<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
File 33-41034
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No.______ [ ]
Post-Effective Amendment No.__10___ [X]
AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No.__10__
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
1818 Market Street, Philadelphia, Pennsylvania 19103
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (215) 751-2923
--------------
George M. Chamberlain, Jr., 1818 Market Street, Philadelphia, PA 19103
- --------------------------------------------------------------------------------
(Name and Address of Agent for Service)
Approximate Date of Public Offering: November 29, 1995
-----------------
It is proposed that this filing will become effective:
------ immediately upon filing pursuant to paragraph (b)
X
------ on November 29, 1995 pursuant to paragraph (b)
------ 60 days after filing pursuant to paragraph (a)(1)
------ on (date) pursuant to paragraph (a)(1)
------ 75 days after filing pursuant to paragraph (a)(2)
------ on (date) pursuant to paragraph (a)(2) of Rule 485.
Registrant has registered an indefinite amount of securities
under the Securities Act of 1933 pursuant to Section 24(f)
of the Investment Company Act of 1940. Registrant's 24f-2
Notice for its most recent fiscal year was filed on January 25, 1995.
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
--- C O N T E N T S ---
This Post-Effective Amendment No. 10 to Registration File No. 33-41034 includes
the following:
1. Facing Page
2. Contents Page
3. Cross-Reference Sheet
4. Part A - Prospectuses and Supplement*
5. Part B - Statement of Additional Information
6. Part C - Other Information
7. Signatures
* The Registrant's Institutional Classes Prospectus dated March 10, 1995 is
incorporated into this filing by reference to the electronic filing of the
Prospectus made pursuant to Rule 497(e) on April 24, 1995. The Supplement to
that Prospectus dated June 30, 1995 that was filed with the Commission on July
7, 1995 pursuant to Rule 497(c) is not incorporated by reference. That
Supplement will be superseded by the Supplement included with this filing as
of the effective date of this filing.
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
CROSS-REFERENCE SHEET*
---------------------
PART A**
------
<TABLE>
<CAPTION>
Location in
Item No. Description Prospectuses
- -------- ----------- ------------
<S> <C> <C> <C>
A Classes/ Institutional
B Classes/ Classes
C Classes
1 Cover Page..................................................... Cover Cover
2 Synopsis....................................................... Synopsis, Synopsis,
Summary of Summary of
Expenses Expenses
3 Condensed Financial Information................................ Financial Financial
Highlights Highlights
4 General Description of Registrant ............................. Investment Investment
Objectives and Objectives and
Policies, Shares Policies, Shares
5 Management of the Fund ........................................ Management of Management of
the Fund the Fund
6 Capital Stock and Other Securities ............................ Delaware Dividends and
Difference, Distributions,
Dividends and Taxes,
Distributions, Shares
Taxes, Shares
7 Purchase of Securities Being Offered........................... Cover, Cover,
Buying Shares, Buying Shares,
Calculation of Calculation of
Offering Price Net Asset
and Net Asset Value Per Share,
Value Per Share, Management of
Management of the Fund
the Fund
8 Redemption or Repurchase....................................... Buying Shares, Buying Shares,
Redemption and Redemption and
Exchange Exchange
9 Pending Legal Proceedings...................................... None None
</TABLE>
* This filing relates to the International Equity Fund A Class, the
International Equity Fund B Class, the International Equity Fund C Class and
the International Equity Fund Institutional Class of the International Equity
Series; the Global Bond Fund A Class, the Global Bond Fund B Class, the
Global Bond Fund C Class and the Global Bond Fund Institutional Class of the
Global Bond Series; and the Global Assets Fund A Class, the Global Assets
Fund B Class, the Global Assets Fund C Class and the Global Assets Fund
Institutional Class of the Global Assets Series. The Class A Shares, the
Class B Shares and the Class C Shares of each Series are combined in one
prospectus, and the Institutional Class of each Series is combined in one
prospectus. The three Series (and twelve classes) have a common Part B and
Part C.
** The Registrant's Institutional Classes Prospectus dated March 10, 1995 is
incorporated into this filing by reference to the electronic filing of that
Prospectus made pursuant to Rule 497(e) on April 24, 1995. The Supplement to
that Prospectus dated June 30, 1995 that was filed with the Commission on
July 7, 1995 pursuant to Rule 497(c) is not incorporated by reference. That
Supplement will be superseded by the Supplement included with this filing as
of the effective date of this filing.
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
CROSS-REFERENCE SHEET
PART B
<TABLE>
<CAPTION>
Location in Statement
Item No. Description of Additional Information
- -------- ----------- -------------------------
<S> <C> <C>
10 Cover Page.................................................... Cover
11 Table of Contents............................................. Table of Contents
12 General Information and History............................... General Information
13 Investment Objectives and Policies............................ Investment Policies and
Portfolio Techniques
14 Management of the Registrant.................................. Officers and Directors
15 Control Persons and Principal Holders of Securities Officers and Directors
16 Investment Advisory and Other Services........................ Plans Under Rule 12b-1 for
the Fund Classes (under
Purchasing Shares), Investment
Management Agreement and Sub-
Advisory Agreement, Officers and
Directors, General Information,
Financial Statements
17 Brokerage Allocation.......................................... Trading Practices and Brokerage
18 Capital Stock and Other Securities............................ Capitalization and
Noncumulative Voting
(under General Information)
19 Purchase, Redemption and Pricing of Securities
Being Offered.............................................. Purchasing Shares,
Determining Offering Price
and Net Asset Value,
Redemption and Repurchase,
Exchange Privilege
20 Tax Status.................................................... Accounting and Tax Issues
21 Underwriters ................................................. Purchasing Shares
22 Calculation of Performance Data............................... Performance Information
23 Financial Statements.......................................... Financial Statements
</TABLE>
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
CROSS-REFERENCE SHEET
---------------------
PART C
------
<TABLE>
<CAPTION>
Location in
Part C
-----------
<S> <C> <C>
24 Financial Statements and Exhibits................................. Item 24
25 Persons Controlled by or under Common
Control with Registrant........................................... Item 25
26 Number of Holders of Securities................................... Item 26
27 Indemnification................................................... Item 27
28 Business and Other Connections of Investment Adviser.............. Item 28
29 Principal Underwriters............................................ Item 29
30 Location of Accounts and Records.................................. Item 30
31 Management Services............................................... Item 31
32 Undertakings...................................................... Item 32
</TABLE>
<PAGE>
INTERNATIONAL EQUITY FUND PROSPECTUS
GLOBAL BOND FUND November 29, 1995
GLOBAL ASSETS FUND
A CLASS SHARES
B CLASS SHARES
C CLASS SHARES
-------------------------------------------------------------------
1818 Market Street, Philadelphia, PA 19103
For Prospectus and Performance: Nationwide 800-523-4640,
Philadelphia 215-988-1333
Information on Existing Accounts: (SHAREHOLDERS ONLY)
Nationwide 800-523-1918, Philadelphia 215-988-1241
Dealer Services: (BROKER/DEALERS ONLY)
Nationwide 800-362-7500, Philadelphia 215-988-1050
Delaware Group Global & International Funds, Inc. (the "Fund") is a
professionally-managed mutual fund of the series type. This Prospectus describes
shares of the International Equity Series, the Global Bond Series and the Global
Assets Series (individually and collectively, the "Series"). The International
Equity Series' objective is to achieve long-term growth without undue risk to
principal. This Series seeks to achieve its objective by investing primarily in
securities that provide the potential for capital appreciation and income. The
Global Bond Series' objective is to achieve current income consistent with the
preservation of principal. This Series seeks to achieve its objective by
investing primarily in fixed income securities that may also provide the
potential for capital appreciation. The Global Assets Series' objective is to
achieve long-term total return. This Series seeks to achieve its objective by
investing in securities which, in Delaware International Advisers Ltd.'s
("Delaware International" or the "Manager") opinion, will provide higher current
income than a portfolio comprised exclusively of equity securities, along with
the potential for capital growth. This Series will invest in both equity and
fixed income securities. See Investment Objectives and Policies.
The International Equity Series offers the International Equity Fund A
Class ("Class A Shares"), the International Equity Fund B Class ("Class B
Shares") and the International Equity Fund C Class ("Class C Shares"); the
Global Bond Series offers the Global Bond Fund A Class ("Class A Shares"), the
Global Bond Fund B Class ("Class B Shares") and the Global Bond Fund C Class
("Class C Shares"); and the Global Assets Series offers the Global Assets Fund A
Class ("Class A Shares"), the Global Assets Fund B Class ("Class B Shares") and
the Global Assets Fund C Class ("Class C Shares"), (collectively, the "Fund
Classes").
Class A Shares may be purchased at the public offering price, which is
equal to the next determined net asset value per share, plus a front-end sales
charge. Class B Shares and Class C Shares may be purchased at a price equal to
the next determined net asset value per share. Class A Shares are subject to a
maximum front-end sales charge of 4.75% and annual 12b-1 Plan expenses of up to
0.30%. Class B Shares are subject to a contingent deferred sales charge ("CDSC")
which may be imposed on redemptions made within six years of purchase and annual
12b-1 Plan expenses of 1.00% which are assessed against the Class B Shares for
approximately eight years after purchase. See Automatic Conversion of Class B
Shares under Buying Shares. Class C Shares are subject to a CDSC which may be
imposed on redemptions made within twelve months of purchase and annual 12b-1
Plan expenses of 1.00%, which are assessed against Class C Shares for the life
of the investment. See Summary of Expenses. These alternatives permit an
investor to choose the method of purchasing shares that is most suitable for his
or her needs. In choosing the most suitable class, an investor should consider
the differences among the three Classes, including the effects of sales charges
and 12b-1 Plan expenses, given the amount of the purchase, the length of time
the investor expects to hold the shares and other circumstances. See Buying
Shares.
-1-
<PAGE>
This Prospectus relates only to the Fund Classes and sets forth
information that you should read and consider before you invest. Please retain
it for future reference. Part B of the Fund's registration statement, dated
November 29, 1995, as it may be amended from time to time, contains additional
information about the Fund's three Series and has been filed with the Securities
and Exchange Commission. Part B is incorporated by reference into this
Prospectus and is available, without charge, by writing to Delaware
Distributors, L.P. at the above address or by calling the above numbers. Each
Series' financial statements appear in its Annual Report for the fiscal year
ended November 30, 1994, and its Semi-Annual Report for the six months ended May
31, 1995, which will accompany any response to requests for Part B.
The International Equity Series also offers the International Equity
Fund Institutional Class; the Global Bond Series also offers the Global Bond
Fund Institutional Class; and the Global Assets Series also offers the Global
Assets Fund Institutional Class. Those classes are available for purchase only
by certain investors. A prospectus for those classes can be obtained by writing
to Delaware Distributors, L.P. at the above address or by calling the above
numbers.
-2-
<PAGE>
TABLE OF CONTENTS
Cover Page Retirement Planning
Synopsis Buying Shares
Summary of Expenses Redemption and Exchange
Financial Highlights Dividends and Distributions
Investment Objectives and Policies Taxes
Investment Strategy Calculation of Offering Price and
Special Risk Considerations Net Asset Value Per Share
The Delaware Difference Management of the Fund
Plans and Services Appendix A--Investment Illustrations
Appendix B--Ratings
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
BE SURE TO CONSULT YOUR FINANCIAL ADVISER WHEN MAKING INVESTMENTS. MUTUAL FUNDS
CAN BE A VALUABLE PART OF YOUR FINANCIAL PLAN; HOWEVER, SHARES OF THE FUND ARE
NOT FDIC OR NCUSIF INSURED, ARE NOT GUARANTEED BY ANY BANK OR ANY CREDIT UNION,
ARE NOT OBLIGATIONS OF ANY BANK OR ANY CREDIT UNION, AND INVOLVE INVESTMENT
RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. SHARES OF THE FUND ARE NOT BANK
OR CREDIT UNION DEPOSITS.
-3-
<PAGE>
SYNOPSIS
Capitalization
The Fund offers the International Equity Series, consisting of the
International Equity Fund A Class, the International Equity Fund B Class, the
International Equity Fund C Class, and the International Equity Fund
Institutional Class; the Global Bond Series, consisting of the Global Bond Fund
A Class, the Global Bond Fund B Class, the Global Bond Fund C Class and the
Global Bond Fund Institutional Class; and the Global Assets Series, consisting
of the Global Assets Fund A Class, the Global Assets Fund B Class, the Global
Assets Fund C Class and the Global Assets Fund Institutional Class. The Fund has
a present authorized capitalization of five hundred million shares of capital
stock with a $.01 par value per share. Fifty million shares have been allocated
to each of the A Class and the Institutional class of shares of each Series, and
twenty-five million shares have been allocated to each of the B Class and C
Class of shares of each Series. See Shares under Management of the Fund.
Investment Manager, Distributor and Service Agent
Delaware International Advisers Ltd. ("Delaware International" or the
"Manager") is the investment manager for each Series and, in that capacity,
provides advice to each Series with respect to its investments. Delaware
Management Company, Inc. ("DMC" or the "Sub-Adviser") is the investment
sub-adviser for the Global Assets Series and, in that capacity, provides advice
with respect to that Series' investment in U.S. securities. Delaware
Distributors, L.P. (the "Distributor") is the national distributor for the Fund
and for all of the other mutual funds in the Delaware Group. Delaware Service
Company, Inc. (the "Transfer Agent") is the shareholder servicing, dividend
disbursing and transfer agent for the Fund and for all of the other mutual funds
in the Delaware Group. See Management of the Fund.
Sales Charges
The price of the Class A Shares includes a maximum front-end sales
charge of 4.75% of the offering price, which, based on the net asset values of
the Class A Shares as of the end of the Fund's most recent fiscal year, is
equivalent to 4.95% with respect to the International Equity Fund A Class, 5.00%
with respect to the Global Assets Fund A Class and 5.00% with respect to the
Global Bond Fund A Class, of the amount invested. The front-end sales charges
are reduced on certain transactions of at least $100,000 but under $1,000,000.
For purchases of $1,000,000 or more, the front-end sales charge is eliminated.
Class A Shares are subject to annual 12b-1 Plan expenses.
The price of Class B Shares is equal to the net asset value per share.
Class B Shares are subject to a CDSC of: (i) 4% if shares are redeemed within
two years of purchase; (ii) 3% if shares are redeemed during the third or fourth
year following purchase; (iii) 2% if shares are redeemed during the fifth year
following purchase; and (iv) 1% if shares are redeemed during the sixth year
following purchase. Class B Shares are subject to annual 12b-1 Plan expenses for
approximately eight years after purchase. See Automatic Conversion of Class B
Shares under Buying Shares.
The price of Class C Shares is equal to the net asset value per share.
Class C Shares are subject to a CDSC of 1% if shares are redeemed within twelve
months of purchase. Class C Shares are subject to annual 12b-1 Plan expenses for
the life of the investment.
See Buying Shares and Distribution (12b-1) and Service under
Management of the Fund.
Purchase Amounts
Generally, the minimum initial investment is $1,000 for Class A Shares,
Class B Shares and Class C Shares. Subsequent investments in any Class generally
must be at least $100. Each purchase of Class B Shares is subject to a maximum
purchase limitation of $250,000. For Class C Shares, each purchase must be in an
amount that is less than $1,000,000. An investor may exceed these maximum
purchase limitations for Class B shares and Class C Shares by making cumulative
purchases over a period of time. An investor should keep in mind, however, that
reduced front-end sales charges apply to investments of $100,000 or more of
Class A Shares, which are subject to lower annual 12b-1 Plan expenses than Class
B Shares and Class C Shares and generally are not subject to a CDSC. The minimum
and maximum purchase amounts for retirement plans may vary. See Buying Shares.
-4-
<PAGE>
Investment Objectives
The investment objective of the International Equity Series is to
achieve long-term growth without undue risk to principal. This Series seeks to
achieve its objective by investing primarily in equity securities that provide
the potential for capital appreciation and income. The Series is an
international fund. As such, at least 65% of the Series' assets will be invested
in equity securities of issuers organized or having a majority of their assets
in or deriving a majority of their operating income in at least three different
countries outside of the United States. See Investment Objectives and Policies.
The investment objective of the Global Bond Series is to achieve
current income consistent with preservation of principal. This Series seeks to
achieve its objective by investing primarily in fixed income securities that may
also provide the potential for capital appreciation. The Series is a global
fund. As such, at least 65% of the Series' assets will be invested in fixed
income securities of issuers organized or having a majority of their assets in
or deriving a majority of their operating income in at least three different
countries, one of which may be the United States. See Investment Objectives and
Policies.
The investment objective of the Global Assets Series is to achieve
long-term total return. This Series seeks to achieve its objective by investing
in securities which, in the Manager's or Sub-Adviser's opinion, will provide
higher current income than a portfolio comprised exclusively of equity
securities, along with the potential for capital growth. The Series will invest
in both equity and fixed income securities. The Series is a global fund. As
such, at least 65% of the Series' assets will be invested in securities of
issuers organized or having a majority of their assets in or deriving a majority
of their operating income in at least three different countries, one of which
may be the United States. It is anticipated that a portion of the Series' assets
may be invested in warrants. For further details, see Investment Objectives and
Policies.
Open-End Investment Company
The Fund, which was organized as a Maryland corporation in 1991, is an
open-end, registered management investment company. The International Equity
Series operates as a diversified fund as defined under the Investment Company
Act of 1940 (the "1940 Act"). The Global Bond Series and the Global Assets
Series operate as nondiversified funds as defined under the 1940 Act. See Shares
under Management of the Fund.
Investment Management Fees
Delaware International furnishes investment management services to each
Series, subject to the supervision and direction of the Fund's Board of
Directors. Under the Investment Management Agreement between each Series and
Delaware International, the annual compensation paid to Delaware International
is equal to .75% of a Series' average daily net assets, less a proportionate
share of all directors' fees paid to the unaffiliated directors by the Series.
The fee paid to Delaware International is higher than the investment advisory
fee paid by most investment companies. Delaware International believes that its
fee is in line with the fees paid by other international equity funds. Delaware
International has entered into a sub-advisory agreement with DMC with respect to
the management of the Global Assets Series' investments in high yield, high risk
U.S. securities. DMC will receive from Delaware International 25% of the
investment management fees under Delaware International's Investment Management
Agreement with the Fund on behalf of the Global Assets Series. See Management of
the Fund.
-5-
<PAGE>
Redemption and Exchange
Class A Shares of the Series may be redeemed or exchanged at the net
asset value calculated after receipt of the redemption or exchange request.
Neither the Fund nor the Distributor assesses a charge for redemptions or
exchanges of Class A Shares, except for certain redemptions of shares purchased
at net asset value, which may be subject to a CDSC if such purchases triggered
the payment of a dealer's commission. See Front-End Sales Charge Alternative -
Class A Shares under Buying Shares and Contingent Deferred Sales Charge for
Certain Purchases of Class A Shares Made at Net Asset Value under Redemption and
Exchange. Class B Shares and Class C shares may be redeemed or exchanged at the
net asset value calculated after receipt of the redemption or exchange request
subject, in the case of redemptions, to any applicable CDSC. Neither the Fund
nor the Distributor assesses any charges other than the CDSC for redemptions or
exchanges of Class B Shares or Class C Shares. There are certain limitations on
an investor's ability to exchange shares between the various classes of shares
that are offered. See Redemption and Exchange.
Risk Factors
Prospective investors should consider a number of factors:
1. Investing in securities of non-United States companies which are
generally denominated in foreign currencies and utilization of forward foreign
currency exchange contracts involve certain considerations comprising both risk
and opportunity not typically associated with investing in United States
companies. See Special Risk Considerations.
2. Each Series may invest in repurchase agreements (which involve risks
of loss if a seller defaults on its obligation under the agreement). See
Repurchase Agreements under Investment Strategy.
3. Each Series may lend portfolio securities to creditworthy
institutions; the principal risk to the Series is the risk that the borrower
fails to return the borrowed security. The Series will require borrowers to
deliver collateral to the Series before lending securities. See Portfolio Loan
Transactions under Investment Strategy.
4. Each Series has the right to engage in options and futures
transactions for hedging purposes, to counterbalance portfolio volatility and,
in connection with futures transactions, will maintain certain collateral in
special accounts established by futures commission merchants in the care of the
Morgan Guaranty Trust Company of New York (the "Custodian Bank"). While the
Series does not engage in options and futures for speculative purposes, there
are risks which result from the use of these instruments by the Series, and an
investor should carefully review the descriptions of such in this Prospectus.
The Fund is not registered as a commodity pool operator nor is the Manager
registered as a commodities trading adviser, in reliance upon various exemptive
rules. See Options and Futures Contracts and Options on Futures Contracts under
Investment Strategy and Special Risk Considerations.
5. The Global Bond Series may invest in interest rate swaps for hedging
purposes which could subject the Series to increased risks. See Interest Rate
Swaps under Investment Strategy and Special Risk Considerations.
6. The Global Assets Series may invest up to 15% of its assets in high
yield, high risk U.S. securities ("junk bonds"). Greater risks may be involved
with an investment in this Series. See High Yield, High Risk Securities under
Investment Strategy.
7. Each Series may invest in the markets of certain emerging countries
which may be subject to a greater degree of economic, political and social
instability than is the case in the United States and Western European markets.
See Special Risk Considerations.
-6-
<PAGE>
8. While the Global Bond Series and the Global Assets Series each
intend to seek to qualify as a "diversified" investment company under provisions
of Subchapter M of the Internal Revenue Code, as amended (the "Code"), neither
Series will be diversified under the 1940 Act. Thus, while at least 50% of a
Series' total assets will be represented by cash, cash items, and other
securities limited in respect of any one issuer to an amount not greater than 5%
of the Series' total assets, it will not satisfy the 1940 Act requirement in
this respect, which applies that test to 75% of the Series' assets. A
nondiversified portfolio is believed to be subject to greater risk because
adverse effects on the portfolio's security holdings may affect a larger portion
of the overall assets.
-7-
<PAGE>
SUMMARY OF EXPENSES
A general comparison of the sales arrangements and other expenses
applicable to Class A, Class B and Class C Shares of each Series follows:
<TABLE>
<CAPTION>
International Equity Series
Shareholder Transaction Expenses Class A Class B Class C
Shares Shares Shares
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases (as
a percentage of offering price............................. 4.75% None None
Maximum Sales Charge Imposed on Reinvested
Dividends (as a percentage of offering price).............. None None None
Maximum Contingent Deferred Sales Charge (as
a percentage of original purchase price or
redemption proceeds, whichever is lower)................... None* 4.00%* 1.00%*
Redemption Fees............................................ None** None** None**
</TABLE>
<TABLE>
<CAPTION>
International Equity
Series
Annual Operating Expenses (as
a percentage of average daily Class A Class B Class C
net assets) Shares Shares Shares
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fees......................... 0.50%++ 0.50%++ 0.50%++
(after voluntary waivers)
12b-1 Expenses (including
service fees)........................... 0.30%+ 1.00%+ 1.00%+
Other Operating Expenses................ 1.05%++ 1.05%***++ 1.05%***++
----- -------- -----
Total Operating Expenses................ 1.85% 2.55% 2.55%
===== ===== =====
</TABLE>
-8-
<PAGE>
<TABLE>
<CAPTION>
Global Bond Series
Class A Class B Class C
Shareholder Transaction Expenses Shares Shares Shares
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases (as
a percentage of offering price)............................ 4.75% None None
Maximum Sales Charge Imposed on Reinvested
Dividends (as a percentage of offering price).............. None None None
Maximum Contingent Deferred Sales Charge (as
a percentage of original purchase price or
redemption proceeds, whichever is lower)................... None* 4.00%* 1.00%*
Redemption Fees............................................ None** None** None**
</TABLE>
<TABLE>
<CAPTION>
Global Bond Series
Annual Operating Expenses (as
a percentage of average daily Class A Class B Class C
net assets) Shares Shares Shares
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fees (after
voluntary waivers)...................... 0.16%++ 0.16%++ 0.16%++
12b-1 Expenses (including
service fees)........................... 0.30%+ 1.00%+ 1.00%+
Other Operating Expenses (after
voluntary waivers)...................... 0.79%++ 0.79%++ 0.79%++
----- ------- -----
Total Operating Expenses................ 1.25% 1.95% 1.95%
===== ==== ====
</TABLE>
-9-
<PAGE>
<TABLE>
<CAPTION>
Global Assets Series
Class A Class B Class C
Shareholder Transaction Expenses Shares Shares Shares
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases (as
a percentage of offering price)............................ 4.75% None None
Maximum Sales Charge Imposed on Reinvested
Dividends (as a percentage of offering price).............. None None None
Maximum Contingent Deferred Sales Charge (as
a percentage of original purchase price or
redemption proceeds, whichever is lower)................... None* 4.00%* 1.00%*
Redemption Fees............................................ None** None** None**
</TABLE>
<TABLE>
<CAPTION>
Global Assets Series
Annual Operating Expenses (as
a percentage of average daily Class A Class B Class C
net assets) Shares Shares Shares
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fees (after
voluntary waivers)...................... 0.16%++ 0.16%++ 0.16%++
12b-1 Expenses (including
service fees)........................... 0.30%+ 1.00%+ 1.00%+
Other Operating Expenses (after
voluntary waivers)...................... 0.79%++ 0.79%++ 0.79%++
----- ----- -----
Total Operating Expenses................ 1.25% 1.95% 1.95%
===== ===== =====
</TABLE>
-10-
<PAGE>
The purpose of this table is to assist the investor in understanding
the various costs and expenses that an investor in Class A Shares, Class B
Shares or Class C Shares of a Series will bear directly or indirectly.
*With respect to Class A Shares, purchases of $1 million or more may be
made at net asset value; however, if in connection with any such purchase
certain dealer commissions are paid to the financial adviser through whom such
purchase is effected, a CDSC of 1% will be imposed on certain redemptions within
twelve months of purchase ("Limited CDSC"). Class B Shares are subject to a CDSC
of: (i) 4% if shares are redeemed within two years of purchase; (ii) 3% if
shares are redeemed during the third or fourth year following purchase; (iii) 2%
if shares are redeemed during the fifth year following purchase; (iv) 1% if
shares are redeemed during the sixth year following purchase; and (v) 0%
thereafter. Class C Shares are subject to a CDSC of 1% if the shares are
redeemed within twelve months of purchase. See Contingent Deferred Sales Charge
for Certain Purchases of Class A Shares Made at Net Asset Value under Redemption
and Exchange\ and Deferred Sales Charge Alternative - Class B Shares and Level
Sales Charge Alternative Class C Shares under Buying Shares.
**CoreStates Bank, N.A. currently charges $7.50 per redemption for
redemptions payable by wire.
***"Other Operating Expenses" for Class B Shares and Class C Shares of
the International Equity Series are estimates derived from the expenses for
Class A Shares of that Series as of November 30, 1994.
+Class A Shares, Class B Shares and Class C Shares are subject to
separate 12b-1 Plans. Long-term shareholders may pay more than the economic
equivalent of the maximum front-end sales charges permitted by rules of the
National Association of Securities Dealers, Inc. (the "NASD"). See Distribution
(12b-1) and Service under Management of the Fund.
++"Other Operating Expenses" for the Global Bond Fund A Class, the
Global Bond Fund B Class, the Global Bond Fund C Class, the Global Assets Fund A
Class, the Global Assets Fund B Class, and the Global Assets Fund C Class are
based on estimated amounts for the first full fiscal year of these Classes,
derived from expenses actually paid by the Fund's International Equity Series
during its most recent fiscal year. Delaware International has elected
voluntarily to waive that portion, if any, of the annual management fees payable
by the International Equity Series, the Global Bond Series and the Global Assets
Series to the extent necessary to ensure that the Total Operating Expenses of
the Class A Shares of those Series do not exceed 1.85%, 1.25% and 1.25%,
respectively, and of the Class B Shares of those Series do not exceed 2.55%,
1.95% and 1.95%, respectively (in all three cases, exclusive of taxes, interest,
brokerage commissions and extraordinary expenses, but inclusive of 12b-1 fees)
through May 31, 1996. Absent the voluntary fee waiver, Total Operating Expenses
for the International Equity Series' fiscal year ending November 30, 1995, based
on the Series' unaudited financial statements dated May 31, 1995, are
anticipated to be 2.08% for Class A Shares and 2.78% for Class B Shares
reflecting management fees of 0.73%. The International Equity Series' total
operating expenses for its previous fiscal year, absent any fee waiver, were
1.82% for Class A Shares and for the period September 6, 1994 through November
30, 1994 were 2.52% for Class B Shares. If the voluntary expense waiver were
not in effect for the Global Bond Series and the Global Assets Series, the Total
Operating Expenses, as a percentage of average daily net assets, are estimated
to be approximately 1.82%, 2.52%, 1.82% and 2.52% for the first full fiscal year
of the Global Bond Fund A Class, the Global Bond Fund B Class, the Global Assets
Fund A Class and the Global Assets Fund B Class, respectively, reflecting
Management Fees of 0.73%. The information in the above table has been adjusted
to reflect that waiver.
Also, see International Equity Fund Institutional Class, Global Bond
Fund Institutional Class and Global Assets Fund Institutional Class under Buying
Shares for expense information about those classes.
-11-
<PAGE>
The following example illustrates the expenses that an investor would
pay on a $1,000 investment over various time periods, assuming (1) a 5% annual
rate of return, (2) redemption at the end of each time period and (3) with
respect to Class B Shares and Class C Shares payment of a CDSC at the time of
redemption, if applicable.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
International
Equity Fund 1 year 3 years 5 years 10 years
------ ------- ------- --------
A Class $65(1) $103 $143 $254
Global Bond 1 year 3 years 5 years 10 years
------ ------- ------- --------
Fund A Class $60(1) $ 85 $113 $191
Global Assets 1 year 3 years 5 years 10 years
------ ------- ------- --------
Fund A Class $60(1) $ 85 $113 $191
International
Equity Fund 1 year 3 years 5 years 10 years
------ ------- ------- --------
B Class $66 $109 $156 $271(2)
Global Bond 1 year 3 years 5 years 10 years
------ ------- ------- --------
Fund B Class $60 $ 91 $125 $209(2)
Global Assets 1 year 3 years 5 years 10 years
------ ------- ------- --------
Fund B Class $60 $ 91 $125 $209(2)
International
Equity Fund 1 year 3 years 5 years 10 years
------ ------- ------- --------
C Class $36 $ 79 $136 $289
Global Bond 1 year 3 years 5 years 10 years
------ ------- ------- --------
Fund C Class $30 $ 61 $105 $227
Global Assets 1 year 3 years 5 years 10 years
------ ------- ------- --------
Fund C Class $30 $ 61 $105 $227
</TABLE>
An investor would pay the following expenses on the same $1,000
investment, assuming no redemption at the end of the period:
-12-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
International
Equity Fund 1 year 3 years 5 years 10 years
------ ------- ------- --------
A Class 65 $103 $143 $254
Global Bond 1 year 3 years 5 years 10 years
------ ------- ------- --------
Fund A Class $60 $ 85 $113 $191
Global Assets 1 year 3 years 5 years 10 years
------ ------- ------- --------
Fund A Class $60 $ 85 $113 $191
International
Equity Fund 1 year 3 years 5 years 10 years
------ ------- ------- --------
B Class $26 $ 79 $136 $271(2)
Global Bond 1 year 3 years 5 years 10 years
------ ------- ------- --------
Fund B Class $20 $ 61 $105 $209(2)
Global Assets 1 year 3 years 5 years 10 years
------ ------- ------- --------
Fund B Class $20 $61 $105 $209(2)
International
Equity Fund 1 year 3 years 5 years 10 years
------ ------- ------- --------
C Class $26 $ 79 $136 $289
Global Bond 1 year 3 years 5 years 10 years
------ ------- ------- --------
Fund C Class $20 $61 $105 $227
Global Assets 1 year 3 years 5 years 10 years
------ ------- ------- --------
Fund C Class $20 $61 $105 $227
</TABLE>
(1) Generally, the Fund does not assess a redemption charge upon redemption
of Class A Shares. Under certain circumstances, however, a Limited
CDSC, which has not been reflected in this calculation, may be imposed
on certain redemptions within twelve months of purchase. See Contingent
Deferred Sales Charge for Certain Purchases of Class A Shares Made at
Net Asset Value under Redemption and Exchange.
-13-
<PAGE>
(2) At the end of approximately eight years after purchase, Class B Shares
of a Series will be automatically converted into Class A Shares of
that Series. The example above assumes conversion of Class B Shares
at the end of the eighth year. However, the conversion may occur as
late as three months after the eighth anniversary of purchase, during
which time the higher 12b-1 Plan fees payable by Class B Shares will
continue to be assessed. Information for the ninth and tenth years
reflects expenses of the Class A Shares. See Automatic Conversion of
Class B Shares under Buying Shares for a description of the automatic
conversion feature.
This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be greater or less than those
shown.
-14-
<PAGE>
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The following financial highlights from October 31, 1991 through November 30,
1994 are derived from the financial statements of Delaware Group Global &
International Funds, Inc. - International Equity Series and have been audited by
Ernst & Young LLP, independent auditors. The data should be read in conjunction
with the financial statements, related notes, and the report of Ernst & Young
LLP covering such financial information and highlights, all of which are
incorporated by reference into Part B. Unaudited financial highlights for the
Class A Shares and Class B Shares of the International Equity Series for the
six-month period ended May 31, 1995 and for the Class A Shares and Class B
Shares of the Global Bond Series and the Global Assets Series for the
period December 27, 1994 to May 31, 1995 are also provided below. The data
should be read in conjunction with the financial statements and related notes
for the periods ended May 31, 1995, all of which are incorporated by reference
into Part B. Further information about the International Equity Series'
performance is contained in its Annual Report to shareholders for the fiscal
year ended November 30, 1994, and its Semi-Annual Report to shareholders for the
six months ended May 31, 1995. A copy of the Series' Annual Report (including
the report of Ernst & Young LLP) of the International Equity Series and its
Semi-Annual Reports of the International Equity Series, the Global Bond Series
and the Global Assets Series may be obtained from the Fund upon request at no
charge. Information regarding Class C Shares has not been included in these
tables because such shares were not offered to the public prior to the date of
this Prospectus.
- -------------------------------------------------------------------------------
-15-
<PAGE>
<TABLE>
<CAPTION>
International Equity Series
Class A Shares
------------------------------------------------------------------
Period
12/1/94 Period
through 10/31/91(1)
5/31/95(2) Year Ended through
(Unaudited) 11/30/94 11/30/93 11/30/92 11/30/91
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................ $11.920 $11.250 $9.590 $9.650 $10.000
Income From Investment Operations
- ---------------------------------
Net Investment Income............................... (0.149) 0.140 0.499 0.162 (0.004)
Net Gains (Losses) on Securities
(both realized and unrealized)..................... 0.694 0.895 1.636 (0.172) (0.346)
----- ----- ----- ------- -------
Total From Investment Operations................... 0.545 1.035 2.135 (0.010) (0.350)
----- ----- ----- ------- -------
Less Distributions
- ------------------
Dividends from Net Investment Income................ (0.125) (0.225) (0.475) (0.050) none
Distributions from Capital Gains.................... (0.470) (0.140) none none none
Returns of Capital.................................. none none none none none
---- ---- ---- ---- ----
Total Distributions................................ (0.595) (0.365) (0.475) (0.050) none
------- ------- ------- ------- ----
Net Asset Value, End of Period...................... $11.870 $11.920 $11.250 $9.590 $9.650
======= ======= ======= ====== ======
- ----------------------------------------------------
Total Return(3)..................................... 4.80%(3) 9.23%(3)(4) 23.08%(3)(4) (0.15%)(3)(4) (3.50%)(3)(4)
- ----------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000's omitted)........... $58,553 $53,736 $31,673 $4,604 $723
Ratio of Expenses to Average Daily Net Assets....... 2.08% 1.56% 1.25% 1.25% (5)
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation........................ --- 1.82% 2.16% 5.67% ---
Ratio of Net Investment Income to Average Daily Net Assets (2.94%) 1.22% 3.91% 2.44% (5)
Ratio of Net Investment Income to Average Daily Net Assets
Prior to Expense Limitation........................ --- 0.96% 3.00% (2.00%) ---
Portfolio Turnover Rate............................. 25% 27% 24% 12% (5)
</TABLE>
(1) Date of initial sale; total return for the limited period between September
6, 1994 through November 30, 1994 has been annualized.
(2) Ratios have been annualized but total return for the limited period between
December 1, 1999 through May 31, 1995 has not been annualized.
(3) Does not reflect maximum sales charge that is or was in effect nor the 1%
Limited CDSC that would apply in the event of certain redemptions within
twelve months of purchase. See Contingent Deferred Sales Charge for Certain
Purchases of Class A Shares Made at Net Asset Value under Redemption and
Exchange.
(4) Total return reflects the expense limitations referenced under Management
of the Fund.
(5) The ratios of expenses and net investment income to average daily net assets
and portfolio turnover have been omitted as management believes such ratios
for this relatively short period are not meaningful.
<PAGE>
<TABLE>
<CAPTION>
International Equity Series
Class B Shares
---------------------------
Period
12/1/94 Period
through 9/6/94(2)
5/31/95(1) through
(Unaudited) 11/30/94
<S> <C> <C>
Net Asset Value, Beginning of Period....................... $11.900 $12.860
Income From Investment Operations
Net Investment Income...................................... (0.156) 0.036
Net Gains (Losses) on Securities
(both realized and unrealized)............................ 0.661 (0.966)
----- -------
Total From Investment Operations.......................... 0.505 (0.930)
----- -------
Less Distributions
Dividends from Net Investment Income....................... (0.105) (0.030)
Distributions from Capital Gains........................... (0.470) none
Returns of Capital......................................... none none
---- ----
Total Distributions....................................... (0.575) (0.030)
------- -------
Net Asset Value, End of Period............................. $11.830 $11.900
======= =======
- -----------------------------------------------------------
Total Return(3)............................................ 4.45%(3) (7.24%)(3)(4)
- -----------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted).................. $1,565 $624
Ratio of Expenses to Average Daily Net Assets.............. 2.78% 2.26%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation............................... -- 2.52%
Ratio of Net Investment Income to Average Daily Net Assets. (3.64%) 0.52%
Ratio of Net Investment Income to Average Daily Net Assets
Prior to Expense Limitation............................... -- 0.26%
Portfolio Turnover Rate.................................... 25% 27%
</TABLE>
- -------------
(1) Ratios have been annualized but total return has not been annualized.
(2) Date of initial public offering; ratios have been annualized but total
return has not been annualized.
(3) Does not reflect CDSC which varies from 1%-4% depending upon the holding
period.
(4) Total return reflects the expense limitations referenced under Management
of the Fund.
<PAGE>
Global Bond Series
Class A Shares
------------------
Period
12/27/94(1)
through
5/31/95
(Unaudited)
Net Asset Value, Beginning of Period......................... $10.000
Income From Investment Operations
Net Investment Income........................................ 0.255
Net Gains (Losses) on Securities
(both realized and unrealized)............................. 0.585
-------
Total From Investment Operations........................... 0.840
-------
Less Distributions
Dividends from Net Investment Income........................ (0.240)
Distributions from Capital Gains............................ none
Returns of Capital.......................................... none
Total Distributions........................................ (0.240)
-------
Net Asset Value, End of Period.............................. $10.600
=======
- ------------------------------------------------------------
Total Return(2)............................................. 8.49%
- ------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted)................... $348
Ratio of Expenses to Average Daily Net Assets............... 1.25%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation................................ 16.55%
Ratio of Net Investment Income to Average Daily Net Assets.. 7.07%
Ratio of Net Investment Income to Average Daily Net Assets
Prior to Expense Limitation................................ (8.23%)
Portfolio Turnover Rate..................................... 70%
- -------------
(1) Date of initial sale; ratios have been annualized but total return for the
limited period between December 27, 1994 through May 31, 1995 has not been
annualized.
(2) Does not reflect maximum sales charge that is or was in effect nor the 1%
Limited CDSC that would apply in the event of certain redemptions within
twelve months of purchase.
See Contingent Deferred Sales Charge for Certain Purchases of Class A
Shares Made at Net Asset Value under Redemption and Exchange. Total return
reflects the expense limitations referenced under Ratios/Supplemental Data
in the Chart.
<PAGE>
Global Bond Series
Class B Shares
------------------
Period
12/27/94(1)
through
5/31/95
(Unaudited)
Net Asset Value, Beginning of Period....................... $10.000
Income From Investment Operations
Net Investment Income...................................... 0.250
Net Gains (Losses) on Securities
(both realized and unrealized)............................ 0.566
-----
Total From Investment Operations.......................... 0.816
-----
Less Distributions
Dividends from Net Investment Income....................... (0.216)
Distributions from Capital Gains........................... none
Returns of Capital......................................... none
Total Distributions....................................... (0.216)
-------
Net Asset Value, End of Period............................. $10.600
=======
- -----------------------------------------------------------
Total Return(2)............................................ 8.24%
- -----------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted).................. $0(3)
Ratio of Expenses to Average Daily Net Assets.............. 1.95%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation............................... 17.25%
Ratio of Net Investment Income to Average Daily Net Assets. 6.37%
Ratio of Net Investment Income to Average Daily Net Assets
Prior to Expense Limitation............................... (8.93%)
Portfolio Turnover Rate.................................... 70%
- -------------
(1) Date of initial public offering; ratios have been annualized but total
return for the limited period between December 27, 1994 through May 31, 1995
has not been annualized.
(2) Does not reflect CDSC which varies from 1%-4% depending upon the holding
period. Total return reflects the expense limitations referenced under
Ratios/Supplemental Data in the Chart.
(3) Only one share of the Global Bond Fund B Class is outstanding, the net asset
value of which is $10.60.
<PAGE>
Global Assets Series
Class A Shares
--------------------
Period
12/27/94(1)
through
5/31/95
(Unaudited)
Net Asset Value, Beginning of Period....................... $10.000
Income From Investment Operations
Net Investment Income...................................... 0.170
Net Gains (Losses) on Securities
(both realized and unrealized)............................ 1.010
-----
Total From Investment Operations.......................... 1.180
-----
Less Distributions
Dividends from Net Investment Income....................... (0.080)
Distributions from Capital Gains........................... none
Returns of Capital......................................... none
Total Distributions....................................... (0.080)
-------
Net Asset Value, End of Period............................. $11.100
- ----------------------------------------------------------- =======
Total Return(2)............................................ 11.84%
- -----------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted).................. $354
Ratio of Expenses to Average Daily Net Assets.............. 1.25%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation............................... 11.15%
Ratio of Net Investment Income to Average Daily Net Assets. 4.75%
Ratio of Net Investment Income to Average Daily Net Assets
Prior to Expense Limitation............................... (5.15%)
Portfolio Turnover Rate.................................... 85%
- -------------
(1) Date of initial sale; ratios have been annualized but total return for the
limited period between December 27, 1994 through May 31, 1995 has not been
annualized.
(2) Does not reflect maximum sales charge that is or was in effect, nor the 1%
Limited CDSC that would apply in the event of certain redemptions within
twelve months of purchase.
See Contingent Deferred Sales Charge for Certain Purchases of Class A
Shares Made at Net Asset Value under Redemption and Exchange. Total return
reflects the expense limitations referenced under Ratios/Supplemental Data
in the Chart.
<PAGE>
Global Assets Series
Class B Shares
--------------------
Period
12/27/94(1)
through
5/31/95
(Unaudited)
Net Asset Value, Beginning of Period....................... $10.000
Income From Investment Operations
Net Investment Income...................................... 0.170
Net Gains (Losses) on Securities
(both realized and unrealized)............................ 0.980
-------
Total From Investment Operations.......................... 1.150
-------
Less Distributions
Dividends from Net Investment Income....................... (0.060)
Distributions from Capital Gains........................... none
Returns of Capital......................................... none
Total Distributions....................................... (0.060)
-------
Net Asset Value, End of Period............................. $11.090
- ----------------------------------------------------------- =======
Total Return(2)............................................ 11.53%
- -----------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted).................. $0(3)
Ratio of Expenses to Average Daily Net Assets.............. 1.95%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation............................... 11.85%
Ratio of Net Investment Income to Average Daily Net Assets. 4.05%
Ratio of Net Investment Income to Average Daily Net Assets
Prior to Expense Limitation............................... (5.85%)
Portfolio Turnover Rate.................................... 85%
- -------------
(1) Date of initial public offering; ratios have been annualized but total
return for the limited period between December 27, 1994 through May 31,
1995 has not been annualized.
(2) Does not reflect CDSC which varies from 1%-4% depending upon the holding
period. Total return reflects the expense limitations referenced under
Ratios/Supplemental Data in the Chart.
(3) Only one share of the Global Assets Fund B Class is outstanding, the net
asset value of which is $11.09.
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The objective of the International Equity Series is to achieve
long-term growth without undue risk to principal. The Series seeks to achieve
this objective by investing primarily in securities that provide the potential
for capital appreciation and income. The Series is an international fund. Under
normal circumstances, at least 65% of the Series' assets will be invested in the
securities of issuers organized or having a majority of their assets in or
deriving a majority of their operating income in at least three different
countries outside of the United States.
The objective of the Global Bond Series is to achieve current income
consistent with the preservation of investors' principal. The Series seeks to
achieve this objective by investing primarily in fixed income securities that
may also provide the potential for capital appreciation. The Series is a global
fund. Under normal circumstances, at least 65% of the Series' assets will be
invested in the fixed income securities of issuers organized or having a
majority of their assets in or deriving a majority of their operating income in
at least three different countries, one of which may be the United States.
The objective of the Global Assets Series is to achieve long-term total
return for investors. The Series seeks to achieve this objective by investing in
securities which, in the Manager's or Sub-Adviser's opinion, will provide higher
current income than a portfolio comprised exclusively of equity securities,
along with the potential for capital growth. The Series is a global fund. Under
normal circumstances, at least 65% of the Series' assets will be invested in the
securities of issuers organized or having a majority of their assets in or
deriving a majority of their operating income in at least three different
countries, one of which may be the United States.
Each Series may invest in securities issued in any currency and may
hold foreign currency. Securities of issuers within a given country may be
denominated in the currency of another country or in multinational currency
units such as the European Currency Unit ("ECU"). For purposes of the 1940 Act,
the International Equity Series will operate as a diversified fund and the
Global Bond Series and the Global Assets Series will each operate as a
nondiversified fund.
INVESTMENT STRATEGY
International Equity Series--The Series will attempt to achieve its
objective by investing in a broad range of equity securities including common
stocks, preferred stocks, convertible securities and warrants. The Manager will
employ a dividend discount analysis across country boundaries and will also use
a purchasing power parity approach to identifying currencies and markets that
are overvalued or undervalued relative to the U.S. dollar.
With a dividend discount analysis, the Manager looks at future
anticipated dividends and discounts the value of those dividends back to what
they would be worth if they were being paid today. The Manager uses this
technique to attempt to compare the value of different investments. With a
purchasing power parity approach, the Manager attempts to identify the amount of
goods and services that a dollar will buy in the United States and compare that
to the amount of a foreign currency required to buy the same amount of goods and
services in another country. Eventually, currencies should trade at levels that
should make it possible for the dollar to buy the same amount of goods and
services overseas as in the United States. When the dollar buys less, the
foreign currency may be considered to be overvalued. When the dollar buys more,
the currency may be considered to be undervalued. The Series may also invest in
sponsored or unsponsored American Depository Receipts or European Depository
Receipts.
-22-
<PAGE>
While the Series may purchase securities in any foreign country,
developed and underdeveloped, or emerging market countries, it is currently
anticipated that the countries in which the Series may invest will include, but
not be limited to, Canada, Germany, the United Kingdom, France, the Netherlands,
Belgium, Spain, Switzerland, Japan, Australia, Hong Kong and Singapore/Malaysia.
With respect to certain countries, investments by an investment company may only
be made through investments in closed-end investment companies that in turn are
authorized to invest in the securities of such countries. Any investment the
Series may make in other investment companies is limited in amount by the 1940
Act and would involve the indirect payment of a portion of the expenses,
including advisory fees, of such other investment companies.
The Series may invest in restricted securities, including securities
eligible for resale without registration pursuant to Rule 144A ("Rule 144A
Securities") under the Securities Act of 1933 (the "1933 Act"). Rule 144A
permits many privately placed and legally restricted securities to be freely
traded among certain institutional buyers such as the Series. See Rule 144A
Securities. The Series may invest no more than 10% of the value of its net
assets in illiquid securities. The Series will not concentrate its investments
in any particular industry, which means that it will not invest 25% or more of
its total assets in any one industry.
For temporary defensive purposes, the Series may invest all or a
substantial portion of its assets in high quality debt instruments issued by
foreign governments, their agencies, instrumentalities or political
subdivisions, the U.S. Government, its agencies or instrumentalities and which
are backed by the full faith and credit of the U.S. Government, or issued by
foreign or U.S. companies. Any corporate debt obligations will be rated AA or
better by Standard & Poor's Ratings Group ("S&P"), or Aa or better by Moody's
Investors Service, Inc. ("Moody's"), or if unrated, will be determined to be of
comparable quality by the Manager. For example, the Series may enter the global
fixed income markets when the Manager believes that the global equity markets
are excessively volatile or overvalued so that the Series' objective cannot be
achieved in such markets. In addition, the Series may invest in the U.S. fixed
income markets for temporary defensive purposes when the Manager believes that
the international equity and fixed income markets are evidencing such excessive
volatility or overvaluation. The Series may also invest in the securities listed
for defensive investing pending investment of proceeds from new sales of Series
shares and to maintain sufficient cash to meet redemption requests.
Global Bond Series--The Series will attempt to achieve its objective by
investing at least 65% of its assets in a broad range of fixed income
securities, including foreign and U.S. Government securities and debt
obligations of foreign and U.S. companies which are generally rated A or better
by S&P or Moody's, or if unrated, are deemed to be of comparable quality by the
Manager. The Series may also invest in zero coupon bonds and in the debt
securities of supranational entities denominated in any currency. Generally, the
value of fixed income securities moves inversely to the movement of market
interest rates. The value of the Series' portfolio securities and, thus, an
investor's shares will be affected by changes in such rates.
Zero coupon bonds are debt obligations which do not entitle the holder
to any periodic payments of interest prior to maturity or a specified date when
the securities begin paying current interest, and therefore are issued and
traded at a discount from their face amounts or par value. A supranational
entity is an entity established or financially supported by the national
governments of one or more countries to promote reconstruction or development.
-23-
<PAGE>
Examples of supranational entities include, among others, the World Bank, the
European Economic Community, the European Coal and Steel Community, the European
Investment Bank, the Inter-Development Bank, the Export-Import Bank and the
Asian Development Bank. For increased safety, the Series currently anticipates
that a large percentage of its assets will be invested in U.S. and foreign
government securities and securities of supranational entities.
With respect to U.S. Government securities, the Series may invest only
in securities issued or guaranteed as to the payment of principal and interest
by the U.S. Government, and those of its agencies or instrumentalities which are
backed by the full faith and credit of the United States. Direct obligations of
the U.S. Government which are available for purchase by the Series include
bills, notes, bonds and other debt securities issued by the U.S. Treasury. These
obligations differ mainly in interest rates, maturities and dates of issuance.
Agencies whose obligations are backed by the full faith and credit of the United
States include the Farmers Home Administration, Federal Financing Bank and
others.
With respect to securities issued by foreign governments, their
agencies, instrumentalities or political subdivisions, the Series will generally
invest in such securities if they have been rated AAA or AA by S&P or Aaa or Aa
by Moody's or, if unrated, have been determined by the Manager to be of
comparable quality.
From time to time, the Series may find opportunities to pursue its
objective outside of the fixed income markets, but in no event will such
investments exceed 5% of the Series' net assets.
The Series may also invest in sponsored or unsponsored American
Depository Receipts or European Depository Receipts. While the Series may
purchase securities of issuers in any foreign country, developed and
underdeveloped, or emerging market countries, it is currently anticipated that
the countries in which the Series may invest will include, but not be limited
to, Canada, Germany, the United Kingdom, France, the Netherlands, Belgium,
Spain, Switzerland, Ireland, Denmark, Portugal, Italy, Austria, Norway, Sweden,
Finland, Luxembourg, Japan and Australia. With respect to certain countries,
investments by an investment company may only be made through investments in
closed-end investment companies that in turn are authorized to invest in the
securities of such countries. Any investment the Series may make in other
investment companies is limited in amount by the 1940 Act and would involve the
indirect payment of a portion of the expenses, including advisory fees, of such
other investment companies.
The Series may invest in restricted securities, including Rule 144A
Securities. See Rule 144A Securities. The Series may invest no more than 10% of
the value of its net assets in illiquid securities. The Series will not
concentrate its investments in any particular industry, which means that it will
not invest 25% or more of its total assets in any one industry.
It is anticipated that the average weighted maturity of the portfolio
will be in the five-to-ten year range. If, however, the Manager anticipates a
declining interest rate environment, the average weighted maturity may be
extended past ten years. Conversely, if the Manager anticipates a rising rate
environment, the average weighted maturity may be shortened to less than five
years.
Global Assets Series--The Series will attempt to achieve its objective
by investing in a broad range of equity and fixed income securities. In
selecting securities investments for the Series, the Manager will consider an
issuer's competitive position, cost structure and liquidity.
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Equity securities in which the Series may invest include convertible securities,
common stocks, preferred stocks and warrants issued in foreign countries or in
the United States. In selecting equity securities in which the Series may
invest, the Manager will use a dividend discount analysis and a purchasing power
parity approach.
Generally, fixed income securities in which the Series may invest
include foreign and U.S. Government securities and debt obligations of foreign
and U.S. companies which are investment grade as determined by any
nationally-recognized statistical rating organization, such as those rated BBB
or better by S&P, or Baa or better by Moody's, or if unrated, are determined to
be of comparable quality by the Manager. Debt obligations rated BBB and Baa have
speculative characteristics. However, the Series may also invest up to 15% of
its net assets in high yield, high risk U.S. fixed income securities. These
securities are rated lower than BBB by S&P and Baa by Moody's or, if unrated,
are considered by the Manager or Sub-Adviser to be of equivalent quality. The
Series will not invest in securities which are rated lower than C by S&P or Ca
by Moody's or, if unrated, are considered by the Manager or Sub-Adviser to be of
a quality that is lower than such ratings. See Appendix B Ratings to this
Prospectus for more rating information. Fixed income securities of this type are
considered to be of poor standing and predominantly speculative. Such securities
are subject to a substantial degree of credit risk. See High Yield, High Risk
Securities. With respect to U.S. Government securities, the Series may invest
only in securities issued or guaranteed as to the payment of principal and
interest by the United States government, and those of its agencies or
instrumentalities which are backed by the full faith and credit of the United
States.
With respect to securities issued by foreign governments, their
agencies, instrumentalities or political subdivisions, the Series will invest
only in such securities if they have been rated AAA or AA by S&P, or Aaa or Aa
by Moody's, or, if unrated, have been determined by the Manager to be of
comparable quality.
It is anticipated that a portion of the Series' assets may be invested
in warrants. Warrants permit the Manager to establish an equity position in
selected securities by committing a lower proportion of the portfolio to
equities. The Manager's intention is to invest the difference between the cost
of the warrant and the equivalent equity security in high quality debt
instruments. The Series may, at any given time, be fully invested in either the
equity or fixed income markets, depending upon investment opportunities
available in each.
The Series may also invest in zero coupon bonds and in the debt
securities of supranational entities denominated in any currency. See Global
Bond Series.
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The Series may also invest in sponsored or unsponsored American
Depository Receipts or European Depository Receipts. While the Series may
purchase securities of issuers in any foreign country, developed and
underdeveloped, or emerging growth countries, it is currently anticipated that
the countries in which the Series may invest in addition to the United States,
will include, but are not limited to, Canada, Germany, the United Kingdom,
France, the Netherlands, Belgium, Spain, Switzerland, Ireland, Denmark,
Portugal, Italy, Austria, Norway, Sweden, Finland, Luxembourg, Greece, Japan,
Australia, Hong Kong, Singapore/Malaysia, Indonesia, Korea, Malaysia, the
Philippines, Taiwan and Thailand. With respect to certain countries, namely
Korea and Taiwan, investments by an investment company may only be made through
investments in closed-end investment companies that in turn are authorized to
invest in the securities of such countries. Any investment the Series may make
in other investment companies is limited in amount by the 1940 Act and would
involve the indirect payment of a portion of the expenses, including advisory
fees, of such other investment companies. The Series may invest in restricted
securities, including Rule 144A Securities. See Rule 144A Securities. The Series
may invest no more than 10% of the value of its net assets in illiquid
securities. The Series will not concentrate its investments in any particular
industry, which means that it will not invest 25% or more of its total assets in
any one industry.
High Yield, High Risk Securities
The Global Assets Series may invest up to
15% of its assets in high yield, high risk U.S. fixed income securities
(commonly known as junk bonds). In the past, in the opinion of the Manager and
the Sub-Adviser, the high yields from these bonds have more than compensated for
their higher default rates. There can be no assurance, however, that yields will
continue to offset default rates on these bonds in the future. The Manager and
the Sub-Adviser intend to maintain an adequately diversified portfolio of these
bonds. While diversification can help to reduce the effect of an individual
default on the Series, there can be no assurance that diversification will
protect the Series from widespread bond defaults brought about by a sustained
economic downturn.
Medium- and low-grade bonds held by the Series may be issued as a
consequence of corporate restructurings, such as leveraged buy-outs, mergers,
acquisitions, debt recapitalizations or similar events. Also these bonds are
often issued by smaller, less creditworthy companies or by highly leveraged
(indebted) firms, which are generally less able than more financially stable
firms to make scheduled payments of interest and principal. The risks posed by
bonds issued under such circumstances are substantial.
The economy and interest rates may affect these high yield, high risk
securities differently from other securities. Prices have been found to be less
sensitive to interest rate changes than higher rated investments, but more
sensitive to adverse economic changes or individual corporate developments.
Also, during an economic downturn or a substantial period of rising interest
rates, highly leveraged issuers may experience financial stress which would
adversely affect their ability to service principal and interest payment
obligations, to meet projected business goals and to obtain additional
financing. Changes by recognized rating agencies in their rating of any security
and in the ability of an issuer to make payments of interest and principal will
also ordinarily have a more dramatic effect on the values of these investments
than on the values of higher-rated securities. Such changes in value will not
affect cash income derived from these securities, unless the issuers fail to pay
interest or dividends when due. Such changes will, however, affect the Series'
net asset value per share.
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Foreign Currency Transactions
Although the Fund values its assets daily in terms of U.S. dollars, it
does not intend to convert its holdings of foreign currencies into U.S. dollars
on a daily basis. Each Series will, however, from time to time, purchase or sell
foreign currencies and/or engage in forward foreign currency transactions in
order to expedite settlement of portfolio transactions and to minimize currency
value fluctuations. Each Series may conduct its foreign currency exchange
transactions on a spot (i.e., cash) basis at the spot rate prevailing in the
foreign currency exchange market or through entering into contracts to purchase
or sell foreign currencies at a future date (i.e., a "forward foreign currency"
contract or "forward" contract). A forward contract involves an obligation to
purchase or sell a specific currency at a future date, which may be any fixed
number of days from the date of the contract, agreed upon by the parties, at a
price set at the time of the contract. The Series will convert currency on a
spot basis from time to time, and investors should be aware of the costs of
currency conversion.
A Series may enter into forward contracts to "lock in" the price of a
security it has agreed to purchase or sell, in terms of U.S. dollars or other
currencies in which the transaction will be consummated. By entering into a
forward contract for the purchase or sale, for a fixed amount of U.S. dollars or
foreign currency, of the amount of foreign currency involved in the underlying
security transaction, the Series will be able to protect itself against a
possible loss resulting from an adverse change in currency exchange rates during
the period between the date the security is purchased or sold and the date on
which payment is made or received.
When the Manager believes that the currency of a particular country may
suffer a significant decline against the U.S. dollar or against another
currency, the Series may enter into a forward foreign currency contract to sell,
for a fixed amount of U.S. dollars or other appropriate currency, the amount of
foreign currency approximating the value of some or all of the Series'
securities denominated in such foreign currency.
A Series will not enter into forward contracts or maintain a net
exposure to such contracts where the consummation of the contracts would
obligate the Series to deliver an amount of foreign currency in excess of the
value of the Series' securities or other assets denominated in that currency.
At the maturity of a forward contract, a Series may either sell the
portfolio security and make delivery of the foreign currency, or it may retain
the security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract with the same currency trader
obligating it to purchase, on the same maturity date, the same amount of the
foreign currency. The Series may realize a gain or loss from currency
transactions.
A Series also may purchase and write put and call options on foreign
currencies (traded on U.S. and foreign exchanges or over-the-counter) for
hedging purposes to protect against declines in the U.S. dollar cost of foreign
securities held by the Series and against increases in the U.S. dollar cost of
such securities to be acquired. Call options on foreign currency written by a
Series will be covered, which means that the Series will own the underlying
foreign currency. With respect to put options on foreign currency written by a
Series, the Series will establish a segregated account with its Custodian Bank
consisting of cash, U.S. Government securities or other high-grade liquid debt
securities in an amount equal to the amount the Series will be required to pay
upon exercise of the put. See Special Risk Considerations.
Repurchase Agreements
Each Series also may use repurchase agreements that are at least 100%
collateralized by securities in which the Series can invest directly. Repurchase
agreements help a Series to invest cash on a temporary basis. A Series may
invest cash balances in joint repurchase agreements with other Delaware Group
funds. Under a repurchase agreement, a Series acquires ownership and possession
of a security, and the seller agrees to buy the security back at a specified
time and higher price. If the seller is unable to repurchase the security, the
Series could experience delays in liquidating the securities. To minimize this
possibility, the Manager, pursuant to direction from the Board of Directors of
the Fund, considers the creditworthiness of banks and dealers when entering into
repurchase agreements.
Portfolio Loan Transactions
Each Series may loan up to 25% of its
assets to qualified broker/dealers or institutional investors for their use
relating to short sales or other security transactions.
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The major risk to which a Series would be exposed on a loan transaction
is the risk that the borrower would go bankrupt at a time when the value of the
security goes up. Therefore, the Series will only enter into loan arrangements
after a review of all pertinent facts by the Manager, subject to overall
supervision by the Board of Directors, including the creditworthiness of the
borrowing broker, dealer or institution and then only if the consideration to be
received from such loans would justify the risk. Creditworthiness will be
monitored on an ongoing basis by the Manager.
Borrowings
Each Series may borrow money as a temporary measure for extraordinary
purposes or to facilitate redemptions. A Series will not borrow money in excess
of one-third of the value of its net assets. A Series has no intention of
increasing its net income through borrowing. Any borrowing will be done from a
bank and, to the extent that such borrowing exceeds 5% of the value of the
Series' net assets, asset coverage of at least 300% is required. In the event
that such asset coverage shall at any time fall below 300%, a Series shall,
within three days thereafter (not including Sunday or holidays) or such longer
period as the U.S. Securities and Exchange Commission may prescribe by rules and
regulations, reduce the amount of its borrowings to such an extent that the
asset coverage of such borrowings shall be at least 300%. A Series will not
pledge more than 10% of its net assets, or issue senior securities as defined in
the 1940 Act, except for notes to banks. Investment securities will not be
purchased while a Series has an outstanding borrowing.
Rule 144A Securities
While maintaining oversight, the Board of Directors has delegated to
the Manager the day-to-day functions of determining whether or not individual
Rule 144A Securities are liquid for purposes of each Series' 10% limitation on
investments in illiquid assets. The Board has instructed the Manager to consider
the following factors in determining the liquidity of a Rule 144A Security: (i)
the frequency of trades and trading volume for the security; (ii) whether at
least three dealers are willing to purchase or sell the security and the number
of potential purchasers; (iii) whether at least two dealers are making a market
in the security; and (iv) the nature of the security and the nature of the
marketplace trades (e.g., the time needed to dispose of the security, the method
of soliciting offers, and the mechanics of transfer).
If the Manager determines that a Rule 144A Security which was
previously determined to be liquid is no longer liquid and, as a result, a
Series' holdings of illiquid securities exceed the Series' 10% limit on
investment in such securities, the Manager will determine what action to take to
ensure that the Series continues to adhere to such limitation.
Options
The Manager may employ options techniques in an attempt to protect
appreciation attained and to take advantage of the liquidity available in the
options market. Each Series may purchase call options on foreign or U.S.
securities and indices and enter into related closing transactions. A Series may
also purchase put options on such securities and indices and enter into related
closing transactions.
A call option enables the purchaser, in return for the premium paid, to
purchase securities from the writer of the option at an agreed price up to an
agreed date. The advantage is that the purchaser may hedge against an increase
in the price of securities it ultimately wishes to buy or take advantage of a
rise in a particular index. A Series will only purchase call options to the
extent that premiums paid on all outstanding call options do not exceed 2% of
its total assets.
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A put option enables the purchaser of the option, in return for the
premium paid, to sell the security underlying the option to the writer at the
exercise price during the option period, and the writer of the option has the
obligation to purchase the security from the purchaser of the option. A Series
will only purchase put options to the extent that the premiums on all
outstanding put options do not exceed 2% of its total assets. The advantage is
that the purchaser can be protected should the market value of the security
decline or should a particular index decline.
An option on a securities index gives the purchaser of the option, in
return for the premium paid, the right to receive from the seller cash equal to
the difference between the closing price of the index and the exercise price of
the option.
Closing transactions essentially let a Series offset put options or
call options prior to exercise or expiration. If a Series cannot effect closing
transactions, it may have to hold a security it would otherwise sell or deliver
a security it might want to hold.
Each Series may use both Exchange-traded and over-the-counter options.
Certain over-the-counter options may be illiquid. A Series will only invest in
such options to the extent consistent with its 10% limit on investment in
illiquid securities. See Special Risk Considerations.
Futures Contracts and Options on Futures
Contracts
The principal purpose of the purchase or sale of futures contracts for
a Series is to protect the Series against the fluctuations in interest or
exchange rates which otherwise might adversely affect the value of the Series'
portfolio securities or adversely affect the prices of securities which the
Series intends to purchase at a later date without actually buying or selling
such securities.
Each Series may enter into contracts for the purchase or sale for
future delivery of securities or foreign currencies. A purchase of a futures
contract means the acquisition of a contractual right to obtain delivery to a
Series of the securities or foreign currency called for by the contract at a
specified price during a specified future month. When a futures contract is
sold, a Series incurs a contractual obligation to deliver the securities or
foreign currency underlying the contract at a specified price on a specified
date during a specified future month. A Series may enter into futures contracts
and options thereon to the extent that not more than 5% of its assets are
required as futures contract margin deposits and premiums on options and may
engage in such transactions to the extent that obligations relating to such
futures and related options on futures transactions represent not more than 20%
of its assets.
A Series may also purchase and write options to buy or sell futures
contracts. Options on futures are similar to options on securities except that
options on futures give the purchaser the right, in return for the premium paid,
to assume a position in a futures contract, rather than actually to purchase or
sell the futures contract, at a specified exercise price at any time during the
period of the option. When a Series enters into a futures transaction, it must
deliver to the futures commission merchant selected by the Series an amount
referred to as "initial margin." This amount is maintained by the futures
commission merchant in an account at the Custodian Bank. Thereafter, a
"variation margin" may be paid by a Series to, or drawn by the Series from, such
account in accordance with controls set for such accounts, depending upon
changes in the price of the underlying securities subject to the futures
contract. See Special Risk Considerations.
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Interest Rate Swaps
In order to attempt to protect the Global Bond Series' investments from
interest rate fluctuations, the Series may engage in interest rate swaps. The
Series intends to use interest rate swaps as a hedge and not as a speculative
investment. Interest rate swaps involve the exchange by the Series with another
party of their respective rights to receive interest, e.g., an exchange of fixed
rate payments for floating rate payments. For example, if the Series holds an
interest-paying security whose interest rate is reset once a year, it may swap
the right to receive interest at this fixed rate for the right to receive
interest at a rate that is reset daily. Such a swap position would offset
changes in the value of the underlying security because of subsequent changes in
interest rates. This would protect the Series from a decline in the value of the
underlying security due to rising rates, but would also limit its ability to
benefit from falling interest rates.
The Series may enter into interest rate swaps on either an asset-based
or liability-based basis, depending upon whether it is hedging its assets or its
liabilities, and will usually enter into interest rate swaps on a net basis,
i.e., the two payment streams are netted out, with the Series receiving or
paying, as the case may be, only the net amount of the two payments. Inasmuch as
these hedging transactions are entered into for non-speculative purposes and not
for the purpose of leveraging the Series' investments, the Manager and the
Series believe such obligations do not constitute senior securities and,
accordingly, will not treat them as being subject to its borrowing restrictions.
The net amount of the excess, if any, of the Series' obligations over its
entitlement with respect to each interest rate swap will be accrued on a daily
basis and an amount of cash or high-quality liquid securities having an
aggregate net asset value at least equal to the accrued excess will be
maintained in a segregated account by the Custodian Bank. If the Series enters
into an interest rate swap on other than a net basis, the Series would maintain
a segregated account in the full amount accrued on a daily basis of the Series'
obligations with respect to the swap.
* * *
Each Series' investment objective, the Fund's designation as an
open-end investment company, the International Equity Series' designation as a
diversified fund, the Global Bond and the Global Assets Series' designations as
nondiversified funds, and their policies concerning portfolio lending, borrowing
and concentration may not be changed unless authorized by the vote of a majority
of the Series' outstanding voting securities. A "majority vote of the
outstanding voting securities" is the vote by the holders of the lesser of a)
67% or more of a Series' voting securities present in person or represented by
proxy if the holders of more than 50% of the outstanding voting securities of
such Series are present or represented by proxy; or b) more than 50% of the
outstanding voting securities. Part B lists other more specific investment
restrictions of the Series which may not be changed without a majority
shareholder vote. A brief discussion of those factors that materially affected
the International Equity Series' performance during its most recently completed
fiscal year appears in the Series' Annual Report.
The remaining investment policies are not fundamental and may be
changed by the Board of Directors of the Fund without a shareholder vote.
See Special Risk Considerations.
SPECIAL RISK CONSIDERATIONS
Shareholders should understand that all investments involve risk and
there can be no guarantee against loss resulting from an investment in a Series,
nor can there be any assurance that the Series' investment objective will be
attained.
