<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
File No. 33-41034
File No. 811-6324
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. / /
---
Post-Effective Amendment No. 19 /X/
---
AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 19
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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) 255-2923
--------------
George M. Chamberlain, Jr., 1818 Market Street, Philadelphia, PA 19103
- -------------------------------------------------------------------------------
(Name and Address of Agent for Service)
Approximate Date of Public Offering: December 18, 1998
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It is proposed that this filing will become effective:
____ immediately upon filing pursuant to paragraph (b)
____ on (date) 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)
X on December 18, 1998 pursuant to paragraph (a)(2) of Rule 485
____
If appropriate:
--- this post-effective amendment designates a new effective date
for a previously filed post-effective amendment
<PAGE>
Title of Securities Being Registered
------------------------------------
Latin America Fund A Class
Latin America Fund B Class
Latin America Fund C Class
Latin America Fund Institutional Class
New Europe Fund A Class
New Europe Fund B Class
New Europe Fund C Class
New Europe Fund Institutional Class
<PAGE>
--- C O N T E N T S ---
This Post-Effective Amendment No. 19 to Registration File No. 33-41034 includes
the following:
1. Facing Page
2. Contents Page
3. Cross-Reference Sheets
4. Part A - Prospectus
5. Part B - Statement of Additional Information
6. Part C - Other Information
7. Signatures
<PAGE>
CROSS-REFERENCE SHEET*
PART A
<TABLE>
<CAPTION>
Location in
Item No. Description Prospectus
- -------- ----------- ----------
Latin America Fund/
New Europe Fund
<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................................. N/A N/A
4 General Description of Registrant .............................. Investment Investment
Objectives and Objectives and
Strategies; Strategies;
Classes of Shares Classes of Shares
5 Management of the Fund ......................................... Management of Management of
the Funds the Funds
6 Capital Stock and Other Securities ............................. The Delaware Dividends and
Difference; Distributions;
Dividends and Taxes; Classes
Distributions; of Shares
Taxes; Classes
of Shares
7 Purchase of Securities Being Offered............................ Cover; Cover;
How to Buy How to Buy
Shares; Shares;
Calculation of Calculation of
Offering Price Net Asset
and Net Asset Value Per Share;
Value Per Share; Management
Management of the Funds
of the Funds
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Location in
Item No. Description Prospectus
- -------- ----------- ----------
Latin America Fund/
New Europe Fund
<S> <C> <C> <C>
A Classes/ Institutional
B Classes/ Classes
C Classes
8 Redemption or Repurchase........................................ How to Buy How to Buy
Shares; Shares;
Redemption and Redemption and
Exchange Exchange
9 Legal Proceedings............................................... None None
</TABLE>
* This filing relates to Class A Shares, Class B Shares, Class C Shares and
Institutional Class shares of Latin America Series and New Europe Series
which have a combined prospectus and a common Part B and Part C.
<PAGE>
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>
CROSS-REFERENCE SHEET
PART C
Location in
Part C
24 Financial Statements and Exhibits...................... Item 24
25 Persons Controlled by or under Common
Control with Registrant................................ Item 25
26 Number of Holders of Securities........................ Item 26
27 Indemnification........................................ Item 27
28 Business and Other Connections of Investment Adviser... Item 28
29 Principal Underwriters................................. Item 29
30 Location of Accounts and Records....................... Item 30
31 Management Services.................................... Item 31
32 Undertakings........................................... Item 32
<PAGE>
NEW EUROPE FUND PROSPECTUS
LATIN AMERICA FUND DECEMBER __, 1998
A CLASS SHARES
B CLASS SHARES
C CLASS SHARES
----------------------------------------------------
1818 Market Street, Philadelphia, PA 19103
For Prospectus and Performance: Nationwide 800-523-1918
Information on Existing Accounts: (SHAREHOLDERS ONLY)
Nationwide 800-523-1918
Dealer Services: (BROKER/DEALERS ONLY)
Nationwide 800-362-7500
Representatives of Financial Institutions:
Nationwide 800-659-2265
This Prospectus describes shares of the New Europe and Latin America
Series (individually, a "Fund" and collectively, the "Funds") of Delaware
Group Global & International Funds, Inc. ("Global Funds, Inc."), both of which
are professionally-managed mutual funds of the series type.
The investment objective of each Fund is to achieve long-term capital
appreciation. The New Europe Fund ("New Europe") seeks to achieve its
objective by investing primarily in equity securities of European companies.
The Latin America Fund ("Latin America") seeks to achieve its objective by
investing primarily in equity securities of Latin American companies. See
Investment Objective and Strategies.
The Funds offer three retail classes of shares: "Class A Shares,"
"Class B Shares" and "Class C Shares" (individually, a "Class" and
collectively, the "Classes").
This Prospectus relates only to the Classes and sets forth
information that you should read and consider before you invest. Please retain
it for future reference. The Funds' Statement of Additional Information ("Part
B" of Global Funds, Inc.'s registration statement), dated December __, 1998,
as it may be amended from time to time, contains additional information about
the Funds and has been filed with the Securities and Exchange Commission (the
"SEC"). Part B is incorporated by reference into this Prospectus and is
available, without charge, by writing to Delaware Distributors, L.P. at the
above address or by calling the above numbers. The Funds' financial statements
will appear in the Annual Report of Global Funds, Inc. and will accompany any
response to requests for Part B. In addition, the SEC maintains a Web site
(http://www.sec.gov) that contains Part B, material incorporated by reference
into Global Funds, Inc.'s registration statement, and other information
regarding registrants that electronically file with the SEC.
<PAGE>
Each Fund also offers an Institutional Class, which is available for
purchase only by certain investors. A prospectus for each Fund's Institutional
Class can be obtained by writing to Delaware Distributors, L.P. at the above
address or by calling the above numbers.
TABLE OF CONTENTS
<TABLE>
<S> <C>
Cover Page How to Buy Shares
Synopsis Redemption and Exchange
Summary of Expenses Dividends and Distributions
Investment Objective and Strategies Taxes
Suitability Calculation of Offering Price and Net Asset
Investment Strategy Value Per Share
Special Risk Considerations Management of the Funds
The Delaware Difference Other Investment Policies and Risk
Plans and Services Considerations
Classes of Shares Appendix A--Ratings
</TABLE>
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
FUNDS ARE NOT FDIC OR NCUSIF INSURED, ARE NOT GUARANTEED BY ANY BANK OR ANY
CREDIT UNION, ARE NOT OBLIGATIONS OF ANY BANK OR ANY CREDIT UNION, AND INVOLVE
INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
SHARES OF THE FUNDS ARE NOT BANK OR CREDIT UNION DEPOSITS.
-2-
<PAGE>
SYNOPSIS
Investment Objectives
The investment objective of each Fund is to achieve long-term capital
appreciation. New Europe seeks to achieve its objective by investing primarily
in equity securities of European countries. Latin America seeks to achieve its
objective by investing primarily in equity securities of Latin American
companies.
New Europe and Latin America are international funds. Under normal
market conditions, at least 65% of New Europe's assets will be invested in
equity securities of companies organized or having a majority of their assets
in or deriving a majority of their operating income in Europe. Under normal
market conditions, at least 65% of Latin America's assets will be invested in
equity securities of companies organized or having a majority of their assets
in or deriving a majority of their operating income in Latin America. For
further details, see Investment Objective and Strategies and Other Investment
Policies and Risk Considerations.
Risk Factors and Special Considerations
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 the utilization of forward
foreign currency exchange contracts involve certain risk and opportunity
considerations not typically associated with investing in United States
companies. See Special Risk Considerations-Foreign Securities Risks and Other
Investment Policies and Risk Considerations.
2. The prices of equity securities in which New Europe and Latin
America may invest, tend to fluctuate, particularly in the shorter term.
Investors in the Funds should be willing to accept the risks associated with
emerging and growth-oriented companies, some of the securities of which may be
speculative and subject the Funds to additional investment risk. See Special
Risk Considerations and Other Investment Policies and Risk Considerations.
3. Each Fund may invest a portion of its assets in the markets of
certain emerging countries. Investments in securities of companies in emerging
markets present a greater degree of risk than tends to be the case for foreign
investments in Western Europe and other developed markets. Among other things,
economic markets and structures tend to be less mature and diverse and the
securities markets which are subject to less government regulation or
supervision may also be smaller, less liquid and subject to greater price
volatility. There is a greater possibility of expropriation, nationalization,
confiscatory taxation, income earned or other special taxes, foreign exchange
restrictions, limitations on the repatriation of income and capital from
investments, defaults in foreign government debt, and economic, political or
social instability. In addition, in many emerging markets, there is
substantially less publicly available information about issuers and the
information that is available tends to be of a lesser quality. These risks are
accentuated for both Funds because many of the countries in Eastern Europe and
most of the countries in Latin America are emerging market countries. See
Special Risk Considerations-Emerging Markets Securities Risks.
4. The New Europe and Latin America Funds target specific regions of
the world for investment. Thus, an investment in either of these Funds will
likely be more volatile than a more geographically diversified fund. Further,
the performance of either Fund is closely tied to the economic and political
conditions of the regions in which it invests. See Special Risk Considerations
- - Region Risks.
-3-
<PAGE>
5. Each Fund may invest up to 30% of its assets, in high yield, high
risk foreign fixed-income securities, including Brady Bonds. Consequently,
greater risks may be involved with an investment in the Funds. See High Yield,
High Risk Securities under Investment Objective and Strategies.
6. The Funds have the right to engage in options and futures
transactions for hedging purposes, to counterbalance portfolio volatility. In
connection with futures transactions, the Funds will maintain certain
collateral in special accounts established with futures commission merchants
or on its behalf in the care of The Chase Manhattan Bank (the "Custodian
Bank"). While the Funds do not engage in options and futures for speculative
purposes, there are risks which result from the use of these instruments, and
an investor should carefully review the descriptions of these risks in this
Prospectus. See Options and Futures Contracts and Options on Futures Contracts
under Other Investment Policies and Risk Considerations.
Investment Manager, Sub-Adviser, Distributor and Service Agent
Delaware International Advisers Ltd. ("Delaware International" or the
"Manager") furnishes investment management services to the Funds, subject to
the supervision of Global Funds, Inc.'s Board of Directors. Delaware
Distributors, L.P. (the "Distributor") is the national distributor for the
Funds and for all of the other mutual funds that are part of Delaware
Investments. Delaware Service Company, Inc. (the "Transfer Agent") is the
shareholder servicing, dividend disbursing, accounting services and transfer
agent for the Funds and for all of the other funds that are part of Delaware
Investments. See Summary of Expenses and Management of the Fund for further
information regarding the Manager and the fees payable under the Funds'
Investment Management Agreements.
Sales Charges
The price of Class A Shares of each Fund includes a maximum front-end
sales charge of 4.75% of the offering price. The sales charge is reduced on
certain transactions of at least $100,000 but under $1,000,000. For purchases
of $1,000,000 or more, the front-end sales charge is eliminated; if a dealer
commission is paid in connection with those purchases, a limited contingent
deferred sales charge ("Limited CDSC") of 1% will be imposed if shares are
redeemed during the first year after the purchase and 0.50% will be imposed if
shares are redeemed during the second year after purchase. See Contingent
Deferred Sales Charge for Certain Redemption of Class A Shares Purchased at
Net Asset Value under Redemption and Exchange. Class A Shares are subject to
annual 12b-1 Plan expenses for the life of the investment.
The price of Class B Shares of each Fund 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; (iv) 1% if shares are redeemed
during the sixth year following purchase; and (v) 0% thereafter. Class B
Shares are subject to annual 12b-1 Plan expenses for approximately eight years
after purchase.
The price of Class C Shares of each Fund is equal to the net asset
value per share. Class C Shares are subject to a CDSC of 1% if shares are
redeemed within 12 months of purchase. Class C Shares are subject to annual
12b-1 Plan expenses for the life of the investment.
See Classes of Shares and Distribution (12b-1) and Service under
Management of the Funds.
Purchase Amounts
Generally, the minimum initial investment in any Class is $1,000.
Subsequent investments generally must be at least $100.
-4-
<PAGE>
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
in Class A Shares, and that Class A Shares are subject to lower annual 12b-1
Plan expenses than Class B and Class C Shares and generally are not subject to
a CDSC. The minimum and maximum purchase amounts for retirement plans may
vary. See How to Buy Shares.
Redemption and Exchange
Class A Shares may be redeemed or exchanged at the net asset value
calculated after receipt of the redemption or exchange request. Neither the
Funds 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 Limited CDSC if a dealer's commission
was paid in connection with such purchases. See Front-End Sales Charge
Alternative - Class A Shares under Classes of Shares.
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 Funds
nor the Distributor assesses any charges other than the CDSC for redemptions
or exchanges of Class B or Class C Shares. There are certain limitations on an
investor's ability to exchange shares between the various classes of shares
that are offered. See Redemption and Exchange.
Open-End Investment Company
Global Funds, Inc. is an open-end, registered management investment
company. Each Fund operates as a diversified fund as defined under the
Investment Company Act of 1940 (the "1940 Act"). Global Funds, Inc. was
organized as a Maryland corporation on May 30, 1991. See Shares under Management
of the Funds.
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<PAGE>
SUMMARY OF EXPENSES
A general comparison of the sales arrangements and other expenses
applicable to Class A, Class B and Class C Shares for each Fund follows:
<TABLE>
<CAPTION>
New Europe Fund
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, as applicable)......................... None* 4.00%* 1.00%*
Redemption Fees.............................................. None** None** None**
</TABLE>
<TABLE>
<CAPTION>
Latin America Fund
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, as applicable)......................... None* 4.00%* 1.00%*
Redemption Fees.............................................. None** None** None**
</TABLE>
*Class A purchases of $1,000,000 or more may be made at net asset value.
However, if in connection with any such purchase a dealer commission is paid
to the financial adviser through whom such purchase is effected, a Limited
CDSC of 1% will be imposed on certain redemptions made during the first year
after the purchase and a Limited CDSC of 0.50% will be imposed on certain
redemptions made during the second year after purchase. Additional Class A
purchase options involving the imposition of a CDSC may be permitted as
described in the Prospectus from time to time. Class B Shares are subject to a
CDSC of: (i) 4% if shares are redeemed within
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<PAGE>
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 12 months of purchase. See Contingent
Deferred Sales Charge for Certain Redemptions of Class A Shares Purchased at Net
Asset Value under Redemption and Exchange; and Deferred Sales Charge Alternative
- - Class B Shares, Level Sales Charge Alternative - Class C Shares and Contingent
Deferred Sales Charge - Class B Shares and Class C Shares under Classes of
Shares.
**First Union National Bank currently charges $7.50 per redemption for
redemptions payable by wire.
<TABLE>
<CAPTION>
New Europe Fund
Annual Operating Expenses Class A Class B Class C
(as a percentage of average daily net assets) Shares Shares Shares
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fees (after voluntary waivers)..................... 0.00%++ 0.00%++ 0.00%++
12b-1 Expenses (including service fees)
(after voluntary waivers)..................................... 0.00%+/++ 0.00%+/++ 0.00%+/++
Other Operating Expenses
(after voluntary payments).................................... 1.25%++ 1.25%++ 1.25%++
===== ===== =====
Total Operating Expenses
(after voluntary waivers and payments)................... 1.25%++ 1.25%++ 1.25%++
===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
Latin America Fund
Annual Operating Expenses Class A Class B Class C
(as a percentage of average daily net assets) Shares Shares Shares
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fees (after voluntary waivers)..................... 0.00%++ 0.00%++ 0.00%++
12b-1 Expenses (including service fees)
(after voluntary waivers)..................................... 0.00%+/++ 0.00%+/++ 0.00%+/++
Other Operating Expenses
(after voluntary payments).................................... 1.25%++ 1.25%++ 1.25%++
===== ===== =====
Total Operating Expenses
(after voluntary waivers and payments)................... 1.25%++ 1.25%++ 1.25%++
===== ===== =====
</TABLE>
+ 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"). The Distributor has elected voluntarily to waive its right
to receive 12b-1 Plan fees (including service fees) from the
commencement of the public offering of the Classes through June 30,
1999. In the absence of those waivers, 12b-1 Plan expenses would
equal 0.30% (no more than 0.25% as set by the Board) for
-7-
<PAGE>
Class A Shares and 1.00% for each of the Class B Shares and Class C
Shares. See Distribution (12b-1) and Service under Management of the
Fund.
++ Because the New Europe and Latin America Funds are new Funds, "Total
Operating Expenses" and "Other Operating Expenses" for each Class of
shares are based on estimated amounts each Fund expects to pay during
the initial fiscal year. As noted above, the Distributor has elected
voluntarily to waive 12b-1 Plan expenses through June 30, 1999. Also,
the Manager has elected voluntarily to waive that portion, if any, of
the annual management fees payable by each Fund and to pay certain
expenses of the Funds to the extent necessary to ensure that each
Fund's Total Operating Expenses (exclusive of 12b-1 Plan fees, taxes,
interest, brokerage commissions and extraordinary expenses) do not
exceed, on an annualized basis, 1.25% of the average daily net assets
of each Fund. The Manager's voluntary fee waivers and expense payments
began at the commencement of the public offering of the Classes and
will extend through June 30, 1999. Absent the Manager's voluntary fee
waiver and expense payments (and the Distributor's voluntary waiver of
the 12b-1 Plan fees for each class), it is estimated that during the
current fiscal year, the Total Operating Expenses, as a percentage of
average daily net assets, would be ____%, ____% and ____%,
respectively, for Class A Shares, Class B Shares and Class C. Shares of
New Europe Fund, and ____%, ____% and ____%, respectively, for Class A
Shares, Class B Shares and Class C Shares of Latin America Fund,
reflecting "Management Fees" of 1.25% in all cases.
For expense information about each Fund's Institutional Class of
shares, see the separate prospectus relating to that class.
Investors utilizing the Asset Planner asset allocation service also
typically incur an annual maintenance fee of $35 per Strategy. However,
effective November 1, 1996, the annual maintenance fee is waived until further
notice. Investors who utilize the Asset Planner for an Individual Retirement
Plan ("IRA") will pay an annual IRA fee of $15 per Social Security Number. See
Part B.
-8-
<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 and no redemption at the end of each time period and
(3) for Class B Shares and Class C Shares, payment of a CDSC at the time of
redemption, if applicable. The following example also reflects the voluntary
waiver of the management fee and payment of expenses by the Manager and the
waiver of the 12b-1 Plan fees by the Distributor as discussed in this
Prospectus.
New Europe Fund
<TABLE>
<CAPTION>
Assuming Redemption Assuming No Redemption
1 year 3 years 1 year 3 years
------ ------- ------ -------
<S> <C> <C> <C> <C>
Class A Shares $___(1) $___ $___ $___
Class B Shares(2) $___ $___ $___ $___
Class C Shares $___ $___ $___ $___
</TABLE>
Latin America Fund
<TABLE>
<CAPTION>
Assuming Redemption Assuming No Redemption
1 year 3 years 1 year 3 years
------ ------- ------ -------
<S> <C> <C> <C> <C>
Class A Shares $___(1) $___ $___ $___
Class B Shares(2) $___ $___ $___ $___
Class C Shares $___ $___ $___ $___
</TABLE>
(1) Generally, no redemption charge is assessed upon redemption of Class
A Shares. Under certain circumstances, however, a Limited CDSC or
other CDSC, which has not been reflected in this calculation, may be
imposed on certain redemptions. See Contingent Deferred Sales Charge
for Certain Redemptions of Class A Shares Purchased at Net Asset
Value under Redemption and Exchange.
(2) At the end of approximately eight years after purchase, Class B
Shares will be automatically converted into Class A Shares. The
example above does not assume conversion of Class B Shares since it
reflects figures only for one and three years. See Automatic
Conversion of Class B Shares under Classes of 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.
The purpose of the above tables is to assist the investor in
understanding the various costs and expenses that an investor in each Class
will bear directly or indirectly.
-9-
<PAGE>
INVESTMENT OBJECTIVE AND STRATEGIES
SUITABILITY
Investors considering any of the Funds should have a long-term
investment time frame.
The Funds cannot assure a specific rate of return or that principal
will be protected. The value of the Funds' shares can be expected to move up
and down depending on market conditions. Consequently, appreciation may be
obtained in periods of generally rising markets, while in declining markets
the value of the Funds' shares may decline.
Investments in foreign securities, whether equity or fixed-income,
involve special risks including those related to currency fluctuations, as
well as to political, economic and social situations different from and
potentially more volatile than those in the United States. In addition, the
accounting, tax and financial reporting standards of foreign countries are
different from and may be less reliable or comprehensive than those relating
to U.S. securities issuers. See Special Risk Considerations for a complete
discussion of the risk factors affecting any international investment. For
these reasons, the Funds are not suitable for short-term investors. However,
through the cautious selection and supervision of its portfolio, the Manager
will strive to achieve the Funds' respective objectives.
The Funds may be suitable for investors with a long-term investment
horizon who are looking for long-term growth potential from a portfolio of
European or Latin American securities. New Europe will invest primarily in
equity securities of European countries of varying size. Latin America will
invest primarily in equity securities of Latin American companies. Investors
should be willing to accept the risks associated with foreign investing as
well as with investments in growth-oriented or emerging issuers, some of which
may be speculative and subject the Funds to additional investment risk.
* * *
Ownership of shares of the Funds can reduce the bookkeeping and
administrative inconvenience that is typically connected with direct purchases
of the type of securities in which the Funds invest.
An investor should not consider a purchase of shares of any Fund as
equivalent to a complete investment program. Delaware Investments includes a
family of funds, generally available through registered investment dealers,
which may be used together to create a more complete investment program.
INVESTMENT STRATEGY
New Europe - The investment objective of New Europe is to achieve
long-term capital appreciation. The Fund seeks to achieve its objective by
investing primarily in equity securities of European companies, which may
include companies located or operating in established or emerging European
countries. Under normal circumstances, at least 65% of the Fund's total assets
will be invested in equity securities of companies organized or having a
majority of their assets in or deriving a majority of their operating income
in Europe. The companies in which the Fund will invest will be of varying
size.
The equity securities in which the Fund may invest include common
stocks, preferred stocks, rights or warrants to purchase common stocks and
securities convertible into common stocks. The Fund may also invest in foreign
companies through sponsored or unsponsored Depositary Receipts.
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The Fund may invest in securities of issuers located in any European
country where the Manager believes that there is the potential for long-term
capital appreciation. The Fund may invest in the securities of issuers located
in European countries with well-established economies and securities markets,
in countries with emerging economies or securities markets or smaller
securities markets. In addition, if opportunities arise, the Fund may invest
in securities of issuers located in Eastern European countries. See Special
Risk Considerations - Emerging Markets Securities Risks.
Latin America - The investment objective of Latin America is to
achieve long-term capital appreciation. The Fund seeks to achieve its
objective by investing primarily in equity securities of companies in Latin
America, most of which are emerging market countries. Under normal
circumstances, at least 65% of the Fund's total assets will be invested in
equity securities of companies organized or having a majority of their assets
in or deriving a majority of their income in Latin America. The companies in
which the Fund will invest will be of varying size.
The equity securities in which the Fund may invest include common
stocks, preferred stocks, rights or warrants to purchase common stocks and
securities convertible stocks. The Fund may also invest in foreign companies
through sponsored or unsponsored Depositary Receipts.
The Latin American countries in which the Fund may invest include
Argentina, Belize, Bolivia, Brazil, Chile, Columbia, Costa Rica, Cuba,
Ecuador, El Salvador, French Guyana, Guatemala, Guyana, Honduras, Mexico,
Nicaragua, Panama, Paraguay, Peru, Surinam, Trinidad/Tobago, Uruguay and
Venezuela.
Both Funds -- In selecting investments for the Funds, the Manager
will employ a dividend discount analysis across country boundaries and will
also use a purchasing power parity approach to identify currencies and markets
that are overvalued or undervalued relative to the U.S. dollar. The Manager
uses the dividend discount analysis, based on available information, to
compare the value of different investments. Using this technique, 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.
Because many of the countries in which the Funds invest are emerging
countries, there may be less information available on which the Manager can
base its dividend discount analysis. Thus, such analysis may not be as
complete as a dividend discount analysis performed on investments in developed
countries.
With a purchasing 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 Funds may invest in both open-end and listed or unlisted
closed-end investment companies, as well as unregistered investment companies.
See Investment Company Securities under Other Investment Policies and Risk
Considerations. The Funds may also invest in convertible preferred stocks that
offer enhanced yield features, such as Preferred Equity Redemption Cumulative
Stock, and certain other non-traditional equity securities.
Each Fund may invest up to 30% of its net assets in fixed-income
securities issued by emerging country companies, and foreign governments,
their agencies, instrumentalities or political subdivisions, all of which may
be high yield, high risk fixed-income securities rated lower than BBB by
Standard & Poor's Ratings Group
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("S&P") and Baa by Moody's Investors Services, Inc. ("Moody's") or, if unrated,
are considered by the Manager to be of equivalent quality and which present
special investment risks. Each Fund may also invest in Brady Bonds. See High
Yield, High Risk Securities and Special Risk Considerations. As of December 31,
1997, the International Small Cap Fund did not hold any of such lower rated
fixed income securities.
For temporary defensive purposes, the Funds may invest all or a
substantial portion of their 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. For example, any Fund may invest in U.S.
fixed-income markets when the Manager believes that the global equity markets
are excessively volatile or overvalued so that the Fund's objective cannot be
achieved in such markets. Any such corporate debt obligations will be rated AA
or better by S&P, or Aa or better by Moody's, or if unrated, will be
determined to be of comparable quality by the Manager. The Funds may also
invest in the securities listed above pending investment of proceeds from new
sales of Fund shares and to maintain sufficient cash to meet redemption
requests.
Restricted and Illiquid Securities
The Funds 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 Funds. See Rule 144A
Securities under Other Investment Policies and Risk Considerations. Each Fund
may each invest up to 15% of the value of its net assets in illiquid
securities, which are securities which may not be disposed of within seven
days at the price at which they are carried on a Fund's books. In the event a
Fund's percentage limitation is exceeded, whether due to changes in the market
value of the Fund's illiquid holdings or because a particular security is
deemed to have become illiquid, the Manager will take steps to remedy these
circumstances in an orderly fashion.
High Yield, High Risk Securities
Each Fund may invest up to 30% of its net assets in high yield, high
risk foreign fixed-income securities, including so-called Brady Bonds. See
Foreign Government Securities Risks under Special Risk Considerations. In the
past, in the opinion of the Manager, 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 intends to maintain an adequately diversified
portfolio of these bonds. While diversification can help to reduce the effect
of an individual default on a Fund, there can be no assurance that
diversification will protect a Fund from widespread bond defaults brought
about by a sustained economic downturn.
Medium- and low-grade bonds held by a Fund 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
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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 a Fund's net asset value
per share.
* * *
Each Fund 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, each Fund will operate as a diversified fund. The Funds will not
concentrate their investments in any particular industry, which means that
each Fund will not invest 25% or more of its total assets in any one industry.
Global Funds, Inc.'s designation as an open-end investment company,
each Fund's designation as a diversified fund, and each Fund's policies
concerning portfolio lending, borrowing and concentration are "fundamental"
and may not be changed unless authorized by the vote of a majority of such
Fund's outstanding voting securities. A vote of a "majority of the outstanding
voting securities" is the vote by the holders of the lesser of a) 67% or more
of a Fund's voting securities present in person or represented by proxy if the
holders of more than 50% of the outstanding voting securities of the Fund 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 each
Fund which may not be changed without a majority shareholder vote.
Any investment policies of a Fund not identified above as "fundamental"
may be changed by the Board of Directors of Global Funds, Inc. without a
shareholder vote. See Special Risk Considerations and Other Investment Policies
and 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 Fund,
nor can there be any assurance that a Fund's investment objective will be
attained.
Foreign Securities Risks. The Funds have the right to purchase
securities in any developed, underdeveloped or emerging country. 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 substantially 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. In particular, the assets and profits appearing on the financial
statements of a developing or emerging country issuer may not reflect its
financial position or results of operations in the way they would be reflected
had the financial statements been prepared in accordance with
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the United States' generally accepted accounting principles. Also, for an issuer
that keeps accounting records in local currency, inflation accounting rules may
require for both tax and accounting purposes, that certain assets and
liabilities be restated on the issuer's balance sheet in order to express items
in terms of currency or constant purchasing power. Inflation accounting may
indirectly generate losses or profits. Consequently, financial data may be
materially affected by restatements for inflation and may not accurately reflect
the real condition of those issuers and securities markets.
Further, the Funds 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, and may be subject to administrative
uncertainties. 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, and capital requirements for
brokerage firms are generally lower. The foreign securities markets of many of
the countries in which the Funds may invest may also be smaller, less liquid
and subject to greater price volatility than those in the United States.
Emerging Markets Securities Risks. Compared to the United States and
other developed countries, emerging countries may have volatile social
conditions, relatively unstable governments and political systems, economies
based on only a few industries and economic structures that are less diverse
and mature, and securities markets that trade a small number of securities,
which can result in a low or nonexistent volume of trading. Prices in these
securities markets 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. Until recently, there
has been an absence of a capital market structure or market-oriented economy
in certain emerging countries. Further, investments and opportunities for
investments by foreign investors are subject to a variety of national policies
and 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, limits on the types of companies in which
foreigners may invest and prohibitions on foreign investments in issuers or
industries deemed sensitive to national interests. Additional restrictions may
be imposed at any time by these or other countries in which the Funds invest.
Also, 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.
Countries such as those in which the Funds may invest have historically
experienced and may continue to experience, substantial, and in some periods
extremely high rates of inflation for many years, 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. Other 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.
Each of the Funds has the ability to invest in emerging market
securities. With respect to the New Europe Fund, most Eastern European
countries are considered emerging markets. Further, with respect to the Latin
America Fund, virtually all Latin American countries are underdeveloped or
emerging. Set forth below are some specific risk factors related to Eastern
Europe and Latin American issuers.
Eastern European Securities Risks. Investments in Eastern European
countries may involve particular risks with respect to nationalization,
expropriation and confiscatory taxation. The communist governments of a
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number of Eastern European countries expropriated large amounts of private
property in the past, in many cases without adequate compensation, and there can
be no assurance that such expropriation will not occur in the future. In the
event of such expropriation, the New Europe Fund could lose a substantial
portion of any investments it has made in the affected countries. In addition,
the accounting, tax and financial reporting standards of Eastern European
Countries are different from and may be less reliable or comprehensive than
those relating to Western European securities. Finally, even though certain
Eastern European currencies may be convertible in to U.S. dollars, the
conversion rates may be artificial relative to the actual market values and may
be unfavorable to Fund investors.
Certain Eastern European countries, which do not have market
economies, are characterized by an absence of developed legal structures
governing private and foreign investments and private property. Certain
countries require governmental approval prior to investments by foreign
persons, or limit the amount of investment by foreign persons in a particular
company or limit the investment of foreign persons to only a specific class of
securities of a company that may have less advantageous terms than securities
of the company available for purchase by nationals.
Authoritarian governments in certain Eastern European countries may
require that a governmental or quasi-governmental authority act as custodian
of the New Europe Fund's assets invested in such country. To the extent such
governmental or quasi-governmental authorities do not satisfy the requirements
of the 1940 Act to act as foreign custodians of the New Europe Fund's cash and
securities, the Fund's investment in such countries may be limited or may be
required to be effected through intermediaries. The risk of loss through
governmental confiscation may be increased in such countries. The New Europe
Fund may also invest in Russian securities. Russian securities involve
additional significant risks, including political and social uncertainty (for
example, regional conflicts and risk of war), currency exchange rate
volatility, pervasiveness of corruption and crime in the Russian economic
system, delays in settling portfolio transactions and risk of loss arising out
of Russia's system of share registration and custody. For more information
about these and other risks associated with Russian securities, please see
Part B.
Satisfactory custodial services for investment securities may not be
available in some Eastern European countries, which may result in the Fund
incurring additional costs and delays in transporting and custodying such
securities outside such countries.
Latin American Securities Risks. The Latin American securities
markets are not as large as the U.S. securities markets and have substantially
less trading volume, resulting in a lack of liquidity and high price
volatility. There is also a high concentration of market capitalization and
trading volume in a small number of issuers representing a limited number of
industries, as well as a high concentration of investors and financial
intermediaries. Latin American brokers typically are fewer in number and less
capitalized than brokers in the United States. These factors, combined with
the U.S. regulatory requirements for open-end funds and the restrictions on
foreign investments discussed below, result in potentially fewer investment
opportunities for the Latin America Fund and may have an adverse impact on the
investment performance of the Fund.
The investment objective of the Latin America Fund reflects the
belief that investment opportunities may result in Latin America from an
evolving long-term international trend encouraging greater market orientation
and diminishing governmental intervention in economic affairs. The Latin
American economies have experienced considerable difficulties in the past
decade. Although there have been significant improvements in recent years, the
Latin American economies continue to experience significant problems,
including high inflation rates and high interest rates. The emergence of the
Latin American economies and securities markets will require continued
economic and fiscal discipline which has been lacking at times in the
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past, as well as stable political and social conditions. Recovery may also be
influenced by international economic conditions, particularly those in the
United States, and by world prices for oil and other commodities. There is no
assurance that the economic initiatives will be successful.
Certain of the risks associated with international investments and
investing in smaller capital markets are heightened for investments in Latin
American countries. For example, some of the currencies of Latin American
countries have experienced steady currency devaluations relative to the U.S.
dollar, and major adjustments have been made in certain of such currencies
periodically. In addition, governments of many Latin American countries have
exercised and continue to exercise substantial influence over many aspects of
the private sector. In certain cases, the government owns or controls many
companies, including the largest in the country. Accordingly, government
actions in the future could have a significant effect on economic conditions
in Latin American countries, which could affect private sector companies and
the Fund, as well as the value of securities in the Fund's portfolio.
In addition to the relative lack of publicly available information
about Latin American issuers and the possibility that such issuers may not be
subject to the same accounting, auditing and financial reporting standards as
are applicable to U.S. companies, inflation accounting rules in some Latin
American countries require, for companies that keep accounting records in the
local currency, for both tax and accounting purposes, that certain assets and
liabilities be restated on the company's balance sheet in order to express
items in terms of currency of constant purchasing power. Inflation accounting
may indirectly generate losses or profits for certain Latin American
companies.
Satisfactory custodial services for investment securities may not be
available in some Latin American countries, which may result in the Fund
incurring additional costs and delays in transporting and custodying such
securities outside such countries.
Most Latin American countries have experienced substantial, and in
some periods extremely high, rates of inflation for many years. Inflation and
rapid fluctuations in inflation rates have had and may continue to have very
negative effects on the economies and securities markets of certain Latin
American countries.
As a result, management of the Fund may determine that,
notwithstanding otherwise favorable investment criteria, it may not be
practicable or appropriate to invest in a particular Latin American country.
The Fund may invest in countries in which foreign investors, including
management of the Fund, have had no or limited prior experience.
Some Latin American countries prohibit or impose substantial
restrictions on investments in their capital markets, particularly their
equity markets, by foreign entities such as the Fund. As illustrations,
certain countries may require governmental approval prior to investments by
foreign persons or limit the amount of investment by foreign persons in a
particular company or limit the investment by foreign persons to only a
specific class of securities of a company which may have less advantageous
terms than securities of the company available for purchase by nationals.
Certain countries may restrict investment opportunities in issuers or
industries deemed important to national interests.
Substantial limitations may exist in certain countries with respect
to the Fund's ability to repatriate investment income, capital or the proceeds
of sales of securities by foreign investors. For example, in Chile, with
limited exceptions, invested capital cannot be repatriated for three years.
The Latin America Fund could be adversely affected by delays in, or a refusal
to grant, any required governmental approval for repatriation of capital, as
well as by the application to the Fund of any restrictions on investments.
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In some Latin American countries, such as Argentina, banks or other
financial institutions may constitute a substantial number of the leading
companies or the companies with the most actively traded securities. The
Investment Company Act restricts the Latin America Fund's investments in any
equity security of an issuer which, in its most recent fiscal year, derived
more than 15% of its revenues from "securities related activities," as defined
by the rules thereunder. These provisions may restrict the Fund's investments
in certain foreign banks and other financial institutions.
Foreign Government Securities Risks. With respect to investment in
debt issues of foreign governments, the ability of a foreign government or
government-related issuer to make timely and ultimate payments on its external
debt obligations will also be strongly influenced by the issuer's balance of
payments, including export performance, its access to international credits
and investments, fluctuations in interest rates and the extent of its foreign
reserves. A country whose exports are concentrated in a few commodities or
whose economy depends on certain strategic imports could be vulnerable to
fluctuations in international prices of these commodities or imports. To the
extent that a country receives payment for its exports in currencies other
than dollars, its ability to make debt payments denominated in dollars could
be adversely affected. If a foreign government or government-related issuer
cannot generate sufficient earnings from foreign trade to service its external
debt, it may need to depend on continuing loans and aid from foreign
governments, commercial banks and multilateral organizations, and inflows of
foreign investment. The commitment on the part of these foreign governments,
multilateral organizations and others to make such disbursements may be
conditioned on the government's implementation of economic reforms and/or
economic performance and the timely service of its obligations. Failure to
implement such reforms, achieve such levels of economic performance or repay
principal or interest when due may curtail the willingness of such third
parties to lend funds, which may further impair the issuer's ability or
willingness to service its debts in a timely manner. The cost of servicing
external debt will also generally be adversely affected by rising
international interest rates because many external debt obligations bear
interest at rates which are adjusted based upon international interest rates.
The ability to service external debt will also depend on the level of the
relevant government's international currency reserves and its access to
foreign exchange. Currency devaluations may affect the ability of a government
issuer to obtain sufficient foreign exchange to service its external debt.
As a result of the foregoing, a foreign governmental issuer may
default on its obligations. If such a default occurs, the Funds may have
limited effective legal recourse against the issuer and/or guarantor. Remedies
must, in some cases, be pursued in the courts of the defaulting party itself,
and the ability of the holder of foreign government and government-related
debt securities to obtain recourse may be subject to the political climate in
the relevant country. In addition, no assurance can be given that the holders
of commercial bank debt will not contest payments to the holders of other
foreign government and government-related debt obligations in the event of
default under their commercial bank loan agreements.
Certain Latin American countries are among the largest debtors to
commercial banks and foreign governments.
Among the foreign government and government related issuers in which
the Funds may invest are certain high-yield securities, including so-called
Brady Bonds. The issuers of the foreign government and government-related high
yield securities, including Brady Bonds, in which the Funds expect to invest
have in the past experienced substantial difficulties in servicing their
external debt obligations, which have led to defaults on certain obligations
and the restructuring of certain indebtedness. Restructuring arrangements have
included, among other things, reducing and rescheduling interest and principal
payments by negotiating new or amended credit agreements or converting
outstanding principal and unpaid interest to Brady Bonds, and obtaining new
credit to finance interest payments. Holders of certain foreign government and
government-
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related high yield securities may be requested to participate in the
restructuring of such obligations and to extend further loans to their issuers.
There can be no assurance that the Brady Bonds and other foreigngovernment and
government-related high yield securities in which the Funds may invest will not
be subject to similar defaults or restructuring arrangements which may adversely
affect the value of such investments. Furthermore, certain participants in the
secondary market for such debt may be directly involved in negotiating the terms
of these arrangements and may therefore have access to information not available
to other market participants.
Brady Bonds are debt securities issued under the framework of the
Brady Plan, an initiative announced by former U.S. Treasury Secretary Nicholas
F. Brady in 1989 as a mechanism for debtor nations to restructure their
outstanding external indebtedness (generally, commercial bank debt). In
restructuring its external debt under the Brady Plan framework, a debtor
nation negotiates with its existing bank lenders as well as multilateral
institutions such as the World Bank and the International Monetary Fund. The
Brady Plan framework, as it has developed, contemplates the exchange of
commercial bank debt for new issued bonds (Brady Bonds). The investment
advisers believe that economic reforms undertaken by countries in connection
with the issuance of Brady Bonds make the debt of countries which have issued
or have announced plans to issue Brady Bonds an attractive opportunity for
investment. Investors, however, should recognize that the Brady Plan only sets
forth general guiding principles for economic reform and debt reduction,
emphasizing that solutions must be negotiated on a case-by-case basis between
debtor nations and their creditors. In addition, Brady Bonds have been issued
only recently and, accordingly, do not have a long payment history.
Region Risks. Each of the New Europe Fund and the Latin America Fund
intends to invest a majority of its assets in a specific region of the world.
Thus, each Fund's performance will be dependent upon the economic and
financial strength and stability of the region in which it invests.
Shareholders should be aware that in many regions of the world, and in
particular in regions where emerging countries are prevalent, the economies of
the countries in such regions are interdependent. Thus, to the extent that
there is economic or financial instability in one country, the likelihood that
such instability will pervade other countries in the region is high.
Consequently, an investment in either the New Europe Fund or the Latin America
Fund is likely to be more volatile than an investment in a more geographically
diverse fund.
Small Company Investment Risks. Investments in common stocks in
general are subject to market, economic and business risks that will cause
their price to fluctuate over time. The securities of companies with smaller
revenues and capitalizations in which the New Europe and Latin America Funds
may invest, may offer greater opportunity for capital appreciation than larger
companies, but investment in such companies presents greater risks than
securities of larger, more established companies. Historically, smaller
capitalization stocks have been more volatile in price than larger
capitalization stocks. Among the reasons for the greater price volatility of
these securities are the lower degree of liquidity in the markets for such
stocks, and the potentially greater sensitivity of such small companies to
changes in or failure of management, and in many other changes in competitive,
business, industry and economic conditions, including risks associated with
limited production, markets, management depth, or financial resources.
Risks Related to Additional Investment Techniques. 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 a Fund
to purchase additional foreign currency on the spot market (and
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bear the expense of such purchase) if the market value of the security is less
than the amount of foreign currency the Fund 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 Fund is obligated to
deliver.
The Funds may invest up to 30% of their respective net assets in high
yield, high risk foreign 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 to be of equivalent quality. See Investment Objectives and Strategies
and High Yield, High Risk Securities. The Funds will not purchase securities
rated lower than C by S&P or Ca by Moody's, or, if unrated, considered to be of
an equivalent quality to such ratings by the Manager. See Appendix A - 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.
* * *
For additional information about the Funds' investment policies and
certain risks associated with investments in certain types of securities
including purchasing put and call options, futures contracts and options
thereon, and options on foreign currencies, see Other Investment Policies and
Risk Considerations in this Prospectus. Part B provides more information
concerning the Funds' investment policies, restrictions and risk factors.
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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 Delaware
Investments.
SHAREHOLDER PHONE DIRECTORY
Shareholder Service Center and Investor Information Center
800-523-1918
Information on Existing Regular Investment Accounts and
Retirement Plan Accounts; Wire Investments; Wire Liquidations;
Telephone Liquidations and Telephone Exchanges; Fund
Information; Literature; Price; Yield and Performance Figures
Delaphone
800-362-FUND
(800-362-3863)
Performance Information
During business hours, you can call the Investor Information Center
for current performance information. Current yield and total return
information may also be included in advertisements and information given to
shareholders. Yields are computed on an annual basis over a 30-day period.
Shareholder Services
During business hours, you can call Delaware Investments' Shareholder
Service Center. Our representatives can answer any questions about your
account, the Funds, various service features and other funds offered by
Delaware Investments.
Delaphone Service
Delaphone is an account inquiry service for investors with
Touch-Tone(R) phone service. It enables you to get information on your account
faster than the mailed statements and confirmations. Delaphone also provides
current performance information on the Funds, as well as other funds offered
by Delaware Investments. Delaphone is available seven days a week, 24 hours a
day.
Dividend Payments
Dividends, capital gains and other distributions, if any, are
automatically reinvested in your account. You may also elect to have the
dividends earned in one fund automatically invested in another Delaware
Investments fund with a different investment objective, subject to certain
exceptions and limitations.
For more information, see Additional Methods of Adding to Your
Investment - Dividend Reinvestment Plan under How to Buy Shares or call the
Shareholder Service Center.
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
dividends. You should examine statements and confirmations immediately and
promptly report any discrepancy by calling the Shareholder Service Center.
-20-
<PAGE>
Duplicate Confirmations
If your financial adviser or investment dealer is noted on your
investment application, we will send a duplicate confirmation to him or her.
This makes it easier for your adviser to help you manage your investments.
Tax Information
Each year, Global Funds, Inc. will mail to you information on the tax
status of your dividends and distributions.
Retirement Planning
An investment in any Fund may be a suitable investment option for
tax-deferred retirement plans. Delaware Investments offers a full spectrum of
qualified and non-qualified retirement plans, including the popular 401(k)
deferred compensation plan, IRA, and the new Roth IRA. Please call Delaware
Investments at 800-523-1918 for more information.
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 Fund with the dollar amount of new
purchases of Class A Shares of the Fund to qualify for a reduced front-end
sales charge on such purchases of Class A Shares. Under the Combined Purchases
Privilege, you may also include certain shares that you own in other funds
offered by Delaware Investments. See Classes of 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 Investments fund shares over a 13-month period.
See Classes of Shares and Part B.
12-Month Reinvestment Privilege
The 12-Month Reinvestment Privilege permits you to reinvest proceeds
from a redemption of Class A Shares, within one year of the date of the
redemption, without paying a front-end sales charge. See Part B.
Exchange Privilege
The Exchange Privilege permits you to exchange all or part of your
shares into shares of other mutual funds offered by Delaware Investments,
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 invest in a Fund through regular liquidations of
shares in your accounts in other funds that are part of Delaware Investments.
Investments under this feature are exchanges and are therefore subject to the
same conditions and limitations as other exchanges of Fund shares. See
Additional Methods of Adding to Your Investment Wealth Builder Option and
Investing by Exchange under How to Buy Shares, and Redemption and Exchange.
-21-
<PAGE>
Financial Information about the Funds
Each fiscal year, you will receive an audited annual report and an
unaudited semi-annual report. These reports provide detailed information about
each Fund's investments and performance. Global Funds, Inc.'s fiscal year ends
on November 30.
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<PAGE>
CLASSES OF SHARES
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 for Class A Shares
("front-end sales charge alternative"), or on a contingent deferred basis for
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, which incur a sales charge when they are
purchased, but generally are not subject to any sales charge when they are
redeemed. Absent any applicable fee waiver, Class A Shares are subject to
annual 12b-1 Plan expenses of up to a maximum of 0.30% (no more than 0.25% as
currently set by the Board) of average daily net assets of such shares.
Certain purchases of Class A Shares qualify for reduced front-end sales
charges. See Front-End Sales Charge Alternative - Class A Shares, below. See
also Contingent Deferred Sales Charge for Certain Redemptions of Class A
Shares Purchased at Net Asset Value under Redemption and Exchange and
Distribution (12b-1) and Service under Management of the Funds.
Class B Shares. An investor who elects the deferred sales charge
alternative acquires Class B Shares, which do not incur a front-end sales
charge when they are purchased, but are subject to a contingent deferred sales
charge if they are redeemed within six years of purchase. Absent any
applicable fee waiver, Class B Shares are subject to annual 12b-1 Plan
expenses of up to a maximum of 1% (0.25% 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. If no waiver
of 12b-1 fees is in effect, 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 Class A Shares. At the end of approximately eight years after
purchase, Class B Shares automatically will be converted into Class A Shares
and, thereafter, for the remainder of the life of the investment, the annual
12b-1 Plan fee of up to 0.30% for Class A Shares will apply. See Automatic
Conversion of Class B Shares, below.
Class C Shares. An investor who elects the level sales charge
alternative acquires Class C Shares, which do not incur a front-end sales
charge when they are purchased, but are subject to a contingent deferred sales
charge if they are redeemed within 12 months of purchase. Absent any
applicable fee waiver, Class C Shares are subject to annual 12b-1 Plan
expenses of up to a maximum of 1% (0.25% 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. If no waiver of 12b-1 fees is in effect, 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 Class A Shares.
Unlike Class B Shares, Class C Shares do not convert to another class.
The alternative purchase arrangements described above permit
investors to choose the method of purchasing shares that is most suitable
given the amount of their purchase, the length of time they expect to hold
their shares and other relevant circumstances. Investors should determine
whether, given their particular circumstances, it is more advantageous to
purchase Class A Shares and incur a front-end sales charge, purchase Class B
Shares and have the entire initial purchase amount invested in a Fund 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 a Fund with their investment being subject to a
CDSC if they redeem shares within 12 months of purchase. In addition,
investors should consider the level of annual 12b-1 Plan
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<PAGE>
expenses applicable to each Class. If no waiver of 12b-1 fees is in effect, the
higher 12b-1 Plan expenses on Class B Shares and Class C Shares will be offset
to the extent a return is realized on the additional money initially invested
upon the purchase of such shares. However, there can be no assurance as to the
return, if any, that will be realized on such additional money. In addition, the
effect of any return earned on such additional money will diminish over time. In
comparing Class B Shares to Class C Shares, investors should also consider the
duration of the annual 12b-1 Plan expenses to which each of the Classes is
subject and the desirability of an automatic conversion feature, which is
available only for Class B Shares.
For the distribution and related services provided to, and the
expenses borne on behalf of, a Fund, absent any applicable fee waiver, the
Distributor and others will be paid, in the case of Class A Shares, from the
proceeds of the front-end sales charge and 12b-1 Plan fees and, in the case of
Class B Shares and Class C Shares, from the proceeds of the 12b-1 Plan fees
and, if applicable, the CDSC incurred upon redemption. Financial advisers may
receive different compensation for selling Class A Shares, Class B Shares and
Class C Shares. Investors should understand that the purpose and function of
the respective 12b-1 Plans and the CDSCs applicable to Class B Shares and
Class C Shares are the same as those of the 12b-1 Plan and the front-end sales
charge applicable to Class A Shares in that such fees and charges are used to
finance the distribution of the respective Classes. See Distribution (12b- 1)
and Service under Management of the Funds.
Dividends, if any, paid on Class A Shares, Class B Shares and Class C
Shares will be calculated in the same manner, at the same time, and on the same
day and will be in the same amount, except that, when assessed, the additional
amount of 12b-1 Plan expenses relating to Class B Shares and Class C Shares will
be borne exclusively by such shares. See Calculation of Offering Price and Net
Asset Value Per Share.
The NASD has adopted certain rules relating to investment company sales
charges. Global Funds, Inc. 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 of any Fund 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 table.
<TABLE>
<CAPTION>
Class A
- --------------------------------------------------------------------------------------------------------------------
Dealer's
Front-End Sales Front-End Sales Commission***
Charge as % of Charge as % of as % of
Offering Amount Offering
Amount of Purchase Price Invested** Price
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Less than $100,000 4.75% ___% 4.00%
$100,000 but under $250,000 3.75 ___% 3.00
$250,000 but under $500,000 2.50 ___% 2.00
$500,000 but under $1,000,000* 2.00 ___% 1.60
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
* There is no front-end sales charge on purchases of Class A Shares of
$1,000,000 or more but, under certain limited circumstances, a 1%
Limited CDSC may apply upon redemption of such shares made during the
first year after the purchase and a 0.50% Limited CDSC may apply upon
redemption of such shares made during the second year after the
purchase.
[** Based on the initial net asset value of $8.50 per share of New Europe
Fund and Latin America Fund Class A shares.]
*** 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 Investments products and services and who increase sales
of Delaware Investments funds may receive an additional commission of
up to 0.15% of the offering price. Dealers who receive 90% or more of
the sales charge may be deemed to be underwriters under the 1933 Act.
- --------------------------------------------------------------------------------
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:
-25-
<PAGE>
Dealer's Commission
(as a percentage of
Amount of Purchase amount purchased)
------------------ -----------------
Up to $5 million 1.00%
Next $20 million up to $25 million 0.50
Amount over $25 million 0.25
Such Class A Shares are subject to a Limited CDSC of 1% if Shares are
redeemed during the first year after purchase and 0.5% if Shares are redeemed
during the second year of purchase.
For accounts with assets over $1,000,000, the dealer commission
resets annually to the highest incremental commission rate on the anniversary
of the first purchase. In determining a financial adviser's eligibility for
the dealer's commission, purchases of Class A Shares of other Delaware
Investments funds as to which a Limited CDSC applies may be aggregated with
those of Class A Shares of the Fund. 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 Investments funds will not qualify
for payment of the dealer's commission, unless a dealer's commission or
similar payment has not been previously paid on the assets being exchanged.
