MACKENZIE FLORIDA LIMITED TERM MUNICIPAL FUND
VIA MIZNER FINANCIAL PLAZA
700 SOUTH FEDERAL HIGHWAY
BOCA RATON, FLORIDA 33432
Dear Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders of
Mackenzie Florida Limited Term Municipal Fund ("Mackenzie Fund"), a series of
the Mackenzie Series Trust ("Mackenzie Trust") to be held on Tuesday, May 28,
1996 at 10:00 a.m. Eastern Time, at the offices of Mackenzie Fund, for the
purpose of considering and voting upon a proposed Agreement and Plan of
Reorganization for Mackenzie Fund.
If the Plan is approved by the shareholders of Mackenzie Fund, all or
substantially all of the assets and all identified and stated liabilities of
Mackenzie Fund will be exchanged for shares of beneficial interest of Voyageur
Florida Limited Term Tax Free Fund ("Voyageur Fund") having an aggregate net
asset value equal to the value of Mackenzie Fund's aggregate net assets
transferred to Voyageur Fund. In the reorganization, you will receive Class A or
Class B shares of Voyageur Fund, respectively, having a net asset value equal to
the value of your Class A or Class B Mackenzie Fund shares.
Voyageur Fund is the sole outstanding series of Voyageur Investment Trust
II, an open-end diversified management investment company located in
Minneapolis, Minnesota. Voyageur Fund Managers, Inc. ("VFM") acts as the
investment adviser to Voyageur Fund. As of December 31, 1995, VFM served as the
investment adviser to six closed-end and 29 open-end funds, administered
numerous private accounts and managed approximately $8.16 billion in assets.
The investment objectives of Mackenzie Fund and Voyageur Fund are similar
in that both seek to provide shareholders with income that is exempt from
federal income tax and both Funds seek to select investments that will enable
shares to be exempt from the Florida intangible personal property tax.
Shareholders should carefully consider, however, both the similarities and the
differences between the investment objectives, policies and restrictions of the
two Funds. These similarities and differences, as well as other important
information concerning the proposed combination of the Funds, are described in
detail in the Prospectus/Proxy Statement, which you are encouraged to review
carefully.
THE BOARD OF TRUSTEES OF MACKENZIE TRUST UNANIMOUSLY RECOMMENDS APPROVAL OF
THE PLAN. Approval of the Plan will require the affirmative vote of the holders
of a majority of the outstanding shares of each class of Mackenzie Fund, voting
as separate classes. We urge you to take the time to consider this important
matter and vote now. Whether or not you expect to attend the meeting, please
sign and promptly return the enclosed proxy in the enclosed postage-prepaid
envelope. Your prompt response will insure that your shares are counted at the
meeting.
Sincerely,
Michael G. Landry
President of the Mackenzie Series Trust
MACKENZIE FLORIDA LIMITED TERM MUNICIPAL FUND
A SEPARATELY MANAGED SERIES OF
MACKENZIE SERIES TRUST
VIA MIZNER FINANCIAL PLAZA
700 SOUTH FEDERAL HIGHWAY
BOCA RATON, FLORIDA 33432
------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 28, 1996
-----------------------
April 26, 1996
To the Shareholders of Mackenzie Florida Limited Term Municipal Fund:
NOTICE IS HEREBY GIVEN that a special meeting of shareholders of Mackenzie
Florida Limited Term Municipal Fund ("Mackenzie Fund"), a separately managed
series of Mackenzie Series Trust ("Mackenzie Trust"), will be held at 10:00 a.m.
Eastern time, on Tuesday, May 28, 1996, at the offices of Mackenzie Fund, Via
Mizner Financial Plaza, 700 South Federal Highway, Boca Raton, Florida 33432.
The purpose of the special meeting is as follows:
1. To consider and vote on a proposed Agreement and Plan of Reorganization
(the "Plan") providing for (a) the acquisition of substantially all of the
assets and the assumption of all liabilities of Mackenzie Fund by Voyageur
Limited Term Tax Free Fund ("Voyageur Fund"), in exchange for shares of
beneficial interest of Voyageur Fund having an aggregate net asset value
equal to the aggregate value of the assets acquired (less liabilities
assumed) of Mackenzie Fund and (b) the liquidation of Mackenzie Fund and
the pro rata distribution of Voyageur Fund shares to Mackenzie Fund
shareholders. Under the Plan, Mackenzie Fund shareholders will receive the
same class of shares of Voyageur Fund that they held in Mackenzie Fund,
having a net asset value equal as of the effective time of the Plan to the
net asset value of their Mackenzie Fund shares.
2. To transact such other business as may properly come before the meeting or
any adjournments or postponements thereof.
Even if Mackenzie Fund shareholders vote to approve the Plan, consummation
of the Plan is subject to certain other conditions. See "Information About the
Reorganization -- Plan of Reorganization" in the attached Prospectus/Proxy
Statement.
THE BOARD OF TRUSTEES OF MACKENZIE TRUST UNANIMOUSLY RECOMMENDS APPROVAL OF
THE PLAN.
The close of business on April 4, 1996 has been fixed as the record date
for the determination of shareholders entitled to notice of and to vote at the
meeting and any adjournments or postponements thereof.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN AND PROMPTLY
RETURN THE ENCLOSED PROXY IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE. IN ORDER TO
AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION, WE RESPECTFULLY ASK FOR
YOUR COOPERATION IN MAILING IN YOUR PROXY PROMPTLY. If you are present at the
meeting, you may then revoke your proxy and vote in person, as explained in the
Prospectus/Proxy Statement in the section entitled "Voting Information."
By Order of the Board of Trustees,
C. WILLIAM FERRIS
SECRETARY
PROSPECTUS/PROXY STATEMENT
DATED APRIL 26, 1996
ACQUISITION OF THE ASSETS OF
MACKENZIE FLORIDA LIMITED TERM MUNICIPAL FUND
A SEPARATELY MANAGED SERIES OF
MACKENZIE SERIES TRUST
VIA MIZNER FINANCIAL PLAZA
700 SOUTH FEDERAL HIGHWAY
BOCA RATON, FLORIDA 33432
BY AND IN EXCHANGE FOR SHARES OF
VOYAGEUR FLORIDA LIMITED TERM TAX FREE FUND
THE SOLE OUTSTANDING SERIES OF
VOYAGEUR INVESTMENT TRUST II
90 SOUTH SEVENTH STREET
SUITE 4400
MINNEAPOLIS, MINNESOTA 55402
This Prospectus/Proxy Statement is being furnished to the shareholders of
Mackenzie Florida Limited Term Municipal Fund ("Mackenzie Fund"), a separately
managed series of Mackenzie Series Trust ("Mackenzie Trust"), in connection with
a special meeting (the "Meeting") of the shareholders of Mackenzie Fund to be
held at the offices of Mackenzie Fund on May 28, 1996, for the purposes set
forth in the accompanying Notice of Special Meeting of Shareholders. This
Prospectus/Proxy Statement is first being mailed to shareholders of Mackenzie
Fund on or about April 26, 1996. Information concerning the voting rights of
each Mackenzie Fund shareholder is set forth under "Voting Information" below.
Representatives of Mackenzie Investment Management Inc., the investment adviser
and manager of Mackenzie Fund, or of its affiliates, may, without cost to
Mackenzie Fund, solicit proxies for management of Mackenzie Fund by means of
mail, telephone, or personal calls. In addition, the services of a third-party
proxy solicitation firm may be utilized; however, such firm's expenses will not
be borne by either Mackenzie Fund or Voyageur Florida Limited Term Tax Free Fund
("Voyageur Fund") as described under "Information About the Reorganization--Plan
of Reorganization" below. Persons holding shares as nominees will, upon request,
be reimbursed for their reasonable expenses incurred in sending proxy soliciting
materials on behalf of the Board of Trustees to their principals.
As set forth in the Notice of Special Meeting of Shareholders, this
Prospectus/Proxy Statement relates to a proposed Agreement and Plan of
Reorganization (the "Plan") providing for (a) the acquisition of substantially
all of the assets and the assumption of all stated and identified liabilities of
Mackenzie Fund by Voyageur Fund, the sole outstanding series of Voyageur
Investment Trust II ("Voyageur Trust"), in exchange for shares of beneficial
interest of Voyageur Fund having an aggregate net asset value equal to the
aggregate value of the assets acquired (less liabilities assumed) of Mackenzie
Fund, and (b) the liquidation of Mackenzie Fund and the pro rata distribution of
its holdings of Voyageur Fund shares to Mackenzie Fund shareholders. Mackenzie
Fund and Voyageur Fund are sometimes referred to herein, individually, as a
"Fund," or together, as the "Funds."
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.
As a result of the transactions contemplated by the Plan (collectively, the
"Reorganization"), each shareholder of Mackenzie Fund will receive Voyageur Fund
shares of the same class that he or she held in Mackenzie Fund, with an
aggregate net asset value equal as of the effective time of the Plan to the
aggregate net asset value of their Mackenzie Fund shares. The Reorganization is
being structured as a tax-free reorganization so that no income, gain or loss
will be recognized by Mackenzie Fund or its shareholders as a result thereof
(except that Mackenzie Fund contemplates that it will make a distribution
immediately prior to the Reorganization of all of its current year net
tax-exempt income, ordinary taxable income and net realized capital gains, if
any, not previously distributed, and any portion of this distribution which does
not constitute an exempt-interest dividend will be taxable to Mackenzie Fund
shareholders subject to taxation). The shareholders of Mackenzie Fund are being
asked to vote on the proposed Plan and Reorganization at the Meeting.
In addition to the approval of the Plan and Reorganization by Mackenzie
Fund shareholders, the consummation of the Reorganization is subject to certain
other conditions. See "Information About the Reorganization -- Plan of
Reorganization."
Voyageur Fund is the sole outstanding series of the Voyageur Trust, an
open-end management investment company which may offer its shares in multiple
series. The investment objective of Voyageur Fund is to provide investors with
preservation of capital and, secondarily, current income exempt from federal
income tax by maintaining a weighted average portfolio maturity of ten years or
less. Voyageur Fund will seek generally to select investments that will enable
its shares to be exempt from the Florida intangible personal property tax. It is
a fundamental policy of Voyageur Fund that 80% of its income distributions be
exempt from federal income tax. Up to 20% of the securities owned by Voyageur
Fund may generate interest that is an item of tax preference for purposes of
federal alternative minimum tax. The investment objectives, policies and
restrictions of both Funds are described and compared below under "Information
About Mackenzie Fund and Voyageur Fund -- Comparison of Investment Objectives,
Policies and Restrictions."
This Prospectus/Proxy Statement, which should be retained for future
reference, sets forth concisely the information about the proposed Plan and
Reorganization and about Voyageur Fund and its affiliates that each Mackenzie
Fund shareholder should know prior to voting on the proposed Plan and
Reorganization.
INCORPORATION BY REFERENCE
The documents listed in items 1 and 2 below, which have been filed with the
Securities and Exchange Commission (the "Commission"), are incorporated herein
by reference to the extent noted below. A Statement of Additional Information
dated April 26, 1996 relating to this Prospectus/Proxy Statement has been filed
with the Commission and is also incorporated by reference into this
Prospectus/Proxy Statement. A copy of the Statement of Additional Information,
and of each of the documents listed in items 2 through 7 below, is available
upon request and without charge by writing to Voyageur Fund at 90 South Seventh
Street, Suite 4400, Minneapolis, Minnesota 55402, or by calling (800) 553-2143.
The documents listed in items 3 through 7 below are incorporated by reference
into the Statement of Additional Information and such items will be provided
with any copy of the Statement of Additional Information which is requested. Any
documents requested will be sent within one business day of receipt of the
request by first class mail or other means designed to ensure equally prompt
delivery.
1. The Prospectus dated March 1, 1995, as supplemented November 9, 1995,
of Voyageur Fund is incorporated herein in its entirety by reference,
and a copy thereof accompanies this Prospectus/Proxy Statement.
2. The Prospectus dated October 27, 1995, of Mackenzie Fund is
incorporated herein in its entirety by reference.
3. The Statement of Additional Information dated March 1, 1995, as
supplemented October 29, 1995, of Voyageur Fund is incorporated by
reference in its entirety in the Statement of Additional Information
relating to this Prospectus/Proxy Statement.
4. The Annual Report of Voyageur Fund for the fiscal year ended December
31, 1995 is incorporated by reference in its entirety in the Statement
of Additional Information relating to this Prospectus/Proxy Statement.
5. The Statement of Additional Information dated October 27, 1995, as
supplemented January 1, 1996, of Mackenzie Fund is incorporated by
reference in its entirety in the Statement of Additional Information
relating to this Prospectus/Proxy Statement.
6. The Annual Report of Mackenzie Fund for the fiscal year ended June 30,
1995 is incorporated by reference in its entirety in the Statement of
Additional Information relating to this Prospectus/Proxy Statement.
7. The unaudited Semi-Annual Report of Mackenzie Fund for the six month
period ended December 31, 1995 is incorporated by reference in its
entirety in the Statement of Additional Information relating to this
Prospectus/Proxy Statement.
Also accompanying and attached to this Prospectus/Proxy Statement as Exhibit A
is a copy of the Plan for the proposed Reorganization.
SUMMARY
This summary is qualified in its entirety by reference to the additional
information contained elsewhere in this Prospectus/Proxy Statement and in the
documents incorporated by reference herein, and by reference to the Plan, a copy
of which is attached to this Prospectus/Proxy Statement as Exhibit A. Mackenzie
Fund shareholders should review the accompanying documents carefully in
connection with their review of this Prospectus/Proxy Statement.
PROPOSED REORGANIZATION
The Plan provides for (a) the acquisition of substantially all of the
assets and the assumption of all identified and stated liabilities of Mackenzie
Fund by Voyageur Fund in exchange for shares of beneficial interest of Voyageur
Fund having an aggregate net asset value equal to the aggregate value of the
assets acquired (less liabilities assumed) of Mackenzie Fund and (b) the
liquidation of Mackenzie Fund and the pro rata distribution of its holdings of
Voyageur Fund shares to Mackenzie Fund shareholders as of the effective time of
the Reorganization (the close of normal trading on the New York Stock Exchange,
currently 4:00 p.m. Eastern Time, five business days after the Plan is approved
by Mackenzie Fund shareholders, or such later date as provided for in the Plan)
(such time and date, the "Effective Time"). As a result of the Reorganization,
each shareholder of Mackenzie Fund will receive Voyageur Fund shares of the same
class that he or she held in Mackenzie Fund with an aggregate net asset value
equal to the aggregate net asset value of the shareholder's Mackenzie Fund
shares as of the Effective Time. See "Information About the Reorganization."
For the reasons set forth below under "Information About the Reorganization
- -- Reasons for the Reorganization," the Board of Trustees of Mackenzie Fund,
including all of the "non-interested" Trustees, as that term is defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), has approved the
Reorganization and has submitted the Plan for approval by Mackenzie Fund
shareholders.
The Board of Trustees of Voyageur Fund has also concluded that the
Reorganization would be in the best interests of Voyageur Fund's existing
shareholders and has therefore approved the Reorganization on behalf of Voyageur
Fund.
Approval of the Plan and Reorganization will require the affirmative vote
of a majority of the outstanding shares of each class of Mackenzie Fund, voting
as separate classes.
TAX CONSEQUENCES
Prior to completion of the Reorganization, Mackenzie Fund will have
received from Dorsey & Whitney LLP, counsel to Voyageur Fund, an opinion that,
upon the Reorganization, no gain or loss will be recognized by Mackenzie Fund or
its shareholders for federal income tax purposes. The holding period and
aggregate tax basis of Voyageur Fund shares that are received by each Mackenzie
Fund shareholder will be the same as the holding period and aggregate tax basis
of Mackenzie Fund shares previously held by such shareholders. In addition, the
holding period and tax basis of the assets of Mackenzie Fund in the hands of
Voyageur Fund as a result of the Reorganization will be the same as in the hands
of Mackenzie Fund immediately prior to the Reorganization. See "Information
About the Reorganization -- Federal Income Tax Consequences."
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
Mackenzie Fund and Voyageur Fund are both non-diversified, open-end
investment company series with investment objectives which are similar.
* The primary investment objective of Mackenzie Fund is to seek as high
a level of interest income exempt from federal income taxes as is
consistent with the preservation of shareholders' capital.
* Voyageur Fund's investment objective is to provide investors with
preservation of capital and, secondarily, current income exempt from
federal income tax by maintaining a weighted average
portfolio maturity of ten years or less.
The investment policies of Mackenzie Fund and Voyageur Fund are similar but not
identical.
