund
(the "Fund"), on behalf of the Fund's C Class (the "Class"). The Plan has been
approved by a majority of the Board of Directors, including a majority of the
Directors who are not interested persons of the Fund and who have no direct or
indirect financial interest in the operation of the Plan or in any agreements
related thereto, cast in person at a meeting called for the purpose of voting on
such Plan. Such approval by the Directors included a determination that in the
exercise of reasonable business judgment and in light of their fiduciary duties,
there is a reasonable likelihood that the Plan will benefit the Fund and its
shareholders. The Plan has been approved by a vote of the holders of a majority
of the outstanding voting securities of the Class, as defined in the Act.
The Fund is a [corporation/business trust] organized under the laws of
the [State of Maryland/Commonwealth of Pennsylvania], is authorized to issue
different series and classes of securities and is an open-end management
investment company registered under the Act. [Delaware Management Company, Inc.
("DMC") or Delaware International Advisers Ltd. ("Delaware International"), an
<PAGE>
affiliate of DMC,] serves as the Fund's investment adviser and manager pursuant
to an Investment Management Agreement. Delaware Service Company, Inc. serves as
the Fund's shareholder servicing, dividend disbursing and transfer agent.
Delaware Distributors, L.P. (the "Distributor") is the principal underwriter and
national distributor for the Fund's shares, including shares of the Class,
pursuant to the Distribution Agreement between the Distributor and the Fund
("Distribution Agreement").
The Plan provides that:
1.(a) The Fund shall pay to the Distributor a monthly fee not to exceed
0.75% (3/4 of 1%) per annum of the Fund's average daily net assets represented
by shares of the Class as may be determined by the Fund's Board of Directors
from time to time.
(b) In addition to the amounts described in paragraph 1(a) above, the
Fund shall pay: (i) to the Distributor for payment to dealers or others; or (ii)
directly to others, an amount not to exceed 0.25% (1/4 of 1%) per annum of the
Fund's average daily net assets represented by shares of the Class, as a service
fee pursuant to dealer or servicing agreements.
2.(a) The Distributor shall use the monies paid to it pursuant to
paragraph 1(a) above to assist in the distribution and promotion of shares of
the Class. Payments made to the Distributor under the Plan may be used for,
among other things, preparation and distribution of advertisements, sales
literature and prospectuses and reports used for sales purposes, as well as
compensation related to sales and marketing personnel, and holding special
<PAGE>
promotions. In addition, such fees may be used to pay for advancing the
commission costs to dealers with respect to the sale of Class shares.
(b) The monies to be paid pursuant to paragraph 1(b) above shall be
used to pay dealers or others for, among other things, furnishing personal
services and maintaining shareholder accounts, which services include confirming
that customers have received the Prospectus and Statement of Additional
Information, if applicable; assisting such customers in maintaining proper
records with the Fund; answering questions relating to their respective
accounts; and aiding in maintaining the investment of their respective customers
in the Fund.
3. The Distributor shall report to the Fund at least monthly on the
amount and the use of the monies paid to it under paragraph 1(a) above. In
addition, the Distributor and others shall inform the Fund monthly and in
writing of the amounts paid under paragraph 1(b) above; both the Distributor and
any others receiving fees under the Plan shall furnish the Board of Directors of
the Fund with such other information as the Board may reasonably request in
connection with the payments made under the Plan and the use thereof by the
Distributor and others in order to enable the Board to make an informed
determination of the amount of the Fund's payments and whether the Plan should
be continued.
4. The officers of the Fund shall furnish to the Board of Directors of
the Fund, and the Directors shall review, on a quarterly basis, a written report
of the amounts expended under the Plan and the purposes for which such
expenditures were made.
<PAGE>
5. This Plan shall take effect at such time as the Distributor shall
notify the fund in writing of the commencement of the Plan (the "Commencement
Date"); thereafter, the Plan shall continue in effect for a period of more than
one year from the Commencement Date only so long as such continuance is
specifically approved at least annually by a vote of the Board of Directors of
the Fund, and of the Directors who are not interested persons of the Fund and
have no direct or indirect financial interest in the operation of the Plan or in
any agreements related to the Plan ("non-interested Directors"), cast in person
at a meeting called for the purpose of voting on such Plan.
6.(a) The Plan may be terminated at any time by vote of a majority of
the non-interested Directors or by vote of a majority of the outstanding voting
securities of the Class.
(b) The Plan may not be amended to increase materially the amount to
be spent for distribution pursuant to paragraph 1 thereof without approval by
the shareholders of the Class.
7. All material amendments to this Plan shall be approved by the
non-interested Directors in the manner described in paragraph 5 above.
8. So long as the Plan is in effect, the selection and nomination of
the Fund's non-interested Directors shall be committed to the discretion of such
non-interested Directors.
9. The definitions contained in Sections 2(a)(3), 2(a)(19) and
2(a)(42) of the Act shall govern the meaning of "affiliated person,"
<PAGE>
"interested person(s)" and "vote of a majority of the outstanding voting
securities," respectively, for the purposes of this Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
November 29, 1995
<PAGE>
[FORM OF 12b-1 PLAN FOR CONSULTANT CLASS SHARES]
12b-1 Plan
Consultant Class
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by [FUND
NAME] (the "Fund") [, for the [SERIES NAME] (the "Series")] on behalf of the
_________________________ class [, now doing business as the
________________________ Consultant Class] (hereinafter referred to as the
"Class"), which Fund [,Series] and Class may do business under these or such
other names as the Board of Directors of the Fund may designate from time to
time. The Plan has been approved by a majority of the Board of Directors,
including a majority of the Directors who are not interested persons of the Fund
and who have no direct or indirect financial interest in the operation of the
Plan or in any agreements related thereto ("non-interested Directors"), cast in
person at a meeting called for the purpose of voting on such Plan. Such approval
by the Directors included a determination that in the exercise of reasonable
business judgment and in light of their fiduciary duties, there is a reasonable
likelihood that the Plan will benefit the Class and its shareholders. If the
Plan has not yet been approved by a majority of the outstanding voting
securities as required in the Act, the Plan will be presented to the public
shareholders at the next regular annual or special meeting.
The Fund is a corporation organized under the laws of the State of
Maryland, is authorized to issue different series and classes of securities and
is an open-end management investment company registered under the Act. Delaware
Management Company, Inc. ("DMC") serves as the [Fund's/Series'] investment
adviser and manager pursuant to an Investment Management Agreement. Delaware
Service Company, Inc. serves as the [Fund's/Series'] shareholder servicing,
dividend disbursing and transfer agent. Delaware Distributors, L.P. (the
"Distributor") is the principal underwriter and national distributor for the
[Fund's/Series'] shares, including shares of the Class, pursuant to the
Distribution Agreement between the Distributor and the Fund ("Distribution
Agreement").
<PAGE>
The Plan provides that:
1. The Fund shall pay to the Distributor a monthly fee not to exceed
0.3% (3/10 of 1%) per annum of the [Fund's/Series'] average daily net assets
represented by shares of the Class (the "Maximum Amount") as may be determined
by the Fund's Board of Directors from time to time. Such monthly fee shall be
reduced by the aggregate sums paid by the Fund [on behalf of the Series] to
persons other than broker-dealers (the "Service Providers") who may, pursuant to
servicing agreements, provide the [Fund/Series] services in the [Fund's/Series']
marketing of shares of the Class.
2. (a) The Distributor shall use the monies paid to it pursuant to
paragraph 1 above to furnish, or cause or encourage others to furnish, services
and incentives in connection with the promotion, offering and sale of Class
shares and, where suitable and appropriate, the retention of Class shares by
shareholders.
(b) The Service Providers shall use the monies paid respectively to
them to reimburse themselves for the actual costs they have incurred in
confirming that their customers have received the Prospectus and Statement of
Additional Information, if applicable, and as a fee for (l) assisting such
customers in maintaining proper records with the Fund (2) answering questions
relating to their respective accounts and (3) aiding in maintaining the
investment of their respective customers in the Class.
3. The Distributor shall report to the Fund at least monthly on the
amount and the use of the monies paid to it under the Plan. The Service
Providers shall inform the Fund monthly and in writing of the amounts each
claims under the Service Agreement and the Plan; both the Distributor and the
Service Providers shall furnish the Board of Directors of the Fund with such
other information as the Board may reasonably request in connection with the
payments made under the Plan and the use thereof by the Distributor and the
Service Providers, respectively, in order to enable the Board to make an
informed determination of the amount of the Fund's payments and whether the Plan
should be continued.
4. The officers of the Fund shall furnish to the Board of Directors of
the Fund, for their review, on a quarterly basis, a written report of the
amounts expended under the Plan and the purposes for which such expenditures
were made.
<PAGE>
5. This Plan shall take effect at such time as the Distributor shall
notify the Fund in writing of the commencement of the Plan, which time shall not
be before the first annual or special meeting of the public shareholders at
which the Plan is or was approved by the vote of a majority of the outstanding
voting securities as required in the Act (the "Commencement Date"); thereafter,
the Plan shall continue in effect for a period of more than one year from the
Commencement Date only so long as such continuance is specifically approved at
least annually by a vote of the Board of Directors of the Fund, and of the
non-interested Directors, cast in person at a meeting called for the purpose of
voting on such Plan.
6. (a) The Plan may be terminated at any time by vote of a majority of
the non-interested Directors or by vote of a majority of the outstanding voting
securities of the Class.
(b) The Plan may not be amended to increase materially the amount to
be spent for distribution pursuant to paragraph l thereof without approval by
the shareholders of the Class.
7. All material amendments to this Plan shall be approved by the
non-interested Directors in the manner described in paragraph 5 above.
8. So long as the Plan is in effect, the selection and nomination of
the Fund's non-interested Directors shall be committed to the discretion of such
non-interested Directors.