The schedule and program for payment of the dealer's commission are subject to
change or termination at any time by the Distributor at 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 Redemptions of Class A Shares Purchased at
Net Asset Value under Redemption and Exchange.
Combined Purchases Privilege
By combining your holdings of Class A Shares with your holdings of
Class B Shares and/or Class C Shares of a particular Fund and shares of the
other funds offered by Delaware Investments, except as 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 Investments fund holdings. In addition, assets held by
investment advisory clients of the Manager or its affiliates in any stable
value account may be combined with other Delaware Investment 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
Investments 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 21 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 result in the payment of a dealer's
-26-
<PAGE>
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,
above.
Allied Plans
Class A Shares are available for purchase by participants in certain
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 Investments funds
("eligible Delaware Investments fund shares"), as well as shares of designated
classes of non-Delaware Investments funds ("eligible non-Delaware Investments
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 Investments and eligible non-Delaware Investments
fund shares held by the Allied Plan may be combined with the dollar amount of
new purchases by that Allied Plan to obtain a reduced front-end sales charge
on additional purchases of eligible Delaware Investments fund shares.
Participants in Allied Plans may exchange all or part of their
eligible Delaware Investments shares for other eligible Delaware Investments
fund shares or for eligible non-Delaware Investments fund shares at net asset
value without payment of a front-end sales charge. However, exchanges of
eligible fund shares, both Delaware Investments and non-Delaware Investments,
which were not subject to a front-end sales charge, will be subject to the
applicable sales charge if exchanged for eligible Delaware Investments fund
shares to which a sales charge applies. No sales charge will apply if the
eligible fund shares were previously acquired through the exchange of eligible
shares on which a sales charge was already paid or through the reinvestment of
dividends. See Investing by Exchange.
A dealer's commission may be payable on purchases of eligible
Delaware Investments 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 Investments fund shares in connection with
Allied Plans, all participant holdings in the Allied Plan will be aggregated.
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 under Waiver of Limited Contingent
Deferred Sales Charge - Class A Shares under Redemption and Exchange, apply to
redemptions by participants in Allied Plans except in the case of exchanges
between eligible Delaware Investments and non-Delaware Investments fund
shares. When eligible Delaware Investments fund shares are exchanged into
eligible non-Delaware Investments 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 Limited CDSC will be paid by the financial
adviser or selling dealer. See Contingent Deferred Sales Charge for Certain
Redemptions of Class A Shares Purchased at Net Asset Value under Redemption
and Exchange.
Buying Class A Shares at Net Asset Value
Class A Shares of a Fund may be purchased at net asset value under the
Delaware Investments Dividend Reinvestment Plan and, under certain
circumstances, the Exchange Privilege or the 12-Month Reinvestment 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 families)
of the Manager, any affiliate, any of the funds offered by
-27-
<PAGE>
Delaware Investments, certain of their agents and registered representatives and
employees of authorized investment dealers and by employee benefit plans for
such entities. Individual purchases, including those in retirement accounts,
must be for accounts in the name of the individual or a qualifying family
member.
Purchases of Class A Shares may also be made by clients of registered
representatives of an authorized investment dealer at net asset value within
12 months after the registered representative changes employment, if the
purchase is funded by proceeds from an investment where a front-end sales
charge, contingent deferred sales charge or other sales charge has been
assessed. Purchases of Class A Shares may also 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 shares of
Delaware Investments funds. 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. Investors may be charged a fee when effecting transactions in Class
A Shares through a broker or agent that offers these special investment
products.
Purchases of Class A Shares at net asset value may also be made by
the following: institutions investing for the account of their trust customers
if they are not eligible to purchase shares of the Institutional Class of the
Funds; and any group retirement plan (excluding defined benefit pension
plans), or such plans of the same employer, for which plan participant records
are maintained on the Retirement Financial Services, Inc. ("RFSI") (formerly
named Delaware Investment & Retirement Services, Inc.) proprietary record
keeping system that (i) has in excess of $500,000 of plan assets invested in
Class A Shares of Delaware Investments funds and any stable value account
available to investment advisory clients of the Manager or its affiliates, or
(ii) is sponsored by an employer that has at any point after May 1, 1997 had
more than 100 employees while such plan has held Class A Shares of a Delaware
Investments fund and such employer has properly represented to RFSI in writing
that it has the requisite number of employees and has received written
confirmation back from RFSI. See Group Investment Plans for information
regarding the applicability of the Limited CDSC.
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 Investments account in connection with loans originated from accounts
previously maintained by another investment firm will also be invested at net
asset value.
Investors in Delaware Investments Unit Investment Trusts may reinvest
monthly dividend checks and/or repayment of invested capital into Class A
Shares of any of the funds offered by Delaware Investments at net asset value.
The Fund must be notified in advance that an investment qualifies for
purchase at net asset value.
Group Investment Plans
Group Investment Plans (e.g., SEP/IRA, SAR/SEP, SIMPLE IRA, SIMPLE
401(k), Profit Sharing and Money Purchase Pension Plans, 401(k) Defined
Contribution Plans, and 403(b)(7) and 457 Deferred Compensation Plans) may
benefit from the reduced front-end sales charges available on Class A Shares
based on total plan assets. If a company has more than one plan investing in
the Delaware Investments funds, then the total amount invested in all plans
will be aggregated to determine the applicable front-end sales charge
reduction
-28-
<PAGE>
on each purchase, both initial and subsequent, if, at the time of each such
purchase, the company notifies the Fund that it qualifies for the reduction.
Employees participating in such Group Investment Plans may also combine the
investments held in their plan account to determine the front-end sales charge
applicable to purchases in non-retirement Delaware Investments 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.
The Limited CDSC is applicable to any redemptions of net asset value
purchases made on behalf of any group retirement plan on which a dealer's
commission has been paid only if such redemption is made pursuant to a
withdrawal of the entire plan from Delaware Investments funds. See Contingent
Deferred Sales Charge for Certain Redemptions of Class A Shares Purchased at
Net Asset Value under Redemption and Exchange.
For additional information on retirement plans, including plan forms,
applications, minimum investments and any applicable account maintenance fees,
contact your investment dealer or the Distributor.
Deferred Sales Charge Alternative - Class B Shares
Class B Shares may be purchased at net asset value without a
front-end sales charge and, as a result, the full amount of the investor's
purchase payment will be invested in Fund shares. The Distributor currently
compensates 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. In addition, 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 pay additional compensation
to dealers or brokers for selling Class B Shares at the time of purchase. As
discussed below, however, absent any applicable fee waiver, Class B Shares are
subject to annual 12b-1 Plan expenses of up to a maximum of 1% for
approximately eight years after purchase and, if redeemed within six years of
purchase, a CDSC.
Proceeds from the CDSC and the annual 12b-1 Plan fees, if any, are
paid to the Distributor and others for providing distribution and related
services, and bearing related expenses, in connection with the sale of Class B
Shares. These payments support the compensation paid to dealers or brokers for
selling Class B Shares. Payments to the Distributor and others under the Class
B 12b-1 Plan may be in an amount equal to no more than 1% annually. The
combination of the CDSC and the proceeds of the 12b-1 Plan fees makes it
possible for the Fund to sell Class B Shares without deducting a front-end
sales charge at the time of purchase.
Holders of Class B Shares who exercise the exchange privilege
described below will continue to be subject to the CDSC schedule for Class B
Shares described in this Prospectus, even after the exchange. Such CDSC
schedule may be higher than the CDSC schedule for Class B Shares acquired as a
result of the exchange. See Redemption and Exchange.
Automatic Conversion of Class B Shares
Class B Shares, other than shares acquired through reinvestment of
dividends, held for eight years after purchase are eligible for automatic
conversion into Class A Shares. Conversions of Class B Shares into Class A
Shares will occur 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.
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<PAGE>
Class B Shares of a fund acquired through a reinvestment of dividends
will convert to the corresponding Class A Shares of that fund (or, in the case
of Delaware Group Cash Reserve, Inc., the Delaware Cash Reserve Consultant
Class) pro-rata with Class B Shares of that fund not acquired through dividend
reinvestment.
All such automatic conversions of Class B Shares will constitute
tax-free exchanges for federal income tax purposes. See Taxes.
Level Sales Charge Alternative - Class C Shares
Class C Shares may be purchased at net asset value without a
front-end sales charge and, as a result, the full amount of the investor's
purchase payment will be invested in Fund shares. The Distributor currently
compensates 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, absent any applicable fee waiver,
Class C Shares are subject to annual 12b-1 Plan expenses and, if redeemed
within 12 months of purchase, a CDSC.
Proceeds from the CDSC and the annual 12b-1 Plan fees, if any, 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.
Holders of Class C Shares who exercise the exchange privilege
described below will continue to be subject to the CDSC schedule for 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 12
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 the time of redemption. No CDSC will be imposed on increases in net
asset value above the initial purchase price, nor will a CDSC be assessed on
redemptions of shares acquired through reinvestments of dividends or capital
gains distributions.
For purposes of this formula, the "net asset value at the time of
purchase" will be the net asset value at purchase of Class B Shares or Class C
Shares of a Fund, even if those shares are later exchanged for shares of
another Delaware Investments fund. In the event of an exchange of the shares,
the "net asset value of such shares at the time of redemption" will be the net
asset value of the shares that were acquired in the exchange.
The following table sets forth the rates of the CDSC for Class B
Shares of the Funds:
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<PAGE>
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
During the seventh year after purchase and, thereafter, until converted
automatically into Class A Shares, 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, absent any applicable fee waiver. See Automatic Conversion of Class B
Shares, above. Investors are reminded that the Class A Shares into which Class
B Shares will convert are subject to ongoing annual 12b-1 Plan expenses of up
to a maximum of 0.30% of average daily net assets of such shares.
In determining whether a CDSC applies 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 12 months are redeemed first followed by shares
acquired through the reinvestment of dividends or distributions, and finally
by shares held for 12 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 Contingent Deferred Sales Charge - Class B and Class C
Shares under Redemption and Exchange.
Other Payments to Dealers -- Class A Shares, Class B Shares and Class C Shares
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 0.25% of the dollar amount of such sales. The
Distributor may also provide additional promotional incentives or payments to
dealers that sell shares of Delaware Investments 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 Conduct Rules, in
connection with the promotion of Delaware Investments 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 Conduct Rules
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 Conduct Rules as they may be
amended.
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Institutional Classes
In addition to offering Class A Shares, Class B Shares and Class C
Shares, each Fund also offers an Institutional Class, which is described in a
separate prospectus and is available for purchase only by certain investors.
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 that describes the Funds' Institutional Classes, contact the
Distributor by writing to the address or by calling the telephone number
listed on page 1 of this Prospectus.
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HOW TO BUY 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. For purchases under a Uniform Gifts to Minors
Act or Uniform Transfers to Minors Act or through an Automatic Investing Plan,
there is a minimum initial purchase of $250 and a minimum subsequent purchase
of $25. 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.
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.
Investing through Your Investment Dealer
You can make a purchase of shares of any Fund through most investment
dealers who, as part of the service they provide, must transmit orders
promptly. They may charge for this service. If you want a dealer but do not
have one, Delaware Investments can refer you to one.
Investing by Mail
1. Initial Purchases--An Investment Application, or in the case of a
retirement plan account, an appropriate retirement plan application, must be
completed, signed and sent with a check payable to the specific Fund and Class
selected to Delaware Investments at 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 Fund and 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 Global Funds,
Inc. 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 First Union National Bank, ABA #________, account number ________
(include your name(s) and your account number for the Class in which you are
investing).
1. Initial Purchases--Before you invest, telephone the 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 plan account, an appropriate
retirement plan application, to the specific Fund and Class selected, to
Delaware Investments at 1818 Market Street, Philadelphia, PA 19103.
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2. Subsequent Purchases--You may make additional investments anytime by wiring
funds to First Union National Bank, as described above. You should advise the
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.
Investing by Exchange
If you have an investment in another mutual fund in Delaware
Investments, you may write and authorize an exchange of part or all of your
investment into shares of any of the Funds. If you wish to open an account by
exchange, call the Shareholder Service Center for more information. All
exchanges are subject to the eligibility and minimum purchase requirements set
forth in each fund's prospectus. See Redemption and Exchange for more complete
information concerning your exchange privileges.
Holders of Class A Shares may exchange all or part of their shares
for certain of the shares of other Delaware Investments funds, including other
Class A Shares, but may not exchange their Class A Shares for Class B Shares
or Class C Shares of the Fund or of any other Delaware Investments fund.
Holders of Class B Shares of the Fund are permitted to exchange all or part of
their Class B Shares only into Class B Shares of other Delaware Investments
funds. Similarly, holders of Class C Shares of a Fund are permitted to
exchange all or part of their Class C Shares only into Class C Shares of other
Delaware Investments funds. Class B Shares of a Fund and Class C Shares of a
Fund acquired by exchange will continue to carry the CDSC and, in the case of
Class B Shares, the automatic conversion schedule of the fund from which the
exchange is made. The holding period of Class B Shares of a Fund acquired by
exchange will be added to that of the shares that were exchanged for purposes
of determining the time of the automatic conversion into Class A Shares of the
Fund.
Permissible exchanges into Class A Shares of a Fund will be made
without a front-end sales charge, except for exchanges of shares that were not
previously subject to a front-end sales charge (unless such shares were
acquired through the reinvestment of dividends). Permissible exchanges into
Class B Shares or Class C Shares of a Fund 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 Classes of Shares 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. Automatic Investing Plan
The Automatic Investing Plan enables you to make regular monthly
investments without writing or mailing checks. You may authorize Global Funds,
Inc. to transfer a designated amount monthly from your checking account to
your Fund 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, SIMPLE IRA, SIMPLE 401(k), Profit Sharing and Money Purchase
Pension Plans, 401(k) Defined Contribution Plans or 403(b)(7) or 457 Deferred
Compensation Plans.
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2. Direct Deposit
You may have your employer or bank make regular investments directly
to your Fund account for you (for example: payroll deduction, pay by phone,
annuity payments). The Funds also accept preauthorized recurring government
and private payments by Electronic Fund Transfer, which avoids mail time and
check clearing holds on payments such as social security, federal salaries,
Railroad Retirement benefits, etc.
* * *
Should investments through an automatic investing plan or by direct
deposit be reclaimed or returned for some reason, Global Funds, Inc. has the
right to liquidate your shares to reimburse the government or transmitting
bank. If there are insufficient funds in your account, you are obligated to
reimburse the Fund.
3. Wealth Builder Option
You can use our Wealth Builder Option to invest in the Funds through
regular liquidations of shares in your accounts in other funds in the Delaware
Investments. You may also elect to invest in other mutual funds offered by
Delaware Investments through the Wealth Builder Option through regular
liquidations of shares in your Fund account.
Under this automatic exchange program, you can authorize regular
monthly amounts (minimum of $100 per fund) to be liquidated from your account
in one or more Delaware Investments funds and invested automatically into any
other account in a Delaware Investments mutual fund that you may specify. If
in connection with the election of the Wealth Builder Option, you wish to open
a new account to receive the automatic investment, such new account must meet
the minimum initial purchase requirements described in the prospectus of the
fund that you select. All investments under this option are exchanges and are
therefore subject to the same conditions and limitations as other exchanges
noted above. You can terminate your participation in Wealth Builder at any
time by giving written notice to the fund from which the exchanges are made.
See Redemption and Exchange.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, SIMPLE IRA, SIMPLE 401(k), Profit Sharing and Money Purchase
Pension Plans, 401(k) Defined Contribution Plans, 403(b)(7) or 457 Deferred
Compensation Plans.
4. Dividend Reinvestment Plan
You can elect to have your distributions (capital gains and/or
dividend income) reinvested in your Fund account or invested in certain other
funds offered by Delaware Investments, subject to the exceptions noted below
as well as the eligibility and minimum purchase requirements set forth in each
fund's prospectus.
Reinvestments of distributions into Class A Shares of a Fund or of
other Delaware Investments funds are made without a front-end sales charge.
Reinvestments of distributions into Class B Shares of a Fund or of other
Delaware Investments funds or into Class C Shares of the Fund or of other
Delaware Investments 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 Classes of Shares for information concerning the automatic
conversion of Class B Shares acquired by reinvesting dividends.
Holders of Class A Shares of a Fund may not reinvest their
distributions into Class B Shares or Class C Shares of any fund offered by
Delaware Investments, including the Fund. Holders of Class B Shares of a Fund
may reinvest their distributions only into Class B Shares of the funds offered
by Delaware Investments which offer that class of shares. Similarly, holders
of Class C Shares of a Fund may reinvest their distributions only
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into Class C Shares of the funds offered by Delaware Investments which offer
that class of shares. For more information about reinvestments, call the
Shareholder Service Center.
Capital gains and/or dividend distributions for participants in the
following retirement plans are automatically reinvested into the same Delaware
Investments fund in which their investments are held: SAR/SEP, SEP/IRA, SIMPLE
IRA, SIMPLE 401(k), Profit Sharing and Money Purchase Pension Plans, 401(k)
Defined Contribution Plans or 403(b)(7) or 457 Deferred Compensation Plans.
Purchase Price and Effective Date
The offering price and net asset value of Class A Shares, Class B
Shares 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 a Fund, its agent or designee. 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
Each 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. A 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 offered by Delaware Investments.
Each 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.
Each Fund also reserves the right, following shareholder
notification, to charge a service fee on non-retirement accounts that, as a
result of redemption, have remained below the minimum stated account balance
for a period of three or more consecutive months. Holders of such accounts may
be notified of their insufficient account balance and advised that they have
until the end of the current calendar quarter to raise their balance to the
stated minimum. If the account has not reached the minimum balance requirement
by that time, the Fund will charge a $9 fee for that quarter and each
subsequent calendar quarter until the account is brought up to the minimum
balance. The service fee will be deducted from the account during the first
week of each calendar quarter for the previous quarter, and will be used to
help defray the cost of maintaining low-balance accounts. No fees will be
charged without proper notice, and no CDSC will apply to such assessments.
Each Fund also reserves the right, upon 60 days' written notice, to
involuntarily redeem accounts that remain under the minimum initial purchase
amount as a result of redemptions. An investor making the minimum initial
investment may be subject to involuntary redemption 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, bond funds, tax-advantaged
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 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 offered by Delaware Investments will
best meet your changing objectives, and the consequences of any exchange
transaction. You may also call Delaware Investments directly for fund
information.
All exchanges involve a purchase of shares of the fund into which the
exchange is made. As with any purchase, an investor should obtain and
carefully read that fund's prospectus before buying shares in an exchange. The
prospectus contains more complete information about the fund, including
charges and expenses.
Your shares will be redeemed or exchanged at a price based on the net
asset value next determined after the Fund receives your request in good
order, subject, in the case of a redemption, to any applicable CDSC or Limited
CDSC. For example, redemption or exchange requests received in good order
after the time the offering price and net asset value of shares are determined
will be processed on the next business day. See Purchase Price and Effective
Date under How to Buy Shares. A shareholder submitting a redemption request
may indicate that he or she wishes to receive redemption proceeds of a
specific dollar amount. In the case of such a request, and in the case of
certain redemptions from retirement plan accounts, the Fund will redeem the
number of shares necessary to deduct the applicable CDSC in the case of Class
B Shares and Class C Shares, and, 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. Redemption proceeds will be distributed promptly, as
described below, but not later than seven days after receipt of a redemption
request.
Except as noted below, for a redemption request to be in "good
order," you must provide your account number, account registration, and the
total number of shares or dollar amount of the transaction. For exchange
requests, you must also provide the name of the fund in which you want to
invest the proceeds. Exchange instructions and redemption requests must be
signed by the record owner(s) exactly as the shares are registered. You may
request a redemption or an exchange by calling the Shareholder Service Center
at 800-523-1918. A Fund may suspend, terminate, or amend the terms of the
exchange privilege upon 60 days' written notice to shareholders.
A Fund will process written and telephone redemption requests to the
extent that the purchase orders for the shares being redeemed have already
settled. A Fund will honor redemption requests as to shares for which a check
was tendered as payment, but the Fund will not mail or wire the proceeds until
it is reasonably satisfied that the purchase check has cleared, which may take
up to 15 days from the purchase date. You can avoid this potential delay if
you purchase shares by wiring Federal Funds. Each 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.
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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 exchanges involving assets
that were previously invested in a fund with a front-end sales charge and/or
exchanges involving the reinvestment of dividends.
Holders of Class B Shares or Class C Shares that exchange their
shares ("Original Shares") for shares of other Delaware Investments funds (in
each case, "New Shares") in a permitted exchange, 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 from which the Original Shares were exchanged. In
an exchange of Class B Shares from a Fund, the Fund's 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, absent any
applicable fee waiver, to the higher 12b-1 fees applicable to Class B Shares
of the Fund 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 a Fund 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.
Written Redemption
You can write to a 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, each Fund requires a signature by all owners of the account
and a signature guarantee for each owner. A signature guarantee can be
obtained from a commercial bank, a trust company or a member of a Securities
Transfer Association Medallion Program ("STAMP"). A signature guarantee cannot
be provided by a notary public. A signature guarantee is designed to protect
the shareholders, the Fund and its agents from fraud. Each Fund reserves the
right to reject a signature guarantee supplied by an eligible institution
based on its creditworthiness. The Funds may require further documentation
from corporations, executors, retirement plans, administrators, trustees or
guardians.
Payment is normally mailed the next business day after receipt of
your redemption request. If your Class A Shares are in certificate form, the
certificate(s) must accompany your request and also be in good order.
Certificates are issued for Class A Shares only if a shareholder submits a
specific request. Certificates are not issued for Class B Shares or Class C
Shares.
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Written Exchange
You may also write to each Fund (at 1818 Market Street, Philadelphia,
PA 19103) to request an exchange of any or all of your shares into another
mutual fund offered by Delaware Investments, 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 redeem or exchange only by written request and you must return your
certificate(s).
The Telephone Redemption--Check to Your Address of Record service and
the Telephone Exchange service, both of which are described below, are
automatically provided unless you notify each Fund in writing that you do not
wish to have such services available with respect to your account. The Funds
reserve the right to modify, terminate or suspend these procedures upon 60
days' written notice to shareholders. It may be difficult to reach a Fund by
telephone during periods when market or economic conditions lead to an
unusually large volume of telephone requests.
Neither the Funds nor their Transfer Agent is responsible for any
shareholder loss incurred in acting upon written or telephone instructions for
redemption or exchange of Fund shares which are reasonably believed to be
genuine. With respect to such telephone transactions, each 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, a 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 after receipt of the redemption 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, you must complete an Authorization Form and have your signature
guaranteed. For your protection, your authorization must be on file. If you
request a wire, your funds will normally be sent the next business day. First
Union National Bank's fee (currently $7.50) will be deducted from your
redemption proceeds. If you ask for a check, it will normally be mailed the
next business day after receipt of your redemption request to your
predesignated bank account. There are no separate fees for this redemption
method, but the mail time may delay getting funds into your bank account.
Simply call the Shareholder Service Center prior to the time the offering
price and net asset value are determined, as noted above.
Telephone Exchange
The Telephone Exchange feature is a convenient and efficient way to
adjust your investment holdings as your liquidity requirements and investment
objectives change. You or your investment dealer of record can
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exchange your shares into other funds offered by Delaware Investments 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.
Contingent Deferred Sales Charge for Certain Redemptions of Class A Shares
Purchased at Net Asset Value
For purchases of $1 million or more, a Limited CDSC will be imposed on
certain redemptions of Class A Shares (or shares into which such Class A Shares
are exchanged) according to the following schedule: (1) 1% if shares are
redeemed during the first year after the purchase; and (2) 0.50% if shares are
redeemed during the second year after the purchase, if such purchases were made
at net asset value and triggered the payment by the Distributor of the dealer's
commission previously described. See Classes of Shares.
The Limited CDSC will be paid to the Distributor and will be assessed
on an amount equal to the lesser of: (1) the net asset value at the time of
purchase of 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 Class A Shares even if those shares are later exchanged for shares
of another Delaware Investments 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 two years will
not be subjected to the Limited CDSC and an exchange of such Class A Shares
into another Delaware Investments 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 two year holding period. The Limited CDSC is assessed if such two year
period is not satisfied irrespective of whether the redemption triggering its
payment is of Class A Shares of a Fund or Class A Shares acquired in the
exchange.
In determining whether a Limited CDSC is payable, it will be assumed
that shares not subject to the Limited CDSC are the first redeemed followed by
other shares held for the longest period of time. The Limited CDSC will not be
imposed upon shares representing reinvested dividends or capital gains
distributions, or upon amounts representing share appreciation. All
investments made during a calendar month, regardless of what day of the month
the investment occurred, will age one month on the last day of that month and
each subsequent month.
Waiver of Limited Contingent Deferred Sales Charge - 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 a 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) distributions to participants from a
retirement plan qualified under section 401(a) or 401(k) of the Internal
Revenue Code of 1986, as amended (the "Code"), or due to death of a
participant in such a plan; (iii) redemptions pursuant to the direction of a
participant or beneficiary of a retirement plan qualified under section 401(a)
or 401(k) of the Code with respect to that retirement plan; (iv) periodic
distributions from an IRA, SIMPLE IRA or 403(b)(7) or 457 Deferred
Compensation Plan or due to death, disability, or attainment of age 59 1/2,
and IRA distributions qualifying under Section 72(t) of the Internal Revenue
Code; (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
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classes of shareholders who are permitted to purchase shares at net asset value,
regardless of the size of the purchase (see Buying Class A Shares at Net Asset
Value under Classes of Shares).
Waiver of Contingent Deferred Sales Charge - Class B Shares and Class C Shares
The CDSC is waived on certain redemptions of Class B Shares in
connection with the following redemptions: (i) redemptions that result from a
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, SIMPLE
IRA, SEP/IRA, 403(b)(7) or 457 Deferred Compensation Plan; (iii) periodic
distributions from an IRA, SIMPLE IRA, SAR/SEP, SEP/IRA, 403(b)(7) or 457
Deferred Compensation Plan due to death, disability or attainment of age 59
1/2, and IRA distributions qualifying under Section 72(t) of the Code; 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 Class C Shares is waived in connection with the following
redemptions: (i) redemptions that result from a 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, SIMPLE IRA, 403(b)(7) or 457 Deferred
Compensation Plan, Profit Sharing Plan, Money Purchase Pension Plan, or 401(k)
Defined Contribution Plan; (iii) periodic distributions from a 403(b)(7) or
457 Deferred Compensation Plan upon attainment of age 59 1/2, Profit Sharing
Plan, Money Purchase Plan, 401(k) Defined Contribution Plan upon attainment of
age 70 1/2, and IRA distributions qualifying under Section 72(t) of the Code;
(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) or
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) periodic
distributions from an IRA or SIMPLE 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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DIVIDENDS AND DISTRIBUTIONS
Global Funds, Inc. declares a dividend on each Fund to all shareholders
of record of the Classes of the Fund at the time the offering price of shares is
determined. See Purchase Price and Effective Date under How to Buy Shares. Thus,
when redeeming shares, dividends continue to be credited up to and including the
date of redemption.
Each Fund will normally declare and make payments from net investment
income on an annual basis. Payments from net realized securities profits of a
Fund, if any, will be made in the quarter following the close of the fiscal
year. Both dividends and distributions, if any, are automatically reinvested
in your account at net asset value.
In addition to the dividends from net investment income and
distributions from realized securities profits that a Fund may declare and
make, as noted above, in order to satisfy certain distribution requirements of
the Tax Reform Act of 1986, each Fund 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
Fund and received by shareholders on the earlier of the date paid or December
31 of the prior year.
Each Class of a Fund will share proportionately in the investment
income and expenses of the Fund, except that, absent any applicable fee
waiver, the per share dividends from net investment income on Class A Shares,
Class B Shares and Class C Shares will vary due to the expenses under the
12b-1 Plan applicable to each Class. Generally, when a 12b-1 Plan fee waiver
is not in effect, 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 Shares 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 Funds.
Both dividends and distributions, if any, are automatically
reinvested in your account at net asset value. See The Delaware Difference for
more information on reinvestment options.
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TAXES
The tax discussion set forth below 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
Fund.
On August 5, 1997, President Clinton signed into law the Taxpayer
Relief Act of 1997 (the "1997 Act"). This new law makes sweeping changes in
the Code. Because many of these changes are complex, and only indirectly
affect the Fund and its distributions to you, they are discussed in Part B.
Changes in the treatment of capital gains, however, are discussed in this
section.
Each Fund intends to qualify as a regulated investment company under
Subchapter M of the Code. As such, the Fund will not be subject to federal
income tax, or to any excise tax, to the extent its earnings are distributed
as provided in the Code and it satisfies certain other requirements relating
to the sources of its income and diversification of its assets.
Each Fund 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 those investors who
are subject to income taxes as ordinary income, whether received in cash or in
additional shares. It is expected that either none or only a nominal portion
of a Fund's dividends will be eligible for the dividends-received deductions
for corporations. The portion of dividends paid by a Fund that so qualifies
will be designated each year in a notice from the Fund to the Fund's
shareholders.
Distributions paid by a Fund 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 Fund. No Fund seeks to
realize any particular amount of capital gains during a year; rather, realized
gains are a by-product of Fund 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 Fund 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.
The Treatment of Capital Gain Distributions under the Taxpayer Relief Act of
1997
The 1997 Act creates a category of long-term capital gain for
individuals that will be taxed at new lower tax rates. For investors who are
in the 28% or higher federal income tax brackets, these gains will be taxed at
a maximum rate of 20%. For investors who are in the 15% federal income tax
bracket, these gains will be taxed at a maximum rate of 10%. Capital gain
distributions will qualify for these new maximum tax rates, depending on when
a Fund's securities were sold and how long they were held by the Fund before
they were sold. The holding periods for which the new rates apply were revised
by the Internal Revenue Service Restructuring and Reform Act of 1998.
Investors who want more information on holding periods and other qualifying
rules relating to these new rates should review the expanded discussion in
Part B, or should contact their own tax advisers.
Global Funds, Inc. will advise you in its annual information reporting
at calendar year end of the amount of its capital gain distributions which will
qualify for these maximum federal tax rates.
Although dividends generally will be treated as distributed when
paid, dividends which are declared in October, November or December to
shareholders of record on a specified date in one of those months, but which,
for operational reasons, may not be paid to the shareholder until the
following January, will be treated for
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tax purposes as if paid by the Fund and received by the shareholder on December
31 of the calendar year in which they are declared.
The sale of shares of a Fund 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 one fund and another Delaware Investments fund. Any loss incurred on a
sale or exchange of Fund shares that had been held for six months or less will
be treated as a long-term capital loss to the extent of capital gains
dividends received with respect to such shares. All or a portion of the sales
charge incurred in acquiring Fund shares will be excluded from the federal tax
basis of any of such shares sold or exchanged within 90 days of their purchase
(for purposes of determining gain or loss upon the sale of such shares) if the
sale proceeds are reinvested in the Fund or in another fund offered by
Delaware Investments 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.
Each Fund 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 Fund at the end of its fiscal year is invested in securities of
foreign corporations, the Fund may elect to pass-through to its shareholders a
pro-rata share of foreign income taxes paid by the Fund. 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 Fund), 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 the Fund 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 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 Classes of
Shares.
In addition to the federal taxes described above, shareholders may or
may not be subject to various state and local taxes. For example,
distributions of interest income and capital gains realized from certain types
of U.S. government securities may be exempt from state personal income taxes.
Because investors' state and local taxes may be different than the federal
taxes described above, investors should consult their own tax advisers.
Each year, Global Funds, Inc. will mail to you information on the tax
status of each Fund's dividends and distributions. Shareholders will also
receive each year information as to the portion of dividend income, if any,
that is derived from U.S. government securities that are exempt from state
income tax. Of course, shareholders who are not subject to tax on their income
would not be required to pay tax on amounts distributed to them by a Fund.
Global Funds, Inc. 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 Investment Application your
proper Taxpayer Identification Number and by certifying that you are not
subject to backup withholding.
See Accounting and Tax Issues and Distributions in Part B for
additional information on tax matters relating to each Fund and its
shareholders.
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CALCULATION OF OFFERING PRICE AND NET ASSET VALUE PER SHARE
The net asset value ("NAV") per share of each Fund is computed by
adding the value of all securities and other assets in the Fund's portfolio,
deducting any liabilities of the Fund (expenses and fees are accrued daily)
and dividing by the number of Fund 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 Global Funds, Inc.'s Board of Directors. Short-term
investments having a maturity of less than 60 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
Global Funds, Inc.'s Board of Directors.
Class A Shares are purchased at the offering price per share, while
Class B Shares and Class C Shares are purchased at the 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.
Each Fund's 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 U.S. holidays or Saturdays). As a result, the net
asset value of each Fund may be significantly affected by such trading on days
when shareholders have no access to the Fund.
The net asset values of all outstanding shares of each class of each
Fund will be computed on a pro-rata basis for each outstanding share based on
the proportionate participation in the Fund represented by the value of shares
of that class. All income earned and expenses incurred by a Fund will be borne
on a pro-rata basis by each outstanding share of a class, based on each class'
percentage in the Fund represented by the value of shares of such classes,
except that the Institutional Class of each Fund will not incur any of the
expenses under Global Funds, Inc.'s 12b-1 Plans related to each Fund, and
Class A Shares, Class B Shares and Class C Shares of each Fund alone will bear
the 12b-1 Plan expenses, if any, payable under their respective 12b-1 Plans.
Due to the specific distribution expenses and other costs that will be
allocable to each class, the NAV of each class of each Fund will vary.
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MANAGEMENT OF THE FUNDS
Directors
The business and affairs of Global Funds, Inc. are managed under the
direction of its Board of Directors. Part B contains additional information
regarding Global Funds, Inc.'s directors and officers.
Investment Manager
The Manager furnishes investment management services to each Fund.
The Manager has offices located at 80 Cheapside, Third Floor, London, England
EC2V 6EE.
Delaware Management Company, Inc. ("Delaware") and its predecessors
have been managing the funds in Delaware Investments since 1938. On November
30, 1997, Delaware and its affiliates within Delaware Investments, including
the Manager, were managing in the aggregate more than $39 billion in assets in
the various institutional or separately managed (approximately
$16,181,491,000) and investment company (approximately $23,274,532,000)
accounts.
Delaware is an indirect, wholly owned subsidiary of Delaware
Management Holdings, Inc. ("DMH"). The Manager 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, Delaware and the Manager are now indirect, wholly owned
subsidiaries, and subject to the ultimate control, of Lincoln National.
Lincoln National, with headquarters in Fort Wayne, Indiana, is a diversified
organization with operations in many aspects of the financial services
industry, including insurance and investment management. The Manager has
entered into an Investment Management Agreement with Global Funds, Inc. on
behalf of the Funds.
The Manager manages each Fund's investments and for its services, the
Manager is entitled to an annual fee equal to 1.25% of the average daily net
assets of each Fund. The directors of Global Funds, Inc. annually review fees
paid to the Manager.
As noted below, the Distributor has temporarily elected to
voluntarily waive its right to receive 12b-1 fees from each Fund. The Manager
has also elected voluntarily to waive that portion, if any, of the annual
management fees payable by the New Europe and Latin America Funds and to pay
expenses of each Fund to the extent necessary to ensure that the Total
Operating Expenses (exclusive of taxes, interest, brokerage commissions and
extraordinary expenses and 12b-1 expenses) of Class A Shares, Class B Shares
and Class C Shares of each Fund do not exceed 1.25% through June 30, 1999.
The investment management fees paid to the Manager, while higher than
the advisory fees paid by other mutual funds in general, are comparable to
fees paid by other mutual funds with similar objectives and policies.
Messrs. Nigel May, Richard Ginty and Joshua Brooks have primary
responsibility for making day-to-day investment decisions for New Europe Fund.
Mr. May is a graduate of Sidney Sussex College, Cambridge and joined Delaware
International in 1991, assuming portfolio management responsibilities and
sharing analytical responsibilities for continental Europe. Prior to joining
Delaware International, he spent five years with Hill Samuel Investment
Advisers Ltd.
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Mr. Ginty, a graduate of Sheffield University, joined Delaware
International in 1992, where his primary research focus is the European equity
markets. Prior to joining Delaware International, his business experience was
with Kleinwort Benson Securities Limited, and prior to that time, with
Fiduciary Trust International.
Mr. Brooks is a graduate of Yale University and has undertaken
graduate studies at The London Business School. Having joined Delaware
Management Company in 1991, Mr. Brooks first worked in equity market analysis
and as a Philadelphia liaison with Delaware International and thereafter
joined Delaware International's emerging markets team in London.
Clive A. Gillmore, Robert Akester and Mr. Brooks have primary
responsibility for making day-to-day investment decisions for Latin America
Fund. A graduate of the University of Warwick and having begun his career at
Legal and General Investment Management, Mr. Gillmore joined Delaware
Investments in 1990 after eight years of investment experience. His most
recent position prior to joining Delaware Investments 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.
Mr. Akester, a graduate of University College, London, recently joined
Delaware International after 26 years of investment experience. His most recent
position prior to joining Delaware International was as Director of Hill Samuel
Investment Advisers Ltd. where he had responsibility for significant overseas
clients and Far Eastern Markets. Mr. Akester is an Associate of the Institute of
Actuaries.
Portfolio Trading Practices
The Funds normally will not invest for short-term trading purposes.
However, a Fund 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 Fund and may affect taxes payable by such Fund's shareholders to the
extent that net capital gains are realized. Given each Fund's investment
objective, it is anticipated that the portfolio turnover rate of each Fund
will not exceed 100%.
The Manager uses its best efforts to obtain the best available price
and most favorable execution for portfolio transactions. Orders may be placed
with brokers or dealers who provide brokerage and research services to the
Manager or their advisory clients. These services may be used by the Manager
in servicing any of its accounts. Subject to best price and execution, the
Manager may consider a broker/dealer's sales of shares of funds offered by
Delaware Investments in placing portfolio orders and may place orders with
broker/dealers that have agreed to defray certain expenses of such funds, such
as custodian fees.
Performance Information
From time to time, the Funds may quote total return performance of
their 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 periods, as
applicable. The Funds may also advertise aggregate and average total return
information concerning a Class over additional periods of time. In addition,
the Funds 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
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favorable than total return information that includes deductions of the maximum
front-end sales charge or any applicable CDSC.
Because securities prices fluctuate, investment results of the
Classes will fluctuate over time. Past performance is not considered a
guarantee of future results.
Distribution (12b-1) and Service
The Distributor, Delaware Distributors, L.P., serves as the national
distributor for each Fund's shares under separate Distribution Agreements with
Global Funds, Inc. dated December __, 1998.
Global Funds, Inc. has adopted separate distribution plans under Rule
12b-1 for each of the Class A Shares, Class B Shares and Class C Shares of
each Fund (the "Plans"). The Plans permit the Funds to pay the Distributor
from the assets of their respective Classes a monthly fee for the
Distributor's 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 shares of each Fund's Classes, 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, the Funds may
make payments from the 12b-1 Plan fees of their respective Classes 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 Global
Funds, Inc. The Distributor has elected voluntarily to waive its right to
receive 12b-1 fees (including service fees) from the commencement of the
public offering of the Classes through June 30, 1999.
The 12b-1 Plan expenses relating to each of the Class B Shares and
Class C Shares of each Fund are also used to pay the Distributor for advancing
the commission costs to dealers with respect to the initial sale of such
shares.
Absent any applicable fee waiver, the aggregate fees paid by the
Funds from the assets of the respective Classes to the Distributor and others
under the Plans may not exceed (i) 0.30% of the Class A Shares' average daily
net assets in any year, and (ii) 1% (0.25% of which are service fees to be
paid by each Fund to the Distributor, dealers and others for providing
personal service and/or maintaining shareholder accounts) of each of the Class
B Shares' and Class C Shares' average daily net assets in any year. No Fund's
Class A Shares, Class B Shares and Class C Shares will incur any distribution
expenses beyond these limits, which may not be increased without shareholder
approval.
Although the maximum fee payable under the Plan relating to Class A
Shares is 0.30% of average daily net assets, the Board of Directors has
currently set the annual fee for the Class at 0.25% of the average daily net
assets. The Board of Directors may increase the fee to the full 0.30% on all
Class A Shares' assets at any time. See Shares.
While payments, if any, pursuant to the Plans may not exceed 0.30%
annually with respect to Class A Shares, and 1% annually with respect to each
of the Class B Shares and Class C Shares, the Plans do not limit
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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 distribution expenses will likely equal or
exceed payments under the Plans. The Distributor may, however, incur such
additional expenses and make additional payments to dealers from its own
resources to promote the distribution of shares of the Classes. The monthly fees
paid to the Distributor under the Plans are subject to the review and approval
of Global Funds, Inc.'s unaffiliated directors, who may reduce the fees or
terminate the Plans at any time.
The Plans do not apply to shares of any Fund's Institutional Class.
Those shares are not included in calculating the Plans' fees, and the Plans
are not used to assist in the distribution and marketing of shares of the
Institutional Classes.
The Transfer Agent, Delaware Service Company, Inc., serves as the
shareholder servicing, dividend disbursing and transfer agent for each Fund
pursuant to an amended and restated agreement dated December __, 1998. The
Transfer Agent also provides accounting services to each Fund pursuant to the
terms of a separate Fund Accounting Agreement.
The directors of Global Funds, Inc. annually review service fees paid
to the Distributor and the Transfer Agent. The Distributor and the Transfer
Agent are also indirect, wholly owned subsidiaries of DMH.
* * *
As with other mutual funds, financial and business organizations and
individuals around the world, each Fund could be adversely affected if the
computer systems used by its service providers do not properly process and
calculate date-related information from and after January 1, 2000. This is
commonly known as the "Year 2000 Problem." Global Funds, Inc. is taking steps
to obtain satisfactory assurances that the Funds' major service providers are
taking steps reasonably designed to address the Year 2000 Problem with respect
to the computer systems that such service providers use. There can be no
assurances that these steps will be sufficient to avoid any adverse impact on
the business of the Funds.
Several European countries are participating in the European Economic
and Monetary Union, which will establish a common European currency for
participating countries. This currency will commonly be known as the "Euro."
It is anticipated that each such participating country will replace its
existing currency with the Euro on January 1, 1999. Additional European
countries may elect to participate after that date. If any of the Funds is
invested in securities of participating countries it could be adversely
affected if the computer systems used by its major service providers are not
properly prepared to handle the implementation of this single currency or the
adoption of the Euro by additional countries in the future. Global Funds, Inc.
is taking steps to obtain satisfactory assurances that the major service
providers of each of the Funds are taking steps reasonably designed to address
these matters with respect to the computer systems that such service providers
use. There can be no assurances that these steps will be sufficient to avoid
any adverse impact on the business of the Funds.
Expenses
Each Fund is responsible for all of its own expenses other than those
borne by the Manager under the Investment Management Agreement and those borne
by the Distributor under the Distribution Agreement. Each Fund's expenses
include its 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.
Shares
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Global Funds, Inc. is an open-end management investment company.
Commonly known as a mutual fund, Global Funds, Inc. was organized as a
Maryland corporation on May 30, 1991. Global Funds, Inc. currently offers
eight series of shares - International Equity Series, International Small Cap
Series, Global Bond Series, Global Assets Series, Emerging Markets Series,
Global Equity Series, New Europe Series and Latin America Series. Each Fund's
shares 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. Each fund will
vote separately on any matter which affects only that fund. Shares of each
fund have a priority over shares of any other fund of Global Funds, Inc. in
the assets and income of that fund.
All shares have noncumulative voting rights which means that the
holders of more than 50% of Global Funds, Inc.'s shares voting for the
election of directors can elect 100% of the directors if they choose to do so.
Under Maryland law, Global Funds, Inc. 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.
New Europe Fund and Latin America Fund also offer New Europe Fund
Institutional Class and Latin America Fund Institutional Class of shares, as
well as Class A Shares, Class B Shares and Class C Shares. Shares of each
Class represent proportionate interests in the assets of each respective Fund
and have the same voting and other rights and preferences as the other Classes
of that Fund, except that shares of the Institutional Classes of each Fund are
not subject to, and may not vote on matters affecting, the Distribution Plans
under Rule 12b-1 relating to Class A Shares, Class B Shares and Class C
Shares. Similarly, as a general matter, the 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 Fund may vote on any proposal to increase materially the fees to
be paid by the Fund under the 12b-1 Plan relating to Class A Shares of that
Fund.
The Lincoln National Life Insurance Company ("LNLIC") is expected to
make the initial investment in the Fund. This could result in LNLIC owning up
to 100% of the outstanding shares of the Fund. Subject to certain limited
exceptions, there are no limitations on LNLIC's ability to redeem its shares
of the Fund and it may elect to do so at any time.
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OTHER INVESTMENT POLICIES AND RISK CONSIDERATIONS
Foreign Currency Transactions
Although each 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 Fund 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 Fund 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
Funds will convert currency on a spot basis from time to time, and investors
should be aware of the costs of currency conversion.
Each Fund 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, each Fund 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, a Fund 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 Fund's
securities denominated in such foreign currency.
The Funds will not enter into forward contracts or maintain a net
exposure to such contracts where the consummation of the contracts would
obligate the Funds to deliver an amount of foreign currency in excess of the
value of a Fund's securities or other assets denominated in that currency.
At the maturity of a forward contract, a Fund 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 Fund may realize gains or losses from currency
transactions.
Each Fund 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 Fund and against increases in the U.S. dollar
cost of such securities to be acquired. Call options on foreign currency
written by a Fund will be covered, which means that the Fund will own the
underlying foreign currency. With respect to put options on foreign currency
written by a Fund, the Fund 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 Fund
will be required to pay upon exercise of the put.
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 Fund could be required to purchase or sell
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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 a Fund's position, the Fund may forfeit the entire amount of the
premium plus related transaction costs. See Special Risk Considerations.
Depositary Receipts
Each Fund may invest in sponsored and unsponsored American Depositary
Receipts ("ADRs"), European Depositary Receipts ("EDRs") and Global Depositary
Receipts ("GDRs") that are actively traded in the United States. ADRs are
receipts typically issued by a U.S. bank or trust company which evidence
ownership of underlying securities issued by a foreign corporation. EDRs and
GDRs are receipts issued by non-U.S. Banks or trust companies and foreign
branches of U.S. banks that evidence ownership of the underlying foreign or
U.S. securities. "Sponsored" ADRs, EDRs or GDRs are issued jointly by the
issuer of the underlying security and a Depositary, and "unsponsored" ADRs,
EDRs or GDRs are issued without the participation of the issuer of the
deposited security. Holders of unsponsored ADRs, EDRs or GDRs generally bear
all the costs of such facilities and the Depositary of an unsponsored ADR, EDR
or GDR facility frequently is under no obligation to distribute shareholder
communications received from the issuer of the deposited security or to pass
through voting rights to the holders of such receipts in respect of the
deposited securities. Therefore, there may not be a correlation between
information concerning the issuer of the security and the market value of an
unsponsored ADR, EDR or GDR. ADRs may be listed on a national securities
exchange or may be traded in the over-the-counter market. EDRs and GDRs traded
in the over-the-counter market which do not have an active or substantial
secondary market will be considered illiquid and therefore will be subject to
a Fund's limitation with respect to such securities. ADR prices are
denominated in U.S. dollars although the underlying securities are denominated
in a foreign currency. Investments in ADRs, EDRs and GDRs involve risks
similar to those accompanying direct investments in foreign securities.
Rule 144A Securities
While maintaining oversight, the Board of Directors of Global Funds,
Inc. 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
Fund's 15% 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
Fund's holdings of illiquid securities exceed the Fund's 15% limitation on
investments in such securities, the Manager will determine what action to take
to ensure that the Fund continues to adhere to its respective limitation.
Portfolio Loan Transactions
Each Fund may loan up to 25% of its assets to qualified
broker/dealers or institutional investors for their use relating to short
sales or other security transactions.
The major risk to which a Fund 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, and the borrower would fail to return the borrowed
security. Therefore, each Fund 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
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<PAGE>
the borrowing broker, dealer or institution and then only if the consideration
to be received from such loans would justify the risk. In addition, a Fund will
require borrowers to deliver collateral to the Fund before lending securities.
Creditworthiness will be monitored on an ongoing basis by the Manager.
Investment Company Securities
Any investments that a Fund makes in either closed-end or open-end
investment companies will be limited by the 1940 Act, and would involve an
indirect payment of a portion of the expenses, including advisory fees, of
such other investment companies. Under the 1940 Act's limitations, a Fund may
not (1) own more than 3% of the voting stock of another investment company;
(2) invest more than 5% of the Fund's total assets in the shares of any one
investment company; nor (3) invest more than 10% of the Fund's total assets in
shares of other investment companies. These percentage limitations also apply
to a Fund's investments in unregistered investment companies.
Repurchase Agreements
Each Fund also may use repurchase agreements that are at least 102%
collateralized by securities in which the Fund can invest directly, including
securities issued or guaranteed by the U.S. government or its agencies or
instrumentalities. Repurchase agreements help a Fund to invest cash on a
temporary basis. Each Fund may invest cash balances in joint repurchase
agreements with other Delaware Investments funds. Under a repurchase
agreement, a Fund acquires ownership and possession of a security, and the
seller agrees to buy the security back at a specified time and higher price.
Repurchase agreements involve the risks of loss if a seller defaults on its
obligations under the agreements. If the seller is unable to repurchase the
security, a Fund could experience delays in liquidating the securities. To
minimize this possibility, the Manager, pursuant to direction from the Global
Funds, Inc.'s Board of Directors, considers the creditworthiness of banks and
dealers when entering into repurchase agreements.
Borrowings
Each Fund may borrow money as a temporary measure for extraordinary
purposes or to facilitate redemptions. A Fund will not borrow money in excess
of one-third of the value of its net assets. A Fund 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 a
Fund's 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 Fund 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 Fund 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 Fund has an outstanding borrowing.
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 Fund may purchase call options on foreign or U.S.
securities and indices and enter into related closing transactions. Each Fund
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. Each Fund 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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<PAGE>
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 Fund
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 Fund offset put options or
call options prior to exercise or expiration. If a Fund cannot effect closing
transactions, it may have to hold a security it would otherwise sell or
deliver a security it might want to hold.
In purchasing put and call options, the premium paid by a Fund plus
any transaction costs will reduce any benefit realized by such Fund upon
exercise of the option.
Each Fund may use both Exchange-traded and over-the-counter options.
Certain over-the-counter options may be illiquid. Each Fund will only invest
in such options to the extent consistent with its 15% limitation on investment
in illiquid securities. The Funds will comply with U.S. Securities and
Exchange Commission asset segregation and coverage requirements when engaging
in these types of transactions.
Futures Contracts and Options on Futures Contracts
The principal purpose of the purchase or sale of futures contracts
for a Fund is to protect the Fund against the fluctuations in interest or
exchange rates which otherwise might adversely affect the value of such Fund's
portfolio securities or adversely affect the prices of securities which the
Fund intends to purchase at a later date without actually buying or selling
such securities.
Each Fund 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
the Fund 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 Fund 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. To the extent that a Fund invests in
futures contracts and options thereon for other than bona fide hedging
purposes, the Fund will not enter into such transactions if, immediately
thereafter, the sum of the amount of initial margin deposits and premiums paid
for open futures options would exceed 5% of such Fund's total assets, after
taking into account unrealized profits and unrealized losses on such contracts
it has entered into; provided, however, that, in the case of an option that is
in-the-money at the time of purchase, the in-the-money amount may be excluded
in calculating the 5%.
Each Fund 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 Fund enters into a futures
transaction, it must deliver to the futures commission merchant selected by
the Fund an amount referred to as "initial margin." This amount is maintained
by the futures commission merchant directly or on its behalf
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<PAGE>
in an account at the Custodian Bank. Thereafter, a "variation margin" may be
paid by the Fund to, or drawn by the Fund 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.
To the extent that interest or exchange rates or securities prices
move in an unexpected direction, a Fund may not achieve the anticipated
benefits of investing in futures contracts and options thereon, or may realize
a loss. To the extent that a Fund 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 Fund from closing out its positions relating to futures.
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<PAGE>
APPENDIX A--RATINGS
General Rating Information
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.