* Mackenzie Fund attempts to achieve its objective by investing
primarily in tax-exempt limited term municipal securities exempt from
both regular federal income taxes, in the opinion of bond counsel to
the issuer, and Florida intangible personal property taxes. As a
fundamental policy, at least 80% of the Fund's net assets is invested,
during periods of normal market conditions, in debt obligations issued
by or on behalf of the State of Florida and its political subdivisions
(agencies, authorities and instrumentalities), and the governments of
Puerto Rico, the U.S. Virgin Islands and Guam, the interest on which
is exempt from regular federal income tax and is not a tax preference
item under the federal alternative minimum tax, and the value of which
is exempt from Florida intangible personal property taxes ("Florida
municipal securities"). Mackenzie Fund ordinarily does not intend to
realize investment income from securities other than Florida municipal
securities. However, to the extent that Florida municipal securities
are not readily available for investment by Mackenzie Fund, the Fund
may invest more than 20% of its net assets in securities other than
Florida municipal securities the interest on which is, in the opinion
of bond counsel to the issuer, exempt from federal income tax.
In normal market conditions, Voyageur Fund seeks to achieve its
investment objective by investing primarily in debt obligations issued
by or on behalf of the State of Florida or a U.S. territory or their
agencies, instrumentalities, municipalities and political
subdivisions, the interest payable on which is, in the opinion of bond
counsel, excludable from gross income for purposes of federal income
tax and which qualify as assets exempt from the Florida intangible
personal property tax. It is a fundamental policy of Voyageur Fund
that 80% of its income distributions be exempt from federal income
tax. During times of adverse market conditions when a defensive
investment posture is warranted, Voyageur Fund may temporarily select
investments without regard to the foregoing policy. However, Voyageur
Fund anticipates that, in normal market conditions, substantially all
of its assets will be invested in securities the interest on which is
exempt from federal income tax.
* Under normal market conditions, Mackenzie Fund will invest no more
than 20% of its net assets in obligations the interest from which
gives rise to a preference item for the purpose of the federal
alternative minimum tax. Similarly, up to 20% of the securities owned
by Voyageur Fund may generate interest that is an item of tax
preference for purposes of the federal alternative minimum tax.
* Mackenzie Fund will not invest more than 5% of its net assets in
obligations of each of the U.S. Virgin Islands and Guam, but may
invest without limit in obligations of Puerto Rico. Although Voyageur
Fund's investment in the obligations of such territories is not
limited, it currently does not hold any such obligations.
* Mackenzie Fund expects to maintain a dollar-weighted average portfolio
maturity of three to six years and will purchase only instruments with
remaining maturities of ten years or less. As noted above, Voyageur
Fund's investment objective provides that the Fund will maintain a
weighted average portfolio maturity of ten years or less.
* Mackenzie Fund may purchase (a) municipal securities that are backed
by the full faith and credit of the United States Government; (b)
notes rated MIG-1 or MIG-2 by Moody's Investors Service, Inc.
("Moody's") or AAA, AA, A, SP-1 or SP-2 by Standard & Poor's Ratings
Services ("S&P"), (c) municipal bonds rated Aaa, Aa or A by Moody's or
AAA, AA or A by S&P; (d) other types of municipal securities provided
that such obligations are rated A-1 or A-2 by S&P or Prime-1 or
Prime-2 by Moody's; and (e) municipal securities that are themselves
unrated, but either are issued by an entity that has other municipal
securities outstanding that meet one of the minimum rating
requirements listed above, or are of equivalent investment quality as
determined by the Fund's investment adviser pursuant to guidelines
established and maintained in good faith by the Board of Trustees.
Voyageur Fund may invest without limitation in securities rated
"investment grade," i.e., within the four highest investment grades,
at the time or investment by Moody's or S&P or, if unrated, judged by
the Fund's investment adviser to be of comparable quality. Up to 20%
of the tax-exempt obligations purchased by Voyageur Fund may be rated
lower than investment grade; however all bond must by rated "B" or
better by Moody's or S&P (or, if unrated, judged by the Fund's
investment adviser to be of comparable quality). Such bonds are often
referred to as "junk" bonds or "high yield" bonds. Bonds rated below
BBB or Baa have a greater vulnerability to default than higher grade
bonds. See "Principal Risk Factors" for a discussion of the risks of
investing in lower grade tax-exempt obligations.
* Both Funds may invest in repurchase agreements, purchase securities on
a "when-issued" basis and borrow money from banks for temporary or
emergency purposes (in an amount equal to 20% of total assets for
Voyageur Fund and 10% of total assets for Mackenzie Fund).
* Voyageur Fund may enter into reverse repurchase agreements, may write
(i.e., sell) covered put and call options and purchase put and call
options on the securities in which it may invest and on indices of
securities in which it may invest, may enter into futures contracts
and may purchase and sell options on futures transactions. Mackenzie
Fund may not enter into such transactions.
The Funds' investment objectives, policies and restrictions are described
and compared in further detail herein under "Information About Mackenzie Fund
and Voyageur Fund -- Comparison of Investment Objectives, Policies and
Restrictions." The Annual Reports of Voyageur Fund and Mackenzie Fund for the
fiscal years ended December 31, 1995 and June 30, 1995, respectively, as well as
the unaudited Semi-Annual Report of Mackenzie Fund for the six month period
ended December 31, 1995 referred to on the cover page hereof under
"Incorporation by Reference," provide information concerning the composition of
the respective Funds' assets at the applicable dates.
FEES AND EXPENSES
MACKENZIE FUND EXPENSES. Mackenzie Investment Management Inc. ("MIMI")
provides business management and investment advisory services to Mackenzie Fund
pursuant to a Business Management and Investment Advisory Agreement. For MIMI's
services under such Agreement, Mackenzie Fund is obligated to pay MIMI a monthly
fee at an annual rate of .55% of the Fund's average daily net assets. As
discussed below, because MIMI voluntarily limits Mackenzie Fund's total
operating expenses to .64% of the Fund's average daily net assets, Mackenzie
Fund currently does not pay any fees under the Business Management and
Investment Advisory Agreement.
Mackenzie Ivy Funds Distribution, Inc. ("MIFDI"), a wholly owned subsidiary
of MIMI, serves as the exclusive distributor of the Class A and Class B shares
of Mackenzie Fund pursuant to an Amended and Restated Distribution Agreement
with Mackenzie Trust. Under such Distribution Agreement, MIFDI retains the sales
charges, if any, paid by Mackenzie Fund Class A shareholders in connection with
their purchases of Fund shares and is entitled to deduct a contingent deferred
sales charge on the redemption of Class B shares (and on the redemption of
certain Class A shares initially sold without a sales charge). In addition,
Mackenzie Fund has adopted pursuant to Rule 12b-1 under the 1940 Act separate
distribution plans pertaining to its Class A and Class B shares (the "Class A
Plan" and the "Class B Plan," collectively, the "Plans"). Under Mackenzie Fund's
Class A and Class B Plans, Mackenzie Fund pays MIFDI a monthly service fee at
the annual rate of up to .25% of the average daily net assets attributable to
its Class A shares or Class B shares, as the case may be. Mackenzie Fund also
pays to MIFDI a distribution fee based on the average daily net assets
attributable to its Class B shares paid monthly at the annual rate of .50%.
Mackenzie Trust has entered into an Administrative Services Agreement with
MIMI, pursuant to which MIMI provides various administrative services for
Mackenzie Fund. Under the agreement, MIMI receives a monthly fee from Mackenzie
Fund at the annual rate of .10% of the Fund's average daily net assets.
Mackenzie Trust also has entered into a Fund Accounting Services Agreement
with MIMI pursuant to which MIMI provides certain accounting and pricing
services for the Fund. For fund accounting services, Mackenzie Fund pays MIMI
out-of-pocket expenses as incurred and a monthly fee based upon the Fund's net
assets at the end of the preceding month at the following rates: $1,000 when net
assets are $20 million and under; $1,500 when net assets are over $20 million to
$75 million; $4,000 when net assets are over $75 million to $100 million; and
$6,000 when net assets are over $100 million.
Mackenzie Ivy Investor Services Corp. ("MIISC"), a wholly owned subsidiary
of MIMI, is the transfer agent and dividend paying agent for Mackenzie Fund and
provides certain shareholder and shareholder-related services. For transfer
agency and shareholder services, Mackenzie Fund pays MIISC an annual fee of
$20.75 per open account and $4.25 for each account that is closed. In addition,
Mackenzie Fund reimburses MIISC monthly for out-of-pocket expenses.
MIMI voluntarily limits total Mackenzie Fund expenses (excluding interest,
12b-1 fees, taxes, brokerage commissions, litigation and indemnification
expenses, and other extraordinary expenses) to an annual rate of .64% of the
Fund's average daily net assets. This expense limitation may be terminated or
revised at any time.
VOYAGEUR FUND EXPENSES. Voyageur Fund Managers, Inc. ("VFM") has been
retained under an Investment Advisory Agreement to act as Voyageur Fund's
investment adviser. Voyageur Fund pays VFM a monthly investment advisory and
management fee equivalent on an annual basis to .40% of the Fund's average daily
net assets.
Voyageur Fund Distributors, Inc. ("VFD"), an affiliate of VFM, acts as the
principal distributor of Voyageur Fund's shares pursuant to a Distribution
Agreement with Voyageur Fund. Under the Distribution Agreement, VFD retains the
sales charges, if any, paid by Voyageur Fund Class A shareholders in connection
with their purchases of Fund shares and is entitled to deduct a contingent
deferred sales charge on the redemption of Class B shares (and on the redemption
of certain Class A shares initially sold without a sales charge). In addition,
Voyageur Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under
the 1940 Act. Pursuant to this Plan, Voyageur Fund pays VFD a Rule 12b-1 fee at
an annual rate of .25% of the Fund's average daily net assets attributable to
Class A shares and 1% of the Fund's average daily net assets attributable to
each of Class B and Class C shares for servicing of shareholder accounts and
distribution related services.
VFM also acts as Voyageur Fund's dividend disbursing, transfer,
administrative and accounting services agent pursuant to an Administrative
Services Agreement. Under the Agreement, Voyageur Fund pays VFM a monthly fee
based upon the Fund's average daily net assets and the number of shareholder
accounts then existing. This fee is equal to the sum of (a) $1.33 per
shareholder account per month, (b) $1,000 per month if the Fund's average daily
net assets do not exceed $50 million, $1,250 per month if the Fund's average
daily net assets are greater than $50 million but do not exceed $100 million,
and $1,500 per month if the Fund's average daily net assets exceed $100 million,
and (c) 0.11% per annum of the first $20 million of the Fund's average daily net
assets, 0.06% per annum of the next $20 million of the Fund's average daily net
assets, 0.035% per annum of the next $60 million of the Fund's average daily net
assets, 0.03% per annum of the next $400 million of the Fund's average daily net
assets and 0.02% per annum of the Fund's average daily net assets in excess of
$500 million.
For the fiscal year ended December 31, 1995, VFM voluntarily limited total
Voyageur Fund expenses, including Rule 12b-1 fees, to .63% of average daily nets
assets for Class A shares, 1.52% of average daily net assets for Class B shares
and 1.62% of average daily net assets for Class C shares.
For the fiscal year ending December 31, 1996, VFM has undertaken to limit
total Voyageur Fund expenses, including Rule 12b-1 fees, to .80% of average
daily net assets for Class A shares and 1.65 % of average daily net assets for
Class B and Class C shares. These expense limitations may be terminated or
revised at any time after December 31, 1996. In addition, VFM is contractually
obligated to pay the operating expenses of Voyageur Fund (excluding interest,
taxes, brokerage fees and commissions, and Rule 12b-1 fees) which exceed 1% of
the Fund's average daily net assets on an annual basis up to the amount of VFM's
investment advisory and management fee.
PRO FORMA FEES AND EXPENSES
The following tables are intended to assist Mackenzie Fund shareholders of
each class in understanding the various costs and expenses (expressed as a
percentage of average net assets) (a) that such shareholders currently bear as
Mackenzie Fund shareholders (under the "Mackenzie Fund" column); (b) that
shareholders of Voyageur Fund currently bear (under the "Voyageur Fund") column;
and (c) that such shareholders can expect to bear as Voyageur Fund shareholders
after the Reorganization is consummated (under the "Pro Forma" column). The
examples set forth below should not be considered representations of past or
future expenses or performance, and actual expenses may be greater or less than
those shown. The following tables are based on Mackenzie Fund expenses for the
fiscal year ended June 30, 1995 and Voyageur Fund expenses for the fiscal year
ended December 31, 1995.
<TABLE>
<CAPTION>
CLASS A SHARES FEES AND EXPENSES
MACKENZIE VOYAGEUR PRO
FUND FUND FORMA (1)
---- ---- ---------
SHAREHOLDER TRANSACTION EXPENSES
<S> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases (as a
percentage of offering price)............................ 3.00% 2.75% 2.75%
Maximum Deferred Sales Charge (2)............................. None None None
ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE NET ASSETS)
Management Fees (after fee waiver) (3)........................ 0% 0.40% 0.40%
Rule 12b-1 Fees (after fee waiver) (3)........................ 0.25% 0.02% 0.15%
Other Expenses (after expense reimbursement)(3) 0.64% 0.21% 0.25%
---- ---- ----
Total Fund Operating Expenses (after fee waivers and
expense reimbursement) (3)................................. 0.89% 0.63% 0.80%
Example (4)
You would pay the following expenses on a $1,000 investment over
various time periods assuming: (1) 5% annual return; and (2)
redemption at the end of each time period:
1 year........................................................ $39 $34 $35
3 years....................................................... $58 $47 $52
5 years....................................................... $78 $62 $71
10 years...................................................... $136 $104 $124
</TABLE>
_____________________________
(1) Pro forma numbers are based on VFM's undertaking to limit Voyageur Fund's
Total Operating Expenses for Class A shares to 0.80% of average daily net
assets for the fiscal year ending December 31, 1996.
(2) For both Funds, a contingent deferred sales charge may apply to the
redemption of Class A shares that are purchased without an initial sales
charge. See "Purchase, Exchange and Redemption Procedures" below.
(3) Total Fund Operating Expenses for each Fund reflect expense limitations
discussed herein. MIMI voluntarily limits total operating expenses for
Mackenzie Fund's Class A shares (excluding taxes, 12b-1 fees, brokerage
commissions, interest, litigation and indemnification expenses and other
extraordinary expenses) to an annual rate of .64% of the Fund's average
daily net assets attributable to such shares. Without expense
reimbursements for the fiscal year ended June 30, 1995, Management Fees for
Mackenzie Fund Class A shares would have been 0.55% of average daily net
assets, Other Expenses would have been 1.29% of average daily net assets,
and Total Fund Operating Expenses would have been 2.09% of average daily
net assets. For the fiscal year ended December 31, 1995, VFM voluntarily
limited Voyageur Fund's total operating expenses for Class A shares to .63%
of average daily net assets. Without expense reimbursements Rule 12b-1 Fees
for Voyageur Fund Class A shares would have been 0.25% of average daily net
assets, Other Expenses would have been 0.60% of average daily net assets,
and Total Fund Operating Expenses would have been 1.25% of average daily
net assets.
(4) Assumes deduction of the maximum initial sales charge at the time of
purchase (3.00% for Mackenzie Fund and 2.75% for Voyageur Fund and on a pro
forma basis) and no deduction of a contingent deferred sales charge at the
time of redemption.
<TABLE>
<CAPTION>
CLASS B SHARES FEES AND EXPENSES
MACKENZIE VOYAGEUR PRO
FUND FUND FORMA (1)
---- ---- ---------
SHAREHOLDER TRANSACTION EXPENSES
<S> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases (as a
percentage of offering price)............................ None None None
Maximum Deferred Sales Charge ................................ 3.00% 3.00% 3.00%
ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE NET ASSETS)
Management Fees (after fee waiver)(2)......................... 0% 0.40% 0.40%
Rule 12b-1 Fees (after fee waiver)(2)......................... 0.75% 0.75% 1.00%
Other Expenses (after expense reimbursement)(2) 0.64% 0.37% 0.25%
---- ---- ----
Total Fund Operating Expenses (after fee waivers and
expense reimbursement)(2).................................. 1.39% 1.52% 1.65%
EXAMPLE (3)
You would pay the following expenses on a $1,000 investment over
various time periods assuming: (1) 5% annual return; and (2) both
redemption and no redemption at the end of each time period:
WITH REDEMPTION
1 year........................................................ $44 $45 $47
3 years....................................................... $64 $68 $72
5 years....................................................... $86 $83 $90
10 years...................................................... $153 $168 $175
WITHOUT REDEMPTION
1 year........................................................ $14 $15 $17
3 years....................................................... $44 $48 $52
5 years....................................................... $76 $83 $90
10 years...................................................... $153 $168 $175
</TABLE>
_____________________________
(1) Pro forma numbers are based on VFM's undertaking to limit Voyageur Fund's
Total Operating Expenses for Class B shares to 1.65% of average daily net
assets for the fiscal year ending December 31, 1996.