9. The definitions contained in Sections 2(a)(19) and 2(a)(42) of the
Act shall govern the meaning of "interested person(s)" and "vote of a majority
of the outstanding voting securities," respectively, for the purposes of this
Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
November 29, 1995
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND A
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1995
- ---------------------------------------------
Average Annual Compounded Rate of Return:
n
P(1+T)=ERV
ONE
YEAR
- ------
1
$1000(1-T)=$1,064.90
T= 6.49%
THREE
YEARS
- -------
3
$1000(1-T)=$1,124.22
T= 3.98%
FIVE
YEARS
- -------
5
$1000(1-T)=$1,377.76
T= 6.62%
LIFE OF
FUND
- -------
9.600000
$1000(1-T)=$1,908.72
T= 6.97%
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND A
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1995
- ---------------------------------------------
Average Annual Compounded Rate of Return:
n
P(1+T)=ERV
ONE
YEAR
- ------
1
$1000(1-T)=$1,032.59
T= 3.26%
THREE
YEARS
- -------
3
$1000(1-T)=$1,090.61
T= 2.93%
FIVE
YEARS
- -------
5
$1000(1-T)=$1,336.18
T= 5.97%
LIFE OF
FUND
- -------
9.600000
$1000(1-T)=$1,851.48
T= 6.63%
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND A
TOTAL RETURN PERFORMANCE
THREE MONTHS
- -----------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $9.34
Initial Shares 107.066
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1995 107.066 $0.182 2.152 109.218
- ----------- ----------- ----------- ----------- -----------
Ending Shares 109.218
Ending NAV $9.13
-----------
Investment Return $997.16
Total Return Performance
- -------------
Investment Return $997.16
Less Initial Investment $1,000.00
-----------
($2.84) / $1,000.00 x 100
Total Return: -0.28%
</TABLE>
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND A
TOTAL RETURN PERFORMANCE
SIX MONTHS
- -----------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $9.27
Initial Shares 107.875
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1995 107.875 $0.367 4.428 112.303
- ----------- ----------- ----------- ----------- -----------
Ending Shares 112.303
Ending NAV $9.13
-----------
Investment Return $1,025.33
Total Return Performance
- -------------
Investment Return $1,025.33
Less Initial Investment $1,000.00
-----------
$25.33 / $1,000.00 x 100
Total Return: 2.53%
</TABLE>
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND A
TOTAL RETURN PERFORMANCE
NINE MONTHS
- -----------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $9.46
Initial Shares 105.708
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1995 105.708 $0.546 6.533 112.241
- ----------- ----------- ----------- ----------- -----------
Ending Shares 112.241
Ending NAV $9.13
-----------
Investment Return $1,024.76
Total Return Performance
- -------------
Investment Return $1,024.76
Less Initial Investment $1,000.00
-----------
$24.76 / $1,000.00 x 100
Total Return: 2.48%
</TABLE>
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND A
TOTAL RETURN PERFORMANCE
ONE YEAR
- -----------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $9.56
Initial Shares 104.603
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1995 104.603 $0.714 8.496 113.099
- ----------- ----------- ----------- ----------- -----------
Ending Shares 113.099
Ending NAV x $9.13
-----------
Investment Return $1,032.59
Total Return Performance
- -------------
Investment Return $1,032.59
Less Initial Investment $1,000.00
-----------
$32.59 / $1,000.00 x 100
Total Return: 3.26%
</TABLE>
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND A
TOTAL RETURN PERFORMANCE
THREE YEARS
- -----------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $10.38
Initial Shares 96.339
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1993 96.339 $0.702 6.926 103.265
- ----------- ----------- ----------- ----------- -----------
1994 103.265 $0.659 7.214 110.479
- ----------- ----------- ----------- ----------- -----------
1995 110.479 $0.714 8.974 119.453
- ----------- ----------- ----------- ----------- -----------
Ending Shares 119.453
Ending NAV X $9.13
-----------
Investment Return $1,090.61
Total Return Performance
- -------------
Investment Return $1,090.61
Less Initial Investment $1,000.00
-----------
$90.61 / $1,000.00 X 100
Total Return: 9.06%
</TABLE>
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND A
TOTAL RETURN PERFORMANCE
FIVE YEARS
- -----------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $9.94
Initial Shares 100.604
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1991 100.604 $0.872 8.633 109.237
- ----------- ----------- ----------- ----------- -----------
1992 109.237 $0.777 8.791 118.028
- ----------- ----------- ----------- ----------- -----------
1993 118.028 $0.702 8.487 126.515
- ----------- ----------- ----------- ----------- -----------
1994 126.515 $0.659 8.839 135.354
- ----------- ----------- ----------- ----------- -----------
1995 135.354 $0.714 10.997 146.351
- ----------- ----------- ----------- ----------- -----------
Ending Shares 146.351
Ending NAV x $9.13
-----------
Investment Return $1,336.18
- -------------
Investment Return $1,336.18
Less Initial Investment $1,000.00
-----------
$336.18 / $1,000.00 x 100
Total Return: 33.62%
</TABLE>
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND A
TOTAL RETURN PERFORMANCE
LIFE OF FUND
- -----------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $10.31
Initial Shares 96.993
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1986 96.993 $0.438 4.304 101.297
- ----------- ----------- ----------- ----------- -----------
1987 101.297 $0.728 7.636 108.933
- ----------- ----------- ----------- ----------- -----------
1988 108.933 $0.710 8.137 117.070
- ----------- ----------- ----------- ----------- -----------
1989 117.070 $0.795 9.950 127.020
- ----------- ----------- ----------- ----------- -----------
1990 127.020 $0.836 11.425 138.445
- ----------- ----------- ----------- ----------- -----------
1991 138.445 $0.872 12.921 151.366
- ----------- ----------- ----------- ----------- -----------
1992 151.366 $0.777 12.181 163.547
- ----------- ----------- ----------- ----------- -----------
1993 163.547 $0.702 11.762 175.309
- ----------- ----------- ----------- ----------- -----------
1994 175.309 $0.659 12.247 187.556
- ----------- ----------- ----------- ----------- -----------
1995 185.556 $0.714 15.235 202.791
- ----------- ----------- ----------- ----------- -----------
Ending Shares 202.791
Ending NAV $9.13
-----------
Investment Return $1,851.48
Total Return Performance
- -------------
Investment Return $1,851.48
Less Initial Investment $1,000.00
-----------
$851.48 / $1,000.00 x 100
Total Return: 85.15%
</TABLE>
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT INSTITUTIONAL
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1995
- ---------------------------------------------
Average Annual Compounded Rate of Return:
n
P(1 / T)=ERV
ONE
YEAR
- ------
1
$1000(1-T)=$1,066.46
T = 6.65%
THREE
YEARS
- -------
3
$1000(1-T)=$1,129.02
T = 4.13%
FIVE
YEARS
- -------
5
$1000(1-T)=$1,387.94
T = 6.78%
LIFE OF
FUND
- -------
9.600000
$1000(1-T)=$1,929.26
T = 7.08%
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND INSTITUTIONAL
TOTAL RETURN PERFORMANCE
THREE MONTHS
- -----------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $9.06
Initial Shares 110.375
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1995 110.375 $0.185 2.259 112.634
- ----------- ----------- ----------- ----------- -----------
Ending Shares 112.634
Ending NAV $9.13
-----------
Investment Return $1,028.35
Total Return Performance
- -------------
Investment Return $1,028.35
Less Initial Investment $1,000.00
-----------
$28.35 / $1,000.00 X 100
Total Return: 2.84%
</TABLE>
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND INSTITUTIONAL
TOTAL RETURN PERFORMANCE
SIX MONTHS
- ------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $8.99
Initial Shares 111.235
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1995 111.235 $0.373 4.649 115.884
- ----------- ----------- ----------- ----------- -----------
Ending Shares 115.884
Ending NAV $9.13
-----------
Investment Return $1,058.02
Total Return Performance
- -------------
Investment Return $1,058.02
Less Initial Investment $1,000.00
-----------
$58.02 / $1,000.00 X 100
Total Return: 5.80%
</TABLE>
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND INSTITUTIONAL
TOTAL RETURN PERFORMANCE
NINE MONTHS
- -----------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $9.18
Initial Shares 108.932
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1995 108.932 $0.555 6.858 115.790
- ----------- ----------- ----------- ----------- -----------
Ending Shares 115.790
Ending NAV $9.13
-----------
Investment Return $1,057.16
Total Return Performance
- -------------
Investment Return $1,057.16
Less Initial Investment $1,000.00
-----------
$57.16 / $1,000.00 X 100
Total Return: 5.72%
</TABLE>
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND INSTITUTIONAL
TOTAL RETURN PERFORMANCE
ONE YEAR
- ------------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $9.27
Initial Shares 107.875
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1995 107.875 $0.727 8.933 116.808
- ----------- ----------- ----------- ----------- -----------
Ending Shares 116.808
Ending NAV x $9.13
-----------
Investment Return $1,066.46
Total Return Performance
- -------------
Investment Return $1,066.46
Less Initial Investment $1,000.00
-----------
$66.46 / $1,000.00 x 100
Total Return: 6.65%
</TABLE>
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND INSTITUTIONAL
TOTAL RETURN PERFORMANCE
THREE YEARS
- ---------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $10.07
Initial Shares 99.305
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1993 99.305 $0.716 7.287 106.592
- ----------- ----------- ----------- ----------- -----------
1994 106.592 $0.673 7.610 114.202
- ----------- ----------- ----------- ----------- -----------
1995 114.202 $0.727 9.458 123.660
- ----------- ----------- ----------- ----------- -----------
Ending Shares 123.660
Ending NAV x $9.13
-----------
Investment Return $1,129.02
Total Return Performance
- -------------
Investment Return $1,129.02
Less Initial Investment $1,000.00
-----------
$129.02 / $1,000.00 x 100
Total Return: 12.90%
</TABLE>
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND INSTITUTIONAL
TOTAL RETURN PERFORMANCE
FIVE YEARS
- -----------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $9.64
Initial Shares 103.734
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1991 103.734 $0.889 9.089 112.823
- ----------- ----------- ----------- ----------- -----------
1992 112.823 $0.791 9.258 122.081
- ----------- ----------- ----------- ----------- -----------
1993 122.081 $0.716 8.956 131.037
- ----------- ----------- ----------- ----------- -----------
1994 131.037 $0.673 9.357 140.394
- ----------- ----------- ----------- ----------- -----------
1995 140.394 $0.727 11.626 152.020
- ----------- ----------- ----------- ----------- -----------
Ending Shares 152.020
Ending NAV X $9.13
-----------