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Each Series has the right to purchase securities in any foreign
country, developed and underdeveloped, or emerging growth countries. Investors
should consider carefully the substantial risks involved in investing in
securities issued by companies and governments of foreign nations. These risks
are in addition to the usual risks inherent in domestic investments. There is
the possibility of expropriation, nationalization or confiscatory taxation,
taxation of income earned in foreign nations or other taxes imposed with respect
to investments in foreign nations, foreign exchange control (which may include
suspension of the ability to transfer currency from a given country), default in
foreign government securities, political or social instability or diplomatic
developments which could affect investments in securities of issuers in those
nations. In addition, in many countries, there is less publicly available
information about issuers than is available in reports about companies in the
United States. Foreign companies are not subject to uniform accounting, auditing
and financial reporting standards, and auditing practices and requirements may
not be comparable to those applicable to United States companies. Further, a
Series may encounter difficulty or be unable to pursue legal remedies and obtain
judgments in foreign courts. Commission rates on securities transactions in
foreign countries, which are sometimes fixed rather than subject to negotiation
as in the United States, are likely to be higher. Further, the settlement period
of securities transactions in foreign markets may be longer than in domestic
markets. In many foreign countries, there is less government supervision and
regulation of business and industry practices, stock exchanges, brokers and
listed companies than in the United States. The foreign securities markets of
many of the countries in which a Series may invest may also be smaller, less
liquid and subject to greater price volatility than those in the United States.
Compared to the United States and other developed countries, emerging
countries may have relatively unstable governments, economies based on only a
few industries, and securities markets that trade a small number of securities.
Prices on these exchanges tend to be volatile and, in the past, securities in
these countries have offered greater potential for gain (as well as loss) than
securities of companies located in developed countries. Further, investments by
foreign investors are subject to a variety of restrictions in many emerging
countries. These restrictions may take the form of prior governmental approval,
limits on the amount or type of securities held by foreigners, and limits on the
types of companies in which foreigners may invest. Additional restrictions may
be imposed at any time by these or other countries in which a Series invests. In
addition, the repatriation of both investment income and capital from several
foreign countries is restricted and controlled under certain regulations,
including, in some cases, the need for certain governmental consents. Although
these restrictions may in the future make it undesirable to invest in emerging
countries, the Manager does not believe that any current repatriation
restrictions would affect its decision to invest in such countries. Countries
such as those in which a Series may invest have historically experienced and may
continue to experience, high rates of inflation, high interest rates, exchange
rate fluctuations or currency depreciation, large amounts of external debt,
balance of payments and trade difficulties and extreme poverty and unemployment.
Additional factors which may influence the ability or willingness to service
debt include, but are not limited to, a country's cash flow situation, the
availability of sufficient foreign exchange on the date a payment is due, the
relative size of its debt service burden to the economy as a whole, its
government's policy towards the International Monetary Fund, the World Bank and
other international agencies and the political constraints to which a government
debtor may be subject.
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In purchasing put and call options, the premium paid by a Series plus
any transaction costs will reduce any benefit realized by the Series upon
exercise of the option.
To the extent that interest or exchange rates or securities prices move
in an unexpected direction, a Series may not achieve the anticipated benefits of
investing in futures contracts and options thereon, or may realize a loss. To
the extent that the Series purchases an option on a futures contract and fails
to exercise the option prior to the exercise date, it will suffer a loss of the
premium paid. Further, the possible lack of a secondary market could prevent the
Series from closing out its positions relating to futures.
As in the case of other kinds of options, the writing of an option on
foreign currency will constitute only a partial hedge, up to the amount of the
premium received, and a Series could be required to purchase or sell foreign
currencies at disadvantageous exchange rates, thereby incurring losses. The
purchase of an option on foreign currency may constitute an effective hedge
against fluctuations in exchange rates, although, in the event of rate movements
adverse to the Series' position, the Series may forfeit the entire amount of the
premium plus related transaction costs.
With respect to forward foreign currency contracts, the precise
matching of forward contract amounts and the value of the securities involved is
generally not possible since the future value of such securities in foreign
currencies will change as a consequence of market movements in the value of
those securities between the date the forward contract is entered into and the
date it matures. The projection of short-term currency strategy is highly
uncertain.
It is impossible to forecast the market value of portfolio securities
at the expiration of the contract. Accordingly, it may be necessary for the
Series to purchase additional foreign currency on the spot market (and bear the
expense of such purchase) if the market value of the security is less than the
amount of foreign currency the Series is obligated to deliver (and if a decision
is made to sell the security and make delivery of the foreign currency).
Conversely, it may be necessary to sell on the spot market some of the foreign
currency received upon the sale of the portfolio security if its market value
exceeds the amount of foreign currency the Series is obligated to deliver.
The Global Bond and Global Assets Series may also invest in zero coupon
bonds. The market prices of zero coupon securities are generally more volatile
than the market prices of securities that pay interest periodically and are
likely to respond to changes in interest rates to a greater degree than do
non-zero coupon securities having similar maturities and credit quality. Current
federal income tax law requires that a holder of a taxable zero coupon security
report as income each year the portion of the original issue discount of such
security that accrues that year, even though the holder receives no cash
payments of interest during the year. Each Series has qualified as a regulated
investment company under the Code. Accordingly, during periods when a Series
receives no interest payments on its zero coupon securities, it will be
required, in order to maintain its desired tax treatment, to distribute cash
approximating the income attributable to such securities. Such distribution may
require the sale of portfolio securities to meet the distribution requirements
and such sales may be subject to the risk factor discussed above.
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The use of interest rate swaps by the Global Bond Series involves
investment techniques and risks different from those associated with ordinary
portfolio securities transactions. If the Manager is incorrect in its forecasts
of market values, interest rates and other applicable factors, the investment
performance of the Series will be less favorable than it would have been if this
investment technique were never used. Interest rate swaps do not involve the
delivery of securities or other underlying assets or principal. Thus, if the
other party to an interest rate swap defaults, the Series' risk of loss consists
of the net amount of interest payments that the Series is contractually entitled
to receive.
The Global Assets Series may invest up to 15% of its net assets in high
yield, high risk U.S. fixed income securities. These securities are rated lower
than BBB by S&P and Baa by Moody's or, if unrated, are considered by the Manager
or Sub-Adviser to be of equivalent quality. See Global Assets Series and High
Yield, High Risk Securities. Fixed income securities of this type are considered
to be of poor standing and predominantly speculative. Such securities are
subject to a substantial degree of credit risk.
While the Global Bond and the Global Assets Series each intend to seek
to qualify as a "diversified" investment company under provisions of Subchapter
M of the Code, neither will be diversified under the 1940 Act. Thus, while at
least 50% of each such Series' total assets will be represented by cash, cash
items, and other securities limited in respect of any one issuer to an amount
not greater than 5% of the Series' total assets, it will not satisfy the 1940
Act requirement in this respect, which applies that test to 75% of the Series'
assets. A nondiversified portfolio is believed to be subject to greater risk
because adverse effects on the portfolio's security holdings may affect a larger
portion of the overall assets.
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THE DELAWARE DIFFERENCE
PLANS AND SERVICES
The Delaware Difference is our commitment to provide you with superior
information and quality service on your investments in the Delaware Group of
funds.
SHAREHOLDER PHONE DIRECTORY
Investor Information Center
800-523-4640
(Philadelphia 215-988-1333)
Fund Information
Literature
Price, Yield and
Performance Figures
Shareholder Service Center
800-523-1918
(Philadelphia 215-988-1241)
Information on Existing
Regular Investment
Accounts and Retirement
Plan Accounts
Wire Investments
Wire Liquidations
Telephone Liquidations
Telephone Exchanges
Delaphone
800-362-FUND
(800-362-3863)
Shareholder Services
During business hours, you can call the Fund's Shareholder Service
Center. Our representatives can answer any questions about your account, the
Series, various service features and other funds in the Delaware Group.
Performance Information
During business hours, you can call the Investor Information Center
to get current performance information.
Delaphone Service
Delaphone is an account inquiry service for investors with
Touch-Tone(R) phone service. It enables you to get information on your account
faster than the mailed statements and confirmations seven days a week, 24 hours
a day. Delaphone is available seven days a week, 24 hours a day.
Statements and Confirmations
You will receive quarterly statements of your account summarizing all
transactions during the period. A confirmation statement will be sent following
all transactions other than those involving a reinvestment of distributions. You
should examine statements and confirmations immediately and promptly report any
discrepancy by calling the Shareholder Service Center.
Duplicate Confirmations
If your investment dealer is noted on your investment application, we
will send your dealer a duplicate confirmation. This makes it easier for your
investment dealer to help you manage your investments.
Tax Information
Each year, the Fund will mail to you information on the tax status of
your dividends and distributions.
Dividend Reinvestment Plan
You can elect to have your distributions (capital gains and/or dividend
income) paid to you by check or reinvested in your account. Also, you may invest
your distributions in certain other funds in the Delaware Group, subject to the
exceptions noted below as well as the eligibility and minimum purchase
requirements set forth in each fund's prospectus.
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<PAGE>
Reinvestments of distributions into Class A Shares of a Series or of
other Delaware Group funds are made without a front-end sales charge.
Reinvestments of distributions into Class B Shares of a Series or of other
Delaware Group funds and Class C Shares of a Series or of other Delaware Group
funds are also made without any sales charge and will not be subject to a CDSC
if later redeemed. See Automatic Conversion of Class B Shares under Buying
Shares for information concerning the automatic conversion of Class B Shares
acquired by reinvesting dividends.
Holders of Class A Shares of a Series may not reinvest their
distributions into Class B Shares or Class C Shares of any fund in the Delaware
Group, including the Series. Holders of Class B Shares of a Series may reinvest
their distributions only into Class B Shares of the funds in the Delaware Group
which offer that class of shares (the "Class B Funds"). Similarly, holders of
Class C Shares of a Series may reinvest their distributions only into Class C
Shares of the funds in the Delaware Group which offer that class of shares (the
"Class C Funds"). See Class B Funds and Class C Funds under Buying Shares for a
list of the funds offering those classes of shares. For more information about
reinvestments, call the Shareholder Service Center.
Exchange Privilege
The Exchange Privilege permits shareholders to exchange all or part of
their shares into shares of the other funds in the Delaware Group, subject to
certain exceptions and limitations. For additional information on exchanges, see
Investing by Exchange under How to Buy Shares and Redemption and Exchange.
Wealth Builder Option
You may elect to have amounts in your account automatically invested in
shares of the other funds in the Delaware Group. Investments under this feature
are exchanges and are therefore subject to the same conditions and limitations
as other exchanges of Class A, Class B and Class C Shares. See Redemption and
Exchange.
Right of Accumulation
With respect to Class A Shares, the Right of Accumulation feature
allows you to combine the value of your current holdings of Class A Shares,
Class B Shares and Class C Shares of a Series with the dollar amount of new
purchases of Class A Shares to qualify for a reduced front-end sales charge.
Under the Combined Purchases Privilege, you may also include certain shares that
you own in other funds in the Delaware Group. See Buying Shares.
Letter of Intention
The Letter of Intention feature permits you to obtain a reduced
front-end sales charge on purchases of Class A Shares by aggregating certain of
your purchases of Delaware Group fund shares over a 13-month period. See Buying
Shares and Part B.
12-Month Reinvestment Privilege
The 12-Month Reinvestment Privilege permits you to reinvest proceeds of
Class A Shares, within one year of the date of redemption, without a front-end
sales charge. See Part B.
Delaware Group Asset Planner
Delaware Group Asset Planner is an asset allocation service that gives
investors, working with a professional financial adviser, the ability to more
easily design and maintain investments in a diversified selection of Delaware
Group mutual funds. The Asset Planner service offers a choice of four
pre-designed Allocation Strategies (each with a different risk/reward profile)
made up of separate investments in predetermined percentages of Delaware Group
funds. With the guidance of a financial adviser, investors may also tailor a
Strategy that meets their personal needs and goals. See How to Buy Shares under
Buying Shares.
Financial Information about the Fund
Each fiscal year, you will receive an audited annual report and an
unaudited semi-annual report. These reports provide detailed information about
the Series' investments and performance. The Fund's fiscal year ends on
November 30.
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<PAGE>
RETIREMENT PLANNING
An investment in a Series may be suitable for tax-deferred retirement
plans. Among the retirement plans noted below, Class B Shares are available for
investment only by Individual Retirement Accounts, Simplified Employee Pension
Plans, 457 Deferred Compensation Plans and 403(b)(7) Deferred Compensation
Plans.
Retirement plans may be subject to plan establishment fees, annual
maintenance fees and/or other administrative or trustee fees. Fees are based
upon the number of participants in the plan as well as the services selected.
Additional information about fees is included in retirement plan materials. Fees
are quoted upon request. Certain shareholder investment services available
to non-retirement plan shareholders may not be available to retirement plan
shareholders. Certain retirement plans may qualify to purchase the International
Equity Fund Institutional Class, the Global Bond Fund Institutional Class and
the Global Assets Fund Institutional Class. For additional information on any of
the plans and Delaware's retirement services, call the Shareholder Service
Center or see Part B.
Individual Retirement Account ("IRA")
Individuals, even if they participate in an employer-sponsored
retirement plan, may establish their own retirement program for investments in
each of the Classes. Contributions to an IRA may be tax-deductible and earnings
are tax-deferred. Under the Tax Reform Act of 1986, the tax deductibility of IRA
contributions is restricted, and in some cases eliminated, for individuals who
participate in certain employer-sponsored retirement plans and whose annual
income exceeds certain limits. Existing IRAs and future contributions up to the
IRA maximums, whether deductible or not, still earn on a tax-deferred basis.
Simplified Employee Pension Plan ("SEP/IRA")
A SEP/IRA may be established by an employer who wishes to sponsor a
tax-sheltered retirement program by making contributions on behalf of all
eligible employees. Each of the Classes is available for investment by a
SEP/IRA.
Salary Reduction Simplified Employee Pension
Plan ("SAR/SEP")
Offers employers with 25 or fewer eligible employees the ability to
establish a SEP/IRA that permits salary deferral contributions. An employer may
also elect to make additional contributions to this plan. Class B Shares are not
available for purchase by such plans.
403(b)(7) Deferred Compensation Plan
Permits employees of public school systems or of certain types of
non-profit organizations to enter into a deferred compensation arrangement for
the purchase of shares of each of the Classes.
457 Deferred Compensation Plan
Permits employees of state and local governments and certain other
entities to enter into a deferred compensation arrangement for the purchase of
shares of each of the Classes.
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<PAGE>
Prototype Profit Sharing or Money Purchase
Pension Plan
Offers self-employed individuals, partnerships and corporations a
tax-qualified plan which provides for the investment of contributions in Class A
Shares or Class C Shares. Class B Shares are not available for purchase by such
plans.
Prototype 401(k) Defined Contribution Plan
Permits employers to establish a tax-qualified plan based on salary
deferral contributions for investment in Class A or Class C Shares. Class C
Shares are not available for purchase by such plans.
Allied Plans
Class A Shares are available for purchase by participants in 401(k)
Defined Contribution Plans ("Allied Plans") which are made available under a
joint venture agreement between the Distributor and another institution through
which mutual funds are marketed and which allow investments in Class A Shares of
designated Delaware Group funds ("eligible Delaware Group fund shares"), as well
as shares of designated classes of non-Delaware Group funds ("eligible
non-Delaware Group fund shares"). Class B Shares and Class C Shares are not
eligible for purchase by Allied Plans.
With respect to purchases made in connection with an Allied Plan, the
value of eligible Delaware Group and eligible non- Delaware Group fund shares
held by a participant under the Allied Plan may be combined with the dollar
amount of new purchases by that participant to obtain a reduced front-end sales
charge on additional purchases of eligible Delaware Group fund shares. See
Front-End Sales Charge Alternative - Class A Shares under Buying Shares.
Participants in Allied Plans may exchange all or part of their eligible
Delaware Group fund shares for other eligible Delaware Group fund shares or for
eligible non-Delaware Group fund shares at net asset value without payment of a
front-end sales charge. However, exchanges of eligible fund shares, both
Delaware Group and non-Delaware Group, which were not subject to a front end
sales charge, will be subject to the applicable sales charge if exchanged for
eligible Delaware Group fund shares to which a sales charge applies. No sales
charge will apply if the eligible fund shares were previously acquired through
the exchange of eligible shares on which a sales charge was already paid or
through the reinvestment of dividends. See Investing by Exchange.
The Limited CDSC is applicable to redemptions of net asset value
purchases from an Allied Plan on which a dealer's commission has been paid.
Waivers of the Limited CDSC, as described below under Waiver of Limited CDSC
Class A Shares, apply to redemptions by participants in Allied Plans, except in
the case of exchanges between eligible Delaware Group and non-Delaware Group
fund shares. When eligible Delaware Group fund shares are exchanged into
eligible non-Delaware Group fund shares, the Limited CDSC will be imposed at the
time of the exchange, unless the joint venture agreement specifies that the
amount of the CDSC will be paid by the financial adviser or selling dealer. See
Contingent Deferred Sales Charge for Certain Purchases of Class A Shares Made at
Net Asset Value under Redemption and Exchange.
A dealer's commission may be payable on purchases of eligible Delaware
Group fund shares under an Allied Plan. In determining a financial adviser's
eligibility for a dealer's commission on net asset value purchases of eligible
Delaware Group fund shares in connection with Allied Plans, all participant
holdings in the Allied Plan will be aggregated. See Front-End Sales Charge
Alternative - Class A Shares under Buying Shares.
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<PAGE>
BUYING SHARES
Purchase Amounts
Generally, the minimum initial purchase is $1,000 for Class A Shares,
Class B Shares and Class C Shares. Subsequent purchases of shares of any Class
generally must be $100 or more. With respect to the International Equity Series
and Global Assets Series only, Class A Shares purchased under the Uniform Gifts
to Minors Act or Uniform Transfers to Minors Act are subject to a minimum
initial purchase of $250 and a minimum subsequent purchase of $25. In addition,
there is a maximum purchase limitation of $250,000 on each purchase of Class B
Shares; for Class C Shares, each purchase must be in an amount that is less than
$1,000,000. An investor may exceed these maximum purchase limitations by making
cumulative purchases over a period of time. In doing so, an investor should keep
in mind that reduced front-end sales charges are available on investments of
$100,000 or more in Class A Shares, and that Class A Shares (i) are subject to
lower annual 12b-1 Plan expenses than Class B Shares and Class C Shares and (ii)
generally are not subject to a CDSC.
For retirement plans, the maximum purchase limitations apply only to
the initial purchase of Class B Shares or Class C Shares by the plan. Minimum
purchase requirements do not apply to retirement plans other than IRAs for which
there is a minimum initial purchase of $250, and a minimum subsequent purchase
of $25, regardless of which class is selected.
Alternative Purchase Arrangements
Shares may be purchased at a price equal to the next determined net
asset value per share, subject to a sales charge which may be imposed, at the
election of the purchaser, at the time of the purchase with respect to Class A
Shares ("front-end sales charge alternative"), or on a contingent deferred basis
with respect to Class B Shares ("deferred sales charge alternative") or Class C
Shares ("level sales charge alternative").
Class A Shares. An investor who elects the front-end sales charge
alternative acquires Class A Shares. Class A Shares incur a sales charge when
they are purchased but generally are not subject to any sales charge when they
are redeemed. Class A Shares are subject to annual 12b-1 Plan expenses of up to
a maximum of .30% of average daily net assets of such shares. See Contingent
Deferred Sales Charge for Certain Purchases of Class A Shares Made at Net Asset
Value and Distribution (12b-1) and Service. Certain purchases of Class A Shares
qualify for reduced front-end sales charges. See Front-End Sales Charge
Alternative - Class A Shares, below.
Class B Shares. An investor who elects the deferred sales charge
alternative acquires Class B Shares. Class B Shares do not incur a front-end
sales charge when they are purchased, but they are subject to a sales charge if
they are redeemed within six years of purchase and are subject to annual 12b-1
Plan expenses of up to a maximum of 1% (.25% of which are service fees to be
paid to the Distributor, dealers or others for providing personal service and/or
maintaining shareholder accounts) of average daily net assets of such shares for
approximately eight years after purchase. Class B Shares permit all of the
investor's dollars to work from the time the investment is made. The higher
12b-1 Plan expenses paid by Class B Shares will cause such shares to have a
higher expense ratio and to pay lower dividends than those related to the Class
A Shares. At the end of approximately eight years after purchase, the Class B
Shares will automatically be converted into Class A Shares. See Automatic
Conversion of Class B Shares, below.
Class C Shares. An investor who elects the level sales charge
alternative acquires Class C Shares. Class C Shares do not incur a front-end
sales charge when they are purchased, but are subject to a sales charge if they
are redeemed within twelve months of purchase and are subject to annual 12b-1
Plan expenses of up to a maximum of 1% (.25% of which are service fees to be
paid to the Distributor, dealers or others for providing personal service and/or
maintaining shareholder accounts) of average daily net assets of such shares for
the life of the investment. The higher 12b-1 Plan expenses paid by Class C
Shares will cause such shares to have a higher expense ratio and to pay lower
dividends than those related to the Class A Shares. Unlike Class B Shares, Class
C Shares do not convert to another class.
The alternative purchase arrangements described above permit investors
in a Series to choose the method of purchasing shares that is most suitable
given the amount of their purchase, the length of time they expect to hold their
shares and other relevant circumstances. Investors should determine whether
given their particular circumstances, it is more advantageous to purchase
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<PAGE>
Class A Shares and incur a front-end sales charge, purchase Class B Shares and
have the entire initial purchase amount invested in the Series with their
investment being subject to a CDSC if they redeem shares within six years of
purchase, or purchase Class C Shares and have the entire initial purchase amount
invested in the Series with their investment being subject to a CDSC if they
redeem shares within twelve months of purchase. In addition, investors should
consider the level of annual 12b-1 Plan expenses to which each of the Classes is
subject and, in comparing Class B Shares to Class C Shares, the desirability of
an automatic conversion feature, which is available only for Class B Shares.
As an illustration, investors who qualify for significantly reduced
front-end sales charges on purchases of Class A Shares, as described below,
might elect the front-end sales charge alternative because similar sales charge
reductions are not available for purchases under either the deferred sales
charge alternative or the level sales charge alternative. Moreover, shares
acquired under the front-end sales charge alternative are subject to annual
12b-1 Plan expenses of up to .30%, whereas Class B Shares acquired under the
deferred sales charge alternative are subject to higher annual 12b-1 Plan
expenses of up to 1% for approximately eight years after purchase (see Automatic
Conversion of Class B Shares) and Class C Shares acquired under the level sales
charge alternative are subject to annual 12b-1 Plan expenses of up to 1% for the
life of the investment. However, because front-end sales charges are deducted
from the purchase amount at the time of purchase, investors who buy Class A
Shares would not have their full purchase amount invested in the Series.
Certain other investors might determine it to be more advantageous to
purchase Class B Shares and have all their money invested initially, although
they would be subject to a CDSC for up to six years after purchase, as well as
annual 12b-1 Plan expenses of up to 1% until the shares are automatically
converted into Class A Shares. Still other investors might determine it to be
more advantageous to purchase Class C Shares and have all of their funds
invested initially, recognizing that they would be subject to a CDSC for just
twelve months after purchase but that Class C Shares do not offer a conversion
feature, so their shares would be subject to annual 12b-1 Plan expenses of up to
1% for the life of the investment. The higher 12b-1 Plan expenses on Class B
Shares and Class C Shares will be offset to the extent return is realized on the
additional money initially invested under the deferred sales charge alternative
or the level sales charge alternative. However, there can be no assurance as to
the return, if any, that will be realized on such additional money.
Prospective investors should refer to Appendix A to this Prospectus for
an illustration of the potential impact on a long-term shareholder's investment
in the Series under each of the purchase options.
For the distribution and related services provided to, and the expenses
borne on behalf of, a Series, the Distributor and others will be paid, in the
case of the Class A Shares, from the proceeds of the front-end sales charge and
12b-1 Plan fees and, in the case of the Class B Shares and the Class C Shares,
from the proceeds of the 12b-1 Plan fees and, if applicable, the CDSC incurred
upon redemption. Sales personnel may receive different compensation for selling
Class A, Class B and Class C Shares. INVESTORS SHOULD UNDERSTAND THAT THE
PURPOSE AND FUNCTION OF THE RESPECTIVE 12b-1 PLANS AND CDSCs APPLICABLE TO THE
CLASS B AND CLASS C SHARES ARE THE SAME AS THOSE OF THE 12b-1 PLAN AND THE
FRONT-END SALES CHARGE APPLICABLE TO CLASS A SHARES IN THAT SUCH FEES AND
CHARGES PROVIDE FOR THE FINANCING OF THE DISTRIBUTION OF THE RESPECTIVE CLASSES.
See 12b-1 Distribution Plans - Class A, Class B and Class C Shares.
Dividends paid by a Series with respect to the Class A, Class B and
Class C Shares, to the extent any dividends are paid, will be calculated in the
same manner, at the same time, on the same day and will be in the same amount,
except that the additional amount of 12b-1 Plan expenses relating to the Class B
and Class C Shares will be borne exclusively by such shares. See Calculation of
Offering Price and Net Asset Value Per Share.
The NASD has adopted certain rules relating to investment company sales
charges. The Fund and the Distributor intend to operate in compliance with these
rules.
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<PAGE>
Front-End Sales Charge Alternative - Class A Shares
Class A Shares may be purchased at the offering price, which reflects a
maximum front-end sales charge of 4.75%. See Calculation of Offering Price and
Net Asset Value Per Share.
Purchases of $100,000 or more carry a reduced front-end sales charge as
shown in the following tables.
International Equity Fund A Class, Global Assets Fund A Class
and Global Bond Fund A Class
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Dealer's
Front-End Sales Charge as % of Concession***
Amount of Purchase Offering Amount as % of
Price Invested** Offering Price
- --------------------------------------------------------------------------------------------------------------------------
International Global Global
Equity Fund Assets Fund Bond Fund
<S> <C> <C> <C> <C> <C>
Less than $100,000 4.75% 4.95% 5.00% 5.00% 4.00%
$100,000 but under $250,000 3.75 3.86 3.90 3.90 3.00
$250,000 but under $500,000 2.50 2.60 2.60 2.60 2.00
$500,000 but under $1,000,000* 2.00 2.01 2.00 2.00 1.60
</TABLE>
- -------------
* There is no front-end sales charge on purchases of Class A Shares of $1
million or more but, under certain limited circumstances, a 1% Limited CDSC
may apply upon redemption of such shares.
** Based on the net asset value per share of the Class A Shares as of the end
of the Fund's most recent fiscal year, which for the Global Assets Fund and
the Global Bond Fund is a date which is prior to the commencement of their
operations.
*** Financial institutions or their affiliated brokers may receive an agency
transaction fee in the percentages set forth above.
- --------------------------------------------------------------------------------
The Fund must be notified when a sale takes place which would qualify for
the reduced front-end sales charge on the basis of previous or current
purchases. The reduced front-end sales charge will be granted upon
confirmation of the shareholder's holdings by the Fund. Such reduced
front-end sales charges are not retroactive.
From time to time, upon written notice to all of its dealers, the
Distributor may hold special promotions for specified periods during which
the Distributor may reallow to dealers up to the full amount of the
front-end sales charge shown above. In addition, certain dealers who enter
into an agreement to provide extra training and information on Delaware
Group products and services and who increase sales of Delaware Group funds
may receive an additional concession of up to .15% of the offering price.
Dealers who receive 90% or more of the sales charge may be deemed to be
underwriters under the 1933 Act.
- --------------------------------------------------------------------------------
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<PAGE>
For initial purchases of Class A Shares of $1,000,000 or more, a
dealer's commission may be paid by the Distributor to financial advisers through
whom such purchases are made, in accordance with the following schedule:
Dealer's
Commission
----------
(as a percent-
Amount age of amount
of Purchase purchased)
- -----------
Up to $2 million 1.00%
Next $1 million up to $3 million .75
Next $2 million up to $5 million .50
Amount over $5 million .25
In determining a financial adviser's eligibility for the dealer's
commission, purchases of Class A Shares of other Delaware Group funds as to
which a Limited CDSC applies may be aggregated with those of the Class A Shares
of a Series. Financial advisers also may be eligible for a dealer's commission
in connection with certain purchases made under a Letter of Intention or
pursuant to an investor's Right of Accumulation. Financial advisers should
contact the Distributor concerning the applicability and calculation of the
dealer's commission in the case of combined purchases.
An exchange from other Delaware Group funds will not qualify for payment
of the dealer's commission, unless such exchange is from a Delaware Group fund
with assets as to which a dealer's commission or similar payment has not been
previously paid. The schedule and program for payment of the dealer's commission
are subject to change or termination at any time by the Distributor in its
discretion.
Redemptions of Class A Shares purchased at net asset value may result in
the imposition of a Limited CDSC if the dealer's commission described above was
paid in connection with the purchase of those shares. See Contingent Deferred
Sales Charge for Certain Purchases of Class A Shares Made at Net Asset Value
under Redemption and Exchange.
Combined Purchases Privilege
By combining your holdings of Class A Shares of a Series with your
holdings of Class B Shares and/or Class C Shares of that Series and shares of
the other funds in the Delaware Group, except those noted below, you can reduce
the front-end sales charges on any additional purchases of Class A Shares.
Shares of Delaware Group Premium Fund, Inc., beneficially owned in connection
with ownership of variable insurance products, may be combined with other
Delaware Group fund holdings. Shares of other funds that do not carry a front-
end sales charge or CDSC may not be included unless they were acquired through
an exchange from a Delaware Group fund that does carry a front-end sales charge
or CDSC.
This privilege permits you to combine your purchases and holdings with
those of your spouse, your children under twenty-one years of age and any trust,
fiduciary or retirement account for the benefit of such family members.
It also permits you to use these combinations under a Letter of
Intention. A Letter of Intention allows you to make purchases over a 13-month
period and qualify the entire purchase for a reduction in front-end sales
charges on Class A Shares.
Combined purchases of $1,000,000 or more, including certain purchases
made at net asset value pursuant to a Right of Accumulation or under a Letter of
Intention, may trigger the payment of a dealer's commission and the
applicability of a Limited CDSC. Investors should consult their financial
advisers or the Shareholder Service Center about the operation of these
features. See Front-End Sales Charge Alternative - Class A Shares under Buying
Shares.
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<PAGE>
Buying at Net Asset Value
Class A Shares of a Series may be
purchased at net asset value under the Delaware Group Dividend Reinvestment Plan
and, under certain circumstances, the 12-Month Reinvestment Privilege and the
Exchange Privilege. See The Delaware Difference and Redemption and Exchange for
additional information.
Purchases of Class A Shares may be made at net asset value by current
and former officers, directors and employees (and members of their immediate
families) of the Manager, any affiliate, any of the funds in the Delaware Group,
certain of their agents and registered representatives and employees of
authorized investment dealers and by employee benefit plans for such entities.
Individual purchases include retirement accounts and must be for accounts in the
name of the individual or a qualifying family member. Purchases of Class A
Shares may be made by clients of registered representatives of an authorized
investment dealer at net asset value within six months of a change of the
registered representative's employment, if the purchase is funded by proceeds
from an investment where a front-end sales charge has been assessed and the
redemption of the investment did not result in the imposition of a CDSC or other
redemption charge. Purchases of Class A Shares also may be made at net asset
value by bank employees who provide services in connection with agreements
between the bank and unaffiliated brokers or dealers concerning sales of Class A
Shares. Officers, directors and key employees of institutional clients of the
Manager or any of its affiliates may purchase Class A Shares at net asset value.
Moreover, purchases may be effected at net asset value for the benefit of the
clients of brokers, dealers and registered investment advisers affiliated with a
broker or dealer, if such broker, dealer or investment adviser has entered into
an agreement with the Distributor providing specifically for the purchase of
Class A Shares in connection with special investment products, such as wrap
accounts or similar fee based programs.
Investments in Class A Shares made by plan level and/or participant
retirement accounts that are for the purpose of repaying a loan taken from such
accounts will be made at net asset value. Loan repayments made to a Delaware
Group account in connection with loans originated from accounts previously
maintained by another investment firm will also be invested at net asset value.
The Fund must be notified in advance that an investment qualifies for
purchase of Class A Shares at net asset value.
Group Investment Plans
Group Investment Plans (e.g., SEP/IRA, SAR/SEP, Prototype Profit
Sharing, Pension and 401(k) Defined Contribution Plans) may also benefit from
the reduced front-end sales charges relating to the Class A Shares set forth in
the tables on page__, based on total plan assets. In addition, 403(b)(7) and 457
Retirement Plan Accounts may benefit from a reduced front-end sales charge on
Class A Shares based on the total amount invested by all participants in the
plan by satisfying the following criteria: (i) the employer for which the plan
was established has 250 or more eligible employees and the plan lists only one
broker of record, or (ii) the plan includes employer contributions and the plan
lists only one broker of record. If a company has more than one plan investing
in the Delaware Group of funds, then the total amount invested in all plans will
be aggregated to determine the applicable front-end sales charge reduction on
each purchase, both initial and subsequent, if, at the time of each such
purchase, the company notifies Delaware that it qualifies for the reduction.
Employees participating in such Group Investment Plans may also combine the
investments held in their plan account to determine the front-end sales charge
applicable to purchases in non-retirement Delaware Group investment accounts if,
at the time of each such purchase, they notify the Fund that they are eligible
to combine purchase amounts held in their plan account.
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<PAGE>
For additional information on these plans, including plan forms,
applications, minimum investments and any applicable account maintenance fees,
contact your investment dealer or the Distributor.
For other retirement plans and special services, see Retirement
Planning.
Deferred Sales Charge Alternative - Class B Shares
Class B Shares may be purchased at net asset value without the
imposition of a front-end sales charge and, as a result, a Series will invest
the full amount of the investor's purchase payment. The Distributor currently
anticipates compensating dealers or brokers for selling Class B Shares at the
time of purchase from its own assets in an amount equal to no more than 4% of
the dollar amount purchased. As discussed below, however, Class B Shares are
subject to annual 12b-1 Plan expenses and, if redeemed within six years of
purchase, a CDSC.
Proceeds from the CDSC and the annual 12b-1 Plan fees are paid to the
Distributor and others for providing distribution and related services, and
bearing expenses in connection with the sale of Class B Shares. These payments
support the compensation paid to dealers or brokers for selling Class B Shares.
Payments to the Distributor and others under the Class B 12b-1 Plan may be in
an amount equal to no more than 1% annually. The combination of the CDSC and the
proceeds of the 12b-1 Plan fees facilitates the ability of a Series to sell the
Class B Shares without deducting a front-end sales charge at the time of
purchase.
Shareholders of a Series' Class B Shares exercising the exchange
privilege described below will continue to be subject to the CDSC schedule for
the Series' Class B Shares described in this Prospectus, even after the
exchange. Such CDSC schedule may be higher than the CDSC schedule relating to
the Class B Shares acquired as a result of the exchange. See Redemption and
Exchange.
Automatic Conversion of Class B Shares
Except for shares acquired through a reinvestment of dividends, Class B
Shares of a Series held for eight years after purchase are eligible for
automatic conversion into Class A Shares of that Series. The Fund will effect
conversions of Class B Shares into Class A Shares only four times in any
calendar year, on the last business day of the second full week of March, June,
September and December (each, a "Conversion Date"). If the eighth anniversary
after a purchase of Class B Shares falls on a Conversion Date, an investor's
Class B Shares will be converted on that date. If the eighth anniversary occurs
between Conversion Dates, an investor's Class B Shares will be converted on the
next Conversion Date after such anniversary. Consequently, if a shareholder's
eighth anniversary falls on the day after a Conversion Date, that shareholder
will have to hold Class B Shares for as long as three additional months after
the eighth anniversary of purchase before the shares will automatically convert
into Class A Shares. Class B Shares of a fund acquired through reinvestment of
dividends will convert to the corresponding Class A Shares of that fund (or, in
the case of Delaware Group Cash Reserve, Inc., the Delaware Cash Reserve
Consultant Class) pro-rata with Class B Shares of that fund not acquired through
dividend reinvestment.
All such automatic conversions of Class B Shares will constitute
tax-free exchanges for federal income tax purposes. See Taxes.
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<PAGE>
Level Sales Charge Alternative - Class C Shares
Class C Shares may be purchased at net asset value without the
imposition of a front-end sales charge and, as a result, the Fund will invest
the full amount of the investor's purchase payment. The Distributor currently
anticipates compensating dealers or brokers for selling Class C Shares at the
time of purchase from its own assets in an amount equal to no more than 1% of
the dollar amount purchased. As discussed below, however, Class C Shares are
subject to annual 12b-1 Plan expenses and, if redeemed within twelve months of
purchase, a CDSC.
Proceeds from the CDSC and the annual 12b-1 Plan fees are paid to the
Distributor and others for providing distribution and related services and
bearing related expenses in connection with the sale of Class C Shares. These
payments support the compensation paid to dealers or brokers for selling Class C
Shares. Payments to the Distributor and others under the Class C 12b-1 Plan may
be in an amount equal to no more than 1% annually.
Shareholders of a Series' Class C Shares who exercise the exchange
privilege described below will continue to be subject to the CDSC schedule for
the Series' Class C Shares as described in this Prospectus. See Redemption and
Exchange.
Contingent Deferred Sales Charge - Class B
Shares and Class C Shares
Class B Shares redeemed within six years of purchase may be subject to a
CDSC at the rates set forth below, and Class C Shares redeemed within twelve
months of purchase may be subject to a CDSC of 1%. CDSCs are charged as a
percentage of the dollar amount subject to the CDSC. The charge will be assessed
on an amount equal to the lesser of the net asset value at the time of purchase
of the shares being redeemed or the net asset value of those shares at
redemption. No CDSC will be imposed on increases in net asset value above the
initial purchase price. In addition, no CDSC will be assessed on redemptions of
shares received through reinvestments of dividends or capital gains
distributions. For purposes of this formula, the "net asset value at the time of
purchase" will be the net asset value at purchase of either the Class B Shares
or the Class C Shares of a Series, even if those shares are later exchanged for
Class B Shares or Class C Shares of another Delaware Group fund. In the event of
an exchange of the shares, the "net asset value of such shares at the time of
redemption" will be the net asset value of the shares that were acquired in the
exchange.
The following table sets forth the rates of the CDSC for the Class B
Shares of the Series:
Contingent Deferred
Sales Charge (as a
Percentage of
Dollar Amount
Year After Purchase Made Subject to Charge)
- ------------------------ --------------------
0-2 4%
3-4 3%
5 2%
6 1%
7 and thereaf None
During the seventh year after purchase and, thereafter, until converted
automatically into Class A Shares of a Series, the Class B Shares will still be
subject to annual 12b-1 Plan expenses of up to 1% of average daily net assets of
those shares. See Automatic Conversion of Class B Shares, above. Investors are
reminded that the Class A Shares into which the Class B Shares will convert are
subject to ongoing annual 12b-1 Plan expenses of up to a maximum of .30% of
average daily net assets representing such shares.
In determining whether a CDSC is applicable to a redemption of Class B
Shares, it will be assumed that shares held for more than six years are redeemed
first, followed by shares acquired through the reinvestment of dividends or
distributions, and finally by shares held longest during the six-year period.
With respect to Class C Shares, it will be assumed that shares held for more
than twelve months are redeemed first, followed by shares acquired through the
reinvestment of dividends or distributions, and finally by shares held for
twelve months or less. All investments made during a calendar month, regardless
of what day of the month the investment occurred, will age one month on the last
day of that month and each subsequent month.
The CDSC is waived on certain redemptions of Class B Shares and Class C
Shares. See Waiver of CDSC - Class B and Class C Shares under Redemption and
Exchange.
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12b-1 Distribution Plans - Class A, Class B and
Class C Shares
Under the distribution plans adopted by the Fund in accordance with Rule
12b-1 under the 1940 Act, a Series is permitted to pay the Distributor annual
distribution fees of up to .30% of the average daily net assets of a Series'
Class A Shares, 1% of the average daily net assets of a Series' Class B Shares
and 1% of the average daily net assets of a Series' Class C Shares. These fees,
which are payable monthly, compensate the Distributor for providing distribution
and related services and bearing certain expenses of each Class. The 12b-1 Plans
applicable to the Class B Shares and the Class C Shares are designed to permit
an investor to purchase Class B Shares or Class C Shares through dealers or
brokers without the assessment of a front-end sales charge while enabling the
Distributor to compensate dealers and brokers for the sale of such shares. For a
more detailed discussion of the 12b-1 Plans relating to the Class A, Class B,
and Class C Shares, see Distribution (12b-1) and Service under Management of the
Fund.
Other Payments to Dealers -- Class A, Class B
and Class C Shares
In addition, from time to time at the discretion of the Distributor, all
registered broker/dealers whose aggregate sales of the Classes exceed certain
limits, as set by the Distributor, may receive from the Distributor an
additional payment of up to .25% of the dollar amount of such sales. The
Distributor may also provide additional promotional incentives or payments to
dealers that sell shares of the Delaware Group of funds. In some instances,
these incentives or payments may be offered only to certain dealers who
maintain, have sold or may sell certain amounts of shares.
Subject to pending amendments to the NASD's Rules of Fair Practice, in
connection with the promotion of Delaware Group fund shares, the Distributor
may, from time to time, pay to participate in dealer-sponsored seminars and
conferences, reimburse dealers for expenses incurred in connection with
preapproved seminars, conferences and advertising and may, from time to time,
pay or allow additional promotional incentives to dealers, which shall include
non-cash concessions, such as certain luxury merchandise or a trip to or
attendance at a business or investment seminar at a luxury resort, as part of
preapproved sales contests. Payment of non-cash compensation to dealers is
currently under review by the NASD and the Securities and Exchange Commission.
It is likely that the NASD's Rules of Fair Practice will be amended such that
the ability of the Distributor to pay non-cash compensation as described above
will be restricted in some fashion. The Distributor intends to comply with the
NASD's Rules of Fair Practice as they may be amended. In addition, as noted
above, the Distributor may pay dealers a commission in connection with net asset
value purchases.
Class B Funds and Class C Funds
The following funds currently offer Class B Shares and Class C Shares:
DMC Tax-Free Income Trust-Pennsylvania, Delaware Group Delchester High-Yield
Bond Fund, Inc., Delaware Group Government Fund, Inc., Limited-Term Government
Fund of Delaware Group Limited-Term Government Funds, Inc., Delaware Group Cash
Reserve, Inc., Tax-Free USA Fund, Tax-Free Insured Fund and Tax-Free USA
Intermediate Fund of Delaware Group Tax-Free Fund, Inc., Delaware Group DelCap
Fund, Inc., Delaware Fund and Devon Fund of Delaware Group Delaware Fund, Inc.,
Delaware Group Value Fund, Inc., Decatur Income Fund and Decatur Total Return
Fund of Delaware Group Decatur Fund, Inc., Delaware Group Trend Fund, Inc. and
each Series of the Fund.
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International Equity Fund Institutional Class,
Global Bond Fund Institutional Class and Global
Assets Fund Institutional Class
In addition to offering the Class A, Class B and Class C Shares of each
Series, the Fund also offers the International Equity Fund Institutional Class,
the Global Bond Fund Institutional Class and the Global Assets Fund
Institutional Class of shares, which are described in a separate prospectus
relating to those classes of shares and is available for purchase only by
certain investors. International Equity Fund Institutional Class, Global Bond
Fund Institutional Class and Global Assets Fund Institutional Class shares
generally are distributed directly by the Distributor and do not have a
front-end sales charge, a CDSC or a Limited CDSC and are not subject to 12b-1
Plan distribution expenses. To obtain a prospectus which describes the
International Equity Fund Institutional Class, the Global Bond Fund
Institutional Class and the Global Assets Fund Institutional Class, contact the
Distributor by writing to the address or by calling the telephone number listed
on the cover of this Prospectus.
Dividend Orders
You may have the dividends earned in one fund automatically invested in
another Delaware Group fund with a different investment objective. For more
information, see Dividend Reinvestment Plan under The Delaware Difference or
call the Shareholder Service Center.
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HOW TO BUY SHARES
The Fund makes it easy to invest by mail, by wire, by exchange and by
arrangement with your investment dealer.
Investing through Your Investment Dealer
You can make a purchase of shares of the Classes through most
investment dealers who, as part of the service they provide, must transmit
orders promptly. They may charge for this service. If you want a dealer but do
not have one, we can refer you to one.
Investing by Mail
1. Initial Purchases-An Investment Application or, in the case of a retirement
account, an appropriate retirement plan application, must be completed, signed
and sent with a check payable to the specific Class selected (for example, if
you wish to buy Class A Shares of the International Equity Series, make the
check payable to International Equity Fund A Class) to 1818 Market Street,
Philadelphia, PA 19103.
2. Subsequent Purchases-Additional purchases may be made at any time by mailing
a check payable to the specific Class selected. Your check should be identified
with your name(s) and account number. An investment slip (similar to a deposit
slip) is provided at the bottom of transaction confirmations and dividend
statements that you will receive from the Fund. Use of this investment slip can
help expedite processing of your check when making additional purchases. Your
investment may be delayed if you send additional purchases by certified mail.
Investing by Wire
You may purchase shares by requesting your bank to transmit funds by
wire to CoreStates Bank, N.A., ABA #031000011, account number 0114-2596 (include
your name(s) and your account number for the Class in which you are investing).
1. Initial Purchases-Before you invest, telephone the Fund's Shareholder Service
Center to get an account number. If you do not call first, processing of your
investment may be delayed. In addition, you must promptly send your Investment
Application or, in the case of a retirement account, an appropriate retirement
plan application, to the specific Class selected to 1818 Market Street,
Philadelphia, PA 19103.
2. Subsequent Purchases-You may make additional investments anytime by wiring
funds to CoreStates Bank, N.A., as described above. You should advise the Fund's
Shareholder Service Center by telephone of each wire you send.
If you want to wire investments to a retirement plan account, call the
Shareholder Service Center for special wiring instructions.
Delaware Group Asset Planner
To invest in Delaware Group funds using the Asset Planner service, you
should complete a Delaware Group Asset Planner Account Registration Form, which
is available only from a financial adviser. The sales charge on the investment
is determined by the individual sales charges of the underlying funds and their
percentage allocation in the selected Strategy. The minimum initial investment
per Strategy is $2,000; subsequent investments must be at least $100. Individual
fund minimums do not apply to investments made using the Asset Planner service.
Class A, Class B and Class C Shares are available for use inside the Asset
Planner service; however, only "like" class shares may be used within the same
Strategy.
An annual maintenance fee, currently $35 per Strategy, is due at the
time of initial investment and by September 30th of each subsequent year. The
fee, payable to Delaware Service Company, Inc. to defray extra costs associated
with administering the Asset Planner service, will be deducted automatically
from one of your Fund accounts if not paid by September 30th. See the Statement
of Additional Information.
Investors will receive a customized quarterly Strategy Report
summarizing all Delaware Group Asset Planner investment performance and account
activity during the prior period. Confirmation statements will be sent following
all transactions other than those involving a reinvestment of distributions.
Certain shareholder services are not available to investors using the Asset
Planner service, due to its special design. These include Delaphone,
Checkwriting Wealth Builder Option and Letter of Intention. Systematic
Withdrawal Plans are available after the account has been open for two years.
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Investing by Exchange
If you have an investment in another mutual fund in the Delaware Group,
you may write and authorize an exchange of part or all of your investment into
shares of a Series. If you wish to open an account by exchange, call the
Shareholder Service Center for more information. All exchanges are subject to
the eligibility and minimum purchase requirements set forth in each Fund's
Prospectus.
Shareholders of Class A Shares may exchange all or part of their shares
for certain of the shares of other funds in the Delaware Group, including other
Class A Shares, but may not exchange their shares for Class B Shares or Class C
Shares of the Series or for any Class B Shares or Class C Shares of any other
fund in the Delaware Group. Shareholders of Class B Shares of a Series are
permitted to exchange all or part of their Class B Shares only into the
corresponding class of shares of the Class B Funds. Similarly, shareholders of
Class C Shares of a Series are permitted to exchange all or part of their Class
C Shares only into the corresponding class of shares of the Class C Funds. Class
B Shares and Class C Shares of a Series acquired by exchange will continue to
carry the CDSC and, in the case of Class B Shares, the automatic conversion
schedule of the fund from which the exchange is made. The holding period of the
Class B Shares of a Series acquired by exchange will be added to that of the
shares that were exchanged for purposes of determining the time of the automatic
conversion into Class A Shares of that Series.
Permissible exchanges into Class A Shares of a Series will be made
without a front-end sales charge imposed by the Series, except for exchanges
from funds not subject to a front-end sales charge (unless such shares were
acquired in an exchange from a fund subject to such a charge or such shares were
acquired through the reinvestment of dividends). Permissible exchanges into
Class B Shares or Class C Shares of the Series will be made without the
imposition of a CDSC by the fund from which the exchange is being made at the
time of the exchange.
See Allied Plans under Retirement Planning for information on exchanges
by participants in an Allied Plan.
Additional Methods of Adding to Your
Investment
Call the Shareholder Service Center for more information if you wish to
use the following services:
1. Direct Deposit
You may have your employer or bank make regular investments directly to
your account for you (for example: payroll deduction, pay by phone, annuity
payments). The Fund also accepts preauthorized recurring government and private
payments by Electronic Fund Transfer, which avoids mail time and check clearing
holds on payments such as social security, federal salaries, Railroad Retirement
benefits, etc.
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<PAGE>
2. Automatic Investing Plan
The Automatic Investing Plan enables you to make regular monthly
investments without writing or mailing checks. You may authorize the Fund to
transfer a designated amount monthly from your checking account to your Series
account. Many shareholders use this as an automatic savings plan. Shareholders
should allow a reasonable amount of time for initial purchases and changes to
these plans to become effective.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, Profit Sharing and Money Purchase Pension Plans, 401(k)
Defined Contribution Plans, 403(b)(7) Deferred Compensation Plans or 457
Deferred Compensation Plans.
* * *
Should investments by these two methods be reclaimed or returned for
some reason, the Fund has the right to liquidate your shares to reimburse the
government or transmitting bank. If there are insufficient funds in your
account, you are obligated to reimburse the Series.
Purchase Price and Effective Date
The offering price and net asset value of the Class A, Class B and
Class C Shares are determined as of the close of regular trading on the New York
Stock Exchange (ordinarily, 4 p.m., Eastern time) on days when the Exchange is
open.
The effective date of a purchase made through an investment dealer is
the date the order is received by the Fund. The effective date of a direct
purchase is the day your wire, electronic transfer or check is received, unless
it is received after the time the offering price or net asset value of shares is
determined, as noted above. Purchase orders received after such time will be
effective the next business day.
The Conditions of Your Purchase
The Fund reserves the right to reject any purchase order. If a purchase
is canceled because your check is returned unpaid, you are responsible for any
loss incurred. The Fund can redeem shares from your account(s) to reimburse
itself for any loss, and you may be restricted from making future purchases in
any of the funds in the Delaware Group. The Fund reserves the right to reject
purchase orders paid by third-party checks or checks that are not drawn on a
domestic branch of a United States financial institution. If a check drawn on a
foreign financial institution is accepted, you may be subject to additional bank
charges for clearance and currency conversion.
The Fund also reserves the right, following shareholder notification,
to charge a service fee on non-retirement accounts that have remained below the
minimum stated account balance for a period of three or more consecutive months.
Holders of such accounts may be notified of their insufficient account balance
and advised that they have until the end of the current calendar quarter to
raise their balance to the stated minimum. If the account has not reached the
minimum balance requirement by that time, the Fund will charge a $9 fee for that
quarter and each subsequent calendar quarter until the account is brought up to
the minimum balance. The service fee will be deducted from the account during
the first week of each calendar quarter for the previous quarter, and will be
used to help defray the cost of maintaining low-balance accounts. No fees will
be charged without proper notice, and no CDSC will apply to such assessments.
The Fund also reserves the right, upon sixty days' written notice, to
involuntarily redeem accounts that remain under a Fund Class' minimum initial
purchase amount as a result of redemptions. An investor making the minimum
initial investment may be subject to involuntary redemption without the
imposition of a CDSC or Limited CDSC if he or she redeems any portion of his or
her account.
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REDEMPTION AND EXCHANGE
You can redeem or exchange your shares in a number of different ways.
The exchange service is useful if your investment requirements change and you
want an easy way to invest in other equity funds, tax-advantaged funds, bond
funds or money market funds. This service is also useful if you are anticipating
a major expenditure and want to move a portion of your investment into a fund
that has the checkwriting feature. Exchanges are subject to the requirements of
each fund and all exchanges of shares from one fund or class to another
constitute taxable events. See Taxes. Further, in order for an exchange to be
processed, shares of the fund being acquired must be registered in the state
where the acquiring shareholder resides. You may want to consult your financial
adviser or investment dealer to discuss which funds in the Delaware Group will
best meet your changing objectives, and the consequences of any exchange
transaction. You may also call the Delaware Group directly for fund information.
Your shares will be redeemed or exchanged at a price based on the net
asset value next determined after we receive your request in good order subject
in the case of a redemption, to any applicable CDSC or Limited CDSC. Redemption
or exchange requests received in good order after the time the offering price
and net asset value of shares are determined, as noted above, will be processed
on the next business day. See Purchase Price and Effective Date under Buying
Shares. A shareholder submitting a redemption request may indicate that he or
she wishes to receive redemption proceeds of a specific dollar amount. In the
case of such a request, and in the case of certain redemptions from retirement
plan accounts, the Fund will redeem the number of shares necessary to deduct the
applicable CDSC in the case of Class B and Class C Shares or, if applicable, the
Limited CDSC in the case of Class A Shares and tender to the shareholder the
requested amount, assuming the shareholder holds enough shares in his or her
account for the redemption to be processed in this manner. Otherwise, the amount
tendered to the shareholder upon redemption will be reduced by the amount of the
applicable CDSC or Limited CDSC.
Except as noted below, for a redemption request to be in "good order,"
you must provide your account number, account registration, and the total number
of shares or dollar amount of the transaction. For exchange requests, you must
also provide the name of the fund you want to receive the proceeds. Exchange
instructions and redemption requests must be signed by the record owner(s)
exactly as the shares are registered. You may request a redemption or an
exchange by calling the Fund at 800-523-1918 (in Philadelphia, 215-988-1241).
The Fund may suspend, terminate, or amend the terms of, the exchange privilege
upon sixty days' written notice to shareholders.
The Fund will honor written redemption requests of shareholders who
recently purchased shares by check, but will not mail the proceeds until it is
reasonably satisfied that the purchase check has cleared, which may take up to
fifteen days from the purchase date. The Fund will not honor telephone
redemptions for shares recently purchased by check unless it is reasonably
satisfied that the purchase check has cleared. You can avoid this potential
delay if you purchase shares by wiring Federal Funds. The Fund reserves the
right to reject a written or telephone redemption request or delay payment of
redemption proceeds if there has been a recent change to the shareholder's
address of record.
There is no front-end sales charge or fee for exchanges made between
shares of funds which both carry a front-end sales charge. Any applicable
front-end sales charge will apply to exchanges from shares of funds not subject
to a front-end sales charge, except for transfers involving assets that were
previously invested in a fund with a front-end sales charge and/or transfers
involving the reinvestment of dividends.
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Holders of Class B Shares or Class C Shares that exchange their shares
("Original Shares") for Class B Shares of other Class B Funds or Class C Shares
of other Class C Funds, as applicable (in each case, "New Shares"), will not be
subject to a CDSC that might otherwise be due upon redemption of the Original
Shares. However, such shareholders will continue to be subject to the CDSC and,
in the case of Class B Shares, the automatic conversion schedule of the Original
Shares as described in this Prospectus and any CDSC assessed upon redemption
will be charged by the Fund. In an exchange of Class B Shares, a Series' CDSC
schedule may be higher than the CDSC schedule relating to the New Shares
acquired as a result of the exchange. For purposes of computing the CDSC that
may be payable upon a disposition of the New Shares, the period of time that an
investor held the Original Shares is added to the period of time that an
investor held the New Shares. With respect to Class B Shares, the automatic
conversion schedule of the Original Shares may be longer than that of the New
Shares. Consequently, an investment in New Shares by exchange may subject an
investor to the higher 12b-1 fees applicable to Class B Shares of a Series for a
longer period of time than if the investment in New Shares were made directly.
Various redemption and exchange methods are outlined below. Except for
the CDSC applicable to certain redemptions of Class B Shares and Class C Shares
and the Limited CDSC applicable to certain redemptions of Class A Shares
purchased at net asset value, there is no fee charged by the Series or the
Distributor for redeeming or exchanging your shares, but such fees could be
charged in the future. You may have your investment dealer arrange to have your
shares redeemed or exchanged. Your investment dealer may charge for this
service.
All authorizations given by shareholders, including selection of any of
the features described below, shall continue in effect until such time as a
written revocation or modification has been received by the Fund or its agent.
All exchanges involve a purchase of shares of the fund into which the
exchange is made. As with any purchase, an investor should obtain and carefully
read that fund's prospectus before buying shares in an exchange. The prospectus
contains more complete information about the fund, including charges and
expenses.
Written Redemption
You can write to the Fund at 1818 Market Street, Philadelphia, PA 19103
to redeem some or all of your shares. The request must be signed by all owners
of the account or your investment dealer of record. For redemptions of more than
$50,000, or when the proceeds are not sent to the shareholder(s) at the address
of record, the Fund requires a signature by all owners of the account and a
signature guarantee for each owner. Each signature guarantee must be supplied by
an eligible guarantor institution. The Fund reserves the right to reject a
signature guarantee supplied by an eligible institution based on its
creditworthiness. The Fund may require further documentation from corporations,
executors, retirement plans, administrators, trustees or guardians.
Payment is normally mailed the next business day, but no later than
seven days, after receipt of your redemption request. If your Class A Shares are
in certificate form, the certificate must accompany your request and also be in
good order. The Fund issues certificates for Class A Shares only if a
shareholder submits a specific request. The Fund does not issue certificates for
Class B or Class C Shares.
Written Exchange
You may also write to the Fund (at 1818 Market Street, Philadelphia, PA
19103) to request an exchange of any or all of your shares into another mutual
fund in the Delaware Group, subject to the same conditions and limitations as
other exchanges noted above.
Telephone Redemption and Exchange
To get the added convenience of the telephone redemption and exchange
methods, you must have the Transfer Agent hold your shares (without charge) for
you. If you choose to have your Class A Shares in certificate form, you may only
redeem or exchange by written request and you must return your certificates.
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The Telephone Redemption - Check to Your Address of Record Service and
the Telephone Exchange service, both of which are described below, are
automatically provided unless you notify the Fund in writing that you do not
wish to have such service available with respect to your account. The Fund
reserves the right to modify, terminate or suspend these procedures upon sixty
days' written notice to shareholders. It may be difficult to reach the Fund by
telephone during periods when market or economic conditions lead to an unusually
large volume of telephone requests.
Neither the Fund nor the Transfer Agent is responsible for any
shareholder loss incurred in acting upon written or telephone instructions for
redemption or exchange of Series shares which are reasonably believed to be
genuine. With respect to such telephone transactions, the Fund will follow
reasonable procedures to confirm that instructions communicated by telephone are
genuine (including verification of a form of personal identification) as, if it
does not, the Fund or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent transactions. Instructions received by telephone are
generally tape recorded, and a written confirmation will be provided for all
purchase, exchange and redemption transactions initiated by telephone. By
exchanging shares by telephone, you are acknowledging prior receipt of a
prospectus for the fund into which your shares are being exchanged.
Telephone Redemption--Check to Your Address of Record
The Telephone Redemption feature is a quick and easy method to redeem
shares. You or your investment dealer of record can have redemption proceeds of
$50,000 or less mailed to you at your address of record. Checks will be payable
to the shareholder(s) of record. Payment is normally mailed the next business
day, but no later than seven days, after receipt of the request. This service is
only available to individual, joint and individual fiduciary-type accounts.
Telephone Redemption--Proceeds to Your Bank
Redemption proceeds of $1,000 or more can be transferred to your
predesignated bank account by wire or by check. You should authorize this
service when you open your account. If you change your predesignated bank
account, the Fund requires an Authorization Form with your signature guaranteed.
For your protection, your authorization must be on file. If you request a wire,
your funds will normally be sent the next business day. CoreStates Bank, N.A.'s
fee (currently $7.50) will be deducted from your redemption. If you ask for a
check, it will normally be mailed the next business day, but no later than seven
days, after receipt of your request to your predesignated bank account. Except
for any CDSC which may be applicable to Class B and Class C Shares and the
Limited CDSC which may be applicable to certain Class A Shares, there are no
fees for this redemption method, but the mail time may delay getting funds into
your bank account. Simply call the Fund's Shareholder Service Center prior to
the time the offering price and net asset value are determined, as noted above.
If expedited payment by check or wire could adversely affect a Series, the Fund
may take up to seven days to pay.
Telephone Exchange
The Telephone Exchange feature is a convenient and efficient way to
adjust your investment holdings as your liquidity requirements and investment
objectives change. You or your investment dealer of record can exchange your
shares into any fund in the Delaware Group under the same registration, subject
to the same conditions and limitations as other exchanges noted above. As with
the written exchange service, telephone exchanges are subject to the
requirements of each fund, as described above. Telephone exchanges may be
subject to limitations as to amounts or frequency.
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Systematic Withdrawal Plans
1. Regular Plans
This plan provides shareholders with a consistent monthly (or quarterly)
payment. This is particularly useful to shareholders living on fixed incomes,
since it can provide them with a stable supplemental amount. With accounts of at
least $5,000, you may elect monthly withdrawals of $25 (quarterly $75) or more.
The Fund does not recommend any particular monthly amount, as each shareholder's
situation and needs vary. Payments are normally made by check. You may elect to
have your payments transferred from your Series account to your predesignated
bank account through the Delaware Group's MoneyLine service. Your funds will
normally be credited to your bank account two business days after the payment
date. Except for the Limited CDSC which may be applicable to Class A Shares and
the CDSC which may be applicable to Class B Shares and Class C Shares as noted
below, there are no fees for this redemption method. You can initiate the
MoneyLine service by completing an Authorization Agreement. If the name and
address on your bank account are not identical to the name and address on your
Fund account, you must have your signature guaranteed. Please call the
Shareholder Service Center for additional information.
2. Retirement Plans
For shareholders eligible under the applicable retirement plan to
receive benefits in periodic payments, the Fund's Systematic Withdrawal Plan
provides you with maximum flexibility. A number of formulas are available for
calculating your withdrawals depending upon whether the distributions are
required or optional. Withdrawals must be for $25 or more; however, no minimum
account balance is required. The MoneyLine service described above is not
available for retirement plans.
* * *
Shareholders should not purchase Class A Shares while participating in
a Systematic Withdrawal Plan. Also, redemptions of Class A Shares via a
Systematic Withdrawal Plan may be subject to a Limited CDSC if the original
purchase was made at net asset value within the twelve months prior to the
withdrawal and a dealer's commission was paid on that purchase. See Contingent
Deferred Sales Charge for Certain Purchases of Class A Shares Made at Net Asset
Value, below. With respect to Class B Shares and Class C Shares redeemed via a
Systematic Withdrawal Plan, any applicable CDSC will be waived if, on the date
that the Plan is established, the annual amount selected to be withdrawn is less
than 12% of the account balance. If the annual amount selected to be withdrawn
exceeds 12% of the account balance on the date that the Systematic Withdrawal
Plan is established, all redemptions under the Plan will be subject to the
applicable CDSC. Whether a waiver of the CDSC is available or not, the first
shares to be redeemed for each Systematic Withdrawal Plan payment will be those
not subject to a CDSC because they have either satisfied the required holding
period or were acquired through the reinvestment of distributions. The 12%
annual limit will be reset on the date that any Systematic Withdrawal Plan is
modified (for example, a change in the amount selected to be withdrawn or the
frequency or date of withdrawals), based on the balance in the account on that
date. See Waiver of CDSC - Class B and Class C Shares, below. For more
information on Systematic Withdrawal Plans, call the Shareholder Service
Center.
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Wealth Builder Option
Shareholders may elect to invest in other mutual funds in the Delaware
Group through our Wealth Builder Option. Under this automatic exchange program,
shareholders can authorize regular monthly amounts (minimum of $100 per fund) to
be liquidated from their Series account and invested automatically into an
account in one or more funds in the Delaware Group. If, in connection with the
Wealth Builder Option, a shareholder wishes to open a new account in such other
fund or funds to receive the automatic investment, such new account must meet
such other fund's minimum initial purchase requirements. Investments under this
option are exchanges and are therefore subject to the same conditions and
limitations as other exchanges noted above.
Shareholders can use the Wealth Builder Option to invest in the Series
through regular liquidations of shares in their accounts in other funds in the
Delaware Group, subject to the same conditions and limitations as other
exchanges noted above. Shareholders can terminate their participation at any
time by written notice to the Fund. See Redemption and Exchange.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, Profit Sharing and Money Purchase Pension Plans, 401(k)
Defined Contribution Plans, 403(b)(7) Deferred Compensation Plans or 457
Deferred Compensation Plans.
Contingent Deferred Sales Charge for Certain
Purchases of Class A Shares Made at Net Asset Value
A Limited CDSC will be imposed by the Fund upon certain redemptions of
Class A Shares (or shares into which such Class A Shares are exchanged) made
within twelve months of purchase, if such purchases were made at net asset value
and triggered the payment by the Distributor of the dealer's commission
described above. See Buying Shares.
The Limited CDSC will be paid to the Distributor and will be equal to
the lesser of 1% of (1) the net asset value at the time of purchase of the Class
A Shares being redeemed or (2) the net asset value of such Class A Shares at the
time of redemption. For purposes of this formula, the "net asset value at the
time of purchase" will be the net asset value at purchase of the Class A Shares
even if those shares are later exchanged for shares of another Delaware Group
fund and, in the event of an exchange of Class A Shares, the "net asset value of
such shares at the time of redemption" will be the net asset value of the shares
acquired in the exchange.
Redemptions of such Class A Shares held for more than twelve months will
not be subjected to the Limited CDSC and an exchange of such Class A Shares into
another Delaware Group fund will not trigger the imposition of the Limited CDSC
at the time of such exchange. The period a shareholder owns shares into which
Class A Shares are exchanged will count towards satisfying the 12-month holding
period. The Fund assesses the Limited CDSC if such 12-month period is not
satisfied irrespective of whether the redemption triggering its payment is of
the Class A Shares of a Series or the Class A Shares acquired in the exchange.
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In determining whether a Limited CDSC is payable, it will be assumed
that shares not subject to the Limited CDSC are the first redeemed followed by
other shares held for the longest period of time. The Limited CDSC will not be
imposed upon shares representing reinvested dividends or capital gains
distributions, or upon amounts representing share appreciation. All investments
made during a calendar month, regardless of what day of the month the investment
occurred, will age one month on the last day of that month and each subsequent
month.
Waiver of Limited CDSC - Class A
Shares The Limited CDSC for Class A Shares on which a dealer's
commission has been paid will be waived in the following instances: (i)
redemptions that result from the Series' right to liquidate a shareholder's
account if the aggregate net asset value of the shares held in the account is
less than the then-effective minimum account size; (ii) distributions to
participants from a retirement plan qualified under section 401(a) or 401(k) of
the Code, or due to death of a participant in such a plan; (iii) redemptions
pursuant to the direction of a participant or beneficiary of a retirement plan
qualified under section 401(a) or 401(k) of the Code with respect to that
retirement plan; (iv) distributions from a section 403(b)(7) Plan or an IRA due
to death, disability, or attainment of age 59 1/2; (v) returns of excess
contributions to an IRA; (vi) distributions by other employee benefit plans to
pay benefits; (vii) distributions described in (ii), (iv), and (vi) above
pursuant to a systematic withdrawal plan; and (viii) redemptions by the classes
of shareholders who are permitted to purchase shares at net asset value,
regardless of the size of the purchase (see Buying at Net Asset Value, under
Buying Shares).
Waiver of CDSC - Class B and Class C Shares
The CDSC on certain redemptions of Class B Shares is waived in
connection with the following redemptions: (i) redemptions that result from the
Fund's right to liquidate a shareholder's account if the aggregate net asset
value of the shares held in the account is less than the then-effective minimum
account size; (ii) returns of excess contributions to an IRA or 403(b)(7)
Deferred Compensation Plan; (iii) required minimum distributions from an IRA,
403(b)(7) Deferred Compensation Plan, or 457 Deferred Compensation Plan; and
(iv) distributions from an account if the redemption results from the death of
all registered owners of the account (in the case of accounts established under
the Uniform Gifts to Minors or Uniform Transfers to Minors Acts or trust
accounts, the waiver applies upon the death of all beneficial owners) or a total
and permanent disability (as defined in Section 72 of the Code) of all
registered owners occurring after the purchase of the shares being redeemed.
The CDSC on certain redemptions of Class C Shares is waived in
connection with the following redemptions: (i) redemptions that result from the
Fund's right to liquidate a shareholder's account if the aggregate net asset
value of the shares held in the account is less than the then-effective minimum
account size; (ii) returns of excess contributions to an IRA, 403(b)(7) Deferred
Compensation Plan, Profit Sharing Plan, Money Purchase Pension Plan or 401(k)
Defined Contribution Plan; (iii) required minimum distributions from an IRA,
403(b)(7) Deferred Compensation Plan, 457 Deferred Compensation Plan, Profit
Sharing Plan, Money Purchase Pension Plan, or 401(k) Defined Contribution Plan;
(iv) distributions from a 403(b)(7) Deferred Compensation Plan, 457 Deferred
Compensation Plan, Profit Sharing Plan, or 401(k) Defined Contribution Plan,
under hardship provisions of the plan; (v) distributions from a 403(b)(7)
Deferred Compensation Plan, 457 Deferred Compensation Plan, Profit Sharing Plan,
Money Purchase Pension Plan or a 401(k) Defined Contribution Plan upon
attainment of normal retirement age under the plan or upon separation from
service; (vi) distributions from an IRA on or after attainment of age 59 1/2;
and (vii) distributions from an account if the redemption results from the death
of all registered owners of the account (in the case of accounts established
under the Uniform Gifts to Minors or Uniform Transfers to Minors Acts or trust
accounts, the waiver applies upon the death of all beneficial owners) or a total
and permanent disability (as defined in Section 72 of the Code) of all
registered owners occurring after the purchase of the shares being redeemed.
