AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 1, 1995
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File Nos. 33-16270
811-5267
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Post-Effective Amendment No. 17
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 17
(Check appropriate box or boxes.)
VOYAGEUR FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
90 SOUTH SEVENTH STREET, SUITE 4400, MINNEAPOLIS, MINNESOTA 55402
(Address of Principal Executive Offices) (Zip Code)
(612) 376-7000
(Registrant's Telephone Number, including Area Code)
THOMAS J. ABOOD
90 SOUTH SEVENTH STREET, SUITE 4400, MINNEAPOLIS, MINNESOTA 55402
(Name and Address of Agent for Service)
Copy to:
Michael J. Radmer, Esq.
Dorsey & Whitney
220 South Sixth Street
Minneapolis, Minnesota 55402
It is proposed that this filing will become effective (check appropriate box):
/ / immediately upon filing pursuant to paragraph (b)
/X/ on November 1, 1995 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(i)
/ / on (date) pursuant to paragraph (a)(i)
/ / 75 days after filing pursuant to paragraph (a)(ii)
/ / on (date) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
The Registrant has registered an indefinite number of shares of common stock
under the Securities Act of 1933 pursuant to Rule 24f-2 under the Investment
Company Act of 1940. A Rule 24f-2 Notice was filed by the Registrant on August
29, 1995.
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CROSS REFERENCE SHEET FOR ITEMS REQUIRED BY FORM N-1A
(VOYAGEUR FUNDS, INC.)
ITEM NO.
OF FORM N-1A CAPTION IN PROSPECTUS
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1 Cover Page
2 Fund Expenses
3 Financial Highlights
4 Investment Objective and Policies; General
Information
5 Management; General Information
6 Distributions to Shareholders and Taxes; General
Information
7 Purchase of Shares; Management; Determination of
Net Asset Value
8 Redemption of Shares; Reinstatement Privilege
9 Not Applicable
CAPTION IN STATEMENT OF ADDITIONAL INFORMATION
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10 Cover Page
11 Table of Contents
12 Not Applicable
13 Investment Restrictions
14 Directors and Executive Officers
15 Directors and Executive Officers; Additional
Information
16 Directors and Executive Officers; The Investment
Adviser and Underwriter
17 The Investment Adviser and Underwriter
18 Not Applicable
19 Special Purchase Plans; Monthly Cash Withdrawal
Plan; Net Asset Value and Public Offering Price
20 Taxes
21 The Investment Adviser and Underwriter
22 Calculation of Performance Data
23 Financial Statements
PROSPECTUS
DATED NOVEMBER 1, 1995
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Voyageur U.S. Government Securities Fund (the "Fund"), the sole series of
Voyageur Funds, Inc. (the "Company"), is an open-end diversified management
investment company, commonly known as a mutual fund. The Fund currently offers
its shares in four classes (Class A, Class B, Class C and Institutional Class),
each sold pursuant to different sales arrangements and expenses.
The Fund's investment objective is to provide its shareholders with a high
level of current income consistent with prudent investment risk. The Fund will
seek to achieve its investment objective by investing in U.S. Treasury bills,
notes, bonds and other obligations issued or unconditionally guaranteed by the
U.S. Government, or otherwise backed by the full faith and credit of the U.S.
Government, and repurchase agreements fully secured by such obligations. The
Fund invests a significant portion of its assets in mortgage participation
certificates guaranteed by the Government National Mortgage Association.
INVESTORS SHOULD READ AND RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE. AN
INVESTMENT IN THE FUND IS NOT A DEPOSIT OR OBLIGATION OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK AND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT,
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY
OTHER FEDERAL AGENCY. AN INVESTMENT IN THE FUND INVOLVES INVESTMENT RISK
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL DUE TO FLUCTUATIONS IN THE FUND'S NET
ASSET VALUE.
This Prospectus sets forth certain information about the Fund that a
prospective investor should know before investing. A Statement of Additional
Information (dated November 1, 1995) has been filed with the Securities and
Exchange Commission. The Statement of Additional Information is available free
of charge by telephone and at the mailing address below, and is incorporated in
its entirety by reference into this Prospectus in accordance with the
Commission's rules.
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VOYAGEUR U.S. GOVERNMENT SECURITIES FUND
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90 SOUTH SEVENTH STREET, SUITE 4400
MINNEAPOLIS, MINNESOTA 55402
612.376.7000 / 800.553.2143
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.
1 VOYAGEUR FUNDS (PROSPECTUS)
PURCHASE INFORMATION
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The Fund offers investors the choice among four classes of shares which offer
different sales charges and bear different expenses. These alternatives permit
an investor to choose the method of purchasing shares that is most beneficial
given the amount of the purchase, the length of time the investor expects to
hold the shares and other circumstances.
CLASS A SHARES
An investor who purchases Class A shares pays a sales charge at the time of
purchase. As a result Class A shares are not subject to any charges when they
are redeemed (except for sales at net asset value in excess of $1 million which
are subject to a contingent deferred sales charge). The initial sales charge may
be reduced or waived for certain purchases. Class A shares are subject to a Rule
12b-1 fee payable at an annual rate of .25% of the Fund's average daily net
assets attributable to Class A shares. See "How to Purchase Shares -- Class A
Shares."
CLASS B SHARES
Class B shares are sold without an initial sales charge, but are subject to a
contingent deferred sales charge of up to 4% if redeemed within six years of
purchase. Class B shares are also subject to a higher Rule 12b-1 fee than Class
A shares. The Rule 12b-1 fee for Class B shares will be paid at an annual rate
of 1% of the Fund's average daily net assets attributable to Class B shares.
Class B shares will automatically convert to Class A shares at net asset value
approximately eight years after purchase. Class B shares provide an investor the
benefit of putting all of the investor's dollars to work from the time the
investment is made, but until conversion will have a higher expense ratio and
pay lower dividends than Class A shares due to the higher Rule 12b-1 fee. See
"How to Purchase Shares -- Class B Shares."
CLASS C SHARES
Class C shares are sold without an initial sales charge, but are subject to a
contingent deferred sales charge of 1% if redeemed within one year of purchase.
Class C shares are also subject to a higher Rule 12b-1 fee than Class A shares.
The Rule 12b-1 fee for Class C shares will be paid at an annual rate of 1% of
the Fund's average daily net assets attributable to Class C shares. Class C
shares provide an investor the benefit of putting all of the investor's dollars
to work from the time the investment is made, but will have a higher expense
ratio and pay lower dividends than Class A shares due to the higher Rule 12b-1
fee. See "How to Purchase Shares -- Class C Shares."
INSTITUTIONAL CLASS SHARES
Institutional Class shares are available to a limited group of investors with no
sales charge at the time of purchase and no contingent deferred sales charge
upon redemption. Institutional Class shares are subject to a Rule 12b-1 fee
payable at an annual rate of .25% of the Fund's average daily net assets
attributable to Institutional Class shares. See "How to Purchase Shares --
Institutional Class Shares."
Investors making investments that qualify for reduced sales charges might
consider Class A shares. Other investors might consider Class B or Class C
shares because all of the purchase price is invested immediately. Orders for
Class B shares for $250,000 or more will be treated as orders for Class A shares
or declined. Sales personnel may receive different compensation depending on
which class of shares they sell.
SHARES OF THE FUND ARE NOT REGISTERED IN ALL STATES. SHARES THAT ARE NOT
REGISTERED IN ONE OR MORE STATES ARE NOT BEING OFFERED AND SOLD IN SUCH STATES.
2 VOYAGEUR FUNDS (PROSPECTUS)
<TABLE>
<CAPTION>
FUND EXPENSES
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SHAREHOLDER TRANSACTION
EXPENSES
-----------------------
Maximum
Deferred Example of Expenses I:
Sales Charge ANNUAL FUND OPERATING EXPENSES An investor would pay the following
Maximum as a % of (as a percentage of Average Net Assets) dollar amount of expenses on
Sales Charge Original --------------------------------------- a $1,000 investment assuming
Imposed on Purchase a 5% annual return and
Purchases Price or Total redemption at the end of each period.
as a % of Redemption Fund -------------------------------------
Offering Proceeds, Management Rule Other Operating
VOYAGEUR FUNDS Price as Applicable Fee 12b-1 Fees Expense Expenses 1 Year 3 Years 5 Years 10 Years
- ----------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A 4.75% 1.00%(2) 0.50% 0.25% 0.20% 0.95% $57 $76 $98 $159
Class B N/A(1) 4.00 0.50 1.00 0.19 1.69 57 83 112 180
Class C N/A(1) 1.00 0.50 1.00 0.15 1.65 27 52 90 195
Institutional Class N/A N/A 0.50 0.25 0.19 0.94 10 30 52 115
</TABLE>
<TABLE>
<CAPTION>
Example of Expenses II:
An investor would pay the following
dollar amount of expenses on
the same investment in Class B and
Class C shares, assuming
no redemption at the end of each period.
-----------------------------------------
1 Year 3 Years 5 Years 10 Years
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U.S. Government Securities Fund
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class B - - - - - - - $17 $53 $92 $180
Class C - - - - - - - 17 52 90 195
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</TABLE>
1 Class B and Class C shares are sold without a front end sales charge, but
their Rule 12b-1 fees may cause long-term shareholders to pay more than the
economic equivalent of the maximum permitted front end sales charges.
2 A contingent deferred sales charge of up to 1% is imposed on certain
redemptions of Class A shares that were purchased without an initial sales
charge as part of an investment of $1 million or more. See "How to Purchase
Shares -- Class A Shares."
THE EXAMPLES CONTAINED IN THE TABLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF
PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN. The purpose of the above Fund Expenses table is to assist the investor in
understanding the various costs and expenses that an investor in the Fund will
bear directly or indirectly. The information set forth in the table reflects
expenses that would have been incurred by shareholders during the past year
absent voluntary fee waivers and reimbursements. Voyageur Fund Managers, Inc.
("Voyageur") voluntarily waived fees and reimbursed expenses for Class B and
Class C shares such that Total Fund Operating Expenses incurred by shareholders
were 1.54% for Class B shares and 1.62% for Class C shares. Voyageur does not
intend to waive fees or reimburse expenses for any class of Fund shares for the
fiscal year ending June 30, 1995. Future expenses may be greater or less than
those shown. Voyageur and Voyageur Fund Distributors, Inc. (the "Underwriter")
are contractually obligated to pay certain operating expenses of the Fund
(including the investment advisory, administrative and Rule 12b-1 fees) which
exceed on an annual basis 1.25% of the Fund's average daily net assets
attributable to Class A and Institutional Class shares and 2.00% of the Fund's
average daily net assets attributable to Class B and Class C shares, up to the
combined amount of the investment advisory and administrative services fees
received from the Fund.
3 VOYAGEUR FUNDS (PROSPECTUS)
FINANCIAL HIGHLIGHTS
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The following table shows certain per share data and selected information for a
share of capital stock outstanding during the indicated periods for the Fund.
This information has been audited by KPMG Peat Marwick LLP, independent
auditors, and should be read in conjunction with the financial statements of the
Fund contained in its annual report. An annual report of the Fund can be
obtained without charge by contacting the Fund at 800-525-6584. In addition to
financial statements, the annual report contains further information about
performance of the Fund.
<TABLE>
<CAPTION>
INCOME (LOSS) FROM
INVESTMENT OPERATIONS LESS DISTRIBUTIONS
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Dividends
Net Realized from Distrib- Net
Asset and Net utions- Asset Total
Value Net Unrealized Invest- from Value Invest-
Beginning Investment Gains on ment Capital End of ment
VOYAGEUR FUNDS of Period Income Securities Income Gains Period Return (3)
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U.S. GOVERNMENT SECURITIES FUND
<S> <C> <C> <C> <C> <C> <C> <C>
Class A
6/30/95 $9.76 $0.62 $0.63 ($0.62) ($0.02) $10.37 13.45%
6/30/94 10.99 0.55 (0.94) (0.55) (0.29) 9.76 (3.95)
6/30/93 10.46 0.61 0.83 (0.61) (0.30) 10.99 14.25
6/30/92 9.99 0.67 0.76 (0.67) (0.29) 10.46 14.68
6/30/91 9.77 0.78 0.32 (0.78) (0.10) 9.99 11.67
6/30/90 10.05 0.82 (0.07) (0.82) (0.21) 9.77 7.89
6/30/89 9.98 0.88 0.07 (0.88) -- 10.05 10.05
11/2/87 (2) - 6/30/88 10.00 0.58 (0.02) (0.58) -- 9.98 5.76
Class B
6/30/95 9.75 0.56 0.65 (0.56) (0.02) 10.38 12.90
6/6/94(2) - 6/30/94 10.05 0.01 (0.28) (0.01) (0.02) 9.75 (2.68)
Class C
1/10/95(2) - 6/30/95 9.48 0.27 0.88 (0.27) -- 10.36 12.73
Institutional Class
6/30/95 9.75 0.62 0.64 (0.62) (0.02) 10.37 13.57
6/6/94(2) - 6/30/94 10.05 0.01 (0.28) (0.01) (0.02) 9.75 (2.64)
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</TABLE>
<TABLE>
<CAPTION>
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RATIOS/SUPPLEMENTAL DATA
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Ratio of Expenses
to Average Daily
Net Assets
Ratio Assuming
Net Ratio of of Net No Voluntary
Assets Expenses Investment Waivers,
End of to Income Portfolio Reimbursements
Period Average to Average Turnover and Expense
(000s) Net Assets Net Assets Rate Reductions
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U.S. GOVERNMENT SECURITIES FUND
<S> <C> <C> <C> <C> <C>
Class A
6/30/95 $75,886 0.95% 6.38% 144.39% 0.95%
6/30/94 84,660 0.96 5.10 124.38 0.96
6/30/93 112,604 1.10 5.61 175.02 1.14
6/30/92 53,332 1.00 6.60 198.54 1.25
6/30/91 22,176 0.95 7.95 186.15 1.25
6/30/90 8,326 1.25 8.35 130.97 1.25
6/30/89 20,137 0.82 8.97 186.97 1.25
11/2/87(2) - 6/30/88 10,048 0.25(4) 8.64(4) 119.01 1.25
Class B
6/30/95 139 1.54 5.56 144.39 1.69
6/6/94(2) - 6/30/94 24 0.30(1) 0.11(1) 124.38 0.30(1)
Class C
1/10/95(2) - 6/30/95 221 1.62(4) 5.10(4) 144.39 1.65
Institutional Class
6/30/95 54,445 0.94 6.39 144.39 0.94
6/6/94(2) - 6/30/94 49,898 0.25(1) 0.16(1) 124.38 0.25(1)
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</TABLE>
Notes to Financial Highlights
1 Ratios presented for the period from June 6, 1994 to June 30, 1994 are not
annualized as they are not indicative of anticipated annual results.
2 Commencement of investment operations.
3 Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
4 Annualized.
4 VOYAGEUR FUNDS (PROSPECTUS)
INVESTMENT OBJECTIVE AND POLICIES
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The Fund's investment objective is to provide its shareholders with a high level
of current income consistent with prudent investment risk. The Fund will seek to
achieve its investment objective by investing in U.S. Treasury bills, notes,
bonds and other obligations issued or unconditionally guaranteed by the U.S.
Government, or otherwise backed by the full faith and credit of the U.S.
Treasury ("U.S. Government Securities"), and repurchase agreements fully secured
by such obligations. The Fund invests a significant portion of its assets in
mortgage participation certificates guaranteed by the Government National
Mortgage Association ("GNMA Certificates"). The Fund's investment objective is
fundamental and may not be changed without shareholder approval. There can, of
course, be no assurance that the Fund will achieve its objective. The Board of
Directors may change any of the investment policies below that are not
designated fundamental.
Securities guaranteed by the full faith and credit of the U.S. Government
include a variety of securities, which differ in their interest rates,
maturities and dates of issuance. For example, Treasury bills have maturities of
one year or less, Treasury notes have maturities of one to ten years and
Treasury bonds generally have maturities of greater than ten years at the date
of issuance. GNMA Certificates are also backed by the full faith and credit of
the U.S. Treasury. Certain other obligations issued by federal agencies or
instrumentalities may also be supported by the full faith and credit of the U.S.
Treasury, depending on the circumstances of the issue.
The Fund may purchase U.S. Government Securities on a when-issued or
delayed delivery basis. The settlement dates for these types of transactions are
determined by mutual agreement of the parties and may occur a month or more
after the parties have agreed to the transaction, except that in no case will
the period from the trade date to the settlement date exceed 120 days.
Securities purchased on a when-issued or delayed delivery basis are subject to
market fluctuation and may decrease in value prior to their maturity, and no
interest accrues to the purchaser during the period prior to settlement. See
"Investment Policies and Restrictions" in the Statement of Additional
Information.
Although the securities in the Fund's portfolio are guaranteed as to
principal and interest by the U.S. Government or otherwise backed by the full
faith and credit of the U.S. Government, the market value of these securities
upon which the Fund's daily net asset value is based will fluctuate and will
tend to vary inversely with changes in prevailing interest rates. As a result,
the price per share a shareholder receives on redemption may be more or less
than the price originally paid for the shares. The dividends per share paid by
the Fund may also vary. In general, shorter term bonds are less sensitive to
interest rate changes, but longer term bonds generally offer higher yields.
GNMA CERTIFICATES
GNMA Certificates are mortgage backed securities representing part ownership of
a pool of mortgage loans. GNMA Certificates differ from bonds in that principal
is scheduled to be paid back by the borrower over the length of the loan rather
than returned in a lump sum at maturity. The Fund purchases "modified
pass-through" type GNMA Certificates for which the payment of principal and
interest on a timely basis is guaranteed, rather than the "straight
pass-through" Certificates for which such guarantee is not available. The Fund
may also purchase "variable rate" GNMA Certificates and may purchase other types
which may be issued with GNMA's guarantee.
GNMA Certificates are created by an "issuer," which is a Federal Housing
Administration ("FHA") approved lender, such as a mortgage banker, commercial
banker or a savings and loan association, and which meets criteria imposed by
GNMA. The issuer assembles a specific pool of mortgages insured by either the
FHA or the Farmers Home Administration or guaranteed by the Veterans
Administration. Upon application by the issuer, and after approval by GNMA of
the pool, GNMA provides its commitment to guarantee timely payment of principal
and interest on the GNMA
5 VOYAGEUR FUNDS (PROSPECTUS)
Certificates secured by the mortgages included in the pool. The GNMA
Certificates, endorsed by GNMA, are then sold by the issuer through securities
dealers.
The yield and payment characteristics of GNMA Certificates differ from
traditional debt securities. When mortgages in the pool underlying a GNMA
Certificate are prepaid by mortgagors or foreclosed, such principal payments are
passed through to the Certificate holders (such as the Fund). Accordingly, the
life of the GNMA Certificate is likely to be substantially shorter than the
stated maturity of the mortgages in the underlying pool. Because of such
variation in prepayment rates, it is not possible to predict the life of a
particular GNMA Certificate.
Payments to holders of GNMA Certificates consist of the monthly
distributions of interest and principal less the GNMA and issuer's fees. The
portion of the monthly payment which represents a return of principal may be
reinvested by the Fund in then-available GNMA obligations which may bear
interest at a rate higher or lower than the obligation from which the payment
was received. The actual yield to be earned by the holder of a GNMA Certificate
is calculated by dividing such payments by the purchase price paid for the GNMA
Certificate (which may be at a premium or a discount from the face value of the
Certificate). Unpredictable prepayments of principal, however, can greatly
change realized yields and in a period of declining interest rates it is more
likely that mortgages contained in GNMA pools will be prepaid thus reducing the
effective yield. Moreover, any premium paid on the purchase of a GNMA
Certificate will be lost if the obligation is prepaid. In periods of falling
interest rates this potential for pre-payment may reduce the general upward
price increase of GNMAs which might otherwise occur. As with other debt
instruments, the price of GNMAs is likely to decrease in times of rising
interest rates. Price changes of the GNMAs held by the Fund have a direct impact
on the net asset value per share of the Fund.
The GNMA guarantee of timely payment of principal and interest on GNMA
Certificates is backed by the full faith and credit of the U.S. Government. GNMA
may borrow U.S. Treasury funds to the extent needed to make payments under its
guarantee.
ZERO COUPON SECURITIES
The Fund may invest in "zero coupon" Treasury securities, which are U.S.
Treasury bills, notes and bonds that have been stripped of their unmatured
interest coupons. Zero coupon securities do not entitle the holder to any
periodic payments of interest prior to maturity. Rather, such securities usually
trade at a deep discount from their face value, and pay their entire face value
at maturity. The difference between the face value of the security (at maturity)
and the amount at which the security was purchased (i.e., the "discount")
represents interest income to the holder. Current federal tax law requires that
a holder of a zero coupon security accrue a portion of such discount as interest
income each year the security is held even though the holder receives no
interest payment in cash on the security during the year. As a registered
investment company, the Fund will be required to distribute this income to
shareholders. See "Distributions to Shareholders and Taxes." These distributions
will be made from the Fund's cash assets or, if necessary, from the proceeds of
sales of portfolio securities. Zero coupon securities generally are subject to
greater fluctuations of market value in response to changing interest rates than
debt obligations of comparable maturities which make current distributions of
interest.
SHORT-TERM TRADING
The Fund intends to use short-term trading of its securities as a means of
managing its portfolio to achieve its investment objective. The Fund will engage
in short-term trading if it believes the transactions, net of costs (including
commission, if any), will result in improving the income or, secondarily,
appreciation potential of its portfolio. The successful use of short-term
trading will depend upon the ability of the Fund to evaluate particular
securities and anticipate relevant market factors, including interest rate
trends and variations from such trends. Short-term trading such as that
contemplated by the Fund places a premium upon the ability of the Fund to obtain
relevant information,
6 VOYAGEUR FUNDS (PROSPECTUS)
evaluate it promptly and take advantage of its evaluations by completing
transactions on a favorable basis. As used herein, "short-term trading" means
selling securities held for a relatively brief period of time, usually less than
three months.
The Fund's short-term trading may lead to frequent changes in investments,
particularly in periods of rapidly fluctuating interest rates. A change in
securities held by the Fund is known as "portfolio turnover" and may involve the
payment by the Fund of dealer mark-ups or underwriting commissions and of
transaction costs on the sale of securities as well as on reinvestment of the
proceeds in other securities. In addition, frequent changes in the Fund's
portfolio securities may result in greater tax liability to the Fund's
shareholders by reason of more short-term capital gains. See "Distributions to
Shareholders and Taxes" in this Prospectus and "The Investment Adviser and
Underwriter -- Portfolio Transactions and Allocation of Brokerage" in the
Statement of Additional Information.
REPURCHASE AGREEMENTS
The Fund will also seek to achieve its investment objective through investing in
repurchase agreements. A repurchase agreement is an instrument under which the
purchaser acquires ownership of an obligation, but the seller agrees, at the
time of sale, to repurchase such obligation at a mutually agreed upon time and
price. Investments in repurchase agreements present the risk that the seller may
fail to repurchase the obligation according to the terms of the agreement.
Should the seller of a repurchase agreement fail to repurchase the underlying
obligation or should the seller become insolvent or involved in a bankruptcy
proceeding, the Fund might incur disposition costs and a loss if the proceeds of
the sale of such obligation to a third party are less than the repurchase price.
In order to minimize these risks, Voyageur will review the creditworthiness of
prospective parties to repurchase agreements under established guidelines and
repurchase agreements will be fully collateralized by U.S. Government Securities
of the same type as those in which the Fund may invest directly. Such collateral
will be maintained on a daily basis at the repurchase price or better.
HOW TO PURCHASE SHARES
- --------------------------------------------------------------------------------
ALTERNATIVE PURCHASE ARRANGEMENTS
The Fund offers investors the choice among four classes of shares which offer
different sales charges and bear different expenses. These alternatives permit
an investor to choose the method of purchasing shares that is most beneficial
given the amount of the purchase, the length of time the investor expects to
hold the shares and other circumstances. Page 2 of this Prospectus contains a
summary of these alternative purchase arrangements
A broker-dealer may receive different levels of compensation depending on
which class of shares is sold. In addition, the Fund's Underwriter from time to
time pays certain additional cash incentives of up to $100 and/or non-cash
incentives, such as vacations or other prizes,to its investment executives and
other broker-dealers and financial institutions in consideration of their sales
of Fund shares. In some instances, other incentives may be made available only
to selected broker-dealers and financial institutions, based on objective
standards developed by the Underwriter, to the exclusion of other broker-dealers
and financial institutions.
GENERAL PURCHASE INFORMATION
The minimum initial investment is $1,000, and the minimum additional investment
is $100. The Fund's shares may be purchased at the public offering price from
the Underwriter, from other broker-dealers who are members of the National
Association of Securities Dealers, Inc. and who have selling agreements with the
Underwriter, and from certain financial institutions that have selling
agreements with the Underwriter.
7 VOYAGEUR FUNDS (PROSPECTUS)
When orders are placed for shares of the Fund, the public offering price
used for the purchase will be the net asset value per share next determined,
plus the applicable sales charge, if any (determined daily). If an order is
placed with the Underwriter or other broker-dealer, the broker-dealer is
responsible for promptly transmitting the order to the Fund. The Fund reserves
the right, in its absolute discretion, to reject any order for the purchase of
shares.
Shares of the Fund may be purchased by opening an account either by
mail or by phone. Dividend income begins to accrue as of the opening of the New
York Stock Exchange (the "Exchange") on the day that payment is received. If
payment is made by check, payment is considered received on the day the check is
received if the check is drawn upon a member bank of the Federal Reserve System
within the Ninth Federal Reserve District (Michigan's Upper Peninsula,
Minnesota, Montana, North Dakota, South Dakota and northwestern Wisconsin). In
the case of other checks, payment is considered received when the check is
converted into "Federal Funds," i.e., monies of member banks within the Federal
Reserve System that are on deposit at a Federal Reserve Bank, normally within
two days after receipt
An investor who may be interested in having shares redeemed shortly after
purchase should consider making unconditional payment by certified check or
other means approved in advance by the Underwriter. Payment of redemption
proceeds will be delayed as long as necessary to verify by expeditious means
that the purchase payment has been or will be collected. Such period of time
typically will not exceed 15 days.
AUTOMATIC INVESTMENT PLAN
Investors may make systematic investments in fixed amounts automatically on a
monthly basis through the Fund's Automatic Investment Plan. Additional
information is available from the Underwriter by calling 800-545-3863.
PURCHASES BY MAIL
To open an account by mail, complete the general authorization form attached to
this Prospectus, designate an investment dealer on the form and mail it, along
with a check payable to the Fund, to:
NW 9369
P.O. Box 1450
Minneapolis, MN 55485-9369
PURCHASES BY TELEPHONE
To open an account by telephone, call 612-376-7014 or 800-545-3863 to obtain an
account number and instructions. Information concerning the account will be
taken over the phone. The investor must then request a commercial bank with
which he or she has an account and which is a member of the Federal Reserve
System to transmit Federal Funds by wire to the Fund as follows:
Norwest Bank Minnesota, N.A., ABA #091000019
For Credit of: Voyageur U.S. Government Securities Fund
Checking Account No.: 872-458
Account Number: (assigned by telephone)
Information on how to transmit Federal Funds by wire is available at any
national bank or any state bank that is a member of the Federal Reserve System.
The bank may charge the shareholder for the wire transfer. If the telephone
order and Federal Funds are received before the primary close of trading on the
Exchange, the order will be deemed to become effective at that time. Otherwise,
the order will be deemed to become effective as of the primary close of trading
on the Exchange on the next day the Exchange is open for trading. The investor
will be required to complete the general authorization form attached to this
Prospectus and mail it to the Fund after making the initial telephone purchase.
8 VOYAGEUR FUNDS (PROSPECTUS)
CLASS A SHARES -- INITIAL SALES CHARGE ALTERNATIVE
The public offering price of Class A shares of the Fund is the net asset value
of the Fund's shares plus the applicable front end sales charge ("FESC"), which
will vary with the size of the purchase. The Fund receives the net asset value.
The FESC varies depending on the size of the purchase and is allocated between
the Underwriter and other broker-dealers. The current sales charges are:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Sales Charge Sales Charge Dealer Discount
as % of as % of as % of
Amount of Purchase Net Asset Value Offering Price Offering Price(1)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $50,000 4.99% 4.75% 4.00%
$50,000 but less than $100,000 4.71 4.50 4.00
$100,000 but less than $250,000 3.90 3.75 3.25
$250,000 but less than $500,000 2.83 2.75 2.50
$500,000 but less than $1,000,000 2.30 2.25 2.00
$1,000,000 or more NAV(3) NAV(3) 1.00(2)
</TABLE>
- --------------------------------------------------------------------------------
1 Brokers and dealers who receive 90% or more of the sales charge may be
considered to be underwriters under the Securities Act of 1933, as amended.
2 The Underwriter intends to pay its investment executives and other
broker-dealers and banks that sell Fund shares, out of its own assets, a
fee of up to 1% of the offering price of sales of $1,000,000 or more other
than on sales not subject to a contingent deferred sales charge.
3 Purchases of $1,000,000 or more may be subject to a contingent deferred
sales charge at the time of redemption. See "-- Contingent Deferred Sales
Charge" below and "How to Sell Shares -- Contingent Deferred Sales Charge."
In connection with the distribution of the Fund's Class A shares, the
Underwriter receives all applicable sales charges. The Underwriter, in turn,
pays its investment executives and other broker-dealers selling such shares a
"dealer discount," as set forth above. In the event that shares are purchased by
a financial institution acting as agent for its customers, the Underwriter or
the broker-dealer with whom such order was placed may pay all or part of its
dealer discount to such financial institution in accordance with agreements
between such parties.
SPECIAL PURCHASE PLANS -- REDUCED SALES CHARGES
Certain investors (or groups of investors) may qualify for reductions in the
sales charges shown above. Investors should contact their broker-dealer or the
Fund for details about the Combined Purchase Privilege, Cumulative Quantity
Discount and Letter of Intention plans. Descriptions are also included with the
general authorization form and in the Statement of Additional Information. These
special purchase plans may be amended or eliminated at any time by the
Underwriter without notice to existing Fund shareholders.
RULE 12B-1 FEES
Class A shares are subject to a Rule 12b-1 fee payable at an annual rate of .25%
of the average daily net assets of the Fund attributable to Class A shares. All
or a portion of such fees are paid quarterly to financial institutions and
service providers with respect to the average daily net assets of the Fund
attributable to shares sold or serviced by such institutions or service
providers. For additional information about this fee, see "Management -- Plan of
Distribution" below.
CONTINGENT DEFERRED SALES CHARGE
Although there is no initial sales charge on purchases of Class A shares of
$1,000,000 or more, the Underwriter pays investment dealers out of its own
assets, a fee of up to 1% of the offering price of such shares. If these shares
are redeemed within a certain period of time after purchase, the redemption
proceeds will be reduced by a contingent deferred sales charge ("CDSC"). For
additional information, see "How to Sell Shares --
9 VOYAGEUR FUNDS (PROSPECTUS)
Contingent Deferred Sales Charge." The amount of the CDSC will depend on the
number of years since the purchase was made according to the following table:
CDSC AS A % OF AMOUNT REDEEMED
FOR INVESTMENTS OF $1,000,000 OR MORE
- --------------------------------------------
First year after purchase 1.0%
Second year after purchase 0.5
Thereafter 0.0
- --------------------------------------------
WAIVER OF SALES CHARGES
Class A shares will be issued at net asset value, without a front-end or
deferred sales charge, if the purchase of such shares is funded by the proceeds
from the redemption of shares of any unrelated open-end investment company that
charges a front-end sales charge and, in certain circumstances, a contingent
deferred sales charge. In order to exercise this privilege, the purchase order
must be received by the Fund within 60 days after the redemption of shares of
the unrelated investment company.
CLASS B SHARES -- CONTINGENT DEFERRED SALES CHARGE ALTERNATIVE The public
offering price of Class B shares of the Fund is the net asset value of such
Fund's shares. Class B shares are sold without an initial sales charge so that
the Fund receives the full amount of the investor's purchase. However, a CDSC of
up to 4% will be imposed if shares are redeemed within six years of purchase.
For additional information, see "How to Sell Shares -- Contingent Deferred Sales
Charge." In addition, Class B shares are subject to higher Rule 12b-1 fees as
described below. The CDSC will depend on the number of years since the purchase
was made, according to the following table:
CDSC as a % of Amount Redeemed *
- -----------------------------------------------
1st year after purchase 4.0%
2nd year after purchase 4.0
3rd year after purchase 3.0
4th year after purchase 3.0
5th year after purchase 2.0
6th year after purchase 1.0
Thereafter 0.0
- -----------------------------------------------
* The CDSC will be calculated on an amount equal to the lesser of the net
asset value of the shares at the time of purchase or their net asset value
at the time of redemption.
Proceeds from the CDSC are paid to the Underwriter and are used to defray
expenses of the Underwriter related to providing distribution-related services
to the Fund in connection with the sale of Class B shares, such as the payment
of compensation to selected broker-dealers, and for selling Class B shares. The
combination of the CDSC and the Rule 12b-1 fee enables the Fund to sell the
Class B shares without deduction of a sales charge at the time of purchase.
Although Class B shares are sold without an initial sales charge, at the time
the shares are sold the Underwriter pays a sales commission equal to 3% of the
amount invested to broker-dealers who sell Class B shares and pays an ongoing
annual servicing fee of .15% (paid quarterly) calculated on the net assets
attributable to sales made by such broker-dealers.
RULE 12B-1 FEES
Class B shares are subject to a Rule 12b-1 fee payable at an annual rate of 1%
of the average daily net assets of the Fund attributable to Class B shares. The
higher Rule 12b-1 fee will cause Class B shares to have a higher expense ratio
and to pay lower dividends than Class A shares. For additional information about
this fee, see "Fund Expenses" above and "Management -- Plan of Distribution"
below.
10 VOYAGEUR FUNDS (PROSPECTUS)
CONVERSION FEATURE
On the first business day of the month eight years after the purchase date,
Class B shares will automatically convert to Class A shares and will no longer
be subject to a higher Rule 12b-1 fee. Such conversion will be on the basis of
the relative net asset values of the two classes. Class A shares issued upon
such conversion will not be subject to any FESC or CDSC. Class B shares acquired
by exchange from Class B shares of another Voyageur Fund will convert into Class
A shares based on the time of the initial purchase. Similarly, Class B shares
acquired by exercise of the Reinstatement Privilege will convert into Class A
shares based on the time of the original purchase of Class B shares. See
"Reinstatement Privilege." Class B shares acquired through reinvestment of
distributions will convert into Class A shares based on the date of issuance of
such shares.
CLASS C SHARES -- LEVEL LOAD ALTERNATIVE
The public offering price of Class C shares of the Fund is the net asset value
of such shares. Class C shares are sold without an initial sales charge so that
the Fund receives the full amount of the investor's purchase. However, a CDSC of
1% will be imposed if shares are redeemed within one year of purchase. For
additional information, see "How to Sell Shares -- Contingent Deferred Sales
Charge." In addition, Class C shares are subject to higher annual Rule 12b-1
fees as described below.
Proceeds from the CDSC are paid to the Underwriter and are used to defray
expenses of the Underwriter related to providing distribution-related services
to the Fund in connection with the sale of Class C shares, such as the payment
of compensation to selected broker-dealers, and for selling Class C shares. The
combination of the CDSC and the Rule 12b-1 fee enables the Fund to sell the
Class C shares without deduction of a sales charge at the time of purchase.
Although Class C shares are sold without an initial sales charge, the
Underwriter pays a sales commission equal to 1% of the amount invested to
broker-dealers who sell Class C shares at the time the shares are sold and an
annual fee of .75% (paid quarterly) of the net asset value of the amount
invested that begins to accrue 13 months after the initial purchase.
RULE 12B-1 FEES
Class C shares are subject to a Rule 12b-1 fee payable at an annual rate of 1%
of the average daily net assets of the Fund attributable to Class C shares. The
higher Rule 12b-1 fee will cause Class C shares to have a higher expense ratio
and to pay lower dividends than Class A shares. For additional information about
this fee, see "Fund Expenses" above and "Management -- Plan of Distribution"
below.
INSTITUTIONAL CLASS SHARES
Institutional Class shares are available to a limited group of investors with no
sales charge at the time of purchase and no contingent deferred sales charge
upon redemption. Institutional Class shares are subject to a Rule 12b-1 fee
payable at an annual rate of .25% of the Fund's average daily net assets
attributable to Institutional Class shares.