Investment Return $1,387.94
- -------------
Investment Return $1,387.94
Less Initial Investment $1,000.00
-----------
$387.94 / $1,000.00 X 100
Total Return: 38.79%
</TABLE>
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND INSTITUTIONAL
TOTAL RETURN PERFORMANCE
LIFE OF FUND
- -----------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $10.00
Initial Shares 100.000
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1986 100.000 $0.438 12.364 104.436
- ----------- ----------- ----------- ----------- -----------
1987 104.436 $0.728 12.364 112.305
- ----------- ----------- ----------- ----------- -----------
1988 112.305 $0.713 12.364 120.733
- ----------- ----------- ----------- ----------- -----------
1989 120.733 $0.809 12.364 131.176
- ----------- ----------- ----------- ----------- -----------
1990 131.176 $0.850 12.364 143.188
- ----------- ----------- ----------- ----------- -----------
1991 143.188 $0.889 12.364 156.825
- ----------- ----------- ----------- ----------- -----------
1992 156.825 $0.791 12.364 169.693
- ----------- ----------- ----------- ----------- -----------
1993 169.693 $0.716 12.364 182.144
- ----------- ----------- ----------- ----------- -----------
1994 182.144 $0.673 12.364 195.151
- ----------- ----------- ----------- ----------- -----------
1995 195.151 $0.727 12.364 211.310
- ----------- ----------- ----------- ----------- -----------
Ending Shares 211.310
Ending NAV $9.13
-----------
Investment Return $1,929.26
Total Return Performance
- -------------
Investment Return $1,929.26
Less Initial Investment $1,000.00
-----------
$929.26 / $1,000.00 x 100
Total Return: 92.93%
</TABLE>
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND B
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1995
- ---------------------------------------------
Average Annual Compounded Rate of Return:
n
P(1 / T)=ERV
ONE
YEAR
- ------
1
$1000(1 - T)=$1,055.89
T = 5.59%
LIFE OF
FUND
- -------
1.16438356
$1000(1 - T)=$1,048.16
T = 4.12%
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND B
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1995
- ---------------------------------------------
Average Annual Compounded Rate of Return:
n
P(1 / T)=ERV
ONE
YEAR
- ------
1
$1000(1 - T)=$1,036.20
T = 3.62%
LIFE OF
FUND
- -------
1.16438356
$1000(1 - T)=$1,028.80
T = 2.47%
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND B
TOTAL RETURN PERFORMANCE
THREE MONTHS (INCLUDING CDSC)
- -----------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $9.06
Initial Shares 110.375
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1995 110.375 $0.162 1.980 112.355
- ----------- ----------- ----------- ----------- -----------
Ending Shares 112.355
Ending NAV x $9.13
-----------
$1,025.80
Less CDSC $20.00
-----------
Investment Return $1,005.80
Total Return Performance
- -------------
Investment Return $1,005.80
Less Initial Investment $1,000.00
-----------
$5.80 / $1,000.00 x 100
Total Return: 0.58%
</TABLE>
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND B
TOTAL RETURN PERFORMANCE
THREE MONTHS (EXCLUDING CDSC)
- -----------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $9.06
Initial Shares 110.375
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1995 110.375 $0.162 1.980 112.355
- ----------- ----------- ----------- ----------- -----------
Ending Shares 112.355
Ending NAV x $9.13
-----------
Investment Return $1,025.80
Total Return Performance
- -------------
Investment Return $1,025.80
Less Initial Investment $1,000.00
-----------
$25.80 / $1,000.00 x 100
Total Return: 2.58%
</TABLE>
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND B
TOTAL RETURN PERFORMANCE
SIX MONTHS (INCLUDING CDSC)
- -----------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $8.99
Initial Shares 111.235
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1995 111.235 $0.328 4.081 115.316
- ----------- ----------- ----------- ----------- -----------
Ending Shares 115.316
Ending NAV x $9.13
-----------
$1,052.84
Less CDSC $20.00
-----------
Investment Return $1,032.84
Total Return Performance
- -------------
Investment Return $1,032.84
Less Initial Investment $1,000.00
-----------
$32.84 / $1,000.00 x 100
Total Return: 3.28%
</TABLE>
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND B
TOTAL RETURN PERFORMANCE
SIX MONTHS (EXCLUDING CDSC)
- -----------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $8.99
Initial Shares 111.235
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1995 111.235 $0.328 4.081 115.316
- ----------- ----------- ----------- ----------- -----------
Ending Shares 115.316
Ending NAV $9.13
-----------
Investment Return $1,052.84
Total Return Performance
- -------------
Investment Return $1,052.84
Less Initial Investment $1,000.00
-----------
$52.84 / $1,000.00 x 100
Total Return: 5.28%
</TABLE>
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND B
TOTAL RETURN PERFORMANCE
NINE MONTHS (EXCLUDING CDSC)
- -----------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $9.18
Initial Shares 108.932
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1995 108.932 $0.488 6.000 114.932
- ----------- ----------- ----------- ----------- -----------
Ending Shares 114.932
Ending NAV $9.13
-----------
Investment Return $1,049.33
Total Return Performance
- -------------
Investment Return $1,049.33
Less Initial Investment $1,000.00
-----------
$49.33 / $1,000.00 X 100
Total Return: 4.93%
</TABLE>
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND B
TOTAL RETURN PERFORMANCE
NINE MONTHS (INCLUDING CDSC)
- -----------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $9.18
Initial Shares 108.932
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1995 108.932 $0.488 6.000 114.932
- ----------- ----------- ----------- ----------- -----------
Ending Shares 114.932
Ending NAV $9.13
-----------
$1,049.33
Less CDSC $19.89
-----------
Investment Return $1,029.44
Total Return Performance
- -------------
Investment Return $1,029.44
Less Initial Investment $1,000.00
-----------
$29.44 / $1,000.00 x 100
Total Return: 2.94%
</TABLE>
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND B
TOTAL RETURN PERFORMANCE
ONE YEAR (EXCLUDING CDSC)
- -----------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $9.27
Initial Shares 107.875
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1995 107.875 $0.636 7.776 115.651
- ----------- ----------- ----------- ----------- -----------
Ending Shares 115.651
Ending NAV $9.13
-----------
Investment Return $1,055.89
Total Return Performance
- -------------
Investment Return $1,055.89
Less Initial Investment $1,000.00
-----------
$55.89 / $1,000.00 x 100
Total Return: 5.59%
</TABLE>
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND B
TOTAL RETURN PERFORMANCE
LIFE OF FUND (EXCLUDING CDSC)
- -----------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $9.43
Initial Shares 106.045
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1994 106.045 $0.091 1.040 107.085
- ----------- ----------- ----------- ----------- -----------
1995 107.085 $0.636 7.719 114.804
- ----------- ----------- ----------- ----------- -----------
Ending Shares 114.804
Ending NAV $9.13
-----------
Investment Return $1,048.16
Total Return Performance
- -------------
Investment Return $1,048.16
Less Initial Investment $1,000.00
-----------
$48.16 / $1,000.00 x 100
Total Return: 4.82%
</TABLE>
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND B
TOTAL RETURN PERFORMANCE
LIFE OF FUND (INCLUDING CDSC)
- -----------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $9.43
Initial Shares 106.045
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1994 106.045 $0.091 1.040 107.085
- ----------- ----------- ----------- ----------- -----------
1995 107.085 $0.636 7.719 114.804
- ----------- ----------- ----------- ----------- -----------
Ending Shares 114.804
Ending NAV $9.13
-----------
$1,048.16
Less CDSC $19.36
-----------
Investment Return $1,028.80
Total Return Performance
- -------------
Investment Return $1,028.80
Less Initial Investment $1,000.00
-----------
$28.80 / $1,000.00 x 100
Total Return: 2.88%
</TABLE>
<PAGE>
DELAWARE GROUP LIMITED TERM GOVERNMENT FUND B
TOTAL RETURN PERFORMANCE
ONE YEAR (INCLUDING CDSC)
- -----------------------------------------------------------
<TABLE>
<S> <C>
Initial Investment $1,000.00
Beginning OFFER $9.27
Initial Shares 107.875
<CAPTION>
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1995 107.875 $0.636 7.776 115.651
- ----------- ----------- ----------- ----------- -----------
Ending Shares 115.651
Ending NAV X $9.13
-----------
$1,055.89
Less CDSC $19.69
-----------
Investment Return $1,036.20
Total Return Performance
- -------------
Investment Return $1,036.20
Less Initial Investment $1,000.00
-----------
$36.20 / $1,000.00 x 100
Total Return: 3.62%
</TABLE>
<PAGE>
Exhibit 16
Delaware Limited Term Government Fund Institutional
Yield Quotation for the Month Ended July 31, 1995
<TABLE>
<S> <C>
Interest Earned $227,179.41
Expense Accrued $25,672.98
Net Income $201,506.43
Average Share Outstanding 4,072,751.699
Maximum Offering Price
July 31, 1995 $9.09
Yield 6.62%
Limited Term Government Fund Institutional: 2 [(227,179 - 25,673 1) 6 -1] 6.62%
[(4,072,752 X 9.09 ) ]
</TABLE>
<PAGE>
Delaware Limited Term Government Fund B
Yield Quotation for the Month Ended July 31, 1995
<TABLE>
<S> <C>
Interest Earned $67,893.19
Expense Accrued $17,098.91
Net Income $50,794.28
Average Share Outstanding 1,217,153.004
Maximum Offering Price
July 31, 1995 $9.09
Yield 5.57%
Limited Term Government Fund B: 2 [(67,893 - 17,099 1) 6 - 1] 5.57%
[(1,217,153 X 9.09 ) ]
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Interest Earned $4,493,983.34
Expense Accrued $599,052.01
Net Income $3,894,931.33
Average Share Outstanding 80,565,744.457
Maximum Offering Price
July 31, 1995 $9.37
Yield 6.27%
Limited Term Government Fund A: 2 [(4,493,983 - 599,052 1) 6 - 1] 6.27%
[(80,565,744 X 9.37 ) ]
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000357059
<NAME> DELAWARE GROUP LIMITED-TERM GOVERNMENT FUND A CLASS
<SERIES>
<NUMBER> 011
<NAME> LIMITED TERM GOVERNMENT SERIES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 866,277,595
<INVESTMENTS-AT-VALUE> 838,654,439
<RECEIVABLES> 13,715,855
<ASSETS-OTHER> 981,846
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 853,352,140
<PAYABLE-FOR-SECURITIES> 9,649,444
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 10,657,412
<TOTAL-LIABILITIES> 20,306,856
<SENIOR-EQUITY> 92,628
<PAID-IN-CAPITAL-COMMON> 952,966,801
<SHARES-COMMON-STOCK> 87,789,386
<SHARES-COMMON-PRIOR> 114,443,832
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (92,390,989)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (27,623,156)
<NET-ASSETS> 789,525,547
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 80,583,963
<OTHER-INCOME> 0
<EXPENSES-NET> 9,049,909
<NET-INVESTMENT-INCOME> 71,534,054
<REALIZED-GAINS-CURRENT> (85,112,787)
<APPREC-INCREASE-CURRENT> (7,549,434)
<NET-CHANGE-FROM-OPS> (21,128,167)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 67,899,145
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 18,177,057