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In addition, the CDSC will be waived on Class B and Class C Shares
redeemed in accordance with a Systematic Withdrawal Plan if the annual amount
selected to be withdrawn under the Plan does not exceed 12% of the value of the
account on the date that the Systematic Withdrawal Plan was established or
modified.
DIVIDENDS AND DISTRIBUTIONS
The Fund declares a dividend on each Series to all shareholders of
record of the Classes of that Series at the time the offering price of shares is
determined. See Purchase Price and Effective Date under Buying Shares. Thus,
when redeeming shares, dividends continue to be credited up to and including the
date of redemption.
The International Equity and Global Assets Series will declare and
normally make payments from net investment income on a quarterly basis. The
Global Bond Series will declare and normally make payments from net investment
income on a monthly basis. During the fiscal year ended November 30, 1994,
dividends totaling $0.255 and $0.030 per share of the Class A Shares and the
Class B Shares, respectively, of the International Equity Series were paid from
net investment income. During the six months ended May 31, 1995, the Class A and
Class B Shares of the International Equity Series paid dividends of $0.125 and
$0.105 per share from net investment income, respectively. For the five month
period ended, May 31, 1995, the Global Bond Series' and Global Assets Series'
Class A Shares paid dividends of $0.24 and $0.80 per share and Class B Shares
paid dividends of $0.216 and $0.80 per share from net investment income,
respectively.
Payment by check of cash dividends will ordinarily be mailed within
three business days after the payable date. Payments from net realized
securities profits of a Series, if any, will be distributed annually in the
quarter following the close of the fiscal year. During the fiscal year ended
November 30, 1994, a distribution of $0.140 per share of the Class A Shares of
the International Equity Series was paid from realized securities profits. Class
C Shares were not offered prior to the date of this Prospectus.
Each of the Classes of a Series will share proportionately in the
investment income and expenses of that Series, except that the per share
dividends from net investment income on the Class A Shares, Class B Shares and
Class C Shares will vary due to the expenses under the 12b-1 Plan applicable to
each class. Generally, the dividends per share on Class B Shares and Class C
Shares can be expected to be lower than the dividends per share on Class A
Shares because the expenses under the 12b-1 Plans relating to Class B and Class
C Shares will be higher than the expenses under the 12b-1 Plan relating to Class
A Shares. See Distribution (12b-1) and Service under Management of the Fund.
Both dividends and distributions, if any, are automatically reinvested
in your account at net asset value, unless you elect otherwise. Any check in
payment of dividends or other distributions which cannot be delivered by the
United States Post Office or which remains uncashed for a period of more than
one year may be reinvested in the shareholder's account at the then-current net
asset value and the dividend option may be changed from cash to reinvest. If you
elect to take your dividends and distributions in cash and such dividends and
distributions are in an amount of $25 or more, you may choose Delaware Group's
MoneyLine service and have such payments transferred from your Series account to
your predesignated bank account. Your funds will normally be credited to your
bank account two business days after the payment date. There are no fees for the
MoneyLine Service. See Systematic Withdrawal Plan for Class A Shares, Class B
Shares and Class C Shares under Redemption and Exchange for information
regarding authorization of this service. This service is not available for
retirement plans. (See The Delaware Difference for more information on
reinvestment options.)
In addition, in order to satisfy certain distribution requirements of
the Tax Reform Act of 1986, a Series may declare special year-end dividend and
capital gains distributions during October, November or December to shareholders
of record on a date in such month. Such distributions, if received by
shareholders by January 31, are deemed to have been paid by the Series and
received by shareholders on the earlier of the date paid or December 31 of the
prior year. On January 5, 1995, a dividend of $0.095 and $0.085 per share of the
Class A Shares and the Class B Shares, respectively, of the International Equity
Series was paid from net investment income. On the same date, a distribution of
$0.470 per share of the Class A Shares and the Class B Shares of the
International Equity Series was paid from realized securities profits to
shareholders of record December 27, 1994.
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TAXES
Each Series has qualified, and intends to continue to qualify, as a
regulated investment company under Subchapter M of the Code. As such, each
Series will not be subject to federal income tax, or to any excise tax, to the
extent its earnings are distributed as provided in the Code.
Each Series intends to distribute substantially all of its net
investment income and net capital gains, if any. Dividends from net investment
income or net short-term capital gains will be taxable to you as ordinary
income, whether received in cash or in additional shares. It is expected that
either none or only a nominal portion of a Series' dividends will be eligible
for the dividends-received deductions for corporations.
Distributions paid by a Series from long-term capital gains, whether
received in cash or in additional shares, are taxable to those investors who are
subject to income taxes as long-term capital gains, regardless of the length of
time an investor has owned shares in the Series. A Series does not seek to
realize any particular amount of capital gains during a year; rather, realized
gains are a byproduct of Series management activities. Consequently, capital
gains distributions may be expected to vary considerably from year to year.
Also, for those investors subject to tax, if purchases of shares in a Series are
made shortly before the record date for a dividend or capital gains
distribution, a portion of the investment will be returned as a taxable
distribution.
Although dividends generally will be treated as distributed when paid,
dividends which are declared in October, November, or December to shareholders
of record in such a month, but which, for operational reasons, may not be paid
to the shareholder until the following January, will be treated for tax purposes
as if paid by a Series and received by the shareholder on December 31 of the
year declared.
The sale of shares of a Series is a taxable event and may result in a
capital gain or loss to shareholders subject to tax. Capital gain or loss may be
realized from an ordinary redemption of shares or an exchange of shares between
two mutual funds (or two series or portfolios of a mutual fund). Any loss
incurred on sale or exchange of a Series' shares which had been held for six
months or less will be treated as a long-term capital loss to the extent of
capital gain dividends received with respect to such shares. All or a portion of
the sales charge incurred in acquiring a Series' shares will be excluded from
the federal tax basis of any of such shares sold or exchanged within ninety days
of their purchase (for purposes of determining gain or loss upon sale of such
shares) if the sale proceeds are reinvested in the Series or in another fund in
the Delaware Group of funds and a sales charge that would otherwise apply to the
reinvestment is reduced or eliminated. Any portion of such sales charge excluded
from the tax basis of the shares sold will be added to the tax basis of the
shares acquired in the reinvestment.
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A Series may be subject to foreign withholding taxes on income from
certain of its foreign securities. If more than 50% in value of the total assets
of a Series at the end of its fiscal year are invested in securities of foreign
corporations, the Series may elect to pass-through to its shareholders a
pro-rata share of foreign income taxes paid by the Series. If this election is
made, shareholders will be (i) required to include in their gross income their
pro-rata share of foreign source income (including any foreign taxes paid by the
Series), and (ii) entitled to either deduct (as an itemized deduction in the
case of individuals) their share of such foreign taxes in computing their
taxable income or to claim a credit for such taxes against their U.S. income
tax, subject to certain limitations under the Code. Shareholders will be
informed by a Series at the end of each calendar year regarding the availability
of any credits on and the amount of foreign source income to be included in
their income tax returns.
The automatic conversion of Class B Shares into Class A Shares of the
relevant Series at the end of approximately eight years after purchase will be
tax-free for federal tax purposes. See Automatic Conversion of Class B Shares
under Buying Shares.
In addition to federal taxes, shareholders may be subject to state and
local taxes on distributions. Distributions of interest income and capital gains
realized from certain types of U.S. Government securities may be exempt from
state personal income taxes. Shares of the Series are exempt from Pennsylvania
county personal property taxes.
Each year, the Fund will mail to you information on the tax status of a
Series' dividends and distributions. You will also receive each year information
as to the portion of dividend income, if any, that is derived from U.S.
Government securities that are exempt from state income tax. Of course,
shareholders who are not subject to tax on their income would not be required to
pay tax on amounts distributed to them by the Series.
The Fund is required to withhold 31% of taxable dividends, capital gains
distributions, and redemptions paid to shareholders who have not complied with
IRS taxpayer identification regulations. You may avoid this withholding
requirement by certifying on your Account Registration Form your proper Taxpayer
Identification Number and by certifying that you are not subject to backup
withholding.
The tax discussion set forth above is included for general information
only. Investors should consult their own tax advisers concerning the federal,
state, local or foreign tax consequences of an investment in the Series.
See Accounting and Tax Issues in Part B for additional information on
tax matters relating to the Series and its shareholders.
CALCULATION OF OFFERING PRICE AND
NET ASSET VALUE PER SHARE
Class A Shares are purchased at the offering price per share, while
Class B Shares and Class C Shares are purchased at the net asset value ("NAV")
per share. The offering price per share of Class A Shares consists of the NAV
per share next computed after the order is received, plus any applicable
front-end sales charges. The offering price and NAV are computed as of the close
of regular trading on the New York Stock Exchange (ordinarily, 4 p.m., Eastern
time) on days when the Exchange is open.
The NAV per share for each Series is computed by adding the value of all
securities and other assets in the Series' portfolio, deducting any liabilities
of that Series (expenses and fees are accrued daily) and dividing by the number
of that Series' shares outstanding. Portfolio securities for which market
quotations are available are priced at market value. Debt securities are priced
at fair value by an independent pricing service using methods approved by the
Fund's Board of Directors. Short-term investments having a maturity of less than
sixty days are valued at amortized cost, which approximates market value. All
other securities are valued at their fair value as determined in good faith and
in a method approved by the Fund's Board of Directors.
A Series' portfolio securities, from time to time, may be listed
primarily on foreign exchanges which trade on days when the New York Stock
Exchange is closed (such as Saturday). As a result, the net asset value of a
Series may be significantly affected by such trading on days when shareholders
have no access to the Series.
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Each share of a Series' four classes will bear, pro-rata, all of the
common expenses of the Series. The net asset values of all outstanding shares of
each class of a Series will be computed on a pro-rata basis for each outstanding
share based on the proportionate participation in that Series represented by the
value of shares of that class. All income earned and expenses incurred by a
Series will be borne on a pro-rata basis by each outstanding share of a class,
based on each class' percentage in the Series represented by the value of shares
of such classes, except that the International Equity Fund Institutional Class,
the Global Bond Fund Institutional Class and the Global Assets Fund
Institutional Class will not incur any distribution fees under the respective
Series' 12b-1 Plans and the Class A, Class B and Class C Shares of each Series
alone will bear the 12b-1 Plan expenses payable under their respective 12b-1
Plans. Due to the specific distribution expenses and other costs that will be
allocable to each class, the net asset value of each class of a particular
Series will vary.
MANAGEMENT OF THE FUND
Directors
The business and affairs of the Fund are managed under the direction of
its Board of Directors. Part B contains additional information regarding the
directors and officers.
Investment Manager and Sub-Adviser
Delaware International Advisers Ltd. ("Delaware International" or the
"Manager") furnishes investment management services to the Fund. Delaware
International is affiliated with Delaware Management Company, Inc. ("DMC" or the
"Sub-Adviser"), which manages the U.S. securities portion of the Global Assets
Series.
DMC and its predecessors have been managing the funds in the Delaware
Group since 1938. On November 30, 1994, Delaware International and DMC were
supervising in the aggregate more than $24 billion in assets in various
institutional (approximately $15,544,258,000) and investment company
(approximately $9,237,192,000) accounts.
DMC is an indirect, wholly-owned subsidiary of Delaware Management
Holdings, Inc. ("DMH"). Delaware International is also controlled by DMH through
several subsidiaries. On April 3, 1995, a merger between DMH and a wholly-owned
subsidiary of Lincoln National Corporation ("Lincoln National") was completed.
DMH, the Manager and the Sub-Adviser are now wholly-owned subsidiaries, and
subject to the ultimate control, of Lincoln National. Lincoln National, with
headquarters in Fort Wayne, Indiana, is a diversified organization with
operations in many aspects of the financial services industry, including
insurance and investment management. In connection with the merger, new
Investment Management Agreements between the Fund on behalf of each Series and
the Manager and a new Sub-Advisory Agreement between the Manager of the Global
Assets Series and the Sub-Adviser were executed following shareholder approval.
The Manager manages each Series' investments and for its services, the
Manager is paid an annual fee equal to .75% of each Series' average daily net
assets, less a proportionate share of all directors' fees paid to the
unaffiliated directors by the Series. Beginning June 1, 1994, Delaware
International elected voluntarily to waive that portion, if any, of the annual
management fees payable by the International Equity Series to the extent
necessary to insure that the Total Operating Expenses (exclusive of taxes,
interest, brokerage commissions, extraordinary expenses and 12b-1 expenses) of
the Class A Shares of this Series did not exceed 1.50% through November 30,
1994. Through November 30, 1994, this waiver and reimbursement noted above also
applied to Class B Shares of this Series. Prior to June 1, 1994, a waiver and
reimbursement commitment was in place to ensure expenses of the Class A Shares
of the International Equity Series did not exceed 1.25% (exclusive of taxes,
interest brokerage commissions and extraordinary expenses, but inclusive of
12b-1 fees). Delaware International has elected voluntarily to waive that
portion, if any, of the annual management fees payable by the Global Bond Series
and the Global Assets Series to the extent necessary to insure that the Total
Operating Expenses (exclusive of taxes, interest, brokerage commissions and
extraordinary expenses, but inclusive of 12b-1 fees) of the Class A Shares of
these Series do not exceed 1.25% and of the Class B and Class C Shares of these
Series do not exceed 1.95% through November 30, 1995. The fee paid to Delaware
International is higher than the investment advisory fee paid by most investment
companies which are not international equity funds. With respect to the
International Equity Series, the investment management fee earned for the fiscal
year ended November 30, 1994 was 0.73% of average daily net assets, of which
0.47% of average daily net assets was paid by the Series. The Manager has
offices located at Veritas House, 125 Finsbury Pavement, London, England EC2A
1NQ.
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Subject to the overall supervision of the Manager, the Sub-Adviser
manages the U.S. securities portion of the Global Assets Series' portfolio and
furnishes the Manager with investment recommendations, asset allocation advice,
research and other investment services with respect to U.S. securities. For the
services provided to the Manager, the Manager pays the Sub-Adviser a monthly fee
equal to 25% of the fee paid to the Manager under the terms of the Investment
Management Agreement.
Clive A. Gillmore has primary responsibility for making day-to-day
investment decisions for the International Equity Series and the Global Assets
Series. He has been the senior portfolio manager for these Series since their
inception. A graduate of the University of Warwick and having begun his career
at Legal and General Investment Management, Mr. Gillmore joined the Delaware
Group in 1990 after eight years of investment experience. His most recent
position prior to joining the Delaware Group was as a Pacific Basin equity
analyst and senior portfolio manager for Hill Samuel Investment Advisers Ltd.
Mr. Gillmore completed the London Business School Investment program.
In making investment decisions for these Series, Mr. Gillmore regularly
consults with an international equity team of seven members, three of whom
research the Pacific Basin and four of whom research the European Markets. Mr.
Gillmore also regularly consults with David G. Tilles. Mr. Tilles, who is Chief
Investment Officer for Delaware International, is a graduate of the University
of Warwick with a BS in management sciences. Before joining the Delaware Group
in 1990, he was Chief Investment Officer of Hill Samuel Investment Advisers Ltd.
He is a member of the Institute of Investment Management & Research and the
Operational Research Society.
George H. Burwell has responsibility for making investment decisions for
the U.S. equity portion of the Global Assets Series and has had such
responsibility for this Series since its inception. Mr. Burwell holds a BA from
the University of Virginia. Prior to joining the Delaware Group in 1992, Mr.
Burwell was a portfolio manager for Midlantic Bank in Edison, New Jersey, where
he managed an equity mutual fund and three commingled funds. Mr. Burwell is a
Chartered Financial Analyst.
In making investment decisions for this Series, Mr. Burwell regularly
consults with Wayne A. Stork and Richard G. Unruh, Jr. Mr. Stork is Chairman of
DMC and the Fund's Board of Directors and a member of the Board of DMC and the
Manager. He is a graduate of Brown University and attended New York University's
Graduate School of Business Administration. Mr. Stork joined the Delaware Group
in 1962 and has served in various executive capacities at different times within
the Delaware organization. A graduate of Brown University, Mr. Unruh received
his MBA from the University of Pennsylvania's Wharton School and joined the
Delaware Group in 1982 after 19 years of investment management experience with
Kidder, Peabody & Co. Inc. Mr. Unruh was named an executive vice president of
the Fund in 1994. He is also a member of the Board of Directors of DMC and the
Manager and was named an executive vice president of DMC in 1994.
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Paul A. Matlack, Gerald T. Nichols and James R. Raith, Jr. have
responsibility for making investment decisions for the high-yield securities
portion of the Global Assets Series. They have had such responsibility since the
Series' inception. A Chartered Financial Analyst, Mr. Matlack is a graduate of
the University of Pennsylvania with an MBA in Finance from George Washington
University. He began his career at Mellon Bank as a credit specialist, and later
served as a corporate loan officer for Mellon Bank and then Provident National
Bank.
Mr. Nichols is a graduate of the University of Kansas, where he received
a BS in Business Administration and an MS in Finance. Prior to joining the
Delaware Group, he was a high-yield credit analyst at Waddell & Reed, Inc. and
subsequently the investment officer for a private merchant banking firm. He is a
Chartered Financial Analyst.
Mr. Raith is a 1973 graduate of Holy Cross University and received his
MBA in Finance from Tulane University in 1975. Before joining the Delaware Group
in 1987, he held portfolio management positions in both fixed income and equity
management including managing life insurance reserves at ICH Corporation and
managing high-yield pension assets for Firestone Tire and Rubber. Mr. Raith also
managed separate accounts for the Delaware Group's Institutional clients.
In making investment decisions for this Series, Mr. Matlack, Mr. Nichols
and Mr. Raith regularly consult with Paul E. Suckow. Mr. Suckow is DMC's Chief
Investment Officer for Fixed Income. A Chartered Financial Analyst, he is a
graduate of Bradley University with an MBA from Western Illinois University. Mr.
Suckow was a fixed income portfolio manager at the Delaware Group from 1981 to
1985. He returned to the Delaware Group in 1993 after eight years with
Oppenheimer Management Corporation.
Ian G. Sims has primary responsibility for making day-to-day investment
decisions for the Global Bond Series. He has been the senior portfolio manager
for this Series since its inception. Mr. Sims is a graduate of the University of
Newcastle-Upon-Tyne. He joined Delaware International in 1990 as a senior
international fixed income and currency manager. Mr. Sims began his investment
career with the Standard Life Assurance Co., and subsequently moved to the Royal
Bank of Canada Investment Management International Company, where he was an
international fixed income manager. Prior to joining Delaware International, he
was a senior fixed income and currency portfolio manager with Hill Samuel
Investment Advisers Ltd.
In making investment decisions for the Global Bond Series, Mr. Sims
regularly consults with Hywel Morgan and Christopher A. Moth. Mr. Morgan was
educated at the University of Wales and was subsequently an Economics Lecturer
at Dundee University. Prior to joining Delaware International, he was Associate
Director of the international fixed income department and head of the credit
review committee at Hill Samuel Investment Management responsible for over $500
million in multi-currency fixed interest accounts. His prior experience included
working as an economic adviser for Credit Suisse and the Economic Intelligence
Unit. Mr. Morgan started his business career as a Corporate Economist &
Strategist at Ford of Europe and Esso Petroleum. Mr. Moth is a graduate of The
City University London. Mr. Moth joined Delaware in 1992. He previously worked
at the Guardian Royal Exchange in an actuarial capacity where he was responsible
for technical analysis, quantitative models and projections. Mr. Moth has been
awarded the certificate in Finance & Investment from the Institute of Actuaries
in London.
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Portfolio Trading Practices
A Series normally will not invest for short-term trading purposes.
However, a Series may sell securities without regard to the length of time
they have been held. The degree of portfolio activity will affect brokerage
costs of a Series and may affect taxes payable by the Series' shareholders to
the extent that net capital gains are realized. It is anticipated that the
portfolio turnover rate of each Series will not exceed 100%. During the past
two fiscal years, the International Equity Series' portfolio turnover rate was
24% for 1993 and 27% for 1994.
The Manager and the Sub-Adviser use their best efforts to obtain the
best available price and most favorable execution for portfolio transactions.
Orders may be placed with brokers or dealers who provide brokerage and research
services to the Manager and the Sub-Adviser or their advisory clients. These
services may be used by the Manager and the Sub-Adviser in servicing any of
their respective accounts. Subject to best price and execution, the Manager and
Sub-Adviser may consider a broker/dealer's sales of a Series' shares in placing
portfolio orders and may place orders with broker/dealers that have agreed to
defray certain Series expenses such as custodian fees.
Performance Information
From time to time, each Series may quote total return performance of
their respective Classes in advertising and other types of literature. The
Global Bond Series may also quote the yield of its Classes in advertising and
other types of literature.
Total return will be based on a hypothetical $1,000 investment,
reflecting the reinvestment of all distributions at net asset value and: (i) in
the case of Class A Shares, the impact of the maximum front-end sales charge at
the beginning of each specified period; and (ii) in the case of Class B Shares
and Class C Shares, the deduction of any applicable CDSC at the end of the
relevant period. Each presentation will include the average annual total return
for one-, five- and ten-year (or life of fund, if applicable) periods, as
relevant. A Series may also advertise aggregate and average total return
information concerning a Class over additional periods of time. In addition,
each Series may present total return information that does not reflect the
deduction of the maximum front-end sales charge or any applicable CDSC. In this
case, such total return information would be more favorable than total return
information which includes deductions of the maximum front-end sales charge or
any applicable CDSC.
The current yield of each class of the Global Bond Series will be
calculated by dividing the annualized net investment income earned by the Class
during a recent 30-day period by the maximum offering price per share on the
last day of the period. The yield formula provides for semi-annual compounding
which assumes that net investment income is earned and reinvested at a constant
rate and annualized at the end of a six-month period.
Because securities prices fluctuate, investment results of the Classes
will fluctuate over time and past performance should not be considered as a
representation of future results.
Distribution (12b-1) and Service
The Distributor, Delaware Distributors, L.P. (which formerly conducted
business as Delaware Distributors, Inc.), serves as the national distributor for
each Series under separate Distribution Agreements dated April 3, 1995 as
amended on November 29, 1995.
-62-
<PAGE>
The Fund has adopted a separate distribution plan under Rule 12b-1 for
each of a Series' Class A Shares, Class B Shares and Class C Shares (the
"Plans"). Each Plan permits a Series to pay the Distributor from the assets of
the respective Classes a monthly fee for its services and expenses in
distributing and promoting sales of shares. These expenses include, among other
things, preparing and distributing advertisements, sales literature, and
prospectuses and reports used for sales purposes, compensating sales and
marketing personnel, holding special promotions for specified periods of time,
and paying distribution and maintenance fees to brokers, dealers and others. In
connection with the promotion of Class A, Class B and Class C Shares, the
Distributor may, from time to time, pay to participate in dealer-sponsored
seminars and conferences, and reimburse dealers for expenses incurred in
connection with preapproved seminars, conferences and advertising. The
Distributor may pay or allow additional promotional incentives to dealers as
part of preapproved sales contests and/or to dealers who provide extra training
and information concerning a Class and increase sales of the Class. In addition,
a Series may make payments from the assets of the respective Class directly to
others, such as banks, who aid in the distribution of Class shares or provide
services in respect of a Class, pursuant to service agreements with the Fund.
The Plan expenses relating to each of the Class B Shares and Class C
Shares of a Series are also used to pay the Distributor for advancing the
commission costs to dealers with respect to the initial sale of such shares.
The aggregate fees paid by a Series from the assets of the respective
Classes to the Distributor and others under the Plans may not exceed .30% of the
Class A Shares' average daily net assets in any year, and 1% (.25% of which are
service fees to be paid by the Series to the Distributor, dealers and others,
for providing personal service and/or maintaining shareholder accounts) of each
of the Class B Shares' and the Class C Shares' average daily net assets in any
year. The Class A, Class B and Class C Shares will not incur any distribution
expenses beyond these limits, which may not be increased without shareholder
approval. The Distributor may, however, incur additional expenses and make
additional payments to dealers from its own resources to promote the
distribution of shares of the Classes.
The Plans do not apply to the Institutional Class of shares of any
Series. Those shares are not included in calculating the Plans' fees, and the
Plans are not used to assist in the distribution and marketing of the shares of
the Institutional Class of any Series.
While payments pursuant to the Plans may not exceed .30% annually with
respect to the Class A Shares and 1% annually with respect to each of the Class
B Shares and the Class C Shares, the Plans do not limit fees to amounts actually
expended by the Distributor. It is therefore possible that the Distributor may
realize a profit in any particular year. However, the Distributor currently
expects that its distribution expenses will likely equal or exceed payments to
it under the Plans. The monthly fees paid to the Distributor are subject to the
review and approval of the Fund's unaffiliated directors, who may reduce the
fees or terminate the Plans at any time.
The Transfer Agent, Delaware Service Company, Inc., serves as the
shareholder servicing, dividend disbursing and transfer agent for each Series
under separate Agreements dated October 25, 1991. The directors of the Fund
annually review service fees paid to the Transfer Agent.
The Distributor and the Transfer Agent are also indirect, wholly-owned
subsidiaries of DMH.
-63-
<PAGE>
Expenses
Each Series is responsible for all of its own expenses other than those
borne by the Manager under the Investment Management Agreements and those borne
by the Distributor under the Distribution Agreements. The ratio of expenses to
average daily net assets of the Class A Shares of the International Equity
Series for the fiscal year ended November 30, 1994 was 1.56%, reflecting the
impact of its 12b-1 Plan and the waiver of fees described above. Based on
expenses derived from the Class A Shares of the International Equity Series
during the fiscal year ended November 30, 1994, the expenses of the Class B
Shares of the International Equity Series are expected to be 2.52%, reflecting
the impact of its 12b-1 Plan, for the fiscal year ended November 30, 1995. The
expenses of the Class A Shares of the Global Bond and Global Assets Series are
expected to be 1.25%, reflecting the impact of their respective 12b-1 Plan and
the waiver of fees described above. The expenses of the Class B Shares of the
Global Bond and the Global Assets Series are expected to be 1.95%. The Fund
anticipates that the expense ratios for Class C Shares will be identical to the
expense ratios for Class B Shares. The ratio of each Class reflects the impact
of its Plan and the waiver of fees described above.
Shares
The Fund is an open-end management investment company. The Fund was
organized as a Maryland corporation on May 30, 1991.
The shares of each Series have a par value of $.01 and when issued will
be fully paid, non-assessable, fully transferable and redeemable at the option
of the holder. The shares have no preference as to conversion, exchange,
dividends, retirement or other features and have no preemptive rights. All Fund
shares have noncumulative voting rights which means that the holders of more
than 50% of the Fund's shares voting for the election of directors can elect
100% of the directors if they choose to do so. Under Maryland law, the Fund is
not required, and does not intend, to hold annual meetings of shareholders
unless, under certain circumstances, it is required to do so under the 1940 Act.
Shareholders of 10% or more of the Fund's shares may request that a special
meeting be called to consider the removal of a director.
The International Equity Series, the Global Bond Series and the Global
Assets Series also offer, respectively, the International Equity Fund
Institutional Class, the Global Bond Fund Institutional Class and the Global
Assets Fund Institutional Class of shares as well as Class A Shares, Class B
Shares and Class C Shares. Shares of each class of a Series represent
proportionate interests in the assets of that Series and have the same voting
and other rights and preferences as the other classes of the Series, except that
shares of the International Equity Fund Institutional Class, the Global Bond
Fund Institutional Class and the Global Assets Fund Institutional Class are not
subject to, and may not vote on matters affecting, the Plans. Similarly, as a
general matter, shareholders of Class A Shares, Class B Shares and Class C
Shares may vote only on matters affecting the Plan that relates to the class of
shares that they hold. However, the Class B Shares of a Series may vote on a
proposal to increase materially the fees to be paid by that Series under the
Plan relating to the respective Class A Shares.
Prior to September 6, 1994, the International Equity Fund A Class was
known as the International Equity Fund class and the International Equity Fund
Institutional Class was known as the International Equity Fund (Institutional)
class.
-64-
<PAGE>
APPENDIX A
Global Bond Series
Illustrations of the Potential Impact on Investment Based on Purchase Option
$10,000 Purchase
<TABLE>
<CAPTION>
Scenario 1 Scenario 2
No Redemption Redeem 1st Year
--------------------------------------- ---------------------------------------
Year Class A Class B Class C Class A Class B Class C
- ---- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
0 9,525 10,000 10,000 9,525 10,000 10,000
1 10,192 10,630 10,630 10,192 10,230 10,530+
2 10,905 11,300 11,300
3 11,669 12,012 12,012
4 12,485 12,768 12,768
5 13,359 13,573 13,573
6 14,294 14,428 14,428
7 15,295 15,337 15,337
8 16,366+ 16,303 16,303
9 17,511 17,444* 17,330
10 18,737 18,665* 18,422
</TABLE>
*This assumes that Class B Shares were converted to Class A
Shares at the end of the eighth year.
<TABLE>
<CAPTION>
Scenario 3 Scenario 4
Redeem 3rd Year Redeem 5th Year
- -------- --------------------------------------- ---------------------------------------
Year Class A Class B Class C Class A Class B Class C
- ---- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
0 9,525 10,000 10,000 9,525 10,000 10,000
1 10,192 10,630 10,630 10,192 10,630 10,630
2 10,905 11,300 11,300 10,905 11,300 11,300
3 11,669 11,712 12,012+ 11,669 12,012 12,012
4 12,485 12,768 12,768
5 13,359 13,373 13,573+
6
7
8
9
10
</TABLE>
<PAGE>
$250,000 Purchase
<TABLE>
<CAPTION>
Scenario 1 Scenario 2
No Redemption Redeem 1st Year
--------------------------------------- ----------------------------------------
Year Class A Class B Class C Class A Class B Class C
- ---- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
0 243,750 250,000 250,000 243,750 250,000 250,000
1 260,813 265,750 265,750 260,813 255,750 263,250+
2 279,069 282,492 282,492
3 298,604 300,289 300,289
4 319,507+ 319,207 319,207
5 341,872 339,318 339,318
6 365,803 360,395 360,695
7 391,409 383,418 383,418
8 418,808 407,574 407,574
9 448,124 436,104* 433,251
10 479,493 466,631* 460,546
</TABLE>
*This assumes that Class B Shares convert to Class A Shares at the
end of the eighth year.
<TABLE>
<CAPTION>
Scenario 3 Scenario 4
Redeem 3rd Year Redeem 5th Year
--------------------------------------- ---------------------------------------
Year Class A Class B Class C Class A Class B Class C
- ---- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
0 243,750 250,000 250,000 243,750 250,000 250,000
1 260,813 265,750 265,750 260,813 265,750 265,750
2 279,069 282,492 282,492 279,069 282,492 282,492
3 298,604 292,789 300,289+ 298,604 300,289 300,289
4 319,507 319,207 319,207
5 341,872+ 334,318 339,318
6
7
8
9
10
</TABLE>
- -------------
Assumes a hypothetical return for Class A of 7% per year, a hypothetical return
for Class B of 6.3% for year 1-8 and 8% for years 9-10, and a hypothetical
return for Class C of 6.3%. Hypothetical returns vary due to the different
expense structure for each Class and do not represent actual performance.
Class A purchase subject to appropriate sales charge breakpoint (4.75% @
$10,000; 3.75% @ $100,000; 2.50% @ $250,000).
Class B purchase assessed appropriate CDSC upon redemption (4%-4%-3%-3%-2%-1%
in years 1-2-3-4-5-6).
Class C purchase assessed 1% CDSC upon redemption in year 1.
Figures marked "+" identify which class offers the greater return potential
based on investment amount and holding period.
-65-
<PAGE>
APPENDIX A
Intentional Equity and Global Asset Series
Illustrations of the Potential Impact on Investment Based on Purchase Option
$10,000 Purchase
<TABLE>
<CAPTION>
Scenario 1 Scenario 2
No Redemption Redeem 1st Year
--------------------------------------- ---------------------------------------
Year Class A Class B Class C Class A Class B Class C
- ---- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
0 9,525 10,000 10,000 9,525 10,000 10,000
1 10,478 10,930 10,930 10,478 10,530 10,830+
2 11,525 11,946 11,946
3 12,678 13,058 13,058
4 13,946 14,272 14,272
5 15,340 15,599 15,599
6 16,874 17,050 17,050
7 18,562 18,636 18,636
8 20,418+ 20,369 20,369
9 22,459 22,405* 22,263
10 24,705 24,646* 24,333
</TABLE>
*This assumes that Class B Shares were converted to Class A Shares
at the end of the eighth year.
<TABLE>
<CAPTION>
Scenario 3 Scenario 4
Redeem 3rd Year Redeem 5th Year
--------------------------------------- ---------------------------------------
Year Class A Class B Class C Class A Class B Class C
- ---- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
0 9,525 10,000 10,000 9,525 10,000 10,000
1 10,478 10,930 10,930 10,478 10,930 10,930
2 11,525 11,946 11,946 11,525 11,946 11,946
3 12,678 12,758 13,058+ 12,678 13,058 13,058
4 13,946 14,272 14,272
5 15,340 15,399 15,599+
6
7
8
9
10
</TABLE>
<PAGE>
$250,000 Purchase
<TABLE>
<CAPTION>
Scenario 1 Scenario 2
No Redemption Redeem 1st Year
--------------------------------------- ----------------------------------------
Year Class A Class B Class C Class A Class B Class C
- ---- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
0 243,750 250,000 250,000 243,750 250,000 250,000
1 268,125 273,250 273,250 268,125 263,250 270,750+
2 294,938 298,662 298,662
3 324,431 326,438 326,438
4 356,874+ 356,797 356,797
5 392,562 389,979 389,979
6 431,818 426,247 426,247
7 475,000 465,888 465,888
8 522,500 509,215 509,215
9 574,750 560,137* 556,572
10 632,225 616,150* 608,333
</TABLE>
*This assumes that Class B Shares were converted to Class A Shares at
the end of the eighth year.
<TABLE>
<CAPTION>
Scenario 3 Scenario 4
Redeem 3rd Year Redeem 5th Year
--------------------------------------- ---------------------------------------
Year Class A Class B Class C Class A Class B Class C
- ---- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
0 243,750 250,000 250,000 243,750 250,000 250,000
1 268,125 273,250 273,250 268,125 273,250 273,250
2 294,938 298,662 298,662 294,938 298,662 298,662
3 324,431 318,938 326,438+ 324,431 326,438 326,438
4 356,874+ 356,797 356,797
5 392,562 384,979 389,979
7
8
9
10
</TABLE>
- -------------
Assumes a hypothetical return for Class A of 10% per year, a hypothetical return
for Class B of 9.3% for years 1-8 and 10% for years 9-10, and a hypothetical
return for Class C of 9.3% per year. Hypothetical returns vary due to the
different expense structures for each Class and do not represent actual
performance.
Class A purchase subject to appropriate sales charge breakpoint (4.75% @
$10,000; 3.75% @ $100,000; 2.50% @ $250,000).
Class B purchase assessed appropriate CDSC upon redemption (4%-4%-3%-3%-2%-1%
in years 1-2-3-4-5-6).
Class C purchase assessed 1% CDSC upon redemption in year 1.
Figures marked "+" identify which class offers the greater return potential
based on investment amount and holding period
-66-
<PAGE>
APPENDIX B--RATINGS
Bonds
Excerpts from Moody's description of its bond ratings: Aaa--judged to be
the best quality. They carry the smallest degree of investment risk; Aa--judged
to be of high quality by all standards; A--possess favorable attributes and are
considered "upper medium" grade obligations; Baa--considered as medium grade
obligations. Interest payments and principal security appear adequate for the
present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time; Ba--judged to have
speculative elements; their future cannot be considered as well assured. Often
the protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class; B--generally lack
characteristics of the desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over any long period
of time may be small; Caa--are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest; Ca--represent obligations which are speculative in a high degree. Such
issues are often in default or have other marked shortcomings; C--the lowest
rated class of bonds and issues so rated can be regarded as having extremely
poor prospects of ever attaining any real investment standing.
Excerpts from S&P's description of its bond ratings: AAA--highest grade
obligations. They possess the ultimate degree of protection as to principal and
interest; AA--also qualify as high grade obligations, and in the majority of
instances differ from AAA issues only in a small degree; A--strong ability to
pay interest and repay principal although more susceptible to changes in
circumstances; BBB--regarded as having an adequate capacity to pay interest and
repay principal; BB, B, CCC, CC--regarded, on balance, as predominantly
speculative with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation. BB indicates the lowest degree of
speculation and CC the highest degree of speculation. While such debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions; C--reserved
for income bonds on which no interest is being paid; D--in default, and payment
of interest and/or repayment of principal is in arrears.
-67-
<PAGE>
--------------------------------------
INTERNATIONAL EQUITY FUND
GLOBAL BOND FUND
GLOBAL ASSETS FUND
The Delaware Group includes --------------------------------------
funds with a wide range of investment
objectives. Stock funds, income funds, A CLASS
tax-free funds, money market funds, --------------------------------------
global and international funds and
closed-end equity funds give investors B CLASS
the ability to create a portfolio that --------------------------------------
fits their personal financial goals.
For more information, contact your C CLASS
financial adviser or call Delaware --------------------------------------
Group at 800-523-4640.
INVESTMENT MANAGER
Delaware International Advisers Ltd.
Veritas House
125 Finsbury Pavement
London, England EC2A 1NQ
SUB-ADVISER
Delaware Management Company, Inc.
One Commerce Square
Philadelphia, PA 19103
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
1818 Market Street
Philadelphia, PA 19103 P R O S P E C T U S
SHAREHOLDER SERVICING, DIVIDEND --------------------------------------
DISBURSING AND TRANSFER AGENT
Delaware Service Company, Inc. November 29, 1995
1818 Market Street
Philadelphia, PA 19103
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young
One Commerce Square
Philadelphia, PA 19103
INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103
CUSTODIAN
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, NY 10260
DELAWARE
GROUP
--------
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
The Registrant's Institutional Classes Prospectus dated March 10, 1995 is
incorporated into this filing by reference to the electronic filing of that
Prospectus made pursuant to Rule 497(e) on April 24, 1995. The Supplement to
that Prospectus dated June 30, 1995 that was filed with the Commission on July
7, 1995 pursuant to Rule 497(c) is not incorporated by reference. That
Supplement will be superseded by the Supplement included with this filing as of
the effective date of this filing.
<PAGE>
November 29, 1995
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
International Equity Fund Institutional Class
Global Bond Fund Institutional Class
Global Assets Fund Institutional Class
Supplement to Prospectus dated March 10, 1995
ADDITIONAL CLASSES
In addition to the Institutional Class offered by each Series, the
International Equity Series offers the International Equity Fund A Class, the
International Equity Fund B Class and the International Equity Fund C Class of
shares, and the Global Bond Series offers the Global Bond Fund A Class, the
Global Bond Fund B Class and the Global Bond Fund C Class of shares and the
Global Assets Series offers the Global Assets Fund A Class, the Global Assets
Fund B Class and the Global Assets Fund C Class of shares (together, the "Fund
Classes"), which are described in a separate prospectus relating to the Fund
Classes. The Fund Classes have sales charges and other expenses that are
different from the Institutional Classes and that may affect the performance of
the Fund Classes. For a prospectus relating to the Fund Classes, write to
Delaware Distributors, L.P. at 1818 Market Street, Philadelphia, PA 19103, or
call at the following telephone number: 800-523-4640.
FINANCIAL HIGHLIGHTS
The following unaudited financial highlights for the International
Equity Fund Institutional Class, the Global Bond Fund Institutional Class and
the Global Assets Fund Institutional Class (the "Institutional Classes") are
derived from the unaudited financial statements of Delaware Group Global &
International Funds, Inc. (the "Fund") for the six-month period ended May 31,
1995. The data should be read in conjunction with the financial statements and
related notes which are incorporated into Part B by reference to the Fund's
Semi-Annual Report for the six months ended May 31, 1995.
<PAGE>
<TABLE>
<CAPTION>
International Global Bond Global Assets
Equity Fund Fund Fund
Institutional Institutional Institutional
Class Class Class
---------------- --------------- --------------
Six Months 12/27/94(2) to 12/27/94(2) to
Ended May 31, 5/31/95 5/31/95
1995 (Unaudited)(1) (Unaudited)(1)
(Unaudited)(1)
<S> <C> <C> <C>
Net Asset Value, Beginning of Period........ $11.970 $10.000 $10.000
Income From Investment Operations
- ---------------------------------
Net Investment Income....................... (0.133) 0.328 0.216
Net Gains or Losses on Securities
(both realized and unrealized)............ 0.703 0.522 0.974
------ ------- -------
Total From Investment Operations.......... 0.570 0.850 1.190
Less Distributions
- ------------------
Dividends (from net investment income)...... (0.160) (0.240) (0.080)
Distributions (from capital gains).......... (0.470) none none
------- ------- ------
Total Distributions....................... (0.630) (0.240) (0.080)
------- ------- ------
Net Asset Value, End of Period.............. $11.910 $10.610 $11.110
======= ======= =======
- --------------------------------------------
Total Return................................ 5.01% 8.59% 11.94%
- ------------
- --------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000's omitted). $10,098 $787 $1,582
Ratio of Expenses to Average Daily Net
Assets...................................... 1.78% 0.95%(3) 0.95%(3)
Ratio of Net Investment Income to Average
Daily Net Assets............................ (2.64%) 7.37%(4) 5.05%(4)
Portfolio Turnover Rate..................... 25% 70% 85%
</TABLE>
- -----------
(1) Ratios have been annualized, but total return has not been annualized.
(2) Date of initial public offering.
(3) Ratios of expenses to average net assets prior to expense
limitation were 16.25% and 10.85% (annualized) for the Global Bond
Fund Institutional Class and the Global Assets Fund Institutional
Class, respectively, for the six months ended May 31, 1995.
(4) Ratios of net investment income to average net assets prior to
expense limitation were (7.93%) and (4.85%) (annualized) for the
Global Bond Fund Institutional Class and the Global Assets Fund
Institutional Class, respectively, for the six months ended May 31,
1995.
-2-
<PAGE>
SUMMARY OF EXPENSES
The following supplements the Summary of Expenses information:
<TABLE>
<CAPTION>
International
Equity Fund
Institutional
Shareholder Transaction Expenses Class
-------------------------------- -------------
<S> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price)................................. None
Maximum Sales Charge Imposed on Reinvested
Dividends (as a percentage of offering price)....................... None
Redemption Fees....................................................... None*
Exchange Fees......................................................... None**
International
Annual Operating Expenses Equity Fund
(as a percentage of average Institutional
daily net assets) Class
--------------------------- -------------
Management Fees After Voluntary Waiver................................ 0.50%***
12b-1 Fees............................................................ None
Other Operating Expenses.............................................. 1.05%
-----
Total Operating Expenses.......................................... 1.55%
=====
</TABLE>
The purpose of this table is to assist the investor in understanding
the various costs and expenses that an investor in each Class will bear directly
or indirectly.
*CoreStates Bank, N.A. currently charges $7.50 per redemption for
redemptions payable by wire.
**Exchanges are subject to the requirements of each fund and a front-end
sales charge may apply.
***Delaware International Advisers Ltd. ("Delaware International") has
elected voluntarily to waive that portion, if any, of the annual management fees
payable by the International Equity Series to the extent necessary to ensure
that the Total Operating Expenses of the International Equity Fund Institutional
Class do not exceed 1.55% through May 31, 1996. Total Operating Expenses assume
that the voluntary waiver has been in effect. Absent the voluntary fee waiver,
Total Operating Expenses for the fiscal year ending November 30, 1995, based on
the Series' unaudited financial statements dated May 31, 1995, are anticipated
to be 1.78% for the International Equity Fund Institutional Class, reflecting
management fees of 0.73%. The International Equity Fund Institutional Class'
Total Operating Expenses for its previous fiscal year, absent any fee waiver,
were 1.26%. See the Prospectus for the Fund Classes for expense information
about those classes.
The information relating to the expenses of the Global Bond Fund
Institutional Class and Global Assets Fund Institutional Class which appears in
the Summary of Expenses section of the Prospectus dated March 10, 1995, remains
accurate, except that Delaware International's election to voluntarily waive
management fees has been extended until May 31, 1996.
-3-
<PAGE>
The following example illustrates the expenses that an investor would
pay on a $1,000 investment over various time periods assuming (1) a 5% annual
rate of return and (2) redemption at the end of each time period. As noted in
the table above, the Fund charges no redemption fees.
<TABLE>
<S> <C> <C> <C> <C>
International Equity Fund 1 year 3 years 5 years 10 years
------ ------- ------- --------
Institutional Class $16 $49 $84 $185
</TABLE>
This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be greater or less than those
shown.
MANAGEMENT OF THE FUND
The following supplements the investment manager information under
Management of the Fund:
On March 29, 1995, shareholders of each of the International Equity
Series, Global Bond Series and Global Assets Series (collectively, the "Series")
approved a new Investment Management Agreement with Delaware International, an
indirect wholly-owned subsidiary of Delaware Management Holdings, Inc. ("DMH").
In addition, shareholders of the Global Assets Series approved a new Sub-
Advisory Agreement between Delaware International and Delaware Management
Company, Inc. ("DMC"), also an indirect, wholly-owned subsidiary of DMH and an
affiliate of Delaware International. The approvals of the new Investment
Management Agreements were subject to the completion of the merger (the
"Merger") between DMH and a wholly-owned subsidiary of Lincoln National
Corporation ("Lincoln National"), which occurred on April 3, 1995. Accordingly,
the previous Investment Management Agreements terminated, and the new Investment
Management Agreements became effective on that date.
Delaware International, DMC and their two affiliates, Delaware Service
Company, Inc., the Fund's shareholder servicing, dividend disbursing and
transfer agent, and Delaware Distributors, L.P., the Fund's national
distributor, are now wholly-owned subsidiaries of Lincoln National. Lincoln
National, with headquarters in Fort Wayne, Indiana, is a diversified
organization with operations in many aspects of the financial services industry,
including insurance and investment management.
Under the new Investment Management Agreements, Delaware International
and DMC will be paid at the same annual fee rates and on the same terms as they
were under the previous Investment Management Agreements. In addition, the
investment approach and operation of Series of the Fund will remain
substantially unchanged.
-4-
<PAGE>
- --------------------------------------------------------------------------------
PART B--STATEMENT OF ADDITIONAL INFORMATION
November 29, 1995
- --------------------------------------------------------------------------------
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
- --------------------------------------------------------------------------------
1818 Market Street
Philadelphia, PA 19103
- --------------------------------------------------------------------------------
For more information about the International Equity Fund
Institutional Class, the Global Bond Fund Institutional Class
and the Global Assets Fund Institutional Class: 800-828-5052
For Prospectus and Performance of the International Equity Fund A Class, the
International Equity Fund B Class, the International Equity Fund C Class, the
Global Bond Fund A Class, the Global Bond Fund B Class, the Global Bond Fund C
Class, the Global Assets Fund A Class, the Global Assets Fund B Class and the
Global Assets Fund C Class:
Nationwide 800-523-4640
Philadelphia 215-988-1333
Information on Existing Accounts of the Fund Classes:
(SHAREHOLDERS ONLY)
Nationwide 800-523-1918
Philadelphia 215-988-1241
Dealer Services:
(BROKER/DEALERS ONLY)
Nationwide 800-362-7500
Philadelphia 215-988-1050
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TABLE OF CONTENTS
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Cover Page
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Investment Policies and Portfolio Techniques
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Accounting and Tax Issues
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Performance Information
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Trading Practices and Brokerage
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Purchasing Shares
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Investment Plans
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Determining Offering Price and
Net Asset Value
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Redemption and Repurchase
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Distributions
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Investment Management Agreement and Sub-Advisory Agreement
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Officers and Directors
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Exchange Privilege
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General Information
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Appendix A -- IRA Information
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Financial Statements
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Delaware Group Global & International Funds, Inc. (the "Fund") is a
professionally-managed mutual fund of the series type presently offering three
series of portfolios: the International Equity Series, the Global Bond Series
and the Global Assets Series (individually and collectively, the "Series").
Each Series of the Fund offers three retail classes: the International
Equity Fund A Class, the Global Bond Fund A Class and the Global Assets Fund A
Class (the "Class A Shares"); the International Equity Fund B Class, the Global
Bond Fund B Class and the Global Assets Fund B Class (the "Class B Shares"); and
the International Equity Fund C Class, the Global Bond Fund C Class and the
Global Assets Fund C Class (the "Class C Shares"). (Class A Shares, Class B
Shares and Class C Shares are collectively referred to as the "Fund Classes.")
Each Series also offers an institutional class: the International Equity Fund
Institutional Class, the Global Bond Fund Institutional Class and the Global
Assets Fund Institutional Class (collectively, the "Institutional Classes").
Class B Shares, Class C Shares and Institutional Class shares of each
Series may be purchased at a price equal to the next determined net asset value
per share. Class A Shares may be purchased at the public offering price, which
is equal to the next determined net asset value per share, plus a front-end
sales charge. Class A Shares are subject to a maximum front-end sales charge of
4.75% and annual 12b-1 Plan expenses of up to 0.30%. Class B Shares are subject
to a contingent deferred sales charge ("CDSC") which may be imposed on
redemptions made within six years of purchase and annual 12b-1 Plan expenses of
up to 1% which are assessed against Class B Shares for approximately eight years
after purchase. See Automatic Conversion of Class B Shares under Buying Shares
in the Prospectuses for the Fund Classes. Class C Shares are subject to a CDSC
which may be imposed on redemptions made within twelve months of purchase and
annual 12b-1 Plan expenses of up to 1%, which are assessed against the Class C
Shares for the life of the investment.
This Statement of Additional Information ("Part B" of the registration
statement) supplements the information contained in the current Prospectus of
the Fund Classes dated November 29, 1995, and the current Prospectus of the
Institutional Classes dated March 10, 1995 and the supplement thereto dated
November 29, 1995, as they may be amended from time to time. It should be read
in conjunction with the respective class' Prospectus. Part B is not itself a
prospectus but is, in its entirety, incorporated by reference into each class'
Prospectus. A Prospectus for each class may be obtained by writing or calling
your investment dealer or contacting the Fund's national distributor, Delaware
Distributors, L.P. (the "Distributor"), 1818 Market Street, Philadelphia, PA
19103.
All references to "shares" in this Part B refer to all classes of
shares of the Fund, except where noted.
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INVESTMENT POLICIES AND PORTFOLIO
TECHNIQUES
Investment Restrictions
The Fund has adopted the following restrictions for each Series (except
where otherwise noted) which, along with its investment objective, cannot be
changed without approval by the holders of a "majority" of the respective
Series' outstanding shares, which is a vote by the holders of the lesser of a)
67% or more of the voting securities present in person or by proxy at a meeting,
if the holders of more than 50% of the outstanding voting securities are present
or represented by proxy; or b) more than 50% of the outstanding voting
securities. The percentage limitations contained in the restrictions and
policies set forth herein apply at the time of purchase of securities.
Each Series shall not:
1. For the International Equity Series, as to 75% of its total assets, and
for the Global Bond and Global Assets Series, as to 50% of their respective
total assets, invest more than 5% of their respective total assets in the
securities of any one issuer (other than obligations issued, or guaranteed by,
the U.S. Government, its agencies or instrumentalities).
2. Invest in securities of other open-end investment companies, except as
part of a merger, consolidation or other acquisition. This limitation does not
prohibit a Series from investing in the securities of closed-end investment
companies at customary brokerage commission rates.
3. Make loans, except to the extent that purchases of debt obligations
(including repurchase agreements) in accordance with a Series' investment
objective and policies, are considered loans and except that the Series may loan
up to 25% of its assets to qualified broker/dealers or institutional investors
for their use relating to short sales or other security transactions.
4. Purchase or sell real estate or real estate limited partnerships, but
this shall not prevent a Series from investing in securities secured by real
estate or interests therein.
5. For the International Equity Series, purchase more than 10% of the
outstanding voting securities of any issuer, or invest in companies for the
purpose of exercising control or management.
6. Engage in the underwriting of securities of other issuers, except that,
in connection with the disposition of a security, the Series may be deemed to be
an "underwriter" as that term is defined in the Securities Act of 1933.
7. Make any investment which would cause 25% or more of its total assets
to be invested in the securities of issuers all of which conduct their principal
business activities in the same industry. This restriction does not apply to
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
8. For the International Equity Series, write, purchase or sell options,
puts, calls or combinations thereof, except that such Series may: (a) purchase
call options to the extent that the premiums paid on all outstanding call
options do not exceed 2% of such Series' total assets; (b) write secured put
options; (c) write covered call options; and (d) purchase put options if such
Series owns the security covered by the put option at the time of purchase, and
provided that premiums paid on all put options outstanding do not exceed 2% of
its total assets. Such Series may sell put or call options previously purchased
and enter into closing transactions with respect to the activities noted above.
9. Purchase or sell commodities or commodity contracts, except that each
Series may enter into futures contracts and options on futures contracts in
accordance with their respective prospectuses, subject to investment restriction
10 below.
10. Enter into futures contracts or options thereon, except that a Series
may enter into futures contracts and options thereon to the extent that not more
than 5% of the Series' assets are required as futures contract margin deposits
and premiums on options and only to the extent that obligations under such
contracts and transactions represent not more than 20% of the Series' assets.
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11. Make short sales of securities, or purchase securities on margin,
except that a Series may satisfy margin requirements with respect to futures
transactions.
12. For the International Equity Series, invest more than 5% of the value
of its total assets in securities of companies less than three years old. Such
three-year period shall include the operation of any predecessor company or
companies.
13. For the International Equity Series, purchase or retain the securities
of any issuer which has an officer, director or security holder who is a
director or officer of the Fund or of its investment manager if or so long as
the directors and officers of the Fund and of its investment manager together
own beneficially more than 5% of any class of securities of such issuer.
14. For the International Equity Series, invest in interests in oil, gas
or other mineral exploration or development programs or leases.
15. For the International Equity Series, invest more than 10% of the
Series' total assets in repurchase agreements maturing in more than seven days
and other illiquid assets.
16. Borrow money in excess of one-third of the value of its net assets and
then only as a temporary measure for extraordinary purposes or to facilitate
redemptions. Any borrowing will be done from a bank and to the extent that such
borrowing exceeds 5% of the value of a Series' net assets, asset coverage of at
least 300% is required. In the event that such asset coverage shall at any time
fall below 300%, a Series shall, within three days thereafter (not including
Sunday or holidays) or such longer period as the Securities and Exchange
Commission (the "SEC") may prescribe by rules and regulations, reduce the amount
of its borrowings to such an extent that the asset coverage of such borrowings
shall be at least 300%. A Series will not pledge more than 10% of its net
assets. A Series will not issue senior securities as defined in the Investment
Company Act of 1940, except for notes to banks.
Although not considered to be a fundamental policy, restriction 5 above
will also apply to the Fund as a whole. In addition, although not considered a
fundamental policy, for purposes of restriction 15 above, securities of foreign
issuers which are not listed on a recognized domestic or foreign exchange or for
which a bona fide market does not exist at the time of purchase or subsequent
valuation are included in the category of illiquid assets. As to the
International Equity Series and the Global Assets Series, although not
considered to be a fundamental investment restriction, each Series will invest
no more than 5% of their respective assets in warrants. Investment restrictions
5, 8, 12, 13, 14, and 15 above are nonfundamental policies of the Global Bond
Series and the Global Assets Series.
Foreign Securities
Investors should recognize that investing in foreign issuers involves
certain considerations, including those set forth in the Series' Prospectuses,
which are not typically associated with investing in United States issuers.
Since the stocks of foreign companies are frequently denominated in foreign
currencies, and since a Series may temporarily hold uninvested reserves in bank
deposits in foreign currencies, a Series will be affected favorably or
unfavorably by changes in currency rates and in exchange control regulations,
and may incur costs in connection with conversions between various currencies.
The investment policies of each Series permit it to enter into forward foreign
currency exchange contracts in order to hedge each Series' holdings and
commitments against changes in the level of future currency rates. Such
contracts involve an obligation to purchase or sell a specific currency at a
future date at a price set at the time of the contract.
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There has been in the past, and there may be again in the future, an
interest equalization tax levied by the United States in connection with the
purchase of foreign securities such as those purchased by the Series. Payment of
such interest equalization tax, if imposed, would reduce a Series' rate of
return on its investment. Dividends paid by foreign issuers may be subject to
withholding and other foreign taxes which may decrease the net return on such
investments as compared to dividends paid to a Series by United States
corporations. Special rules govern the federal income tax treatment of certain
transactions denominated in terms of a currency other than the U.S. dollar or
determined by reference to the value of one or more currencies other than the
U.S. dollar. The types of transactions covered by the special rules generally
include the following: (i) the acquisition of, or becoming the obligor under, a
bond or other debt instrument (including, to the extent provided in Treasury
Regulations, preferred stock); (ii) the accruing of certain trade receivables
and payables; and (iii) the entering into or acquisition of any forward
contract, futures contract, option and similar financial instruments other than
any "regulated futures contract" or "nonequity option" marked to market. The
disposition of a currency other than the U.S. dollar by a U.S. taxpayer is also
treated as a transaction subject to the special currency rules. However, foreign
currency-related regulated futures contracts and nonequity options are generally
not subject to the special currency rules, if they are or would be treated as
sold for their fair market value at year-end under the marking to market rules
applicable to other futures contracts, unless an election is made to have such
currency rules apply. With respect to transactions covered by the special rules,
foreign currency gain or loss is calculated separately from any gain or loss on
the underlying transaction and is normally taxable as ordinary gain or loss. A
taxpayer may elect to treat as capital gain or loss foreign currency gain or
loss arising from certain identified forward contracts, futures contracts and
options that are capital assets in the hands of the taxpayer and which are not
part of a straddle. Certain transactions subject to the special currency rules
that are part of a "section 988 hedging transaction" (as defined in the Internal
Revenue Code of 1986 (the "Code"), as amended, and the Treasury Regulations)
will be integrated and treated as a single transaction or otherwise treated
consistently for purposes of the Code. The income tax effects of integrating and
treating a transaction as a single transaction are generally to create a
synthetic debt instrument that is subject to the original discount provisions.
It is anticipated that some of the non-U.S. dollar denominated investments and
foreign currency contracts each Series may make or enter into will be subject to
the special currency rules described above.
Repurchase Agreements
While each Series is permitted to do so, it normally does not invest in
repurchase agreements, except to invest cash balances.
The funds in the Delaware Group have obtained an exemption from the
joint-transaction prohibitions of Section 17(d) of the Investment Company Act of
1940 to allow the Delaware Group funds jointly to invest cash balances. Each
Series may invest cash balances in a joint repurchase agreement in accordance
with the terms of the Order and subject generally to the conditions described
below.
A repurchase agreement is a short-term investment by which the purchaser
acquires ownership of a debt security and the seller agrees to repurchase the
obligation at a future time and set price, thereby determining the yield during
the purchaser's holding period. Should an issuer of a repurchase agreement fail
to repurchase the underlying security, the loss to a Series, if any, would be
the difference between the repurchase price and the market value of the
security. Each Series will limit its investments in repurchase agreements to
those which Delaware International Advisers Ltd. (the "Manager"), under the
guidelines of the Board of Directors, determines to present minimal credit risks
and which are of high quality. In addition, a Series must have collateral of at
least 100% of the repurchase price, including the portion representing the
Series' yield under such agreements which is monitored on a daily basis.
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Portfolio Loan Transactions
Each Series may loan up to 25% of its assets to qualified broker/dealers
or institutional investors for their use relating to short sales or other
security transactions.
It is the understanding of the Manager that the staff of the SEC permits
portfolio lending by registered investment companies if certain conditions are
met. These conditions are as follows: 1) each transaction must have 100%
collateral in the form of cash, short-term U.S. Government securities, or
irrevocable letters of credit payable by banks acceptable to the Fund from the
borrower; 2) this collateral must be valued daily and should the market value of
the loaned securities increase, the borrower must furnish additional collateral
to the Series; 3) the Series must be able to terminate the loan after notice, at
any time; 4) the Series must receive reasonable interest on any loan, and any
dividends, interest or other distributions on the lent securities, and any
increase in the market value of such securities; 5) the Series may pay
reasonable custodian fees in connection with the loan; and 6) the voting rights
on the lent securities may pass to the borrower; however, if the directors of
the Fund know that a material event will occur affecting an investment loan,
they must either terminate the loan in order to vote the proxy or enter into an
alternative arrangement with the borrower to enable the directors to vote the
proxy.
The major risk to which a Series would be exposed on a loan transaction is
the risk that the borrower would go bankrupt at a time when the value of the
security goes up. Therefore, a Series will only enter into loan arrangements
after a review of all pertinent facts by the Manager, under the supervision of
the Board of Directors, including the creditworthiness of the borrowing broker,
dealer or institution and then only if the consideration to be received from
such loans would justify the risk. Creditworthiness will be monitored on an
ongoing basis by the Manager.
Foreign Currency Transactions
A Series may purchase or sell currencies
and/or engage in forward foreign currency transactions in order to expedite
settlement of portfolio transactions and to minimize currency value
fluctuations.
Forward foreign currency contracts are traded in the interbank market
conducted directly between currency traders (usually large commercial banks) and
their customers. A forward contract generally has no deposit requirement, and no
commissions are charged at any stage for trades. A Series will account for
forward contracts by marking to market each day at daily exchange rates.
When a Series enters into a forward contract to sell, for a fixed amount
of U.S. dollars or other appropriate currency, the amount of foreign currency
approximating the value of some or all of a Series' assets denominated in such
foreign currency, the Series' Custodian Bank or subcustodian will place cash or
liquid high grade debt securities in a separate account of the Series in an
amount not less than the value of the Series' total assets committed to the
consummation of such forward contracts. If the additional cash or securities
placed in the separate account declines, additional cash or securities will be
placed in the account on a daily basis so that the value of the account will
equal the amount of a Series' commitments with respect to such contracts.
Options
Each Series may purchase call options or purchase put options and will not
engage in option strategies for speculative purposes.
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Each Series may invest in options that are either listed on U.S. or
recognized foreign exchanges or traded over-the counter. Certain
over-the-counter options may be illiquid. Thus, it may not be possible to close
options positions and this may have an adverse impact on a Series' ability to
effectively hedge its securities. A Series will not, however, invest more than
10% of its assets in illiquid securities.
Purchasing Call Options--Each Series may purchase call options to the
extent that premiums paid by the Series do not aggregate more than 2% of the
Series' total assets. When a Series purchases a call option, in return for a
premium paid by a Series to the writer of the option, the Series obtains the
right to buy the security underlying the option at a specified exercise price at
any time during the term of the option. The writer of the call option, who
receives the premium upon writing the option, has the obligation, upon exercise
of the option, to deliver the underlying security against payment of the
exercise price. The advantage of purchasing call options is that a Series may
alter portfolio characteristics and modify portfolio maturities without
incurring the cost associated with portfolio transactions.
A Series may, following the purchase of a call option, liquidate its
position by effecting a closing sale transaction. This is accomplished by
selling an option of the same series as the option previously purchased. The
Series will realize a profit from a closing sale transaction if the price
received on the transaction is more than the premium paid to purchase the
original call option; the Series will realize a loss from a closing sale
transaction if the price received on the transaction is less than the premium
paid to purchase the original call option.
Although a Series will generally purchase only those call options for
which there appears to be an active secondary market, there is no assurance that
a liquid secondary market on an Exchange will exist for any particular option,
or at any particular time, and for some options no secondary market on an
Exchange may exist. In such event, it may not be possible to effect closing
transactions in particular options, with the result that the Series would have
to exercise its options in order to realize any profit and would incur brokerage
commissions upon the exercise of such options and upon the subsequent
disposition of the underlying securities acquired through the exercise of such
options. Further, unless the price of the underlying security changes
sufficiently, a call option purchased by a Series may expire without any value
to the Series.
Purchasing Put Options--Each Series may invest up to 2% of its total
assets in the purchase of put options. A Series will, at all times during which
it holds a put option, own the security covered by such option.
A put option purchased by a Series gives it the right to sell one of its
securities for an agreed price up to an agreed date. A Series intends to
purchase put options in order to protect against a decline in the market value
of the underlying security below the exercise price less the premium paid for
the option ("protective puts"). The ability to purchase put options will allow a
Series to protect unrealized gain in an appreciated security in its portfolio
without actually selling the security. If the security does not drop in value, a
Series will lose the value of the premium paid. A Series may sell a put option
which it has previously purchased prior to the sale of the securities underlying
such option. Such sale will result in a net gain or loss depending on whether
the amount received on the sale is more or less than the premium and other
transaction costs paid on the put option which is sold.
A Series may sell a put option purchased on individual portfolio
securities. Additionally, the Series may enter into closing sale transactions. A
closing sale transaction is one in which the Series, when it is the holder of an
outstanding option, liquidates its position by selling an option of the same
series as the option previously purchased.
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Futures
Each Series may enter into contracts for the purchase or sale for future
delivery of securities or foreign currencies. While futures contracts provide
for the delivery of securities, deliveries usually do not occur. Contracts are
generally terminated by entering into an offsetting transaction. When a Series
enters into a futures transaction, it must deliver to the futures commission
merchant selected by the Series an amount referred to as "initial margin." This
amount is maintained by the futures commission merchant in an account at the
Series' Custodian Bank. Thereafter, a "variation margin" may be paid by the
Series to, or drawn by the Series from, such account in accordance with controls
set for such accounts, depending upon changes in the price of the underlying
securities subject to the futures contract.
In addition, when a Series engages in futures transactions, to the extent
required by the SEC, it will maintain with its custodian, assets in a segregated
account to cover its obligations with respect to such contracts, which assets
will consist of cash, cash equivalents or high quality debt securities from its
portfolio in an amount equal to the difference between the fluctuating market
value of such futures contracts and the aggregate value of the margin payments
made by the Series with respect to such futures contracts.
Each Series may enter into such futures contracts to protect against the
adverse affects of fluctuations in interest or foreign exchange rates without
actually buying or selling the securities or foreign currency. For example, if
interest rates are expected to increase, a Series might enter into futures
contracts for the sale of debt securities. Such a sale would have much the same
effect as selling an equivalent value of the debt securities owned by the
Series. If interest rates did increase, the value of the debt securities in the
portfolio would decline, but the value of the futures contracts to the Series
would increase at approximately the same rate, thereby keeping the net asset
value of the Series from declining as much as it otherwise would have.
Similarly, when it is expected that interest rates may decline, futures
contracts may be purchased to hedge in anticipation of subsequent purchases of
securities at higher prices. Since the fluctuations in the value of futures
contracts should be similar to those of debt securities, a Series could take
advantage of the anticipated rise in value of debt securities without actually
buying them until the market had stabilized. At that time, the futures contracts
could be liquidated and the Series could then buy debt securities on the cash
market.
With respect to options on futures contracts, when a Series is not fully
invested, it may purchase a call option on a futures contract to hedge against a
market advance due to declining interest rates. The purchase of a call option on
a futures contract is similar in some respects to the purchase of a call option
on an individual security. Depending on the pricing of the option compared to
either the price of the futures contract upon which it is based, or the price of
the underlying debt securities, it may or may not be less risky than ownership
of the futures contract or underlying debt securities. As with the purchase of
futures contracts, when a Series is not fully invested, it may purchase a call
option on a futures contract to hedge against a market advance due to declining
interest rates.
The writing of a call option on a futures contract constitutes a partial
hedge against the declining price of the security or foreign currency which is
deliverable upon exercise of the futures contract. If the futures price at the
expiration of the option is below the exercise price, a Series will retain the
full amount of the option premium which provides a partial hedge against any
decline that may have occurred in the Series' portfolio holdings. The writing of
a put option on a futures contract constitutes a partial hedge against the
increasing price of the security or foreign currency which is deliverable upon
exercise of the futures contract. If the futures price at the expiration of the
option is higher than the exercise price, the Series will retain the full amount
of the option premium which provides a partial hedge against any increase in the
price of securities which the Series intends to purchase.
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If a put or call option a Series has written is exercised, the Series will
incur a loss which will be reduced by the amount of the premium it receives.
Depending on the degree of correlation between changes in the value of its
portfolio securities and changes in the value of its futures positions, a
Series' losses from existing options on futures may, to some extent, be reduced
or increased by changes in the value of portfolio securities. The purchase of a
put option on a futures contract is similar in some respects to the purchase of
protective puts on portfolio securities. For example, a Series will purchase a
put option on a futures contract to hedge the Series' portfolio against the risk
of rising interest rates.
To the extent that interest rates move in an unexpected direction, a
Series may not achieve the anticipated benefits of futures contracts or options
on futures contracts or may realize a loss. For example, if a Series is hedged
against the possibility of an increase in interest rates which would adversely
affect the price of securities held in its portfolio and interest rates decrease
instead, the Series will lose part or all of the benefit of the increased value
of its securities which it has because it will have offsetting losses in its
futures position. In addition, in such situations, if the Series had
insufficient cash, it may be required to sell securities from its portfolio to
meet daily variation margin requirements. Such sales of securities may, but will
not necessarily, be at increased prices which reflect the rising market. The
Series may be required to sell securities at a time when it may be
disadvantageous to do so.
Further, with respect to options on futures contracts, a Series may seek
to close out an option position by writing or buying an offsetting position
covering the same securities or contracts and have the same exercise price and
expiration date. The ability to establish and close out positions on options
will be subject to the maintenance of a liquid secondary market, which cannot be
assured.
Options on Foreign Currencies
Each Series may purchase and write options on foreign currencies for
hedging purposes in a manner similar to that in which futures contracts on
foreign currencies, or forward contracts, will be utilized. For example, a
decline in the dollar value of a foreign currency in which portfolio securities
are denominated will reduce the dollar value of such securities, even if their
value in the foreign currency remains constant. In order to protect against such
diminutions in the value of portfolio securities, a Series may purchase put
options on the foreign currency. If the value of the currency does decline, the
Series will have the right to sell such currency for a fixed amount in dollars
and will thereby offset, in whole or in part, the adverse effect on its
portfolio which otherwise would have resulted.