The investors who may purchase Institutional Class shares include: (1)
officers and directors of the Funds; (2) officers, directors and full-time
employees of Voyageur Companies, Inc., Voyageur, Voyageur Asset Management
Group, Inc., ("VAMG"), the Underwriter and Pohlad Companies, and officers,
directors and full-time employees of parents and subsidiaries of the foregoing
companies; (3) officers, directors and full-time employees of investment
advisers of other mutual funds subject to a sales charge and included in any
other family of mutual funds that includes any Voyageur Fund as a member ("Other
Load Funds"), and officers, directors and full-time employees of parents,
subsidiaries and corporate affiliates of such investment advisers; (4) spouses
and lineal ancestors and descendants of the officers, directors/trustees and
employees referenced in clauses (1), (2) and (3), and lineal ancestors and
descendants of their spouses; (5) investment executives and other employees of
banks and dealers that have selling agreements with the Underwriter and parents,
spouses and children under the age of 21
11 VOYAGEUR FUNDS (PROSPECTUS)
of such investment executives and other employees; (6) trust companies and bank
trust departments for funds held in a fiduciary, agency, advisory, custodial or
similar capacity; (7) any state or any political subdivision thereof or any
instrumentality, department, authority or agency of any state or political
subdivision thereof; (8) partners and full-time employees of the Fund's counsel;
(9) managed account clients of Voyageur, clients of investment advisers
affiliated with Voyageur and other registered investment advisers and their
clients; (10) "wrap accounts" for the benefit of clients of financial planners
adhering to certain standards established by Voyageur; (11) tax-qualified
employee benefit plans for employees of Voyageur Companies, Inc., Voyageur, VAMG
and the Underwriter and (12) employee benefit plans qualified under Section
401(a) of the Internal Revenue Code of 1986, as amended (the "Code") (which does
not include Individual Retirement Accounts) and custodial accounts under Section
403(b)(7) of the Code (also known as tax-sheltered annuities).
RETIREMENT PLANS
- --------------------------------------------------------------------------------
Shares of the Fund may be an appropriate investment medium for retirement plans,
including: (a) Keogh (HR-10) plans (for self-employed individuals); (b)
qualified corporate pension and profit sharing plans (for employees); (c)
Individual Retirement Accounts (IRAs) (for employees and their spouses); and (d)
tax-deferred investment plans (for employees of public school systems and
certain types of charitable organizations). Certain retirement plans may qualify
to purchase Institutional Class shares at net asset value with no sales charge
at the time of purchase.
Persons desiring information about such plans, including their
availability, should contact the Fund. All retirement plans summarized above
involve a long-term commitment of assets and are subject to various legal
requirements and restrictions. The legal and tax implications may vary according
to the circumstances of the individual investor. Therefore, the investor is
urged to consult with an attorney or tax adviser prior to the establishment of
such a plan.
HOW TO SELL SHARES
- --------------------------------------------------------------------------------
The Fund will redeem its shares in cash at the net asset value next determined
after receipt of a shareholder's written request for redemption in good order
(see "Good Order" below). If shares for which payment has been collected are
redeemed, payment must be made within seven days. Dividends will be accrued on
shares through, but not including, the day of redemption. The Fund may suspend
this right of redemption and may postpone payment only when the Exchange is
closed for other than customary weekends or holidays, or if permitted by the
rules of the Securities and Exchange Commission during periods when trading on
the Exchange is restricted or during any emergency which makes it impracticable
for the Fund to dispose of its securities or to determine fairly the value of
its net assets or during any other period permitted by order of the Commission
for the protection of investors.
The Fund reserves the right and currently plans to redeem Fund shares and
mail the proceeds to the shareholder if at any time the value of Fund shares in
the account falls below a specified value, currently set at $250. Shareholders
will be notified and will have 60 days to bring the account up to the required
value before any redemption action will be taken by the Fund.
CONTINGENT DEFERRED SALES CHARGE
The CDSC will be calculated on an amount equal to the lesser of the net asset
value of the shares at the time of purchase or their net asset value at the time
of redemption. No charge will be imposed on increases in net asset value above
the initial purchase price. In
12 VOYAGEUR FUNDS (PROSPECTUS)
addition, no charge will be assessed on shares derived from reinvestment of
dividends or capital gains distributions.
In determining whether a CDSC is payable with respect to any redemption,
the calculation will be determined in the manner that results in the lowest rate
being charged. Therefore, it will be assumed that shares that are not subject to
the CDSC are redeemed first, shares subject to the lowest level of CDSC are
redeemed next, and so forth. If a shareholder owns Class A and either Class B or
Class C shares, then absent a shareholder choice to the contrary, Class B or
Class C shares not subject to a CDSC will be redeemed in full prior to any
redemption of Class A shares not subject to a CDSC.
The CDSC does not apply to: (1) redemptions of Class B shares in connection
with the automatic conversion to Class A shares; (2) redemptions of shares when
the Fund exercises its right to liquidate accounts which are less than the
minimum account size; and (3) redemptions in the event of the death or
disability of the shareholder within the meaning of Section 72(m)(7) of the
Internal Revenue Code.
If a shareholder exchanges Class A, Class B or Class C shares subject to a
CDSC for Class A, Class B or Class C shares, respectively, of a different
Voyageur fund, the transaction will not be subject to a CDSC. However, when
shares acquired through the exchange are redeemed, the shareholder will be
treated as if no exchange took place for the purpose of determining the CDSC.
Fund shares are exchangeable for shares of any money market fund available
through Voyageur. No CDSC will be imposed at the time of any such exchange;
however, the shares acquired in any such exchange will remain subject to the
CDSC and the period during which such shares represent shares of the money
market fund will not be included in determining how long the shares have been
held. Any CDSC due upon a redemption of Fund shares will be reduced by the
amount of any Rule 12b-1 payments made by such money market fund with respect to
such shares.
The Underwriter, upon notification, intends to provide, out of its own
assets, a PRO RATA refund of any CDSC paid in connection with a redemption of
Class A, Class B or Class C shares of the Fund (by crediting such refunded CDSC
to such shareholder's account) if, within 90 days of such redemption, all or any
portion of the redemption proceeds are reinvested in shares of the same class in
any of the Voyageur Funds. Any reinvestment within 90 days of a redemption to
which the CDSC was paid will be made without the imposition of an FESC but will
be subject to the same CDSC to which such amount was subject prior to the
redemption. The amount of CDSC will be calculated from the original investment
date.
EXPEDITED REDEMPTIONS
The Fund offers several expedited redemption procedures, described below, which
allow a shareholder to redeem Fund shares at net asset value determined on the
same day that the shareholder places the request for redemption of those shares.
Pursuant to these expedited redemption procedures, the Fund's shares will be
redeemed at their net asset value next determined following the Fund's receipt
of the redemption request. The Fund reserves the right at any time to suspend or
terminate the expedited redemption procedures or to impose a fee for this
service.
EXPEDITED TELEPHONE REDEMPTION
Shareholders redeeming at least $1,000 and no more than $50,000 (for which
certificates have not been issued) may redeem by telephoning the Fund directly
at 612-376-7014 or 800-545-3863. The applicable section of the general
authorization form must have been completed by the shareholder and filed with
the Fund before the telephone request is received. The proceeds of the
redemption will be paid by check mailed to the shareholder's address of record
or, if requested at the time of redemption, by wire to the bank designated on
the general authorization form. The Fund will employ reasonable procedures to
confirm that telephone instructions are genuine, including requiring that
13 VOYAGEUR FUNDS (PROSPECTUS)
payment be made only to the shareholder's address of record or to the bank
account designated on the authorization form and requiring certain means of
telephonic identification. The Fund's Adviser and Distributor will not be liable
for following instructions which are reasonably believed to be genuine.
EXPEDITED REDEMPTIONS THROUGH CERTAIN BROKER-DEALERS
Certain broker-dealers who have sales agreements with the Underwriter may allow
their customers to effect a redemption of shares of the Fund purchased through
such a broker-dealer by notifying the broker-dealer of the amount of shares to
be redeemed. The broker-dealer is then responsible for promptly placing the
redemption request with the Fund on the customer's behalf. Payment will be made
to the shareholder by check or wire sent to the broker-dealer. Broker-dealers
offering this service may impose a fee or additional requirements for such
redemptions.
GOOD ORDER
"Good order" means that stock certificates, if issued, must accompany the
request for redemption and must be duly endorsed for transfer, or must be
accompanied by a duly executed stock power. If no stock certificates have been
issued, a written request to redeem must be made. Stock certificates will not be
issued for Class B, Class C or Institutional Class shares. In any case, the
shareholder must execute the redemption request exactly as the shares are
registered. If the redemption proceeds are to be paid to the registered
holder(s), a signature guarantee is not normally required. A signature guarantee
is required in certain other circumstances, for example, to redeem more than
$50,000 or to have a check mailed other than to the shareholder's address of
record. See "Other Information" in the Statement of Additional Information. The
Adviser may waive certain of these redemption requirements at its own risk, but
also reserves the right to require signature guarantees on all redemptions, in
contexts perceived by the Adviser to subject the Fund to an unusual degree of
risk.
MONTHLY CASH WITHDRAWAL PLAN
An investor who owns or buys shares of the Fund valued at $10,000 or more at the
current offering price may open a Withdrawal Plan and have a designated sum of
money paid monthly to the investor or another person. Deferred sales charges may
apply to monthly redemptions of Class B or Class C shares. For additional
information see "Monthly Cash Withdrawal Plan" in the Statement of Additional
Information.
REINSTATEMENT PRIVILEGE
- --------------------------------------------------------------------------------
An investor in the Fund whose shares have been redeemed and who has not
previously exercised the Reinstatement Privilege as to the Fund may reinvest the
proceeds of such redemption in shares of the same class of any Voyageur Fund
eligible for sale in the shareholder's state of residence (provided that the
proceeds of a redemption of Institutional Class shares may be reinvested in
Class A shares of any Voyageur Fund). Reinvestment will be at the net asset
value of Fund shares next determined after the Underwriter receives a check
along with a letter requesting reinstatement. The Underwriter must receive the
letter requesting reinstatement within 365 days following the redemption.
Investors who desire to exercise the Privilege should contact their
broker-dealer or the Fund.
Exercise of the Reinstatement Privilege does not alter the income tax
treatment of any capital gains realized on a sale of Fund shares, but to the
extent that any shares are sold at a loss and the proceeds are reinvested within
30 days in shares of the Fund, some or all of the loss may not be allowed as a
deduction, depending upon the number of shares reacquired.
14 VOYAGEUR FUNDS (PROSPECTUS)
EXCHANGE PRIVILEGE
- -------------------------------------------------------------------------------
Except as described below, shareholders may exchange some or all of their Fund
shares for shares of another Voyageur Fund, provided that the shares to be
acquired in the exchange are eligible for sale in the shareholder's state of
residence. Class A and Institutional Class shareholders may exchange their
shares for Class A shares of other Voyageur Funds. Class B shareholders may
exchange their shares for the Class B shares of other Voyageur Funds and Class C
shareholders may exchange their shares for the Class C shares of other Voyageur
Funds. Shares of each class may also be exchanged for shares of any money market
fund available through Voyageur.
The minimum amount which may be exchanged is $1,000. The exchange will be
made on the basis of the relative net asset values next determined after receipt
of the exchange request, plus the amount, if any, by which the applicable sales
charge exceeds the sum of all sales charges previously paid in connection with
the prior investment. For a discussion of issues relating to the contingent
deferred sales charge upon such exchanges, see "How to Sell Shares -- Contingent
Deferred Sales Charge." There is no specific limit on exchange frequency;
however, the Fund is intended for long term investment and not as a trading
vehicle. The Adviser reserves the right to prohibit excessive exchanges (more
than four per quarter). The Adviser reserves the right, upon 60 days prior
notice, to restrict the frequency of, or otherwise modify, condition, terminate
or impose charges upon, exchanges. An exchange is considered to be a sale of
shares on which the investor may realize a capital gain or loss for income tax
purposes. Exchange requests may be placed directly with the fund in which the
investor owns shares, through the Adviser or through other broker-dealers. An
investor considering an exchange should obtain a prospectus of the fund to be
acquired and should read such prospectus carefully. Contact the Fund, the
Adviser or any of such other broker-dealers for further information about the
exchange privilege.
MANAGEMENT
- --------------------------------------------------------------------------------
DIRECTORS AND EXECUTIVE OFFICERS OF THE FUND
Under the laws of the State of Minnesota, the Board of Directors is responsible
for managing the business and affairs of the Company. The names, addresses,
principal occupations and other affiliations of Directors and executive officers
of the Company are set forth in the Statement of Additional Information.
INVESTMENT ADVISER; PORTFOLIO MANAGEMENT
Voyageur has been retained under an investment advisory agreement (the "Advisory
Agreement") with the Company to act as the Fund's investment adviser, subject to
the authority of the Board of Directors. Voyageur and the Underwriter are each
indirect wholly-owned subsidiaries of Dougherty Financial Group, Inc. ("DFG"),
which is owned approximately 49% by Michael E. Dougherty, 49% by Pohlad
Companies and less than 1% by certain retirement plans for the benefit of DFG
employees. Mr. Dougherty co-founded the predecessor of DFG in 1977 and has
served as DFG's Chairman of the Board and Chief Executive Officer since
inception. Pohlad Companies is a holding company owned in equal parts by each of
James O. Pohlad, Robert C. Pohlad and William M. Pohlad. As of October 1, 1995,
Voyageur served as the manager to six closed-end and ten open-end investment
companies (comprising 26 separate investment portfolios), administered numerous
private accounts and managed approximately $7.65 billion in assets. Voyageur's
principal business address is 90 South Seventh Street, Suite 4400, Minneapolis,
Minnesota 55402.
The Fund pays Voyageur a monthly investment advisory and management fee
equivalent on an annual basis to .50% of its average daily net assets.
15 VOYAGEUR FUNDS (PROSPECTUS)
Jane M. Wyatt has had day-to-day portfolio management responsibility for
the Fund since 1990. Ms. Wyatt is an Executive Vice President of the Fund and
has been Chief Investment Officer and a Director of Voyageur and the Distributor
since 1993. Previously, she had been an Executive Vice President of Voyageur
since 1992 and a Vice President of Voyageur from 1989 to 1992. Ms. Wyatt has
approximately nineteen years of risk management experience.
PLAN OF DISTRIBUTION
The Fund has adopted a Plan of Distribution under the 1940 Act (the "Plan") and
has entered into a Distribution Agreement with Voyageur Fund Distributors, Inc.
(the "Underwriter"). Pursuant to the Plan, the Fund pays the Underwriter a Rule
12b-1 fee at an annual rate of .25% of the Fund's average daily net assets
attributable to Class A shares and Institutional Class shares and 1% of the
Fund's average daily net assets attributable to Class B and Class C shares for
servicing of shareholder accounts and distribution-related services. Payments
made under the Plan are not tied exclusively to expenses actually incurred by
the Underwriter and may exceed such expenses.
All of the Rule 12b-1 fee attributable to Class A shares and Institutional
Class shares, and a portion of the fee equal to .25% of the average daily net
assets of the Fund attributable to each of the Class B shares and Class C shares
constitutes a shareholder servicing fee designed to compensate the Underwriter
for the provision of certain services to shareholders. The services provided may
include personal services provided to shareholders, such as answering
shareholder inquiries and providing reports and other information, and services
related to the maintenance of shareholder accounts. The Underwriter may use the
Rule 12b-1 fee or a portion thereof to make payments to qualifying
broker-dealers and financial institutions that provide such services.
That portion of the Rule 12b-1 fee equal to .75% of the average daily net
assets of the Fund attributable to Class B shares and Class C shares,
respectively, constitutes a distribution fee designed to compensate the
Underwriter for advertising, marketing and distributing the Class B and Class C
shares. In connection therewith, the Underwriter may provide initial and ongoing
sales compensation to its investment executives and other broker-dealers for
sales of Class B and Class C shares and may pay for other advertising and
promotional expenses in connection with the distribution of Class B and Class C
shares. The distribution fee attributable to Class B and Class C shares is
designed to permit an investor to purchase such shares through investment
executives of the Underwriter and other broker-dealers without the assessment of
an initial sales charge and at the same time to permit the Underwriter to
compensate its investment executives and other broker-dealers in connection with
the sale of such shares.
Payments under the Distribution Plan are not tied to the expenses for
shareholder servicing and distribution-related activities actually incurred by
the Underwriter, so that such payments may exceed or be less than expenses
actually incurred by the Underwriter.
CUSTODIAN; DIVIDEND DISBURSING, TRANSFER, ADMINISTRATIVE AND ACCOUNT SERVICES
AGENT
Norwest Bank Minnesota, N.A. serves as the custodian of the Fund's
portfolio securities and cash.
Voyageur acts as the Fund's dividend disbursing, transfer, administrative
and accounting services agent to perform dividend-paying functions, to calculate
the Fund's daily share price and to maintain shareholder records. The fees paid
for these services are based on the Fund's assets and include reimbursement of
out-of-pocket expenses. Voyageur receives a monthly fee from the Fund equal to
the sum of (1) $1.33 per shareholder account per month, (2) a monthly fee
ranging from $1,000 to $1,500 based on the average daily net assets of the Fund
and (3) a percentage of average daily net assets which ranges from 0.11% to
0.02% based on the average daily net assets of the Fund. See "The Investment
Adviser and Underwriter -- Expenses of the Fund" in the Statement of Additional
Information.
16 VOYAGEUR FUNDS (PROSPECTUS)
EXPENSES OF THE FUND
Voyageur is contractually obligated to reimburse each class of shares of the
Fund up to the amount of the investment advisory and administrative services
fees, to the extent that operating expenses, including the investment advisory,
administrative services and Rule 12b-1 fees (but excluding interest expense,
taxes, brokerage fees and commissions) exceed on an annual basis 1.25% of the
Fund's average daily net assets attributable to each of Class A shares and
Institutional Class shares and 2.00% of the Fund's average daily net assets
attributable to each of Class B and Class C shares. In addition, Voyageur and
the Underwriter reserve the right to voluntarily waive their fees in whole or
part and to voluntarily absorb certain other Fund expenses.
The Fund's expenses include, among others, fees of Directors, expenses of
Directors' and shareholders' meetings, insurance premiums, expenses of
redemption of shares, expenses of the issue and sale of shares (to the extent
not otherwise borne by the Underwriter), expenses of printing and mailing stock
certificates and shareholder statements, association membership dues, charges of
the Fund's custodian, bookkeeping, auditing and legal expenses, fees and
expenses of registering the Fund and its shares with the Securities and Exchange
Commission and registering or qualifying its shares under state securities laws
and expenses of preparing and mailing prospectuses and reports to existing
shareholders.
PORTFOLIO TRANSACTIONS
The Fund's portfolio transactions will generally be with the issuer or with
dealers acting on a principal basis. However, portfolio transactions for the
Fund which are executed on an agency basis may be effected through the
Underwriter or another broker-dealer affiliated directly or indirectly with
Voyageur, provided the commissions, fees or other remuneration received by such
affiliated broker-dealer are reasonable and fair compared to the commissions,
fees or other remuneration paid to other broker-dealers in connection with
comparable transactions involving similar securities being purchased or sold
during a comparable period of time. It is not anticipated that the Fund will
effect any brokerage transactions with any affiliated broker-dealer, including
the Underwriter, unless it would be to the Fund's advantage. Voyageur may
consider sales of shares of the Fund as a factor in the selection of
broker-dealers to execute the Fund's securities transactions.
DETERMINATION OF NET ASSET VALUE
- --------------------------------------------------------------------------------
Generally, the net asset value of the Fund's shares is determined once daily,
Monday through Friday, as of 3:00 p.m., Minneapolis time (the primary closing
time of the Exchange), on each business day on which the Exchange is open for
trading. Net asset value per share of each Class of Fund shares is determined in
the following manner: U.S. Government Securities are stated at an
institutionally determined valuation based generally upon the average of last
reported bid and asked prices. Short-term debt securities having remaining
maturities of 60 days or less are stated at amortized cost which approximates
market. All other securities and other assets are valued at fair value using
methods approved in good faith by the Company's Board of Directors. Liabilities
are deducted from the total, and the resulting amount is divided by the number
of shares outstanding.
17 VOYAGEUR FUNDS (PROSPECTUS)
DISTRIBUTIONS TO SHAREHOLDERS AND TAXES
- --------------------------------------------------------------------------------
The Fund declares a distribution from net investment income on each day that the
Fund is open for business. Net investment income consists of interest accrued on
portfolio investments of the Fund, less accrued expenses. Distributions of net
investment income and realized short-term capital gains, if any, are paid
monthly. The distribution of short term capital gains on a monthly basis could
potentially affect the future timing of investment purchases and sales. Net
realized long-term capital gains, if any, are distributed annually.
Distributions paid by the Fund, if any, with respect to Class A, Class B, Class
C and Institutional Class shares 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
higher Rule 12b-1 fees applicable to Class B and Class C shares will be borne
exclusively by such shares. The per share distributions on Class B and Class C
shares will be lower than the per share distributions on Class A shares and
Institutional Class shares as a result of the higher Rule 12b-1 fees applicable
to Class B and Class C shares
Shareholders receive distributions from net investment income and capital
gains in additional shares of the Fund at net asset value, without any sales
charge, unless they elect otherwise. The Fund sends monthly statements to its
shareholders with details of any reinvested dividends
The Fund qualified during its last taxable year and intends to qualify
during its current taxable year as a regulated investment company under the
Internal Revenue Code of 1986, as amended (the "Code"). So long as it does so,
the Fund will not be liable for federal income taxes to the extent it
distributes its taxable income to its shareholders.
Distributions by the Fund are generally taxable to shareholders, whether
received in cash or in additional shares of the Fund. Distributions from the
Fund's net investment income and net short-term capital gains are taxable to
shareholders as ordinary income. Distributions from the Fund designated as
long-term capital gain distributions will be reportable by the shareholder as
long-term capital gains irrespective of how long the shareholder has held the
shares. Shareholders not subject to federal income taxation will not be taxed on
distributions by the Fund. Shareholders will be notified annually as to the
amount, nature and federal income tax status of dividends and distributions.
The foregoing discussion of federal income tax consequences is based upon
tax laws and regulations in effect on the date of this Prospectus and is subject
to change by legislative or administrative action. For additional information,
see "Taxes" in the Statement of Additional Information. Prospective investors
are advised to consult with their tax advisers concerning the application of
state and local tax laws to investments in and distributions by the Fund.
INVESTMENT PERFORMANCE
- --------------------------------------------------------------------------------
Advertisements and other sales literature for the Fund may refer to "yield,"
"average annual total return," "cumulative total return" and "current
distribution rate" and may compare such performance quotations with published
indices and comparable quotations of other funds. Performance quotations are
computed separately for Class A, Class B, Class C and Institutional Class
shares. When the Fund advertises any performance information, it also will
advertise its average annual total return as required by the rules of the
Securities and Exchange Commission and will include performance data for each
class of shares. All such figures are based on historical earnings and
performance and are not intended to be indicative of future performance.
Additionally, performance information may not provide a basis for
18 VOYAGEUR FUNDS (PROSPECTUS)
comparison with other investments or other mutual funds using a different method
of calculating performance. The investment return on and principal value of an
investment in the Fund will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
Average annual total return is the average annual compounded rate of return
on a hypothetical $1,000 investment made at the beginning of the advertised
period. Cumulative total return is calculated by subtracting a hypothetical
$1,000 payment to a Fund from the redeemable value of such payment at the end of
the advertised period, dividing such difference by $1,000 and multiplying the
quotient by 100. In calculating average annual and cumulative total return, the
maximum sales charges is deducted from the hypothetical investment and all
dividends and distributions are assumed to be reinvested. Such total return
quotations may be accompanied by quotations which do not reflect the reduction
in value of the initial investment due to the sales charge, and which thus will
be higher.
In addition to advertising total return and yield, comparative performance
information may be used from time to time in advertising the Fund's shares,
including data from Lipper Analytical Services, Inc. and Morningstar.
For Fund performance information and daily net asset value quotations,
investors may call 612-376-7010 or 800-525-6584. For additional information
regarding the calculation of the Fund's yield, average annual total return,
cumulative total return and current distribution rate, see "Calculation of
Performance Data" in the Statement of Additional Information.
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Fund sends to its shareholders six-month unaudited and annual audited
financial statements.
The shares of the Fund constitute a separate series of common stock, $.01
par value per share, of a Minnesota corporation authorized to issue its shares
in one or more series. Voyageur U.S. Government Securities Fund is represented
by the Series A common shares of Voyageur Funds, Inc., incorporated on April 15,
1987. All shares of the corporation are non-assessable and fully transferable
when issued, and possess no cumulative voting, preemptive or conversion rights.
The Board of Directors is empowered under its Articles of Incorporation to issue
other series of common stock without shareholder approval.
The Fund currently offers its shares in four classes, each with different
sales arrangements and bearing different expenses as previously described in
this Prospectus. Class A, Class B, Class C and Institutional Class shares each
represent interests in the assets of the Fund and have identical voting,
dividend, liquidation and other rights on the same terms and conditions except
that expenses related to the distribution of each class are borne solely by such
class and each class of shares has exclusive voting rights with respect to
provisions of the Fund's Rule 12b-1 distribution plan which pertain to that
particular class and other matters for which separate class voting is
appropriate under applicable law; provided that, because Class B shares
eventually convert to Class A shares, Class B shareholders will have the right
to vote separately as a class with respect to any amendment to the Rule 12b-1
distribution plan that would materially increase the amount to be paid
thereunder with respect to the Class A shares. In the event of liquidation of
the Fund, each of the shares of the Fund is entitled to its portion of the
Fund's net assets after all debt and expenses have been paid. Since Class B and
Class C shares pay higher distribution expenses, the liquidation proceeds to
Class B and Class C shares is likely to be lower than to other shareholders.
19 VOYAGEUR FUNDS (PROSPECTUS)
Fund shares are freely transferable, are entitled to dividends as declared
by the Directors, and, in liquidation of the Fund, are entitled to receive the
net assets of the Fund. The Fund does not generally hold annual meetings of
shareholders and will do so only when required by law. Shareholders may remove
Directors from office by votes cast in person or by proxy at a meeting of
shareholders or by written consent and, in accordance with Section 16(c) of the
1940 Act, the Directors shall promptly call a meeting of shareholders for the
purpose of voting upon the question of removal of any Director when requested to
do so by the record holders of not less than 10% of the outstanding shares.
Each share of a series has one vote irrespective of the relative net asset
value of the shares. On some issues, such as the election of Directors, all
shares of a corporation vote together as one series. On an issue affecting only
a particular series or class, the shares of the affected series or class vote as
a separate series or class.
NO DEALER, SALES REPRESENTATIVE OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS (AND/OR IN THE STATEMENT OF ADDITIONAL INFORMATION REFERRED TO
ON THE COVER PAGE OF THIS PROSPECTUS), AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND
OR VOYAGEUR FUND DISTRIBUTORS, INC. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
OR SOLICITATION BY ANYONE IN THE STATE IN WHICH SUCH OFFER OR SOLICITATION IS
NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
20 VOYAGEUR FUNDS (PROSPECTUS)
(This page has been left blank intentionally.)
PART B
VOYAGEUR U.S. GOVERNMENT SECURITIES FUND
A SEPARATELY MANAGED SERIES OF VOYAGEUR FUNDS, INC.
STATEMENT OF ADDITIONAL INFORMATION
DATED NOVEMBER 1, 1995
This Statement of Additional Information is not a prospectus, but should be
read in conjunction with the Fund's Prospectus dated November 1, 1995. A copy of
the Prospectus may be obtained free of charge by contacting the Fund at 90 South
Seventh Street, Suite 4400, Minneapolis, Minnesota 55402. Telephone:
612-376-7000 or 800-525-6584.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
Investment Policies and Restrictions............................................................................B-2
Directors and Executive Officers................................................................................B-4
The Investment Adviser and Underwriter..........................................................................B-7
Net Asset Value and Public Offering Price......................................................................B-14
Taxes..........................................................................................................B-15
Bank Sales.....................................................................................................B-17
Special Purchase Plans.........................................................................................B-17
Calculation of Performance Data................................................................................B-20
Monthly Cash Withdrawal Plan...................................................................................B-23
Additional Information.........................................................................................B-24
Financial Statements...........................................................................................B-26
</TABLE>
No person has been authorized to give any information or to make any
representations other than those contained in this Statement of Additional
Information or the Prospectus dated November 1, 1995 and, if given or made, such
information or representations may not be relied upon as having been authorized
by the Fund. This Statement of Additional Information does not constitute an
offer to sell securities in any state or jurisdiction in which such offering may
not lawfully be made. The delivery of this Statement of Additional Information
at any time shall not imply that there has been no change in the affairs of the
Fund since the date hereof.
INVESTMENT POLICIES AND RESTRICTIONS
INVESTMENT POLICIES
WHEN ISSUED AND DELAYED DELIVERY SECURITIES. At the time the Fund
commits to purchase securities on a when-issued or delayed delivery basis, it
will record the transaction and thereafter reflect the value, each day, of such
security in determining its net asset value. At the time of delivery of the
securities, the value may be more or less than the purchase price. The Fund will
also establish a segregated account with its custodian in which it will maintain
cash or cash equivalents or other portfolio securities equal in value to its
commitments for such when-issued or delayed delivery securities. The Fund
generally will enter into agreements to purchase securities on a when-issued or
delayed delivery basis only with the intention of actually acquiring the
securities. The purchase of securities on a when-issued or delayed delivery
basis exposes the Fund to risk because the securities may decrease in value
prior to their delivery. Purchasing securities on a when-issued or delayed
delivery basis involves the additional risk that the return available in the
market when the delivery takes place will be higher than that obtained in the
transaction itself. Although the Fund dos not presently intend to do so, these
risks could result in increased volatility of the Fund's net asset value to the
extent that the Fund purchases securities on a when-issued or delayed delivery
basis while remaining substantially fully invested.
REPURCHASE AGREEMENTS. The Fund will also follow the collateral custody,
protection and perfection guidelines recommended by the Comptroller of the
Currency for the use of national banks in their direct repurchase agreement
activities. As an additional safety measure, the Fund will enter into repurchase
agreements only with primary dealers that report to the Federal Reserve Bank of
New York or with the 100 largest U. S. commercial banks, as measured by domestic
deposits.
PORTFOLIO TURNOVER. The portfolio turnover rate for a fiscal year is the
ratio of the lesser of purchases or sales of portfolio securities to the monthly
average of the value of portfolio securities, excluding securities whose
maturities at acquisition were one year or less. The Fund's portfolio turnover
rate will not be a limiting factor when the Fund deems it desirable to sell or
purchase securities. As described in the Prospectus, the Fund's portfolio
turnover rate may exceed 100%, which may result in higher transaction costs for
the Fund.
INVESTMENT RESTRICTIONS
Voyageur U.S. Government Securities Fund (the "Fund"), a separately managed
series of Voyageur Funds, Inc. (the "Company"), has adopted certain investment
restrictions set forth below which, together with the investment objective of
the Fund, cannot be changed without approval by holders of a majority of the
outstanding voting shares of the Fund. As defined in the Investment Company Act
of 1940 (the "1940 Act"), this means the lesser of the vote of (a) 67% of the
shares of the Fund at a meeting where more than 50% of the outstanding shares of
the Fund are present in person or by proxy or (b) more than 50% of the
outstanding shares of the Fund. The Fund may not:
1. Borrow money, except from banks for temporary or emergency purposes in
an amount not exceeding 5% of the value of the Fund's total assets. The Fund
will not borrow for leverage purposes, and securities will not be purchased
while borrowings are outstanding. Interest paid on any money borrowed will
reduce the Fund's net income.
2. Pledge, hypothecate, mortgage or otherwise encumber its assets in excess
of 5% of its total assets (taken at the lower of cost or current value) and then
only to secure borrowings permitted by restriction (1) above.
3. Purchase securities on margin, except such short-term credits as may be
necessary for the clearance of purchases and sales of securities.
4. Make short sales of securities or maintain a short position for the
account of the Fund unless at all times when a short position is open it owns an
equal amount of such securities or owns securities which, without payment of any
further consideration, are convertible into or exchangeable for securities of
the same issue as, and equal in amount to, the securities sold short.
5. Underwrite securities issued by other persons except to the extent that,
in connection with the disposition of its portfolio investments, it may be
deemed to be an underwriter under federal securities laws.
6. Purchase or sell real estate, although it may purchase securities which
are secured by or represent interests in real estate.
7. Purchase or sell commodities or commodity contracts.
8. Make loans, except by purchase of debt obligations in which the Fund may
invest consistent with its investment policies and through repurchase
agreements.
9. Invest in securities of any issuer if, to the knowledge of the Fund,
officers and directors of the Fund or officers and directors of the Fund's
investment adviser who beneficially own more than 1/2 of 1% of the securities of
that issuer together own more than 5%.
10. Purchase securities restricted as to resale.
11. Invest more than 25% of its assets in the securities of issuers in any
single industry; provided that there shall be no limitation on the purchase of
securities issued by banks and obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
12. Invest in (a) securities which in the opinion of the Fund's investment
adviser at the time of such investment are not readily marketable, and (b)
securities the disposition of which is restricted under federal securities laws
(as described in fundamental restriction (10) above).
13. Invest in securities of other investment companies, except as part of a
merger, consolidation or acquisition of assets.
14. Purchase options or puts, calls, straddles, spreads or combinations
thereof; in connection with the purchase of fixed-income securities, however,
the Fund may acquire attached warrants or other rights to subscribe for
securities of companies issuing such fixed-income securities or securities of
parents or subsidiaries of such companies. (The Fund's investment policies do
not currently permit it to exercise warrants or rights with respect to equity
securities.)
15. Buy or sell oil, gas or other mineral leases, rights or royalty
contracts.
Any investment restriction or limitation which involves a maximum
percentage of securities or assets shall not be considered to be violated unless
an excess over the percentage occurs immediately after an acquisition of
securities or a utilization of assets and such excess results therefrom.
DIRECTORS AND EXECUTIVE OFFICERS
The directors and officers of the Company, their position with the Fund and
their principal occupations during the past five years are set forth below. In
addition to the occupations set forth below, the directors and officers also
serve as directors and trustees or officers of various closed-end and open-end
investment companies managed by Voyageur.
PRINCIPAL OCCUPATION(S) DURING
PAST FIVE YEARS AND OTHER
NAME, ADDRESS, AND AGE POSITION AFFILIATIONS
- ---------------------- -------- ----------------------------
Clarence G. Frame, 76 Director Of counsel, Briggs & Morgan
W-875 law firm.
First National Bank Building
332 Minnesota Street
St. Paul, Minnesota 55101
Richard F. McNamara, 61 Director Chief Executive Officer of
7808 Creekridge Circle, #200 Activar, Inc., a Minneapolis-
Minneapolis, Minnesota 55439 based holding company consist-
ing of seventeen companies in
industrial plastics, sheet
metal, automotive aftermarket,
construction supply, electron-
ics and financial services,
since 1966.
Thomas F. Madison, 58 * Director Vice Chairman-Office of the
200 South Fifth Street CEO, Minnesota Mutual Life
Suite 2100 Insurance Company since
Minnepolis, Minnesota 55402 February 1994; President and
CEO of MLM Partners, Inc.
since January 1993; previous-
ly, President of U.S. WEST
Communications-Markets from
1988 to 1993; Mr. Madison
currently serves on the board
of directors of Minnesota
Mutual Life Insurance Company,
Valmont Industries, Inc.,
Eltrax Systems, Inc and vari-
ous civic and educational
organizations.
James W. Nelson, 52 Director Chairman and Chief Executive
81 South Ninth Street Officer of Eberhardt Holding
Suite 4400 Company and its subsidiaries
Minneapolis, Minnesota 55402 since 1990.
Robert J. Odegard, 73 Director Special Assistant to the
University of Minnesota President of the University of
Foundation Minnesota since 1990.
1300 South Second Street
Minneapolis, Minnesota 55454
John G. Taft, 41 President President (since 1991) and
90 South Seventh Street Director (since 1993) of the
Suite 4400 Adviser; Director (since 1993)
Minneapolis, Minnesota 55402 and Executive Vice President
(since 1995) of the
Underwriter; Management
committee member of the
Adviser from 1991 to 1993;
Managing Director at Piper,
Jaffray & Hopwood Incorporated
in Minneapolis from 1986 to
1991.
Jane M. Wyatt, 40 Executive Chief Investment Officer
90 South Seventh Street Vice (since 1993) and Portfolio
Suite 4400 President Manager (since 1989) of the
Minneapolis, Minnesota 55402 Adviser; Director of the
Adviser and the Underwriter
since 1993.
Andrew M. McCullagh, Jr., 46 Executive Portfolio Manager of the
90 South Seventh Street Vice Adviser since 1990; previous-
Suite 4400 President ly, Director of the Adviser
Minneapolis, Minnesota 55402 and the Underwriter from 1993
to 1995.
Elizabeth H. Howell, 32 Vice Portfolio Manger of the
90 South Seventh Street President Adviser since 1991; previous-
Suite 4400 ly, portfolio manager for
Minneapolis, Minnesota 55402 Windsor Financial Group,
Minneapolis, Minnesota from
1988 to 1991.
James C. King, 54 Vice Portfolio Manager of the
90 South Seventh Street President Adviser since 1990; previous-
Suite 4400 ly, Director of the Adviser
Minneapolis, Minnesota 55402 and the Underwriter from 1993
to 1995.