<NUMBER-OF-SHARES-REDEEMED> 49,806,031
<SHARES-REINVESTED> 4,974,528
<NET-CHANGE-IN-ASSETS> (340,686,064)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (7,278,202)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5,023,989
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 9,049,909
<AVERAGE-NET-ASSETS> 955,848,445
<PER-SHARE-NAV-BEGIN> 9.84
<PER-SHARE-NII> 0.667
<PER-SHARE-GAIN-APPREC> 0.850
<PER-SHARE-DIVIDEND> 0.667
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.99
<EXPENSE-RATIO> 0.91
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000357059
<NAME> DELAWARE GROUP LIMITED-TERM GOVERNMENT FUND B CLASS
<SERIES>
<NUMBER> 012
<NAME> LIMITED TERM GOVERNMENT SERIES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 866,277,595
<INVESTMENTS-AT-VALUE> 838,645,439
<RECEIVABLES> 13,715,855
<ASSETS-OTHER> 981,846
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 853,352,140
<PAYABLE-FOR-SECURITIES> 9,649,444
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 10,657,412
<TOTAL-LIABILITIES> 20,306,856
<SENIOR-EQUITY> 92,628
<PAID-IN-CAPITAL-COMMON> 952,966,801
<SHARES-COMMON-STOCK> 698,474
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (92,390,989)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (27,623,156)
<NET-ASSETS> 6,281,660
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 80,583,963
<OTHER-INCOME> 0
<EXPENSES-NET> 9,049,909
<NET-INVESTMENT-INCOME> 71,534,054
<REALIZED-GAINS-CURRENT> (85,112,787)
<APPREC-INCREASE-CURRENT> (7,549,434)
<NET-CHANGE-FROM-OPS> (21,128,167)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 145,627
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 747,755
<NUMBER-OF-SHARES-REDEEMED> 60,105
<SHARES-REINVESTED> 10,824
<NET-CHANGE-IN-ASSETS> (340,686,064)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (7,278,202)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5,023,989
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 9,049,909
<AVERAGE-NET-ASSETS> 3,365,340
<PER-SHARE-NAV-BEGIN> 9.43
<PER-SHARE-NII> 0.399
<PER-SHARE-GAIN-APPREC> 0.440
<PER-SHARE-DIVIDEND> 0.399
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.99
<EXPENSE-RATIO> 1.76
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000357059
<NAME> DELAWARE GROUP LIMITED-TERM GOVERNMENT FUND INST CLASS
<SERIES>
<NUMBER> 013
<NAME> LIMITED TERM GOVERNMENT SERIES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 866,277,595
<INVESTMENTS-AT-VALUE> 838,654,439
<RECEIVABLES> 13,715,855
<ASSETS-OTHER> 981,846
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 853,352,140
<PAYABLE-FOR-SECURITIES> 9,649,444
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 10,657,412
<TOTAL-LIABILITIES> 20,306,856
<SENIOR-EQUITY> 92,628
<PAID-IN-CAPITAL-COMMON> 952,966,801
<SHARES-COMMON-STOCK> 4,140,598
<SHARES-COMMON-PRIOR> 4,848,004
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (92,390,989)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (27,623,156)
<NET-ASSETS> 37,238,077
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 80,583,963
<OTHER-INCOME> 0
<EXPENSES-NET> 9,049,909
<NET-INVESTMENT-INCOME> 71,534,054
<REALIZED-GAINS-CURRENT> (85,112,787)
<APPREC-INCREASE-CURRENT> (7,549,434)
<NET-CHANGE-FROM-OPS> (21,128,167)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3,489,282
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,776,208
<NUMBER-OF-SHARES-REDEEMED> 2,856,655
<SHARES-REINVESTED> 373,041
<NET-CHANGE-IN-ASSETS> (340,686,064)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (7,278,202)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5,023,989
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 9,049,909
<AVERAGE-NET-ASSETS> 48,147,124
<PER-SHARE-NAV-BEGIN> 9.84
<PER-SHARE-NII> 0.681
<PER-SHARE-GAIN-APPREC> 0.850
<PER-SHARE-DIVIDEND> 0.681
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.99
<EXPENSE-RATIO> 0.76
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000357059
<NAME> DELAWARE GROUP TREASURY RESERVES, INC.
<SERIES>
<NUMBER> 021
<NAME> U.S. GOVERNMENT MONEY SERIES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 18,142,954
<INVESTMENTS-AT-VALUE> 18,142,954
<RECEIVABLES> 41,155
<ASSETS-OTHER> 26,505
<OTHER-ITEMS-ASSETS> 4,642
<TOTAL-ASSETS> 18,215,256
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 19,164
<TOTAL-LIABILITIES> 19,164
<SENIOR-EQUITY> 18,196,092
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 17,119,479
<SHARES-COMMON-PRIOR> 20,918,782
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 17,119,479
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 850,742
<OTHER-INCOME> 0
<EXPENSES-NET> 256,404
<NET-INVESTMENT-INCOME> 594,338
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 571,649
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 16,559,404
<NUMBER-OF-SHARES-REDEEMED> 20,896,267
<SHARES-REINVESTED> 537,560
<NET-CHANGE-IN-ASSETS> (3,277,714)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 102,105
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 256,404
<AVERAGE-NET-ASSETS> 19,705,388
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.289
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0.289
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 1.26
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000357059
<NAME> DELAWARE GROUP TREASURY RESERVES, INC.
<SERIES>
<NUMBER> 022
<NAME> U.S. GOVERNMENT MONEY SERIES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 18,142,954
<INVESTMENTS-AT-VALUE> 18,142,954
<RECEIVABLES> 41,155
<ASSETS-OTHER> 26,505
<OTHER-ITEMS-ASSETS> 4,642
<TOTAL-ASSETS> 18,215,256
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 19,164
<TOTAL-LIABILITIES> 19,164
<SENIOR-EQUITY> 18,196,092
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,076,613
<SHARES-COMMON-PRIOR> 555,024
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,076,613
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 850,742
<OTHER-INCOME> 0
<EXPENSES-NET> 256,404
<NET-INVESTMENT-INCOME> 594,338
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 22,689
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 942,446
<NUMBER-OF-SHARES-REDEEMED> 440,741
<SHARES-REINVESTED> 19,884
<NET-CHANGE-IN-ASSETS> (3,277,714)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 102,105
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 256,404
<AVERAGE-NET-ASSETS> 715,708
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.289
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0.289
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 1.26
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000357059
<NAME> DELAWARE GROUP TREASURY RESERVES, INC.
<SERIES>
<NUMBER> 022
<NAME> U.S. GOVERNMENT MONEY SERIES
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> JUN-30-1995
<INVESTMENTS-AT-COST> 15,117,346
<INVESTMENTS-AT-VALUE> 15,117,346
<RECEIVABLES> 55,180
<ASSETS-OTHER> 637
<OTHER-ITEMS-ASSETS> 9,204
<TOTAL-ASSETS> 15,182,367
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 22,013
<TOTAL-LIABILITIES> 22,013
<SENIOR-EQUITY> 15,160
<PAID-IN-CAPITAL-COMMON> 15,145,194
<SHARES-COMMON-STOCK> 819,530
<SHARES-COMMON-PRIOR> 1,076,613
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 819,530
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 478,855
<OTHER-INCOME> 0
<EXPENSES-NET> 109,688
<NET-INVESTMENT-INCOME> 369,167
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 369,167
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 20,139
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 115,973
<NUMBER-OF-SHARES-REDEEMED> 392,241
<SHARES-REINVESTED> 19,185
<NET-CHANGE-IN-ASSETS> (3,035,738)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 35,880
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 109,688
<AVERAGE-NET-ASSETS> 888,520
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.23
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0.23
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 1.36
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000357059
<NAME> DELAWARE GROUP TREASURY RESERVES, INC.
<SERIES>
<NUMBER> 021
<NAME> U.S. GOVERNMENT MONEY SERIES
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> JUN-30-1995
<INVESTMENTS-AT-COST> 15,117,346
<INVESTMENTS-AT-VALUE> 15,117,346
<RECEIVABLES> 55,180
<ASSETS-OTHER> 637
<OTHER-ITEMS-ASSETS> 9,204
<TOTAL-ASSETS> 15,182,367
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 22,013
<TOTAL-LIABILITIES> 22,013
<SENIOR-EQUITY> 15,160
<PAID-IN-CAPITAL-COMMON> 15,145,194
<SHARES-COMMON-STOCK> 14,340,824
<SHARES-COMMON-PRIOR> 17,119,479
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 14,340,824
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 478,855
<OTHER-INCOME> 0
<EXPENSES-NET> 109,688
<NET-INVESTMENT-INCOME> 369,167
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 369,167
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 349,028
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6,018,940
<NUMBER-OF-SHARES-REDEEMED> 9,132,900
<SHARES-REINVESTED> 335,305
<NET-CHANGE-IN-ASSETS> (3,035,738)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 35,880
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 109,688
<AVERAGE-NET-ASSETS> 15,368,032
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.23
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0.23
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 1.36
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000357059
<NAME> DELAWARE GROUP TRESURY RESERVES, INC.
<SERIES>
<NUMBER> 012
<NAME> TREASURY RESERVES INTERMEDIATE SERIES
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> JUN-30-1995
<INVESTMENTS-AT-COST> 783,205,688
<INVESTMENTS-AT-VALUE> 787,153,005
<RECEIVABLES> 12,035,901
<ASSETS-OTHER> 10,246,915
<OTHER-ITEMS-ASSETS> 149
<TOTAL-ASSETS> 809,435,970
<PAYABLE-FOR-SECURITIES> 17,584,579
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,558,240
<TOTAL-LIABILITIES> 22,142,819
<SENIOR-EQUITY> 86,266
<PAID-IN-CAPITAL-COMMON> 895,238,041
<SHARES-COMMON-STOCK> 1,191,519
<SHARES-COMMON-PRIOR> 698,474
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (111,978,473)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,947,317
<NET-ASSETS> 10,874,216
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 36,737,545
<OTHER-INCOME> 0
<EXPENSES-NET> 3,980,361
<NET-INVESTMENT-INCOME> 32,757,184
<REALIZED-GAINS-CURRENT> (19,587,484)
<APPREC-INCREASE-CURRENT> 31,570,473
<NET-CHANGE-FROM-OPS> 44,740,173
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 302,961
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 547,592
<NUMBER-OF-SHARES-REDEEMED> 75,389
<SHARES-REINVESTED> 20,842
<NET-CHANGE-IN-ASSETS> (45,752,133)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (92,390,989)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,001,806
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 32,757,184
<AVERAGE-NET-ASSETS> 8,546,713
<PER-SHARE-NAV-BEGIN> 8.990
<PER-SHARE-NII> 0.328
<PER-SHARE-GAIN-APPREC> 0.140
<PER-SHARE-DIVIDEND> 0.328
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.130
<EXPENSE-RATIO> 1.84
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000357059
<NAME> DELAWARE GROUP TREASURY RESERVES, INC.