(2) Total Fund Operating Expenses for each Fund reflect expense limitations
discussed herein. MIMI voluntarily limits Mackenzie Fund's total operating
expenses (excluding taxes, 12b-1 fees, brokerage commissions, interest,
litigation and indemnification expenses and other extraordinary expenses)
to an annual rate of .64% of the Fund's average daily net assets. Without
expense reimbursements for the fiscal year ended June 30, 1995, Management
Fees for Mackenzie Fund Class B shares would have been 0.55% of average
daily net assets, Other Expenses would have been 1.29% of average daily net
assets, and Total Fund Operating Expenses would have been 2.59% of average
daily net assets. For the fiscal year ended December 31, 1995, VFM
voluntarily limited Voyageur Fund's total operating expenses for Class B
shares to 1.52% of average daily net assets. Without expense
reimbursements, Rule 12b-1 Fees for Voyageur Fund Class B shares would have
been 1.00% of average daily net assets, Other Expenses for Voyageur Fund
Class B shares would have been .60% of average daily net assets and Total
Fund Operating Expenses would have been 2.00% of average daily net assets.
(3) Assumes deduction of a contingent deferred sales charge upon redemption at
the end of the one, three and five year periods.
PURCHASE, EXCHANGE AND REDEMPTION PROCEDURES
PURCHASES OF SHARES. Class A shares of both Mackenzie Fund and Voyageur
Fund may be purchased at a public offering price equal to their net asset value
per share plus a sales charge. The maximum sales charge for Mackenzie Fund is
3.00% of the public offering price for investments of less than $25,000. For
Voyageur Fund, the maximum sales charge is 2.75% of the public offering price
for investments of less than $50,000. For each Fund, the sales charge is reduced
on a graduated scale for larger purchases. Purchases of $1,000,000 or more for
Voyageur Fund and $500,000 or more for Mackenzie Fund are not subject to an
initial sales charge. However, Voyageur Fund Class A shares purchased without an
initial sales charge and redeemed during the first year after purchase are
subject to a 0.5% contingent deferred sales charge and Mackenzie Fund shares
redeemed within 24 months after the end of the calendar quarter in which the
purchase was made are subject to a 0.75% contingent deferred sales charge. Class
A shares of each Fund are subject to a Rule 12b-1 fee payable at an annual rate
of .25% of the Fund's average daily net assets attributable to Class A shares.
Class B shares of both Funds are offered to investors at net asset value,
without a sales charge. Each Fund imposes a contingent deferred sales charge
("CDSC") of up to 3% on share redemptions. For each Fund, the maximum CDSC
applies to redemptions during the first year after purchase. For Mackenzie Fund,
the charge declines to 2 1/2 % during the second year; 2% during the third year;
1 1/2% during the fourth year; 1% during the fifth year; and 0% in the sixth
year and thereafter. For Voyageur Fund, the charge remains at 3% during the
second year and declines to 2% during the third year, 1% during the fourth year,
and 0% in the fifth year and thereafter. Class B shares of Voyageur Fund are
subject to a Rule 12b-1 fee payable at an annual rate of 1.00% of the Fund's
average daily net assets attributable to Class B Shares. Class B shares of
Mackenzie Fund are subject to a Rule 12b-1 fee payable at an annual rate of .75%
of Mackenzie Fund's average daily net assets attributable to Class B shares.
Class B shares of each Fund automatically convert to Class A shares at net asset
value approximately eight years after purchase.
Voyageur Fund also offers Class C shares. Such shares are sold without an
initial or contingent deferred sales charge. The Rule 12b-1 fee for Voyageur
Fund Class C shares is paid at an annual rate of 1% of the Fund's average daily
net assets attributable to Class C shares. Class C shares do not convert to any
other class of shares. Mackenzie Fund does not offer Class C shares.
For additional information on the purchase of Voyageur Fund and Mackenzie
Fund shares, see "How to Purchase Shares," beginning on page 20 of the
accompanying Voyageur Fund prospectus, and pages 8 through 12 of the Mackenzie
Fund prospectus incorporated herein by reference.
PURCHASES AT REDUCED OR NO SALES CHARGE. For the Class A shares of each
Fund, various persons, entities and groups may qualify for reduced sales
charges, or for purchases at net asset value without a sales charge. Following
the Reorganization, current Mackenzie Fund shareholders (as holders of Voyageur
Fund shares) will be entitled to such Special Purchase Plans and other purchase
privileges as are set forth in the accompanying prospectus of Voyageur Fund.
These purchase plans and privileges differ in certain respects from those
currently offered by Mackenzie Fund. See "How to Purchase Shares -- Class A
Shares -- Front End Sales Charge Alternative" beginning on page 22 of the
accompanying Voyageur Fund prospectus and "Qualifying for a Reduced Sales
Charge" beginning on page 10 of the Mackenzie Fund prospectus incorporated
herein by reference. Additionally, Class A shares of Voyageur Fund will be
offered at net asset value, without the imposition of a sales charge, to
shareholder accounts which were in existence and entitled to purchase shares of
Mackenzie Fund without a sales charge as of the Effective Time.
REDEMPTION. Shareholders of each Fund may redeem their shares, in whole or
in part, on any business day. All redemptions are made at the net asset value
next determined after a redemption request has been received in good order. As
discussed above, a contingent deferred shales charge may apply to redemptions of
certain Class A shares initially purchased without a sales charge, and to Class
B share redemptions prior to conversion. For additional information on
redemption of shares, see " "How to Sell Shares," beginning on page 26 of the
accompanying Voyageur Fund prospectus, and "How to Redeem Shares," beginning on
page 12 of the Mackenzie Fund prospectus incorporated herein by reference.
EXCHANGE PRIVILEGES. Shares of Mackenzie Fund may be exchanged for shares
of the same class of other Ivy and Mackenzie funds and shares of Voyageur Fund
may be exchanged for shares of the same class of other Voyageur funds. These
exchange privileges are further explained on page 29 of the accompanying
Voyageur Fund prospectus and on page 14 of the Mackenzie Fund prospectus
incorporated herein by reference, in both cases under the heading "Exchange
Privilege."
DIVIDENDS AND DISTRIBUTIONS
Mackenzie Fund declares and pays monthly on an equal basis any dividends
from net investment income (to the extent not previously distributed) on both
classes of Fund shares. Net realized long-term capital gains, if any, are
distributed at least once annually.
Voyageur Fund declares a distribution from net investment income on each
day that the Fund is open for business and pays such distributions monthly. Net
realized long-term capital gains, if any, are distributed annually.
Distributions paid by Voyageur Fund with respect to Class A, Class B and Class C
shares are calculated in the same manner, at the same time, on the same day and
will be in the same amount, except that the higher Rule 12b-1 fees applicable to
Class B and Class C shares will be borne exclusively by such shares.
For each Fund, dividends and capital gains distributions are reinvested in
additional shares of the same class unless a shareholder elects otherwise.
CAPITAL SHARES; SHAREHOLDER VOTING RIGHTS
Mackenzie Fund currently offers Class A and Class B shares. Voyageur Fund
currently offers Class A, Class B and Class C shares. Each class of shares of a
Fund represents an interest in the same portfolio of investments of such Fund
and has identical voting, dividend, liquidation, and other rights on the same
terms and conditions except that expenses related to the distribution of a class
of shares are borne solely by such class and that each class of a Fund's shares
has exclusive voting rights with respect the provisions of such Fund's Rule
12b-1 plan which pertain to that particular class or when a class vote is
required by the 1940 Act. In addition, each class of shares of Mackenzie Fund
has a different dividend and distribution policy.
Voyageur Fund intends to apply for rulings from the Internal Revenue
Service ("IRS") to the effect that distributions paid with respect to the
different classes of shares of Voyageur Fund will not constitute "preferential
dividends" within the meaning of Section 562(c) of the Internal Revenue Code of
1986, as amended (the "Code"), and that all such distributions will therefore
qualify for the "dividends paid deduction" under Sections 561 and 852(b)(2)(D)
of the Code. In 1994, the IRS issued the same rulings to several other funds
managed by VFM that included classes with terms identical to those of the
classes of Voyageur Fund. Voyageur Fund expects to receive the requested
rulings.
PRINCIPAL RISK FACTORS
GENERAL
Because the investment objectives, policies and restrictions of Mackenzie
Fund and Voyageur Fund are similar (see "Information About Mackenzie Fund and
Voyageur Fund -- Comparison of Investment Objectives, Policies and Restrictions"
below), an investment in either Fund involves many of the same risks. Certain of
these risks are discussed below.
DEBT SECURITIES. Investment in debt securities, including municipal
securities, involves both interest rate and credit risk. Generally, the value of
debt instruments rises and falls inversely with interest rates. As interest
rates decline, the value of debt securities generally increases. Conversely,
rising interest rates tend to cause the value of debt securities to decrease.
Bonds with longer maturities generally are more volatile than bonds with shorter
maturities. The market value of debt securities also varies according to the
relative financial condition of the issuer. In general, lower-quality bonds
offer higher yields due to the increased risk that the issuer will be unable to
meet its obligations on interest or principal payments at the time called for by
the debt instrument. Each Fund's investments are also subject to "call" risk.
Certain obligations held by a Fund may permit the issuer at its option to call
or redeem its securities. If an issuer were to redeem securities held by a Fund
during a time of declining interest rates, the Fund might not be able to
reinvest the proceeds in securities providing the same investment return as the
securities redeemed.
TAX-EXEMPT OBLIGATIONS. The value of tax-exempt obligations owned by each
Fund may be adversely affected by local political and economic conditions and
developments within the state of Florida. Adverse conditions in an industry
significant to a local economy could have a correspondingly adverse effect on
the financial condition of local issuers. Other factors that could affect
tax-exempt obligations include a change in the local, state or national economy,
demographic factors, ecological or environmental concerns, statutory limitations
on the issuer's ability to increase taxes and other developments generally
affecting the revenues of issuers (for example, legislation or court decisions
reducing state aid to local governments or mandatory additional services).
Financial considerations relating to the risks associated with investing in
Florida are described in the accompanying prospectus of Voyageur Fund under
"Risks and Special Investment Considerations--State Considerations," in the
prospectus of Mackenzie Fund incorporated herein by reference under "Investment
Techniques and Risk Factors--Special Considerations Relating to Florida
Municipal Securities," and in the statements of additional information of both
Funds, incorporated by reference into the Statement of Additional Information
relating to this Prospectus/Proxy Statement. Each Fund also may invest in debt
obligations issued by or on behalf of certain United States territories,
including Puerto Rico, the U.S. Virgin Islands and Guam. Mackenzie Fund will not
invest more than 5% of its net assets in obligations of each of the U.S. Virgin
Islands and Guam, but may invest without limit in obligations of Puerto Rico.
Investments in obligations of the government of Puerto Rico require a careful
assessment of certain risk factors, including its reliance on substantial
federal assistance and favorable tax programs, above-average levels of
unemployment and low wealth levels, and susceptibility to adverse shifts in
energy prices as well as U.S. foreign trade/monetary policies. See the statement
of additional information of Mackenzie Fund incorporated by reference into the
Statement of Additional Information relating to this Prospectus/Proxy Statement.
OTHER. Both Funds may invest in repurchase agreements, purchase securities
on a "when-issued" basis and borrow money from banks for temporary or emergency
purposes (in an amount equal to 20% of total assets for Voyageur Fund and 10% of
total assets for Mackenzie Fund). Each of these transactions involves certain
risks as set forth in the accompanying Voyageur Fund prospectus under
"Investment Objectives and Policies -- Miscellaneous Investment Practices" and
in the Mackenzie Fund prospectus incorporated herein by reference under
"Investment Techniques and Risk Factors."
DIFFERENCES IN INVESTMENT RISKS
As discussed below, there are certain differences in the investment risks
associated with investments in Voyageur Fund and Mackenzie Fund that should be
considered carefully by Mackenzie Fund shareholders.
LOWER QUALITY DEBT OBLIGATIONS. Voyageur Fund may be subject to a greater
degree of credit risk than Mackenzie Fund. In normal circumstances, Voyageur
Fund may invest up to 20% of its total assets in tax-exempt obligations rated
below investment grade (but not rated lower than B by S&P or Moody's) or in
unrated tax-exempt obligations considered by VFM to be of comparable quality to
such securities. Mackenzie Fund does not invest in securities rated lower than A
(or unrated securities of comparable quality). Investment in such lower grade
tax-exempt obligations involves special risks as compared with investment in
higher grade tax-exempt obligations. Lower grade tax-exempt obligations
generally involve greater credit risk than higher grade tax-exempt obligations
and are more sensitive to adverse economic changes, significant increases in
interest rates and individual issuer developments. The market for lower grade
tax-exempt obligations is considered to be less liquid than the market for
investment grade tax-exempt obligations, which may adversely affect the ability
of Voyageur Fund to dispose of such securities in a timely manner at a price
which reflects the value of such securities in VFM's judgment. The market price
for less liquid securities tends to be more volatile than the market price for
more liquid securities. The lower liquidity of and the absence of readily
available market quotations for lower grade tax-exempt obligations may make
VFM's valuation of such securities more difficult, and VFM's judgment may play a
greater role in the valuation of Voyageur Fund's lower grade tax-exempt
obligations. Periods of economic uncertainty and changes may have a greater
impact on the market price of such bonds and, therefore, the net asset value of
Voyageur Fund. Voyageur Fund may, if deemed appropriate by VFM, retain a
security whose rating has been downgraded below B by S&P or Moody's, or whose
rating has been withdrawn. In no event, however, will more than 5% of Voyageur
Fund's total assets consist of securities that have been downgraded to a rating
lower than B or, in the case of unrated securities, that have been determined by
VFM to be of a quality lower than B. During the year ended December 31, 1995,
Voyageur Fund did not invest in any securities rated lower than A or in any
unrated securities. Additional information concerning the risks associated with
investments in lower grade tax-exempt obligations can be found in Voyageur
Fund's statement of additional information incorporated by reference into the
Statement of Additional Information relating to this prospectus/Proxy Statement.
DERIVATIVE TAX-EXEMPT OBLIGATIONS. Voyageur Fund may acquire derivative
tax-exempt obligations, which are custodial receipts or certificates
underwritten by securities dealers or banks that evidence ownership of future
interest payments, principal payments or both on certain tax-exempt obligations.
Certain of these derivative tax-exempt obligations involve special risks. The
principal and interest payments on the custodial receipts underlying derivative
tax-exempt obligations may be allocated in a number of ways. For example,
payments may be allocated such that certain custodial receipts may have variable
or floating interest rates and others may be stripped securities which pay only
the principal or interest due on the underlying tax-exempt obligations. Voyageur
Fund may also invest in custodial receipts which are "inverse floating
obligations" (also sometimes referred to as "residual interest bonds"). These
securities pay interest rates that vary inversely to changes in the interest
rates of specified short-term tax-exempt obligations or an index of short-term
tax-exempt obligations. Thus, as market interest rates increase, the interest
rates on inverse floating obligations decrease. Conversely, as market rates
decline, the interest rates on inverse floating obligations increase. Such
securities have the effect of providing a degree of investment leverage, since
the interest rates on such securities will generally change at a rate which is a
multiple of the change in the interest rates of the specified tax-exempt
obligations or index. As a result, the market values of inverse floating
obligations will generally be more volatile than the market values of other
tax-exempt obligations and investments in these types of obligations will
increase the volatility of the net asset value of shares of Voyageur Fund.
Voyageur Fund's investments in derivative tax-exempt obligations, when combined
with investments in below investment grade rated securities, will not exceed 20%
of the Fund's total assets. Mackenzie Fund may not invest in such securities.
CONCENTRATION. Voyageur Fund may invest without limitation, in
circumstances in which other appropriate available investments may be in limited
supply, in housing, health care, utility, transportation, education and/or
industrial obligations. In such circumstances, economic, business, political and
other changes affecting one bond might also affect other bonds in the same
segment, thereby potentially increasing market or credit risk. A discussion of
these segments of the municipal bond market is set forth in Voyageur Fund's
statement of additional information, incorporated by reference in the Statement
of Additional Information relating to this Prospectus/Proxy Statement, under
"Investment Policies and Restrictions -- Concentration Policy." Mackenzie Fund
may not purchase the securities of issuers conducting their principal business
activities in the same industry if immediately after such purchase the value of
the Fund's investments in such industry would exceed 25% of the value of the
total assets of the Fund.