Conversely, where a rise in the dollar value of a currency in which
securities to be acquired are denominated is projected, thereby increasing the
cost of such securities, a Series may purchase call options thereon. The
purchase of such options could offset, at least partially, the effects of the
adverse movement in exchange rates. As in the case of other types of options,
however, the benefit to a Series deriving from purchases of foreign currency
options will be reduced by the amount of the premium and related transaction
costs. In addition, where currency exchange rates do not move in the direction
or to the extent anticipated, a Series could sustain losses on transactions in
foreign currency options which would require it to forego a portion or all of
the benefits of advantageous changes in such rates.
A Series may write options on foreign currencies for the same types of
hedging purposes. For example, where a Series anticipates a decline in the
dollar value of foreign currency denominated securities due to adverse
fluctuations in exchange rates, it could, instead of purchasing a put option,
write a call option on the relevant currency. If the expected decline occurs,
the option will most likely not be exercised, and the diminution in the value of
portfolio securities will be offset by the amount of the premium received.
Similarly, instead of purchasing a call option to hedge against an
anticipated increase in the dollar cost of securities to be acquired, a Series
could write a put option on the relevant currency which, if rates move in the
manner projected, will expire unexercised and allow the Series to hedge such
increased cost up to the amount of the premium. As in the case of other types of
options, however, the writing of a foreign currency option will constitute only
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a partial hedge up to the amount of the premium, and only if rates move in the
expected direction. If this does not occur, the option may be exercised and the
Series would be required to purchase or sell the underlying currency at a loss
which may not be offset by the amount of the premium. Through the writing of
options on foreign currencies, a Series also may be required to forego all or a
portion of the benefit which might otherwise have been obtained from favorable
movements in exchange rates.
Each Series intends to write covered call options on foreign currencies. A
call option written on a foreign currency by a Series is "covered" if the Series
owns the underlying foreign currency covered by the call or has an absolute and
immediate right to acquire that foreign currency without additional cash
consideration (or for additional cash consideration held in a segregated account
by the Custodian Bank) upon conversion or exchange of other foreign currency
held in its portfolio. A call option is also covered if the Series has a call on
the same foreign currency and in the same principal amount as the call written
where the exercise price of the call held (a) is equal to or less than the
exercise price of the call written, or (b) is greater than the exercise price of
the call written if the difference is maintained by the Series in cash, U.S.
Government securities or other high-grade liquid debt securities in a segregated
account with its Custodian Bank.
With respect to writing put options, at the time the put is written, a
Series will establish a segregated account with its Custodian Bank consisting of
cash, U.S. Government securities or other high-grade liquid debt securities in
an amount equal in value to the amount the Series will be required to pay upon
exercise of the put. The account will be maintained until the put is exercised,
has expired, or the Series has purchased a closing put of the same series as the
one previously written.
In order to comply with the securities laws of one state, a Series will
not write put or call options if the aggregate value of the securities
underlying the calls or obligations underlying the puts determined as of the
date the options are sold exceed 25% of the Series' net assets. Should state
laws change or the Fund receive a waiver of their application for a Series, the
Series' reserve the right to increase this percentage.
Options on Stock Indices
A stock index assigns relative values to the common stocks included in the
index with the index fluctuating with changes in the market values of the
underlying common stock.
Options on stock indices are similar to options on stocks but have
different delivery requirements. Stock options provide the right to take or make
delivery of the underlying stock at a specified price. A stock index option
gives the holder the right to receive a cash "exercise settlement amount" equal
to (i) the amount by which the fixed exercise price of the option exceeds (in
the case of a put) or is less than (in the case of a call) the closing value of
the underlying index on the date of exercise, multiplied by (ii) a fixed "index
multiplier." Receipt of this cash amount will depend upon the closing level of
the stock index upon which the option is based being greater than (in the case
of a call) or less than (in the case of a put) the exercise price of the option.
The amount of cash received will be equal to such difference between the closing
price of the index and exercise price of the option expressed in dollars times a
specified multiple. The writer of the option is obligated, in return for the
premium received, to make delivery of this amount. Gain or loss to a Series on
transactions in stock index options will depend on price movements in the stock
market generally (or in a particular industry or segment of the market) rather
than price movements of individual securities.
-10-
<PAGE>
As with stock options, a Series may offset its position in stock index
options prior to expiration by entering into a closing transaction on an
Exchange or it may let the option expire unexercised.
A stock index fluctuates with changes in the market values of the stock so
included. Some stock index options are based on a broad market index such as the
Standard & Poor's 500 or the New York Stock Exchange Composite Index, or a
narrower market index such as the Standard & Poor's 100. Indices are also based
on an industry or market segment such as the AMEX Oil and Gas Index or the
Computer and Business Equipment Index. Options on stock indices are currently
traded on domestic exchanges such as: The Chicago Board Options Exchange, New
York Stock Exchange and American Stock Exchange as well as on foreign exchanges.
The Series' ability to hedge effectively all or a portion of its
securities through transactions in options on stock indices depends on the
degree to which price movements in the underlying index correlate with price
movements in the Series' portfolio securities. Since a Series' portfolio will
not duplicate the components of an index, the correlation will not be exact.
Consequently, a Series bears the risk that the prices of the securities being
hedged will not move in the same amount as the hedging instrument. It is also
possible that there may be a negative correlation between the index or other
securities which would result in a loss on both such securities and the hedging
instrument.
Positions in stock index options may be closed out only on an Exchange
which provides a secondary market. There can be no assurance that a liquid
secondary market will exist for any particular stock index option. Thus, it may
not be possible to close such an option. The inability to close options
positions could have an adverse impact on a Series' ability effectively to hedge
its securities. A Series will enter into an option position only if there
appears to be a liquid secondary market for such options.
A Series will not engage in transactions in options on stock indices for
speculative purposes but only to protect appreciation attained and to take
advantage of the liquidity available in the option markets.
Rule 144A Securities
A Series may invest in restricted securities, including unregistered
securities eligible for resale without registration pursuant to Rule 144A ("Rule
144A Securities") under the Securities Act of 1933 (the "1933 Act"). Rule 144A
Securities may be freely traded among qualified institutional investors without
registration under the 1933 Act.
Investing in Rule 144A Securities could have the effect of increasing the
level of the Series' illiquidity to the extent that qualified institutional
buyers become, for a time, uninterested in purchasing these securities. After
the purchase of a Rule 144A Security, however, the Board of Directors and the
Manager will continue to monitor the liquidity of that security to ensure that a
Series has no more than 10% of its net assets in illiquid securities.
-11-
<PAGE>
ACCOUNTING AND TAX ISSUES
When a Series writes a call, or purchases a put option, an amount equal to
the premium received or paid by it is included in the Series' assets and
liabilities as an asset and as an equivalent liability.
In writing a call, the amount of the liability is subsequently "marked to
market" to reflect the current market value of the option written. The current
market value of a written option is the last sale price on the principal
Exchange on which such option is traded or, in the absence of a sale, the mean
between the last bid and asked prices. If an option which a Series has written
expires on its stipulated expiration date, the Series recognizes a capital gain.
If a Series enters into a closing purchase transaction with respect to an option
which the Series has written, the Series realizes a gain (or loss if the cost of
the closing transaction exceeds the premium received when the option was sold)
without regard to any unrealized gain or loss on the underlying security, and
the liability related to such option is extinguished. If a call option which a
Series has written is exercised, the Series realizes a capital gain or loss from
the sale of the underlying security and the proceeds from such sale are
increased by the premium originally received.
The premium paid by a Series for the purchase of a put option is recorded
in the Series' assets and liabilities as an investment and subsequently adjusted
daily to the current market value of the option. For example, if the current
market value of the option exceeds the premium paid, the excess would be
unrealized appreciation and, conversely, if the premium exceeds the current
market value, such excess would be unrealized depreciation. The current market
value of a purchased option is the last sale price on the principal Exchange on
which such option is traded or, in the absence of a sale, the mean between the
last bid and asked prices. If an option which a Series has purchased expires on
the stipulated expiration date, the Series realizes a short-term or long-term
capital loss for federal income tax purposes in the amount of the cost of the
option. If a Series exercises a put option, it realizes a capital gain or loss
(long-term or short-term, depending on the holding period of the underlying
security) from the sale of the underlying security and the proceeds from such
sale will be decreased by the premium originally paid.
Options on Certain Stock Indices
Accounting for options on certain stock indices will be in accordance with
generally accepted accounting principles. The amount of any realized gain or
loss on closing out such a position will result in a realized gain or loss for
tax purposes. Such options held by a Series at the end of each fiscal year on a
broad-based stock index will be required to be "marked to market" for federal
income tax purposes. Generally, sixty percent of any net gain or loss recognized
on such deemed sales or on any actual sales will be treated as long-term capital
gain or loss, and the remainder will be treated as short-term capital gain or
loss.
Other Tax Requirements
Each Series has qualified, and intends to continue to qualify, as a
regulated investment company under Subchapter M of the Code. The Fund must meet
several requirements to maintain its status as a regulated investment company.
Among these requirements are that at least 90% of its investment company taxable
income be derived from dividends, interest, payment with respect to securities
loans and gains from the sale or disposition of securities; that at the close of
each quarter of its taxable year at least 50% of the value of its assets consist
of cash and cash items, government securities, securities of other regulated
investment companies and, subject to certain diversification requirements, other
securities; and that less than 30% of its gross income be derived from sales of
securities held for less than three months.
-12-
<PAGE>
The requirement that not more than 30% of the Fund's gross income be
derived from gains from the sale or other disposition of securities held for
less than three months may restrict the Series in its ability to write covered
call options on securities which it has held less than three months, to write
options which expire in less than three months, to sell securities which have
been held less than three months and to effect closing purchase transactions
with respect to options which have been written less than three months prior to
such transactions. Consequently, in order to avoid realizing a gain within the
three-month period, the Series may be required to defer the closing out of a
contract beyond the time when it might otherwise be advantageous to do so. The
Series may also be restricted in the sale of purchased put options and the
purchase of put options for the purpose of hedging underlying securities because
of the application of the short sale holding period rules with respect to such
underlying securities.
The straddle rules of Section 1092 may apply. Generally, the straddle
provisions require the deferral of losses to the extent of unrecognized gains
related to the offsetting positions in the straddle. Excess losses, if any, can
be recognized in the year of loss. Deferred losses will be carried forward and
will be subject to the same limitation in subsequent years.
The federal income tax rules governing the taxation of interest rate swaps
are not entirely clear and may require the Global Bond Series to treat payments
received under such arrangements as ordinary income and to amortize such
payments under certain circumstances. The Global Bond Series will limit its
activity in this regard in order to maintain its qualification as a regulated
investment company.
-13-
<PAGE>
PERFORMANCE INFORMATION
From time to time, the Fund may state each Class' total return in
advertisements and other types of literature. Any statements of total return
performance data for a Class will be accompanied by information on the average
annual compounded rate of return for that Class over, as relevant, the most
recent one-, five- and ten-year (or life of fund, if applicable) periods. The
Fund may also advertise aggregate and average total return information of each
Class over additional periods of time.
The average annual total rate of return for each Class is based on a
hypothetical $1,000 investment that includes capital appreciation and
depreciation during the stated periods. The following formula will be used for
the actual computations:
n
P(1 + T) = ERV
Where: P = a hypothetical initial purchase order
of $1,000 from which, in the case
only of Class A Shares, the
maximum front-end sales charge, if
any, is deducted;
T = average annual total return;
n = number of years;
ERV = redeemable value of the hypothetical $1,000 purchase at the
end of the period after the deduction of the applicable CDSC,
if any, with respect to Class B Shares and Class C Shares.
Aggregate or cumulative total return is calculated in a similar manner,
except that the results are not annualized. Each calculation assumes the maximum
front-end sales charge, if any, is deducted from the initial $1,000 investment
at the time it is made with respect to Class A Shares and that all distributions
are reinvested at net asset value, and, with respect to Class B Shares and Class
C Shares, reflects the deduction of the CDSC that would be applicable upon
complete redemption of such shares. In addition, the Series may present total
return information that does not reflect the deduction of the maximum front-end
sales charge or any applicable CDSC.
In the case of Class A Shares, the Limited CDSC, applicable only to
certain redemptions of those shares, will not be deducted from any computation
of total return. See the Prospectus for the Fund Classes for a description of
the Limited CDSC and the limited instances in which it applies. All references
to a CDSC will apply to Class B Shares or Class C Shares.
The performance of the International Equity Fund A Class and the
International Equity Fund Institutional Class, as shown below, is the average
annual total return quotations for the one- and three-year periods ended May 31,
1995 and for the life of these Classes, computed as described above. The average
annual total return for the International Equity Fund A Class at offer reflects
the maximum front-end sales charges paid on the purchase of shares. The average
annual total return for International Equity Fund A Class at net asset value
(NAV) does not reflect the payment of the maximum front-end sales charge of
4.75%. Pursuant to applicable regulation, total return shown for the
International Equity Fund Institutional Class for the periods prior to the
commencement of operations of such Class is calculated by taking the performance
of the International Equity Fund A Class and adjusting it to reflect the
elimination of all front-end sales charges. However, for those periods, no
adjustment has been made to eliminate the impact of 12b-1 payments, and
performance would have been affected had such an adjustment been made. The
performance of the International Equity Fund B Class, as shown below, is the
aggregate total return quotation for the period September 6, 1994 (date of
initial public offering) through May 31, 1995. The aggregate total return for
International Equity Fund B Class including deferred sales charge reflects the
deduction of the applicable CDSC that would be paid if the shares were redeemed
at May 31, 1995. The aggregate total return for International Equity Fund B
Class excluding deferred sales charge assumes the shares were not redeemed at
May 31, 1995 and therefore does not reflect the deduction of a CDSC. Securities
prices fluctuated during the periods covered and the past results should not be
considered as representative of future performance.
-14-
<PAGE>
Average Annual Total Return(1)
International International International
Equity Fund Equity Fund Equity Fund
A Class A Class Institutional
(at Offer)(3) (at NAV) Class(2)
1 year
ended
5/31/95 (2.38%) 2.49% 2.78%
3 years
ended
5/31/95 6.22% 7.96% 8.23%
Period
10/31/91(4)
through
5/31/95 7.43% 8.90% 9.14%
Aggregate Total Return(1)
International International
Equity Fund Equity Fund
B Class B Class
(Including (Excluding
Deferred Sales Deferred Sales
Charge) Charge)
Period
9/6/94(5)
through
5/31/95 (6.79%) (3.11%)
(1) Effective November 29, 1995, the Manager has elected voluntarily to waive
that portion, if any, of the annual management fees payable by the Series
to the extent necessary to ensure that the Total Operating Expenses of the
International Equity Fund A Class, International Equity Fund Institutional
Class and the International Equity Fund B Class do not exceed 1.85%, 1.55%
and 2.55%, respectively (exclusive of taxes, interest, brokerage
commissions and extraordinary expenses, but inclusive of 12b-1 expenses)
through May 31, 1996. From June 1, 1994, through November 30, 1994, a
waiver and reimbursement commitment was in place to ensure that Total
Operating Expenses of the International Equity Fund A Class and the
International Equity Fund Institutional Class did not exceed 1.50%
(exclusive of taxes, interest, brokerage commissions, extraordinary
expenses and 12b-1 expenses) through November 30, 1994. Through November
30, 1994, this waiver was also applicable to the International Equity Fund
B Class. Prior to June 1, 1994, a waiver and reimbursement commitment was
in place to ensure that expenses did not exceed 1.25% (exclusive of taxes,
interest, brokerage commissions and extraordinary expenses, but inclusive
of 12b-1 fees) for the International Equity Fund A Class and .95%
(exclusive of taxes, interest, brokerage commissions and extraordinary
expenses) for the International Equity Fund Institutional Class. In the
absence of such waiver, performance would have been affected negatively.
(2) Date of initial public offering was November 9, 1992.
(3) Prior to November 29, 1995, the maximum front-end sales charge was 5.75%.
Effective November 29, 1995, the maximum front-end sales charge was reduced
to 4.75% and the above performance numbers are calculated using 4.75% as
the applicable sales charge.
(4) Date of initial public offering of International Equity Fund A Class.
(5) Date of initial public offering of International Equity Fund B Class; total
return for this short of a time period may not be representative of
longer-term results.
-15-
<PAGE>
Information regarding the performance of Class C Shares is not shown
because such shares were not offered to the public prior to the date of this
Part B.
The performance for each Class of the Global Bond Series and the Global
Assets Series, as shown below, is the aggregate total return quotations for the
life of each Class. The aggregate total return for the Class A Shares of these
Series at offer reflects the maximum front-end sales charge paid on the purchase
of shares. The aggregate total return for the Class A Shares of these Series at
net asset value (NAV) does not reflect the deduction of the maximum front-end
sales charge. The aggregate total return for the Class B Shares of these Series
including deferred sales charge reflects the deduction of the applicable CDSC
that would be paid if the shares were redeemed at May 31, 1995. The aggregate
total return for the Class B Shares of these Series excluding deferred sales
charge assumes the shares were not redeemed at May 31, 1995 and therefore does
not reflect the deduction of a CDSC.
Aggregate Total Return(1)
Global Bond Global Bond Global Bond
Fund A Fund A Fund
Class Class Institutional
(at Offer) (at NAV) Class
Period
12/27/94(2)
through
5/31/95 3.33% 8.49% 8.59%
Global Bond Global Bond
Fund B Fund B
Class(3) Class(3)
(Including (Excluding
Deferred Sales Deferred Sales
Charge) Charge)
Period
12/27/94(2)
through
5/31/95 4.24% 8.24%
Global Assets Global Assets Global Assets
Fund A Fund A Fund
Class Class Institutional
(at Offer)(4) (at NAV) Class
Period
12/27/94(2)
through
5/31/95 6.51% 11.84% 11.94%
Global Assets Global Assets
Fund B Fund B
Class(3) Class(3)
(Including (Excluding
Deferred Sales Deferred Sales
Charge) Charge)
Period
12/27/94(2)
through
5/31/95 7.53% 11.53%
(1) Effective November 29, 1995, the Manager has elected to voluntarily waive
that portion, if any, of the annual management fees payable by the Global
Bond Series and the Global Asset Series to ensure that the Total Operating
Expenses of the Class A Shares and Institutional Class Shares of each
Series, respectively, do not exceed 1.25% and .95%, respectively, and of
the Class B Shares of each Series, respectively, do not exceed 1.95% (in
each case, exclusive of taxes, interest, brokerage commissions and
extraordinary expenses, but inclusive of 12b-1 expenses) through May 31,
1996. Prior to November 29, 1995, a waiver and reimbursement commitment was
in place to ensure that Total Operating Expenses of these Series (exclusive
of taxes, extraordinary expenses and, in the case of the Class A Shares and
the Class B Shares of these Series, 12b-1 expenses) did not exceed .95%
through November 30, 1995. In the absence of such waiver, performance would
have been affected negatively.
(2) Date of initial public offering; total return for this short of a time
period may not be representative of longer-term results.
-16-
<PAGE>
(3) Only one share is outstanding.
(4) Prior to November 29, 1995, the maximum front-end sales charge was 5.75%.
Effective November 29, 1995, the maximum front-end sales charge was reduced
to 4.75% and the above performance numbers are calculated using 4.75% as
the applicable sales charge.
Information regarding the performance of Class C Shares is not shown
because such shares were not offered to the public prior to the date of this
Part B.
The Fund may also state total return performance for each Class in the
form of an average annual return. This average annual return figure will be
computed by taking the sum of a class' annual returns, then dividing that figure
by the number of years in the overall period indicated. The computation will
reflect the impact of the maximum front-end sales charge or CDSC, if any, paid
on the illustrated investment amount against the first year's return. From time
to time, the Fund may quote actual total return performance for each class in
advertising and other types of literature compared to indices or averages of
alternative financial products available to prospective investors. For example,
the performance comparisons may include the average return of various bank
instruments, some of which may carry certain return guarantees offered by
leading banks and thrifts as monitored by Bank Rate Monitor, and those of
generally-accepted corporate bond and government security price indices of
various durations prepared by Lehman Brothers and Salomon Brothers, Inc. These
indices are not managed for any investment goal.
Total return performance for a class will be computed by adding all
reinvested income and realized securities profits distributions plus the change
in net asset value during a specific period and dividing by the offering price
at the beginning of the period. It will also reflect, as applicable, the maximum
front-end sales charge or CDSC paid with respect to the illustrated investment
amount, but not any income taxes payable by shareholders on the reinvested
distributions included in the calculation. Because securities prices fluctuate,
past performance should not be considered as a representation of the results
which may be realized from an investment in a Series in the future.
From time to time, the Fund may also quote each class' actual total
return performance, dividend results and other performance information of each
class in advertising and other types of literature and may compare that
information, or may separately illustrate similar information reported by, the
Standard & Poor's 500 Stock Index and the Dow Jones Industrial Average and other
unmanaged indices.
The Standard & Poor's 500 Stock Index and the Dow Jones Industrial
Average are industry-accepted unmanaged indices of generally-conservative
securities used for measuring general market performance. The total return
performance reported for these indices will reflect the reinvestment of all
distributions on a quarterly basis and market price fluctuations. The indices do
not take into account any sales charge or other fees.
As stated in the Fund's Prospectuses, the Fund may also quote the
current yield of each class of the Global Bond Series in advertisements and
investor communications.
The yield computation is determined by dividing the net investment
income per share earned during the period by the maximum offering price per
share on the last day of the period and annualizing the resulting figure,
according to the following formula.
a-b
----------------
YIELD = 2[(cd + 1)6 - 1]
Where: a =
dividends and interest earned during the period;
b =
expenses accrued for the period (net of reimbursements);
c =
the average daily number of shares outstanding during the period that were
entitled to receive dividends;
d =
the maximum offering price per share on the last day of the period.
-17-
<PAGE>
The above formula will be used in calculating quotations of yield, based
on specific 30-day periods identified in advertising by the Fund. Yield assumes
the maximum front-end sales charge, if any, and does not reflect the deduction
of any CDSC or Limited CDSC. The yields of the Global Bond Fund A Class, the
Global Bond Fund B Class and the Global Bond Fund Institutional Class as of May
31, 1995, were 7.02%, 6.51% and 7.65%, respectively, reflecting the waiver of
fees by the Manager. Only one share of the Global Bond Fund B Class is
outstanding. Actual yield may be affected by variations in sales charges on
investments.
Past performance, such as yields quoted in advertisements, should not be
considered as representative of the results which may be realized from an
investment in a Series in the future.
Investors should note that the income earned and dividends paid by the
Global Bond Series and the Global Assets Series will vary with the fluctuation
of interest rates and performance of the portfolio to the extent of the Series'
investments in debt securities. The net asset value of any Series may change.
Unlike money market funds, the Series invest in longer-term securities that
fluctuate in value and do so in a manner inversely correlated with changing
interest rates. A Series' net asset value will tend to rise when interest rates
fall. Conversely, a Series' net asset value will tend to fall as interest rates
rise. Normally, fluctuations in interest rates have a greater effect on the
prices of longer-term bonds. The value of the securities held in a Series will
vary from day to day and investors should consider the volatility of a Series'
net asset value as well as its yield before making a decision to invest.
Comparative information on the Consumer Price Index may also be included.
The Consumer Price Index, as prepared by the U.S. Bureau of Labor Statistics, is
the most commonly used measure of inflation. It indicates the cost fluctuations
of a representative group of consumer goods. It does not represent a return from
an investment.
Statistical and performance information and various indices compiled and
maintained by organizations such as the following, may also be used in preparing
exhibits comparing certain industry trends to comparable Series activity and
performance and in illustrating general financial planning principles. Any
indices used are not managed for any investment goal.
CDA Technologies, Inc. is a performance evaluation service that maintains
a statistical database of performance, as reported by a diverse universe
of independently-managed mutual funds.
Ibbotson Associates, Inc. is a consulting firm that provides a variety of
historical data including total return, capital appreciation and income on
the stock market as well as other investment asset classes, and inflation.
With their permission, this information will be used primarily for
comparative purposes and to illustrate general financial planning
principles.
Interactive Data Corporation is a statistical access service that
maintains a database of various international industry indicators, such as
historical and current price/earning information, individual equity and
fixed income price and return information.
Compustat Industrial Databases, a service of Standard & Poor's, may also
be used in preparing performance and historical stock and bond market
exhibits. This firm maintains fundamental databases that provide
financial, statistical and market information covering more than 7,000
industrial and non-industrial companies.
-18-
<PAGE>
Russell Indexes is an investment analysis service that provides both
current and historical stock performance information, focusing on the
business fundamentals of those firms issuing the security.
Morgan Stanley Capital International is a statistical and research firm
that maintains a statistical database of international securities. This
firm also compiles and maintains a number of unmanaged indices of
international securities. These indices are designed to measure the
performance of the stock markets of the USA, Europe, Canada, Mexico,
Australia and the Far East, and that of international industry groups.
FT-Actuaries World Indices are jointly compiled by The Financial Times,
Ltd.; Goldman, Sachs & Co.; and Wood Mackenzie & Co., Ltd. in conjunction
with the Institute of Actuaries and the Faculty of Actuaries. Indices
maintained by this group primarily focus on compiling statistical
information on international financial markets and industry sectors, stock
and bond issues and certain fundamental information about the companies
issuing the securities. Statistical information on international
currencies is also maintained.
Salomon Brothers is a statistical research firm that maintains databases
of international markets and bond markets (corporate and government-issued
securities). This information, as well as unmanaged indices compiled and
maintained by Salomon, will be used in preparing comparative
illustrations.
Current interest rate and yield information on government debt obligations
of various durations, as reported weekly by the Federal Reserve (Bulletin H.15),
may also be used. As well, current industry rate and yield information on all
industry available fixed income securities, as reported weekly by The Bond
Buyer, may also be used in preparing comparative illustrations.
The Fund may also promote each class' yield and/or total return
performance and use comparative performance information computed by and
available from certain industry and general market research and publications,
such as Lipper Analytical Services, Inc., IBC/Donoghue's Money Market Report and
Morningstar, Inc.
The performance of the Class A Shares, Class B Shares and International
Equity Fund Institutional Class, as shown below, reflects maximum sales charges,
if any, but not any income taxes payable by shareholders on the reinvested
distributions included in the calculations. The performance of Class B Shares is
calculated both with the applicable CDSC included and excluded. The net asset
value of a class fluctuates so shares, when redeemed, may be worth more or less
than the original investment, and a class' results should not be considered as
representative of future performance. For these purposes, the calculations
assume the reinvestment of any realized securities profits distributions and
income dividends paid during the indicated periods.
-19-
<PAGE>
The following tables are examples, for purposes of illustration only, of
cumulative total return performance for the International Equity Fund A Class
and the International Equity Fund Institutional Class for the three-, six- and
nine-month periods ended May 31, 1995, for the one-and three-year periods ended
May 31, 1995 and for the life of these classes. Cumulative total return for the
three- and six-month period ended May 31, 1995 and for the period September 6,
1994 (date of initial public offering) through May 31, 1995 is also provided
below for the International Equity Fund B Class. Pursuant to applicable
regulation, total return shown for the International Equity Fund Institutional
Class for the periods prior to the commencement of operations of such class is
calculated by taking the performance of the International Equity Fund A Class
and adjusting it to reflect the elimination of all sales charges. However, for
those periods, no adjustment has been made to eliminate the impact of 12b-1
payments, and performance may have been affected had such an adjustment been
made. Information regarding the performance of the International Equity Fund C
Class is not shown because such shares were not offered to the public prior to
the date of this Part B.
Cumulative Total Return(1)
International International
Equity Fund Equity Fund
A Class Institutional
(at Offer)(3) Class(2)
3 months
ended
5/31/95 0.68% 5.76%
6 months
ended
5/31/95 (0.14%) 5.01%
9 months
ended
5/31/95 (7.44%) (2.62%)
1 year
ended
5/31/95 (2.38%) 2.78%
3 years
ended
5/31/95 19.83% 26.79%
10/31/91(4)
through
5/31/95 29.30% 36.81%
International International
Equity Fund Equity Fund
B Class B Class
(Including (Excluding
Deferred Sales Deferred Sales
Charge) Charge)
3 months
ended
5/31/95 (1.43%) 5.43%
6 months
ended
5/31/95 0.48% 4.45%
Period
9/6/94(5)
through
5/31/95 (6.79%) (3.11%)
(1) Effective November 29, 1995, the Manager has elected
voluntarily to waive that portion, if any, of the annual
management fees payable by the Series to the extent
necessary to ensure that the Total Operating Expenses of the
International Equity Fund A Class, International Equity Fund
Institutional Class and the International Equity Fund B Class
do not exceed 1.85%, 1.55% and 2.55%, respectively
(exclusive of taxes, interest, brokerage commissions and
extraordinary expenses, but inclusive of 12b-1 expenses)
through May 31, 1996. From June 1, 1994, through
November 30, 1994, a waiver and reimbursement
commitment was in place to ensure that Total Operating
Expenses of the International Equity Fund A Class and the
International Equity Fund Institutional Class did not exceed
1.50% (exclusive of taxes, interest, brokerage commissions,
extraordinary expenses and 12b-1 expenses) through
November 30, 1994. Through November 30, 1994, this
waiver was also applicable to the International Equity Fund
B Class. Prior to June 1, 1994, a waiver and reimbursement
commitment was in place to ensure that expenses did not
exceed 1.25% (exclusive of taxes, interest, brokerage
commissions and extraordinary expenses, but inclusive of
12b-1 fees) for the International Equity Fund A Class and
<PAGE>
.95% (exclusive of taxes, interest, brokerage commissions
and extraordinary expenses) for the International Equity
Fund Institutional Class. In the absence of such waiver,
performance would have been affected negatively.
(2) Date of initial public offering was November 9, 1992.
(3) Prior to November 29, 1995, the maximum front-end sales
charge was 5.75%. Effective November 29, 1995, the maximum front-end
sales charge was reduced to 4.75% and the above performance numbers are
calculated using 4.75% as the applicable sales charge.
(4) Date of initial public offering of International Equity Fund A
Class.
(5) Date of initial public offering of International Equity Fund B Class;
total return for this short of a time period may not be representative
of longer-term results.
-20-
<PAGE>
Cumulative total return performance for Class A Shares, Class B Shares
and the Institutional Class of Shares of the Global Bond Series and the Global
Assets Series for the three-month period ended May 31, 1995 and for the life of
these classes is provided below. Information regarding the performance of the
Class C Shares of these Series is not shown because such shares were not offered
to the public prior to the date of this Part B.
Cumulative Total Return(1)
Global Global
Bond Bond
Global Fund B Fund B
Global Bond Class(3) Class(3)
Bond Fund (Including (Excluding
Fund Institu- Deferred Deferred
A Class tional Sales Sales
(at Offer) Class Charge) Charge)
3 months
ended
5/31/95 0.99% 6.05% 1.66% 5.66%
Period
12/27/94(2)
through
5/31/95 3.33% 8.59% 4.24% 8.24%
Global Global
Assets Assets
Global Fund B Fund B
Global Assets Class(3) Class(3)
Assets Fund (Including (Excluding
Fund Institu- Deferred Deferred
A Class tional Sales Sales
(at Offer)(4) Class Charge) Charge)
3 months
ended
5/31/95 3.36% 8.47% 4.07% 8.07%
Period
12/27/94(2)
through
5/31/95 6.51% 11.94% 7.53% 11.53%
(1) Effective November 29, 1995, the Manager has elected to voluntarily waive
that portion, if any, of the annual management fees payable by the Global
Bond Series and the Global Asset Series to ensure that the Total Operating
Expenses of the Class A Shares and Institutional Class Shares of each
Series, respectively, do not exceed 1.25% and .95%, respectively, and of
the Class B Shares of each Series, respectively, do not exceed 1.95% (in
each case, exclusive of taxes, interest, brokerage commissions and
extraordinary expenses, but inclusive of 12b-1 expenses) through May 31,
1996. Prior to November 29, 1995, a waiver and reimbursement commitment
was in place to ensure that Total Operating Expenses of these Series
(exclusive of taxes, extraordinary expenses and, in the case of the Class
A Shares and the Class B Shares of these Series, 12b-1 expenses) did not
exceed .95% through November 30, 1995. In the absence of such waiver,
performance would have been affected negatively.
(2) Date of initial public offering; total return for this short of a time
period may not be representative of longer-term results.
(3) Only one share is outstanding.
(4) Prior to November 29, 1995, the maximum front-end sales charge was 5.75%.
Effective November 29, 1995, the maximum front-end sales charge was
reduced to 4.75% and the above performance numbers are calculated using
4.75% as the applicable sales charge.
Because every investor's goals and risk threshold are different, the
Distributor, as distributor for the Fund and other mutual funds in the Delaware
Group, will provide general information about investment alternatives and
scenarios that will allow investors to assess their personal goals. This
information will include general material about investing as well as materials
reinforcing various industry-accepted principles of prudent and responsible
personal financial planning. One typical way of addressing these issues is to
compare an individual's goals and the length of time the individual has to
attain these goals to his or her risk threshold. In addition, the Distributor
may also provide information that discusses the overriding investment philosophy
of Delaware Management Company, Inc. ("DMC" or the "Sub-Adviser"), Delaware
Investment Advisers, a division of DMC, and the Manager, an affiliate of DMC,
and how that philosophy impacts Fund investment disciplines and strategies
employed in seeking each Series' objectives. The Distributor may also from time
to time cite general or specific information about the institutional clients of
DMC, including the number of such clients serviced by DMC.
THE POWER OF COMPOUNDING
When you opt to reinvest your current income for additional Fund shares,
your investment is given yet another opportunity to grow. It's called the Power
of Compounding and the following charts illustrate just how powerful it can be.
-21-
<PAGE>
Compounded Returns
Results for various assumed fixed rates of return on a $10,000 investement
compounded monthly for 10 years:
6% Rate 8% Rate 10% Rate 12% Rate
of Return of Return of Return of Return
12-'85 $10,617 $10,830 $11,047 $11,268
12-'86 $11,272 $11,729 $12,204 $12,697
12-'87 $11,967 $12,702 $13,482 $14,308
12-'88 $12,705 $13,757 $14,894 $16,122
12-'89 $13,488 $14,898 $16,453 $18,167
12-'90 $14,320 $16,135 $18,176 $20,471
12-'91 $15,203 $17,474 $20,079 $23,067
12-'92 $16,141 $18,924 $22,182 $25,993
12-'93 $17,137 $20,495 $24,504 $29,290
12-'94 $18,194 $22,196 $27,070 $33,004
Results for various assumed fixed rates of return on a $10,000
investment compounded quarterly for 10 years:
6% Rate 8% Rate 10% Rate 12% Rate
of Return of Return of Return of Return
12-'85 $10,614 $10,824 $11,038 $11,255
12-'86 $11,265 $11,717 $12,184 $12,668
12-'87 $11,956 $12,682 $13,449 $14,258
12-'88 $12,690 $13,728 $14,845 $16,047
12-'89 $13,468 $14,859 $16,386 $18,061
12-'90 $14,295 $16,084 $18,087 $20,328
12-'91 $15,172 $17,410 $19,965 $22,879
12-'92 $16,103 $18,845 $22,038 $25,751
12-'93 $17,091 $20,399 $24,326 $28,983
12-'94 $18,140 $22,080 $26,851 $32,620
The figures are calculated assuming a fixed constant investment return and
assume no fluctuation in the value of principal. These figures do not reflect
payment of applicable taxes or sales charges, are not intended to be a
projection of investment results and do not reflect the actual performance
results of any of the classes.
TRADING PRACTICES AND BROKERAGE
The Manager selects brokers or dealers to execute transactions on behalf
of each Series for the purchase or sale of portfolio securities on the basis of
its judgment of their professional capability to provide the service. The
Sub-Adviser performs this function with respect to transactions on behalf of the
Global Assets Series for the purchase and sale of U.S. securities. The primary
consideration is to have brokers or dealers execute transactions at best price
and execution. Best price and execution refers to many factors, including the
price paid or received for a security, the commission charged, the promptness
and reliability of execution, the confidentiality and placement accorded the
order and other factors affecting the overall benefit obtained by the account on
the transaction. A number of trades are made on a net basis where the Fund
either buys securities directly from the dealer or sells them to the dealer. In
these instances, there is no direct commission charged but there is a spread
(the difference between the buy and sell price) which is the equivalent of a
commission. When a commission is paid, the Fund pays reasonably competitive
brokerage commission rates based upon the professional knowledge of the Manager
or the Sub-Adviser as to rates paid and charged for similar transactions
throughout the securities industry. In some instances, the Fund may pay a
minimal share transaction cost when the transaction presents no difficulty.
During the fiscal years ended November 30, 1992, 1993 and 1994, the
aggregate dollar amounts of brokerage commissions paid by the International
Equity Series were $8,488, $71,517 and $137,192, respectively.
The Manager or the Sub-Advisor may allocate out of all commission business
generated by all of the funds and accounts under its management, brokerage
business to brokers or dealers who provide brokerage and research services.
These services include advice, either directly or through publications or
writings, as to the value of securities, the advisability of investing in,
purchasing or selling securities, and the availability of securities or
purchasers or sellers of securities; furnishing of analyses and reports
-22-
<PAGE>
concerning issuers, securities or industries; providing information on economic
factors and trends; assisting in determining portfolio strategy; providing
computer software and hardware used in security analyses; and providing
portfolio performance evaluation and technical market analyses. Such services
are used by the Manager or the Sub- Adviser in connection with its investment
decision-making process with respect to one or more funds and accounts managed
by it, and may not be used, or used exclusively, with respect to the fund or
account generating the brokerage.
During the fiscal year ended November 30, 1994, portfolio transactions of
the International Equity Series in the amount of $37,124,562, resulting in
brokerage commissions of $127,910, was directed to brokers for brokerage and
research services provided.
As provided in the Securities Exchange Act of 1934 and each Series'
Investment Management Agreement, higher commissions are permitted to be paid to
broker/dealers who provide brokerage and research services than to
broker/dealers who do not provide such services if such higher commissions are
deemed reasonable in relation to the value of the brokerage and research
services provided. Although transactions are directed to broker/dealers who
provide such brokerage and research services, the Fund believes that the
commissions paid to such broker/dealers are not, in general, higher than
commissions that would be paid to broker/dealers not providing such services and
that such commissions are reasonable in relation to the value of the brokerage
and research services provided. In some instances, services may be provided to
the Manager or the Sub-Adviser which constitute in some part brokerage and
research services used by the Manager or the Sub-Adviser in connection with its
investment decision-making process and constitute in some part services used by
the Manager or the Sub-Adviser in connection with administrative or other
functions not related to its investment decision-making process. In such cases,
the Manager or the Sub-Adviser will make a good faith allocation of brokerage
and research services and will pay out of its own resources for services used by
the Manager or the Sub-Adviser in connection with administrative or other
functions not related to its investment decision-making process. In addition, so
long as no fund is disadvantaged, portfolio transactions which generate
commissions or their equivalent are allocated to broker/dealers who provide
daily portfolio pricing services to the Fund and to other funds in the Delaware
Group. Subject to best price and execution, commissions allocated to brokers
providing such pricing services may or may not be generated by the funds
receiving the pricing service.
The Manager or the Sub-Adviser may place a combined order for two or more
accounts or funds engaged in the purchase or sale of the same security if, in
its judgment, joint execution is in the best interest of each participant and
will result in best price and execution. Transactions involving commingled
orders are allocated in a manner deemed equitable to each account or fund. When
a combined order is executed in a series of transactions at different prices,
each account participating in the order may be allocated an average price
obtained from the executing broker. It is believed that the ability of the
accounts to participate in volume transactions will generally be beneficial to
the accounts and funds. Although it is recognized that, in some cases, the joint
execution of orders could adversely affect the price or volume of the security
that a particular account or fund may obtain, it is the opinion of the Manager,
the Sub-Adviser and the Fund's Board of Directors that the advantages of
combined orders outweigh the possible disadvantages of separate transactions.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. (the "NASD"), and subject to seeking best price and
execution, the Fund may place orders with broker/dealers that have agreed to
defray certain Series expenses such as custodian fees, and may, at the request
of the Distributor, give consideration to sales of shares of the Series as a
factor in the selection of brokers and dealers to execute Series portfolio
transactions.
-23-
<PAGE>
Portfolio Turnover
A Series is free to dispose of portfolio securities at any time, subject
to complying with the Code and the Investment Company Act of 1940, when changes
in circumstances or conditions make such a move desirable in light of the
investment objective. A Series will not attempt to achieve or be limited to a
predetermined rate of portfolio turnover, such a turnover always being
incidental to transactions undertaken with a view to achieving a Series'
investment objective.
The degree of portfolio activity may affect brokerage costs of a Series
and taxes payable by a Series' shareholders. A turnover rate of 100% would
occur, for example, if all the investments in the Series' portfolio at the
beginning of the year were replaced by the end of the year. In investing for
capital appreciation, a Series may hold securities for any period of time.
Portfolio turnover will also be increased if a Series writes a large number of
call options which are subsequently exercised. To the extent a Series realizes
gains on securities held for less than six months, such gains are taxable to the
shareholder or to the Series at ordinary income tax rates. The turnover rate
also may be affected by cash requirements from redemptions and repurchases of
Series shares. Total brokerage costs generally increase with higher portfolio
turnover rates.
Under certain market conditions, a Series may experience a high rate of
portfolio turnover which could exceed 100%. The portfolio turnover rate of a
Series is calculated by dividing the lesser of purchases or sales of portfolio
securities for the particular fiscal year by the monthly average of the value of
the portfolio securities owned by the Series during the particular fiscal year,
exclusive of securities whose maturities at the time of acquisition are one year
or less.
During the past two fiscal years, the
International Equity Series' portfolio turnover rates were 24% for 1993 and 27%
for 1994.
-24-
<PAGE>
PURCHASING SHARES
The Distributor serves as the national distributor for each Series'
classes of shares and has agreed to use its best efforts to sell shares of the
Fund. See the Prospectuses for additional information on how to invest. Shares
of the Fund are offered on a continuous basis and may be purchased through
authorized investment dealers or directly by contacting the Fund or its agent.
The minimum initial investment generally is $1,000 for Class A Shares,
Class B Shares and Class C Shares. Subsequent purchases generally must be at
least $100. The initial and subsequent investment minimums for Class A Shares
will be waived for purchases by officers, directors and employees of any
Delaware Group fund, the Manager or Sub-Adviser or any of their affiliates if
the purchases are made pursuant to a payroll deduction program. With respect to
the International Equity Series and the Global Assets Series only, Class A
Shares purchased pursuant to the Uniform Gifts to Minors Act or Uniform
Transfers to Minors Act and Class A Shares purchased in connection with an
Automatic Investor Plan are subject to a minimum initial purchase of $250 and a
minimum subsequent purchase of $25. Accounts opened under the Delaware Group
Asset Planner service are subject to a minimum initial investment of $2000 per
Asset Planner Strategy selected. There are no minimum purchase requirements for
the Institutional Classes, but certain eligibility requirements must be
satisfied.
Each purchase of Class B Shares is subject to a maximum purchase
limitation of $250,000. For Class C Shares, each purchase must be in an amount
that is less than $1,000,000 (See Investment Plans for purchase limitations
applicable to each of the Fund's master retirement plans.) The Fund will reject
any order for purchase of more than $250,000 of Class B Shares and $1,000,000 or
more of Class C Shares. An investor may exceed these limitations by making
cumulative purchases over a period of time. In doing so, an investor should keep
in mind, however, that reduced front-end sales charges apply to investments of
$100,000 or more in Class A Shares, which are subject to lower annual 12b-1 Plan
expenses than Class B Shares and Class C Shares and generally are not subject to
a CDSC.
Selling dealers have the responsibility of transmitting orders promptly.
The Fund reserves the right to reject any order for the purchase of its shares
if in the opinion of management such rejection is in the Fund's best interest.
The NASD has adopted amendments to its Rules of Fair Practice relating to
investment company sales charges. The Fund and the Distributor intend to operate
in compliance with these rules.
Class A Shares are purchased at the offering price which reflects a
maximum front-end sales charge of 4.75%; however, lower front-end sales charges
apply for larger purchases. See the table below. Class A Shares are also subject
to annual 12b-1 Plan expenses.
Class B Shares are purchased at net asset value and are subject to a CDSC
of: (i) 4% if shares are redeemed within two years of purchase; (ii) 3% if
shares are redeemed during the third or fourth year following purchase; (iii) 2%
if shares are redeemed during the fifth year following purchase; and (iv) 1% if
shares are redeemed during the sixth year following purchase. Class B Shares are
also subject to annual 12b-1 Plan expenses which are higher than those to which
Class A Shares are subject and are assessed against Class B Shares for
approximately eight years after purchase.
Class C shares are purchased at net asset value and are subject to a CDSC
of 1% if shares are redeemed within twelve months following purchase. Class C
Shares are also subject to annual 12b-1 Plan expenses for the life of the
investment which are equal to those to which Class B shares are subject.
Shares of the Institutional Classes are purchased at the net asset value
per share without the imposition of a front-end sales charge, CDSC or 12b-1 Plan
expenses.
Institutional Class shares, Class A Shares, Class B Shares and Class C
Shares represent a proportionate interest in a Series' assets and will receive a
proportionate interest in that Series' income, before application, as to the
Class A, Class B and Class C Shares, of any expenses under the Fund's 12b-1
Plans.
-25-
<PAGE>
See Automatic Conversion of Class B Shares under Buying Shares in the Fund
Classes' Prospectus, and Determining Offering Price and Net Asset Value and
Plans Under Rule 12b-1 for the Fund Classes in this Part B.
Certificates representing shares purchased are not ordinarily issued
unless a shareholder submits a specific request. Certificates are not issued in
the case of Class B Shares or Class C Shares. However, purchases not involving
the issuance of certificates are confirmed to the investor and credited to the
shareholder's account on the books maintained by Delaware Service Company, Inc.
(the "Transfer Agent"). The investor will have the same rights of ownership with
respect to such shares as if certificates had been issued. An investor that is
permitted to obtain a certificate may receive a certificate representing shares
purchased by sending a letter to the
Transfer Agent requesting the certificate. No charge is made for any certificate
issued. Investors who hold certificates representing any of their shares may
only redeem those shares by written request. The investor's certificate(s) must
accompany such request.
Alternative Purchase Arrangements
The alternative purchase arrangements of Class A Shares, Class B Shares
and Class C Shares of each Series permit an investor to choose the method of
purchasing shares that is most suitable for his or her needs given the amount of
their purchase, the length of time they expect to hold their shares and other
relevant circumstances. Investors should determine whether, given their
particular circumstances, it is more advantageous to purchase Class A Shares of
a Series and incur a front-end sales charge and annual 12b-1 Plan expenses of up
to a maximum of .30% of the average daily net assets of Class A Shares or to
purchase either Class B or Class C Shares of a Series and have the entire
initial purchase amount invested in the Series with the investment thereafter
subject to a CDSC and annual 12b-1 Plan expenses. Class B Shares are subject to
a CDSC if the shares are redeemed within six years of purchase, and Class C
Shares are subject to a CDSC if the shares are redeemed within twelve months of
purchase. Class B and Class C Shares are each subject to annual 12b-1 Plan
expenses of up to a maximum of 1% (.25% of which are service fees to be paid to
the Distributor, dealers or others for providing personal service and/or
maintaining shareholder accounts) of average daily net assets of the respective
class. Class B Shares will automatically convert to Class A Shares at the end of
approximately eight years after purchase and, thereafter be subject to annual
12b-1 Plan expenses of up to a maximum of .30% of average daily net assets of
such shares. Unlike Class B Shares, Class C Shares do not convert into another
class.
Class A Shares - International Equity Series, Global Bond Series and Global
Assets Series
-26-
<PAGE>
Purchases of $100,000 or more of Class A Shares at the offering price
carry reduced front-end sales charges as shown in the accompanying tables, and
may include a series of purchases over a 13-month period under a Letter of
Intention signed by the purchaser. See Special Purchase Features - Class A
Shares, below for more information on ways in which investors can avail
themselves of reduced front-end sales charges and other purchase features.
-27-
<PAGE>
International Equity Fund A Class
Global Assets Fund A Class
Global Bond Fund A Class
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Front-End Sales Charge as % of
----------------------------------------------------------------------------------
Amount Invested**
--------------------------------------------------------------- Dealers'
Concession
Offering International Global Global as % of
Amount of Purchase Price Equity Fund Assets Fund Bond Fund Offering Price
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
Less than $100,000 4.75% 4.95% 5.00% 5.00% 4.00%
$100,000 but under $250,000 3.75 3.86 3.90 3.90 3.00
$250,000 but under $500,000 2.50 2.60 2.60 2.60 2.00
$500,000 but under $1,000,000* 2.00 2.01 2.00 2.00 1.60
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* There is no front-end sales charge on purchases of Class A Shares of $1
million or more but, under certain limited circumstances, a 1% CDSC may
apply upon redemption of such shares (the "Limited CDSC"). The Limited
CDSC that may be applicable arises only in the case of certain net asset
value purchases which have triggered the payment of a dealer's
commission.
** Based on the net asset values per share of Class A Shares as of the end
of the Fund's most recent fiscal year, which for the Global Assets Fund
and the Global Bond Fund is a date which is prior to the commencement of
their operations.
*** Financial institutions or their affiliated brokers may receive an agency
transaction fee in the percentages set forth above.
- --------------------------------------------------------------------------------
The Fund must be notified when a sale takes place which would qualify for the
reduced front-end sales charge on the basis of previous or current purchases.
The reduced front-end sales charge will be granted upon confirmation of the
shareholder's holdings by the Fund. Such reduced front-end sales charges are not
retroactive.
From time to time, upon written notice to all of its dealers, the Distributor
may hold special promotions for specified periods during which the Distributor
may reallow to dealers up to the full amount of the front-end sales charges
shown above. Dealers who receive 90% or more of the sales charge may be deemed
to be underwriters under the 1933 Act.
- --------------------------------------------------------------------------------
-28-
<PAGE>
-29-
<PAGE>
Certain dealers who enter into an agreement to provide extra training and
information on Delaware Group products and services and who increase sales of
Delaware Group funds may receive an additional concession of up to .15% of the
offering price in connection with sales of Class A Shares. Such dealers must
meet certain requirements in terms of organization and distribution capabilities
and their ability to increase sales. The Distributor should be contacted for
further information on these requirements as well as the basis and circumstances
upon which the additional concession will be paid. Participating dealers may be
deemed to have additional responsibilities under the securities laws.
Dealer's Commission
For initial purchases of Class A Shares of $1,000,000 or more, a dealer's
commission may be paid by the Distributor to financial advisers through whom
such purchases are effected in accordance with the following schedule:
Dealer's
Commission
------------
(as a percent-
Amount age of amount
of Purchase purchased)
- -----------
Up to $2 million 1.00%
Next $1 million up to $3 million .75
Next $2 million up to $5 million .50
Amount over $5 million .25
In determining a financial adviser's eligibility for the dealer's
commission, purchases of Class A Shares of other Delaware Group funds as to
which a Limited CDSC applies (see Redemption and Repurchase) may be aggregated
with those of Class A Shares of a Series. Financial advisers also may be
eligible for a dealer's commission in connection with certain purchases made
under a Letter of Intention or pursuant to an investor's Right of Accumulation.
Financial advisers should contact the Distributor concerning the applicability
and calculation of the dealer's commission in the case of combined purchases.
An exchange from other Delaware Group funds will not qualify for payment
of the dealer's commission, unless such exchange is from a Delaware Group fund
with assets as to which a dealer's commission or similar payment has not been
previously paid. The schedule and program for payment of the dealer's commission
are subject to change or termination at any time by the Distributor in its
discretion.
Contingent Deferred Sales Charge - Class B Shares
and Class C Shares
Class B and Class C Shares are purchased without the imposition of a
front-end sales charge. Class B Shares redeemed within six years of purchase may
be subject to a CDSC at the rates set forth below, and Class C Shares redeemed
within twelve months of purchase may be subject to a CDSC of 1%. CDSC fees are
charged as a percentage of the dollar amount subject to the CDSC. The charge
will be assessed on an amount equal to the lesser of the net asset value at the
time of purchase of the shares being redeemed or the net asset value of those
shares at the time of redemption. No CDSC will be imposed on increases in net
asset value above the initial purchase price. In addition, no CDSC will be
assessed on redemption of shares received through reinvestment of dividends or
capital gains distributions. See Waiver of CDSC - Class B and Class C Shares
under Redemption and Exchange in the Fund Classes' Prospectus for a list of the
instances in which the CDSC is waived.
The following table sets forth the rates of the CDSC for Class B Shares of
each Series:
Contingent Deferred
Sales Charge (as a
Percentage of
Dollar Amount
Year After Purchase Made Subject to Charge)
------------------------ ------------------
0-2 4%
3-4 3%
5 2%
6 1%
7 and thereafter None
-30-
<PAGE>
During the seventh year after purchase and, thereafter, until converted
automatically into Class A Shares of the Series, Class B Shares will still be
subject to the annual 12b-1 Plan expenses of up to 1% of average daily net
assets of those shares. At the end of approximately eight years after purchase,
the investor's Class B Shares will be automatically converted into Class A
Shares of the Series. See Automatic Conversion of Class B Shares under Buying
Shares in the Fund Classes' Prospectus. Such conversion will constitute a
tax-free exchange for federal income tax purposes. See Taxes in the Prospectus
for the Fund Classes.
Plans Under Rule 12b-1 for the Fund Classes
Pursuant to Rule 12b-1 under the Investment Company Act of 1940, the Fund
has adopted a separate plan for each of the Class A Shares, the Class B Shares
and the Class C Shares of a Series (the "Plans"). Each Plan permits a Series to
pay for certain distribution, promotional and related expenses involved in the
marketing of only the class to which the Plan applies. The Plans do not apply to
the Institutional Class of shares. Such shares are not included in calculating
the Plans' fees, and the Plans are not used to assist in the distribution and
marketing of the Institutional Class shares. Shareholders of the Institutional
Class may not vote on matters affecting the Plans.
The Plans permit a Series, pursuant to the Distribution Agreement, to pay
out of the assets of the Class A Shares, Class B Shares and Class C Shares
monthly fees to the Distributor for its services and expenses in distributing
and promoting sales of shares of such classes. These expenses include, among
other things, preparing and distributing advertisements, sales literature and
prospectuses and reports used for sales purposes, compensating sales and
marketing personnel, and paying distribution and maintenance fees to securities
brokers and dealers who enter into dealer's agreements with the Distributor. The
Plan expenses relating to Class B and Class C Shares are also used to pay the
Distributor for advancing the commission costs to dealers with respect to the
initial sale of such shares.
In addition, a Series may make payments out of the assets of the Class A
Shares, Class B Shares and Class C Shares directly to other unaffiliated
parties, such as banks, who either aid in the distribution of shares of, or
provide services to, such classes.
The maximum aggregate fee payable by a Series under the Plans and the
Series' Distribution Agreement, is on an annual basis up to .30% of the Class A
Shares' average daily net assets for the year, and up to 1% (.25% of which are
service fees to be paid to the Distributor, dealers and others for providing
personal service and/or maintaining shareholder accounts) of each of the Class B
Shares' and the Class C Shares' average daily net assets for the year. The
Fund's Board of Directors may reduce these amounts at any time.
All of the distribution expenses incurred by the Distributor and others,
such as broker/dealers, in excess of the amount paid on behalf of Class A, Class
B and Class C Shares would be borne by such persons without any reimbursement
from such classes. Subject to seeking best price and execution, a Series may,
from time to time, buy or sell portfolio securities from or to firms which
receive payments under the Plans.
From time to time, the Distributor may pay additional amounts from its
own resources to dealers for aid in distribution or for aid in providing
administrative services to shareholders.
The Plans and the Distribution Agreements, as amended, have all been
approved by the Board of Directors of the Fund, including a majority of the
directors who are not "interested persons" (as defined in the Investment Company
Act of 1940) of the Fund and who have no direct or indirect financial interest
-31-
<PAGE>
in the Plans, by vote cast in person at a meeting duly called for the purpose of
voting on the Plans and such Distribution Agreements. Continuation of the Plans
and the Distribution Agreements, as amended, must be approved annually by the
Board of Directors in the same manner as specified above.
Each year, the directors must determine whether continuation of the Plans
is in the best interest of shareholders of, respectively, Class A Shares, Class
B Shares and Class C Shares and that there is a reasonable likelihood of the
Plan relating to a Fund Class providing a benefit to that class. The Plans and
the Distribution Agreements, as amended, may be terminated at any time without
penalty by a majority of those directors who are not "interested persons" or by
a majority vote of the outstanding voting securities of the relevant Fund Class.
Any amendment materially increasing the percentage payable under the Plans must
likewise be approved by a majority vote of the outstanding voting securities of
the relevant Fund Class, as well as by a majority vote of those directors who
are not "interested persons." With respect to the Class A Shares' Plans any
material increase in the maximum percentage payable thereunder must be approved
by a majority of the outstanding voting Class B Shares of the relevant Series.
Also, any other material amendment to the Plans must be approved by a majority
vote of the directors including a majority of the noninterested directors of the
Fund having no interest in the Plans. In addition, in order for the Plans to
remain effective, the selection and nomination of directors who are not
"interested persons" of the Fund must be effected by the directors who
themselves are not "interested persons" and who have no direct or indirect
financial interest in the Plans. Persons authorized to make payments under the
Plans must provide written reports at least quarterly to the Board of Directors
for their review.
For the fiscal year ended November 30, 1994, payments from the
International Equity Fund A Class pursuant to its Plan amounted to $152,074 and
such payments were used for the following purposes: Annual/Semi-Annual Reports -
$2,308; Broker Trails - $118,562; Commission to Wholesalers $22,324;
Promotional-Other - $1,856; and Prospectus Printing - $7,024. For the period
September 6, 1994 (date of initial public offering) through November 30, 1994
payments from the Class B Shares pursuant to its Plan amounted to $623 and such
payments were used for the following purposes: Broker Sales Charges - $260;
Broker Trails - $143; Commission to Wholesalers - $45; and Interest on Broker
Sales Charges - $175.
The staff of the SEC has proposed amendments to Rule 12b-1 and other
related regulations that could impact Rule 12b-1 Distribution Plans. The Fund
intends to amend the Plans, if necessary, to comply with any new rules or
regulations the SEC may adopt with respect to Rule 12b-1.
Other Payments to Dealers - Class A, Class B and
Class C Shares
From time to time, at the discretion of the Distributor, all registered
broker/dealers whose aggregate sales of Fund Classes exceed certain limits as
set by the Distributor, may receive from the Distributor an additional payment
of up to .25% of the dollar amount of such sales. The Distributor may also
provide additional promotional incentives or payments to dealers that sell
shares of the Delaware Group of funds. In some instances, these incentives or
payments may be offered only to certain dealers who maintain, have sold or may
sell certain amounts of shares.
Payments to dealers made in connection with seminars, conferences or
contests relating to the promotion of fund shares may be in an amount up to 100%
of the expenses incurred or awards made.
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The Distributor may also pay a portion
of the expense of preapproved dealer advertisements promoting the sale of
Delaware Group fund shares.
Special Purchase Features - Class A Shares
Buying at Net Asset Value
Class A Shares may be purchased without a front-end sales charge under
the Dividend Reinvestment Plan and, under certain circumstances, the 12-Month
Reinvestment Privilege and the
Exchange Privilege.
Current and former officers, directors and employees of the Fund, any
other fund in the Delaware Group, the Sub-Adviser, including the Manager, or any
of the Sub-Adviser's affiliates that may in the future be created, legal counsel
to the funds and registered representatives and employees of broker/dealers who
have entered into Dealer's Agreements with the Distributor may purchase Class A
Shares and any such class of shares of any of the funds in the Delaware Group,
including any fund that may be created, at the net asset value per share.
Spouses, parents, brothers, sisters and children (regardless of age) of such
persons at their direction, and any employee benefit plan established by any of
the foregoing funds, corporations, counsel or broker/dealers may also purchase
Class A Shares at net asset value. Purchases of Class A Shares may also be made
by clients of registered representatives of an authorized investment dealer at
net asset value within six months of a change of the registered representative's
employment, if the purchase is funded by proceeds from an investment where a
front-end sales charge has been assessed and the redemption of the investment
did not result in the imposition of a CDSC or other redemption charges.
Purchases of Class A Shares also may be made at net asset value by bank
employees who provide services in connection with agreements between the bank
and unaffiliated brokers or dealers concerning sales of Class A Shares.
Officers, directors and key employees of institutional clients of the Manager,
the Sub-Adviser or any of their affiliates may purchase Class A Shares at net
asset value. Moreover, purchases may be effected at net asset value for the
benefit of the clients of brokers, dealers and registered investment advisers
affiliated with a broker or dealer, if such broker, dealer or investment adviser
has entered into an agreement with the Distributor providing specifically for
the purchase of Class A Shares in connection with special investment products,
such as wrap accounts or similar fee based programs. Such purchasers are
required to sign a letter stating that the purchase is for investment only and
that the securities may not be resold except to the issuer. Such purchasers may
also be required to sign or deliver such other documents as the Fund may
reasonably require to establish eligibility for purchase at net asset value. The
Fund must be notified in advance that the trade qualifies for purchase at net
asset value.
Beginning May 25, 1995, Class A Shares of each Series may be purchased at
net asset value by any investor within ninety days after a redemption of shares
from a fund outside the Delaware Group of funds provided that: 1) the redeemed
shares were purchased no more than five years before the proposed purchase of
Class A Shares of a Series; and 2) a front-end sales charge was paid in
connection with the purchase of the redeemed shares or a CDSC was paid upon
their redemption.
Investments in Class A Shares made by plan level and/or participant
retirement accounts that are for the purpose of repaying a loan taken from such
accounts will be made at net asset value. Loan repayments made to a Delaware
Group account in connection with loans originated from accounts previously
maintained by another investment firm will also be invested at net asset value.
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Letter of Intention
The reduced front-end sales charges described above with respect to Class
A Shares are also applicable to the aggregate amount of purchases made by any
such purchaser previously enumerated within a 13-month period pursuant to a
written Letter of Intention provided by the Distributor and signed by the
purchaser, and not legally binding on the signer or the Fund, which provides for
the holding in escrow by the Transfer Agent of 5% of the total amount of the
Class A Shares intended to be purchased until such purchase is completed within
the 13-month period. A Letter of Intention may be dated to include shares
purchased up to ninety days prior to the date the Letter is signed. The 13-month
period begins on the date of the earliest purchase. If the intended investment
is not completed, except as noted below, the purchaser will be asked to pay an
amount equal to the difference between the front-end sales charge on Class A
Shares purchased at the reduced rate and the front-end sales charge otherwise
applicable to the total shares purchased. If such payment is not made within
twenty days following the expiration of the 13-month period, the Transfer Agent
will surrender an appropriate number of the escrowed shares for redemption in
order to realize the difference. Such purchasers may include the value (at
offering price at the level designated in their Letter of Intention) of all
their shares of a Series and of any class of any of the other mutual funds in
the Delaware Group (except shares of any Delaware Group fund which do not carry
a front-end sales charge, CDSC or Limited CDSC, other than shares of Delaware
Group Premium Fund, Inc. beneficially owned in connection with the ownership of
variable insurance products, unless they were acquired through an exchange from
a Delaware Group fund which carried a front-end sales charge, CDSC or Limited
CDSC) previously purchased and still held as of the date of their Letter of
Intention toward the completion of such Letter. For purposes of satisfying an
investor's obligation under a Letter of Intention, Class B Shares and Class C
Shares of a Series and the corresponding classes of shares of other Delaware
Group funds which offer such shares may be aggregated with Class A Shares of the
Series and the corresponding class of shares of the other Delaware Group funds.
Employers offering a Delaware Group retirement plan may also complete a
Letter of Intention to obtain a reduced front-end sales charge on investments of
Class A Shares made by the plan. The aggregate investment level of the Letter of
Intention will be determined and accepted by the Transfer Agent at the point of
plan establishment. The level and any reduction in front-end sales charge will
be based on actual plan participation and the projected investments in Delaware
Group funds that are offered with a front-end sales charge, CDSC or Limited CDSC
for a 13-month period. The Transfer Agent reserves the right to adjust the
signed Letter of Intention based on this acceptance criteria. The 13-month
period will begin on the date this Letter of Intention is accepted by the
Transfer Agent. If actual investments exceed the anticipated level and equal an
amount that would qualify the plan for further discounts, any front-end sales
charges will be automatically adjusted. In the event this Letter of Intention is
not fulfilled within the 13-month period, the plan level will be adjusted
(without completing another Letter of Intention) and the employer will be billed
for the difference in front-end sales charges due, based on the plan's assets
under management at that time. Employers may also include the value (at offering
price at the level designated in their Letter of Intention) of all their shares
intended for purchase that are offered with a front-end sales charge, CDSC or
Limited CDSC of any class. Class B Shares and Class C Shares of a Series and
other Delaware Group funds which offer corresponding classes of shares may also
be aggregated for this purpose.
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Combined Purchases Privilege
In determining the availability of the reduced front-end sales charge
previously set forth with respect to Class A Shares, purchasers may combine the
total amount of any combination of the Fund Classes' shares as well as shares of
any other class of any of the other Delaware Group funds (except shares of any
Delaware Group fund which do not carry a front-end sales charge, CDSC or Limited
CDSC, other than shares of Delaware Group Premium Fund, Inc. beneficially owned
in connection with the ownership of variable insurance products, unless they
were acquired through an exchange from a Delaware Group fund which carried a
front-end sales charge, CDSC or Limited CDSC).
The privilege also extends to all purchases made at one time by an
individual; or an individual, his or her spouse and their children under
twenty-one years of age; or a trustee or other fiduciary of trust estates or
fiduciary accounts for the benefit of such family members (including certain
employee benefit programs).
Right of Accumulation
In determining the availability of the reduced front-end sales charge
with respect to Class A Shares, purchasers may also combine any subsequent
purchases of Class A Shares, Class B Shares and Class C Shares of the Fund
Classes as well as shares of any other class of any of the other Delaware Group
funds which offer such classes (except shares of any Delaware Group fund which
do not carry a front-end sales charge, CDSC or Limited CDSC, other than shares
of Delaware Group Premium Fund, Inc. beneficially owned in connection with the
ownership of variable insurance products, unless they were acquired through an
exchange from shares from a Delaware Group fund which carried a front-end sales
charge, CDSC or Limited CDSC). Using the International Equity Fund A Class as an
example, if any such purchaser has previously purchased and still holds shares
of that class and/or shares of any other of the classes described in the
previous sentence with a value of $40,000 and subsequently purchases $60,000 at
offering price of additional shares of Class A Shares, the charge applicable to
the $60,000 purchase would currently be 3.75%. For the purpose of this
calculation, the shares presently held shall be valued at the public offering
price that would have been in effect were the shares purchased simultaneously
with the current purchase. Investors should refer to the table of sales charges
for Class A Shares to determine the applicability of the Right of Accumulation
to their particular circumstances.
12-Month Reinvestment Privilege
Holders of Class A Shares (and of the Institutional Classes holding
shares which were acquired through an exchange of one of the other mutual funds
in the Delaware Group offered with a front-end sales charge) who redeem such
shares of a Series have one year from the date of redemption to reinvest all or
part of their redemption proceeds in Class A Shares of that Series or in Class A
Shares of any of the other funds in the Delaware Group, subject to applicable
eligibility and minimum purchase requirements, in states where shares of such
other funds may be sold, at net asset value without the payment of a front-end
sales charge. This privilege does not extend to Class A Shares where the
redemption of the shares triggered the payment of a Limited CDSC. Persons
investing redemption proceeds from direct investments in mutual funds in the
Delaware Group offered without a front-end sales charge will be required to pay
the applicable sales charge when purchasing Class A Shares. The reinvestment
privilege does not extend to a redemption of either Class B or Class C Shares.
Any such reinvestment cannot exceed the redemption proceeds (plus any
amount necessary to purchase a full share). The reinvestment will be made at the
net asset value next determined after receipt of remittance. A redemption and
reinvestment could have income tax consequences. It is recommended that a tax
adviser be consulted with respect to such transactions. Any reinvestment
directed to a fund in which the investor does not then have an account will be
treated like all other initial purchases of a fund's shares. Consequently, an
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investor should obtain and read carefully the prospectus for the fund in
which the investment is proposed to be made before investing or sending money.
The prospectus contains more complete information about the fund, including
charges and expenses.
Investors should consult their financial advisers or the Transfer Agent,
which also serves as the Fund's shareholder servicing agent, about the
applicability of the Limited CDSC (see Contingent Deferred Sales Charge for
Certain Purchases of Class A Shares Made at Net Asset Value under Redemption and
Exchange in the Fund Classes' Prospectus) in connection with the features
described above.
Group Investment Plans
Group Investment Plans which are not eligible to purchase shares of the
Institutional Classes may also benefit from the reduced front-end sales charges
for investments in Class A Shares set forth in the tables on page , based on
total plan assets. If a company has more than one plan investing in the Delaware
Group of funds, then the total amount invested in all plans would be used in
determining the applicable front-end sales charge reduction upon each purchase,
both initial and subsequent, upon notification to the Fund at the time of each
such purchase. Employees participating in such Group Investment Plans may also
combine the investments made in their plan account when determining the
applicable front-end sales charge on purchases to non-retirement Delaware Group
investment accounts if they so notify the Fund in connection with each purchase.
For other retirement plans and special services, see retirement plans for the
Fund Classes under Investment Plans.
The Institutional Classes
Each Series' Institutional Class is available for purchase only by: (a)
retirement plans introduced by persons not associated with brokers or dealers
that are primarily engaged in the retail securities business and rollover
individual retirement accounts from such plans; (b) tax-exempt employee benefit
plans of the Manager, the Sub-Adviser or their affiliates and securities dealer
firms with a selling agreement with the Distributor; (c) institutional advisory
accounts of the Manager, the Sub-Adviser or their affiliates and those having
client relationships with Delaware Investment Advisers, a division of the
Sub-Adviser, or its affiliates and their corporate sponsors, as well as
subsidiaries and related employee benefit plans and rollover individual
retirement accounts from such institutional advisory accounts; (d) banks, trust
companies and similar financial institutions investing for their own account or
for the account of their trust customers for whom such financial institution is
exercising investment discretion in purchasing shares of the Institutional
Class; and (e) registered investment advisers investing on behalf of clients
that consist solely of institutions and high net-worth individuals having at
least $1,000,000 entrusted to the adviser for investment purposes, but only if
the adviser is not affiliated or associated with a broker or dealer and derives
compensation for its services exclusively from its clients for such advisory
services.