<SERIES>
<NUMBER> 011
<NAME> TREASURY RESERVES INTERMEDIATE SERIES
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> JUN-30-1995
<INVESTMENTS-AT-COST> 783,205,688
<INVESTMENTS-AT-VALUE> 787,153,005
<RECEIVABLES> 12,035,901
<ASSETS-OTHER> 10,246,915
<OTHER-ITEMS-ASSETS> 149
<TOTAL-ASSETS> 809,435,970
<PAYABLE-FOR-SECURITIES> 17,584,579
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,558,240
<TOTAL-LIABILITIES> 22,142,819
<SENIOR-EQUITY> 86,266
<PAID-IN-CAPITAL-COMMON> 895,238,041
<SHARES-COMMON-STOCK> 80,967,555
<SHARES-COMMON-PRIOR> 87,789,386
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (111,978,473)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,947,317
<NET-ASSETS> 738,938,013
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 36,737,545
<OTHER-INCOME> 0
<EXPENSES-NET> 3,980,361
<NET-INVESTMENT-INCOME> 32,757,184
<REALIZED-GAINS-CURRENT> (19,578,484)
<APPREC-INCREASE-CURRENT> 31,570,473
<NET-CHANGE-FROM-OPS> 44,740,173
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 30,930,516
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,979,600
<NUMBER-OF-SHARES-REDEEMED> 14,045,543
<SHARES-REINVESTED> 2,244,112
<NET-CHANGE-IN-ASSETS> (45,752,133)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (92,390,989)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,001,806
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 32,757,184
<AVERAGE-NET-ASSETS> 763,609,703
<PER-SHARE-NAV-BEGIN> 8.990
<PER-SHARE-NII> 0.367
<PER-SHARE-GAIN-APPREC> 0.140
<PER-SHARE-DIVIDEND> 0.367
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.130
<EXPENSE-RATIO> 0.99
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000357059
<NAME> DELAWARE GROUP TREASURY RESERVES, INC.
<SERIES>
<NUMBER> 013
<NAME> TREASURY RESERVES INTERMEDIATE SERIES
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> JUN-30-1995
<INVESTMENTS-AT-COST> 783,205,688
<INVESTMENTS-AT-VALUE> 787,153,005
<RECEIVABLES> 12,035,901
<ASSETS-OTHER> 10,246,915
<OTHER-ITEMS-ASSETS> 149
<TOTAL-ASSETS> 809,435,970
<PAYABLE-FOR-SECURITIES> 17,584,579
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,558,240
<TOTAL-LIABILITIES> 22,142,819
<SENIOR-EQUITY> 86,266
<PAID-IN-CAPITAL-COMMON> 895,238,041
<SHARES-COMMON-STOCK> 4,106,892
<SHARES-COMMON-PRIOR> 4,140,598
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (111,978,473)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,947,317
<NET-ASSETS> 37,480,922
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 36,737,545
<OTHER-INCOME> 0
<EXPENSES-NET> 3,980,361
<NET-INVESTMENT-INCOME> 32,757,184
<REALIZED-GAINS-CURRENT> (19,587,484)
<APPREC-INCREASE-CURRENT> 31,570,473
<NET-CHANGE-FROM-OPS> 44,740,173
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,523,707
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 501,458
<NUMBER-OF-SHARES-REDEEMED> 702,497
<SHARES-REINVESTED> 167,333
<NET-CHANGE-IN-ASSETS> (45,752,133)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (92,390,989)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,001,806
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 32,757,184
<AVERAGE-NET-ASSETS> 37,068,396
<PER-SHARE-NAV-BEGIN> 8.990
<PER-SHARE-NII> 0.373
<PER-SHARE-GAIN-APPREC> 0.140
<PER-SHARE-DIVIDEND> 0.373
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.130
<EXPENSE-RATIO> 0.84
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
EX-99
EX-99.B19 DIRECTORS' POWER OF ATTORNEY
POWER OF ATTORNEY
Each of the undersigned, a member of the Board of Directors of DELAWARE
GROUP TREASURY RESERVES, INC., hereby constitutes and appoints Wayne A. Stork,
W. Thacher Longstreth and Walter P. Babich and any one of them acting singly,
his true and lawful attorneys-in-fact, in his name, place, and stead, to execute
and cause to be filed with the Securities and Exchange Commission and other
federal or state government agency or body, such registration statements, and
any and all amendments thereto as either of such designees may deem to be
appropriate under the Securities Act of 1933, as amended, the Investment Company
Act of 1940, as amended, and all other applicable federal and state securities
laws.
IN WITNESS WHEREOF, the undersigned have executed this instrument as of
this 20th day of April, 1995.
/s/Walter P. Babich /s/W. Thacher Longstreth
------------------------- ------------------------
Walter P. Babich W. Thacher Longstreth
/s/Anthony D. Knerr /s/Charles E. Peck
------------------------- ------------------------
Anthony D. Knerr Charles E. Peck
/s/Ann R. Leven /s/Wayne A. Stork
------------------------- ------------------------
Ann R. Leven Wayne A. Stork
<PAGE>
F I N A N C I A L
S T A T E M E N T S
DELAWARE GROUP TREASURY RESERVES, INC. -
TREASURY RESERVES INTERMEDIATE SERIES*
STATEMENT OF NET ASSETS
DECEMBER 31, 1994
<TABLE>
<CAPTION>
Principal Market
Amount Value
<S> <C> <C>
U.S. TREASURY OBLIGATIONS -
23.82%
U.S. Treasury Bonds
13.125% 5/15/01................................ $33,070,000 $ 41,792,213
U.S. Treasury Bonds
13.375% 8/15/01................................ 51,177,000 65,650,470
U.S. Treasury Bonds
14.25% 2/15/02................................. 21,623,000 29,150,507
U.S. Treasury Bonds
15.75% 11/15/02................................ 18,000,000 25,520,634
U.S. Treasury Notes
9.375% 4/15/96................................. 35,550,000 36,360,967
------------
Total U.S. Treasury Obligations
(cost $202,717,467)............................ 198,474,791
------------
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION
OBLIGATIONS (GNMA) - 12.16%
GNMA 9.00% 2016 to 2022........................... 53,766,153 54,486,737
GNMA 10.00% 2016 to 2018.......................... 2,161,492 2,275,646
GNMA 10.50% 2015 to 2016.......................... 828,776 872,028
GNMA 11.00% 2009 to 2020.......................... 10,292,147 11,252,084
GNMA 11.50% 2015 to 2019.......................... 194,540 213,690
GNMA GPM (Graduated Payment
Mortgage) 11.50% 2010 to 2013.................. 292,624 314,845
GNMA GPM 12.00% 2010 to 2012...................... 123,529 133,450
GNMA GPM 12.25% 2013 to 2014...................... 496,273 538,612
GNMA 12.50% 2010.................................. 356,651 399,561
GNMA GPM 13.75% 2014.............................. 124,489 136,724
GNMA II 9.50% 2020 to 2021........................ 9,570,506 9,782,857
GNMA II 9.75% 2016 to 2019........................ 1,108,390 1,130,557
GNMA II 10.00% 2020............................... 6,494,065 6,747,743
GNMA II 10.50% 2020............................... 396,509 417,202
GNMA II 11.00% 2015............................... 3,452,070 3,696,953
GNMA II Jumbo 11.50% 2017 to 2018................. 822,433 886,943
GNMA II 12.00% 2014 to 2016....................... 5,802,176 6,326,188
GNMA II 12.50% 2013............................... 1,479,838 1,628,285
GNMA II GPM 12.75% 2015........................... 30,247 33,016
------------
Total Government National Mortgage
Association Obligations
(cost $105,159,903)............................ 101,273,121
------------
COLLATERALIZED MORTGAGE
OBLIGATIONS (CMO) - 31.53%
Citicorp Mortgage Securities
1990-10 A5 9.50% 7/25/05....................... $ 2,024,532 $ 2,043,562
Federal Home Loan Mortgage
Corporation 1290-E
7.00% 11/15/14................................. 19,380,000 18,841,684
Federal Home Loan Mortgage
Corporation 1360-VL
7.50% 5/15/97.................................. 2,801,073 2,788,362
Federal Home Loan Mortgage
Corporation 31 D
7.55% 5/15/20.................................. 1,000,000 967,811
Federal Home Loan Mortgage
Corporation 1260-E
8.00% 10/15/04................................. 5,783,244 5,752,187
Federal Home Loan Mortgage
Corporation 1276 H
8.00% 9/15/06.................................. 20,413,000 20,033,353
Federal Home Loan Mortgage
Corporation 1343
8.00% 9/15/12.................................. 14,437,500 14,491,164
Federal Home Loan Mortgage
Corporation 1126 I
8.50% 10/15/19................................. 15,000,000 14,984,708
Federal Home Loan Mortgage
Corporation 69F
9.00% 12/15/05................................. 2,600,000 2,625,900
Federal Home Loan Mortgage
Corporation 136D
9.00% 3/15/20.................................. 5,000,000 5,035,680
Federal Home Loan Mortgage
Corporation 26F
9.50% 2/15/20.................................. 11,973,326 12,270,908
Federal Home Loan Mortgage
Corporation 139F
9.50% 6/15/20.................................. 9,100,000 9,231,566
Federal Home Loan Mortgage
Corporation 1765-B BA
10.00% 1/15/17................................. 18,208,150 18,632,058
Federal Home Loan Mortgage
Corporation 1614
10.00% 6/15/20................................. 41,604,073 43,008,210
Federal National Mortgage Association
6.50% 3/1/09................................... 1,108,939 1,016,759
Federal National Mortgage Association
1989-58E 8.50% 9/25/18......................... 8,617,000 8,628,938
Federal National Mortgage Association
1990-128H 8.50% 12/25/19....................... 18,568,711 18,498,066
Federal National Mortgage Association
1993-39A 8.75% 3/25/18......................... 16,245,316 16,179,320
Federal National Mortgage Association
1990-137D 9.00% 12/25/18....................... 15,000,000 15,111,734
Federal National Mortgage Association
1990-23G 9.20% 12/25/18........................ 9,310,000 9,404,437
</TABLE>
- -------------------------
*Known and does business as Treasury Reserves Intermediate Fund.