OPTIONS, FUTURES CONTRACTS AND REVERSE REPURCHASE AGREEMENTS. Voyageur Fund
may write (i.e., sell) covered put and call options and purchase put and call
options on the securities in which it may invest and on indices of securities in
which it may invest. Voyageur Fund also may enter into contracts for the
purchase or sale for future delivery of fixed income securities or contracts
based on financial indices including any index of securities in which the Fund
may invest ("futures contracts") and may purchase and write put and call options
on futures contracts. Mackenzie Fund may not engage in options or futures
transactions. In addition, Voyageur Fund may enter into reverse repurchase
agreements with banks and securities dealers with respect to not more than 10%
of its total assets. Mackenzie Fund may not enter into such agreements. The use
of options, futures contracts and reverse repurchase agreements entails special
risks as set forth in the accompanying Voyageur Fund prospectus under
"Investment Objectives and Policies -- Miscellaneous Investment Practices."
COMPARISON OF INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
INVESTMENT OBJECTIVES
Mackenzie Fund and Voyageur Fund are both non-diversified, open-end funds
with investment objectives which are similar.
* The primary investment objective of Mackenzie Fund is to seek as high
a level of interest income exempt from federal income taxes as is
consistent with the preservation of shareholders' capital.
* Voyageur Fund's investment objective is to provide investors with
preservation of capital and, secondarily, current income exempt from
federal income tax by maintaining a weighted average portfolio
maturity of ten years or less.
INVESTMENT POLICIES
The investment policies and restrictions of Mackenzie Fund and Voyageur
Fund are similar but not identical, as discussed in further detail below.
GENERAL. Mackenzie Fund attempts to achieve its objective by investing
primarily in tax-exempt limited term municipal securities exempt from both
regular federal income taxes, in the opinion of bond counsel to the issuer, and
Florida intangible personal property taxes. As a fundamental policy, at least
80% of the Fund's net assets is invested, during periods of normal market
conditions, in debt obligations issued by or on behalf of the State of Florida
and its political subdivisions (agencies, authorities and instrumentalities),
and the governments of Puerto Rico, the U.S. Virgin Islands and Guam, the
interest on which is exempt from regular federal income tax and is not a tax
preference item under the federal alternative minimum tax, and the value of
which is exempt from Florida intangible personal property taxes ("Florida
municipal securities"). Mackenzie Fund ordinarily does not intend to realize
investment income from securities other than Florida municipal securities.
However, to the extent that Florida municipal securities are not readily
available for investment by Mackenzie Fund, the Fund may invest more than 20% of
its net assets in securities other than Florida municipal securities the
interest on which is, in the opinion of bond counsel to the issuer, exempt from
federal income tax. Under normal market conditions, Mackenzie Fund will invest
no more than 20% of its net assets in obligations the interest from which gives
rise to a preference item for the purpose of the federal alternative minimum
tax.
In normal market conditions, Voyageur Fund seeks to achieve its investment
objective by investing primarily in debt obligations issued by or on behalf of
the State of Florida or a U.S. territory or their agencies, instrumentalities,
municipalities and political subdivisions, the interest payable on which is, in
the opinion of bond counsel, excludable from gross income for purposes of
federal income tax and which qualify as assets exempt from the Florida
intangible personal property tax. It is a fundamental policy of Voyageur Fund
that 80% of its income distributions be exempt from federal income tax. During
times of adverse market conditions when a defensive investment posture is
warranted, Voyageur Fund may temporarily select investments without regard to
the foregoing policy. However, Voyageur Fund anticipates that, in normal market
conditions, substantially all of its assets will be invested in securities the
interest on which is exempt from federal income tax. Up to 20% of the securities
owned by Voyageur Fund may generate interest that is an item of tax preference
for purposes of the federal alternative minimum tax.
TERRITORIAL OBLIGATIONS. Mackenzie Fund will not invest more than 5% of its
net assets in obligations of each of the U.S. Virgin Islands and Guam, but may
invest without limit in obligations of Puerto Rico. Although Voyageur Fund's
investment in the obligations of such territories is not limited, it currently
does not hold any such obligations.
AVERAGE PORTFOLIO MATURITY. Mackenzie Fund expects to maintain a
dollar-weighted average portfolio maturity of three to six years and will
purchase only instruments with remaining maturities of ten years or less. As
noted above, Voyageur Fund's investment objective provides that the Fund will
maintain a weighted average portfolio maturity of ten years or less.
SECURITIES RATINGS. Mackenzie Fund may purchase (a) municipal securities
that are backed by the full faith and credit of the United States Government;
(b) notes rated MIG-1 or MIG-2 by Moody's Investors Service, Inc. ("Moody's") or
AAA, AA, A, SP-1 or SP-2 by Standard & Poor's Ratings Services ("S&P"), (c)
municipal bonds rated Aaa, Aa or A by Moody's or AAA, AA or A by S&P; (d) other
types of municipal securities provided that such obligations are rated A-1 or
A-2 by S&P or Prime-1 or Prime-2 by Moody's; and (e) municipal securities that
are themselves unrated, but either are issued by an entity that has other
municipal securities outstanding that meet one of the minimum rating
requirements listed above, or are of equivalent investment quality as determined
by the Fund's investment adviser pursuant to guidelines established and
maintained in good faith by the Board of Trustees.
Voyageur Fund may invest without limitation in securities rated "investment
grade," i.e., within the four highest investment grades, at the time or
investment by Moody's or S&P or, if unrated, judged by the Fund's investment
adviser to be of comparable quality. Up to 20% of the tax-exempt obligations
purchased by Voyageur Fund may be rated lower than investment grade; however all
bond must by rated "B" or better by Moody's or S&P (or, if unrated, judged by
the Fund's investment adviser to be of comparable quality). Such bonds are often
referred to as "junk" bonds or "high yield" bonds. Bonds rated below BBB or Baa
have a greater vulnerability to default than higher grade bonds. See "Principal
Risk Factors" for a discussion of the risks of investing in lower grade
tax-exempt obligations.
ILLIQUID SECURITIES. With respect to Voyageur Fund, as a fundamental policy
that may not be changed without shareholder approval, the Fund may invest up to
15% of its net assets in illiquid securities. Mackenzie Fund may invest up to
10% of its net assets in such securities. The sale of illiquid securities often
requires more time and results in higher brokerage charges or dealer discounts
and other selling expenses than does the sale of securities eligible for trading
on national securities exchanges or in the over-the-counter markets. A Fund may
be restricted in its ability to sell such securities at a time when its
investment adviser deems it advisable to do so. In addition, in order to meet
redemption requests, a Fund may have to sell other assets, rather than such
illiquid securities, at a time which is not advantageous.
REPURCHASE AGREEMENTS. Both Funds may invest in repurchase agreements.
Repurchase agreements are short-term instruments under which securities are
purchased from a bank or a securities dealer with an agreement by the seller to
repurchase the securities at a mutually agreeable date, interest rate, and
price. A further discussion of repurchase agreements, including the risks
thereof, see the accompanying Voyageur Fund prospectus under "Investment
Objectives and Policies -- Miscellaneous Investment Practices -- Repurchase
Agreements."
REVERSE REPURCHASE AGREEMENTS. Voyageur Fund may engage in reverse
repurchase agreements with banks and securities dealers with respect to not more
than 10% of its total assets. Mackenzie Fund may not enter into such agreements.
Reverse repurchase agreements are ordinary repurchase agreements in which
Voyageur Fund is the seller of, rather than the investor in, securities and
agrees to repurchase them at an agreed upon time and price. A further discussion
of reverse repurchase agreements, including the risks thereof, see the
accompanying Voyageur Fund prospectus under "Investment Objectives and Policies
- -- Miscellaneous Investment Practices -- Reverse Repurchase Agreements."
FORWARD COMMITMENTS. Each Fund may purchase securities on a "when issued"
or forward commitment basis, with delivery and payment for the securities
normally taking place 15 to 45 days after the date of the transaction. The
payment obligation and the interest rate that will be received on the securities
are each fixed at the time the buyer enters into the commitment. The purchase of
securities on such a basis involves certain risks. See "Investment Objectives
and Policies -- Miscellaneous Investment Practices -- Forward Commitments" in
the accompanying Voyageur Fund prospectus.
TAXABLE INVESTMENTS. Each Fund may invest up to 20% of its net assets in
taxable fixed income obligations under normal market conditions, although
Voyageur Fund anticipates that, in normal market conditions, it will invest
substantially all of its assets in tax-exempt obligations. In addition, each
Fund may invest without limit in taxable fixed income securities for temporary
defensive purposes or, with respect to Voyageur Fund, for liquidity purposes.
The taxable obligations in which Voyageur Fund may invest are described in the
accompanying Voyageur Fund prospectus under "Investment Objectives and Policies
- -- All Funds." Each Fund may invest up to 20% of its assets in securities the
interest on which is an item of tax preference for purposes of the federal
alternative minimum tax.
BORROWING. As a fundamental policy, Mackenzie Fund may borrow from banks up
to a limit of 10% of its total assets, but only for temporary or emergency
purposes. Voyageur Fund, as a fundamental policy, may borrow money from banks
for temporary or emergency purposes in an amount not exceeding 20% of the value
of its total assets. As discussed above, Voyageur Fund may also borrow money in
the form of reverse repurchase agreements in an amount up to 10% of its total
assets.
OPTIONS. Voyageur Fund may write (i.e., sell) covered put and call options
and purchase put and call options on the securities in which it may invest and
on indices of securities in which it may invest. Mackenzie Fund generally does
not engage in options transactions. Participation in the options market involves
investment risks and transaction costs to which Voyageur Fund would not be
subject absent the use of this strategy. See "Investment Objectives and Policies
- -- Miscellaneous Investment Practices -- Options on Securities" in the
accompanying Voyageur Fund prospectus.
FUTURES CONTRACTS AND OPTIONS THEREON. Voyageur Fund may enter into
contracts for the purchase or sale for future delivery of fixed income
securities or contracts based on financial indices including any index of
securities in which the Fund may invest ("futures contracts") and may purchase
and write put and call options to buy or sell futures contracts ("options on
futures contracts"). Mackenzie Fund generally does not enter into futures
contracts or options on futures contracts. The successful use of such
instruments draws upon VFM's experience with respect to such instruments and
generally depends upon VFM's ability to forecast interest rate movements
correctly. See "Investment Objectives and Policies -- Miscellaneous Investment
Practices -- Futures Contracts and Options on Futures Contracts" in the
accompanying Voyageur Fund prospectus.
The foregoing comparison does not purport to be a complete summary of the
investment policies, restrictions and risk factors of Mackenzie Fund or Voyageur
Fund. For complete discussions of the investment policies, restrictions and risk
factors of the respective Funds, see Voyageur Fund's Prospectus accompanying
this Prospectus/Proxy Statement; Mackenzie Fund's Prospectus referred to under
"Incorporation by Reference;" and the Statements of Additional Information of
Mackenzie Fund and Voyageur Fund, also referred to under such caption. The
Annual Reports of Voyageur Fund and Mackenzie Fund for the fiscal years ended
December 31, 1995 and June 30, 1995, respectively, referred to on the cover page
hereof under "Incorporation by Reference," provide information concerning the
composition of the respective Funds' assets at the applicable dates.
CAPITALIZATION
The following table shows the capitalization of Mackenzie Fund and of
Voyageur Fund as of December 31, 1995 and on an unaudited pro forma basis as of
that date, giving effect to the proposed Reorganization:
(In thousands, except per share values)
<TABLE>
<CAPTION>
MACKENZIE VOYAGEUR
FUND FUND PRO FORMA
---- ---- ---------
CLASS A SHARES
<S> <C> <C> <C>
Net assets........................................... $3,365 $859 $4,224
Net asset value per share............................ $10.28 $10.56 $10.56
Shares outstanding................................... 327 81 400
CLASS B SHARES
Net assets........................................... $1,648 $41 $1,689
Net asset value per share............................ $10.28 $10.56 $10.56
Shares outstanding................................... 160 4 160
CLASS C SHARES*
Net assets........................................... -- $54 $54
Net asset value per share............................ -- $10.55 $10.55
Shares outstanding................................... -- 5 5
</TABLE>
_____________________________
* Mackenzie Fund does not offer Class C shares.
INFORMATION ABOUT THE REORGANIZATION
REASONS FOR THE REORGANIZATION
Mackenzie Trust was organized in April 1985. Mackenzie Fund, a series of
Mackenzie Trust, commenced operations on April 1, 1994. Since Mackenzie Fund
commenced operations, MIMI has voluntarily limited total Fund expenses
(excluding interest, 12b-1 fees, taxes, brokerage commissions, litigation and
indemnification expenses, and other extraordinary expenses) to an annual rate of
0.64% of the Fund's average daily net assets, resulting in total Fund operating
expenses for the fiscal year ended June 30, 1995 of 0.89% and 1.39% of average
daily net assets attributable to Class A and Class B shares, respectively.
Without expense reimbursements, total operating expenses for Class A and Class B
Mackenzie Fund shares would have been 2.09% and 2.59%, respectively, of average
daily net assets for such fiscal year. MIMI is not obligated to limit Mackenzie
Fund expenses, and has determined that it is economically unfeasible to continue
to limit expenses to the current level of .64%. MIMI therefore proposed the
Reorganization to the Board of Trustees of Mackenzie Trust. The Board of
Trustees of Mackenzie Trust has determined that the Reorganization is in the
best interests of and is expected to provide certain benefits to Mackenzie Fund
and its shareholders. The Board considered, among other things, the following
factors in making such determinations:
(a) PORTFOLIO MANAGEMENT. As of December 31, 1995, VFM served as the
manager to six closed-end and 29 open-end funds, administered numerous
private accounts and managed approximately $8.16 billion in assets. Of the
closed-end and open-end funds under management, 30 are "single state"
funds, including four Florida funds. Thus, Mackenzie Fund fits well within
VFM's area of expertise.
(b) EXPENSE RATIOS. VFM has undertaken to limit Voyageur Fund expenses
for the fiscal year ending December 31, 1996, to 0.80% of average daily net
assets for Class A shares and 1.65% of average daily net assets for Class B
and Class C shares. Assuming VFM continues to limit expenses to such
levels, Class A Mackenzie Fund shareholders will experience a slightly
lower expense ratio as shareholders of Voyageur Fund (0.80% of average
daily net assets for Voyageur Fund, as compared to 0.89% for Mackenzie Fund
after expense limitations). Class B shareholders will experience a somewhat
higher expense ratio (1.65% of average daily net assets for Voyageur Fund,
as compared to 1.39% for Mackenzie Fund). Assuming no expense limitations
for either Fund, both Class A and Class B Mackenzie Fund shareholders would
benefit from significantly lower expense ratios as Voyageur Fund
shareholders. (Without expense reimbursements, total Mackenzie Fund
operating expenses for the fiscal year ended June 30, 1995 were 2.09% and
2.59% of the average daily net assets of Class A and Class B shares,
respectively. Total operating expenses for Voyageur Fund for the fiscal
year ended December 31, 1995 were 1.25% of average daily net assets for
Class A shares and 2.00% of average daily net assets for Class B shares.)
In addition, the Reorganization should allow for certain fund expenses to
be spread over a larger asset base and may in the future result in
economies of scale for shareholders of Voyageur Fund.
(c) TAX CONSEQUENCES OF THE REORGANIZATION. It is intended that the
proposed reorganization will be tax-free to Mackenzie Fund and Mackenzie
Fund shareholders. See "Federal Income Tax Consequences" below.
(d) TERMS OF THE PLAN. The Board considered the terms and conditions
of the Plan, including that (i) the exchange of Mackenzie Fund shares for
Voyageur Fund shares will take place on a net asset value basis; and (ii)
no sales charge will be incurred by Mackenzie Fund shareholders in
connection with their acquisition of Voyageur Fund shares in the
Reorganization.
(e) EXPENSES OF THE REORGANIZATION. VFM will pay the costs incurred by
the Acquiring Fund and the Acquired Fund in connection with the
Reorganization, including the fees and expenses associated with the
preparation and filing of a registration statement for purposes of
registering the Voyageur Fund shares to be issued in the Reorganization,
and the expenses of printing and mailing this Prospectus/Proxy Statement
and holding the Mackenzie Fund shareholder meeting required to approve the
Reorganization.