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<PAGE>
Delaware Investments includes funds with a wide range of investment
objectives. Stock funds, income funds, national and state-specific tax-exempt
funds, money market funds, global and international funds and closed-end funds
give investors the ability to create a portfolio that fits their personal
financial goals. For more information, contact your financial adviser or call
Delaware Investments at 800-523-1918.
INVESTMENT MANAGER
Delaware International Advisers Ltd.
80 Cheapside
Third Floor
London, England EC2V 6EE
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
1818 Market Street
Philadelphia, PA 19103
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING,
ACCOUNTING SERVICES
AND TRANSFER AGENT
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
One Commerce Square
Philadelphia, PA 19103
INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103
CUSTODIAN
The Chase Manhattan Bank
4 Chase Metrotech Center
Brooklyn, NY 11245
NEW EUROPE FUND
LATIN AMERICA FUND
- -----------------------------------
A CLASS
B CLASS
C CLASS
- -----------------------------------
P R O S P E C T U S
- -----------------------------------
DECEMBER __, 1998
DELAWARE
INVESTMENTS
-----------
- -----------------------------------
<PAGE>
NEW EUROPE FUND PROSPECTUS
LATIN AMERICA FUND DECEMBER _____, 1998
----------------------------------------------------
1818 Market Street, Philadelphia, PA 19103
For more information about New Europe Fund
Institutional Class and Latin America Fund Institutional Class
call Delaware Group at 800-828-5052
This Prospectus describes shares of the New Europe and Latin America
Series (individually, a "Fund" and collectively, the "Funds") of Delaware Group
Global & International Funds, Inc. ("Global Funds, Inc."), both of which are
professionally-managed mutual funds of the series type.
The investment objective of each Fund is to achieve long-term capital
appreciation. The New Europe Fund ("New Europe") seeks to achieve its objective
by investing primarily in equity securities of European companies. The Latin
America Fund ("Latin America") seeks to achieve its objective by investing
primarily in equity securities of Latin American companies. See Investment
Objective and Strategies.
The Funds offer an Institutional Class of shares (the "Class"). This
Prospectus relates only to the Class and sets forth information that you should
read and consider before you invest. Please retain it for future reference. The
Funds' Statement of Additional Information ("Part B" of Global Funds, Inc.'s
registration statement), dated December _____, 1998, as it may be amended from
time to time, contains additional information about the Funds and has been filed
with the Securities and Exchange Commission (the "SEC"). Part B is incorporated
by reference into this Prospectus and is available, without charge, by writing
to Delaware Distributors, L.P. at the above address or by calling the above
number. The Funds' financial statements will appear in the Annual Report of
Global Funds, Inc. and will accompany any response to requests for Part B. In
addition, the SEC maintains a Web site (http://www.sec.gov) that contains Part
B, material included by reference into Global Funds, Inc.'s registration
statement, and other information regarding registrants that electronically file
with the SEC.
Each Fund also offers Class A Shares, Class B Shares and Class C
Shares. Shares of these classes are subject to sales charges and other expenses,
which may affect their performance. A prospectus for these classes can be
obtained by writing to Delaware Distributors, L.P. at the above address or by
calling 800-523-1918.
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<PAGE>
TABLE OF CONTENTS
________________________________________________________________________________
Cover Page Redemption and Exchange
- --------------------------------------------------------------------------------
Synopsis Dividends and Distributions
- --------------------------------------------------------------------------------
Summary of Expenses Taxes
- --------------------------------------------------------------------------------
Investment Objective and Strategies Calculation of Net Asset Value Per Share
- --------------------------------------------------------------------------------
Suitability Management of the Funds
- --------------------------------------------------------------------------------
Investment Strategy Other Investment Policies and Risk
- --------------------------------------------------------------------------------
Special Risk Considerations Considerations
- --------------------------------------------------------------------------------
Classes of Shares Appendix A--Ratings
- --------------------------------------------------------------------------------
How to Buy Shares
________________________________________________________________________________
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 FUNDS ARE
NOT FDIC OR NCUSIF INSURED, ARE NOT GUARANTEED BY ANY BANK OR ANY CREDIT UNION,
ARE NOT OBLIGATIONS OF ANY BANK OR ANY CREDIT UNION, AND INVOLVE INVESTMENT
RISK, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED. SHARES OF
THE FUNDS ARE NOT BANK OR CREDIT UNION DEPOSITS.
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<PAGE>
SYNOPSIS
Investment Objectives
The investment objective of each Fund is to achieve long-term capital
appreciation. New Europe seeks to achieve its objective by investing primarily
in equity securities of European countries. Latin America seeks to achieve its
objective by investing primarily in equity securities of Latin American
companies.
New Europe and Latin America are international funds. Under normal
market conditions, at least 65% of New Europe's assets will be invested in
equity securities of companies organized or having a majority of their assets in
or deriving a majority of their operating income in Europe. Under normal market
conditions, at least 65% of Latin America's assets will be invested in equity
securities of companies organized or having a majority of their assets in or
deriving a majority of their operating income in Latin America. For further
details, see Investment Objective and Strategies and Other Investment Policies
and Risk Considerations.
Risk Factors and Special Considerations
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 the utilization of forward
foreign currency exchange contracts involve certain risk and opportunity
considerations not typically associated with investing in United States
companies. See Special Risk Considerations-Foreign Securities Risks and Other
Investment Policies and Risk Considerations.
2. The prices of equity securities, especially those of the smaller
non-U.S. companies in which New Europe and Latin American may invest, tend to
fluctuate, particularly in the shorter term. Investors in the Funds should be
willing to accept the risks associated with emerging and growth-oriented
companies, some of the securities of which may be speculative and subject the
Funds to additional investment risk. See Special Risk Considerations and Other
Investment Policies and Risk Considerations.
3. Each Fund may invest a portion of its assets in the markets of
certain emerging countries. Investments in securities of companies in emerging
markets present a greater degree of risk than tends to be the case for foreign
investments in Western Europe and other developed markets. Among other things,
economic markets and structures tend to be less mature and diverse and the
securities markets which are subject to less government regulation or
supervision may also be smaller, less liquid and subject to greater price
volatility. There is a greater possibility of expropriation, nationalization,
confiscatory taxation, income earned or other special taxes, foreign exchange
restrictions, limitations on the repatriation of income and capital from
investments, defaults in foreign government debt, and economic, political or
social instability. In addition, in many emerging markets, there is
substantially less publicly available information about issuers and the
information that is available tends to be of a lesser quality. These risks are
accentuated for both Funds because many of the countries in Eastern Europe and
most of the countries in Latin America are emerging market countries. See
Special Risk Considerations-Emerging Markets Securities Risks.
4. The New Europe and Latin America Funds target specific regions of
the world for investment. Thus, an investment in either of these Funds will
likely be more volatile than a more geographically diversified fund. Further,
the performance of either Fund is closely tied to the economic and political
conditions of the region in which it invests. See Special Risk Considerations -
Region Risks.
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<PAGE>
5. Each Fund may invest up to 30% of its assets, in high yield, high
risk foreign fixed-income securities, including Brady Bonds. Consequently,
greater risks may be involved with an investment in the Funds. See High Yield,
High Risk Securities under Investment Objective and Strategies.
6. Funds have the right to engage in options and futures transactions
for hedging purposes, to counterbalance portfolio volatility. In connection with
futures transactions, the Funds will maintain certain collateral in special
accounts established with futures commission merchants or on its behalf in the
care of The Chase Manhattan Bank (the "Custodian Bank"). While the Funds do not
engage in options and futures for speculative purposes, there are risks which
result from the use of these instruments, and an investor should carefully
review the descriptions of these risks in this Prospectus. See Options and
Futures Contracts and Options on Futures Contracts under Other Investment
Policies and Risk Considerations.
Investment Manager, Sub-Adviser, Distributor and Service Agent
Delaware International Advisers Ltd. ("Delaware International" or the
"Manager") furnishes investment management services to the Funds, subject to the
supervision of Global Funds, Inc.'s Board of Directors. Delaware Distributors,
L.P. (the "Distributor") is the national distributor for the Funds and for all
of the other mutual funds that are part of Delaware Investments. Delaware
Service Company, Inc. (the "Transfer Agent") is the shareholder servicing,
dividend disbursing, accounting services and transfer agent for the Funds and
for all of the other mutual funds that are part of Delaware Investments. See
Summary of Expenses and Management of the Fund for further information regarding
the Manager and the fees payable under the Fund's Investment Management
Agreements.
Purchase Price
Shares of the Class offered by this Prospectus are available at net
asset value, without a front-end or contingent deferred sales charge and are not
subject to distribution fees under a Rule 12b-1 distribution plan.
Redemption and Exchange
Shares of the Class are redeemed or exchanged at the net asset value
calculated after receipt of the redemption or exchange request. See Redemption
and Exchange.
Open-End Investment Company
Global Funds, Inc. is an open-end, registered management investment
company. Each Fund operates as a diversified fund as defined under the
Investment Company Act of 1940 (the "1940 Act"). Global Funds, Inc. was
organized as a Maryland corporation on May 30, 1991. See Shares under Management
of the Funds.
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<PAGE>
SUMMARY OF EXPENSES
A general comparison of the sales arrangements and other expenses
applicable to the Class of Shares for each Fund follows:
New Latin
Shareholder Transaction Expenses Europe America
- --------------------------------------------------------------------------------
Maximum Sales Charge Imposed
on Purchases (as a percentage
of offering price)............................ None None
Maximum Sales Charge Imposed on
Reinvested Dividends (as a
percentage of offering price)................. None None
Exchange Fees................................. None* None*
* Exchanges are subject to the requirements of each Fund and a front-end sales
charge may apply.
Annual Operating Expenses New Latin
(as a percentage of average daily net assets) Europe America
- --------------------------------------------------------------------------------
Management Fees (after voluntary waivers)..... 0.00%** 0.00%**
12b-1 Expenses (including service fees)
(after voluntary waivers)..................... None None
Other Operating Expenses
(after voluntary payments).................... 1.25%** 1.25%**
==== ====
Total Operating Expenses
(after voluntary waivers and payments)... 1.25%** 1.25%**
==== ====
** Because the New Europe and Latin America Funds are new Funds, "Total
Operating Expenses" and "Other Operating Expenses" for each Class of each
Fund are based on estimated amounts each Fund expects to pay during the
initial fiscal year. The Manager has elected voluntarily to waive that
portion, if any, of the annual management fees payable by each Fund and to
pay certain expenses of the Funds to the extent necessary to ensure that each
Fund's Total Operating Expenses (exclusive of taxes, interest, brokerage
commissions and extraordinary expenses) do not exceed, on an annualized
basis, 1.25% of the average daily net assets of each Fund. The Manager's
voluntary fee waivers and expense payments began at the commencement of the
public offering of the Classes and will extend through June 30, 1999. Absent
the Manager's voluntary fee waiver and expense payments, it is estimated that
during the current fiscal year, the Total Operating Expenses for each Fund,
as a percentage of average daily net assets, would be ____%, reflecting
"Management Fees" of 1.25%.
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<PAGE>
For expense information about each Fund's Class A, Class B and Class C
Shares, see the separate prospectus relating to those classes.
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. Each Fund does not
charge a redemption fee. The following example also reflects the voluntary
waiver of the management fee and other payment of expenses by the Manager, as
discussed in this Prospectus.
1 year 3 years
------ -------
New Europe Fund $___ $___
Latin America Fund $___ $___
This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be greater or less than those
shown.
The purpose of the above tables is to assist the investor in
understanding the various costs and expenses that an investor in the Class will
bear directly or indirectly.
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<PAGE>
INVESTMENT OBJECTIVE AND STRATEGIES
SUITABILITY
Investors considering any of the Funds should have a long-term
investment time frame.
The Funds cannot assure a specific rate of return or that principal
will be protected. The value of the Funds' shares can be expected to move up and
down depending on market conditions. Consequently, appreciation may be obtained
in periods of generally rising markets, while in declining markets the value of
the Funds' shares may decline.
Investments in foreign securities, whether equity or fixed-income,
involve special risks including those related to currency fluctuations, as well
as to political, economic and social situations different from and potentially
more volatile than those in the United States. In addition, the accounting, tax
and financial reporting standards of foreign countries are different from and
may be less reliable or comprehensive than those relating to U.S. securities
issuers. See Special Risk Considerations for a complete discussion of the risk
factors affecting any international investment. For these reasons, the Funds are
not suitable for short-term investors. However, through the cautious selection
and supervision of its portfolio, the Manager will strive to achieve the Funds'
objectives.
The Funds may be suitable for investors with a long-term investment
horizon who are looking for long-term growth potential from a portfolio of
European or Latin American securities. New Europe will invest primarily in
equity securities of European countries of varying size. Latin America will
invest primarily in equity securities of Latin American companies. Investors
should be willing to accept the risks associated with foreign investing as well
as with investments in growth-oriented or emerging issuers, some of which may be
speculative and subject the Funds to additional investment risk.
* * *
Ownership of shares of the Funds can reduce the bookkeeping and
administrative inconvenience that is typically connected with direct purchases
of the type of securities in which the Funds invest.
An investor should not consider a purchase of shares of any Fund as
equivalent to a complete investment program. The Delaware Investments includes a
family of funds, generally available through registered investment dealers,
which may be used together to create a more complete investment program.
INVESTMENT STRATEGY
New Europe - The investment objective of New Europe is to achieve
long-term capital appreciation. The Fund seeks to achieve its objective by
investing primarily in equity securities of European companies, which may
include companies located or operating in established or emerging European
countries. Under normal circumstances, at least 65% of the Fund's total assets
will be invested in equity securities of companies organized or having a
majority of their assets in or deriving a majority of their operating income in
Europe. The companies in which the Fund will invest will be of varying size.
The equity securities in which the Fund may invest include common
stocks, preferred stocks, rights or warrants to purchase common stocks and
securities convertible into common stocks. The Fund may also invest in foreign
companies through sponsored or unsponsored Depositary Receipts.
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<PAGE>
The Fund may invest in securities of issuers located in any European
country where the Manager believes that there is the potential for long-term
capital appreciation. The Fund may invest in the securities of issuers located
in European countries with well-established economics and securities markets, in
countries with emerging economies or securities markets or smaller securities
markets. In addition, if opportunities arise, the Fund may invest in securities
of issuers located in Eastern European countries. See Special Risk
Considerations - Emerging Markets Securities Risks.
Latin America - The investment objective of Latin America is to achieve
long-term capital appreciation. The Fund seeks to achieve its objective by
investing primarily in equity securities of companies in Latin America, most of
which are emerging market countries. Under normal circumstances, at least 65% of
the Fund's total assets will be invested in equity securities of companies
organized or having a majority of their assets in or deriving a majority of
their income in Latin America. The companies in which the Fund will invest will
be of varying size.
The equity securities in which the Fund may invest include common
stocks, preferred stocks, rights or warrants to purchase common stocks and
securities convertible stocks. The Fund may also invest in foreign companies
through sponsored or unsponsored Depositary Receipts.
The Latin American countries in which the Fund may invest include
Argentina, Belize, Bolivia, Brazil, Chile, Columbia, Costa Rica, Cuba, Ecuador,
El Salvador, French Guyana, Guatemala, Guyana, Honduras, Mexico, Nicaragua,
Panama, Paraguay, Peru, Surinam, Trinidad/Tobago, Uruguay and Venezuela.
Both Funds -- In selecting investments for the Funds, the Manager will
employ a dividend discount analysis across country boundaries and will also use
a purchasing power parity approach to identify currencies and markets that are
overvalued or undervalued relative to the U.S. dollar. The Manager uses the
dividend discount analysis, based on available information, to compare the value
of different investments. Using this technique, 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. Because many of the countries
in which the Funds invest are emerging countries, there may be less information
available on which the Manager can base its dividend discount analysis. Thus,
such analysis may not be as complete as a dividend discount analysis performed
on investments in developed countries.
With a purchasing 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 Funds may invest in both open-end and listed or unlisted closed-end
investment companies, as well as unregistered investment companies. See
Investment Company Securities under Other Investment Policies and Risk
Considerations. The Funds may also invest in convertible preferred stocks that
offer enhanced yield features, such as Preferred Equity Redemption Cumulative
Stock, and certain other non-traditional equity securities.
Each Fund may invest up to 30% of its net assets in fixed-income
securities issued by emerging country companies, and foreign governments, their
agencies, instrumentalities or political subdivisions, all of which may
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be high yield, high risk fixed-income securities rated lower than BBB by
Standard & Poor's Ratings Group ("S&P") and Baa by Moody's Investors Services,
Inc. ("Moody's") or, if unrated, are considered by the Manager to be of
equivalent quality and which present special investment risks. Each Fund may
also invest in Brady Bonds. See High Yield, High Risk Securities and Special
Risk Considerations.
For temporary defensive purposes, the Fund 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. For example, the Fund may invest in U.S. fixed-income
markets when the Manager believes that the global equity markets are excessively
volatile or overvalued so that the Fund's objective cannot be achieved in such
markets. Any such corporate debt obligations will be rated AA or better by S&P,
or Aa or better by Moody's, or if unrated, will be determined to be of
comparable quality by the Manager. The Fund may also invest in the securities
listed above pending investment of proceeds from new sales of Fund shares and to
maintain sufficient cash to meet redemption requests.
Restricted and Illiquid Securities
The Funds 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 Funds. See Rule 144A
Securities under Other Investment Policies and Risk Considerations. Each Fund
may each invest up to 15% of the value of its net assets in illiquid securities,
which are securities which may not be disposed of within seven days at the price
at which they are carried on a Fund's books. In the event a Fund's percentage
limitation is exceeded, whether due to changes in the market value of the Fund's
illiquid holdings or because a particular security is deemed to have become
illiquid, the Manager will take steps to remedy these circumstances in an
orderly fashion.
High Yield, High Risk Securities
Each Fund may invest up to 30% of its net assets in high yield, high
risk foreign fixed-income securities, including so-called Brady Bonds. See
Foreign Government Securities Risks under Special Risk Considerations. In the
past, in the opinion of the Manager, 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 intends to maintain an adequately diversified portfolio of
these bonds. While diversification can help to reduce the effect of an
individual default on a Fund, there can be no assurance that diversification
will protect the Fund from widespread bond defaults brought about by a sustained
economic downturn.
Medium-grade and low-grade bonds held by a Fund 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
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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 a Fund's net asset value
per share.
* * *
Each Fund 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,
each Fund will operate as a diversified fund. The Funds will not concentrate
their investments in any particular industry, which means that each Fund will
not invest 25% or more of its total assets in any one industry.
Global Funds, Inc.'s designation as an open-end investment company,
each Fund's designation as a diversified fund, and each Fund's policies
concerning portfolio lending, borrowing and concentration are "fundamental" and
may not be changed unless authorized by the vote of a majority of such Fund's
outstanding voting securities. A vote of a "majority of the outstanding voting
securities" is the vote by the holders of the lesser of a) 67% or more of a
Fund's voting securities present in person or represented by proxy if the
holders of more than 50% of the outstanding voting securities of the Fund 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 each
Fund which may not be changed without a majority shareholder vote.
Any investment policies of a Fund not identified above as "fundamental"
may be changed by the Board of Directors of Global Funds, Inc. without a
shareholder vote. See Special Risk Considerations and Other Investment Policies
and 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 Fund,
nor can there be any assurance that a Fund's investment objective will be
attained.
Foreign Securities Risks. The Funds have the right to purchase
securities in any developed, underdeveloped or emerging country. 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 substantially 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. In particular, the assets and profits appearing on the financial
statements of a developing or emerging country issuer may not reflect its
financial position or results of operations in the way they would be reflected
had the financial statements been prepared in accordance with the United States'
generally accepted accounting principles. Also, for an issuer that keeps
accounting records in
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local currency, inflation accounting rules may require for both tax and
accounting purposes, that certain assets and liabilities be restated on the
issuer's balance sheet in order to express items in terms of currency or
constant purchasing power. Inflation accounting may indirectly generate losses
or profits. Consequently, financial data may be materially affected by
restatements for inflation and may not accurately reflect the real condition of
those issuers and securities markets.
Further, the Funds 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, and may be subject to administrative
uncertainties. 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, and capital requirements for
brokerage firms are generally lower. The foreign securities markets of many of
the countries in which the Funds may invest may also be smaller, less liquid and
subject to greater price volatility than those in the United States.
Emerging Markets Securities Risks. Compared to the United States and
other developed countries, emerging countries may have volatile social
conditions, relatively unstable governments and political systems, economies
based on only a few industries and economic structures that are less diverse and
mature, and securities markets that trade a small number of securities, which
can result in a low or nonexistent volume of trading. Prices in these securities
markets 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. Until recently, there has been an
absence of a capital market structure or market-oriented economy in certain
emerging countries. Further, investments and opportunities for investments by
foreign investors are subject to a variety of national policies and 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, limits on the types of companies in which foreigners may invest and
prohibitions on foreign investments in issuers or industries deemed sensitive to
national interests. Additional restrictions may be imposed at any time by these
or other countries in which the Funds invest. Also, 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. Countries such as those in which the Funds may
invest have historically experienced and may continue to experience,
substantial, and in some periods extremely high rates of inflation for many
years, 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. Other 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.
Each of the Funds has the ability to invest in emerging market
securities. With respect to the New Europe Fund, most Eastern European countries
are considered emerging markets. Further, with respect to the Latin America
Fund, virtually all Latin American countries are underdeveloped or emerging. Set
forth below are some specific risk factors related to Eastern Europe and Latin
American issuers.
Eastern European Securities Risks. Investments in Eastern European
countries may involve risks of nationalization, expropriation and confiscatory
taxation. The communist governments of a number of Eastern European countries
expropriated large amounts of private property in the past, in many cases
without adequate
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compensation, and there can be no assurance that such expropriation will not
occur in the future. In the event of such expropriation, the New Europe Fund
could lose a substantial portion of any investments it has made in the affected
countries. In addition, the accounting, tax and financial reporting standards of
Eastern European countries are different from and may be less reliable or
comprehensive than those relating to Western European securities. Finally, even
though certain Eastern European currencies may be convertible into U.S. dollars,
the conversion rates may be artificial relative to the actual market values and
may be unfavorable to Fund investors.
Certain Eastern European countries, which do not have market economies,
are characterized by an absence of developed legal structures governing private
and foreign investments and private property. Certain countries require
governmental approval prior to investments by foreign persons, or limit the
amount of investment by foreign persons in a particular company or limit the
investment of foreign persons to only a specific class of securities of a
company that may have less advantageous terms than securities of the company
available for purchase by nationals.
Authoritarian governments in certain Eastern European countries may
require that a governmental or quasi-governmental authority act as custodian of
the New Europe Fund's assets invested in such country. To the extent such
governmental quasi-governmental authorities do not satisfy the requirements of
the 1940 Act to act as foreign custodians of the New Europe Fund's cash and
securities, the Fund's investment in such countries may be limited or may be
required to be effected through intermediaries. The risk of loss through
governmental confiscation may be increased in such countries. The New Europe
Fund may also invest in Russian securities. Russian securities involve
additional significant risks, including political and social uncertainty (for
example, regional conflicts and risk of war), currency exchange rate volatility,
pervasiveness of corruption and crime in the Russian economic system, delays in
settling portfolio transactions and risk of loss arising out of Russia's system
of share registration and custody. For more information about these and other
risks associated with Russian securities, please see the SAI.
Satisfactory custodial services for investment securities may not be
available in some Eastern European Countries, which may result in the Fund
incurring additional costs and delays in transporting and custodying such
securities outside such countries.
Latin American Securities Risks. The Latin American securities markets
are not as large as the U.S. securities markets and have substantially less
trading volume, resulting in a lack of liquidity and high price volatility.
There is also a high concentration of market capitalization and trading volume
in a small number of issuers representing a limited number of industries, as
well as a high concentration of investors and financial intermediaries. Latin
American brokers typically are fewer in number and less capitalized than brokers
in the United States. These factors, combined with the U.S. regulatory
requirements for open-end funds and the restrictions on foreign investments
discussed below, may result in potentially fewer investment opportunities for
the Latin America Fund and may have an adverse impact on the investment
performance of the Fund.
The investment objective of the Latin America Fund reflects the belief
that investment opportunities may result in Latin America from an evolving
long-term international trend encouraging greater market orientation and
diminishing governmental intervention in economic affairs. The Latin American
economies have experienced considerable difficulties in the past decade.
Although there have been significant improvements in recent years, the Latin
American economies continue to experience significant problems, including high
inflation rates and high interest rates. The emergence of the Latin American
economies and securities markets will require continued economic and fiscal
discipline which has been lacking at times in the past, as well as stable
political and social conditions. Recovery may also be influenced by
international
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<PAGE>
economic conditions, particularly those in the United States, and by world
prices for oil and other commodities. There is no assurance that the economic
initiatives will be successful.
Certain of the risks associated with international investments and
investing in small capital markets are heightened for investments in Latin
American countries. For example, some of the currencies of Latin American
countries have experienced steady devaluations relative to the U.S. dollar, and
major adjustments have been made in certain of such currencies periodically. In
addition, governments of many Latin American countries have exercised and
continue to exercise substantial influence over many aspects of the private
sector. In certain cases, the government owns or controls many companies,
including the largest in the country. Accordingly, government actions in the
future could have a significant effect on economic conditions in Latin American
countries, which could affect private sector companies and the Latin Fund, as
well as the value of securities in the Fund's portfolio.
In addition to the relative lack of publicly available information
about Latin American issuers and the possibility that such issuers may not be
subject to the same accounting, auditing and financial reporting standards as
are applicable to U.S. companies, inflation accounting rules in some Latin
American countries require, for companies that keep accounting records in the
local currency, for both tax and accounting purposes, that certain assets and
liabilities be restated on the company's balance sheet in order to express items
in terms of currency of constant purchasing power. Inflation accounting may
indirectly generate losses or profits for certain Latin American companies.
Satisfactory custodial services for investment securities may not be
available in some Latin American countries, which may result in the Funds
incurring additional costs and delays in transporting and custodying such
securities outside such countries.
Most Latin American countries have experienced substantial, and in some
periods extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had and may continue to have very negative
effects on the economies and securities markets of certain Latin American
countries.
As a result, management of the Funds may determine that,
notwithstanding otherwise favorable investment criteria, it may not be
practicable or appropriate to invest in a particular Latin American country. The
Funds may invest in countries in which foreign investors, including management
of the Funds, have had no or limited prior experience.
Some Latin American countries prohibit or impose substantial
restrictions on investments in their capital markets, particularly their equity
markets, by foreign entities such as the Fund. As illustrations, certain
countries may require governmental approval prior to investments for foreign
persons or limit the amount of investment by foreign persons in a particular
company or limit the investment by foreign persons to only a specific class of
securities of a company which may have less advantageous terms than securities
of the company available for purchase by nationals. Certain countries may
restrict investment opportunities in issuers or industries deemed important to
national interests.
Substantial limitations may exist in certain countries with respect to
the Fund's ability to repatriate investment income, capital or the proceeds of
sales of securities by foreign investors. For example, in Chile, with limited
exceptions, invested capital cannot be repatriated for three years. The Fund
could be adversely affected by delays in, or a refusal to grant, any required
governmental approval for repatriation of capital, as well as by the application
to the Fund of any restrictions on investments.
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<PAGE>
In some Latin American countries, such as Argentina, banks or other
financial institutions may constitute a substantial number of the leading
companies or the companies with the most actively traded securities. The
Investment Company Act restricts Fund's investments in any equity security of an
issuer which, in its most recent fiscal year, derived more than 15% of its
revenues from "securities related activities," as defined by the rules
thereunder. These provisions may restrict a Fund's investments in certain
foreign banks and other financial institutions.
Foreign Government Securities Risks. With respect to investment in debt
issues of foreign governments, the ability of a foreign government or
government-related issuer to make timely and ultimate payments on its external
debt obligations will also be strongly influenced by the issuer's balance of
payments, including export performance, its access to international credits and
investments, fluctuations in interest rates and the extent of its foreign
reserves. A country whose exports are concentrated in a few commodities or whose
economy depends on certain strategic imports could be vulnerable to fluctuations
in international prices of these commodities or imports. To the extent that a
country receives payment for its exports in currencies other than dollars, its
ability to make debt payments denominated in dollars could be adversely
affected. If a foreign government or government-related issuer cannot generate
sufficient earnings from foreign trade to service its external debt, it may need
to depend on continuing loans and aid from foreign governments, commercial banks
and multilateral organizations, and inflows of foreign investment. The
commitment on the part of these foreign governments, multilateral organizations
and others to make such disbursements may be conditioned on the government's
implementation of economic reforms and/or economic performance and the timely
service of its obligations. Failure to implement such reforms, achieve such
levels of economic performance or repay principal or interest when due may
curtail the willingness of such third parties to lend funds, which may further
impair the issuer's ability or willingness to service its debts in a timely
manner. The cost of servicing external debt will also generally be adversely
affected by rising international interest rates because many external debt
obligations bear interest at rates which are adjusted based upon international
interest rates. The ability to service external debt will also depend on the
level of the relevant government's international currency reserves and its
access to foreign exchange. Currency devaluations may affect the ability of a
government issuer to obtain sufficient foreign exchange to service its external
debt.
As a result of the foregoing, a foreign governmental issuer may default
on its obligations. If such a default occurs, the Funds may have limited
effective legal recourse against the issuer and/or guarantor. Remedies must, in
some cases, be pursued in the courts of the defaulting party itself, and the
ability of the holder of foreign government and government-related debt
securities to obtain recourse may be subject to the political climate in the
relevant country. In addition, no assurance can be given that the holders of
commercial bank debt will not contest payments to the holders of other foreign
government and government-related debt obligations in the event of default under
their commercial bank loan agreements.
Certain Latin American countries are among the largest debtors to
commercial banks and foreign governments. Among the foreign government and
government related issuers in which the Funds may invest are certain high-yield
securities, including so-called Brady Bonds. The issuers of the foreign
government and government-related high yield securities, including Brady Bonds,
in which the Funds expect to invest have in the past experienced substantial
difficulties in servicing their external debt obligations, which have led to
defaults on certain obligations and the restructuring of certain indebtedness.
Restructuring arrangements have included, among other things, reducing and
rescheduling interest and principal payments by negotiating new or amended
credit agreements or converting outstanding principal and unpaid interest to
Brady Bonds, and obtaining new credit to finance interest payments. Holders of
certain foreign government and government-related high yield securities may be
requested to participate in the restructuring of such obligations and to extend
further loans to their issuers. There can be no assurance that the Brady Bonds
and other foreign government and
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government-related high yield securities in which the Funds may invest will not
be subject to similar defaults or restructuring arrangements which may adversely
affect the value of such investments. Furthermore, certain participants in the
secondary market for such debt may be directly involved in negotiating the terms
of these arrangements and may therefore have access to information not available
to other market participants.
Brady Bonds are debt securities issued under the framework of the Brady
Plan, an initiative announced by former U.S. Treasury Secretary Nicholas F.
Brady in 1989 as a mechanism for debtor nations to restructure their outstanding
external indebtedness (generally, commercial bank debt). In restructuring its
external debt under the Brady Plan framework, a debtor nation negotiates with
its existing bank lenders as well as multilateral institutions such as the World
Bank and the International Monetary Fund. The Brady Plan framework, as it has
developed, contemplates the exchange of commercial bank debt for new issued
bonds (Brady Bonds). The investment advisers believe that economic reforms
undertaken by countries in connection with the issuance of Brady Bonds make the
debt of countries which have issued or have announced plans to issue Brady Bonds
an attractive opportunity for investment. Investors, however, should recognize
that the Brady Plan only sets forth general guiding principles for economic
reform and debt reduction, emphasizing that solutions must be negotiated on a
case-by-case basis between debtor nations and their creditors. In addition,
Brady Bonds have been issued only recently and, accordingly, do not have a long
payment history.
Region Risks. Both of the New Europe Fund and the Latin America Fund
intend to invest a majority of its assets in a specific region of the world.
Thus, each Fund's performance will be dependent upon the economic and financial
strength and stability of the region in which it invests. Shareholders should be
aware that in many regions of the world, and in particular in regions where
emerging countries are prevalent, the economies of the countries in such regions
are interdependent. Thus, to the extent that there is economic or financial
instability in one country, the likelihood that such instability will pervade
other countries in the region is high. Consequently, an investment in either the
New Europe Fund or the Latin America Fund is likely to be more volatile than an
investment in a more geographically diverse fund.
Small Company Investment Risks. Investments in common stocks in general
are subject to market, economic and business risks that will cause their price
to fluctuate over time. The securities of companies with smaller revenues and
capitalizations in which the New Europe and Latin America Funds may invest to a
limited degree, may offer greater opportunity for capital appreciation than
larger companies, but investment in such companies presents greater risks than
securities of larger, more established companies. Historically, smaller
capitalization stocks have been more volatile in price than larger
capitalization stocks. Among the reasons for the greater price volatility of
these securities are the lower degree of liquidity in the markets for such
stocks, and the potentially greater sensitivity of such small companies to
changes in or failure of management, and in many other changes in competitive,
business, industry and economic conditions, including risks associated with
limited production, markets, management depth, or financial resources.
Risks Related to Additional Investment Techniques. 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 a Fund
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 Fund is obligated to deliver (and if a decision is made to
sell the security and make delivery of the foreign
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<PAGE>
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 Fund is obligated to
deliver.
The Funds may invest up to 30% of their respective net assets in high
yield, high risk foreign 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 to be of equivalent quality. See Investment Objectives and Strategies
and High Yield, High Risk Securities. The Funds will not purchase securities
rated lower than C by S&P or Ca by Moody's, or, if unrated, considered to be of
an equivalent quality to such ratings by the Manager. See Appendix A - 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.
* * *
For additional information about the Fund's investment policies and
certain risks associated with investments in certain types of securities
including purchasing put and call options, futures contracts and options
thereon, and options on foreign currencies, see Other Investment Policies and
Risk Considerations in this Prospectus. Part B provides more information
concerning the Funds investment policies, restrictions and risk factors.
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CLASSES OF SHARES
The Distributor serves as the national distributor for the Funds.
Shares of the Class may be purchased directly by contacting a Fund or its agent
or through authorized investment dealers. All purchases of shares of the Class
are at net asset value. There is no front-end or contingent deferred sales
charge.
Investment instructions given on behalf of participants in an
employer-sponsored retirement plan are made in accordance with directions
provided by the employer. Employees considering purchasing shares of the Class
as part of their retirement program should contact their employer for details.
Shares of the Class are available for purchase only by: (a) retirement
plans introduced by persons not associated with brokers or dealers that are
primarily engaged in the retail securities business and rollover individual
retirement accounts from such plans; (b) tax-exempt employee benefit plans of
the Manager or its affiliates and securities dealer firms with a selling
agreement with the Distributor; (c) institutional advisory accounts of the
Manager or its affiliates and those having client relationships with Delaware
Investment Advisers, a division of the Manager, or its affiliates and their
corporate sponsors, as well as subsidiaries and related employee benefit plans
and rollover individual retirement accounts from such institutional advisory
accounts; (d) a bank, trust company and similar financial institution investing
for its own account or for the account of its trust customers for whom such
financial institution is exercising investment discretion in purchasing shares
of the Class, except where the investment is part of a program that requires
payment to the financial institution of a Rule 12b-1 Plan fee; 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.
Class A, Class B and Class C Shares of the Funds
In addition to offering the Class of the Funds, each Fund also offers
Class A, Class B and Class C shares, which are described in a separate
prospectus. Shares of the Funds may be purchased through authorized investment
dealers or directly by contacting a Fund or its Distributor. Class A Shares,
Class B Shares and Class C Shares may have different sales charges and other
expenses which may affect performance. To obtain a prospectus relating to such
classes, contact the Distributor by writing to the address or by calling the
phone number listed on page 1 of this Prospectus.
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HOW TO BUY SHARES
The Funds make it easy to invest by mail, by wire, by exchange and by
arrangement with your investment dealer. In all instances, investors must
qualify to purchase shares of the Class.
Investing Directly 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 Fund and Class
selected to Delaware Investments at 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 Fund and Class selected. Your check
should be identified with your name(s) and account number.
Investing Directly by Wire
You may purchase shares by requesting your bank to transmit funds by
wire to First Union National Bank, ABA #________, account number ________
(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 Client
Services Department at 800-828-5052 to get an account number. If you do not call
first, it may delay processing your investment. 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 Fund and Class
selected, to Delaware Investments at 1818 Market Street, Philadelphia, PA 19103.
2. Subsequent Purchases--You may make additional investments anytime by
wiring funds to First Union National Bank, as described above. You must advise
your Client Services Representative by telephone at 800-828-5052 prior to
sending your wire.
Investing by Exchange
If you have an investment in another mutual fund in Delaware
Investments and you qualify to purchase shares of the Class, you may write and
authorize an exchange of part or all of your investment into shares of any of
the Funds of the same Class of shares. Accordingly, Class B Shares and Class C
Shares of the Funds and any other funds in Delaware Investments offering such a
class of shares may not be exchanged into the Class. If you wish to open an
account by exchange, call your Client Services Representative at 800-828-5052
for more information. See Redemption and Exchange for more complete information
concerning your exchange privileges.
Investing through Your Investment Dealer
You can make a purchase of shares of the Fund through most investment
dealers who, as part of the service they provide, must transmit orders promptly.
They may charge for this service.
Purchase Price and Effective Date
The purchase price (net asset value) is determined as of the close of
regular trading on the New York Stock Exchange (ordinarily, 4 p.m., Eastern
time) on days when the Exchange is open.
The effective date of a purchase made through an investment dealer is
the date the order is received by a Fund, its agent or designee. The effective
date of a direct purchase is the day your wire, electronic transfer or
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check is received, unless it is received after the time the share price is
determined, as noted above. Purchase orders received after such time will be
effective the next business day.
The Conditions of Your Purchase
The Funds reserve 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. Each 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 Delaware Investments. Each 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.
Each Fund also reserves the right, upon 60 days' written notice, to
involuntarily redeem accounts that remain under $250 as a result of redemptions.
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REDEMPTION AND EXCHANGE
Redemption and exchange requests made on behalf of participants in an
employer-sponsored retirement plan are made in accordance with directions
provided by the employer. Employees should therefore contact their employer for
details.
Your shares will be redeemed or exchanged based on the net asset value
next determined after the Fund receives your request in good order. For example,
redemption or exchange requests received in good order after the time the net
asset value of shares is determined will be processed on the next business day.
See Purchase Price and Effective Date under How to Buy Shares. Except as
otherwise 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. With regard to exchanges, you must
also provide the name of the fund in which you want to invest the proceeds.
Exchange instructions and redemption requests must be signed by the record
owner(s) exactly as the shares are registered. You may request a redemption or
an exchange by calling a Fund at 800-828-5052. Redemption proceeds will be
distributed promptly, as described below, but not later than seven days after
receipt of a redemption request.
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 Fund will process written and telephone redemption requests to the
extent that the purchase orders for the shares being redeemed have already
settled. A Fund will honor redemption requests as to shares for which a check
was tendered as payment, but the Fund will not mail or wire the proceeds until
it is reasonably satisfied that the check has cleared, which may take up to 15
days from the purchase date. You can avoid this potential delay if you purchase
shares by wiring Federal Funds. Each 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.
Shares of the Class may be exchanged into any other Delaware Group
mutual fund, provided: (1) the investment satisfies the eligibility and other
requirements set forth in the prospectus of the fund being acquired, including
the payment of any applicable front-end sales charge; and (2) the shares of the
fund being acquired are in a state where that fund is registered. If exchanges
are made into other shares that are eligible for purchase only by those
permitted to purchase shares of the Class, such shares will be exchanged at net
asset value. Shares of the Class may not be exchanged into Class B Shares or
Class C Shares of other funds offered by Delaware Investments. Each Fund may
suspend, terminate or amend the terms of the exchange privilege upon 60 days'
written notice to shareholders.
Various redemption and exchange methods are outlined below. No fee is
charged by a Fund or the Distributor for redeeming or exchanging your shares,
although in the case of an exchange, a sales charge may apply. You may also 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 a Fund or its agent.
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Written Redemption and Exchange
You can write to Fund at 1818 Market Street, Philadelphia, PA 19103 to
redeem some or all of your shares or to request an exchange of any or all of
your shares into another mutual fund offered by Delaware Investments, subject to
the same conditions and limitations as other exchanges noted above. 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, a Fund requires a signature by
all owners of the account and may require a signature guarantee. A signature
guarantee can be obtained from a commercial bank, a trust company or a member of
a Securities Transfer Association Medallion Program ("STAMP"). A signature
guarantee cannot be provided by a notary public. A signature guarantee is
designed to protect the shareholders, the Fund and its agents from fraud. Each
Fund reserves the right to reject a signature guarantee supplied by an eligible
institution based on its creditworthiness. Each Fund may require further
documentation from corporations, executors, retirement plans, administrators,
trustees or guardians.
Payment is normally mailed the next business day after receipt of your
redemption request. Certificates are issued for shares only if you submit a
specific request. If your shares are in certificate form, the certificate(s)
must accompany your request and also be in good order.
You also may submit your written request for redemption or exchange by
facsimile transmission at the following number: 215-255-8864.
Telephone Redemption and Exchange
To get the added convenience of the telephone redemption and exchange
methods, you must have the Transfer Agent hold your shares (without charge) for
you. If you choose to have your shares in certificate form, you may redeem or
exchange only by written request and you must return your certificates.
The Telephone Redemption--Check to Your Address of Record service and
the Telephone Exchange service, both of which are described below, are
automatically provided unless you notify the Fund in writing that you do not
wish to have such services available with respect to your account. The Funds
reserve the right to modify, terminate or suspend these procedures upon 60 days'
written notice to shareholders. It may be difficult to reach a Fund by telephone
during periods when market or economic conditions lead to an unusually large
volume of telephone requests.
Neither the Funds nor their Transfer Agent is responsible for any
shareholder loss incurred in acting upon written or telephone instructions for
redemption or exchange of Fund shares which are reasonably believed to be
genuine. With respect to such telephone transactions, each Fund will follow
reasonable procedures to confirm that instructions communicated by telephone are
genuine (including verification of a form of personal identification) if it does
not, a Fund or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent transactions. 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
You or your investment dealer of record can have redemption proceeds of
$50,000 or less mailed to you at your record address. Checks will be payable to
the shareholder(s) of record. Payment is normally mailed the next business day
after receipt of the redemption request.
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Telephone Redemption--Proceeds to Your Bank
Redemption proceeds of $1,000 or more can be transferred to your
predesignated bank account by wire or by check. You should authorize this
service when you open your account. If you change your predesignated bank
account, you must submit a written authorization and you may need to have your
signature guaranteed. For your protection, your authorization must be on file.
If you request a wire, your funds will normally be sent the next business day.
If you ask for a check, it will normally be mailed the next business day after
receipt of your redemption request to your predesignated bank account. There are
no fees for this redemption method, but the mail time may delay getting funds
into your bank account. Simply call your Client Services Representative prior to
the time the net asset value is determined, as noted above.
Telephone Exchange
You or your investment dealer of record can exchange shares into any
fund offered by Delaware Investments under the same registration. As with the
written exchange service, telephone exchanges are subject to the same conditions
and limitations as other exchanges noted above. Telephone exchanges may be
subject to limitations as to amounts or frequency.
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DIVIDENDS AND DISTRIBUTIONS
Global Funds, Inc. declares a dividend on each Fund to all shareholders
of record of the Class of the Fund at the time the offering price of shares is
determined. See Purchase Price and Effective Date under How to Buy Shares. Thus,
when redeeming shares, dividends continue to be credited up to and including the
date of redemption.
Each Fund will normally declare and make payments from net investment
income on an annual basis. Payments from net realized securities profits of a
Fund, if any, will be made in the quarter following the close of the fiscal
year. Both dividends and distributions, if any, are automatically reinvested in
your account at net asset value.
In addition to the dividends from net investment income and
distributions from realized securities profits that a Fund may declare and make,
as noted above, in order to satisfy certain distribution requirements of the Tax
Reform Act of 1986, each Fund 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 Fund and received by
shareholders on the earlier of the date paid or December 31 of the prior year.
Each class of a Fund will share proportionately in the investment
income and expenses of the Fund, except that the Class will not incur any
distribution fee under Global Funds, Inc.'s 12b-1 Plans which apply to Class A
Shares, Class B Shares and Class C Shares.
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TAXES
The tax discussion set forth below 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 Fund.
On August 5, 1997, President Clinton signed into law the Taxpayer
Relief Act of 1997 (the "1997 Act"). This new law makes sweeping changes in the
Internal Revenue Code (the "Code"). Because many of these changes are complex,
and only indirectly affect the Fund and its distributions to you, they are
discussed in Part B. Changes in the treatment of capital gains, however, are
discussed in this section.
Each Fund intends to qualify as a regulated investment company under
Subchapter M of the Code. As such, the Fund will not be subject to federal
income tax, or to any excise tax, to the extent its earnings are distributed as
provided in the Code and it satisfies certain other requirements relating to the
sources of its income and diversification of its assets.
Each Fund 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 those investors who are subject
to income taxes as ordinary income, whether received in cash or in additional
shares. It is expected that either none or only a nominal portion of a Fund's
dividends will be eligible for the dividends-received deductions for
corporations. The portion of dividends paid by a Fund that so qualifies will be
designated each year in a notice from the Fund to the Fund's shareholders.
Distributions paid by a Fund 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 Fund. No Fund seeks to realize any
particular amount of capital gains during a year; rather, realized gains are a
by-product of Fund 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 Fund 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.
The Treatment of Capital Gain Distributions under the Taxpayer Relief
Act of 1997
The 1997 Act creates a category of long-term capital gain for
individuals that will be taxed at new lower tax rates. For investors who are in
the 28% or higher federal income tax brackets, these gains will be taxed at a
maximum rate of 20%. For investors who are in the 15% federal income tax
bracket, these gains will be taxed at a maximum rate of 10%. Capital gain
distributions will qualify for these new maximum tax rates, depending on when a
Fund's securities were sold and how long they were held by the Fund before they
were sold. The holding periods for which the new rates apply were revised by the
Internal Revenue Service Restructuring and Reform Act of 1998. Investors who
want more information on holding periods and other qualifying rules relating to
these new rates should review the expanded discussion in Part B, or should
contact their own tax advisers.
Global Funds, Inc. will advise you in its annual information reporting
at calendar year end of the amount of its capital gain distributions which will
qualify for these maximum federal tax rates.
Although dividends generally will be treated as distributed when paid,
dividends which are declared in October, November or December to shareholders of
record on a specified date in one of those months, but which, for operational
reasons, may not be paid to the shareholder until the following January, will be
treated for
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tax purposes as if paid by the Fund and received by the shareholder on December
31 of the calendar year in which they are declared.
The sale of shares of a Fund 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
one fund and another Delaware Investments fund.
Each Fund 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 Fund at the end of its fiscal year is invested in securities of foreign
corporations, the Fund may elect to pass-through to its shareholders a pro-rata
share of foreign income taxes paid by the Fund. 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
Fund), 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
the Fund 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.
In addition to the federal taxes described above, shareholders may or
may not be subject to various state and local taxes. For example, distributions
of interest income and capital gains realized from certain types of U.S.
government securities may be exempt from state personal income taxes. Because
investors' state and local taxes may be different than the federal taxes
described above, investors should consult their own tax advisers.
Each year, Global Funds, Inc. will mail to you information on the tax
status of each Fund's dividends and distributions. Shareholders will also
receive each year information as to the portion of dividend income, if any, that
is derived from U.S. government securities that are exempt from state income
tax. Of course, shareholders who are not subject to tax on their income would
not be required to pay tax on amounts distributed to them by a Fund.
Global Funds, Inc. 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 Investment Application your proper
Taxpayer Identification Number and by certifying that you are not subject to
backup withholding.
See Accounting and Tax Issues and Distributions in Part B for
additional information on tax matters relating to each Fund and its
shareholders.
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CALCULATION OF NET ASSET VALUE PER SHARE
The purchase and redemption price of Class shares of each Fund is the
net asset value ("NAV") per share of Class shares next computed after the order
is received. The NAV is computed as of the close of regular trading on the New
York Stock Exchange (ordinarily, 4 p.m., Eastern time) on days when the Exchange
is open.
The NAV per share is computed by adding the value of all securities and
other assets in a Fund's portfolio, deducting any liabilities of the Fund
(expenses and fees are accrued daily) and dividing by the number of Fund 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 Global Funds, Inc.'s Board
of Directors. Short-term investments having a maturity of less than 60 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 Global Funds, Inc.'s Board of Directors.
Each Fund's 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 U.S. holidays or Saturdays). As a result, the net
asset value of each Fund may be significantly affected by such trading on days
when shareholders have no access to the Fund.
The net asset values of all outstanding shares of each class of each
Fund will be computed on a pro-rata basis for each outstanding share based on
the proportionate participation in the Fund represented by the value of shares
of that class. All income earned and expenses incurred by a Fund will be borne
on a pro-rata basis by each outstanding share of a class, based on each class'
percentage in the Fund represented by the value of shares of such classes,
except that the Class of each Fund will not incur any of the expenses under
Global Funds, Inc.'s 12b-1 Plans related to each Fund and Class A Shares, Class
B Shares and Class C Shares of each Fund 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 each Fund will vary.
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MANAGEMENT OF THE FUNDS
Directors
The business and affairs of Global Funds, Inc. are managed under the
direction of its Board of Directors. Part B contains additional information
regarding Global Funds, Inc.'s directors and officers.
Investment Manager
The Manager furnishes investment management services to each Fund. The
Manager has offices located at 80 Cheapside, Third Floor, London, England EC2V
6EE.
Delaware Management Company ("Delaware") and its predecessors have been
managing the funds in Delaware Investments since 1938. On November 30, 1997,
Delaware and its affiliates within the Delaware Group, including the Manager,
were managing in the aggregate more than $39 billion in assets in the various
institutional or separately managed (approximately $23,274,532,000) and
investment company (approximately $16,181,491,000) accounts.
Delaware is a series of Delaware Management Business Trust. Delaware
changed its form of organization from a corporation to a business trust on March
1, 1998. Delaware is an indirect, wholly owned subsidiary of Delaware Management
Holdings, Inc. ("DMH"). The Manager 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, Delaware and the Manager are now indirect, wholly owned subsidiaries, and
subject to the ultimate control, of Lincoln National. Lincoln National, with
headquarters in Fort Wayne, Indiana, is a diversified organization with
operations in many aspects of the financial services industry, including
insurance and investment management. The Manager has entered into an Investment
Management Agreement with Global Funds, Inc. on behalf of the Funds.
The Manager manages each Fund's investments and for its services, the
Manager is entitled to an annual fee equal to 1.25% of the average daily net
assets of each Fund. The directors of Global Funds, Inc. annually review the
fees paid to the Manager.
The Manager has elected voluntarily to waive that portion, if any, of
the annual management fees payable by the New Europe and Latin America Funds and
to pay expenses of each Fund to the extent necessary to ensure that the Total
Operating Expenses (exclusive of taxes, interest, brokerage commissions and
extraordinary expenses) of Class A Shares, Class B Shares and Class C Shares of
each Fund do not exceed 1.25% through June 30, 1999.
The investment management fees paid to the Manager, while higher than
the advisory fees paid by other mutual funds in general, are comparable to fees
paid by other mutual funds with similar objectives and policies.
Messrs. Nigel May, Richard Ginty and Joshua Brooks have primary
responsibility for making day-to-day investment decisions for New Europe Fund.
Mr. May is a graduate of Sidney Sussex College, Cambridge and joined Delaware
International in 1991, assuming portfolio management responsibilities and
sharing analytical responsibilities for continental Europe. Prior to joining
Delaware International, he spent five years with Hill Samuel Investment Advisers
Ltd.
Mr. Ginty, a graduate of Sheffield University, joined Delaware
International in 1992, where his primary research focus is the European equity
markets. Prior to joining Delaware International, his business experience was
with Kleinwort Benson Securities Limited, and prior to that time, with Fiduciary
Trust International.
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Mr. Brooks is a graduate of Yale University and has undertaken graduate
studies at The London Business School. Having joined Delaware Management Company
in 1991, Mr. Brooks first worked in equity market analysis and as a Philadelphia
liaison with Delaware International and thereafter joined Delaware
International's emerging markets team in London.