Shares of the Institutional Classes are available for purchase at net
asset value, without the imposition of a front-end sales charge or CDSC and are
not subject to Rule 12b-1 expenses.
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Reinvestment Plan/Open Account
Unless otherwise designated by shareholders in writing, dividends from
net investment income and distributions from realized securities profits, if
any, will be automatically reinvested in additional shares of the respective
Fund Class in which an investor has an account (based on the net asset value in
effect on the reinvestment date) and will be credited to the shareholder's
account on that date. All dividends and distributions of an Institutional Class
are reinvested in the account of the holders of such shares (based on the net
asset value of the Series in effect on the reinvestment date). A confirmation of
each dividend payment from net investment income and of distributions from
realized securities profits, if any, will be mailed to shareholders in the first
quarter of the fiscal year.
Under the Reinvestment Plan/Open Account, shareholders may purchase and
add full and fractional shares to their plan accounts at any time either through
their investment dealers or by sending a check or money order to the Series.
Such purchases, which must meet the minimum subsequent purchase requirements set
forth in Prospectus for the Fund Classes and this Part B, are made, for Class A
Shares at the public offering price, and for Class B Shares, Class C Shares and
Institutional Classes at the net asset value, at the end of the day of receipt.
A reinvestment plan may be terminated at any time. This plan does not assure a
profit nor protect against depreciation in a declining market.
Reinvestment of Dividends in Other Delaware
Group Funds
Subject to applicable eligibility and minimum initial purchase
requirements and the limitations set forth below, holders of Class A, Class B
and Class C Shares may automatically reinvest dividends and/or distributions
from a Series in any of the other mutual funds in the Delaware Group, including
the Series, in states where their shares may be sold. Such investments will be
at net asset value at the close of business on the reinvestment date without any
front-end sales charge or service fee. The shareholder must notify the Transfer
Agent in writing and must have established an account in the fund into which the
dividends and/or distributions are to be invested. Any reinvestment directed to
a fund in which the investor does not then have an account will be treated like
all other initial purchases of a fund's shares. Consequently, an investor should
obtain and read carefully the prospectus for the fund in which the investment is
proposed to be made before investing or sending money. The prospectus contains
more complete information about the fund, including charges and expenses. See
also Dividend Reinvestment Plan in the Prospectus for the Fund Classes.
Subject to the following limitations, dividends and/or distributions from
other funds in the Delaware Group may be invested in shares of a Series,
provided an account has been established. Dividends from Class A Shares may not
be directed to Class B or Class C Shares of another fund in the Delaware Group.
Dividends from Class B Shares may only be directed to Class B Shares of another
fund in the Delaware Group that offers such class of shares. Dividends from
Class C Shares may only be directed to Class C Shares of another fund in the
Delaware Group that offers such class of shares. See Class B Funds and Class C
Funds under Buying Shares in the Prospectus for the Fund Classes for the funds
in the Delaware Group that are eligible for investment by holders of Fund
shares.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, Profit Sharing and Money Purchase Pension Plans, 401(k)
Defined Contribution Plans, 403(b)(7) Deferred Compensation Plans or 457
Deferred Compensation Plans.
Investing by Electronic Fund Transfer
Direct Deposit Purchase Plan--Investors may arrange for a Series to
accept for investment in Class A, Class B or Class C Shares, through an agent
bank, preauthorized government or private recurring payments. This method of
investment assures the timely credit to the shareholder's account of payments
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such as social security, veterans' pension or compensation benefits, federal
salaries, Railroad Retirement benefits, private payroll checks, dividends, and
disability or pension fund benefits. It also eliminates lost, stolen and delayed
checks.
Automatic Investing Plan--Shareholders of Class A Shares, Class B Shares
and Class C Shares may make automatic investments by authorizing, in advance,
monthly payments directly from their checking account for deposit into their
Series account. This type of investment will be handled in either of the two
ways noted below. (1) If the shareholder's bank is a member of the National
Automated Clearing House Association ("NACHA"), the amount of the investment
will be electronically deducted from his or her account by Electronic Fund
Transfer ("EFT"). The shareholder's checking account will reflect a debit each
month at a specified date although no check is required to initiate the
transaction. (2) If the shareholder's bank is not a member of NACHA, deductions
will be made by preauthorized checks, known as Depository Transfer Checks.
Should the shareholder's bank become a member of NACHA in the future, his or her
investments would be handled electronically through EFT.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, Profit Sharing and Money Purchase Pension Plans, 401(k)
Defined Contribution Plans, 403(b)(7) Deferred Compensation Plans or 457
Deferred Compensation Plans.
* * *
Investments under the Direct Deposit Purchase Plan and the Automatic
Investing Plan must be for $25 or more for Class A Shares and $100 or more for
Class B and Class C Shares. An investor wishing to take advantage of either
service must complete an authorization form. Either service can be discontinued
by the shareholder at any time without penalty by giving written notice.
Payments to a Series from the federal government or its agencies on
behalf of a shareholder may be credited to the shareholder's account after such
payments should have been terminated by reason of death or otherwise. Any such
payments are subject to reclamation by the federal government or its agencies.
Similarly, under certain circumstances, investments from private sources may be
subject to reclamation by the transmitting bank. In the event of a reclamation,
a Series may liquidate sufficient shares from a shareholder's account to
reimburse the government or the private source. In the event there are
insufficient shares in the shareholder's account, the shareholder is expected to
reimburse the Series.
Direct Deposit Purchases by Mail
Shareholders may authorize a third party,
such as a bank or employer, to make investments directly to their Series
accounts. A Series will accept these investments, such as bank-by-phone, annuity
payments and payroll allotments, by mail directly from the third party.
Investors should contact their employers or financial institutions who in turn
should contact the Fund for proper instructions.
Retirement Plans for the Fund Classes
An investment in the Series may be suitable
for tax-deferred retirement plans. Among the retirement plans noted below, Class
B Shares are available for investment only by Individual Retirement Accounts,
Simplified Employee Pension Plans, 457 Deferred Compensation Plans and 403(b)(7)
Deferred Compensation Plans. The CDSC may be waived on certain redemptions of
Class B and Class C Shares. See Waiver of CDSC Class B and Class C Shares under
Redemption and Exchange in the Prospectus for the Fund Classes for a list of the
instances in which the CDSC is waived.
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Each purchase of Class B Shares is subject to a maximum purchase
limitation of $250,000 for retirement plans. Each purchase of Class C Shares
must be in an amount that is less than $1,000,000 for such plans. The maximum
purchase limitations apply only to the initial purchase of shares by the
retirement plan.
Minimum investment limitations generally applicable to other investors do
not apply to retirement plans other than Individual Retirement Accounts
("IRAs"), for which there is a minimum initial purchase of $250 and a minimum
subsequent purchase of $25 regardless of which class is selected. Retirement
plans may be subject to plan establishment fees, annual maintenance fees and/or
other administrative or trustee fees. Fees are based upon the number of
participants in the plan as well as the services selected. Additional
information about fees is included in retirement plan materials. Fees are quoted
upon request. Annual maintenance fees may be shared by Delaware Management Trust
Company, the Transfer Agent, other affiliates of the Manager and others that
provide services to such plans.
Certain shareholder investment services available to non-retirement plan
shareholders may not be available to retirement plan shareholders. Certain
retirement plans may qualify to purchase shares of the Institutional Class. See
Institutional Classes above. For additional information on any of the plans and
Delaware's retirement services, call the Shareholder Service Center telephone
number.
It is advisable for an investor considering any one of the retirement
plans described below to consult with an attorney, accountant or a qualified
retirement plan consultant. For further details, including applications for any
of these plans, contact your investment dealer or the Distributor.
Taxable distributions from the retirement plans described below may be
subject to withholding.
Please contact your investment dealer or the Distributor for the special
application forms required for the plans described below.
Prototype Profit Sharing or Money Purchase
Pension Plans
Prototype Plans are available for self-employed individuals, partnerships
and corporations which replace the former Keogh and corporate retirement plans.
These plans contain profit sharing or money purchase pension plan provisions.
Contributions may be invested only in Class A and Class C Shares.
Individual Retirement Account ("IRA")
A document is available for an individual
who wants to establish an IRA by making contributions which may be
tax-deductible, even if the individual is already participating in an
employer-sponsored retirement plan. Even if contributions are not deductible for
tax purposes, as indicated below, earnings will be tax-deferred. In addition, an
individual may make contributions on behalf of a spouse who has no compensation
for the year or elects to be treated as having no compensation for the year.
Investments in each of the Fund Classes are permissible.
The Tax Reform Act of 1986 (the "Act") restructured, and in some cases
eliminated, the tax deductibility of IRA contributions. Under the Act, the full
deduction for IRAs ($2,000 for each working spouse and $2,250 for one-income
couples) was retained for all taxpayers who are not covered by an
employer-sponsored retirement plan. Even if a taxpayer (or his or her spouse) is
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covered by an employer-sponsored retirement plan, the full deduction is still
available if the taxpayer's adjusted gross income is below $25,000 ($40,000 for
taxpayers filing joint returns). A partial deduction is allowed for married
couples with incomes between $40,000 and $50,000, and for single individuals
with incomes between $25,000 and $35,000. The Act does not permit deductions for
contributions to IRAs by taxpayers whose adjusted gross income before IRA
deductions exceeds $50,000 ($35,000 for singles) and who are active participants
in an employer-sponsored retirement plan. Taxpayers who are not allowed
deductions on IRA contributions still can make nondeductible IRA contributions
of as much as $2,000 for each working spouse ($2,250 for one-income couples),
and defer taxes on interest or other earnings from the IRAs. Special rules apply
for determining the deductibility of contributions made by married individuals
filing separate returns.
A company or association may establish a Group IRA for employees or
members who want to purchase shares of the Series. Purchases of $1 million or
more of Class A Shares qualify for purchase at net asset value but may, under
certain circumstances, be subject to a Limited CDSC. See Purchasing Shares
concerning reduced front-end sales charges applicable to Class A Shares.
Investments generally must be held in the IRA until age 59 1/2 in order
to avoid premature distribution penalties, but distributions generally must
commence no later than April 1 of the calendar year following the year in which
the participant reaches age 70 1/2. Individuals are entitled to revoke the
account, for any reason and without penalty, by mailing written notice of
revocation to Delaware Management Trust Company within seven days after the
receipt of the IRA Disclosure Statement or within seven days after the
establishment of the IRA, except, if the IRA is established more than seven days
after receipt of the IRA Disclosure Statement, the account may not be revoked.
Distributions from the account (except for the pro-rata portion of any
nondeductible contributions) are fully taxable as ordinary income in the year
received. Excess contributions removed after the tax filing deadline, plus
extensions, for the year in which the excess contributions were made are subject
to a 6% excise tax on the amount of excess. Premature distributions
(distributions made before age 59 1/2, except for death, disability and certain
other limited circumstances) will be subject to a 10% excise tax on the amount
prematurely distributed, in addition to the income tax resulting from the
distribution. See Class B Shares and Class C Shares under Alternative Purchase
Arrangements in the Fund Classes' Prospectus concerning the applicability of a
CDSC upon redemption.
See Appendix A for additional IRA information.
Simplified Employee Pension Plan ("SEP/IRA")
A SEP/IRA may be established by an
employer who wishes to sponsor a tax-sheltered retirement program by making
contributions on behalf of all eligible employees. Each of the Fund Classes is
available for investment by a SEP/IRA.
Salary Reduction Simplified Employee Pension
Plan ("SAR/SEP")
Employers with twenty-five or fewer eligible employees can establish this
plan which permits employer contributions and salary deferral contributions in
Class A Shares and Class C Shares only.
Prototype 401(k) Defined Contribution Plan
Section 401(k) of the Code permits employers
to establish qualified plans based on salary deferral contributions. Plan
documents are available to enable employers to establish a plan. An employer may
also elect to make profit sharing contributions and/or matching contributions
with investments in only Class A Shares and Class C Shares or certain other
funds in the Delaware Group. Purchases under the plan may be combined for
purposes of computing the reduced front-end sales charge applicable to Class A
Shares as set forth in the table on page .
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Deferred Compensation Plan for Public Schools
and Non-Profit Organizations ("403(b)(7)")
Section 403(b)(7) of the Code permits public school systems and certain
non-profit organizations to use mutual fund shares held in a custodial account
to fund deferred compensation arrangements for their employees. A custodial
account agreement is available for those employers who wish to purchase any of
the Fund Classes in conjunction with such an arrangement. Applicable front-end
sales charges with respect to Class A Shares for such purchases are set forth in
the table on page .
Deferred Compensation Plan for State and Local
Government Employees ("457")
Section 457 of the Code permits state and local governments, their
agencies and certain other entities to establish a deferred compensation plan
for their employees who wish to participate. This enables employees to defer a
portion of their salaries and any federal (and possibly state) taxes thereon.
Such plans may invest in shares of any of the Fund Classes. Although investors
may use their own plan, there is available a Delaware Group 457 Deferred
Compensation Plan. Interested investors should contact the Distributor or their
investment dealers to obtain further information. Applicable front-end sales
charges for such purchases of Class A Shares are set forth in the table on page
.
DETERMINING OFFERING PRICE AND NET
ASSET VALUE
Orders for purchases of Class A Shares are effected at the offering price
next calculated by a Series after receipt of the order by the Fund or its agent.
Orders for purchases of Class B Shares, Class C Shares and the Institutional
Classes are effected at the net asset value per share next calculated after
receipt of the order by the Fund or its agent. Selling dealers have the
responsibility of transmitting orders promptly.
The offering price for Class A Shares consists of the net asset value per
share plus any applicable front-end sales charges. Offering price and net asset
value are computed as of the close of regular trading on the New York Stock
Exchange (ordinarily, 4 p.m., Eastern time) on days when the Exchange is open.
The New York Stock Exchange is scheduled to be open Monday through Friday
throughout the year except for New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas. When the
New York Stock Exchange is closed, the Fund will generally be closed, pricing
calculations will not be made and purchase and redemption orders will not be
processed.
An example showing how to calculate the net asset value per share and, in
the case of Class A Shares, the offering price per share, is included in the
Series' financial statements which are incorporated by reference into this Part
B.
Each Series' net asset value per share is computed by adding the value of
all the securities and other assets in the Series' portfolio, deducting any
liabilities of the Series, and dividing by the number of Series' shares
outstanding. Expenses and fees are accrued daily. In determining a Series' total
net assets, portfolio securities primarily listed or traded on a national or
foreign securities exchange, except for bonds, are valued at the last sale price
on that exchange. Exchange traded options are valued at the last reported sale
price or, if no sales are reported, at the mean between bid and asked prices.
Non-exchange traded options are valued at fair value using a mathematical model.
Futures contracts are valued at their daily quoted settlement price. For
valuation purposes, foreign securities initially expressed in foreign currency
values will be converted into U.S. dollar values at the mean between the bid and
offered quotations of such currencies against U.S. dollars as last quoted by any
recognized dealer or major bank which is a regular participant in the
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institutional foreign exchange markets. Securities not traded on a particular
day, over-the-counter securities, and government and agency securities are
valued at the mean value between bid and asked prices. Money market instruments
having a maturity of less than sixty days are valued at amortized cost. Debt
securities (other than short-term obligations) are valued on the basis of
valuations provided by a pricing service when such prices are believed to
reflect the fair value of such securities. Use of a pricing service has been
approved by the Board of Directors. Prices provided by a pricing service take
into account appropriate factors such as institutional trading in similar groups
of securities, yield, quality, coupon rate, maturity, type of issue, trading
characteristics and other market data. Subject to the foregoing, securities for
which market quotations are not readily available and other assets are valued at
fair value as determined in good faith and in a method approved by the Board of
Directors.
Each class of a Series will bear, pro-rata, all of the common expenses of
that Series. The net asset values of all outstanding shares of each class of a
Series will be computed on a pro-rata basis for each outstanding share based on
the proportionate participation in a Series represented by the value of shares
of that class. All income earned and expenses incurred by a Series will be borne
on a pro-rata basis by each outstanding share of a class, based on each class'
percentage in a Series represented by the value of shares of such classes,
except that the Institutional Classes will not incur any of the expenses under
the Fund's 12b-1 Plans and shares of the Fund Classes alone will bear the 12b-1
Plan fees payable under their respective Plans. Due to the specific distribution
expenses and other costs that will be allocable to each class, the net asset
value of each class of a Series will vary.
REDEMPTION AND REPURCHASE
Any shareholder may require the Fund to redeem Series shares by sending a
written request, signed by the record owner or owners exactly as the shares are
registered, to the Fund, 1818 Market Street, Philadelphia, PA 19103. In
addition, certain redemption methods described below are available when stock
certificates have not been issued. The Fund does not issue certificates for
Class A Shares or Institutional Class shares, unless a shareholder specifically
requests them. The Fund does not issue certificates for Class B Shares or Class
C Shares. If stock certificates have been issued for shares being redeemed, they
must accompany the written request. For redemptions of $50,000 or less paid to
the shareholder at the address of record, the Fund requires a request signed by
all owners of the shares or the investment dealer of record, but does not
require signature guarantees. When the redemption is for more than $50,000, or
if payment is made to someone else or to another address, signatures of all
record owners are required and a signature guarantee may be required. Each
signature guarantee must be supplied by an eligible guarantor institution. The
Fund reserves the right to reject a signature guarantee supplied by an eligible
institution based on its creditworthiness. The Fund may request further
documentation from corporations, retirement plans, executors, administrators,
trustees or guardians.
In addition to redemption of Series shares by the Fund, the Distributor,
acting as agent of the Fund, offers to repurchase Series shares from
broker/dealers acting on behalf of shareholders. The redemption or repurchase
price, which may be more or less than the shareholder's cost, is the net asset
value per share next determined after receipt of the request in good order by
the Fund or its agent, less any applicable CDSC or Limited CDSC. This is
computed and effective at the time the offering price and net asset value are
determined. See Determining Offering Price and Net Asset Value. The Fund and the
Distributor end their business day at 5 p.m., Eastern time. This offer is
discretionary and may be completely withdrawn without further notice by the
Distributor.
Orders for the repurchase of Series shares which are submitted to the
Distributor prior to the close of its business day will be executed at the net
asset value per share computed that day (subject to any applicable CDSC or
Limited CDSC), if the repurchase order was received by the broker/dealer from
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the shareholder prior to the time the offering price and net asset value are
determined on such day. The selling dealer has the responsibility of
transmitting orders to the Distributor promptly. Such repurchase is then settled
as an ordinary transaction with the broker/dealer (who may make a charge to the
shareholder for this service) delivering the shares repurchased.
Certain redemptions of Class A Shares purchased at net asset value may
result in the imposition of a Limited CDSC. See Contingent Deferred Sales Charge
for Certain Purchases of Class A Shares Made at Net Asset Value under Redemption
and Exchange in the Prospectus for the Fund Classes. Class B Shares are subject
to a CDSC of: (i) 4% if shares are redeemed within two years of purchase; (ii)
3% if shares are redeemed during the third or fourth year following purchase;
(iii) 2% if shares are redeemed during the fifth year following purchase; and
(iv) 1% if shares are redeemed during the sixth year following purchase. Class C
Shares are subject to a CDSC of 1% if shares are redeemed within twelve months
following purchase. See Contingent Deferred Sales Charge under Buying Shares in
the Prospectus for the Fund Classes. Except for the applicable CDSC or Limited
CDSC and, with respect to the expedited payment by wire described below, for
which there is currently a $7.50 bank wiring cost, neither the Fund nor the
Distributor charges a fee for redemptions or repurchases, but such fees could be
charged at any time in the future.
Payment for shares redeemed will ordinarily be mailed the next business
day, but in no case later than seven days, after receipt of a redemption request
in good order.
If a shareholder who recently purchased shares by check seeks to redeem
all or a portion of those shares in a written request, the Fund will honor the
redemption request but will not mail the proceeds until it is reasonably
satisfied of the collection of the investment check. This potential delay can be
avoided by making investments by wiring Federal Funds.
If a shareholder has been credited with a purchase by a check which is
subsequently returned unpaid for insufficient funds or for any other reason, the
Fund will automatically redeem from the shareholder's account the Series shares
purchased by the check plus any dividends earned thereon. Shareholders may be
responsible for any losses to the Series or to the Distributor.
In case of a suspension of the determination of the net asset value
because the New York Stock Exchange is closed for other than weekends or
holidays, or trading thereon is restricted or an emergency exists as a result of
which disposal by a Series of securities owned by it is not reasonably
practical, or it is not reasonably practical for a Series fairly to value its
assets, or in the event that the SEC has provided for such suspension for the
protection of shareholders, a Series may postpone payment or suspend the right
of redemption or repurchase. In such case, the shareholder may withdraw the
request for redemption or leave it standing as a request for redemption at the
net asset value next determined after the suspension has been terminated.
Payment for shares redeemed or repurchased may be made either in cash or
kind, or partly in cash and partly in kind. Any portfolio securities paid or
distributed in kind would be valued as described in Determining Offering Price
and Net Asset Value. Subsequent sale by an investor receiving a distribution in
kind could result in the payment of brokerage commissions. However, the Fund has
elected to be governed by Rule 18f-1 under the Investment Company Act of 1940
pursuant to which the Fund is obligated to redeem Series shares solely in cash
up to the lesser of $250,000 or 1% of the net asset value of the Series during
any 90-day period for any one shareholder.
The value of a Series' investment is subject to changing market prices.
Thus, a shareholder reselling shares to a Series may sustain either a gain or
loss, depending upon the price paid and the price received for such shares.
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Small Accounts
Before the Fund involuntarily redeems shares from an account that, under
the circumstances noted in the relevant Prospectus, has remained below the
minimum amounts required by the Fund's Prospectuses and sends the proceeds to
the shareholder, the shareholder will be notified in writing that the value of
the shares in the account is less than the minimum required and will be allowed
sixty days from the date of notice to make an additional investment to meet the
required minimum. See The Conditions of Your Purchase under Buying Shares in the
Fund's Prospectuses. Any redemption in an inactive account established with a
minimum investment may trigger mandatory redemption. No CDSC or Limited CDSC
will apply to the redemptions described in this paragraph.
With respect to the International Equity Series and the Global Assets
Series only, effective November 29, 1995, the minimum initial investment in
Class A Shares was increased from $250 to $1,000. Class A accounts that were
established prior to November 29, 1995 and maintain a balance in excess of $250
will not presently be subject to the $9 quarterly service fee that may be
assessed on accounts with balances below the stated minimum nor subject to
involuntarily redemption.
* * *
The Fund has available certain redemption privileges, as described below.
The Fund reserves the right to suspend or terminate these expedited payment
procedures upon sixty days' written notice to shareholders.
Expedited Telephone Redemptions
Shareholders of the Fund Classes or their
investment dealers of record wishing to redeem any amount of shares of $50,000
or less for which certificates have not been issued may call the Fund at
800-523-1918 (in Philadelphia, 215-988-1241) or, in the case of shareholders of
the Institutional Classes, their Client Services Representative at 800- 828-5052
prior to the time the offering price and net asset value are determined, as
noted above, and have the proceeds mailed to them at the record address. Checks
payable to the shareholder(s) of record will normally be mailed the next
business day, but no later than seven days, after the receipt of the redemption
request. This option is only available to individual, joint and individual
fiduciary-type accounts.
In addition, redemption proceeds of $1,000 or more can be transferred to
your predesignated bank account by wire or by check by calling the Fund, as
described above. An authorization form must have been completed by the
shareholder and filed with the Fund before the request is received. Payment will
be made by wire or check to the bank account designated on the authorization
form as follows:
1. Payment by Wire: Request that Federal Funds be wired to the bank
account designated on the authorization form. Redemption proceeds will normally
be wired on the next business day following receipt of the redemption request.
There is a $7.50 wiring fee (subject to change) charged by CoreStates Bank, N.A.
which will be deducted from the withdrawal proceeds each time the shareholder
requests a redemption. If the proceeds are wired to the shareholder's account at
a bank which is not a member of the Federal Reserve System, there could be a
delay in the crediting of the funds to the shareholder's bank account.
2. Payment by Check: Request a check be mailed to the bank account
designated on the authorization form. Redemption proceeds will normally be
mailed the next business day, but no later than seven days, from the date of the
telephone request. This procedure will take longer than the Payment by Wire
option (1 above) because of the extra time necessary for the mailing and
clearing of the check after the bank receives it.
Redemption Requirements: In order to change the name of the bank and the
account number it will be necessary to send a written request to the Fund and a
signature guarantee may be required. Each signature guarantee must be supplied
by an eligible guarantor institution. The Fund reserves the right to reject a
signature guarantee supplied by an eligible institution based on its
creditworthiness.
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To reduce the shareholder's risk of attempted fraudulent use of the
telephone redemption procedure, payment will be made only to the bank account
designated on the authorization form.
The Fund will not honor telephone redemptions for Series shares recently
purchased by check unless it is reasonably satisfied that the purchase check has
cleared.
If expedited payment under these procedures could adversely affect a
Series, the Fund may take up to seven days to pay the shareholder.
Neither the Fund nor the Transfer Agent is responsible for any
shareholder loss incurred in acting upon written or telephone instructions for
redemption or exchange of Series shares which are reasonably believed to be
genuine. With respect to such telephone transactions, the Fund will follow
reasonable procedures to confirm that instructions communicated by telephone are
genuine (including verification of a form of personal identification) as, if it
does not, the Fund or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent transactions. Telephone instructions received by
shareholders of the Fund Classes are generally tape recorded. A written
confirmation will be provided for all purchase, exchange and redemption
transactions initiated by telephone.
Systematic Withdrawal Plans
Shareholders of Class A, Class B and Class C Shares who own or purchase
$5,000 or more of shares at the offering price, or net asset value, as
applicable, for which certificates have not been issued may establish a
Systematic Withdrawal Plan for monthly withdrawals of $25 or more, or quarterly
withdrawals of $75 or more, although the Fund does not recommend any specific
amount of withdrawal. This $5,000 minimum does not apply for a Series' prototype
retirement plans. Shares purchased with the initial investment and through
reinvestment of cash dividends and realized securities profits distributions
will be credited to the shareholder's account and sufficient full and fractional
shares will be redeemed at the net asset value calculated on the third business
day preceding the mailing date.
Checks are dated either the 1st or the 15th of the month, as selected by
the shareholder (unless such date falls on a holiday or a weekend) and are
normally mailed within two business days. Both ordinary income dividends and
realized securities profits distributions will be automatically reinvested in
additional shares of a class at net asset value. This plan is not recommended
for all investors and should be started only after careful consideration of its
operation and effect upon the investor's savings and investment program. To the
extent that withdrawal payments from the plan exceed any dividends and/or
realized securities profits distributions paid on shares held under the plan,
the withdrawal payments will represent a return of capital and the share balance
may in time be depleted, particularly in a declining market.
The sale of shares for withdrawal payments constitutes a taxable event
and a shareholder may incur a capital gain or loss for federal income tax
purposes. This gain or loss may be long-term or short-term depending on the
holding period for the specific shares liquidated. Premature withdrawals from
retirement plans may have adverse tax consequences.
Withdrawals under this plan by the holders of Class A Shares or any
similar plan of any other investment company charging a front-end sales charge
made concurrently with the purchases of the Class A Shares of this or the shares
of any other investment company will ordinarily be disadvantageous to the
shareholder because of the payment of duplicative sales charges. Shareholders
should not purchase Class A Shares while participating in a Systematic
Withdrawal Plan and a periodic investment program in a fund managed by the
Manager must be terminated before a Systematic Withdrawal Plan can take effect,
except if the shareholder is a participant in one of our retirement plans or is
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investing in Delaware Group funds which do not carry a sales charge. Also,
redemptions of Class A Shares pursuant to a Systematic Withdrawal Plan may be
subject to a Limited CDSC if the purchase was made at net asset value and a
dealer's commission has been paid on that purchase. Redemptions of Class B
Shares or Class C Shares pursuant to a Systematic Withdrawal Plan may be subject
to a CDSC, unless the annual amount selected to be withdrawn is less than 12% of
the account balance on the date that the Systematic Withdrawal Plan was
established. See Waiver of CDSC - Class B and Class C Shares and Waiver of
Limited CDSC - Class A Shares under Redemption and Exchange in the Prospectus
for the Fund Classes.
An investor wishing to start a Systematic Withdrawal Plan must complete
an authorization form. If the recipient of Systematic Withdrawal Plan payments
is other than the registered shareholder, the shareholder's signature on this
authorization must be guaranteed. Each signature guarantee must be supplied by
an eligible guarantor institution. The Fund reserves the right to reject a
signature guarantee supplied by an eligible institution based on its
creditworthiness. This plan may be terminated by the shareholder or the Transfer
Agent at any time by giving written notice.
The Systematic Withdrawal Plan is not available with respect to the
Institutional Classes.
Wealth Builder Option
Shareholders of the Fund Classes may elect to invest in one or more of
the other mutual funds in the Delaware Group through our Wealth Builder Option.
Under this automatic exchange program, shareholders can authorize regular
monthly investments (minimum of $100 per fund) to be liquidated from their
account and invested automatically into other mutual funds in the Delaware
Group, subject to the conditions and limitations set forth in the Fund Classes'
Prospectus. See Wealth Builder Option and Redemption and Exchange in the
Prospectus for the Fund Classes.
The investment will be made on the 20th day of each month (or, if the
fund selected is not open that day, the next business day) at the public
offering price or net asset value, as applicable, of the fund selected on the
date of investment. No investment will be made for any month if the value of the
shareholder's account is less than the amount specified for investment.
Periodic investment through the Wealth Builder Option does not insure
profits or protect against losses in a declining market. The price of the fund
into which investments are made could fluctuate. Since this program involves
continuous investment regardless of such fluctuating value, investors selecting
this option should consider their financial ability to continue to participate
in the program through periods of low fund share prices. This program involves
automatic exchanges between two or more fund accounts and is treated as a
purchase of shares of the fund into which investments are made through the
program. See Exchange Privilege for a brief summary of the tax consequences of
exchanges.
Shareholders can also use the Wealth Builder Option to invest in the Fund
Classes through regular liquidations of shares in their accounts in other mutual
funds in the Delaware Group, subject to the conditions and limitations described
in the Fund Classes' Prospectus. Shareholders can terminate their participation
at any time by written notice to the Fund.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, Profit Sharing and Money Purchase Pension Plans, 401(k)
Defined Contribution Plans, 403(b)(7) Deferred Compensation Plans or 457
Deferred Compensation Plans. This option also is not available to shareholders
of the Institutional Classes.
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DISTRIBUTIONS
The International Equity Series and the Global Assets Series will
normally declare and make payments from net investment income on a quarterly
basis. The Global Bond Series will normally declare and make payments from net
investment income on a monthly basis.
Payments from net realized securities profits of a Series, if any, will
be distributed annually in the quarter following the close of the fiscal year.
Dividend payments of $1.00 or less will be automatically reinvested,
notwithstanding a shareholder's election to receive dividends in cash. If such a
shareholder's dividends increase to greater than $1.00, the shareholder would
have to file a new election in order to begin receiving dividends in cash again.
Any check in payment of dividends or other distributions which cannot be
delivered by the U.S. Post Office or which remains uncashed for a period of more
than one year may be reinvested in the shareholder's account at the then-current
net asset value and the dividend option may be changed from cash to reinvest. A
Series may deduct from a shareholder's account the costs of the Series' effort
to locate a shareholder if a shareholder's mail is returned by the U.S. Post
Office or the Series is otherwise unable to locate the shareholder or verify the
shareholder's mailing address. These costs may include a percentage of the
account when a search company charges a percentage fee in exchange for their
location services. See also Other Tax Requirements under Accounting and Tax
Issues.
Each class of shares of a Series will share proportionately in the
investment income and expenses of that Series, except that Class A Shares, Class
B Shares and Class C Shares alone will incur distribution fees under their
respective 12b-1 Plans. See Plans Under Rule 12b-1 for the Fund Classes.
During the fiscal year ended November 30, 1994, dividends totaling
$0.225, $0.030 and $0.245 per share of the International Equity Fund A Class,
the International Equity Fund B Class and the International Equity Fund
Institutional Class, respectively, were paid from net investment income. In
addition, a distribution of $0.140 per share was paid from the realized
securities profits of the International Equity Fund A Class and the
International Equity Fund Institutional Class. On January 6, 1995, a dividend of
$0.095, $0.085 and $0.130 per share was paid from net investment income to
International Equity Fund A Class, International Equity Fund B Class and
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International Equity Fund Institutional Class shareholders of record December
27, 1994, respectively. On the same date, a distribution of $0.470 per share was
paid from realized securities profits to International Equity Fund A Class,
International Equity Fund B Class and International Equity Fund Institutional
Class shareholders of record December 27, 1994.
INVESTMENT MANAGEMENT AGREEMENT
AND SUB-ADVISORY AGREEMENT
Delaware International Advisers Ltd. ("Delaware International" or the
"Manager"), located at Veritas House, 125 Finsbury Pavement, London, England
EC2A 1NQ, furnishes investment management services to each Series, subject to
the supervision and direction of the Fund's Board of Directors. Delaware
International is affiliated with Delaware Management Company, Inc. ("DMC").
Delaware International has entered into a Sub- Advisory Agreement with DMC for
the Global Assets Series.
DMC and its predecessors have been managing the funds in the Delaware
Group since 1938. The aggregate assets of these funds on November 30, 1994 were
approximately $9,237,192,000. Investment advisory services are also provided to
institutional accounts with assets on November 30, 1994 of approximately
$15,544,258,000.
The Investment Management Agreement for each Series and the Sub-Advisory
Agreement for the Global Assets Series are dated April 3, 1995 and were approved
by shareholders on March 29, 1995.
The Agreements have an initial term of two years and may be further
renewed after their initial terms only so long as such renewal and continuance
are specifically approved at least annually by the Board of Directors or by vote
of a majority of the outstanding voting securities of the Series, and only if
the terms of the renewal thereof have been approved by the vote of a majority of
the directors of the Fund who are not parties thereto or interested persons of
any such party, cast in person at a meeting called for the purpose of voting on
such approval. The Agreements are terminable without penalty on sixty days'
notice by the directors of the Fund or by the Manager. The Agreements will
terminate automatically in the event of their assignment.
The Manager manages each Series' investments. The compensation paid by
each Series for investment management services is equal to 1/16 of 1% of each
Series' respective average daily net assets during the month (the equivalent of
.75 of 1% per year), less all directors' fees paid to the unaffiliated directors
by the Series. This fee may be higher than that paid by most funds which are not
international equity funds.
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Under the Sub-Advisory Agreement, DMC manages the Global Assets Series'
investments in U.S. securities. DMC will receive from the Manager, 25% of the
investment management fees under the Manager's Investment Management Agreement
with the Fund on behalf of the Global Assets Series.
On November 30, 1994, the net assets of the International Equity Series
were $61,972,724.
Beginning June 1, 1994, Delaware International elected voluntarily to
waive that portion, if any, of the annual management fees payable by the
International Equity Series and to reimburse the Series to the extent necessary
to ensure that the Total Operating Expenses of the International Equity Fund A
Class and the International Equity Fund Institutional Class did not
exceed 1.50% (exclusive of taxes, interest, brokerage commissions, extraordinary
expenses and, in the case of the International Equity Fund A Class, 12b-1
expenses) through November 30, 1994. Prior to June 1, 1994, a waiver and
reimbursement commitment was in place to ensure expenses did not exceed 1.25%
(exclusive of taxes, interest, brokerage commissions and extraordinary expenses,
but inclusive of 12b-1 expenses) and 0.95% (exclusive of taxes, interest,
brokerage commissions and extraordinary expenses) for the International Equity
Fund A Class and the International Equity Fund Institutional Class,
respectively. Through November 30, 1994, the waiver and reimbursement noted
above with respect to the International Equity Fund A Class also applied to the
International Equity Fund B Class. Delaware International has also elected to
voluntarily waive that portion, if any, of the annual management fees payable by
the Global Bond Series and the Global Assets Series to ensure that the Total
Operating Expenses of these Series (exclusive of taxes, interest, brokerage
commissions, extraordinary expenses and, in the case of the Global Bond Fund A
Class, the Global Bond Fund B Class, the Global Assets Fund A Class and the
Global Assets Fund B Class, 12b-1 expenses) do not exceed .95% through November
30, 1995. For the fiscal years ended November 30, 1992 and 1993, the Manager
voluntarily waived its entire investment management fees of $17,405 and
$146,221, respectively, and reimbursed the International Equity Series for
expenses in the amounts of $105,534 and $36,188, respectively. For the fiscal
year ended November 30, 1994, the investment management fee of the International
Equity Series amounted to $415,544 of which $149,271 was waived and $266,273 was
paid. Effective November 29, 1995, Delaware International has elected
voluntarily to waive that portion, if any, of the annual management fees payable
by the International Equity Series, the Global Bond Series and the Global Assets
Series to the extent necessary to ensure that the Total Operating Expenses of
the Class A Shares of those Series do not exceed 1.85%, 1.25% and 1.25%,
respectively, of the Class B Shares of those Series do not exceed 2.55%, 1.95%
and 1.95%, respectively, and of the Institutional Classes of those Series do
not exceed 1.55%, 0.95% and 0.95%, respectively (in each case, exclusive of
taxes, interest, brokerage commissions and extraordinary expenses, but inclusive
of 12b-1 expenses) through May 31, 1996.
Delaware International and DMC are controlled and indirectly,
wholly-owned by Delaware Management Holdings, Inc.
Except for those expenses borne by the Manager under the Investment
Management Agreements and the Distributor under the Distribution Agreements,
each Series is responsible for all of its own expenses. Among others, these
include each Series' proportionate share of rent and certain other
administrative expenses; the investment management fees; transfer and dividend
disbursing agent fees and costs; custodian expenses; federal and state
securities registration fees; proxy costs; and the costs of preparing
prospectuses and reports sent to shareholders. For the fiscal year ended
November 30, 1994, the ratio of expenses to average net assets for the
International Equity Fund A Class was 1.56%, reflecting the impact of its 12b-1
Plan. The ratio of expenses to average daily net assets for the International
Equity Fund Institutional Class was 1.26%. These ratios reflect the voluntary
waiver of fees by the Manager described above. Based on the expenses derived
from the Class A Shares of the International Equity Series, the expenses of the
Class B Shares are expected to be 2.55%, reflecting the impact of its 12b-1
Plan. The ratios of expenses to average daily net assets for the Global Bond
Fund A Class, the Global Bond Fund B Class and the Global Bond Fund
Institutional Class are expected to be 1.25%, 1.95% and 0.95%, respectively,
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reflecting the waiver of fees by the Manager described above. The ratios of
expenses to average daily net assets for the Global Assets Fund A Class, the
Global Assets Fund B Class and the Global Assets Fund Institutional Class are
expected to be 1.25%, 1.95% and 0.95%, respectively, reflecting the waiver of
fees by the Manager described above. The Fund anticipates that the ratio of
expenses to average daily net assets of Class C Shares will be identical to that
of Class B Shares.
By California regulation, the Manager is required to waive certain fees
and reimburse the Series for certain expenses to the extent that the Series'
operating expenses, exclusive of taxes, interest, brokerage commissions and
extraordinary expenses, exceed 2 1/2% of its first $30 million of average daily
net assets, 2% of the next $70 million of average daily net assets and 1 1/2% of
any additional average daily net assets. For the fiscal year ended November 30,
1994, no such reimbursement was necessary or paid.
Distribution and Service
The Distributor, Delaware Distributors, L.P. (which formerly conducted
business as Delaware Distributors, Inc.), located at 1818 Market Street, serves
as the national distributor of each Series' shares under separate Distribution
Agreements dated April 3, 1995, as amended on November 29, 1995. The Distributor
is an affiliate of the Manager and bears all of the costs of promotion and
distribution, except for payments by each Series on behalf of its respective
Class A Shares, Class B Shares and Class C Shares under the 12b-1 Plan for each
class. Prior to January 3, 1995, Delaware Distributors, Inc. ("DDI") served as
the national distributor of the Series' shares. On that date, Delaware
Distributors, L.P., a newly formed limited partnership, succeeded to the
business of DDI. All officers and employees of DDI became officers and employees
of Delaware Distributors, L.P. DDI is the corporate general partner of Delaware
Distributors, L.P. and both DDI and Delaware Distributors, L.P. are indirect,
wholly-owned subsidiaries of Delaware Management Holdings, Inc.
The Transfer Agent, Delaware Service Company, Inc., another affiliate of
the Manager located at 1818 Market Street, Philadelphia, PA 19103, serves as the
Series' shareholder servicing, dividend disbursing and transfer agent pursuant
to a Shareholders Services Agreement dated October 25, 1991. The Transfer Agent
is also an indirect, wholly-owned subsidiary of Delaware Management Holdings,
Inc.
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OFFICERS AND DIRECTORS
The business and affairs of the Fund are managed under the direction of
its Board of Directors.
Certain officers and directors of the Fund hold identical positions in
each of the other funds in the Delaware Group. On October 31, 1995, the Fund's
officers and directors owned less than 1% of the outstanding shares of the
International Equity Fund A Class and the International Equity Fund B Class,
respectively, and approximately 8.40% of the outstanding shares of the
International Equity Fund Institutional Class; approximately 6.85% and 28.58%,
respectively, of the outstanding shares of the Global Bond Fund A Class and the
Global Bond Fund Institutional Class and less than 1% of the outstanding shares
of the Global Bond Fund B Class; and approximately 29.60% of the outstanding
shares of the Global Assets Fund Institutional Class and less than 1% of the
outstanding shares of the Global Assets Fund A Class and the Global Assets Fund
B Class, respectively.
As of October 31, 1995, the Fund believes the following accounts held 5%
or more of the outstanding shares of the International Equity Fund A Class,
Intentional Equity Fund Institutional Class and International Equity Fund B
Class: Merrill, Lynch, Pierce, Fenner & Smith Inc., Mutual Fund Operations, P.O.
Box 41621, Jacksonville, FL 32203 held of record for the benefit of others
269,747 shares (5.30%) of the outstanding shares of the International Equity
Fund A Class. Price Waterhouse, LLP, 401(k) Savings Plan, National
Administrative Center, P.O. Box 30004, Tampa, FL 33630 held 374,860 shares
(41.11%) and Delaware Management Company, Inc., Employee Profit Sharing Trust,
1818 Market Street, Philadelphia, PA 19103 held 255,408 shares (28.01%) of the
outstanding shares of the International Equity Fund Institutional Class. Shares
held by Delaware Management Company, Inc., Employee Profit Sharing Trust are
beneficially owned by the participants in that plan. Merrill, Lynch, Pierce,
Fenner & Smith Inc., Mutual Fund Operations, Attention Book Entry, 4800 Deer
Lake Drive East, 3rd Fl., Jacksonville, FL 32246 held of record for the benefit
of others 17,750 shares (6.65%) and Fox & Company, P.O. Box 976, New York, NY
10268 held 17,020 shares (6.38%) of the outstanding shares of the International
Equity Fund B Class.
As of the October 31, 1995, the Fund believes the following accounts held
5% or more of the outstanding shares of, respectively, the Global Assets Fund A
Class, Global Assets Fund Institutional Class and Global Assets Fund B Class:
U.S Clearing Corp., Cust. for Rosemary A. Theis IRA, 10001 W. Frontage Road 165,
South Gate, CA 90280 held 5,987 shares (6.49%); Resch S. Tile, Inc., Highway N.
East P.O. Box 223, Birnamwood, WI 54414 held 5,781 shares (6.27%); Louise H.
Durbin and LuAnn Hyder & Laurie Clement Co., TUW Gilbert Durbin Trust, FBO
Louise H. Durbin, 59 Cortland Ave. 337, Stamford, CT 06902; and Jay L. Lewis 525
West End Ave., New York, NY 10024 held 4,609 shares (5.00%) of the outstanding
shares of the Global Assets Fund A Class. Delaware Management Company, Inc.,
Employee Profit Sharing Trust, 1818 Market Street, Philadelphia, PA 19103 held
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<PAGE>
96,174 shares (53.20%); Delaware Management Company, Inc., Employee Profit
Sharing Trust, FBO Harold Ofstie held 18,253 shares (8.43%); Delaware Management
Company, Inc., Employee Profit Sharing Trust, FBO Richard G. Unruh held 12,255
shares (6.77%); Delaware Management Company, Inc., Employee Profit Sharing
Trust, FBO Edward N. Antoian held 10,216 shares (5.65%); Delaware Management
Company, Inc., Employee Profit Trust, FBO Dennis L. Adams held 10,216 shares
(5.65%); and Delaware Management Company, Inc., c/o Joseph H. Hastings, 1818
Market Street, Philadelphia, PA 19103 held 81,729 shares (45.21%) of the
outstanding shares of the Global Assets Fund Institutional Class. Shares held by
Delaware Management Company, Inc., Employee Profit Sharing Trust are
beneficially owned by the participants in that plan, including those named for
the benefit of above. Prudential Securities FBO, Warren K. Stratton and Joanne
K. Stratton CO-TTEES, The WK Stratton and JB Stratton Living Trust, UA DTD
7/24/91, Bedford, NH 03110 held 6,442 shares (30.54%), Prudential Securities
FBO, Warren Stratton TTEE, Canfield Grandchildren's Group Trust, UA DTD 4/14/94,
71 Pilgrim Drive, Bedford, NH 03110 held 2,176 shares (10.31%) and Dain
Bosworth, Inc., Custodian Thomas Slota, MD, A/C 7458-9762, Thomas Slota ISERP,
2350 W. Villard Ave., Suite 104, Milwaukee, WI 53209 held 1,275 shares (6.04%)
of the outstanding shares of the Global Assets Fund B Class.
As of the October 31, 1995, the Fund believes the following accounts held
5% or more of the outstanding shares of, respectively, the Global Bond Fund A
Class, Global Bond Fund Institutional Class and Global Bond Fund B Class:
Prudential Securities FBO, Russell W. Bagley, IRA DTD 4/13/95, 5700 Northwood
Rdg., Bloomington, MN 55437 held 8,878 shares (11.55%); U.S. Clearing Corp.,
Cust. Rosemary A. Thies IRA, 10001 W. Frontage Rd. 165, South Gate, CA 90280
held 6,543 shares (8.57%); Paul E. Suckow, 1219 Denbigh Ln., Radnor, PA 19087
held 5,271 shares (6.85%); and Brian F. Wruble, 7801 Huron Street, Philadelphia,
PA 19118 held 5,261 shares (6.84%) of the outstanding shares of the Global Bond
Fund A Class. Delaware Management Company, Inc., c/o Joseph H. Hastings, 1818
Market Street, Philadelphia, PA 19103 held 42,083 shares (53.44%); Delaware
Management Company, Inc., Employee Profit Sharing Trust, 1818 Market Street,
Philadelphia, PA 19103 held 35,874 shares (45.55%); Delaware Management Company,
Inc., Employee Profit Trust, FBO Edward N. Antoian held 10,521 shares (13.36%);
Delaware Management Company, Inc., Employee Profit Sharing Trust, FBO Dennis L.
Adams held 10,521 shares (13.36%); and Delaware Management Company, Inc.,
Employee Profit Sharing Trust, FBO Richard G. Unruh held 10,544 shares (13.40%)
of the outstanding shares of the Global Bond Fund Institutional Class. Shares
held by Delaware Management Company, Inc., Employee Profit Sharing Trust, are
beneficially owned by the participants in that plan, including those named for
the benefit of above. Prudential Securities FBO, Warren Stratton TTEE, Canfield
Grandchildren's Trust, UA DTD 4/14/94, 71 Pilgram Drive, Bedford, NH 03110 held
2,178 shares (28.19%); Prudential Securities FBO, Warren Stratton TTEE, Canfield
Grandchildren's Group Trust, UA DTD 4/14/94, 71 Pilgram Drive, Bedford, NH 03110
held 1,500 shares (19.41%); Colleen C. Reynolds, 19 Westview Dr., Danielson, CT
06239 held 1,366 shares (17.68%); Prudential Securities FBO, Warren Stratton
TTEE, Christopher Canfield Trust, UA DTD 4/14/94, 71 Pilgram Drive, Bedford, NH
03110 held 1,000 shares (12.94%); Prudential Securities FBO, Huei Chu Wu CF and
Frederick Wu, Under CA Uniform Transfers to Minors Act, P.O. Box 6504, Oxnard,
CA 93631 473 shares (6.12%); Prudential Securities FBO, Huei Chu Wu CF and
Lawrence Wu, Under CA Uniform Transfers to Minors Act, P.O. Box 6504, Oxnard, CA
93631 held 470 shares (6.08%); and Prudential Securities FBO, Huei Chu Wu CF and
Jonathan Wu, Under CA Uniform Transfers to Minors Act, P.O. Box 6504, Oxnard, CA
93631 held 468 shares (6.05%) of the outstanding shares of the Global Bond Fund
B Class.
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DMH Corp., Delaware Management Company, Inc., Delaware Distributors,
L.P., Delaware Distributors, Inc., Delaware Service Company, Inc., Delaware
Management Trust Company, Delaware International Holdings Ltd., Founders
Holdings, Inc., Delaware International Advisers Ltd. and Delaware Investment
Counselors, Inc. are direct or indirect, wholly-owned subsidiaries of Delaware
Management Holdings, Inc. ("DMH"). On April 3, 1995, a merger between DMH and a
wholly-owned subsidiary of Lincoln National Corporation ("Lincoln National") was
completed. In connection with the merger, new Investment Management Agreements
between the Fund on behalf of each Series and the Manager and a new Sub-Advisory
Agreement between the Manager and the Sub-Adviser on behalf of the Global Assets
Series and the Sub-Adviser were executed following shareholder approval. DMH,
the Manager and the Sub-Adviser are now wholly-owned subsidiaries, and subject
to the ultimate control, of Lincoln National. Lincoln National, with
headquarters in Fort Wayne, Indiana, is a diversified organization with
operations in many aspects of the financial services industry, including
insurance and investment management.
Directors and principal officers of the Fund are noted below along with
their ages and their business experience for the past five years. Unless
otherwise noted, the address of each officer and director is One Commerce
Square, Philadelphia, PA 19103.
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<PAGE>
*Wayne A. Stork (58)
Chairman, President, Chief Executive Officer, Director and/or Trustee of
the Fund, each of the other sixteen funds in the Delaware Group,
Delaware Management Holdings, Inc. and Delaware Investment
Counselors, Inc.
Chairman, Chief Executive Officer, Chief Investment Officer and Director
of Delaware Management Company, Inc.
Chairman, Chief Executive Officer and Director of DMH Corp., Delaware
International Advisers Ltd., Delaware International Holdings Ltd.
and Founders Holdings, Inc.
Director of Delaware Distributors, Inc. and Delaware Service
Company, Inc.
During the past five years, Mr. Stork has served in various executive
capacities at different times within the Delaware organization.
Winthrop S. Jessup (50)
Executive Vice President of the Fund, fifteen other funds in the Delaware
Group (which excludes Delaware Pooled Trust, Inc.) and Delaware
Management Holdings, Inc.
President and Chief Executive Officer of Delaware Pooled Trust, Inc.
President and Director of Delaware Investment Counselors, Inc.
Executive Vice President and Director of DMH Corp., Delaware Management
Company, Inc., Delaware International Holdings Ltd. and Founders
Holdings, Inc.
Vice Chairman and Director of Delaware Distributors, Inc.
Vice Chairman of Delaware Distributors, L.P.
Director of Delaware Management Trust Company, Delaware Service Company,
Inc. and Delaware International Advisers Ltd.
During the past five years, Mr. Jessup has served in various executive
capacities at different times within the Delaware organization.
Richard G. Unruh, Jr. (56)
Executive Vice President of the Fund and each of the other sixteen funds
in the Delaware Group. Executive Vice President and Director of Delaware
Management Company, Inc.
Senior Vice President of Delaware Management Holdings, Inc.
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<PAGE>
Director of Delaware International Advisers Ltd.
During the past five years, Mr. Unruh has served in various executive
capacities at different times within the Delaware organization.
- -------------
*Director affiliated with the investment manager of the Fund and considered an
"interested person" as defined in the Investment Company Act of 1940.
-55-
<PAGE>
Walter P. Babich (68)
Director and/or Trustee of the Fund and each of the other sixteen funds
in the Delaware Group.
460 North Gulph Road, King of Prussia, PA 19406.
Board Chairman, Citadel Constructors, Inc.
From 1986 to 1988, Mr. Babich was a partner of Irwin & Leighton and from
1988 to 1991, he was a partner of I&L Investors.
Anthony D. Knerr (56)
Director and/or Trustee of the Fund and each of the other sixteen funds
in the Delaware Group.
500 Fifth Avenue, New York, NY 10110.
Consultant, Anthony Knerr & Associates.
From 1982 to 1988, Mr. Knerr was Executive Vice President/Finance and
Treasurer of Columbia University, New York. From 1987 to 1989, he
was also a lecturer in English at the University. In addition, Mr.
Knerr was Chairman of The Publishing Group, Inc., New York, from
1988 to 1990.
Mr. Knerr founded The Publishing Group, Inc. in 1988.
-56-
<PAGE>
Ann R. Leven (55)
Director and/or Trustee of the Fund and each of the other sixteen funds
in the Delaware Group.
785 Park Avenue, New York, NY 10021.
Treasurer, National Gallery of Art.
From 1984 to 1990, Ms. Leven was Treasurer and Chief Fiscal Officer of
the Smithsonian Institution, Washington, DC, and from 1975 to 1994,
she was Adjunct Professor of Columbia Business School.
W. Thacher Longstreth (74)
Director and/or Trustee of the Fund and each of the other sixteen funds
in the Delaware Group.
1617 John F. Kennedy Boulevard, Philadelphia, PA 19103.
Vice Chairman, Packquisition Corp., a financial printing, commercial
printing and information processing firm.
Philadelphia City Councilman.
President, MLW, Associates.
Director, Tasty Baking Company.
Director, Healthcare Services Group.
Charles E. Peck (69)
Director and/or Trustee of the Fund and each of the other sixteen funds
in the Delaware Group.
P.O. Box 1102, Columbia, MD 21044.
Secretary, Enterprise Homes, Inc.
From 1981 to 1990, Mr. Peck was Chairman and Chief Executive Officer of
The Ryland Group, Inc., Columbia, MD.
David K. Downes (55)
Senior Vice President/Chief Administrative Officer/Chief Financial
Officer of the Fund, each of the other sixteen funds in the Delaware
Group and Delaware Management Company, Inc.
Chairman and Director of Delaware Management Trust Company.
Senior Vice President/Chief Administrative Officer/Chief Financial
Officer/Treasurer of Delaware Management Holdings, Inc.
Senior Vice President/Chief Financial Officer/Treasurer and Director of
DMH Corp.
Senior Vice President/Chief Administrative Officer/Chief Financial
Officer and Director of Delaware Service Company, Inc.
Senior Vice President/Chief Administrative Officer and Director of
Delaware Distributors, Inc.
Senior Vice President/Chief Administrative Officer of Delaware
Distributors, L.P.
Chief Financial Officer and Director of Delaware International Holdings
Ltd.
Senior Vice President/Chief Financial Officer/Treasurer of Delaware
Investment Counselors, Inc.
Senior Vice President and Director of Founders Holdings, Inc.
Director of Delaware International Advisers Ltd.
Before joining the Delaware Group in 1992, Mr. Downes was Chief
Administrative Officer, Chief Financial Officer and Treasurer of
Equitable Capital Management Corporation, New York, from December
1985 through August 1992, Executive Vice President from December
1985 through March 1992, and Vice Chairman from March 1992 through
August 1992.
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<PAGE>
George M. Chamberlain, Jr. (48)
Senior Vice President and Secretary of the Fund, each of the other
sixteen funds in the Delaware Group, Delaware Management Holdings,
Inc., Delaware Distributors, L.P. and Delaware Investment
Counselors, Inc.
Executive Vice President, Secretary and Director of Delaware Management
Trust Company.
Senior Vice President, Secretary and Director of DMH Corp., Delaware
Management Company, Inc., Delaware Distributors, Inc. and Delaware
Service Company, Inc.
Corporate Vice President, Secretary and Director of Founders Holdings,
Inc.
Secretary and Director of Delaware International Holdings Ltd.
Director of Delaware International Advisers Ltd.
Attorney.
During the past five years, Mr. Chamberlain has served in various
capacities at different times within the Delaware organization.
Paul E. Suckow (48)
Senior Vice President/Chief Investment Officer, Fixed Income of the Fund,
each of the other sixteen funds in the Delaware Group, Delaware
Management Holdings, Inc. and Delaware Management Company, Inc.
Senior Vice President and Director of Founders Holdings, Inc.
Director of Founders CBO Corporation.
Before returning to the Delaware Group in 1993, Mr. Suckow was Executive
Vice President and Director of Fixed Income for Oppenheimer
Management Corporation, New York, NY from 1985 to 1992. Prior to
that, Mr. Suckow was a fixed income portfolio manager for the
Delaware Group.
George H. Burwell (33)
Vice President/Senior Portfolio Manager of the Fund, of seven other
equity funds in the Delaware Group and of Delaware Management
Company, Inc.
Before joining the Delaware Group in 1992, Mr. Burwell was a portfolio
manager for Midlantic Bank, New Jersey. In addition, he was a
security analyst for Balis & Zorn, New York and for First Fidelity
Bank, New Jersey.
Paul A. Matlack (36)
Vice President/Senior Portfolio Manager of the Fund, of nine other income
funds and the closed-end funds in the Delaware Group and of Delaware Management
Company, Inc.
Vice President of Founders Holdings, Inc.
Secretary and Director of Founders CBO Corporation.
During the past five years, Mr. Matlack has served in various capacities
at different times within the Delaware organization.
Gerald T. Nichols (37)
Vice President/Senior Portfolio Manager of the Fund, of nine other income
funds and the closed-end funds in the Delaware Group and of Delaware
Management Company, Inc.
Vice President of Founders Holdings, Inc.
Treasurer and Director of Founders CBO Corporation.
During the past five years, Mr. Nichols has served in various capacities
at different times within the Delaware organization.
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<PAGE>
James R. Raith, Jr. (44)
Vice President/Senior Portfolio Manager of the Fund, of nine other income
funds and the closed-end funds in the Delaware Group and of Delaware
Management Company, Inc.
Vice President of Founders Holdings, Inc.
President and Director of Founders CBO Corporation.
During the past five years, Mr. Raith has served in various capacities at
different times within the Delaware organization.
Joseph H. Hastings (45)
Vice President/Corporate Controller of the Fund, each of the other
sixteen funds in the Delaware Group, Delaware Management Holdings,
Inc., DMH Corp., Delaware Management Company, Inc., Delaware
Distributors, L.P., Delaware Distributors, Inc., Delaware Service
Company, Inc., Delaware Investment Counselors, Inc. and Founders
Holdings, Inc.
Executive Vice President/Treasurer/Chief Financial Officer of Delaware
Management Trust Company.
Assistant Treasurer of Founders CBO Corporation.
1818 Market Street, Philadelphia, PA 19103.
Before joining the Delaware Group in 1992, Mr. Hastings was Chief
Financial Officer for Prudential Residential Services, L.P., New
York, NY from 1989 to 1992. Prior to that, Mr. Hastings served as
Controller and Treasurer for Fine Homes International, L.P.,
Stamford, CT from 1987 to 1989.
Michael P. Bishof (33)
Vice President/Treasurer of the Fund, each of the other sixteen funds in
the Delaware Group, Delaware Management Company, Inc., Delaware
Distributors, L.P., Delaware Distributors, Inc., Delaware Service
Company, Inc., Founders Holdings, Inc. and Founders CBO Corporation.
Prior to joining the Delaware Group in 1995, Mr. Bishof was a vice
president for Bankers Trust, New York, NY from 1994 to 1995, a vice
president for First Boston Investment Management, New York, NY from
1993 to 1994 and an assistant vice president for Equitable Capital
Management Corporation, New York, NY from 1987 to 1993.
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<PAGE>
The following is a compensation table listing for each director entitled
to receive compensation, the aggregate compensation received from the Fund and
the total compensation received from all Delaware Group funds for the fiscal
year ended November 30, 1994 and an estimate of annual benefits to be received
upon retirement under the Delaware Group Retirement Plan for Directors/Trustees
as of November 30, 1994.
<TABLE>
<CAPTION>
Pension or
Retirement Estimated Total
Benefits Annual Compensation
Aggregate Accrued Benefits from all 17
Compensation as Part of Upon Delaware
Name from Fund Fund Expenses Retirement* Group Funds
<S> <C> <C> <C>
W. Thacher Longstreth $1,606.04 None $18,100 $39,619.35
Ann R. Leven $1,748.13 None $18,100 $44,590.02
Walter P. Babich $1,719.70 None $18,100 $43,595.90
Anthony D. Knerr $2,150.01 None $18,100 $43,962.29
Charles E. Peck $1,448.04 None $18,100 $36,483.40
</TABLE>
* Under the terms of the Delaware Group Retirement Plan for
Directors/Trustees, each disinterested director who, at the time of his or
her retirement from the Board, has attained the age of seventy years and
served on the Board for at least five continuous years, is entitled to
receive payments from each fund in the Delaware Group for a period equal to
the lesser of the number of years that such person served as a director or
the remainder of such person's life. The amount of such payments will be
equal, on an annual basis, to the amount of the annual retainer that is paid
to directors of each fund at the time of such person's retirement. If an
eligible director retired as of November 30, 1994, he or she would be
entitled to annual payments totaling $18,100, in the aggregate, from all of
the funds in the Delaware Group, based on the number of funds in the
Delaware Group as of that date.
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<PAGE>
EXCHANGE PRIVILEGE
The exchange privileges available for shareholders of the Series' classes
and for shareholders of classes of other funds in the Delaware Group are set
forth in the relevant prospectuses for such classes. The following supplements
that information. The Fund reserves the right to reject exchange requests at any
time. The Fund may modify, terminate or suspend the exchange privilege upon
sixty days' notice to shareholders.
All exchanges involve a purchase of shares of the fund into which the
exchange is made. As with any purchase, an investor should obtain and carefully
read that fund's prospectus before buying shares in an exchange. The prospectus
contains more complete information about the fund, including charges and
expenses. A shareholder requesting an exchange will be sent a current prospectus
and an authorization form for any of the other mutual funds in the Delaware
Group. Exchange instructions must be signed by the record owner(s) exactly as
the shares are registered.
An exchange constitutes, for tax purposes, the sale of one fund or series
and the purchase of another. The sale may involve either a capital gain or loss
to the shareholder for federal income tax purposes.
In addition, investment advisers and dealers may make exchanges between
funds in the Delaware Group on behalf of their clients by telephone or other
expedited means. This service may be discontinued or revised at any time by the
Transfer Agent. Such exchange requests may be rejected if it is determined that
a particular request or the total requests at any time could have an adverse
effect on any of the funds. Requests for expedited exchanges may be submitted
with a properly completed exchange authorization form, as described above.
Telephone Exchange Privilege
Shareholders owning shares for which certificates have not been issued
or their investment dealers of record may exchange shares by telephone for
shares in other mutual funds in the Delaware Group. This service is
automatically provided unless the Fund receives written notice from the
shareholder to the contrary.
Shareholders or their investment dealers of record may contact the
Transfer Agent at 800-523-1918 (in Philadelphia, 215-988-1241) or, in the case
of shareholders of the Institutional Classes, their Client Services
Representative at 800-828-5052, to effect an exchange. The shareholder's current
Series account number must be identified, as well as the registration of the
account, the share or dollar amount to be exchanged and the fund into which the
exchange is to be made. Requests received on any day after the time the offering
price and net asset value are determined will be processed the following day.
See Determining Offering Price and Net Asset Value. Any new account established
through the exchange will automatically carry the same registration, shareholder
information and dividend option as the account from which the shares were
exchanged. The exchange requirements of the fund into which the exchange is
being made, such as sales charges, eligibility and investment minimums, must be
met. (See the prospectus of the fund desired or inquire by calling the Transfer
Agent or, as relevant, your Client Services Representative.) Certain funds are
not available for retirement plans.
The telephone exchange privilege is intended as a convenience to
shareholders and is not intended to be a vehicle to speculate on short-term
swings in the securities market through frequent transactions in and out of the
funds in the Delaware Group. Telephone exchanges may be subject to limitations
as to amounts or frequency. The Transfer Agent and the Fund reserve the right to
record exchange instructions received by telephone and to reject exchange
requests at any time.
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<PAGE>
As described in the Fund's Prospectuses, neither the Fund nor the
Transfer Agent is responsible for any shareholder loss incurred in acting upon
written or telephone instructions for redemption or exchange of Series shares
which are reasonably believed to be genuine.
Right to Refuse Timing Accounts
With regard to accounts that are administered by market timing services
("Timing Firms") to purchase or redeem shares based on changing economic and
market conditions ("Timing Accounts"), the Fund will refuse any new Timing
Arrangements, as well as any new purchases (as opposed to exchanges) in Delaware
Group funds from Timing Firms. The Fund reserves the right to temporarily or
permanently terminate the exchange privilege or reject any specific purchase
order for any person whose transactions seem to follow a timing pattern who: (i)
makes an exchange request out of the Fund within two weeks of an earlier
exchange request out of the Fund, or (ii) makes more than two exchanges out of
the Fund per calendar quarter, or (iii) exchanges shares equal in value to at
least $5 million, or more than 1/4 of 1% of the Fund's net assets. Accounts
under common ownership or control, including accounts administered so as to
redeem or purchase shares based upon certain predetermined market indicators,
will be aggregated for purposes of the exchange limits.
Restrictions on Timed Exchanges
Timing Accounts operating under existing Timing Agreements may only
execute exchanges between the following eight Delaware Group funds: (1) Decatur
Income Fund, (2) Decatur Total Return Fund, (3) Delaware Fund, (4) Limited-Term
Government Fund, (5) Tax-Free USA Fund, (6) Delaware Cash Reserve, (7)
Delchester Fund and (8) Tax-Free Pennsylvania Fund. No other Delaware Group
funds are available for Timed Exchanges. Assets redeemed or exchanged out of
Timing Accounts in Delaware Group funds not listed above may not be reinvested
back into that Timing Account. The Fund reserves the right to apply these same
restrictions to the account(s) of any person whose transactions seem to follow a
time pattern (as described above).
The Fund also reserves the right to refuse the purchase side of an
exchange request by any Timing Account, person, or group if, in the Manager's
judgment, the Fund would be unable to invest effectively in accordance with its
investment objectives and policies, or would otherwise potentially be adversely
affected. A shareholder's purchase exchanges may be restricted or refused if the
Fund receives or anticipates simultaneous orders affecting significant portions
of the Fund's assets. In particular, a pattern of exchanges that coincide with a
"market timing" strategy may be disruptive to the Fund and therefore may be
refused.
Except as noted above, only shareholders and their authorized brokers of
record will be permitted to make exchanges or redemptions.
Following is a summary of the investment objectives of the other Delaware
Group funds:
Delaware Fund seeks long-term growth by a balance of capital
appreciation, income and preservation of capital. It uses a dividend-oriented
valuation strategy to select securities issued by established companies that are
believed to demonstrate potential for income and capital growth. Devon Fund
seeks current income and capital appreciation by investing primarily in
income-producing common stocks, with a focus on common stocks the Manager
believes have the potential for above average dividend increases over time.
Trend Fund seeks long-term growth by investing in common stock issued by
emerging growth companies exhibiting strong capital appreciation potential.
Value Fund seeks capital appreciation by investing primarily in common
stocks whose market values appear low relative to their underlying value or
future potential.
DelCap Fund seeks long-term capital growth by investing in common stocks
and securities convertible into common stocks of companies that have a
demonstrated history of growth and have the potential to support continued
growth.
Decatur Income Fund seeks the highest possible current income by
investing primarily in common stocks that provide the potential for income and
capital appreciation without undue risk to principal. Decatur Total Return Fund
seeks long-term growth by investing primarily in securities that provide the
potential for income and capital appreciation without undue risk to principal.
Delchester Fund seeks as high a current income as possible by investing
principally in corporate bonds, and also in U.S. Government securities and
commercial paper.
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<PAGE>
U.S. Government Fund seeks high current income by investing primarily in
long-term U.S. Government debt obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
Limited-Term Government Fund seeks high, stable income by investing
primarily in a portfolio of short- and intermediate-term securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities and
instruments secured by such securities. U.S. Government Money Fund seeks maximum
current income with preservation of principal and maintenance of liquidity by
investing only in short-term securities issued or guaranteed as to principal and
interest by the U.S. Government, its agencies or instrumentalities, and
repurchase agreements collateralized by such securities, while maintaining a
stable net asset value.
Delaware Cash Reserve seeks the highest level of income consistent with
the preservation of capital and liquidity through investments in short-term
money market instruments, while maintaining a stable net asset value.
Tax-Free USA Fund seeks high current income exempt from federal income
tax by investing in municipal bonds of geographically-diverse issuers. Tax-Free
Insured Fund invests in these same types of securities but with an emphasis on
municipal bonds protected by insurance guaranteeing principal and interest are
paid when due. Tax-Free USA Intermediate Fund seeks a high level of current
interest income exempt from federal income tax, consistent with the preservation
of capital by investing primarily in municipal bonds.
Tax-Free Money Fund seeks high current income, exempt from federal income
tax, by investing in short-term municipal obligations, while maintaining a
stable net asset value.
Tax-Free Pennsylvania Fund seeks a high level of current interest income
exempt from federal and, to the extent possible, certain Pennsylvania state and
local taxes, consistent with the preservation of capital.