(f) UNAMORTIZED ORGANIZATIONAL EXPENSES. Prior to the Effective Time,
MIMI will pay Mackenzie Fund an amount in cash equal to the unamortized
organizational expenses on the books of Mackenzie Fund.
The Board of Trustees of Mackenzie Trust concluded that the factors noted
in (a) through (f) above render the proposed Reorganization fair to and in the
best interests of shareholders of Mackenzie Fund.
PLAN OF REORGANIZATION
The following summary of the proposed Plan and the Reorganization is
qualified in its entirety by reference to the Plan attached to this
Prospectus/Proxy Statement as Exhibit A. The Plan provides that, as of the
Effective Time, Voyageur Fund will acquire all or substantially all of the
assets and assume all identified and stated liabilities of Mackenzie Fund in
exchange for Voyageur Fund shares having an aggregate net asset value equal to
the aggregate value of the assets acquired (less liabilities assumed) from
Mackenzie Fund. The value of Mackenzie Fund assets and liabilities to be
acquired by Voyageur Fund, and the value of Voyageur Fund shares to be received
in exchange therefor, will be computed as of the Effective Time. Voyageur Fund
will not assume any liabilities or obligations of Mackenzie Fund, whether
absolute or contingent, other than those identified and stated in an unaudited
statement of assets and liabilities of Mackenzie Fund as of the Effective Time.
Because Mackenzie Fund is a separate series of Mackenzie Trust, for corporate
law purposes the transaction is structured as a sale of the assets and
assumption of the liabilities allocated to Mackenzie Fund in exchange for the
issuance of Voyageur Fund shares to Mackenzie Fund, followed immediately by the
distribution of such Voyageur Fund shares to Mackenzie Fund shareholders and the
cancellation and retirement of outstanding Mackenzie Fund shares.
Pursuant to the Plan, each holder of Class A or Class B shares of Mackenzie
Fund will receive, at the Effective Time, Class A or Class B shares,
respectively, of Voyageur Fund with an aggregate net asset value equal to the
aggregate net asset value of Mackenzie Fund shares owned by such shareholder
immediately prior to the Effective Time. Under the Plan, the net asset value per
share of Mackenzie Fund's and Voyageur Fund's Class A and Class B shares will be
computed as of the Effective Time using the valuation procedures set forth in
the respective Funds' declarations of trust and bylaws and then-current
prospectuses and statements of additional information and as may be required by
the 1940 Act. At the Effective Time, Voyageur Fund will issue to Mackenzie Fund,
and Mackenzie Fund will distribute to Mackenzie Fund's shareholders of record,
determined as of the Effective Time, Voyageur Fund shares issued in exchange for
Mackenzie Fund assets as described above. All outstanding shares of Mackenzie
Fund thereupon will be canceled and retired and no additional shares
representing interests in Mackenzie Fund will be issued thereafter, and
Mackenzie Fund will be deemed to be liquidated. The distribution of Voyageur
Fund shares to former Mackenzie Fund shareholders will be accomplished by the
establishment of accounts on the share records of Voyageur Fund in the names of
Mackenzie Fund shareholders, each representing the numbers of full and
fractional Voyageur Fund Class A or Class B shares due such shareholders.
The Plan provides that no sales charges will be incurred by Mackenzie Fund
shareholders in connection with the acquisition by them of Voyageur Fund shares
pursuant thereto. The Plan also provides that former holders of Mackenzie Fund
Class B shares who receive Voyageur Fund Class B shares in the Reorganization
will receive credit for the period they held Mackenzie Fund Class B shares in
applying the four-year step-down of the contingent deferred sales charge on
Voyageur Fund Class B shares and in determining the date upon which such shares
convert to Voyageur Fund Class A shares. In addition, the Plan provides that in
applying the one-year 0.5% contingent deferred sales charge on purchases of
Class A shares with respect to which the front-end sales charge was waived,
credit will be given for the period a former Mackenzie Fund shareholder who is
subject to such a contingent deferred sales charge held his or her shares.
Mackenzie Fund contemplates that it will make a distribution immediately
prior to the Effective Time of all of its current year net tax-exempt income,
ordinary taxable income and net realized capital gains, if any, not previously
distributed. Any portion of this distribution which does not constitute an
exempt-interest dividend will be taxable to Mackenzie Fund shareholders subject
to taxation.
The consummation of the Reorganization is subject to the conditions set
forth in the Plan, including, among others: (i approval of the Plan by the
shareholders of Mackenzie Fund; (ii) the delivery of the opinion of counsel
described below under "-- Federal Income Tax Consequences;" (iii) the accuracy
as of the Effective Time of the representations and warranties made by Mackenzie
Fund and Voyageur Fund in the Plan; and (iv) the delivery of customary closing
certificates. See the Plan attached hereto as Exhibit A for a complete listing
of the conditions to the consummation of the Reorganization. The Plan may be
terminated and the Reorganization abandoned at any time prior to the Effective
Time, before or after approval by shareholders of Mackenzie Fund, by resolution
of the Board of Trustees of either Mackenzie Trust or Voyageur Trust, if
circumstances should develop that, in the opinion of such Board, make proceeding
with the consummation of the Plan and Reorganization not in the best interests
of the respective Fund's shareholders.
The Plan provides that VFM will pay the costs incurred by the Acquiring
Fund and the Acquired Fund in connection with the Reorganization, including the
fees and expenses associated with the preparation and filing of a registration
statement for purposes of registering the Voyageur Fund shares to be issued in
the Reorganization, and the expenses of printing and mailing this
Prospectus/Proxy Statement and holding the Mackenzie Fund shareholder meeting
required to approve the Reorganization. The Plan also provides that at or prior
to the Effective Time, expenses incurred by Mackenzie Fund shall have been
maintained by MIMI or otherwise so as not to exceed any applicable state-imposed
expense limitations. In addition, the Plan provides that at or prior to the
Effective Time, appropriate action shall have been taken by MIMI or otherwise
such that there are no unamortized organizational expenses on the books of
Mackenzie Fund.
Under the Plan, Mackenzie Fund has agreed not to acquire any securities
which are not permissible investments for Voyageur Fund prior to the Effective
Time, and it is a condition to closing that Mackenzie Fund not hold any such
securities immediately prior to the Effective Time. See "Summary -- Investment
Objectives, Policies and Restrictions" and "Information about Mackenzie Fund and
Voyageur Fund -- Comparison of Investment Objectives, Policies and
Restrictions." Mackenzie Fund does not hold any such securities at the date of
this Prospectus/Proxy Statement.
Approval of the Plan will require the affirmative vote of a majority of the
outstanding shares of each class of Mackenzie Fund, voting as separate classes.
If the Plan is not approved, the Boards of Trustees of the respective Funds will
consider other possible courses of action.
DESCRIPTION OF VOYAGEUR FUND SHARES
For information concerning the shares of beneficial interest of Voyageur
Fund, including voting rights, see "Summary -- Capital Shares; Shareholder
Voting Rights" above. All Voyageur Fund shares issued in the Reorganization will
be fully paid and non-assessable and will not be entitled to preemptive or
cumulative voting rights.
FEDERAL INCOME TAX CONSEQUENCES
It is intended that the exchange of Voyageur Fund shares for Mackenzie
Fund's net assets and the distribution of such shares to Mackenzie Fund's
shareholders upon liquidation of Mackenzie Fund will be treated as a tax-free
reorganization under the Internal Revenue Code of 1986, as amended (the "Code"),
and that, for federal income tax purposes, no income, gain or loss will be
recognized by Mackenzie Fund's shareholders (except that Mackenzie Fund
contemplates that it will make a distribution, immediately prior to the
Reorganization, of all of its current year net tax-exempt income, ordinary
taxable income and net realized capital gains, if any, not previously
distributed, and any portion of this distribution which does not constitute an
exempt-interest dividend will be taxable to Mackenzie Fund shareholders subject
to taxation). Mackenzie Fund has not asked, nor does it plan to ask, the
Internal Revenue Service to rule on the tax consequences of the Reorganization.
As a condition to the closing of the Reorganization, the two Funds will
receive an opinion from Dorsey & Whitney LLP, counsel to Voyageur Fund, based in
part on certain representations to be furnished by each Fund, substantially to
the effect that the federal income tax consequences of the Reorganization will
be as follows:
(i) the Reorganization will constitute a reorganization within the meaning
of Section 368(a)(1)(D) of the Code, and Voyageur Fund and Mackenzie
Fund each will qualify as a party to the Reorganization under Section
368(b) of the Code;
(ii) Mackenzie Fund shareholders will recognize no income, gain or loss
upon receipt, pursuant to the Reorganization, of Voyageur Fund shares.
Mackenzie Fund shareholders subject to taxation will recognize income
upon receipt of any ordinary taxable income or net capital gains of
Mackenzie Fund which are distributed by Mackenzie Fund prior to the
Effective Time;
(iii) the tax basis of the Voyageur Fund shares received by each Mackenzie
Fund shareholder pursuant to the Reorganization will be equal to the
tax basis of the Mackenzie Fund shares exchanged therefor;
(iv) the holding period of Voyageur Fund shares received by each Mackenzie
Fund shareholder pursuant to the Reorganization will include the
period during which the Mackenzie Fund shareholder held Mackenzie Fund
shares exchanged therefor, provided that the Mackenzie Fund shares
were held as a capital asset at the Effective Time;
(v) Mackenzie Fund will recognize no income, gain or loss by reason of the
Reorganization;
(vi) Voyageur Fund will recognize no income, gain or loss by reason of the
Reorganization;
(vii) the tax basis of the assets received by Voyageur Fund pursuant to the
Reorganization will be the same as the basis of those assets in the
hands of Mackenzie Fund as of the Effective Time;
(viii) the holding period of the assets received by Voyageur Fund pursuant
to the Reorganization will include the period during which such assets
were held by Mackenzie Fund; and
(ix) Voyageur Fund will succeed to and take into account the earnings and
profits, or deficit in earnings and profits, of Mackenzie Fund as of
the Effective Time.
Shareholders of Mackenzie Fund should consult their tax advisors regarding
the effect, if any, of the proposed Reorganization in light of their individual
circumstances. Since the foregoing discussion only relates to the federal income
tax consequences of the Reorganization, shareholders of Mackenzie Fund should
consult their tax advisors as to state and local tax consequences, if any, of
the Reorganization.
RECOMMENDATION AND VOTE REQUIRED
The Board of Trustees of Mackenzie Trust, including the "non-interested"
trustees, unanimously recommends that shareholders of Mackenzie Fund approve the
Plan. Approval of the Plan will require the affirmative vote of a majority of
the outstanding shares of each class of Mackenzie Fund, voting as separate
classes.
VOTING INFORMATION
GENERAL
This Prospectus/Proxy Statement is furnished in connection with a
solicitation of proxies by the Board of Trustees of Mackenzie Trust to be used
at the Special Meeting of Mackenzie Fund shareholders to be held at 10:00 a.m.,
Eastern time, on May 28, 1996, at the offices of Mackenzie Fund, and at any
adjournments thereof. This Prospectus/Proxy Statement, along with a Notice of
Special Meeting and a proxy card, is first being mailed to shareholders of
Mackenzie Fund on or about April 26, 1996. Only shareholders of record as of the
close of business on April 4, 1996 (the "Record Date") will be entitled to
notice of, and to vote at, the Meeting or any adjournment thereof. If the
enclosed form of proxy is properly executed and returned on time to be voted at
the Meeting, the proxies named therein will vote the shares represented by the
proxy in accordance with the instructions marked thereon. Unmarked proxies will
be voted "for" the proposed Plan and Reorganization. A proxy may be revoked by
giving written notice, in person or by mail, of revocation before the Meeting to
Mackenzie Fund at its principal executive offices, Via Mizner Financial Plaza,
700 South Federal Highway, Boca Raton, Florida 33432, or by properly executing
and submitting a later-dated proxy, or by voting in person at the Meeting.
If a shareholder executes and returns a proxy but abstains from voting, the
shares held by such shareholder will be deemed present at the Meeting for
purposes of determining a quorum and will be included in determining the total
number of votes cast. If a proxy is received from a broker or nominee indicating
that such person has not received instructions from the beneficial owner or
other person entitled to vote Mackenzie Fund shares (i.e., a broker "non-vote"),
the shares represented by such proxy will not be considered present at the
Meeting for purposes of determining a quorum and will not be included in
determining the number of votes cast. Brokers and nominees will not have
discretionary authority to vote shares for which instructions are not received
from the beneficial owner.
Approval of the Plan and Reorganization will require the affirmative vote
described above under "Information About the Reorganization -- Recommendation
and Vote Required."
As of April 4, 1996 (a) Mackenzie Fund had 258,806 Class A shares and
136,185 Class B shares outstanding and entitled to vote at the Meeting; (b)
Voyageur Fund had 83,314 Class A shares, 3,939 Class B shares and 5,162 Class C
shares outstanding; and (c) the trustees and officers of the respective Funds as
a group owned less than one percent of the outstanding shares of each Fund or
any class thereof. The following paragraph sets forth information concerning
those persons known by the respective Funds to own of record or beneficially
more than 5% of the outstanding shares of either Fund, or more than 5% of the
outstanding shares of any class of either Fund, as indicated, as of such date,
including persons and entities who beneficially own more than 25% of either Fund
or any class thereof. Unless otherwise indicated, the persons named below have
both record and beneficial ownership.
MACKENZIE FUND. Class A: William Holskin & Frances Holskin JtTen, 9289
Byron Avenue, Surfside, FL 33154 (5.2% of Class A); Henry Maicci TTEE, Henry
Maicci Revocable Trust, 55 E. Osceola St., Ste 200, Stuart, FL 34994 (5.1% of
Class A). Class B: Smith Barney Inc., 388 Greenwich St., New York, NY 10013
(7.4% of Class B); Geo J. Burrus III TTEE, Geo J. Burrus III Trust, 1953
Independence Ave., Viera, FL 32940 (6% of Class B).
VOYAGEUR FUND. Class A: Merrill Lynch Pierce Fenner & Smith Inc., Mutual
Fund Operations, 4800 Deer Lake Drive E, Jacksonville, FL 32246, of record,
(29.85% of Class A); Gloria R. Johnson ET AL TTEES, Gloria Holt Russell Tr,
Bears Paw Country Club, 1512 Wildwood Lane, Naples, FL 33942 (13.84% of Class
A); Voyageur Fund Managers, Attn: Mike Holmdahl, 90 South 7th St., Suite 4400,
Minneapolis, MN 55402 (12.43% of Class A); Robert P. Eldredge, C. Colleen
Eldredge JT TEN, 2625 N. Narcoossee Road, Saint Could, FL 34771 (10.09% of Class
A); C. Colleen Eldredge, Thomas C. Moore Jr. JT TEN, 2625 N. Narcoossee Rd,
Saint Cloud, FL 34771 (8.81% of Class A); Martha B. Helm, 162 69 Avenue North,
St. Petersburg, FL 33702 (6.27% of Class A). Class B: Georgellen E. Wilder TTEE,
Georgellen E. Wilder TR, 5489 Lake Tyner Dr., Orlando, FL 32839 (100% of Class
B). Class C: PaineWebber for the benefit of June L. Mason TTEE FBO June L. Mason
Rev. Trust, 1180 Reef Road, Apt. 19A, Vero Beach, FL 32963-3031 (100% of Class
C).
Proxies are solicited by mail. Additional solicitations may be made by
telephone or personal contact by officers or employees of MIMI and its
affiliates without cost to the Funds. In addition, the services of a third-party
proxy solicitation firm may be utilized; however, such firm's fees and expenses
will not be borne by Mackenzie Fund or Voyageur Fund as described under
"Information About the Reorganization -- Plan of Reorganization" above.
In the event that sufficient votes to approve the Plan and Reorganization
are not received by the date set for the Meeting, the persons named as proxies
may propose one or more adjournments of the Meeting for up to 120 days to permit
further solicitation of proxies. In determining whether to adjourn the Meeting,
the following factors may be considered: the percentage of votes actually cast,
the percentage of negative votes actually cast, the nature of any further
solicitation and the information to be provided to shareholders with respect to
the reasons for the solicitation. Any such adjournment will require the
affirmative vote of a majority of the shares present in person or by proxy and
entitled to vote at the Meeting. The persons named as proxies will vote upon
such adjournment after consideration of the best interests of all shareholders.