Richard Vandenberg, 45 Vice Portfolio Manager of the
90 South Seventh Street President Adviser since October 1992;
Suite 4400 previously, Proprietary Trader
Minneapolis, Minnesota 55402 with Norwest Bank from March
1992 to October 1992;
President of Ravan
Corporation, a commodity
trading adviser in Excelsior,
Minnesota from 1990 to
March 1992.
Kenneth R. Larsen, 32 Treasurer Treasurer of the Adviser and
90 South Seventh Street the Underwriter since 1990;
Suite 4400 previously, Chief Financial
Minneapolis, Minnesota 55402 Officer (from 1991 to 1995),
Director (from 1993 to 1995),
Secretary (from 1990 to 1993)
and Controller (from 1988 to
1990) of the Adviser and the
Underwriter.
Thomas J. Abood, 31 Secretary General Counsel of the
90 South Seventh Street Adviser and the Underwriter
Suite 4400 since October 1994; previous-
Minneapolis, Minnesota 55402 ly, associated with the law
firm of Skadden, Arps, Slate,
Meagher & Flom, Chicago,
Illinois from 1988 to 1994.
_________________________________
* "Interested person" of the Fund as such term is defined in the 1940 Act.
The Company does not compensate its officers. Each director (who is not an
employee of Voyageur or any of its affiliates) receives a total annual fee of
$24,000 for serving as a director or trustee for each of the open-end and
closed-end investment companies (the "Fund Complex") for which Voyageur acts as
investment adviser, plus a $500 fee for each special in-person meeting attended
by such director. These fees are allocated among each series or fund in the Fund
Complex based on the relative average net asset value of each series or fund.
Currently the Fund Complex consists of ten open-end investment companies
comprising 26 series or funds and six closed-end investment companies. In
addition, each director or trustee who is not an employee of Voyageur or any of
its affiliates is reimbursed for expenses incurred in connection with attending
meetings. Mr. Harley Danforth received $18,000 for service as a director/trustee
of the Fund Complex through the fiscal year ended June 30, 1995. Mr. Danforth
has resigned as a member of the Board of the Company, but has been retained as a
consultant by the Fund Complex for the period ending January 1996. He will
receive $20,000 from the Fund Complex for his services as a consultant. The
following table sets forth the aggregate compensation received by each director
from the Fund for the most recently ended fiscal year as well as the total
compensation received by each director from the Fund Complex during the calendar
year ended December 31, 1994.
<TABLE>
<CAPTION>
Pension or
Retirement Estimated Total
Aggregate Benefits Accrued Annual Benefits Compensation
Compensation as Part of Upon from Fund
Director from the Fund Fund Expenses Retirement Complex
- -------- ------------- ------------- ---------- -------
<S> <C> <C> <C> <C>
Clarence G. Frame $258 None None $22,500
Richard F. McNamara $258 None None $22,500
Thomas F. Madison $258 None None $16,000
James W. Nelson $258 None None $22,500
Robert J. Odegard $258 None None $22,500
</TABLE>
THE INVESTMENT ADVISER AND UNDERWRITER
Voyageur Fund Distributors, Inc. (the "Underwriter") is the principal
distributor of the Fund's shares. With regard to the Underwriter, Mr. Frank
Tonnemaker is the President and a director and Mr. Taft and Ms. Wyatt are each
executive vice presidents and directors. Mr. Larsen is Treasurer of the
Underwriter.
INVESTMENT ADVISORY AGREEMENT
The Fund does not maintain its own research department. The Company has
contracted with Voyageur, on behalf of the Fund, for investment advice and
management. Pursuant to the Company's Investment Advisory Agreement, Voyageur
has the sole and exclusive responsibility for the management of the Fund's
portfolio and the making and execution of all investment decisions for the Fund
subject to the objectives and investment policies and restrictions of the Fund
and subject to the supervision of the Company's Board of Directors. Voyageur
also furnishes, at its own expense, office facilities, equipment and personnel
for servicing the investments of the Fund. Voyageur has agreed to arrange for
officers and employees of Voyageur to serve without compensation from the
Company as directors, officers or employees of the Company if duly elected to
such positions by the shareholders or directors of the Company.
As compensation for Voyageur's services, the Fund pays a monthly investment
advisory and management fee equivalent on an annual basis to .50 of 1% of the
average daily net assets of the Fund. As of June 30, 1995, 1994 and 1993, the
Fund had net assets of $130,689,931, $134,582,276 and $112,604,210,
respectively. For the fiscal years ended June 30, 1995, 1994 and 1993, the Fund
paid $647,382, $715,217 and $407,371, respectively, in investment advisory fees
(before expense reimbursements or waivers, as described below).
The Company's Investment Advisory Agreement continues from year to year
only if approved annually (a) by the Company's Board of Directors or by vote of
a majority of the outstanding voting securities of the Fund and (b) by vote of a
majority of directors of the Company who are not parties to the Investment
Advisory Agreement or interested persons (as defined in the 1940 Act) of any
such party, cast in person at a meeting of the Board of Directors of the Company
called for the purpose of voting on such approval. The Investment Advisory
Agreement may be terminated by the Company or the parties to such agreement on
60 days' notice and terminates automatically in the event of its assignment.
ADMINISTRATIVE SERVICES AGREEMENT
Voyageur also acts as the Fund's dividend disbursing, transfer,
administrative and accounting services agent pursuant to an Administrative
Services Agreement between Voyageur and the Company. Pursuant to the
Administrative Services Agreement, Voyageur provides the Fund all dividend
disbursing, transfer agency, administrative and accounting services required by
the Fund including, without limitation, the following: (i) the calculation of
net asset value per share at such times and in such manner as is specified in
the Fund's current Prospectus and Statement of Additional Information, (ii) upon
the receipt of funds for the purchase of the Fund's shares or the receipt of
redemption requests with respect to the Fund's shares outstanding, the
calculation of the number of shares to be purchased or redeemed, respectively,
(iii) upon the Fund's distribution of dividends, the calculation of the amount
of such dividends to be received per share, the calculation of the number of
additional shares of the Fund to be received by each Fund shareholder (other
than any shareholder who has elected to receive such dividends in cash) and the
mailing of payments with respect to such dividends to shareholders who have
elected to receive such dividends in cash, (iv) the provision of transfer agency
services, (v) the creation and maintenance of such records relating to the
business of the Fund as the Fund may from time to time reasonably request, (vi)
the preparation of tax forms, reports, notices, proxy statements, proxies and
other shareholder communications, and the mailing thereof to shareholders of the
Fund, and (vii) the provision of such other dividend disbursing, administrative
and accounting services as the Fund and Voyageur may from time to time agree
upon. Pursuant to the Administrative Services Agreement, the Adviser also
provides such regulatory reporting and compliance related services and tasks for
the Fund as the Fund may reasonably request.
As compensation for these services, the Fund pays Voyageur a monthly fee
based upon the Fund's average daily net assets and the number of shareholder
accounts then existing. This fee is equal to the sum of (i) $1.33 per
shareholder account per month; (ii) $1,000 per month if the Fund's average daily
net assets do not exceed $50 million, $1,250 per month if the Fund's average
daily net assets are greater than $50 million but do not exceed $100 million,
and $1,500 per month if the Fund's average daily net assets are greater than
$100 million; and (iii) 0.11% per annum of the first $20 million of the Fund's
average daily net assets, 0.06% per annum of the next $20 million of the Fund's
average daily net assets, 0.035% per annum of the next $60 million of the Fund's
average daily net assets, 0.03% per annum of the next $400 million of the Fund's
average daily net assets, and 0.02% per annum of the Fund's average daily net
assets in excess of $500 million. For purposes of calculating average daily net
assets, as such term is used in the Administrative Services Agreement, the
Fund's net assets equal its total assets minus its total liabilities. The Fund
also reimburses Voyageur for its out-of-pocket expenses in connection with
Voyageur's provision of services under the Administrative Services Agreement.
The Company or Voyageur can terminate the Administrative Services Agreement on
60 days' notice to the other party. For the fiscal years ended June 30, 1995,
1994 and 1993, the Fund paid $144,961, $168,373 and $110,370, respectively, in
dividend disbursing, administrative and accounting services fees (before expense
reimbursements or waivers as described below).
EXPENSES OF THE FUND
Voyageur is contractually obligated to reimburse each class of Fund shares
up to the amount of the investment advisory and administrative services fees, to
the extent that operating expenses, including the investment advisory,
administrative services and Rule 12b-1 fees (but excluding interest expense,
taxes, brokerage fees and commissions) exceed on an annual basis 1.25% of the
Fund's average daily net assets attributable to each of Class A and
Institutional Class shares and 2.00% of the Fund's average daily net assets
attributable to each of Class B and Class C shares. In addition, Voyageur and
the Underwriter reserve the right to voluntarily waive their fees in whole or
part and to voluntarily absorb certain other of the Fund's expenses. For the
fiscal year ended June 30, 1993, Voyageur waived or absorbed $30,000 of expenses
for Class A shares, including voluntary waivers of $30,000. Class B, Class C and
Institutional Class shares were not offered during fiscal 1993. For the fiscal
year ended June 30, 1994, Voyageur did not waive or absorb any expenses for any
class of shares. For the fiscal year ended June 30, 1995, Voyageur waived,
absorbed or reduced $1,582 of expenses for Class A shares, $65 for Class B
shares, $6 for Class C shares and $1,066 for Institutional Class shares,
including voluntary waivers of $0 for Class A shares, $65 for Class B shares, $6
for Class C shares and $0 for Institutional Class shares.
All costs and expenses (other than those specifically referred to as being
borne by Voyageur or the Underwriter) incurred in the operation of the Fund are
borne by the Fund. These expenses include, among others, interest, taxes,
brokerage fees and commissions, fees of the directors who are not employees of
Voyageur or any of its affiliates, expenses of directors' and shareholders'
meetings, including the cost of printing and mailing proxies, expenses of
insurance premiums for fidelity and other coverage, expenses of redemption of
shares, expenses of issue and sale of shares (to the extent not borne by the
Underwriter or Voyageur under their agreements with the Fund), expenses of
printing and mailing stock certificates representing shares of the Fund,
association membership dues, charges of the Fund's custodian, and bookkeeping,
audit and legal expenses. The Fund will also pay the fees and bear the expense
of registering and maintaining the registration of the Fund and its shares with
the Securities and Exchange Commission and registering or qualifying its shares
under state or other securities laws and the expense of preparing and mailing
prospectuses and reports to shareholders.
RULE 12B-1 PLAN OF DISTRIBUTION; DISTRIBUTION AGREEMENT
The Fund has adopted a Plan of Distribution (the "Plan") relating to the
payment of certain expenses pursuant to Rule 12b-1 under the 1940 Act. Rule
12b-1(b) provides that any payments made by the Fund in connection with the
distribution of its shares may only be made pursuant to a written plan
describing all material aspects of the proposed financing of distribution and
also requires that all agreements with any person relating to implementation of
the plan must be in writing. In addition, Rule 12b-1(b)(1) requires that such
plan be approved by a vote of at least a majority of the Fund's outstanding
shares, and Rule 12b-1(b)(2) requires that such plan, together with any related
agreements, be approved by a vote of the Board of Directors 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, cast in person at a meeting called for the purpose of voting on such
plan or agreements. Rule 12b-1(b)(3) requires that the plan or agreement
provide, in substance: (1) that it shall continue in effect for a period of more
than one year from the date of its execution or adoption only so long as such
continuance is specifically approved at least annually in the manner described
in paragraph (b)(2) of Rule 12b-1; (2) that any person authorized to direct the
disposition of monies paid or payable by the Fund pursuant to its plan or any
related agreement shall provide to the Board of Directors, and the directors
shall review, at least quarterly, a written report of the amount so expended and
the purposes for which such expenditures were made; and (3) in the case of a
plan, that it may be terminated at any time by vote of a majority of the members
of the Board of 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 or by vote of a majority of the outstanding
voting securities of the Fund.
Rule 12b-1(b)(4) requires that such plans may not be amended to increase
materially the amount to be spent for distribution without shareholder approval
and that all material amendments of the plan must be approved in the manner
described in paragraph (b)(2) of Rule 12b-1. Rule 12b-1(c) provides that the
Fund may rely upon Rule 12b-1(1) only if selection and nomination of the Fund's
disinterested directors are committed to the discretion of such disinterested
directors. Rule 12b-1(e) provides that the Fund may implement or continue a plan
pursuant to Rule 12b-1(b) only if the directors who vote to approve such
implementation or continuation conclude, in the exercise of reasonable business
judgment and in light of their fiduciary duties under state law, and under
Section 36(a) and (b) of the 1940 Act, that there is a reasonable likelihood
that the plan will benefit the Fund and its shareholders.
The Company has entered into a Distribution Agreement (on behalf of the
Fund) with the Underwriter, pursuant to which the Underwriter acts as the
principal underwriter of the Fund's shares. The Distribution Agreement and Plan
provide that the Underwriter agrees to provide, and shall pay costs which it
incurs in connection with providing, ongoing servicing and/or maintenance of
Fund shareholder accounts (such costs are referred to as "Shareholder Servicing
Expenses") and that the Underwriter shall also pay all costs of distributing the
shares of the Fund ("Distribution Expenses"). Shareholder Servicing Expenses
include all expenses of the Underwriter incurred in connection with providing
ongoing servicing and/or maintenance of Fund shareholder accounts including, but
not limited to, an allocation of the Underwriter's overhead and payments made to
persons, including employees of the Underwriter, who respond to inquiries of
shareholders regarding their ownership of Fund shares, or who provide other
administrative or accounting services not otherwise required to be provided by
the Fund's investment adviser or transfer agent. Distribution Expenses include,
but are not limited to, initial and ongoing sales compensation (in addition to
sales loads) paid to investment executives of the Underwriter and to other
broker-dealers and participating financial institutions; expenses incurred in
the printing of prospectuses, statements of additional information and reports
used for sales purposes; expenses of preparation and distribution of sales
literature; expenses of advertising of any type; an allocation of the
Underwriter's overhead; payments to and expenses of persons who provide support
services in connection with the distribution of Fund shares; and other
distribution-related expenses.
Pursuant to the provisions of the Distribution Agreement, the Underwriter
is entitled to receive a total fee each quarter at an annual rate of .25% of the
average daily net assets attributable to the Fund's Class A and Institutional
Class shares and 1.00% of the average daily net assets attributable to the
Fund's Class B and Class C shares. As determined from time to time by the Board
of Directors, a portion of such fees shall be designated as a "shareholder
servicing fee" and a portion shall be designated as a "distribution fee." The
Board of Directors has determined that all of the fee payable with respect to
Class A shares and Institutional Class shares shall be designated a shareholder
servicing fee. For fees payable with respect to Class B and Class C shares, that
portion of the fee equal to .25% of average daily net assets attributable to the
Fund's Class B shares or Class C shares, as the case may be, is designated a
shareholder servicing fee and that portion of the fee equal to .75% of average
daily net assets attributable to the Fund's Class B shares or Class C shares, as
the case may be, is designated a distribution fee. Amounts payable to the
Underwriter under the Distribution Agreement may exceed or be less than the
Underwriter's actual distribution expenses and shareholder servicing expenses.
In the event such distribution expenses and shareholder servicing expenses
exceed amounts payable to the Underwriter under the Plan, the Underwriter shall
not be entitled to reimbursement by the Fund.
The Company's Distribution Agreement is renewable from year to year if the
directors approve the Agreement and the Plan. The Company or the Underwriter can
terminate the Distribution Agreement on 60 days' notice to the other party, and
such Agreement terminates automatically upon its assignment. In the Distribution
Agreement, the Underwriter agrees to indemnify the Fund against all costs of
litigation and other legal proceedings and against any liability incurred by or
imposed on the Fund in any way arising out of or in connection with the sale or
distribution of the Fund's shares, except to the extent that such liability is
the result of information which was obtainable by the Underwriter only from
persons affiliated with the Fund but not the Underwriter.
Pursuant to the Distribution Agreement, the Underwriter has agreed to act
as the principal underwriter for the Fund in the sale and distribution to the
public of shares of the Fund, either through dealers or otherwise. The
Underwriter has agreed to offer such shares for sale at all times when such
shares are available for sale and may lawfully be offered for sale and sold. For
its services, in addition to being paid the shareholder servicing fee and the
distribution fee, pursuant to the Rule 12b-1 Plan discussed above, the
Underwriter receives the sales charge on sales of Fund shares set forth in the
Prospectus.
For the fiscal year ended June 30, 1993, the Fund paid Rule 12b-1 fees of
$203,685 and Voyageur voluntarily waived or absorbed $30,000 of such fees that
were otherwise payable within the 1.25% expense limitation. There was only one
class of shares outstanding during fiscal 1993. For the fiscal year ended June
30, 1994, the Fund paid Rule 12b-1 fees of $349,605 for Class A shares, $16 for
Class B shares and $7,992 for Institutional Class shares. There were no Class C
shares outstanding during fiscal 1994. For the fiscal year ended June 30, 1995,
the Fund paid Rule 12b-1 fees of $192,688 for Class A shares, $455 for Class B
shares, $228 for Class C shares and $130,835 for Institutional Class shares.
Voyageur voluntarily waived, absorbed or reduced $1,582 of such fees for Class A
shares, $65 for Class B shares, $6 for Class C shares and $1,066 for
Institutional Class shares that were otherwise payable within the 1.25% expense
limitation.
Distribution fees for the fiscal year ended June 30, 1995, were used by the
Underwriter as follows:
Advertising and promotions $ 9,371
Printing and mailing of prospectuses
to other than current shareholders 11,491
Compensation to underwriters
(trail fees to investment executives) 15,151
Compensation to dealers 280,721
Compensation to sales personnel 7,472
----------
Total $ 324,206
==========
The aggregate dollar amount of underwriting commissions paid by Class A
shareholders the Fund for the fiscal years ended June 30, 1995, 1994 and 1993
were $75,170, $1,088,194 and $1,126,432, respectively. The amount of such
commissions retained by the Underwriter was $10,778, $153,930 and $150,485,
respectively. Contingent deferred sales charges paid by Class B shareholders
were $896 during the year ended June 30, 1995.
PORTFOLIO TRANSACTIONS AND ALLOCATION OF BROKERAGE
As the Fund's portfolio is composed exclusively of debt, rather than equity
securities, most of the Fund's portfolio transactions are effected with dealers
without the payment of brokerage commissions, but rather at net prices which
usually include a spread or markup. In effecting portfolio transactions on
behalf of the Fund, Voyageur seeks the most favorable net price consistent with
the best execution. However, Voyageur frequently selects a dealer to effect a
particular transaction without contacting all dealers who might be able to
effect such transaction, because of the volatility of the bond market and the
desire of Voyageur to accept a particular price for a security because the price
offered by the dealer meets its guidelines for profit, yield or both.
Decisions with respect to placement of the Fund's portfolio transactions
are made by Voyageur. The primary consideration in making these decisions is
efficiency in the execution of orders and obtaining the most favorable net
prices for the Fund. When consistent with these objectives, business may be
placed with broker-dealers who furnish investment research services to Voyageur.
Such research services include advice, both directly and in writing, 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; as well as analyses and reports concerning issues, industries,
securities, economic factors and trends, portfolio strategy and the performance
of accounts. This allows Voyageur to supplement its own investment research
activities and enables Voyageur to obtain the views and information of
individuals and research staffs of many different securities firms prior to
making investment decisions for the Fund. To the extent portfolio transactions
are effected with broker-dealers who furnish research services to Voyageur,
Voyageur receives a benefit, not capable of evaluation in dollar amounts,
without providing any direct monetary benefit to the Fund from these
transactions.
Voyageur has not entered into any formal or informal agreements with any
broker-dealers, nor does it maintain any "formula" which must be followed in
connection with the placement of the Fund's portfolio transactions in exchange
for research services provided Voyageur. However, Voyageur does maintain
informal lists of broker-dealers, which are used from time to time as a general
guide in the placement of the Fund's business, in order to encourage certain
broker-dealers to provide Voyageur with research services which Voyageur
anticipates will be useful to it. Because the lists are merely a general guide,
which are to be used only after the primary criterion for the selection of
broker-dealers (discussed above) has been met, substantial deviations from the
lists are permissible and may be expected to occur. Voyageur will authorize the
Fund to pay an amount of commission for effecting a securities transaction in
excess of the amount of commission another broker-dealer would have charged only
if Voyageur determines in good faith that such amount of commission is
reasonable in relation to the value of the brokerage and research services
provided by such broker-dealer, viewed in terms of either that particular
transaction or Voyageur's overall responsibilities with respect to the accounts
as to which they exercise investment discretion.
The Fund will not effect any brokerage transactions in its portfolio
securities with any broker-dealer affiliated directly or indirectly with
Voyageur unless such transactions, including the frequency thereof, the receipt
of commissions payable in connection therewith and the selection of the
affiliated broker-dealer effecting such transactions are not unfair or
unreasonable to the shareholders of the Fund. In the event any transactions are
executed on an agency basis, Voyageur will authorize the Fund to pay an amount
of commission for effecting a securities transaction in excess of the amount of
commission another broker-dealer would have charged only if Voyageur determines
in good faith that such amount of commission is reasonable in relation to the
value of the brokerage and research services provided by such broker-dealer,
viewed in terms of either that particular transaction or Voyageur's overall
responsibilities with respect to the Funds as to which they exercise investment
discretion. If the Fund executes any transactions on an agency basis, it will
generally pay higher than the lowest commission rates available.
In determining the commissions to be paid to a broker-dealer affiliated
with Voyageur, it is the policy of the Fund that such commissions will, in the
judgment of Voyageur, subject to review by the Board of Directors, be both (a)
at least as favorable as those which would be charged by other qualified brokers
in connection with comparable transactions involving similar securities being
purchased or sold on an exchange during a comparable period of time, and (b) at
least as favorable as commissions contemporaneously charged by such affiliated
broker-dealers on comparable transactions for their most favored comparable
unaffiliated customers. While the Fund does not deem it practicable and in its
best interest to solicit competitive bids for commission rates on each
transaction, consideration will regularly be given to posted commission rates as
well as to other information concerning the level of commissions charged on
comparable transactions by other qualified brokers.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. and subject to the policies set forth in the preceding
paragraphs and such other policies as the Company's directors may determine,
Voyageur may consider sales of shares of the Fund as a factor in the selection
of broker-dealers to execute the Fund's securities transactions.
For the fiscal years ended June 30, 1995, 1994 and 1993, the Fund did not
pay any brokerage commissions, direct any portfolio transactions to
broker-dealers because of research services provided to Voyageur or execute any
brokerage transactions with an affiliated broker-dealer.
Pursuant to conditions set forth in rules of the Securities and Exchange
Commission, the Fund may purchase securities from an underwriting syndicate of
which an affiliated broker-dealer is a member but not directly from such
affiliated broker-dealers itself. Such conditions relate to the price and amount
of the securities purchased, the commission or spread paid and the quality of
the issuer. The rules further require that such purchases take place in
accordance with procedures adopted and reviewed periodically by the Board of
Directors of the Company, particularly those directors who are not interested
persons of the Company.
NET ASSET VALUE AND PUBLIC OFFERING PRICE
The method for determining the public offering price of Fund shares, which
is equal to the net asset value per share plus the applicable sales charge, if
any, is summarized in the Prospectus. The net asset value of the Fund's shares
is determined on each day on which the New York Stock Exchange is open, provided
that the net asset value need not be determined on days when no Fund shares are
tendered for redemption and no order for Fund shares is received. The New York
Stock Exchange is not open for business on the following holidays (or on the
nearest Monday or Friday if the holiday falls on a weekend): New Year's Day,
President's Day, Good Friday, Memorial Day, July 4th, Labor Day, Thanksgiving
and Christmas.
The portfolio securities in which the Fund invests fluctuate in value and
hence the net asset value per share of the Fund also fluctuates. On June 30,
1995, the net asset value per share and the maximum public offering price per
share for Class A shares, Class B shares, Class C shares and Institutional Class
shares of the Fund were calculated as follows:
<TABLE>
<CAPTION>
CLASS A SHARES
<S> <C>
Net Assets ($75,885,986) = Net Asset Value Per Share ($10.37)
------------------------
Shares outstanding (7,316,794)
Maximum Public Offering Price/share = $10.37 + 4.75% of Public Offering Price
Maximum Public Offering Price = $10.37 = $10.89/share
----------------
100% - 4.75%
CLASS B SHARES
Net Assets ($138,678) = Net Asset Value Per Share ($10.38)
-------------------------
Shares outstanding (13,359)
CLASS C SHARES
Net Assets ($220,686) = Net Asset Value Per Share ($10.36)
---------------------
Shares outstanding (21,292)
INSTITUTIONAL CLASS SHARES
Net Assets ($54,444,581) = Net Asset Value Per Share ($10.37)
------------------------
Shares outstanding (5,247,734)
</TABLE>
TAXES
Under the Internal Revenue Code of 1986, as amended (the "Code"), the Fund
will be subject to a nondeductible excise tax equal to 4% of the excess, if any,
of the taxable amount required to be distributed for each calendar year over the
amount actually distributed. In order to avoid this excise tax, the Fund
generally must declare dividends by the end of a calendar year representing 98%
of the Fund's ordinary income for the calendar year and 98% of its capital gain
net income (both long- and short-term capital gains) for the 12-month period
ending on October 31 of such year. For purposes of the excise tax, any income on
which the Fund has paid corporate-level tax is considered to have been
distributed. The Fund intends to make sufficient distributions each year to
avoid the payment of the excise tax.
If shares of the Fund are sold or otherwise disposed of, the shareholder
will realize a capital gain or loss equal to the difference between the purchase
price and the sales price of the shares disposed of, if, as is usually the case,
the shares are a capital asset in the hands of the shareholder. If the sale or
other disposition occurs more than one year after the shares were acquired, the
resulting capital gain or loss will be long-term. A special provision of the
Code pertaining to regulated investment companies states that, if the Fund's
shares with respect to which a long-term capital gain distribution has been made
are held for six months or less, any loss on the sale or other disposition of
those shares will be a long-term capital loss to the extent of such long-term
capital gain distribution, unless such sale or other disposition is made
pursuant to a plan that provides for the periodic liquidation of an investment
in the Fund.
An exchange of shares in one Voyageur Fund for shares in another Voyageur
Fund pursuant to exercise of the Exchange Privilege is considered to be a sale
of the shares for federal tax purposes that may result in a taxable gain or
loss. If a shareholder incurs a sales charge in acquiring shares and then, after
holding those shares not more than 90 days, exchanges them pursuant to the
Exchange Privilege for shares of another Voyageur Fund, the shareholder may not
take into account the initial sales charge (to the extent that the otherwise
applicable sales charge on the later-acquired shares is reduced) for purposes of
determining the shareholder's gain or loss on the exchange of the first held
shares. Similarly, if a shareholder redeems shares in the Fund within 90 days of
purchasing them and then repurchases shares in the Fund pursuant to the
reinstatement privilege (see "Reinstatement Privilege" in the Prospectus), the
shareholder may not take the sales charge paid on the initial purchase of Fund
shares into account in determining gain or loss on the sale of the first
acquired shares. However, in both cases the amount of the disallowed sales
charge may be taken into account in determining gain or loss on the eventual
sale or exchange of the later-acquired shares.
For individuals, long-term capital gains are subject to a maximum tax rate
of 28% while ordinary income is subject to a maximum effective rate in excess of
39.6% (resulting from a combination of a nominal 39.6% rate, a phase-out of
personal exemptions for individuals filing single returns with adjusted gross
income in excess of $114,700 and for married couples filing joint returns with
adjusted gross income in excess of $172,050, and a partial disallowance of
itemized deductions for individuals with adjusted gross income in excess of
$114,700). For corporations, both ordinary income and capital gains are
currently subject to a maximum rate of 35%.
Shareholders will be notified annually as to the amount, nature and federal
income tax status of dividends and distributions. The Fund is also required to
report all distributions and redemption payments to the Internal Revenue
Service. The Fund is required to withhold 31% of taxable interest, dividends and
certain other payments, including redemption payments, for shareholders who fail
to furnish their correct taxpayer identification number (for most individuals,
the Social Security number) or as a result of certain other events specified in
Section 3406 of the Code. Payees that are exempt from this "backup withholding"
are generally not individuals but are corporations or governmental entities. In
order to avoid withholding, a shareholder of the Fund must provide a taxpayer
identification number to the Fund and must certify that he or she is not subject
to backup withholding.
The foregoing is a general and abbreviated summary of the Code and Treasury
Regulations in effect as of the date of the Fund's Prospectus and this Statement
of Additional Information. No attempt has been made to discuss any state and
local income tax consequences of an investment in the Fund. State and local
income tax treatment may differ from the federal income tax treatment discussed
above. Potential investors in the Fund are encouraged to consult a competent tax
adviser regarding the income tax consequences of acquiring shares in the Fund.
BANK SALES
Banks, acting as agents for their customers and not for the Funds or the
Underwriter, from time to time may purchase Fund shares for the accounts of such
customers. Generally, the Glass-Steagall Act prohibits banks from engaging in
the business of underwriting, selling or distributing securities. Should the
activities of any bank, acting as agent for its customers in connection with the
purchase of the Fund's shares, be deemed to violate the Glass-Steagall Act,
management will take whatever action, if any, is appropriate in order to provide
efficient services for the Fund. Management does not believe that a termination
in the relationship with a bank would result in any material adverse
consequences to the Fund. In addition, state securities laws on this issue may
differ and banks and financial institutions may be required to register as
dealers pursuant to state law. Fund shares are not deposits or obligations of,
or guaranteed or endorsed by, any bank and are not insured or guaranteed by the
U.S. Government, the Federal Deposit Insurance Corporation, the Federal Reserve
Board or any other federal agency.
SPECIAL PURCHASE PLANS
AUTOMATIC INVESTMENT PLAN. As a convenience to investors, shares may be
purchased through a preauthorized automatic investment plan. Such preauthorized
investments (at least $100) may be used to purchase shares of the Fund at the
public offering price next determined after the Fund receives the investment
(normally the 20th of each month, or the next business day thereafter). Further
information is available from the Underwriter.
COMBINED PURCHASE PRIVILEGE. The following persons (or groups of persons)
may qualify for reductions from the front end sales charge ("FESC") schedule for
Class A shares set forth in the Prospectus by combining purchases of any class
of shares of any one or more of the Voyageur Load Funds and Other Load Funds (as
defined below), if the combined purchase of all such funds totals at least
$50,000:
(i) an individual or a "company" as defined in Section 2(a)(8) of
the 1940 Act;
(ii) an individual, his or her spouse and their children under
twenty-one, purchasing for his, her or their own account;
(iii) a trustee or other fiduciary purchasing for a single trust
estate or single fiduciary account (including a pension,
profit-sharing or other employee benefit trust) created pursuant to a
plan qualified under Section 401 of the Code;
(iv) tax-exempt organizations enumerated in Section 501(c)(3) of
the Code;
(v) employee benefit plans of a single employer or of affiliated
employers;
(vi) any organized group which has been in existence for more
than six months, provided that it is not organized for the purpose of
buying redeemable securities of a registered investment company, and
provided that the purchase is made through a central administration,
or through a single dealer, or by other means which result in economy
of sales effort or expense. An organized group does not include a
group of individuals whose sole organizational connection is
participation as credit cardholders of a company, policyholders of an
insurance company, customers of either a bank or broker-dealer, or
clients of an investment adviser.
CUMULATIVE QUANTITY DISCOUNT (RIGHT OF ACCUMULATION). A purchase of shares
of any class may qualify for a Cumulative Quantity Discount. The applicable FESC
will then be based on the total of:
(i) the investor's current purchase; and
(ii) the net asset value (at the close of business on the
previous day) of shares of any class of Voyageur Load Funds and shares
of Other Load Funds held by the investor; and
(iii) the net asset value of shares of any class of Voyageur Load
Funds and shares of Other Load Funds owned by another shareholder
eligible to participate with the investor in a "Combined Purchase
Privilege" (see above).
For example, if an investor owned shares worth $35,000 at the then current
net asset value and purchased an additional $15,000 of shares, the sales charge
for the $15,000 purchase would be at the rate applicable to a single $50,000
purchase.
To qualify for the Combined Purchase Privilege or to obtain the Cumulative
Quantity Discount on a purchase through an investment dealer, when each purchase
is made the investor or dealer must provide the Fund whose shares are being
purchased with sufficient information to verify that the purchase qualifies for
the privilege or discount.
LETTER OF INTENTION. Investors may also obtain the reduced front-end sales
charges for Class A shares shown in the Prospectus by means of a written Letter
of Intention, which expresses the investor's intention to invest not less than
$50,000 (including certain "credits," as described below) within a period of 13
months in any class of Voyageur Load Funds and Other Load Funds. Each purchase
of shares under a Letter of Intention will be made at the public offering price
applicable at the time of such purchase to a single transaction of the dollar
amount indicated in the Letter. A Letter of Intention may include purchases of
shares made not more than 90 days prior to the date that an investor signs a
Letter; however, the 13-month period during which the Letter is in effect will
begin on the date of the earliest purchase to be included. Investors qualifying
for the Combined Purchase Privilege described above may purchase shares under a
single Letter of Intention.
For example, on the date an investor signs a Letter of Intention to invest
at least $50,000 as set forth above and the investor and the investor's spouse
and children under twenty-one have previously invested $35,000 in shares which
are still held by such persons, it will only be necessary to invest a total of
$15,000 during the 13 months following the first date of purchase of such shares
in order to qualify for the sales charges applicable to investments of $50,000.
The Letter of Intention is not a binding obligation upon the investor to
purchase the full amount indicated. The minimum initial investment under a
Letter of Intention is 5% of such amount. Shares purchased with the first 5% of
such amount will be held in escrow to secure payment of the higher sales charge
applicable to the shares actually purchased if the full amount indicated is not
purchased. When the full amount indicated has been purchased, the escrow will be
released. To the extent that an investor purchases more than the dollar amount
indicated on the Letter of Intention and qualifies for further reduced sales
charges, the sales charges will be adjusted for the entire amount purchased at
the end of the 13-month period. The difference in sales charges will be used to
purchase additional shares at the then current offering price applicable to the
actual amount of the aggregate purchases.
Investors electing to take advantage of a Letter of Intention should
carefully review the information regarding the Letter of Intention which follows
the general authorization form included with the Prospectus.
OTHER LOAD FUNDS. "Other Load Funds" are defined as other mutual funds
subject to a sales charge and included in any other family of mutual funds that
includes any Voyageur Fund as a member. Shares of Other Load Funds will be
included with any class of Voyageur Load Fund shares in a Combined Purchase
Privilege, Cumulative Quantity Discount or Letter of Intention only if such
Other Load Fund shares are owned by customers of dealers that Voyageur or the
Underwriter has engaged to provide administration or accounting services to
Voyageur Load Fund omnibus accounts in connection with the offering of the
Voyageur Load Funds as part of the Other Load Funds' family of funds.
Additionally, the maximum reduction of the applicable Voyageur Load Fund's FESC
that may result from the inclusion of shares of Other Load Funds in a Combined
Purchase Privilege, Cumulative Quantity Discount or Letter of Intention shall be
a reduction to the front-end sales charge applicable to purchases of $500,000
but less than $1,000,000 (as set forth in the sales charge table in the
Prospectus).
OTHER INFORMATION
CONVERSION OF CLASS B SHARES. In addition to information regarding
conversion set forth in the prospectus, the conversion of Class B shares to
Class A shares is subject to the continuing availability of a ruling from the
Internal Revenue Service or an opinion of counsel that payment of different
dividends by each of the classes of shares does not result in the Fund's
dividends or distributions constituting "preferential dividends" under the Code
and that such conversions do not constitute taxable events for Federal tax
purposes. There can be no assurance that such ruling or opinion will be
available, and the conversion of Class B shares to Class A shares will not occur
if such ruling or opinion will not be available. In such event, Class B shares
would continue to be subject to higher expenses than Class A shares for an
indefinite period.
SIGNATURE GUARANTY. In addition to information regarding redemption of
shares and signature guaranty set forth in the Prospectus, a signature guaranty
will be required when redemption proceeds: (1) exceed $50,000 (unless proceeds
are being wired to a pre-authorized bank account, in which case a guarantee is
not required), (2) are to be paid to someone other than the registered
shareholder or (3) are to be mailed to an address other than the address of
record or wired to an account other than the pre-authorized bank or brokerage
account. On joint account redemptions of the type previously listed, each
signature must be guaranteed. A signature guarantee may not be provided by a
notary public. Please contact your investment executive for instructions as to
what institutions constitute eligible signature guarantors.
VALUATION OF PORTFOLIO SECURITIES. Generally, trading in certain securities
such as tax exempt securities, corporate bonds, U.S. Government Securities and
money market instruments is substantially completed each day at various times
prior to the primary close of trading on the Exchange. The values of such
securities used in determining the net asset value of Fund shares are computed
as of such times. Occasionally events affecting the value of such securities may
occur between such times and the primary close of trading on the Exchange which
are not reflected in the computation of net asset value. If events materially
affecting the value of such securities occur during such period, then these
securities are valued at their fair market value as determined in good faith by
Voyageur in accordance with procedures adopted by the Board.