Delaware Group Premium Fund offers nine series available exclusively as
funding vehicles for certain insurance company separate accounts. Equity/Income
Series seeks the highest possible total rate of return by selecting issues that
exhibit the potential for capital appreciation while providing higher than
average dividend income. High Yield Series seeks as high a current income as
possible by investing in rated and unrated corporate bonds, U.S. Government
securities and commercial paper. Capital Reserves Series seeks a high stable
level of current income while minimizing fluctuations in principal by investing
in a diversified portfolio of short- and intermediate-term securities. Money
Market Series seeks the highest level of income consistent with preservation of
capital and liquidity through investments in short-term money market
instruments. Growth Series seeks long-term capital appreciation by investing its
assets in a diversified portfolio of securities exhibiting the potential for
significant growth. Multiple Strategy Series seeks a balance of capital
appreciation, income and preservation of capital. It uses a dividend-oriented
valuation strategy to select securities issued by established companies that are
believed to demonstrate potential for income and capital growth. International
Equity Series seeks long-term growth without undue risk to principal by
investing primarily in equity securities of foreign issuers that provide the
potential for capital appreciation and income. Value Series seeks capital
appreciation by investing in small- to mid-cap common stocks whose market value
appears low relative to their underlying value or future earnings and growth
potential. Emphasis will also be placed on securities of companies that may be
temporarily out of favor or whose value is not yet recognized by the market.
Emerging Growth Series seeks long-term capital appreciation by investing
primarily in small-cap common stocks and convertible securities of emerging and
other growth-oriented companies. These securities will have been judged to be
responsive to changes in the market place and to have fundamental
characteristics to support growth.
Income is not an objective.
For more complete information about any of these funds, including charges
and expenses, you can obtain a prospectus from the Distributor. Read it
carefully before you invest or forward funds.
Each of the summaries above is qualified in its entirety by the
information contained in each fund's prospectus(es).
-63-
<PAGE>
GENERAL INFORMATION
Delaware International is the investment manager of each Series of the
Fund and DMC is the sub-adviser to the Global Assets Series. Delaware
International, or its affiliate DMC, also manages the other funds in the
Delaware Group. DMC, through a separate division, also manages private
investment accounts. While investment decisions of each Series are made
independently from those of the other funds and accounts, they may make
investment decisions at the same time.
Access persons and advisory persons of the Delaware Group of funds, as
those terms are defined in SEC Rule 17j-1 under the 1940 Act, who provide
services to Delaware Management Company, Inc., Delaware International Advisers
Ltd. or their affiliates, are permitted to engage in personal securities
transactions subject to the exceptions set forth in Rule 17j-1 and the following
general restrictions and procedures: (1) certain blackout periods apply to
personal securities transactions of those persons; (2) transactions must receive
advance clearance and must be completed on the same day as the clearance is
received; (3) certain persons are prohibited from investing in initial public
offerings of securities and other restrictions apply to investments in private
placements of securities; (4) opening positions may only be closed-out at a
profit after a 60-day holding period has elapsed; and (5) the Compliance Officer
must be informed periodically of all securities transactions and duplicate
copies of brokerage confirmations and account statements must be supplied to the
Compliance Officer.
The Distributor acts as national distributor for the Fund and for the
other mutual funds in the Delaware Group. As previously described, prior to
January 3, 1995, DDI served as the national distributor for the Fund. In its
capacity as such, DDI received net commissions from the Fund on behalf of the
International Equity Fund A Class, after reallowances to dealers, as follows:
Total
Amount of
Fiscal Under- Amounts Net
Year writing Reallowed Commission
Ending Commissions to Dealers to Distributor
- -------- ----------- ---------- --------------
11/30/94 $653,278 $564,877 $88,401
11/30/93 377,504 326,612 50,892
11/30/92 144,524 125,302 19,222
For the fiscal year ended November 30, 1994, in its capacity as the
Fund's national distributor, DDI received Limited CDSC payments in the amount of
$3,644 with respect to the International Equity Fund A Class. For the period
September 6, 1994 (date of initial public offering) through November 30, 1994,
DDI also received CDSC payments in the amount of $1,283 with respect to the
International Equity Fund B Class.
Effective as of January 3, 1995, all such payments described above have
been paid to the Distributor.
The Transfer Agent, an affiliate of Delaware International and DMC, acts
as shareholder servicing, dividend disbursing and transfer agent for the Fund
and for the other mutual funds in the Delaware Group. The Transfer Agent is paid
a fee by each Series for providing these services consisting of an annual per
account charge of $5.50 for the International Equity and Global Assets Series
and $11.00 for the Global Bond Series plus transaction charges for particular
services according to a schedule. Compensation is fixed each year and approved
by the Board of Directors, including a majority of the unaffiliated directors.
DMC and its affiliates own the name "Delaware Group." Under certain
circumstances, including the termination of the Fund's advisory relationship
with Delaware International and DMC or its distribution relationship with the
Distributor, DMC and its affiliates could cause the Fund to delete the words
"Delaware Group" from the Fund's name.
-64-
<PAGE>
Morgan Guaranty Trust Company of New York ("Morgan"), 60 Wall Street, New
York, NY 10260, is custodian of the Fund's securities and cash. As custodian for
the Fund, Morgan maintains a separate account or accounts for the Fund;
receives, holds and releases portfolio securities on account of the Fund;
receives and disburses money on behalf of the Fund; and collects and receives
income and other payments and distributions on account of the Fund's portfolio
securities.
The legality of the issuance of the shares offered hereby, registered
pursuant to Rule 24f-2 under the Investment Company Act of 1940, has been passed
upon for the Fund by Stradley, Ronon, Stevens & Young, Philadelphia,
Pennsylvania.
Capitalization
The Fund has a present authorized capitalization of five hundred million
shares of capital stock with a $.01 par value per share. The Board of Directors
has allocated fifty million shares to each Series' classes of shares. Prior to
November 9, 1992, each Series of the Fund offered one Retail class of shares,
from November 9, 1992 to September 6, 1994, each Series of the Fund offered two
classes of shares and from September 6, 1994 to December 27, 1994, each Series
of the Fund offered three classes of shares. The Fund currently offers twelve
classes of shares and each Series offers four classes of shares. Each class of
shares in the respective Series represents a proportionate interest in the
assets of that Series, and each has the same voting and other rights and
preferences as the other classes, except that shares of the Institutional
Classes may not vote on any matter affecting the Fund Classes' Distribution
Plans under Rule 12b-1. Similarly, as a general matter, shareholders of Class A
Shares, Class B Shares and Class C Shares may vote only on matters affecting the
12b-1 Plan that relates to the class of shares that they hold. However, Class B
Shares of a Series may vote on a proposal to increase materially the fees to be
paid by a Series under the Rule 12b-1 Plan relating to the respective Class A
Shares. General expenses of a Series will be allocated on a pro-rata basis to
the respective classes according to asset size, except that expenses of the Rule
12b-1 Plans of the Fund Classes will be allocated solely to the respective
class. While all shares have equal voting rights on matters affecting the entire
Fund, each Series would vote separately on any matter which affects only that
Series, such as any change in its own investment objective and policy or action
to dissolve the Series and as otherwise prescribed by the Investment Company Act
of 1940. Shares of each Series have a priority in that Series' assets, and in
gains on and income from the portfolio of that Series. Shares have no preemptive
rights, are fully transferable and, when issued, are fully paid and
nonassessable.
Prior to September 6, 1994, the International Equity Fund A Class was
known as the International Equity Fund class and the International Equity Fund
Institutional Class was known as the International Equity Fund (Institutional)
class.
Noncumulative Voting
These shares have noncumulative voting rights which means that the
holders of more than 50% of the shares of the Fund voting for the election of
directors can elect all the directors if they choose to do so, and, in such
event, the holders of the remaining shares will not be able to elect any
directors.
This Part B does not include all of the information contained in the
Registration Statement which is on file with the SEC.
-65-
<PAGE>
APPENDIX A--IRA INFORMATION
The Tax Reform Act of 1986 restructured, and in some cases eliminated,
the tax deductibility of IRA contributions. Under the Act, the full deduction
for IRAs ($2,000 for each working spouse and $2,250 for one-income couples) was
retained for all taxpayers who are not covered by an employer-sponsored
retirement plan. Even if a taxpayer (or his or her spouse) is covered by an
employer-sponsored retirement plan, the full deduction is still available if the
taxpayer's adjusted gross income is below $25,000 ($40,000 for taxpayers filing
joint returns). A partial deduction is allowed for married couples with incomes
between $40,000 and $50,000, and for single individuals with incomes between
$25,000 and $35,000. The Act does not permit deductions for contributions to
IRAs by taxpayers whose adjusted gross income before IRA deductions exceeds
$50,000 ($35,000 for singles) and who are active participants in an
employer-sponsored retirement plan. Taxpayers who were not allowed deductions on
IRA contributions still can make nondeductible IRA contributions of as much as
$2,000 for each working spouse ($2,250 for one-income couples), and defer taxes
on interest or other earnings from the IRAs. Special rules apply for determining
the deductibility of contributions made by married individuals filing separate
returns.
As illustrated in the following tables, maintaining an Individual
Retirement Account remains a valuable opportunity.
For many, an IRA will continue to offer both an up-front tax break with
its tax deduction each year and the real benefit that comes with tax-deferred
compounding. For others, losing the tax deduction will impact their taxable
income status each year. Over the long term, however, being able to defer taxes
on earnings still provides an impressive investment opportunity--a way to have
money grow faster due to tax-deferred compounding.
Even if your IRA contribution is no longer deductible, the benefits of
saving on a tax-deferred basis can be substantial. Additional exhibits found in
this Appendix A illustrate the benefits of tax-deferred versus taxable
compounding. For illustration purposes, each reflects a constant 10% rate of
return, with the reinvestment of all proceeds compounded at a frequency
indicated at the top of each exhibit. When used in advertising and other
promotional materials, the rate of return and compounding frequency used
(monthly compounding for the Global Bond Series, and quarterly for the Global
Assets and International Equity Series) will reflect the actual annualized
return experienced by each Series or a representative average return of each
Series' peer mutual funds. The tables do not take into account any sales charges
or fees. Of course, earnings accumulated in your IRA will be subject to tax upon
withdrawal.
-66-
<PAGE>
The first table reflects a constant 10% rate of return, compounded
annually, with the reinvestment of all proceeds. The tables do not take into
account any sales charges or fees. If you choose a mutual fund with a
fluctuating net asset value, like any Series of Delaware Group Global &
International Funds, Inc., your bottom line at retirement could be lower--it
could also be much higher.
$2,000 Invested Annually Assuming a 10% Annualized Return
15% Tax Bracket Single - $0-$22,750
---------------
Joint - $0-$38,000
<TABLE>
<CAPTION>
How Much You
End of Cumulative How Much You Have With Full
Year Investment Amount Have Without IRA IRA Deduction
<S> <C> <C> <C>
1 $ 2,000 $ 1,844 $ 2,200
5 10,000 10,929 13,431
10 20,000 27,363 35,062
15 30,000 52,074 69,899
20 40,000 89,231 126,005
25 50,000 145,103 216,364
30 60,000 229,114 361,887
35 70,000 355,438 596,254
40 80,000 545,386 973,704
[Without IRA--investment of $1,700 ($2,000 less 15%) earning 8.5% (10% less 15%)]
</TABLE>
-67-
<PAGE>
28% Tax Bracket Single - $22,751-$55,100
---------------
Joint - $38,001-$91,850
<TABLE>
<CAPTION>
End of Cumulative How Much You How Much You Have with Full IRA
Year Investment Amount Have Without IRA No Deduction Deduction
<S> <C> <C> <C> <C>
1 $ 2,000 $ 1,544 $ 1,584 $ 2,200
5 10,000 8,913 9,670 13,431
10 20,000 21,531 25,245 35,062
15 30,000 39,394 50,328 69,899
20 40,000 64,683 90,724 126,005
25 50,000 100,485 155,782 216,364
30 60,000 151,171 260,559 361,887
35 70,000 222,927 429,303 596,254
40 80,000 324,512 701,067 973,704
</TABLE>
[Without IRA--investment of $1,440 ($2,000 less 28%) earning 7.2% (10% less
28%)] [With IRA--No Deduction--investment of $1,440 ($2,000 less 28%) earning
10%]
31% Tax Bracket Single - $55,101-$115,000
---------------
Joint - $91,851-$140,000
<TABLE>
<CAPTION>
End of Cumulative How Much You How Much You Have with Full IRA
Year Investment Amount Have Without IRA No Deduction Deduction
<S> <C> <C> <C> <C>
1 $ 2,000 $ 1,475 $ 1,518 $ 2,200
5 10,000 8,467 9,268 13,431
10 20,000 20,286 24,193 35,062
15 30,000 36,787 48,231 69,899
20 40,000 59,821 86,943 126,005
25 50,000 91,978 149,291 216,364
30 60,000 136,868 249,702 361,887
35 70,000 199,536 411,415 596,254
40 80,000 287,021 671,855 973,704
</TABLE>
[Without IRA--investment of $1,380 ($2,000 less 31%) earning 6.9% (10% less
31%)] [With IRA--No Deduction--investment of $1,380 ($2,000 less 31%) earning
10%]
-68-
<PAGE>
36% Tax Bracket* Single - $115,001-$250,000
----------------
Joint - $140,001-$250,000
<TABLE>
<CAPTION>
End of Cumulative How Much You How Much You Have with Full IRA
Year Investment Amount Have Without IRA No Deduction Deduction
<S> <C> <C> <C> <C>
1 $ 2,000 $ 1,362 $ 1,408 $ 2,200
5 10,000 7,739 8,596 13,431
10 20,000 18,292 22,440 35,062
15 30,000 32,683 44,736 69,899
20 40,000 52,308 80,643 126,005
25 50,000 79,069 138,473 216,364
30 60,000 115,562 231,608 361,887
35 70,000 165,327 381,602 596,254
40 80,000 233,190 623,170 973,704
</TABLE>
[Without IRA--investment of $1,280 ($2,000 less 36%) earning 6.4% (10% less
36%)] [With IRA--No Deduction--investment of $1,280 ($2,000 less 36%) earning
10%]
39.6% Tax Bracket* Single - over $250,000
------------------
Joint - over $250,000
<TABLE>
<CAPTION>
End of Cumulative How Much You How Much You Have with Full IRA
Year Investment Amount Have Without IRA No Deduction Deduction
<S> <C> <C> <C> <C>
1 $ 2,000 $ 1,281 $ 1,329 $ 2,200
5 10,000 7,227 8,112 13,431
10 20,000 16,916 21,178 35,062
15 30,000 29,907 42,219 69,899
20 40,000 47,324 76,107 126,005
25 50,000 70,677 130,684 216,364
30 60,000 101,986 218,580 361,887
35 70,000 143,965 360,137 596,254
40 80,000 200,249 588,117 973,704
</TABLE>
[Without IRA--investment of $1,208 ($2,000 less 39.6%) earning 6.04% (10% less
39.6%)] [With IRA--No Deduction--investment of $1,208 ($2,000 less 39.6% earning
10%]
* For tax years beginning after 1992, a 36% tax rate applies to all taxable
income in excess of the maximum dollar amounts subject to the 31% tax rate.
In addition, a 10% surtax (not applicable to capital gains) applies to
certain high-income taxpayers. It is computed by applying a 39.6% rate to
taxable income in excess of $250,000. The above tables do not reflect the
personal exemption phaseout nor the limitations of itemized deductions that
may apply.
-69-
<PAGE>
(SAI-DGG&I/PART B)
$2,000 SINGLE INVESTMENT AT A RETURN OF 10% COMPOUNDED MONTHLY
<TABLE>
<CAPTION>
TAXABLE - TAXABLE - TAXABLE - TAXABLE - TAXABLE - TAX
YEARS 39.6%* 36%* 31% 28% 15% DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10 $ 3,653 $ 3,787 $ 3,980 $ 4,100 $ 4,665 $ 5,414
15 4,938 5,210 5,614 5,870 7,125 8,908
20 6,673 7,169 7,918 8,405 10,882 14,656
30 12,190 13,572 15,756 17,231 25,385 39,675
40 22,267 25,696 31,351 35,323 59,214 107,401
</TABLE>
$2,000 INVESTED ANNUALLY AT A RETURN OF 10% COMPOUNDED MONTHLY
<TABLE>
<CAPTION>
TAXABLE - TAXABLE - TAXABLE - TAXABLE - TAXABLE - TAX
YEARS 39.6%* 36%* 31% 28% 15% DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10 $ 28,276 $ 28,891 $ 29,773 $ 30,317 $ 32,819 $ 36,018
15 50,241 51,913 54,348 55,875 63,110 72,877
20 79,928 83,590 89,014 92,468 109,373 133,521
30 174,276 187,150 206,891 219,878 287,948 397,466
40 346,618 383,214 441,441 481,071 704,501 1,111,974
</TABLE>
* For tax years beginning after 1992, a 36% tax rate applies to all taxable
income in excess of the maximum dollar amounts subject to the 31% tax rate.
In addition, a 10% surtax (not applicable to capital gains) applies to
certain high-income taxpayers. It is computed by applying a 39.6% rate to
taxable income in excess of $250,000. The above tables do not reflect the
personal exemption phaseout nor the limitations of itemized deductions that
may apply.
-70-
<PAGE>
$2,000 SINGLE INVESTMENT AT A RETURN OF 10% COMPOUNDED QUARTERLY
<TABLE>
<CAPTION>
TAXABLE - TAXABLE - TAXABLE - TAXABLE - TAXABLE - TAX
YEARS 39.6%* 36%* 31% 28% 15% DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10 $ 3,642 $ 3,774 $ 3,964 $ 4,083 $ 4,638 $ 5,370
15 4,915 5,184 5,581 5,833 7,062 8,800
20 6,633 7,121 7,857 8,334 10,755 14,419
30 12,081 13,436 15,572 17,012 24,939 38,716
40 22,001 25,352 30,865 34,728 57,831 103,956
</TABLE>
$2,000 INVESTED ANNUALLY AT A RETURN OF 10% COMPOUNDED QUARTERLY
<TABLE>
<CAPTION>
TAXABLE - TAXABLE - TAXABLE - TAXABLE - TAXABLE - TAX
YEARS 39.6%* 36%* 31% 28% 15% DEFERRED
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10 $ 28,226 $ 28,833 $ 29,702 $ 30,239 $ 32,699 $ 35,834
15 50,104 51,753 54,152 55,654 62,755 72,298
20 79,629 83,239 88,573 91,966 108,525 132,049
30 173,245 185,894 205,256 217,971 284,358 390,394
40 343,773 379,596 436,523 475,187 692,097 1,084,066
</TABLE>
* For tax years beginning after 1992, a 36% tax rate applies to all taxable
income in excess of the maximum dollar amounts subject to the 31% tax rate.
In addition, a 10% surtax (not applicable to capital gains) applies to
certain high-income taxpayers. It is computed by applying a 39.6% rate to
taxable income in excess of $250,000. The above tables do not reflect the
personal exemption phaseout nor the limitations of itemized deductions that
may apply.
-71-
<PAGE>
THE VALUE OF STARTING YOUR IRA EARLY
The following illustrates how much more you would have contributing
$2,000 each January--the earliest opportunity--compared to contributing on April
15th of the following year--the latest, for each tax year.
After 5 years $3,528 more
10 years $6,113
20 years $17,228
30 years $47,295
Compounded returns for the longest period of time is the key. The above
illustration assumes a 10% rate of return and the reinvestment of all proceeds.
And it pays to shop around. If you get just 2% more per year, it can make
a big difference when you retire. A constant 8% versus 10% return, both
compounded monthly, illustrates the point. This chart is based on a yearly
investment of $2,000 on January 1. After 30 years the difference can mean as
much as 50% more!
8% Return 10% Return
10 Years $ 31,828 $ 36,018
20 Years 102,476 133,521
30 Years 259,288 397,466
The statistical exhibits above are for illustration purposes only and do
not reflect the actual performance for any Series of Delaware Group Global &
International Funds, Inc. either in the past or in the future.
-72-
<PAGE>
FINANCIAL STATEMENTS
Ernst & Young LLP serves as the independent auditors for the Fund and, in
its capacity as such, audits the financial statements contained in the Fund's
Annual Report. Delaware Group Global & International Funds, Inc. - International
Equity Series' Statement of Net Assets, Statement of Operations, Statement of
Changes in Net Assets and Notes to Financial Statements for the fiscal year
ended November 30, 1994, and Delaware Group Global & International Funds, Inc. -
Global Bond and Global Assets Series' Statements of Assets and Liabilities and
Notes to Financial Statements at November 30, 1994, as well as the reports of
Ernst & Young LLP, independent auditors, are included in the Series' Annual
Reports to shareholders. The financial statements, the notes relating thereto
and the reports of Ernst & Young LLP listed above are incorporated by reference
from the Annual Reports into this Part B. In addition, unaudited financial
statements and the notes relating thereto for each Series for the period ended
May 31, 1995 are also incorporated by reference from the Fund's Semi-Annual
Report into this Part B.
-73-
<PAGE>
The Delaware Group includes funds with a wide range of investment
objectives. Stock funds, income funds, tax-free funds, money market funds,
global and international funds and closed-end equity funds give investors the
ability to create a portfolio that fits their personal financial goals. For more
information, shareholders of the Fund Classes should contact their financial
adviser or call Delaware Group at 800-523-4640, in Philadelphia call
215-988-1333 and shareholders of the Institutional Classes should contact
Delaware Group at 800-828-5052.
INVESTMENT MANAGER
Delaware International Advisers Ltd.
Veritas House
125 Finsbury Pavement
London, England EC2A 1NQ
SUB-ADVISER
Delaware Management Company, Inc.
One Commerce Square
Philadelphia, PA 19103
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
1818 Market Street
Philadelphia, PA 19103
SHAREHOLDER SERVICING, DIVIDEND
DISBURSING AND TRANSFER AGENT
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young
One Commerce Square
Philadelphia, PA 19103
INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103
CUSTODIAN
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, NY 10260
- -------------------------------------------
DELAWARE GROUP
- -------------------------------------------
GLOBAL & INTERNATIONAL FUNDS, INC.
- -------------------------------------------
INTERNATIONAL EQUITY SERIES
- -------------------------------------------
GLOBAL BOND SERIES
- -------------------------------------------
GLOBAL ASSETS SERIES
- -------------------------------------------
PART B
STATEMENT OF
ADDITIONAL INFORMATION
- -------------------------------------------
November 29, 1995
DELAWARE
GROUP
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
PART C
------
Other Information
-----------------
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements:
Part A - Financial Highlights
*Part B - Statement of Net Assets
Statements of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Notes to Financial Statements
Accountant's Reports
* The financial statements (with the exception of the Statements of
Assets and Liabilities) and Accountant's Report listed above relating
to the International Equity Series are incorporated by reference from
the Registrant's Annual Report for the fiscal year ended November 30,
1994 into Part B. The Statements of Assets and Liabilities, Notes to
Financial Statements and the Accountant's Reports listed above for
the Global Bond Series and Global Assets Series are also incorporated
by reference from the Registrant's Annual Report for the fiscal year
ended November 30, 1994 into Part B. The Registrant's Annual Reports
were electronically filed with the Commission in Post-Effective
Amendment No. 9 which was filed on June 30, 1995. In addition, the
unaudited financial statements for each Series for the six-month
period ended May 31, 1995 are incorporated by reference from the
Registrant's Semi-Annual Report into Part B. The Registrant's
Semi-Annual Report was electronically filed with the Commission on
August 4, 1995.
(b) Exhibits:
(1) Articles of Incorporation.
(a) Articles of Incorporation, as amended and
supplemented to date, attached as Exhibit.
(b) Form of Articles Supplementary (November 1995)
attached as Exhibit.
i
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
(2) By-Laws. By-Laws, as amended through June 30, 1995,
incorporated into this filing by reference to Post-Effective
Amendment No. 9 filed June 30, 1995.
(3) Voting Trust Agreement. Inapplicable.
(4) Copies of All Instruments Defining the Rights of Holders.
(a) Articles of Incorporation, Articles of Amendment and
Articles Supplementary. Article Fifth and Article
Ninth of the Articles of Incorporation (May 30,
1991), Article Second of Articles Supplementary (May
22, 1992 and September 6, 1994), Article Second of
Certificate of Correction to Articles Supplementary
(December 28, 1994) attached as Exhibit 24(b)(1)(a)
and Form of Articles Supplementary (November 1995)
attached as Exhibit 24(b)(1)(b).
(b) By-Laws. Article II and Article III, as amended, and
Article XIV incorporated into this filing by
reference to Post-Effective Amendment No. 9 filed
June 30, 1995.
(5) Investment Management Agreements. Investment Management
Agreements between Delaware International Advisers Ltd. and
the Registrant on behalf of each Series dated April 3, 1995
and Sub-Advisory Agreement between Delaware International
Advisers Ltd. and Delaware Management Company, Inc. on
behalf of the Global Assets Series dated April 3, 1995
incorporated into this filing by reference to Post-Effective
Amendment No. 9 filed June 30, 1995.
ii
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
(6) (a) Distribution Agreements.
(i) Form of Distribution Agreement (April 1995)
included as Module.
(ii) Form of Amendment No. 1 to Distribution
Agreement (November 1995) included as Module.
(b) Administration and Service Agreement. Form of
Administration and Service Agreement (as amended
November 1995) included as Module.
(c) Dealer's Agreement. Form of Dealer's Agreement (as
amended November 1995) included as Module.
(d) Form of Mutual Fund Agreement for the Delaware Group
of Funds incorporated into this filing by reference
to Post-Effective Amendment No. 8 filed March 3,
1995.
(7) Bonus, Profit Sharing, Pension Contracts. Incorporated into
this filing by reference to Post-Effective Amendment No. 9
filed June 30, 1995.
(8) Custodian Agreements. Incorporated into this filing by
reference to Post-Effective Amendment No. 1 filed March 30,
1992.
(9) Other Material Contracts. Shareholders Services Agreements
incorporated into this filing by reference to Post-Effective
Amendment No. 1 filed March 30, 1992.
(10) Opinion of Counsel. Filed with letter relating to Rule
24f-2 on January 25, 1995.
(11) Consents of Auditors. Attached as Exhibit.
(12) Inapplicable.
(13) Undertaking of Initial Shareholder. Incorporated into this
filing by reference to Pre-Effective Amendment No. 1 filed
August 22, 1991.
(14) Model Plans. Incorporated into this filing by reference to
Post-Effective Amendment No. 5 filed March 24, 1994 and
Post-Effective Amendment No. 8 filed March 3, 1995.
iii
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
**(15) Plans under Rule 12b-1.
(a) Form of Plan under Rule 12b-1 for Class A of each Series
(November 1995) included as Module.
(b) Form of Plan under Rule 12b-1 for Class B of each Series
(November 1995) included as Module.
(c) Form of Plan under Rule 12b-1 for Class C of each Series
(November 1995) included as Module.
(16) Schedules of Computation for each Performance Quotation.
Incorporated into this filing by reference to Post-Effective
Amendment No. 9 filed June 30, 1995.
(17) Financial Data Schedules. Incorporated into this filing by
reference to Post-Effective Amendment No. 9 filed June 30,
1995.
(18) Plan under Rule 18f-3. Form of Plan under Rule 18f-3
included as Module.
(19) Other: Directors' Power of Attorney. Incorporated into this
filing by reference to Post-Effective Amendment No. 9
filed June 30, 1995.
**Relates only to the Class A, B and C Shares of each Series.
Item 25. Persons Controlled by or under Common Control with Registrant. None.
Item 26. Number of Holders of Securities.
(1) (2)
Number of
Title of Class Record Holders
-------------- --------------
Delaware Group Global & International
Funds, Inc.'s
International Equity Series:
International Equity Fund A Class
Common Stock 5,714 Accounts as of
$.01 Par Value Per Share October 31, 1995
iv
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
Item 26. Number of Holders of Securities.
(1) (2)
Number of
Title of Class Record Holders*
-------------- --------------
International Equity Fund B Class
Common Stock 386 Accounts as of
$.01 Par Value Per Share October 31, 1995
International Equity Fund C Class
Common Stock 0 Accounts as of
$.01 Par Value Per Share October 31, 1995
International Equity Fund Institutional Class
Common Stock 30 Accounts as of
$.01 Par Value Per Share October 31, 1995
Delaware Group Global & International
Funds, Inc.'s
Global Bond Series:
Global Bond Fund A Class
Common Stock 74 Accounts as of
$.01 Par Value Per Share October 31, 1995
Global Bond Fund B Class
Common Stock 9 Accounts as of
$.01 Par Value Per Share October 31, 1995
Global Bond Fund C Class
Common Stock 0 Accounts as of
$.01 Par Value Per Share October 31, 1995
Global Bond Fund Institutional Class
Common Stock 3 Accounts as of
$.01 Par Value Per Share October 31, 1995
* Class C Shares of each Series were not offered prior to the effective date of
this Registration Statement.
v
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
(1) (2)
Number of
Title of Class Record Holders*
-------------- --------------
Delaware Group Global & International
Funds, Inc.'s
Global Assets Series:
Global Assets Fund A Class
Common Stock 154 Accounts as of
$.01 Par Value Per Share October 31, 1995
Global Assets Fund B Class
Common Stock 36 Accounts as of
$.01 Par Value Per Share October 31, 1995
Global Assets Fund C Class
Common Stock 0 Accounts as of
$.01 Par Value Per Share October 31, 1995
Global Assets Fund Institutional Class
Common Stock 3 Accounts as of
$.01 Par Value Per Share October 31, 1995
* Class C Shares of each Series were not offered prior to the effective date of
this Registration Statement.
Item 27. Indemnification. Incorporated into this filing by reference to
initial Registration Statement filed June 4, 1991 and Article XIV of
the By-Laws incorporated into this filing by reference to Post-
Effective Amendment No. 9 filed June 30, 1995.
Item 28. Business and Other Connections of Investment Adviser.
Delaware International Advisers Ltd. ("Delaware International") serves
as investment manager to the International Equity Series, the Global Bond Series
and the Global Assets Series of the Registrant, The International Equity
Portfolio, The Global Fixed Income Portfolio and The International Fixed Income
Portfolio of Delaware Pooled Trust, Inc., and the International Equity Series of
Delaware Group Premium Fund, Inc., and serves as sub-investment manager to
Delaware Group Global Dividend and Income Fund, Inc., and provides investment
advisory services to institutional accounts, primarily retirement plans and
endowment funds.
The following persons serving as directors or officers of Delaware
International have held the following positions during the past two years:
vi
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Delaware International Advisers Ltd.
Business Address and its Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------------------------------------------
<S> <C>
*Wayne A. Stork Chairman of the Board, Chief Executive Officer and Director of Delaware
International Advisers Ltd., DMH Corp., Delaware International Holdings
Ltd. and Founders Holdings, Inc.; President, Chief Executive Officer,
Chairman of the Board and Director of the Registrant, and with the exception
of Delaware Pooled Trust, Inc., each of the other funds in the Delaware
Group and Delaware Management Holdings, Inc.; Chairman of the Board and
Director of Delaware Pooled Trust, Inc. and Delaware Investment Counselors,
Inc.; Chairman of the Board, Chief Executive Officer, Chief Investment
Officer and Director of Delaware Management Company, Inc.; and Director
of Delaware Distributors, Inc. and Delaware Service Company, Inc.
**G. Roger H. Kitson Vice Chairman and Director of Delaware International Advisers Ltd.
**David G. Tilles Managing Director, Chief Investment Officer and Director of Delaware
International Advisers Ltd.
**John Emberson Secretary/Compliance Officer/Finance Director and Director of Delaware
International Advisers Ltd.
*David K. Downes Director of Delaware International Advisers Ltd.; Senior Vice President, Chief
Administrative Officer, Chief Financial Officer and Treasurer of Delaware
Management Holdings, Inc.; Senior Vice President/Chief Administrative
Officer/Chief Financial Officer of Delaware Management Company, Inc., the
Registrant and each of the other funds in the Delaware Group; Chairman and
Director of Delaware Management Trust Company; Senior Vice President,
Chief Financial Officer, Treasurer and Director of DMH Corp.; Senior Vice
President, Chief Administrative Officer and Director of Delaware Distributors,
Inc.; Senior Vice President and Chief Administrative Officer of Delaware
Distributors, L.P.; Senior Vice President, Chief Administrative Officer, Chief
Financial Officer and Director of Delaware Service Company, Inc.; Chief
Financial Officer and Director of Delaware International Holdings Ltd.;
Senior Vice President, Chief Financial Officer and Treasurer of Delaware
Investment Counselors, Inc.; and Senior Vice President and Director of
Founders Holdings, Inc.
</TABLE>
* Business address is 1818 Market Street, Philadelphia, PA 19103.
** Business address is Veritas House, 125 Finsbury Pavement, London, England
EC2A 1NQ.
vii
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Delaware International Advisers Ltd.
Business Address and its Affiliates and Other Positions and Offices Held
- ------------------ ---------------------------------------------------------------------------------
<S> <C>
*George M. Chamberlain, Jr. Director of Delaware International Advisers Ltd.; Senior Vice President and
Secretary of the Registrant, each of the other funds in the Delaware Group,
Delaware Distributors, L.P., Delaware Management Holdings, Inc. and
Delaware Investment Counselors, Inc.; Senior Vice President, Secretary and
Director of Delaware Management Company, Inc., DMH Corp., Delaware
Distributors, Inc. and Delaware Service Company, Inc.; Executive Vice
President, Secretary and Director of Delaware Management Trust Company;
Corporate Vice President, Secretary and Director of Founders Holdings,
Inc.; and Secretary and Director of Delaware International Holdings Ltd.
Director of ICI Mutual Insurance Co. since 1992, P.O. Box 730, Burlington, VT
*Winthrop S. Jessup Director of Delaware International Advisers Ltd., Delaware Service
Company, Inc. and Delaware Management Trust Company; Executive Vice
President of the Registrant and, with the exception of Delaware Pooled
Trust, Inc., each of the other funds in the Delaware Group and Delaware
Management Holdings, Inc.; President and Chief Executive Officer of
Delaware Pooled Trust, Inc.; Executive Vice President and Director of
DMH Corp., Delaware Management Company, Inc., Delaware International
Holdings Ltd. and Founders Holdings, Inc.; Vice Chairman of Delaware
Distributors, L.P.; Vice Chairman and Director of Delaware Distributors,
Inc.; and President and Director of Delaware Investment Counselors, Inc.
*Richard G. Unruh, Jr. Director of Delaware International Advisers Ltd.; Executive Vice President
and Director of Delaware Management Company, Inc.; Executive Vice
President of the Registrant and each of the other funds in the Delaware
Group; and Senior Vice President of Delaware Management Holdings, Inc.
Board of Directors, Chairman of Finance Committee, Keystone Insurance Company
since 1989, 2040 Market Street, Philadelphia, PA; Board of Directors,
Chairman of Finance Committee, Mid Atlantic, Inc., since 1989, 2040 Market
Street, Philadelphia, PA
</TABLE>
* Business address is 1818 Market Street, Philadelphia, PA 19103.
** Business address is Veritas House, 125 Finsbury Pavement, London, England
EC2A 1NQ.
viii
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Delaware International Advisers Ltd.
Business Address and its Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------------------------------------------
<S> <C>
*Richard J. Flannery Director of Delaware International Advisers Ltd.; Managing
Director/Corporate Tax & Affairs of Delaware Management Holdings, Inc.,
DMH Corp., Delaware Management Company, Inc., Delaware Distributors,
L.P., Delaware Distributors, Inc., Delaware Service Company, Inc.,
Delaware Management Trust Company, Delaware International Holdings
Ltd., Delaware Investment Counselors, Inc. and Founders CBO Corporation;
Vice President of the Registrant and each of the other funds in the Delaware
Group; and Managing Director/Corporate & Tax Affairs and Director of
Founders Holdings, Inc.
Limited Partner of Stonewall Links, L.P. since 1991, Bulltown Rd.,
Elverton, PA; Director and Member of Executive Committee of Stonewall
Links, Inc. since 1991, Bulltown Rd., Elverton, PA
*John C. E. Campbell Director of Delaware International Advisers Ltd.
**Timothy W. Sanderson Senior Portfolio Manager/Deputy Compliance Officer/Director Equity
Research and Director of Delaware International Advisers Ltd.
**Clive A. Gillmore Senior Portfolio Manager/Director U.S. Mutual Fund Liaison and Director
of Delaware International Advisers Ltd.
**Hamish O. Parker Senior Portfolio Manager/Director U.S. Marketing Liaison and Director of
Delaware International Advisers Ltd.
**Ian G. Sims Senior Portfolio Manager/Deputy Managing Director and Director of
Delaware International Advisers Ltd.
**Elizabeth A. Desmond Senior Portfolio Manager of Delaware International Advisers Ltd.
**Gavin A. Hall Senior Portfolio Manager of Delaware International Advisers Ltd.
**Christopher A. Moth(1) Portfolio Manager of Delaware International Advisers Ltd.
</TABLE>
* Business address is 1818 Market Street, Philadelphia, PA 19103.
** Business address is Veritas House, 125 Finsbury Pavement, London, England
EC2A 1NQ.
ix
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Delaware International Advisers Ltd.
Business Address and its Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------------------------------------------
<S> <C>
**Richard J. Ginty(2) Assistant Portfolio Manager of Delaware International Advisers Ltd.
**Fiona Barwick(3) Assistant Portfolio Manager of Delaware International Advisers Ltd.
</TABLE>
(1) SENIOR ACTUARIAL TRAINEE, Guardian Royal Exchange prior to April 1993.
(2) RESEARCH ANALYST, Kleinworth Benson Ltd. prior to May 1993.
(3) INVESTMENT ASSISTANT, Touche, Remnant and Co. prior to April 1993.
* Business address is 1818 Market Street, Philadelphia, PA 19103.
** Business address is Veritas House, 125 Finsbury Pavement, London, England
EC2A 1NQ.
Delaware Management Company, Inc. ("DMC"), an affiliate of Delaware
International, serves as sub-investment manager to a portion of the portfolio of
the Global Assets Series and as investment manager to other funds in the
Delaware Group (Delaware Group Delaware Fund, Inc., Delaware Group Trend Fund,
Inc., Delaware Group Value Fund, Inc., Delaware Group DelCap Fund, Inc.,
Delaware Group Decatur Fund, Inc., Delaware Group Delchester High-Yield Bond
Fund, Inc., Delaware Group Government Fund, Inc., Delaware Group Limited-Term
Government Funds, Inc., Delaware Group Cash Reserve, Inc., Delaware Group
Tax-Free Fund, Inc., DMC Tax-Free Income Trust-Pennsylvania, Delaware Group Tax-
Free Money Fund, Inc., Delaware Group Premium Fund, Inc., Delaware Pooled Trust,
Inc., Delaware Group Dividend and Income Fund, Inc. and Delaware Group Global
Dividend and Income Fund, Inc.) and provides investment advisory services to
institutional accounts, primarily retirement plans and endowment funds. In
addition, certain directors of DMC also serve as directors/trustees of the other
Delaware Group funds, and certain officers are also officers of these other
funds. A company owned by DMC's parent company acts as principal underwriter to
the mutual funds in the Delaware Group (see Item 29 below) and another such
company acts as the shareholder servicing, dividend disbursing and transfer
agent for all of the mutual funds in the Delaware Group.
The following persons serving as directors or officers of DMC have
held the following positions during the past two years:
x
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with DMC and its
Business Address* Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------------------------------------------
<S> <C>
Wayne A. Stork Chairman of the Board, Chief Executive Officer, Chief Investment Officer
and Director of Delaware Management Company, Inc.; President, Chief
Executive Officer, Chairman of the Board and Director of the Registrant,
and with the exception of Delaware Pooled Trust, Inc., each of the other
funds in the Delaware Group and Delaware Management Holdings, Inc.;
Chairman of the Board and Director of Delaware Pooled Trust, Inc. and
Delaware Investment Counselors, Inc.; Chairman, Chief Executive Officer
and Director of DMH Corp., Delaware International Advisers Ltd.,
Delaware International Holdings Ltd. and Founders Holdings, Inc.; and
Director of Delaware Distributors, Inc. and Delaware Service Company, Inc.
Winthrop S. Jessup Executive Vice President and Director of Delaware Management Company,
Inc., DMH Corp., Delaware International Holdings Ltd. and Founders
Holdings, Inc.; Executive Vice President of the Registrant and, with the
exception of Delaware Pooled Trust, Inc., each of the other funds in the
Delaware Group and Delaware Management Holdings, Inc.; President and
Chief Executive Officer of Delaware Pooled Trust, Inc.; Vice Chairman of
Delaware Distributors, L.P.; Vice Chairman and Director of Delaware
Distributors, Inc.; Director of Delaware Service Company, Inc., Delaware
Management Trust Company and Delaware International Advisers Ltd.; and
President and Director of Delaware Investment Counselors, Inc.
Richard G. Unruh, Jr. Executive Vice President and Director of Delaware Management Company,
Inc.; Executive Vice President of the Registrant and each of the other funds in
the Delaware Group; Senior Vice President of Delaware Management Holdings, Inc.;
and Director of Delaware International Advisers Ltd.
Board of Directors, Chairman of Finance Committee, Keystone Insurance Company
since 1989, 2040 Market Street, Philadelphia, PA; Board of Directors,
Chairman of Finance Committee, Mid Atlantic, Inc., since 1989, 2040 Market Street,
Philadelphia, PA
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xi
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with DMC and its
Business Address* Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------------------------------------------
<S> <C>
Paul E. Suckow Senior Vice President/Chief Investment Officer, Fixed Income of Delaware
Management Company, Inc., the Registrant, each of the other funds in the Delaware
Group and Delaware Management Holdings, Inc.; Senior Vice President and Director
of Founders Holdings, Inc.; and Director of Founders CBO Corporation
David K. Downes Senior Vice President, Chief Administrative Officer and Chief Financial
Officer of Delaware Management Company, Inc., the Registrant and each of
the other funds in the Delaware Group; Chairman and Director of Delaware
Management Trust Company; Senior Vice President, Chief Administrative
Officer, Chief Financial Officer and Treasurer of Delaware Management
Holdings, Inc.; Senior Vice President, Chief Financial Officer, Treasurer and
Director of DMH Corp.; Senior Vice President, Chief Administrative
Officer and Director of Delaware Distributors, Inc.; Senior Vice President
and Chief Administrative Officer of Delaware Distributors, L.P.; Senior
Vice President, Chief Administrative Officer, Chief Financial Officer and
Director of Delaware Service Company, Inc.; Chief Financial Officer and
Director of Delaware International Holdings Ltd.; Senior Vice President,
Chief Financial Officer and Treasurer of Delaware Investment Counselors,
Inc.; Senior Vice President and Director of Founders Holdings, Inc.; and
Director of Delaware International Advisers Ltd.
George M. Chamberlain, Jr. Senior Vice President, Secretary and Director of Delaware Management
Company, Inc., DMH Corp., Delaware Distributors, Inc. and Delaware
Service Company, Inc.; Senior Vice President and Secretary of the
Registrant, each of the other funds in the Delaware Group, Delaware
Distributors, L.P., Delaware Investment Counselors, Inc. and Delaware
Management Holdings, Inc.; Executive Vice President, Secretary and
Director of Delaware Management Trust Company; Corporate Vice
President, Secretary and Director of Founders Holdings, Inc.; Secretary and
Director of Delaware International Holdings Ltd.; and Director of Delaware
International Advisers Ltd.
Director of ICI Mutual Insurance Co. since 1992, P.O. Box 730, Burlington, VT
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xii
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with DMC and its
Business Address* Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------------------------------------------
<S> <C>
Richard J. Flannery Managing Director/Corporate Tax & Affairs of Delaware Management
Company, Inc., Delaware Management Holdings, Inc., DMH Corp.,
Delaware Distributors, L.P., Delaware Distributors, Inc., Delaware Service
Company, Inc., Delaware Management Trust Company, Delaware
International Holdings Ltd., Delaware Investment Counselors, Inc. and
Founders CBO Corporation; Vice President of the Registrant and each of the
other funds in the Delaware Group; Managing Director/Corporate Tax &
Affairs and Director of Founders Holdings, Inc.; and Director of Delaware
International Advisers Ltd.
Limited Partner of Stonewall Links, L.P. since 1991, Bulltown Rd.,
Elverton, PA; Director and Member of Executive Committee of Stonewall
Links, Inc. since 1991, Bulltown Rd., Elverton, PA
Michael P. Bishof(1) Vice President and Treasurer of Delaware Management Company, Inc., the
Registrant, each of the other funds in the Delaware Group, Delaware Management
Holdings, Inc., DMH Corp., Delaware Distributors, L.P., Delaware Distributors,
Inc., Delaware Service Company, Inc., Founders Holdings, Inc. and Founders CBO
Corporation
Eric E. Miller Vice President and Assistant Secretary of Delaware Management Company, Inc.,
the Registrant, each of the other funds in the Delaware Group, Delaware
Management Holdings, Inc., DMH Corp.,Delaware Distributors, L.P., Delaware
Distributors Inc., Delaware Service Company, Inc., Delaware Management Trust
Company and Founders Holdings, Inc.
Richelle S. Maestro Vice President and Assistant Secretary of Delaware Management Company,
Inc., the Registrant, each of the other funds in the Delaware Group,
Delaware Management Holdings, Inc., Delaware Distributors, L.P.,
Delaware Distributors, Inc., Delaware Service Company, Inc., DMH Corp.,
Delaware Management Trust Company, Delaware Investment Counselors,
Inc. and Founders Holdings, Inc.; and Assistant Secretary of Founders CBO
Corporation
General Partner of Tri-R Associates since 1989, 10001 Sandmeyer Ln.,
Philadelphia, PA
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xiii
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with DMC and its
Business Address* Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------------------------------------------
<S> <C>
Joseph H. Hastings Vice President/Corporate Controller of Delaware Management Company,
Inc., the Registrant, each of the other funds in the Delaware Group,
Delaware Management Holdings, Inc., DMH Corp., Delaware Distributors,
L.P., Delaware Distributors, Inc., Delaware Service Company, Inc.,
Delaware Investment Counselors, Inc. and Founders Holdings, Inc.;
Executive Vice President, Chief Financial Officer and Treasurer of
Delaware Management Trust Company; and Assistant Treasurer of Founders
CBO Corporation
Bruce A. Ulmer Vice President/Director of Internal Audit of Delaware Management
Company, Inc., the Registrant, each of the other funds in the Delaware
Group, Delaware Management Holdings, Inc., DMH Corp. and Delaware
Management Trust Company
Lisa O. Brinkley(2) Vice President/Compliance of Delaware Management Company, Inc., the
Registrant, each of the other funds in the Delaware Group, DMH Corp., Delaware
Distributors, L.P., Delaware Distributors, Inc., Delaware Service Company, Inc.,
Delaware Management Trust Company and Delaware Investment Counselors, Inc.
Rosemary E. Milner Vice President/Legal of Delaware Management Company, Inc., the
Registrant, each of the other funds in the Delaware Group, Delaware
Distributors, L.P. and Delaware Distributors, Inc.
Douglas L. Anderson(3) Vice President/Operations of Delaware Management Company, Inc. and Delaware
Service Company, Inc.; and Vice President/Operations and Director of Delaware
Management Trust Company
Michael T. Taggart(4) Vice President/Facilities Management and Administrative Services of
Delaware Management Company, Inc.
Gerald T. Nichols Vice President/Senior Portfolio Manager of Delaware Management Company,
Inc., the Registrant, each of the tax-exempt funds, the fixed income funds
and the closed-end funds in the Delaware Group; Vice President of Founders
Holdings, Inc.; and Treasurer and Director of Founders CBO Corporation
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xiv
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with DMC and its
Business Address* Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------------------------------------------
<S> <C>
J. Michael Pokorny Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.,
the Registrant, each of the tax-exempt funds and the fixed income funds
in the Delaware Group
Gary A. Reed Vice President/Senior Portfolio Manager of Delaware Management Company,
Inc., the Registrant, each of the tax-exempt funds and the fixed income funds in the
Delaware Group and Delaware Investment Counselors, Inc.
Paul A. Matlack Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.,
the Registrant, each of the tax-exempt funds, the fixed income funds and the
closed-end funds in the Delaware Group; Vice President of Founders Holdings, Inc.; and
Secretary and Director of Founders CBO Corporation
James R. Raith, Jr. Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.,
the Registrant, each of the tax-exempt funds, the fixed income funds and
the closed-end funds in the Delaware Group; Vice President of Founders Holdings, Inc.;
and President and Director of Founders CBO Corporation
Patrick P. Coyne Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.,
the Registrant, each of the tax-exempt funds and the fixed income funds in the
Delaware Group
Roger A. Early(5) Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.,
the Registrant, each of the tax-exempt funds and the fixed income funds in the
Delaware Group
Edward N. Antoian Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.,
the Registrant and each of the equity funds in the Delaware Group
George H. Burwell Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.,
the Registrant and each of the equity funds in the Delaware Group
John B. Fields Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.,
the Registrant, each of the equity funds in the Delaware Group and Delaware
Investment Counselors, Inc.
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xv
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with DMC and its
Business Address* Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------------------------------------------
<S> <C>
Edward A. Trumpbour Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc., the Registrant and each of the equity funds in the Delaware
Group
David C. Dalrymple Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc., the Registrant and each of the equity funds in the Delaware
Group
</TABLE>
(1) VICE PRESIDENT/GLOBAL INVESTMENT MANAGEMENT OPERATIONS, Bankers Trust and
VICE PRESIDENT, CS First Boston Investment Management prior to June 1995.
(2) VICE PRESIDENT AND COMPLIANCE OFFICER, Banc One Securities Corporation prior
to June 1994 and ASSISTANT VICE PRESIDENT AND COMPLIANCE OFFICER, Aetna Life
and Casualty prior to March 1993.
(3) VICE PRESIDENT OF OPERATIONS, Supervised Service Company prior to March
1994.
(4) ASSISTANT VICE PRESIDENT/ADMINISTRATIVE SERVICES, United Pacific Life
Insurance prior to January 1994.
(5) SENIOR VICE PRESIDENT AND PORTFOLIO MANAGER, Federated Investors prior to
July 1994.
Item 29. Principal Underwriters.
(a) Delaware Distributors, L.P. serves as principal underwriter for
all the mutual funds in the Delaware Group.
(b) Information with respect to each director, officer or partner of
principal underwriter:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
- ------------------ --------------------- ---------------------
<S> <C> <C>
Delaware Distributors, Inc. General Partner None
Delaware Management Sub-Investment Manager
Company, Inc. Limited Partner to Global Assets Series
Delaware Investment
Counselors, Inc. Limited Partner None
Winthrop S. Jessup Vice Chairman Executive Vice President
Keith E. Mitchell President and Chief None
Executive Officer
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xvi
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
- ------------------ ---------------------- ----------------------
<S> <C> <C>
David K. Downes Senior Vice President and Senior Vice President/Chief
Chief Administrative Officer Administrative Officer/Chief
Financial Officer
George M. Chamberlain, Jr. Senior Vice President/ Senior Vice President/
Secretary Secretary
J. Lee Cook Senior Vice President/ None
National Sales Manager
Stephen H. Slack Senior Vice President/ None
Wholesaler
William F. Hostler Senior Vice President/ None
Marketing Services
Minette van Noppen Senior Vice President/ None
Retirement Services
Richard J. Flannery Managing Director/Corporate Vice President
& Tax Affairs
Eric E. Miller Vice President/ Vice President/
Assistant Secretary Assistant Secretary
Richelle S. Maestro Vice President/ Vice President/
Assistant Secretary Assistant Secretary
Michael P. Bishof Vice President/Treasurer Vice President/Treasurer
Joseph H. Hastings Vice President/ Vice President/
Corporate Controller Corporate Controller
Lisa O. Brinkley Vice President/ Vice President/
Compliance Compliance
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xvii
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
- ------------------ --------------------- ---------------------
<S> <C> <C>
Rosemary E. Milner Vice President/Legal Vice President/Legal
Diane M. Anderson Vice President/ None
Retirement Services
Denise F. Guerriere Vice President/Client Services None
Julia R. Vander Els Vice President/ None
Retirement Services
Jerome J. Alrutz Vice President/ None
Retirement Services
Martin J. Cole Vice President/ None
Retirement Services
Joanne A. Mettenheimer Vice President/ None
National Accounts
Christopher H. Price Vice President/Annuity None
Marketing & Administration
Thomas S. Butler Vice President/ None
DDI Administration
Frank Albanese Vice President/Wholesaler None
William S. Carroll Vice President/Wholesaler None
William S. Castetter Vice President/Wholesaler None
Thomas J. Chadie Vice President/Wholesaler None
Robert M. Frank Vice President/Wholesaler None
Douglas R. Glennon Vice President/Wholesaler None
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
xviii
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
- ------------------ ---------------------- ---------------------
<S> <C> <C>
Alan D. Kessler Vice President/Wholesaler None
William M. Kimbrough Vice President/Wholesaler None
Mac McAuliffe Vice President/Wholesaler None
Patrick L. Murphy Vice President/Wholesaler None
Henry W. Orvin Vice President/Wholesaler None
Philip G. Rickards Vice President/Wholesaler None
Dion D. Rooney Vice President/Wholesaler None
Michael W. Rose Vice President/Wholesaler None
Thomas E. Sawyer Vice President/Wholesaler None
Sanford G. Simmons, Jr. Vice President/Wholesaler None
Robert E. Stansbury Vice President/Wholesaler None
Larry D. Stone Vice President/Wholesaler None
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
(c) Not Applicable.
Item 30. Location of Accounts and Records.
All accounts and records are maintained in Philadelphia at 1818
Market Street, Philadelphia, PA 19103 or One Commerce Square,
Philadelphia, PA 19103.
Item 31. Management Services. None.
Item 32. Undertakings.
(a) Not Applicable.
xix
<PAGE>
Form N-1A
File No. 33-41034
Delaware Group Global &
International Funds, Inc.
(b) Not Applicable.
(c) The Registrant hereby undertakes to furnish each person to
whom a prospectus is delivered with a copy of the Registrant's
latest annual report to shareholders, upon request and without
charge.
(d) The Registrant hereby undertakes to promptly call a meeting
of shareholders for the purpose of voting upon the question
of removal of any director when requested in writing to do so
by the record holders of not less than 10% of the outstanding
shares.
xx
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, this Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in this City of Philadelphia and Commonwealth of Pennsylvania on
this 22nd day of November, 1995.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
By/s/Wayne A. Stork
-----------------------------------
Wayne A. Stork
Chairman of the Board, President,
Chief Executive Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
- ---------------------------------------- ------------------------------------- ------------------
<S> <C> <C>
Chairman of the Board, President,
/s/Wayne A. Stork Chief Executive Officer and Director November 22, 1995
- ----------------------------------------
Wayne A. Stork
Senior Vice President/Chief Financial
Officer/Chief Administrative Officer
(Principal Financial Officer and
s/David K. Downes Principal Accounting Officer) November 22, 1995
- ----------------------------------------
David K. Downes
/s/Walter P. Babich * Director November 22, 1995
- ----------------------------------------
Walter P. Babich*
/s/Anthony D. Knerr * Director November 22, 1995
- ----------------------------------------
Anthony D. Knerr*
/s/Ann R. Leven * Director November 22, 1995
- ----------------------------------------
Ann R. Leven
/s/W. Thacher Longstreth * Director November 22, 1995
- ----------------------------------------
W. Thacher Longstreth
/s/Charles E. Peck * Director November 22, 1995
- ----------------------------------------
Charles E. Peck
*By/s/Wayne A. Stork
-----------------------------
Wayne A. Stork
as Attorney-in-Fact for
each of the persons indicated
</TABLE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Exhibits
to
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Exhibit
- ------------ -------
<S> <C>
EX-99.B1A Articles of Incorporation, as amended and supplemented to date
EX-99.B1B Form of Articles Supplementary (November 1995)
EX-99.B6AI Form of Distribution Agreement (April 1995)
(Module Name
DIS_AGR_NON_MON)
EX-99.B6AII Form of Amendment No. 1 to Distribution Agreement (November 1995)
(Module Name
AMD_DIS_AGR_NON)
EX-99.B6B Form of Administration and Service Agreement (as amended November 1995)
(Module Name
ADMIN_SER_AGREE)
EX-99.B6C Form of Dealer's Agreement (as amended November 1995)
(Module Name
DEALERS_AGREE)
EX-99.B11 Consents of Auditors
EX-99.B15A Form of Plan under Rule 12b-1 for A Class of each Series (November 1995)
(Module Name
CL_A_SHARE_NON)
EX-99.B15B Form of Plan under Rule 12b-1 for B Class of each Series (November 1995)
(Module Name
CL_B_SHARE_ALL)
EX-99.B15C Form of Plan under Rule 12b-1 for C Class of each Series (November 1995)
(Module Name
CL_C_SHARE_ALL)
EX-99.B18 Form of Plan under Rule 18f-3
(Module Name
PLAN)
</TABLE>
<PAGE>
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
CERTIFICATE OF CORRECTION
Delaware Group Global & International Funds, Inc., a Maryland
corporation having its principal office in Baltimore, Maryland (the
"Corporation"), hereby certifies, in accordance with Section 1-207 of the
Maryland General Corporation Law, to the State Department of Assessments and
Taxation of Maryland that:
FIRST: This Certificate of Correction corrects
Articles Supplementary to Articles of Incorporation filed
with the State Department of Assessments and Taxation of
Maryland on December 27, 1994 (the "Articles Supplementary").
SECOND: The only party to the Articles
Supplementary is the Corporation.
THIRD: A. As filed, Article SECOND of the
Articles Supplementary states:
SECOND: The shares of the Global Bond Fund B Class and the Global
Assets Fund B Class (each referred to herein as a "B Class") shall
represent proportionate interests in the same portfolio of investments
as the shares of, respectively, the Global Bond Fund A Class and the
Global Bond Fund Institutional Class and the Global Assets Fund A Class
and the Global Assets Fund Institutional Class of the Corporation. The
shares of a B Class shall have the same preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends,
qualifications, or terms or conditions of redemption as the shares of
the Global Bond Fund A Class and Global Bond Fund Institutional Class
and the Global Assets Fund A Class and Global Assets Fund Institutional
Class, respectively, all as set forth in the Articles of Incorporation
of the Corporation, except for the differences hereafter set forth:
1. The dividends and distributions of investment income and capital
gains with respect to a B Class of shares of Common Stock of the
respective Series shall be in such amounts as may be declared from time
to time by the Board of Directors, and such dividends and distributions
may vary with respect to such class from the dividends and
distributions of investment income and capital gains with respect
<PAGE>
to the other classes of Common Stock of that Series of the Corporation
to reflect differing allocations of the expenses of the Corporation
among the classes and any resultant difference among the net asset
values per share of the classes, to such extent and for such purposes
as the Board of Directors may deem appropriate. The allocation of
investment income and capital gains and expenses and liabilities of
each Series among its three classes of Common Stock shall be determined
by the Board of Directors in a manner that is consistent with the
order, as applicable, dated September 6, 1994 (Investment Company Act
of 1940 Release No. 20529) issued by the Securities and Exchange
Commission, and any existing or future order or any rule or
interpretation under the Investment Company Act of 1940, as amended,
that modifies or supersedes such order;
2. Except as may otherwise be required by law pursuant to any
applicable order, rule or interpretation issued by the Securities and
Exchange Commission, or otherwise, the holders of a B Class shares
shall have (i) exclusive voting rights with respect to any matter
submitted to a vote of stockholders that affects only holders of the B
Class shares of that Series, including without limitation, the
provisions of any Distribution Plan adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended, (a "Distribution
Plan") applicable to that B Class and (ii) no voting rights with
respect to the provisions of any Distribution Plan applicable to the
existing classes of Common Stock of the respective Series or with
regard to any other matter submitted to a vote of stockholders which
does not affect holders of the B Class shares.
3. (a) Other than shares described in paragraph (3)(b) herein, each
share of the Global Bond Fund B Class and the Global Assets Fund B
Class shall be converted automatically, and without any action or
choice on the part of the holder thereof, into shares of, respectively,
the Global Bond Fund A Class and the Global Assets Fund A Class on the
Conversion Date. The term "Conversion Date" when used herein shall mean
a date set forth in the prospectus of the B Class, as such prospectus
may be amended from time to time, that is no later than three months
after either (i) the date on which the eighth anniversary of the date
of issuance of the share occurs, or (ii) any such other anniversary
date as may be determined by the Board of Directors and set forth in
the prospectus of the B Class, as such prospectus may be amended
<PAGE>
from time to time; provided that any such other anniversary date
determined by the Board of Directors shall be a date that will occur
prior to the anniversary date set forth in clause (i) and any such
other date theretofore determined by the Board of Directors pursuant to
this clause (ii); but further provided that, subject to the provisions
of the next sentence, for any shares of the B Class acquired through an
exchange, or through a series of exchanges, as permitted by the
Corporation as provided in the prospectus of the B Class, as such
prospectus may be amended from time to time, from another investment
company or another series of the Corporation (an "eligible investment
company"), the Conversion Date shall be the conversion date applicable
to the shares of stock of the eligible investment company originally
subscribed for in lieu of the Conversion Date of any stock acquired
through exchange if such eligible investment company issuing the stock
originally subscribed for had a conversion feature, but not later than
the Conversion Date determined under (i) above. For the purpose of
calculating the holding period required for conversion, the date of
issuance of a share of the B Class shall mean (i) in the case of a
share of the B Class obtained by the holder thereof through an original
subscription to the Corporation, the date of the issuance of such share
of the B Class, or (ii) in the case of a share of the B Class obtained
by the holder thereof through an exchange, or through a series of
exchanges, from an eligible investment company, the date of issuance of
the share of the eligible investment company to which the holder
originally subscribed.
(b) Each share of a B Class (i) purchased through the automatic
reinvestment of a dividend or distribution with respect to that B Class
or the corresponding B Class of any other investment company or any
other series of the Corporation issuing such class of shares or (ii)
issued pursuant to an exchange privilege granted by the Corporation in
an exchange or series of exchanges for shares originally purchased
through the automatic reinvestment of a dividend or distribution with
respect to shares of capital stock of an eligible investment company
shall be segregated in a separate sub-account on the stock records of
the Corporation for each of the holders of record thereof. On any
Conversion Date, a number of the shares held in the separate
sub-account of the holder of record of the share or shares being
converted, calculated in accordance with the next following sentence,
shall be converted automatically, and without any action or choice on
<PAGE>
the part of the holder, into shares of the Global Bond Fund A Class in
the case of shares of the Global Bond Fund B Class or the Global Assets
Fund A Class in the case of shares of the Global Assets Fund B Class.
The number of shares in the holder's separate sub-account so converted
shall (i) bear the same ratio to the total number of shares maintained
in the separate sub-account on the Conversion Date (immediately prior
to conversion) as the number of shares of the holder converted on the
Conversion Date pursuant to paragraph (3)(a) hereof bears to the total
number of B Class shares of the holder on the Conversion Date
(immediately prior to conversion) after subtracting the shares then
maintained in the holder's separate sub-account, or (ii) be such other
number as may be calculated in such other manner as may be determined
by the Board of Directors and set forth in the prospectus of the B
Class, as such prospectus may be amended from time to time.
(c) The number of shares of the Global Bond Fund A Class and the Global
Assets Fund A Class, as the case may be, into which a share of a B
Class is converted pursuant to paragraphs 3(a) and 3(b) hereof shall
equal the number (including for this purpose fractions of a share)
obtained by dividing the net asset value per share of such B Class for
purposes of sales and redemption thereof on the Conversion Date by the
net asset value per share of the Global Bond Fund A Class or the Global
Assets Fund A Class, as the case may be, for purposes of sales and
redemption thereof on the Conversion Date.
(d) On the Conversion Date, the shares of a B Class converted into
shares of the Global Bond Fund A Class or the Global Assets Fund A
Class, as the case may be, will no longer be deemed outstanding and the
rights of the holders thereof (except the right to receive (i) the
number of shares of the Global Bond Fund A Class or the Global Assets
Fund A Class into which the shares of the B Class have been converted
and (ii) declared but unpaid dividends to the Conversion Date or such
other date set forth in the prospectus of the B Class, as such
prospectus may be amended from time to time and (iii) the right to vote
converting shares of the B Class held as of any record date occurring
on or before the Conversion Date and theretofore set with respect to
any meeting held after the Conversion Date) will cease. Certificates
representing shares of the Global Bond Fund A Class or the Global
Assets Fund A Class resulting from the conversion need not be issued
<PAGE>
until certificates representing shares of the relevant B Class
converted, if issued, have been received by the Corporation or its
agent duly endorsed for transfer.
(e) The automatic conversion of a B Class into the Global Bond Fund A
Class or the Global Assets Fund A Class, as the case may be, as set
forth in paragraphs 3(a) and 3(b) of this Article SECOND shall be
suspended at any time that the Board of Directors determines (i) that
there is not available a reasonably satisfactory opinion of counsel to
the effect that (x) the assessment of the higher fee under the
Distribution Plan with respect to the B Class does not result in the
Corporation's dividends or distributions constituting a "preferential
dividend" under the Internal Revenue Code of 1986, as amended, and (y)
the conversion of the B Class does not constitute a taxable event under
federal income tax law, or (ii) any other condition to conversion set
forth in the prospectus of the B Class, as such prospectus may be
amended from time to time, is not satisfied.
(f) The automatic conversion of a B Class into the Global Bond Fund A
Class or the Global Assets Fund A Class, as the case may be, as set
forth in paragraphs 3(a) and 3(b) hereof may also be suspended by
action of the Board of Directors at any time that the Board of
Directors determines such suspension to be appropriate in order to
comply with, or satisfy the requirements of the Investment Company Act
of 1940, as amended, and in effect from time to time, or any rule,
regulation or order issued thereunder relating to voting by the holders
of the B Class on any Distribution Plan with respect to, as relevant,
the Global Bond Fund A Class or the Global Assets Fund A Class and in
effect from time to time, and in connection with, or in lieu of, any
such suspension, the Board of Directors may provide holders of the B
Class with alternative conversion or exchange rights into other classes
of stock of the Corporation in a manner consistent with the law, rule,
regulation or order giving rise to the possible suspension of the
conversion right.
B. Article SECOND of the Articles Supplementary, as corrected, states:
SECOND: The shares of the Global Bond Fund B Class and the Global
Assets Fund B Class (each referred to herein as a "B Class") shall
represent proportionate interests in the same portfolio of investments
as the shares of, respectively, the Global Bond Fund A Class
<PAGE>
and the Global Bond Fund Institutional Class and the Global Assets Fund
A Class and the Global Assets Fund Institutional Class of the
Corporation. The shares of a B Class shall have the same preferences,
conversion or other rights, voting powers, restrictions, limitations as
to dividends, qualifications, or terms or conditions of redemption as
the shares of the Global Bond Fund A Class and Global Bond Fund
Institutional Class and the Global Assets Fund A Class and Global
Assets Fund Institutional Class, respectively, all as set forth in the
Articles of Incorporation of the Corporation, except for the
differences hereafter set forth:
1. The dividends and distributions of investment income and capital
gains with respect to a B Class of shares of Common Stock of the
respective Series shall be in such amounts as may be declared from time
to time by the Board of Directors, and such dividends and distributions
may vary with respect to such class from the dividends and
distributions of investment income and capital gains with respect to
the other classes of Common Stock of that Series of the Corporation to
reflect differing allocations of the expenses of the Corporation among
the classes and any resultant difference among the net asset values per
share of the classes, to such extent and for such purposes as the Board
of Directors may deem appropriate. The allocation of investment income
and capital gains and expenses and liabilities of each Series among its
three classes of Common Stock shall be determined by the Board of
Directors in a manner that is consistent with the orders, as
applicable, dated April 10, 1987 and September 6, 1994 (Investment
Company Act of 1940 Release Nos. 15675 and 20529) issued by the
Securities and Exchange Commission, and any existing or future order or
any rule or interpretation under the Investment Company Act of 1940, as
amended, that modifies or supersedes such orders;
2. Except as may otherwise be required by law pursuant to any
applicable order, rule or interpretation issued by the Securities and
Exchange Commission, or otherwise, the holders of a B Class shares
shall have (i) exclusive voting rights with respect to any matter
submitted to a vote of stockholders that affects only holders of the B
Class shares of that Series, including without limitation, the
provisions of any Distribution Plan adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended, (a "Distribution
Plan") applicable to that B Class and (ii) no voting rights with
<PAGE>
respect to the provisions of any Distribution Plan applicable to the
existing classes of Common Stock of the respective Series or with
regard to any other matter submitted to a vote of stockholders which
does not affect holders of the B Class shares.
3. (a) Other than shares described in paragraph (3)(b) herein, each
share of the Global Bond Fund B Class and the Global Assets Fund B
Class shall be converted automatically, and without any action or
choice on the part of the holder thereof, into shares of, respectively,
the Global Bond Fund A Class and the Global Assets Fund A Class on the
Conversion Date. The term "Conversion Date" when used herein shall mean
a date set forth in the prospectus of the B Class, as such prospectus
may be amended from time to time, that is no later than three months
after either (i) the date on which the eighth anniversary of the date
of issuance of the share occurs, or (ii) any such other anniversary
date as may be determined by the Board of Directors and set forth in
the prospectus of the B Class, as such prospectus may be amended from
time to time; provided that any such other anniversary date determined
by the Board of Directors shall be a date that will occur prior to the
anniversary date set forth in clause (i) and any such other date
theretofore determined by the Board of Directors pursuant to this
clause (ii); but further provided that, subject to the provisions of
the next sentence, for any shares of the B Class acquired through an
exchange, or through a series of exchanges, as permitted by the
Corporation as provided in the prospectus of the B Class, as such
prospectus may be amended from time to time, from another investment
company or another series of the Corporation (an "eligible investment
company"), the Conversion Date shall be the conversion date applicable
to the shares of stock of the eligible investment company originally
subscribed for in lieu of the Conversion Date of any stock acquired
through exchange if such eligible investment company issuing the stock
originally subscribed for had a conversion feature, but not later than
the Conversion Date determined under (i) above. For the purpose of
calculating the holding period required for conversion, the date of
issuance of a share of the B Class shall mean (i) in the case of a
share of the B Class obtained by the holder thereof through an original
subscription to the Corporation, the date of the issuance of such share
of the B Class, or (ii) in the case of a share of the B Class obtained
by the holder thereof through an exchange, or through a series of
exchanges, from an eligible investment company, the date of issuance
<PAGE>
of the share of the eligible investment company to which the holder
originally subscribed.