INTERESTS OF CERTAIN PERSONS
The following persons affiliated with Voyageur Fund receive payments from
the Fund for services rendered pursuant to contractual arrangements with the
Fund: VFM receives payments from Voyageur Fund for investment advisory services
it renders pursuant to an Investment Advisory Agreement, and for dividend
disbursing, transfer agency, administrative and accounting services it renders
pursuant to an Administrative Services Agreement. VFD receives payments from
Voyageur Fund for servicing of shareholder accounts and distribution-related
services pursuant to a Distribution Agreement and the Fund's Plan of
Distribution. See "Summary--Fees and Expenses--Voyageur Fund Expenses" above.
FINANCIAL STATEMENTS AND EXPERTS
The audited statements of assets and liabilities, including the schedules
of investments in securities, of Mackenzie Fund as of June 30, 1995, and of
Voyageur Fund as of December 31, 1995, and the related statements of operations
for the years then ended, the statements of changes in net assets for each of
the periods indicated therein, and the financial highlights for the periods
indicated therein, as included in the Annual Reports of Mackenzie Fund for the
fiscal year ended June 30, 1995 and Voyageur Fund for the fiscal year ended
December 31, 1995, respectively, have been incorporated by reference into this
Prospectus/Proxy Statement in reliance on the reports of KPMG Peat Marwick LLP,
independent auditors for Voyageur Fund, and Coopers & Lybrand L.L.P.,
independent auditors for Mackenzie Fund, given on the authority of such firms as
experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters concerning the issuance of the shares of Voyageur
Fund to be issued in the Reorganization will be passed on by Dorsey & Whitney
LLP, 220 South Sixth Street, Minneapolis, Minnesota 55402.
OTHER INFORMATION ABOUT MACKENZIE FUND AND VOYAGEUR FUND
Information concerning Voyageur Fund and Mackenzie Fund is incorporated
herein by reference from their current Prospectuses dated March 1, 1995 as
supplemented November 9, 1995, and October 27, 1995, respectively. The
Prospectus of Voyageur Fund accompanies this Prospectus/Proxy Statement and
forms part of the Registration Statement of Voyageur Fund on Form N-1A which has
been filed with the Commission. The Prospectus of Mackenzie Fund may be obtained
in the manner described under "Incorporation by Reference" and forms part of the
Registration Statement of Mackenzie Fund on Form N-1A which has been filed with
the Commission.
Voyageur Fund and Mackenzie Fund are subject to the informational
requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and in
accordance therewith file reports and other information including proxy
materials, reports and charter documents with the Commission. These proxy
materials, reports and other information filed by Voyageur Fund and Mackenzie
Fund can be inspected and copies obtained at the Public Reference Facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549
and at the New York Regional Office of the Commission at Seven World Trade
Center, 13th Floor, New York, New York 10048. Copies of such material can also
be obtained from the Public Reference Branch, Office of Consumer Affairs and
Information Services, Securities and Exchange Commission, Washington, D.C. 20549
at prescribed rates.
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "AGREEMENT") is made as of
this day of , 1996, by and between Voyageur Investment Trust II ("VOYAGEUR
TRUST"), a business trust organized under the laws of the Commonwealth of
Massachusetts, on behalf of Voyageur Florida Limited Term Tax Free Fund (the
"ACQUIRING FUND"), a series of Voyageur Trust, and Mackenzie Series Trust
("MACKENZIE TRUST"), a business trust organized under the laws of the
Commonwealth of Massachusetts, on behalf of Mackenzie Florida Limited Term
Municipal Fund (the "ACQUIRED Fund"), a series of Mackenzie Trust.
This Agreement is intended to be and is adopted as a plan of reorganization
and liquidation pursuant to Section 368(a)(1)(D) of the United States Internal
Revenue Code of 1986, as amended (the "CODE"). The reorganization (the
"REORGANIZATION") will consist of the transfer of all or substantially all of
the assets of the Acquired Fund to the Acquiring Fund and the assumption by the
Acquiring Fund of all of the identified and stated liabilities of the Acquired
Fund in exchange solely for full and fractional voting shares of beneficial
interest, par value $.001 per share, of the Acquiring Fund (the "ACQUIRING FUND
SHARES"), having an aggregate net asset value equal to the aggregate value of
the assets acquired (less liabilities assumed) of the Acquired Fund, and the
distribution of the Acquiring Fund Shares to the shareholders of the Acquired
Fund in liquidation of the Acquired Fund as provided herein, all upon the terms
and conditions hereinafter set forth.
WITNESSETH:
WHEREAS, each of Voyageur Trust and Mackenzie Trust is a registered,
open-end management investment company, with Mackenzie Trust offering its shares
of beneficial interest in multiple series (each of which series represents a
separate and distinct portfolio of assets and liabilities) and Voyageur Trust
offering its shares of beneficial interest in a single series at the current
time;
WHEREAS, the Acquired Fund offers Class A and Class B shares and the
Acquiring Fund offers Class A, Class B and Class C shares;
WHEREAS, the Acquired Fund owns securities which generally are assets of
the character in which the Acquiring Fund is permitted to invest; and
WHEREAS, the Board of Trustees of each of the Acquired Fund and the
Acquiring Fund has determined that the exchange of all or substantially all of
the assets of the Acquired Fund for Acquiring Fund Shares and the assumption of
all of the liabilities of the Acquired Fund by the Acquiring Fund is in the best
interests of the shareholders of the Acquired Fund and the Acquiring Fund,
respectively.
NOW, THEREFORE, in consideration of the premises and of the
representations, warranties, covenants and agreements hereinafter set forth, the
parties hereto covenant and agree as follows:
1. TRANSFER OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE ACQUIRED FUND TO
THE ACQUIRING FUND SOLELY IN EXCHANGE FOR ACQUIRING FUND SHARES, THE
ASSUMPTION OF ALL ACQUIRED FUND LIABILITIES AND THE LIQUIDATION OF THE
ACQUIRED FUND
1.1 Subject to the requisite approval by Acquired Fund shareholders and to
the other terms and conditions set forth herein and on the basis of the
representations and warranties contained herein, the Acquired Fund agrees to
transfer all or substantially all of the Acquired Fund's assets as set forth in
Section 1.2 to the Acquiring Fund, and the Acquiring Fund agrees in exchange
therefor (a) to deliver to the Acquired Fund that number of full and fractional
Acquiring Fund Shares determined in accordance with Article 2, and (b) to assume
all of the identified and stated liabilities of the Acquired Fund, as set forth
in Section 1.3. Such transactions shall take place as of the effective time
provided for in Section 3.1 (the "EFFECTIVE TIME").
1.2 (a) The assets of the Acquired Fund to be acquired by the Acquiring
Fund shall consist of all or substantially all of the Acquired Fund's property,
including, but not limited to, all cash, securities, commodities, futures, and
interest and dividends receivable which are owned by the Acquired Fund as of the
Effective Time. All of said assets shall be set forth in detail in an unaudited
statement of assets and liabilities of the Acquired Fund as of the Effective
Time (the "EFFECTIVE TIME STATEMENT"). The Effective Time Statement shall, with
respect to the listing of the Acquired Fund's portfolio securities, detail the
adjusted tax basis of such securities by lot, the respective holding periods of
such securities and the current and accumulated earnings and profits of the
Acquired Fund. The Effective Time Statement shall be prepared in accordance with
generally accepted accounting principles (except for footnotes) consistently
applied from the prior audited period and shall be certified by the Acquired
Fund's treasurer.
(b) The Acquired Fund has provided the Acquiring Fund with a list of all of
the Acquired Fund's assets as of the date of execution of this Agreement. The
Acquired Fund reserves the right to sell any of these securities in the ordinary
course of its business and, subject to Section 5.1, to acquire additional
securities in the ordinary course of its business.
1.3 The Acquiring Fund shall assume all of the identified and stated
liabilities, expenses, costs, charges and reserves (including, but not limited
to, expenses incurred in the ordinary course of the Acquired Fund's operations,
such as accounts payable relating to custodian fees, investment management and
administrative fees, legal and audit fees, and expenses of state securities
registration of the Acquired Fund's shares) reflected in the Effective Time
Statement. The Acquiring Fund shall assume only those liabilities of the
Acquired Fund in the amounts reflected on the Effective Time Statement and shall
not assume any other liabilities, whether absolute or contingent, known or
unknown, accrued or unaccrued.
1.4 Immediately after the transfer of assets provided for in Section 1.1
and the assumption of liabilities provided for in Section 1.3, and pursuant to
the plan of reorganization adopted herein, the Acquired Fund will distribute pro
rata (as provided in Article 2) to the Acquired Fund's shareholders of record,
determined as of the Effective Time (the "ACQUIRED FUND SHAREHOLDERS"), the
Acquiring Fund Shares received by the Acquired Fund pursuant to Section 1.1, and
all other assets of the Acquired Fund, if any. Thereafter, no additional shares
representing interests in the Acquired Fund shall be issued. Such distribution
will be accomplished by the transfer of the Acquiring Fund Shares then credited
to the account of the Acquired Fund on the books of the Acquiring Fund to open
accounts on the share records of the Acquiring Fund in the names of the Acquired
Fund shareholders representing the numbers and classes of Acquiring Fund Shares
due each such shareholder. All issued and outstanding shares of the Acquired
Fund will simultaneously be canceled on the books of the Acquired Fund, although
share certificates representing interests in the Acquired Fund will represent
those numbers and classes of Acquiring Fund Shares after the Effective Time as
determined in accordance with Article 2. Unless requested by Acquired Fund
shareholders, the Acquiring Fund will not issue certificates representing the
Acquiring Fund Shares issued in connection with such exchange.
1.5 Ownership of Acquiring Fund Shares will be shown on the books of the
Acquiring Fund. Acquiring Fund Shares will be issued in the manner described in
the Acquiring Fund's Prospectus and Statement of Additional Information as in
effect as of the Effective Time, except that no front-end sales charges will be
incurred by Acquired Fund Shareholders in connection with their acquisition of
Acquiring Fund Shares pursuant to this Agreement.
1.6 The Acquiring Fund agrees that in determining contingent deferred sales
charges applicable to Class B shares distributed by it in the Reorganization and
the date upon which Class B shares distributed by it in the Reorganization
convert to Class A shares, it shall give credit for the period during which the
holders thereof held the shares of the Acquired Fund in exchange for which such
Acquiring Fund shares were issued. In the event that Class A shares of the
Acquiring Fund are distributed in the Reorganization to former holders of Class
A shares of the Acquired Fund with respect to which the front-end sales charge
was waived due to a purchase of $500,000 or more, the Acquiring Fund agrees that
in determining whether a deferred sales charge is payable upon the sale of such
Class A shares of the Acquiring Fund it shall give credit for the period during
which the holder thereof held such Acquired Fund shares.
1.7 Any reporting responsibility of the Acquired Fund, including, but not
limited to, the responsibility for filing of regulatory reports, tax returns, or
other documents with the Securities and Exchange Commission (the "COMMISSION"),
any state securities commissions, and any federal, state or local tax
authorities or any other relevant regulatory authority, is and shall remain the
responsibility of the Acquired Fund.
2. VALUATION; ISSUANCE OF ACQUIRING FUND SHARES
2.1 The net asset value per share of the Acquired Fund's and the Acquiring
Fund's Class A and Class B shares shall be computed as of the Effective Time and
after the declaration of any dividends or distributions on that date using the
valuation procedures set forth in their respective declarations of trust and
bylaws, their then-current Prospectuses and Statements of Additional
Information, and as may be required by the Investment Company Act of 1940, as
amended (the "1940 ACT").
2.2 (a) The total number of Class A Acquiring Fund shares to be issued
(including fractional shares, if any) in exchange for the assets and liabilities
of the Acquired Fund which are allocable to the Acquired Fund's Class A shares
shall be determined as of the Effective Time by multiplying the number of Class
A Acquired Fund shares outstanding immediately prior to the Effective Time times
a fraction, the numerator of which is the net asset value per share of the
Acquired Fund's Class A shares immediately prior to the Effective Time, and the
denominator of which is the net asset value per share of the Acquiring Fund's
Class A shares immediately prior to the Effective Time, each as determined
pursuant to Section 2.1.
(b) The total number of Class B Acquiring Fund shares to be issued
(including fractional shares, if any) in exchange for the assets and liabilities
of the Acquired Fund which are allocable to the Acquired Fund's Class B shares
shall be determined as of the Effective Time by multiplying the number of Class
B Acquired Fund shares outstanding immediately prior to the Effective Time times
a fraction, the numerator of which is the net asset value per share of the
Acquired Fund's Class B shares immediately prior to the Effective Time, and the
denominator of which is the net asset value per share of the Acquiring Fund's
Class B shares immediately prior to the Effective Time, each as determined
pursuant to Section 2.1.
2.3 Immediately after the Effective Time, the Acquired Fund shall
distribute to the Acquired Fund Shareholders of the respective classes in
liquidation of the Acquired Fund pro rata within classes (based upon the ratio
that the number of Acquired Fund shares of the respective classes owned by each
Acquired Fund Shareholder immediately prior to the Effective Time bears to the
total number of issued and outstanding Acquired Fund shares of such classes
immediately prior to the Effective Time) the full and fractional Acquiring Fund
Shares of the respective classes received by the Acquired Fund pursuant to
Section 2.2. Accordingly, each Class A Acquired Fund Shareholder shall receive,
immediately after the Effective Time, Class A Acquiring Fund Shares with an
aggregate net asset value equal to the aggregate net asset value of the Class A
Acquired Fund shares owned by such Acquired Fund Shareholder immediately prior
to the Effective Time; and each Class B Acquired Fund Shareholder shall receive,
immediately after the Effective Time, Class B Acquiring Fund Shares with an
aggregate net asset value equal to the aggregate net asset value of the Class B
Acquired Fund shares owned by such Acquired Fund Shareholder immediately prior
to the Effective Time.
3. EFFECTIVE TIME; CLOSING
3.1 The closing of the transactions contemplated by this Agreement (the
"CLOSING") shall occur as of the close of normal trading on the New York Stock
Exchange (the "EXCHANGE") (currently, 4:00 p.m. Eastern time), and after the
declaration of any dividends or distributions on such date, five business days
after this Agreement and the transactions contemplated herein have been approved
by the requisite vote of the holders of the outstanding shares of the Acquired
Fund, or at such time on such later date as provided herein or as the parties
otherwise may agree in writing (such time and date being referred to herein as
the "EFFECTIVE TIME"). All acts taking place at the Closing shall be deemed to
take place simultaneously as of the Effective Time unless otherwise agreed to by
the parties. The Closing shall be held at the offices of Dorsey & Whitney LLP,
220 South Sixth Street, Minneapolis, Minnesota 55402, or at such other place as
the parties may agree.
3.2 The Acquired Fund shall deliver at the Closing its written instructions
to the custodian for the Acquired Fund, acknowledged and agreed to in writing by
such custodian, irrevocably instructing such custodian to transfer to the
Acquiring Fund all of the Acquired Fund's portfolio securities, cash, and any
other assets to be acquired by the Acquiring Fund pursuant to this Agreement.
3.3 In the event that the Effective Time occurs on a day on which (a)the
Exchange or another primary trading market for portfolio securities of the
Acquiring Fund or the Acquired Fund shall be closed to trading or trading
thereon shall be restricted, or (b trading or the reporting of trading on the
Exchange or elsewhere shall be disrupted so that accurate appraisal of the value
of the net assets of the Acquiring Fund or the Acquired Fund is impracticable,
the Effective Time shall be postponed until the close of normal trading on the
Exchange on the first business day when trading shall have been fully resumed
and reporting shall have been restored.
3.4 The Acquired Fund shall deliver at the Closing a certificate of its
transfer agent stating that the records maintained by the transfer agent (which
shall be made available to the Acquiring Fund) contain the names and addresses
of the Acquired Fund shareholders and the numbers and classes of outstanding
Acquired Fund shares owned by each such shareholder as of the Effective Time.
The Acquiring Fund shall certify at the Closing that the Acquiring Fund Shares
required to be issued by it pursuant to this Agreement have been issued and
delivered as required herein.