8
<PAGE>
Statement of Net Assets (Continued)
<TABLE>
<CAPTION>
Principal Market
Amount Value
<S> <C> <C>
COLLATERALIZED MORTGAGE
OBLIGATIONS (CMO) (Continued)
Federal National Mortgage Association
10.00% 9/25/18................................. $ 3,912,395 $ 4,003,790
Federal National Mortgage Association
1989-1C 10.30% 3/25/18......................... 2,544,097 2,605,978
Federal National Mortgage Association
1989-19A 10.30% 4/25/19........................ 9,104,798 9,484,387
Investors F5 CMO 10.875% 10/25/13................. 271,821 287,177
PaineWebber Trust CMO
9.00% 3/20/97.................................. 2,798,430 2,808,688
Prudential Home Mortgage Securities
1992-2 A17 8.30% 3/25/07....................... 4,025,423 3,941,770
------------
Total Collateralized Mortgage
Obligations
(cost $272,024,179)............................ 262,678,197
------------
ASSET-BACKED SECURITIES - 8.67%
First Alliance Mortgage Loan Trust
1994-3 A1 7.825% 10/25/25...................... 9,613,211 9,420,947
First Chicago 1991-D 8.40% 6/15/98................ 20,000,000 20,144,000
Sears Credit Account Trust 1991-B
8.60% 5/15/98.................................. 9,000,000 9,095,400
Standard Credit Card Master Trust
1991-4A 8.00% 10/7/97.......................... 9,979,000 9,984,987
Standard Credit Card Master Trust
1991-1A 8.50% 8/7/97........................... 23,350,000 23,583,500
------------
Total Asset-Backed Securities
(cost $76,042,461)............................. 72,228,834
------------
CORPORATE BONDS - 5.14%
British Colombia Hydro
15.50% 11/15/11................................ 8,000,000 9,476,384
Ontario Province 17.00% 11/5/11................... 7,760,000 9,358,094
Security Pacific 11.00% 3/1/01................... 21,500,000 23,972,522
------------
Total Corporate Bonds
(cost $43,602,293)............................. 42,807,000
------------
AGENCY OBLIGATIONS - 6.33%
Federal Home Loan Bank
8.05% 9/2/09................................... 24,700,000 24,163,294
Federal National Mortgage Association
8.45% 10/21/96................................. 13,450,000 13,590,526
Federal National Mortgage Association
9.15% 4/10/98.................................. 8,400,000 8,631,034
World Bank 10.125% 9/15/97........................ 6,000,000 6,315,420
------------
Total Agency Obligations
(cost $54,868,971) 52,700,274
------------
AGENCY MORTGAGE-BACKED
SECURITIES - 12.92%
Federal Home Loan Mortgage
Corporation 7.50%
12/1/08 to 5/1/09.............................. 6,256,617 6,078,056
Federal Home Loan Mortgage
Corporation 8.00%
5/1/05 to 7/11/11.............................. $18,512,275 $ 18,023,893
Federal Home Loan Mortgage
Corporation 8.50%
12/1/08 to 11/1/10............................. 4,820,280 4,752,265
Federal Home Loan Mortgage
Corporation 8.75% 5/1/10....................... 1,357,843 1,348,175
Federal Home Loan Mortgage
Corporation 9.00%
6/1/09 to 1/1/24............................... 13,607,926 13,773,548
Federal Home Loan Mortgage
Corporation 9.50% 11/1/05...................... 8,004,296 8,129,098
Federal Home Loan Mortgage
Corporation 11.00%
9/1/10 to 10/1/14.............................. 680,179 729,492
Federal National Mortgage Association
8.00% 7/1/02 to 7/1/23......................... 3,800,815 3,725,143
Federal National Mortgage Association
8.50% 8/1/07 to 8/1/17......................... 21,130,542 20,993,328
Federal National Mortgage Association
9.00% 8/1/04 to 4/1/16......................... 5,380,637 5,402,225
Federal National Mortgage Association
9.25% 3/1/09 to 8/1/16......................... 3,910,105 3,997,110
Federal National Mortgage Association
10.00% 1/1/19.................................. 1,242,220 1,305,496
Federal National Mortgage Association
11.00% 8/1/10 to 8/1/20........................ 17,281,108 18,685,198
Federal National Mortgage Association
12.50% 2/01/11................................. 365,062 401,886
Federal National Mortgage Association
13.00% 7/01/15................................. 224,221 248,745
------------
Total Agency Mortgage-Backed
Securities (cost $111,009,153)................. 107,593,658
------------
<CAPTION>
Number of
Contracts
<S> <C> <C>
PUT OPTIONS - 0.05%
5 Year Futures on U.S. Treasury Notes,
3/18/95, $99................................... 400 118,752
5 Year Futures on U.S. Treasury Notes,
3/18/95, $100.................................. 500 328,125
------------
Total Put Options (cost $572,069)................. 446,877
------------
CALL OPTIONS WRITTEN - (0.05%)
5 Year Futures on U.S. Treasury Notes,
3/18/95, $101.................................. 1,150 (395,313)
------------
Total Call Options Written
(premium received $565,901).................... (395,313)
------------
</TABLE>
9
<PAGE>
Statement of Net Assets (Continued)
<TABLE>
<CAPTION>
Principal Market
Amount Value
<S> <C> <C>
REPURCHASE AGREEMENTS - 0.10%
With PaineWebber 5.75% 1/3/95
(dated 12/30/94 collateralized by
$879,000 U.S. Treasury Notes
6.75% due 5/31/97, market value
$864,579)...................................... $847,000 $ 847,000
------------
Total Repurchase Agreements
(cost $847,000)................................ 847,000
------------
TOTAL MARKET VALUE OF SECURITIES
OWNED - 100.67% (cost $866,277,595)............ 838,654,439
LIABILITIES NET OF RECEIVABLES AND
OTHER ASSETS - (0.67%)......................... (5,609,155)
------------
NET ASSETS APPLICABLE TO 87,789,386
TREASURY RESERVES INTERMEDIATE FUND
A CLASS SHARES, 4,140,598 TREASURY
RESERVES INSTITUTIONAL CLASS SHARES
AND 698,474 TREASURY RESERVES
INTERMEDIATE FUND B CLASS SHARES
($.001 PAR VALUE) OUTSTANDING;
EQUIVALENT TO $8.99 PER SHARE -
100.00%........................................ $833,045,284
============
</TABLE>
See accompanying notes
DELAWARE GROUP TREASURY RESERVES, INC. -
TREASURY RESERVES INTERMEDIATE SERIES
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1994
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.......................................... $ 80,583,963
EXPENSES:
Management fees ($5,023,989) and
directors' fees ($7,395)....................... 5,031,384
Dividend disbursing and transfer
agent fees and expenses........................ 1,710,859
Distribution expenses............................. 1,411,008
Reports and statements to
shareholders................................... 270,874
Salaries.......................................... 261,151
Custodian fees.................................... 101,563
Taxes (other than income)......................... 96,725
Registration fees................................. 25,855
Legal............................................. 24,400
Auditing.......................................... 6,999
Other............................................. 109,091 9,049,909
---------- ------------
NET INVESTMENT INCOME............................. 71,534,054
------------
NET REALIZED AND UNREALIZED
LOSS ON INVESTMENTS:
Net realized loss from security
transactions................................... (83,809,674)
Net realized loss from futures
contracts...................................... (2,178,076)
Net realized gain on options...................... 874,963 (85,112,787)
----------
Net unrealized depreciation of
investments.................................... (7,549,434)
------------
NET REALIZED AND UNREALIZED LOSS ON
INVESTMENTS.................................... (92,662,221)
------------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS................................ $(21,128,167)
============
COMPUTATION OF NET ASSET VALUE AND OFFERING
PRICE OF TREASURY RESERVES INTERMEDIATE
FUND A CLASS:
Net asset value per share (A)..................... $8.99
Sales charges (3.00% of offering price or
3.10% of amount invested per share) (B)........ 0.28
-----
Offering price.................................... $9.27
=====
</TABLE>
- -------------------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon the redemption or repurchase of shares.
(B) See Purchasing shares in the current Prospectus, for purchases of $100,000
or more.
See accompanying notes
10
<PAGE>
DELAWARE GROUP TREASURY RESERVES, INC. -
TREASURY RESERVES INTERMEDIATE SERIES
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
12/31/94 12/31/93
<S> <C> <C>
OPERATIONS:
Net investment income...................... $ 71,534,054 $ 73,974,296
Net realized loss from security
transactions............................ (85,112,787) (3,367,647)
Net unrealized depreciation
during the period....................... (7,549,434) (17,410,964)
-------------- --------------
Net increase (decrease) in net assets
resulting from operations............... (21,128,167) 53,195,685
-------------- --------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM NET
INVESTMENT INCOME:
Treasury Reserves Intermediate
Fund A Class......................... (67,899,145) (70,239,400)
Treasury Reserves Intermediate
Fund Institutional Class............. (3,489,282) (3,734,895)
Treasury Reserves Intermediate
Fund B Class......................... (145,627) --
-------------- --------------
(71,534,054) (73,974,295)
-------------- --------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Treasury Reserves Intermediate
Fund A Class......................... 173,103,587 638,174,641
Treasury Reserves Intermediate
Fund Institutional Class............. 17,044,450 25,127,540
Treasury Reserves Intermediate
Fund B Class......................... 6,890,177 --
Net asset value of shares issued upon
reinvestment of dividends from
net investment income:
Treasury Reserves Intermediate
Fund A Class......................... 46,483,822 50,757,203
Treasury Reserves Intermediate
Fund Institutional Class............. 3,479,603 3,695,878
Treasury Reserves Intermediate
Fund B Class......................... 98,455 --
-------------- --------------
247,100,094 717,755,262
-------------- --------------
Cost of shares repurchased:
Treasury Reserves Intermediate
Fund A class......................... (468,009,117) (404,830,288)
Treasury Reserves Intermediate
Fund Institutional Class............. (26,564,816) (32,646,794)
Treasury Reserves Intermediate
Fund B Class......................... (550,004) --
-------------- --------------
(495,123,937) (437,477,082)
-------------- --------------
Increase (decrease) in net assets
derived from capital share
transactions............................ (248,023,843) 280,278,180
-------------- --------------
NET INCREASE (DECREASE)
IN NET ASSETS........................... (340,686,064) 259,499,570
NET ASSETS:
Beginning of period........................ 1,173,731,348 914,231,778
-------------- --------------
End of period.............................. $ 833,045,284 $1,173,731,348
============== ==============
</TABLE>
See accompanying notes
DELAWARE GROUP TREASURY RESERVES, INC. -
TREASURY RESERVES INTERMEDIATE FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994
1. Significant Accounting Policies
Delaware Group Treasury Reserves, Inc. -- Treasury Reserves Intermediate Series
(the "Series"), formerly known as Investors Series and doing business as
Treasury Reserves Intermediate Fund, is the second series of Delaware Group
Treasury Reserves, Inc. (the "Fund"), a diversified open-end investment company
established under Pennsylvania law under a Declaration of Trust dated November
27, 1981. The Fund was reorganized as a Maryland corporation in 1990 and is
registered under the Investment Company Act of 1940 (as amended). The Fund also
offers the U.S. Government Money Series. The Series currently offers the
Treasury Reserves Intermediate Fund A Class (formerly known as Investors II and
Treasury Reserves Intermediate Fund class) the Treasury Reserves Intermediate
Fund Institutional Class (formerly known as Treasury Reserves Intermediate Fund
(Institutional) class) and effective May 2, 1994, the Treasury Reserves
Intermediate Fund B Class. Each class of the Series will share proportionately
in the investment income and expenses of the Series, except that the
Intermediate Fund Institutional Class will not incur any distribution fees under
the 12b-1 Plan.