(b) Each share of a B Class (i) purchased through the automatic
reinvestment of a dividend or distribution with respect to that B Class
or the corresponding B Class of any other investment company or any
other series of the Corporation issuing such class of shares or (ii)
issued pursuant to an exchange privilege granted by the Corporation in
an exchange or series of exchanges for shares originally purchased
through the automatic reinvestment of a dividend or distribution with
respect to shares of capital stock of an eligible investment company
shall be segregated in a separate sub-account on the stock records of
the Corporation for each of the holders of record thereof. On any
Conversion Date, a number of the shares held in the separate
sub-account of the holder of record of the share or shares being
converted, calculated in accordance with the next following sentence,
shall be converted automatically, and without any action or choice on
the part of the holder, into shares of the Global Bond Fund A Class in
the case of shares of the Global Bond Fund B Class or the Global Assets
Fund A Class in the case of shares of the Global Assets Fund B Class.
The number of shares in the holder's separate sub-account so converted
shall (i) bear the same ratio to the total number of shares maintained
in the separate sub-account on the Conversion Date (immediately prior
to conversion) as the number of shares of the holder converted on the
Conversion Date pursuant to paragraph (3)(a) hereof bears to the total
number of B Class shares of the holder on the Conversion Date
(immediately prior to conversion) after subtracting the shares then
maintained in the holder's separate sub-account, or (ii) be such other
number as may be calculated in such other manner as may be determined
by the Board of Directors and set forth in the prospectus of the B
Class, as such prospectus may be amended from time to time.
(c) The number of shares of the Global Bond Fund A Class and the Global
Assets Fund A Class, as the case may be, into which a share of a B
Class is converted pursuant to paragraphs 3(a) and 3(b) hereof shall
equal the number (including for this purpose fractions of a share)
obtained by dividing the net asset value per share of such B Class for
purposes of sales and redemption thereof on the Conversion Date by the
net asset value per share of the Global Bond Fund A Class or the Global
Assets Fund A Class, as the case may be, for purposes of sales and
redemption thereof on the Conversion Date.
<PAGE>
(d) On the Conversion Date, the shares of a B Class converted into
shares of the Global Bond Fund A Class or the Global Assets Fund A
Class, as the case may be, will no longer be deemed outstanding and the
rights of the holders thereof (except the right to receive (i) the
number of shares of the Global Bond Fund A Class or the Global Assets
Fund A Class into which the shares of the B Class have been converted
and (ii) declared but unpaid dividends to the Conversion Date or such
other date set forth in the prospectus of the B Class, as such
prospectus may be amended from time to time and (iii) the right to vote
converting shares of the B Class held as of any record date occurring
on or before the Conversion Date and theretofore set with respect to
any meeting held after the Conversion Date) will cease. Certificates
representing shares of the Global Bond Fund A Class or the Global
Assets Fund A Class resulting from the conversion need not be issued
until certificates representing shares of the relevant B Class
converted, if issued, have been received by the Corporation or its
agent duly endorsed for transfer.
(e) The automatic conversion of a B Class into the Global Bond Fund A
Class or the Global Assets Fund A Class, as the case may be, as set
forth in paragraphs 3(a) and 3(b) of this Article SECOND shall be
suspended at any time that the Board of Directors determines (i) that
there is not available a reasonably satisfactory opinion of counsel to
the effect that (x) the assessment of the higher fee under the
Distribution Plan with respect to the B Class does not result in the
Corporation's dividends or distributions constituting a "preferential
dividend" under the Internal Revenue Code of 1986, as amended, and (y)
the conversion of the B Class does not constitute a taxable event under
federal income tax law, or (ii) any other condition to conversion set
forth in the prospectus of the B Class, as such prospectus may be
amended from time to time, is not satisfied.
(f) The automatic conversion of a B Class into the Global Bond Fund A
Class or the Global Assets Fund A Class, as the case may be, as set
forth in paragraphs 3(a) and 3(b) hereof may also be suspended by
action of the Board of Directors at any time that the Board of
Directors determines such suspension to be appropriate in order to
comply with, or satisfy the requirements of the Investment Company Act
<PAGE>
of 1940, as amended, and in effect from time to time, or any rule,
regulation or order issued thereunder relating to voting by the holders
of the B Class on any Distribution Plan with respect to, as relevant,
the Global Bond Fund A Class or the Global Assets Fund A Class and in
effect from time to time, and in connection with, or in lieu of, any
such suspension, the Board of Directors may provide holders of the B
Class with alternative conversion or exchange rights into other classes
of stock of the Corporation in a manner consistent with the law, rule,
regulation or order giving rise to the possible suspension of the
conversion right.
IN WITNESS WHEREOF, Delaware Group Global & International Funds, Inc.
has caused this Certificate of Correction to be signed in its name and on its
behalf this 28th day of December, 1994.
DELAWARE GROUP GLOBAL &
INTERNATIONAL FUNDS, INC.
By: /s/ Eric E. Miller
---------------------
Eric E. Miller
Vice President
ATTEST:
/s/ Richelle S. Maestro
- ------------------------
Richelle S. Maestro
Assistant Secretary
THE UNDERSIGNED, Vice President of DELAWARE GROUP GLOBAL &
INTERNATIONAL FUNDS, INC., who executed on behalf of the said Corporation the
foregoing Certificate of Correction, of which this instrument is made a part,
hereby acknowledges, in the name of and on behalf of said Corporation, said
Certificate of Correction to be the corporate act of said Corporation and
further certifies that, to the best of his knowledge, information and belief,
the matters and facts set forth therein with respect to the authorization and
approval thereof are true in all material respects, under the penalties of
perjury.
/s/ Eric E. Miller
--------------------
Eric E. Miller
Vice President
<PAGE>
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
ARTICLES SUPPLEMENTARY
TO
ARTICLES OF INCORPORATION
Delaware Group Global & International Funds, Inc., a Maryland
corporation having its principal office in Baltimore, Maryland (the
"Corporation"), hereby certifies, in accordance with Section 2-208 of the
Maryland General Corporation Law, to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The Board of Directors of the Corporation
has adopted resolutions taking the following actions:
1. redesignating (1) the Global Income Series, the Global Income Fund
class and the Global Income Fund (Institutional) class as,
respectively, the Global Bond Series, the Global Bond Fund A Class and
the Global Bond Fund Institutional Class and (2) the Global Total
Return Series, the Global Total Return Fund class and the Global Total
Return Fund (Institutional) class as, respectively, the Global Assets
Series, the Global Assets Fund A Class and the Global Assets Fund
Institutional Class;
2. classifying a third class of shares of the Global Bond Series of
Common Stock of the Corporation as the Global Bond Fund B Class and
allocating 50,000,000 shares of authorized, unissued and unclassified
Common Stock, par value $0.01 per share, to the Global Bond Fund B
Class; and
3. classifying a third class of shares of the Global Assets Series of
Common Stock of the Corporation as the Global Assets Fund B Class and
allocating 50,000,000 shares of authorized, unissued and unclassified
Common Stock, par value $0.01 per share, to the Global Assets Fund B
Class.
SECOND: The shares of the Global Bond Fund B Class and the Global
Assets Fund B Class (each referred to herein as a "B Class") shall represent
proportionate interests in the same portfolio of investments as the shares
<PAGE>
of, respectively, the Global Bond Fund A Class and the Global Bond Fund
Institutional Class and the Global Assets Fund A Class and the Global Assets
Fund Institutional Class of the Corporation. The shares of a B Class shall have
the same preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, or terms or conditions of
redemption as the shares of the Global Bond Fund A Class and Global Bond Fund
Institutional Class and the Global Assets Fund A Class and Global Assets Fund
Institutional Class, respectively, all as set forth in the Articles of
Incorporation of the Corporation, except for the differences hereafter set
forth:
1. The dividends and distributions of investment income and capital
gains with respect to a B Class of shares of Common Stock of the
respective Series shall be in such amounts as may be declared from time
to time by the Board of Directors, and such dividends and distributions
may vary with respect to such class from the dividends and
distributions of investment income and capital gains with respect to
the other classes of Common Stock of that Series of the Corporation to
reflect differing allocations of the expenses of the Corporation among
the classes and any resultant difference among the net asset values per
share of the classes, to such extent and for such purposes as the Board
of Directors may deem appropriate. The allocation of investment income
and capital gains and expenses and liabilities of each Series among its
three classes of Common Stock shall be determined by the Board of
Directors in a manner that is consistent with the order, as applicable,
dated September 6, 1994 (Investment Company Act of 1940 Release No.
20529) issued by the Securities and Exchange Commission, and any
existing or future order or any rule or interpretation under the
Investment Company Act of 1940, as amended, that modifies or supersedes
such order;
2. Except as may otherwise be required by law pursuant to any
applicable order, rule or interpretation issued by the Securities and
Exchange Commission, or otherwise, the holders of a B Class shares
shall have (i) exclusive voting rights with respect to any matter
submitted to a vote of stockholders that affects only holders of the B
Class shares of that Series, including without limitation, the
provisions of any Distribution Plan adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended, (a "Distribution
Plan") applicable to that B Class and (ii) no voting rights with
respect to the provisions of any Distribution Plan applicable to the
existing classes of Common Stock of the respective Series or with
<PAGE>
regard to any other matter submitted to a vote of stockholders which
does not affect holders of the B Class shares.
3. (a) Other than shares described in paragraph (3)(b) herein, each
share of the Global Bond Fund B Class and the Global Assets Fund B
Class shall be converted automatically, and without any action or
choice on the part of the holder thereof, into shares of, respectively,
the Global Bond Fund A Class and the Global Assets Fund A Class on the
Conversion Date. The term "Conversion Date" when used herein shall mean
a date set forth in the prospectus of the B Class, as such prospectus
may be amended from time to time, that is no later than three months
after either (i) the date on which the eighth anniversary of the date
of issuance of the share occurs, or (ii) any such other anniversary
date as may be determined by the Board of Directors and set forth in
the prospectus of the B Class, as such prospectus may be amended from
time to time; provided that any such other anniversary date determined
by the Board of Directors shall be a date that will occur prior to the
anniversary date set forth in clause (i) and any such other date
theretofore determined by the Board of Directors pursuant to this
clause (ii); but further provided that, subject to the provisions of
the next sentence, for any shares of the B Class acquired through an
exchange, or through a series of exchanges, as permitted by the
Corporation as provided in the prospectus of the B Class, as such
prospectus may be amended from time to time, from another investment
company or another series of the Corporation (an "eligible investment
company"), the Conversion Date shall be the conversion date applicable
to the shares of stock of the eligible investment company originally
subscribed for in lieu of the Conversion Date of any stock acquired
through exchange if such eligible investment company issuing the stock
originally subscribed for had a conversion feature, but not later than
the Conversion Date determined under (i) above. For the purpose of
calculating the holding period required for conversion, the date of
issuance of a share of the B Class shall mean (i) in the case of a
share of the B Class obtained by the holder thereof through an original
subscription to the Corporation, the date of the issuance of such share
of the B Class, or (ii) in the case of a share of the B Class obtained
by the holder thereof through an exchange, or through a series of
exchanges, from an eligible investment company, the date of issuance of
the share of the eligible investment company to which the holder
originally subscribed.
<PAGE>
(b) Each share of a B Class (i) purchased through the automatic
reinvestment of a dividend or distribution with respect to that B Class
or the corresponding B Class of any other investment company or any
other series of the Corporation issuing such class of shares or (ii)
issued pursuant to an exchange privilege granted by the Corporation in
an exchange or series of exchanges for shares originally purchased
through the automatic reinvestment of a dividend or distribution with
respect to shares of capital stock of an eligible investment company
shall be segregated in a separate sub-account on the stock records of
the Corporation for each of the holders of record thereof. On any
Conversion Date, a number of the shares held in the separate
sub-account of the holder of record of the share or shares being
converted, calculated in accordance with the next following sentence,
shall be converted automatically, and without any action or choice on
the part of the holder, into shares of the Global Bond Fund A Class in
the case of shares of the Global Bond Fund B Class or the Global Assets
Fund A Class in the case of shares of the Global Assets Fund B Class.
The number of shares in the holder's separate sub-account so converted
shall (i) bear the same ratio to the total number of shares maintained
in the separate sub-account on the Conversion Date (immediately prior
to conversion) as the number of shares of the holder converted on the
Conversion Date pursuant to paragraph (3)(a) hereof bears to the total
number of B Class shares of the holder on the Conversion Date
(immediately prior to conversion) after subtracting the shares then
maintained in the holder's separate sub-account, or (ii) be such other
number as may be calculated in such other manner as may be determined
by the Board of Directors and set forth in the prospectus of the B
Class, as such prospectus may be amended from time to time.
(c) The number of shares of the Global Bond Fund A Class and the Global
Assets Fund A Class, as the case may be, into which a share of a B
Class is converted pursuant to paragraphs 3(a) and 3(b) hereof shall
equal the number (including for this purpose fractions of a share)
obtained by dividing the net asset value per share of such B Class for
purposes of sales and redemption thereof on the Conversion Date by the
net asset value per share of the Global Bond Fund A Class or the Global
Assets Fund A Class, as the case may be, for purposes of sales and
redemption thereof on the Conversion Date.
<PAGE>
(d) On the Conversion Date, the shares of a B Class converted into
shares of the Global Bond Fund A Class or the Global Assets Fund A
Class, as the case may be, will no longer be deemed outstanding and the
rights of the holders thereof (except the right to receive (i) the
number of shares of the Global Bond Fund A Class or the Global Assets
Fund A Class into which the shares of the B Class have been converted
and (ii) declared but unpaid dividends to the Conversion Date or such
other date set forth in the prospectus of the B Class, as such
prospectus may be amended from time to time and (iii) the right to vote
converting shares of the B Class held as of any record date occurring
on or before the Conversion Date and theretofore set with respect to
any meeting held after the Conversion Date) will cease. Certificates
representing shares of the Global Bond Fund A Class or the Global
Assets Fund A Class resulting from the conversion need not be issued
until certificates representing shares of the relevant B Class
converted, if issued, have been received by the Corporation or its
agent duly endorsed for transfer.
(e) The automatic conversion of a B Class into the Global Bond Fund A
Class or the Global Assets Fund A Class, as the case may be, as set
forth in paragraphs 3(a) and 3(b) of this Article SECOND shall be
suspended at any time that the Board of Directors determines (i) that
there is not available a reasonably satisfactory opinion of counsel to
the effect that (x) the assessment of the higher fee under the
Distribution Plan with respect to the B Class does not result in the
Corporation's dividends or distributions constituting a "preferential
dividend" under the Internal Revenue Code of 1986, as amended, and (y)
the conversion of the B Class does not constitute a taxable event under
federal income tax law, or (ii) any other condition to conversion set
forth in the prospectus of the B Class, as such prospectus may be
amended from time to time, is not satisfied.
(f) The automatic conversion of a B Class into the Global Bond Fund A
Class or the Global Assets Fund A Class, as the case may be, as set
forth in paragraphs 3(a) and 3(b) hereof may also be suspended by
action of the Board of Directors at any time that the Board of
Directors determines such suspension to be appropriate in order to
comply with, or satisfy the requirements of the Investment Company Act
of 1940, as amended, and in effect from time to time, or any rule,
regulation or order issued thereunder relating to voting by the holders
of the B Class on any Distribution Plan with respect to, as relevant,
<PAGE>
the Global Bond Fund A Class or the Global Assets Fund A Class and in
effect from time to time, and in connection with, or in lieu of, any
such suspension, the Board of Directors may provide holders of the B
Class with alternative conversion or exchange rights into other classes
of stock of the Corporation in a manner consistent with the law, rule,
regulation or order giving rise to the possible suspension of the
conversion right.
THIRD: The shares of the Global Bond Fund B Class and the Global Assets
Fund B Class have been classified by the Board of Directors pursuant to
authority contained in the Articles of Incorporation of the Corporation.
IN WITNESS WHEREOF, Delaware Group Global & International Funds, Inc.
has caused these Articles Supplementary to be signed in its name and on its
behalf this 27th day of December, 1994.
DELAWARE GROUP GLOBAL &
INTERNATIONAL FUNDS, INC.
By: /s/ Eric E. Miller
--------------------
Eric E. Miller
Vice President
ATTEST:
/s/ Richelle S. Maestro
- -------------------------
Richelle S. Maestro
Assistant Secretary
THE UNDERSIGNED, Vice President of DELAWARE GROUP GLOBAL &
INTERNATIONAL FUNDS, INC., who executed on behalf of the said Corporation the
foregoing Articles Supplementary, of which this instrument is made a part,
hereby acknowledges, in the name of and on behalf of said Corporation, said
Articles Supplementary to be the corporate act of said Corporation and further
certifies that, to the best of his knowledge, information and belief, the
matters and facts set forth therein with respect to the authorization and
approval thereof are true in all material respects, under the penalties of
perjury.
/s/ Eric E. Miller
--------------------
Eric E. Miller
Vice President
<PAGE>
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
ARTICLES SUPPLEMENTARY
TO
ARTICLES OF INCORPORATION
Delaware Group Global & International Funds, Inc., a Maryland
corporation having its principal office in Baltimore, Maryland (the
"Corporation"), hereby certifies, in accordance with Section 2-208 of the
Maryland General Corporation Law, to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The Board of Directors of the Corporation has adopted a
resolution classifying a third class of shares of Common Stock of the
International Equity Fund Series of the Corporation as the International Equity
Fund B Class and allocating 50,000,000 shares of authorized, unissued and
unclassified Common Stock, par value $0.01 per share, to the International
Equity Fund B Class (the "B Class").
SECOND: The shares of the B Class shall represent proportionate
interests in the same portfolio of investments as the shares of the
International Equity Fund (Institutional) class and the International Equity
Fund class of the Corporation. The shares of the B Class shall have the same
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, or terms or conditions of
redemption as the shares of the International Equity Fund (Institutional) class
and the International Equity Fund class, all as set forth in the Articles of
Incorporation of the Corporation, except for the differences hereafter set
forth:
1. The dividends and distributions of investment income and capital
gains with respect to the B Class of shares of Common Stock shall be in such
amounts as may be declared from time to time by the Board of Directors, and such
dividends and distributions may vary with respect to such class from the
dividends and distributions of investment income and capital gains with respect
to the other classes of Common Stock of the Corporation to reflect differing
allocations of the expenses of the Corporation among the classes and any
resultant difference among the net asset values per share of the classes, to
such extent and for such purposes as the Board of Directors may deem
appropriate. The allocation of investment income and capital gains and expenses
and liabilities of the Corporation among the three classes of Common Stock of
the Corporation shall be determined by the Board of Directors in a manner that
is consistent with the order, as applicable, dated November 9, 1992 (Investment
Company Act of 1940 Release No. 19086) issued by the Securities and Exchange
Commission, and any future order or any rule or interpretation under the
Investment Company Act of 1940, as amended, that modifies or supersedes such
order;
<PAGE>
2. Except as may otherwise be required by law pursuant to any
applicable order, rule or interpretation issued by the Securities and Exchange
Commission, or otherwise, the holders of the B Class shares shall have (i)
exclusive voting rights with respect to any matter submitted to a vote of
stockholders that affects only holders of the B Class shares, including without
limitation, the provisions of any Distribution Plan adopted pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended, (a "Distribution
Plan") applicable to the B Class and (ii) no voting rights with respect to the
provisions of any Distribution Plan applicable to the existing classes of Common
Stock or with regard to any other matter submitted to a vote of stockholders
which does not affect holders of the B Class shares.
3. (a) Each share of the B Class, other than shares described in
paragraph (3)(b) herein, shall be converted automatically, and without any
action or choice on the part of the holder thereof, into shares of the
International Equity Fund class on the Conversion Date. The term "Conversion
Date" when used herein shall mean a date set forth in the prospectus of the B
Class, as such prospectus may be amended from time to time, that is no later
than three months after either (i) the date on which the eighth anniversary of
the date of issuance of the share occurs, or (ii) any such other anniversary
date as may be determined by the Board of Directors and set forth in the
prospectus of the B Class, as such prospectus may be amended from time to time;
provided that any such other anniversary date determined by the Board of
Directors shall be a date that will occur prior to the anniversary date set
forth in clause (i) and any such other date theretofore determined by the Board
of Directors pursuant to this clause (ii); but further provided that, subject to
the provisions of the next sentence, for any shares of the B Class acquired
through an exchange, or through a series of exchanges, as permitted by the
Corporation as provided in the prospectus of the B Class, as such prospectus may
be amended from time to time, from another investment company or another series
of the Corporation (an "eligible investment company"), the Conversion Date shall
be the conversion date applicable to the shares of stock of the eligible
investment company originally subscribed for in lieu of the Conversion Date of
any stock acquired through exchange if such eligible investment company issuing
the stock originally subscribed for had a conversion feature, but not later than
the Conversion Date determined under (i) above. For the purpose of calculating
the holding period required for conversion, the date of issuance of a share of
the B Class shall mean (i) in the case of a share of the B Class obtained by the
holder thereof through an original subscription to the Corporation, the date of
the issuance of such share of the B Class or (ii) in the case of a share of the
B Class obtained by the holder thereof through an exchange, or through a series
of exchanges, from an eligible investment company, the date of issuance of the
share of the eligible investment company to which the holder originally
subscribed.
<PAGE>
(b) Each share of the B Class (i) purchased through the automatic
reinvestment of a dividend or distribution with respect to the B Class or the
corresponding B Class of any other investment company or any other series of the
Corporation issuing such class of shares or (ii) issued pursuant to an exchange
privilege granted by the Corporation in an exchange or series of exchanges for
shares originally purchased through the automatic reinvestment of a dividend or
distribution with respect to shares of capital stock of an eligible investment
company shall be segregated in a separate sub-account on the stock records of
the Corporation for each of the holders of record thereof. On any Conversion
Date, a number of the shares held in the separate sub-account of the holder of
record of the share or shares being converted, calculated in accordance with the
next following sentence shall be converted automatically, and without any action
or choice on the part of the holder, into shares of the International Equity
Fund class. The number of shares in the holder's separate sub-account so
converted shall (i) bear the same ratio to the total number of shares maintained
in the separate sub-account on the Conversion Date (immediately prior to
conversion) as the number of shares of the holder converted on the Conversion
Date pursuant to paragraph (3)(a) hereof bears to the total number of B Class
shares of the holder on the Conversion Date (immediately prior to conversion)
after subtracting the shares then maintained in the holder's separate
sub-account, or (ii) be such other number as may be calculated in such other
manner as may be determined by the Board of Directors and set forth in the
prospectus of the B Class, as such prospectus may be amended from time to time.
(c) The number of shares of the International Equity Fund class into
which a share of the B Class is converted pursuant to paragraphs 3(a) and 3(b)
hereof shall equal the number (including for this purpose fractions of a share)
obtained by dividing the net asset value per share of the B Class for purposes
of sales and redemption thereof on the Conversion Date by the net asset value
<PAGE>
per share of the International Equity Fund class for purposes of sales and
redemption thereof on the Conversion Date.
(d) On the Conversion Date, the shares of the B Class converted into
shares of the International Equity Fund class will no longer be deemed
outstanding and the rights of the holders thereof (except the right to receive
(i) the number of shares of the International Equity Fund class into which the
shares of the B Class have been converted and (ii) declared but unpaid dividends
to the Conversion Date or such other date set forth in the prospectus of the B
Class, as such prospectus may be amended from time to time and (iii) the right
to vote converting shares of the B Class held as of any record date occurring on
or before the Conversion Date and theretofore set with respect to any meeting
held after the Conversion Date) will cease. Certificates representing shares of
the International Equity Fund class resulting from the conversion need not be
issued until certificates representing shares of the B Class converted, if
issued, have been received by the Corporation or its agent duly endorsed for
transfer.
(e) The automatic conversion of the B Class into the International
Equity Fund class as set forth in paragraphs 3(a) and 3(b) of this Article
SECOND shall be suspended at any time that the Board of Directors determines (i)
that there is not available a reasonably satisfactory opinion of counsel to the
effect that (x) the assessment of the higher fee under the Distribution Plan
with respect to the B Class does not result in the Corporation's dividends or
distributions constituting a "preferential dividend" under the Internal Revenue
Code of 1986, as amended, and (y) the conversion of the B Class does not
constitute a taxable event under federal income tax law, or (ii) any other
condition to conversion set forth in the prospectus of the B Class, as such
prospectus may be amended from time to time, is not satisfied.
(f) The automatic conversion of the B Class into the International
Equity Fund Class as set forth in paragraphs 3(a) and 3(b) hereof may also be
suspended by action of the Board of Directors at any time that the Board of
Directors determines such suspension to be appropriate in order to comply with,
or satisfy the requirements of the Investment Company Act of 1940, as amended,
and in effect from time to time, or any rule, regulation or order issued
thereunder relating to voting by the holders of the B Class on any Distribution
Plan with respect to the International Equity Fund class and in effect from time
to time, and in connection with, or in lieu of, any such suspension, the Board
of Directors may provide holders of the B Class with alternative conversion or
exchange rights into other classes of stock of the Corporation in a manner
consistent with the law, rule, regulation or order giving rise to the possible
suspension of the conversion right.
<PAGE>
THIRD: The shares of the B Class have been classified by the Board of
Directors pursuant to authority contained in the Articles of Incorporation of
the Corporation.
IN WITNESS WHEREOF, Delaware Group Global & International Funds, Inc.
has caused these Articles Supplementary to be signed in its name and on its
behalf this 2nd day of September, 1994.
DELAWARE GROUP GLOBAL &
INTERNATIONAL FUNDS, INC.
By: /s/ George M. Chamberlain, Jr.
--------------------------------
George M. Chamberlain, Jr.
Senior Vice President
ATTEST:
/s/ Eric E. Miller
- --------------------
Eric E. Miller
Assistant Secretary
THE UNDERSIGNED, Senior Vice President of DELAWARE GROUP GLOBAL &
INTERNATIONAL FUNDS, INC., who executed on behalf of the said Corporation the
foregoing Articles Supplementary, of which this instrument is made a part,
hereby acknowledge, in the name of and on behalf of said Corporation, said
Articles Supplementary to be the corporate act of said Corporation and further
certifies that, to the best of his knowledge, information and belief, the
matters and facts set forth therein with respect to the authorization and
approval thereof are true in all material respects, under the penalties of
perjury.
/s/ George M. Chamberlain, Jr.
-------------------------------
George M. Chamberlain, Jr.
Senior Vice President
<PAGE>
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
ARTICLES SUPPLEMENTARY
TO
ARTICLES OF INCORPORATION
Delaware Group Global & International Funds, Inc., a Maryland
corporation having its principal office in Baltimore, Maryland (the
"Corporation"), hereby certifies, in accordance with Section 2-208 of the
Maryland General Corporation Law, to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The Board of Directors of the Corporation has adopted a
resolution designating a second class of shares of Common Stock of each Series,
respectively, as the International Equity Fund (Institutional) class, Global
Income Fund (Institutional) class and Global Total Return Fund (Institutional)
class (as distinguished from the existing class of common stock of each Series,
which shall henceforth be identified, respectively, as the International Equity
Fund class, Global Income Fund class and Global Total return Fund class), and
classifying and allocating Fifty Million (50,000,000) shares of authorized,
unissued and unclassified Common Stock, with a par value of One Cent ($.01) per
share, to the new class of each Series.
SECOND: The shares of the new class of each Series and the existing
class of such Series shall represent proportionate interests in the same
portfolio of investments of such Series. The shares of the new class of each
Series of the Corporation shall have the same rights and privileges, and shall
be subject to the same limitations and priorities as the shares of the existing
class of each Series, all as set forth in the Articles of Incorporation of the
Corporation, provided that dividends paid on the shares of, respectively, the
International Equity Fund (Institutional) class, Global Income Fund
(Institutional) class and Global Total Return Fund (Institutional) class shall
not reflect any reduction for payment of fees under the Distribution Plan of,
respectively, the International Equity Fund class, Global Income Fund class and
Global Total Return Fund class adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended, and provided further, that the
shares of the International Equity Fund (Institutional) class, Global Income
Fund (Institutional) class and Global Total Return Fund (Institutional) class
shall not vote upon or with respect to any matter relating to or arising from
any such Distribution Plan.
THIRD: The shares of each such class of the Corporation have been
classified by the Board of Directors pursuant to authority contained in the
Articles of Incorporation of the Corporation.
<PAGE>
IN WITNESS WHEREOF, Delaware Group Global & International Funds, Inc.
has caused these Articles Supplementary to be signed in its name and on its
behalf this 22nd day of May, 1992.
DELAWARE GROUP GLOBAL &
INTERNATIONAL FUNDS, INC.
By: /s/ George M. Chamberlain, Jr.
--------------------------------
George M. Chamberlain, Jr.
Vice President
ATTEST:
/s/ Eric E. Miller
- ---------------------
Eric E. Miller
Assistant Secretary
THE UNDERSIGNED, Vice President of DELAWARE GROUP GLOBAL &
INTERNATIONAL FUNDS, INC., who executed on behalf of the said Corporation the
foregoing Articles Supplementary, of which this instrument is made a part,
hereby acknowledges, in the name of and on behalf of said Corporation, said
Articles Supplementary to be the corporate act of said Corporation and further
certifies that, to the best of his knowledge, information and belief, the
matters and facts set forth therein with respect to the approval thereof are
true in all material respects, under the penalties of perjury.
/s/ George M. Chamberlain, Jr.
- --------------------------------
George M. Chamberlain, Jr.
<PAGE>
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
Delaware Group Global & International Funds, Inc., a Maryland
corporation having its principal Maryland office in Baltimore, Maryland (the
"Corporation"), hereby certifies, in accordance with Section 2-604 of the
Maryland General Corporation Law, to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The Articles of Incorporation are hereby amended by striking out
the fourth paragraph of Article FIFTH of the Articles of Incorporation and
inserting in lieu thereof the following:
Subject to the aforesaid power of the Board of Directors, one series of
shares is hereby designated and classified as the International Equity
Series and Fifty Million (50,000,000) shares of Common Stock (par value
$.01 per share) are hereby initially classified and allocated to such
series; a second series of shares is hereby designated and classified
as the Global Income Series and Fifty Million (50,000,000) shares of
Common Stock (par value $.01 per share) are hereby initially classified
and allocated to such series; and a third series of shares is hereby
designated and classified as the Global Total Return Series and Fifty
Million (50,000,000) shares of Common Stock (par value $.01 per share)
are hereby initially classified and allocated to such series. At any
time when there are no shares outstanding or subscribed for a
particular series or sub-series previously established and designated
herein or by the Board of Directors, the series or sub-series may be
eliminated by the Board of Directors by the same means.
SECOND: The Board of Directors of the Corporation at a meeting duly
convened and held on July 22, 1991, approved changing the name of the Global
Bond Series to the Global Income Series and adopted a resolution approving the
foregoing action, declaring that said action as proposed was advisable and
directing that it be submitted for approval to the sole stockholder of the
Global Bond Series of the Corporation.
THIRD: Pursuant to the requirements of Section 2-505 of the Maryland
General Corporation Law governing actions taken by unanimous consent of
stockholders, the sole stockholder of the Global Bond Series of the Corporation
consented to, approved and adopted the amendment to the Articles of
Incorporation of the Corporation as set forth above.
<PAGE>
FOURTH: The above amendment to the Articles of Incorporation has been
duly advised by the Board of Directors and approved by the sole stockholder of
the Global Bond Series of the Corporation.
FIFTH: The Articles of Amendment shall become effective on the date
such Articles are accepted for filing by the Department of Assessments and
Taxation.
IN WITNESS WHEREOF, Delaware Group Global & International Funds, Inc.
has caused these Articles of Amendment to be signed in its name and on its
behalf this 12th day of August, 1991.
ATTEST: DELAWARE GROUP GLOBAL &
INTERNATIONAL FUNDS, INC.
/s/ Richard J. Flannery By: /s/ Eric E. Miller
- ------------------------ ----------------------
Richard J. Flannery Eric E. Miller
Assistant Secretary Vice President
THE UNDERSIGNED, Vice President of DELAWARE GROUP GLOBAL &
INTERNATIONAL FUNDS, INC., who executed on behalf of the said Corporation the
foregoing Articles of Amendment, of which this instrument is made a part, hereby
acknowledges, in the name of and on behalf of said Corporation, said Articles of
Amendment to be the corporate act of said Corporation and further certifies
that, to the best of his knowledge, information and belief, the matters and
facts set forth therein with respect to the approval thereof are true in all
material respects, under the penalties of perjury.
/s/ Eric E. Miller
--------------------
Eric E. Miller
<PAGE>
ARTICLES OF INCORPORATION
OF
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
FIRST: The undersigned, Eric E. Miller, whose post office address is
One Commerce Square, Philadelphia, Pennsylvania 19103, and being at least
eighteen years of age, does hereby cause to be filed these Articles of
Incorporation for the purpose of forming a corporation under the General
Corporation Law of the State of Maryland.
SECOND: The name of the corporation is Delaware
Group Global & International Funds, Inc.
THIRD: The purpose for which the corporation is formed is to operate as
an investment company and to exercise all of the powers and to do any and all of
things as fully and to the same extent as any other corporation incorporated
under the laws of the State of Maryland, now or hereinafter in force, including,
without limitation, the following:
1. To purchase, hold, invest and reinvest in, sell, exchange, transfer,
mortgage, and otherwise acquire and dispose of securities of every kind,
character and description.
2. To exercise all rights, powers and privileges with reference to or
incident to ownership, use and enjoyment of any of such securities, including,
but without limitation, the right, power and privilege to own, vote, hold,
purchase, sell, negotiate, assign, exchange, transfer, mortgage, pledge or
otherwise deal with, dispose of, use, exercise or enjoy any rights, title,
interest, powers or privileges under or with reference to any of such
securities; and to do any and all acts and things for the preservation,
protection, improvement and enhancement in value of any of such securities.
3. To purchase or otherwise acquire, own, hold, sell, exchange, assign,
transfer, mortgage, pledge or otherwise dispose of, property of all kinds.
4. To buy, sell, mortgage, encumber, hold, own, exchange, rent or
otherwise acquire and dispose of, and to develop, improve, manage, subdivide,
and generally to deal and trade in real property, improved and unimproved, and
wheresoever situated; and to build, erect, construct, alter and maintain
buildings, structures, and other improvements on real property.
5. To borrow or raise moneys for any of the purposes of the
corporation, and to mortgage or pledge the whole or any part of the property and
franchise of the corporation, real, personal, and mixed, tangible or intangible,
and wheresoever situated.
<PAGE>
6. To enter into, make and perform contracts and undertakings of every
kind for any lawful purpose, without limit as to amount.
7. To issue, purchase, sell and transfer, reacquire, hold, trade and
deal in, to the extent permitted under the General Corporation Law of the State
of Maryland, capital stock, bonds, debentures and other securities of the
corporation, from time to time, to such extent as the Board of Directors shall,
consistent with the provisions of these Articles of Incorporation, determine;
and to repurchase, reacquire and redeem, to the extent permitted under the
General Corporation Law of the State of Maryland, from time to time, the shares
of its own capital stock, bonds, debentures and other securities.
The foregoing clauses shall each be construed as purposes, objects and
powers, and it is hereby expressly provided that the foregoing enumeration of
specific purposes, objects and powers shall not be held to limit or restrict in
any manner the powers of the corporation, and that they are in furtherance of,
and in addition to, and not in limitation of, the general powers conferred upon
the corporation by the laws of the State of Maryland or otherwise; nor shall the
enumeration of one thing be deemed to exclude another, although it be of like
nature, not expressed.
FOURTH: The post office address of the principal office of the
corporation in the State of Maryland is:
c/o The Corporation Trust, Incorporated
32 South Street
Baltimore, Maryland 21202
The name and post office address of the initial resident agent of the
corporation in the State of Maryland is:
The Corporation Trust, Incorporated
32 South Street
Baltimore, Maryland 21202
FIFTH: The total number of shares of stock which the corporation shall
have authority to issue is Five Hundred Million (500,000,000) shares of stock,
with a par value of One Cent ($.01) per share, to be known and designated as
Common Stock, such shares of Common Stock having an aggregate par value of Five
Million Dollars ($5,000,000).
Subject to the provisions of these Articles of Incorporation, the Board
of Directors shall have the power to issue shares of Common Stock of the
corporation from time to time, at prices not less than the net asset value or
par value thereof, whichever is greater, for such consideration in such form as
may be fixed from time to time pursuant to the direction of the Board of
Directors.
Pursuant to Section 2-105 of the Maryland General Corporation Law, the
Board of Directors of the corporation shall have the power to designate one or
<PAGE>
more series of shares of Common Stock and sub-series (classes) thereof, and to
classify or reclassify any unissued shares with respect to such series or
sub-series thereof, and such series and sub-series (subject to any applicable
rule, regulation or order of the Securities and Exchange Commission or other
applicable law or regulation) shall have such preference, conversion or other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, terms and conditions of redemption and other characteristics as
the Board may determine, unless inconsistent with this Article FIFTH.
Subject to the aforesaid power of the Board of Directors, one series of
shares is hereby designated and classified as the International Equity Series
and Fifty Million (50,000,000) shares of Common Stock (par value $.01 per share)
are hereby initially classified and allocated to such series; a second series of
shares is hereby designated and classified as the Global Bond Series and Fifty
Million (50,000,000) shares of Common Stock (par value $.01 per share) are
hereby initially classified and allocated to such series; and a third series of
shares is hereby designated and classified as the Global Total Return Series and
Fifty Million (50,000,000) shares of Common Stock (par value $.01 per share) are
hereby initially classified and allocated to such series. At any time when there
are no shares outstanding or subscribed for a particular series or sub-series
previously established and designated herein or by the Board of Directors, the
series or sub-series may be eliminated by the Board of Directors by the same
means.
Each share of a series shall have equal rights with each other share of
that series with respect to the assets of the corporation pertaining to that
series. The dividends payable to the holders of any sub-series (subject to any
applicable rules, regulation or order of the Securities and Exchange Commission
or any other applicable law or regulation) may be charged with any pro rata
portion of distribution expenses paid pursuant to a Plan of Distribution adopted
by such sub-series in accordance with Rule 12b-1 under the Investment Company
Act of 1940 (or any successor thereto), which dividend shall be determined as
directed by the Board and need not be individually declared, but may be declared
and paid in accordance with a formula adopted by the Board. Except as otherwise
provided herein, all references in these Articles of Incorporation to Common
Stock or series of stock shall apply without discrimination to the shares of
each series of stock.
The holder of each share of stock of the corporation shall be entitled
to one vote for each full share, and a fractional vote for each fractional share
of stock then standing in his or her name in the books of the corporation. On
any matter submitted to a vote of shareholders, all shares of the corporation
then issued and outstanding and entitled to vote, irrespective of the series,
shall be voted in the aggregate and not by series except (1) when otherwise
<PAGE>
expressly provided by the Maryland General Corporation Law; (2) when required by
the Investment Company Act of 1940, as amended, shares shall be voted by
individual series, or sub-series; and (3) when the matter does not affect any
interest of the particular series or sub-series, then only shareholders of
affected series or sub-series shall be entitled to vote thereon. Holders of
shares of stock of the corporation shall not be entitled to cumulative voting in
the election of directors or on any other matter.
Each series of stock of the corporation shall have the following
powers, preferences and participating, voting, or other special rights and the
qualifications, restrictions, and limitations thereof shall be as follows:
1. All consideration received by the corporation for the issue or sale
of stock of each series, together with all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation thereof, and any funds or payments derived from any reinvestment of
such proceeds in whatever form the same may be, shall irrevocably belong to the
series of shares of stock with respect to which such assets, payments or funds
were received by the corporation for all purposes, subject only to the rights of
creditors, and shall be so handled upon the books of account of the corporation.
Such assets, income, earnings, profit and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation thereof and any assets
derived from any reinvestment of such proceeds, in whatever form the same may
be, are herein referred to as "assets belonging to" such series.
2. The Board of Directors may from time to time declare and pay
dividends or distributions, in stock or in cash, on any or all series of stock;
provided, such dividends or distributions on shares of any series of stock shall
be paid only out of earnings, surplus, or other lawfully available assets
belonging to such series.
3. The Board of Directors shall have the power in its discretion to
distribute to the shareholders of the corporation or to the shareholders of any
series thereof in any fiscal year as dividends, including dividends designated
in whole or in part as capital gain distributions, amounts sufficient, in the
opinion of the Board of Directors, to enable the corporation or any series
thereof to qualify as a "regulated investment company" under the Internal
Revenue Code of 1986, as amended, or any successor or comparable statute
thereof, and regulations promulgated thereunder (collectively, the "IRC"), and
to avoid liability of the corporation or any series thereof for Federal income
tax in respect of that year and to make other appropriate adjustments in
connection therewith.
4. The Board of Directors shall have the power, in its discretion, to
make such elections as to the tax status of the corporation or any series or
class of the corporation as may be permitted or required under the IRC as
<PAGE>
presently in effect or as amended, without the vote of shareholders of the
corporation or any series thereof.
5. In event of the liquidation or dissolution of the corporation,
shareholders of each series shall be entitled to receive, as a series, out of
the assets of the corporation available for distribution to shareholders, but
other than general assets not belonging to any particular series of stock, the
assets belong to such series, and the assets so distributable to the
shareholders of any series shall be distributed among such shareholders in
proportion to the number of shares of such series held by them and recorded on
the books of the corporation. In the event that there are any general assets not
belonging to any particular series of stock and available for distribution, such
distribution shall be made to the holders of stock of all series in proportion
to the net asset value of the respective series determined as hereinafter
provided.
6. The assets belonging to any series of stock shall be charged with
the liabilities in respect to such series, and shall also be charged with its
share of the general liabilities of the corporation, in proportion to the net
asset value of the respective series determined as hereinafter provided. The
determination of the Board of Directors shall be conclusive as to the amount of
liabilities, including accrued expenses and reserves, as to the allocation of
the same as to a given series, and as to whether the same or general assets of
the corporation are allocable to one or more series.
7. The Board of Directors may provide for a holder of any series of
stock of the corporation, who surrenders his certificate in good form for
transfer to the corporation or, if the shares in question are not represented by
certificates, who delivers to the corporation a written request in good order
signed by the shareholder, to convert the shares in question on such basis as
the Board may provide, into shares of stock of any other series of the
corporation.
8. The holders of the shares of Common Stock or other securities of the
corporation shall have no preemptive rights to subscribe to new or additional
shares of its Common Stock or other securities.
SIXTH: The number of directors of the corporation shall be such number
as may from time to time be fixed by the By-Laws of the corporation or pursuant
to authorization contained in such By-Laws; provided, notwithstanding anything
herein to the contrary, the Board of Directors shall consist initially of three
directors until such time as the number of directors is fixed as stated above.
The names of the directors who shall act as such until successors are duly
chosen and qualified are: Wayne A. Stork, Winthrop S. Jessup, and George M.
Chamberlain, Jr.
<PAGE>
SEVENTH: The following provisions are inserted for the management of
the business and for the conduct of the affairs of the corporation:
1. The Board of Directors shall have power to fix an initial offering
price for the shares of any series which shall yield to the corporation not less
than the par value thereof, at which price the shares of the Common Stock of the
corporation shall be offered for sale, and to determine from time to time
thereafter the offering price which shall yield to the corporation not less than
the par value thereof from sales of the shares of its Common Stock; provided,
however, that no shares of the Common Stock of the corporation shall be issued
or sold for a consideration which shall yield to the corporation less than the
net asset value of shares of such series determined as hereinafter provided, as
of the business day on which such shares are sold, or at such other times set by
the Board of Directors, except in the case of shares of such Common Stock issued
in payment of a dividend properly declared and payable.
Notwithstanding anything in these Articles of Incorporation to the
contrary, the Board of Directors shall have power to establish in its absolute
discretion the basis or method for determining the value of the assets belonging
to any class or series, and the net asset value of each share of any class or
series of the corporation for purposes of sales, redemptions, repurchases of
shares or otherwise.
The net asset value of the property and assets of the corporation shall
be determined in accordance with the Investment Company Act of 1940, as amended,
and with generally accepted accounting principles, and at such times as the
Board of Directors may direct, by deducting from the total market or appraised
value of all of the property and assets of the corporation, all debts,
obligations and liabilities of the corporation (including, but without
limitation of the generality of any of the foregoing, any or all debts,
obligations, liabilities or claims of any and every kind and nature, whether
fixed, accrued, or unmatured, and any reserves or charges, determined in
accordance with generally accepted accounting principles, for any or all
thereof, whether for taxes, including estimated taxes or unrealized book
profits, expenses, contingencies or otherwise).
The net asset value per share of a series of the Common Stock of the
corporation shall be determined by adding the total market or appraised value of
the property and assets of the relevant series of the corporation, subtracting
the liabilities determined by the Board of Directors to be applicable to that
series, allocating any general assets and general liabilities to that series,
and dividing the net result by the total number of shares of its Common Stock
then issued and outstanding for such series, including any shares sold by the
corporation up to and including the date as of which such net asset value is to
be determined whether or not certificates therefor have actually been issued. In
case the net asset value of each share so determined shall include a fraction
<PAGE>
of one cent, such net asset value of each share shall be adjusted to the nearest
full cent.
2. To the extent permitted by law, and except in the case of a national
financial emergency, the corporation shall redeem shares of its Common Stock
from its stockholders upon request of the holder thereof received by the
corporation or its designated agent during business hours of any business day,
provided that such request must be accompanied by surrender of any outstanding
certificate or certificates for such shares in form for transfer, together with
such proof of the authenticity of signatures as may reasonably be required on
such shares (or, on such request in the event no certificate is outstanding) by,
or pursuant to the direction of the Board of Directors of the corporation, and
accompanied by proper stock transfer stamps, if any. Shares redeemed upon any
such request shall be purchased by the corporation at the net asset value of
such shares determined in the manner provided in Paragraph (1) of this Article
Seventh, and in accordance with the redemption procedures prescribed in the then
current Prospectus for the applicable series of shares of the corporation.
Payments for shares of its Common Stock so redeemed by the corporation
shall be made from the assets of the applicable series in cash, except payment
for such shares may, at the option of the Board of Directors, or such officer or
officers as they may duly authorize for the purpose in their complete
discretion, be made from the assets of that series in kind or partially in cash
and partially in kind. In case of any payment in kind the Board of Directors, or
their delegate, shall have absolute discretion as to what security or securities
of such series shall be distributed in kind and the amount of the same; and the
securities shall be valued for purposes of distribution at the value at which
they were appraised in computing the current net asset value of the series of
the corporation's shares, provided that any stockholder who cannot legally
acquire securities so distributed in kind by reason of the prohibitions of the
Investment Company Act of 1940, as amended, shall receive cash.
Payment for shares of its Common Stock so redeemed by the corporation
shall be made by the corporation as provided above within seven days after the
date which such shares are deposited; provided, however, that if payment shall
be made by delivery of assets of the corporation, as provided above, any
securities to be delivered as part of such payment shall be delivered as
promptly as any necessary transfers of such securities on the books of the
several corporations whose securities are to be delivered may be made, but not
necessarily within such seven day period.
The right of any holder of shares of the Common Stock of the
corporation to receive dividends thereon and all other rights of such
stockholder with respect to the shares so redeemed by the corporation shall
cease and determine from and after the time as of which the purchase price
<PAGE>
of such shares shall be fixed, as provided above, except the right of such
stockholder to receive payment for such shares as provided for herein.
For the purposes of these Articles of Incorporation, a "national
financial emergency" is defined as the whole or any part of any period (i)
during which the New York Stock Exchange is closed other than customary weekend
and holiday closings, (ii) during which trading on the New York Stock Exchange
is restricted, (iii) during which an emergency exists as a result of which
disposal by the corporation of securities owned by such series is not reasonably
practicable or it is not reasonably practicable for the corporation fairly to
determine the value of the net assets of such series, or (iv) during any other
period when the Securities and Exchange Commission (or any succeeding
governmental authority) may for the protection of security holders of the
corporation by order permit suspension of the right of redemption or
postponement of the date of payment on redemption; provided that applicable
rules and regulations of the Securities and Exchange Commission (or any
succeeding governmental authority) shall govern as to whether the conditions
prescribed in (ii), (iii), or (iv) exist. The Board of Directors may, in its
discretion, declare the suspension described in (iv) above at an end, and such
other suspension relating to a national financial emergency shall terminate as
the case may be on the first business day on which said Stock Exchange shall
have reopened or the period specified in (ii) or (iii) shall have expired (as to
which in the absence of an official ruling by said Commission or succeeding
authority, the determination of the Board of Directors shall be conclusive).
3. The Board of Directors may, from time to time, without the vote or
consent of stockholders, establish uniform standards with respect to the minimum
net asset value of a stockholder account or a minimum investment which may be
made by a stockholder. The Board of Directors may authorize the closing of those
stockholder accounts not meeting the specified minimum standards of net asset
value by redeeming all of the shares in such accounts, provided there is mailed
to each affected stockholder account, at least thirty (30) days prior to the
planned redemption date, a notice setting forth the minimum account size
requirement and the date on which the account will be closed if the minimum size
requirement is not met prior to said closing date.
EIGHTH: (a) To the fullest extent that limitations on the liability of
directors and officers are permitted by the Maryland General Corporation Law, no
director or officer of the corporation shall have any liability to the
corporation or its stockholders for damages. This limitation on liability
applies to events occurring at the time a person serves as a director or officer
of the corporation whether or not such person is a director or officer at the
time of any proceeding in which liability is asserted.
<PAGE>
(b) No provision of this Article shall be effective to protect or
purport to protect any director or officer of the corporation against any
liability to the corporation or its security holders to which he would otherwise
be subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
(c) References to the Maryland General Corporation Law in this Article
are to the law as from time to time amended. No amendment to the Articles of
Incorporation of the corporation shall affect any right of any person under this
Article based on any event, omission or proceeding prior to such amendment.
NINTH: Subject to the Investment Company Act of 1940, as amended, each
of the following actions, to the extent required to be approved by the
shareholders under Maryland General Corporation Law, shall be approved by a
majority of all votes entitled to be cast on the matter:
(i) Amendment or amendment and restatement of
the Articles;
(ii) Reduction of stated capital;
(iii) Consolidation, merger, share exchange or
transfer of assets;
(iv) Distribution in partial liquidation; or
(v) Voluntary dissolution.
TENTH: The corporation expressly reserves the right to amend, alter,
change or repeal any provision contained in these Articles of Incorporation, and
all rights, contract and otherwise, conferred herein upon the stockholders are
granted subject to such reservation.
ELEVENTH: The corporation expressly agrees and acknowledges that the
names "Delaware Group" and "Delaware Group Global & International Funds" are the
sole property of Delaware Management Company, Inc. ("DMC"), that similar names
are used by funds in the investment business which are affiliated with DMC, and
that the corporation's use of such name is with permission of DMC. The
corporation further expressly agrees and acknowledges that its use of such name
may be terminated by DMC if the corporation ceases to use DMC as its investment
advisor or Delaware Distributors, Inc. ("DDI") as its principal underwriter (or
to use affiliates of DMC and DDI for such purposes). The corporation further
expressly agrees and acknowledges that in such event DMC may require the
corporation to present to its shareholders, at the next annual or special
meeting of the corporation held after such request, a proposal to change the
name of the corporation to delete reference to the name "Delaware Group." The
corporation further expressly agrees and acknowledges in such event to use its
best efforts to comply promptly with such request to change its name and that
<PAGE>
the Board of Directors of the corporation shall recommend such a proposal to its
shareholders. The corporation further expressly acknowledges and agrees, upon
shareholder approval of such a proposal, to make and cause to be made such
filings to effect the change of name as may be necessary with the State of
Maryland, the United States Securities and Exchange Commission, or other
regulatory authorities.
IN WITNESS WHEREOF, the undersigned incorporator of Delaware Group
Global & International Funds, Inc. who executed the foregoing Articles of
Incorporation hereby acknowledges the same to be his act and further
acknowledges that, to the best of his knowledge the matters and facts set forth
therein are true in all material respects, under the penalties of perjury.
Dated the 29th day of May, 1991.
/s/ Eric E. Miller
- --------------------------
Eric E. Miller
<PAGE>
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
ARTICLES SUPPLEMENTARY
TO
ARTICLES OF INCORPORATION
Delaware Group Global & International Funds, Inc., a Maryland
corporation having its principal office in Baltimore, Maryland (the
"Corporation"), hereby certifies, in accordance with Section 2-208 of the
Maryland General Corporation Law, to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The Corporation has authority to issue a total of Five Hundred
Million (500,000,000) shares of common stock with a par value of One Cent
($0.01) per share of the Corporation ("Common Stock"), having an aggregate par
value of Five Million Dollars ($5,000,000). Of such Five Hundred Million
(500,000,000) shares of Common Stock, One Hundred Fifty Million (150,000,000)
shares have been allocated to each of the International Equity Series, Global
Assets Series and Global Bond Series of the Common Stock. Fifty Million
(50,000,000) shares of the International Equity Series of the Common Stock have
been allocated to each of the International Equity Fund class, the International
Equity Fund (Institutional) class and the International Equity Fund B Class of
such series. Fifty Million (50,000,000) shares of the Global Bond Series of the
Common Stock have been allocated to each of the Global Bond Fund A Class, the
Global Bond Fund Institutional Class and the Global Bond Fund B Class of such
series. Fifty Million (50,000,000) shares of the Global Assets Series of the
Common Stock have been allocated to each of the Global Assets Fund A Class,
Global Assets Fund Institutional Class and Global Assets Fund B Class of such
series.
SECOND: The Board of Directors of the Corporation, at a meeting held on
July 20, 1995, adopted a resolution taking the following actions:
1. Classifying a fourth class of shares of the International
Equity Series of the Common Stock as the International Equity
Fund C Class (the "Equity C Class") and reclassifying and
allocating Twenty-Five Million (25,000,000) shares of
authorized and unissued Common Stock, previously classified
and allocated to the International Equity Fund B Class of the
International Equity Series of the Common Stock, to the Equity
C Class.
<PAGE>
2. Classifying a fourth class of shares of the Global Bond
Series of the Common Stock as the Global Bond Fund C Class
(the "Bond C Class") and reclassifying and allocating
Twenty-Five Million (25,000,000) shares of authorized and
unissued Common Stock, previously classified and allocated to
the Global Bond Fund B Class of the Global Bond Series of the
Common Stock, to the Bond C Class.
3. Classifying a fourth class of shares of the Global Assets
Series of the Common Stock as the Global Assets Fund C Class
(the "Assets C Class") and reclassifying and allocating
Twenty-Five Million (25,000,000) shares of authorized and
unissued Common Stock, previously classified and allocated to
the Global Assets Fund B Class of the Global Assets Series of
the Common Stock, to the Assets C Class.
THIRD: The shares of the Equity C Class shall represent proportionate
interests in the same portfolio of investments as the shares of the
International Equity Fund class, International Equity Fund (Institutional) class
and International Equity Fund B Class of the International Equity Series of the
Common Stock. The shares of the Equity C Class shall have the same preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends, qualifications, or terms or conditions of redemption as the shares of
the International Equity Fund class, International Equity Fund (Institutional)
class and International Equity Fund B Class of the International Equity Series
of the Common Stock, all as set forth in the Articles of Incorporation of the
Corporation, except for the differences hereinafter set forth:
1. The dividends and distributions of investment income and
capital gains with respect to shares of the Equity C Class
shall be in such amounts as may be declared from time to time
by the Board of Directors, and such dividends and
distributions may vary with respect to such class from the
dividends and distributions of investment income and capital
gains with respect to shares of the other classes of the
International Equity Series of the Common Stock to reflect
differing allocations of the expenses of the Corporation among
the shares of such classes and any resultant difference among
the net asset values per share of the shares of such classes,
to such extent and for such purposes as the Board of Directors
may deem appropriate. The allocation of investment income and
capital gains and expenses and liabilities of the Corporation
among the four classes of the International Equity Series of
the Common Stock shall be determined by the Board of Directors
in a manner that is consistent with the order, as applicable,
-2-
<PAGE>
dated September 6, 1994 (Investment Company Act of 1940
Release No. 20529) issued by the Securities and Exchange
Commission, and any amendments to such order, any future order
or any Multiple Class Plan adopted by the Corporation in
accordance with Rule 18f-3 under the Investment Company Act of
1940, as amended, that modifies or supersedes such order.
2. Except as may otherwise be required by law pursuant to any
applicable order, rule or interpretation issued by the
Securities and Exchange Commission, or otherwise, the holders
of shares of the Equity C Class shall have (i) exclusive
voting rights with respect to any matter submitted to a vote
of stockholders that affects only holders of shares of the
Equity C Class, including without limitation the provisions of
any Distribution Plan adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended (a "Distribution
Plan") applicable to shares of the Equity C Class, and (ii) no
voting rights with respect to the provisions of any
Distribution Plan applicable to any other class of Common
Stock or with regard to any other matter submitted to a vote
of stockholders which does not affect holders of shares of the
Equity C Class.
3. The shares of the Equity C Class shall not automatically
convert into shares of the International Equity Fund class of
the International Equity Series of the Common Stock as do the
shares of the International Equity Fund B Class of the
International Equity Series of the Common Stock.
FOURTH: The shares of the Bond C Class shall represent proportionate
interests in the same portfolio of investments as the shares of the Global Bond
Fund A Class, Global Bond Fund Institutional Class and Global Bond Fund B Class
of the Global Bond Series of the Common Stock. The shares of the Bond C Class
shall have the same preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications, or terms or
conditions of redemption as the shares of the Global Bond Fund A Class, Global
Bond Fund Institutional Class and Global Bond Fund B Class of the Global Bond
Series of the Common Stock, all as set forth in the Articles of Incorporation of
the Corporation, except for the differences hereinafter set forth:
1. The dividends and distributions of investment income and
capital gains with respect to shares of the Bond C Class shall
be in such amounts as may be declared from time to time by the
Board of Directors, and such dividends and distributions
-3-
<PAGE>
may vary with respect to such class from the dividends and
distributions of investment income and capital gains with
respect to shares of the other classes of the Global Bond
Series of the Common Stock to reflect differing allocations of
the expenses of the Corporation among the shares of such
classes and any resultant difference among the net asset
values per share of the shares of such classes, to such extent
and for such purposes as the Board of Directors may deem
appropriate. The allocation of investment income and capital
gains and expenses and liabilities of the Corporation among
the four classes of the Global Bond Series of the Common Stock
shall be determined by the Board of Directors in a manner that
is consistent with the order, as applicable, dated September
6, 1994 (Investment Company Act of 1940 Release No. 20529)
issued by the Securities and Exchange Commission, and any
amendments to such order, any future order or any Multiple
Class Plan adopted by the Corporation in accordance with Rule
18f-3 under the Investment Company Act of 1940, as amended,
that modifies or supersedes such order.
2. Except as may otherwise be required by law pursuant to any
applicable order, rule or interpretation issued by the
Securities and Exchange Commission, or otherwise, the holders
of shares of the Bond C Class shall have (i) exclusive voting
rights with respect to any matter submitted to a vote of
stockholders that affects only holders of shares of the Bond C
Class, including without limitation the provisions of any
Distribution Plan applicable to shares of the Bond C Class,
and (ii) no voting rights with respect to the provisions of
any Distribution Plan applicable to any other class of Common
Stock or with regard to any other matter submitted to a vote
of stockholders which does not affect holders of shares of the
Bond C Class.
3. The shares of the Bond C Class shall not automatically
convert into shares of the Global Bond Fund A Class of the
Global Bond Series of the Common Stock as do the shares of the
Global Bond Fund B Class of the Global Bond Series of the
Common Stock.
FIFTH: The shares of the Assets C Class shall represent proportionate
interests in the same portfolio of investments as the shares of the Global
Assets Fund A Class, Global Assets Fund Institutional Class and Global Assets
Fund B Class of the Global Assets Series of the Common Stock. The shares of the
Assets C Class shall have the same preferences, conversion or other rights,
-4-
<PAGE>
voting powers, restrictions, limitations as to dividends, qualifications, or
terms or conditions of redemption as the shares of the Global Assets Fund A
Class, Global Assets Fund Institutional Class and Global Assets Fund B Class of
the Global Assets Series of the Common Stock, all as set forth in the Articles
of Incorporation of the Corporation, except for the differences hereinafter set
forth:
1. The dividends and distributions of investment income and
capital gains with respect to shares of the Assets C Class
shall be in such amounts as may be declared from time to time
by the Board of Directors, and such dividends and
distributions may vary with respect to such class from the
dividends and distributions of investment income and capital
gains with respect to shares of the other classes of the
Global Assets Series of the Common Stock to reflect differing
allocations of the expenses of the Corporation among the
shares of such classes and any resultant difference among the
net asset values per share of the shares of such classes, to
such extent and for such purposes as the Board of Directors
may deem appropriate. The allocation of investment income and
capital gains and expenses and liabilities of the Corporation
among the four classes of the Global Assets Series of the
Common Stock shall be determined by the Board of Directors in
a manner that is consistent with the order, as applicable,
dated September 6, 1994 (Investment Company Act of 1940
Release No. 20529) issued by the Securities and Exchange
Commission, and any amendments to such order, any future order
or any Multiple Class Plan adopted by the Corporation in
accordance with Rule 18f-3 under the Investment Company Act of
1940, as amended, that modifies or supersedes such order.
2. Except as may otherwise be required by law pursuant to any
applicable order, rule or interpretation issued by the
Securities and Exchange Commission, or otherwise, the holders
of shares of the Assets C Class shall have (i) exclusive
voting rights with respect to any matter submitted to a vote
of stockholders that affects only holders of shares of the
Assets C Class, including without limitation the provisions of
any Distribution Plan applicable to shares of the Assets C
Class, and (ii) no voting rights with respect to the
provisions of any Distribution Plan applicable to any other
class of Common Stock or with regard to any other matter
submitted to a vote of stockholders which does not affect
holders of shares of the Assets C Class.
-5-
<PAGE>
3. The shares of the Assets C Class shall not automatically
convert into shares of the Global Assets Fund A Class of the
Global Assets Series of the Common Stock as do the shares of
the Global Assets Fund B Class of the Global Assets Series of
the Common Stock.
SIXTH: The shares of the International Equity Fund B Class of the
International Equity Series of the Common Stock, Global Bond Fund B Class of the
Global Bond Series of the Common Stock and Global Assets Fund B Class of the
Global Assets Series of the Common Stock reclassified as shares of the Equity C
Class, Bond C Class and Assets C Class, respectively, pursuant to these Articles
Supplementary have been reclassified by the Board of Directors pursuant to
authority contained in the Articles of Incorporation of the Corporation.
SEVENTH: These Articles Supplementary shall become effective on
November 28, 1995.
IN WITNESS WHEREOF, Delaware Group Global & International Funds, Inc.
has caused these Articles Supplementary to be signed in its name and on its
behalf this ____ day of November, 1995.
DELAWARE GROUP GLOBAL & INTERNATIONAL
FUNDS, INC.
By:_____________________________________
George M. Chamberlain, Jr.
Senior Vice President
ATTEST:
_______________________________
Assistant Secretary
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<PAGE>
THE UNDERSIGNED, Senior Vice President of DELAWARE GROUP GLOBAL &
INTERNATIONAL FUNDS, INC., who executed on behalf of the said Corporation the
foregoing Articles Supplementary, of which this instrument is made a part,
hereby acknowledges, in the name of and on behalf of said Corporation, said
Articles Supplementary to be the corporate act of said Corporation and further
certifies that, to the best of his knowledge, information and belief, the
matters and facts set forth therein with respect to the authorization and
approval thereof are true in all material respects, under the penalties of
perjury.
___________________________________
George M. Chamberlain, Jr.
Senior Vice President
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<PAGE>
[FORM OF DISTRIBUTION AGREEMENT]
[FUND NAME]
[SERIES NAME, IF APPLICABLE]
DISTRIBUTION AGREEMENT
Distribution Agreement (the "Agreement") made as of this 3rd
day of April, 1995 by and between [FUND NAME], a [Maryland
corporation/Pennsylvania common law trust] (the "Fund")[, for the [SERIES NAME]
(the "Series")] and DELAWARE DISTRIBUTORS, L.P. (the "Distributor"), a Delaware
limited partnership.
WITNESSETH
WHEREAS, the Fund is an investment company regulated by
Federal and State regulatory bodies, and
WHEREAS, the Distributor is engaged in the business of
promoting the distribution of the securities of investment companies and, in
connection therewith and acting solely as agent for such investment companies
and not as principal, advertising, promoting, offering and selling their
securities to the public, and
WHEREAS, the Fund and the Distributor (or its predecessor)
were the parties to a contract under which the Distributor acted as the national
distributor of the shares of the [Fund/Series], which contract was amended and
restated as of the [date] and subsequently readopted as of January 3, 1995 (the
"Prior Distribution Agreement"), and
WHEREAS, Delaware Management Holdings, Inc. ("Holdings"),
the indirect parent company of the Distributor, completed on the
date of this Agreement a merger transaction with a newly-formed
subsidiary of Lincoln National Corporation, pursuant to which
Holdings became a wholly-owned subsidiary of Lincoln National
Corporation, and
<PAGE>
WHEREAS, the merger transaction resulted in a change of
control of the Distributor and an automatic termination of the Prior
Distribution Agreement, and
WHEREAS, the Board of [Directors/Trustees] of the Fund has
determined to enter into a new agreement with the Distributor as of the date
hereof, pursuant to which the Distributor shall continue to be the national
distributor of the [Fund's/Series'] ____________ class (now doing business as
___________ A Class and hereinafter referred to as the "Class A Shares"), the
Fund's ___________ B Class (the "Class B Shares") and the Fund's ______________
(Institutional) class (now doing business as _____________ Institutional Class
and hereinafter referred to as the "Institutional Class Shares"), which classes
may do business under these or such other names as the Board of
[Directors/Trustees] may designate from time to time, on the terms and
conditions set forth below,
NOW, THEREFORE, the parties hereto, intending to be
legally bound hereby, agree as follows:
1. The Fund hereby engages the Distributor to promote the distribution of
the [Fund's/Series'] shares and, in connection therewith and as agent
for the Fund and not as principal, to advertise, promote, offer and
sell the [Fund's/Series'] shares to the public.
<PAGE>
2. (a) The Distributor agrees to serve as distributor of the
[Fund's/Series'] shares and, as agent for the Fund and
not as principal, to advertise, promote and use its best
efforts to sell the [Fund's/Series'] shares wherever
their sale is legal, either through dealers or otherwise,
in such places and in such manner, not inconsistent with
the law and the provisions of this Agreement and the
Fund's Registration Statement under the Securities Act of
1933, including the Prospectus contained therein and the
Statement of Additional Information contained therein, as
may be mutually determined by the Fund and the
Distributor from time to time.
(b) For the Institutional Class Shares, the Distributor will bear
all costs of financing any activity which is primarily
intended to result in the sale of that class of shares,
including, but not necessarily limited to, advertising,
compensation of underwriters, dealers and sales personnel, the
printing and mailing of sales literature and distribution of
that class of shares.
(c) For its services as agent for the Class A Shares and Class B
Shares, the Distributor shall be entitled to compensation on
each sale or redemption, as appropriate, of shares of such
classes equal to any front-end or deferred sales charge
described in the Prospectus from time to time and may allow
concessions to dealers in such amounts and on such terms as
are therein set forth.
<PAGE>
(d) For the Class A Shares and Class B Shares, the Fund
shall, in addition, compensate the Distributor for its
services as provided in the Distribution Plan as adopted
on behalf of the Class A Shares and Class B Shares,
respectively, pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (the "Plans"), copies of
which as presently in force are attached hereto as,
respectively, Exhibit "A" and "B".
3. (a) The Fund agrees to make available for sale by the Fund
through the Distributor all or such part of the authorized but
unissued shares [of the Series] as the Distributor shall
require from time to time, and except as provided in Paragraph
3(b) hereof, the Fund will not sell [its/the Series'] shares
other than through the efforts of the Distributor.
(b) The Fund reserves the right from time to time (1) to sell
and issue shares other than for cash; (2) to issue shares
in exchange for substantially all of the assets of any
corporation or trust, or in exchange of shares of any
corporation or trust; (3) to pay stock dividends to its
shareholders, or to pay dividends in cash or stock at the
option of its stockholders, or to sell stock to existing
stockholders to the extent of dividends payable from time
to time in cash, or to split up or combine its
outstanding shares of common stock; (4) to offer shares
for cash to its stockholders as a whole, by the use of
transferable rights or otherwise, and to sell and issue shares
pursuant to such offers; and (5) to act as its own distributor
in any jurisdiction in which the Distributor is not registered
as a broker-dealer.
<PAGE>
4. The Fund warrants the following:
(a) The Fund is, or will be, a properly registered investment
company, and any and all [Series] shares which it will sell
through the Distributor are, or will be, properly registered
with the Securities and Exchange Commission ("SEC").
(b) The provisions of this Agreement do not violate the terms of
any instrument by which the Fund is bound, nor do they violate
any law or regulation of any body having jurisdiction over the
Fund or its property.
5. (a) The Fund will supply to the Distributor a conformed copy
of the Registration Statement, all amendments thereto,
all exhibits, and each Prospectus and Statement of
Additional Information.
(b) The Fund will register or qualify the shares for sale in
such states as is deemed desirable.
(c) The Fund, without expense to the Distributor,
(1) will give and continue to give such financial
statements and other information as may be required
by the SEC or the proper public bodies of the
states in which the [Fund's/Series'] shares may be
qualified;
(2) from time to time, will furnish the Distributor as
soon as reasonably practicable true copies of its
periodic reports to stockholders;
<PAGE>
(3) will promptly advise the Distributor in person or by
telephone or telegraph, and promptly confirm such
advice in writing, (a) when any amendment or
supplement to the Registration Statement becomes
effective, (b) of any request by the SEC for
amendments or supplements to the Registration
Statement or the Prospectus or for additional
information, and (c) of the issuance by the SEC of
any Stop Order suspending the effectiveness of the
Registration Statement, or the initiation of any
proceedings for that purpose;
(4) if at any time the SEC shall issue any Stop Order
suspending the effectiveness of the Registration
Statement, will make every reasonable effort to
obtain the lifting of such order at the earliest
possible moment;
(5) will from time to time, use its best effort to keep a
sufficient supply of [Series] shares authorized, any
increases being subject to approval of the Fund's
shareholders as may be required;
(6) before filing any further amendment to the
Registration Statement or to the Prospectus, will
furnish the Distributor copies of the proposed
amendment and will not, at any time, whether before
or after the effective date of the Registration
Statement, file any amendment to the Registration
Statement or supplement to the Prospectus of which
the Distributor shall not previously have been
advised or to which the Distributor shall reasonably
object (based upon the accuracy or completeness
thereof) in writing;
(7) will continue to make available to its stockholders
(and forward copies to the Distributor) of such
periodic, interim and any other reports as are now,
or as hereafter may be, required by the provisions of
the Investment Company Act of 1940; and
(8) will, for the purpose of computing the offering price
of [its/the Series'] shares, advise the Distributor
within one hour after the close of the New York Stock
Exchange (or as soon as practicable thereafter) on
each business day upon which the New York Stock
Exchange may be open of the net asset value per share
of [its/the Series'] shares of common stock outstand-
ing, determined in accordance with any applicable
provisions of law and the provisions of the Articles
of Incorporation, as amended, of the Fund as of the
close of business on such business day. In the event
that prices are to be calculated more than once
daily, the Fund will promptly advise the Distributor
of the time of each calculation and the price
computed at each such time.