3.5 At the Closing, each party to this Agreement shall deliver to the other
such bills of sale, liability assumption agreements, checks, assignments, share
certificates, if any, receipts or other similar documents as such other party or
its counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Acquired Fund represents and warrants to the Acquiring Fund as
follows:
(a) Mackenzie Trust is a business trust duly organized and validly existing
under the laws of the Commonwealth of Massachusetts with power under its
declaration of trust to own all of its properties and assets and to carry on its
business as it is now conducted;
(b) Mackenzie Trust is a registered investment company classified as a
management company of the open-end type, and its registration with the
Commission as an investment company under the 1940 Act, and of each series of
shares offered by Mackenzie Trust (including the Acquired Fund shares) under the
Securities Act of 1933, as amended (the "1933 ACT"), is in full force and
effect;
(c) Shares of the Acquired Fund are registered in all jurisdictions in
which they are required to be registered under state securities laws and any
other applicable laws; said registrations, including any periodic reports or
supplemental filings, are complete and current in all material respects; all
fees required to be paid in connection with such registrations have been paid;
and the Acquired Fund is not subject to any stop orders, and is fully qualified
to sell its shares in any state in which its shares have been registered;
(d) The Prospectus and Statement of Additional Information of the Acquired
Fund, as of the date hereof and up to and including the Effective Time, conform
and will conform in all material respects to the applicable requirements of the
1933 Act and the 1940 Act and the rules and regulations of the Commission
thereunder and do not and will not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not materially misleading;
(e) The Acquired Fund is not, and the execution, delivery and performance
of this Agreement will not result, in a violation of Mackenzie Trust's
declaration of trust or bylaws or of any material agreement, indenture,
instrument, contract, lease or other undertaking to which the Acquired Fund is a
party or by which it is bound, except as previously disclosed to the Acquiring
Fund in writing;
(f) Except as previously disclosed to the Acquiring Fund in writing, no
material litigation or administrative proceeding or investigation of or before
any court or governmental body is presently pending or, to the best of the
Acquired Fund's knowledge, threatened against the Acquired Fund or any of its
properties or assets. The Acquired Fund is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental body
which materially and adversely affects its business or its ability to consummate
the transactions herein contemplated;
(g) The Statement of Assets and Liabilities of the Acquired Fund as of the
end of its most recently concluded fiscal year has been audited by Coopers &
Lybrand L.L.P., independent accountants, and is in accordance with generally
accepted accounting principles consistently applied, and such statement (a copy
of which has been furnished to the Acquiring Fund) presents fairly, in all
material respects, the financial position of the Acquired Fund as of such date,
and there are no known material contingent liabilities of the Acquired Fund as
of such date not disclosed therein;
(h) Since the end of the Acquired Fund's most recently concluded fiscal
year, there has not been any material adverse change in the Acquired Fund's
financial condition, assets, liabilities or business other than changes
occurring in the ordinary course of business, except as otherwise disclosed to
the Acquiring Fund. For the purposes of this paragraph (h), a decline in net
asset value per share of the Acquired Fund, the discharge or incurrence of
Acquired Fund liabilities in the ordinary course of business, or the redemption
of Acquired Fund shares by Acquired Fund shareholders, shall not constitute such
a material adverse change;
(i) All material federal and other tax returns and reports of the Acquired
Fund required by law to have been filed prior to the Effective Time shall have
been filed and shall be correct, and all federal and other taxes shown as due or
required to be shown as due on said returns and reports shall have been paid or
provision shall have been made for the payment thereof, and, to the best of the
Acquired Fund's knowledge, no such return is currently under audit and no
assessment shall have been asserted with respect to such returns;
(j) For each taxable year of its operation, the Acquired Fund has met the
requirements of Subchapter M of the Code for qualification and treatment as a
regulated investment company, and the Acquired Fund intends to meet the
requirements of Subchapter M of the Code for qualification and treatment as a
regulated investment company for its final, partial taxable year;
(k) All issued and outstanding shares of the Acquired Fund are, and at the
Effective Time will be, duly and validly issued and outstanding, fully paid and
non-assessable (recognizing that, under Massachusetts law, Acquired Fund
Shareholders could, under certain circumstances, be held personally liable for
obligations of Mackenzie Trust). All of the issued and outstanding shares of the
Acquired Fund will, at the Effective Time, be held by the persons and in the
amounts set forth in the records of the Acquired Fund, as provided in Section
3.4. The Acquired Fund does not have outstanding any options, warrants or other
rights to subscribe for or purchase any Acquired Fund shares, and there is not
outstanding any security convertible into any Acquired Fund shares (other than
Class B shares which automatically convert to Class A shares after a specified
period);
(l) At the Effective Time, the Acquired Fund will have good and marketable
title to the Acquired Fund's assets to be transferred to the Acquiring Fund
pursuant to Section 1.2 and full right, power, and authority to sell, assign,
transfer and deliver such assets hereunder, and upon delivery of and payment for
such assets, the Acquiring Fund will acquire good and marketable title thereto,
subject to no restrictions on the full transfer thereof, including such
restrictions as might arise under the 1933 Act other than as disclosed to the
Acquiring Fund in the Effective Time Statement;
(m) The execution, delivery and performance of this Agreement will have
been duly authorized prior to the Effective Time by all necessary action on the
part of the Acquired Fund's Board of Trustees, and, subject to the approval of
the Acquired Fund shareholders, this Agreement will constitute a valid and
binding obligation of the Acquired Fund, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other laws relating to or affecting
creditors' rights and to the application of equitable principles in any
proceeding, whether at law or in equity;
(n) The information to be furnished by and on behalf of the Acquired Fund
for use in registration statements, proxy materials and other documents which
may be necessary in connection with the transactions contemplated hereby shall
be accurate and complete in all material respects;
(o) All information pertaining to the Acquired Fund, Mackenzie Trust, and
their agents and affiliates and included in the Registration Statement referred
to in Section 5.5 (or supplied by the Acquired Fund, Mackenzie Trust or their
agents or affiliates for inclusion in said Registration Statement), on the
effective date of said Registration Statement and up to and including the
Effective Time, will not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which such statements
are made, not materially misleading (other than as may timely be remedied by
further appropriate disclosure);
(p) Since the end of the Acquired Fund's most recently concluded fiscal
year, there have been no material changes by the Acquired Fund in accounting
methods, principles or practices, including those required by generally accepted
accounting principles, except as disclosed in writing to the Acquiring Fund; and
(q) The Effective Time Statement will be prepared in accordance with
generally accepted accounting principles (except for footnotes) consistently
applied and will present accurately in all material respects the assets and
liabilities of the Acquired Fund as of the Effective Time, and the values of the
Acquired Fund's assets and liabilities to be set forth in the Effective Time
Statement will be computed as of the Effective Time using the valuation
procedures set forth in the Acquired Fund's declaration of trust and bylaws, its
then-current Prospectus and Statement of Additional Information, and as may be
required by the 1940 Act. At the Effective Time, the Acquired Fund will have no
liabilities, whether absolute or contingent, accrued or unaccrued, which are not
reflected in the Effective Time Statement.
4.2 The Acquiring Fund represents and warrants to the Acquired Fund as
follows:
(a) Voyageur Trust is a business trust duly organized and validly existing
under the laws of the Commonwealth of Massachusetts with power under its
declaration of trust to own all of its properties and assets and to carry on its
business as it is now conducted;
(b) Voyageur Trust is a registered investment company classified as a
management company of the open-end type, and its registration with the
Commission as an investment company under the 1940 Act, and of each series of
shares offered by Voyageur Trust (including the Acquiring Fund Shares) under the
1933 Act, is in full force and effect;
(c) Shares of the Acquiring Fund are registered in all jurisdictions in
which they are required to be registered under state securities laws and any
other applicable laws; said registrations, including any periodic reports or
supplemental filings, are complete and current; all fees required to be paid in
connection with such registrations have been paid; and the Acquiring Fund is in
good standing, is not subject to any stop orders, and is fully qualified to sell
its shares in any state in which its shares have been registered;
(d) The Prospectus and Statement of Additional Information of the
Acquiring Fund, as of the date hereof and up to and including the Effective
Time, conform and will conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and regulations of
the Commission thereunder and do not and will not include any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not materially misleading;
(e) The Acquiring Fund is not, and the execution, delivery and performance
of this Agreement will not result, in a violation of its declaration of trust or
bylaws or of any material agreement, indenture, instrument, contract, lease or
other undertaking to which the Acquiring Fund is a party or by which it is
bound;
(f) No material litigation or administrative proceeding or investigation of
or before any court or governmental body is presently pending or, to the best of
the Acquiring Fund's knowledge, threatened against the Acquiring Fund or any of
its properties or assets. The Acquiring Fund is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental body
which materially and adversely affects its business or its ability to consummate
the transactions herein contemplated;
(g) The Statement of Assets and Liabilities of the Acquiring Fund as of
the end of its most recently concluded fiscal year has been audited by KPMG Peat
Marwick LLP, independent accountants, and is in accordance with generally
accepted accounting principles consistently applied, and such statement (a copy
of which has been furnished to the Acquired Fund) presents fairly, in all
material respects, the financial position of the Acquiring Fund as of such date,
and there are no known material contingent liabilities of the Acquiring Fund as
of such date not disclosed therein;
(h) Since the end of the Acquiring Fund's most recently concluded fiscal
year, there has not been any material adverse change in the Acquiring Fund's
financial condition, assets, liabilities or business other than changes
occurring in the ordinary course of business, except as otherwise disclosed to
the Acquired Fund. For the purposes of this paragraph (h), a decline in net
asset value per share of the Acquiring Fund, the discharge or incurrence of
Acquiring Fund liabilities in the ordinary course of business, or the redemption
of Acquiring Fund shares by Acquiring Fund shareholders, shall not constitute
such a material adverse change;
(i) All material federal and other tax returns and reports of the Acquiring
Fund required by law to have been filed prior to the Effective Time shall have
been filed and shall be correct, and all federal and other taxes shown as due or
required to be shown as due on said returns and reports shall have been paid or
provision shall have been made for the payment thereof, and, to the best of the
Acquiring Fund's knowledge, no such return is currently under audit and no
assessment shall have been asserted with respect to such returns;
(j) For each taxable year of its operation, the Acquiring Fund has met the
requirements of Subchapter M of the Code for qualification and treatment as a
regulated investment company, and the Acquiring Fund intends to meet the
requirements of Subchapter M of the Code for qualification and treatment as a
regulated investment company in the current and future years;
(k) All issued and outstanding shares of the Acquiring Fund are, and at the
Effective Time will be, duly and validly issued and outstanding, fully paid and
non-assessable (recognizing that, under Massachusetts law, Acquiring Fund
Shareholders could, under certain circumstances, be held personally liable for
obligations of Voyageur Trust). The Acquiring Fund Shares to be issued and
delivered to the Acquired Fund for the account of the Acquired Fund
Shareholders, pursuant to the terms of this Agreement, at the Effective Time
will have been duly authorized and, when so issued and delivered, will be duly
and validly issued and outstanding, fully paid and non-assessable (recognizing
that, under Massachusetts law, Acquiring Fund Shareholders could, under certain
circumstances, be held personally liable for obligations of Voyageur Trust). The
Acquiring Fund does not have outstanding any options, warrants or other rights
to subscribe for or purchase any Acquiring Fund shares, and there is not
outstanding any security convertible into any Acquiring Fund shares (other than
Class B shares which automatically convert to Class A shares after a specified
period);
(l) The execution, delivery and performance of this Agreement will have
been duly authorized prior to the Effective Time by all necessary action on the
part of Voyageur Trust's Board of Trustees, and at the Effective Time this
Agreement will constitute a valid and binding obligation of the Acquiring Fund,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and
other laws relating to or affecting creditors' rights and to the application of
equitable principles in any proceeding, whether at law or in equity.
Consummation of the transactions contemplated by this Agreement does not require
the approval of the Acquiring Fund's shareholders;
(m) The information to be furnished by and on behalf of the Acquiring Fund
for use in registration statements, proxy materials and other documents which
may be necessary in connection with the transactions contemplated hereby shall
be accurate and complete in all material respects;
(n) Since the end of the Acquiring Fund's most recently concluded fiscal
year, there have been no material changes by the Acquiring Fund in accounting
methods, principles or practices, including those required by generally accepted
accounting principles, except as disclosed in writing to the Acquired Fund; and
(o) The Registration Statement referred to in Section 5.5, on its effective
date and up to and including the Effective Time, will (i) conform in all
material respects to the applicable requirements of the 1933 Act, the Securities
Exchange Act of 1934, as amended (the "1934 ACT"), and the 1940 Act and the
rules and regulations of the Commission thereunder, and (ii) not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which such statements were made, not materially misleading
(other than as may timely be remedied by further appropriate disclosure);
provided, however, that the representations and warranties in clause (ii) of
this paragraph shall not apply to statements in (or omissions from) the
Registration Statement concerning the Acquired Fund, Mackenzie Trust, and their
agents and affiliates (or supplied by the Acquired Fund, Mackenzie Trust, or
their agents or affiliates for inclusion in said Registration Statement).
5. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND
5.1 Each of the Acquired Fund and the Acquiring Fund will operate its
business in the ordinary course between the date hereof and the Effective Time,
it being understood that such ordinary course of business will include the
declaration and payment of customary dividends and distributions, and any other
distributions that may be advisable (which may include distributions prior to
the Effective Time of net income and/or net realized capital gains not
previously distributed). Between the date hereof and the Effective Time, the
Acquired Fund will not acquire any securities which are not permissible
investments for the Acquiring Fund.
5.2 The Acquired Fund will call a meeting of its shareholders to consider
and act upon this Agreement and to take all other action reasonably necessary to
obtain approval of the transactions contemplated herein.
5.3 The Acquired Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requests concerning the beneficial
ownership of the Acquired Fund shares.
5.4 Subject to the provisions of this Agreement, the Acquiring Fund and the
Acquired Fund will each take, or cause to be taken, all actions, and do or cause
to be done, all things reasonably necessary, proper or advisable to consummate
and make effective the transactions contemplated by this Agreement.
5.5 The Acquired Fund will provide the Acquiring Fund with information
reasonably necessary with respect to the Acquired Fund and its agents and
affiliates for the preparation of the Registration Statement on Form N-14 of the
Acquiring Fund (the "REGISTRATION STATEMENT"), in compliance with the 1933 Act,
the 1934 Act and the 1940 Act.
5.6 The Acquiring Fund agrees to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and such
state blue sky or securities laws as may be necessary in order to conduct its
operations after the Effective Time.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquiring Fund of all the obligations to be performed by it hereunder at or
before the Effective Time, and, in addition thereto, the following further
conditions (any of which may be waived by the Acquired Fund, in its sole and
absolute discretion):
6.1 All representations and warranties of the Acquiring Fund contained in
this Agreement shall be true and correct as of the date hereof and, except as
they may be affected by the transactions contemplated by this Agreement, as of
the Effective Time with the same force and effect as if made at such time;
6.2 The Acquiring Fund shall have delivered to the Acquired Fund a
certificate executed in its name by its President or a Vice President, in a form
reasonably satisfactory to the Acquired Fund and dated as of the date of the
Closing, to the effect that the representations and warranties of the Acquiring
Fund made in this Agreement are true and correct at the Effective Time, except
as they may be affected by the transactions contemplated by this Agreement;
6.3 The Acquiring Fund shall have delivered to the Acquired Fund the
certificate as to the issuance of Acquiring Fund shares contemplated by the
second sentence of Section 3.4;
6.4 The Acquiring Fund's investment adviser shall have paid or agreed to
pay the costs incurred by Voyageur Trust and Mackenzie Trust in connection with
the Reorganization, including the fees and expenses associated with the
preparation and filing of the Registration Statement referred to in Section 5.5
above, and the expenses of printing and mailing the prospectus/proxy statement,
soliciting proxies and holding the Acquired Fund shareholder meeting required to
approve the transactions contemplated by this Agreement; and
6.5 The Acquired Fund shall have received an opinion from Dorsey & Whitney
LLP, counsel to the Acquiring Fund, dated as of the Closing Date, to the effect
that:
(a) Under federal laws and the laws of the State of Minnesota, this
Agreement has been duly authorized, executed and delivered by the Acquiring
Fund and, assuming due authorization, execution and delivery of the
Agreement by the Acquired Fund, constitutes a valid and legally binding
obligation of the Acquiring Fund enforceable against the Acquiring Fund in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equitable principles;
(b) The execution and delivery of this Agreement did not and the exchange
of the Acquired Fund's assets for shares of the Acquiring Fund do not
violate (i) the Acquiring Fund's declaration of trust or bylaws or (ii) any
federal law of the United States or the laws of the State of Minnesota
applicable to the Acquiring Fund; provided, however, that (x) such counsel
may state that it expresses no opinion with respect to federal or state
securities laws, other antifraud laws and fraudulent transfer laws, (y)
insofar as performance by the Acquiring Fund of its obligations under this
Agreement is concerned such counsel may state that it expresses no opinion
as to bankruptcy, insolvency, reorganization, moratorium or similar laws of
general applicability relating to or affecting creditors' rights, and (z)
insofar as the opinion expressed in subsection (i) hereof involves the laws
of the Commonwealth of Massachusetts, such counsel may assume that such
laws are the same as the laws of the State of Minnesota;
(c) All regulatory consents, authorizations, approvals and filings required
to be obtained or made by the Acquired Fund under the federal laws of the
United States, the laws of the Commonwealth of Massachusetts and state Blue
Sky or securities laws for the consummation of the transactions
contemplated by this Agreement have been obtained or made.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquired Fund of all of the obligations to be performed by it hereunder at or
before the Effective Time and, in addition thereto, the following conditions
(any of which may be waived by the Acquiring Fund, in its sole and absolute
discretion):
7.1 All representations and warranties of the Acquired Fund contained in
this Agreement shall be true and correct as of the date hereof and, except as
they may be affected by the transactions contemplated by this Agreement, as of
the Effective Time with the same force and effect as if made at such time.