Clive A. Gillmore, as well as Robert Akester and Mr. Brooks have
primary responsibility for making day-to-day investment decisions for Latin
America Fund. A graduate of the University of Warwick and having begun his
career at Legal and General Investment Management, Mr. Gillmore joined Delaware
Investments in 1990 after eight years of investment experience. His most recent
position prior to joining the Delaware Investments 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.
Mr. Akester, a graduate of University College, London, recently joined
Delaware International after 26 years of investment experience. His most recent
position prior to joining Delaware International was as Director of Hill Samuel
Investment Advisers Ltd. where he had responsibility for significant overseas
clients and Far Eastern Markets. Mr. Akester is an Associate of the Institute of
Actuaries.
Portfolio Trading Practices
The Funds normally will not invest for short-term trading purposes.
However, a Fund 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 Fund and may affect taxes payable by such Fund's shareholders to the extent
that net capital gains are realized. Given each Fund's investment objective, it
is anticipated that the portfolio turnover rate of each Fund will not exceed
100%.
The Manager uses its best efforts to obtain the best available price
and most favorable execution for portfolio transactions. Orders may be placed
with brokers or dealers who provide brokerage and research services to the
Manager or their advisory clients. These services may be used by the Manager in
servicing any of its accounts. Subject to best price and execution, the Manager
may consider a broker/dealer's sales of shares of funds offered by Delaware
Investments in placing portfolio orders and may place orders with broker/dealers
that have agreed to defray certain expenses of such funds, such as custodian
fees.
Performance Information
From time to time, the Funds may quote total return performance of this
Class 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. Each
presentation will include the average annual total return for one-year,
five-year and ten-year, or life-of-fund periods, as applicable. The Funds may
also advertise aggregate and average total return information concerning the
Class over additional periods of time.
Because securities prices fluctuate, investment results of the Class
will fluctuate over time. Past performance is not considered a guarantee of
future results.
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 dividends. You
should examine statements and confirmations immediately and promptly report any
discrepancy by calling your Client Services Representative.
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Financial Information about each Fund
Each fiscal year, you will receive an audited annual report and an
unaudited semi-annual report. These reports provide detailed information about
each Fund's investments and performance. Global Funds, Inc.'s fiscal year ends
on November 30.
Distribution and Service
The Distributor, Delaware Distributors, L.P., serves as the national
distributor for the Fund's shares under a Distribution Agreement with Global
Funds, Inc. dated as of December __, 1998.
The Transfer Agent, Delaware Service Company, Inc., serves as the
shareholder servicing, dividend disbursing and transfer agent for each Fund
under an amended and restated agreement dated December __, 1998. The Transfer
Agent also provides accounting services to each Fund pursuant to the terms of a
separate Fund Accounting Agreement. Certain recordkeeping services and other
shareholder services that otherwise would be performed by the Transfer Agent may
be performed by certain other entities and the Transfer Agent may elect to enter
into an agreement to pay such other entities for those services. In addition,
participant account maintenance fees may be assessed for certain recordkeeping
services provided as part of retirement plan and administration service
packages. These fees are based on the number of participants in the plan and the
various services selected. Fees will be quoted upon request and are subject to
change.
The directors of Global Funds, Inc. annually review the fees paid to
the Distributor and the Transfer Agent. The Distributor and the Transfer Agent
are indirect, wholly owned subsidiaries of DMH.
* * *
As with other mutual funds, financial and business organizations and
individuals around the world, each Fund could be adversely affected if the
computer systems used by its service providers do not properly process and
calculate date-related information from and after January 1, 2000. This is
commonly known as the "Year 2000 Problem." Global Funds, Inc. is taking steps to
obtain satisfactory assurances that the Funds' major service providers are
taking steps reasonably designed to address the Year 2000 Problem with respect
to the computer systems that such service providers use. There can be no
assurances that these steps will be sufficient to avoid any adverse impact on
the business of the Funds.
Several European countries are participating in the European Economic
and Monetary Union, which will establish a common European currency for
participating countries. This currency will commonly be known as the "Euro." It
is anticipated that each such participating country will replace its existing
currency with the Euro on January 1, 1999. Additional European countries may
elect to participate after that date. If any of the Funds is invested in
securities of participating countries it could be adversely affected if the
computer systems used by its major service providers are not properly prepared
to handle the implementation of this single currency or the adoption of the Euro
by additional countries in the future. Global Funds, Inc. is taking steps to
obtain satisfactory assurances that the major service providers of each of the
Funds are taking steps reasonably designed to address these matters with respect
to the computer systems that such service providers use. There can be no
assurances that these steps will be sufficient to avoid any adverse impact on
the business of the Funds.
Expenses
Each Fund is responsible for all of its own expenses other than those
borne by the Manager under the Investment Management Agreement and those borne
by the Distributor under the Distribution Agreement. Each Fund's expenses
include its proportionate share of rent and certain other administrative
expenses; the investment
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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.
Shares
Global Funds, Inc. is an open-end management investment company.
Commonly known as a mutual fund, Global Funds, Inc. was organized as a Maryland
corporation on May 30, 1991. Global Funds, Inc. currently offers eight series of
shares - International Equity Series, International Small Cap Series, Global
Bond Series, Global Assets Series, Emerging Markets Series, Global Equity
Series, New Europe Series and Latin America Series. Each Fund's shares 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. Each fund will vote separately on any matter
which affects only that fund. Shares of each fund have a priority over shares of
any other fund of Global Funds, Inc. in the assets and income of that fund.
All shares have noncumulative voting rights which means that the
holders of more than 50% of Global Funds, Inc.'s shares voting for the election
of directors can elect 100% of the directors if they choose to do so. Under
Maryland law, Global Funds, Inc. 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.
In addition to Class shares, each Fund also offers Class A, Class B and
Class C shares. Shares of each Class represent proportionate interests in the
assets of each Fund and have the same voting and other rights and preferences as
the other classes of the Fund, except that shares of the Classes are not subject
to, and may not vote on matters affecting, the Distribution Plans under Rule
12b-1 relating to Class A Shares, Class B Shares and Class C Shares.
The Lincoln National Life Insurance Company ("LNLIC") is expected to
make the initial investment in the Fund. As a result, LNLIC could own up to 100%
of the outstanding shares of the Fund. Subject to certain limited exceptions,
there are no limitations on LNLIC's ability to redeem its shares of the Fund and
it may elect to do so at any time.
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OTHER INVESTMENT POLICIES AND RISK CONSIDERATIONS
Foreign Currency Transactions
Although each 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 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 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 Funds will convert currency on a spot basis from time
to time, and investors should be aware of the costs of currency conversion.
Each Fund 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, each Fund 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, a Fund 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 Fund's securities
denominated in such foreign currency.
The Funds will not enter into forward contracts or maintain a net
exposure to such contracts where the consummation of the contracts would
obligate the Funds to deliver an amount of foreign currency in excess of the
value of a Fund's securities or other assets denominated in that currency.
At the maturity of a forward contract, a Fund 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 Fund may realize a gains or losses from currency
transactions.
Each Fund 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 Fund and against increases in the U.S. dollar cost of
such securities to be acquired. Call options on foreign currency written by a
Fund will be covered, which means that the Fund will own the underlying foreign
currency. With respect to put options on foreign currency written by a Fund, the
Fund 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 Fund will be required to pay upon exercise of
the put.
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 Fund could be required to purchase or sell foreign
currencies at disadvantageous exchange rates, thereby incurring losses. The
purchase of an option on
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foreign currency may constitute an effective hedge against fluctuations in
exchange rates, although, in the event of rate movements adverse to a Fund's
position, the Fund may forfeit the entire amount of the premium plus related
transaction costs. See Special Risk Considerations.
Depositary Receipts
Each Fund may invest in sponsored and unsponsored American Depositary
Receipts ("ADRs"), European Depositary Receipts ("EDRs") and Global Depositary
Receipts ("GDRs") that are actively traded in the United States. ADRs are
receipts typically issued by a U.S. bank or trust company which evidence
ownership of underlying securities issued by a foreign corporation. EDRs and
GDRs are receipts issued by non-U.S. Banks or trust companies and foreign
branches of U.S. banks that evidence ownership of the underlying foreign or U.S.
securities. "Sponsored" ADRs, EDRs or GDRs are issued jointly by the issuer of
the underlying security and a Depositary, and "unsponsored" ADRs, EDRs or GDRs
are issued without the participation of the issuer of the deposited security.
Holders of unsponsored ADRs, EDRs or GDRs generally bear all the costs of such
facilities and the Depositary of an unsponsored ADR, EDR or GDR facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited security or to pass through voting
rights to the holders of such receipts in respect of the deposited securities.
Therefore, there may not be a correlation between information concerning the
issuer of the security and the market value of an unsponsored ADR, EDR or GDR.
ADRs may be listed on a national securities exchange or may be traded in the
over-the-counter market. EDRs and GDRs traded in the over-the-counter market
which do not have an active or substantial secondary market will be considered
illiquid and therefore will be subject to a Fund's limitation with respect to
such securities. ADR prices are denominated in U.S. dollars although the
underlying securities are denominated in a foreign currency. Investments in
ADRs, EDRs and GDRs involve risks similar to those accompanying direct
investments in foreign securities.
Rule 144A Securities
While maintaining oversight, the Board of Directors of Global Funds,
Inc. 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
Fund's 15% 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
Fund's holdings of illiquid securities exceed the Fund's 15% limitation on
investments in such securities, the Manager will determine what action to take
to ensure that the Fund continues to adhere to its respective limitation.
Portfolio Loan Transactions
Each Fund may loan up to 25% of its assets to qualified broker/dealers
or institutional investors for their use relating to short sales or other
security transactions.
The major risk to which a Fund 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, and the borrower would fail to return the borrowed security.
Therefore, each Fund 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
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would justify the risk. In addition, a Fund will require borrowers to deliver
collateral to the Fund before lending securities. Creditworthiness will be
monitored on an ongoing basis by the Manager.
Investment Company Securities
Any investments that a Fund makes in either closed-end or open-end
investment companies will be limited by the 1940 Act, and would involve an
indirect payment of a portion of the expenses, including advisory fees, of such
other investment companies. Under the 1940 Act's limitations, a Fund may not (1)
own more than 3% of the voting stock of another investment company; (2) invest
more than 5% of the Fund's total assets in the shares of any one investment
company; nor (3) invest more than 10% of the Fund's total assets in shares of
other investment companies. These percentage limitations also apply to a Fund's
investments in unregistered investment companies.
Repurchase Agreements
Each Fund also may use repurchase agreements that are at least 102%
collateralized by securities in which the Fund can invest directly, including
securities issued or guaranteed by the U.S. government or its agencies or
instrumentalities. Repurchase agreements help a Fund to invest cash on a
temporary basis. Each Fund may invest cash balances in joint repurchase
agreements with other Delaware Investments funds. Under a repurchase agreement,
a Fund acquires ownership and possession of a security, and the seller agrees to
buy the security back at a specified time and higher price. Repurchase
agreements involve the risks of loss if a seller defaults on its obligations
under the agreements. If the seller is unable to repurchase the security, a Fund
could experience delays in liquidating the securities. To minimize this
possibility, the Manager, pursuant to direction from the Global Funds, Inc.'s
Board of Directors, considers the creditworthiness of banks and dealers when
entering into repurchase agreements.
Borrowings
Each Fund may borrow money as a temporary measure for extraordinary
purposes or to facilitate redemptions. A Fund will not borrow money in excess of
one-third of the value of its net assets. Each Fund 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 a Fund's
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 Fund 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 Fund 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 Fund has
an outstanding borrowing.
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 Fund may purchase call options on foreign or U.S.
securities and indices and enter into related closing transactions. Each Fund
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. Each Fund 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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<PAGE>
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 Fund
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 Fund offset put options or call
options prior to exercise or expiration. If a Fund cannot effect closing
transactions, it may have to hold a security it would otherwise sell or deliver
a security it might want to hold.
In purchasing put and call options, the premium paid by a Fund plus any
transaction costs will reduce any benefit realized by such Fund upon exercise of
the option.
Each Fund may use both Exchange-traded and over-the-counter options.
Certain over-the-counter options may be illiquid. Each Fund will only invest in
such options to the extent consistent with its 15% limitation on investment in
illiquid securities. The Funds will comply with U.S. Securities and Exchange
Commission asset segregation and coverage requirements when engaging in these
types of transactions.
Futures Contracts and Options on Futures Contracts
The principal purpose of the purchase or sale of futures contracts for
a Fund is to protect the Fund against the fluctuations in interest or exchange
rates which otherwise might adversely affect the value of such Fund's portfolio
securities or adversely affect the prices of securities which the Fund intends
to purchase at a later date without actually buying or selling such securities.
Each Fund 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 the Fund 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 Fund
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. To the extent that a Fund invests in futures contracts
and options thereon for other than bona fide hedging purposes, the Fund will not
enter into such transactions if, immediately thereafter, the sum of the amount
of initial margin deposits and premiums paid for open futures options would
exceed 5% of such Fund's total assets, after taking into account unrealized
profits and unrealized losses on such contracts it has entered into; provided,
however, that, in the case of an option that is in-the-money at the time of
purchase, the in-the-money amount may be excluded in calculating the 5%.
Each Fund 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 Fund enters into a futures transaction, it must
deliver to the futures commission merchant selected by the Fund an amount
referred to as "initial margin." This amount is maintained by the futures
commission merchant directly or on its behalf in an account at the Custodian
Bank. Thereafter, a "variation margin" may be paid by the Fund to, or drawn by
the
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<PAGE>
Fund 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.
To the extent that interest or exchange rates or securities prices move
in an unexpected direction, a Fund may not achieve the anticipated benefits of
investing in futures contracts and options thereon, or may realize a loss. To
the extent that a Fund 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
Fund from closing out its positions relating to futures.
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<PAGE>
APPENDIX A--RATINGS
General Rating Information
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 condition; 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.
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<PAGE>
For more information contact Delaware
Investments at 800-828-5052. NEW EUROPE FUND
LATIN AMERICA FUND
_______________________________
INSTITUTIONAL CLASS
_______________________________
INVESTMENT MANAGER
Delaware International Advisers Ltd.
80 Cheapside
Third Floor
London, England EC2V 6EE
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,
ACCOUNTING SERVICES DECEMBER __, 1998
AND TRANSFER AGENT
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
One Commerce Square
Philadelphia, PA 19103
INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103
CUSTODIAN DELAWARE
The Chase Manhattan Bank INVESTMENTS
4 Chase Metrotech Center -----------
Brooklyn, NY 11245
_______________________________
<PAGE>
(SAI-DGG&I/PART B)
________________________________________________________________________________
PART B--STATEMENT OF ADDITIONAL INFORMATION
DECEMBER __, 1998
________________________________________________________________________________
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
NEW EUROPE FUND
LATIN AMERICA FUND
________________________________________________________________________________
1818 Market Street
Philadelphia, PA 19103
________________________________________________________________________________
For more information about Institutional Classes: 800-828-5052
For Prospectus and Performance of Class A Shares, Class B Shares and
Class C Shares: Nationwide 800-523-4640
Information on Existing Accounts of Class A Shares, Class B Shares and
Class C Shares: (SHAREHOLDERS ONLY) Nationwide 800-523-1918
Dealer Services: (BROKER/DEALERS ONLY) Nationwide 800-362-7500
________________________________________________________________________________
TABLE OF CONTENTS
________________________________________________________________________________
Cover Page
________________________________________________________________________________
Investment Policies and Portfolio Techniques
________________________________________________________________________________
Accounting and Tax Issues
________________________________________________________________________________
Performance Information
________________________________________________________________________________
Trading Practices and Brokerage
________________________________________________________________________________
Purchasing Shares
________________________________________________________________________________
Investment Plans
________________________________________________________________________________
Determining Offering Price and Net Asset Value
________________________________________________________________________________
Redemption and Repurchase
________________________________________________________________________________
Distributions
________________________________________________________________________________
Investment Management Agreements
________________________________________________________________________________
Officers and Directors
________________________________________________________________________________
Exchange Privilege
________________________________________________________________________________
General Information
________________________________________________________________________________
Financial Statements
________________________________________________________________________________
<PAGE>
Delaware Group Global & International Funds, Inc. ("Global Funds,
Inc.") is a professionally-managed mutual fund of the series type. This
Statement of Additional Information ("Part B" of the registration statement)
describes the New Europe Series ("New Europe Fund") and Latin America Series
("Latin America Fund") (individually, a "Fund" and collectively, the "Funds")
of Global Funds, Inc. Each Fund offers Class A Shares, Class B Shares, Class C
Shares (together the "Fund Classes"), and an Institutional Class (individually
a "Class" and collectively the "Classes"). A separate Statement of Additional
Information dated February 4, 1998, relates to Global Fund Inc.'s remaining
six series and is available by contacting the Fund's national distributor,
Delaware Distributors, L.P. at the noted address or by calling the numbers
listed above on page 1 of this Part B.
Class B Shares, Class C Shares and Institutional Class shares of each
Fund 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, absent any applicable fee waiver, annual Rule 12b-1 Plan ("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, absent any applicable fee waiver, 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 Classes of Shares in the Prospectuses for the Fund Classes. Class
C Shares are subject to a CDSC which may be imposed on redemptions made within
12 months of purchase and, absent any applicable fee waiver, annual 12b-1 Plan
expenses of up to 1%, which are assessed against the Class C Shares for the
life of the investment. Due to voluntary waivers by Delaware Distributors,
L.P. (the "Distributor"), New Europe Fund and Latin America Fund will not pay
12b-1 fees with respect to any Class until June 30, 1999.
This Part B supplements the information contained in the current
Prospectuses for the Fund Classes and the Institutional Classes dated December
__, 1998 for the Funds, as they may be amended from time to time. Part B
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. Prospectuses relating to the Fund Classes and
Prospectuses relating to the Institutional Classes may be obtained by writing
or calling your investment dealer or by contacting the Funds' national
distributor, Delaware Distributors, L.P., 1818 Market Street, Philadelphia, PA
19103.
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<PAGE>
INVESTMENT POLICIES AND PORTFOLIO TECHNIQUES
Investment Restrictions
Global Funds, Inc. has adopted the following restrictions for each
Fund (except where otherwise noted) which cannot be changed without approval
by the holders of a "majority" of the respective Fund's outstanding shares,
which is a vote by the holders of the lesser of a) 67% or more of the voting
securities present in person or by proxy at a meeting, if the holders of more
than 50% of the outstanding voting securities are present or represented by
proxy; or b) more than 50% of the outstanding voting securities. The
percentage limitations contained in the restrictions and policies set forth
herein apply at the time of purchase of securities.
Each Fund shall not:
1. Make investments that will result in the concentration (as that
term may be defined in the 1940 Act, any rule or other thereunder, or U.S.
Securities and Exchange Commission ("SEC") staff interpretation thereof) of
its investments in the securities of issuers primarily engaged in the same
industry, provided that this restriction does not limit the Fund from
investing in obligations issued or guaranteed by the U.S. government, its
agencies or instrumentalities, or in certificates of deposit.
2. Borrow money or issue senior securities, except as the 1940 Act,
any rule or order thereunder, or SEC staff interpretation thereof, may permit.
3. Underwrite the securities of other issuers, except that the Fund
may engage in transactions involving the acquisition, disposition or resale of
its portfolio securities, under circumstances where it may be considered to be
an underwriter under the Securities Act of 1933.
4. Purchase or sell real estate, unless acquired as a result of
ownership of securities or other instruments and provided that this
restriction does not prevent the Fund from investing n issuers which invest,
deal or otherwise engage in transactions in real estate or interests therein,
or investing in securities that are secured by real estate or interests
therein.
5. Purchase or sell physical commodities, unless acquired as a result
of ownership of securities or other instruments and provided that this
restriction does not prevent the Fund from engaging in transactions involving
futures contracts and options thereon or investing in securities that are
secured by physical commodities.
6. Make loans, provided that this restriction does not prevent the
Fund from purchasing debt obligations, entering into repurchase agreements,
loaning its assets to broker/dealers or institutional investors and investing
in loans, including assignments and participation interests.
In applying the Funds' fundamental policy concerning concentration
that is described above, it is a matter of non-fundamental policy that: (i)
utility companies will be divided according to their services, for example,
gas, gas transmission, electric and telephone will each be considered a
separate industry; (ii) financial service companies will be classified
according to the end users of their services, for example, automobile finance,
bank finance and diversified finance will each be considered a separate
industry; and (iii) asset backed securities will be classified according to
the underlying assets securing such securities.
In addition to the fundamental policies and investment restrictions
described above, and the various general investment policies described in the
prospectus, the New Europe Fund and Latin America Fund will be
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<PAGE>
subject to the following investment restrictions, which are considered non-
fundamental and may be changed by the Board of Directors without shareholder
approval.
1. The Fund is permitted to invest in other investment companies,
including open-end, closed-end or unregistered investment companies, either
within the percentage limits set forth in the 1940 Act, any rule or order
thereunder, or SEC staff interpretation thereof, or without regard to
percentage limits in connection with a merger, reorganization, consolidation
or other similar transaction. However, the Fund may not operate as a "fund of
funds" which invests primarily in the shares of other investment companies as
permitted by Section 12(d)(1)(F) or (G) of the 1940 Act, if its own shares are
utilized as investments by such a "fund of funds."
2. The Fund may not invest more than 15% of its net assets in
securities which it cannot sell or dispose of in the ordinary course of
business within seven days at approximately the value at which the Fund has
valued the investment.
Foreign Securities
Investors should recognize that investing in foreign issuers involves
certain considerations, including those set forth in the Funds' 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 Fund may temporarily hold uninvested reserves in bank
deposits in foreign currencies, a Fund 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 Fund permit it to enter into forward foreign
currency exchange contracts in order to hedge each Fund's 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.
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 a Fund. Payment of
such interest equalization tax, if imposed, would reduce a Fund's 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 Fund 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, as amended (the
"Code"), and the Treasury Regulations) will be integrated and treated as a
single transaction or otherwise treated consistently for
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<PAGE>
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 Fund may make or enter into will be subject to the
special currency rules described above.
Repurchase Agreements
While each Fund is permitted to do so, it normally does not invest in
repurchase agreements, except to invest cash balances.
The Delaware Investments funds have obtained an exemption from the
joint-transaction prohibitions of Section 17(d) of the 1940 Act to allow
Delaware Investments funds jointly to invest cash balances. Each Fund 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
Fund, if any, would be the difference between the repurchase price and the
market value of the security. Each Fund 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
Fund must have collateral of at least 102% of the repurchase price, including
the portion representing a Fund's yield under such agreements which is
monitored on a daily basis.
Portfolio Loan Transactions
Each Fund 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
Global Funds, Inc. 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 Fund; 3) the Fund must be able to
terminate the loan after notice, at any time; 4) the Fund 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 Fund 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 Global Funds, Inc. 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 Fund would be exposed on a portfolio loan
transaction is the risk that the borrower would go bankrupt at a time when the
value of the security goes up. Therefore, each Fund will only enter into loan
arrangements after a review of all pertinent facts by the Manager, under the
supervision of the Board of Directors, including the creditworthiness of the
borrowing broker, dealer or institution and then only if the consideration to
be received from such loans would justify the risk. Creditworthiness will be
monitored on an ongoing basis by the Manager.
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Foreign Currency Transactions
A Fund 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 Fund will account
for forward contracts by marking to market each day at daily exchange rates.
When a Fund 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 Fund's assets denominated
in such foreign currency, the Fund's Custodian Bank or subcustodian will place
cash or liquid high grade debt securities in a separate account of the Fund in
an amount not less than the value of the Fund's 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 Fund's commitments with respect to such contracts.
Options
Each Fund may purchase call options or purchase put options and will
not engage in option strategies for speculative purposes.
Each Fund 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 Fund's
ability to effectively hedge its securities. A Fund will not, however, invest
more than 15% of its assets in illiquid securities.
Purchasing Call Options--Each Fund may purchase call options to the
extent that premiums paid by the Fund do not aggregate more than 2% of the
Fund's total assets. When a Fund purchases a call option, in return for a
premium paid by a Fund to the writer of the option, the Fund 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 Fund
may alter portfolio characteristics and modify portfolio maturities without
incurring the cost associated with portfolio transactions.
A Fund 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. A
Fund 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; a Fund 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 Fund 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 a Fund 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
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acquired through the exercise of such options. Further, unless the price of the
underlying security changes sufficiently, a call option purchased by a Fund may
expire without any value to the Fund.
Purchasing Put Options--Each Fund may invest up to 2% of its total
assets in the purchase of put options. A Fund will, at all times during which
it holds a put option, own the security covered by such option.
A put option purchased by a Fund gives it the right to sell one of
its securities for an agreed price up to an agreed date. A Fund 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 Fund 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 Fund will lose the value of the premium paid. A Fund 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 Fund may sell a put option purchased on individual portfolio
securities. Additionally, a Fund may enter into closing sale transactions. A
closing sale transaction is one in which a Fund, 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.
Futures
Each Fund 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 Fund enters into a futures transaction, it must deliver to the futures
commission merchant selected by the Fund an amount referred to as "initial
margin." This amount is maintained by the futures commission merchant in an
account at the Fund's Custodian Bank. Thereafter, a "variation margin" may be
paid by a Fund to, or drawn by the Fund 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 Fund engages in futures transactions, to the
extent required by the SEC, it will maintain with its Custodian Bank, 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 a Fund with respect to such
futures contracts.
Each Fund 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 Fund 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 a Fund. If
interest rates did increase, the value of the debt securities in the portfolio
would decline, but the value of the futures contracts to a Fund would increase
at approximately the same rate, thereby keeping the net asset value of the Fund
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 Fund could take advantage of the anticipated rise in
value of debt
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securities without actually buying them until the market had stabilized. At that
time, the futures contracts could be liquidated and the Fund could then buy debt
securities on the cash market.
With respect to options on futures contracts, when a Fund 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 Fund 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 Fund will
retain the full amount of the option premium which provides a partial hedge
against any decline that may have occurred in the Fund's 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 Fund will
retain the full amount of the option premium which provides a partial hedge
against any increase in the price of securities which the Fund intends to
purchase.
If a put or call option a Fund has written is exercised, the Fund
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 Fund's 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 Fund
will purchase a put option on a futures contract to hedge the Fund's portfolio
against the risk of rising interest rates.
To the extent that interest rates move in an unexpected direction, a
Fund may not achieve the anticipated benefits of futures contracts or options
on futures contracts or may realize a loss. For example, if a Fund 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 Fund 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 Fund
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. A Fund 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 Fund 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 Fund 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
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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 Fund
may purchase put options on the foreign currency. If the value of the currency
does decline, a Fund 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 Fund 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 Fund 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 Fund 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 Fund may write options on foreign currencies for the same types of
hedging purposes. For example, where a Fund 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 Fund
could write a put option on the relevant currency which, if rates move in the
manner projected, will expire unexercised and allow a Fund 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 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 Fund 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 Fund 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 Fund intends to write covered call options on foreign
currencies. A call option written on a foreign currency by a Fund is "covered"
if the Fund 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
Fund 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
Fund 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 Fund 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 Fund will be required to pay
upon exercise of the put. The account will be maintained until the put is
exercised, has expired, or the Fund has purchased a closing put of the same
series as the one previously written.
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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 Fund 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.
As with stock options, a Fund 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 and Poor's 500 (R) Composite Stock Price Index ("S&P
500") or the New York Stock Exchange Composite Index, or a narrower market
index such as the Standard & Poor's 100 Index ("S&P 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, the New York Stock Exchange and American Stock Exchange as well as
on foreign exchanges.
A Fund's 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 Fund's portfolio securities. Since a Fund's portfolio will
not duplicate the components of an index, the correlation will not be exact.
Consequently, a Fund 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 Fund's ability effectively
to hedge its securities. A Fund will enter into an option position only if
there appears to be a liquid secondary market for such options.
A Fund 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.
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Rule 144A Securities
A Fund may invest in restricted securities, including unregistered
securities eligible for resale without registration pursuant to Rule 144A
("Rule 144A Securities") under 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 a Fund's 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 Fund has no more than 15% of its net assets in illiquid securities.
Non-Traditional Equity Securities
New Europe Fund and Latin American Fund may each invest in
convertible preferred stocks that offer enhanced yield features, such as
Preferred Equity Redemption Cumulative Stock ("PERCS"), which provide an
investor, such as the Funds, with the opportunity to earn higher dividend
income than is available on a company's common stock. A PERCS is a preferred
stock which generally features a mandatory conversion date, as well as a
capital appreciation limit which is usually expressed in terms of a stated
price. Upon the conversion date, most PERCS convert into common stock of the
issuer (PERCS are generally not convertible into cash at maturity). Under a
typical arrangement, if after a predetermined number of years the issuer's
common stock is trading at a price below that set by the capital appreciation
limit, each PERCS would convert to one share of common stock. If, however, the
issuer's common stock is trading at a price above that set by the capital
appreciation limit, the holder of the PERCS would receive less than one full
share of common stock. The amount of that fractional share of common stock
received by the PERCS holder is determined by dividing the price set by the
capital appreciation limit of the PERCS by the market price of the issuer's
common stock. PERCS can be called at any time prior to maturity, and hence do
not provide call protection. However, if called early, the issuer may pay a
call premium over the market price to the investor. This call premium declines
at a preset rate daily, up to the maturity date of the PERCS.
New Europe Fund and Latin America Fund may also invest in other
enhanced convertible securities. These include but are not limited to ACES
(Automatically Convertible Equity Securities), PEPS (Participating Equity
Preferred Stock), PRIDES (Preferred Redeemable Increased Dividend Equity
Securities), SAILS (Stock Appreciation Income Linked Securities), TECONS (Term
Convertible Notes), QICS (Quarterly Income Cumulative Securities) and DECS
(Dividend Enhanced Convertible Securities). ACES, PEPS, PRIDES, SAILS, TECONS,
QICS, and DECS all have the following features: they are company-issued
convertible preferred stock; unlike PERCS, they do not have capital
appreciation limits; they seek to provide the investor with high current
income, with some prospect of future capital appreciation; they are typically
issued with three to four-year maturities; they typically have some built-in
call protection for the first two to three years; investors have the right to
convert them into shares of common stock at a preset conversion ratio or hold
them until maturity; and upon maturity, they will automatically convert to
either cash or a specified number of shares of common stock.
Additional Risks Relating to Russian Securities
The New Europe Fund may invest to a limited degree in Russian
Securities. Investing in Russian companies involves a high degree of risk and
special considerations not typically associated with investing in the U.S.
securities markets, and should be considered highly speculative. Such risks
include: (1) delays in settling portfolio transactions and risk of loss
arising out of Russia's system of share registration and custody; (2) the risk
that it may be impossible or more difficult than in other countries to obtain
and/or enforce a judgment; (3) pervasiveness of corruption and crime in the
Russian economic system; (4) currency exchange
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rate volatility and the lack of available currency hedging instruments;
(5) higher rates of inflation (including the risk of social unrest associated
with periods of hyper-inflation); (6) controls on foreign investment and local
practices disfavoring foreign investors and limitations on repatriation of
invested capital, profits and dividends, and on the New Europe Fund's ability to
exchange local currencies for U.S. dollars; (7) the risk that the government
of Russia or other executive or legislative bodies may decide not to continue
to support the economic reform programs implemented since the dissolution of
the Soviet Union and could follow radically different political and/or
economic policies to the detriment of investors, including non-market-oriented
policies such as the support of certain industries at the expense of other
sectors or investors, or a return to the centrally planned economy that
existed prior to the dissolution of the Soviet Union; (8) the financial
condition of Russian companies, including large amounts of inter-company debt
which may create a payments crisis on a national scale; (9) dependency on
exports and the corresponding importance of international trade; (10) the risk
that the Russian tax system will not be reformed to prevent inconsistent,
retroactive and/or exorbitant taxation; and (11) possible difficulty in
identifying a purchaser of securities held by the New Europe Fund due to the
underdeveloped nature of the securities markets.
There is little historical data on Russian securities markets because
they are relatively new and a substantial proportion of securities
transactions in Russia are privately negotiated outside of stock exchanges.
Because of the recent formation of the securities markets as well as the
underdeveloped state of the banking and telecommunications systems,
settlement, clearing and registration of securities transactions are subject
to significant risks. Ownership of shares (except where shares are held
through depositories that meet the requirements of the 1940 Act) is defined
according to entries in the company's share register and normally evidenced by
extracts from the register or by formal share certificates. However, there is
no central registration system for shareholders and these services are carried
out by the companies themselves or by registrars located throughout Russia.
These registrars are not necessarily subject to effective state supervision
and it is possible for the New Europe Fund to lose its registration through
fraud, negligence or even mere oversight. While the New Europe Fund will
endeavor to ensure that its interest continues to be appropriately recorded
either itself or through a custodian or other agent inspecting the share
register and by obtaining extracts of share registers through regular
confirmations, these extracts have no legal enforceability and it is possible
that subsequent illegal amendment or other fraudulent act may deprive the New
Europe Fund of its ownership rights or improperly dilute its interests. In
addition, while applicable Russian regulations impose liability on registrars
for losses resulting from their errors, it may be difficult for the Fund to
enforce any rights it may have against the registrar or issuer of the
securities in the event of loss of share registration. Furthermore, although a
Russian public enterprise with more than 1,000 shareholders is required by law
to contract out the maintenance of its shareholder register to an independent
entity that meets certain criteria, in practice this regulation has not always
been strictly enforced. Because of this lack of independence, management of a
company may be able to exert considerable influence over who can purchase and
sell the company's shares by illegally instructing the registrar to refuse to
record transactions in the share register. This practice may prevent the New
Europe Fund from investing in the securities of certain Russian companies
deemed suitable by the Investment Manager. Further, this also could cause a
delay in the sale of Russian company securities by the Fund if a potential
purchaser is deemed unsuitable, which may expose the Fund to potential loss on
the investment.
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ACCOUNTING AND TAX ISSUES
When a Fund writes a call, or purchases a put option, an amount equal
to the premium received or paid by it is included in the Fund's 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
Fund has written expires on its stipulated expiration date, the Fund
recognizes a capital gain. If a Fund enters into a closing purchase
transaction with respect to an option which the Fund has written, the Fund
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 Fund has written is
exercised, the Fund 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 Fund for the purchase of a put option is
recorded in the Fund's 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 Fund has purchased expires on the stipulated expiration date,
the Fund 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 Fund 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 Fund 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, 60% 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 Fund has qualified, and intends to continue to qualify, as a
regulated investment company under Subchapter M of the Code. As such, a Fund
will not be subject to federal income tax, or to any excise tax, to the extent
its earnings are distributed as provided in the Code and it satisfies other
requirements relating to the sources of its income and diversification of its
assets.
In order to qualify as a regulated investment company for federal
income tax purposes, each Fund must meet certain specific requirements,
including:
(i) A Fund must maintain a diversified portfolio of securities,
wherein no security (other than U.S. government securities and securities of
other regulated investment companies) can exceed 25% of that Fund's total
assets, and, with respect to 50% of that Fund's total assets, no investment
(other than cash and cash items,
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U.S. government securities and securities of other regulated investment
companies) can exceed 5% of that Fund's total assets;
(ii) A Fund must derive at least 90% of its gross income from
dividends, interest, payments with respect to securities loans, and gains from
the sale or disposition of stock and securities or foreign currencies, or
other income derived with respect to its business of investing in such stock,
securities, or currencies;
(iii) A Fund must distribute to its shareholders at least 90% of its
investment company taxable income and net tax-exempt income for each of its
fiscal years; and
(iv) A Fund must realize less than 30% of its gross income for each
fiscal year from gains from the sale of securities and certain other assets
that have been held by the Fund for less than three months ("short-short
income"). The Taxpayer Relief Act of 1997 (the "1997 Act") repealed the 30%
short-short income test for tax years of regulated investment companies
beginning after August 5, 1997; however, this rule may have continuing effect
in some states for purposes of classifying the Fund as a regulated investment
company.
The Code requires a Fund to distribute at least 98% of its taxable
ordinary income earned during the calendar year and 98% of its capital gain
net income earned during the 12 month period ending October 31 (in addition to
amounts from the prior year that were neither distributed nor taxed to such
Fund) to shareholders by December 31 of each year in order to avoid federal
excise taxes. The Funds intend as a matter of policy to declare and pay
sufficient dividends in December or January (which are treated by shareholders
as received in December) but does not guarantee and can give no assurances
that its distributions will be sufficient to eliminate all such taxes.
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 recognized in the year that unrealized losses exceed unrealized gains.
The federal income tax rules governing the taxation of interest rate
swaps are not entirely clear and may require Global Bond Fund to treat
payments received under such arrangements as ordinary income and to amortize
such payments under certain circumstances. Global Bond Fund will limit its
activity in this regard in order to maintain its qualification as a regulated
investment company.
The 1997 Act has also added new provisions for dealing with
transactions that are generally called "Constructive Sale Transactions." Under
these rules, the Fund must recognize gain (but not loss) on any constructive
sale of an appreciated financial position in stock, a partnership interest or
certain debt instruments. The Fund will generally be treated as making a
constructive sale when it: 1) enters into a short sale on the same or
substantially identical property; 2) enters into an offsetting notional
principal contract; or 3) enters into a futures or forward contract to deliver
the same or substantially identical property. Other transactions (including
certain financial instruments called collars) will be treated as constructive
sales as provided in Treasury regulations to be published. There are also
certain exceptions that apply for transactions that are closed before the end
of the 30th day after the close of the taxable year.
Investment in Foreign Currencies and Foreign Securities--The Funds
are authorized to invest certain limited amounts in foreign securities. Such
investments, if made, will have the following additional tax consequences to
each Fund:
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Under the Code, gains or losses attributable to fluctuations in
foreign currency exchange rates which occur between the time a Fund accrues
income (including dividends), or accrues expenses which are denominated in a
foreign currency, and the time a Fund actually collects such income or pays
such expenses generally are treated as ordinary income or loss. Similarly, on
the disposition of debt securities denominated in a foreign currency and on
the disposition of certain options, futures, forward contracts, gain or loss
attributable to fluctuations in the value of foreign currency between the date
of acquisition of the security or contract and the date of its disposition are
also treated as ordinary gain or loss. These gains or losses, referred to
under the Code as "Section 988" gains or losses, may increase or decrease the
amount of a Fund's net investment company taxable income, which, in turn, will
affect the amount of income to be distributed to you by a Fund.
If a Fund's Section 988 losses exceed a Fund's other investment
company taxable income during a taxable year, a Fund generally will not be
able to make ordinary dividend distributions to you for that year, or
distributions made before the losses were realized will be recharacterized as
return of capital distributions for federal income tax purposes, rather than
as an ordinary dividend or capital gain distribution. If a distribution is
treated as a return of capital, your tax basis in your Fund shares will be
reduced by a like amount (to the extent of such basis), and any excess of the
distribution over your tax basis in your Fund shares will be treated as
capital gain to you.
The 1997 Act generally requires that foreign income be translated
into U.S. dollars at the average exchange rate for the tax year in which the
transactions are conducted. Certain exceptions apply to taxes paid more than
two years after the taxable year to which they relate. This new law may
require a Fund to track and record adjustments to foreign taxes paid on
foreign securities in which it invests. Under a Fund's current reporting
procedure, foreign security transactions are recorded generally at the time of
each transaction using the foreign currency spot rate available for the date
of each transaction. Under the new law, a Fund will be required to record at
fiscal year end (and at calendar year end for excise tax purposes) an
adjustment that reflects the difference between the spot rates recorded for
each transaction and the year-end average exchange rate for all of a Fund's
foreign securities transactions. There is a possibility that the mutual fund
industry will be given relief from this new provision, in which case no
year-end adjustments will be required.
The Funds may be subject to foreign withholding taxes on income from
certain of its foreign securities. If more than 50% of the total assets of a
Fund at the end of its fiscal year are invested in securities of foreign
corporations, a Fund may elect to pass-through to you your pro rata share of
foreign taxes paid by a Fund. If this election is made, you will be: (i)
required to include in your gross income your pro rata share of foreign source
income (including any foreign taxes paid by a Fund); and (ii) entitled to
either deduct your share of such foreign taxes in computing your taxable
income or to claim a credit for such taxes against your U.S. income tax,
subject to certain limitations under the Code. You will be informed by a Fund
at the end of each calendar year regarding the availability of any such
foreign tax credits and the amount of foreign source income (including any
foreign taxes paid by a Fund). If a Fund elects to pass-through to you the
foreign income taxes that it has paid, you will be informed at the end of the
calendar year of the amount of foreign taxes paid and foreign source income
that must be included on your federal income tax return. If a Fund invests 50%
or less of its total assets in securities of foreign corporations, it will not
be entitled to pass-through to you your pro-rata shares of foreign taxes paid
by a Fund. In this case, these taxes will be taken as a deduction by a Fund,
and the income reported to you will be the net amount after these deductions.
The 1997 Act also simplifies the procedures by which investors in funds that
invest in foreign securities can claim tax credits on their individual income
tax returns for the foreign taxes paid by a Fund. These provisions will allow
investors who pay foreign taxes of $300 or less on a single return or $600 or
less on a joint return during any year (all of which must be reported on IRS
Form 1099-DIV from a Fund to the investor) to claim a tax credit against their
U.S. federal income tax for the amount of foreign taxes paid by a Fund. This
process will allow you, if you qualify, to bypass the burdensome and
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detailed reporting requirements on the foreign tax credit schedule (Form 1116)
and report your foreign taxes paid directly on page 2 of Form 1040. You should
note that this simplified procedure will not be available until calendar year
1998.
Investment in Passive Foreign Investment Company securities--The
Funds may invest in shares of foreign corporations which may be classified
under the Code as passive foreign investment companies ("PFICs"). In general,
a foreign corporation is classified as a PFIC if at least one-half of its
assets constitute investment-type assets or 75% or more of its gross income is
investment-type income. If a Fund receives an "excess distribution" with
respect to PFIC stock, the Fund itself may be subject to U.S. federal income
tax on a portion of the distribution, whether or not the corresponding income
is distributed by a Fund to you. In general, under the PFIC rules, an excess
distribution is treated as having been realized ratably over the period during
which a Fund held the PFIC shares. A Fund itself will be subject to tax on the
portion, if any, of an excess distribution that is so allocated to prior Fund
taxable years, and an interest factor will be added to the tax, as if the tax
had been payable in such prior taxable years. In this case, you would not be
permitted to claim a credit on your own tax return for the tax paid by a Fund.
Certain distributions from a PFIC as well as gain from the sale of PFIC shares
are treated as excess distributions. Excess distributions are characterized as
ordinary income even though, absent application of the PFIC rules, certain
distribution might have been classified as capital gain. This may have the
effect of increasing Fund distributions to you that are treated as ordinary
dividends rather than long-term capital gain dividends.
A Fund may be eligible to elect alternative tax treatment with
respect to PFIC shares. Under an election that currently is available in some
circumstances, a Fund generally would be required to include in its gross
income its share of the earnings of a PFIC on a current basis, regardless of
whether distributions are received from the PFIC during such period. If this
election were made, the special rules, discussed above, relating to the
taxation of excess distributions, would not apply. In addition, the 1997 Act
provides for another election that would involve marking-to-market the Fund's
PFIC shares at the end of each taxable year (and on certain other dates as
prescribed in the Code), with the result that unrealized gains would be
treated as though they were realized. The Fund would also be allowed an
ordinary deduction for the excess, if any, of the adjusted basis of its
investment in the PFIC stock over its fair market value at the end of the
taxable year. This deduction would be limited to the amount of any net
mark-to-market gains previously included with respect to that particular PFIC
security. If a Fund were to make this second PFIC election, tax at the Fund
level under the PFIC rules would generally be eliminated.
The application of the PFIC rules may affect, among other things, the
amount of tax payable by a Fund (if any), the amounts distributable to you by
a Fund, the time at which these distributions must be made, and whether these
distributions will be classified as ordinary income or capital gain
distributions to you.
You should be aware that it is not always possible at the time shares
of a foreign corporation are acquired to ascertain that the foreign
corporation is a PFIC, and that there is always a possibility that a foreign
corporation will become a PFIC after a Fund acquires shares in that
corporation. While a Fund will generally seek to avoid investing in PFIC
shares to avoid the tax consequences detailed above, there are no guarantees
that it will do so and it reserves the right to make such investments as a
matter of its fundamental investment policy.
Most foreign exchange gains are classified as ordinary income which
will be taxable to you as such when distributed. Similarly, you should be
aware that any foreign exchange losses realized by a Fund, including any
losses realized on the sale of foreign debt securities, are generally treated
as ordinary losses for federal income tax purposes. This treatment could
increase or reduce a Fund's income available for distribution to you, and may
cause some or all of a Fund's previously distributed income to be classified
as a return of capital.
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PERFORMANCE INFORMATION
From time to time, each Fund may state its Classes' total return and
yield in advertisements and other types of literature. Any statement 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 periods, as applicable.
Each Fund may also advertise aggregate and average total return information
for its Classes over additional periods of time. In addition, each Fund may
include illustrations showing the power of compounding in advertisements and
other types of literature.
In presenting performance information for Class A Shares, the Limited
CDSC or other CDSC, applicable only to certain redemptions of those shares,
will not be deducted from any computation of total return. See the
Prospectuses for the Fund Classes for a description of the Limited CDSC or
other CDSC and the limited instances in which it applies. All references to a
CDSC in this Performance Information section will apply to Class B Shares or
Class C Shares.
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 of only Class A Shares, the maximum
front-end sales charge 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, each
Fund may present total return information that does not reflect the deduction
of the maximum front-end sales charge or any applicable CDSC.
Each Fund may also state total return performance for its Classes 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, each Fund may quote actual total return performance for its
Classes 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
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<PAGE>
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.
Performance information for the Funds is not provided because they
are new funds with no operating history.
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 Fund in the future.
From time to time, each Fund may also quote its Classes' actual
total return performance, dividend results and other performance information
in advertising and other types of literature. This information may be compared
to that of other mutual funds with similar investment objectives and to stock,
bond and other relevant indices or to rankings prepared by independent
services or other financial or industry publications that monitor the
performance of mutual funds. For example, the performance of a Fund (of Fund
Class) may be compared to data prepared by Lipper Analytical Services, Inc.,
Morningstar, Inc., or to the S&P 500 Index, the Dow Jones Industrial Average,
the Morgan Stanley Capital International (MSCI), Europe, Australia and Far
East (EAFE) Index, the MSCI Emerging Markets Free Index, or the Salomon
Brothers World Government Bond Index.
Lipper Analytical Services, Inc. maintains statistical performance
databases, as reported by a diverse universe of independently-managed mutual
funds. Morningstar, Inc. is a mutual fund rating service that rates mutual
funds on the basis of risk-adjusted performance. Rankings that compare a
Fund's performance to another fund in appropriate categories over specific
time periods also may be quoted in advertising and other types of literature.
The S&P 500 and the Dow Jones Industrial Average are industry-accepted
unmanaged indices of generally-conservative securities used for measuring
general market performance. Similarly, the MSCI EAFE Index, the MSCI Emerging
Markets Free Index, and the Salomon Brothers World Government Bond Index are
industry-accepted unmanaged indices of equity securities in developed
countries and global debt securities, respectively, 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
charges or other fees. A direct investment in an unmanaged index is not
possible.
Comparative information on the Consumer Price Index may also be
included in advertisements or other literature. The Consumer Price Index, as
prepared by the U.S. Bureau of Labor Statistics, is the most commonly used
measure of inflation. It indicates the cost fluctuations of a representative
group of consumer goods. It does not represent a return from an investment.
Each Fund may also promote its Classes' 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.
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<PAGE>
The performance of multiple indices compiled and maintained by
statistical research firms, such as Morgan Stanley, Salomon Brothers and
Lehman Brothers, may be combined to create a blended performance result for
comparative purposes. Generally, the indices selected will be representative
of the types of securities in which the Funds may invest and the assumptions
that were used in calculating the blended performance will be described.
Ibbotson Associates of Chicago, Illinois ("Ibbotson") provides
historical returns of the capital markets in the United States, including
common stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the Consumer Price Index), and
combinations of various capital markets. The performance of these capital
markets is based on the returns of different indices. The Funds may use the
performance of these capital markets in order to demonstrate general
risk-versus-reward investment scenarios. Performance comparisons may also
include the value of a hypothetical investment in any of these capital
markets. The risks associated with the security types in any capital market
may or may not correspond directly to those of the Funds. The Funds may also
compare performance to that of other compilations or indices that may be
developed and made available in the future.
The Funds may include discussions or illustrations of the potential
investment goals of a prospective investor (including materials that describe
general principles of investing, such as asset allocation, diversification,
risk tolerance, and goal setting, questionnaires designed to help create a
personal financial profile, worksheets used to project savings needs based on
assumed rates of inflation and hypothetical rates of return and action plans
offering investment alternatives), investment management techniques, policies
or investment suitability of a Fund (such as value investing, market timing,
dollar cost averaging, asset allocation, constant ratio transfer, automatic
account rebalancing, the advantages and disadvantages of investing in
tax-deferred and taxable investments or global or international investments),
economic and political conditions, the relationship between sectors of the
economy and the economy as a whole, the effects of inflation and historical
performance of various asset classes, including but not limited to, stocks,
bonds and Treasury bills. From time to time advertisements, sales literature,
communications to shareholders or other materials may summarize the substance
of information contained in shareholder reports (including the investment
composition of a Fund), as well as the views as to current market, economic,
trade and interest rate trends, legislative, regulatory and monetary
developments, investment strategies and related matters believed to be of
relevance to a Fund. In addition, selected indices may be used to illustrate
historic performance of selected asset classes. The Funds may also include in
advertisements, sales literature, communications to shareholders or other
materials, charts, graphs or drawings which illustrate the potential risks and
rewards of investment in various investment vehicles, including but not
limited to, domestic and international stocks, and/or bonds, treasury bills
and shares of a Fund. In addition, advertisements, sales literature,
communications to shareholders or other materials may include a discussion of
certain attributes or benefits to be derived by an investment in a Fund and/or
other mutual funds, shareholder profiles and hypothetical investor scenarios,
timely information on financial management, tax and retirement planning (such
as information on Roth IRAs and Educational IRAs) and investment alternatives
to certificates of deposit and other financial instruments. Such sales
literature, communications to shareholders or other materials may include
symbols, headlines or other material which highlight or summarize the
information discussed in more detail therein.
Materials may refer to the CUSIP numbers of the Funds and may
illustrate how to find the listings of the Funds in newspapers and
periodicals. Materials may also include discussions of other Funds, products,
and services.
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<PAGE>
The Funds may quote various measures of volatility and benchmark
correlation in advertising. In addition, the Funds may compare these measures
to those of other funds. Measures of volatility seek to compare the historical
share price fluctuations or total returns to those of a benchmark. Measures of
benchmark correlation indicate how valid a comparative benchmark may be.
Measures of volatility and correlation may be calculated using averages of
historical data. A Fund may advertise its current interest rate sensitivity,
duration, weighted average maturity or similar maturity characteristics.
Advertisements and sales materials relating to a Fund may include information
regarding the background and experience of its portfolio managers.
Because every investor's goals and risk threshold are different, the
Distributor, as distributor for Global Funds, Inc. and other Delaware
Investments mutual funds, 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 ("Delaware"),
Delaware Investment Advisers, a division of Delaware, and the Manager, an
affiliate of Delaware, and how that philosophy impacts Fund investment
disciplines and strategies employed in seeking each Fund's objectives. The
Distributor may also from time to time cite general or specific information
about the institutional clients of Delaware or the Manager, including the
number of such clients serviced by Delaware and/or the Manager.
Dollar-Cost Averaging
For many people, deciding when to invest can be a difficult decision.
Security prices tend to move up and down over various market cycles and logic
says to invest when prices are low. However, even experts can't always pick
the highs and the lows. By using a strategy known as dollar-cost averaging,
you schedule your investments ahead of time. If you invest a set amount on a
regular basis, that money will always buy more shares when the price is low
and fewer when the price is high. You can choose to invest at any regular
interval--for example, monthly or quarterly--as long as you stick to your
regular schedule. Dollar-cost averaging looks simple and it is, but there are
important things to remember.