The Series uses the service of an independent pricing organization whose methods
are reviewed and approved by the Board of Directors. U.S. government and other
debt securities are valued at the mean between the last reported bid and asked
prices. Short-term investments having a maturity of less than 60 days are valued
at amortized cost. Prices for other debt securities are primarily retrieved from
an independent pricing service. However, for some of these securities, quotes
will be obtained directly from brokers who supply a bid and asked price, from
which a mean value is derived. Exchange traded options are valued at the last
reported sales price or, if no sales are reported, at the mean between the last
reported bid and asked prices. Securities for which quotations are not available
are valued at fair value as determined in good faith by the Board of Directors
for the Series. No securities were valued on this basis in the accompanying
financial statements.
The Series invests in securities whose value is derived from an underlying pool
of mortgages or consumer loans. Some of these securities are collateralized
mortgage obligations (CMOs). CMOs are debt securities issued by U.S. government
agencies or by financial institutions and other mortgage lenders which are
collateralized by a pool of mortgages held under an indenture. The Series
invests in private-backed CMOs only if they are 100% collateralized at the time
of issuance by securities or certificates issued or guaranteed by the U.S.
government, its agencies or instrumentalities. Prepayment of mortgages may
shorten the stated maturity of the obligation and can result in a loss of
premium, if any has been paid. Certain of these securities may be stripped
(securities which provide only the principal or interest feature of the
underlying security). The yield to maturity on a interest-only CMO is extremely
sensitive not only to changes in prevailing interest rates, but also to the rate
of principal payments (including prepayments) on the related underlying mortgage
assets and a rapid rate of principal payments may have a material adverse effect
on the Series' yield to maturity. If the underlying mortgage assets experience
greater than anticipated prepayments of principal, the Series may fail to fully
recoup its initial investment in these securities even if the securities are
rated in the highest rating categories. The Series will, from time to time,
invest in higher risk interest-only CMOs. At December 31, 1994, no assets of the
Series were invested in interest-only CMOs.
11
<PAGE>
Notes to Financial Statements (Continued)
1. Significant Accounting Policies (Continued)
As a writer of call options, the Series receives a premium at the outset which
is recorded as a liability and is subsequently adjusted to the current market
value of the option written. The Series bears the market risk of unfavorable
changes in the price of the financial instrument underlying the option.
Generally, the Series would incur a gain, to the extent of the premiums, if the
price of the underlying financial instrument decreases between the date the
option is written and the date on which the option is terminated. Generally, the
Series would realize a loss, if the price on the financial instrument increases
between those dates.
The Series engaged in trading financial futures contracts during the year ended
December 31, 1994. The Series is exposed to market risk as a result of changes
in the value of the underlying financial instruments. Investments in financial
futures require the Series to "mark to market" on a daily basis, which reflects
the change in the market value of the contract at the close of each day's
trading. Accordingly, variation margin payments are made or received to reflect
daily unrealized gains or losses. When the contracts are closed, the Series
recognizes a realized gain or loss. These investments require initial margin
deposits with a custodian which consist of cash or cash equivalents, up to
approximately 10% of the contract amount. The amount of these deposits is
determined by the exchange or Board of Trade on which the contract is traded and
is subject to change. The Series will not enter into futures contracts to the
extent that more than 5% of the Series' assets are required as futures contract
margin deposits and will not engage in such transactions to the extent that
obligations relating to such transactions exceed 20% of the Series' assets. At
December 31, 1994, no assets of the Series were invested in financial futures.
Security transactions are accounted for on the date the securities are purchased
or sold (trade date). Gains and losses are based upon the specific
identification method for both financial statement and federal tax purposes.
Income and expenses are recorded on the accrual basis. Expenses directly
attributable to a Series are paid by that Series. Other common expense are
apportioned on the basis of net assets of the respective Series.
Each Series of the Fund declares a dividend of its net investment income on a
daily basis which is paid monthly to shareholders of record at the time of the
previous calculation of the Series' net asset value. An investor begins earning
dividends when payments for shares purchased are converted into federal funds
and are available for investment by the Series.
No provision for federal income taxes was made since it is the intention of the
Fund to comply with the provision of the Internal Revenue Code available to
regulated investment companies and to make requisite distributions to
shareholders.
2. Investment Management Fees and Other Transactions with Affiliates
In accordance with the terms of the Investment Management Agreement, Delaware
Management Company, Inc., the investment manager of the Fund, will receive a fee
to be paid monthly, which is computed on the net assets of the Series as of the
close of business each day at the annual rate of 0.50% less all amounts paid to
the directors. On December 12, 1994, Delaware Management Holdings, Inc., which
indirectly owns all of the outstanding stock of Delaware Management Company,
Inc. entered into an agreement of merger with Lincoln National Corporation. The
merger will result in Delaware Management Holdings, Inc. becoming a wholly-owned
subsidiary of Lincoln National Corporation. The transaction is subject to the
receipt of all regulatory and shareholder approvals.
Pursuant to the Distribution Agreement between the Fund and Delaware
Distributors, Inc., an affiliate of Delaware Management Company, Inc., the
Distributors will be paid monthly a fee which is computed on the net assets of
the Fund as of the close of business each day at the annual rate not to exceed
0.15% of the Series' average daily net assets attributable to the Treasury
Reserves Intermediate Fund A Class for the year and at the annual rate of 1.00%
of the Series' average daily net assets attributable to the Treasury Reserves
Intermediate Fund B Class for the year.
Certain officers and directors of Delaware Management Company, Inc. are officers
and/or directors of the Series. Directors, officers and employees of Delaware
Management Company, Inc., who are also directors, officers and employees of the
Fund, do not receive any compensation from the Fund. Salaries of officers and
employees who are exclusively employed by the Delaware Group of Funds are
apportioned on the basis of net assets of the respective Funds. For the year
ended December 31, 1994, expenses related to such salaries amounted to $261,151.
During the year ended December 31, 1994, Delaware Service Company, Inc., an
affiliate of Delaware Management Company, Inc., billed and the Series expensed
$1,588,359 as fees for providing dividend disbursing and transfer agent services
to the Series. In addition, Delaware Distributors, L.P., another affiliate of
Delaware Management Company, Inc. received $488,339 from commissions earned on
sales of Delaware Group Treasury Reserves Intermediate Fund A Class capital
stock.
On December 31, 1994 the Series had an investment management fee payable to
Delaware Management Company, Inc. of $8,924 and the Series had dividend
disbursing and transfer agent fees and other expenses payable to Delaware
Service Company, Inc. of $24,284. In addition, the Series has payables to
Delaware Management Company, Inc. and its affiliates, Delaware Service Company,
Inc. and Delaware Distributors, L.P. of $28,062, $24,174 and $13,294,
respectively for other expenses related to operations.
12
<PAGE>
Notes to Financial Statements (Continued)
3. Investments
Investment securities based on cost for federal income tax purposes at December
31, 1994 are as follows:
<TABLE>
<S> <C>
Cost of investments......................................... $866,277,595
Aggregate unrealized appreciation........................... 402,712
Aggregate unrealized depreciation........................... (28,025,868)
------------
Market value of investments................................. $838,654,439
============
</TABLE>
Net loss based on cost of specific certificate or bond sold for federal income
tax purposes was $85,124,477 for the year ended December 31, 1994. For federal
income tax purposes, the Series had accumulated capital losses of $92,391,252 at
December 31, 1994 of which may be carried forward and applied against future
capital gains. The capital loss carryforward expires as follows: 1995 -
$2,146,972, 1996 - $859,564, 1997 - $574,529, 1998 -$707,105, 2001 - $2,978,605
and 2002 - $85,124,477.
During the year ended December 31, 1994, the Series had purchases of
$816,798,281 and sales of $687,929,229 of investment securities, other than U.S.
government securities and short-term debt securities having maturities of one
year or less.
On December 31, 1994, the Fund had a receivable for investment securities sold
of $565,299 and a payable for investment securities purchased of $9,649,444.
Transactions in call options written for the year ended December 31, 1994 were
as follows:
<TABLE>
<CAPTION>
Call Options
Terminated
------------
No. of Premiums Net Realized
Contracts Received Cost Gain
--------- -------- ---- ------------
<S> <C> <C> <C> <C>
Options
Outstanding
Dec. 31, 1993.......... -- $ --
Contracts written......... 3,400 1,521,680
----- ----------
3,400 1,521,680
----- ----------
Contracts terminated:
Closed................. 2,250 955,779 $410,643 $545,136
----- ---------- ======== ========
Contracts
Outstanding
Dec. 31, 1994.......... 1,150 $ 565,901
===== ==========
</TABLE>
Net realized gains on put options purchased for the year ended December 31, 1994
were $329,827.