CALCULATION OF PERFORMANCE DATA
Advertisements and other sales literature for the Fund may refer to the
Fund's "yield," "average annual total return," "cumulative total return" and
"current distribution rate." Such performance information is calculated as
follows.
YIELD
Yield is computed by dividing the net investment income per share deemed
earned during the computation period by the maximum offering price per share on
the last day of the period, according to the following formula:
6
SEC YIELD = 2(((a-b) + 1) -1)
---
cd
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; and
d = the maximum offering price per share on the last day of
the period.
30 DAY YIELD
------------
Absent Voluntary
Actual Fee Waivers
------ -----------
Class A 5.54% N/A%
Class B 5.29 5.23
Class C 4.80 4.79
Institutional 5.81 N/A
Class
CURRENT DISTRIBUTION RATE
The current distribution rate is calculated by determining the amount of
distributions that would have been paid over a twelve-month period to the holder
of one hypothetical Fund share purchased at the beginning of such period, and
dividing such amount by the current maximum offering price per share (the net
asset value per Fund share plus the maximum sales charge). Under certain
circumstances that may affect distributions made by the Fund, such as a change
in investment policies or Fund expenses, it may be appropriate, for purposes of
calculating the distribution rate, to annualize the distributions paid during
the period such amended policies or expenses were in effect rather than using
distributions made during the past twelve months. Current distribution rates,
unlike standardized yield quotations, may include distributions to shareholders
from sources other than dividends and interest, such as short-term capital
gains, and may be computed over different time periods. Additionally, current
distribution rates do not reflect certain elements of return, such as unrealized
appreciation or depreciation in the value of portfolio investments.
The distribution rate as of June 30, 1995 was 5.75% for Class A shares,
5.53% for Class B shares, 5.28% for Class C shares and 6.03% for Institutional
Class shares.
AVERAGE ANNUAL TOTAL RETURN
Average annual total return is computed by finding the average annual
compounded rates of return over the periods indicated in the advertisement that
would equate the initial amount invested to the ending redeemable value,
according to the following formula:
n
P(1+T) = ERV
Where: P = a hypothetical initial payment of $1,000;
T = average annual total return;
n = number of years; and
ERV = ending redeemable value at the end of the period of a
hypothetical $1,000 payment made at the beginning of
such period.
This calculation deducts the maximum sales charge from the initial
hypothetical $1,000 investment, assumes all dividends and capital gain
distributions are reinvested at net asset value on the appropriate reinvestment
dates as described in the Prospectus, and includes all recurring fees, such as
investment advisory and management fees, charged as expenses to all shareholder
accounts.
Voyageur has waived or paid certain expenses of the Fund, thereby
increasing total return and yield. These expenses may or may not be waived or
paid in the future in Voyageur's discretion. The following table sets forth the
average annual total return for the Fund, after voluntary and contractual
expense reimbursements and waivers, for one year, five years (for Class A shares
only) and since inception (November 2, 1987 for Class A shares and June 6, 1994
for Class B and Institutional Class shares, and January 10, 1995 for Class C
shares) for the period ending June 30, 1995:
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
Absent Voluntary
Fee Waivers and
Actual Expense Reimbursement
------ ---------------------
Since Since
1 Year 5 Years Inception 1 Year 5 Years Inception
------ ------- --------- ------ ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Class A 8.06% 8.72% 8.79% N/A% 8.58% 8.40%
Class B 12.90 N/A 9.07 12.57 N/A 8.78
Class C N/A N/A 12.73 N/A N/A 12.71
Institutional Class 13.57 N/A 9.71 N/A N/A N/A
</TABLE>
CUMULATIVE TOTAL RETURN
Cumulative total return is computed by finding the cumulative compounded
rate of return over the period indicated in the advertisement that would equate
the initial amount invested to the ending redeemable value, according to the
following formula:
CTR = ERV - P
------- 100
P
Where: CTR = Cumulative total return;
ERV = ending redeemable value at the end of the period of a
hypothetical $1,000 payment made at the beginning of
such period; and
P = initial payment of $1,000.
This calculation deducts the maximum sales charge from the initial
hypothetical $1,000 investment, assumes all dividends and capital gains
distributions are reinvested at net asset value on the appropriate reinvestment
dates as described in the Prospectus, and includes all recurring fees, such as
investment advisory and management fees, charged as expenses to all shareholder
accounts.
The following table sets forth the cumulative total returns for the
Fund from inception (November 2, 1987 for Class A shares and June 6, 1994 for
Class B and Institutional Class shares and January 10, 1995 for Class C shares)
to June 30, 1995:
<TABLE>
<CAPTION>
Cumulative Total Return Cumulative Total Return
(after voluntary and contractual (Absent voluntary expense
expense reimbursements) reimbursements)
-------------------------------- ------------------------
<S> <C> <C>
Class A 90.73% 86.89%
Class B 9.87 9.55
Class C 12.73 12.71
Institutional Class 10.56 N/A
</TABLE>
MONTHLY CASH WITHDRAWAL PLAN
Any investor who owns or buys shares of the Fund valued at $10,000 or more
at the current offering price may open a Withdrawal Plan and have a designated
sum of money paid monthly to the investor or another person. Shares are
deposited in a Withdrawal Plan account and all distributions are reinvested in
additional shares of the Fund at net asset value. Shares in a Withdrawal Plan
account are then redeemed at net asset value to make each withdrawal payment.
Deferred sales charges may apply to monthly redemptions of Class B and Class C
shares. Redemptions for the purpose of withdrawal are made on the 25th of the
month (or on the preceding business day if the 25th falls on a weekend or is a
holiday) at that day's closing net asset value and checks are mailed on the next
business day. Payments will be made to the registered shareholder or to another
party if preauthorized by the registered shareholder. As withdrawal payments may
include a return on principal, they cannot be considered a guaranteed annuity or
actual yield of income to the investor. The redemption of shares in connection
with a Withdrawal Plan may result in a gain or loss for tax purposes. Continued
withdrawals in excess of income will reduce and possibly exhaust invested
principal, especially in the event of a market decline. The maintenance of a
Withdrawal Plan concurrently with purchases of additional shares of a class of
Fund shares which imposes an FESC would normally be disadvantageous to the
investor because of the FESC payable on such purchases. For this reason, an
investor may not maintain a Plan for the accumulation of shares of a class of
Fund shares which imposes an FESC (other than through reinvestment of
distributions) and a Withdrawal Plan at the same time. The cost of administering
Withdrawal Plans is borne by the Fund as an expense of all shareholders. The
Fund or the Underwriter may terminate or change the terms of the Withdrawal Plan
at any time. The Withdrawal Plan is fully voluntary and may be terminated by the
shareholder at any time without the imposition of any penalty.
Since the Withdrawal Plan may involve invasion of capital, investors
should consider carefully with their own financial advisers whether the
Withdrawal Plan and the specified amounts to be withdrawn are appropriate in
their circumstances. The Fund makes no recommendations or representations in
this regard.
ADDITIONAL INFORMATION
The Fund knows of no person who, as of October 2, 1995, owned of record or
beneficially 5% or more of Class A shares of the Fund. The following persons
owned of record or beneficially more than 5% of the Class B shares of the Fund
as of September 26, 1995: Smith Barney Inc., New York, New York, 11,013 shares
(19.77%); Carl T. Brown, Jr., Tulsa, Oklahoma, 12176 shares (21.86%); Herbert C.
MacKinnon, Temple Terrace, Florida, 3783 shares (6.79%) and Susan Morrisett,
Tulsa, Oklahoma, 7300 shares (13.11%). The following persons owned of record or
beneficially more than 5% of the Class C shares of the Fund as of September 26,
1995: Norval O. and Roselyn A. Jesme, Canby, Minnesota 2068 shares (9.28%);
Gerald J. and Charlotte B. Thompson, Canby, Minnesota, 1577 shares (7.08%); and
Daniel W. Drake, Weehawken, New Jersey 16142 shares (72.40%). The following
persons owned of record or beneficially more than 5% of the Institutional Class
shares of the Fund as of September 26, 1995: City of Rapid City, Rapid City,
South Dakota, 789,990 shares (14.69%); City of Sioux Falls, Sioux Falls, South
Dakota, 896,345 shares (16.66%); Rapid City Area Schools, Rapid City, South
Dakota, 691,453 shares (12.86%); and City of Mounds View, Mounds View,
Minnesota, 510,547 shares (9.49%).
CUSTODIAN; COUNSEL; INDEPENDENT AUDITORS
Norwest Bank Minnesota, N.A., Sixth Street & Marquette Avenue, Minneapolis,
Minnesota 55479, acts as custodian of the Fund's assets and portfolio
securities.
Dorsey & Whitney P.L.L.P., 220 South Sixth Street, Minneapolis, Minnesota
55402, serves as counsel for the Company.
KPMG Peat Marwick LLP, 4200 Norwest Center, Minneapolis, Minnesota 55402,
serves as independent auditors for the Company.
LIMITATION OF DIRECTOR LIABILITY
Under Minnesota law, each director of the Company owes certain fiduciary
duties to the Company and to its shareholders. Minnesota law provides that a
director "shall discharge the duties of the position of director in good faith,
in a manner the director reasonably believes to be in the best interest of the
corporation, and with the care an ordinarily prudent person in a like position
would exercise under similar circumstances." Fiduciary duties of a director of a
Minnesota corporation include, therefore, both a duty of "loyalty" (to act in
good faith and act in a manner reasonably believed to be in the best interests
of the corporation) and a duty of "care" (to act with the care an ordinarily
prudent person in a like position would exercise under similar circumstances).
In February 1987, Minnesota enacted legislation which authorizes corporations to
eliminate or limit the personal liability of a director to the corporation or
its shareholders for monetary damages for breach of the fiduciary duty of
"care." Minnesota law does not, however, permit a corporation to eliminate or
limit the liability of directors (i) for any breach of the directors' duty of
"loyalty" to the corporation or its shareholders, (ii) for acts or omissions not
in good faith or that involve intentional misconduct or a knowing violation of
law, (iii) for authorizing a dividend, stock repurchase or redemption or other
distribution in violation of Minnesota law or for violation of certain
provisions of Minnesota securities laws, or (iv) for any transaction from which
the directors derived an improper personal benefit. The Company's Articles of
Incorporation limit the liability of Company directors to the fullest extent
permitted by Minnesota statutes, except to the extent that such liability cannot
be limited as provided in the 1940 Act (which Act prohibits any provisions which
purport to limit the liability of directors arising from such directors' willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of their role as directors).
Minnesota law does not eliminate the duty of "care" imposed upon a
director. It only authorizes a corporation to eliminate monetary liability for
violations of that duty. Minnesota law, further, does not permit elimination or
limitation of liability of "officers" to the corporation for breach of their
duties as officers (including the liability of directors who serve as officers
for breach of their duties as officers). Minnesota law does not permit
elimination or limitation of the availability of equitable relief, such as
injunctive or rescissionary relief. These remedies, however, may be ineffective
in situations where shareholders become aware of such a breach after a
transaction has been consummated and rescission has become impractical. Further,
Minnesota law does not permit elimination or limitation of a director's
liability under the Securities Act of 1933 or the Securities Exchange Act of
1934, and it is uncertain whether and to what extent the elimination of monetary
liability would extend to violations of duties imposed on directors by the 1940
Act and the rules and regulations adopted thereunder.
SHAREHOLDER MEETINGS
The Company is not required under Minnesota law to hold annual or
periodically scheduled regular meetings of shareholders. Regular and special
shareholder meetings are held only at such times and with such frequency as
required by law. Minnesota corporation law provides for the Board of Directors
to convene shareholder meetings when it deems appropriate. In addition, if a
regular meeting of shareholders has not been held during the immediately
preceding fifteen months, a shareholder or shareholders holding three percent or
more of the voting shares of the Fund may demand a regular meeting of
shareholders of the Fund by written notice of demand given to the chief
executive officer or the chief financial officer of the Fund. Within ninety days
after receipt of the demand, a regular meeting of shareholders must be held at
the expense of the Fund. Irrespective of whether a regular meeting of
shareholders has been held during the immediately preceding fifteen months, in
accordance with Section 16(c) under the 1940 Act, the Board of Directors of the
Company shall 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 percent of the outstanding shares.
Additionally, the 1940 Act requires shareholder votes for all amendments to
fundamental investment policies and restrictions and for all investment advisory
contracts and amendments thereto.
FINANCIAL STATEMENTS
The audited statement of assets and liabilities, including the schedule of
investments in securities, of the Fund as of June 30, 1995, the related
statement of operations for the year then ended, the statements of changes in
net assets for each of the years in the two-year period ended June 30, 1995, and
the financial highlights for each of the years in the five-year period ended
June 30, 1995, have been incorporated by reference into this Statement of
Additional Information from the Fund's annual report to shareholders in reliance
on the report of KPMG Peat Marwick LLP, independent auditors of the Fund, given
on the authority of such firm as experts in accounting and auditing.
PART C
VOYAGEUR FUNDS, INC.
(VOYAGEUR U. S. GOVERNMENT SECURITIES FUND)
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements as filed with the Securities and Exchange
Commission on August 29, 1995 are hereby incorporated by reference.
(b) EXHIBITS:
1.1 Amended and Restated Articles of Incorporation, dated November
22, 1993, filed as an Exhibit hereto.
1.2 Certificate of Designation of Class A, B, and Y of Series A,
dated May 17, 1994, filed as an Exhibit hereto.
1.3 Certificate of Designation of Class C of Series A, dated August
30, 1994, filed as an Exhibit hereto
1.4 Articles of Correction, dated July 27, 1994, to the Amended and
Restated Articles of Incorporation, filed as an Exhibit hereto.
2 Bylaws (as amended November 29, 1993), filed as an Exhibit
hereto.
3 Not applicable
4 Specimen copy of share certificate, filed as an Exhibit hereto.
5 Investment Advisory Agreement, filed as an Exhibit hereto.
6.1 Distribution Agreement, filed as an Exhibit hereto.
6.2 Form of Dealer Sales Agreement, filed as an Exhibit hereto.
6.3 Form of Bank Agreement, filed as an Exhibit hereto.
7 Not applicable
8 Custodian Agreement, filed as an Exhibit hereto
9 Administrative Services Agreement, filed as an Exhibit hereto.
10 Opinion and Consent of Dorsey & Whitney, dated October 30, 1995,
filed as an Exhibit hereto.
11 Consent of KPMG Peat Marwick, dated October 27, 1995, filed as an
Exhibit hereto.
12 Not applicable
13 Letter of Investment Intent, incorporated by reference to
Pre-Effective Amendment No. 1 to the Registrant's Registration
Statement on Form N-1A filed October 16, 1987.
14 Not applicable
15 Plan of Distribution, filed as an Exhibit hereto.
16.1 Schedule for Computation of Performance Data - Class A Shares,
filed as an Exhibit hereto.
16.2 Schedule for Computation of Performance Data - Class B Shares,
filed as an Exhibit hereto.
16.3 Schedule for Computation of Performance Data - Class C Shares,
filed as an Exhibit hereto.
16.4 Schedule for Computation of Performance Data - Institutional
Class Shares, filed as an Exhibit hereto.
17.1 Power of Attorney, filed as an Exhibit hereto.
17.2 Financial Data Schedule, filed hereto electronically as Exhibit
27 pursuant to Rule 401 of Regulation S-T.
18 Not Applicable.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Voyageur serves as investment manager to the following closed-end and
open-end management investment companies:
CLOSED-END INVESTMENT COMPANIES
Voyageur Arizona Municipal Income Fund, Inc.
Voyageur Colorado Insured Municipal Income Fund, Inc.
Voyageur Florida Insured Municipal Income Fund
Voyageur Minnesota Municipal Income Fund, Inc.
Voyageur Minnesota Municipal Income Fund II, Inc.
Voyageur Minnesota Municipal Income Fund III, Inc.
OPEN-END INVESTMENT COMPANIES AND SERIES THEREOF
Voyageur Funds, Inc.
Voyageur U.S. Government Securities Fund
Voyageur Insured Funds, Inc.
Voyageur Minnesota Insured Fund
Voyageur Arizona Insured Tax Free Fund
Voyageur National Insured Tax Free Fund
Voyageur Colorado Insured Tax Free Fund
Voyageur Intermediate Tax Free Funds, Inc.
Voyageur Minnesota Limited Term Tax Free Fund
Voyageur National Limited Term Tax Free Fund
Voyageur Arizona Limited Term Tax Free Fund
Voyageur Colorado Limited Term Tax Free Fund
Voyageur California Limited Term Tax Free Fund
Voyageur Investment Trust
Voyageur California Insured Tax Free Fund
Voyageur Florida Insured Tax Free Fund
Voyageur Kansas Tax Free Fund
Voyageur Missouri Insured Tax Free Fund
Voyageur New Mexico Tax Free Fund
Voyageur Oregon Insured Tax Free Fund
Voyageur Utah Tax Free Fund
Voyageur Washington Insured Tax Free Fund
Voyageur Florida Tax Free Fund
Voyageur Investment Trust II
Voyageur Florida Limited Term Tax Free Fund
Voyageur Tax Free Funds, Inc.
Voyageur Minnesota Tax Free Fund
Voyageur North Dakota Tax Free Fund
Voyageur Mutual Funds, Inc.
Voyageur Iowa Tax Free Fund
Voyageur Wisconsin Tax Free Fund
Voyageur Idaho Tax Free Fund
Voyageur Arizona Tax Free Fund
Voyageur California Tax Free Fund
Voyageur National Tax Free Fund
Voyageur Mutual Funds II, Inc.
Voyageur Colorado Tax Free Fund
Voyageur Mutual Funds III , Inc.
Voyageur Growth and Income Fund
Voyageur Growth Stock Fund
Voyageur International Equity Fund
Voyageur Aggressive Growth Fund
VAM Institutional Funds, Inc.
VAM Global Fixed Income Fund
VAM Short Duration Government Agency Fund
VAM Intermediate Duration Government Agency Fund
VAM Government Mortgage Fund
VAM Short Duration Total Return Fund
VAM Intermediate Duration Total Return Fund
VAM Intermediate Duration Municipal Fund
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
The following table sets forth the number of holders of shares of the
Registrant as of June 30, 1995.
Title of Class Number of Record Holders
-------------- ------------------------
Common shares, Series A,
par value $.01 per share:
Class A 2,876
Class B 13
Class C 5
Institutional Class 69
ITEM 27. INDEMNIFICATION
The Registrant's Articles of Incorporation and Bylaws provide that the
Registrant shall indemnify such persons, for such expenses and liabilities, in
such manner, under such circumstances, and to such extent as permitted by
Section 302A.521 of the Minnesota Statutes, as now enacted or hereafter amended;
provided, however, that no such indemnification may be made if it would be in
violation of Section 17(h) of the Investment Company Act of 1940, as now enacted
or hereinafter amended, and any rules, regulations or releases promulgated
thereunder.
The Registrant may indemnify its officers and directors and other "persons"
acting in an "official capacity" (as such terms are defined in Section 302A.521)
pursuant to a determination by the board of directors or shareholders of the
Registrant as set forth in Section 302A.521, by special legal counsel selected
by the board or a committee thereof for the purpose of making such a
determination, or by a Minnesota court upon application of the person seeking
indemnification. If a director is seeking indemnification for conduct in the
capacity of director or officer of the Registrant, then such director generally
may not be counted for the purpose of determining either the presence of a
quorum or such director's eligibility to be indemnified.
In any case, indemnification is proper only if the eligibility determining
body decides that the person seeking indemnification has: (a) not received
indemnification for the same conduct from any other party or organization;
(b)acted in good faith; (c) received no improper personal benefit; (d) in the
case of criminal proceedings, had no reasonable cause to believe the conduct was
unlawful; (e) reasonably believed that the conduct was in the best interest of
the Registrant, or in certain contexts, was not opposed to the best interest of
the Registrant; and (f) had not otherwise engaged in conduct which precludes
indemnification under either Minnesota or federal law (including, but not
limited to, conduct constituting willful misfeasance, bad faith, gross
negligence, or reckless disregard of duties as set forth in Section 17(h) and
(i) of the Investment Company Act of 1940).
If a person is made or threatened to be made a party to a proceeding, the
person is entitled, upon written request to the Registrant, to payment or
reimbursement by the Registrant of reasonable expenses, including attorneys'
fees and disbursements, incurred by the person in advance of the final
disposition of the proceeding, (a) upon receipt by the Registrant of a written
affirmation by the person of a good faith belief that the criteria for
indemnification set forth in Section 302A.521 have been satisfied and a written
undertaking by the person to repay all amounts so paid or reimbursed by the
Registrant, if it is ultimately determined that the criteria for indemnification
have not been satisfied, and (b) after a determination that the facts then known
to those making the determination would not preclude indemnification under
Section 302A.521. The written undertaking required by clause (a) is an unlimited
general obligation of the person making it, but need not be secured and shall be
accepted without reference to financial ability to make the repayment.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless, in the opinion of its counsel, the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The Registrant undertakes to comply with the indemnification requirements
of Investment Company Release 7221 (June 9, 1972) and Investment Company Release
11330 (September 2, 1980).
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
The name and principal occupations(s) during the past two fiscal years of
each director and executive officer of the Adviser are set forth below. The
business address of each is 90 South Seventh Street, Suite 4400, Minneapolis,
Minnesota 55402, except that the principal business address of Mr. McCullagh is
717 Seventeenth Street, Denver, Colorado 80202.
<TABLE>
<CAPTION>
Name and Address Position with Adviser Principal Occupation(s)
- ---------------- --------------------- -----------------------
<S> <C> <C>
Michael E. Dougherty Chairman Chairman of the Board, President and Chief
Executive Officer of Dougherty Financial
Group, Inc. ("DFG") and Chairman of
Voyageur, the Underwriter and Dougherty
Dawkins, Inc.
John G. Taft President and Director See biographical information in Part B of the
Registration Statement.
Jane M. Wyatt Director and Chief See biographical information in Part B of the
Investment Officer Registration Statement.
Edward J. Kohler Director and Executive Director and Executive Vice President of the Adviser
Vice President and Director of the Underwriter since 1995;
previously, President and Director of Piper Capital
Management Incorporated from 1985 to 1995.
Frank C. Tonnemaker Director and Executive Director of Voyageur and the Underwriter
Vice President since 1993; Executive Vice President of
Voyageur since 1994; Vice President of
Voyageur from 1990 to 1994.
Thomas J. Abood General Counsel See biographical information in Part B of the
Registration Statement.
Kenneth R. Larsen Treasurer See biographical information in Part B of the
Registration Statement.
Steven B. Johansen Secretary and Chief Secretary of DFG, the Underwriter and
Financial Officer Dougherty Dawkins, Incorporated ("DDI");
Chief Financial Officer of DFG, the
Underwriter and DDI since 1995; previously,
Treasurer of DFG and DDI from 1990 to 1995
</TABLE>
Information on the business of Registrant's Adviser is contained in the
section of the Prospectus entitled "Management" and in the section of the
Statement of Additional Information entitled "The Investment Adviser and
Underwriter" filed as part of this Registration Statement.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) Voyageur Fund Distributors, Inc., the underwriter of the Registrant's
shares, is principal underwriter for the shares of Voyageur Tax Free Funds,
Inc., Voyageur Insured Funds, Inc., Voyageur Intermediate Tax Free Funds, Inc.,
Voyageur Investment Trust, Voyageur Investment Trust II, Voyageur Mutual Funds,
Inc., Voyageur Mutual Funds II, Inc., Voyageur Mutual Funds III, Inc. and
Voyageur Mutual Funds IV, Inc., affiliated open-end management investment
companies.
(b) The directors of the Underwriter are the same as the directors of the
Adviser as set forth above in Item 28. The executive officers of the Underwriter
and the positions of these individuals with respect to the Registrant are:
<TABLE>
<CAPTION>
Positions and Offices Positions and Offices
Name with Underwriter with Registrant
- ---- ----------------------- ---------------------
<S> <C> <C>
Michael E. Dougherty Chairman None
Steven B. Johansen Secretary & CFO None
Kenneth R. Larsen Treasurer Treasurer
Thomas J. Abood General Counsel Secretary
</TABLE>
The address of each of the executive officers is 90 South Seventh Street, Suite
4400, Minneapolis, Minnesota 55402.
(c) Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The custodian for Registrant is Norwest Bank Minnesota, N.A., Sixth Street
& Marquette Avenue, Minneapolis, Minnesota 55402. The dividend disbursing,
administrative and accounting services agent of Registrant is Voyageur Fund
Managers, Inc. The address of Voyageur Fund Managers, Inc. and the Registrant is
90 South Seventh Street, Suite 4400, Minneapolis, Minnesota 55402.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
(a) Not applicable.
(b) Not applicable.
(c) Each recipient of a prospectus of any series of the Registrant may
request the latest Annual Report of such series, and such Annual Report will be
furnished by the Registrant without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the 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 on Form N-1A to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Minneapolis, State of
Minnesota, on the 30th day of October 1995.
VOYAGEUR FUNDS, INC.
By /s/ John G. Taft
--------------------------
John G. Taft, President
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 date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
John G. Taft* President (Principal
Executive Officer) October 30, 1995
Kenneth R. Larsen* Treasurer (Principal Financial
and Accounting Officer) October 30, 1995
James W. Nelson* Director
Clarence G. Frame* Director
Robert J. Odegard* Director
Richard F. McNamara* Director
Thomas F. Madison* Director
*/s/ Thomas J. Abood Attorney-in-Fact October 30, 1995
------------------------------
Thomas J. Abood
(Pursuant to Powers of Attorney dated January 24, 1995 and re-filed
electronically herewith)
</TABLE>
- AS FILED WITH THE SECRETARY OF STATE OF MINNESOTA ON NOVEMBER 23, 1993 -
CERTIFICATE OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
VOYAGEUR FUNDS, INC.
The undersigned, John G. Taft and Theodore E. Jessen, President and
Secretary, respectively, of Voyageur Funds, Inc. (the "Corporation"), a
Minnesota corporation, hereby certify as follows:
1. The name of the Corporation is Voyageur Funds, Inc.
2. At meetings duly called and held (pursuant to the requirements of the
Minnesota Statutes, Chapter 302A) on July 21 and October 13, 1993, the
Corporation's Board of Directors and shareholders, respectively,
adopted and approved the following Amended and Restated Articles of
Incorporation of the Corporation to replace the Corporation's existing
Articles of Incorporation (as amended) in their entirety, and directed
that the officers of the Corporation file the following Amended and
Restated Articles of Incorporation in the office of the Minnesota
Secretary of State.
__________________
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
VOYAGEUR FUNDS, INC.
For the purpose of forming a corporation pursuant to the provisions of
Minnesota Statutes, Chapter 302A, the following Amended and Restated Articles of
Incorporation are adopted:
1. The name of the corporation (the "Corporation") is Voyageur Funds,
Inc.
2. The Corporation shall have general business purposes and shall have
unlimited power to engage in and do any lawful act concerning any and all lawful
businesses for which corporations may be organized under the Minnesota Statutes,
Chapter 302A. Without limiting the generality of the foregoing, the Corporation
shall have specific power:
(a) To conduct, operate and carry on the business of a so-called
"open-end" management investment company pursuant to applicable state and
federal regulatory statutes, and exercise all the powers necessary and
appropriate to the conduct of such operations.
(b) To purchase, subscribe for, invest in or otherwise acquire, and to
own, hold, pledge, mortgage, hypothecate, sell, possess, transfer or
otherwise dispose of, or turn to account or realize upon, and generally
deal in, all forms of securities of every kind, nature, character, type and
form, and other financial instruments which may not be deemed to be
securities, including but not limited to futures contracts and options
thereon. Such securities and other financial instruments may include but
are not limited to shares, stocks, bonds, debentures, notes, scrip,
participation certificates, rights to subscribe, warrants, options,
certificates of deposit, bankers' acceptances, repurchase agreements,
commercial paper, choses in action, evidences of indebtedness, certificates
of indebtedness and certificates of interest of any and every kind and
nature whatsoever, secured and unsecured, issued or to be issued, by any
corporation, company, partnership (limited or general), association, trust,
entity or person, public or private, whether organized under the laws of
the United States, or any state, commonwealth, territory or possession
thereof, or organized under the laws of any foreign country, or any state,
province, territory or possession thereof, or issued or to be issued by the
United States government or any agency or instrumentality thereof, options
on stock indexes, stock index and interest rate futures contracts and
options thereon, and other futures contracts and options thereon.
(c) In the above provisions of this Article 2, purposes shall also be
construed as powers and powers shall also be construed as purposes, and the
enumeration of specific purposes or powers shall not be construed to limit
other statements of purposes or to limit purposes or powers which the
Corporation may otherwise have under applicable law, all of the same being
separate and cumulative, and all of the same may be carried on, promoted
and pursued, transacted or exercised in any place whatsoever.
3. The Corporation shall have perpetual existence.
4. The location and post office address of the registered office in
Minnesota is 90 South Seventh Street, Suite 4400, Minneapolis, Minnesota 55402.
5. The total authorized number of shares of the Corporation is ten trillion
(10,000,000,000,000), all of which shall be common shares of the par value of
$.01 per share (individually, a "Share" and collectively, the "Shares"). The
Corporation may issue and sell any of its Shares in fractional denominations to
the same extent as its whole Shares, and Shares and fractional denominations
shall have, in proportion to the relative fractions represented thereby, all the
rights of whole Shares, including, without limitation, the right to vote, the
right to receive dividends and distributions, and the right to participate upon
liquidation of the Corporation.
(a) Ten billion (10,000,000,000) of the Shares may be issued by the
Corporation in a series designated "Series A Common Shares," and the
remaining nine trillion, nine hundred ninety billion (9,990,000,000,000)
Shares authorized by this Article 5 shall initially be undesignated Shares
(the "Undesignated Shares"). Any series of the Shares shall be referred to
herein individually as a "Series" and collectively herein, together with
any further series from time to time created by the Board of Directors, as
"Series." The Undesignated Shares may be issued in such Series with such
designations, preferences and relative, participating, optional or other
special rights, or qualifications, limitations or restrictions thereof, as
shall be stated or expressed in a resolution or resolutions providing for
the issue of any Series as may be adopted from time to time by the Board of
Directors of the Corporation pursuant to the authority hereby vested in the
Board of Directors. Each Series of Shares which the Board of Directors may
establish, as provided herein, may evidence, if the Board of Directors
shall so determine by resolution, an interest in a separate and distinct
portion of the Corporation's assets, which shall take the form of a
separate portfolio of investment securities, cash and other assets.
Authority to establish such separate portfolios is hereby vested in the
Board of Directors of the Corporation, and such separate portfolios may be
established by the Board of Directors without the authorization or approval
of the holders of any Series of Shares of the Corporation. Such investment
portfolios in which Shares of the Series represent interests are also
hereinafter referred to as "Series."
(b) The Shares of each Series may be classified by the Board of
Directors in one or more classes (individually, a "Class" and,
collectively, together with any other class or classes within any Series,
the "Classes") with such relative rights and preferences as shall be stated
or expressed in a resolution or resolutions providing for the issue of any
such Class or Classes as may be adopted from time to time by the Board of
Directors of the Corporation pursuant to the authority hereby vested in the
Board of Directors and Minnesota Statutes, Section 302A.401, Subd. 3, or
any successor provision. The Shares of each Class within a Series may be
subject to such charges and expenses (including by way of example, but not
by way of limitation, front-end and deferred sales charges, expenses under
Rule 12b-1 plans, administration plans, service plans, or other plans or
arrangements, however designated) as may be adopted from time to time by
the Board of Directors in accordance, to the extent applicable, with the
Investment Company Act of 1940, as amended (together with the rules and
regulations promulgated thereunder, the "1940 Act"), which charges and
expenses may differ from those applicable to another Class within such
Series, and all of the charges and expenses to which a Class is subject
shall be borne by such Class and shall be appropriately reflected (in the
manner determined by the Board of Directors in the resolution or
resolutions providing for the issue of such Class) in determining the net
asset value and the amounts payable with respect to dividends and
distributions on and redemptions or liquidations of, such Class. Subject to
compliance with the requirements of the 1940 Act, the Board of Directors
shall have the authority to provide that Shares of any Class shall be
convertible (automatically, optionally or otherwise) into Shares of one or
more other Classes in accordance with such requirements and procedures as
may be established by the Board of Directors.
6. The shareholders of each Series (or Class thereof) of common shares of
the Corporation:
(a) shall not have the right to cumulate votes for the election of
directors; and
(b) shall have no preemptive right to subscribe to any issue of shares
of any Series (or Class thereof) of the Corporation now or hereafter
created, designated or classified.
7. A description of the relative rights and preferences of all Series of
Shares (and Classes thereof) is as follows, unless otherwise set forth in one or
more amendments to these Articles of Incorporation or in the resolution
providing for the issue of such Series (and Classes thereof):
(a) On any matter submitted to a vote of shareholders of the
Corporation, all Shares of the Corporation then issued and outstanding and
entitled to vote, irrespective of Series or Class, shall be voted in the
aggregate and not by Series or Class, except: (i) when otherwise required
by Minnesota Statutes, Chapter 302A, in which case shares will be voted by
individual Series or Class, as applicable; (ii) when otherwise required by
the 1940 Act or the rules adopted thereunder, in which case shares shall be
voted by individual Series or Class, as applicable; and (iii) when the
matter does not affect the interests of a particular Series or Class
thereof, in which case only shareholders of the Series or Class thereof
affected shall be entitled to vote thereon and shall vote by individual
Series or Class, as applicable.
(b) All consideration received by the Corporation for the issue or
sale of Shares of any Series, together with all assets, income, earnings,
profits and proceeds derived therefrom (including all proceeds derived from
the sale, exchange or liquidation thereof and, if applicable, any assets
derived from any reinvestment of such proceeds in whatever form the same
may be) shall become part of the assets of the portfolio to which the
Shares of that Series relate, for all purposes, subject only to the rights
of creditors, and shall be so treated upon the books of account of the
Corporation. Such assets, income, earnings, profits and proceeds (including
any proceeds derived from the sale, exchange or liquidation thereof and, if
applicable, 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 of Shares of the Corporation.
(c) Assets of the Corporation not belonging to any particular Series
are referred to herein as "General Assets." General Assets shall be
allocated to each Series in proportion to the respective net assets
belonging to such Series. The determination of the Board of Directors shall
be conclusive as to the amount of assets, as to the characterization of
assets as those belonging to a Series or as General Assets, and as to the
allocation of General Assets.
(d) The assets belonging to a particular Series of Shares shall be
charged with the liabilities incurred specifically on behalf of such Series
of Shares ("Special Liabilities"). Such assets shall also be charged with a
share of the general liabilities of the Corporation ("General Liabilities")
in proportion to the respective net assets belonging to such Series of
common shares. The determination of the Board of Directors shall be
conclusive as to the amount of liabilities, including accrued expenses and
reserves, as to the characterization of any liability as a Special
Liability or General Liability, and as to the allocation of General
Liabilities among Series.
(e) The Board of Directors may, to the extent permitted by Minnesota
Statutes, Chapter 302A or any successor provision thereto, declare and pay
dividends or distributions in Shares, cash or other property on any or all
Series (or Classes thereof) of Shares, the amount of such dividends and the
payment thereof being wholly in the discretion of the Board of Directors.
(f) In the event of the liquidation or dissolution of the Corporation,
holders of the Shares of any Series shall have priority over the holders of
any other Series with respect to, and shall be entitled to receive, out of
the assets of the Corporation available for distribution to holders of
shares, the assets belonging to such Series of Shares and the General
Assets allocated to such Series of Shares, and the assets so distributable
to the holders of the Shares of any Series shall be distributed among such
holders in proportion to the number of Shares of such Series held by each
such shareholder and recorded on the books of the Corporation, except that,
in the case of a Series with more than one Class of Shares, such
distributions shall be adjusted to appropriately reflect any charges and
expenses borne by each individual Class.
(g) With the approval of a majority of the shareholders of each of the
affected Series of Shares present in person or by proxy at a meeting called
for the following purpose (provided that a quorum of the issued and
outstanding Shares of the affected Series is present at such meeting in
person or by proxy), the Board of Directors may transfer the assets of any
Series to any other Series. Upon such a transfer, the Corporation shall
issue Shares representing interests in the Series to which the assets were
transferred in exchange for all Shares representing interests in the Series
from which the assets were transferred. Such Shares shall be exchanged at
their respective net asset values.
8. The following additional provisions, when consistent with law, are
hereby established for the management of the business, for the conduct of the
affairs of the Corporation, and for the purpose of describing certain specific
powers of the Corporation and of its directors and shareholders.