Dollar-cost averaging works best over longer time periods, and it
doesn't guarantee a profit or protect against losses in declining markets. If
you need to sell your investment when prices are low, you may not realize a
profit no matter what investment strategy you utilize. That's why dollar-cost
averaging can make sense for long-term goals. Since the potential success of a
dollar-cost averaging program depends on continuous investing, even through
periods of fluctuating prices, you should consider your dollar-cost averaging
program a long-term commitment and invest an amount you can afford and
probably won't need to withdraw. You also should consider your financial
ability to continue to purchase shares during periods of high fund share
prices. Delaware Investments offers three services -- Automatic Investing
Program, Direct Deposit Program and the Wealth Builder Option -- that can help
to keep your regular investment program on track. See Investing by Electronic
Fund Transfer - Direct Deposit Purchase Plan and Automatic Investing Plan
under Investment Plans and Wealth Builder Option under Investment Plans for a
complete description of these services, including restrictions or limitations.
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<PAGE>
The example below illustrates how dollar-cost averaging can work. In
a fluctuating market, the average cost per share over a period of time will be
lower than the average price per share for the same time period.
Number
Investment Price Per of Shares
Amount Share Purchased
Month 1 $100 $10.00 10
Month 2 $100 $12.50 8
Month 3 $100 $ 5.00 20
Month 4 $100 $10.00 10
---------------------------------------------------------------
$400 $37.50 48
Total Amount Invested: $400
Total Number of Shares Purchased: 48
Average Price Per Share: $9.38 ($37.50/4)
Average Cost Per Share: $8.33 ($400/48 shares)
This example is for illustration purposes only. It is not
intended to represent the actual performance of any stock or bond fund offered
by Delaware Investments.
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. Each Fund may include illustrations showing the
power of compounding in advertisements and other types of literature.
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<PAGE>
TRADING PRACTICES AND BROKERAGE
The Manager selects brokers or dealers to execute transactions on
behalf of each Fund for the purchase or sale of portfolio securities on the
basis of its judgment of their professional capability to provide the service.
The primary consideration is to have brokers 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 a 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 involved pays
reasonably competitive brokerage commission rates based upon the professional
knowledge of the Manager 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.
The Manager may allocate out of all commission business generated by
all of the funds and accounts under its management, brokerage business to
brokers or dealers who provide brokerage and research services. These services
include advice, either directly or through publications or writings, as to the
value of securities, the advisability of investing in, purchasing or selling
securities, and the availability of securities or purchasers or sellers of
securities; furnishing of analyses and reports concerning issuers, securities
or industries; providing information on economic factors and trends; assisting
in determining portfolio strategy; providing computer software and hardware
used in security analyses; and providing portfolio performance evaluation and
technical market analyses. Such services are used by the Manager in connection
with its investment decision-making process with respect to one or more funds
and accounts managed by it, and may not be used, or used exclusively, with
respect to the fund or account generating the brokerage.
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<PAGE>
As provided in the Securities Exchange Act of 1934 (the "1934 Act")
and each Fund's Investment Management Agreement, higher commissions are
permitted to be paid to broker/dealers who provide brokerage and research
services than to broker/dealers who do not provide such services if such
higher commissions are deemed reasonable in relation to the value of the
brokerage and research services provided. Although transactions are directed
to broker/dealers who provide such brokerage and research services, the Funds
believe that the commissions paid to such broker/dealers are not, in general,
higher than commissions that would be paid to broker/dealers not providing
such services and that such commissions are reasonable in relation to the
value of the brokerage and research services provided. In some instances,
services may be provided to the Manager which constitute in some part
brokerage and research services used by the Manager in connection with its
investment decision-making process and constitute in some part services used
by the Manager in connection with administrative or other functions not
related to its investment decision-making process. In such cases, the Manager
will make a good faith allocation of brokerage and research services and will
pay out of its own resources for services used by the Manager in connection
with administrative or other functions not related to its investment
decision-making process. In addition, so long as no fund is disadvantaged,
portfolio transactions which generate commissions or their equivalent are
allocated to broker/dealers who provide daily portfolio pricing services to a
Fund and to other Delaware Investments funds. Subject to best price and
execution, commissions allocated to brokers providing such pricing services
may or may not be generated by the funds receiving the pricing service.
The Manager may place a combined order for two or more accounts or
funds engaged in the purchase or sale of the same security if, in its
judgment, joint execution is in the best interest of each participant and will
result in best price and execution. Transactions involving commingled orders
are allocated in a manner deemed equitable to each account or fund. When a
combined order is executed in a series of transactions at different prices,
each account participating in the order may be allocated an average price
obtained from the executing broker. It is believed that the ability of the
accounts to participate in volume transactions will generally be beneficial to
the accounts and funds. Although it is recognized that, in some cases, the
joint execution of orders could adversely affect the price or volume of the
security that a particular account or fund may obtain, it is the opinion of
the Manager and Global Funds, Inc.'s Board of Directors that the advantages of
combined orders outweigh the possible disadvantages of separate transactions.
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<PAGE>
Consistent with the Conduct Rules of the National Association of
Securities Dealers, Inc. (the "NASD"), and subject to seeking best price and
execution, a Fund may place orders with broker/dealers that have agreed to
defray certain expenses of the funds offered by Delaware Investments such as
custodian fees, and may, at the request of the Distributor, give consideration
to sales of shares of such funds as a factor in the selection of brokers and
dealers to execute Fund portfolio transactions.
Portfolio Turnover
A Fund is free to dispose of portfolio securities at any time,
subject to complying with the Code and the 1940 Act, when changes in
circumstances or conditions make such a move desirable in light of its
investment objective. A Fund 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 Fund's
investment objective.
The degree of portfolio activity may affect brokerage costs of a Fund
and taxes payable by a Fund's shareholders. A turnover rate of 100% would
occur, for example, if all the investments in the Fund's portfolio at the
beginning of the year were replaced by the end of the year. In investing for
capital appreciation, a Fund may hold securities for any period of time.
Portfolio turnover will also be increased if a Fund writes a large number of
call options which are subsequently exercised. To the extent a Fund realizes
gains on securities held for less than six months, such gains are taxable to
the shareholder or to the Fund at ordinary income tax rates. The turnover rate
also may be affected by cash requirements from redemptions and repurchases of
Fund shares. Total brokerage costs generally increase with higher portfolio
turnover rates.
Under certain market conditions, a Fund may experience a rate of
portfolio turnover which could exceed 100%. Each Fund's portfolio turnover
rate 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 Fund during the particular fiscal
year, exclusive of securities whose maturities at the time of acquisition are
one year or less.
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PURCHASING SHARES
The Distributor serves as the national distributor for each Fund's
shares and has agreed to use its best efforts to sell shares of each Fund. See
the Prospectuses for additional information on how to invest. Shares of each
Fund are offered on a continuous basis and may be purchased through authorized
investment dealers or directly by contacting Global Funds, Inc. or the
Distributor.
The minimum initial investment generally is $1,000 for Class A
Shares, Class B Shares and Class C Shares. Subsequent purchases of such
Classes 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 Investments fund, the Manager or any
of their affiliates if the purchases are made pursuant to a payroll deduction
program. Shares purchased pursuant to the Uniform Gifts to Minors Act or
Uniform Transfers to Minors Act and shares purchased in connection with an
Automatic Investing Plan are subject to a minimum initial purchase of $250 and
a minimum subsequent purchase of $25. Accounts opened under the Delaware
Investments Asset Planner service are subject to a minimum initial investment
of $2,000 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 retirement plans. Global Funds, Inc. will reject any purchase
order for 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. 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 and that, absent any applicable fee waiver, Class A Shares
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 are responsible for transmitting orders promptly.
Global Funds, Inc. reserves the right to reject any order for the purchase of
its shares of a Fund if in the opinion of management such rejection is in such
Fund's best interest.
The NASD has adopted amendments to its Conduct Rules, as amended,
relating to investment company sales charges. Global Funds, Inc. 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,
absent any applicable fee waiver, 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, absent any
applicable fee waiver, are higher than those to which Class A Shares are
subject and are assessed against the Class B Shares for approximately eight
years after purchase. See Automatic Conversion of Class B Shares under Classes
of Shares in the Fund Classes' Prospectuses.
Class C Shares are purchased at net asset value and are subject to a
CDSC of 1% if shares are redeemed within 12 months following purchase. Class C
Shares, absent any applicable fee waiver, are also subject to
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annual 12b-1 Plan expenses for the life of the investment which are equal to
those to which Class B Shares are subject.
The Distributor has voluntarily elected to waive the payment of 12b-1
plan expenses by New Europe Fund and Latin America Fund from the commencement
of the public offering through June 30, 1999. As a result, the Fund Classes of
the New Europe Fund and Latin America Fund will not incur any 12b-1 Plan
expenses during such period.
Institutional Class shares are purchased at the net asset value per
share without the imposition of a front-end or contingent deferred sales
charge or 12b-1 Plan expenses. See Plans Under Rule 12b-1 for the Fund Classes
under Purchasing Shares, and Determining Offering Price and Net Asset Value in
this Part B.
Class A Shares, Class B Shares, Class C Shares and Institutional
Class shares represent a proportionate interest in a Fund's assets and will
receive a proportionate interest in that Fund's income, before application, as
to Class A, Class B and Class C Shares, of any expenses under that Fund's
12b-1 Plans.
Certificates representing shares purchased are not ordinarily issued
unless, in the case of Class A Shares or Institutional Class shares, a
shareholder submits a specific request. Certificates are not issued in the
case of Class B Shares or Class C Shares or in the case of any retirement plan
account including self-directed IRAs. 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 full share denominations purchased by sending a letter signed by
each owner of the account to the Transfer Agent requesting the certificate. No
charge is assessed by Global Funds, Inc. for any certificate issued. A
shareholder may be subject to fees for replacement of a lost or stolen
certificate under certain conditions, including the cost of obtaining a bond
covering the lost or stolen certificate. Please contact the Funds for further
information. 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 permit investors to choose the method of purchasing
shares that is most suitable for their needs given the amount of their
purchase, the length of time they expect to hold their shares and other
relevant circumstances. Investors should determine whether, given their
particular circumstances, it is more advantageous to purchase Class A Shares
and incur a front-end sales charge and, absent any applicable fee waiver,
annual 12b-1 Plan expenses of up to a maximum of 0.30% of the average daily
net assets of Class A Shares or to purchase either Class B or Class C Shares
and have the entire initial purchase amount invested in the Fund with the
investment thereafter subject to a CDSC and, absent any applicable fee waiver,
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 12 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% (0.25% 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 0.30% of average daily net assets of
such shares. Unlike Class B Shares, Class C Shares do not convert to another
class.
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Class A Shares
Purchases of $100,000 or more of Class A Shares at the offering price
carry reduced front-end sales charges 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.
Certain dealers who enter into an agreement to provide extra training
and information on Delaware Investments products and services and who increase
sales of Delaware Investments funds may receive an additional commission of up
to 0.15% 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 commission will be paid.
Participating dealers may be deemed to have additional responsibilities under
the securities laws.
Dealer's Commission
As described more fully in the Prospectuses for the Fund Classes, 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. See Front-End Sales Charge Alternative - Class A
Shares in the Prospectuses for the Fund Classes for the applicable schedule
and further details.
Contingent Deferred Sales Charge - Class B Shares and Class C Shares
Class B Shares and Class C Shares are purchased without 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 above, and Class C Shares redeemed
within 12 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 the time of redemption. No CDSC will be imposed on increases in net
asset value above the initial purchase price, nor will a CDSC be assessed on
redemptions of shares acquired through reinvestment of dividends or capital
gains distributions. See Waiver of Contingent Deferred Sales Charge--Class B
Shares and Class C Shares under Redemption and Exchange in the Prospectuses
for the Fund Classes for a list of the instances in which the CDSC is waived.
During the seventh year after purchase and, thereafter, until converted
automatically into Class A Shares, Class B Shares, absent any applicable fee
waiver, 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 the same Fund. See Automatic Conversion of Class
B Shares under Classes of Shares in the Fund Classes' Prospectuses. Such
conversion will constitute a tax-free exchange for federal income tax
purposes. See Taxes in the Prospectuses for the Fund Classes.
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Plans Under Rule 12b-1 for the Fund Classes
Pursuant to Rule 12b-1 under the 1940 Act, Global Funds, Inc. has
adopted a separate plan for each of the Class A Shares, the Class B Shares and
the Class C Shares of a Fund (the "Plans"). Each Plan permits the relevant
Fund to pay for certain distribution, promotional and related expenses
involved in the marketing of only the Classes of shares to which the Plan
applies. The Plans do not apply to Institutional Classes 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 shares of the
Institutional Classes. Shareholders of the Institutional Classes may not vote
on matters affecting the Plans.
The Plans permit a Fund, pursuant to its 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 Shares 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, absent any applicable fee waiver, each Fund 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 Fund under its Plans and a
Fund's Distribution Agreement, is on an annual basis, up to 0.30% of average
daily net assets of Class A Shares, and up to 1% (0.25% of which are service
fees to be paid to the Distributor, dealers and others for providing personal
service and/or maintaining shareholder accounts) of Class B Shares' and Class
C Shares' average daily net assets for the year. Global Funds, Inc.'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 Shares, Class B Shares and Class C Shares would be borne by such
persons without any reimbursement from such classes. Subject to seeking best
price and execution, a Fund 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 Global Funds, Inc., including a majority
of the directors who are not "interested persons" (as defined in the 1940 Act)
of Global Funds, Inc. and who have no direct or indirect financial interest in
the Plans, by vote cast in person at a meeting duly called for the purpose of
voting on the Plans and such 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 of each Fund and that there is a
reasonable likelihood of the Plan relating to a 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 relevant Class'
outstanding voting
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securities. Any amendment materially increasing the percentage payable under the
Plans must likewise be approved by a majority vote of the relevant Class'
outstanding voting securities, as well as by a majority vote of those directors
who are not "interested persons." With respect to each Class A Shares' Plan any
material increase in the maximum percentage payable thereunder must also be
approved by a majority of the outstanding voting securities of the respective
Fund's B Class. 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 Global Funds, Inc. 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 Global Funds, Inc. 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 its review.
The staff of the SEC has proposed amendments to Rule 12b-1 and other
related regulations that could impact Rule 12b-1 Distribution Plans. Global
Funds, Inc. 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 Shares, Class B Shares 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 0.25% 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 Investments 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. The Distributor may
also pay a portion of the expense of preapproved dealer advertisements
promoting the sale of Delaware Investments fund shares.
Special Purchase Features - Class A Shares
Buying Class A Shares 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
Exchange Privilege and the 12-Month Reinvestment Privilege.
Current and former officers, directors and employees of Global Funds,
Inc., any other fund offered by Delaware Investments, including the Manager,
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 of the Funds and any such Class of shares of any
of the other funds offered by Delaware Investments, including any fund that
may be created, at the net asset value per share. Family members (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. Class A
Shares may also be purchased at net asset value by current and former
officers, directors and employees (and members of their families) of the
Dougherty Financial Group LLC.
Purchases of Class A Shares may also be made by clients of registered
representatives of an authorized investment dealer at net asset value within
12 months after the registered representative changes employment, if the
purchase is funded by proceeds from an investment where a front-end sales
charge, contingent deferred sales charge or other sales charge has been
assessed. Purchases of Class A Shares may also 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 shares of
Delaware Investments funds. Officers, directors and key employees of
institutional clients of the Manager or any of their affiliates may purchase
Class A Shares at net
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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 Global Funds, Inc.
may reasonably require to establish eligibility for purchase at net asset value.
Purchases of Class A Shares at net asset value may also be made by
the following: financial institutions investing for the account of their
customers when they are not eligible to purchase shares of the Institutional
Class of a Fund; and any group retirement plan (excluding defined benefit
pension plans), or such plans of the same employer, for which plan participant
records are maintained on the Retirement Financial Services, Inc., ("RFSI")
proprietary record keeping system that (i) has in excess of $500,000 of plan
assets invested in Class A Shares of Delaware Investments funds and in any
stable value product available through Delaware Investments, or (ii) is
sponsored by an employer that has at any point after May 1, 1997 more than 100
employees while such plan has held Class A Shares of a Delaware Investments
fund and such employer has properly represented to RFSI in writing that it has
the requisite number of employees and has received written confirmation back
from RFSI.
Investors in Delaware-Voyageur Unit Investment Trusts may reinvest
monthly dividend checks and/or repayment of invested capital into Class A
Shares of any of the funds offered by Delaware Investments at net asset value.
Investments in Class A Shares made by plan level and/or participant
retirement accounts that are for the purpose of repaying a loan taken from
such accounts will be made at net asset value. Loan repayments made to a
Delaware Investments account in connection with loans originated from accounts
previously maintained by another investment firm will also be invested at net
asset value.
Global Funds, Inc. must be notified in advance that the trade qualifies
for purchase at net asset value.
Letter of Intention
The reduced front-end sales charges described above with respect to
Class A Shares are also applicable to the aggregate amount of purchases made
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 Global Funds, Inc., which provides for the holding in escrow by the
Transfer Agent of 5% of the total amount of Class A Shares intended to be
purchased until such purchase is completed within the 13-month period. A
Letter of Intention may be dated to include shares purchased up to 90 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 20 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
Fund and of any class of any of the other mutual funds offered by Delaware
Investments (except shares of any Delaware Investments 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
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from a Delaware Investments 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 Fund and the corresponding classes of shares of
other Delaware Investments funds which offer such shares may be aggregated
with Class A Shares of the Fund and the corresponding class of shares of the
other Delaware Investments funds.
Employers offering a Delaware Investments 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 Investments 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 Fund and other Delaware Investments funds which offer corresponding
classes of shares may also be aggregated for this purpose.
Combined Purchases Privilege
In determining the availability of the reduced front-end sales charge
previously set forth with respect to Class A Shares, purchasers may combine
the total amount of any combination of Class A Shares, Class B Shares and/or
Class C Shares of the Funds, as well as shares of any other class of any of
the other Delaware Investments funds (except shares of any Delaware
Investments 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 Investments fund which
carried a front-end sales charge, CDSC or Limited CDSC). In addition, assets
held by investment advisory clients of the Manager or its affiliates in a
stable value account may be combined with other Delaware Investments fund
holdings.
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 21;
or a trustee or other fiduciary of trust estates or fiduciary accounts for the
benefit of such family members (including certain employee benefit programs).
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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 a Fund as
well as shares of any other class of any of the other Delaware Investments
funds which offer such classes (except shares of any Delaware Investments 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 Investments fund which carried
a front-end sales charge, CDSC or Limited CDSC). If, for example, any such
purchaser has previously purchased and still holds Class A Shares and/or
shares of any other of the classes described in the previous sentence with a
value of $40,000 and subsequently purchases $60,000 at offering price of
additional shares of Class A Shares, the charge applicable to the $60,000
purchase would currently be 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 of a Fund (and of Institutional Classes
holding shares which were acquired through an exchange from one of the other
Delaware Investments mutual funds offered with a front-end sales charge) who
redeem such shares have one year from the date of redemption to reinvest all
or part of their redemption proceeds in Class A Shares of that Fund or in
Class A Shares of any of the other Delaware Investments funds, 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 Delaware
Investments mutual funds 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
Shares 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
investor should obtain and read carefully the prospectus for the fund in which
the investment is intended to be made before investing or sending money. The
prospectus contains more complete information about the fund, including
charges and expenses.
Investors should consult their financial advisers or the Transfer
Agent, which also serves as the Funds' shareholder servicing agent, about the
applicability of the Limited CDSC (see Contingent Deferred Sales Charge for
Certain Redemptions of Class A Shares Purchased at Net Asset Value under
Redemption and Exchange in the Fund Classes' Prospectuses) in connection with
the features described above.
Group Investment Plans
Group Investment Plans that 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 Prospectuses for
Fund Classes, based on total plan assets. If a company has more than one plan
investing in the Delaware Investments 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 in which the investment is being made 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-
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end sales charge on purchases to non-retirement Delaware Investments investment
accounts if they so notify the Fund in which the investment is being made in
connection with each purchase. See Retirement Plans for the Fund Classes under
Investment Plans for information about Retirement Plans.
Institutional Classes
The Institutional Class of each Fund is available for purchase only
by: (a) retirement plans introduced by persons not associated with brokers or
dealers that are primarily engaged in the retail securities business and
rollover individual retirement accounts from such plans; (b) tax-exempt
employee benefit plans of the Manager or their affiliates and securities
dealer firms with a selling agreement with the Distributor; (c) institutional
advisory accounts of the Manager 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) a bank, trust company and similar financial institution
investing for its own account or for the account of its trust customers for
whom such financial institution is exercising investment discretion in
purchasing shares of the Class, except where the investment is part of a
program that requires payment to the financial institution of a Rule 12b-1
Plan fee; 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 Institutional Classes are available for purchase at net
asset value, without the imposition of a front-end or contingent deferred
sales charge and are not subject to Rule 12b-1 expenses.
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INVESTMENT PLANS
Reinvestment Plan/Open Account
All dividends and distributions of each Class of the Funds are
reinvested in the accounts of the holders of such shares (based on the net
asset value 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
specific Fund and Class in which the shares are being purchased. Such
purchases, which must meet the minimum subsequent purchase requirements set
forth in the Prospectuses 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 Class shares at the net asset value, at the end of the day of
receipt. A reinvestment plan may be terminated at any time. This plan does not
assure a profit nor protect against depreciation in a declining market.
Reinvestment of Dividends in Other Delaware Investments Funds
Subject to applicable eligibility and minimum initial purchase
requirements and the limitations set forth below, holders of Class A Shares,
Class B Shares and Class C Shares may automatically reinvest dividends and/or
distributions in any of the Delaware Investments mutual funds, including the
Funds, 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 intended to be made before investing or
sending money. The prospectus contains more complete information about the
fund, including charges and expenses. See also Additional Methods of Adding to
Your Investment - Dividend Reinvestment Plan under How to Buy Shares in the
Prospectuses for the Fund Classes.
Subject to the following limitations, dividends and/or distributions
from other funds offered by Delaware Investments may be invested in shares of
the Funds, provided an account has been established. Dividends from Class A
Shares may not be directed to Class B Shares or Class C Shares. Dividends from
Class B Shares may only be directed to other Class B Shares and dividends from
Class C Shares may only be directed to other Class C Shares.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, SIMPLE IRA, SIMPLE 401(k), Profit Sharing and Money Purchase
Pension Plans, 401(k) Defined Contribution Plans, or 403(b)(7) or 457 Deferred
Compensation Plans.
Investing by Electronic Fund Transfer
Direct Deposit Purchase Plan--Investors may arrange for any Fund to
accept for investment in Class A Shares, Class B Shares 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 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.
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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 Fund account. This type of investment will be handled in either of
the following ways. (1) If the shareholder's bank is a member of the National
Automated Clearing House Association ("NACHA"), the amount of the investment
will be electronically deducted from his or her account by Electronic Fund
Transfer ("EFT"). The shareholder's checking account will reflect a debit each
month at a specified date although no check is required to initiate the
transaction. (2) If the shareholder's bank is not a member of NACHA,
deductions will be made by preauthorized checks, known as Depository Transfer
Checks. Should the shareholder's bank become a member of NACHA in the future,
his or her investments would be handled electronically through EFT.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, SIMPLE IRA, SIMPLE 401(k), Profit Sharing and Money Purchase
Pension Plans, 401(k) Defined Contribution Plans, or 403(b)(7) or 457 Deferred
Compensation Plans.
* * *
Initial investments under the Direct Deposit Purchase Plan and the
Automatic Investing Plan must be for $250 or more and subsequent investments
under such plans must be for $25 or more. An investor wishing to take
advantage of either service 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 Fund from the federal government or its agencies on
behalf of a shareholder may be credited to the shareholder's account after
such payments should have been terminated by reason of death or otherwise. Any
such payments are subject to reclamation by the federal government or its
agencies. Similarly, under certain circumstances, investments from private
sources may be subject to reclamation by the transmitting bank. In the event
of a reclamation, a Fund may liquidate sufficient shares from a shareholder's
account to reimburse the government or the private source. In the event there
are insufficient shares in the shareholder's account, the shareholder is
expected to reimburse the Fund.
Direct Deposit Purchases by Mail
Shareholders may authorize a third party, such as a bank or employer,
to make investments directly to their Fund accounts. A Fund will accept these
investments, such as bank-by-phone, annuity payments and payroll allotments,
by mail directly from the third party. Investors should contact their
employers or financial institutions who in turn should contact Global Funds,
Inc. for proper instructions.
Wealth Builder Option
Shareholders can use the Wealth Builder Option to invest in the Fund
Classes through regular liquidations of shares in their accounts in other
mutual funds offered by Delaware Investments. Shareholders of the Fund Classes
may elect to invest in one or more of the other mutual funds offered by
Delaware Investments through the Wealth Builder Option. See Wealth Builder
Option and Redemption and Exchange in the Prospectuses for the Fund Classes.
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 Delaware Investments
mutual funds, subject to the conditions and limitations set forth in the Fund
Classes' Prospectuses. 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
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of investment. No investment will be made for any month if the value of the
shareholder's account is less than the amount specified for investment.
Periodic investment through the Wealth Builder Option does not insure
profits or protect against losses in a declining market. The price of the fund
into which investments are made could fluctuate. Since this program involves
continuous investment regardless of such fluctuating value, investors
selecting this option should consider their financial ability to continue to
participate in the program through periods of low fund share prices. This
program involves automatic exchanges between two or more fund accounts and is
treated as a purchase of shares of the fund into which investments are made
through the program. See Exchange Privilege for a brief summary of the tax
consequences of exchanges. Shareholders can terminate their participation in
Wealth Builder at any time by giving written notice to the fund from which
exchanges are made.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, SIMPLE IRA, SIMPLE 401(k), Profit Sharing and Money Purchase
Pension Plans, 401(k) Defined Contribution Plans, or 403(b)(7) or 457 Deferred
Compensation Plans. This option also is not available to shareholders of the
Institutional Classes.
Delaware Investments Asset Planner
To invest in Delaware Investments funds using the Delaware
Investments Asset Planner asset allocation service, you should complete a
Delaware Investments Asset Planner Account Registration Form, which is
available only from a financial adviser or investment dealer. Effective
September 1, 1997, the Delaware Investments Asset Planner Service is only
available to financial advisers or investment dealers who have previously used
this service. The Delaware Investments Asset Planner service offers a choice
of four predesigned asset allocation strategies (each with a different
risk/reward profile) in predetermined percentages in Delaware Investments
funds. With the help of a financial adviser, you may also design a customized
asset allocation strategy.
The sales charge on an investment through the Asset Planner service
is determined by the individual sales charges of the underlying funds and
their percentage allocation in the selected Strategy. Exchanges from existing
Delaware Investments accounts into the Asset Planner service may be made at
net asset value under the circumstances described under Investing by Exchange
in the Prospectuses. Also see Buying Class A Shares at Net Asset Value under
Classes of Shares. The minimum initial investment per Strategy is $2,000;
subsequent investments must be at least $100. Individual fund minimums do not
apply to investments made using the Asset Planner service. Class A Shares,
Class B Shares and Class C Shares are available through the Asset Planner
service. Generally, only shares within the same class may be used within the
same Strategy. However, Class A Shares of a Fund and of other Delaware
Investments funds may be used in the same Strategy with consultant class
shares that are offered by certain other Delaware Investments funds.
An annual maintenance fee, currently $35 per Strategy, is due at the
time of initial investment and by September 30 of each subsequent year. The
fee, payable to Delaware Service Company, Inc. to defray extra costs
associated with administering the Asset Planner service, will be deducted
automatically from one of the funds within your Asset Planner account if not
paid by September 30. However, effective November 1, 1996, the annual
maintenance fee is waived until further notice. Investors who utilize the
Asset Planner for an IRA will continue to pay an annual IRA fee of $15 per
Social Security number. Investors will receive a customized quarterly Strategy
Report summarizing all Delaware Investments 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.
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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.
Retirement Plans for the Fund Classes
An investment in a Fund may be suitable for tax-deferred retirement
plans. Delaware Investments offers a full spectrum of qualified and
non-qualified retirement plans, including the 401(k) deferred compensation
plan, Individual Retirement Account ("IRA"), and the new Roth IRA.
The CDSC may be waived on certain redemptions of Class B Shares and
Class C Shares. See Waiver of Contingent Deferred Sales Charge - Class B
Shares and Class C Shares under Redemption and Exchange in the Prospectuses
for the Fund Classes for a list of the instances in which the CDSC is waived.
Purchases of Class B Shares are subject to a maximum purchase
limitation of $250,000 for retirement plans. Purchases 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 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
Classes. See Institutional Classes, above. For additional information on any
of the plans and Delaware's retirement services, call the Shareholder Service
Center telephone number.
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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 may be subject to
withholding.
Please contact your investment dealer or the Distributor for the
special application forms required for the plans.
Prototype Profit Sharing or Money Purchase Pension Plans
Prototype Plans are available for self-employed individuals,
partnerships and corporations. These plans can be maintained as Section
401(k), profit sharing or money purchase pension plans. 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 and make 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,
for years prior to 1997, elects to be treated as having no compensation for
the year. Investments in each of the Fund Classes are permissible.
An individual can contribute up to $2,000 to his or her IRA each
year. Contributions may or may not be deductible depending upon the taxpayer's
adjusted gross income and whether the taxpayer or his or her spouse is an
active participant in an employer-sponsored retirement plan. Even if a
taxpayer (or his or her spouse) is an active participant in an
employer-sponsored retirement plan, the full $2,000 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. No deductions are
available 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 for years prior to 1997), 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.
Effective for tax years beginning after 1996, one-income couples can
contribute up to $2,000 to each spouse's IRA provided the combined
compensation of both spouses is at least equal to the total contributions for
both spouses. If the working spouse is an active participant in an
employer-sponsored retirement plan and earns over $40,000, the maximum
deduction limit is reduced in the same way that the limit is reduced for
contributions to a non-spousal IRA.
A company or association may establish a Group IRA for employees or
members who want to purchase shares of a Fund. 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 for
information on reduced front-end sales charges applicable to Class A Shares.
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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 Alternative Purchase Arrangements - Class B Shares
and Class C Shares under Classes of Shares, Contingent Deferred Sales Charge -
Class B Shares and Class C Shares under Classes of Shares, and Waiver of
Contingent Deferred Sales Charge - Class B and Class C Shares under Redemption
and Exchange in the Fund Classes' Prospectuses concerning the applicability of
a CDSC upon redemption.
Effective January 1, 1997, the 10% premature distribution penalty
will not apply to distributions from an IRA that are used to pay medical
expenses in excess of 7.5% of adjusted gross income or to pay health insurance
premiums by an individual who has received unemployment compensation for 12
consecutive weeks.
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")
Although new SAR/SEP plans may not be established after December 31,
1996, existing plans may be maintained by employers having 25 or fewer
employees. An employer may elect to make additional contributions to such
existing plans.
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 Delaware Investments
funds. 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 Prospectuses for Fund Classes.
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 Prospectuses for Fund Classes.
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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 Investments 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
Prospectuses for Fund Classes.
SIMPLE IRA
A SIMPLE IRA combines many of the features of an IRA and a 401(k)
Plan but is easier to administer than a typical 401(k) Plan. It requires
employers to make contributions on behalf of their employees and also has a
salary deferral feature that permits employees to defer a portion of their
salary into the plan on a pre-tax basis.
SIMPLE 401(k)
A SIMPLE 401(k) is like a regular 401(k) except that plan sponsors
are limited to 100 employees and, in exchange for mandatory plan sponsor
contributions, discrimination testing is no longer required. Class B Shares
are not available for purchase by such plans.
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DETERMINING OFFERING PRICE AND NET ASSET VALUE
Orders for purchases of Class A Shares are effected at the offering
price next calculated by the Fund in which shares are being purchased after
receipt of the order by the Fund, its agent or certain other authorized
persons. See Distribution and Service under Investment Management Agreements
and Sub-Advisory Agreements. Orders for purchases of Class B Shares, Class C
Shares and Institutional Class shares are effected at the net asset value per
share next calculated by the Fund in which shares are being purchased after
receipt of the order by the Fund, its agent or certain other authorized
persons. Selling dealers are responsible for 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, Martin Luther King,
Jr.'s Birthday, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving and Christmas. When the New York Stock Exchange is
closed, the Funds 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 Funds' financial statements which are incorporated by reference into
this Part B.
Each Fund's net asset value per share is computed by adding the value
of all the securities and other assets in the Fund's portfolio, deducting any
liabilities of the Fund, and dividing by the number of Fund shares
outstanding. Expenses and fees are accrued daily. In determining a Fund's
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 currencies and foreign
securities denominated 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 based on rates in effect that day. 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 60 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. Foreign
securities and the prices of foreign securities denominated in foreign
currencies are translated to U.S. dollars based on rates in effect as of 12
p.m., Eastern time. 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 Fund will bear, pro-rata, all of the common expenses
of that Fund. The net asset values of all outstanding shares of each class of
a Fund will be computed on a pro-rata basis for each outstanding share based
on the proportionate participation in that Fund represented by the value of
shares of that class. All income earned and expenses incurred by a Fund will
be borne on a pro-rata basis by each outstanding share of a class,
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based on each class' percentage in that Fund represented by the value of shares
of such classes, except that the Institutional Classes will not incur any of the
expenses under Global Funds, Inc.'s 12b-1 Plans and Class A Shares, Class B
Shares and Class C Shares 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 Fund will vary. For so long as the current waivers of 12b-1 Plan expenses
by the Distributor in connection with the distribution of Class A Shares,
Class B Shares and Class C Shares of the Funds remain applicable, no such
variance shall arise.
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REDEMPTION AND REPURCHASE
Any shareholder may require a Fund to redeem shares by sending a
written request, signed by the record owner or owners exactly as the shares
are registered, to the Fund, at 1818 Market Street, Philadelphia, PA 19103. In
addition, certain expedited redemption methods described below are available
when stock certificates have not been issued. Certificates are issued for
Class A Shares and Institutional Class shares only if a shareholder
specifically requests them. Certificates are not issued 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 request must be
signed by all owners of the shares or the investment dealer of record, but a
signature guarantee is not required. When the redemption is for more than
$50,000, or if payment is made to someone else or to another address,
signatures of all record owners are required and a signature guarantee may be
required. Each signature guarantee must be supplied by an eligible guarantor
institution. Each Fund reserves the right to reject a signature guarantee
supplied by an eligible institution based on its creditworthiness. The Funds
may request further documentation from corporations, retirement plans,
executors, administrators, trustees or guardians.
In addition to redemption of Fund shares, the Distributor, acting as
agent of the Funds, offers to repurchase Fund 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
respective Fund, its agent or certain other authorized persons, subject to any
applicable CDSC or Limited CDSC. See Distribution and Service under Investment
Management Agreements. 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 Funds and the Distributor end their business days 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 Fund shares which are submitted to the
Distributor prior to the close of its business day will be executed at the net
asset value per share computed that day (subject to the applicable CDSC or
Limited CDSC), if the repurchase order was received by the broker/dealer from
the shareholder prior to the time the offering price and net asset value are
determined on such day. The selling dealer has the responsibility of
transmitting orders to the Distributor promptly. Such repurchase is then
settled as an ordinary transaction with the broker/dealer (who may make a
charge to the shareholder for this service) delivering the shares repurchased.
Certain redemptions of Class A Shares purchased at net asset value
may result in the imposition of a Limited CDSC. See Contingent Deferred Sales
Charge for Certain Redemptions of Class A Shares Purchased at Net Asset Value
under Redemption and Exchange in the Prospectuses 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 12 months following purchase. See Contingent Deferred Sales
Charge - Class B Shares and Class C Shares under Classes of Shares in the
Prospectuses 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, in the case of the Fund Classes, there is currently a $7.50 bank wiring
cost, neither the Funds nor the Distributor charges a fee for redemptions or
repurchases, but such fees could be charged at any time in the future.
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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; provided, however, that each commitment to
mail or wire redemption proceeds by a certain time, as described below, is
modified by the qualifications described in the next paragraph.
Each Fund will process written or telephone redemption requests to
the extent that the purchase orders for the shares being redeemed have already
been settled. A Fund will honor the redemption requests as to shares for which
a check was tendered as payment, but a Fund will not mail or wire the proceeds
until it is reasonably satisfied that the check has cleared. 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 involved will automatically redeem from the shareholder's
account the shares purchased by the check plus any dividends earned thereon.
Shareholders may be responsible for any losses to a Fund or to the
Distributor.
In case of a suspension of the determination of the net asset value
because the New York Stock Exchange is closed for other than weekends or
holidays, or trading thereon is restricted or an emergency exists as a result
of which disposal by a Fund of securities owned by it is not reasonably
practical, or it is not reasonably practical for a Fund fairly to value its
assets, or in the event that the SEC has provided for such suspension for the
protection of shareholders, a Fund 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, Global Funds, Inc. has elected to be governed by Rule 18f-1 under the
1940 Act pursuant to which each Fund is obligated to redeem shares solely in
cash up to the lesser of $250,000 or 1% of the net asset value of such Fund
during any 90-day period for any one shareholder.
The value of a Fund's investments is subject to changing market
prices. Thus, a shareholder reselling shares to a Fund may sustain either a
gain or loss, depending upon the price paid and the price received for such
shares.
Small Accounts
Before a Fund involuntarily redeems shares from an account that,
under the circumstances listed in the relevant Prospectus, has remained below
the minimum amounts required by Global Funds, Inc.'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 60 days from the date of notice to make an additional
investment to meet the required minimum. See The Conditions of Your Purchase
under How to Buy Shares in Global Funds, Inc.'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 redemptions
described in this paragraph.
The Funds generally require a minimum balance of $1,000 for accounts
in all Classes.
* * *
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Each Fund has made available certain redemption privileges, as
described below. The Funds reserve the right to suspend or terminate these
expedited payment procedures upon 60 days' written notice to shareholders.
Expedited Telephone Redemptions
Shareholders of the Fund Classes or their investment dealers of
record wishing to redeem any amount of shares of $50,000 or less for which
certificates have not been issued may call the Shareholder Service Center at
800-523-1918 or, in the case of shareholders of 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 address of record. 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 phone
numbers listed above. An authorization form must have been completed by the
shareholder and filed with the relevant 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 First Union
National Bank which will be deducted from the withdrawal proceeds each time
the shareholder requests a redemption from Class A Shares, Class B Shares and
Class C Shares. 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
relevant Fund and a signature guarantee may be required. Each signature
guarantee must be supplied by an eligible guarantor institution. The Funds
reserve the right to reject a signature guarantee supplied by an eligible
institution based on its creditworthiness.
To reduce the shareholder's risk of attempted fraudulent use of the
telephone redemption procedure, payment will be made only to the bank account
designated on the authorization form.
If expedited payment under these procedures could adversely affect a
Fund, such Fund may take up to seven days to pay the shareholder.
Neither the Funds nor the Funds' Transfer Agent is responsible for
any shareholder loss incurred in acting upon written or telephone instructions
for redemption or exchange of Fund shares which are reasonably believed to be
genuine. With respect to such telephone transactions, each 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, such 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
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<PAGE>
are generally tape recorded. A written confirmation will be provided for all
purchase, exchange and redemption transactions initiated by telephone.
Systematic Withdrawal Plans
Shareholders of Class A Shares, Class B Shares and Class C Shares who
own or purchase $5,000 or more of shares at the offering price, or net asset
value, as applicable, for which certificates have not been issued may
establish a Systematic Withdrawal Plan for monthly withdrawals of $25 or more,
or quarterly withdrawals of $75 or more, although the Funds do not recommend
any specific amount of withdrawal. This $5,000 minimum does not apply for a
Fund's 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 made concurrently with the purchases of
additional shares of the same Fund may be disadvantageous to the shareholder.
Purchases of Class A Shares through a periodic investment program in a fund
managed by the Manager must be terminated before a Systematic Withdrawal Plan
with respect to such shares can take effect, except if the shareholder is a
participant in one of our retirement plans or is investing in Delaware
Investments funds which do not carry a sales charge. 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
Contingent Deferred Sales Charge - Class B Shares and Class C Shares and
Waiver of Limited Contingent Deferred Sales Charge - Class A Shares under
Redemption and Exchange in the Prospectuses for the Fund Classes. Shareholders
should consult their financial advisers to determine whether a Systematic
Withdrawal Plan would be suitable for them.
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 Funds reserve 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 for Institutional
Classes, or currently, any of the Fund Classes of the Funds.
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<PAGE>
DISTRIBUTIONS
The Funds each will normally declare and make payments from net
investment income on an annual basis. Payments from net realized securities
profits of each Fund, 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 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. A Fund may deduct from a shareholder's account
the costs of the Fund's effort to locate a shareholder if a shareholder's mail
is returned by the U.S. Post Office or the Fund is otherwise unable to locate
the shareholder or verify the shareholder's mailing address. These costs may
include a percentage of the account when a search company charges a percentage
fee in exchange for their location services.
Each class of shares of a Fund will share proportionately in the
investment income and expenses of such Fund, except that, absent any
applicable fee waiver, Class A Shares, Class B Shares and Class C Shares alone
will incur distribution fees under their respective 12b-1 Plans.
Under the Taxpayer Relief act of 1997 (the "1997 Act"), a Fund is
required to track its sales of portfolio securities and to report its capital
gain distributions to you according to the following categories of holding
periods:
"Pre-Act long-term capital gains": securities sold by a Fund before
May 7, 1997, that were held for more than 12 months. These gains will
be taxable to individual investors at a maximum rate of 28%.
"Mid-term capital gains" or "28 percent rate gain": securities sold
by a Fund after July 28, 1997 that were held more than one year but
not more than 18 months. These gains will be taxable to individual
investors at a maximum rate of 28%.
"1997 Act long-term capital gains" or "20 percent rate gain":
securities sold by a Fund between May 7, 1997 and July 28, 1997 that
were held for more than 12 months, and securities sold by a Fund
after July 28, 1997 that were held for more than 18 months. These
gains will be taxable to individual investors at a maximum rate of
20% for investors in the 28% or higher federal income tax brackets,
and at a maximum rate of 10% for investors in the 15% federal income
tax bracket.
"Qualified 5-year gains": For individuals in the 15% bracket,
qualified 5-year gains are net gains on securities held for more than
5 years which are sold after December 31, 2000. For individual who
are subject to tax at higher rate brackets, qualified 5-year gains
are net gains on securities which are purchased after December 31,
2000 and are held for more than 5 years. Taxpayers subject to tax at
a higher rate brackets may also make an election for shares held on
January 1, 2001 to recognize gain on their shares in order to qualify
such shares as qualified 5-year property. These gains will be taxable
to individual investors at a maximum rate of 18% for
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<PAGE>
investors in the 28% or higher federal income tax brackets, and at a
maximum rate of 8% for investors in the 15% federal income tax bracket.
Because of each Fund's investment policy, it is expected that either
none or only a nominal portion of a Fund's dividends will be eligible for the
dividends-received deduction for corporations. The portion of dividends paid
by a Fund that so qualifies will be designated each year in a notice mailed to
the Fund's shareholders, and cannot exceed the gross amount of dividends
received by a Fund from domestic (U.S.) corporations that would have qualified
for the dividends-received deduction in the hands of a Fund if the Fund was a
regular corporation. The availability of the dividends-received deduction is
subject to certain holding period and debt financing restrictions imposed
under the Code on the corporation claiming the deduction. Under the 1997 Act,
the amount that a Fund may designate as eligible for the dividends-received
deduction will be reduced or eliminated if the shares on which the dividends
earned by the Fund were debt-financed or held by the Fund for less than a
46-day period during a 90-day period beginning 45 days before the ex-dividend
date and ending 45 days after the ex-dividend date. Similarly, if your Fund
shares are debt-financed or held by you for less than a 46-day period during a
90-day period beginning 45 days before the ex-dividend date and ending 45 days
after the ex-dividend date, then the dividends-received deduction for Fund
dividends on your shares may also be reduced or eliminated. Even if designated
as dividends eligible for the dividends-received deduction, all dividends
(including any deducted portion) must be included in your alternative minimum
taxable income calculation.
Shareholders will be notified annually by Global Funds, Inc., Inc. as
to the federal income tax status of dividends and distributions paid by their
Fund.
In addition to the federal taxes described above, shareholders may or
may not be subject to various state and local taxes. Because shareholders'
state and local taxes may be different than the federal taxes described above,
shareholders should consult their own tax advisers.
See also Other Tax Requirements under Accounting and Tax Issues in
this Part B.
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<PAGE>
INVESTMENT MANAGEMENT AGREEMENTS
Delaware International Advisers Ltd. ("Delaware International" or the
"Manager"), located at Third Floor, 80 Cheapside, London, England EC2V 6EE,
furnishes investment management services to each Fund, subject to the
supervision and direction of Global Funds, Inc.'s Board of Directors. Delaware
International is affiliated with Delaware Management Company ("Delaware").
Delaware Management Company ("Delaware") and its predecessors have
been managing the funds offered by Delaware Investments since 1938. On
November 30, 1997, Delaware and its affiliates within Delaware Investments,
including the Manager, were managing in the aggregate more than $39 billion in
assets in the various institutional or separately managed (approximately
$23,274,532,000) and investment company (approximately $16,181,491,000)
accounts.
The Investment Management Agreements for the new Europe and Latin
America Funds are dated December __, 1998, and were approved by the initial
shareholder on December __, 1998. 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 Fund to which the Agreement relates, and only if the terms
of the renewal thereof have been approved by the vote of a majority of the
directors of Global Funds, Inc. 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
60 days' notice by the directors of Global Funds, Inc. or by the Manager. The
Agreements will terminate automatically in the event of their assignment.
The Manager manages each Fund's investments. The compensation payable
by New Europe Fund and Latin America Fund for investment management services
is equal to (on an annual basis) 1.25% of the Fund's average daily net assets.
The fees payable to Delaware International, while higher than the advisory
fees paid to other mutual funds in general, are comparable to fees paid by
other mutual funds with similar objectives and policies.
Beginning with the commencement of operations of New Europe Fund and
Latin America Fund through June 30, 1999 the Distributor has elected to
voluntarily waive 12b-1 expenses and Delaware International has voluntarily
elected to waive that portion, if any, of the annual management fees payable
by New Europe Fund and Latin America Fund and to reimburse the Fund's expenses
to the extent necessary to ensure that the Total Operating Expenses of Class A
Shares, Class B Shares, Class C Shares and the Institutional Class of this
Fund do not exceed 1.25% (exclusive of taxes, interest, brokerage commissions
and extraordinary expenses) on an annualized basis.
Except for those expenses borne by the Manager under the Investment
Management Agreements and the Distributor under the Distribution Agreements,
each Fund is responsible for all of its own expenses. Among others, these
include each Fund's 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.
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 the shares of New Europe and
Latin America Funds under separate Distribution Agreements dated December __,
1998. The Distributor is
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<PAGE>
an affiliate of the Manager and bears all of the costs of promotion and
distribution, except for payments by each Fund on behalf of its respective
Class A Shares, Class B Shares and Class C Shares under the 12b-1 Plan for each
class. The Distributor has elected voluntarily to waive payments under the 12b-1
Plan for Class A Shares, Class B Shares and Class C Shares of New Europe Fund
and Latin America Fund during the commencement of the public offering of the
Fund through June 30, 1999.
The Transfer Agent, Delaware Service Company, Inc., another affiliate
of the Manager located at 1818 Market Street, Philadelphia, PA 19103, serves
as the shareholder servicing, dividend disbursing and transfer agent for each
Fund under an amended and restated agreement dated December __, 1998. The
Transfer Agent provides accounting services to the Funds pursuant to the terms
of a separate Fund Accounting Agreement. The Transfer Agent is also an
indirect, wholly owned subsidiary of Delaware Management Holdings, Inc.
The Fund has authorized one or more brokers to accept on its behalf
purchase and redemption orders in addition to the Transfer Agent. Such brokers
are authorized to designate other intermediaries to accept purchase and
redemption orders on the behalf of the Funds. For purposes of pricing, the
Funds will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts
the order.
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<PAGE>
OFFICERS AND DIRECTORS
The business and affairs of Global Funds, Inc. are managed under the
direction of its Board of Directors.
Certain officers and directors of Global Funds, Inc. hold identical
positions in each of the other Delaware Investments funds. Because the Funds
are newly-created and are not commencing operations, no accounts hold 5% or
more of a class of shares of a Fund.
DMH Corp., Delvoy, Inc., Delaware Management Company, Delaware
Distributors, L.P., Delaware Distributors, Inc., Delaware Service Company,
Inc., Delaware Management Trust Company, Delaware International Holdings Ltd.,
Founders Holdings, Inc., Delaware International Advisers Ltd., Delaware
Capital Management, Inc. and Retirement Financial Services, Inc. are direct or
indirect, wholly owned subsidiaries of Delaware Management Holdings, Inc.
("DMH"). On April 3, 1995, a merger between DMH and a wholly owned subsidiary
of Lincoln National Corporation ("Lincoln National") was completed. DMH and
the Manager are now indirect, wholly owned subsidiaries, and subject to the
ultimate control, of Lincoln National. Lincoln National, with headquarters in
Fort Wayne, Indiana, is a diversified organization with operations in many
aspects of the financial services industry, including insurance and investment
management.
Certain officers and directors of Global Funds, Inc. hold identical
positions in each of the other funds offered by Delaware Investments.
Directors and principal officers of Global Funds, Inc. 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 (60)
Chairman and Director and/or Trustee of Global Funds, Inc. and each of
the other 33 investment companies in Delaware Investments,
Delaware Management Holdings, Inc. and Delaware Capital
Management, Inc.
Chairman, President, Chief Executive Officer and Director of DMH Corp.,
Delaware Distributors, Inc. and Founders Holdings, Inc.
Chairman, President, Chief Executive Officer, Chief Investment Officer
and Director of Delaware
Management Company, Inc. and Delaware International Holdings
Ltd.
Chairman, Chief Executive Officer and Director of Delaware
International Advisers Ltd.
Chairman of Delaware Distributors, L.P.
Director of Delaware Service Company, Inc. and Retirement Financial
Services, Inc.
Chief Executive Officer of Delvoy, Inc.
During the past five years, Mr. Stork has served in various executive
capacities at different times within the Delaware
organization.
*Jeffrey J. Nick (44)
President, Chief Executive Officer, Director and/or Trustee of Global
Funds, Inc. and each of the 33 other investment companies in
Delaware Investments.
President, Chief Executive Officer and Director of Delaware Management
Holdings, Inc. and Lincoln National Investment Companies, Inc.
President of Lincoln Funds Corporation.
From 1992 to 1996, Mr. Nick was Managing Director of Lincoln National
UK plc and from 1989 to 1992, he was Senior Vice President
responsible for corporate planning and development for Lincoln
National Corporation.
Richard G. Unruh, Jr. (58)
Executive Vice President of Global Funds, Inc. and each of the other 33
investment companies in Delaware Investments, Delaware
Management Holdings, Inc. and Delaware Capital Management,
Inc.
Executive Vice President and Director of Delaware Management Company
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 Funds' investment manager and considered an
"interested person" as defined in the 1940 Act.
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<PAGE>
Paul E. Suckow (50)
ExecutiveVice President/Chief Investment Officer, Fixed Income of
Global Funds, Inc., each of the other 33 investment
companies in the Delaware Group, Delaware Management Company
and Delaware Management Holdings, Inc.
Executive Vice President and Director of Founders Holdings, Inc.
Executive Vice President of Delaware Capital Management, Inc.
Director of Founders CBO Corporation and HYPPCO Finance Company Ltd.
Before returning to Delaware Investments in 1993, Mr. Suckow was
Executive Vice President and Director of Fixed Income for
Oppenheimer Management Corporation, New York, NY from 1985
to 1992. Prior to that, Mr. Suckow was a fixed-income
portfolio manager for Delaware Investments.
Walter P. Babich (70)
Director and/or Trustee of Global Funds, Inc. and each of the other 33
investment companies in Delaware Investments.
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.
John H. Durham (61)
Director and/or Trustee of Global & International Funds, Inc. and 18
other companies in the Delaware Investments family.
120 Gibraltar Road, Horsham, PA 19044
Partner, Complete Care Services
Mr. Durham served as Chairman of the Board of each fund in the
Delaware Investments family from 1986 to 1991; President of
each fund from 1977 to 1990; and Chief Executive Officer of
each fund from 1984 to 1990. Prior to 1992, with respect to
Delaware Management Holdings, Inc., Delaware Management
Company, Delaware Distributors, Inc. and Delaware Service
Company, Inc., Mr. Durham served as a director and in various
executive capacities at different times.