7.2 The Acquired Fund shall have delivered to the Acquiring Fund the
Effective Time Statement.
7.3 The Acquired Fund shall have delivered to the Acquiring Fund a
certificate executed in its name by its President or a Vice President, in a form
reasonably satisfactory to the Acquiring Fund and dated as of the date of the
Closing, to the effect that the representations and warranties of the Acquired
Fund made in this Agreement are true and correct at the Effective Time, except
as they may be affected by the transactions contemplated by this Agreement.
7.4 The Acquired Fund shall have delivered to the Acquiring Fund the
written instructions to the custodian for the Acquired Fund contemplated by
Section 3.2.
7.5 The Acquired Fund shall have delivered to the Acquiring Fund the
certificate as to its shareholder records contemplated by the first sentence of
Section 3.4.
7.6 At or prior to the Effective Time, the expenses incurred by the
Acquired Fund (or accrued up to the Effective Time) shall have been maintained
by the Acquired Fund's investment adviser or otherwise so as not to exceed any
applicable contractual or state-imposed expense
limitations.
7.7 At or prior to the Effective Time, appropriate action shall have been
taken by the Acquired Fund's investment adviser or otherwise such that no
unamortized organizational expenses shall be reflected in the Effective Time
Statement.
7.8 Immediately prior to the Effective Time, the Acquired Fund shall not
hold any securities which are not permissible investments for the Acquiring
Fund.
7.9 On or prior to the Closing Date, the Acquired Fund shall have made a
distribution to its shareholders of its net tax-exempt income, ordinary taxable
income and net realized capital gains, if any, for its taxable year ending on
the Closing Date, to the extent necessary to avoid federal income and excise
taxes on its income and gains and to maintain its status as a regulated
investment company under the Code.
7.10 The Acquiring Fund shall have received an opinion from Dechert Price &
Rhoads, counsel to the Acquired Fund, dated as of the Closing Date, to the
effect that:
(a) Mackenzie Trust has been duly organized and is validly existing as a
business trust under the laws of the Commonwealth of Massachusetts with
requisite power and authority to own its properties and, to the knowledge of
such counsel, to carry on its business as presently conducted;
(b) Under federal laws and the laws of the Commonwealth of Massachusetts,
this Agreement has been duly authorized, executed and delivered by the Acquired
Fund and, assuming due authorization, execution and delivery of the Agreement by
the Acquiring Fund, constitutes a valid and legally binding obligation of the
Acquired Fund enforceable against the Acquired Fund in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equitable principles;
(c) The execution and delivery of this Agreement did not and the exchange
of the Acquired Fund's assets for shares of the Acquiring Fund do not violate
(i) the Acquired Fund's declaration of trust or bylaws or (ii) any federal law
of the United States or the laws of the Commonwealth of Massachusetts applicable
to the Acquired Fund, provided, however, that such counsel may state that it
expresses no opinion with respect to federal or state securities laws, other
antifraud laws and fraudulent transfer laws; and provided further that insofar
as performance by the Acquired Fund of its obligations under this Agreement is
concerned such counsel may state that it expresses no opinion as to bankruptcy,
insolvency, reorganization, moratorium or similar laws of general applicability
relating to or affecting creditors' rights;
d) All regulatory consents, authorizations, approvals and filings required
to be obtained or made by the Acquired Fund under the federal laws of the United
States and the laws of the Commonwealth of Massachusetts for the consummation of
the transactions contemplated by this Agreement have been obtained or made.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND THE
ACQUIRED FUND
The following shall constitute further conditions precedent to the
consummation of the Reorganization:
8.1 This Agreement and the transactions contemplated herein shall have been
approved by the requisite votes of (a) the Board of Trustees of each of the
Acquiring Fund and the Acquired Fund, and (b) the holders of the outstanding
shares of the Acquired Fund in accordance with the provisions of the Acquired
Fund's Amended and Restated Declaration of Trust, as amended, and By-Laws and
applicable law, and each Fund shall have delivered certified copies of the
resolutions evidencing such approvals to the other Fund. Notwithstanding
anything herein to the contrary, neither the Acquiring Fund nor the Acquired
Fund may waive the conditions set forth in this Section 8.1.
8.2 As of the Effective Time, no action, suit or other proceeding shall be,
to the knowledge of either party to this Agreement, threatened or pending before
any court or governmental agency in which it is sought to restrain or prohibit,
or obtain damages or other relief in connection with, this Agreement or the
transactions contemplated herein.
8.3 All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities deemed necessary by
the Acquiring Fund or the Acquired Fund to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been obtained,
except where failure to obtain any such consent, order or permit would not
involve a risk of a material adverse effect on the assets or properties of the
Acquiring Fund or the Acquired Fund, provided that either party hereto may for
itself waive any of such conditions.
8.4 The Registration Statement shall have become effective under the 1933
Act, and no stop order suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the 1933 Act.
8.5 The parties shall have received the opinion of Dorsey & Whitney LLP
addressed to the Acquired Fund and the Acquiring Fund, dated as of the date of
the Closing, and based in part on certain representations to be furnished by the
Acquired Fund, the Acquiring Fund, and their respective investment advisers,
substantially to the effect that:
(a) the Reorganization will constitute a reorganization within the meaning
of Section 368(a)(1)(D) of the Code, and the Acquiring Fund and the Acquired
Fund each will qualify as a party to the Reorganization under Section 368(b) of
the Code;
(b) the Acquired Fund shareholders will recognize no income, gain or loss
upon receipt, pursuant to the Reorganization, of the Acquiring Fund Shares.
Acquired Fund shareholders subject to taxation will recognize income upon
receipt of any net investment income or net capital gains of the Acquired Fund
which are distributed by the Acquired Fund prior to the Effective Time;
(ci) the tax basis of the Acquiring Fund Shares received by each Acquired
Fund shareholder pursuant to the Reorganization will be equal to the tax basis
of the Acquired Fund shares exchanged therefor;
(d) the holding period of the Acquiring Fund Shares received by each
Acquired Fund shareholder pursuant to the Reorganization will include the period
during which the Acquired Fund shareholder held the Acquired Fund shares
exchanged therefor, provided that the Acquired Fund shares were held as a
capital asset at the Effective Time;
(e) the Acquired Fund will recognize no income, gain or loss by reason of
the Reorganization;
(f) the Acquiring Fund will recognize no income, gain or loss by reason of
the Reorganization;
(g)) the tax basis of the assets received by the Acquiring Fund pursuant to
the Reorganization will be the same as the basis of those assets in the hands of
the Acquired Fund as of the Effective Time;
(h) the holding period of the assets received by the Acquiring Fund
pursuant to the Reorganization will include the period during which such assets
were held by the Acquired Fund; and
(i) the Acquiring Fund will succeed to and take into account the earnings
and profits, or deficit in earnings and profits, of the Acquired Fund as of the
Effective Time.
9. INDEMNIFICATION
9.1 The Acquiring Fund agrees to indemnify and hold harmless the Acquired
Fund and each of the Acquired Fund's trustees and officers from and against any
and all losses, claims, damages, liabilities or expenses (including, without
limitation, the payment of reasonable legal fees and reasonable costs of
investigation) to which, jointly or severally, the Acquired Fund or any of its
directors or officers may become subject, insofar as any such loss, claim,
damage, liability or expense (or actions with respect thereto) arises out of or
is based on any breach by the Acquiring Fund of any of its representations,
warranties, covenants or agreements set forth in this Agreement.
9.2 The Acquired Fund agrees to indemnify and hold harmless the Acquiring
Fund and each of the Acquiring Fund's directors and officers from and against
any and all losses, claims, damages, liabilities or expenses (including, without
limitation, the payment of reasonable legal fees and reasonable costs of
investigation) to which, jointly or severally, the Acquiring Fund or any of its
directors or officers may become subject, insofar as any such loss, claim,
damage, liability or expense (or actions with respect thereto) arises out of or
is based on any breach by the Acquired Fund of any of its representations,
warranties, covenants or agreements set forth in this Agreement.
10. ENTIRE AGREEMENT; SURVIVAL OF REPRESENTATIONS AND WARRANTIES
10.1 The Acquiring Fund and the Acquired Fund agree that neither party has
made any representation, warranty, covenant or agreement not set forth herein
and that this Agreement constitutes the entire agreement between the parties.
10.2 The representations and warranties contained in this Agreement or in
any document delivered pursuant hereto or in connection herewith shall survive
the consummation of the transactions contemplated hereby.
11. TERMINATION
This Agreement and the transactions contemplated hereby may be terminated
and abandoned at any time prior to the Closing:
(a) by either party by resolution of the party's board of trustees at any
time prior to the Effective Time, if circumstances should develop that, in the
good faith opinion of such board, make proceeding with this Agreement and such
transactions not in the best interest of the applicable party's shareholders;
(b) By either party by notice to the other, without liability to the
terminating party on account of such termination (providing the terminating
party is not otherwise in material default or breach of this Agreement) if the
Closing shall not have occurred on or before August 31, 1996.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the authorized officers of the
Acquired Fund and the Acquiring Fund; provided, however, that following the
meeting of the Acquired Fund shareholders called by the Acquired Fund pursuant
to Section 5.2 of this Agreement, no such amendment may have the effect of
changing the provisions for determining the number of Acquiring Fund Shares to
be issued to Acquired Fund shareholders under this Agreement to the detriment of
such shareholders without their further approval.
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be deemed duly given
if delivered or mailed by registered mail, postage prepaid, addressed to the
Acquiring Fund at 90 South Seventh Street, Suite 4400, Minneapolis, Minnesota
55402, Attention: President, and to the Acquired Fund at Via Mizner Financial
Plaza, 700 South Federal Highway, Boca Raton, Florida 33432, Attention:
President.
14. HEADINGS; COUNTERPARTS; ASSIGNMENT; MISCELLANEOUS
14.1 The Article and Section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2 All agreements, covenants, representations and warranties made herein
by the Acquired Fund, and all obligations, duties, responsibilities, rights and
privileges created hereunder in the name of the Acquired Fund, and all actions
that are to be taken by the Acquired Fund, shall be treated as if made, created
or to be taken by Mackenzie Trust on behalf of the Acquired Fund. The name
"Mackenzie Series Trust" is the designation of the Trustees for the time being
under a Declaration of Trust dated April 22, 1985, as amended. The Acquired
Fund's obligations hereunder shall not be binding upon any of the Trust's
trustees, shareholders, nominees, officers, agents, or employees personally, but
shall bind only the trust property of Mackenzie Trust. Any persons dealing with
Mackenzie Trust must look solely to trust property for the enforcement of any
claims against Mackenzie Trust. No series of Mackenzie Trust other than the
Acquired Fund is responsible for the Acquired Fund's obligations.
14.3 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original and all of which together shall constitute one
and the same agreement.
14.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by
either party without the prior written consent of the other party. Nothing
herein expressed or implied is intended or shall be construed to confer upon or
give any person, firm or corporation, other than the parties hereto and their
respective successors and assigns, any rights or remedies under or by reason of
this Agreement.
14 .5 The validity, interpretation and effect of this Agreement shall be
governed exclusively by the laws of the Commonwealth of Massachusetts, without
giving effect to the principles of conflict of laws thereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its President or Vice President.
VOYAGEUR INVESTMENT TRUST II
on behalf of
VOYAGEUR FLORIDA LIMITED TERM TAX
FREE FUND
By________________________________
Its_______________________________
MACKENZIE SERIES TRUST
on behalf of
MACKENZIE FLORIDA LIMITED TERM
MUNICIPAL FUND
By________________________________
Its_______________________________
PROSPECTUS /PROXY STATEMENT
APRIL 26, 1996
PROPOSED ACQUISITION OF ASSETS OF
MACKENZIE FLORIDA LIMITED TERM
MUNICIPAL FUND
A SEPARATELY MANAGED SERIES OF
MACKENZIE SERIES TRUST
BY AND IN EXCHANGE FOR SHARES OF
VOYAGEUR FLORIDA LIMITED TERM
TAX FREE FUND
THE SOLE OUTSTANDING SERIES OF
VOYAGEUR INVESTMENT TRUST II
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TABLE OF CONTENTS
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PAGE
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INCORPORATION BY REFERENCE............... 2
SUMMARY.................................. 4
PRINCIPAL RISK FACTORS................... 11
COMPARISON OF INVESTMENT
OBJECTIVES, POLICIES AND
RESTRICTIONS.......................... 14
CAPITALIZATION........................... 17
INFORMATION ABOUT THE
REORGANIZATION........................ 17
VOTING INFORMATION....................... 21
FINANCIAL STATEMENTS AND EXPERTS
22
LEGAL MATTERS............................ 23
OTHER INFORMATION ABOUT MACKENZIE
FUND AND VOYAGEUR FUND................ 23
EXHIBIT A -- AGREEMENT AND PLAN OF
REORGANIZATION........................ A-1
THE FOLLOWING DOCUMENTS ACCOMPANY THIS
PROSPECTUS/PROXY STATEMENT:
PROSPECTUS DATED MARCH 1, 1995, AS
SUPPLEMENTED NOVEMBER 9, 1995, OF
VOYAGEUR FLORIDA LIMITED TERM TAX
FREE FUND
ANNUAL REPORT OF VOYAGEUR FLORIDA
LIMITED TERM TAX FREE FUND FOR THE
FISCAL YEAR ENDED DECEMBER 31, 1995
PART B
STATEMENT OF ADDITIONAL INFORMATION
DATED APRIL 25, 1996
ACQUISITION OF THE ASSETS OF
MACKENZIE FLORIDA LIMITED TERM MUNICIPAL FUND
A SEPARATELY MANAGED SERIES OF
MACKENZIE SERIES TRUST
VIA MIZNER FINANCIAL PLAZA, 700 SOUTH FEDERAL HIGHWAY
BOCA RATON, FLORIDA 33432
(800-456-5111)
BY AND IN EXCHANGE FOR SHARES OF
VOYAGEUR FLORIDA LIMITED TERM TAX FREE FUND
A SEPARATELY MANAGED SERIES OF
VOYAGEUR INVESTMENT TRUST II
90 SOUTH SEVENTH STREET, SUITE 4400
MINNEAPOLIS, MINNESOTA 55402
(800-553-2143)
This Statement of Additional Information relates to the proposed Agreement
and Plan of Reorganization providing for (a) the acquisition of substantially
all of the assets and the assumption of all stated and identified liabilities of
Mackenzie Florida Limited Term Municipal Fund (the "Acquired Fund"), a
separately managed series of Mackenzie Series Trust, by Voyageur Florida Limited
Term Tax Free Fund (the "Acquiring Fund"), in exchange for shares of beneficial
interest of the Acquiring Fund having an aggregate net asset value equal to the
aggregate value of the assets acquired (less the liabilities assumed) of the
Acquired Fund and (b) the liquidation of the Acquired Fund and the pro rata
distribution of the Acquiring Fund shares to Acquired Fund shareholders.
This Statement of Additional Information consists of this cover page and
the following documents, of which items 1 through 4 are incorporated by
reference herein:
1. The Statement of Additional Information dated March 1, 1995, as
supplemented August 29, 1995, of the Acquiring Fund.
2. The Annual Report of the Acquiring Fund for the fiscal year ended
December 31, 1995.
3. The Statement of Additional Information dated October 27, 1995 as
supplemented January 1, 1996 of the Acquired Fund.
4. The Annual Report and unaudited Semi-Annual Report of the Acquired
Fund for the fiscal year and six month period ended June 30, 1995 and
December 31, 1995, rspectively.
5. Financial Statements required by Form N-14, Item 14 (to the extent not
included in items 2 and 4 above).
This Statement of Additional Information is not a prospectus. A
Prospectus/Proxy Statement dated April 25, 1996 relating to the above-referenced
transaction may be obtained without charge by writing or calling the Acquiring
Fund at the address or telephone number noted above. This Statement of
Additional Information relates to, and should be read in conjunction with, such
Prospectus/Proxy Statement.