(a) In furtherance and not in limitation of the powers conferred by
statute and pursuant to these Articles of Incorporation, the Board of
Directors is expressly authorized to do the following:
(i) to make, adopt, alter, amend and repeal Bylaws of the
Corporation unless reserved to the shareholders by the Bylaws or by
the laws of the State of Minnesota, subject to the power of the
shareholders to change or repeal such Bylaws;
(ii) to distribute, in its discretion, for any fiscal year (in
the year or in the next fiscal year) as ordinary dividends and as
capital gains distributions, respectively, amounts sufficient to
enable each Series to qualify under the Internal Revenue Code as a
regulated investment company to avoid any liability for federal income
tax in respect of such year. Any distribution or dividend paid to
shareholders from any capital source shall be accompanied by a written
statement showing the source or sources of such payment;
(iii) to authorize, subject to such vote, consent, or approval of
shareholders and other conditions, if any, as may be required by any
applicable statute, rule or regulation, the execution and performance
by the Corporation of any agreement or agreements with any person,
corporation, association, company, trust, partnership (limited or
general) or other organization whereby, subject to the supervision and
control of the Board of Directors, any such other person, corporation,
association, company, trust, partnership (limited or general), or
other organization shall render managerial, investment advisory,
distribution, transfer agent, accounting and/or other services to the
Corporation (including, if deemed advisable, the management or
supervision of the investment portfolios of the Corporation) upon such
terms and conditions as may be provided in such agreement or
agreements;
(iv) to authorize any agreement of the character described in
subparagraph (iii) of this paragraph (a) with any person, corporation,
association, company, trust, partnership (limited or general) or other
organization, although one or more of the members of the Board of
Directors or officers of the Corporation may be the other party to any
such agreement or an officer, director, employee, shareholder, or
member of such other party, and no such agreement shall be invalidated
or rendered voidable by reason of the existence of any such
relationship;
(v) to allot and authorize the issuance of the authorized but
unissued Shares of any Series, or Class thereof, of the Corporation;
(vi) to accept or reject subscriptions for Shares of any Series,
or Class thereof, made after incorporation;
(vii) to fix the terms, conditions and provisions of and
authorize the issuance of options to purchase or subscribe for Shares
of any Series, or Class thereof, including the option price or prices
at which Shares may be purchased or subscribed for;
(viii) to take any action which might be taken at a meeting of
the Board of Directors, or any duly constituted committee thereof,
without a meeting pursuant to a writing signed by that number of
directors or committee members that would be required to taken the
same action at a meeting of the Board of Directors or committee
thereof at which all directors or committee members were present;
provided, however, that, if such action also requires shareholder
approval, such writing must be signed by all of the directors or
committee members entitled to vote on such matter; and
(ix) to determine what constitutes net income, total assets and
the net asset value of the Shares of each Series (or Class thereof) of
the Corporation. Any such determination made in good faith shall be
final and conclusive, and shall be binding upon the Corporation, and
all holders (past, present and future) of Shares of each Series and
Class thereof.
(b) Except as provided in the next sentence of this paragraph (b),
Shares of any Series, or Class thereof, hereafter issued which are
redeemed, exchanged, or otherwise acquired by the Corporation shall return
to the status of authorized and unissued Shares of such Series or Class.
Upon the redemption, exchange, or other acquisition by the Corporation of
all outstanding Shares of any Series (or Class thereof), hereafter issued,
such Shares shall return to the status of authorized and unissued Shares
without designation as to Series (if no Shares of the Series remain
outstanding) or with the same designation as to Series, but no designation
as to Class within such Series (if Shares of such Series remain
outstanding, but no Shares of such Class thereof remain outstanding), and
all provisions of these articles of incorporation relating to such Series,
or Class thereof (including, without limitation, any statement establishing
or fixing the rights and preferences of such Series, or Class thereof),
shall cease to be of further effect and shall cease to be a part of these
articles. Upon the occurrence of such events, the Board of Directors of the
Corporation shall have the power, pursuant to Minnesota Statutes Section
302A.135, Subdivision 5 or any successor provision and without shareholder
action, to cause restated articles of incorporation of the Corporation to
be prepared and filed with the Secretary of State of the State of Minnesota
which reflect such removal from these articles of all such provisions
relating to such Series, or Class thereof.
(c) The determination as to any of the following matters made by or
pursuant to the direction of the Board of Directors consistent with these
Articles of Incorporation and in the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of duties, shall be final and
conclusive and shall be binding upon the Corporation and every holder of
shares of its capital stock: namely, the amount of the assets, obligations,
liabilities and expenses of each Series (or Class thereof) of the
Corporation; the amount of the net income of each Series (or Class thereof)
of the Corporation from dividends and interest for any period and the
amount of assets at any time legally available for the payment of dividends
in each Series (or Class thereof); the amount of paid-in surplus, other
surplus, annual or other net profits, or net assets in excess of capital,
undivided profits, or excess of profits over losses on sales of securities
of each Series (or Class thereof); the amount, purpose, time of creation,
increase or decrease, alteration or cancellation of any reserves or charges
and the propriety thereof (whether or not any obligation or liability for
which such reserves or charges shall have been created shall have been paid
or discharged); the market value, or any sale, bid or asked price to be
applied in determining the market value, of any security owned or held by
or in each Series of the Corporation; the fair value of any other asset
owned by or in each Series of the Corporation; the number of Shares of each
Series (or Class thereof) of the Corporation issued or issuable; any matter
relating to the acquisition, holding and disposition of securities and
other assets by each Series of the Corporation; and any question as to
whether any transaction constitutes a purchase of securities on margin, a
short sale of securities, or an underwriting of the sale of, or
participation in any underwriting or selling group in connection with the
public distribution of any securities.
(d) The Board of Directors or the shareholders of the Corporation may
adopt, amend, affirm or reject investment policies and restrictions upon
investment or the use of assets of each Series of the Corporation and may
designate some such policies as fundamental and not subject to change other
than by a vote of a majority of the outstanding voting securities, as such
phrase is defined in the 1940 Act, of the affected Series of the
Corporation.
9. The Corporation shall indemnify such persons for such expenses and
liabilities, in such manner, under such circumstances, and to the full extent
permitted by Section 302A.521 of the Minnesota Statutes, as now enacted or
hereafter amended, provided, however, that no such indemnification may be made
if it would be in violation of Section 17(h) of the 1940 Act, as now enacted or
hereafter amended.
10. To the fullest extent permitted by the Minnesota Statutes, Chapter
302A, as the same exists or may hereafter be amended (except as prohibited by
the 1940 Act, as the same exists or may hereafter be amended), a director of the
Corporation shall not be liable to the Corporation or its shareholders for
monetary damages for breach of fiduciary duty as a director.
IN WITNESS WHEREOF, the undersigned duly elected and serving President and
Secretary of the Corporation have executed this Certificate of Amendment to the
Articles of Incorporation on this 22nd day of November, 1993.
/s/ John G. Taft
-------------------------
John G. Taft
President
/s/ Theodore E. Jessen
-------------------------
Theodore E. Jessen
Secretary
- AS FILED WITH THE SECRETARY OF STATE OF MINNESOTA ON MAY 20, 1994 -
CERTIFICATE OF DESIGNATION
of
CLASS A, CLASS B AND CLASS Y COMMON SHARES OF SERIES A
of
VOYAGEUR FUNDS, INC.
The undersigned duly elected Secretary of Voyageur Funds, Inc., a Minnesota
corporation (the "Corporation"), hereby certifies that the following is a true,
complete and correct copy of resolutions duly adopted by a majority of the
directors of the Board of Directors of the Corporation on April 25, 1994:
WHEREAS, the total authorized number of shares of the Corporation is
ten trillion, all of which shares are common shares, par value $.01 per
share, as set forth in the Corporation's Amended and Restated Articles of
Incorporation (the "Articles");
WHEREAS, ten billion of such shares have been designated in the
Articles as Series A Common Shares; and
WHEREAS, pursuant to Section 5(b) of the Articles, the shares of each
Series may be classified by the Board of Directors in one or more classes
with such relative rights and preferences as shall be stated or expressed
in a resolution or resolutions providing for the issue of any such class or
classes as may be adopted from time to time by the Board of Directors of
the Corporation.
NOW, THEREFORE, BE IT RESOLVED, that of the ten billion shares
designated in the Articles as Series A Common Shares, five billion are
hereby designated as Series A, Class A Common Shares, five billion are
hereby designated as Series A, Class B Common Shares and five billion are
hereby designated as Series A, Class Y Common Shares, and the Series A
Common Shares which are outstanding on the date hereof are hereby
redesignated as Series A, Class A Common Shares.
FURTHER RESOLVED, that the Class A, Class B and Class Y Common Shares
designated by these resolutions shall have the relative rights and
preferences set forth in the Articles. As provided in Section 5(b) of the
Articles, each Class of Common Shares designated by these resolutions may
be subject to such charges and expenses (including, by way of example but
not by way of limitation, such front-end and deferred sales charges as may
be permitted under the Investment Company Act of 1940 (the "1940 Act") and
the rules of the National Association of Securities Dealers, Inc., and
expenses under Rule 12b-1 plans, administration plans, service plans or
other plans or arrangements, however designated) adopted from time to time
by the Board of Directors of the Corporation in accordance, to the extent
applicable, with the 1940 Act, which charges and expenses may differ from
those applicable to another Class, and all of the charges and expenses to
which a Class is subject shall be borne by such Class and shall be
appropriately reflected in determining the net asset value and the amounts
payable with respect to dividends and distributions on, and redemptions or
liquidation of, such Class.
FURTHER RESOLVED, that the officers of the Corporation are hereby
authorized and directed to file with the office of the Secretary of State
of Minnesota a Certificate of Designation setting forth the relative rights
and preferences of the Class A, Class B and Class Y Common Shares
designated hereby, as required by Section 302A.401, Subd. 3(b) of the
Minnesota Statutes.
IN WITNESS WHEREOF, the undersigned has signed this Certificate of
Designation on behalf of the Corporation this 17th day of May, 1994.
/s/ Theodore E. Jessen
------------------------------
Theodore E. Jessen, Secretary
- AS FILED WITH THE SECRETARY OF STATE OF MINNESOTA ON SEPTEMBER 1, 1994 -
CERTIFICATE OF DESIGNATION
of
CLASS C COMMON SHARES OF SERIES A
of
VOYAGEUR FUNDS, INC.
The undersigned duly elected Secretary of Voyageur Funds, Inc., a Minnesota
corporation (the "Corporation"), hereby certifies that the following is a true,
complete and correct copy of resolutions duly adopted by a majority of the
directors of the Board of Directors of the Corporation on July 26, 1994:
WHEREAS, the total authorized number of shares of the Corporation is
ten trillion, all of which shares are common shares, par value $.01 per
share, as set forth in the Corporation's Amended and Restated Articles of
Incorporation (the "Articles");
WHEREAS, ten billion of such shares have been designated in the
Articles as Series A Common Shares; and
WHEREAS, pursuant to Section 5(b) of the Articles, the shares of each
Series may be classified by the Board of Directors in one or more classes
with such relative rights and preferences as shall be stated or expressed
in a resolution or resolutions providing for the issue of any such class or
classes as may be adopted from time to time by the Board of Directors of
the Corporation.
WHEREAS, of the ten billion shares designated as Series A Common
Shares, the Board of Directors previously has designated one billion as
Series A, Class A Common Shares, one billion as Series A, Class B Common
Shares, and one billion as Series A, Class Y Common Shares.
NOW, THEREFORE, BE IT RESOLVED, that of the seven billion Series A
Common Shares remaining undesignated as to class in the Articles, one
billion are hereby designated as Series A, Class C Common Shares and the
remaining six billion Series A Common Shares shall remain undesignated as
to class.
FURTHER RESOLVED, that the Class C Common Shares designated by these
resolutions shall have the relative rights and preferences set forth in the
Articles. As provided in Section 5(b) of the Articles, Class C Common
Shares designated by these resolutions may be subject to such charges and
expenses (including, by way of example but not by way of limitation, such
front-end and deferred sales charges as may be permitted under the
Investment Company Act of 1940 (the "1940 Act") and the rules of the
National Association of Securities Dealers, Inc., and expenses under Rule
12b-1 plans, administration plans, service plans or other plans or
arrangements, however designated) adopted from time to time by the Board of
Directors of the Corporation in accordance, to the extent applicable, with
the 1940 Act, which charges and expenses may differ from those applicable
to another Class, and all of the charges and expenses to which a Class is
subject shall be borne by such Class and shall be appropriately reflected
in determining the net asset value and the amounts payable with respect to
dividends and distributions on, and redemptions or liquidation of, such
Class.
FURTHER RESOLVED, that the officers of the Corporation are hereby
authorized and directed to file with the office of the Secretary of State
of Minnesota a Certificate of Designation setting forth the relative rights
and preferences of the Class C Common Shares designated hereby, as required
by Section 302A.401, Subd. 3(b) of the Minnesota Statutes.
IN WITNESS WHEREOF, the undersigned has signed this Certificate of
Designation on behalf of the Corporation this 30th day of August, 1994.
/s/ Theodore E. Jessen
------------------------------
Theodore E. Jessen, Secretary
- AS FILED WITH THE SECRETARY OF STATE OF MINNESOTA ON JULY 28, 1994 -
ARTICLES OF CORRECTION OF
VOYAGEUR FUNDS, INC.
In order to correct the Certificate of Designation of Voyageur Funds, Inc.,
as filed with the Minnesota Secretary of State on May 20, 1994, the undersigned
hereby makes the following statements:
1. The name of the person who filed the instrument is Theodore E. Jessen.
2. The instrument to be corrected is the Certificate of Designation filed
with the Minnesota Secretary of State on May 20, 1994.
3. The errors to be corrected are the designation of shares contained in
the fifth paragraph of such Certificate.
4. The fifth paragraph of the Certificate of Designation of Voyageur Funds,
Inc. is hereby set forth in its corrected form in its entirety as follows:
NOW, THEREFORE, BE IT RESOLVED, that of the ten billion shares designated
in the Articles as Series A Common Shares, one billion are hereby designated as
Series A, Class A Common Shares, one billion are hereby designated as Series A,
Class B Common Shares, one billion are hereby designated as Series A, Class Y
Common Shares, the remaining seven billion Series A Common Shares shall remain
undesignated as to class, and the Series A Common Shares which are outstanding
on the date hereof are hereby redesignated as Series A, Class A Common Shares.
Dated: July 27, 1994
/s/ Theodore E. Jessen
-----------------------------------------
Theodore E. Jessen, Secretary
BYLAWS
OF
VOYAGEUR FUNDS, INC.
(AS AMENDED BY THE BOARD OF DIRECTORS ON NOVEMBER 29, 1993)
ARTICLE I
OFFICES, CORPORATE SEAL
Section 1.01. NAME. The name of the corporation is "Voyageur Funds, Inc."
The name of the series represented by the corporation's Series A Common Shares
is "Voyageur U.S. Government Securities Fund."
Section 1.02. REGISTERED OFFICE. The registered office of the corporation
in Minnesota shall be that set forth in the Articles of Incorporation or in the
most recent amendment of the Articles of Incorporation or resolution of the
directors filed with the Secretary of State of Minnesota changing the registered
office.
Section 1.03. OTHER OFFICES. The corporation may have such other offices,
within or without the State of Minnesota, as the directors shall, from time to
time, determine.
Section 1.04. NO CORPORATE SEAL. The corporation shall have no corporate
seal.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 2.01. PLACE AND TIME OF MEETING. Except as provided otherwise by
Minnesota Statutes Chapter 302A, meetings of the shareholders may be held at any
place, within or without the State of Minnesota, designated by the directors
and, in the absence of such designation, shall be held at the registered office
of the corporation in the State of Minnesota. The directors shall designate the
time of day for each meeting and, in the absence of such designation, every
meeting of shareholders shall be held at ten o'clock a.m.
Section 2.02. REGULAR MEETINGS. The corporation shall not be required to
hold annual meetings of shareholders. Regular meetings shall be held only with
such frequency and at such times and places as provided in and required by
Minnesota Statutes Section 302A.431.
Section 2.03. SPECIAL MEETINGS. Special meetings of the shareholders may be
held at any time and for any purpose and may be called by the Chairman of the
Board, the President, any two directors, or by one or more shareholders holding
ten percent (10%) or more of the shares entitled to vote on the matters to be
presented to the meeting.
Section 2.04. QUORUM. Adjourned Meetings. The holders of a majority of the
shares outstanding and entitled to vote shall constitute a quorum for the
transaction of business at any regular or special meeting. In case a quorum
shall not be present at a meeting, those present in person or by proxy shall
adjourn the meeting to such day as they shall, by majority vote, agree upon
without further notice other than by announcement at the meeting at which such
adjournment is taken. If a quorum is present, a meeting may be adjourned from
time to time without notice other than announcement at the meeting. At adjourned
meetings at which a quorum is present, any business may be transacted which
might have been transacted at the meeting as originally noticed. If a quorum is
present, the shareholders may continue to transact business until adjournment
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum.
Section 2.05. VOTING. At each meeting of the shareholders, every
shareholder having the right to vote shall be entitled to vote either in person
or by proxy. Each shareholder, unless the Articles of Incorporation provide
otherwise, shall have one vote for each share having voting power registered in
such shareholder's name on the books of the corporation. Except as otherwise
specifically provided by these Bylaws or as required by provisions of the
Investment Company Act of 1940 or other applicable laws, all questions shall be
decided by a majority vote of the number of shares entitled to vote and
represented at the meeting at the time of the vote. If the matter(s) to be
presented at a regular or special meeting relates only to particular classes or
series of the corporation, then only the shareholders of such classes or series
are entitled to vote on such matter(s).
Section 2.06. VOTING - PROXIES. The right to vote by proxy shall exist only
if the instrument authorizing such proxy to act shall have been executed in
writing by the shareholder or by such shareholder's attorney thereunto duly
authorized in writing. No proxy shall be voted after eleven months from its date
unless it provides for a longer period.
Section 2.07. CLOSING OF BOOKS. The Board of Directors may fix a time, not
exceeding sixty (60) days preceding the date of any meeting of shareholders, as
a record date for the determination of the shareholders entitled to notice of,
and to vote at, such meeting, notwithstanding any transfer of shares on the
books of the corporation after any record date so fixed. The Board of Directors
may close the books of the corporation against the transfer of shares during the
whole or any part of such period. If the Board of Directors fails to fix a
record date for determination of the shareholders entitled to notice of, and to
vote at, any meeting of shareholders, the record date shall be the thirtieth
(30th) day preceding the date of such meeting.
Section 2.08. NOTICE OF MEETINGS. There shall be mailed to each
shareholder, shown by the books of the corporation to be a holder of record of
voting shares, at such shareholder's address as shown by the books of the
corporation, a notice setting out the date, time and place of each regular
meeting and each special meeting, except where the meeting is an adjourned
meeting and the date, time and place of the meeting were announced at the time
of adjournment, which notice shall be mailed within the period required by law.
Every notice of any special meeting shall state the purpose or purposes for
which the meeting has been called, pursuant to Section 2.03, and the business
transacted at all special meetings shall be confined to the purpose stated in
such notice.
Section 2.09. WAIVER OF NOTICE. Notice of any regular or special meeting
may be waived either before, at or after such meeting orally or in a writing
signed by each shareholder or representative thereof entitled to vote the shares
so represented. A shareholder by his or her attendance at any meeting of
shareholders, shall be deemed to have waived notice of such meeting, except
where the shareholder objects at the beginning of the meeting to the transaction
of business because the item may not lawfully be considered at that meeting and
does not participate at that meeting in the consideration of the item at that
meeting.
Section 2.10. WRITTEN ACTION. Any action which might be taken at a meeting
of the shareholders may be taken without a meeting if done in writing and signed
by all of the shareholders entitled to vote on that action. If the action to be
taken relates to particular classes or series of the corporation, then only
shareholders of such classes or series are entitled to vote on such action.
ARTICLE III
DIRECTORS
Section 3.01. NUMBER, QUALIFICATION AND TERM OF OFFICE. The number of
directors shall be established by resolution of the shareholders (subject to the
authority of the Board of Directors to increase or decrease the number of
directors as permitted by law). In the absence of such shareholder resolution,
the number of directors shall be the number last fixed by the shareholders, the
Board of Directors or the Articles of Incorporation. Directors need not be
shareholders. Each of the directors shall hold office until the regular meeting
of shareholders next held after his or her election and until his or her
successor shall have been elected and shall qualify, or until the earlier death,
resignation, removal or disqualification of such director.
Section 3.02. ELECTION OF DIRECTORS. Except as otherwise provided in
Sections 3.11 and 3.12 hereof, the directors shall be elected at the regular
shareholders' meeting. In the event that directors are not elected at a regular
shareholders' meeting, then directors may be elected at a special shareholders'
meeting, provided that the notice of such meeting shall contain mention of such
purpose. At each shareholders' meeting for the election of directors, the
directors shall be elected by a plurality of the votes validly cast at such
election. Each holder of shares of each class or series of stock of the
corporation shall be entitled to vote for directors and shall have equal voting
power for each share of each class or series of the corporation.
Section 3.03. GENERAL POWERS.
(a) Except as otherwise permitted by statute, the property, affairs and
business of the corporation shall be managed by the Board of Directors, which
may exercise all the powers of the corporation except those powers vested solely
in the shareholders of the corporation by statute, the Articles of Incorporation
or these Bylaws, as amended.
(b) All acts done by any meeting of the Directors or by any person acting
as a director, so long as his or her successor shall not have been duly elected
or appointed, shall, notwithstanding that it be afterwards discovered that there
was some defect in the election of the directors or such person acting as
aforesaid or that they or any of them were disqualified, be as valid as if the
directors or such other person, as the case may be, had been duly elected and
were or was qualified to be directors or a director of the corporation.
Section 3.04. POWER TO DECLARE DIVIDENDS.
(a) The Board of Directors, from time to time as they may deem advisable,
may declare and pay dividends in cash or other property of the corporation, out
of any source available for dividends, to the shareholders of each class or
series of stock of the corporation according to their respective rights and
interests in the investment portfolio of the corporation issuing such class or
series of stock.
(b) Notwithstanding the above provisions of this Section 3.04, the Board of
Directors may at any time declare and distribute pro rata among the shareholders
of each class or series of stock a "stock dividend" out of the authorized but
unissued shares of stock of each class or series, including any shares
previously purchased by a class or series of the corporation.
Section 3.05. BOARD MEETINGS. Meetings of the Board of Directors may be
held from time to time at such time and place within or without the State of
Minnesota as may be designated in the notice of such meeting.
Section 3.06. CALLING MEETINGS, NOTICE. A director may call a board meeting
by giving ten (10) days notice to all directors of the date, time and place of
the meeting; provided that if the day or date, time and place of a board meeting
have been announced at a previous meeting of the board, no notice is required.
Section 3.07. WAIVER OF NOTICE. Notice of any meeting of the Board of
Directors may be waived by any director either before, at or after such meeting
orally or in a writing signed by such director. A director, by his or her
attendance and participation in the action taken at any meeting of the Board of
Directors, shall be deemed to have waived notice of such meeting, except where
the director objects at the beginning of the meeting to the transaction of
business because the item may not lawfully be considered at that meeting and
does not participate at that meeting in the consideration of the item at that
meeting.
Section 3.08. QUORUM. A majority of the directors holding office
immediately prior to a meeting of the Board of Directors shall constitute a
quorum for the transaction of business at such meeting; provided however,
notwithstanding the above, if the Board of Directors is taking action pursuant
to the Investment Company Act of 1940, as now enacted or hereafter amended, a
majority of directors who are not "interested persons" (as defined by the
Investment Company Act of 1940, as now enacted or hereafter amended) of the
corporation shall constitute a quorum for taking such action.
Section 3.09. ADVANCE CONSENT OR OPPOSITION. A director may give
advance written consent or opposition to a proposal to be acted on at a meeting
of the Board of Directors. If such director is not present at the meeting,
consent or opposition to a proposal does not constitute presence for purposes of
determining the existence of a quorum, but consent or opposition shall be
counted as a vote in favor of or against the proposal and shall be entered in
the minutes or other record of action at the meeting, if the proposal acted on
at the meeting is substantially the same or has substantially the same effect as
the proposal to which the director has consented or objected. This procedure
shall not be used to act on any investment advisory agreement or plan of
distribution adopted under Rule 12b-1 of the Investment Company Act of 1940, as
amended.
Section 3.10. CONFERENCE COMMUNICATIONS. Any or all directors may
participate in any meeting of the Board of Directors, or of any duly constituted
committee thereof, by any means of communication through which the directors may
simultaneously hear each other during such meeting. For the purposes of
establishing a quorum and taking any action at the meeting, such directors
participating pursuant to this Section 3.10 shall be deemed present in person at
the meeting, and the place of the meeting shall be the place of origination of
the conference communication. This procedure shall not be used to act on any
investment advisory agreement or plan of distribution adopted under Rule 12b-1
of the Investment Company Act of 1940, as amended.
Section 3.11. VACANCIES; NEWLY CREATED DIRECTORSHIPS. Vacancies in the
Board of Directors of this corporation occurring by reason of death,
resignation, removal or disqualification shall be filled for the unexpired term
by a majority of the remaining directors of the Board although less than a
quorum; newly created directorships resulting from an increase in the authorized
number of directors by action of the Board of Directors as permitted by Section
3.01 may be filled by a two-thirds (2/3) vote of the directors serving at the
time of such increase; and each person so elected shall be a director until his
or her successor is elected by the shareholders at their next regular or special
meeting; provided, however, that no vacancy can be filled as provided above if
prohibited by the provisions of the Investment Company Act of 1940.
Section 3.12. REMOVAL. The entire Board of Directors or an individual
director may be removed from office, with or without cause, by a vote of the
shareholders holding a majority of the shares entitled to vote at an election of
directors. In the event that the entire Board or any one or more directors be so
removed, new directors shall be elected at the same meeting, or the remaining
directors may, to the extent vacancies are not filled at such meeting, fill any
vacancy or vacancies created by such removal. A director named by the Board of
Directors to fill a vacancy may be removed from office at any time, with or
without cause, by the affirmative vote of the remaining directors if the
shareholders have not elected directors in the interim between the time of the
appointment to fill such vacancy and the time of the removal.
Section 3.13. COMMITTEES. A resolution approved by the affirmative vote of
a majority of the Board of Directors may establish committees having the
authority of the board in the management of the business of the corporation to
the extent provided in the resolution. A committee shall consist of one or more
persons, who need not be directors, appointed by affirmative vote of a majority
of the directors present. Committees are subject to the direction and control
of, and vacancies in the membership thereof shall be filled by, the Board of
Directors.
A majority of the members of the committee present at a meeting is a quorum
for the transaction of business, unless a larger or smaller proportion or number
is provided in a resolution approved by the affirmative vote of a majority of
the directors present.
Section 3.14. WRITTEN ACTION. Except as provided in the Investment Company
Act of 1940, as amended, any action which might be taken at a meeting of the
Board of Directors, or any duly constituted committee thereof, may be taken
without a meeting if done in writing and signed by that number of directors or
committee members that would be required to take the same action at a meeting of
the board or committee thereof at which all directors or committee members were
present; provided, however, that any action which also requires shareholder
approval may be taken by written action only if such writing is signed by all of
the directors or committee members entitled to vote on such matter .
Section 3.15. COMPENSATION. Directors who are not salaried officers of this
corporation or affiliated with its investment adviser shall receive such fixed
sum per meeting attended and/or such fixed annual sum as shall be determined,
from time to time, by resolution of the Board of Directors. All directors shall
receive their expenses, if any, of attendance at meetings of the Board of
Directors or any committee thereof. Nothing herein contained shall be construed
to preclude any director from serving this corporation in any other capacity and
receiving proper compensation therefor.
Section 3.16. RESIGNATION. A director may resign by giving written notice
to the corporation, and the resignation is effective without acceptance when
given, unless a later effective time is specified in the notice.
ARTICLE IV
OFFICERS
Section 4.01. NUMBER. The officers of the corporation shall consist of a
Chairman of the Board (if one is elected by the Board), the President, one or
more Vice Presidents (if desired by the Board), a Secretary, a Treasurer and
such other officers and agents as may, from time to time, be elected by the
Board of Directors. Any number of offices may be held by the same person.
Section 4.02. ELECTION, TERM OF OFFICE AND QUALIFICATIONS. The Board of
Directors shall elect, from within or without their number, the officers
referred to in Section 4.01 of these Bylaws, each of whom shall have the powers,
rights, duties, responsibilities and terms in office provided for in these
Bylaws or a resolution of the Board not inconsistent therewith. The President
and all other officers who may be directors shall continue to hold office until
the election and qualification of their successors, notwithstanding an earlier
termination of their directorship.
Section 4.03. RESIGNATION. Any officer may resign his or her office at any
time by delivering a written resignation to the corporation. Unless otherwise
specified therein, such resignation shall take effect upon delivery.
Section 4.04. REMOVAL AND VACANCIES. Any officer may be removed from office
by a majority of the Board of Directors with or without cause. Such removal,
however, shall be without prejudice to the contract rights of the person so
removed. If there be a vacancy among the officers of the corporation by reason
of death, resignation or otherwise, such vacancy shall be filled for the
unexpired term by the Board of Directors.
Section 4.05. CHAIRMAN OF THE BOARD. The Chairman of the Board, if one is
elected, shall preside at all meetings of the shareholders and directors and
shall have such other duties as may be prescribed, from time to time, by the
Board of Directors.
Section 4.06. PRESIDENT. The President shall have general active management
of the business of the corporation. In the absence of the Chairman of the Board,
the President shall preside at all meetings of the shareholders and directors.
The President shall be the chief executive officer of the corporation and shall
see that all orders and resolutions of the Board of Directors are carried into
effect. The President shall be ex officio a member of all standing committees.
The President may execute and deliver, in the name of the corporation, any
deeds, mortgages, bonds, contracts or other instruments pertaining to the
business of the corporation and, in general, shall perform all duties usually
incident to the office of the President. The President shall have such other
duties as may, from time to time, be prescribed by the Board of Directors.
Section 4.07. VICE PRESIDENT. Each Vice President shall have such powers
and shall perform such duties as may be specified in the Bylaws or prescribed by
the Board of Directors or by the President. In the event of absence or
disability of the President, Vice Presidents shall succeed to the President's
power and duties in the order designated by the Board of Directors.
Section 4.08. SECRETARY. The Secretary shall be secretary of, and shall
attend, all meetings of the shareholders and Board of Directors and shall record
all proceedings of such meetings in the minute book of the corporation. The
Secretary shall give proper notice of meetings of shareholders and directors.
The Secretary shall perform such other duties as may, from time to time, be
prescribed by the Board of Directors or by the President.
Section 4.09. TREASURER. The Treasurer shall be the chief financial officer
and shall keep accurate accounts of all money of the corporation received or
disbursed. The Treasurer shall deposit all moneys, drafts and checks in the name
of, and to the credit of, the corporation in such banks and depositories as a
majority of the Board of Directors shall, from time to time, designate. The
Treasurer shall have power to endorse, for deposit, all notes, checks and drafts
received by the corporation. The Treasurer shall disburse the funds of the
corporation, as ordered by the Board of Directors, making proper vouchers
therefor. The Treasurer shall render to the President and the directors,
whenever required, an account of all his or her transactions as Treasurer and of
the financial condition of the corporation, and shall perform such other duties
as may, from time to time, be prescribed by the Board of Directors or by the
President.
Section 4.10. ASSISTANT SECRETARIES. At the request of the Secretary, or in
the Secretary's absence or disability, any Assistant Secretary shall have power
to perform all the duties of the Secretary, and, when so acting, shall have all
the powers of, and be subject to all restrictions upon, the Secretary. The
Assistant Secretaries shall perform such other duties as from time to time may
be assigned to them by the Board of Directors or the President.
Section 4.11. ASSISTANT TREASURERS. At the request of the Treasurer, or in
the Treasurer's absence or disability, any Assistant Treasurer shall have power
to perform all the duties of the Treasurer, and when so acting, shall have all
the powers of, and be subject to all the restrictions upon, the Treasurer. The
Assistant Treasurers shall perform such other duties as from time to time may be
assigned to them by the Board of Directors or the President.
Section 4.12. COMPENSATION. The officers of this corporation shall receive
such compensation for their services as may be determined, from time to time, by
resolution of the Board of Directors.
Section 4.13. SURETY BONDS. The Board of Directors may require any officer
or agent of the corporation to execute a bond (including, without limitation,
any bond required by the Investment Company Act of 1940 and the rules and
regulations of the Securities and Exchange Commission) to the corporation in
such sum and with such surety or sureties as the Board of Directors may
determine, conditioned upon the faithful performance of his or her duties to the
corporation, including responsibility for negligence and for the accounting of
any of the corporation's property, funds or securities that may come into his or
her hands. In any such case, a new bond of like character shall be given at
least every six years, so that the dates of the new bond shall not be more than
six years subsequent to the date of the bond immediately preceding.
ARTICLE V
SHARES AND THEIR TRANSFER AND REDEMPTION
Section 5.01. CERTIFICATES FOR SHARES.
(a) The corporation may have certificated or uncertificated shares, or
both, as designated by resolution of the Board of Directors. Every owner of
certificated shares of the corporation shall be entitled to a certificate,
to be in such form as shall be prescribed by the Board of Directors,
certifying the number of shares of the corporation owned by him or her.
Within a reasonable time after the issuance or transfer of uncertificated
shares, the corporation shall send to the new shareholder the information
required to be stated on certificates. Certificated shares shall be
numbered in the order in which they shall be issued and shall be signed, in
the name of the corporation, by the President or a Vice President and by
the Treasurer or Secretary or by such officers as the Board of Directors
may designate. Such signatures may be by facsimile if authorized by the
Board of Directors. Every certificate surrendered to the corporation for
exchange or transfer shall be cancelled, and no new certificate or
certificates shall be issued in exchange for any existing certificate until
such existing certificate shall have been so cancelled, except in cases
provided for in Section 5.08.
(b) In case any officer, transfer agent or registrar who shall have
signed any such certificate, or whose facsimile signature has been placed
thereon, shall cease to be such an officer (because of death, resignation
or otherwise) before such certificate is issued, such certificate may be
issued and delivered by the corporation with the same effect as if he or
she were such officer, transfer agent or registrar at the date of issue.
Section 5.02. ISSUANCE OF SHARES. The Board of Directors is authorized to
cause to be issued shares of the corporation up to the full amount authorized by
the Articles of Incorporation in such classes or series and in such amounts as
may be determined by the Board of Directors and as may be permitted by law. No
shares shall be allotted except in consideration of cash or other property,
tangible or intangible, received or to be received by the corporation under a
written agreement, of services rendered or to be rendered to the corporation
under a written agreement, or of an amount transferred from surplus to stated
capital upon a share dividend. At the time of such allotment of shares, the
Board of Directors making such allotments shall state, by resolution, their
determination of the fair value to the corporation in monetary terms of any
consideration other than cash for which shares are allotted. No shares of stock
issued by the corporation shall be issued, sold or exchanged by or on behalf of
the corporation for any amount less than the net asset value per share of the
shares outstanding as determined pursuant to Article X hereunder.
Section 5.03. REDEMPTION OF SHARES. Upon the demand of any shareholder,
this corporation shall redeem any share of stock issued by it held and owned by
such shareholder at the net asset value thereof as determined pursuant to
Article X hereunder. The Board of Directors may suspend the right of redemption
or postpone the date of payment during any period as may be permitted by law.
If following a redemption request by any shareholder of this corporation,
the value of such shareholder's interest in the corporation falls below the
required minimum investment, as may be set from time to time by the Board of
Directors, the corporation's officers are authorized, in their discretion and on
behalf of the corporation, to redeem such shareholder's entire interest and
remit such amount, provided that such a redemption will only be effected by the
corporation following: (a) a redemption by a shareholder, which causes the value
of such shareholder's interest in the corporation to fall below the required
minimum investment; (b) the mailing by the corporation to such shareholder of a
"notice of intention to redeem"; and (c) the passage of at least sixty (60) days
from the date of such mailing, during which time the shareholder will have the
opportunity to make an additional investment in the corporation to increase the
value of such shareholder's account to at least the required minimum investment.
Section 5.04. TRANSFER OF SHARES. Transfer of shares on the books of the
corporation may be authorized only by the shareholder, or the shareholder's
legal representative, or the shareholder's duly authorized attorney-in-fact, and
upon the surrender of the certificate or the certificates for such shares or a
duly executed assignment covering shares held in unissued form. The corporation
may treat, as the absolute owner of shares of the corporation, the person or
persons in whose name shares are registered on the books of the corporation.
Section 5.05. REGISTERED SHAREHOLDERS. The corporation shall be entitled to
treat the holder of record of any share or shares of stock as the holder in fact
thereof and accordingly shall not be bound to recognize any equitable or other
claim to or interest in such share on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise expressly
provided by the laws of Minnesota.
Section 5.06. TRANSFER OF AGENTS AND REGISTRARS. The Board of Directors may
from time to time appoint or remove transfer agents and/or registrars of
transfers of shares of stock of the corporation, and it may appoint the same
person as both transfer agent and registrar. Upon any such appointment being
made all certificates representing shares of capital stock thereafter issued
shall be countersigned by one of such transfer agents or by one of such
registrars of transfers or by both and shall not be valid unless so
countersigned. If the same person shall be both transfer agent and registrar,
only one countersignature by such person shall be required.