Anthony D. Knerr (59)
Director and/or Trustee of Global Funds, Inc. and each of the other 33
investment companies in Delaware Investments.
500 Fifth Avenue, New York, NY 10110.
Founder and Managing Director, Anthony Knerr & Associates.
From 1982 to 1988, Mr. Knerr was Executive Vice President/Finance and
Treasurer of Columbia University, New York. From 1987 to 1989,
he was also a lecturer in English at the University. In
addition, Mr. Knerr was Chairman of The Publishing Group,
Inc., New York, from 1988 to 1990. Mr. Knerr founded The
Publishing Group, Inc. in 1988.
Ann R. Leven (57)
Director and/or Trustee of Global Funds, Inc. and each of the other 33
investment companies 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
1992, she was Adjunct Professor of Columbia Business School.
W. Thacher Longstreth (77)
Director and/or Trustee of Global Funds, Inc. and each of the other 33
investment companies in Delaware Investments.
City Hall, Philadelphia, PA 19107.
Philadelphia City Councilman.
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<PAGE>
Thomas F. Madison (61)
Director and/or Trustee of Global Funds, Inc. and 33 other investment
companies in the Delaware Group.
President and Chief Executive Officer, MLM Partners, Inc.
200 South Fifth Street, Suite 2100, Minneapolis, Minnesota 55402.
Mr. Madison has also been Chairman of the Board of Communications
Holdings, Inc. since 1996.
From February to September 1994, Mr. Madison served as Vice
Chairman--Office of the CEO of The Minnesota Mutual Life
Insurance Company and from 1988 to 1993, he was President of
U.S. WEST Communications--Markets.
Charles E. Peck (72)
Director and/or Trustee of Global Funds, Inc. and each of the other 33
investment companies in Delaware Investments.
P.O. Box 1102, Columbia, MD 21044.
Secretary/Treasurer, Enterprise Homes, Inc.
From 1981 to 1990, Mr. Peck was Chairman and Chief Executive Officer
of The Ryland Group, Inc., Columbia, MD.
David K. Downes (58)
ExecutiveVice President/Chief Operating Officer/Chief Financial
Officer of Global Funds, Inc., each of the other 33
investment companies in Delaware Investments, Delaware
Management Holdings, Inc, Founders CBO Corporation, Delaware
Capital Management, Inc. and Delaware Distributors, L.P.
Executive Vice President, Chief Operating Officer, Chief Financial
Officer and Director of Delaware Management Company,
DMH Corp., Delaware Distributors, Inc., Founders Holdings,
Inc., Delaware International Holdings, Inc. and Delvoy, Inc.
President/Chief Executive Officer/Chief Financial Officer and Director
of Delaware Service Company, Inc.
Vice President of Lincoln Funds Corporation.
Chairman, Chief Executive Officer and Director of Retirement Financial
Services, Inc.
Chairman and Director of Delaware Management Trust Company.
Director of Delaware International Advisers Ltd.
Before joining Delaware Investments 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. (50)
Senior Vice President, Secretary and General Counsel of Global Funds,
Inc., each of the other 33 investment companies in Delaware
Investments, Delaware Distributors, L.P. and Delaware
Management Holdings, Inc.
Senior Vice President, Secretary, General Counsel and Director of
DMH Corp., Delaware Management Company, Delaware
Distributors, Inc., Delaware Service Company, Inc., Founders
Holdings, Inc., Retirement Financial Services, Inc.,
Delaware Capital Management, Inc. and Delvoy, Inc.
Executive Vice President, Secretary, General Counsel and Director of
Delaware Management Trust Company.
Senior Vice President and Director of Delaware International Holdings
Ltd.
Director of Delaware International Advisers Ltd.
Secretary of Lincoln Funds Corporation.
Attorney.
During the past five years, Mr. Chamberlain has served in various
capacities at different times within the Delaware
organization.
Joseph H. Hastings (48)
Senior Vice President/Corporate Controller of the Global Funds, Inc.,
each of the other 33 investment companies in Delaware
Investments and Founders Holdings, Inc.
Senior Vice President/Corporate Controller/Treasurer of Delaware
Management Holdings, Inc., DMH Corp., Delaware Management
Company, Delaware Distributors, L.P., Delaware Distributors,
Inc., Delaware Service Company, Inc., Delaware Capital
Management, Inc. and Delaware International Holdings Ltd.
Senior Vice President/Controller and Treasurer of Delvoy, Inc.
Chief Financial Officer/Treasurer of Retirement Financial Services,
Inc.
Executive Vice President/Chief Financial Officer/Treasurer of Delaware
Management Trust Company.
Senior Vice President/Assistant Treasurer of Founders CBO Corporation.
Treasurer of Lincoln Funds Corporation.
1818 Market Street, Philadelphia, PA 19103.
Before joining Delaware Investments 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.
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<PAGE>
Michael P. Bishof (35)
Senior Vice President/Treasurer of Global Funds, Inc., each of the
other 33 investment companies in Delaware Investments,
Delaware Distributors, Inc. and Founders Holdings, Inc.
Senior Vice President/Investment Accounting of Delaware Management
Company and Delaware Service Company, Inc.
Senior Vice President and Treasurer/Manager, Investment Accounting of
Delaware Distributors, L.P.
Senior Vice President and Manager of Investment Accounting of Delaware
International Holdings Ltd.
Assistant Treasurer of Founders CBO Corporation.
Before joining Delaware Investments in 1995, Mr. Bishof was a Vice
President for Bankers Trust, New York, NY from 1994 to 1995,
a Vice President for CS First Boston Investment Management,
New York, NY from 1993 to 1994 and an Assistant Vice
President for Equitable Capital Management Corporation, New
York, NY from 1987 to 1993.
George H. Burwell (36)
Vice President/Senior Portfolio Manager of Global Funds, Inc., of seven
other investment companies in Delaware Investments and of
Delaware Management Company
Before joining Delaware Investments 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 (38)
Vice President/Senior Portfolio Manager of Global Funds, Inc., of 11
other investment companies in Delaware Investments and of
Delaware Management Company
Vice President of Founders Holdings, Inc.
President 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 (39)
Vice President/Senior Portfolio Manager of Global Funds, Inc., of
11 other investment companies in Delaware Investments and of
Delaware Management Company.
Vice President of Founders Holdings, Inc.
Assistant Secretary, 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.
Robert L. Arnold (34)
Vice President/Portfolio Manager of Global Funds, Inc. and two other
investment companies in the Delaware Group.
During the past five years, Mr. Arnold has served in various
capacities at different times within the Delaware
organization.
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<PAGE>
The following is a compensation table listing for each director
entitled to receive compensation, the aggregate compensation received from
Global Funds, Inc. and the total compensation received from all Delaware
Investments funds for the fiscal year ended November 30, 1997 and an estimate
of annual benefits to be received upon retirement under the Delaware
Investments Retirement Plan for Directors/Trustees as of September 30, 1998.
Only the independent directors of Global & International Funds, Inc. receive
compensation from the Funds.
<TABLE>
<CAPTION>
Pension or
Retirement Total
Benefits Estimated Compensation
Aggregate Accrued Annual from all 33
Compensation as Part of Benefits Delaware Investments
from Global Global Funds, Upon Investment
Name Funds, Inc. Inc. Expenses Retirement* Companies
<S> <C> <C> <C> <C>
W. Thacher Longstreth $1,555 None $38,500 $59,243
Ann R. Leven $1,640 None $38,500 $64,452
Walter P. Babich $1,624 None $38,500 $63,452
Anthony D. Knerr $1,624 None $38,500 $63,452
Charles E. Peck $1,459 None $38,500 $56,057
Thomas F. Madison** $837 None $38,500 $37,225
John H. Durham*** N/A None $31,500 N/A
</TABLE>
* Under the terms of the Delaware Investments Retirement Plan for Directors/
Trustees, each disinterested director who, at the time of his or her
retirement from the Board, has attained the age of 70 years and served on
the Board for at least five continuous years, is entitled to receive
payments from each Delaware Investments fund 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 September 30, 1998, he or she would
be entitled to annual payments totaling the amount noted above, in the
aggregate, from all of the Delaware Investments funds, based on the number
of funds offered by Delaware Investments as of that date.
** Thomas F. Madison joined Global Funds, Inc's Board of Directors on
April 30, 1997.
*** John H. Durham joined the Board of Directors of Global & International
Funds, Inc. and 18 other investment companies in the Delaware Investments
family on April 16, 1998.
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EXCHANGE PRIVILEGE
The exchange privileges available for shareholders of the Fund's
classes and for shareholders of classes of other Delaware Investments funds
are set forth in the relevant prospectus for such classes. The following
supplements that information. Each Fund may modify, terminate or suspend the
exchange privilege upon 60 days' notice to shareholders.
All exchanges involve a purchase of shares of the fund into which the
exchange is made. As with any purchase, an investor should obtain and
carefully read that fund's prospectus before buying shares in an exchange. The
prospectus contains more complete information about the fund, including
charges and expenses. A shareholder requesting an exchange will be sent a
current prospectus and an authorization form for any of the other Delaware
Investments mutual funds. 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 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 Delaware Investments funds 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 offered by Delaware Investments. This service
is automatically provided unless the relevant Fund receives written notice
from the shareholder to the contrary.
Shareholders or their investment dealers of record may contact the
Shareholder Service Center at 800-523-1918 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 Fund account
number must be identified, as well as the registration of the account, the
share or dollar amount to be exchanged and the fund into which the exchange is
to be made. Requests received on any day after the time the offering price 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 Delaware Investments funds. Telephone exchanges may be subject to
limitations as to amounts or frequency. The Transfer Agent and each Fund
reserve the right to record exchange instructions received by telephone and to
reject exchange requests at any time.
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As described in the Funds' Prospectuses, neither the Funds nor their
Transfer Agent is responsible for any shareholder loss incurred in acting upon
written or telephone instructions for redemption or exchange of Fund shares
which are reasonably believed to be genuine.
Right to Refuse Timing Accounts
With regard to accounts that are administered by market timing
services ("Timing Firms") to purchase or redeem shares based on changing
economic and market conditions ("Timing Accounts"), each Fund will refuse any
new timing arrangements, as well as any new purchases (as opposed to
exchanges) in Delaware Investments funds from Timing Firms. A 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 Investments funds: (1)
Decatur Income Fund, (2) Decatur Total Return Fund, (3) Delaware Fund, (4)
Limited-Term Government Fund, (5) USA Fund, (6) Delaware Cash Reserve, (7)
Delchester Fund and (8) Tax-Free Pennsylvania Fund. No other Delaware
Investments funds are available for timed exchanges. Assets redeemed or
exchanged out of Timing Accounts in Delaware Investments funds not listed
above may not be reinvested back into that Timing Account. Each Fund reserves
the right to apply these same restrictions to the account(s) of any person
whose transactions seem to follow a timing pattern (as described above).
Each 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 a 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 a
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 Investments 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 stocks
issued by emerging growth companies exhibiting strong capital appreciation
potential.
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Small Cap Value Fund seeks capital appreciation by investing
primarily in common stocks whose market values appear low relative to their
underlying value or future potential.
DelCap Fund seeks long-term capital growth by investing in common
stocks and securities convertible into common stocks of companies that have a
demonstrated history of growth and have the potential to support continued
growth.
Decatur Income Fund seeks the highest possible current income by
investing primarily in common stocks that provide the potential for income and
capital appreciation without undue risk to principal. Decatur Total Return
Fund seeks long-term growth by investing primarily in securities that provide
the potential for income and capital appreciation without undue risk to
principal. Blue Chip Fund seeks to achieve long-term capital appreciation.
Current income is a secondary objective. It seeks to achieve these objectives
by investing primarily in equity securities and any securities that are
convertible into equity securities. Social Awareness Fund seeks to achieve
long-term capital appreciation. It seeks to achieve this objective by
investing in equity securities of medium-to large-sized companies expected to
grow over time that meet the Fund's "Social Criteria" strategy.
Delchester Fund seeks as high a current income as possible by
investing principally in high yield, high risk corporate bonds, and also in
U.S. government securities and commercial paper. Strategic Income Fund seeks
to provide investors with high current income and total return by using a
multi-sector investment approach, investing principally in three sectors of
the fixed-income securities markets: high yield, higher risk securities,
investment grade fixed-income securities and foreign government and other
foreign fixed-income securities. High-Yield Opportunities Fund seeks to
provide investors with total return and, as a secondary objective, high
current income.
U.S. Government Fund seeks high current income by investing 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.
REIT Fund seeks to achieve maximum long-term total return with
capital appreciation as a secondary objective. It seeks to achieve its
objectives by investing in securities of companies primarily engaged in the
real estate industry.
Tax-Free USA Fund seeks high current income exempt from federal
income tax by investing in municipal bonds of geographically-diverse issuers.
Tax-Free Insured Fund invests in these same types of securities but with an
emphasis on municipal bonds protected by insurance guaranteeing principal and
interest
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are paid when due. Tax-Free USA Intermediate Fund seeks a high level of current
interest income exempt from federal income tax, consistent with the preservation
of capital by investing primarily in municipal bonds.
Tax-Free Money Fund seeks high current income, exempt from federal
income tax, by investing in short-term municipal obligations, while
maintaining a stable net asset value.
Tax-Free New Jersey Fund seeks a high level of current interest
income exempt from federal income tax and New Jersey state and local taxes,
consistent with preservation of capital. Tax-Free Ohio Fund seeks a high level
of current interest income exempt from federal income tax and Ohio state and
local taxes, consistent with preservation of capital. Tax-Free Pennsylvania
Fund seeks a high level of current interest income exempt from federal income
tax and Pennsylvania state and local taxes, consistent with the preservation
of capital.
U.S. Growth Fund seeks to maximize capital appreciation by investing
in companies of all sizes which have low dividend yields, strong balance
sheets and high expected earnings growth rates relative to their industry.
Overseas Equity Fund seeks to maximize total return (capital appreciation and
income), principally through investments in an internationally diversified
portfolio of equity securities. New Pacific Fund seeks long-term capital
appreciation by investing primarily in companies which are domiciled in or
have their principal business activities in the Pacific Basin.
Delaware Group Premium Fund, Inc. offers 15 funds available
exclusively as funding vehicles for certain insurance company separate
accounts. Decatur Total Return Series (formerly known as 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. Delchester Series (formerly know as 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. Cash Reserve Series (formerly
known as Money Market Series) seeks the highest level of income consistent
with preservation of capital and liquidity through investments in short-term
money market instruments. DelCap Series (formerly known as Growth Series)
seeks long-term capital appreciation by investing its assets in a diversified
portfolio of securities exhibiting the potential for significant growth.
Delaware Series (formerly known as 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. Trend Series (formerly known as 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. Global Bond
Series seeks to achieve current income consistent with the preservation of
principal by investing primarily in global fixed-income securities that may
also provide the potential for capital appreciation. Strategic Income Series
seeks high current income and total return by using a multi-sector investment
approach, investing primarily in three sectors of the fixed-income securities
markets: high-yield, higher risk securities; investment grade fixed-income
securities; and foreign government and other foreign fixed-income securities.
Devon Series seeks current income and capital
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appreciation by investing primarily in income-producing common stocks, with a
focus on common stocks that the investment manager believes have the potential
for above-average dividend increases over time. Emerging Markets Series seeks to
achieve long-term capital appreciation by investing primarily in equity
securities of issuers located or operating in emerging countries. Convertible
Securities Series seeks a high level of total return on its assets through a
combination of capital appreciation and current income by investing primarily in
convertible securities. Quantum Series seeks to achieve long-term capital
appreciation by investing primarily in equity securities of medium to
large-sized companies expected to grow over time that meet the Series' "Social
Criteria" strategy.
Delaware-Voyageur US Government Securities Fund seeks to provide a
high level of current income consistent with the prudent investment risk by
investing in U.S. Treasury bills, notes, bonds, and other obligations issued
or unconditionally guaranteed by the full faith and credit of the U.S.
Treasury, and repurchase agreements fully secured by such obligations.
Delaware-Voyageur Tax-Free Arizona Insured Fund seeks to provide a
high level of current income exempt from federal income tax and the Arizona
personal income tax, consistent with the preservation of capital.
Delaware-Voyageur Minnesota Insured Fund seeks to provide a high level of
current income exempt from federal income tax and the Minnesota personal
income tax, consistent with the preservation of capital.
Delaware-Voyageur Tax-Free Minnesota Intermediate Fund seeks to
provide a high level of current income exempt from federal income tax and the
Minnesota personal income tax, consistent with preservation of capital. The
Fund seeks to reduce market risk by maintaining an average weighted maturity
from five to ten years.
Delaware-Voyageur Tax-Free California Insured Fund seeks to provide a
high level of current income exempt from federal income tax and the California
personal income tax, consistent with the preservation of capital.
Delaware-Voyageur Tax-Free Florida Insured Fund seeks to provide a high level
of current income exempt from federal income tax, consistent with the
preservation of capital. The Fund will seek to select investments that will
enable its shares to be exempt from the Florida intangible personal property
tax. Delaware-Voyageur Tax-Free Florida Fund seeks to provide a high level of
current income exempt from federal income tax, consistent with the
preservation of capital. The Fund will seek to select investments that will
enable its shares to be exempt from the Florida intangible personal property
tax. Delaware-Voyageur Tax-Free Kansas Fund seeks to provide a high level of
current income exempt from federal income tax, the Kansas personal income tax
and the Kansas Intangible personal property tax, consistent with the
preservation of capital. Delaware-Voyageur Tax-Free Missouri Insured Fund
seeks to provide a high level of current income exempt from federal income tax
and the Missouri personal income tax, consistent with the preservation of
capital. Delaware-Voyageur Tax-Free New Mexico Fund seeks to provide a high
level of current income exempt from federal income tax and the New Mexico
personal income tax, consistent with the preservation of capital.
Delaware-Voyageur Tax-Free Oregon Insured Fund seeks to provide a high level
of current income exempt from federal income tax and the Oregon personal
income tax, consistent with the preservation of capital. Delaware-Voyageur
Tax-Free Utah Fund seeks to provide a high level of current income exempt from
federal income tax, consistent with the preservation of capital.
Delaware-Voyageur Tax-Free Washington Insured Fund seeks to provide a high
level of current income exempt from federal income tax, consistent with the
preservation of capital.
Delaware-Voyageur Tax-Free Florida Intermediate Fund seeks to provide
a high level of current income exempt from federal income tax, consistent with
the preservation of capital. The Fund will seek to
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select investments that will enable its shares to be exempt from the Florida
intangible personal property tax. The Fund seeks to reduce market risk by
maintaining an average weighted maturity from five to ten years.
Delaware-Voyageur Tax-Free Arizona Fund seeks to provide a high level
of current income exempt from federal income tax and the Arizona personal
income tax, consistent with the preservation of capital. Delaware-Voyageur
Tax-Free California Fund seeks to provide a high level of current income
exempt from federal income tax and the California personal income tax,
consistent with the preservation of capital. Delaware-Voyageur Tax-Free Iowa
Fund seeks to provide a high level of current income exempt from federal
income tax and the Iowa personal income tax, consistent with the preservation
of capital. Delaware-Voyageur Tax-Free Idaho Fund seeks to provide a high
level of current income exempt from federal income tax and the Idaho personal
income tax, consistent with the preservation of capital. Delaware-Voyageur
Minnesota High Yield Municipal Bond Fund seeks to provide a high level of
current income exempt from federal income tax and the Minnesota personal
income tax primarily through investment in medium and lower grade municipal
obligations. National High Yield Municipal Fund seeks to provide a high level
of income exempt from federal income tax, primarily through investment in
medium and lower grade municipal obligations. Delaware-Voyageur Tax-Free New
York Fund seeks to provide a high level of current income exempt from federal
income tax and the personal income tax of the state of New York and the city
of New York, consistent with the preservation of capital. Delaware-Voyageur
Tax-Free Wisconsin Fund seeks to provide a high level of current income exempt
from federal income tax and the Wisconsin personal income tax, consistent with
the preservation of capital.
Delaware-Voyageur Tax-Free Colorado Fund seeks to provide a high
level of current income exempt from federal income tax and the Colorado
personal income tax, consistent with the preservation of capital.
Aggressive Growth Fund seeks long-term capital appreciation, which
the Fund attempts to achieve by investing primarily in equity securities
believed to have the potential for high earnings growth. Although the Fund, in
seeking its objective, may receive current income from dividends and interest,
income is only an incidental consideration in the selection of the Fund's
investments. Growth Stock Fund has an objective of long-term capital
appreciation. The Fund seeks to achieve its objective from equity securities
diversified among individual companies and industries. Tax-Efficient Equity
Fund seeks to obtain for taxable investors a high total return on an after-tax
basis. The Fund will attempt to achieve this objective by seeking to provide a
high long-term after-tax total return through managing its portfolio in a
manner that will defer the realization of accrued capital gains and minimize
dividend income.
Delaware-Voyageur Tax-Free Minnesota Fund seeks to provide a high
level of current income exempt from federal income tax and the Minnesota
personal income tax, consistent with the preservation of capital.
Delaware-Voyageur Tax-Free North Dakota Fund seeks to provide a high level of
current income exempt from federal income tax and the North Dakota personal
income tax, consistent with the preservation of capital.
For more complete information about any of the Delaware Investments
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).
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GENERAL INFORMATION
Delaware International is the investment manager of each Fund of
Global Funds, Inc. Delaware International, or its affiliate Delaware, also
manages the other Delaware Investments funds. Delaware, through a separate
division, also manages private investment accounts. While investment decisions
of each Fund are made independently from those of the other funds and
accounts, investment decisions for such other funds and accounts may be made
at the same time as investment decisions for a Fund.
Delaware International, or its affiliate Delaware also manages the
investment options for Delaware Medallion(SM) III Variable Annuity. Medallion
is issued by Allmerica Financial Life Insurance and Annuity Company (First
Allmerica Financial Life Insurance Company in New York and Hawaii). Delaware
Medallion offers 15 different investment series ranging from domestic equity
funds, international equity and bond funds and domestic fixed income funds.
Each investment series available through Medallion utilizes an investment
strategy and discipline the same as or similar to one of the Delaware
Investments mutual funds available outside the annuity. See Delaware Group
Premium Fund, Inc., above.
Access persons and advisory persons of the Delaware Investments
funds, as those terms are defined in SEC Rule 17j-1 under the 1940 Act, who
provide services to Delaware, Delaware International 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 each of the Funds
and for the other Delaware Investments mutual funds.
The Transfer Agent, an affiliate of Delaware International and
Delaware, acts as shareholder servicing, dividend disbursing and transfer
agent for each Fund and for the other Delaware Investments mutual funds. The
Transfer Agent is paid a fee by each Fund for providing these services
consisting of an annual per account charge of $5.50 for each Fund 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. The Transfer Agent also
provides accounting services to each Fund. Those services include performing
all functions related to calculating each Fund's net asset value and providing
all financial reporting services, regulatory compliance testing and the
related accounting services. For its services, the Transfer Agent is paid a
fee based on total assets of all Delaware Investments funds for which it
provides such accounting services. Such fee is equal to 0.25% multiplied by
the total amount of assets in the complex for which the Transfer Agent
furnishes accounting services, where such aggregate complex assets are $10
billion or less, and 0.20% of assets if such aggregate complex assets exceed
$10 billion. The fees are charged to each fund, including each Fund, on an
aggregate pro-rata basis. The asset-based fee payable to the Transfer Agent is
subject to a minimum fee calculated by determining the total number of
investment portfolios and associated classes.
Delaware and its affiliates own the name "Delaware Group." Under
certain circumstances, including the termination of Global Funds, Inc.'s
advisory relationship with Delaware International and Delaware or its
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distribution relationship with the Distributor, Delaware and its affiliates
could cause Global Funds, Inc. to delete the words "Delaware Group" from
Global Funds, Inc.'s name.
The Chase Manhattan Bank ("Chase"), 4 Chase Metrotech Center,
Brooklyn, NY 11245, is custodian of each Fund's securities and cash. As
custodian for the Fund, Chase maintains a separate account or accounts for
each Fund; receives, holds and releases portfolio securities on account of
each Fund; receives and disburses money on behalf of each Fund; and collects
and receives income and other payments and distributions on account of each
Fund's portfolio securities.
Capitalization
Global Funds, Inc. has a present authorized capitalization of one
billion shares of capital stock with a $0.01 par value per share. Each Fund
currently offers four classes of shares. The Board of Directors has allocated
fifty million shares to each of the Fund's Class A Shares and Institutional
Class, and has allocated twenty-five million shares to each of the Fund's
Class B Shares and Class C Shares.
While shares of Global Funds, Inc. have equal voting rights, except
as noted below, on matters affecting the Funds, each Fund would vote
separately on any matter it is directly affected by, such as any change in its
fundamental investment policies and as otherwise prescribed by the 1940 Act.
Shares of each Fund have a priority in that Fund's assets, and in gains on and
income from the portfolio of that Fund. All shares have no preemptive rights,
are fully transferable and, when issued, are fully paid and nonassessable.
Each Class of each Fund represents a proportionate interest in the
assets of such Fund and has the same voting and other rights and preferences
as the other classes of that Fund, except that shares of a Fund's
Institutional Class may not vote on any matter affecting the Fund Classes'
Plans under Rule 12b-1. Similarly, as a general matter, shareholders of Class
A Shares, Class B Shares and Class C Shares of a Fund 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 Fund may vote on any proposal to increase
materially the fees to be paid by a Fund under the 12b-1 Plan relating to its
Class A Shares. General expenses of a Fund will be allocated on a pro-rata
basis to the respective classes according to asset size, except that expenses
of the 12b-1 Plans of each Fund's Class A Shares, Class B Shares and Class C
Shares will be allocated solely to those Classes.
The Registration Statements of the Funds and Classes of Global Funds,
Inc. described in this Part B became effective on the following dates:
New Europe Fund
New Europe Fund A Class December __, 1998
New Europe Fund B Class December __, 1998
New Europe Fund C Class December __, 1998
New Europe Fund Institutional Class December __, 1998
Latin America Fund
Latin America Fund A Class December __, 1998
Latin America Fund B Class December __, 1998
Latin America Fund C Class December __, 1998
Latin America Fund Institutional Class December __, 1998
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Noncumulative Voting
Global Funds, Inc. shares have noncumulative voting rights which
means that the holders of more than 50% of the shares of Global Funds, Inc.
voting for the election of directors can elect all the directors if they
choose to do so, and, in such event, the holders of the remaining shares will
not be able to elect any directors.
This Part B does not include all of the information contained in the
Registration Statement which is on file with the SEC.
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FINANCIAL STATEMENTS
Ernst & Young LLP serves as the independent auditors for Delaware
Group Global & International Funds, Inc. and, in its capacity as such, audits
the annual financial statements of the Funds. Since the Funds have recently
commenced operations, no operating history exists.
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Delaware Investments includes funds with a wide range of investment
objectives. Stock funds, income funds, national and state-specific tax-exempt
funds, money market funds, global and international funds and closed-end funds
give investors the ability to create a portfolio that fits their personal
financial goals. For more information, shareholders of the Fund Classes should
contact their financial adviser or call Delaware Investments at 800-523-4640,
and shareholders of the Institutional Classes should contact Delaware Group at
800-828-5052.
INVESTMENT MANAGER
Delaware International Advisers Ltd.
80 Cheapside
Third Floor
London, England EC2V 6EE
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
1818 Market Street
Philadelphia, PA 19103
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING,
ACCOUNTING SERVICES
AND TRANSFER AGENT
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
One Commerce Square
Philadelphia, PA 19103
INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103
CUSTODIAN
The Chase Manhattan Bank
4 Chase Metrotech Center
Brooklyn, NY 11245
DELAWARE GROUP
________________________________________________________________________________
________________________________________________________________________________
GLOBAL & INTERNATIONAL FUNDS, INC.
________________________________________________________________________________
NEW EUROPE FUND
________________________________________________________________________________
LATIN AMERICA FUND
________________________________________________________________________________
PART B
STATEMENT OF
ADDITIONAL INFORMATION
________________________________________________________________________________
DECEMBER __, 1998
DELAWARE
INVESTMENTS
-----------
________________________________________________________________________________
<PAGE>
PART C
------
Other Information
-----------------
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements:
Part A - N/A
Part B - N/A
(b) Exhibits:
(1) Articles of Incorporation.
(a) Articles of Incorporation, as amended and
supplemented through April 30, 1996, incorporated
into this filing by reference to Post-Effective
Amendment No. 10 filed November 27, 1995.
(b) Executed Articles Supplementary (November 28, 1995)
incorporated into this filing by reference to
Post-Effective Amendment No. 11 filed January 31,
1996.
(c) Executed Articles Supplementary (April 30, 1996)
incorporated into this filing by reference to
Post-Effective Amendment No. 13 filed May 16, 1996.
(d) Executed Articles Supplementary (July 21, 1997)
incorporated into this filing by reference to
Post-Effective Amendment No. 18 filed February 4,
1998.
(e) Form of Articles Supplementary (July 21, 1997)
incorporated into this filing by reference to
Post-Effective Amendment No. 18 filed February 4,
1998.
(f) Articles Supplementary (1998) to be filed by
Amendment.
(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.
(i) 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) incorporated into this filing by
reference to Post-Effective Amendment No. 10
filed November 27, 1995.
<PAGE>
PART C - Other Information
(Continued)
(ii) Article Third, Article Fourth and Article
Fifth of Articles Supplementary (November
28, 1995) incorporated into this filing by
reference to Post-Effective Amendment No. 11
filed January 31, 1996.
(iii) Article Fourth of Articles Supplementary
(April 30, 1996) incorporated into this
filing by reference to Post-Effective
Amendment No. 13 filed May 16, 1996.
(iv) Article Fifth of Articles Supplementary
(July 21, 1997) incorporated into this
filing by reference to Post-Effective
Amendment No. 18 filed February 4, 1998.
(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.
(a) Investment Management Agreement (April 3, 1995)
between Delaware International Advisers Ltd. and
the Registrant on behalf of the International
Equity Series incorporated into this filing by
reference to Post-Effective Amendment No. 9 filed
June 30, 1995.
(b) Investment Management Agreement (April 3, 1995)
between Delaware International Advisers Ltd. and
the Registrant on behalf of the Global Assets
Series (now named Global Equity Series)
incorporated into this filing by reference to
Post-Effective Amendment No. 9 filed June 30, 1995.
(c) Investment Management Agreement (April 3, 1995)
between Delaware International Advisers Ltd. and
the Registrant on behalf of the Global Bond Series
incorporated into this filing by reference to
Post-Effective Amendment No. 9 filed June 30, 1995.
(d) Sub-Advisory Agreement (April 3, 1995) between
Delaware International Advisers Ltd. and Delaware
Management Company, Inc. on behalf of the Global
Bond Series incorporated into this filing by
reference to Post-Effective Amendment No. 9 filed
June 30, 1995.
(e) Investment Management Agreement (May 1, 1996)
between Delaware International Advisers Ltd. and
the Registrant on behalf of the Emerging Markets
Series incorporated into this filing by reference
to Post-Effective Amendment No. 13 filed May 16,
1996.
(f) Executed Investment Management Agreement (July 21,
1997) between Delaware International Advisers Ltd.
and the Registrant on behalf of the International
Small Cap Series incorporated into this filing by
reference to Post-Effective Amendment No. 18 filed
February 4, 1998.
<PAGE>
PART C - Other Information
(Continued)
(g) Investment Management Agreement (1997) between
Delaware International Advisers Ltd. and the
Registrant on behalf of the Global Equity Series
(now named Global Opportunities Series) to be filed
by Amendment.
(h) Sub-Advisory Agreement (1997) between Delaware
International Advisers Ltd. and Delaware Management
Company, Inc. on behalf of the Global Equity Series
(now named Global Opportunities Series) to be filed
by Amendment.
(i) Form of Investment Management Agreement (1998)
between Delaware International Advisers Ltd. and
Delaware Management Company on behalf of New Europe
Series and Latin America Series attached as
Exhibit.
(6) (a) Distribution Agreements.
(i) Form of Distribution Agreement (April 3,
1995) incorporated into this filing by
reference to Post-Effective Amendment No. 10
filed November 27, 1995.
(ii) Form of Amendment No. 1 to Distribution
Agreement (November 29, 1995) incorporated
into this filing by reference to
Post-Effective Amendment No. 10 filed
November 27, 1995.
(iii) Executed Distribution Agreement (May 1, 1996)
between Delaware Distributors, L.P. and the
Registrant on behalf of the Emerging Markets
Series incorporated into this filing by
reference to Post-Effective Amendment No. 13
filed May 16, 1996.
(iv) Form of Distribution Agreement (1997)
(Module) between Delaware Distributors, L.P.
and the Registrant on behalf of the Global
Equity Series (now named Global Opportunities
Series) incorporated into this filing by
reference to Post-Effective Amendment No. 16
filed April 28, 1997.
(v) Executed Distribution Agreement (July 21,
1997) between Delaware Distributors, L.P. and
the Registrant on behalf of International
Small Cap Series incorporated into this
filing by reference to Post-Effective
Amendment No. 18 filed February 4, 1998.
(vi) Form of Distribution Agreement (1998) between
Delaware Distributors, L.P. and the
Registrant on behalf of New Europe Series and
Latin America Series attached as Exhibit.
(b) Administration and Service Agreement. Form of
Administration and Service Agreement (Module) (as
amended November 1995) incorporated into this
filing by reference to Post-Effective Amendment No.
10 filed November 27, 1995.
(c) Dealer's Agreements.
<PAGE>
PART C - Other Information
(Continued)
(i) Dealer's Agreement (Module) with Delaware
Distributors, Inc. (as amended November 1995)
incorporated into this filing by reference to
Post-Effective Amendment No. 10 filed
November 27, 1995.
(d) Mutual Fund Agreement for the Delaware Group of
Funds (Module) (November 1995) incorporated into
this filing by reference to Post-Effective
Amendment No. 11 filed January 31, 1996.
(7) Bonus, Profit Sharing, Pension Contracts.
(a) Amended and Restated Profit Sharing Plan (November
17, 1994) incorporated into this filing by
reference to Post-Effective Amendment No. 9 filed
June 30, 1995.
(b) Amendment to Profit Sharing Plan (December 21,
1995) incorporated into this filing by reference to
Post-Effective Amendment No. 11 filed January 31,
1996.
(8) Custodian Agreements.
(a) Executed Custodian Agreement (Module) between The
Chase Manhattan Bank and the Registrant on behalf
of each Series (May 1, 1996) incorporated into this
filing by reference to Post-Effective Amendment No.
14 filed November 27, 1996.
(i) Amendment (November 1997) to Custodian
Agreement between The Chase Manhattan Bank
and the Registrant on behalf of each Series
incorporated into this filing by reference to
Post-Effective Amendment No. 18 filed
February 4, 1998.
(ii) Form of Letter (December 1998) to add Latin
America Series and New Europe Series to the
Custodian Agreement between The Chase
Manhattan Bank and the Registrant attached as
Exhibit.
(b) Form of Securities Lending Agreement (1996) between
The Chase Manhattan Bank and the Registrant on
behalf of each Series incorporated into this filing
by reference to Post-Effective Amendment No. 13
filed May 16, 1996.
(9) Other Material Contracts.
(a) Shareholders Services Agreement (October 25, 1991)
between Delaware Service Company, Inc. and the
Registrant on behalf of the International Equity
Series incorporated into this filing by reference
to Post-Effective Amendment No. 14 filed November
27, 1996.
<PAGE>
PART C - Other Information
(Continued)
(b) Shareholders Services Agreement (October 25, 1991)
between Delaware Service Company, Inc. and the
Registrant on behalf of the Global Assets Series
(formerly Global Total Return Series and now named
Global Equity Series) incorporated into this filing
by reference to Post-Effective Amendment No. 14
filed November 27, 1996.
(c) Shareholders Services Agreement (October 25, 1991)
between Delaware Service Company, Inc. and the
Registrant on behalf of the Global Bond Series
(formerly Global Income Series) incorporated into
this filing by reference to Post-Effective
Amendment No. 14 filed November 27, 1996.
(d) Shareholders Services Agreement (May 1, 1996)
between Delaware Service Company, Inc. and the
Registrant on behalf of the Emerging Markets Series
incorporated into this filing by reference to
Post-Effective Amendment No. 13 filed May 16, 1996.
(e) Form of Amended and Restated Shareholders Services
Agreement (1997) (Module) between Delaware Service
Company, Inc. and the Registrant on behalf of each
Series incorporated into this filing by reference
to Post-Effective Amendment No. 16 filed April 28,
1997.
(f) Form of Amended and Restated Shareholders Services
Agreement (December 1998) between Delaware Service
Company, Inc. and the Registrant on behalf of each
Series attached as Exhibit.
(g) Executed Delaware Group of Funds Fund Accounting
Agreement between Delaware Service Company, Inc.
and the Registrant (August 19, 1996) incorporated
into this filing by reference to Post-Effective
Amendment No. 14 filed November 27, 1996.
(i) Executed Amendment No. 9 (March 31, 1998) to
Schedule A to Delaware Group of Funds Fund
Accounting Agreement attached as Exhibit.
(ii) Form of Amendment No. 13 (1998) to Schedule A
to Delaware Group of Funds Fund Accounting
Agreement attached as Exhibit.
(10) Opinion of Counsel. To be filed by Amendment.
(11) Consent of Auditors. Inapplicable.
(12) Inapplicable.
(13) Undertaking of Initial Shareholder.
Incorporated into this filing by reference to
Pre-Effective Amendment No. 1 filed August
22, 1991.
(14) Inapplicable.
<PAGE>
PART C - Other Information
(Continued)
(15) Plans under Rule 12b-1.
(a) Form of Plan under Rule 12b-1 for Class A of the
International Equity, Global Bond and Global Assets
Series (now named Global Equity Series) (November
1995) incorporated into this filing by reference to
Post-Effective Amendment No. 10 filed November 27,
1995.
(b) Form of Plan under Rule 12b-1 for Class B of the
International Equity, Global Bond and Global Assets
Series (now named Global Equity Series) (November
1995) incorporated into this filing by reference to
Post-Effective Amendment No. 10 filed November 27,
1995.
(c) Form of Plan under Rule 12b-1 for Class C of the
International Equity, Global Bond and Global Assets
Series (now named Global Equity Series) (November
1995) incorporated into this filing by reference to
Post-Effective Amendment No. 10 filed November 27,
1995.
(d) Executed Plan under Rule 12b-1 (May 1, 1996) for
Class A Shares of the Emerging Markets Series
incorporated into this filing by reference to
Post-Effective Amendment No. 13 filed May 16, 1996.
(e) Executed Plan under Rule 12b-1 (May 1, 1996) for
Class B Shares of the Emerging Markets Series
incorporated into this filing by reference to
Post-Effective Amendment No. 13 filed May 16, 1996.
(f) Executed Plan under Rule 12b-1 (May 1, 1996) for
Class C Shares of the Emerging Markets Series
incorporated into this filing by reference to
Post-Effective Amendment No. 13 filed May 16, 1996.
(g) Form of Plan under Rule 12b-1 for Global Equity
(now named Global Opportunities Series) Series
Class A (1997) (Module) incorporated into this
filing by reference to Post-Effective Amendment No.
16 filed April 28, 1997.
(h) Form of Plan under Rule 12b-1 for Global Equity
(now named Global Opportunities Series) Series
Class B (1997) (Module) incorporated into this
filing by reference to Post-Effective Amendment No.
16 filed April 28, 1997.
(i) Form of Plan under Rule 12b-1 for and Global Equity
(now named Global Opportunities Series) Series
Class C (1997) (Module) incorporated into this
filing by reference to Post-Effective Amendment No.
16 filed April 28, 1997.
(j) Form of Plan under Rule 12b-1 for International
Small Cap Series Class A (July 1997) incorporated
into this filing by reference to Post-Effective
Amendment No. 18 filed February 4, 1998.
(k) Form of Plan under Rule 12b-1 for International
Small Cap Series Class B (July 1997) incorporated
into this filing by reference to Post-Effective
Amendment No. 18 filed February 4, 1998.
<PAGE>
PART C - Other Information
(Continued)
(l) Form of Plan under Rule 12b-1 for International
Small Cap Series Class C (July 1997) incorporated
into this filing by reference to Post-Effective
Amendment No. 18 filed February 4, 1998.
(m) Form of Plan under Rule 12b-1 for Class A (December
1998) on behalf of Latin America Series and New
Europe Series attached as Exhibit.
(n) Form of Plan under Rule 12b-1 for Class B (December
1998) on behalf of Latin America Series and New
Europe Series attached as Exhibit.
(o) Form of Plan under Rule 12b-1 for Class C (December
1998) on behalf of Latin America Series and New
Europe Series attached as Exhibit.
(16) Schedules of Computation for each Performance
Quotation.
(a) Incorporated into this filing by reference to
Post-Effective Amendment No. 9 filed June 30, 1995,
Post-Effective Amendment No. 11 filed January 31,
1996, Post-Effective Amendment No. 14 filed
November 27, 1996, Post-Effective Amendment No. 15
filed March 21, 1997 and Post-Effective Amendment
No. 18 filed February 4, 1998.
(17) Financial Data Schedules. Inapplicable.
(18) Plan under Rule 18f-3.
(a) Plan under Rule 18f-3 (September 18, 1997) attached
as Exhibit.
(i) Amended Appendix A (December 18, 1997) to
Plan under Rule 18f-3 incorporated into this
filing by reference to Post-Effective
Amendment No. 18 filed February 4, 1998.
(ii) Amended Appendix A (1998) to Plan under Rule
18f-3 attached as Exhibit.
(19) Other: Directors' Power of Attorney.
Attached as Exhibit.
Item 25. Persons Controlled by or under Common Control with Registrant. None
<PAGE>
PART C - Other Information
(Continued)
Item 26. Number of Holders of Securities.
Number of
Title of Class Record Holders
-------------- --------------
Delaware Group Global & International
Funds, Inc.'s International Equity Series:
International Equity Fund A Class
Common Stock 9,355 Accounts as of
$.01 Par Value Per Share August 31, 1998
International Equity Fund B Class
Common Stock 4,309 Accounts as of
$.01 Par Value Per Share August 31, 1998
International Equity Fund C Class
Common Stock 1,309 Accounts as of
$.01 Par Value Per Share August 31, 1998
International Equity Fund Institutional Class
Common Stock 76 Accounts as of
$.01 Par Value Per Share August 31, 1998
Delaware Group Global & International
Funds, Inc.'s Global Equity Series:
Global Equity Fund A Class
Common Stock 937 Accounts as of
$.01 Par Value Per Share August 31, 1998
Global Equity Fund B Class
Common Stock 605 Accounts as of
$.01 Par Value Per Share August 31, 1998
Global Equity Fund C Class
Common Stock 200 Accounts as of
$.01 Par Value Per Share August 31, 1998
Global Equity Fund Institutional Class
Common Stock 16 Accounts as of
$.01 Par Value Per Share August 31, 1998
<PAGE>
PART C - Other Information
(Continued)
Number of
Title of Class Record Holders
-------------- --------------
Delaware Group Global & International
Funds, Inc.'s Global Bond Series:
Global Bond Fund A Class
Common Stock 371 Accounts as of
$.01 Par Value Per Share August 31, 1998
Global Bond Fund B Class
Common Stock 132 Accounts as of
$.01 Par Value Per Share August 31, 1998
Global Bond Fund C Class
Common Stock 51 Accounts as of
$.01 Par Value Per Share August 31, 1998
Global Bond Fund Institutional Class
Common Stock 115 Accounts as of
$.01 Par Value Per Share August 31, 1998
Delaware Group Global & International
Funds, Inc.'s Emerging Markets Series:
Emerging Markets Fund A Class
Common Stock 1,385 Accounts as of
$.01 Par Value Per Share August 31, 1998
Emerging Markets Fund B Class
Common Stock 871 Accounts as of
$.01 Par Value Per Share August 31, 1998
Emerging Markets Fund C Class
Common Stock 309 Accounts as of
$.01 Par Value Per Share August 31, 1998
Emerging Markets Fund Institutional Class
Common Stock 18 Accounts as of
$.01 Par Value Per Share August 31, 1998
Delaware Group Global & International
Funds, Inc.'s Global Opportunities Series:
Global Opportunities Fund A Class
Common Stock 4 Accounts as of
$.01 Par Value Per Share August 31, 1998
<PAGE>
PART C - Other Information
(Continued)
Number of
Title of Class Record Holders
Global Opportunities Fund B Class
Common Stock 0 Accounts as of
$.01 Par Value Per Share August 31, 1998
Global Opportunities Fund C Class
Common Stock 0 Accounts as of
$.01 Par Value Per Share August 31, 1998
Global Opportunities Fund Institutional Class
Common Stock 2 Accounts as of
$.01 Par Value Per Share August 31, 1998
Delaware Group Global & International
Funds, Inc.'s International Small Cap Series:
International Small Cap Fund A Class
Common Stock 1 Account as of
$.01 Par Value Per Share August 31, 1998
International Small Cap Fund B Class
Common Stock 0 Accounts as of
$.01 Par Value Per Share August 31, 1998
International Small Cap Fund C Class
Common Stock 0 Accounts as of
$.01 Par Value Per Share August 31, 1998
International Small Cap Fund Institutional Class
Common Stock 2 Accounts as of
$.01 Par Value Per Share August 31, 1998
Delaware Group Global & International
Funds, Inc.'s Latin America Series:
Latin America Fund A Class
Common Stock 0 Accounts as of
$.01 Par Value Per Share August 31, 1998
Latin America Fund B Class
Common Stock 0 Accounts as of
$.01 Par Value Per Share August 31, 1998
Latin America Fund C Class
Common Stock 0 Accounts as of
$.01 Par Value Per Share August 31, 1998
<PAGE>
PART C - Other Information
(Continued)
Number of
Title of Class Record Holders
-------------- --------------
Latin America Fund Institutional Class
Common Stock 0 Accounts as of
$.01 Par Value Per Share August 31, 1998
Delaware Group Global & International
Funds, Inc.'s New Europe Series:
New Europe Fund A Class
Common Stock 0 Accounts as of
$.01 Par Value Per Share August 31, 1998
New Europe Fund B Class
Common Stock 0 Accounts as of
$.01 Par Value Per Share August 31, 1998
New Europe Fund C Class
Common Stock 0 Accounts as of
$.01 Par Value Per Share August 31, 1998
New Europe Fund Institutional Class
Common Stock 0 Accounts as of
$.01 Par Value Per Share August 31, 1998
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.
<PAGE>
PART C - Other Information
(Continued)
Item 28. Business and Other Connections of Investment Adviser.
Delaware International Advisers Ltd. ("Delaware International") serves as
investment manager to International Equity Series, Global Bond Series, Global
Equity Series, Emerging Markets Series, International Small Cap Series, Global
Opportunities Series, Latin America Series and New Europe Series of the
Registrant, and also serves as investment manager or sub-investment adviser to
certain of the other funds in the Delaware Investments family (Delaware Group
Global Dividend and Income Fund, Inc., Delaware Group Income Funds, Inc.,
Delaware Group Adviser Funds, Inc., Delaware Pooled Trust, Inc. and Delaware
Group Premium Fund, Inc.) and other institutional accounts.
Information regarding the officers and directors of Delaware
International and the positions they have held with the Registrant during the
past two fiscal years is provided below.
<TABLE>
<CAPTION>
<S> <C>
Name and Principal Positions and Offices with Delaware International Advisers Ltd.
Business Address and its Affiliates and Other Positions and Offices Held
- ---------------- -------------------------------------------------------
*Wayne A. Stork Chairman, Chief Executive Officer and Director of Delaware International
Holdings Ltd. and Delaware International Advisers Ltd.; Chairman of the Board,
President, Chief Executive Officer, Chief Investment Officer and
Director/Trustee of Delaware Management Company, Inc. and Delaware
Management Business Trust; Chairman of the Board, President, Chief Executive
Officer, Chief Investment Officer of Delaware Management Company (a series
of Delaware Management Business Trust); Chairman of the Board, President,
Chief Executive Officer and Director of DMH Corp., Delaware Distributors, Inc.
and Founders Holdings, Inc.; Chairman, Chief Executive Officer and Chief
Investment Officer of Delaware Investment Advisers (a series of Delaware
Management Business Trust); Chairman of the Board and Director and/or
Trustee of the Registrant, each of the other funds in the Delaware Investments
family, Delaware Management Holdings, Inc., and Delaware Capital
Management, Inc.; Chairman of Delaware Distributors, L.P.; President and
Chief Executive Officer of Delvoy, Inc.; and Director and/or Trustee of
Delaware Service Company, Inc. and Retirement Financial Services, Inc.
* Jeffrey J. Nick Director of Delaware International Advisers Ltd.; President, Chief Executive
Officer and Director and/or Trustee of the Registrant and each of the other
investment companies in the Delaware Investments family; President and
Director of Delaware Management Holdings, Inc.; President, Chief Executive
Officer and Director of Lincoln National Investment Companies, Inc.; and
President of Lincoln Funds Corporation
**David G. Tilles Managing Director, Chief Investment Officer and Director of Delaware
International Advisers Ltd. and Chief Investment Officer and Director of
Delaware International Holdings, Ltd.
**G. Roger H. Kitson Vice Chairman and Director of Delaware International Advisers Ltd.
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
** Business address of each is Third Floor, 80 Cheapside, London, England
EC2V 6EE.
<PAGE>
PART C - Other Information
(Continued)
<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>
**Ian G. Sims Deputy Managing Director/ Chief Investment Officer/Global Fixed Income and
Director of Delaware International Advisers Ltd.
**John Emberson Secretary, Compliance Officer, Finance Director and Director of Delaware
International Advisers Ltd.
**Nigel G. May Senior Portfolio Manager/Head of Pacific Basin Group and Director of Delaware
International Advisers Ltd.
**Elizabeth A. Desmond Senior Portfolio Manager/Head of European Group and Director of Delaware
International Advisers Ltd.
*David K. Downes Director of Delaware International Advisers Ltd.; Executive Vice President, Chief
Operating Officer, Chief Financial Officer and Director of Delaware Management
Company (a series of Delaware Management Business Trust), DMH Corp, Delaware
Distributors, Inc., Founders Holdings, Inc. and Delvoy, Inc.; Executive Vice
President, Chief Financial Officer, Chief Administrative Officer and Trustee of
Delaware Management Business Trust; Executive Vice President, Chief Operating
Officer and Chief Financial Officer of the Registrant and each of the other funds
in the Delaware Investments family, Delaware Management Holdings, Inc., Founders
CBO Corporation, Delaware Capital Management, Inc., Delaware Management Company (a
series of Delaware Management Business Trust), Delaware Investment Advisers (a
series of Delaware Management Business Trust) and Delaware Distributors, L.P.;
President, Chief Executive Officer, Chief Financial Officer and Director of
Delaware Service Company, Inc.; President, Chief Operating Officer, Chief
Financial Officer and Director of Delaware International Holdings Ltd.; Chairman,
Chief Executive Officer and Director of Retirement Financial Services, Inc.;
Chairman and Director of Delaware Management Trust Company; and Vice President of
Lincoln Funds Corporation
Chief Executive Officer and Director of Forewarn, Inc. since 1993, 8 Clayton
Place, Newtown Square, PA
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
** Business address of each is Third Floor, 80 Cheapside, London, England
EC2V 6EE.
<PAGE>
PART C - Other Information
(Continued)
Name and Principal Positions and Offices with Delaware International
Business Address Advisers Ltd. and its Affiliates and Other Positions
and Offices Held
*Richard G. Unruh, Jr. President of Delaware Investment Advisers (a series
of Delaware Management Business Trust); Executive
Vice President and Director/Trustee of Delaware
Management Company, Inc. and Delaware Management
Business Trust; Executive Vice President of the
Registrant, each of the other funds in the Delaware
Investments family, Delaware Management Holdings,
Inc., Delaware Capital Management, Inc. and Delaware
Management Company (a series of Delaware Management
Business Trust); and Director of Delaware
International Advisers Ltd.