<PAGE>
6. The Distributor agrees to submit to the Fund, prior to its
use, the form of all sales literature proposed to be generally
disseminated by or for the Distributor, all advertisements
proposed to be used by the Distributor, all sales literature
or advertisements prepared by or for the Distributor for such
dissemination or for use by others in connection with the sale
of the [Fund's/Series'] shares, and the form of dealers' sales
contract the Distributor intends to use in connection with
sales of the [Fund's/Series'] shares. The Distributor also
agrees that the Distributor will submit such sales literature
and advertisements to the NASD, SEC or other regulatory agency
as from time to time may be appropriate, considering practices
then current in the industry. The Distributor agrees not to
use such form of dealers' sales contract or to use or to
permit others to use such sales literature or advertisements
without the written consent of the Fund if any regulatory
agency expresses objection thereto or if the Fund delivers to
the Distributor a written objection thereto.
7. The purchase price of each share sold hereunder shall be the offering
price per share mutually agreed upon by the parties hereto, and as
described in the Fund's Prospectus, as amended from time to time,
determined in accordance with any applicable provision of law, the
provisions of its Articles of Incorporation and the Rules of Fair
Practice of the National Association of Securities Dealers, Inc.
<PAGE>
8. The responsibility of the Distributor hereunder shall be
limited to the promotion of sales of [Fund/Series] shares. The
Distributor shall undertake to promote such sales solely as
agent of the Fund, and shall not purchase or sell such shares
as principal. Orders for [Series] shares and payment for such
orders shall be directed to the Fund's agent, Delaware Service
Company, Inc. for acceptance on behalf of the Fund. The
Distributor is not empowered to approve orders for sales of
shares or accept payment for such orders. Sales of [Fund/
Series] shares shall be deemed to be made when and where
accepted by Delaware Service Company, Inc. on behalf of the
Fund.
9. With respect to the apportionment of costs between the Fund
and the Distributor of activities with which both are
concerned, the following will apply:
(a) The Fund and the Distributor will cooperate in preparing
the Registration Statements, the Prospectus, the
Statement of Additional Information, and all amendments,
supplements and replacements thereto. The Fund will pay
all costs incurred in the preparation of the Fund's
Registration Statement, including typesetting, the costs
incurred in printing and mailing Prospectuses and Annual,
Semi-Annual and other financial reports to its own
shareholders and fees and expenses of counsel and
accountants.
<PAGE>
(b) The Distributor will pay the costs incurred in printing
and mailing copies of Prospectuses to prospective
investors.
(c) The Distributor will pay advertising and promotional
expenses, including the costs of literature sent to
prospective investors.
(d) The Fund will pay the costs and fees incurred in
registering or qualifying the shares with the various
states and with the SEC.
(e) The Distributor will pay the costs of any additional copies of
Fund financial and other reports and other Fund literature
supplied to the Distributor by the Fund for sales promotion
purposes.
10. The Distributor may engage in other business, provided such other
business does not interfere with the performance by the Distributor of
its obligations under this Agreement.
11. The Fund agrees to indemnify, defend and hold harmless the
Distributor and each person, if any, who controls the
Distributor within the meaning of Section 15 of the Securities
Act of 1933, from and against any and all losses, damages, or
liabilities to which, jointly or severally, the Distributor or
such controlling person may become subject, insofar as the
losses, damages or liabilities arise out of the performance of
its duties hereunder except that the Fund shall not be liable
<PAGE>
for indemnification of the Distributor or any controlling person
thereof for any liability to the Fund or its security holders to which
they would otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence in the performance of their duties under
this Agreement.
12. Copies of financial reports, Registration Statements and
Prospectuses, as well as demands, notices, requests, consents,
waivers, and other communications in writing which it may be
necessary or desirable for either party to deliver or furnish
to the other will be duly delivered or furnished, if delivered
to such party at its address shown below during regular
business hours, or if sent to that party by registered mail or
by prepaid telegram filed with an office or with an agent of
Western Union or another nationally recognized telegraph
service, in all cases within the time or times herein
prescribed, addressed to the recipient at 1818 Market Street,
Philadelphia, Pennsylvania 19103, or at such other address as
the Fund or the Distributor may designate in writing and
furnish to the other.
13. This Agreement shall not be assigned, as that term is defined in the
Investment Company Act of 1940, by the Distributor and shall terminate
automatically in the event of its attempted assignment by the
Distributor. This Agreement shall not be assigned by the Fund without
the written consent of the Distributor signed by its duly authorized
officers and delivered to the Fund. Except as specifically provided in
<PAGE>
the indemnification provision contained in Paragraph 11 herein, this
Agreement and all conditions and provisions hereof are for the sole and
exclusive benefit of the parties hereto and their legal successors and
no express or implied provision of this Agreement is intended or shall
be construed to give any person other than the parties hereto and their
legal successors any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provisions herein contained.
14. (a) This Agreement shall remain in force for a period of two
years from the date hereof and from year to year
thereafter, but only so long as such continuance is
specifically approved at least annually by the Board of
[Directors/Trustees] or by vote of a majority of the
outstanding voting securities of the Fund and only if the
terms and the renewal thereof have been approved by the
vote of a majority of the [Directors/Trustees] of the
Fund, who are not parties hereto or interested persons of
any such party, cast in person at a meeting called for
the purpose of voting on such approval.
(b) The Distributor may terminate this Agreement on written notice
to the Fund at any time in case the effectiveness of the
Registration Statement shall be suspended, or in case Stop
Order proceedings are initiated by the SEC in respect of the
Registration Statement and such proceedings are not withdrawn
or terminated within thirty days. The Distributor may also
<PAGE>
terminate this Agreement at any time by giving the Fund
written notice of its intention to terminate the Agreement at
the expiration of three months from the date of delivery of
such written notice of intention to the Fund.
(c) The Fund may terminate this Agreement at any time on at
least thirty days prior written notice to the Distributor
(1) if proceedings are commenced by the Distributor or
any of its stockholders for the Distributor's liquidation
or dissolution or the winding up of the Distributor's
affairs; (2) if a receiver or trustee of the Distributor
or any of its property is appointed and such appointment
is not vacated within thirty days thereafter; (3) if, due
to any action by or before any court or any federal or
state commission, regulatory body, or administrative
agency or other governmental body, the Distributor shall
be prevented from selling securities in the United States
or because of any action or conduct on the Distributor's
part, sales of the shares are not qualified for sale. The
Fund may also terminate this Agreement at any time upon
prior written notice to the Distributor of its intention
to so terminate at the expiration of three months from
the date of the delivery of such written notice to the
Distributor.
<PAGE>
15. The validity, interpretation and construction of this
Agreement, and of each part hereof, will be governed by the
laws of the Commonwealth of Pennsylvania.
16. In the event any provision of this Agreement is determined to
be void or unenforceable, such determination shall not affect
the remainder of the Agreement, which shall continue to be in
force.
DELAWARE DISTRIBUTORS, L.P.
By: DELAWARE DISTRIBUTORS, INC.,
----------------------------------------
General Partner
Attest:
By:
- -------------------------------- --------------------------------------
Name: Name:
Title: Title:
[FUND NAME]
[for the SERIES NAME]
Attest:
By:
- -------------------------------- --------------------------------------
Name: Name:
Title: Title:
<PAGE>
[FORM OF 12b-1 PLAN FOR CLASS A SHARES]
Exhibit A
12b-1 PLAN
----------
The following Distribution Plan (the "Plan") has been adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by [FUND NAME]
(the "Fund")[, for the [SERIES NAME] (the "Series")] on behalf of the _________
class [(now doing business as __________ A Class and] hereinafter referred to as
the "Class"), which Fund[, Series] and Class may do business under these or such
other names as the Board of [Directors/Trustees] of the Fund may designate from
time to time. The Plan has been approved by a majority of the Board of
[Directors/Trustees], including a majority of the [Directors/Trustees] who are
not interested persons of the Fund and who have no direct or indirect financial
interest in the operation of the Plan or in any agreements related thereto, cast
in person at a meeting called for the purpose of voting on such Plan. Such
approval by the [Directors/Trustees] included a determination that in the
exercise of reasonable business judgment and in light of their fiduciary duties,
there is a reasonable likelihood that the Plan will benefit the Class and its
shareholders. If the Plan has not yet been approved by a majority of the
outstanding voting securities as required in the Act, the Plan will be presented
to the public shareholders at the next regular annual or special meeting.
<PAGE>
The Fund is a [corporation/common law trust] organized under the laws of
the [State of Maryland/Commonwealth of Pennsylvania], is authorized to issue
different series and classes of securities and is an open-end management
investment company registered under the Act. [Delaware Management Company, Inc.
("DMC")/Delaware International Advisers Ltd. ("DIA Ltd.")] serves as the
[Fund's/Series'] investment adviser and manager pursuant to an Investment
Management Agreement. Delaware Service Company, Inc. serves as the
[Fund's/Series'] shareholder servicing, dividend disbursing and transfer agent.
Delaware Distributors, L.P. ("the Distributor") is the principal underwriter and
national distributor for the [Fund's/Series'] shares, including shares of the
Class, pursuant to the Distribution Agreement between the Distributor and the
[Fund/Series] ("Distribution Agreement").
The Distributor may enter into agreements with other registered
broker-dealers substantially in the form of the Dealer Agreement approved by the
Fund in the implementation of this Plan and of the Distribution Agreement
between it and the [Fund/Series]. The [Fund/Series] may, in addition, enter into
arrangements with persons other than broker-dealers which are not "affiliated
persons" or "interested persons" of the Fund, [DMC/DIA Ltd.] or the Distributor
to provide to the [Fund/Series] services in the [Fund's/Series'] marketing of
the shares of the Class, such arrangements to be reflected by Service
Agreements.
<PAGE>
The Plan provides that:
l. The Fund shall pay a monthly fee not to exceed 0.3% (3/10
of 1%) per annum of the [Fund's/Series'] average daily net assets represented by
shares of the Class (the "Maximum Amount") as may be determined by the Fund's
Board of [Directors/Trustees] from time to time. Such monthly fee shall be
reduced by the aggregate sums paid by the Fund to persons other than
broker-dealers (the "Service Providers") pursuant to Service Agreements referred
to above.
2. (a) The Distributor shall use the monies paid to it
pursuant to paragraph l above to furnish, or cause or encourage others to
furnish, services and incentives in connection with the promotion, offering and
sale of Class shares and, where suitable and appropriate, the retention of Class
shares by shareholders.
(b) The Service Providers shall use the monies paid
respectively to them to reimburse themselves for the actual costs they have
incurred in confirming that their customers have received the Prospectus and
Statement of Additional Information, if applicable, and as a fee for (l)
assisting such customers in maintaining proper records with the Fund (2)
answering questions relating to their respective accounts and (3) aiding in
maintaining the investment of their respective customers in the Class.
3. The Distributor shall report to the Fund at least monthly
on the amount and the use of the monies paid to it under the Plan. The Service
Providers shall inform the Fund monthly and in writing of the amounts each
claims under the Service Agreements and the Plan; both the Distributor and the
<PAGE>
Service Providers shall furnish the Board of [Directors/Trustees] of the Fund
with such other information as the Board may reasonably request in connection
with the payments made under the Plan and the use thereof by the Distributor and
the Service Providers, respectively, in order to enable the Board to make an
informed determination of the amount of the Fund's payments and whether the Plan
should be continued.
4. The officers of the Fund shall furnish to the Board of
[Directors/Trustees] of the Fund, for their review, on a quarterly basis, a
written report of the amounts expended under the Plan and the purposes for which
such expenditures were made.
5. This Plan shall take effect at such time as the Distributor
shall notify the Fund in writing of the commencement of the Plan, which time
shall not be before the first annual or special meeting of the public
shareholders at which the Plan is or was approved by the vote of a majority of
the outstanding voting securities as required in the Act (the "Commencement
Date"); thereafter, the Plan shall continue in effect for a period of more than
one year from the Commencement Date only so long as such continuance is
specifically approved at least annually by a vote of the Board of
[Directors/Trustees] of the Fund, and of the [Directors/Trustees] who are not
interested persons of the Fund and have no direct or indirect financial interest
in the operation of the Plan or in any agreements related to the Plan
("non-interested [Directors/Trustees]"), cast in person at a meeting called for
the purpose of voting on such Plan.
<PAGE>
6. (a) The Plan may be terminated at any time by vote
of a majority of the non-interested [Directors/Trustees] or by vote
of a majority of the outstanding voting securities of the Class.
(b) The Plan may not be amended to increase
materially the amount to be spent for distribution pursuant to paragraph l
thereof without approval by the shareholders of the Class.
7. The Distribution Agreement between the [Fund/Series] and
the Distributor, and the Service Agreements between the [Fund/ Series] and the
Service Providers, shall specifically have a copy of this Plan attached to, and
its terms and provisions incorporated respectively by reference in, such
agreements.
8. All material amendments to this Plan shall be approved by
the non-interested [Directors/Trustees] in the manner described in paragraph 5
above.
9. So long as the Plan is in effect, the selection and
nomination of the Fund's non-interested [Directors/Trustees] shall be committed
to the discretion of such non-interested [Directors/Trustees].
10. The definitions contained in Sections 2(a)(3), 2(a)(4),
2(a)(l9) and 2(a)(42) of the Act shall govern the meaning of "affiliated
person," "assignment," "interested person(s)" and "vote of a majority of the
outstanding voting securities," respectively, for the purposes of this Plan.
This Plan shall take effect on the Commencement Date, as
previously defined.
<PAGE>
[FORM OF 12b-1 PLAN FOR CLASS B SHARES]
Exhibit B
12b-1 Plan
----------
The following Distribution Plan (the "Plan") has been adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by [FUND NAME]
(the "Fund"), [for the [SERIES NAME] (the "Series")] on behalf of the _________
B Class (the "Class"), which Fund[, Series] and Class may do business under
these or such other names as the Board of [Directors/Trustees] of the Fund may
designate from time to time. The Plan has been approved by a majority of the
Board of [Directors/Trustees], including a majority of the [Directors/Trustees]
who are not interested persons of the Fund and who have no direct or indirect
financial interest in the operation of the Plan or in any agreements related
thereto, cast in person at a meeting called for the purpose of voting on such
Plan. Such approval by the [Directors/Trustees] included a determination that in
the exercise of reasonable business judgment and in light of their fiduciary
duties, there is a reasonable likelihood that the Plan will benefit the Class
and its shareholders. The Plan has been approved by a vote of the holders of a
majority of the outstanding voting securities of the Class, as defined in the
Act.
The Fund is a [corporation/common law trust] organized under the laws of
the [State of Maryland/Commonwealth of Pennsylvania], is authorized to issue
different series and classes of securities and is an open-end management
investment company registered under the Act. [Delaware Management Company,
Inc./Delaware International Advisers Ltd.] serves as the [Fund's/Series']
investment adviser and manager pursuant to an Investment Management Agreement.
Delaware Service Company, Inc. serves as the [Fund's/Series'] shareholder
servicing, dividend disbursing and transfer agent. Delaware Distributors, L.P.
(the "Distributor") is the principal underwriter and national distributor for
the [Fund's/Series'] shares, including shares of the Class, pursuant to the
Distribution Agreement between the Distributor and the [Fund/Series]
("Distribution Agreement").
<PAGE>
The Plan provides that:
1. (a) The Fund shall pay to the Distributor a monthly fee not
to exceed 0.75% (3/4 of 1%) per annum of the [Fund's/ Series'] average daily net
assets represented by shares of the Class as may be determined by the Fund's
Board of [Directors/Trustees] from time to time.
(b) In addition to the amounts described in (a) above, the
Fund shall pay (i) to the Distributor for payment to dealers or others, or (ii)
directly to others, an amount not to exceed 0.25% (1/4 of 1%) per annum of the
[Fund's/Series'] average daily net assets represented by shares of the Class, as
a service fee pursuant to dealer or servicing agreements, the forms of which
have been approved from time to time by the Fund's Board of
[Directors/Trustees].
2. (a) The Distributor shall use the monies paid to it
pursuant to paragraph 1(a) above to assist in the distribution and
promotion of shares of the Class. Payments made to the Distributor under the
Plan may be used for, among other things, preparation and distribution of
advertisements, sales literature and prospectuses and reports used for sales
purposes, as well as compensation related to sales and marketing personnel, and
holding special promotions. In addition, such fees may be used to pay for
advancing the commission costs to dealers with respect to the sale of Class
shares.
<PAGE>
(b) The monies to be paid pursuant to paragraph 1(b) above
shall be used to pay dealers or others for, among other things, furnishing
personal services and maintaining shareholder accounts, which services include
confirming that customers have received the Prospectus and Statement of
Additional Information, if applicable; assisting such customers in maintaining
proper records with the Fund; answering questions relating to their respective
accounts; and aiding in maintaining the investment of their respective customers
in the Class.
3. The Distributor shall report to the Fund at least monthly
on the amount and the use of the monies paid to it under paragraph 1(a) above.
In addition, the Distributor and others shall inform the Fund monthly and in
writing of the amounts paid under paragraph 1(b) above; both the Distributor and
any others receiving fees under the Plan shall furnish the Board of
[Directors/Trustees] of the Fund with such other information as the Board may
reasonably request in connection with the payments made under the Plan and the
use thereof by the Distributor and others in order to enable the Board to make
an informed determination of the amount of the Fund's payments and whether the
Plan should be continued.
<PAGE>
4. The officers of the Fund shall furnish to the Board of
[Directors/Trustees] of the Fund, for their review, on a quarterly basis, a
written report of the amounts expended under the Plan and the purposes for which
such expenditures were made.
5. This Plan shall take effect at such time as the Distributor
shall notify the Fund of the commencement of the Plan (the "Commencement Date");
thereafter, the Plan shall continue in effect for a period of more than one year
from the Commencement Date only so long as such continuance is specifically
approved at least annually by a vote of the Board of [Directors/Trustees] of the
Fund, and of the [Directors/Trustees] who are not interested persons of the Fund
and have no direct or indirect financial interest in the operation of the Plan
or in any agreements related to the Plan ("non-interested
[Directors/Trustees]"), cast in person at a meeting called for the purpose of
voting on such Plan.
6. (a) The Plan may be terminated at any time by vote of a
majority of the non-interested [Directors/Trustees] or by vote of a majority of
the outstanding voting securities of the Class.
(b) The Plan may not be amended to increase materially the
amount to be spent for distribution pursuant to paragraph 1 thereof without
approval by the shareholders of the Class.
<PAGE>
7. The Distribution Agreement between the [Fund/Series] and
the Distributor, and any dealers or servicing agreements between the Distributor
and brokers or others or between the [Fund/Series] and others receiving a
servicing fee, shall specifically have a copy of this Plan attached to, and its
terms and provisions incorporated respectively by reference in, such agreements.
8. All material amendments to this Plan shall be approved by
the non-interested [Directors/Trustees] in the manner described in paragraph 5
above.
9. So long as the Plan is in effect, the selection and
nomination of the Fund's non-interested [Directors/Trustees] shall be committed
to the discretion of such non-interested [Directors/Trustees].
10. The definitions contained in Sections 2(a)(3), 2(a)(4),
2(a)(19) and 2(a)(42) of the Act shall govern the meaning of "affiliated
person," "assignment," "interested person(s)" and "vote of a majority of the
outstanding voting securities," respectively, for the purposes of this Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
<PAGE>
[Form of Amendment to Distribution Agreement]
[FUND NAME]
[SERIES NAME, IF APPLICABLE]
AMENDMENT NO. 1 TO DISTRIBUTION AGREEMENT
This Amendment No. 1 to Distribution Agreement (this "Agreement") is
made as of the_____day of___________, 1995, by and between____________(the
"Fund"),[for the____________(the "Series"),] and DELAWARE DISTRIBUTORS, L.P.
(the "Distributor").
WITNESSETH
WHEREAS, the Fund[, for the Series,] and the Distributor are parties to
that certain Distribution Agreement made as of the 3rd day of April, 1995 (the
"Distribution Agreement"); and
WHEREAS, the Board of Directors of the Fund has established [CLASS C
SHARES NAME] (the "Class C Shares") as an additional class of [the Series]
[shares of the Fund] and the Fund and the Distributor desire to amend the
Distribution Agreement to provide that the Distributor shall act as the national
distributor of the Class C Shares pursuant thereto;
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. The Class C Shares are hereby included among the shares to which the
Distribution Agreement relates and the Distributor shall act as distributor for
the Class C Shares pursuant to and in accordance with the Distribution
Agreement, as amended hereby.
2. Hereafter, each reference to "Class A Shares and Class B Shares" in
Section 2 (c) and (d) of the Distribution Agreement [compensation of the
Distributor] shall be deemed to include the Class C Shares, provided that the
<PAGE>
Distribution Plan adopted pursuant to Rule 12b-1 under the Investment Company
Act of 1940 for the Class C Shares and presently in force is attached hereto as
Exhibit "A."
DELAWARE DISTRIBUTORS, L.P.
By: Delaware Distributors, Inc.,
General Partner
ATTEST:
By:
- ------------------------------ --------------------------------
Name: Name:
Title: Title:
[FUND NAME][,for the [SERIES NAME]]
ATTEST:
By:
- ------------------------------ ---------------------------------
Name: Name:
Title: Title:
<PAGE>
EXHIBIT A
[FORM OF 12b-1 PLAN
C CLASS SHARES]
DISTRIBUTION PLAN
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by the Fund
(the "Fund"), on behalf of the Fund's C Class (the "Class"). The Plan has been
approved by a majority of the Board of Directors, including a majority of the
Directors who are not interested persons of the Fund and who have no direct or
indirect financial interest in the operation of the Plan or in any agreements
related thereto, cast in person at a meeting called for the purpose of voting on
such Plan. Such approval by the Directors included a determination that in the
exercise of reasonable business judgment and in light of their fiduciary duties,
there is a reasonable likelihood that the Plan will benefit the Fund and its
shareholders. The Plan has been approved by a vote of the holders of a majority
of the outstanding voting securities of the Class, as defined in the Act.
The Fund is a [corporation/business trust] organized under the laws of
the [State of Maryland/Commonwealth of Pennsylvania], is authorized to issue
different series and classes of securities and is an open-end management
investment company registered under the Act. [Delaware Management Company, Inc.
A-1
<PAGE>
("DMC") or Delaware International Advisers Ltd. ("Delaware International"), an
affiliate of DMC,] serves as the Fund's investment adviser and manager pursuant
to an Investment Management Agreement. Delaware Service Company, Inc. serves as
the Fund's shareholder servicing, dividend disbursing and transfer agent.
Delaware Distributors, L.P. (the "Distributor") is the principal underwriter and
national distributor for the Fund's shares, including shares of the Class,
pursuant to the Distribution Agreement between the Distributor and the Fund
("Distribution Agreement").
The Plan provides that:
1.(a) The Fund shall pay to the Distributor a monthly fee not to exceed
0.75% (3/4 of 1%) per annum of the Fund's average daily net assets represented
by shares of the Class as may be determined by the Fund's Board of Directors
from time to time.
(b) In addition to the amounts described in paragraph 1(a) above, the
Fund shall pay: (i) to the Distributor for payment to dealers or others; or (ii)
directly to others, an amount not to exceed 0.25% (1/4 of 1%) per annum of the
Fund's average daily net assets represented by shares of the Class, as a service
fee pursuant to dealer or servicing agreements.
2.(a) The Distributor shall use the monies paid to it pursuant to
paragraph 1(a) above to assist in the distribution and promotion of shares of
the Class. Payments made to the Distributor under the Plan may be used for,
among other things, preparation and distribution of advertisements, sales
literature and prospectuses and reports used for sales purposes, as well as
compensation related to sales and marketing personnel, and holding special
A-2
<PAGE>
promotions. In addition, such fees may be used to pay for advancing the
commission costs to dealers with respect to the sale of Class shares.
(b) The monies to be paid pursuant to paragraph 1(b) above shall be
used to pay dealers or others for, among other things, furnishing personal
services and maintaining shareholder accounts, which services include confirming
that customers have received the Prospectus and Statement of Additional
Information, if applicable; assisting such customers in maintaining proper
records with the Fund; answering questions relating to their respective
accounts; and aiding in maintaining the investment of their respective customers
in the Fund.
3. The Distributor shall report to the Fund at least monthly on the
amount and the use of the monies paid to it under paragraph 1(a) above. In
addition, the Distributor and others shall inform the Fund monthly and in
writing of the amounts paid under paragraph 1(b) above; both the Distributor and
any others receiving fees under the Plan shall furnish the Board of Directors of
the Fund with such other information as the Board may reasonably request in
connection with the payments made under the Plan and the use thereof by the
Distributor and others in order to enable the Board to make an informed
determination of the amount of the Fund's payments and whether the Plan should
be continued.
A-3
<PAGE>
4. The officers of the Fund shall furnish to the Board of Directors of
the Fund, and the Directors shall review, on a quarterly basis, a written report
of the amounts expended under the Plan and the purposes for which such
expenditures were made.
5. This Plan shall take effect at such time as the Distributor shall
notify the fund in writing of the commencement of the Plan (the "Commencement
Date"); thereafter, the Plan shall continue in effect for a period of more than
one year from the Commencement Date only so long as such continuance is
specifically approved at least annually by a vote of the Board of Directors of
the Fund, and of the Directors who are not interested persons of the Fund and
have no direct or indirect financial interest in the operation of the Plan or in
any agreements related to the Plan ("non-interested Directors"), cast in person
at a meeting called for the purpose of voting on such Plan.
6.(a) The Plan may be terminated at any time by vote of a majority of
the non-interested Directors or by vote of a majority of the outstanding voting
securities of the Class.
(b) The Plan may not be amended to increase materially the amount to
be spent for distribution pursuant to paragraph 1 thereof without approval by
the shareholders of the Class.
7. All material amendments to this Plan shall be approved by the
non-interested Directors in the manner described in paragraph 5 above.
A-4
<PAGE>
8. So long as the Plan is in effect, the selection and nomination of
the Fund's non-interested Directors shall be committed to the discretion of such
non-interested Directors.
9. The definitions contained in Sections 2(a)(3), 2(a)(19) and
2(a)(42) of the Act shall govern the meaning of "affiliated person,"
"interested person(s)" and "vote of a majority of the outstanding voting
securities," respectively, for the purposes of this Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
November 29, 1995
A-5
<PAGE>
DELAWARE GROUP
Administration and Service Agreement
Gentlemen:
We are the national distributor of the shares of all of the classes
(now existing or hereafter added) of all of the Funds in the Delaware Group of
Funds. The term "Fund" as used in this Agreement refers to each fund in the
Delaware Group which retains the Distributor to promote and sell its shares, and
any fund which may hereafter be added to the Delaware Group and retain us as
national distributor. You have indicated that you wish to provide certain
services to your customers relating to their ownership of Fund shares, in
accordance with the terms of this Agreement.
TERMS
1. With respect to any Fund that offers shares of classes for which
Distribution Plans have been adopted under Rule 12b-1 (individually a "12b-1
Plan") of the Investment Company Act of 1940 (the "1940 Act"), which 12b-1 Plans
provide for the payment of service fees, we expect you to provide administrative
and other services, including, but not limited to, furnishing personal and other
services and assistance to your customers who own Fund shares, answering routine
inquiries regarding a Fund, assisting in changing dividend options, account
designations and addresses, maintaining such accounts, or such other services as
a Fund may require, to the extent permitted by applicable statutes, rules, or
regulations. For such services, we shall pay you a fee, as established by us
from time to time, based on the value of the shares of each class of each Fund
which are attributable to customers of your firm. We are permitted to make this
payment under the terms of the 12b-1 Plans adopted by certain of the Funds, as
such Plans may be in effect from time to time.
2. You shall furnish us and each Fund with such information as shall
reasonably be requested by the Board of Directors or Trustees with respect to
the fees paid to you pursuant to this Agreement.
3. We shall furnish to the Board of Directors or Trustees, for their
review, on a quarterly basis, a written report of the amounts expended under
<PAGE>
the Plan by us with respect to the relevant Fund and the purposes for which
such expenditures were made.
4. This Agreement may be terminated by either party at any time by
written notice to that effect and will terminate without notice upon any act of
insolvency by you. Notwithstanding the termination of this Agreement, you shall
remain liable for any amounts otherwise owing to the Distributor or the Funds
and for your portion of any transfer tax or other liability which may be
asserted or assessed against the Distributor or the Fund, or upon any one or
more of the Distributor's dealers, based upon a claim that you and such dealers
or any of them constitute a partnership, an unincorporated business or other
separate entity.
5. Any obligation assumed by a Fund pursuant to this Agreement shall be
limited in all cases to the assets of such Fund and no person shall seek
satisfaction thereof from shareholders of a Fund.
6. The 12b-1 Plans in effect on the date of this Agreement are
described in the Funds' Prospectuses. Each Fund reserves the right to terminate
or suspend its 12b-1 Plan(s) at any time as specified in such Plan(s) and we
reserve the right, at any time, without notice, to modify, suspend or terminate
payments hereunder in connection with such 12b-1 Plan(s).
7. This Agreement shall take effect on the date set forth below.
8. The terms and provisions of the current Prospectus and Statement of
Additional Information for each relevant Fund are hereby accepted and agreed to
by the parties hereto as evidenced by our execution hereof.
GENERAL
9. Governing Law. This Agreement will be governed by and construed in
accordance with the law of the State of Pennsylvania, without reference to that
state's choice of law doctrine.
10. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one Agreement.
11. Severability. In the event that any provision of this Agreement,
or the application of any such provision to any person or set of circumstances,
shall be determined to be invalid, unlawful, void or unenforceable to any
extent, the remainder of this Agreement, and the application of such provision
<PAGE>
to persons or circumstances other than those as to which it is determined to be
invalid, unlawful, void or unenforceable, shall not be impaired or otherwise
affected and shall continue to be valid and enforceable to the fullest extent
permitted by law.
12. Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto and supersedes all prior agreements and
understandings between the parties hereto relating to the subject matter hereof.
13. Headings. The underlined headings contained herein are for
convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the interpretation
hereof.
DELAWARE DISTRIBUTORS, L.P.
By: DELAWARE DISTRIBUTORS, INC.,
General Partner
By:
--------------------------------
Agreed and Accepted:
- ------------------------------
(Name)
By:
---------------------------
(Authorized Officer)
Date:
-------------------------
<PAGE>
DEALER'S AGREEMENT
We invite you, as a selected dealer, to participate as principal in the
distribution of the shares of all of the classes (now existing or hereafter
added) of all of the Funds in the Delaware Group of Investment Companies which
retain us, Delaware Distributors, L.P., to act as exclusive national
distributor. The term "Fund" as used in this Agreement, refers to each Fund in
the Delaware Group which retains us to promote and sell its shares, and any Fund
which may hereafter be added to the Delaware Group and retain us as national
distributor. Such additional Funds will be included in this Agreement upon our
providing you with written notice of such inclusion.
OFFERING PRICE TO PUBLIC: Orders for shares received from you and accepted by a
Fund or its agent, Delaware Service Company, Inc., will be at the public
offering price applicable to each order as set forth in that Fund's Prospectus.
The manner of computing the net asset value of shares, the public offering price
and the effective time of orders received from you are described in the
Prospectus for each Fund. We reserve the right, at any time and without notice,
to suspend the sale of Fund shares.
CONCESSIONS TO YOU: You will be entitled to deduct the applicable concession as
set forth in the then current Prospectus of a Fund from the purchase price of
certain purchase orders placed by you for shares of a Fund having a sales
charge. We reserve the right from time to time, without prior notice, to modify,
suspend or eliminate such concessions by amendment, sticker or supplement to the
Prospectus for the Fund. If any shares confirmed to you under the terms of this
Agreement are redeemed or repurchased by the Fund or by us as agent for the
Fund, or are tendered for redemption or repurchase, within seven business days
after the date of our confirmation of the original purchase order, you shall
promptly refund to us the concession allowed to you on such shares.
PURCHASE PLANS: The purchase price on all orders placed by you and any
concessions or other fees otherwise due to you under this Agreement will be
subject to the then current terms and provisions of any applicable special plans
and accounts (e.g., volume purchases, letters of intent, rights of accumulation,
combined purchases privilege, exchange and reinvestment privileges and
<PAGE>
retirement plan accounts) as set forth from time to time in the Prospectus. We
must be notified when an order is placed if it qualifies for a reduced sales
charge under any of these plans. We reserve the right, at any time, without
prior notice, to modify, suspend or eliminate any such plans or accounts by
amendment, sticker or supplement to the Prospectus for the Fund.
SALES, ORDERS AND CONFIRMATIONS: In offering Fund shares to the public or
otherwise, you shall act as dealer for your own account, and in no transaction
shall you have any authority to act as agent for the Fund, for any other
selected dealer or for us. No person is authorized to make any representations
concerning the shares to the Fund except those contained in the Prospectus and
in written information issued by the Fund or by us as a supplement to such
Prospectus. In purchasing Fund shares, you shall rely only on such
representations.
All sales must be made subject to confirmation and orders are subject
to acceptance or rejection by the Fund in its sole discretion. Your orders must
be wired, telephoned or written to the Fund or its agent. You agree to place
orders for the same number of shares sold by you at the price at which such
shares are sold. You agree that you will not purchase Fund shares except for
investment or for the purpose of covering purchase orders already received and
that you will not, as principal, sell Fund shares unless purchased by you from
the Fund under the terms hereof. You also agree that you will not withhold
placing with us orders received from your customers so as to profit yourself
from such withholding. Each of your orders shall be confirmed by you in writing
on the same day.
PAYMENT AND ISSUANCE OF CERTIFICATES: The shares purchased by you hereunder
shall be paid for in full at the public offering price, less any concession to
you as set forth above, by check payable to the Fund, at its office, within
three business days after our acceptance of your order. If not so paid, we
reserve the right to cancel the sale and to hold you responsible for any loss
sustained by us or the Fund (including lost profit) in consequence. Certificates
representing the Fund's shares will not be issued unless (i) the Fund's
Prospectus indicates that certificates may be issued for the class of shares
being purchased, and (ii) a specific request is received from the purchaser.
Certificates, if requested, will be issued in the names indicated by
registration instructions accompanying your payment.
-2-
<PAGE>
REDEMPTION: The Prospectus describes the provisions whereby the Fund, under all
ordinary circumstances, will redeem shares held by shareholders on demand. You
agree that you will not make any representations to shareholders relating to the
redemption of their shares other than the statements contained in the Prospectus
and the underlying organizational documents of the Fund, to which it refers, and
that you will quote as the redemption price only the price determined by the
Fund. You shall not repurchase any shares from your customers at a price below
that next quoted by the Fund for redemption. You may charge a reasonable fee for
services in connection with the repurchase by you from your customers of shares.
You may hold such repurchased shares only for investment purposes or submit such
shares to the Fund for redemption.
12b-1 PLAN: With respect to any Fund that offers shares of classes for which
Distribution Plans have been adopted under Rule 12b-1 (individually a "12b-1
Plan") of the Investment Company Act of 1940 (the "1940 Act"), we expect you to
provide distribution and marketing services in the promotion of the Fund's
shares. In connection with the receipt of distribution fees and/or the receipt
of service fees as set forth under the 12b-1 Plan(s) applicable to the class or
classes of Fund shares purchased by your customers, we expect you to provide
administrative and other services to your customers who own Fund shares,
including, but not limited to, furnishing personal and other services and
assistance, answering routine inquiries regarding a Fund, assisting in changing
dividend options, account designations and addresses, maintaining such accounts,
or such other services as the Fund may require, to the extent permitted by
applicable statutes, rules, or regulations. For such services we will pay you a
fee, as established by us from time to time, based on a portion of the net asset
value of the accounts of your clients in the Fund. We are permitted to make this
payment under the terms of the 12b-1 Plans adopted by certain of the Funds, as
such Plans may be in effect from time to time. The 12b-1 Plans in effect on the
date of this Agreement are described in the Funds' Prospectuses. Each Fund
reserves the right to terminate or suspend its 12b-1 Plan at any time as
specified in the Plan and we reserve the right, at any time, without notice, to
modify, suspend or terminate payments hereunder in connection with such 12b-1
Plan. You will furnish the Fund and us with such information as may be
-3-
<PAGE>
reasonably requested by the Fund or its directors or trustees or by us with
respect to such fees paid to you pursuant to this Agreement.
LEGAL COMPLIANCE: This Agreement and any transaction with, or payment to, you
pursuant to the terms hereof is conditioned on your representation to us that,
as of the date of this Agreement you are, and at all times during its
effectiveness you will be: (a) a registered broker/dealer under the Securities
Exchange Act of 1934 and qualified under applicable state securities laws in
each jurisdiction in which you are required to be qualified to act as a
broker/dealer in securities, and a member in good standing of the National
Association of Securities Dealers, Inc. (the "NASD"); or (b) a foreign
broker/dealer not eligible for membership in the NASD and otherwise in
compliance with applicable U.S. federal and state securities laws. You agree to
notify us promptly in writing and immediately suspend sales of Fund shares if
this representation ceases to be true. You also agree that, whether you are a
member of the NASD or a foreign broker/dealer not eligible for such membership,
you will comply with the rules of the NASD including, in particular, Sections 2
and 26 of Article III thereof, and that you will maintain adequate records with
respect to your transactions with the Funds.
BLUE SKY MATTERS: We shall have no obligation or responsibility with respect to
your right to sell Fund shares in any state or jurisdiction. From time to time
we may furnish you with information identifying the states and jurisdictions
under the securities laws of which it is believed a Fund's shares may be sold.
You will not transact orders for Fund shares in states or jurisdictions in which
we indicate Fund shares may not be sold. You agree to offer and sell Fund shares
outside the United States only in compliance with all applicable laws, rules and
regulations of any foreign government having jurisdiction over such transactions
in addition to any applicable laws, rules and regulations of the United States.
LITERATURE: We will furnish you with copies of each Fund's Prospectus, sales
literature and other information made publicity available by the Fund, in
reasonable quantities upon your request. You agree to deliver a copy of the
current Prospectus in accordance with the provisions of the Securities Act of
1933 to each purchaser of Fund shares for whom you act as broker. We shall file
Fund sales literature and promotional material with the NASD and SEC as
required.
-4-
<PAGE>
You may not publish or use any sales literature or promotional materials with
respect to the Funds without our prior review and written approval.
NOTICES AND COMMUNICATIONS: All communications from you should be addressed to
us at One Commerce Square, 2005 Market Street, Philadelphia, PA 19103. Any
notice from us to you shall be deemed to have been duly given if mailed or
telegraphed to you at the address set forth below. Each of us may change the
address to which notices shall be sent by notice to the other in accordance with
the terms hereof.
TERMINATION: This Agreement may be terminated by either party at any time by
written notice to that effect and will terminate without notice upon the
appointment of a trustee for you under the Securities Investor Protection Act,
or any other act of insolvency by you. Notwithstanding the termination of this
Agreement, you shall remain liable for any amounts otherwise owing to us or the
Funds and for your portion of any transfer tax or other liability which may be
asserted or assessed against the Fund, or us, or upon any one or more of the
selected dealers based upon the claim that the selected dealers or any of them
constitute a partnership, an unincorporated business or other separate entity.
AMENDMENT: This Agreement may be amended or revised at any time by us upon
notice to you and, unless you notify us in writing to the contrary, you will be
deemed to have accepted such modifications.
GENERAL: Your acceptance hereof will constitute an obligation on your part to
observe all the terms and conditions hereof. In the event you breach any of the
terms and conditions of this Agreement, you will indemnify us, the Funds, and
our affiliates for any damages, losses, costs and expenses (including reasonable
attorneys' fees) arising out of or relating to such breach and we may offset any
such damages, losses, costs and expenses against any amounts due to you
hereunder. Nothing contained herein shall constitute you, us and any dealers an
association or partnership. All references in this Agreement to the "Prospectus"
refer to the then current version of the Prospectus and include the Statement of
Additional Information incorporated by reference therein and any stickers or
supplements thereto. This Agreement supercedes and replaces any prior agreement
-5-
<PAGE>
between us and you with respect to your purchase and sale of Fund shares and is
to be construed in accordance with the laws of the State of Delaware.
Please confirm this Agreement by executing one copy of this Agreement
below and returning it to us. Keep the enclosed duplicate copy for your records.
DELAWARE DISTRIBUTORS, L.P.
By: Delaware Distributors, Inc.,
General Partner
By:/s/Keith E. Mitchell
----------------------
Name: Keith E. Mitchell
Title: President/Chief Executive Officer
-6-
<PAGE>
DEALER'S AGREEMENT ACCEPTANCE
DELAWARE DISTRIBUTORS, L.P.
The undersigned hereby confirms the Dealer's Agreement and acknowledges
that any purchase of Fund shares made during the effectiveness of this Agreement
is subject to all the applicable terms and conditions set forth in this
Agreement, and agrees to pay for the shares at the price and upon the terms and
conditions stated in the Agreement. The undersigned hereby acknowledges receipt
of Prospectuses relating to the Fund shares and confirms that, in executing the
Dealer's Agreement, it has relied on such Prospectuses and not on any other
statement whatsoever, written or oral.
INVESTMENT DEALER PLEASE SIGN HERE AND COMPLETE BELOW
By: DATE
------------------------------- ----------------------------
Name:
-----------------------------
Title:
----------------------------
- ----------------------------------
FIRM
- ----------------------------------
FIRM'S TAX IDENTIFICATION NUMBER
- ----------------------------------
STREET ADDRESS
- ----------------------------------
CITY/STATE/ZIP
Consent of Independent Auditors
We consent to the references to our firm under the captions "Financial
Highlights" in the Prospectus and "Financial Statements" in the Statement of
Additional Information and to the incorporation by reference in this Post-
Effective Amendment No. 10 to the Registration Statement (Form N-1A) (No.
33-41034) of Delaware Group Global & International Funds, Inc. -- International
Equity Series, Global Assets Series, and Global Bond Series of our report dated
January 6, 1995, included in the 1994 Annual Reports to Shareholders of Delaware
Group Global & International Funds, Inc. -- International Equity Series, Global
Assets Series, and Global Bond Series.
Ernst & Young LLP
Philadelphia, Pennsylvania
November 24, 1995
[FORM OF 12b-1 PLAN FOR CLASS A SHARES]
12b-1 Plan
Class A
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule l2b-l under the Investment Company Act of l940 (the "Act") by [FUND
NAME] (the "Fund")[, now for the [SERIES NAME] (the "Series")] on behalf of the
_____________ class [now doing business as the _____________ A Class]
(hereinafter referred to as the "Class"), which Fund[, Series] and Class may do
business under these or such other names as the Board of [Directors/Trustees] of
the Fund may designate from time to time. The Plan has been approved by a
majority of the Board of [Directors/Trustees], including a majority of the
[Directors/Trustees] who are not interested persons of the Fund and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreements related thereto ("non-interested [Directors/Trustees]"), cast in
person at a meeting called for the purpose of voting on such Plan. Such approval
by the [Directors/Trustees] included a determination that in the exercise of
reasonable business judgment and in light of their fiduciary duties, there is a
reasonable likelihood that the Plan will benefit the Class and its shareholders.
If the Plan has not yet been approved by a majority of the outstanding voting
securities as required in the Act, the Plan will be presented to the public
shareholders at the next regular annual or special meeting.
<PAGE>
The Fund is a [corporation/common law trust] organized under the laws
of the [State of Maryland/Commonwealth of Pennsylvania], is authorized to issue
different series and classes of securities and is an open-end management
investment company registered under the Act. [Delaware Management Company,
Inc./Delaware International Advisers Ltd.] serves as the [Fund's/Series']
investment adviser and manager pursuant to an Investment Management Agreement.
Delaware Service Company, Inc. serves as the [Fund's/Series'] shareholder
servicing, dividend disbursing and transfer agent. Delaware Distributors, L.P.
(the "Distributor") is the principal underwriter and national distributor for
the [Fund's/Series'] shares, including shares of the Class pursuant to the
Distribution Agreement between the Distributor and the [Fund/Series]
("Distribution Agreement").
The Plan provides that:
l. The Fund shall pay to the Distributor a monthly fee not to exceed
0.3% (3/10 of l%) per annum of the [Fund's/Series'] average daily net assets
represented by shares of the Class (the "Maximum Amount") as may be determined
by the Fund's Board of [Directors/Trustees] from time to time. Such monthly fee
shall be reduced by the aggregate sums paid by the Fund [on behalf of the
Series] to persons other than broker-dealers (the "Service Providers") who may,
pursuant to servicing agreements, provide to the [Fund/Series] services in the
[Fund's/Series'] marketing of shares of the Class.
2. (a) The Distributor shall use the monies paid to it pursuant to
paragraph l above to furnish, or cause or encourage others to furnish, services
and incentives in connection with the promotion, offering and sale of Class
shares and, where suitable and appropriate, the retention of Class shares by
shareholders.
(b) The Service Providers shall use the monies paid respectively to
them to reimburse themselves for the actual costs they have incurred in
confirming that their customers have received the Prospectus and Statement of
Additional Information, if applicable, and as a fee for (l) assisting such
customers in maintaining proper records with the Fund (2) answering questions
relating to their respective accounts and (3) aiding in maintaining the
investment of their respective customers in the Class.
<PAGE>
3. The Distributor shall report to the Fund at least monthly on the
amount and the use of the monies paid to it under the Plan. The Service
Providers shall inform the Fund monthly and in writing of the amounts each
claims under the Plan; both the Distributor and the Service Providers shall
furnish the Board of [Directors/Trustees] of the Fund with such other
information as the Board may reasonably request in connection with the payments
made under the Plan and the use thereof by the Distributor and the Service
Providers, respectively, in order to enable the Board to make an informed
determination of the amount of the Fund's payments and whether the Plan should
be continued.
4. The officers of the Fund shall furnish to the Board of
[Directors/Trustees] of the Fund, for their review, on a quarterly basis, a
written report of the amounts expended under the Plan and the purposes for which
such expenditures were made.
5. This Plan shall take effect at such time as the Distributor shall
notify the Fund in writing of the commencement of the Plan, which time shall not
be before the first annual or special meeting of the public shareholders at
which the Plan is or was approved by the vote of a majority of the outstanding
voting securities as required in the Act (the "Commencement Date"); thereafter,
the Plan shall continue in effect for a period of more than one year from the
Commencement Date only so long as such continuance is specifically approved at
least annually by a vote of the Board of [Directors/Trustees] of the Fund, and
of the non-interested [Directors/Trustees], cast in person at a meeting called
for the purpose of voting on such Plan.
6. (a) The Plan may be terminated at any time by vote of a majority of
the non-interested [Directors/Trustees] or by vote of a majority of the
outstanding voting securities of the Class.
(b) The Plan may not be amended to increase materially the amount to
be spent for distribution pursuant to paragraph l thereof without approval by
the shareholders of the Class.
7. All material amendments to this Plan shall be approved by the
non-interested [Directors/Trustees] in the manner described in paragraph 5
above.
<PAGE>
8. So long as the Plan is in effect, the selection and nomination of
the Fund's non-interested [Directors/Trustees] shall be committed to the
discretion of such non-interested [Directors/Trustees].
9. The definitions contained in Sections 2(a)(19) and 2(a)(42) of the
Act shall govern the meaning of "interested person(s)" and "vote of a majority
of the outstanding voting securities," respectively, for the purposes of this
Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
November 29, 1995
[FORM OF 12b-1 PLAN FOR CLASS B SHARES]
12b-1 Plan
Class B
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by [FUND
NAME] (the "Fund") [,for the [SERIES NAME] (the "Series")] on behalf of the
_______________________ B Class (the "Class"), which Fund[, Series] and Class
may do business under these or such other names as the Board of
[Directors/Trustees] of the Fund may designate from time to time. The Plan has
been approved by a majority of the Board of [Directors/Trustees], including a
majority of the [Directors/Trustees] who are not interested persons of the Fund
and who have no direct or indirect financial interest in the operation of the
Plan or in any agreements related thereto ("non-interested
[Directors/Trustees]"), cast in person at a meeting called for the purpose of
voting on such Plan. Such approval by the [Directors/Trustees] included a
determination that in the exercise of reasonable business judgment and in light
of their fiduciary duties, there is a reasonable likelihood that the Plan will
benefit the Class and its shareholders. The Plan has been approved by a vote of
the holders of a majority of the outstanding voting securities of the Class, as
defined in the Act.
The Fund is a [corporation/common law trust] organized under the laws
of the [State of Maryland/Commonwealth of Pennsylvania], is authorized to issue
different series and classes of securities and is an open-end management
investment company registered under the Act. [Delaware Management Company,
Inc./Delaware International Advisers Ltd.] serves as the [Fund's/Series']
investment adviser and manager pursuant to an Investment Management Agreement.
Delaware Service Company, Inc. serves as the [Fund's/Series'] shareholder
servicing, dividend disbursing and transfer agent. Delaware Distributors, L.P.
(the "Distributor") is the principal underwriter and national distributor for
the [Fund's/Series'] shares, including shares of the Class, pursuant to the
Distribution Agreement between the Distributor and the [Fund/Series]
("Distribution Agreement").
<PAGE>
The Plan provides that:
1. (a) The Fund shall pay to the Distributor a monthly fee not to
exceed 0.75% (3/4 of 1%) per annum of the [Fund's/Series'] average daily net
assets represented by shares of the Class as may be determined by the Fund's
Board of [Directors/Trustees] from time to time.
(b) In addition to the amounts described in (a) above, the Fund
shall pay (i) to the Distributor for payment to dealers or others, or (ii)
directly to others, an amount not to exceed 0.25% (1/4 of 1%) per annum of the
[Fund's/Series'] average daily net assets represented by shares of the Class, as
a service fee pursuant to dealer or servicing agreements.
2. (a) The Distributor shall use the monies paid to it pursuant to
paragraph 1(a) above to assist in the distribution and promotion of shares of
the Class. Payments made to the Distributor under the Plan may be used for,
among other things, preparation and distribution of advertisements, sales
literature and prospectuses and reports used for sales purposes, as well as
compensation related to sales and marketing personnel, and holding special
promotions. In addition, such fees may be used to pay for advancing the
commission costs to dealers with respect to the sale of Class shares.
(b) The monies to be paid pursuant to paragraph 1(b) above shall be
used to pay dealers or others for, among other things, furnishing personal
services and maintaining shareholder accounts, which services include confirming
that customers have received the Prospectus and Statement of Additional
Information, if applicable; assisting such customers in maintaining proper
records with the Fund; answering questions relating to their respective
accounts; and aiding in maintaining the investment of their respective customers
in the Class.
3. The Distributor shall report to the Fund at least monthly on the
amount and the use of the monies paid to it under paragraph 1(a) above. In
addition, the Distributor and others shall inform the Fund monthly and in
writing of the amounts paid under paragraph 1(b) above; both the Distributor and
any others receiving fees under the Plan shall furnish the Board of
[Directors/Trustees] of the Fund with such other information as the Board may
reasonably request in connection with the payments made under the Plan and the
use thereof by the Distributor and others in order to enable the Board to make
an informed determination of the amount of the Fund's payments and whether the
Plan should be continued.
<PAGE>
4. The officers of the Fund shall furnish to the Board of
[Directors/Trustees] of the Fund, for their review, on a quarterly basis, a
written report of the amounts expended under the Plan and the purposes for which
such expenditures were made.
5. This Plan shall take effect at such time as the Distributor shall
notify the Fund of the commencement of the Plan (the "Commencement Date");
thereafter, the Plan shall continue in effect for a period of more than one year
from the Commencement Date only so long as such continuance is specifically
approved at least annually by a vote of the Board of [Directors/Trustees] of the
Fund, and of the non-interested [Directors/Trustees], cast in person at a
meeting called for the purpose of voting on such Plan.
6.(a) The Plan may be terminated at any time by vote of a majority
of the non-interested [Directors/Trustees] or by vote of a majority of the
outstanding voting securities of the Class.
(b) The Plan may not be amended to increase materially the amount to
be spent for distribution pursuant to paragraph 1 thereof without approval by
the shareholders of the Class.
7. All material amendments to this Plan shall be approved by the
non-interested [Directors/Trustees] in the manner described in paragraph 5
above.
8. So long as the Plan is in effect, the selection and nomination of
the Fund's non-interested [Directors/Trustees] shall be committed to the
discretion of such non-interested [Directors/Trustees].
9. The definitions contained in Sections 2(a)(19) and 2(a)(42) of the
Act shall govern the meaning of "interested person(s)" and "vote of a majority
of the outstanding voting securities," respectively, for the purposes of this
Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
November 29, 1995
<PAGE>
[FORM OF 12b-1 PLAN
C CLASS SHARES]
DISTRIBUTION PLAN
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by the Fund
(the "Fund"), on behalf of the Fund's C Class (the "Class"). The Plan has been
approved by a majority of the Board of Directors, including a majority of the
Directors who are not interested persons of the Fund and who have no direct or
indirect financial interest in the operation of the Plan or in any agreements
related thereto, cast in person at a meeting called for the purpose of voting on
such Plan. Such approval by the Directors included a determination that in the
exercise of reasonable business judgment and in light of their fiduciary duties,
there is a reasonable likelihood that the Plan will benefit the Fund and its
shareholders. The Plan has been approved by a vote of the holders of a majority
of the outstanding voting securities of the Class, as defined in the Act.
The Fund is a [corporation/business trust] organized under the laws of
the [State of Maryland/Commonwealth of Pennsylvania], is authorized to issue
different series and classes of securities and is an open-end management
investment company registered under the Act. [Delaware Management Company, Inc.
("DMC") or Delaware International Advisers Ltd. ("Delaware International"), an
<PAGE>
affiliate of DMC,] serves as the Fund's investment adviser and manager pursuant
to an Investment Management Agreement. Delaware Service Company, Inc. serves as
the Fund's shareholder servicing, dividend disbursing and transfer agent.
Delaware Distributors, L.P. (the "Distributor") is the principal underwriter and
national distributor for the Fund's shares, including shares of the Class,
pursuant to the Distribution Agreement between the Distributor and the Fund
("Distribution Agreement").
The Plan provides that:
1.(a) The Fund shall pay to the Distributor a monthly fee not to exceed
0.75% (3/4 of 1%) per annum of the Fund's average daily net assets represented
by shares of the Class as may be determined by the Fund's Board of Directors
from time to time.
(b) In addition to the amounts described in paragraph 1(a) above, the
Fund shall pay: (i) to the Distributor for payment to dealers or others; or (ii)
directly to others, an amount not to exceed 0.25% (1/4 of 1%) per annum of the
Fund's average daily net assets represented by shares of the Class, as a service
fee pursuant to dealer or servicing agreements.
2.(a) The Distributor shall use the monies paid to it pursuant to
paragraph 1(a) above to assist in the distribution and promotion of shares of
the Class. Payments made to the Distributor under the Plan may be used for,
among other things, preparation and distribution of advertisements, sales
literature and prospectuses and reports used for sales purposes, as well as
compensation related to sales and marketing personnel, and holding special
<PAGE>
promotions. In addition, such fees may be used to pay for advancing the
commission costs to dealers with respect to the sale of Class shares.
(b) The monies to be paid pursuant to paragraph 1(b) above shall be
used to pay dealers or others for, among other things, furnishing personal
services and maintaining shareholder accounts, which services include confirming
that customers have received the Prospectus and Statement of Additional
Information, if applicable; assisting such customers in maintaining proper
records with the Fund; answering questions relating to their respective
accounts; and aiding in maintaining the investment of their respective customers
in the Fund.
3. The Distributor shall report to the Fund at least monthly on the
amount and the use of the monies paid to it under paragraph 1(a) above. In
addition, the Distributor and others shall inform the Fund monthly and in
writing of the amounts paid under paragraph 1(b) above; both the Distributor and
any others receiving fees under the Plan shall furnish the Board of Directors of
the Fund with such other information as the Board may reasonably request in
connection with the payments made under the Plan and the use thereof by the
Distributor and others in order to enable the Board to make an informed
determination of the amount of the Fund's payments and whether the Plan should
be continued.
4. The officers of the Fund shall furnish to the Board of Directors of
the Fund, and the Directors shall review, on a quarterly basis, a written report
of the amounts expended under the Plan and the purposes for which such
expenditures were made.
<PAGE>
5. This Plan shall take effect at such time as the Distributor shall
notify the fund in writing of the commencement of the Plan (the "Commencement
Date"); thereafter, the Plan shall continue in effect for a period of more than
one year from the Commencement Date only so long as such continuance is
specifically approved at least annually by a vote of the Board of Directors of
the Fund, and of the Directors who are not interested persons of the Fund and
have no direct or indirect financial interest in the operation of the Plan or in
any agreements related to the Plan ("non-interested Directors"), cast in person
at a meeting called for the purpose of voting on such Plan.
6.(a) The Plan may be terminated at any time by vote of a majority of
the non-interested Directors or by vote of a majority of the outstanding voting
securities of the Class.
(b) The Plan may not be amended to increase materially the amount to
be spent for distribution pursuant to paragraph 1 thereof without approval by
the shareholders of the Class.
7. All material amendments to this Plan shall be approved by the
non-interested Directors in the manner described in paragraph 5 above.
8. So long as the Plan is in effect, the selection and nomination of
the Fund's non-interested Directors shall be committed to the discretion of such
non-interested Directors.
9. The definitions contained in Sections 2(a)(3), 2(a)(19) and
2(a)(42) of the Act shall govern the meaning of "affiliated person,"
<PAGE>
"interested person(s)" and "vote of a majority of the outstanding voting
securities," respectively, for the purposes of this Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
November 29, 1995
<PAGE>
Draft 11/8/95
SUBJECT TO BOARD APPROVAL
The Delaware Group of Funds
Multiple Class Plan Pursuant to Rule 18f-3
This Multiple Class Plan (the "Plan") has been adopted by a
majority of the Board of Directors of each of the investment companies listed on
Appendix A as may be amended from time to time (each individually a "Fund," and
collectively, the "Funds"), including a majority of the Directors who are not
interested persons of each Fund, pursuant to Rule 18f-3 under the Investment
Company Act of 1940, as amended (the "Act"). The Board of each Fund has
determined that the Plan, including the allocation of expenses, is in the best
interests of the Fund as a whole, each series of shares offered by such Fund
(individually and collectively the "Series") where the Fund offers its shares in
multiple series, and each class of shares offered by the Fund or Series, as
relevant. The Plan sets forth the provisions relating to the establishment of
multiple classes of shares for each Fund and, if relevant, its Series. To the
extent that a subject matter set forth in this Plan is covered by a Fund's
Articles of Incorporation or By-Laws, such Articles of Incorporation or By-Laws
will control in the event of any inconsistencies with descriptions contained in
this Plan.
The term "Portfolio," when used in this Plan in the context of
a Fund that offers only a single series of shares, shall be a reference to the
Fund, and when used in the context of a Fund that offers multiple series of
shares, shall be a reference to each series of such Fund.
CLASSES
1. Appendix A to this Plan describes the classes to be issued
by each Portfolio and identifies the names of such classes.
FRONT-END SALES CHARGE
2. Class A shares carry a front-end sales charge as described
in the Funds' relevant prospectuses; and Class B, Class C and Institutional
Class shares are sold without a front-end sales charge.
<PAGE>
CONTINGENT DEFERRED SALES CHARGE
3. Class A shares are not subject to a contingent deferred
sales charge ("CDSC"), except in the following limited circumstances. On
investments of $1 million or more for which a dealer's commission is paid by the
Fund's principal underwriter, a CDSC of 1.00% of the lesser of (i) the net asset
value at the time of redemption, or (ii) the original net asset value at the
time of purchase applies to redemptions of those investments within the
contingency period of 12 months from the month of purchase.
4. Class B shares redeemed within six years of their purchase
shall be assessed a CDSC at the following rate: (i) 4.00% if shares are redeemed
within two years of purchase; (ii) 3.00% if shares are redeemed during the third
or fourth year following purchase; (iii) 2.00% if shares are redeemed during the
fifth year following purchase; (iv) 1.00% if shares are redeemed during the
sixth year following purchase; and (vi) 0% thereafter.
5. Class C shares redeemed within twelve months of their
purchase shall be assessed a CDSC at the rate of 1.00% of the lesser of (i) the
net asset value at the time of redemption, or (ii) the original net asset value
at the time of purchase.
6. The CDSC for each class is waived in certain circumstances,
as described in the Funds' relevant prospectuses. Shares that are subject to a
CDSC age one month at the end of the month in which the shares were purchased,
regardless of the specific date during the month that the shares were purchased.
7. Institutional Class shares are not subject to a CDSC.
RULE 12b-1 PLANS
8. In accordance with the Rule 12b-1 Plan for the Class A
shares of each Portfolio, the Fund shall pay to Delaware Distributors, L.P. (the
"Distributor") a monthly fee not to exceed 0.30% per annum of such Portfolio's
average daily net assets represented by Class A shares as may be determined by
the Fund's Board of Directors from time to time. The monthly fee shall be
reduced by the aggregate sums paid by or on behalf of such Portfolio to persons
other than broker-dealers (the "Service Providers") pursuant to servicing
agreements.
9. In accordance with the Rule 12b-1 Plan for the Class B
shares of each Portfolio, the Fund shall pay to the Distributor a monthly fee
not to exceed 0.75% per annum of such Portfolio's average daily net assets
represented by Class B shares as may be determined by the Fund's Board of
Directors from time to time. In addition to these amounts, the Fund shall pay
(i) to the Distributor for payment to dealers or others, or (ii) directly to
others, an amount not to exceed 0.25% per annum of such Portfolio's average
daily net assets represented by Class B shares, as a service fee pursuant to
dealer or servicing agreements.
-2-
<PAGE>
10. In accordance with the Rule 12b-1 Plan for the Class C
shares of each Portfolio, the Fund shall pay to the Distributor a monthly fee
not to exceed 0.75% per annum of such Portfolio's average daily net assets
represented by Class C shares as may be determined by the Fund's Board of
Directors from time to time. In addition to these amounts, the Fund shall pay
(i) to the Distributor for payment to dealers or others, or (ii) directly to
others, an amount not to exceed 0.25% per annum of such Portfolio's average
daily net assets represented by Class C shares, as a service fee pursuant to
dealer or servicing agreements.
11. A Rule 12b-1 Plan has not been adopted for the
Institutional Class shares of any Portfolio.
ALLOCATION OF EXPENSES
12. The Fund shall allocate to each class of shares of a
Portfolio any fees and expenses incurred by the Fund in connection with the
distribution or servicing of such class of shares under a Rule 12b-1 Plan, if
any, adopted for such class. In addition, the Fund reserves the right, subject
to approval by the Fund's Board of Directors, to allocate fees and expenses of
the following nature to a particular class of shares of a Portfolio (to the
extent that such fees and expenses actually vary among each class of shares or
vary by types of services provided to each class of shares of the Portfolio):
(i) transfer agency and other recordkeeping costs;
(ii) Securities and Exchange Commission and blue sky
registration or qualification fees;
(iii) printing and postage expenses related to printing and
distributing class specific materials, such as
shareholder reports, prospectuses and proxies to
current shareholders of a particular class or to
regulatory authorities with respect to such class of
shares;
(iv) audit or accounting fees or expenses relating
solely to such class;
(v) the expenses of administrative personnel and
services as required to support the shareholders
of such class;
-3-
<PAGE>
(vi) litigation or other legal expenses relating solely
to such class of shares;
(vii) Directors' fees and expenses incurred as a result
of issues relating solely to such class of shares;
and
(viii) other expenses subsequently identified and determined
to be properly allocated to such class
of shares.
13. Except for any expenses that are allocated to a particular
class as described in paragraph 11 above, all expenses incurred by a Portfolio
will be allocated to each class of shares of such Portfolio on the basis of the
net asset value of each such class in relation to the net asset value of the
Portfolio.
ALLOCATION OF INCOME AND GAINS
14. Income and realized and unrealized capital gains and
losses of a Portfolio will be allocated to each class of shares of such
Portfolio on the basis of the net asset value of each such class in relation to
the net asset value of the Portfolio.
CONVERSIONS
15. (a) Except for shares acquired through a reinvestment of
dividends or distributions, Class B shares held for eight years after purchase
are eligible for automatic conversion into Class A shares of the same Portfolio
in accordance with the terms described in the relevant prospectus. Class B
shares acquired through a reinvestment of dividends or distributions will
convert into Class A shares of the same Portfolio pro rata with the Class B
shares that were not acquired through the reinvestment of dividends and
distributions.
(b) The automatic conversion feature of Class B shares
shall be suspended at any time that the Board of Directors of the Fund
determines that there is not available a reasonably satisfactory opinion of
counsel to the effect that (i) the assessment of the higher fee under the Fund's
Rule 12b-1 Plan for Class B does not result in the Fund's dividends or
distributions constituting a preferential dividend under the Internal Revenue
Code of 1986, as amended, and (ii) the conversion of Class B shares into Class A
shares does not constitute a taxable event under federal income tax law. In
addition, the Board of Directors of a Fund may suspend the automatic conversion
feature by determining that any other condition to conversion set forth in the
relevant prospectus, as amended from time to time, is not satisfied.
-4-
<PAGE>
(c) The Board of Directors of a Fund may also suspend the
automatic conversion of Class B shares if it determines that suspension is
appropriate to comply with the requirements of the Act, or any rule or
regulation issued thereunder, relating to voting by Class B shareholders on the
Fund's Rule 12b-1 Plan for Class A or, in the alternative, the Board of
Directors may provide Class B shareholders with alternative conversion or
exchange rights.
16. Class A, Class C and Institutional Class shares do
not have a conversion feature.
EXCHANGES
17. Exchanges are permitted between Class A Shares and
Institutional Class Shares of a Portfolio or of any other Portfolio in the
Delaware Group funds; Class B shares of a Portfolio may only be exchanged for
Class B shares of any other Portfolio in the Delaware Group; Class C shares of a
Portfolio may only be exchanged for Class C shares of any other Portfolio in the
Delaware Group. All exchanges are subject to the eligibility and minimum
purchase requirements set forth in the Funds' prospectuses. Exchanges cannot be
made between open-end and closed-end funds within the Delaware Group.
18. Each class will vote separately with respect to the Rule
12b-1 Plan related to that class; provided, however, that Class B shares of a
Portfolio may vote on any proposal to materially increase the fees to be paid by
the Fund under the Rule 12b-1 Plan for the Class A shares of the same Portfolio.
19. On an ongoing basis, the Directors, pursuant to their
fiduciary responsibilities under the Act and otherwise, will monitor the
Portfolio for the existence of any material conflicts between the interests of
all the classes of shares offered by such Portfolio. The Directors, including a
majority of the Directors who are not interested persons of the Fund, shall take
such action as is reasonably necessary to eliminate any such conflict that may
develop. The Manager and the Distributor shall be responsible for alerting the
Board to any material conflicts that arise.
20. As described more fully in the Funds' relevant
prospectuses, broker-dealers that sell shares of a Portfolio will be compensated
differently depending on which class of shares the investor selects.
21. Each Fund reserves the right to increase, decrease or
waive the CDSC imposed on any existing or future class of shares of a Portfolio
within the ranges permissible under applicable rules and regulations of the
Securities and Exchange Commission (the "SEC") and the rules of the National
Association of Securities Dealers, Inc. (the "NASD"), as such rules may be
-5-
<PAGE>
amended or adopted from time to time. Each Fund may in the future alter the
terms of the existing classes of such Portfolio or create new classes in
compliance with applicable rules and regulations of the SEC and the NASD.
22. All material amendments to this Plan must be approved by a
majority of the Directors of each Fund affected by such amendments, including a
majority of the Directors who are not interested persons of the Fund.
Effective as of November 29, 1995
-6-
<PAGE>
APPENDIX A
List of Funds and Their Classes
1. Delaware Group Delaware Fund, Inc.
Delaware Fund
Delaware Fund A Class
Delaware Fund B Class
Delaware Fund C Class
Delaware Fund Institutional Class
Devon Fund
Devon Fund A Class
Devon Fund B Class
Devon Fund C Class
Devon Fund Institutional Class
2. Delaware Group Trend Fund, Inc.
Trend Fund A Class
Trend Fund B Class
Trend Fund C Class
Trend Fund Institutional Class
3. Delaware Group Value Fund, Inc.
Value Fund A Class
Value Fund B Class
Value Fund C Class
Value Fund Institutional Class
4. Delaware Group DelCap Fund, Inc.
DelCap Fund A Class
DelCap Fund B Class
DelCap Fund C Class
DelCap Fund Institutional Class
5. Delaware Group Decatur Fund, Inc.
Decatur Income Fund
Decatur Income Fund A Class
Decatur Income Fund B Class
Decatur Income Fund C Class
Decatur Income Fund Institutional Class
<PAGE>
Decatur Total Return Fund
Decatur Total Return Fund A Class
Decatur Total Return Fund B Class
Decatur Total Return Fund C Class
Decatur Total Return Fund Institutional Class
6. Delaware Group Global & International Funds, Inc.
International Equity Series
International Equity Fund A Class
International Equity Fund B Class
International Equity Fund C Class
International Equity Fund Institutional Class
Global Bond Series
Global Bond Fund A Class
Global Bond Fund B Class
Global Bond Fund C Class
Global Bond Fund Institutional Class
Global Assets Series
Global Assets Fund A Class
Global Assets Fund B Class
Global Assets Fund C Class
Global Assets Fund Institutional Class
-8-