Section 5.07. TRANSFER REGULATIONS. The shares of stock of the corporation
may be freely transferred, and the Board of Directors may from time to time
adopt rules and regulations with reference to the method of transfer of shares
of stock of the corporation.
Section 5.08. LOST, STOLEN, DESTROYED AND MUTILATED CERTIFICATES. The
holder of any stock of the corporation shall immediately notify the corporation
of any loss, theft, destruction or mutilation of any certificate therefor, and
the Board of Directors may, in its discretion, cause to be issued to such holder
a new certificate or certificates of stock, upon the surrender of the mutilated
certificate or in case of loss, theft or destruction of the certificate upon
satisfactory proof of such loss, theft, or destruction. A new certificate or
certificates of stock will be issued to the owner of the lost, stolen or
destroyed certificate only after such owner, or his or her legal
representatives, gives to the corporation and to such registrar or transfer
agent as may be authorized or required to countersign such new certificate or
certificates a bond, in such sum as they may direct, and with such surety or
sureties, as they may direct, as indemnity against any claim that may be made
against them or any of them on account of or in connection with the alleged
loss, theft, or destruction of any such certificate.
ARTICLE VI
DIVIDENDS
Section 6.01. The net investment income of each class or series of the
corporation will be determined, and its dividends shall be declared and made
payable at such time(s) as the Board of Directors shall determine. Dividends
shall be payable to shareholders of record as of the date of declaration.
It shall be the policy of each series of the corporation to qualify for and
elect the tax treatment applicable to regulated investment companies under the
Internal Revenue Code, so that such series will not be subjected to federal
income tax on such part of its income or capital gains as it distributes to
shareholders.
ARTICLE VII
BOOKS AND RECORDS, AUDIT, FISCAL YEAR
Section 7.01. SHARE REGISTER. The Board of Directors of the corporation
shall cause to be kept at its principal executive office, or at another place or
places within the United States determined by the board:
(1) a share register not more than one year old, containing the names
and addresses of the shareholders and the number and classes or
series of shares held by each shareholder; and
(2) a record of the dates on which transaction statements
representing shares were issued.
Section 7.02. OTHER BOOKS AND RECORDS. The Board of Directors shall cause
to be kept at its principal executive office, or, if its principal executive
office is not in Minnesota, shall make available at its registered office within
ten days after receipt by an officer of the corporation of a written demand for
them made by a shareholder or other person authorized by Minnesota Statutes
Section 302A.461, originals or copies of:
(1) records of all proceedings of shareholders for the last three
years;
(2) records of all proceedings of the Board of Directors for the last
three years;
(3) its articles and all amendments currently in effect;
(4) its bylaws and all amendments currently in effect;
(5) financial statements required by Minnesota Statutes Section
302A.463 and the financial statement for the most recent interim
period prepared in the course of the operation of the corporation
for distribution to the shareholders or to a governmental agency
as a matter of public record;
(6) reports made to shareholders generally within the last three
years;
(7) a statement of the names and usual business addresses of its
directors and principal officers;
(8) any shareholder voting or control agreements of which the
corporation is aware; and
(9) such other records and books of account as shall be necessary and
appropriate to the conduct of the corporate business.
Section 7.03. AUDIT; ACCOUNTANT.
(a) The Board of Directors shall cause the records and books of account of
the corporation to be audited at least once in each fiscal year and at such
other times as it may deem necessary or appropriate.
(b) The corporation shall employ an independent public accountant or firm
of independent public accountants to examine the accounts of the corporation and
to sign and certify financial statements filed by the corporation.
Section 7.04. FISCAL YEAR. The fiscal year of the corporation shall be
determined by the Board of Directors.
ARTICLE VIII
INDEMNIFICATION OF CERTAIN PERSONS
Section 8.01. The corporation shall indemnify such persons, for such
expenses and liabilities, in such manner, under such circumstances, and to such
extent as permitted by Section 302A.521 of the Minnesota Statutes, as now
enacted or hereafter amended, provided, however, that no such indemnification
may be made if it would be in violation of Section 17(h) of the Investment
Company Act of 1940, as now enacted or hereinafter amended.
ARTICLE IX
VOTING OF STOCK HELD
Section 9.01. Unless otherwise provided by resolution of the Board of
Directors, the President, any Vice President, the Secretary or the Treasurer,
may from time to time appoint an attorney or attorneys or agent or agents of the
corporation, in the name and on behalf of the corporation, to cast the votes
which the corporation may be entitled to cast as a stockholder or otherwise in
any other corporation or association, any of whose stock or securities may be
held by the corporation, at meetings of the holders of the stock or other
securities of any such other corporation or association, or to consent in
writing to any action by any such other corporation or association, and may
instruct the person or persons so appointed as to the manner of casting such
votes or giving such consent, and may execute or cause to be executed on behalf
of the corporation, such written proxies, consents, waivers or other instruments
as it may deem necessary or proper; or any of such officers may themselves
attend any meeting of the holders of stock or other securities of any such
corporation or association and thereat vote or exercise any or all other rights
of the corporation as the holder of such stock or other securities of such other
corporation or association, or consent in writing to any action by any such
other corporation or association.
ARTICLE X
VALUATION OF NET ASSET VALUE
10.01. The net asset value per share of each class or series of stock of
the corporation shall be determined in good faith by or under supervision of the
officers of the corporation as authorized by the Board of Directors as often and
on such days and at such time(s) as the Board of Directors shall determine, or
as otherwise may be required by law, rule, regulation or order of the Securities
and Exchange Commission.
ARTICLE XI
CUSTODY OF ASSETS
Section 11.01. All securities and cash owned by this corporation shall, as
hereinafter provided, be held by or deposited with a bank or trust company
having (according to its last published report) not less than Two Million
Dollars ($2,000,000) aggregate capital, surplus and undivided profits (the
"Custodian").
This corporation shall enter into a written contract with the custodian
regarding the powers, duties and compensation of the Custodian with respect to
the cash and securities of this corporation held by the Custodian. Said contract
and all amendments thereto shall be approved by the Board of Directors of this
corporation. In the event of the Custodian's resignation or termination, the
corporation shall use its best efforts promptly to obtain a successor Custodian
and shall require that the cash and securities owned by this corporation held by
the Custodian be delivered directly to such successor Custodian.
ARTICLE XII
AMENDMENTS
Section 12.01. These Bylaws may be amended or altered by a vote of the
majority of the Board of Directors at any meeting provided that notice of such
proposed amendment shall have been given in the notice given to the directors of
such meeting. Such authority in the Board of Directors is subject to the power
of the shareholders to change or repeal such bylaws by a majority vote of the
shareholders present or represented at any regular or special meeting of
shareholders called for such purpose, and the Board of Directors shall not make
or alter any Bylaws fixing a quorum for meetings of shareholders, prescribing
procedures for removing directors or filling vacancies in the Board of
Directors, or fixing the number of directors or their classifications,
qualifications or terms of office, except that the Board of Directors may adopt
or amend any Bylaw to increase or decrease their number.
ARTICLE XIII
MISCELLANEOUS
Section 13.01. INTERPRETATION. When the context in which words are used in
these Bylaws indicates that such is the intent, singular words will include the
plural and vice versa, and masculine words will include the feminine and neuter
genders and vice versa.
Section 13.02. ARTICLE AND SECTION TITLES. The titles of Sections and
Articles in these Bylaws are for descriptive purposes only and will not control
or alter the meaning of any of these Bylaws as set forth in the text.
[The following is a prototype of the Registrant's share certificate. It is a
"two-sided" document. The facing page is in a "landscaped" position and
boardered with intricate, detailed graphics. This similar graphical detail is
found boardering boxes for the number and type of shares.]
VOYAGEUR
NUMBER SHARES
[VOID] [VOID]
INCORPORATED UNDER THE LAWS OF THE STATE OF MINNESOTA
THIS CERTIFIES THAT
VOID
is the owner and
registered holder of
------- -------
- -------------------- --------------------
------- -------
transferable only on the books of the Corporation by the holder hereof in person
or by duly authorized Attorney upon surrender of this certificate properly
endorsed.
IN WITNESS WHEREOF, the said Corporation has caused this certificate to be
signed by its duly authorized officers.
Dated:
SECRETARY [VOID] PRESIDENT [VOID]
(REVERSE SIDE)
________________________________________________________________________________
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UTMA - ________Custodian________
(Cust) (Minor)
TEN ENT - as tenants by entireties under Uniform Transfer to Minors
JT TEN - as joint tenants with right of survivorship Act _____________________
and not as tenants in common (State)
Additional abbreviations may also be used though not in the above list.
________________________________________________________________________________
FOR VALUE RECEIVED______HEREBY SELL, ASSIGN AND TRANSFER UNTO
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
(Box to insert information)
________________________________________________________________________________
Please print or typewrite name and address including postal zip code of assignee
________________________________________________________________________________
________________________________________________________________________________
__________________________________________________________________________SHARES
OF THE CAPITAL STOCK REPRESENTED BY THE WITHIN CERTIFICATE,
AND DO HEREBY IRREVOCABLY CONSTITUTE AND APPOINT
___________________________________________________________________ATTORNEY TO
TRANSFER THE SAID STOCK ON THE BOOKS OF THE WITHIN-NAMED CORPORATION WITH FULL
POWER OF SUBSTITUTION IN THE PREMISES.
DATED ________________________________________________
________________________________________________
NOTICE: The signature to this assignment must
correspond to the name as written upon the face
of the certificate in every particular without
alteration or enlargement or any change whatever
SIGNATURE GUARANTEED
INVESTMENT ADVISORY AGREEMENT
This Agreement, made this 1st day of November, 1993, by and between
Voyageur Funds, Inc., a Minnesota corporation (the "Company"), on behalf of each
Fund represented by a series of shares of common stock of the Fund that adopts
this Agreement (each a "Fund" and, collectively, the "Funds") (the Funds,
together with the date each Fund adopts this Agreement, are set forth in Exhibit
A hereto, which shall be updated from time to time to reflect additions,
deletions or other changes thereto), and Voyageur Fund Managers, Inc., a
Minnesota corporation ("Voyageur"),
WITNESSETH:
1. INVESTMENT ADVISORY SERVICES.
(a) The Company hereby engages Voyageur on behalf of the Funds, and
Voyageur hereby agrees to act, as investment adviser for, and to manage the
investment of the assets of, the Funds.
(b) The investment of the assets of each Fund shall at all times be subject
to the applicable provisions of the Articles of Incorporation, the Bylaws, the
Registration Statement, and the current Prospectus and the Statement of
Additional Information, if any, of the Company and each Fund and shall conform
to the policies and purposes of each Fund as set forth in such documents and as
interpreted from time to time by the Board of Directors of the Company. Within
the framework of the investment policies of each Fund, and except as otherwise
permitted by this Agreement, Voyageur shall have the sole and exclusive
responsibility for the management of each Fund's investment portfolio and for
making and executing all investment decisions for each Fund. Voyageur shall
report to the Board of Directors regularly at such times and in such detail as
the Board may from time to time determine appropriate, in order to permit the
Board to determine the adherence of Voyageur to the investment policies of the
Funds.
(c) Voyageur shall, at its own expense, furnish all office facilities,
equipment and personnel necessary to discharge its responsibilities and duties
hereunder. Voyageur shall arrange, if requested by the Company, for officers or
employees of Voyageur to serve without compensation from any Fund as directors,
officers, or employees of the Company if duly elected to such positions by the
shareholders or directors of the Company (as required by law).
(d) Voyageur hereby acknowledges that all records pertaining to each Fund's
investments are the property of the Company, and in the event that a transfer of
investment advisory services to someone other than Voyageur should ever occur,
Voyageur will promptly, and at its own cost, take all steps necessary to
segregate such records and deliver them to the Company.
2. COMPENSATION FOR SERVICES.
In payment for the investment advisory and management services to be
rendered by Voyageur hereunder, each Fund shall pay to Voyageur a monthly fee,
which fee shall be paid to Voyageur not later than the fifth business day of the
month following the month in which said services were rendered. The monthly fee
payable by each Fund shall be as set forth in EXHIBIT A hereto, which may be
updated from time to time to reflect amendments, if any, to EXHIBIT A. The
monthly fee payable by each Fund shall be based on the average of the net asset
values of all of the issued and outstanding shares of the Fund as determined as
of the close of each business day of the month pursuant to the Articles of
Incorporation, Bylaws, and currently effective Prospectus and Statement of
Additional Information of the Company and the Fund. For purposes of calculating
each Fund's average daily net assets, as such term is used in this Agreement,
each Fund's net assets shall equal its total assets minus (a) its total
liabilities and (b) its net orders receivable from dealers.
3. ALLOCATION OF EXPENSES.
(a) In addition to the fee described in Section 2 hereof, each Fund shall
pay all its costs and expenses which are not assumed by Voyageur. These Fund
expenses include, by way of example, but not by way of limitation, all expenses
incurred in the operation of the Fund and any public offering of its shares,
including, among others, Rule 12b-1 plan of distribution fees (if any),
interest, taxes, brokerage fees and commissions, fees of the directors who are
not employees of Voyageur or the principal underwriter of the Fund's shares (the
"Underwriter"), or any of their affiliates, expenses of directors' and
shareholders' meetings, including the cost of printing and mailing proxies,
expenses of insurance premiums for fidelity and other coverage, expenses of
redemption of shares, expenses of issue and sale of shares (to the extent not
borne by the Underwriter under its agreement with the Fund), expenses of
printing and mailing stock certificates representing shares of the Fund,
association membership dues, charges of custodians, transfer agents, dividend
disbursing agents, accounting services agents, investor servicing agents, and
bookkeeping, auditing, and legal expenses. Each Fund will also pay the fees and
bear the expense of registering and maintaining the registration of the Fund and
its shares with the Securities and Exchange Commission and registering or
qualifying its shares under state or other securities laws and the expense of
preparing and mailing prospectuses and reports to shareholders.
(b) The Underwriter shall bear all advertising and promotional expenses in
connection with the distribution of each Fund's shares, including paying for
prospectuses for new shareholders, except as provided in the following sentence.
No Fund shall use any of its assets to finance costs incurred in connection with
the distribution of its shares except pursuant to a Plan of Distribution, if
any, adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940 (as
amended, the "Act").
4. LIMIT ON EXPENSES.
Voyageur shall reimburse each Fund, in an amount not in excess of the
investment advisory and management fee payable by such Fund, if, and to the
extent that, the aggregate operating expenses of the Company, including the
investment advisory and management fee, Rule 12b-1 fees (if any) and deferred
organizational costs but excluding interest expense, taxes and brokerage fees
and commissions, are in excess of the expense limit applicable to such Fund,
which is set forth in EXHIBIT A hereto.
5. FREEDOM TO DEAL WITH THIRD PARTIES.
Voyageur shall be free to render services to others similar to those
rendered under this Agreement or of a different nature except as such services
may conflict with the services to be rendered or the duties to be assumed
hereunder.
6. REPORTS TO DIRECTORS OF THE FUND.
Appropriate officers of Voyageur shall provide the directors of the Company
with such information as is required by any plan of distribution adopted by the
Company on behalf of any Fund pursuant to Rule 12b-1 under the Act.
7. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT.
(a) The effective date of this Agreement with respect to each Fund shall be
the date set forth on EXHIBIT A hereto.
(b) Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect with respect to each Fund for a period more than two years
from the date of its execution but only as long as such continuance is
specifically approved at least annually by (i) the Board of Directors of the
Company or by the vote of a majority of the outstanding voting securities of the
applicable Fund, and (ii) by the vote of a majority of the directors of the
Company who are not parties to this Agreement or "interested persons", as
defined in the Act, of Voyageur or of the Company cast in person at a meeting
called for the purpose of voting on such approval.
(c) This Agreement may be terminated with respect to any Fund at any time,
without the payment of any penalty, by the Board of Directors of the Company or
by the vote of a majority of the outstanding voting securities of such Fund, or
by Voyageur, upon 60 days' written notice to the other party.
(d) This agreement shall terminate automatically in the event of its
"assignment" (as defined in the Act).
(e) No amendment to this Agreement shall be effective with respect to any
Fund until approved by the vote of: (i) a majority of the directors of the
Company who are not parties to this Agreement or "interested persons" (as
defined in the Act) of Voyageur or of the Company cast in person at a meeting
called for the purpose of voting on such approval; and (ii) a majority of the
outstanding voting securities of the applicable Fund.
(f) Wherever referred to in this Agreement, the vote or approval of the
holders of a majority of the outstanding voting securities or shares of a Fund
shall mean the lesser of (i) the vote of 67% or more of the voting securities of
such Fund present at a regular or special meeting of shareholders duly called,
if more than 50% of the Fund's outstanding voting securities are present or
represented by proxy, or (ii) the vote of more than 50% of the outstanding
voting securities of such Fund.
8. NOTICES.
Any notice under this Agreement shall be in writing, addressed, delivered
or mailed, postage prepaid, to the other party at such address as such other
party may designate in writing for receipt of such notice.
IN WITNESS WHEREOF, the Company and Voyageur have caused this Agreement to
be executed by their duly authorized officers as of the day and year first above
written.
VOYAGEUR FUNDS, INC.
BY /s/John G. Taft
----------------------
Its
----------------
VOYAGEUR FUND MANAGERS, INC.
By /s/
---------------------
Its
-----------------
Exhibit A
to
Investment Advisory Agreement
between
Voyageur Fund Managers, Inc.
and
Voyageur Funds, Inc.
MONTHLY ADVISORY FEE
(as % of average daily
FUND EFFECTIVE DATE net assets)
---- -------------- ---------------------
Series A (Class A)--Voyageur U.S.
Government Securities Fund November 1, 1993 .041666% (1-A)
(1-A) Voyageur shall reimburse the Class A shares of the Fund, in an amount
not in excess of the administrative services fee and the advisory and
management fee payable by the Class A shares of the Fund, if, and to
the extent that, the aggregate operating expenses of the Class A
shares of the Fund, including the advisory and management fee, the
administrative services fee, deferred organizational costs and Rule
12b-1 fees (if any), but excluding interest expense, taxes and
brokerage fees and commissions, are in excess of 1.25% (on an annual
basis) of the average daily net assets of the Class A shares of the
Fund (the "Expense Limit"). Voyageur shall first reimburse to the
Class A shares of the Fund the advisory and management fee payable
hereunder by the Class A shares of the Fund and then, to the extent
necessary to reduce expenses to the Expense Limit, shall reimburse to
the Class A shares of the Fund the administrative services fee.
Series A (Class B)--Voyageur U.S.
Government Securities Fund June 1, 1994 .041666% (1-B)
(1-B) Voyageur shall reimburse the Class B shares of the Fund, in an amount
not in excess of the administrative services fee and the advisory and
management fee payable by the Class B shares of the Fund, if, and to
the extent that, the aggregate operating expenses of the Class B
shares of the Fund, including the advisory and management fee, the
administrative services fee, deferred organizational costs and Rule
12b-1 fees (if any), but excluding interest expense, taxes and
brokerage fees and commissions, are in excess of 2.00% (on an annual
basis) of the average daily net assets of the Class B shares of the
Fund (the "Expense Limit"). Voyageur shall first reimburse to the
Class B shares of the Fund the advisory and management fee payable
hereunder by the Class B shares of the Fund and then, to the extent
necessary to reduce expenses to the Expense Limit, shall reimburse to
the Class B shares of the Fund the administrative services fee.
Series A (Class Y)--Voyageur U.S.
Government Securities Fund June 1, 1994 .041666% (1-Y)
(1-Y) Voyageur shall reimburse the Class Y shares of the Fund, in an amount
not in excess of the administrative services fee and the advisory and
management fee payable by the Class Y shares of the Fund, if, and to
the extent that, the aggregate operating expenses of the Class Y
shares of the Fund, including the advisory and management fee, the
administrative services fee, deferred organizational costs and Rule
12b-1 fees (if any), but excluding interest expense, taxes and
brokerage fees and commissions, are in excess 1.25% (on an annual
basis) of the average daily net assets of the Class Y shares of the
Fund (the "Expense Limit"). Voyageur shall first reimburse to the
Class Y shares of the Fund the advisory and management fee payable
hereunder by the Class Y shares of the Fund and then, to the extent
necessary to reduce expenses to the Expense Limit, shall reimburse to
the Class Y shares of the Fund the administrative services fee.
Series A (Class C)--Voyageur U.S.
Government Securities Fund September 1, 1994 .041666% (1-C)
(1-C) Voyageur shall reimburse the Class C shares of the Fund, in an amount
not in excess of the administrative services fee and the advisory and
management fee payable by the Class C shares of the Fund, if, and to
the extent that, the aggregate operating expenses of the Class C
shares of the Fund, including the advisory and management fee, the
administrative services fee, deferred organizational costs and Rule
12b-1 fees (if any), but excluding interest expense, taxes and
brokerage fees and commissions, are in excess of 2.00% (on an annual
basis) of the average daily net assets of the Class C shares of the
Fund (the "Expense Limit"). Voyageur shall first reimburse to the
Class C shares of the Fund the advisory and management fee payable
hereunder by the Class C shares of the Fund and then, to the extent
necessary to reduce expenses to the Expense Limit, shall reimburse to
the Class C shares of the Fund the administrative services fee.
VOYAGEUR FUNDS, INC.
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into as of this 1st day September 1994,
by and between Voyageur Funds, Inc., a Minnesota corporation (the "Company"),
for and on behalf of its sole series, Voyageur U.S. Government Securities Fund
(the "Fund"), and Voyageur Fund Distributors, Inc., a Minnesota corporation (the
"Underwriter"). This Agreement shall apply to the Class A, B, C and Y shares of
the Fund.
WITNESSETH:
1. UNDERWRITING SERVICES
The Company, on behalf of the Fund, hereby engages the Underwriter, and the
Underwriter hereby agrees to act, as principal underwriter for the Fund in the
sale and distribution of the shares of each class of the Fund to the public,
either through dealers or otherwise. The Underwriter agrees to offer such shares
for sale at all times when such shares are available for sale and may lawfully
be offered for sale and sold.
2. SALE OF SHARES
The shares of the Fund are to be sold only on the following terms:
(a) All subscriptions, offers, or sales shall be subject to acceptance or
rejection by the Company. Any offer for or sale of shares shall be
conclusively presumed to have been accepted by the Company if the
Company shall fail to notify the Underwriter of the rejection of such
offer or sale prior to the computation of the net asset value of such
shares next following receipt by the Company of notice of such offer
or sale.
(b) No share of the Fund shall be sold by the Underwriter (i) for any
consideration other than cash or, pursuant to any exchange privilege
provided for by the applicable currently effective Prospectus or
Statement of Additional Information (hereinafter referred to
collectively as, the "Prospectus"), shares of any other investment
company for which the Underwriter acts as an underwriter, or (ii)
except in instances otherwise provided for by the applicable currently
effective Prospectus, for any amount less than the public offering
price per share, which shall be determined in accordance with the
applicable currently effective Prospectus.
(c) In connection with certain sales of shares, a contingent deferred
sales charge will be imposed in the event of a redemption transaction
occurring within a certain period of time following such a purchase,
as described in the applicable currently effective Prospectus.
(d) The front-end sales charge, if any, for any class of shares of the
Fund may, at the discretion of the Company and the Underwriter, be
reduced or eliminated as permitted by the Investment Company Act of
1940, and the rules and regulations thereunder, as they may be amended
from time to time (the "1940 Act"), provided that such reduction or
elimination shall be set forth in the Prospectus for such class, and
provided that the Company shall in no event receive for any shares
sold an amount less than the net asset value thereof. In addition, any
contingent deferred sales charge for any class of shares of a Fund
may, at the discretion of the Company and the Underwriter, be reduced
or eliminated in accordance with the terms of an exemptive order
received from, or any applicable rule or rules promulgated by, the
Securities and Exchange Commission, provided that such reduction or
elimination shall be set forth in the Prospectus for such class of
shares.
(e) The Underwriter shall require any securities dealer entering into a
selected dealer agreement with the Underwriter to disclose to
prospective investors the existence of all available classes of shares
of the Fund and to determine the suitability of each available class
as an investment for each such prospective investor.
3. REGISTRATION OF SHARES
The Company agrees to make prompt and reasonable efforts to effect and keep
in effect, at its expense, the registration or qualification of the Fund's
shares for sale in such jurisdictions as the Company may designate.
4. INFORMATION TO BE FURNISHED TO THE UNDERWRITER
The Company agrees that it will furnish the Underwriter with such
information with respect to the affairs and accounts of the Company (and each
Fund or class thereof) as the Underwriter may from time to time reasonably
require, and further agrees that the Underwriter, at all reasonable times, shall
be permitted to inspect the books and records of the Company.
5. ALLOCATION OF EXPENSES
During the period of this Agreement, the Company shall pay or cause to be
paid all expenses, costs and fees incurred by the Company which are not assumed
by the Underwriter. The Underwriter agrees to provide, and shall pay costs which
it incurs in connection with providing, administrative or accounting services to
shareholders of the Fund (such costs are referred to as "Shareholder Servicing
Costs"). Shareholder Servicing Costs include all expenses of the Underwriter
incurred in connection with providing administrative or accounting services to
shareholders of the Fund, including, but not limited to, an allocation of the
Underwriter's overhead and payments made to persons, including employees of the
Underwriter, who respond to inquiries of shareholders regarding their ownership
of Fund shares, or who provide other administrative or accounting services not
otherwise required to be provided by the Fund's investment adviser or transfer
agent. The Underwriter shall also pay all costs of distributing the shares of
the Fund ("Distribution Expenses"). Distribution Expenses include, but are not
limited to, initial and ongoing sales compensation (in addition to sales loads)
paid to investment executives of the Underwriter and to other broker-dealers and
participating financial institutions; expenses incurred in the printing of
prospectuses, statements of additional information and reports used for sales
purposes; expenses of preparation and distribution of sales literature; expenses
of advertising of any type; an allocation of the Underwriter's overhead;
payments to and expenses of persons who provide support services in connection
with the distribution of Fund shares; and other distribution-related expenses.
6. COMPENSATION TO THE UNDERWRITER
As compensation for all of its services provided and its costs assumed
under this Agreement, the Underwriter shall receive the following forms and
amounts of compensation:
(a) The Underwriter shall be entitled to receive or retain any front-end
sales charge imposed in connection with sales of shares of the Fund, as set
forth in the applicable current Prospectus. Up to the entire amount of such
front-end sales charge may be reallowed by the Underwriter to broker-dealers and
participating financial institutions in connection with their sale of Fund
shares. The amount of the front-end sales charge (if any) may be retained or
deducted by the Underwriter from any sums received by it in payment for shares
so sold. If such amount is not deducted by the Underwriter from such payments,
such amount shall be paid to the Underwriter by the Company not later than five
business days after the close of any calendar quarter during which any such
sales were made by the Underwriter and payment received by the Company.
(b) The Underwriter shall be entitled to receive or retain any contingent
deferred sales charge imposed in connection with any redemption of shares of the
Fund, as set forth in the applicable current Prospectus.
(c) Pursuant to the Company's Plan of Distribution adopted in accordance
with Rule 12b-1 under the 1940 Act (the "Plan"):
(i) Class A and Class Y of the Fund are each obligated to pay the
Underwriter a total fee in connection with the servicing of shareholder
accounts of such class and in connection with distribution-related services
provided in respect of such class, calculated and payable quarterly, at the
annual rate of .25% of the value of the average daily net assets of such
class. All or any portion of such total fee may be payable as a Shareholder
Servicing Fee, and all or any portion of such total fee may be payable as a
Distribution Fee, as determined from time to time by the Company's Board of
Directors. Until further action by the Board of Directors, all of such fee
shall be designated and payable as a Shareholder Servicing Fee.
(ii) Class B and Class C of the Fund are each obligated to pay the
Underwriter a total fee in connection with the servicing of shareholder
accounts of such class and in connection with distribution-related services
provided in respect of such class, calculated and payable quarterly, at the
annual rate of 1.00% of the value of the average daily net assets of such
class. All or any portion of such total fee may be payable as a Shareholder
Servicing Fee, and all or any portion of such total fee may be payable as a
Distribution Fee, as determined from time to time by the Company's Board of
Directors. Until further action by the Board of Directors, a portion of
such total fee equal to .25% per annum of the average daily net assets of
each such class shall be designated and payable as a Shareholder Servicing
Fee and the remainder of such fee shall be designated as a Distribution
Fee.
Average daily net assets shall be computed in accordance with the
applicable currently effective Prospectus. Amounts payable to the Underwriter
under the Plan may exceed or be less than the Underwriter's actual Distribution
Expenses and Shareholder Servicing Costs. In the event such Distribution
Expenses and Shareholder Servicing Costs exceed amounts payable to the
Underwriter under the Plan, the Underwriter shall not be entitled to
reimbursement by the Company.
(d) In each year during which this Agreement remains in effect, the
Underwriter will prepare and furnish to the Board of Directors of the Company,
and the Board will review, on a quarterly basis, written reports complying with
the requirements of Rule 12b-1 under the 1940 Act that set forth the amounts
expended under this Agreement and the Plan, on a class by class basis, and the
purposes for which those expenditures were made.
7. LIMITATION OF THE UNDERWRITER'S AUTHORITY
The Underwriter shall be deemed to be an independent contractor and, except
as specifically provided or authorized herein, shall have no authority to act
for or represent the Fund or the Company.
8. SUBSCRIPTION FOR SHARES--REFUND FOR CANCELLED ORDERS
The Underwriter shall subscribe for the shares of the Fund only for the
purpose of covering purchase orders already received by it or for the purpose of
investment for its own account. In the event that an order for the purchase of
shares of the Fund is placed with the Underwriter by a customer or dealer and
subsequently cancelled, the Underwriter shall forthwith cancel the subscription
for such shares entered on the books of the Fund, and, if the Underwriter has
paid the Fund for such shares, shall be entitled to receive from the Fund in
refund of such payment the lesser of:
(a) the consideration received by the Fund for said shares; or
(b) the net asset value of such shares at the time of cancellation by the
Underwriter.
9. INDEMNIFICATION OF THE COMPANY
The Underwriter agrees to indemnify the Fund and the Company against any
and all litigation and other legal proceedings of any kind or nature and against
any liability, judgment, cost, or penalty imposed as a result of such litigation
or proceedings in any way arising out of or in connection with the sale or
distribution of the shares of the Fund by the Underwriter. In the event of the
threat or institution of any such litigation or legal proceedings against the
Fund, the Underwriter shall defend such action on behalf of the Fund or the
Company at the Underwriter's own expense, and shall pay any such liability,
judgment, cost, or penalty resulting therefrom, whether imposed by legal
authority or agreed upon by way of compromise and settlement; provided, however,
the Underwriter shall not be required to pay or reimburse the Fund for any
liability, judgment, cost, or penalty incurred as a result of information
supplied by, or as the result of the omission to supply information by, the
Company to the Underwriter, or to the Underwriter by a director, officer, or
employee of the Company who is not an "interested person," as defined in the
provisions of the 1940 Act, of the Underwriter, unless the information so
supplied or omitted was available to the Underwriter or the Fund's investment
adviser without recourse to the Fund or the Company or any such person referred
to above.
10. FREEDOM TO DEAL WITH THIRD PARTIES
The Underwriter shall be free to render to others services of a nature
either similar to or different from those rendered under this contract, except
such as may impair its performance of the services and duties to be rendered by
it hereunder.
11. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT
(a) The effective date of this Agreement is set forth in the first
paragraph of this Agreement. Unless sooner terminated as hereinafter provided,
this Agreement shall continue in effect for a period of one year after the date
of its execution, and from year to year thereafter, but only so long as such
continuance is specifically approved at least annually by a vote of the Board of
Directors of the Company, and of the directors who are not "interested persons"
(as defined in the provisions of the 1940 Act) of the Company and have no direct
or indirect financial interest in the operation of the Plan or in any agreement
related to the Plan (including, without limitation, this Agreement), cast in
person at a meeting called for the purpose of voting on this Agreement.
(b) This Agreement may be terminated at any time with respect to the Fund
or any class thereof, without the payment of any penalty, by the vote of a
majority of the members of the Board of Directors of the Company who are not
"interested persons" (as defined in the provisions of the 1940 Act) of the
Company and who have no direct or indirect financial interest in the operation
of the Plan or in any agreement related to the Plan (including, without
limitation, this Agreement), or by the vote of a majority of the outstanding
voting securities of the Fund (or class thereof), or by the Underwriter, upon 60
days' written notice to the other party.
(c) This Agreement shall automatically terminate in the event of its
"assignment" (as defined by the provisions of the 1940 Act).
(d) Wherever referred to in this Agreement, the vote or approval of the
holders of a majority of the outstanding voting securities of the Fund (or class
thereof) shall mean the lesser of (i) the vote of 67% or more of the voting
securities of the Fund (or class thereof) present at a regular or special
meeting of shareholders duly called, if more than 50% of the Fund's (or class's,
as applicable) outstanding voting securities are present or represented by
proxy, or (ii) the vote of more than 50% of the outstanding voting securities of
the Fund (or class thereof).
12. AMENDMENTS TO AGREEMENT
No material amendment to this Agreement shall be effective until approved
by the Underwriter and by vote of a majority of the Board of Directors of the
Company who are not "interested persons" (as defined in the provisions of the
1940 Act) of the Underwriter.
13. NOTICES
Any notice under this Agreement shall be in writing, addressed, delivered
or mailed, postage prepaid, to the other party at such address as such other
party may designate in writing for receipt of such notice.
IN WITNESS WHEREOF, the Company and the Underwriter have caused this
Agreement to be executed by their duly authorized officers as of the day and
year first above written.
VOYAGEUR FUNDS, INC.
By /s/ Ted Jessen
------------------------
Its /s/ Vice President
--------------------
VOYAGEUR FUND DISTRIBUTORS, INC.
By /s/Kenneth R. Larsen
------------------------
Its /s/ C.F.O.
--------------------
VOYAGEUR FUND DISTRIBUTORS, INC.
90 South Seventh Street
Minneapolis, MN 55402
DEALER SALES AGREEMENT
Dear Sir or Madam:
This Dealer Sales Agreement (the "Agreement") made as of the date set forth
below, by and between Voyageur Fund Distributors, Inc., (the "Underwriter"), and
you (the "Dealer"), sets forth the terms of selling arrangements between the
Underwriter and you as Dealer.
WHEREAS, the Underwriter has entered into Distribution Agreements with
certain investment companies, including open-end investment companies and unit
investment trusts (the "Funds"), under which the Underwriter was engaged and
agreed to act as principal underwriter of the securities of such Funds to the
public, either through dealers or otherwise; and
WHEREAS, the parties hereto desire that the Dealer be a member of a selling
group to sell and distribute shares or units of the Funds' securities to the
public;
NOW, THEREFORE, the Dealer hereby offers to become a member in a selling
group to sell and distribute the Funds' securities to the public and to render
certain shareholder services, subject to the following terms and conditions.
1. ACCEPTANCE OF SUBSCRIPTIONS. Subscriptions solicited by you will be
accepted only at the price, in the amounts, and on the terms which are set forth
in the then current Prospectuses (the term "Prospectus" shall also include any
Statement of Additional Information incorporated therein by reference) of the
Funds.
2. DEALER DISCOUNT AND OTHER COMPENSATION. The Dealer shall receive, for
sales of the Funds' shares or units, the applicable Dealer Discount or other
compensation as set forth in the then current prospectus of the relevant Fund.
Additionally, with respect to certain of the Funds, the Dealer may be entitled
to receive additional compensation upon such terms and conditions and in such
amounts as set forth in such Prospectus (and on Schedule A attached hereto with
respect to sales of money market Funds) for providing to Fund shareholders
certain personal and account maintenance services (including, but not limited
to, responding to shareholder inquiries and providing information on their
investments) not otherwise required to be provided by the applicable Funds'
investment adviser or transfer agent ("Service Fees") or (in addition to the
aforementioned Dealer Discount) for sales of the applicable Fund's securities("
Distribution Fees"). These additional amounts may be amended in the Prospectus
or Schedule A in whole or in part without notice from time to time by the
Underwriter.
3. ORDERS. Orders to purchase shares or units of any Fund shall be placed
as described in the then current Prospectus of the applicable Fund and as
instructed from time to time by the Underwriter. Orders shall be placed promptly
upon receipt, and there shall be no postponement of orders received so as to
profit the Dealer by reason of such postponement. Each order shall be confirmed
by the Dealer in writing on the day such order was placed. Payment for shares or
units ordered from us shall be in New York or Boston clearinghouse funds
received by us by the later of: (i) the end of the fifth business day following
your receipt of the customer's order to purchase such shares or units or (ii)
the end of one business day following your receipt of the customer's payment for
such shares or units, but in no event later than the end of the eighth business
day following your receipt of the customer's order; PROVIDED, HOWEVER, that
commencing as of June 1, 1995 and in accordance with Rule 15c6-1 under the
Securities Exchange Act of 1934, as amended, payment for such shares or units
must be received by us not later than the end of the third business day
following your receipt of the customer's order. If such payment is not received
by us, we reserve the right, without notice, forthwith to cancel the sale, or,
in the case of shares, at our option, to sell the shares ordered back to the
issuer, in which case we may hold you responsible for any loss, including loss
of profit, suffered by us resulting from your failure to make payment as
aforesaid.