4. Fund Shares
Transactions in Class shares of the Series were as follows:
<TABLE>
<CAPTION>
Year Year
Ended Ended
12/31/94 12/31/93
<S> <C> <C>
Shares sold:
Treasury Reserves Intermediate Fund
A Class....................................... 18,177,057 63,652,962
Treasury Reserves Intermediate Fund
Institutional Class........................... 1,776,208 2,505,357
Treasury Reserves Intermediate Fund
B Class....................................... 747,755 --
Shares issued upon reinvestment of
dividends from net investment
income
Treasury Reserves Intermediate Fund
A Class....................................... 4,974,528 5,073,850
Treasury Reserves Intermediate Fund
Institutional Class........................... 373,041 369,212
Treasury Reserves Intermediate Fund
B Class.......................................... 10,824 --
----------- -----------
26,059,413 71,601,381
----------- -----------
Shares repurchased:
Treasury Reserves Intermediate Fund
A Class....................................... (49,806,031) (40,445,476)
Treasury Reserves Intermediate Fund
Institutional Class........................... (2,856,655) (3,266,670)
Treasury Reserves Intermediate Fund
B Class....................................... (60,105) --
----------- -----------
(52,722,791) (43,712,146)
----------- -----------
Net decrease..................................... (26,663,378) (27,889,235)
=========== ===========
5. Components of Net Assets
Capital shares ($.001 par value,
2,000,000,000 shares authorized to the Series)... $953,059,429
Accumulated undistributed loss:
Net realized loss on investments................. (92,390,989)
Net unrealized depreciation of investments....... (27,623,156)
------------
Net assets applicable to 87,789,386 Treasury
Reserves Intermediate Fund A Class shares,
4,140,598 Treasury Reserves Intermediate Fund
Institutional Class shares and 698,474
Treasury Reserves Intermediate Fund B Class
shares, equivalent to $8.99 per share at
December 31, 1994............................. $833,045,284
============
</TABLE>
13
<PAGE>
Notes to Financial Statements (Continued)
6. Financial Highlights
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Treasury Reserves Intermediate Fund A Class
-----------------------------------------------------------------------------------
Year Ended
12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/28/89
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $9.840 $10.000 $10.190 $9.770 $9.720 $9.700
Income from investment operations:
Net investment income.............. 0.667 0.681 0.740 0.799 0.814 0.843
Net realized and unrealized gain
(loss) from security
transactions.................... (0.850) (0.160) (0.190) 0.420 0.050 0.020
------- ------- ------- ------- ------- -------
Total from investment
operations...................... (0.183) 0.521 0.550 1.219 0.864 0.863
Less distributions:
Dividends.......................... (0.667) (0.681) (0.740) (0.799) (0.814) (0.843)
Distributions from net realized
gain on security
transactions.................... none none none none none none
------- ------- ------- ------- ------- -------
Total distributions................ (0.667) (0.681) (0.740) (0.799) (0.814) (0.843)
Net asset value, end of period........ $ 8.990 $ 9.840 $10.000 $10.190 $ 9.770 $ 9.720
======= ======= ======= ======= ======= =======
Total return/4/....................... (1.88%) 5.31% 5.62% 13.04% 9.32% 9.28%
Ratios/supplemental data:
Net assets, end of period
(000 omitted)................... $789,525 $1,126,031 $861,829 $144,129 $107,739 $107,637
Ratio of expenses to average
net assets...................... 0.91% 0.88% 0.87%/2/ 0.90%/2/ 0.99% 0.97%
Ratio of net investment income
to average net assets........... 7.10% 6.77% 7.03%/3/ 7.96%/3/ 8.41% 8.72%
Portfolio turnover rate............ 148% 171% 77% 42% 175% 311%
<CAPTION>
Treasury Reserves Intermediate Fund A Class
--------------------------------------------------------
Period
11/24/85/1/
Year Ended to
12/29/88 12/31/87 12/25/86 12/26/85
Net asset value, beginning of period.. $9.800 $9.980 $10.040 $10.000
Income from investment operations:
Net investment income.............. 0.730 0.695 0.836 0.057
Net realized and unrealized gain
(loss) from security
transactions.................... (0.100) (0.180) (0.060) 0.040
------- ------- ------- -------
Total from investment
operations...................... 0.630 0.515 0.776 0.097
Less distributions:
Dividends.......................... (0.730) (0.695) (0.836) (0.057)
Distributions from net realized
gain on security
transactions.................... none none none none
------- ------- ------- -------
Total distributions................ (0.730) (0.695) (0.836) (0.057)
Net asset value, end of period........ $ 9.700 $ 9.800 $ 9.980 $10.040
======= ======= ======= =======
Total return/4/....................... 6.63% 5.46% 7.89% /1/
Ratios/supplemental data:
Net assets, end of period
(000 omitted)................... $132,859 $138,818 $182,727 $8,070
Ratio of expenses to average
net assets...................... 0.90% 1.06% 1.02%/2/ /1/
Ratio of net investment income
to average net assets........... 7.44% 6.86% 7.85%/3/ /1/
Portfolio turnover rate............ 146% 304% 39% /1/
</TABLE>
- -------------------------
/1/ November 24, 1985 was the date of the initial public offering; the ratios of
expenses and net investment income to average net assets, portfolio turnover
and total return have been omitted as management believes that such ratios
for this relatively short period are not meaningful.
/2/ Ratio of expenses to average net assets prior to expense limitation was
0.90% for 1992, 0.99% for 1991 and 1.08% for 1986.
/3/ Ratio of net investment income to average net assets prior to expense
limitation was 7.01% for 1992, 7.87% for 1991 and 7.79% for 1986.
/4/ Does not include maximum sales charge of 3.00% nor the 1% limited contingent
deferred sales charge that would apply in the event of certain redemptions
within 12 months of purchase.
14
<PAGE>
Notes to Financial Statements (Continued)
6. Financial Highlights
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Treasury Reserves
Intermediate Fund
Institutional Class
-----------------------------------------------------------------------------------
Year Ended
12/31/94 12/31/93 12/31/92* 12/31/91 12/31/90 12/28/89
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $9.840 $10.000 $10.190 $9.770 $9.720 $9.700
Income from investment operations:
Net investment income................ 0.681 0.696 0.754 0.816 0.828 0.857
Net realized and unrealized gain
(loss) from security
transactions...................... (0.850) (0.160) (0.190) 0.420 0.050 0.020
------- ------- ------- ------- ------- -------
Total from investment operations..... (0.169) 0.536 0.564 1.236 0.878 0.877
Less distributions:
Dividends............................ (0.681) (0.696) (0.754) (0.816) (0.828) (0.857)
Distributions from net realized
gain on security transactions..... none none none none none none
------- ------- ------- ------- ------- -------
Total distributions.................. (0.681) (0.696) (0.754) (0.816) (0.828) (0.857)
Net asset value, end of period.......... $8.990 $9.840 $10.000 $10.190 $9.770 $9.720
======= ======= ======= ======= ======= =======
Total return/5/......................... (1.74%) 5.44% 5.77% 13.21% 9.48% 9.44%
Ratios/supplemental data:
Net assets, end of period (000
omitted).......................... $37,238 $47,700 $52,403 $146,598 $12,811 $3,933
Ratio of expenses to average net
assets............................ 0.76% 0.74% 0.75%/2/ 0.75%/2/ 0.84% 0.82%
Ratio of net investment income
to average net assets............. 7.25% 6.91% 7.58%/3/ 8.11%/3/ 8.56% 8.87%
Portfolio turnover rate.............. 148% 171% 77% 42% 175% 311%
<CAPTION>
Treasury Reserves Treasury Reserves
Intermediate Fund Intermediate Fund
Institutional Class B Class
-------------------------------------------
Period Period
9/2/87/1/ 5/2/94/4/
to to
12/29/88 12/31/87 12/31/94
<S> <C> <C> <C>
Net asset value, beginning of period.... $9.800 $9.770 $9.430
Income from investment operations:
Net investment income................ 0.744 0.192 0.399
Net realized and unrealized gain
(loss) from security
transactions...................... (0.100) 0.030 (0.440)
------- ------- -------
Total from investment operations..... 0.644 0.222 (0.041)
Less distributions:
Dividends............................ (0.744) (0.192) (0.399)
Distributions from net realized
gain on security transactions..... none none none
------- ------- -------
Total distributions.................. (0.744) (0.192) (0.399)
Net asset value, end of period.......... $9.700 $9.800 $8.990
======= ======= =======
Total return/5/......................... 6.78% 5.61% (0.44%)
Ratios/supplemental data:
Net assets, end of period (000
omitted).......................... $5,740 $10,599 $6,282
Ratio of expenses to average net
assets............................ 0.75% /1/ 1.76%
Ratio of net investment income
to average net assets............. 7.59% /1/ 6.25%
Portfolio turnover rate.............. 146% /1/ 148%
</TABLE>
- -------------------------
The per share data for the period 1987 to 1991 is derived from data of the
Investors I class which like the Intermediate Fund Institutional Class, a new
class of shares, was not subject to Rule 12b-1 distribution expenses. Shares of
Investors I class were converted into shares of Investors II class, now referred
to as Intermediate Fund A Class, on June 1, 1992 pursuant to a Plan of
Recapitalization approved by shareholders of Investors I class.
/1/ September 2, 1987 was the date of the initial public offering; the ratios of
expenses and net investment income to average net assets and portfolio
turnover have been omitted as management believes that such ratios for this
relatively short period are not meaningful.
/2/ Ratio of expenses to average net assets prior to expense limitation was
0.78% for 1992 and 0.84% for 1991 for the Treasury Reserves Intermediate
Fund Institutional Class.
/3/ Ratio of net investment income to average net assets prior to expense
limitation was 7.54% for 1992 and 8.02% for 1991 for the Treasury Reserves
Intermediate Fund Institutional Class.
/4/ May 2, 1994 was the date of the initial public offering; ratios have been
annualized and total return has not been annualized.
/5/ Does not include any applicable contingent deferred sales charge which
varies from 1%-2% depending upon the holding period for the Treasury
Reserves Intermediate Fund B Class.
* The per share data and ratios for Investors I class and the Treasury
Reserves Intermediate Fund Institutional Class have been combined for 1992.
For the five months ended May 31, 1992, the Investors I class operating
expenses and net investment income per share were $.031 and $.325,
respectively. For the seven months ended December 31, 1992, the Treasury
Reserves Intermediate Fund Institutional Class' operating expenses and net
investment income per share were $.045 and $.429, respectively. All net
investment income was distributed to shareholders.
15
<PAGE>
DELAWARE GROUP TREASURY RESERVES, INC. -
TREASURY RESERVES INTERMEDIATE SERIES
REPORT OF INDEPENDENT AUDITORS
To the Shareholders and Board of Directors
Delaware Group Treasury Reserves, Inc. - Treasury Reserves Intermediate Series
We have audited the accompanying statement of net assets of Delaware Group
Treasury Reserves, Inc. - Treasury Reserves Intermediate Series as of December
31, 1994 and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the nine years in the period
then ended and the period from November 24, 1985 (date of initial public
offering) to December 26, 1985. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1994 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Delaware Group Treasury Reserves, Inc. - Treasury Reserves Intermediate Series
at December 31, 1994, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended,
and the financial highlights for the nine years in the period then ended and the
period from November 24, 1985 (date of initial public offering) to December 26,
1985, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
February 7, 1995
- --------------------------------------------------------------------------------
This annual report is for the information of Treasury Reserve
Intermediate Fund shareholders, but it may be used with prospective
investors when preceded or accompanied by a current Prospectus, which
gives details about charges, expenses, investment objectives and
operating policies of the Fund. Summary investment results are
documented in the current Statement of Additional Information. If used
with prospective investors after March 31, 1995, this report must also
be accompanied by a Treasury Reserves Intermediate Fund Performance
Update for the most recently completed calendar quarter. The figures
in this report represent past performance and are not a guarantee of
future results. The return and principal of an investment in the Fund
will fluctuate so that shares, when redeemed, may be worth more or
less than their original cost.
16