Board of Directors, Chairman of Finance Committee,
Keystone Insurance Company since 1989, 2040 Market
Street, Philadelphia, PA; Board of Directors,
Chairman of Finance Committee, AAA Mid Atlantic, Inc.
since 1989, 2040 Market Street, Philadelphia, PA;
Board of Directors, Metron, Inc. since 1995, 11911
Freedom Drive, Reston, VA
*Richard J. Flannery Executive Vice President and General Counsel of
Delaware Management Holdings, Inc., DMH Corp.,
Delaware Management Company, Inc., Delaware
Distributors, Inc., Delaware Distributors, L.P.,
Delaware Management Trust Company, Delaware Capital
Management, Inc., Delaware Service Company, Inc.,
Delaware Management Company (a series of Delaware
Management Business Trust), Delaware Investment
Advisers (a series of Delaware Management Business
Trust); Founders CBO Corporation and Retirement
Financial Services, Inc.; Senior Vice
President/Corporate and International Affairs of the
Registrant and each of the other funds in the
Delaware Investments family; Executive Vice
President/General Counsel and Director of Delaware
International Holdings Ltd.; Founders Holdings, Inc.
and Delvoy, Inc.; and Director of Delaware
International Advisers Ltd.
Director, HYPPCO Finance Company Ltd.
Limited Partner of Stonewall Links, L.P. since 1991,
Bulltown Rd., Elverton, PA; Director and Member of
Executive Committee of Stonewall Links, Inc. since
1991, Bulltown Rd., Elverton, PA
*John C. E. Campbell Director of Delaware International Advisers Ltd.;
Executive Vice President of Delaware Investment
Advisers
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
** Business address of each is Third Floor, 80 Cheapside, London,
England EC2V 6EE.)
Name and Principal Positions and Offices with the Manager and its
<PAGE>
PART C - Other Information
(Continued)
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
*George M. Senior Vice President, Secretary and General Counsel
Chamberlain, Jr. of the Registrant and each of the other funds in the
Delaware Investments family; Senior Vice President
and Secretary of Delaware Distributors, L.P.,
Delaware Management Company (a series of Delaware
Management Business Trust), Delaware Investment
Advisers (a series of Delaware Management Business
Trust) and Delaware Management Holdings, Inc.; Senior
Vice President, Secretary and Director/Trustee of
Delaware Management Company, Inc., DMH Corp.,
Delaware Distributors, Inc., Delaware Service
Company, Inc., Founders Holdings, Inc., Delaware
Capital Management, Inc., Retirement Financial
Services, Inc., Delvoy, Inc. and Delaware Management
Business Trust; Senior Vice President and Director of
Delaware International Holdings Ltd.; Executive Vice
President, Secretary and Director of Delaware
Management Trust Company; Director of Delaware
International Advisers Ltd.; Secretary of Lincoln
Funds Corporation
**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.
**Gavin A. Hall Senior Portfolio Manager of Delaware International
Advisers Ltd.
**Robert Akester Senior Portfolio Manager of Delaware International
Advisers Ltd.
**Hywel Morgan Senior Portfolio Manager of Delaware International
Advisers Ltd.
**Fiona A. Barwick Senior Portfolio Manager of Delaware International
Advisers Ltd.
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
** Business address of each is Third Floor, 80 Cheapside, London,
England EC2V 6EE.
<PAGE>
PART C - Other Information
(Continued)
Delaware Management Company, an affiliate of Delaware International
and a series of Delaware Management Business Trust, serves as investment manager
to a portion of the portfolio of the Global Equity Series and Global
Opportunities Series and as investment manager or sub-adviser to certain of the
other funds in the Delaware Investments family (Delaware Group Equity Funds I,
Inc., Delaware Group Equity Funds II, Inc., Delaware Group Equity Funds III,
Inc., Delaware Group Equity Funds IV, Inc., Delaware Group Equity Funds V, Inc.,
Delaware Group Government Fund, Inc., Delaware Group Income Funds, Inc.,
Delaware Group Limited-Term Government Funds, Inc., Delaware Group Cash Reserve,
Inc., Delaware Group Tax-Free Fund, Inc., Delaware Group State Tax-Free Income
Trust, Delaware Group Tax-Free Money Fund, Inc., Delaware Group Premium Fund,
Inc., Delaware Pooled Trust, Inc., Delaware Group Adviser Funds, Inc., Delaware
Group Dividend and Income Fund, Inc., Delaware Group Global Dividend and Income
Fund, Inc., Delaware Group Foundation Funds, Inc., Voyageur Intermediate
Tax-Free Funds, Inc., Voyageur Tax-Free Funds, Inc., Voyageur Funds, Inc.,
Voyageur Insured Funds, Inc., Voyageur Investment Trust, Voyageur Investment
Trust II, Voyageur Mutual Funds, Inc., Voyageur Mutual Funds II, Inc., Voyageur
Mutual Funds III, Inc., Voyageur Arizona Municipal Income Fund, Inc., Voyageur
Colorado Insured Municipal Income Fund, Inc., Voyageur Florida Insured Municipal
Income Fund, Voyageur Minnesota Municipal Fund, Inc., Voyageur Minnesota
Municipal Fund II, Inc. and Voyageur Minnesota Municipal Fund III, Inc.). In
addition, certain officers of the Manager also serve as directors/trustees of
the other funds in the Delaware Investments family, and certain officers are
also officers of these other funds. A company indirectly owned by the Manager's
indirect parent company acts as principal underwriter to the mutual funds in the
Delaware Investments family (see Item 29 below) and another such company acts as
the shareholder services, dividend disbursing, accounting servicing and transfer
agent for all of the mutual funds in the Delaware Investments family.
The following persons serving as officers of the Manager have held the
following positions during the past two years:
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
Wayne A. Stork Chairman of the Board, President, Chief Executive
Officer, Chief Investment Officer and
Director/Trustee of Delaware Management Company, Inc.
and Delaware Management Business Trust; Chairman of
the Board, President, Chief Executive Officer, Chief
Investment Officer of Delaware Management Company (a
series of Delaware Management Business Trust);
Chairman of the Board, President, Chief Executive
Officer and Director of DMH Corp., Delaware
Distributors, Inc. and Founders Holdings, Inc.;
Chairman, Chief Executive Officer and Chief
Investment Officer of Dealware Investment Advisers (a
series of Delaware Management Business Trust);
Chairman, Chief Executive Officer and Director of
Delaware International Holdings Ltd. and Delaware
International Advisers Ltd.; Chairman of the Board
and Director of the Registrant, each of the other
funds in the Delaware Investments family, Delaware
Management Holdings, Inc., and Delaware Capital
Management, Inc.; Chairman of Delaware Distributors,
L.P.; President and Chief Executive Officer of
Delvoy, Inc.; and Director and/or Trustee of Delaware
Service Company, Inc. and Retirement Financial
Services, Inc.
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
Richard G. Unruh, Jr. Executive Vice President of the Registrant, each of
the other funds in the Delaware Investments family,
Delaware Management Holdings, Inc., Delaware Capital
Management, Inc. and Delaware Management Company (a
series of Delaware Management Business Trust);
Executive Vice President and Director/Trustee of
Delaware Management Company, Inc. and Delaware
Management Business Trust; President of Delaware
Investment Advisers (a series of Delaware Management
Business Trust); and Director of Delaware
International Advisers Ltd.
Board of Directors, Chairman of Finance Committee,
Keystone Insurance Company since 1989, 2040 Market
Street, Philadelphia, PA; Board of Directors,
Chairman of Finance Committee, AAA Mid Atlantic, Inc.
since 1989, 2040 Market Street, Philadelphia, PA;
Board of Directors, Metron, Inc. since 1995, 11911
Freedom Drive, Reston, VA
Paul E. Suckow Executive Vice President/Chief Investment Officer,
Fixed Income of Delaware Management Company, Inc.,
Delaware Management Company (a series of Delaware
Management Business Trust), Delaware Investment
Advisers (a series of Delaware Management Business
Trust), the Registrant, each of the other funds in
the Delaware Investments family and Delaware
Management Holdings, Inc.; Executive Vice President
and Director of Founders Holdings, Inc.; Executive
Vice President of Delaware Capital Management, Inc.
and Delaware Management Business Trust; and Director
of Founders CBO Corporation
Director, HYPPCO Finance Company Ltd.
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
David K. Downes Executive Vice President, Chief Operating Officer,
Chief Financial Officer and Director of Delaware
Management Company, Inc., DMH Corp, Delaware
Distributors, Inc., Founders Holdings, Inc. and
Delvoy, Inc.; Executive Vice President, Chief
Financial Officer, Chief Administrative Officer and
Trustee of Delaware Management Business Trust;
Executive Vice President, Chief Operating Officer and
Chief Financial Officer of the Registrant and each of
the other funds in the Delaware Investments family,
Delaware Management Holdings, Inc., Founders CBO
Corporation, Delaware Capital Management, Inc.,
Delaware Management Company (a series of Delaware
Management Business Trust), Delaware Investment
Advisers (a series of Delaware Management Business
Trust) and Delaware Distributors, L.P.; President,
Chief Executive Officer, Chief Financial Officer and
Director of Delaware Service Company, Inc.;
President, Chief Operating Officer, Chief Financial
Officer and Director of Delaware International
Holdings Ltd.; Chairman, Chief Executive Officer and
Director of Retirement Financial Services, Inc.;
Chairman and Director of Delaware Management Trust
Company; Director of Delaware International Advisers
Ltd.; and Vice President of Lincoln Funds Corporation
Chief Executive Officer and Director of Forewarn,
Inc. since 1993, 8 Clayton Place, Newtown Square, PA
Richard J. Flannery Executive Vice President and General Counsel of
Delaware Management Holdings, Inc., DMH Corp.,
Delaware Management Company, Inc., Delaware
Distributors, Inc., Delaware Distributors, L.P.,
Delaware Management Trust Company, Delaware Capital
Management, Inc., Delaware Service Company, Inc.,
Delaware Management Company (a series of Delaware
Management Business Trust), Delaware Investment
Advisers (a series of Delaware Management Business
Trust); Founders CBO Corporation and Retirement
Financial Services, Inc.; Senior Vice
President/Corporate and International Affairs of the
Registrant and each of the other funds in the
Delaware Investments family; Executive Vice
President/General Counsel and Director of Delaware
International Holdings Ltd.; Founders Holdings, Inc.
and Delvoy, Inc.; and Director of Delaware
International Advisers Ltd.
Director, HYPPCO Finance Company Ltd.
Limited Partner of Stonewall Links, L.P. since 1991,
Bulltown Rd., Elverton, PA; Director and Member of
Executive Committee of Stonewall Links, Inc. since
1991, Bulltown Rd., Elverton, PA
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
George M. Senior Vice President, Secretary and General Counsel
Chamberlain, Jr. of the Registrant and each of the other funds in the
Delaware Investments family; Senior Vice President
and Secretary of Delaware Distributors, L.P.,
Delaware Management Company (a series of Delaware
Management Business Trust), Delaware Investment
Advisers (a series of Delaware Management Business
Trust) and Delaware Management Holdings, Inc.; Senior
Vice President, Secretary and Director/Trustee of
Delaware Management Company, Inc., DMH Corp.,
Delaware Distributors, Inc., Delaware Service
Company, Inc., Founders Holdings, Inc., Delaware
Capital Management, Inc., Retirement Financial
Services, Inc., Delvoy, Inc. and Delaware Management
Business Trust; Senior Vice President and Director of
Delaware International Holdings Ltd.; Executive Vice
President, Secretary and Director of Delaware
Management Trust Company; Director of Delaware
International Advisers Ltd.; Secretary of Lincoln
Funds Corporation
Michael P. Bishof Senior Vice President and Treasurer of the
Registrant, each of the other funds in the Delaware
Investments family and Founders Holdings, Inc.;
Senior Vice President/Investment Accounting of
Delaware Management Company, Inc., Delaware
Management Company (a series of Delaware Management
Business Trust) and Delaware Service Company, Inc.;
Senior Vice President and Treasurer/ Manager,
Investment Accounting of Delaware Distributors, L.P.
and Delaware Investment Advisers (a series of
Delaware Management Business Trust); Senior Vice
President and Assistant Treasurer of Founders CBO
Corporation; and Senior Vice President and Manager of
Investment Accounting of Delaware International
Holdings Ltd.
Joseph H. Hastings Senior Vice President/Corporate Controller and
Treasurer of Delaware Management Holdings, Inc., DMH
Corp., Delaware Management Company, Inc., Delaware
Distributors, Inc., Delaware Capital Management,
Inc., Delaware Distributors, L.P., Delaware Service
Company, Inc., Delaware International Holdings Ltd.,
Delaware Management Company (a series of Delaware
Management Business Trust), Delvoy, Inc. and Delaware
Management Business Trust; Senior Vice
President/Corporate Controller of the Registrant,
each of the other funds in the Delaware Investments
family and Founders Holdings, Inc.; Executive Vice
President, Chief Financial Officer and Treasurer of
Delaware Management Trust Company; Chief Financial
Officer and Treasurer of Retirement Financial
Services, Inc.; Senior Vice President/Assistant
Treasurer of Founders CBO Corporation; and Treasurer
of Lincoln Funds Corporation
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
Michael T. Taggart Senior Vice President/Facilities Management and
Administrative Services of Delaware Management
Company, Inc. and Delaware Management Company (a
series of Delaware Management Business Trust)
Douglas L. Anderson Senior Vice President/Operations of Delaware
Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust),
Retirement Financial Services, Inc. and Delaware
Service Company, Inc.; Senior Vice President/
Operations and Director of Delaware Management Trust
Company
James L. Shields Senior Vice President/Chief Information Officer of
Delaware Management Company, Inc., Delaware
Management Company (a series of Delaware Management
Business Trust), Delaware Service Company, Inc. and
Retirement Financial Services, Inc.
Eric E. Miller Vice President, Assistant Secretary and Deputy
General Counsel of the Registrant and each of the
other funds in the Delaware Investments family,
Delaware Management Company, Inc., Delaware
Management Company (a series of Delaware Management
Business Trust), Delaware Investment Advisers (a
series of Delaware Management Business Trust),
Delaware Management Holdings, Inc., DMH Corp.,
Delaware Distributors, L.P., Delaware Distributors
Inc., Delaware Service Company, Inc., Delaware
Management Trust Company, Founders Holdings, Inc.,
Delaware Capital Management, Inc. and Retirement
Financial Services, Inc.; Assistant Secretary of
Delaware Management Business Trust; and Vice
President and Assistant Secretary of Delvoy, Inc.
Richelle S. Maestro Vice President and Assistant Secretary of the
Registrant, each of the other funds in the Delaware
Investments family, Delaware Management Company,
Inc., Delaware Management Company (a series of
Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management
Business Trust), Delaware Management Holdings, Inc.,
Delaware Distributors, L.P., Delaware Distributors,
Inc., Delaware Service Company, Inc., DMH Corp.,
Delaware Management Trust Company, Delaware Capital
Management, Inc., Retirement Financial Services,
Inc., Founders Holdings, Inc. and Delvoy, Inc.; Vice
President and Secretary of Delaware International
Holdings Ltd.; and Secretary of Founders CBO
Corporation
Partner of Tri-R Associates since 1989, 10001
Sandmeyer Lane, Philadelphia, PA
Richard Salus(1) Vice President/Assistant Controller of Delaware
Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust) and
Delaware Management Trust Company
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
Bruce A. Ulmer Vice President/Director of LNC Internal Audit of the
Registrant, each of the other funds in the Delaware
Investments family, Delaware Management Company,
Inc., Delaware Management Company (a series of
Delaware Management Business Trust), Delaware
Management Holdings, Inc., DMH Corp., Delaware
Management Trust Company and Retirement Financial
Services, Inc.; Vice President/Director of Internal
Audit of Delvoy, Inc.
Joel A. Ettinger(2) Vice President/Director of Taxation of the
Registrant, each of the other funds in the Delaware
Investments family, Delaware Management Company,
Inc., Delaware Management Company (a series of
Delaware Management Business Trust) and Delaware
Management Holdings, Inc., Founders Holdings, Inc.
and Founders CBO Corporation
Christopher Adams Vice President/Strategic Planning of Delaware
Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust) and
Delaware Service Company, Inc.
Susan L. Hanson Vice President/Strategic Planning of Delaware
Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust) and
Delaware Service Company, Inc.
Dennis J. Mara(3) Vice President/Acquisitions of Delaware Management
Company, Inc. and Delaware Management Company (a
series of Delaware Management Business Trust)
Scott Metzger Vice President/Business Development of Delaware
Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust) and
Delaware Service Company, Inc.
Lisa O. Brinkley Vice President/Compliance of the Registrant, Delaware
Management Company, Inc., each of the other funds in
the Delaware Investments family, Delaware Management
Company (a series of Delaware Management Business
Trust), DMH Corp., Delaware Distributors, L.P.,
Delaware Distributors, Inc., Delaware Service
Company, Inc., Delaware Management Trust Company,
Delaware Capital Management, Inc. and Retirement
Financial Services, Inc.; Vice President/Compliance
Officer of Delaware Management Business Trust; and
Vice President of Delvoy, Inc.
Mary Ellen Carrozza Vice President/Client Services of Delaware Management
Company, Inc., Delaware Management Company (a series
of Delaware Management Business Trust), Delaware
Investment Advisers (a series of Delaware Management
Business Trust) and the Registrant
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
Gerald T. Nichols Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust),
Delaware Investment Advisers (a series of Delaware
Management Business Trust), the Registrant, 22 other
investment companies in the Delaware Investments
family; Vice President of Founders Holdings, Inc.;
and Treasurer, Assistant Secretary and Director of
Founders CBO Corporation
Paul A. Matlack Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust),
Delaware Investment Advisers (a series of Delaware
Management Business Trust), the Registrant, 21 other
investment companies in the Delaware Investments
family; Vice President of Founders Holdings, Inc.;
and President and Director of Founders CBO
Corporation
Gary A. Reed Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust),
Delaware Investment Advisers (a series of Delaware
Management Business Trust), the Registrant, 19 other
investment companies in the Delaware Investments
family and Delaware Capital Management, Inc.
Patrick P. Coyne Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust),
Delaware Investment Advisers (a series of Delaware
Management Business Trust), the Registrant, 19 other
investment companies in the Delaware Investments
family and Delaware Capital Management, Inc.
Roger A. Early Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust),
Delaware Investment Advisers (a series of Delaware
Management Business Trust), the Registrant, 19 other
investment companies in the Delaware Investments
family
Mitchell L. Conery(4) Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust),
Delaware Investment Advisers (a series of Delaware
Management Business Trust), the Registrant, 19 other
investment companies in the Delaware Investments
family and Delaware Capital Management, Inc.
George H. Burwell Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust), the
Registrant and nine other investment companies in the
Delaware Investments family
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
John B. Fields Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust),
Delaware Investment Advisers (a series of Delaware
Management Business Trust), the Registrant, ten
other investment companies in the Delaware
Investments family, Delaware Capital Management, Inc.
and Trustee of Delaware Management Business Trust
Gerald S. Frey Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust),
Delaware Investment Advisers (a series of Delaware
Management Business Trust), the Registrant and nine
other investment companies in the Delaware
Investments family
Christopher Beck(5) Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust),
Delaware Investment Advisers (a series of Delaware
Management Business Trust), the Registrant and ten
other investment companies in the Delaware
Investments family
Elizabeth H. Howell(6) Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust), the
Registrant and 16 other investment companies in
the Delaware Investments family
Andrew M. McCullagh, Vice President/Senior Portfolio Manager of Delaware
Jr.(7) Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust) the
Registrant and 17 other investment companies in
the Delaware Investments family
Babak Zenouzi Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust), the
Registrant and 12 other investment companies in the
Delaware Investments family
J. Paul Dokas(8) Vice President/Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust), the
Registrant and one other investment company in the
Delaware Investments family
Cynthia Isom Vice President/Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust), the
Registrant and 17 other investment companies in the
Delaware Investments family
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
Paul Grillo Vice President/Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust),
Delaware Investment Advisers (a series of Delaware
Management Business Trust), the Registrant and 19
other investment companies in the Delaware
Investments family
Marshall T. Bassett(9) Vice President/Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust),
Delaware Investment Advisers (a series of Delaware
Management Business Trust), the Registrant and nine
other investment companies in the Delaware
Investments family
John A. Heffern(10) Vice President/Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust) the
Registrant and nine other investment companies in the
Delaware Investments family
Lori P. Wachs Vice President/Portfolio Manager of Delaware
Management Company, Inc., Delaware Management Company
(a series of Delaware Management Business Trust) the
Registrant and nine other investment companies in the
Delaware Investments family
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
(1) SENIOR MANAGER, Ernst & Young LLP prior to December 1996.
(2) TAX PRINCIPAL, Ernst & Young LLP prior to April 1998.
(3) CORPORATE CONTROLLER, IIS prior to July 1997.
(4) INVESTMENT OFFICER, Travelers Insurance prior to January 1997.
(5) SENIOR PORTFOLIO MANAGER, Pitcairn Trust Company prior to May 1997.
(6) SENIOR PORTFOLIO MANAGER, Voyageur Fund Managers, Inc. prior to
May 1997.
(7) SENIOR VICE PRESIDENT, SENIOR PORTFOLIO MANAGER, Voyageur Asset
Management LLC prior to May 1997.
(8) DIRECTOR OF TRUST INVESTMENTS, Bell Atlantic Corporation prior to
February 1997.
(9) VICE PRESIDENT, Morgan Stanley Asset Management prior to March 1997.
(10) SENIOR VICE PRESIDENT, EQUITY RESEARCH, NatWest Securities Corporation
prior to March 1997.
<PAGE>
PART C - Other Information
(Continued)
Item 29. Principal Underwriters.
(a) Delaware Distributors, L.P. serves as principal
underwriter for all the mutual funds in the Delaware
Investments family.
(b) Information with respect to each director, officer or
partner of principal underwriter:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ ---------------- ---------------
<S> <C> <C>
Delaware Distributors, Inc. General Partner None
Delaware Investment
Advisers Limited Partner None
Delaware Capital
Management, Inc. Limited Partner None
Wayne A. Stork Chairman Chairman
Bruce D. Barton President and Chief Executive None
Officer
David K. Downes Executive Vice President, Executive Vice President, Chief
Chief Operating Officer Operating Officer and Chief
and Chief Financial Officer Financial Officer
Richard J. Flannery Executive Vice President/General Senior Vice President/
Counsel Corporate and
International
Affairs
George M. Chamberlain, Jr. Senior Vice President/Secretary Senior Vice President/
Secretary/General Counsel
Joseph H. Hastings Senior Vice President/Corporate Senior Vice President/
Controller & Treasurer Corporate Controller
Terrence P. Cunningham Senior Vice President/Financial None
Institutions
Thomas E. Sawyer Senior Vice President/ None
National Sales Director
Mac McAuliffe Senior Vice President/Sales None
Manager, Western Division
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ ---------------- ---------------
<S> <C> <C>
J. Chris Meyer Senior Vice President/ None
Director Product Management
William M. Kimbrough Senior Vice President/Wholesaler None
Daniel J. Brooks Senior Vice President/Wholesaler None
Bradley L. Kolstoe Senior Vice President/Western None
Division Sales Manager
Henry W. Orvin Senior Vice President/Eastern None
Division Sales Manager
Michael P. Bishof Senior Vice President and Treasurer/ Senior Vice
Manager, Investment Accounting President/Treasurer
Eric E. Miller Vice President/Assistant Secretary/ Vice President/Assistant
Deputy General Counsel Secretary/Deputy General
Counsel
Richelle S. Maestro Vice President/ Vice President/
Assistant Secretary Assistant Secretary
Lisa O. Brinkley Vice President/Compliance Vice President/Compliance
Daniel H. Carlson Vice President/Strategic Marketing None
Diane M. Anderson Vice President/Plan Record Keeping None
and Administration
Anthony J. Scalia Vice President/Defined Contribution None
Sales, SW Territory
Courtney S. West Vice President/Defined Contribution None
Sales, NE Territory
Denise F. Guerriere Vice President/Client Services None
Gordon E. Searles Vice President/Client Services None
Lori M. Burgess Vice President/Client Services None
Julia R. Vander Els Vice President/Participant Services None
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ ---------------- ---------------
<S> <C> <C>
Jerome J. Alrutz Vice President/Retail Sales None
Scott Metzger Vice President/Business Development Vice President/Business
Development
Larry Carr Vice President/Sales Manager None
Stephen C. Hall Vice President/Institutional Sales None
Gregory J. McMillan Vice President/ National Accounts None
Holly W. Reimel Vice President/Manager, None
National Accounts
Christopher H. Price Vice President/Manager, None
Insurance
Stephen J. DeAngelis Vice President/Product Development None
Andrew W. Whitaker Vice President/Financial Institutions None
Jessie Emery Vice President/ Marketing None
Communications
Darryl S. Grayson Vice President, Broker/Dealer None
Internal Sales
Dinah J. Huntoon Vice President/Product None
Manager Equity
Soohee Lee Vice President/Fixed Income None
Product Management
Michael J. Woods Vice President/UIT Product None
Management
Ellen M. Krott Vice President/Marketing None
Dale L. Kurtz Vice President/Marketing Support None
David P. Anderson Vice President/Wholesaler None
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ ---------------- ---------------
<S> <C> <C>
Lee D. Beck Vice President/Wholesaler None
Gabriella Bercze Vice President/Wholesaler None
Larry D. Birdwell Vice President/Wholesaler None
Terrence L. Bussard Vice President/Wholesaler None
William S. Carroll Vice President/Wholesaler None
William L. Castetter Vice President/Wholesaler None
Thomas J. Chadie Vice President/Wholesaler None
Joseph Gallagher Vice President/Wholesaler None
Thomas C. Gallagher Vice President/Wholesaler None
Douglas R. Glennon Vice President/Wholesaler None
Ronald A. Haimowitz Vice President/Wholesaler None
Edward J. Hecker Vice President/Wholesaler None
Christopher L. Johnston Vice President/Wholesaler None
Michael P. Jordan Vice President/Wholesaler None
Jeffrey A. Keinert Vice President/Wholesaler None
Thomas P. Kennett Vice President/ Wholesaler None
Theodore T. Malone Vice President/Wholesaler None
Debbie A. Marler Vice President/Wholesaler None
Nathan W. Medin Vice President/Wholesaler None
Roger J. Miller Vice President/Wholesaler None
Andrew Morris Vice President/Wholesaler None
Patrick L. Murphy Vice President/Wholesaler None
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ ---------------- ---------------
<S> <C> <C>
Scott Naughton Vice President/Wholesaler None
Stephen C. Nell Vice President/Wholesaler None
Julia A. Nye Vice President/Wholesaler None
Joseph T. Owczarek Vice President/Wholesaler None
Mary Ellen Pernice-Fadden Vice President/Wholesaler None
Mark A. Pletts Vice President/Wholesaler None
Philip G. Rickards Vice President/Wholesaler None
Laura E. Roman Vice President/Wholesaler None
Linda Schulz Vice President/Wholesaler None
Edward B. Sheridan Vice President/Wholesaler None
Robert E. Stansbury Vice President/Wholesaler None
Julia A. Stanton Vice President/Wholesaler None
Larry D. Stone Vice President/Wholesaler None
Edward J. Wagner Vice President/Wholesaler None
Wayne W. Wagner Vice President/Wholesaler None
John A. Wells Vice President/Marketing None
Technology
Scott Whitehouse Vice President/Wholesaler None
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
(c) Inapplicable.
Item 30. Location of Accounts and Records.
All accounts and records are maintained in Philadelphia at 1818
Market Street, Philadelphia, PA 19103 or One Commerce Square,
Philadelphia, PA 19103, or in London at Third Floor, 80
Cheapside, London, England EC2V 6EE.
<PAGE>
PART C - Other Information
(Continued)
Item 31. Management Services. None.
Item 32. Undertakings.
(a) Not Applicable.
(b) Not Applicable.
(c) The Registrant hereby undertakes to furnish each person to
whom a prospectus is delivered with a copy of the
Registrant's latest annual report to shareholders, upon
request and without charge.
(d) Not Applicable.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, this Registrant 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 2nd day of
October, 1998.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
By /s/ Wayne A. Stork
------------------
Wayne A. Stork
Chairman
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
- ----------------------------------------- ----------------------------------------- ---------------
<S> <C> <C>
/s/ Wayne A. Stork Chairman of the Board and Director October 2, 1998
- -----------------------------------------
Wayne A. Stork
/s/ David K. Downes Executive Vice President/Chief Operating October 2, 1998
- ------------------------------------------ Officer/Chief Financial Officer
David K. Downes (Principal Financial Officer and Principal
Accounting Officer)
/s/ Walter P. Babich * Director October 2, 1998
- ------------------------------------------
Walter P. Babich
/s/ John H. Durham * Director October 2, 1998
- -----------------------------------------
John H. Durham
/s/ Anthony D. Knerr * Director October 2, 1998
- -----------------------------------------
Anthony D. Knerr
/s/ Ann R. Leven * Director October 2, 1998
- -----------------------------------------
Ann R. Leven
/s/ W. Thacher Longstreth * Director October 2, 1998
- -----------------------------------------
W. Thacher Longstreth
/s/Thomas F. Madison * Director October 2, 1998
- -----------------------------------------
Thomas F. Madison
/s/Jeffrey J. Nick * Director October 2, 1998
- -----------------------------------------
Jeffrey J. Nick
/s/Charles E. Peck * Director October 2, 1998
- -----------------------------------------
Charles E. Peck
</TABLE>
*By /s/ Wayne A. Stork
------------------
Wayne A. Stork
as Attorney-in-Fact for
each of the persons indicated
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Exhibits
to
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
<PAGE>
PART C - Other Information
(Continued)
INDEX TO EXHIBITS
Exhibit No. Exhibit
- ----------- -------
EX-99.B5I Form of Investment Management Agreement (1998) between Delaware
International Advisers Ltd. and Delaware Management Company on
behalf of Latin America Series and New Europe Series
EX-99.B6VI Form of Distribution Agreement (1998) between Delaware
Distributors, L.P. and the Registrant on behalf of Latin
America Series and New Europe Series
EX-99.B8AII Form of Letter (December 1998) to add Latin America Series and
New Europe Series to the Custodian Agreement between The Chase
Manhattan Bank and the Registrant
EX-99.B9F Form of Amended and Restated Shareholders Services Agreement
(December 1998) between Delaware Service Company, Inc. and the
Registrant on behalf of each Series
EX-99.B9GI Executed Amendment No. 9 (March 31, 1998) to Schedule A to
Delaware Group of Funds Fund Accounting Agreement
EX-99.B9GII Form of Amendment No. 13 (1998) to Schedule A to Delaware Group
of Funds Fund Accounting Agreement
EX-99.B15M Form of Plan under Rule 12b-1 for Class A (December 1998) on
behalf of Latin America Series and New Europe Series
EX-99.B15N Form of Plan under Rule 12b-1 for Class B (December 1998) on
behalf of Latin America Series and New Europe Series
EX-99.B15O Form of Plan under Rule 12b-1 for Class C (December 1998) on
behalf of Latin America Series and New Europe Series
EX-99.B18AII Amended Appendix A (1998) to Plan under Rule 18f-3
EX-99.B19 Power of Attorney
<PAGE>
EX-99.B5I
EXHIBIT 24(B)(5)(I)
[REGISTRANT NAME]
FORM OF INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, made by and between [REGISTRANT], a Maryland
corporation ("Fund") on behalf of the [SERIES] ("Series"), and
("Investment Manager").
W I T N E S S E T H:
WHEREAS, the Fund has been organized and operates as an
investment company registered under the Investment Company Act of 1940 and is
currently comprised of [x] series, including the Series; as a separate series of
the Fund, each series engages in the business of investing and reinvesting its
assets in securities, and
WHEREAS, the Investment Manager is a registered investment
adviser under the Investment Advisers Act of 1940 and engages in the business of
providing investment management services; and
WHEREAS, in connection with the changes in investment manager,
the Fund on behalf of the Series and the Investment Manager desire to enter into
this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, and each of the parties hereto intending to be legally bound,
it is agreed as follows:
1. The Fund hereby employs the Investment Manager to manage
the investment and reinvestment of the Series' assets and to administer its
affairs, subject to the direction of the Fund's Board of Directors and officers
<PAGE>
of the Fund for the period and on the terms hereinafter set forth. The
Investment Manager hereby accepts such employment and agrees during such period
to render the services and assume the obligations herein set forth for the
compensation herein provided. The Investment Manager shall for all purposes
herein be deemed to be an independent contractor, and shall, unless otherwise
expressly provided and authorized, have no authority to act for or represent the
Fund in any way, or in any way be deemed an agent of the Fund. The Investment
Manager shall regularly make decisions as to what securities and other
instruments to purchase and sell on behalf of the Series and shall effect the
purchase and sale of such investments in furtherance of the Series' objectives
and policies and shall furnish the Board of Directors of the Fund with such
information and reports regarding the Series' investments as the Investment
Manager deems appropriate or as the Directors of the Fund may reasonably
request.
2. The Fund shall conduct its own business and affairs and
shall bear the expenses and salaries necessary and incidental thereto including,
but not in limitation of the foregoing, the costs incurred in: the maintenance
of its corporate existence; the maintenance of its own books, records and
procedures; dealing with its own shareholders; the payment of dividends;
transfer of stock, including issuance, redemption and repurchase of shares;
preparation of share certificates; reports and notices to shareholders; calling
and holding of shareholders' meetings; miscellaneous office expenses; brokerage
commissions; custodian fees; legal and accounting fees; taxes; and federal and
state registration fees. Directors, officers and employees of the Investment
Manager may be directors, officers and employees of any of the funds (including
the Fund) of which is investment manager. Directors, officers
and employees of the Investment Manager who are directors, officers and/or
employees of these
-2-
<PAGE>
funds shall not receive any compensation from the funds for acting in such dual
capacity.
In the conduct of the respective businesses of the parties
hereto and in the performance of this Agreement, the Fund and Investment Manager
may share facilities common to each, with appropriate proration of expenses
between them.
3. (a) Subject to the primary objective of obtaining the best
available prices and execution, the Investment Manager will place orders for the
purchase and sale of portfolio securities and other instruments with such
broker/dealers selected who provide statistical, factual and financial
information and services to the Fund, to the Investment Manager, to any
Sub-Adviser, as defined in Paragraph 5 hereof, or to any other fund for which
the Investment Manager or any such Sub-Adviser provides investment advisory
services and/or with broker/dealers who sell shares of the Fund or who sell
shares of any other fund for which the Investment Manager or any such
Sub-Adviser provides investment advisory services. Broker/dealers who sell
shares of the funds of which is investment manager, shall
only receive orders for the purchase or sale of portfolio securities to the
extent that the placing of such orders is in compliance with the Rules of the
Securities and Exchange Commission and the National Association of Securities
Dealers, Inc.
(b) Notwithstanding the provisions of subparagraph (a)
above and subject to such policies and procedures as may be adopted by the Board
of Directors and officers of the Fund, the Investment Manager may ask the Fund
and the Fund may agree to pay a member of an exchange, broker or dealer an
amount of commission for effecting a securities transaction in excess of the
amount of commission another member of an exchange, broker or dealer would have
-3-
<PAGE>
charged for effecting that transaction, in such instances where the Fund and the
Investment Manager have determined in good faith that such amount of commission
was reasonable in relation to the value of the brokerage and research services
provided by such member, broker or dealer, viewed in terms of either that
particular transaction or the Investment Manager's overall responsibilities with
respect to the Fund and to other funds and other advisory accounts for which the
Investment Manager or any Sub-Adviser, as defined in Paragraph 5 hereof,
exercises investment discretion.
4. As compensation for the services to be rendered to the Fund
by the Investment Manager under the provisions of this Agreement, the Fund shall
pay to the Investment Manager monthly from the Series' assets, a fee on the
average daily net assets of the Series during the month. Such fee shall be
calculated in accordance with the following schedule:
Monthly Annual Rate Average Daily Net Assets
------- ----------- ------------------------
If this Agreement is terminated prior to the end of any
calendar month, the management fee shall be prorated for the portion of any
month in which this Agreement is in effect according to the proportion which the
number of calendar days, during which the Agreement is in effect, bears to the
number of calendar days in the month, and shall be payable within 10 days after
the date of termination.
-4-
<PAGE>
5. The Investment Manager may, at its expense, select and
contract with one or more investment advisers registered under the Investment
Advisers Act of 1940 (the "Sub-Adviser") to perform some or all of the services
for the Series for which it is responsible under this Agreement. The Investment
Manager will compensate any Sub-Adviser for its services to the Series. The
Investment Manager may terminate the services of any Sub-Adviser at any time in
its sole discretion, and shall at such time assume the responsibilities of such
Sub-Adviser unless and until a successor Sub-Adviser is selected and the
requisite approval of the Series' shareholders is obtained. The Investment
Manager will continue to have responsibility for all advisory services furnished
by any Sub-Adviser.
6. The services to be rendered by the Investment Manager to
the Fund under the provisions of this Agreement are not to be deemed to be
exclusive, and the Investment Manager shall be free to render similar or
different services to others so long as its ability to render the services
provided for in this Agreement shall not be impaired thereby.
7. The Investment Manager, its directors, officers, employees,
agents and shareholders may engage in other businesses, may render investment
advisory services to other investment companies, or to any other corporation,
association, firm or individual, and may render underwriting services to the
Fund or to any other investment company, corporation, association, firm or
individual.
8. The Investment Manager or its affiliates are permitted to
use the identifying names "Delaware," "Delaware Investments," or "Delaware
Group" when sponsoring Funds (or their series or classes), whether already
existing or to be created in the future. The Investment Manager hereby consents
to the Fund's use of the identifying words "Delaware," "Delaware Investments,"
-5-
<PAGE>
or "Delaware Group" in the name of the Fund, or any series or class of shares of
the Fund. In the event that the Investment Manager ceases to be the Fund's
investment manager, or otherwise determines that the Fund should no longer
utilize such names for any reason, the Investment Manager may revoke its consent
in writing and the Fund will promptly cease using such names for the Fund, its
series or classes, and will take all necessary steps to amend the Fund's
Articles of Incorporation and Bylaws to reflect a name change.
9. In the absence of willful misfeasance, bad faith, gross
negligence, or a reckless disregard of the performance of its duties as the
Investment Manager to the Fund, the Investment Manager shall not be subject to
liability to the Fund or to any shareholder of the Fund for any action or
omission in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale of any
security, or otherwise.
10. This Agreement shall be executed and become effective as
of the date written below if approved by the vote of a majority of the
outstanding voting securities of the Series. It shall continue in effect for a
period of two years and may be renewed thereafter only so long as such renewal
and continuance is specifically approved at least annually by the Board of
Directors or by the vote of a majority of the outstanding voting securities of
the Series and only if the terms and the renewal hereof have been approved by
the vote of a majority of the Directors of the Fund who are not parties hereto
or interested persons of any such party, cast in person at a meeting called for
the purpose of voting on such approval. Notwithstanding the foregoing, this
Agreement may be terminated by the Fund at any time, without the payment of a
penalty, on sixty days' written notice to the Investment Manager of the Fund's
intention to do so, pursuant to action by the Board of Directors of the Fund or
pursuant to the vote of a majority of the outstanding voting securities of the
-6-
<PAGE>
Series. The Investment Manager may terminate this Agreement at any time, without
the payment of a penalty, on sixty days' written notice to the Fund of its
intention to do so. Upon termination of this Agreement, the obligations of all
the parties hereunder shall cease and terminate as of the date of such
termination, except for any obligation to respond for a breach of this Agreement
committed prior to such termination, and except for the obligation of the Fund
to pay to the Investment Manager the fee provided in Paragraph 4 hereof,
prorated to the date of termination. This Agreement shall automatically
terminate in the event of its assignment.
11. This Agreement shall extend to and bind the heirs,
executors, administrators and successors of the parties hereto.
12. For the purposes of this Agreement, the terms "vote of a
majority of the outstanding voting securities"; "interested persons"; and
"assignment" shall have the meaning defined in the Investment Company Act of
1940.
IN WITNESS WHEREOF, the parties hereto have caused their
corporate seals to be affixed and duly attested and their presents to be signed
by their duly authorized officers as of the _____ day of _________, _ _ _ _.
[REGISTRANT NAME].
for the [SERIES NAME]
By:
Name:
Title:
Attest:
Name:
Title:
-7-
<PAGE>
By:
Name:
Title:
Attest:
Name:
Title:
-8-
<PAGE>
EX-99.B6VI
EXHIBIT 24(B)(6)(VI)
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
__________ FUND
DISTRIBUTION AGREEMENT
Distribution Agreement (the "Agreement") made as of this _____ day of
December, 1998 by and between DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.,
a Maryland corporation (the "Fund"), for the________ FUND series (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 desires to enter into an agreement with the
Distributor on behalf of the Series, pursuant to which the Distributor shall
serve as the national distributor of the Series' ____________________ Fund A
Class ("Class A Shares"), ____________________ Fund B Class ("Class B Shares"),
____________________ Fund C Class ("Class C Shares"), and ____________________
Fund Institutional Class ("Institutional Class Shares"), which Series and
classes may do business under these or such other names as the Board of
Directors may designate from time to time, on the terms and conditions set forth
below.
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. The Fund hereby engages the Distributor to promote the
distribution of the Series' shares and, in connection
therewith and as agent for the Fund and not as principal, to
advertise, promote, offer and sell the Series' shares to the
public.
2. (a) The Distributor agrees to serve as distributor of the
Series' shares and, as agent for the Fund and not as
principal, to advertise, promote and use its best
efforts to sell the 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 Prospectuses
and the Statement of Additional Information contained
therein, as may be mutually determined by the Fund
and the Distributor from time to time.
<PAGE>
(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 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,
Class B Shares, and Class C 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.
(d) For the Class A Shares, Class B Shares, and Class C
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, Class B Shares, and Class C 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," "B," and "C."
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 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.
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.
-2-
<PAGE>
5. (a) The Fund will supply to the Distributor a
conformed copy of the Registration Statement and all
amendments thereto, including all exhibits and each
Prospectus and Statement of Additional Information.
(b) The Fund will register or qualify the Series' shares
for sale in such states as is deemed desirable.
(c) The Fund, without expense to the Distributor:
(1) will give and continue to give such
financial statements and other information
as may be required by the SEC or the proper
public bodies of the states in which the
Series' shares may be qualified;
(2) from time to time, will furnish to the
Distributor as soon as reasonably
practicable true copies of its periodic
reports to stockholders;
(3) will promptly advise the Distributor in
person or by telephone or telegraph, and
promptly confirm 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 Prospectuses 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 the approval of shareholders as
may be required;
(6) before filing any further amendment to the
Registration Statement or to any Prospectus,
will furnish to 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 any 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
-3-
<PAGE>
(8) will, for the purpose of computing the
offering price of Series' shares, advise the
Distributor within one hour after the close
of the New York Stock Exchange (or as soon
as practicable thereafter) on each business
day upon which the New York Stock Exchange
may be open of the net asset value per share
of the Series' shares of common stock
outstanding, determined in accordance with
any applicable provisions of law and the
provisions of the Articles of Incorporation,
as amended, of the Fund as of the close of
business on such business day. In the event
that prices are to be calculated more than
once daily, the Fund will promptly advise
the Distributor of the time of each
calculation and the price computed at each
such time.
6. The Distributor agrees to submit to the Fund, prior to its
use, the form of all sales literature proposed to be generally
disseminated by or for the Distributor, all advertisements
proposed to be used by the Distributor, all sales literature
or advertisements prepared by or for the Distributor for such
dissemination or for use by others in connection with the sale
of the Series' shares, and the form of dealers' sales contract
the Distributor intends to use in connection with sales of the
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 Prospectuses, as
amended from time to time, determined in accordance with any
applicable provision of law, the provisions of its Articles of
Incorporation and the Conduct Rules of the National
Association of Securities Dealers, Inc.
8. The responsibility of the Distributor hereunder shall be
limited to the promotion of sales of Series' shares. The
Distributor shall undertake to promote such sales solely as
agent of the Fund, and shall not purchase or sell such shares
as principal. Orders for Series' shares and payment for such
orders shall be directed to the Fund's agent, Delaware Service
Company, Inc. for acceptance on behalf of the Fund. The
Distributor is not empowered to approve orders for sales of
Series' shares or accept payment for such orders. Sales of
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:
-4-
<PAGE>
(a) The Fund and the Distributor will cooperate in
preparing the Registration Statements, the
Prospectuses, 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.
(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 Series' shares with the
various states and with the SEC.
(e) The Distributor will pay the costs of any additional
copies of Fund financial and other reports and other
Fund literature supplied to the Distributor by the
Fund for sales promotion purposes.
10. The Distributor may engage in other business, provided such
other business does not interfere with the performance by the
Distributor of its obligations under this Agreement.
11. The Fund agrees to indemnify, defend and hold harmless from
the assets of the Series the Distributor and each person, if
any, who controls the Distributor within the meaning of
Section 15 of the Securities Act of 1933, from and against any
and all losses, damages, or liabilities to which, jointly or
severally, the Distributor or such controlling person may
become subject, insofar as the losses, damages or liabilities
arise out of the performance of its duties hereunder, except
that the Fund shall not be liable for indemnification of the
Distributor or any controlling person thereof for any
liability to the Fund or its security holders to which they
would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance of their
duties under this Agreement.
12. Copies of financial reports, Registration Statements and
Prospectuses, as well as demands, notices, requests, consents,
waivers, and other communications in writing which it may be
necessary or desirable for either party to deliver or furnish
to the other will be duly delivered or furnished, if delivered
to such party at its address shown below during regular
business hours, or if sent to that party by registered mail or
by prepaid telegram filed with an office or with an agent of
Western Union or another nationally recognized telegraph
service, in all cases within the time or times herein
prescribed, addressed to the recipient at 1818 Market Street,
Philadelphia, Pennsylvania 19103, or at such other address as
the Fund or the Distributor may designate in writing and
furnish to the other.
13. This Agreement shall not be assigned, as that term is defined
in the Investment Company Act of 1940, by the Distributor and
shall terminate automatically in the event of its attempted
-5-
<PAGE>
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 the
indemnification provision contained in Paragraph 11 herein,
this Agreement and all conditions and provisions hereof are
for the sole and exclusive benefit of the parties hereto and
their legal successors and no express or implied provision of
this Agreement is intended or shall be construed to give any
person other than the parties hereto and their legal
successors any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provisions herein
contained.
14. (a) This Agreement shall remain in force for a period
of two years from the date hereof and from year to
year thereafter, but only so long as such continuance
is specifically approved at least annually by the
Board of Directors or by vote of a majority of the
outstanding voting securities of the Series and only
if the terms and the renewal thereof have been
approved by the vote of a majority of the Directors
of the Fund who are not parties hereto or interested
persons of any such party, cast in person at a
meeting called for the purpose of voting on such
approval.
(b) The Distributor may terminate this Agreement on
written notice to the Fund at any time in case the
effectiveness of the Registration Statement shall be
suspended, or in case Stop Order proceedings are
initiated by the SEC in respect of the Registration
Statement and such proceedings are not withdrawn or
terminated within thirty days. The Distributor may
also terminate this Agreement at any time by giving
the Fund written notice of its intention to terminate
the Agreement at the expiration of three months from
the date of delivery of such written notice of
intention to the Fund.
(c) The Fund may terminate this Agreement at any time on
at least thirty days' prior written notice to the
Distributor (1) if proceedings are commenced by the
Distributor or any of its partners 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.
-6-
<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:
DELAWARE GROUP GLOBAL &
INTERNATIONAL FUNDS, INC.
for the __________ FUND
Attest:
______________________________ By:__________________________________
Name: Name:
Title: Title:
-7-
<PAGE>
EXHIBIT A
DISTRIBUTION PLAN
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
_______ FUND
_________ FUND A CLASS
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule l2b-l under the Investment Company Act of 1940 (the "Act") by Delaware
Group Global & International Funds, Inc. (the "Fund"), for the
____________________ Fund series (the "Series") on behalf of the
____________________ Fund A Class ("Class"), which Fund, Series and Class may do
business under these or such other names as the Board of Directors of the Fund
may designate from time to time. The Plan has been approved by a majority of the
Board of Directors, including a majority of the Directors who are not interested
persons of the Fund and who have no direct or indirect financial interest in the
operation of the Plan or in any agreements related thereto ("non-interested
Directors"), cast in person at a meeting called for the purpose of voting on
such Plan. Such approval by the Directors included a determination that in the
exercise of reasonable business judgment and in light of their fiduciary duties,
there is a reasonable likelihood that the Plan will benefit the Series and
shareholders of the Class. The Plan has been adopted prior to any public
offering of the Class.
The Fund is a corporation organized under the laws of the State of
Maryland, is authorized to issue different series and classes of securities and
is an open-end management investment company registered under the Act. Delaware
International Advisers Ltd. serves as the Series' investment adviser and manager
pursuant to an Investment Management Agreement. Delaware Service Company, Inc.
serves as the Series' shareholder servicing, dividend disbursing and transfer
agent. Delaware Distributors, L.P. (the "Distributor") is the principal
underwriter and national distributor for the Series' shares, including shares of
the Class, pursuant to the Distribution Agreement between the Distributor and
the Fund on behalf of the Series ("Distribution Agreement").
The Plan provides that:
l. The Fund shall pay to the Distributor a monthly fee not to exceed
0.30% (3/10 of l%) per annum of the Series' average daily net assets represented
by shares of the Class (the "Maximum Amount") as may be determined by the Fund's
Board of Directors from time to time. Such monthly fee shall be reduced by the
aggregate sums paid by the Fund on behalf of the Series to persons other than
broker-dealers (the "Service Providers") who may, pursuant to servicing
agreements, provide to the Series services in the 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,
A-1
<PAGE>
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 Plan; both the Distributor and the Service Providers shall
furnish the Board of Directors of the Fund with such other information as the
Board may reasonably request in connection with the payments made under the Plan
and the use thereof by the Distributor and the Service Providers, respec tively,
in order to enable the Board to make an informed determination of the amount of
the Fund's payments and whether the Plan should be continued.
4. The officers of the Fund shall furnish to the Board of Directors of
the Fund, for their review, on a quarterly basis, a written report of the
amounts expended under the Plan and the purposes for which such expenditures
were made.
5. This Plan shall take effect at such time as the Distributor shall
notify the Fund in writing of the commencement of the Plan (the "Commencement
Date"); thereafter, the Plan shall continue in effect for a period of more than
one year from the Commencement Date only so long as such continuance is
specifically approved at least annually by a vote of the Board of Directors of
the Fund, and of the non-interested Directors, cast in person at a meeting
called for the purpose of voting on such Plan.
6. (a) The Plan may be terminated at any time by vote of a majority of
the non-interested Directors or by vote of a majority of the outstanding voting
securities of the Class.
(b) The Plan may not be amended to increase materially the
amount to be spent for distribution pursuant to paragraph l hereof without
approval by the shareholders of the Class.
7. All material amendments to this Plan shall be approved by the
non-interested Directors in the manner described in paragraph 5 above.
8. So long as the Plan is in effect, the selection and nomination of
the Fund's non-interested Directors shall be committed to the discretion of such
non-interested Directors.
9. The definitions contained in Sections 2(a)(19) and 2(a)(42) of the
Act shall govern the meaning of "interested person(s)" and "vote of a majority
of the outstanding voting securities," respectively, for the purposes of this
Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
December _____, 1998
A-2
<PAGE>
EXHIBIT B
DISTRIBUTION PLAN
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
_________ FUND
___________ FUND B CLASS
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by Delaware
Group Global & International Funds, Inc. (the "Fund"), for the
____________________ Fund series (the "Series") on behalf of the
____________________ Fund B Class (the "Class"), which Fund, Series and Class
may do business under these or such other names as the Board of Directors of the
Fund may designate from time to time. The Plan has been approved by a majority
of the Board of Directors, including a majority of the Directors who are not
interested persons of the Fund and who have no direct or indirect financial
interest in the operation of the Plan or in any agreements related thereto
("non-interested Directors"), cast in person at a meeting called for the purpose
of voting on such Plan. Such approval by the Directors included a determination
that in the exercise of reasonable business judgment and in light of their
fiduciary duties, there is a reasonable likelihood that the Plan will benefit
the Series and shareholders of the Class. The Plan has been adopted prior to any
public offering of the Class.