4. GENERAL. In soliciting purchases of shares or units of any Fund, the
Dealer shall act as an independent contractor and not as an agent of the
Underwriter or the Fund. The Dealer agrees that neither the Underwriter nor any
other dealer nor any of the Funds shall be deemed an agent of the Dealer.
Nothing herein shall constitute the Dealer as a partner of the Underwriter, any
other dealer or any of the Funds, or render any such entity liable for
obligations of the Dealer. The Dealer understands and agrees that each
shareholder account which includes shares or units of any Fund subject to the
Fund's contingent deferred sales charge (as described in the applicable Fund's
current Prospectus) shall not be included the Dealer's omnibus or house account,
if any, but shall be established as a separate shareholder account in which
purchase and redemption transactions are reported separately to the Underwriter.
5. DEALER'S UNDERTAKINGS. No person is authorized to make any
representation concerning shares or units of any Fund except those contained in
the then current Prospectus of the applicable Fund. The Dealer shall not sell
shares or units of any Fund pursuant to this Agreement unless the then current
Prospectus of the applicable Fund is furnished to the purchaser prior to the
offer and sale. The Dealer shall not use any supplemental sales literature of
any kind without prior written approval of the Underwriter unless it is
furnished by the Underwriter for such purpose. In offering and selling shares or
units of any Fund, the Dealer will rely solely on the representations contained
in the then current Prospectus of the applicable Fund. With respect to any Fund
offering multiple classes of shares, the Dealer shall disclose to prospective
investors the existence of all available classes of such Fund and shall
determine the suitability of each available class as an investment for each such
prospective investor. Notwithstanding Paragraph 8 of this Agreement, the Dealer
agrees to indemnify and to hold harmless the Funds and/or the Underwriter from
and against any and all claims, liability, expense or loss in any way arising
out of or in any way connected with (i) any violation of this Paragraph 5, (ii)
any account established by the Dealer, or for which the Dealer is broker-dealer
of record, with a "transfer on death", "payable on death" or other similar
restriction or (iii) arising out of or in any way connected with the Dealer's
willful, reckless or negligent violation of any law, regulation, contract or
other arrangement; provided that the notice provisions set forth in Paragraph 9
with respect to the Underwriter shall apply equally under this Agreement with
respect to the Dealer.
6. REPRESENTATIONS AND AGREEMENTS OF THE DEALER. By accepting this
Agreement, the Dealer represents that it: (i) is registered as a broker-dealer
under the Securities Exchange Act of 1934, as amended; (ii) is qualified to act
as a dealer in each jurisdiction in which it will offer shares of any Fund;
(iii) is a member in good standing of the National Association of Securities
Dealers, Inc.; and (iv) will maintain such registrations, qualifications and
memberships throughout the term of this Agreement. The Dealer shall comply with
all applicable federal laws, the laws of each jurisdiction in which it will
offer shares of any Fund, and the rules and regulations of the National
Association of Securities Dealers, Inc. The Dealer shall not be entitled to any
compensation during any period in which it has been suspended or expelled from
membership in the National Association of Securities Dealers, Inc.
7. DEALER'S EMPLOYEES. By accepting this Agreement, the Dealer assumes full
responsibility for thorough and prior training of its representatives concerning
the selling methods to be used in connection with the offer and sale of shares
of the Fund, giving special emphasis to the principles of full and fair
disclosure to prospective investors.
8. INDEMNIFICATION. Except as otherwise provided in this Agreement, the
Underwriter hereby agrees to indemnify and to hold harmless the Dealer and each
person, if any, who controls the Dealer within the meaning of Section 15 of the
Securities Act of 1933 (the "Act") and their respective successors and assigns
(hereinafter in this paragraph separately and collectively referred to as the
"Defendants") from and against any and all losses, claims, demands or
liabilities, joint or several, to which the Defendants may become subject under
the Act, at common law or otherwise (including any legal or other expense
reasonably incurred in connection therewith), insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement of a material fact contained in the then current
Prospectuses (and/or Statements of Additional Information) of the Funds or arise
out of or are based upon the omission or alleged omission to state therein a
material fact that is required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided that this indemnity agreement is subject to the
condition that notice be given as provided in paragraph 9.
9. NOTICE. Upon the presentation in writing of any claim or the
commencement of any suit against any Defendant in respect of which
indemnification may be sought from the Underwriter on account of its agreement
contained in the preceding sentence, such Defendant shall with reasonable
promptness give notice in writing of such suit to the Underwriter, but failure
so to give such notice shall not relieve the Underwriter from any liability that
it may have to the Defendants otherwise than on account of said indemnity
agreement. The Underwriter shall be entitled to participate at its own expense
in the defense, or, if it so elects, to assume the defense of any such claim or
suit, but if the Underwriter elects to assume the defense, such defense shall be
conducted by counsel chosen by it and satisfactory to the Defendants who are
parties to such suit or against whom such claim is presented. If the Underwriter
elects to assume the defense and retain such counsel as herein provided, such
Defendant shall bear the fees and expenses subsequently incurred of any
additional counsel retained by them. The Underwriter agrees to notify the Dealer
promptly, as soon as it has knowledge thereof, of the commencement of any
litigation or proceedings against the Underwriter or any of the Funds or any of
their directors or officers, in connection with the offer or sale of shares of
the Funds' common stock to the public. The Underwriter's obligation under this
paragraph shall survive the termination of this Agreement.
10. ASSIGNMENT. The Underwriter may assign this Agreement to an affiliate
upon notice to the Dealer. This Agreement may not be assigned by the Dealer.
11. TERMINATION. Either party may terminate this Agreement at any time upon
giving written notice to the other party hereto. This Agreement shall terminate
automatically upon an "assignment" as defined in the Investment Company Act of
1940.
12. WAIVER. No failure, neglect or forbearance on the part of the
Underwriter to require strict performance of this Agreement shall be construed
as a waiver of the rights or remedies of the Underwriter hereunder.
13. GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of Minnesota without reference to the choice of laws or
conflicts principles of such state.
14. SUSPENDING SALES, AMENDING OR CANCELING THIS AGREEMENT. The Underwriter
may, at any time, without notice, suspend sales or withdraw any offering of
shares entirely. The Underwriter reserves the right to amend or cancel this
Agreement upon notice to you. The Dealer agrees that any order to purchase
shares of Funds placed after notice of any amendment to this Agreement has been
sent to the Dealer shall constitute the Dealer's agreement to any such
amendment.
DEALER:
_____________________________ __________________________
(Name) (NSCC Clearing Number)
_____________________________ __________________________
(Tax Identification Number) (NSCC Executing Broker Symbol)
_____________________________ __________________________
(Street Address) (Telephone Number)
_____________________________
(City) (State) (Zip)
Date of offer:__________________, 19___
By________________________________________________
(Signature)
Please Print Name_________________________________
Its_______________________________________________
(Title)
VOYAGEUR FUND DISTRIBUTORS, INC.
By:_____________________________
Name: Frank C. Tonnemaker
Title : President
SCHEDULE A
<TABLE>
<CAPTION>
MONEY MARKET SHARES
A. For money market shares sold by a dealer participating in the Voyageur Cash Advantage Program*:
Average Annual
Fund Aggregate Balance Annual Fee
---- ----------------- ----------
<S> <C> <C>
Voyageur Cash Trust Series $0 - $5 million.............. .40%
Voyageur Minnesota Municipal Cash Trust over $5 million - $10 million .45%
over $10 million............. .50%
Voyageur California Municipal Cash Trust not applicable............... .25%
Voyageur Florida Municipal Cash Trust not applicable............... .25%
B. For money market shares sold by a dealer not participating in the Voyageur Cash Advantage Program*:
Average Annual
Fund Aggregate Balance Annual Fee
---- ----------------- -----------
Voyageur Cash Trust Series not applicable............... .30%
Voyageur Minnesota Cash Trust Series not applicable .............. .25%
Voyageur California Cash Trust Series not applicable .............. .25%
Voyageur Florida Cash Trust Series not applicable............... .25%
</TABLE>
* The Voyageur Cash Advantage Program permits broker/dealers to use the Voyageur
Cash Trust Series of Money Market Funds and additional selected money market
funds as a "proprietary" money market fund family. In order to participate in
the Program, broker/dealers must communicate purchase and sell orders to
Voyageur through electronic or telephonic media, must maintain a single omnibus
account for each applicable Cash Trust Series and must perform all necessary
subaccounting and record keeping for individual client accounts.
FORM OF VOYAGEUR
BANK SALES AGREEMENT
THIS AGREEMENT, made this ________ day of __________, 1995, by and between
Voyageur Fund Distributors, Inc. ("Voyageur"), having its principal office at 90
South Seventh Street, Suite 4300, Minneapolis, Minnesota 55402, and
_______________________ (the "Bank"), having its principal office at
_______________________________________________________________________________.
WHEREAS, Voyageur is engaged in certain distribution and marketing
activities for certain registered investment companies including open-end
investment companies and unit investment trusts (the "Funds"); and
WHEREAS, the parties hereto desire that the Bank be enabled to purchase
shares or units of the Funds' securities solely upon the order of, and for the
account of, customers of the Bank, as agent for such customers;
NOW, THEREFORE, the Bank hereby offers to purchase shares or units of the
Funds' securities and to render certain shareholder services, subject to the
following terms and conditions.
1. CUSTOMERS. The customers referred to in this Agreement are the Bank's
customers and not customers of Voyageur. Voyageur shall execute
transactions for the Bank's customers only upon the Bank's authorization,
it being understood in all cases that (a) the Bank is at all times acting
as the agent of the customer and not of the funds or Voyageur; (b) the
transactions are without recourse against the Bank by the customer; (c) as
between the Bank and the customer, the customer will have full beneficial
ownership of the securities; (d) each transaction is initiated solely upon
the order of the customer without any investment discretion by the Bank;
and (e) each transaction is for the account of the customer and not for the
Bank's account. It is understood and agreed that whether securities are
registered in the purchaser's name, in the Bank's name, or in the name of
the Bank's nominee, the customer will have full beneficial ownership of the
securities. The Bank agrees that it will not withhold placing orders
received from its customers so as to profit itself as a result of such
withholding, and the Bank will place orders for purchases and redemptions
promptly upon receipt from its clients.
2. ACCEPTANCE OF SUBSCRIPTIONS. Purchases made by the Bank on behalf of its
customers will be accepted only at the price, in the amounts, and on the
terms which are set forth in the then current Prospectus (and/or Statement
of Additional Information) of the respective Fund.
3. BANK DISCOUNT AND OTHER COMPENSATION. The Bank shall receive, for each
purchase of shares or units of any of the Funds for customers of the Bank,
as agent for such customers, the applicable Dealer Discount or other
compensation as set forth in the relevant Prospectus (and on Schedule A
hereto with respect to sales of money market funds). Additionally, with
respect to certain of the Funds, the Bank may be entitled to receive
additional compensation upon such terms and conditions and in such amounts
as set forth in the Prospectus providing to Fund shareholders certain
personal and account maintenance services (including, but not limited to,
responding to shareholder inquiries and providing information on their
investments) not otherwise required to be provided by the applicable Fund's
investment adviser or transfer agent ("Service Fees") or (in addition to
the aforementioned Dealer Discount) for sales of shares or units of the
applicable Funds' securities ("Distribution Fee"). Schedule A may be
amended in whole or in part without notice from time to time by Voyageur.
4. ORDERS. Orders to purchase shares or units of the Funds shall be placed as
described in the then current Prospectus (and/or Statement of Additional
Information) of the respective Fund and as instructed from time to time by
Voyageur. Orders shall be placed promptly upon receipt, and there shall be
no postponement of orders received so as to profit the Bank by reason of
such postponement. Each order shall be confirmed by the Bank in writing on
the day such order was placed.
5. GENERAL. In purchasing shares or units of the Funds for customers of the
Bank, as agent for such customers, the Bank shall act as an independent
contractor and not as an agent of Voyageur or the Funds. The Bank
understands and agrees that each shareholder account which includes shares
or units of any Fund subject to the Fund's contingent deferred sales charge
(as described in the applicable Fund's current Prospectus and Statement of
Additional Information) shall not be included in the Bank's omnibus or
house account, if any, but shall be established as a separate shareholder
account in which purchase and redemption transactions are reported
separately to Voyageur.
6. BANK'S UNDERTAKINGS. No person is authorized to make any representation
concerning shares or units of the Funds except those contained in the then
current Prospectus (and/or Statement of Additional Information) of the
respective Fund; provided that all prospective purchasers of Fund shares or
units, prior to the Bank's submission of an order for Fund shares or units
on behalf of such person, shall be informed that an investment in Fund
shares or units is not an obligation of the Bank, and such an investment is
not protected or covered by any deposit insurance. The Bank shall not
purchase shares or units of the Funds for customers of the Bank, as agent
for such customers, pursuant to this Agreement unless the then current
Prospectus of the respective Fund is furnished to the customer prior to the
offer and sale. The Bank shall not use any supplemental sales literature of
any kind without prior written approval of Voyageur unless it is furnished
by Voyageur for such purpose. In purchasing shares or units of the Funds
for customers of the Bank, as agent for such customers, the Bank will rely
solely on the representations contained in the then current Prospectus
(and/or Statement of Additional Information) of the respective Fund. With
respect to any Fund offering multiple classes of shares, the Bank shall
disclose to prospective investors the existence of all available classes of
such Fund and shall determine the suitability of each available class as an
investment for each such prospective investor.
7. REPRESENTATIONS AND AGREEMENTS OF THE BANK. By accepting this Agreement,
the Bank (i) represents that it is a national bank or State bank or trust
company (whether or not a member of the Federal Reserve System) or other
financial institution or private banker (all as defined in Chapter 3 of
Title 12 of United States Code) and (ii) agrees that it will comply with
all applicable federal laws, rules and regulations including, but not
limited to, the Glass- Steagall Act (codified at 12 U.S.C.Sec. 24(7), 78,
377 and 378) and all laws, rules and regulations of any jurisdiction
applicable to the Bank's provision of services hereunder. The Bank shall
promptly answer all written complaints and other correspondence relating to
accounts or forward such complaints to Voyageur.
8. BANK'S EMPLOYEES. By accepting this Agreement, the Bank assumes full
responsibility for thorough and prior training of its representatives
concerning the methods to be used in connection with purchasing shares or
units of the Funds for customers of the Bank, as agent for such customers,
giving special emphasis to the principles of full and fair disclosure to
prospective investors.
9. BANK'S INDEMNIFICATION. The Bank hereby agrees to indemnify and to hold
harmless the Funds and Voyageur and each person, if any, who controls the
Funds or Voyageur within the meaning of Section 15 of the Securities Act of
1933 (the "Act"), from and against any and all losses, claims, demands or
liabilities to which the Funds or Voyageur may become subject under the
Act, or otherwise, insofar as such losses, claims, demands or liabilities
(or actions in respect thereof) arise out of or are based upon any
unauthorized use of sales materials by the Bank or its representatives or
upon alleged misrepresentations or omission to state material facts in
connection with statements made by the Bank or its representatives orally
or by other means; and the Bank will reimburse the Funds and Voyageur for
any legal or other expenses reasonably incurred in connection with the
investigation or defense or any such action or claim. Voyageur shall, after
receiving the first summons or other legal process disclosing the nature of
the action being served upon Voyageur or the Funds, in any proceeding in
respect of which indemnity may be sought by the Funds or Voyageur
hereunder, notify the Bank in writing of the commencement thereof within a
reasonable time. In case any such litigation be brought against the Funds
or Voyageur, Voyageur shall notify the Bank of the commencement thereof and
the Bank shall be entitled to participate in (and to the extent the Bank
shall wish, to direct) the defense thereof at the Bank's expense, but such
defense shall be conducted by counsel of good-standing satisfactory to the
Funds and Voyageur. If the Bank shall fail to provide such defense,
Voyageur or the Funds may defend such action at the Bank's cost and
expense. The Bank's obligation under this paragraph shall survive the
termination of this Agreement.
10. ASSIGNMENT. This Agreement may not be assigned by the Bank without consent
of Voyageur.
11. TERMINATION. Either party may terminate this Agreement at any time upon
giving written notice to the other party hereto.
12. WAIVER. No failure, neglect or forbearance on the part of Voyageur to
require strict performance of this Agreement shall be construed as a waiver
of the rights or remedies of Voyageur hereunder.
13. GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of Minnesota without reference to its choice of laws
principles.
14. SUSPENDING SALES, amending or canceling this Agreement. The Underwriter
may, at any time, without notice, suspend sales or withdraw any offering of
shares or units entirely. The Underwriter reserves the right to amend or
cancel this Agreement upon notice to you. The Bank agrees that any order to
purchase shares or units of funds placed after notice of any amendment to
this Agreement has been sent to the Bank shall constitute the Bank's
agreement to any such amendment.
BANK:
________________________ __________________________
(Name) (NSCC Clearing Number)
________________________ __________________________
(Tax Identification Number) (NSCC Executing Broker Symbol)
________________________ __________________________
(Street Address) (Telephone Number)
________________________
(City) (State) (Zip)
Date of offer: _____________, 19___
By ___________________________________________
(Signature)
Please Print Name ____________________________
Its __________________________________________
(Title)
Accepted by
VOYAGEUR FUND DISTRIBUTORS, INC.
Date of acceptance: _____________, 19__
By ___________________________________________
(Signature)
Its __________________________________________
(Title)
CUSTODIAN AGREEMENT
THIS AGREEMENT, made as of the 20th day of April, 1992, by and between
Voyageur Funds, Inc., a Minnesota corporation (the "Fund"), for and on behalf of
each series of the Fund that adopts this Agreement (said series being
hereinafter referred to, individually, as a "Series" and, collectively, as the
"Series"), and Norwest Bank Minnesota N.A., a national banking association
organized and existing under the laws of the United States of America (the
"Custodian"). The name of each Series that adopts this Agreement and the
effective date of this Agreement with respect to each such Series are set forth
in EXHIBIT A hereto.
WITNESSETH:
WHEREAS, the Fund desires to appoint the Custodian as the custodian for the
assets of each Series, and the Custodian desires to accept such appointment,
pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein made, the Fund and the Custodian agree as follows:
ARTICLE 1. DEFINITIONS
The word "Securities" as used herein shall be construed to include, without
being limited to, shares, stocks, bonds, debentures, notes, scrip, participation
certificates, rights to subscribe, warrants, options, certificates of deposit,
bankers' acceptances, repurchase agreements, commercial paper, choses in action,
evidences of indebtedness, investment contracts, voting trust certificates,
certificates of indebtedness and certificates of interest of any and every kind
and nature whatsoever, secured and unsecured, issued or to be issued, by any
corporation, company, partnership (limited or general), association, trust,
entity or person, public or private, whether organized under the laws of the
United States, or any state, commonwealth, territory or possession thereof, or
organized under the laws of any foreign country, or any state, province,
territory or possession thereof, or issued or to be issued by the United States
government or any agency or instrumentality thereof, options on stock indexes,
stock index and interest rate futures contracts and options thereon, and other
futures contracts and options thereon.
The words "Written Order from the Fund" shall mean a writing signed or
initialed by one or more person or persons designated in the current certified
list referred to in Article 2, provided that if said writing is signed by only
one person, that person shall be an officer of the Fund designated in said
current certified list. "Written Order from the Fund" also may include a
communication effected directly between electro-mechanical or electronic devices
(including, but not limited to, facsimile transceivers) provided that management
of the Fund and the Custodian are satisfied that such procedures afford adequate
safeguards for the assets of each Series.
ARTICLE 2. NAMES, TITLES AND SIGNATURES OF FUND'S OFFICERS
The Fund shall certify to the Custodian the names, titles and signatures of
officers and other persons who are authorized to give any Written Order from the
Fund on behalf of each Series. The Fund agrees that, whenever any change in such
authorization occurs, it will file with the Custodian a new certified list of
names, titles and signatures which shall be signed by at least one officer
previously certified to the Custodian if any such officer still holds an office
in the Fund. The Custodian is authorized to rely and act upon the names, titles
and signatures of the individuals as they appear in the most recent such
certified list which has been delivered to the Custodian as hereinbefore
provided.
ARTICLE 3. SUB-CUSTODIANS AND DEPOSITORIES
Notwithstanding any other provision in this Agreement to the contrary, all
or any of the cash and Securities of each Series may be held in the Custodian's
own custody or in the custody of one or more other banks or trust companies
selected by the Custodian or as directed in one or more Written Orders from the
Fund. Any such sub-custodian must have the qualifications required for
custodians under the Investment Company Act of 1940, as amended. The Custodian
or sub-custodian, as the case may be, may participate directly or indirectly in
one or more "securities depositories" (as defined in Rule 17f-4 under the
Investment Company Act of 1940, as amended, or in any successor provisions or
rules thereto). Any references in this Agreement to the delivery of Securities
by or to the Custodian shall, with respect to Securities custodied with one of
the aforementioned "securities depositories," be interpreted to mean that the
Custodian shall cause a bookkeeping entry to be made by the applicable
securities depository to indicate the transfer of ownership of the applicable
Security to or from the Fund, all as set forth in one or more Written Orders
from the Fund. Additionally, any references in this Agreement to the receipt of
proceeds or payments with respect to Securities transactions shall, with respect
to Securities custodied with one of the aforementioned "securities
depositories," be interpreted to mean that the Custodian shall have received an
advice from such securities depository that said proceeds or payments have been
received by such depository and deposited in the Custodian's account.
ARTICLE 4. RECEIPT AND DISBURSING OF MONEY
SECTION (1). The Fund shall from time to time cause cash owned by the Fund
to be delivered or paid to the Custodian for the account of any Series, but the
Custodian shall not be under any obligation or duty to determine whether all
cash of the Fund is being so deposited or to take any action or to give any
notice with respect to cash not so deposited. The Custodian agrees to hold such
cash, together with any other sum collected or received by it for or on behalf
of each Series of the Fund, in the account of such Series in conformity with the
terms of this Agreement. The Custodian shall be authorized to disburse cash from
the account of each Series only:
(a) upon receipt of and in accordance with Written Orders from
the Fund stating that such cash is being used for one or more of the
following purposes, and specifying such purpose or purposes, provided,
however, that a reference in such Written Order from the Fund to the
pertinent paragraph or paragraphs of this Article shall be sufficient
compliance with this provision:
(i) the payment of interest;
(ii) the payment of dividends;
(iii) the payment of taxes;
(iv) the payment of the fees or charges to any investment
adviser of any Series;
(v) the payment of fees to a Custodian, stock registrar,
transfer agent or dividend disbursing agent for any
Series;
(vi) the payment of distribution fees and commissions;
(vii) the payment of any operating expenses, which shall be
deemed to include legal and accounting fees and all
other expenses not specifically referred to in this
paragraph (a);
(viii) payments to be made in connection with the
conversion, exchange or surrender of Securities owned
by any Series;
(ix) payments on loans that may from time to time be due;
(x) payment to a recognized and reputable broker for
Securities purchased by the Fund through said broker
(whether or not including any regular brokerage fees,
charges or commissions on the transaction) upon receipt
by the Custodian of such Securities in proper form for
transfer and after the receipt of a confirmation from
the broker or dealer with respect to the transaction;
(xi) payment to an issuer or its agent on a subscription for
Securities of such issuer upon the exercise of rights
so to subscribe, against a receipt from such issuer or
agent for the cash so paid;
(b) as provided in Article 5 hereof; and
(c) upon the termination of this Agreement.
SECTION (2). The Custodian is hereby appointed the attorney-in-fact of the
Fund to use reasonable efforts to enforce and collect all checks, drafts or
other orders for the payment of money received by the Custodian for the account
of each Series and drawn to or to the order of the Fund and to deposit them in
the account of the applicable Series.
ARTICLE 5. RECEIPT OF SECURITIES
The Fund agrees to place all of the Securities of each Series in its
account with the Custodian, but the Custodian shall not be under any obligation
or duty to determine whether all Securities of any Series are being so
deposited, or to require that such Securities be so deposited, or to take any
action or give any notice with respect to the Securities not so deposited. The
Custodian agrees to hold such Securities in the account of the Series designated
by the Fund, in the name of the Fund or of bearer or of a nominee of the
Custodian, and in conformity with the terms of this Agreement. The Custodian
also agrees, upon Written Order from the Fund, to receive from persons other
than the Fund and to hold in the account of the Series designated by the Fund
Securities specified in said Written Order of the Fund, and, if the same are in
proper form, to cause payment to be made therefor to the persons from whom such
Securities were received, from the funds of the applicable Series held by the
Custodian in said account in the amounts provided and in the manner directed by
the Written Order from the Fund.
The Custodian agrees that all Securities of each Series placed in its
custody shall be kept physically segregated at all times from those of any other
Series, person, firm or corporation, and shall be held by the Custodian with all
reasonable precautions for the safekeeping thereof. Upon delivery of any
Securities of any Series to a subcustodian pursuant to Article 3 of this
Agreement, the Custodian will create and maintain records identifying those
assets which have been delivered to the subcustodian as belonging to the
applicable Series.
ARTICLE 6. DELIVERY OF SECURITIES
The Custodian agrees to transfer, exchange or deliver Securities as
provided in Article 7, or on receipt by it of, and in accordance with, a Written
Order from the Fund in which the Fund shall state specifically which of the
following cases is covered thereby:
(a) in the case of deliveries of Securities sold by the Fund, against
receipt by the Custodian of the proceeds of sale and after receipt of a
confirmation from a broker or dealer (or, in accordance with industry
practice with respect to "same day trades," acceptance of delivery of such
securities by the broker or dealer, which acceptance is followed up by
confirmation thereof within the normal settlement period) with respect to
the transaction;
(b) in the case of deliveries of Securities which may mature or be
called, redeemed, retired or otherwise become payable, against receipt by
the Custodian of the sums payable thereon or against interim receipts or
other proper delivery receipts;
(c) in the case of deliveries of Securities which are to be
transferred to and registered in the name of the Fund or of a nominee of
the Custodian and delivered to the Custodian for the account of the Series,
against receipt by the Custodian of interim receipts or other proper
delivery receipts;
(d) in the case of deliveries of Securities to the issuer thereof, its
transfer agent or other proper agent, or to any committee or other
organization for exchange for other Securities to be delivered to the
Custodian in connection with a reorganization or recapitalization of the
issuer or any split-up or similar transaction involving such Securities,
against receipt by the Custodian of such other Securities or against
interim receipts or other proper delivery receipts;
(e) in the case of deliveries of temporary certificates in exchange
for permanent certificates, against receipt by the Custodian of such
permanent certificates or against interim receipts or other proper delivery
receipts;
(f) in the case of deliveries of Securities upon conversion thereof
into other Securities, against receipt by the Custodian of such other
Securities or against interim receipts or other proper delivery receipts;
(g) in the case of deliveries of Securities in exchange for other
Securities (whether or not such transactions also involve the receipt or
payment of cash), against receipt by the Custodian of such other Securities
or against interim receipts or other proper delivery receipts;
(h) in the case of warrants, rights or similar Securities, the
surrender thereof in the exercise of such warrants, rights or similar
Securities or the surrender of interim receipts or temporary Securities for
definitive Securities;
(i) for delivery in connection with any loans of securities made by
the Fund for the benefit of any Series, but only against receipt of
adequate collateral as agreed upon from time to time by the Custodian and
the Fund;
(j) for delivery as security in connection with any borrowings by the
Fund for the benefit of any Series requiring a pledge of assets from the
applicable Series, but only against receipt of amounts borrowed;
(k) for delivery in accordance with the provisions of any agreement
among the Fund, the Custodian and a bank, broker-dealer or futures
commission merchant relating to compliance with applicable rules and
regulations regarding account deposits, escrow or other arrangements in
connection with transactions by the Fund for the benefit of any Series;
(l) in a case not covered by the preceding paragraphs of this Article,
upon receipt of a resolution adopted by the Board of Directors of the Fund,
signed by an officer of the Fund and certified to by the Secretary,
specifying the Securities and assets to be transferred, exchanged or
delivered, the purposes for which such delivery is being made, declaring
such purposes to be proper corporate purposes, and naming a person or
persons (each of whom shall be a properly bonded officer or employee of the
Fund) to whom such transfer, exchange or delivery is to be made; and
(m) in the case of deliveries pursuant to paragraphs (a) through (k)
above, the Written Order from the Fund shall direct that the proceeds of
any Securities delivered, or Securities or other assets exchanged for or in
lieu of Securities so delivered, are to be delivered to the Custodian.
ARTICLE 7. CUSTODIAN'S ACTS WITHOUT WRITTEN ORDERS FROM THE FUND
Unless and until the Custodian receives contrary Written Orders from the
Fund, the Custodian shall without order from the Fund:
(a) present for payment all bills, notes, checks, drafts and similar
items, and all coupons or other income items (except stock dividends), held
or received for the account of any Series, and which require presentation
in the ordinary course of business, and credit such items to the account of
the applicable Series conditionally, subject to final payment;
(b) present for payment all Securities which may mature or be called,
redeemed, retired or otherwise become payable and credit such items to the
account of the applicable Series conditionally, subject to final payment;
(c) hold for and credit to the account of any Series all shares of
stock and other Securities received as stock dividends or as the result of
a stock split or otherwise from or on account of Securities of the Series,
and notify the Fund, in the Custodian's monthly reports to the Fund, of the
receipt of such items;
(d) deposit or invest (as instructed from time to time by the Fund)
any cash received by it from, for or on behalf of any Series to the credit
of the account of the applicable Series;
(e) charge against the account for any Series disbursements authorized
to be made by the Custodian hereunder and actually made by it, and notify
the Fund of such charges at least once a month;
(f) deliver Securities which are to be transferred to and reissued in
the name of any Series, or of a nominee of the Custodian for the account of
any Series, and temporary certificates which are to be exchanged for
permanent certificates, to a proper transfer agent for such purpose against
interim receipts or other proper delivery receipts; and
(g) hold for disposition in accordance with Written Orders from the
Fund hereunder all options, rights and similar Securities which may be
received by the Custodian and which are issued with respect to any
securities held by it hereunder, and notify the Fund promptly of the
receipt of such items.
ARTICLE 8. SEGREGATED ACCOUNTS
Upon receipt of a Written Order from the Fund, the Custodian shall
establish and maintain one or more segregated accounts for and on behalf of the
Series specified in said Written Order from the Fund for purposes of segregating
cash and/or Securities (of the type agreed upon from time to time by the
Custodian and the Fund) for the purpose or purposes specified in said Written
Order from the Fund.
ARTICLE 9. DELIVERY OF PROXIES
The Custodian shall deliver promptly to the Fund all proxies, notices and
communications with relation to Securities held by it which it may receive from
sources other than the Fund.
ARTICLE 10. TRANSFER
The Fund shall furnish to the Custodian appropriate instruments to enable
the Custodian to hold or deliver in proper form for transfer any Securities
which it may hold for the account of any Series of the Fund. For the purpose of
facilitating the handling of Securities, unless otherwise directed by Written
Order from the Fund, the Custodian is authorized to hold Securities deposited
with it under this Agreement in the name of its registered nominee or nominees
(as defined in the Internal Revenue Code and any regulations of the United
States Treasury Department issued thereunder or in any provision of any
subsequent federal tax law exempting such transaction from liability for stock
transfer taxes) and shall execute and deliver all such certificates in
connection therewith as may be required by such laws or regulations or under the
laws of any state. The Custodian shall, if requested by the Fund, advise the
Fund of the certificate number of each certificate so presented for transfer and
that of the certificate received in exchange therefor, and shall use its best
efforts to the end that the specific Securities held by it hereunder shall be at
all times identifiable.
ARTICLE 11. TRANSFER TAXES AND OTHER DISBURSEMENTS
The Fund, for and on behalf of each Series, shall pay or reimburse the
Custodian for any transfer taxes payable upon transfers of Securities made
hereunder, including transfers incident to the termination of this Agreement,
and for all other necessary and proper disbursements and expenses made or
incurred by the Custodian in the performance or incident to the termination of
this Agreement, and the Custodian shall have a lien upon any cash or Securities
held by it for the account of each applicable Series of the Fund for all such
items, enforceable, after thirty days' written notice by registered mail from
the Custodian to the Fund, by the sale of sufficient Securities to satisfy such
lien. The Custodian may reimburse itself by deducting from the proceeds of any
sale of Securities an amount sufficient to pay any transfer taxes payable upon
the transfer of Securities sold. The Custodian shall execute such certificates
in connection with Securities delivered to it under this Agreement as may be
required, under the provisions of any federal revenue act and any regulations of
the Treasury Department issued thereunder or any state laws, to exempt from
taxation any transfers and/or deliveries of any such Securities as may qualify
for such exemption.
ARTICLE 12. CUSTODIAN'S LIABILITY FOR
PROCEEDS OF SECURITIES SOLD
If the mode of payment for Securities to be delivered by the Custodian is
not specified in the Written Order from the Fund directing such delivery, the
Custodian shall make delivery of such Securities against receipt by it of cash,
a postal money order or a check drawn by a bank, trust company or other banking
institution, or by a broker named in such Written Order from the Fund, for the
amount the Custodian is directed to receive. The Custodian shall be liable for
the proceeds of any delivery of Securities made pursuant to this Article, but
provided that it has complied with the provisions of this Article, only to the
extent that such proceeds are actually received.
ARTICLE 13. CUSTODIAN'S REPORT
The Custodian shall furnish the Fund, as of the close of business on the
last business day of each month, a statement showing all cash transactions and
entries for the account of each Series of the Fund. The books and records of the
Custodian pertaining to its actions as Custodian under this Agreement shall be
open to inspection and audit, at reasonable times, by officers of, and auditors
employed by, the Fund. The Custodian shall furnish the Fund with a list of the
Securities held by it in custody for the account of each Series of the Fund as
of the close of business on the last business day of each quarter of the Fund's
fiscal year.
ARTICLE 14. CUSTODIAN'S COMPENSATION
The Custodian shall be paid compensation at such rates and at such times as
may from time to time be agreed on in writing by the parties hereto (as set
forth with respect to each Series in EXHIBIT B hereto), and the Custodian shall
have a lien for unpaid compensation, to the date of termination of this
Agreement, upon any cash or Securities held by it for the Series accounts of the
Fund, enforceable in the manner specified in Article 11 hereof.
ARTICLE 15. DURATION, TERMINATION AND AMENDMENT OF AGREEMENT
This Agreement shall remain in effect with respect to each Series, as it
may from time to time be amended, until it shall have been terminated as
hereinafter provided, but no such amendment or termination shall affect or
impair any rights or liabilities arising out of any acts or omissions to act
occurring prior to such amendment or termination.
The Custodian may terminate this Agreement by giving the Fund ninety days'
written notice of such termination by registered mail addressed to the Fund at
its principal place of business.
The Fund may terminate this Agreement by giving ninety days' written notice
thereof delivered by registered mail to the Custodian at its principal place of
business. Additionally, this Agreement may be terminated with respect to any
Series of the Fund pursuant to the same procedures, in which case this Agreement
shall continue in full effect with respect to all other Series of the Fund.
Upon termination of this Agreement, the assets of the Fund, or Series
thereof, held by the Custodian shall be delivered by the Custodian to a
successor custodian upon receipt by the Custodian of a Written Order from the
Fund designating the successor custodian; and if no successor custodian is
designated in said Written Order from the Fund, the Custodian shall, upon such
termination, deliver all such assets to the Fund.
This Agreement may be amended or terminated at any time by the mutual
agreement of the Fund and the Custodian. Additionally, this Agreement may be
amended or terminated with respect to any Series of the Fund at any time by the
mutual agreement of the Fund and the Custodian, in which case such amendment or
termination would apply to such Series amending or terminating this Agreement
but not to the other Series of the Fund.
This Agreement may not be assigned by the Custodian without the consent of
the Fund, authorized or approved by a resolution of its Board of Directors.
ARTICLE 16. SUCCESSOR CUSTODIAN
Any bank or trust company into which the Custodian or any successor
custodian may be merged or converted or with which it or any successor custodian
may be consolidated, or any bank or trust company resulting from any merger,
conversion or consolidation to which the Custodian or any successor custodian
shall be a party, or any bank or trust company succeeding to the business of the
Custodian, shall be and become the successor custodian without the execution of
any instrument or any further act on the part of the Fund or the Custodian or
any successor custodian.
Any successor custodian shall have all the power, duties and obligations of
the preceding custodian under this Agreement and any amendments thereof and
shall succeed to all the exemptions and privileges of the preceding custodian
under this Agreement and any amendments thereof.
ARTICLE 17. GENERAL
Nothing expressed or mentioned in or to be implied from any provisions of
this Agreement is intended to give or shall be construed to give any person or
corporation other than the parties hereto any legal or equitable right, remedy
or claim under or in respect of this Agreement or any covenant, condition or
provision herein contained, this Agreement and all of the covenants, conditions
and provisions hereof being intended to be, and being, for the sole and
exclusive benefit of the parties hereto and their respective successors and
assigns.