The Fund is a corporation organized under the laws of the State of
Maryland, is authorized to issue different series and classes of securities and
is an open-end management investment company registered under the Act. Delaware
International Advisers Ltd. serves as the Series' investment adviser and manager
pursuant to an Investment Management Agreement. Delaware Service Company, Inc.
serves as the Series' shareholder servicing, dividend disbursing and transfer
agent. Delaware Distributors, L.P. (the "Distributor") is the principal
underwriter and national distributor for the Series' shares, including shares of
the Class, pursuant to the Distribution Agreement between the Distributor and
the Fund on behalf of the Series ("Distribution Agreement").
The Plan provides that:
1. (a) The Fund shall pay to the Distributor a monthly fee not to
exceed 0.75% (3/4 of 1%) per annum of the Series' average daily net assets
represented by shares of the Class as may be determined by the Fund's Board of
Directors from time to time.
(b) In addition to the amounts described in (a) above, the
Fund shall pay (i) to the Distributor for payment to dealers or others, or (ii)
directly to others, an amount not to exceed 0.25% (1/4 of 1%) per annum of the
Series' average daily net assets represented by shares of the Class, as a
service fee pursuant to dealer or servicing agreements.
B-1
<PAGE>
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 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, for their review, on a quarterly basis, a written report of the
amounts expended under the Plan and the purposes for which such expenditures
were made.
5. This Plan shall take effect at such time as the Distributor shall
notify the Fund of the commencement of the Plan (the "Commencement Date");
thereafter, the Plan shall continue in effect for a period of more than one year
from the Commencement Date only so long as such continuance is specifically
approved at least annually by a vote of the Board of Directors of the Fund, and
of the 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 hereof 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.
B-2
<PAGE>
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.
December _____, 1998
B-3
<PAGE>
EXHIBIT C
DISTRIBUTION PLAN
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
___________ FUND
__________ FUND C CLASS
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by Delaware
Group Global & International Funds, Inc. (the "Fund"), for the
____________________ Fund series (the "Series) on behalf of the
____________________ Fund C Class (the "Class"), which Fund, Series and Class
may do business under these or such other names as the Board of Directors of the
Fund may designate from time to time. The Plan has been approved by a majority
of the Board of Directors, including a majority of the Directors who are not
interested persons of the Fund and who have no direct or indirect financial
interest in the operation of the Plan or in any agreements related thereto
("non-interested Directors"), cast in person at a meeting called for the purpose
of voting on such Plan. Such approval by the Directors included a determination
that in the exercise of reasonable business judgment and in light of their
fiduciary duties, there is a reasonable likelihood that the Plan will benefit
the Series and shareholders of the Class. The Plan has been adopted prior to any
public offering of the Class.
The Fund is a corporation organized under the laws of the State of
Maryland, is authorized to issue different series and classes of securities and
is an open-end management investment company registered under the Act. Delaware
International Advisers Ltd. serves as the Series' investment adviser and manager
pursuant to an Investment Management Agreement. Delaware Service Company, Inc.
serves as the Series' shareholder servicing, dividend disbursing and transfer
agent. Delaware Distributors, L.P. (the "Distributor") is the principal
underwriter and national distributor for the Series' shares, including shares of
the Class, pursuant to the Distribution Agreement between the Distributor and
the Fund on behalf of the Series ("Distribution Agreement").
The Plan provides that:
1. (a) The Fund shall pay to the Distributor a monthly fee not to
exceed 0.75% (3/4 of 1%) per annum of the Series' average daily net assets
represented by shares of the Class as may be determined by the Fund's Board of
Directors from time to time.
(b) In addition to the amounts described in 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 Series' average daily net assets represented by shares of the
Class, as a service fee pursuant to dealer or servicing agreements.
C-1
<PAGE>
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 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, for their review, on a quarterly basis, a written report of the
amounts expended under the Plan and the purposes for which such expenditures
were made.
5. This Plan shall take effect at such time as the Distributor shall
notify the Fund of the commencement of the Plan (the "Commencement Date");
thereafter, the Plan shall continue in effect for a period of more than one year
from the Commencement Date only so long as such continuance is specifically
approved at least annually by a vote of the Board of Directors of the Fund, and
of the 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 hereof 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.
C-2
<PAGE>
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.
December _____, 1998
C-3
<PAGE>
EX-99.B8AII
Exhibit 24(b)8(a)(ii)
As of __________,1998
VIA UPS OVERNIGHT
- -----------------
The Chase Manhattan Bank
4 Chase MetroTech Center
Brooklyn, New York 11245
Attention: Global Custody Division
Re: Global Custody Agreement, Effective May 1, 1996
between The Chase Manhattan Bank and those registered
investment companies (and on behalf of certain series
thereof), listed on Schedule A attached thereto
("Agreement")
-----------------------------------------------------
Ladies and Gentlemen:
Pursuant to the provisions of Section 1 of the Agreement, the undersigned, on
behalf of Delaware Group Global & International Funds, Inc. for the benefit of
Latin America Fund and New Europe Fund (the "Series") hereby appoints The Chase
Manhattan Bank to provide custodial services for these Series under and in
accordance with the terms of the Agreement and accordingly, requests that the
Series be added to Schedule A to the Agreement effective 1998. Kindly
acknowledge your agreement to provide such services and to add these Series to
Schedule A by signing in the space provided below.
DELAWARE GROUP GLOBAL & INTERNATIONAL
FUNDS, INC.
on behalf of Latin America Fund and
New Europe Fund
By:________________________________
David K. Downes
Its: Executive Vice President
Chief Operating Officer
Chief Financial Officer
AGREED:
THE CHASE MANHATTAN BANK
By:_____________________
Its:____________________
<PAGE>
EX-99.B9F
Exhibit 24(b)(9)(f)
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
INTERNATIONAL EQUITY SERIES
GLOBAL EQUITY SERIES
GLOBAL BOND SERIES
EMERGING MARKETS SERIES
INTERNATIONAL SMALL CAP SERIES
GLOBAL OPPORTUNITIES SERIES
LATIN AMERICA SERIES
NEW EUROPE SERIES
SECOND AMENDED AND RESTATED SHAREHOLDERS SERVICES AGREEMENT
THIS AGREEMENT, made as of this day of December, 1998 by and between
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC. (the "Fund"), a Maryland
Corporation, for the INTERNATIONAL EQUITY SERIES, the GLOBAL EQUITY SERIES, the
GLOBAL BOND SERIES, the EMERGING MARKETS SERIES, the INTERNATIONAL SMALL CAP
SERIES, the GLOBAL OPPORTUNITIES SERIES, the LATIN AMERICA SERIES and the NEW
EUROPE SERIES (collectively the "Series"), and DELAWARE SERVICE COMPANY, INC.
("DSC"), a Delaware Corporation, each having its principal office and place of
business at 1818 Market Street, Philadelphia, Pennsylvania 19103.
W I T N E S S E T H:
WHEREAS, the Investment Management Agreements between the Fund and
Delaware International Advisers Ltd. provide that the Fund shall conduct its own
business and affairs and shall bear the expenses and salaries necessary and
incidental thereto including, but not in limitation of the foregoing, the costs
incurred in: the maintenance of its corporate existence; the maintenance of its
own books, records and procedures; dealing with its own shareholders; the
payment of dividends; transfers of stock, including issuance and redemption of
shares; reports and notices to stockholders; calling and holding of stockholder
meetings; miscellaneous office expenses; brokerage commissions; legal and
accounting fees; taxes; and federal and state registration fees; and
WHEREAS, the Fund and DSC desire to have a written agreement concerning
the performance of the foregoing services and providing compensation therefor;
and
WHEREAS, the Fund and DSC previously entered into separate Shareholder
Services Agreements each dated October 25, 1991 providing for the provision of
services to the International Equity Series, the Global Assets Series and the
Global Bond Series and a Shareholder Services Agreement dated May 1, 1996
providing the provision of services to the Emerging Markets Series; and
WHEREAS, the Fund and DSC desired to consolidate and amend and restate
their Shareholder Services Agreements dated as of October 25, 1991 and May 1,
1996 to include the Fund's new series, the International Small Cap Series and
the Global Equity Series ("First Amended and Restated Shareholders Services
Agreement").
<PAGE>
WHEREAS, the Fund and DSC wish to amend the First Amended and Restated
Agreement to add the Latin America Fund and the New Europe Fund;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth, and intending legally to be bound, it is agreed:
I. APPOINTMENT AS AGENT
1.1 The Fund hereby appoints DSC Shareholder Services Agent for the
Series to provide as agent for the Fund services as Transfer Agent, Dividend
Disbursing Agent and Shareholder Servicing Agent and DSC hereby accepts such
appointment and agrees to provide the Fund, as its agent, the services described
herein.
1.2 The Fund shall pay DSC and DSC shall accept, for the services
provided hereunder, the compensation provided for in Section VIII hereof. The
Fund also shall reimburse DSC for expenses incurred or advanced by it for the
Fund in connection with its services hereunder.
II. DOCUMENTATION
2.1 The Fund represents that it has provided or made available to DSC
(or has given DSC an opportunity to examine) copies of, and DSC represents that
it has received from the Fund (or is otherwise familiar with), the following
documents:
(a) The Articles of Incorporation or other documents
evidencing the Fund's form of organization and any current amendments or
supplements thereto.
(b) The By-Laws of the Fund;
(c) Any resolution or other action of the Fund or the Board of
Directors of the Fund establishing or affecting the rights, privileges or other
status of each class or series of shares of the Fund, including those relating
to the Series or altering or abolishing each such class or series;
(d) A certified copy of a resolution of the Board of Directors
of the Fund appointing DSC as Shareholder Services Agent for the Series and
authorizing the execution of this Agreement;
(e) The forms of share certificates of the Series in the forms
approved by the Board of Directors of the Fund;
(f) A copy of the Fund's currently effective Prospectuses and
Statement of Additional Information under the Securities Act of 1933, if
effective;
(g) Copies of all account application forms and other
documents relating to stockholder accounts in the Series;
2
<PAGE>
(h) Copies of documents relating to Plans of the Fund for the
purchase, sale or repurchase of its shares, including periodic payment or
withdrawal plans, reinvestment plans or retirement plans;
(i) Any opinion of counsel to the Fund relating to the
authorization and validity of the shares of the Series issued or proposed to be
issued under the law of the State of the Fund's organization, including the
status thereof under any applicable securities laws;
(j) A certified copy of any resolution of the Board of
Directors of the Fund authorizing any person to give instructions to DSC under
this Agreement (with a specimen signature of such person if not already
provided), setting forth the scope of such authority; and
(k) Any amendment, revocation or other documents altering,
adding, qualifying or repealing any document or authority called for under this
Section 2.1.
2.2 The Fund and DSC may consult as to forms or documents that may be
required in performing services hereunder.
2.3 The Fund shall provide or make available to DSC a certified copy of
any resolution of the stockholders or the Board of Directors of the Fund
providing for a dividend, capital gains distribution, distribution of capital,
stock dividend, stock split or other similar action affecting the authorization
or issuance of shares of the Fund or the payment of dividends.
2.4 In the case of any recapitalization or other capital adjustment
requiring a change in the form of stock certificates or the books recording the
same, the Fund shall deliver or make available to DSC:
(a) A certified copy of any document authorizing or effecting
such change;
(b) Written instructions from an authorized officer
implementing such change; and
(c) An opinion of counsel to the Fund as to the validity of
such action, if requested by DSC.
2.5 The Fund warrants the following:
(a) The Fund is, or will be, a properly registered investment
company under the Investment Company Act of 1940 and any and all Series' shares
which it issues will be properly registered and lawfully issued under applicable
federal and state laws.
(b) The provisions of this contract 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.
2.6 DSC warrants the following:
(a) DSC is and will be properly registered as a transfer agent
under the Securities and Exchange Act of 1934 and is duly authorized to serve,
and may lawfully serve as such.
3
<PAGE>
(b) The provisions of this contract do not violate the terms
of any instrument by which DSC is bound; nor do they violate any law or
regulation of any body having jurisdiction over DSC or its property.
4
<PAGE>
III. STOCK CERTIFICATES
3.1 The Fund shall furnish or authorize DSC to obtain, at the Fund's
expense, a sufficient supply of blank stock certificates for the Series, and
from time to time will replenish such supply upon the request of DSC. The Fund
agrees to indemnify and exonerate, save and hold DSC harmless, from and against
any and all claims or demands that may be asserted against DSC concerning the
genuineness of any stock certificate supplied to DSC pursuant to this Section.
3.2 DSC shall safeguard, and shall account to the Fund, upon its demand
for, all such stock certificates: (a) as issued, showing to whom issued, or (b)
as unissued, establishing the safekeeping, cancellation or destruction thereof.
3.3 The Fund shall promptly inform DSC in writing of any change in the
officers authorized to sign stock certificates or in the form thereof. If an
officer whose manual or facsimile signature is affixed to any blank share
certificate shall die, resign or be removed prior to the issuance of such
certificate, DSC may nevertheless issue such certificate notwithstanding such
death, resignation or removal, and the Fund shall with respect thereto promptly
provide to DSC any approval, adoption or ratification as may be required by DSC.
IV. TRANSFER AGENT
4.1 As Transfer Agent for the Fund, DSC shall issue, redeem and
transfer shares of the Series, and, in connection therewith but not in
limitation thereof, it shall:
(a) Upon receipt of authority to issue shares, determine the
total shares to be issued and issue such shares by crediting shares to accounts
created and maintained in the registration forms provided; as applicable,
prepare, issue and deliver stock certificates.
(b) Upon proper transfer authorization, transfer shares by
debiting transferor-stockholder accounts and crediting such shares to accounts
created and/or maintained for transferee-stockholders; if applicable, issue
and/or cancel stock certificates.
(c) Upon proper redemption authorization, determine the total
shares redeemed and to be redeemed; determine the total redemption payments made
and to be made; redeem shares by debiting stockholder accounts; as applicable
receive and cancel stock certificates for shares redeemed; and remit or cause to
be remitted the redemption proceeds to stockholders.
(d) Create and maintain accounts; reconcile and control cash
due and paid, shares issued and to be issued, cash remitted and to be remitted
and shares debited and credited to accounts; provide such notices, instructions
or authorizations as the Fund may require.
4.2 DSC shall not be required to issue, transfer or redeem Series'
shares upon receipt of DSC from the Fund, or from any federal or state
regulatory agency or authority, written notice that the issuance, transfer or
redemption of Series' shares has been suspended or discontinued.
5
<PAGE>
V. DIVIDEND DISBURSING AGENT
5.1 As Dividend Disbursing Agent for the Series, DSC shall disburse and
cause to be disbursed to stockholders of each Series dividends, capital gains
distributions or any payments from other sources as directed by the Fund. In
connection therewith, but not in the limitation thereof, DSC shall:
(a) Calculate the total disbursement due and payable and the
disbursement to each stockholder as to shares owned, in accordance with the
Fund's authorization.
(b) Calculate the total disbursements for each stockholder, as
aforesaid, to be disbursed in cash; prepare and mail checks therefor.
(c) Calculate the total disbursement for each stockholder of
each Series, as aforesaid, for which Series' shares are to be issued and
authorized and instruct the issuance of Series' shares therefor in accordance
with Section IV hereof.
(d) Prepare and mail or deliver such forms and notices
pertaining to disbursements as required by federal or state authority.
(e) Create and maintain records, reconcile and control
disbursements to be made and made, both as to cash and shares, as aforesaid;
provide such notices, instruction or authorization as the Fund may require.
5.2 DSC shall not be required to make any disbursement upon the receipt
of DSC from the Fund, or from any federal or state agency or authority, written
notice that such disbursement shall not be made.
VI. SHAREHOLDER SERVICING AGENT
6.1 As Shareholder Servicing Agent for the Series, DSC shall provide
those services ancillary to, but in implementation of, the services provided
under Sections I through V hereof, and those generally defined and accepted as
shareholder services. In connection therewith, but not in limitation thereof,
DSC shall:
(a) Except where instructed in writing by the Fund not to do
so, and where in compliance with applicable law, accept orders on behalf of the
Fund; receive and process investments and applications; remit to the Fund or its
custodian payments for shares acquired and to be issued; and direct the issuance
of shares in accordance with Section IV hereof.
(b) Receive, record and respond to communications of
stockholders and their agents.
(c) As instructed by the Fund, prepare and mail stockholder
account information, mail Series stockholder reports and Series prospectuses.
(d) Prepare and mail proxies and material for Fund stockholder
meetings, receive and process proxies from stockholders, and deliver such
proxies as directed by the Fund.
6
<PAGE>
(e) Administer investment plans offered by the Fund to
investors and stockholders of each Series, including retirement plans, including
activities not otherwise provided in Section I through V of this Agreement.
VII. PERFORMANCE OF DUTIES
7.1 The parties hereto intend that Series stockholders and their
stockholdings shall be confidential, and any information relating thereto shall
be released by DSC only to those persons or authorities who DSC has reason to
believe are authorized to receive such information; or, as instructed by the
Fund.
7.2 DSC may, in performing this Agreement, require the Fund or the
Fund's distributor to provide it with an adequate number of copies of
prospectuses, reports or other documents required to be furnished to investors
or stockholders.
7.3 DSC may request or receive instructions from the Fund and may, at
the Fund's expense, consult with counsel for the Fund or its own counsel with
respect to any matter arising in connection with the performance of its duties
hereunder, and shall not be liable for any action taken or omitted by it in good
faith in accordance with such instructions or opinions of counsel.
7.4 DSC shall maintain reasonable insurance coverage for errors and
omissions and reasonable bond coverage for fraud.
7.5 Upon notice thereof to the Fund, DSC may employ others to provide
services to DSC in its performance of this Agreement.
7.6 Personnel and facilities of DSC used to perform services hereunder
may be used to perform similar services to other funds of the Delaware Group and
to others, and may be used to perform other services for the Fund, the other
funds of the Delaware Group and others.
7.7 DSC shall provide its services as transfer agent hereunder in
accordance with Section 17 of the Securities Exchange Act of 1934, and the rules
and regulations thereunder. Further, the parties intend that the processes,
procedures, safeguards and controls employed should be those generally applied
and accepted for the type services provided hereunder by other institutions
providing the same or similar services, and, those which should provide
efficient, safe and economical services so as to promote promptness and accuracy
and to maintain the integrity of the Fund's records.
7.8 The Fund and DSC may, from time to time, set forth in writing
Guidelines For Selective Procedures to be applicable to the services hereunder.
7
<PAGE>
VIII. COMPENSATION
8.1 The Fund and DSC acknowledge that because DSC has common ownership
and close management ties with the Fund's investment advisor and the Fund's
distributor and serves the other funds of the Delaware Group (DSC having been
originally established to provide the services hereunder for the funds of the
Delaware Group), advantages and benefits to the Fund in the employment of DSC
hereunder can be available which may not generally be available to it from
others providing similar services.
8.2 The Fund and DSC further acknowledge that the compensation by the
Fund to DSC is intended to induce DSC to provide services under this Agreement
of a nature and quality which the Board of Directors of the Fund, including a
majority who are not parties to this Agreement or interested person of the
parties hereto, has determined after due consideration to be necessary for the
conduct of the business of the Fund, in the best interests of the Fund, the
Series and their stockholders.
8.3 Compensation by the Fund to DSC hereunder shall be determined in
accordance with Schedule A hereto as it shall be amended from time to time as
provided for herein and which is incorporated herein as a part hereof.
8.4 Compensation as provided in Schedule A shall be reviewed and
approved in the manner set forth in Section 10.1 hereof by the Board of
Directors of the Fund at least annually and may be reviewed and approved more
frequently at the request of either party. The Board may request, and DSC shall
provide, such information as the Board may reasonably require to evaluate the
basis of and approve the compensation.
IX. STANDARD OF CARE
9.1 The Fund acknowledges that DSC shall not be liable for, and in the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of the performance of its duties under this Agreement, agrees to
indemnify DSC against, any claim or deficiency arising from the performance of
DSC's duties hereunder, including DSC's costs, counsel fees and expenses
incurred in investigation or defending any such claim or any administrative or
other proceeding, and acknowledges that any risk of loss or damage arising from
the conduct of the Fund's affairs in accordance herewith or in accordance with
Guidelines or instructions given hereunder, shall be borne by the Fund.
X. CONTRACTUAL STATUS
10.1 This Agreement shall be executed and become effective on the date
first written above if approved by a vote of the Board of Directors of the Fund,
including an affirmative vote of a majority of the non-interested members of the
Board, cast in person at a meeting called for the purpose of voting on such
approval. It shall continue in effect for an indeterminate period, and is
subject to termination on sixty (60) days notice by either party unless earlier
terminated or amended by agreement among the parties. Compensation under this
Agreement shall require approval by a majority vote of the Board of Directors of
the Fund, including an affirmative vote of the majority of the non-interested
members of the Board cast in person at a meeting called for the purpose of
voting on such approval.
8
<PAGE>
10.2 This Agreement may not be assigned without the approval of the
Fund.
10.3 This Agreement shall be governed by the laws of the Commonwealth
of Pennsylvania.
DELAWARE SERVICE COMPANY, INC.
ATTEST:______________________ By:____________________________________
Title:
DELAWARE GROUP GLOBAL &
INTERNATIONAL FUNDS, INC. for its
INTERNATIONAL EQUITY SERIES
GLOBAL EQUITY SERIES
GLOBAL BOND SERIES
EMERGING MARKETS SERIES
INTERNATIONAL SMALL CAP SERIES
GLOBAL OPPORTUNITIES SERIES
LATIN AMERICA SERIES
NEW EUROPE SERIES
ATTEST:______________________ By:____________________________________
Title:
9
<PAGE>
SCHEDULE A
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
SECOND AMENDED AND RESTATED
SHAREHOLDERS SERVICES AGREEMENT
COMPENSATION SCHEDULE
10
<PAGE>
SCHEDULE A
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
SECOND AMENDED AND RESTATED
SHAREHOLDERS SERVICES AGREEMENT
COMPENSATION SCHEDULE
PAGE 2
11
<PAGE>
EX-99.B9GI
EXHIBIT 24(B)(9)(G)(I)
AMENDMENT NO. 9
to
SCHEDULE A
of
DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT
Delaware Group Adviser Funds, Inc.
Corporate Income Fund (liquidated September 19, 1997)
Enterprise Fund (liquidated September 19, 1997)
Federal Bond Fund (liquidated September 19, 1997)
New Pacific Fund
U.S. Growth Fund
Overseas Equity Fund (formerly World Growth Fund)
Delaware Group Cash Reserve, Inc.
Delaware Group Equity Funds I, Inc. (formerly Delaware)
Delaware Fund
Devon Fund
Delaware Group Equity Funds II, Inc. (formerly Decatur)
Blue Chip Fund (New)
Decatur Income Fund
Decatur Total Return Fund
Quantum Fund (New)
Delaware Group Equity Funds III, Inc. (formerly Trend)
Trend Fund
Delaware Group Equity Funds IV, Inc. (formerly DelCap)
Capital Appreciation Fund (New)
DelCap Fund
Delaware Group Equity Funds V, Inc. (formerly Value)
Small Cap Value Fund (formerly Value Fund)
Retirement Income Fund (New)
- ------------------
*Except as otherwise noted, all Portfolios included on this Schedule A
are Existing Portfolios for purposes of the compensation described on Schedule B
to that Fund Accounting Agreement between Delaware Service Company, Inc. and the
Delaware Group of Funds dated as of August 19, 1996 ("Agreement"). All
portfolios added to this Schedule A by amendment executed by a Company on behalf
of such Portfolio hereof shall be a New Portfolio for purposes of Schedule B to
the Agreement.
<PAGE>
Delaware Group Foundation Funds (New)
Balanced Portfolio (New)
Growth Portfolio (New)
Income Portfolio (New)
Delaware Group Government Fund, Inc.
Government Income Series (U.S. Government Fund )
Delaware Group Global & International Funds, Inc.
Emerging Markets Fund (New)
Global Assets Fund
Global Bond Fund
International Equity Fund
Global Equity Fund (New)
International Small Cap Fund (New)
Delaware Group Income Funds, Inc. (formerly Delchester)
Delchester Fund
High-Yield Opportunities Fund (New)
Strategic Income Fund (New)
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U. S. Government Money Fund
Delaware Pooled Trust, Inc.
The Aggressive Growth Portfolio
The Large-Cap Value Equity Portfolio
(formerly The Defensive Equity Portfolio)
The Small/Mid-Cap Value Equity Portfolio (New)
(formerly The Defensive Equity Small/Mid-Cap Portfolio)
The Defensive Equity Utility Portfolio (deregistered January 14, 1997)
The Emerging Markets Portfolio (New)
The Intermediate Fixed Income Portfolio
(formerly The Fixed Income Portfolio)
The Global Fixed Income Portfolio
The High-Yield Bond Portfolio (New)
The International Equity Portfolio
The International Fixed Income Portfolio (New)
The Labor Select International Equity Portfolio
The Limited-Term Maturity Portfolio (New)
The Real Estate Investment Trust Portfolio
The Global Equity Portfolio (New)
The Real Estate Investment Trust Portfolio II (New)
The Diversified Core Fixed Income Portfolio (New)
The Aggregate Fixed Income Portfolio (New)
2
<PAGE>
Delaware Group Premium Fund, Inc.
Capital Reserves Series
Cash Reserve Series
Convertible Securities Series (New)
Decatur Total Return Series
Delaware Series
Delchester Series
Devon Series (New)
Emerging Markets Series (New)
DelCap Series
Global Bond Series (New)
International Equity Series
Quantum Series (New)
REIT Series (New)
Strategic Income Series (New)
Trend Series
Value Series
Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group State Tax-Free Income Trust (formerly DMCT Tax-Free Income
Trust-Pennsylvania)
Tax-Free Pennsylvania Fund
Tax-Free New Jersey Fund (New)
Tax-Free Ohio Fund (New)
Voyageur Funds, Inc.
Voyageur U.S. Government Securities Fund (New)
Voyageur Insured Funds, Inc.
Arizona Insured Tax Free Fund (New)
Colorado Insured Fund (New)
Minnesota Insured Fund (New)
National Insured Tax Free Fund (New)
Voyageur Intermediate Tax Free Funds, Inc.
Arizona Limited Term Tax Free Fund (New)
California Limited Term Tax Free Fund (New)
Colorado Limited Term Tax Free Fund (New)
Minnesota Limited Term Tax Free Fund (New)
National Limited Term Tax Free Fund (New)
3
<PAGE>
Voyageur Investment Trust
California Insured Tax Free Fund (New)
Florida Insured Tax Free Fund (New)
Florida Tax Free Fund (New)
Kansas Tax Free Fund (New)
Missouri Insured Tax Free Fund (New)
New Mexico Tax Free Fund (New)
Oregon Insured Tax Free Fund (New)
Utah Tax Free Fund (New)
Washington Insured Tax Free Fund (New)
Voyageur Investment Trust II
Florida Limited Term Tax Free Fund (New)
Voyageur Mutual Funds, Inc.
Arizona Tax Free Fund (New)
California Tax Free Fund (New)
Iowa Tax Free Fund (New)
Idaho Tax Free Fund (New)
Minnesota High Yield Municipal Bond Fund (New)
National High Yield Municipal Bond Fund (New)
National Tax Free Fund (New)
New York Tax Free Fund (New)
Wisconsin Tax Free Fund (New)
Voyageur Mutual Funds II, Inc.
Colorado Tax Free Fund (New)
Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund (New)
Growth Stock Fund (New)
International Equity Fund (New)
Tax Efficient Equity Fund (New)
Voyageur Tax Free Funds, Inc.
Minnesota Tax Free Fund (New)
North Dakota Tax Free Fund (New)
4
<PAGE>
Dated as of March 31, 1998
DELAWARE SERVICE COMPANY, INC.
By: /s/David K. Downes
- --------------------------------------------------------------------
David K. Downes
President, Chief Executive Officer and Chief Financial Officer
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS III, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP FOUNDATION FUNDS
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP STATE TAX-FREE INCOME TRUST
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
VOYAGEUR FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.
By: /s/ Wayne A. Stork
- -------------------------------
Wayne A. Stork
Chairman
<PAGE>
EX-99.B9GII
Exhibit 24(b)(9)(g)(ii)
AMENDMENT NO. 13
to
SCHEDULE A
of
DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT
Delaware Group Adviser Funds, Inc.
Corporate Income Fund (liquidated September 19, 1997)
Enterprise Fund (liquidated September 19, 1997)
Federal Bond Fund (liquidated September 19, 1997)
New Pacific Fund
U.S. Growth Fund
Overseas Equity Fund (formerly World Growth Fund)
Delaware Group Cash Reserve, Inc.
Delaware Group Equity Funds I, Inc. (formerly Delaware)
Delaware Fund
Devon Fund
Delaware Group Equity Funds II, Inc. (formerly Decatur)
Blue Chip Fund (New)
Decatur Income Fund
Decatur Total Return Fund
Social Awareness Fund (formerly Quantum Fund) (New)
Diversified Value Fund (New)
Delaware Group Equity Funds III, Inc. (formerly Trend)
Trend Fund
Delaware Group Equity Funds IV, Inc. (formerly DelCap)
Capital Appreciation Fund (New)
DelCap Fund
Delaware Group Equity Funds V, Inc. (formerly Value)
Small Cap Value Fund (formerly Value Fund)
Retirement Income Fund (New)
Mid-Cap Value Fund (New)
Small Cap Contrarian Fund (New)
- ------------------
*Except as otherwise noted, all Portfolios included on this Schedule A
are Existing Portfolios for purposes of the compensation described on Schedule B
to that Fund Accounting Agreement between Delaware Service Company, Inc. and the
Delaware Group of Funds dated as of August 19, 1996 ("Agreement"). All
portfolios added to this Schedule A by amendment executed by a Company on behalf
of such Portfolio hereof shall be a New Portfolio for purposes of Schedule B to
the Agreement.
<PAGE>
Delaware Group Foundation Funds (New)
Balanced Portfolio (New)
Growth Portfolio (New)
Income Portfolio (New)
The Asset Allocation Portfolio (New)
Delaware Group Government Fund, Inc.
Government Income Series (U.S. Government Fund )
Delaware Group Global & International Funds, Inc.
Emerging Markets Fund (New)
Global Assets Fund
Global Bond Fund
International Equity Fund
Global Equity Fund (New)
International Small Cap Fund (New)
New Europe Fund (New)
Latin America Fund (New)
Delaware Group Income Funds, Inc. (formerly Delchester)
Delchester Fund
High-Yield Opportunities Fund (New)
Strategic Income Fund (New)
Corporate Bond Fund (New)
Extended Duration Bond Fund (New)
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U. S. Government Money Fund
Delaware Pooled Trust, Inc.
The Aggressive Growth Portfolio
The Large-Cap Value Equity Portfolio
(formerly The Defensive Equity Portfolio)
The Small/Mid-Cap Value Equity Portfolio (New)
(formerly The Defensive Equity Small/Mid-Cap Portfolio)
The Defensive Equity Utility Portfolio (deregistered January 14, 1997)
The Emerging Markets Portfolio (New)
The Intermediate Fixed Income Portfolio
(formerly The Fixed Income Portfolio)
The Global Fixed Income Portfolio
The High-Yield Bond Portfolio (New)
The International Equity Portfolio
The International Fixed Income Portfolio (New)
The Labor Select International Equity Portfolio
The Limited-Term Maturity Portfolio (New)
The Real Estate Investment Trust Portfolio
The Global Equity Portfolio (New)
The Real Estate Investment Trust Portfolio II (New)
The Diversified Core Fixed Income Portfolio (New)
The Aggregate Fixed Income Portfolio (New)
The Small-Cap Growth Equity Portfolio (New)
The Growth and Income Portfolio (New)
2
<PAGE>
Delaware Group Premium Fund, Inc.
Capital Reserves Series
Cash Reserve Series
Convertible Securities Series (New)
Decatur Total Return Series
Delaware Series
Delchester Series
Devon Series (New)
Emerging Markets Series (New)
DelCap Series
Global Bond Series (New)
International Equity Series
Social Awareness Series (formerly Quantum Series) (New)
REIT Series (New)
Strategic Income Series (New)
Trend Series
Small Cap Value Series (formerly Value Series)
Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group State Tax-Free Income Trust (formerly DMCT Tax-Free Income
Trust-Pennsylvania)
Tax-Free Pennsylvania Fund
Tax-Free New Jersey Fund (New)
Tax-Free Ohio Fund (New)
Voyageur Funds, Inc.
Voyageur US Government Securities Fund (New)
Voyageur Insured Funds, Inc.
Arizona Insured Tax Free Fund (New)
Colorado Insured Fund (New)
Minnesota Insured Fund (New)
National Insured Tax Free Fund (New)
Voyageur Intermediate Tax Free Funds, Inc.
Arizona Limited Term Tax Free Fund (New)
California Limited Term Tax Free Fund (New)
Colorado Limited Term Tax Free Fund (New)
Minnesota Limited Term Tax Free Fund (New)
National Limited Term Tax Free Fund (New)
3
<PAGE>
Voyageur Investment Trust
California Insured Tax Free Fund (New)
Florida Insured Tax Free Fund (New)
Florida Tax Free Fund (New) Kansas Tax Free Fund (New)
Missouri Insured Tax Free Fund (New)
New Mexico Tax Free Fund (New)
Oregon Insured Tax Free Fund (New)
Utah Tax Free Fund (New)
Washington Insured Tax Free Fund (New)
Voyageur Investment Trust II
Florida Limited Term Tax Free Fund (New)
Voyageur Mutual Funds, Inc.
Arizona Tax Free Fund (New)
California Tax Free Fund (New)
Iowa Tax Free Fund (New)
Idaho Tax Free Fund (New)
Minnesota High Yield Municipal Bond Fund (New)
National High Yield Municipal Bond Fund (New)
National Tax Free Fund (New)
New York Tax Free Fund (New)
Wisconsin Tax Free Fund (New)
Voyageur Mutual Funds II, Inc.
Colorado Tax Free Fund (New)
Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund (New)
Growth Stock Fund (New)
International Equity Fund (New)
Tax Efficient Equity Fund (New)
Voyageur Tax Free Funds, Inc.
Minnesota Tax Free Fund (New)
North Dakota Tax Free Fund (New)
4
<PAGE>
Dated as of December , 1998
DELAWARE SERVICE COMPANY, INC.
By: _______________________________________________________________
David K. Downes
President, Chief Executive Officer and Chief Financial Officer
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS III, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP FOUNDATION FUNDS
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP STATE TAX-FREE INCOME TRUST
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
VOYAGEUR FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.
By: __________________________________________
Wayne A. Stork
Chairman
<PAGE>
EX-99.B15M
EXHIBIT 24(B)(15)(M)
EXHIBIT A
DISTRIBUTION PLAN
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
________ FUND
________ FUND A CLASS
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule l2b-l under the Investment Company Act of 1940 (the "Act") by Delaware
Group Global & International Funds, Inc. (the "Fund"), for the
____________________ Fund series (the "Series") on behalf of the _______________
Fund A Class ("Class"), which Fund, Series and Class may do business under these
or such other names as the Board of Directors of the Fund may designate from
time to time. The Plan has been approved by a majority of the Board of
Directors, including a majority of the Directors who are not interested persons
of the Fund and who have no direct or indirect financial interest in the
operation of the Plan or in any agreements related thereto ("non-interested
Directors"), cast in person at a meeting called for the purpose of voting on
such Plan. Such approval by the Directors included a determination that in the
exercise of reasonable business judgment and in light of their fiduciary duties,
there is a reasonable likelihood that the Plan will benefit the Series and
shareholders of the Class. The Plan has been adopted prior to any public
offering of the Class.
The Fund is a corporation organized under the laws of the State of
Maryland, is authorized to issue different series and classes of securities and
is an open-end management investment company registered under the Act. Delaware
International Advisers Ltd. serves as the Series' investment adviser and manager
pursuant to an Investment Management Agreement. Delaware Service Company, Inc.
serves as the Series' shareholder servicing, dividend disbursing and transfer
agent. Delaware Distributors, L.P. (the "Distributor") is the principal
underwriter and national distributor for the Series' shares, including shares of
the Class, pursuant to the Distribution Agreement between the Distributor and
the Fund on behalf of the Series ("Distribution Agreement").
The Plan provides that:
l. The Fund shall pay to the Distributor a monthly fee not to exceed
0.30% (3/10 of l%) per annum of the Series' average daily net assets represented
by shares of the Class (the "Maximum Amount") as may be determined by the Fund's
Board of Directors from time to time. Such monthly fee shall be reduced by the
aggregate sums paid by the Fund on behalf of the Series to persons other than
broker-dealers (the "Service Providers") who may, pursuant to servicing
agreements, provide to the Series services in the 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.
A-1
<PAGE>
(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 Plan; both the Distributor and the Service Providers shall
furnish the Board of Directors of the Fund with such other information as the
Board may reasonably request in connection with the payments made under the Plan
and the use thereof by the Distributor and the Service Providers, respectively,
in order to enable the Board to make an informed determination of the amount of
the Fund's payments and whether the Plan should be continued.
4. The officers of the Fund shall furnish to the Board of Directors of
the Fund, for their review, on a quarterly basis, a written report of the
amounts expended under the Plan and the purposes for which such expenditures
were made.
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 non-interested Directors, cast in person at a meeting
called for the purpose of voting on such Plan.
6. (a) The Plan may be terminated at any time by vote of a majority of
the non-interested Directors or by vote of a majority of the outstanding voting
securities of the Class.
(b) The Plan may not be amended to increase materially the amount to
be spent for distribution pursuant to paragraph l hereof without approval by the
shareholders of the Class.
7. All material amendments to this Plan shall be approved by the
non-interested Directors in the manner described in paragraph 5 above.
8. So long as the Plan is in effect, the selection and nomination of
the Fund's non-interested Directors shall be committed to the discretion of such
non-interested Directors.
9. The definitions contained in Sections 2(a)(19) and 2(a)(42) of the
Act shall govern the meaning of "interested person(s)" and "vote of a majority
of the outstanding voting securities," respectively, for the purposes of this
Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
December _____, 1998
A-2
<PAGE>
EX-99.B15N
EXHIBIT 24 (B)(15)(N)
EXHIBIT B
DISTRIBUTION PLAN
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
________ FUND
________ FUND B CLASS
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by Delaware
Group Global & International Funds, Inc. (the "Fund"), for the
____________________ Fund series (the "Series") on behalf of the
____________________ Fund B Class (the "Class"), which Fund, Series and Class
may do business under these or such other names as the Board of Directors of the
Fund may designate from time to time. The Plan has been approved by a majority
of the Board of Directors, including a majority of the Directors who are not
interested persons of the Fund and who have no direct or indirect financial
interest in the operation of the Plan or in any agreements related thereto
("non-interested Directors"), cast in person at a meeting called for the purpose
of voting on such Plan. Such approval by the Directors included a determination
that in the exercise of reasonable business judgment and in light of their
fiduciary duties, there is a reasonable likelihood that the Plan will benefit
the Series and shareholders of the Class. The Plan has been adopted prior to any
public offering of the Class.
The Fund is a corporation organized under the laws of the State of
Maryland, is authorized to issue different series and classes of securities and
is an open-end management investment company registered under the Act. Delaware
International Advisers Ltd. serves as the Series' investment adviser and manager
pursuant to an Investment Management Agreement. Delaware Service Company, Inc.
serves as the Series' shareholder servicing, dividend disbursing and transfer
agent. Delaware Distributors, L.P. (the "Distributor") is the principal
underwriter and national distributor for the Series' shares, including shares of
the Class, pursuant to the Distribution Agreement between the Distributor and
the Fund on behalf of the Series ("Distribution Agreement").
The Plan provides that:
1. (a) The Fund shall pay to the Distributor a monthly fee not to
exceed 0.75% (3/4 of 1%) per annum of the Series' average daily net assets
represented by shares of the Class as may be determined by the Fund's Board of
Directors from time to time.
(b) In addition to the amounts described in (a) above, the
Fund shall pay (i) to the Distributor for payment to dealers or others, or (ii)
directly to others, an amount not to exceed 0.25% (1/4 of 1%) per annum of the
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
B-1
<PAGE>
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 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, for their review, on a quarterly basis, a written report of the
amounts expended under the Plan and the purposes for which such expenditures
were made.
5. This Plan shall take effect at such time as the Distributor shall
notify the Fund of the commencement of the Plan (the "Commencement Date");
thereafter, the Plan shall continue in effect for a period of more than one year
from the Commencement Date only so long as such continuance is specifically
approved at least annually by a vote of the Board of Directors of the Fund, and
of the 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 hereof without
approval by the shareholders of the Class.
7. All material amendments to this Plan shall be approved by the
non-interested Directors in the manner described in paragraph 5 above.
8. So long as the Plan is in effect, the selection and nomination of
the Fund's non-interested Directors shall be committed to the discretion of such
non-interested Directors.
9. The definitions contained in Sections 2(a)(19) and 2(a)(42) of the
Act shall govern the meaning of "interested person(s)" and "vote of a majority
of the outstanding voting securities," respectively, for the purposes of this
Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
December _____, 1998
B-2
<PAGE>
EX-99.B15O
EXHIBIT 24(B)(15)(O)
EXHIBIT C
DISTRIBUTION PLAN
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
________ FUND
________ FUND C CLASS
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by Delaware
Group Global & International Funds, Inc. (the "Fund"), for the
____________________ Fund series (the "Series) on behalf of the________________
Fund C Class (the "Class"), which Fund, Series and Class may do business under
these or such other names as the Board of Directors of the Fund may designate
from time to time. The Plan has been approved by a majority of the Board of
Directors, including a majority of the Directors who are not interested persons
of the Fund and who have no direct or indirect financial interest in the
operation of the Plan or in any agreements related thereto ("non-interested
Directors"), cast in person at a meeting called for the purpose of voting on
such Plan. Such approval by the Directors included a determination that in the
exercise of reasonable business judgment and in light of their fiduciary duties,
there is a reasonable likelihood that the Plan will benefit the Series and
shareholders of the Class. The Plan has been adopted prior to any public
offering of the Class.
The Fund is a corporation organized under the laws of the State of
Maryland, is authorized to issue different series and classes of securities and
is an open-end management investment company registered under the Act. Delaware
International Advisers Ltd. serves as the Series' investment adviser and manager
pursuant to an Investment Management Agreement. Delaware Service Company, Inc.
serves as the Series' shareholder servicing, dividend disbursing and transfer
agent. Delaware Distributors, L.P. (the "Distributor") is the principal
underwriter and national distributor for the Series' shares, including shares of
the Class, pursuant to the Distribution Agreement between the Distributor and
the Fund on behalf of the Series ("Distribution Agreement").
The Plan provides that:
1. (a) The Fund shall pay to the Distributor a monthly fee not to
exceed 0.75% (3/4 of 1%) per annum of the Series' average daily net assets
represented by shares of the Class as may be determined by the Fund's Board of
Directors from time to time.
(b) In addition to the amounts described in 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 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
C-1
<PAGE>
reports used for sales purposes, as well as compensation related to sales and
marketing personnel, and holding special promotions. In addition, such fees may
be used to pay for advancing the commission costs to dealers with respect to the
sale of Class shares.
(b) The monies to be paid pursuant to paragraph 1(b) above
shall be used to pay dealers or others for, among other things, furnishing
personal services and maintaining shareholder accounts, which services include
confirming that customers have received the Prospectus and Statement of
Additional Information, if applicable; assisting such customers in maintaining
proper records with the Fund; answering questions relating to their respective
accounts; and aiding in maintaining the investment of their respective customers
in the Class.
3. The Distributor shall report to the Fund at least monthly on the
amount and the use of the monies paid to it under paragraph 1(a) above. In
addition, the Distributor and others shall inform the Fund monthly and in
writing of the amounts paid under paragraph 1(b) above; both the Distributor and
any others receiving fees under the Plan shall furnish the Board of Directors of
the Fund with such other information as the Board may reasonably request in
connection with the payments made under the Plan and the use thereof by the
Distributor and others in order to enable the Board to make an informed
determination of the amount of the Fund's payments and whether the Plan should
be continued.
4. The officers of the Fund shall furnish to the Board of Directors of
the Fund, for their review, on a quarterly basis, a written report of the
amounts expended under the Plan and the purposes for which such expenditures
were made.
5. This Plan shall take effect at such time as the Distributor shall
notify the Fund of the commencement of the Plan (the "Commencement Date");
thereafter, the Plan shall continue in effect for a period of more than one year
from the Commencement Date only so long as such continuance is specifically
approved at least annually by a vote of the Board of Directors of the Fund, and
of the 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 hereof without
approval by the shareholders of the Class.
7. All material amendments to this Plan shall be approved by the
non-interested Directors in the manner described in paragraph 5 above.
8. So long as the Plan is in effect, the selection and nomination of
the Fund's non-interested Directors shall be committed to the discretion of such
non-interested Directors.
9. The definitions contained in Sections 2(a)(19) and 2(a)(42) of the
Act shall govern the meaning of "interested person(s)" and "vote of a majority
of the outstanding voting securities," respectively, for the purposes of this
Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
December _____, 1998
C-2
<PAGE>
EX-99.B18AII
EXHIBIT 24(B)(18)(A)(II)
APPENDIX A
(As revised 1998)
List of Funds and Their Classes
1. Delaware Group Equity Funds I, 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 Equity Funds II, Inc.
Decatur Income Fund
Decatur Income Fund A Class
Decatur Income Fund B Class
Decatur Income Fund C Class
Decatur Income Fund Institutional Class
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
Blue Chip Fund (Added February 24, 1997)
Blue Chip Fund A Class
Blue Chip Fund B Class
Blue Chip Fund C Class
Blue Chip Fund Institutional Class
<PAGE>
Social Awareness Fund (formerly Quantum Fund) (Added
February 24, 1997)
Social Awareness Fund A Class
Social Awareness Fund B Class
Social Awareness Fund C Class
Social Awareness Fund Institutional Class
Diversified Value Fund (Added 1998)
Diversified Value Fund A Class
Diversified Value Fund B Class
Diversified Value Fund C Class
Diversified Value Fund Insitutional Class
3. Delaware Group Equity Funds III, Inc. (Formerly Trend)
Trend Fund
Trend Fund A Class
Trend Fund B Class
Trend Fund C Class
Trend Fund Institutional Class
4. Delaware Group Equity Funds IV, Inc.
DelCap Fund
DelCap Fund A Class
DelCap Fund B Class
DelCap Fund C Class
DelCap Fund Institutional Class
Capital Appreciation Fund (Added November 29, 1996)
Capital Appreciation Fund A Class
Capital Appreciation Fund B Class
Capital Appreciation Fund C Class
Capital Appreciation Fund Institutional Class
5. Delaware Group Equity Funds V, Inc. (Formerly Value)
Small Cap Value Fund (Formerly Value Fund)
Small Cap Value Fund A Class
Small Cap Value Fund B Class
Small Cap Value Fund C Class
Small Cap Value Fund Institutional Class
<PAGE>
Retirement Income Fund (Added November 29, 1996)
Retirement Income Fund A Class
Retirement Income Fund B Class
Retirement Income Fund C Class
Retirement Income Fund Institutional Class
Mid-Cap Value Fund (Added December 1998)
Mid-Cap Value Fund A Class
Mid-Cap Value Fund B Class
Mid-Cap Value Fund C Class
Mid-Cap Value Fund Institutional Class
Small Cap Contrarian Fund (Added December 1998)
Small Cap Contrarian Fund A Class
Small Cap Contrarian Fund B Class
Small Cap Contrarian Fund C Class
Small Cap Contrarian 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
Emerging Markets Series (Added May 1, 1996)
Emerging Markets Fund A Class
Emerging Markets Fund B Class
Emerging Markets Fund C Class
Emerging Markets Fund Institutional Class
<PAGE>
Latin America Fund (Added December 1998)
Latin America Fund A Class
Latin America Fund B Class
Latin America Fund C Class
Latin America Fund Institutional Class
New Europe Fund (Added December 1998)
New Europe Fund A Class
New Europe Fund B Class
New Europe Fund C Class
New Europe Fund Institutional Class
7. Delaware Group Income Funds, Inc.
Strategic Income Fund (Added September 30, 1996)
Strategic Income Fund A Class
Strategic Income Fund B Class
Strategic Income Fund C Class
Strategic Income Fund Institutional Class
<PAGE>
8. Delaware Pooled Trust, Inc.
The Real Estate Investment Trust Portfolio (added
October 14, 1997)
REIT Fund A Class
REIT Fund B Class
REIT Fund C Class
REIT Fund Institutional Class
9. Delaware Group Foundation Funds (added December 18, 1997)
Income Portfolio
Income Fund A Class
Income Fund B Class
Income Fund C Class
Income Fund Institutional Class
Balanced Portfolio
Balanced Fund A Class
Balanced Fund B Class
Balanced Fund C Class
Balanced Fund Institutional Class
Growth Portfolio
Growth Fund A Class
Growth Fund B Class
Growth Fund C Class
Growth Fund Institutional Class
<PAGE>
EX-99.B19
Exhibit 24(b)(19)
POWER OF ATTORNEY
Each of the undersigned, a member of the Boards of Directors/Trustees of the
Delaware Group Funds listed on Exhibit A to this Power of Attorney, hereby
constitutes and appoints on behalf of each of the Funds listed on Exhibit A,
Wayne A. Stork, Jeffrey J. Nick and Walter P. Babich and any one of them acting
singly, his true and lawful attorneys-in-fact, in his name, place, and stead, to
execute and cause to be filed with the Securities and Exchange Commission and
other federal or state government agency or body, such registration statements,
and any and all amendments thereto as either of such designees may deem to be
appropriate under the Securities Act of 1933, as amended, the Investment Company
Act of 1940, as amended, and all other applicable federal and state securities
laws.
IN WITNESS WHEREOF, the undersigned have executed this instrument as of this
18th day of December, 1997.
/s/Walter P. Babich /s/Thomas F. Madison
- -------------------------- ------------------------------
Walter P. Babich Thomas F. Madison
/s/Anthony D. Knerr /s/Jeffrey J. Nick
- -------------------------- ------------------------------
Anthony D. Knerr Jeffrey J. Nick
/s/Ann R. Leven /s/Charles E. Peck
- -------------------------- ------------------------------
Ann R. Leven Charles E. Peck
/s/W. Thacher Longstreth /s/Wayne A. Stork
- -------------------------- ------------------------------
W. Thacher Longstreth Wayne A. Stork
<PAGE>
POWER OF ATTORNEY
EXHIBIT A
DELAWARE GROUP FUNDS
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS III, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP STATE TAX-FREE INCOME TRUST
DELAWARE GROUP DIVIDEND AND INCOME FUND, INC.
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC.
DELAWARE GROUP FOUNDATION FUNDS
VOYAGEUR FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.
VOYAGEUR TAX FREE FUNDS, INC.
VOYAGEUR ARIZONA MUNICIPAL INCOME FUND, INC.
VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUND, INC.
VOYAGEUR FLORIDA INSURED MUNICIPAL INCOME FUND
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND, INC.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND II, INC.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND III, INC.
<PAGE>
POWER OF ATTORNEY
The undersigned, a member of the Boards of Directors/Trustees of the Delaware
Group Funds listed on Exhibit A to this Power of Attorney, hereby constitutes
and appoints on behalf of each of the Funds listed on Exhibit A, Wayne A. Stork,
Jeffrey J. Nick and Walter P. Babich and any one of them acting singly, his true
and lawful attorneys-in-fact, in his name, place, and stead, to execute and
cause to be filed with the Securities and Exchange Commission and other federal
or state government agency or body, such registration statements, and any and
all amendments thereto as either of such designees may deem to be appropriate
under the Securities Act of 1933, as amended, the Investment Company Act of
1940, as amended, and all other applicable federal and state securities laws.
IN WITNESS WHEREOF, the undersigned have executed this instrument as of this
16th day of April, 1998.
/s/ John H. Durham
- ----------------------------
John H. Durham
<PAGE>
POWER OF ATTORNEY
EXHIBIT A
DELAWARE GROUP FUNDS
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS III, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP STATE TAX-FREE INCOME TRUST
DELAWARE GROUP DIVIDEND AND INCOME FUND, INC.
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC.
DELAWARE GROUP FOUNDATION FUNDS