It is the purpose and intention of the parties hereto that the Fund shall
retain all the power, rights and responsibilities of determining policy,
exercising discretion and making decisions with respect to the purchase, or
other acquisition, and the sale, or other disposition, of all of its Securities,
and that the duties and responsibilities of the Custodian hereunder shall be
limited to receiving and safeguarding the assets and Securities of each Series
of the Fund and to delivering or disposing of them pursuant to the Written Order
from the Fund as aforesaid, and the Custodian shall have no authority, duty or
responsibility for the investment policy of the Fund or for any acts of the Fund
in buying or otherwise acquiring, or in selling or otherwise disposing of, any
Securities, except as hereinbefore specifically set forth.
The Custodian shall in no case or event permit the withdrawal of any money
or Securities of the Fund upon the mere receipt of any director, officer,
employee or agent of the Fund, but shall hold such money and Securities for
disposition under the procedures herein set forth.
ARTICLE 18. STANDARD OF CARE; INDEMNIFICATION
In connection with the performance of its duties and responsibilities
hereunder, the Custodian (and each officer, employee, agent, sub-custodian and
depository of or engaged by the Custodian) shall at all times be held to the
standard of reasonable care. The Custodian shall be fully responsible for any
action taken or omitted by any officer, employee, agent, sub-custodian or
depository of or engaged by the Custodian to the same extent as if the Custodian
were to take or omit to take such action directly. The Custodian agrees to
indemnify and hold the Fund and each Series of the Fund harmless from and
against any and all loss, liability and expense, including reasonable legal fees
and expenses, arising out of the Custodian's own negligence, misfeasance, bad
faith or willful misconduct or that of any officer, employee, agent,
sub-custodian and depository of or engaged by the Custodian in the performance
of the Custodian's duties and obligations under this Agreement; PROVIDED,
HOWEVER, that, notwithstanding any other provision in this Agreement, the
Custodian shall not be responsible for the following:
(a) any action taken or omitted in accordance with any Written Order
from the Fund reasonably believed by the Custodian to be genuine and to be
signed by the proper party or parties; or
(b) any action taken or omitted in reasonable reliance on the advice
of counsel of or reasonably acceptable to the Fund relating to any of its
duties and responsibilities hereunder.
The Fund agrees to indemnify and hold the Custodian harmless from and
against any and all loss, liability and expense, including reasonable legal fees
and expenses, arising out of the performance by the Custodian (and each officer,
employee, agent, sub-custodian and depository of or engaged by the Custodian) of
its duties and responsibilities under this Agreement PROVIDED THAT the Custodian
(or any officer, employee, agent, sub-custodian or depository of or engaged by
the Custodian, as applicable) exercised reasonable care in the performance of
its duties and responsibilities under this Agreement.
ARTICLE 19. EFFECTIVE DATE
This Agreement shall become effective with respect to each Series that
adopts this Agreement when this Agreement shall have been approved with respect
to such Series by the Board of Directors of the Fund. The effective date with
respect to each Series shall be set forth on EXHIBIT A hereto. The Fund shall
transmit to the Custodian promptly after such approval by said Board of
Directors a copy of its resolution embodying such approval, certified by the
Secretary of the Fund.
ARTICLE 20. GOVERNING LAW
This Agreement is executed and delivered in Minneapolis, Minnesota, and the
laws of the State of Minnesota shall be controlling and shall govern the
construction, validity and effect of this contract.
IN WITNESS WHEREOF, the Fund and the Custodian have caused this Agreement
to be executed in duplicate as of the date first above written by their duly
authorized officers.
ATTEST: VOYAGEUR FUNDS, INC.
By /s/Kenneth R. Larsen
- ----------------------- --------------------------------
Secretary Its /s/Treasurer
ATTEST: NORWEST BANK MINNESOTA, N.A.
Rose Harriman By /s/Brent Siegel
- ----------------------- --------------------------------
Trust Officer Its /s/ Assistant Vice President
EXHIBIT A
(as amended through April 20, 1992)
TO
CUSTODIAN AGREEMENT
BETWEEN
VOYAGEUR FUNDS, INC.
AND
NORWEST BANK MINNESOTA, N.A.
NAME OF SERIES EFFECTIVE DATE
Series A - Voyageur U. S. Government
Securities Fund April 20, 1992
A-1
EXHIBIT B
(as amended through April 20, 1992)
TO
CUSTODIAN AGREEMENT
BETWEEN
VOYAGEUR FUNDS, INC.
AND
NORWEST BANK MINNESOTA, N.A.
COMPENSATION SCHEDULE
B-1
NORWEST BANK MINNESOTA
CUSTODY FEE SCHEDULE
VOYAGEUR MUTUAL FUNDS
<TABLE>
<CAPTION>
DOMESTIC FEE SCHEDULE
<S> <C> <C>
ISSUE CHARGE - ANNUALLY
All Issue Types..............................................................................................$17.50
ASSET CHARGES - ANNUALLY
Bonds at Par Value........................................................................................$0.000065
Stocks at Market Value....................................................................................$0.000065
TRANSACTION CHARGES
DTC Buy/Sell/Maturity........................................................................................$10.00
Fed Buy/Sell/Maturity........................................................................................$12.50
PTC Buy/Sell/Maturity........................................................................................$20.00
Principal Payments...........................................................................................$10.00
Int Payments..............................................................................................no charge
Non-Trade Wires..............................................................................................$10.00
Cash Movements................................................................................................$3.00
Asset Transfers..............................................................................................$15.00
Corporate Actions
(calls/reorg/split/tender).................................................................................$23.00
Options......................................................................................................$20.00
Futures......................................................................................................$11.00
Norwest ACCESS.........................................................................$10.00 per month/per account
SUNGARD SYSTEM CHARGES
Fund Accounting System......................................................................$6750 per fund per year
Multiclass Shares Module....................................................................$1350 per fund per year
Global Accounting..................................................................................$18,500 per year
Pricing Services (monthly)................................................... approximately $6,000-$7,000 per month
</TABLE>
ADMINISTRATIVE SERVICES AGREEMENT
This Agreement is made and entered into this 27th day of October 1994, by
and between Voyageur Funds, Inc., a Minnesota corporation (the "Company"), on
behalf of each Fund of the Company represented by a series of shares of common
stock of the Company that adopts this Agreement (each, a "Fund" and,
collectively, the "Funds") (the Funds, together with the date each Fund adopts
this Agreement, are set forth in EXHIBIT A hereto, which shall be updated from
time to time to reflect additions, deletions or other changes thereto), and
Voyageur Fund Managers, Inc., a Minnesota corporation ("Voyageur").
1. DIVIDEND DISBURSING, ADMINISTRATIVE, ACCOUNTING AND TRANSFER AGENCY
SERVICES; COMPLIANCE SERVICES.
(a) The Company on behalf of each Fund hereby engages Voyageur, and
Voyageur hereby agrees, to provide to each Fund all dividend disbursing,
administrative and accounting services required by each Fund, including, without
limitation, the following:
(i) The calculation of net asset value per share at such times and in
such manner as specified in each Fund's current Prospectus and Statement of
Additional Information and at such other times as the parties hereto may
from time to time agree upon;
(ii) Upon the receipt of funds for the purchase of Fund shares or the
receipt of redemption requests with respect to Fund shares outstanding, the
calculation of the number of shares to be purchased or redeemed,
respectively;
(iii) Upon the Fund's distribution of dividends, (A) the calculation
of the amount of such dividends to be received per Fund share, (B) the
calculation of the number of additional Fund shares to be received by each
Fund shareholder, other than any shareholder who has elected to receive
such dividends in cash and (C) the mailing of payments with respect to such
dividends to shareholders who have elected to receive such dividends in
cash;
(iv) The provision of transfer agency services as described below:
(1) Voyageur shall make original issues of shares of each Fund in
accordance with each Fund's current Prospectus and Statement of
Additional Information and with instructions from the Company.
(2) Prior to the daily determination of net asset value of each
Fund in accordance with the each Fund's current Prospectus and
Statement of Additional Information, Voyageur shall process all
purchase orders received since the last determination of each Fund's
net asset value.
(3) Transfers of shares shall be registered and new Fund share
certificates shall be issued by Voyageur upon surrender of properly
endorsed outstanding Fund share certificates with all necessary
signature guarantees and satisfactory evidence of compliance with all
applicable laws relating to the payment or collection of taxes.
(4) Voyageur may issue new Fund share certificates in place of
Fund share certificates represented to have been lost, destroyed or
stolen, upon receiving indemnity satisfactory to Voyageur and may
issue new Fund share certificates in exchange for, and upon surrender
of, mutilated Fund share certificates.
(5) Voyageur will maintain stock registry records in the usual
form in which it will note the issuance, transfer and redemption of
Fund shares and the issuance and transfer of Fund share certificates,
and is also authorized to maintain an account in which it will record
the Fund shares and fractions issued and outstanding from time to time
for which issuance of Fund share certificates is deferred.
(6) Voyageur will, in addition to the duties and functions
above-mentioned, perform the usual duties and functions of a stock
transfer agent for a registered investment company.
(v) The creation and maintenance of such records relating to the
business of each Fund as each Fund may from time to time reasonably
request;
(vi) The preparation of tax forms, reports, notices, proxy statements,
proxies and other Fund shareholder communications, and the mailing thereof
to Fund shareholders; and
(vii) The provision of such other dividend disbursing, administrative
and accounting services as the parties hereto may from time to time agree
upon.
(b) The Company also hereby engages Voyageur to perform, and Voyageur
hereby agrees to perform, such regulatory reporting and compliance related
services and tasks for the Company or any Fund as the Company may reasonably
request. Without limiting the generality of the foregoing, Voyageur shall:
(i) Prepare or assist in the preparation of prospectuses, statements
of additional information and registration statements for the Funds, and
assure the timely filing of all required amendments thereto.
(ii) Prepare such reports, applications and documents as may be
necessary to register the Funds' shares with state securities authorities;
monitor sales of Fund shares for compliance with state securities laws; and
file with the appropriate state securities authorities the registration
statement for each Fund and all amendments thereto, required reports
regarding sales and redemptions of Fund shares and such other reports as
may be necessary to register each Fund and its shares with state securities
authorities and keep such registrations effective.
(iii) Develop and prepare communications to shareholders, including
each Fund's annual and semi-annual report to shareholders.
(iv) Obtain and keep in effect fidelity bonds and directors and
officers/errors and omissions insurance policies for the Funds in
accordance with the requirements of Rules 17g-1 and 17d-1(7) under the
Investment Company Act of 1940 as such bonds and policies are approved by
the Funds' Board of Directors.
(v) Prepare and file with the Securities and Exchange Commission each
Fund's semi-annual reports on Form N-SAR and all required notices pursuant
to Rule 24f-2 under the Investment Company Act of 1940.
(vi) Prepare materials (including, but not limited to, agendas,
proposed resolutions and supporting materials) in connection with meetings
of the Company's Board of Directors;
(vii) Prepare or assist in the preparation of proxy and other
materials in connection with meetings of the shareholders of the Company or
any Fund;
(viii) Prepare and file tax returns for the Funds;
(ix) Concur with Fund counsel in connection with the development and
preparation of any of the foregoing; and
(x) Perform such other compliance related services and tasks upon
which the parties hereto may from time to time agree.
(c) Voyageur hereby acknowledges that all records necessary in the
operation of the Fund are the property of the Company, and in the event that a
transfer of any of the responsibilities set forth herein to someone other than
Voyageur should ever occur, Voyageur will promptly, and at its own cost, take
all steps necessary to segregate such records and deliver them to the Company.
2. COMPENSATION
(a) As compensation for the dividend disbursing, administrative, accounting
and compliance services to be provided by Voyageur hereunder, each Fund shall
pay to Voyageur a monthly fee as set forth in EXHIBIT A hereto, which fee shall
be paid to Voyageur not later than the fifth business day following the end of
each month in which said services were rendered. For purposes of calculating
each Fund's average daily net assets, as such term is used in this Agreement,
the Fund's net assets shall equal its total assets minus (i) its total
liabilities and (ii) its net orders receivable from dealers.
(b) In addition to the compensation provided for in Section 2(a) hereof and
as set forth in EXHIBIT A hereto, each Fund shall reimburse Voyageur for all
out-of-pocket expenses incurred by Voyageur in connection with its provision of
services hereunder, including, without limitation, postage, stationery and
mailing expenses. Said reimbursement shall be paid to Voyageur not later than
the fifth business day following the end of each month in which said expenses
were incurred.
(c) For purposes of calculating the compensation to be paid to Voyageur
pursuant to Section 2(a) above, "house accounts" with brokerage firms which hold
shares in a Fund will be treated as separate accounts for fee calculation
purposes (based upon the number of shareholder accounts within the "house
account"), where Voyageur's work in connection with servicing such house
accounts is substantially the same as if such accounts did not exist, and
Voyageur had to directly service the shareholder accounts underlying such house
accounts.
3. FREEDOM TO DEAL WITH THIRD PARTIES.
Voyageur shall be free to render services to others similar to those
rendered under this Agreement or of a different nature except as such services
may conflict with the services to be rendered or the duties to be assumed
hereunder.
4. EFFECTIVE DATE, DURATION, AMENDMENT AND TERMINATION OF AGREEMENT.
(a) The effective date of this Agreement with respect to each Fund shall be
the date set forth on EXHIBIT A hereto.
(b) Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect with respect to each Fund for a period more than two years
from the date of its execution but only as long as such continuance is
specifically approved at least annually by (i) the Board of Directors of the
Company or by the vote of a majority of the outstanding voting securities of the
applicable Fund, and (ii) by the vote of a majority of the directors of the
Company who are not parties to this Agreement or "interested persons", as
defined in the Investment Company Act of 1940 (as amended, the "Act"), of the
Adviser or of the Company cast in person at a meeting called for the purpose of
voting on such approval.
(c) This Agreement may be terminated with respect to any Fund at any time,
without the payment of any penalty, by the Board of Directors of the Company or
by the vote of a majority of the outstanding voting securities of such Fund, or
by Voyageur, upon 60 days' written notice to the other party.
(d) This agreement shall terminate automatically in the event of its
"assignment" (as defined in the Act) unless such assignment is approved in
advance by the Board of Directors, including a majority of the directors of the
Company who are not parties to this Agreement or "interested persons" (as
defined in the Act) of the Adviser or of the Company, and, if and to the extent
required by the Act, the approval of the shareholders of each Fund.
(e) No amendment to this Agreement shall be effective with respect to any
Fund until approved by the vote of a majority of the directors of the Company
who are not parties to this Agreement or "interested persons" (as defined in the
Act) of the Adviser or of the Company cast in person at a meeting called for the
purpose of voting on such approval and, if and to the extent required by the
Act, a majority of the outstanding voting securities of the applicable Fund.
5. NOTICES.
Any notice under this Agreement shall be in writing, addressed, delivered
or mailed, postage prepaid, to the other party at such address as such other
party may designate in writing for receipt of such notice.
6. INTERPRETATION; GOVERNING LAW.
This Agreement shall be subject to and interpreted in accordance with all
applicable provisions of law including, but not limited to, the Act and the
rules and regulations promulgated thereunder. To the extent that the provisions
herein contained conflict with any such applicable provisions of law, the latter
shall control. The laws of the State of Minnesota shall otherwise govern the
construction, validity and effect of this Agreement.
IN WITNESS WHEREOF, the Company and Voyageur have caused this Agreement to
be executed by their duly authorized officers as of the day and year first above
written.
VOYAGEUR FUNDS, INC.
By /s/John G. Taft
------------------------
Its /s/ President
--------------------
VOYAGEUR FUND MANAGERS, INC.
By /s/John G. Taft
------------------------
Its /s/ President
--------------------
EXHIBIT A
TO
ADMINISTRATIVE SERVICES AGREEMENT
BETWEEN
VOYAGEUR FUND MANAGERS, INC.
AND
VOYAGEUR FUNDS, INC.
FUND EFFECTIVE DATE
---- --------------
Series A--Voyageur U. S. Government Securities Fund October 27, 1994
COMPENSATION
------------
The sum of (i) $1.33 per shareholder account per month; (ii) $1,000 per month if
the Fund's average daily net assets do not exceed $50 million, $1,250 per month
if the Fund's average daily net assets are greater than $50 million but do not
exceed $100 million, and $1,500 per month if the Fund's average daily net assets
are greater than $100 million; and (iii) 0.11% per annum of the first $20
million of the Fund's average daily net assets, .06% per annum of the next $20
million of the Fund's average daily net assets, .035% per annum of the next $60
million of the Fund's average daily net assets, .03% per annum of the next $400
million of the Fund's average daily net assets, and .02% per annum of the Fund's
average daily net assets in excess of $500 million. (1)
________________________
(1) Voyageur shall reimburse the Fund, in an amount not in excess of the
advisory and management fee payable under the Investment Advisory Agreement and
the administrative services fee payable hereunder, if, and to the extent that,
the aggregate operating expenses of the Fund (including the advisory and
management fee, the administrative services fee, deferred organizational costs
and Rule 12b-1 fees, if any, but excluding interest expense, taxes and brokerage
fees and commissions) are in excess of 1.25% of the average daily net assets of
the Fund on an annual basis (the "Expense Limit"). Voyageur shall first
reimburse the Fund the advisory and management fee payable and then, to the
extent necessary to reduce the Fund's expenses to the Expense Limit, shall
reimburse the administrative services fee payable hereunder.
DORSEY & WHITNEY
Professional Limited Liability Partnership
PILLSBURY CENTER SOUTH
220 SOUTH SIXTH STREET
MINNEAPOLIS, MINNESOTA 55402-1498
(612) 340-2600
FAX (612) 340-2868
Voyageur Funds, Inc.
90 South Seventh Street
Minneapolis, Minnesota 55402
Ladies and Gentlemen:
We have acted as counsel to Voyageur Funds, Inc., a Minnesota corporation
(the "Fund"), in connection with a Registration Statement on Form N-1A (File
No.33-16270) (the "Registration Statement") relating to the sale by the Fund of
an indefinite number of the Class A, B, and C and Institutional Class Shares of
Series A, of the Fund's common stock, par value $.01 per share (the "Series A
Common Shares").
We have examined such documents and have reviewed such questions of law as
we have considered necessary and appropriate for the purposes of our opinions
set forth below. In rendering our opinions set forth below, we have assumed the
authenticity of all documents submitted to us as originals, the genuineness of
all signatures and the conformity to authentic originals of all documents
submitted to us as copies. We have also assumed the legal capacity for all
purposes relevant hereto of all natural persons and, with respect to all parties
to agreements or instruments relevant hereto other than the Fund, that such
parties had the requisite power and authority (corporate or otherwise) to
execute, deliver and perform such agreements or instruments, that such
agreements or instruments have been duly authorized by all requisite action
(corporate or otherwise), executed and delivered by such parties and that such
agreements or instruments are the valid, binding and enforceable obligations of
such parties. As to questions of fact material to our opinions, we have relied
upon certificates of officers of the Fund and of public officials. We have also
assumed that the Series A Common Shares will be issued and sold as described in
the Registration Statement.
Based upon the foregoing, we are of the opinion that the Series A Common
Shares to be sold by the Fund pursuant to the Registration Statement have been
duly authorized by all requisite corporate action and, upon issuance, delivery
and payment therefore as described in the Registration Statement, will be
validly issued, fully paid and nonassessable.
Our opinions expressed above are limited to the laws of the State of
Minnesota.
Voyageur Funds, Inc
October 30, 1995
Page 2
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and to the reference to our firm as "Counsel" in the
Registration Statement.
Dated: October 30, 1995
Very truly yours,
/s/DORSEY & WHITNEY P.L.L.P
INDEPENDENT AUDITORS' CONSENT
-----------------------------
The Board of Directors
Voyageur Funds, Inc.:
We consent to the use of our report included herein and the references to our
Firm under the headings "FINANCIAL HIGHLIGHTS" in Part A and "ADDITIONAL
INFORMATION - Custodian; Counsel; Independent Auditors," and "FINANCIAL
STATEMENTS" in Part B of the Registration Statement.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
October 27, 1995
VOYAGEUR FUNDS, INC.
PLAN OF DISTRIBUTION
This Plan of Distribution (the "Plan") is adopted pursuant to Rule 12b-1
(the "Rule") under the Investment Company Act of 1940 (as amended, the "1940
Act") by Voyageur Funds, Inc., a Minnesota corporation (the "Company"), for and
on behalf of each series (each series is referred to hereinafter as a "Fund")
and, if applicable, each class thereof (each such class is referred to
hereinafter as a "Class"). The Funds and, if applicable, Classes thereof that
currently have adopted this Plan, and the effective dates of such adoptions, are
as follow:
Voyageur U.S. Government Securities Fund, Class A November 1, 1993
Voyageur U.S. Government Securities Fund, Class B June 6, 1994
Voyageur U.S. Government Securities Fund, Class Y June 6, 1994
Voyageur U.S. Government Securities Fund, Class C September 1, 1994
1. COMPENSATION
Class A and Class Y of each Fund offering shares of such Class are each
obligated to pay the Underwriter a total fee in connection with the servicing of
shareholder accounts of such Class and in connection with distribution-related
services provided in respect of such Class, calculated and payable quarterly, at
the annual rate of .25% of the value of the average daily net assets of such
Class. All or any portion of such total fee may be payable as a Shareholder
Servicing Fee, and all or any portion of such total fee may be payable as a
Distribution Fee, as determined from time to time by the Company's Board of
Directors. Until further action by the Board of Directors, all of such fee shall
be designated and payable as a Shareholder Servicing Fee.
Class B and Class C of each Fund offering shares of such Class are each
obligated to pay the Underwriter a total fee in connection with the servicing of
shareholder accounts of such Class and in connection with distribution-related
services provided in respect of such Class, calculated and payable quarterly, at
the annual rate of 1.00% of the value of the average daily net assets of such
Class. All or any portion of such total fee may be payable as a Shareholder
Servicing Fee, and all or any portion of such total fee may be payable as a
Distribution Fee, as determined from time to time by the Company's Board of
Directors. Until further action by the Board of Directors, a portion of such
total fee equal to .25% per annum of the average daily net assets of each such
Class shall be designated and payable as a Shareholder Servicing Fee and the
remainder of such fee shall be designated as a Distribution Fee.
2. EXPENSES COVERED BY THE PLAN
(a) The Shareholder Servicing Fee may be used by the Underwriter to provide
compensation for ongoing servicing and/or maintenance of shareholder accounts.
Compensation may be paid by the Underwriter to persons, including employees of
the Underwriter, and institutions who respond to inquiries of Fund shareholders
regarding their ownership of shares or their accounts with the Company or who
provide other administrative or accounting services not otherwise required to be
provided by the Company's investment adviser, transfer agent or other agent of
the Company.
(b) The Distribution Fee may be used by the Underwriter to provide initial
and ongoing sales compensation to its investment executives and to other
broker-dealers in respect of sales of Fund shares and to pay for other
advertising and promotional expenses in connection with the distribution of Fund
shares. These advertising and promotional expenses include, by way of example
but not by way of limitation, costs of printing and mailing prospectuses,
statements of additional information and shareholder reports to prospective
investors; preparation and distribution of sales literature; advertising of any
type; an allocation of overhead and other expenses of the Underwriter related to
the distribution of Fund shares; and payments to, and expenses of, officers,
employees or representatives of the Underwriter, of other broker-dealers, banks
or other financial institutions, and of any other persons who provide support
services in connection with the distribution of Fund shares, including travel,
entertainment, and telephone expenses.
(c) Payments under the Plan are not tied exclusively to the expenses for
shareholder servicing and distribution related activities actually incurred by
the Underwriter, so that such payments may exceed expenses actually incurred by
the Underwriter. The Company's Board of Directors will evaluate the
appropriateness of the Plan and its payment terms on a continuing basis and in
doing so will consider all relevant factors, including expenses borne by the
Underwriter and amounts it receives under the Plan.
3. ADDITIONAL PAYMENTS BY ADVISER AND THE UNDERWRITER
The Company's investment adviser and the Underwriter may, at their option
and in their sole discretion, make payments from their own resources to cover
the costs of additional distribution and shareholder servicing activities.
4. APPROVAL BY SHAREHOLDERS
The Plan will not take effect with respect to any Class of a Fund offering
multiple classes of shares or, if a Fund offers only one class of shares, with
repect to such Fund, and no fee will be payable in accordance with Section 1 of
the Plan, until the Plan has been approved by a vote of at least a majority of
the outstanding voting securities of such Class or Fund.
5. APPROVAL BY DIRECTORS
Neither the Plan nor any related agreements will take effect until approved
by a majority vote of both (a) the full Board of Directors of the Company and
(b) those Directors who are not interested persons of the Company and who have
no direct or indirect financial interest in the operation of the Plan or in any
agreements related to it (the "Independent Directors"), cast in person at a
meeting called for the purpose of voting on the Plan and the related agreements.
6. CONTINUANCE OF THE PLAN
The Plan will continue in effect from year to year so long as its
continuance is specifically approved annually by vote of the Company's Board of
Directors in the manner described in Section 5 above.
7. TERMINATION
The Plan may be terminated at any time with respect to any Fund or, if
applicable, Class thereof, without penalty, by vote of a majority of the
Independent Directors or by a vote of a majority of the outstanding voting
securities of such Fund or Class.
8. AMENDMENTS
The Plan may not be amended with respect to any Fund or, if applicable,
Class thereof, to increase materially the amount of the fees payable pursuant to
the Plan, as described in Section 1 above, unless the amendment is approved by a
vote of at least a majority of the outstanding voting securities of that Fund or
Class (and, if applicable, of any other affected Class or Classes), and all
material amendments to the Plan must also be approved by the Company's Board of
Directors in the manner described in Section 5 above.
9. SELECTION OF CERTAIN DIRECTORS
While the Plan is in effect, the selection and nomination of the Company's
Directors who are not interested persons of the Company will be committed to the
discretion of the Directors then in office who are not interested persons of the
Company.
10. WRITTEN REPORTS
In each year during which the Plan remains in effect, the Underwriter and
any person authorized to direct the disposition of monies paid or payable by the
Company pursuant to the Plan or any related agreement will prepare and furnish
to the Company's Board of Directors, and the Board will review, at least
quarterly, written reports, complying with the requirements of the Rule, which
set out the amounts expended under the Plan, on a Class by Class basis if
applicable, and the purposes for which those expenditures were made.
11. PRESERVATION OF MATERIALS
The Company will preserve copies of the Plan, any agreement relating to the
Plan and any report made pursuant to Section 10 above, for a period of not less
than six years (the first two years in an easily accessible place) from the date
of the Plan, agreement or report.
12. MEANING OF CERTAIN TERMS
As used in the Plan, the terms "interested person" and "majority of the
outstanding voting securities" will be deemed to have the same meaning that
those terms have under the 1940 Act and the rules and regulations under the 1940
Act, subject to any exemption that may be granted to the Company under the 1940
Act by the Securities and Exchange Commission.
EXHIBIT 16.1
COMPUTATION OF PERFORMANCE QUOTATIONS
VOYAGEUR FUNDS, INC.
CLASS "A" SHARES
Average annual total return figures for the current one year period, five
year period, and life of fund ending June 30, 1995, are calculated as follows:
1/n
Formula: P(1+T) = ERV or T = ERV/p -1
Where: P = hypothetical initial investment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the period
One year period (includes 4.75% front-end sales charge):
8.06% = 1,080.62
-------- -1
1,000
Five year period:
1/5
8.72% = 1,531.41
-------- -1
1,000
Life of Fund (from November 2, 1987):
1/7.6667
8.79% = 1,907.33
------- -1
1,000
Cumulative total return figures for the period beginning November 2, 1987
and ending June 30, 1995 are calculated as follows:
Formula: CTR = ERV - P
------- 100
P
Where: CTR = cumulative total return
ERV = ending redeemable value at the end of the period of
a hypothetical $1,000 payment made at the beginning
of the period
P = initial payment of $1,000
90.73% = 1,907.33 -1,000
--------------- 100
1,000
The 30 day SEC yield for the period ending June 30, 1995 is calculated as
follows:
6
Formula: SEC YIELD = 2(((a-b) + 1) -1)
---
cd
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
6
5.53% = 2(((439,098.96 - 75,251.96) + 1) - 1)
----------------------
7,332,138.9369 x 10.89
EXHIBIT 16.2
COMPUTATION OF PERFORMANCE QUOTATIONS
VOYAGEUR FUNDS, INC.
CLASS "B" SHARES
Average annual total return figures for the current one year period,
five year period, and life of fund ending June 30, 1995, are calculated as
follows:
1/n
Formula: P(1+T) = ERV or T = ERV/p -1
Where: P = hypothetical initial investment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the period
One year period:
12.90% = 1,128.96
-------- -1
1,000
Five year period: Not Applicable
Life of Fund (from June 6, 1994):
1/1.0833
9.07% = 1,098.66
-------- -1
1,000
Cumulative total return figures for the period beginning June 6, 1994 and
ending June 30, 1995 are calculated as follows:
Formula: CTR = ERV - P
------- 100
P
Where: CTR = cumulative total return
ERV = ending redeemable value at the end of the period of
a hypothetical $1,000 payment made at the beginning
of the period
P = initial payment of $1,000
9.87% = 1,098.66 - 1,000
------------------ 100
1,000
The 30 day SEC yield for the period ending June 30, 1995 is calculated as
follows:
6
Formula: SEC YIELD = 2(((a-b) + 1) -1)
---
cd
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
6
5.29% = 2(((650.36 - 159.07) + 1) -1)
-------------------
10,858.1267 x 10.38
EXHIBIT 16.3
COMPUTATION OF PERFORMANCE QUOTATIONS
VOYAGEUR FUNDS, INC.
CLASS "C" SHARES
Average annual total return figures for the current one year period,
five year period, and life of fund ending June 30, 1995, are calculated as
follows:
1/n
Formula: P(1+T) = ERV or T = ERV/p -1
Where: P = hypothetical initial investment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the period
One year period: Not Applicable
Five year period: Not Applicable
Life of Fund (from January 10, 1995):
12.73% = 1,127.29
-------- -1
1,000
Cumulative total return figures for the period beginning January 10, 1995
and ending June 30, 1995 are calculated as follows:
Formula: CTR = ERV - P
------- 100
P
Where: CTR = cumulative total return
ERV = ending redeemable value at the end of the period of
a hypothetical $1,000 payment made at the beginning
of the period
P = initial payment of $1,000
12.73% = 1,127.29 - 1,000
---------------- 100
1,000
The 30 day SEC yield for the period ending June 30, 1995 is calculated as
follows:
6
Formula: SEC YIELD = 2(((a-b) + 1) -1)
---
cd
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
6
4.80%= 2((( 434.87 - 135.46 ) + 1) -1)
------------------
7,291.9797 x 10.36
EXHIBIT 16.4
COMPUTATION OF PERFORMANCE QUOTATIONS
VOYAGEUR FUNDS, INC.
"INSTITUTIONAL" CLASS SHARES
Average annual total return figures for the current one year period, five
year period, and life of fund ending June 30, 1995, are calculated as follows:
1/n
Formula: P(1+T) = ERV or T = ERV/p -1
Where: P = hypothetical initial investment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the period
One year period:
13.57% = 1,135.68 -1
--------
1,000
Five year period: Not Applicable
Life of Fund (from June 6, 1994):
1/1.0833
9.71% = 1,105.65 -1
--------
1,000
Cumulative total return figures for the period beginning June 6, 1994 and
ending June 30, 1995 are calculated as follows:
Formula: CTR = ERV - P
------- 100
P
Where: CTR = cumulative total return
ERV = ending redeemable value at the end of the period of
a hypothetical $1,000 payment made at the beginning
of the period
P = initial payment of $1,000
10.56% = 1,105.65 -1,000
----------------- 100
1,000
The 30 day SEC yield for the period ending June 30, 1995 is calculated as
follows:
6
Formula: SEC YIELD = 2(((a-b) + 1) -1)
---
cd
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
6
5.81% = 2((( 313,172.49 - 53,675.73 ) + 1) -1)
-------------------------
5,227,621.4656 x 10.37
VOYAGEUR FUNDS, INC.
VOYAGEUR TAX FREE FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.
VOYAGEUR MUTUAL FUNDS IV, INC.
POWER OF ATTORNEY
The undersigned, duly elected directors, trustees and/or officers of
Voyageur Funds, Inc., Voyageur Tax Free Funds, Inc., Voyageur Insured Funds,
Inc., Voyageur Intermediate Tax Free Funds, Inc., Voyageur Investment Trust,
Voyageur Investment Trust II, Voyageur Mutual Funds, Inc., Voyageur Mutual Funds
II, Inc., Voyageur Mutual Funds III, Inc. and Voyageur Mutual Funds IV, Inc.
(collectively, the "Funds") appoint John G. Taft, Kenneth R. Larsen, Theodore E.
Jessen and Thomas J. Abood, or any one of them, on their behalf as directors,
trustees and/or officers of the Funds, as attorney-in-fact for the purpose of
signing their names and filing with the Securities and Exchange Commission or
any other regulatory authority as may be desirable or necessary, notifications,
registration statements and other filings, and any and all amendments to said
notifications, registration statements and other filings, and all exhibits
thereto and other documents, for the purpose of registering the Funds under the
Investment Company Act of 1940, registering shares of common stock of the Funds
under the Securities Act of 1933 and filing all other documents as may be
required by any federal or state securities commission or otherwise.
REGISTRANT FILE NO.
Voyageur Funds, Inc. 33-16270
Voyageur Tax Free Funds, Inc. 2-87910
Voyageur Insured Funds, Inc. 33-11235
Voyageur Intermediate Tax Free Funds, Inc. 2-99266
Voyageur Investment Trust 33-42827
REGISTRANT FILE NO.
Voyageur Investment Trust II 33-75112
Voyageur Mutual Funds, Inc. 33-63238
Voyageur Mutual Funds II, Inc. 33-11495
Voyageur Mutual Funds III, Inc. 2-95928
Voyageur Mutual Funds IV, Inc. 2-95930
/s/ John G. Taft
- ----------------------
John G. Taft
President of all Funds
(except Voyageur Mutual Funds II, Inc.)
/s/ Kenneth R. Larsen
- ----------------------
Kenneth R. Larsen
Treasurer (Principal Financial and
Accounting Officer of all Funds)
/s/ Andrew M. McCullagh, Jr.
- ----------------------------
Andrew M. McCullagh, Jr.
President of Voyageur Mutual Funds II, Inc.
/s/ Thomas F. Madison
- ----------------------
Thomas F. Madison
Director/Trustee of all Funds
/s/ Clarence G. Frame
- ----------------------
Clarence G. Frame
Director/Trustee of all Funds
/s/ James W. Nelson
- ----------------------
James W. Nelson
Director/Trustee of all Funds
/s/ Robert J. Odegard
- ----------------------
Robert J. Odegard
Director/Trustee of all Funds
/s/ Richard F. McNamara
- -----------------------
Richard F. McNamara
Director/Trustee of all Funds
Dated: January 24, 1995
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0000819799
<NAME> VOYAGEUR FUNDS, INC.
<SERIES>
<NUMBER> 1
<NAME> VOYAGEUR U.S. GOVERNMENT SECURITIES FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> JUL-01-1994
<PERIOD-END> JUN-30-1995
<INVESTMENTS-AT-COST> 123,987,766
<INVESTMENTS-AT-VALUE> 129,375,731
<RECEIVABLES> 1,522,982
<ASSETS-OTHER> 96,386
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 130,995,099
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 305,168
<TOTAL-LIABILITIES> 305,168
<SENIOR-EQUITY> 125,992
<PAID-IN-CAPITAL-COMMON> 134,961,251
<SHARES-COMMON-STOCK> 12,599,179
<SHARES-COMMON-PRIOR> 13,793,782
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 21,533
<ACCUMULATED-NET-GAINS> (9,763,744)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5,387,965
<NET-ASSETS> 130,689,931
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 9,492,870
<OTHER-INCOME> 0
<EXPENSES-NET> 1,225,133
<NET-INVESTMENT-INCOME> 8,267,737
<REALIZED-GAINS-CURRENT> (9,763,744)
<APPREC-INCREASE-CURRENT> 18,185,818
<NET-CHANGE-FROM-OPS> 16,689,811
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 8,289,270
<DISTRIBUTIONS-OF-GAINS> 260,968
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,854,537
<NUMBER-OF-SHARES-REDEEMED> 4,590,852
<SHARES-REINVESTED> 541,712
<NET-CHANGE-IN-ASSETS> (3,892,345)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 260,968
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 647,382
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,227,852
<AVERAGE-NET-ASSETS> 129,466,300
<PER-SHARE-NAV-BEGIN> 9.76
<PER-SHARE-NII> .62
<PER-SHARE-GAIN-APPREC> .63
<PER-SHARE-DIVIDEND> .62
<PER-SHARE-DISTRIBUTIONS> .64
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.37
<EXPENSE-RATIO> .95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
